U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File Number 0-14819
RENT-A-WRECK OF AMERICA, INC. (Exact name
- ---------------------------------------------------------------------
of small business issuer as
specified in its Charter)
Delaware 95-3926056
- ---------------------------- ----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11460 Cronridge Drive, Suite 120, Owings Mills, MD 21117
- -------------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number: (410) 581-5755
- ----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 4,283,517 shares as of July
22, 1997.
Transitional Small Business Disclosure Format (Check One):
Yes [ ] No [X]
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
FORM 10-QSB - JUNE 30, 1997
INDEX
Part I. Financial Information Page
- ------------------------------- ----
Item 1. Financial Statements
Consolidated Balance Sheets as of
March 31, 1997 and
June 30, 1997 (Unaudited) 2-3
Consolidated Statements of Earnings for
the Three Months ended
June 30, 1996 and 1997 (Unaudited) 4
Consolidated Statements of Cash Flows for
the Three Months ended June 30, 1996 and
1997 (Unaudited) 5
Notes to Consolidated Financial Statements
(Unaudited) 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-9
Part II. Other Information
- -------- -----------------
Item 1. Legal proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 5. Other Information-Retirement of
Stock Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
Part I - Financial Information
Item 1 - Financial Statements
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
March 31, June 30,
1997 1997
----------- ----------
(Unaudited)
CURRENT ASSETS:
Cash and Cash Equivalents, including restricted cash... $1,077,578 $1,107,123
Accounts Receivable, net of allowance
for doubtful accounts of $762,757 and $817,183 at
March 31, 1997 and June 30, 1997, respectively:
Continuing License Fees and
Advertising Fees................................. 291,181 301,782
Current Portion of Notes Receivable................ 415,072 478,562
Current Portion of Direct Financing
Leases........................................... 47,228 42,770
Insurance Premiums Receivable...................... 25,784 7,505
Other.............................................. 25,136 13,051
Prepaid Expenses....................................... 117,566 199,796
----------- ----------
TOTAL CURRENT ASSETS............................... 1,999,545 2,150,589
----------- ----------
PROPERTY AND EQUIPMENT:
Vehicles............................................. 53,025 62,115
Furniture, Equipment and Leasehold
Improvements....................................... 738,130 485,406
Less: Accumulated Depreciation and
Amortization.................................. (448,472) (201,950)
----------- -----------
NET PROPERTY AND EQUIPMENT............................. 342,683 345,571
----------- ----------
OTHER ASSETS:
Trademarks and other Intangible Assets, net of
accumulated amortization of $88,729 and $93,676 at
March 31, 1997 and June 30, 1997, respectively..... 219,086 215,206
Long-term Portion of Notes and Direct Financing Lease
Receivables, net of allowance of $16,278 and $14,979
at March 31, 1997 and June 30, 1997, respectively.. 32,629 36,168
----------- ----------
251,715 251,374
----------- ----------
TOTAL ASSETS....................................... $2,593,943 $2,747,534
=========== ==========
The accompanying notes are an integral part of this financial statement.
2
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, June 30,
1997 1997
----------- ----------
(Unaudited)
CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses................ $ 720,338 $ 616,925
Dividends Payable.................................... 28,782 28,645
Insurance Premiums, Deposits, and Provision for
Loss............................................... 50,828 234,627
Current Maturities of Capital Lease Obligations...... 8,578 8,919
----------- ----------
TOTAL CURRENT LIABILITIES.......................... 808,526 889,116
----------- ----------
CAPITAL LEASE OBLIGATIONS, Less Current Maturities..... 30,089 27,727
----------- ----------
TOTAL LIABILITIES.................................. 838,615 916,843
----------- ----------
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Convertible Cumulative Series A Preferred Stock,
$.01 par value; authorized 10,000,000 shares;
issued and outstanding 1,439,125 shares at March
31, 1997 and 1,432,250 shares at June 30, 1997
(aggregate liquidation preference $1,151,300
at March 31, 1997 and $1,145,800 at June 30, 1997). 14,391 14,322
Common Stock, $.01 par value; authorized
25,000,000 shares; issued and
outstanding 4,234,767 shares at March 31, 1997 and
4,251,642 shares at June 30, 1997.................. 42,347 42,516
Additional Paid-In Capital........................... 3,021,490 3,033,890
Accumulated Deficit.................................. (1,322,900) (1,260,037)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY......................... 1,755,328 1,830,691
----------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY........................................... $2,593,943 $2,747,534
=========== ==========
The accompanying notes are an integral part of this financial statement.
3
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended June 30,
---------------------------
1996 1997
----------- ----------
REVENUES:
Initial License Fees................................ $ 228,000 $ 270,500
Advertising Fees.................................... 170,718 176,845
Continuing License Fees............................. 515,396 548,725
Direct Financing Leases to Franchisees.............. 2,365 375
Insurance Premiums.................................. 42,901 87,567
Other............................................... 21,535 43,319
----------- ----------
980,915 1,127,331
EXPENSES:
Salaries, Consulting Fees and
Employee Benefits................................. 187,789 195,215
Sales and Marketing Expenses........................ 182,512 247,064
Advertising and Promotion.......................... 226,879 256,410
General and Administrative Expenses................. 192,259 231,055
Depreciation and Amortization....................... 28,341 30,544
----------- ----------
817,780 960,288
----------- ----------
OPERATING INCOME................................ 163,135 167,043
INTEREST INCOME, NET.................................. 15,271 18,091
----------- ----------
INCOME BEFORE INCOME TAX EXPENSE................ 178,406 185,134
----------- ----------
INCOME TAX EXPENSE.................................... 21,900 52,500
----------- ----------
NET INCOME...................................... $ 156,506 $ 132,634
DIVIDENDS ON CONVERTIBLE CUMULATIVE
PREFERRED STOCK..................................... 30,915 28,645
----------- ----------
NET INCOME APPLICABLE TO COMMON
AND COMMON EQUIVALENT SHARES........................ $ 125,591 $ 103,989
----------- ----------
EARNINGS PER COMMON SHARE............................. $ .03 $ .02
=========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING....................... 4,828,267 4,954,975
=========== ==========
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1996 1997
----------- -----------
<S> <C> <C>
Increase (decrease) in cash and cash
equivalents
Cash flows from operating activities:
Net income ............................................ $ 156,506 $ 132,634
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization ..................... 28,341 30,544
Provision for doubtful accounts ................... 80,687 53,127
Changes in assets and liabilities:
Accounts and notes receivable ................... (140,469) (95,936)
Prepaid expenses ............................. (9,301) (82,230)
Accounts payable and accrued
expenses ...................................... 11,919 (103,550)
Insurance premiums, deposits, and
loss reserves ................................. 14,335 183,799
----------- -----------
Net cash provided by operating activities ......... 142,018 118,388
----------- -----------
Cash flows from investing activities:
Acquisition of property and equipment ................. (32,841) (28,347)
Additions to trademarks and other ..................... (11,012) (1,066)
----------- -----------
Net cash used in investing activities ............. (43,853) (29,413)
----------- -----------
Cash flow from financing activities:
Repayments of long-term debt .......................... (3,936) (2,021)
Issuance of common stock .............................. -- 12,500
Retirement of common stock ............................ (14,000) --
Retirement of preferred stock ......................... (27,019) --
Preferred dividends paid .............................. (64,185) (69,909)
----------- -----------
Net cash used in financing activities ............. (109,140) (59,430)
----------- -----------
Net increase in cash and cash
equivalents .................................... (10,975) 29,545
Cash and cash equivalents at beginning of period ........ 579,871 1,077,578
----------- -----------
Cash and cash equivalents at end of period .............. $ 568,896 $ 1,107,123
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid ......................................... $ 1,480 $ 1,492
Taxes paid ............................................ $ 43,986 $ 52,890
Non-cash transactions:
Capital Lease Obligations ............................. $ 3,936 $ 2,021
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements presented herein include
the accounts of Rent-A-Wreck of America, Inc. ("RAWA, Inc.") and its wholly
owned subsidiaries, Rent-A-Wreck Operations, Inc. ("RAW OPS"), Rent-A-Wreck One
Way, Inc. ("RAW One Way"), Consolidated American Rental Insurance Company, LTD
("CAR Insurance") and Bundy American Corporation ("Bundy"), and Bundy's
subsidiaries, Rent-A-Wreck Leasing, Inc. ("RAW Leasing"), URM Corporation
("URM") and Central Life and Casualty Company, Limited ("CLC").
All of the above entities are collectively referred to as the "Company"
unless the context provides or requires otherwise. All material intercompany
balances and transactions have been eliminated.
The consolidated balance sheet as of June 30, 1997, the consolidated
statements of earnings for the three-month periods ended June 30, 1996 and 1997
and the consolidated statements of cash flows for the three-month periods ended
June 30, 1996 and 1997 have been prepared by the Company without audit. In the
opinion of management, all adjustments which are necessary to present a fair
statement of the results of operations for the interim periods have been made,
and all such adjustments are of a normal recurring nature. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. It is suggested that these financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's March
31, 1997 audited financial statements. The results of operations for the interim
periods are not necessarily indicative of the results for a full year.
2. PREFERRED STOCK
As of March 31, 1997, preferred dividend arrearages were $274,180. The
Company paid $41,127 of these arrearages during the quarter ended June 30, 1997.
For the quarter ended June 30, 1997, the Company declared dividends totaling
$28,645 which are expected to be paid during the second quarter of the Company's
fiscal year.
6
<PAGE>
3.EARNINGS PER COMMON SHARE
The computation of earnings per common share for the three-month
periods ended June 30, 1996 and 1997, respectively, is presented on a fully
diluted basis and is based upon the weighted average number of common shares
outstanding for those periods. Any dilutive effect of stock options and warrants
was considered in computation of earnings per common share. In the computation
for the three-month periods ended June 30, 1996 and 1997, cumulative preferred
dividends in the amounts of $30,915 and $28,645 were subtracted from net income
to arrive at the earnings applicable to common shareholders.
4.LITIGATION
The Company is party to legal proceedings incidental to its business
from time to time. Certain claims, suits and complaints arise in the ordinary
course of business and may be filed against the Company. Based on facts now
known to the Company, management believes all such matters are adequately
provided for, covered by insurance or, if not so covered or provided for, are
without merit, or involve such amounts that would not materially adversely
affect the consolidated results of operations or financial position of the
Company.
Item 2.Management's Discussion and Analysis of Financial
- --------------------------------------------------------
Condition and Results of Operations
-----------------------------------
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO JUNE 30,
1996
Revenue from franchising operations which includes initial license
fees, continuing license fees and direct financing leases increased by $73,839
(10%). This increase occurred primarily due to an increase in initial license
fees and continuing license fees. The initial license fees increased by $42,500
(19%) due to the addition of new franchises and the continuing license fees
increased by $33,329 (6%) due to the fleet growth at existing franchises and the
Company's dedication of more resources to the collection effort. Revenues from
insurance premiums were $72,573 due to the new reinsurance program that started
in March 1997, partially offset by a $12,190 (48%) reduction in the physical
damage insurance program ("CLC") and by a $17,419 (100%) reduction in the
national insurance program ("URM") due to its termination and replacement by CAR
Insurance. Other revenue increased by $21,784 (101%) due primarily to increased
internal marketing activity.
Total operating expenses increased by $142,508 (17%) in this period
compared to the same period in the prior year. Salary expense increased by
$7,426 (4%) primarily as a result of additional hires in response to the growth
of the Company. General and administrative expenses increased by $38,796 (20%),
which resulted primarily from additional expenses related to
7
<PAGE>
the new reinsurance company. Sales and marketing expenses increased by $64,552
(35%), which resulted primarily from the new reinsurance program, an addition to
commission expense due to a larger amount of franchise sales made in this period
compared to the same period in the prior year, and a partially non-recurring
promotional campaign to sell more franchises.
Net interest income increased $2,820 (18%), primarily due to the
Company's collection effort.
Depreciation and amortization expense increased by $2,203 (8%) in this
period compared to the same period in the prior year. This increase was
primarily due to the additional investment in computer software and hardware.
The Company realized operating income of $167,043, before taxes and
interest, for the three-month period ended June 30, 1997 compared to operating
income of $163,135 for the same period in the prior year, reflecting an increase
of $3,908 (2%). This increase resulted primarily from the increase in initial
license fees and continuing license fees due to the addition of new franchises
and the Company's collection efforts.
Income tax expense for the three-month period ended June 30, 1997
increased by $30,600 (140%) compared to the three-month period ended June 30,
1996 due to higher pre-tax earnings and the depletion of the Company's federal
income tax net operating loss carryforward.
Inflation has had no material impact on the operations and financial
condition of the Company for the periods presented.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997, the Company had working capital of $1,261,473
compared to $1,191,019 at March 31, 1997. This increase of $70,454 primarily
resulted from the net profit earned during the three-month period ended June 30,
1997.
The Company has finalized an $800,000 letter of credit with The Chase
Manhattan Bank ("Chase") in connection with the Company's new CAR Insurance
subsidiary. This letter of credit is part of the reinsurance agreement with
American International Group ("AIG") to secure payment of claims. Funds drawn
against the letter of credit bear interest at 3% plus Chase's prime commercial
lending rate (which prime rate was 8.5% on August 8, 1997). For the quarter
ended June 30, 1997, AIG has not drawn any funds from the letter of credit. This
letter of credit is secured by all of the Company's assets.
The Company is committed under capital lease agreements for various
equipment, and it rents its office facilities under the terms of an operating
lease. The capital lease obligations were $38,667 and $36,646 at June 30,
8
<PAGE>
1996 and June 30, 1997, respectively. The Company is utilizing its working
capital to pay for these obligations.
The furniture, equipment and leasehold improvements decreased by
$252,724 (34%). This decrease accrued primarily due to writing off the assets
that were not in use and were fully depreciated.
Cash provided by operations was $118,388, resulting from an increase in
net income and an increase in insurance premiums, deposits, and loss reserves
offset by an increase in accounts and notes receivable and a decrease in
accounts payable and accrued expenses. Insurance premiums, deposits, and loss
reserves increased due to the new insurance program. Accounts and notes
receivable increased primarily from addition of new franchises which financed a
portion of their initial fees owed to the Company by notes issued by the
Company. Accounts payable and accrued expenses decreased primarily due to the
Company's payments on the year-end audit and new advertising programs. Cash used
in investing activities of $29,413 related primarily to the acquisition of
computer software and hardware and maintaining trademarks. Cash used in
financing activities was $59,430, which was applied to payments of preferred
dividends offset by issuance of common stock in connection with the acquisition
of assets.
The Company believes cash provided by operations and its letter of
credit will provide sufficient working capital to support its business plan
through fiscal 1998.
IMPACT OF INFLATION
Inflation has had no material impact on the operations and financial
condition of the Company.
The statements regarding anticipated future performance of the Company
contained in this report are forward-looking statements which are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements involve risks and uncertainties that
could cause the Company's actual results to differ materially from the
forward-looking statements. Factors which could cause or contribute to such
differences include, but are not limited to, the Company's limited experience in
the reinsurance business and the potential for negative claims experience, the
effects of government regulation of the Company's franchise and insurance
programs including maintaining properly registered franchise documents and
making any required alterations in the Company's franchise program to comply
with changes in the laws, competitive pressures from other motor vehicle rental
companies which have greater marketing and financial resources than the Company,
protection of the Company's trademarks, and the dependence on the Company's
relationships with its franchisees. These risks and uncertainties are more fully
described under the caption, "Item 6 - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Important Factors" in the
Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 1997.
All forward-looking statements should be considered in light of these risks and
uncertainties.
9
<PAGE>
Selected Financial Data
-----------------------
Set forth below are selected financial data with respect to the
consolidated statements of earnings of the Company and its subsidiaries for the
fiscal quarters ended June 30, 1996 and 1997 and with respect to the balance
sheets thereof at June 30 in each of those years.
The selected financial data have been derived from the Company's
unaudited consolidated financial statements and should be read in conjunction
with the financial statements and related notes thereto and other financial
information appearing elsewhere herein.
Quarters ended June 30,
-----------------------
1996 1997
-----------------------
(in thousands except per share
and number of franchises)
(Unaudited)
Franchisees' Results
Franchisees' revenue (1) $8,590 $9,145
Number of franchises 444 468
Results of Operations
Total revenue $ 981 $1,127
Total expense 818 960
Income before income
taxes 178 185
Net income 156 132
Earnings per common share (2) $ .03 $ .02
Weighted average number of
shares outstanding 4,828 4,955
Balance Sheet Data
Working capital $ 927 $1,261
Total assets $2,238 $2,748
Long-term obligations $ 35 $ 28
Shareholders' equity $1,424 $1,831
(1) The franchisees' revenue data have been derived from unaudited
reports provided by franchisees in paying license fees.
(2) Earnings per common share are after deducting a provision for
preferred dividends of $30,915 and $28,645 in the quarters ended June 30, 1996
and 1997, respectively.
10
<PAGE>
Part II. Other Information
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
Information is incorporated by reference from the Company's Report Form
10-KSB for the year ended March 31, 1997 under the caption "Item 3 Legal
Proceedings".
ITEM 2. CHANGES IN SECURITIES
- ------- ---------------------
The Company issued 6,875 shares of its common stock on June 4, 1997
pursuant to section 3(a)(9) of the Securities Act of 1933, as amended. The
shares were issued to a holder of the Company's preferred shares who converted
his preferred shares into common shares on a one-for-one basis.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ------- -------------------------------
The information disclosed in footnote 2 to the financial statements
provided in Part I Item 1 of this Report on Form 10-QSB is incorporated herein
by this reference.
ITEM 5. OTHER INFORMATION-RETIREMENT OF STOCK INFORMATION
- ------- -------------------------------------------------
During the quarter ended June 30, 1997, 6,875 shares of preferred stock
were converted to common shares, reducing total outstanding preferred shares
from 1,439,125 to 1,432,250.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) See Exhibit Index following the Signatures page, which is
incorporated herein by reference.
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
11
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Rent-A-Wreck of America, Inc.
-----------------------------
(Registrant)
By: Date:
/s/Mitra Khosravi August 11, 1997
- ----------------------- ---------------------
Mitra Khosravi
Chief Accounting Officer
/s/Kenneth L. Blum, Sr. August 11, 1997
- ----------------------- ---------------------
Kenneth L. Blum, Sr.
CEO and Chairman of
the Board
12
<PAGE>
EXHIBIT INDEX
TO
RENT-A-WRECK of AMERICA, INC.
FORM 10-QSB FOR THE QUARTER ENDED JUNE 30, 1997
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 Standby or Performance Letter of Credit Application And
Agreement to the Chase Manhattan Bank dated June 3, 1997.
4.2 Financing Statement dated June 10, 1997 by Rent-A-Wreck
Leasing in favor of The Chase Manhattan Bank
4.3 General Security Agreement dated June 4, 1997 by Rent-A-Wreck
Leasing in favor of The Chase Manhattan Bank
4.4 Financing Statement dated June 10, 1997 by Rent-A-Wreck
Operation, Inc. in favor of The Chase Manhattan Bank
4.5 General Security Agreement dated June 4, 1997 by Rent-A-Wreck
Operation, Inc. in favor of The Chase Manhattan Bank
4.6 Financing Statement dated June 10, 1997 by Rent-A-Wreck One
Way in favor of The Chase Manhattan Bank
4.7 General Security Agreement dated June 4, 1997 by Rent-A-Wreck
One Way in favor of The Chase Manhattan Bank
4.8 Financing Statement dated June 10, 1997 by Bundy American
Corporation in favor of The Chase Manhattan Bank
4.9 General Security Agreement dated June 4, 1997 by Bundy
American Corporation in favor of The Chase Manhattan Bank
4.10 Financing Statement by Rent-A-Wreck of America, Inc. dated
June 10, 1997 in favor of Chase Manhattan Bank
4.11 General Security Agreement dated June 4, 1997 by Rent-A-Wreck
of America, Inc. in favor of The Chase Manhattan Bank
13
<PAGE>
4.12 Financing Statement dated June 10, 1997 by URM Corporation in
favor of The Chase Manhattan Bank
4.13 General Security Agreement dated June 4, 1997 by URM
Corporation in favor of The Chase Manhattan Bank
4.14 Financing Statement dated June 6, 1997 by Central Life and
Casualty Company, Limited in favor of The Chase Manhattan Bank
4.15 General Security Agreement dated June 4, 1997 by Central Life
and Casualty Company, Limited, in favor of The Chase Manhattan
Bank
10.1 Amendment to Management Agreement between Rent-A-Wreck Of
America, Inc., and K.A.B., Inc. effective July 1, 1997.
27 Financial Data Schedule
14
STANDBY OR PERFORMANCE LETTER OF CREDIT
APPLICATION AND AGREEMENT
This Agreement consists of three parts. The first part is an
Application for a Standby or Performance Letter of Credit in which the
Applicant(s) sets forth the terms of the Letter of Credit that it (they) has
(have) asked us to issue. The second part, which will apply in the event we
issue the Letter of Credit, sets forth the Terms and Conditions that govern the
relationship between the Applicant(s) and us. Among other things, it covers the
obligation of the Applicant(s) to reimburse us, to provide security for their
obligations, and that upon the occurrence of certain events the Applicant(s)
will deliver additional security for its (their) obligations and defines the
rights of, and remedies available to, us under various circumstances. The third
part is an Authorization of the Account Party, if the Account Party is not also
the Order Party, under which the Account Party agrees to be bound by this
Agreement.
Part I: Application for Standby or Performance Letter of Credit
TO: THE CHASE MANHATTAN BANK
Letter of Credit Division
55 Water Street
17th Floor
New York, New York 10041
("Issuer")
The undersigned hereby request(s) that you issue your irrevocable letter of
credit by:
|_| Airmail |_| Teletransmission (Specify means___________) |X| Courier Service
(If none specified, issuer may choose)
IN FAVOR OF: TO BE ADVISED THROUGH: |_| CHECK BOX IF
ALSO TO BE
CONFIRMED BY
ADVISING BANK
National Union Fire Ins. Co. of Pittsburgh, PA
- --------------------------------------------------------------------------------
99 John Street - 10th Floor
- ------------------------------------ ----------------------------------
New York, NY 10270
- ------------------------------------ ----------------------------------
- ------------------------------------ ----------------------------------
- ------------------------------------ ----------------------------------
("Beneficiary")
By order of Rent a Wreck of America, Inc.
---------------------------------------------------------------------
("Order Part")
Consolidated American Rental Insurance Co., Ltd.
("Account Party")
Up to an aggregate amount of $800.00
----------------------------------------------------
Available by (complete A or B, NOT both):
A. |_| Drafts at sight on the Issuer payable at the Issuer's counters
accompanied by:
B. |_| Tested Telex Demand to the Issuer stating:
EXPIRATION DATE:
Drafts and documents must be dated and presented to, or Tested Telex
Demand received by, the Issuer not later than May 31, 1998, provided,
however, that the Letter of Credit will automatically extend without
any amendment for one year from the expiration date or any future
expiration date until May 31, 2002, unless at least sixty (60) days
prior to such expiration date the Bank notifies the Beneficiary and
Applicant that the Letter of Credit will not be renewed for any such
additional period.
|_| Credit to contain "Evergreen" clause with no less than 60 days' notice
of non-renewal to the Beneficiary.
|_| Partial drawings prohibited
Unless otherwise stated herein, the negotiating/paying bank (if any) is
authorized to send all documents to you in one airmail or courier
service, if available.
|_| Special Instructions: Specify below. If additional space is needed,
include additional sheets. These sheets form an integral part of this
Application.
<PAGE>
Part II: Terms and Conditions.
In consideration of the issuance by the Bank of the Credit as requested in the
Application, the Applicant hereby agrees with the Bank as follows:
1. Definitions. The following terms shall have the meanings set forth below:
(1) "Applicant" means each party signing the Application, whether as
Order Party or as Account Party.
(2) "Agreement" means the Application, the Terms and Conditions and the
Authorization.
(3) "Application" means Part I of this Agreement and shall also include
all subsequent written and oral requests by the Applicant for amendments to the
Credit.
(4) "Bank" means the Issuer of the Credit as indicated in Part I.
(5) "Credit" means the letter of credit issued by the Bank by order of
the Applicant pursuant to the Application, as such Credit may be amended from
time to time.
(6) "Instrument" means any draft, receipt, acceptance, teletransmission
(including but not limited to telex or cable) or other written demand for
payment under the Credit.
(7) "Third Party" means any person or entity other than the Applicant
liable for the obligations of the Applicant under this Agreement.
(8) "Uniform Customs and Practice" means the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, or any subsequent revision thereof adhered to by
the Bank on the date the Credit is issued.
2. Reimbursement Obligation.
A. Payment. The Applicant will pay the Bank, on demand, at the Bank's
principal office, in immediately available funds, the amount required to pay
each Instrument or other amount paid or to be paid under the Credit upon
documents presented in substantial compliance with the terms of the Credit. Such
payment shall be made with interest from the date of the Bank's payment of such
Instrument or other amount paid by the Bank to the date of reimbursement. Such
payments shall be made free and clear of and without deduction for any present
or future taxes, levies, imposts, deductions, charges, withholdings, and all
liabilities with respect thereto. The Applicant's payment obligations under this
paragraph 2A are absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this paragraph under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Credit or this Agreement, or any term or provision therein
or herein or in any Instrument or other document relating hereto or thereto,
(ii) any inaccuracy or misstatement or omission in any Instrument or other
document presented under any Credit, (iii) payment under any Credit, letter of
indemnity or release order against presentation of an Instrument or other
document that does not comply in any manner with the terms of such Credit,
letter of indemnity or release order, (iv) the failure of any Instrument or
other document presented under a Credit to bear any reference to the appropriate
Credit, or inadequate reference in any Instrument to the related Credit, or
failure of any document (other than documents expressly required to be presented
under such Credit) to accompany any Instrument at negotiation, or failure of any
person to note the amount of any Instrument or draw under a Credit on the
reviser of such Credit, or to surrender or take up a Credit or to forward
documents apart from Instruments as required by the terms of a Credit, (v) the
Bank of any of its affiliates being the beneficiary of the Credit, (vi) honor of
a presentation or other demand without regard to any nondocumentary condition(s)
in the Credit; (vii) honor of a presentation or other demand up to the amount
available under the Credit against a draft or other documents claiming amounts,
in excess of the amount available; (viii) the occurrence of any of the events,
circumstances or conduct set forth in paragraph 7, or (ix) any other event,
circumstance or conduct whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Applicant's obligations hereunder; provided, that nothing in this paragraph 2A
shall excuse the Bank from liability to the Applicant to the extent of any
direct damages suffered by the Applicant (as opposed to special, consequential
or punitive damages or claims therefor) caused by the Bank's failure to exercise
care (as defined in paragraph 7 when determining whether instruments and other
documents presented under a Credit comply with the terms thereof.
B. Authorization to Charge Accounts. The Applicant expressly authorizes
the Bank (but the Bank shall not be required), without demand for payment or
notice to the Applicant, which are hereby expressly waived, to charge, debit
and/or set off against the demand deposit account referred to at the end of this
Agreement and any other accounts(s) maintained by the Applicant with any office
of the Bank or any subsidiary or any affiliate of the Bank (now or in the
future, whether general or special, time or demand, matured or unmatured) and to
apply immediately, any balance of deposits and any sums credited by or due or
payable from the Bank to the Applicant in such account or accounts, to the
payment of any and all of Applicant's obligations and liabilities to the Bank
hereunder, including without limitation, obligations and liabilities under
Paragraphs 2A and C and Paragraphs 3 and 8 hereunder, all without prejudice to
the rights of the Bank against the Applicant with respect to any and all amounts
which may be or remain unpaid.
C. Foreign Currency Obligations. If the Instrument is in foreign
currency, the Applicant's payment shall be in United States currency at the
Bank's then current selling rate for cable transfers to the place of payment of
the Instrument on the date of such payment or of the Bank's settlement of its
obligation, as the Bank may require. If, for any cause, on the date of payment
or settlement, as the case may be, there is no selling rate or other rate of
exchange generally current in New York for effecting such transfers, the
Applicant will pay the Bank on demand an amount in United States currency
equivalent to the Bank's actual cost of settlement of its obligation however or
whenever the Bank shall make such settlement, with interest from the date of
settlement to the date of payment by the Applicant. The Applicant will comply
with all governmental exchange regulations now or hereafter applicable to the
Credit or Instrument or payments related thereto and will pay the Bank, on
demand, in United States currency, such amount as the Bank may have been
required to expend on account of such regulations.
3. Payment of Commissions, Expenses, Counsel Fees, Interest, Additional Costs
and Facility Fees.
A. Commissions, Etc. The Applicant will pay the Bank, on demand, at its
principal office at 270 Park Avenue, New York, New York 10017, the Bank's
commission and all charges, costs and expenses paid or incurred by the Bank in
connection with the Credit, including fees and charges of counsel, and costs
allocated by the Bank's internal legal department in connection with the
preparation, performance or enforcement of this Agreement or the Credit.
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Commissions payable hereunder shall be at the rate customarily charged by the
Bank at the time in like circumstances.
B. Interest. The Applicant agrees to pay interest on any amounts due
under this Agreement which are not paid when due at 3% plus that rate of
interest from time to time announced by the Bank at its principal office, as its
prime commercial lending rate, which rate shall not exceed the maximum rate
permissible under applicable law.
C. Additional Costs. The Applicant shall also pay to the Bank on demand
such amounts as the Bank in its sole discretion determines are necessary to
compensate it for any cost attributable to its issuing or having the Credit
outstanding. Such costs shall include any cost resulting from the application of
any law or regulation to the Bank regarding any reserve, assessment, capital
adequacy or similar requirement relating to letters of credit or the
reimbursement agreements with respect thereto or to similar liabilities or
assets of the Bank, whether existing at the time of issuance of the Credit or
adopted thereafter. In the case of sale of a participation permitted by
paragraph 15 hereof, all amounts payable by the Applicant under this paragraph,
shall be determined as if the Bank had not sold such participation. The
Applicant acknowledges that there may be various methods of allocating costs to
the Credit and agrees that the Bank's allocation for purposes of determining the
costs referred to above (including the cost of maintaining capital required in
connection with the Credit) shall be conclusive and binding upon the Applicant,
provided such allocation is made in good faith. The Applicant also agrees to pay
all withholding, stamp and other taxes or duties imposed by any taxing authority
on payments under the Credit and this Agreement and to indemnify the Bank
against all liabilities, costs, claims, and expenses resulting from any omission
to pay or delay in paying any such duty or tax.
D. Facility Fee. A non-refundable facility fee of 1% per annum, payable
in advance of the stated amount of the Credit.
4. Successors; Bank's Honoring. The Bank may honor, as complying with the terms
of the Credit and of the Application, any drawing by, or Instrument or other
document signed or issued by, a person (or a transferee of such person)
purporting to be an administrator, executor, trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, liquidator, receiver, other
legal representative or successor by operation of law of the party authorized
under the Credit to draw under the Credit or to sign or issue such Instruments
or other documents; provided, that any such drawing, Instrument or other
document is otherwise in substantial compliance with the Credit.
5. Amendment, Change, Modification, No Waiver. No amendment, change,
modification or waiver to which the Bank has consented shall be deemed to mean
that the Bank will consent or has consented to any other or subsequent request
to amend, change, modify or waive a term of the Credit. The Bank shall not be
deemed to have amended, changed or modified any term hereof or to have waived
any of its rights hereunder, unless the Bank or its unauthorized agent shall
have consented to such amendment, change or modification in writing or signed
such waiver.
6. U.C.P.; Agreements and Acknowledgments.
A. The Uniform Customs and Practice. The Uniform Customs and Practice
shall be binding on the Applicant and the Bank except to the extent it is
otherwise expressly agreed.
B. Other Agreements and Acknowledgments.
It is also agreed that:
(1) user(s) of the Credit shall not be deemed agents of the Bank;
(2) none of the Bank, its affiliates, subsidiaries or its
correspondents shall be responsible for, and the obligation of
the Applicant to pay the Bank under Section 2 hereof shall not
be affect by, (i) any act, error, neglect, default, omission,
insolvency or failure in business of any of its correspondents
or (ii) the form, validity, accuracy, sufficiency, legal
effect or genuineness of any instrument or other document
presented under the Credit;
(3) any action, inaction or omission on the part of the Bank or
any of its affiliates, subsidiaries or correspondents, under
or in connection with the Credit or the related instruments,
documents or property, if in good faith, shall be binding upon
the Applicant and shall not place the Bank or any such
affiliate, subsidiary or correspondent under any liability to
the Applicant or affect in any way whatsoever the Applicant's
obligation to pay the Bank under Section 2 hereof and in no
event shall the Bank or any such affiliate, subsidiary or
correspondent be liable for any special or consequential
damages;
(4) the Applicant will promptly examine: (i) the copy of the
Credit (and of any amendments thereof) sent to it by the Bank;
and (ii) all instruments and documents delivered to it from
time to time, and, in the event of any claim of noncompliance
with Applicant's instructions or other irregularity, the
Applicant will immediately notify the Bank thereof in writing,
the Applicant being conclusively deemed to have waived any
such claim against the Bank and any of its affiliates,
subsidiaries and correspondents unless notice is given as
aforesaid;
(5) if the Credit states any condition (whether for information or
otherwise) without specifying the document to be presented to
determine compliance therewith, the Bank may (but shall not be
obligated to) treat such condition as not stated and disregard
it for purposes of determining compliance with the terms of
the Credit; and
(6) the Bank shall have no obligation to notify the Applicant of
discrepancies in any Instruments or other documents presented
under the Credit and any such notification or request for a
waiver of such discrepancies shall not constitute a waiver of
such discrepancies by the Bank nor any agreement to notify or
seek a waiver of any future discrepancies.
7. Instructions; No Liability. Instructions whether given orally (in person or
by telephone), in writing (by teletransmission or other means) or by electronic
means may be honored by the Bank when received from anyone purporting to be
authorized to give such instructions for the Applicant. Each oral instruction
shall be confirmed in writing by the person giving such instruction, or other
authorized officer, but the Bank's responsibility with respect to any
instruction shall not be affected by its failure to receive, or the content of,
such confirmation. The Bank shall have no responsibility to notify Applicant of
any discrepancies between Applicant's oral instructions and its written
confirmation, and in the event of any such discrepancy, the oral instructions
shall govern. The Bank shall be fully protected in, and shall incur no liability
to the Applicant for, acting upon any oral, written or electronic instructions
which the Bank in good faith believes to have been given by any authorized
person, and in no event shall the Bank be liable for special, indirect or
consequential damages. The Bank may, at its option, use any means of verifying
any
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instructions received by it. The Bank also may, at its option, refuse to act on
any instruction or any part thereof, without incurring any responsibility for
any loss, liability or expense arising out of such refusal. The parties hereto
further agree that in the absence of gross negligence or willful misconduct on
the part of the Bank (as finally determined by arbitration pursuant to paragraph
14, the Bank shall be deemed to have acted with care when determining whether
Instruments and other documents presented under a Credit comply with the terms
thereof. Further, neither the Bank nor any of its affiliates, subsidiaries or
correspondents shall be deemed to have acted with gross negligence or willful
misconduct or to have any liability or responsibility under any circumstances by
reason of or in connection with:
(i) any of the circumstances referred to in paragraph 2A. (i) -
(vii);
(ii) errors, omissions, interruptions or delays in transmission or
in delivery of any message by mail, telex, cable, telegraph,
wireless or other teletransmission or computer transmission or
oral instructions, whether or not they may be in cipher; or,
in the case of a Computerized Request, any machine or computer
breakdown or malfunction, interruption or malfunction of
communication facilities or for any other similar or
dissimilar cause beyond its reasonable control;
(iii) any act, error, neglect or default, omission, insolvency or
failure in business of any of its correspondents or any Third
Party;
(iv) the form, validity, accuracy, sufficiency, legal effect or
genuineness of any Instrument or other document presented
under a Credit;
(v) any error in interpretation of technical terms;
(vi) failure to notify Applicant of beneficiary's request for an
amendment, termination, transfer of drawing rights or
assignment of proceeds, of a presentation, of a discrepancy in
documents, of the facilitation of a cure or of dishonor or
honor or any other action or inaction toward the beneficiary
of a nominated bank (except for failure to notify Applicant of
the disposition of the documents after honor);
(vii) any action, inaction or omission on the part of the Bank or
any of its affiliates, subsidiaries or correspondents,
required or permitted under the Uniform Commercial Code, the
Uniform Customs and Practice, the United Nations Convention on
Independent Guarantees and Standby Letters of Credit or the
International Standby Practices 1997 as chosen in or as in
effect where and when the Credit is issued;
(viii)shipment(s) under such Credit exceeding the quantity called
for under such Credit;
(ix) any drawing by, or Instrument or other document otherwise in
order signed or issued by, a person (or a transferee of such
person) purporting to be an administrator, executor, trustee
in bankruptcy, debtor in possession, assignee for the benefit
of creditors, liquidator, receiver or other legal
representative or successor by operation of law of the party
authorized under such Credit to draw or issue such Instrument
or other document;
(x) any consequence arising from causes beyond the control of the
Bank; or
(xi) the Bank accepting and/or making payment upon Instruments or
other documents which appear on their face to be in
substantial compliance with the terms of a Credit without
undertaking any further investigation, regardless of any
notice or information to the contrary, or the Bank refusing to
accept and/or make payment upon such Instruments or documents
if such Instruments or documents are not in strict compliance
with the terms of such Credit.
8. Indemnification. The Applicant agrees to indemnify and hold harmless the
Bank, each affiliate and subsidiary of the Bank, and the correspondents of any
of them, against any and all claims, losses, liabilities, damages, costs,
penalties and fines, including reasonable counsel fees and allocated costs of
internal counsel, howsoever arising from or in connection with the Credit,
including, without limitation, any such claim, liability, damage, cost liability
or fine arising out of any transfer, sale, delivery, surrender or endorsement of
any document at any time(s) held by the Bank or any of its affiliates or
subsidiaries, or held for the account of any of them by any correspondent of any
of them, or arising out of any action, suit or proceeding for injunctive or
other judicial or administrative relief or any other judicial or governmental
order and affecting, directly or indirectly, the Bank or such affiliate,
subsidiary or correspondent.
9. Licenses. The Applicant will procure promptly any necessary import, export or
other licenses in connection with the Credit and any property shipped
thereunder, and will comply with all foreign and domestic governmental
regulations in regard to the shipment of such property or the financing thereof
and will furnish the Bank on its demand, with evidence thereof.
10. Pledge and Assignment of Security.
A. Pledge and Grant of Security Interests. As security for the payment
or performance of (i) any and all of the Applicant's obligations and/or
liabilities to the Bank under this Agreement (including the contingent
obligation under paragraph 11 to pay or deliver to the Bank the maximum amount
available under the Credit whether or not a drawing, claim or demand for payment
has been made under the Credit) and (ii) all other obligations and/or
liabilities of the Applicant to the Bank, absolute or contingent, due or to
become due, or which are now or may at any time(s) hereafter be owing by the
Applicant to the Bank, the Applicant hereby:
(1) pledges and/or grants to the Bank a continuing lien upon and
assignment of all right, title and interest of the Applicant in and to
the balance of every deposit account, now or at any time hereafter
existing, of the Applicant with any office of the Bank or any affiliate
or subsidiary thereof, wherever located, and any other claims of the
Applicant against any office of the Bank or any affiliate or subsidiary
thereof, and in and to all money, instruments, securities, documents,
chattel paper, demands, precious metals, funds, and all claims and
demands and rights and interest therein of the Applicant, and in and to
all evidences thereof, which have been or at any time shall be
delivered to or otherwise come into the possession, custody or control
of any office of the Bank or any affiliate or subsidiary thereof, or
into the possession, custody or control of any affiliate, agent or
correspondent of any such entity for any purpose, whether or not for
the express purpose of being used by any such entity as collateral,
security or for safekeeping and the Bank shall be deemed to have
possession, custody or control of all such property actually in transit
to, or set apart for, it or any of its affiliates or subsidiaries (or
any of their agents, property actually in transit to, or set apart for,
it or any of its affiliates or subsidiaries (or any of their agents,
correspondents or others acting in their behalf), it being understood
that the receipt at any time by such entities (or any of their agents,
correspondents, or others acting in their behalf), of other security of
whatever nature,
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including cash, shall not be deemed a waiver of any of the Bank's
rights or powers hereunder. The Applicant agrees that such affiliates
or subsidiaries shall be agent(s) of the Bank for the purpose of
perfecting a security interest in any such deposit accounts or other
property; and
(2) pledges and/or grants to the Bank a security interest in any and
all property the Applicant holds as security for the obligations of any
party related to the Credit, and further, subordinates its right to
payment from such property and the proceeds thereof to the rights of
the Bank, until the Bank is paid in full, and agrees that it will hold
in trust for and promptly deliver to the Bank any payment received from
such property or proceeds.
B. Additional Rights of the Bank. The Bank is authorized to take any
action necessary to protect its rights in the security provided hereunder
(whether or not a drawing, claim or demand for payment has been made under the
Credit) including but not limited to segregating all or any part of the balance
of any deposit account referred to in paragraph 10(A) or other security to be
applied to the Applicant's obligations to the Bank as provided in paragraph 11.
11. Events of Default; Obligations; Remedies. Upon the occurrence of any of the
events described in this paragraph 11 (whether or not a drawing, claim or demand
for payment has been made under the Credit) the Applicant agrees that (A) any
and all obligations and liabilities of the Applicant to the Bank, matured or
unmatured, absolute or contingent, whether now existing or hereafter incurred
(including the obligations hereunder), shall be due and payable forthwith
without notice or demand and (B) the Bank may (i) charge, debit and/or setoff
against any account of the Applicant maintained at any office of the Bank or at
any subsidiary or affiliate of the Bank (now or in the future, whether general
or special, time or demand, matured or unmatured) for the maximum amount
available under the Credit and also for any and all other obligations and
liabilities of the Applicant (and for those of each of its subsidiaries and
affiliates) to the Bank hereunder or otherwise, matured or unmatured, absolute
or contingent, whether now existing or hereafter incurred, (ii) demand that the
Applicant, and the Applicant shall upon such demand, deliver, transfer or assign
to the Bank cash or other property of a value and character satisfactory to the
Bank (together with executed financing statements in such form as the Bank may
reasonably require) as security for all such obligations and liabilities and/or
(iii) liquidate any or all of the property pledged, assigned and/or in which the
Bank has been granted a security interest, and in each case, the Bank shall hold
such amounts, proceeds and collateral as security for (or at the Bank's option,
make payment in satisfaction of) the Applicant's (and such subsidiaries' and
affiliates') obligations and liabilities, matured or unmatured, absolute or
contingent, whether now existing or hereafter incurred, hereunder or otherwise
to the Bank;
(1) if there shall occur any material adverse change in the condition
(financial or otherwise), business, operations or prospects of the
Applicant or any Third Party;
(2) if any statement made, or any information or report furnished to,
the Bank in connection with this Agreement contained any
misstatement of a material fact or omitted to state a material fact
or any fact necessary to make any statement contained therein not
materially misleading;
(3) the death or dissolution of the Applicant or any Third Party;
(4) if any obligation and/or liability of the Applicant or any Third
Party shall not be paid or performed when due, or any default or
event of default (as such is defined under any agreement for the
payment of money to which the Applicant or a Third Party is a
party) remains uncured after the cure period provided in the
related agreement has elapsed; or
(5) if the Applicant or a Third Party shall become insolvent (however
such insolvency may be evidenced or defined) or generally not be
able to pay its debts as they become due, or make a general
assignment for the benefit of creditors, or if the Applicant or a
Third Party shall suspend the transaction of its usual business or
be expelled or suspended from any exchange, or if an application is
made by any judgment creditor of the Applicant or a Third Party for
an order directing the Bank to pay over money or to deliver other
property, or if a petition in bankruptcy shall be filed by or
against the Applicant or a Third Party, or if a petition shall be
filed by or against the Applicant or any proceeding shall be
instituted by or against the Applicant or a Third Party for any
relief under any bankruptcy or insolvency laws or any law relating
to the relief of debtors, readjustment or indebtedness,
reorganization, composition or extensions, or if any governmental
authority, or any court at the instance of any governmental
authority, shall take possession of any substantial part of the
property of the Applicant or a Third Party or shall assume control
over the affairs or operations of the Applicant or a Third Party,
or if a receiver or custodian shall be appointed of, or a writ or
order of attachment or garnishment shall be issued or made against,
any of the property or assets of the Applicant or a Third Party or
the Applicant or a Third Party shall represent that any of the
foregoing has occurred or will occur;
(6) if a temporary restraining order, injunction (preliminary or
permanent) or any similar order is issued in connection with the
Credit or any instrument or document relating thereto which order
may apply, directly or indirectly, to the Bank; or
(7) the Bank shall in good faith deem itself insecure at any time.
(8) failure to furnish to the Bank within the time periods specified or
as otherwise required by the Bank;
(i) Borrower's 10K Report filed with the Securities and Exchange
Commission ("SEC") within one hundred and twenty (120) days of
fiscal year end,
(ii) Borrower's 10Q Report filed with the SEC within sixty (60)
days of each quarter's end, and
(iii)quarterly schedules of all accounts receivable and accounts
payable of the Borrower and its wholly owned subsidiaries
showing separately those which are more than thirty (30) days,
sixty (60) days and ninety (90) days old, by the 10th business
day of the quarter then ended;
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(9) if the Consolidated Tangible Net Worth is less than $1,300,000
at any fiscal year end.
("Consolidated Tangible Net Worth" is defined, at any date as
(1) the aggregate amount at which all assets of the Borrower
and its subsidiaries would be shown on a balance sheet at such
date after deducting capitalized research and development
costs, capitalized interest, debt discount and expense,
goodwill, patents, trademarks, copyrights, franchises,
licenses and such other assets as are properly classified as
"intangible assets", less (2) the aggregate amount of all
indebtedness, liabilities (including tax and other proper
accruals) and reserves of the Borrower and its subsidiaries,
excluding approved subordinated debt).
(10) if the ratio of Consolidated Total Unsubordinated Liabilities
to Consolidated Tangible Net Worth plus approved Subordinated
Debt exceeds 1:1 at any fiscal year end.
("Consolidated Total Unsubordinated Liabilities" is defined as
all items which, in accordance with generally accepted
accounting principles applied on a consistent basis, would
properly be included on the liability side of the balance
sheet (other than approved subordinated debt, capital stock,
capital surplus and retained earning), as of the date on which
the amount of Consolidated Total Unsubordinated Liabilities is
to be determined, of the Borrower and its Subsidiaries
computed and combined in accordance with generally accepted
accounting principles applied on a consistent basis.)
(11) if the ratio of consolidated net cash flow (earnings before
interest expense, taxes, depreciation, amortization) to debt
service coverage (all payments of principal, interest on loans
and capital lease payments, dividends on preferred stock and
dividends on common stock exceeding debt service coverage)
falls below 2.25:1 for any fiscal year end.
12. Continuing Rights and Obligations. The Bank's rights and liens hereunder
shall continue unimpaired, and the Applicant shall be and remain obligated in
accordance with the terms and provisions hereof, notwithstanding the release
and/or substitution of any property which may be held as security hereunder at
any time, or of any rights or interest therein or the release of any Third
Party. The Applicant waives any defense whatsoever which might constitute a
defense available to, or discharge of, a surety or a guarantor. No delay,
extension of time, renewal, compromise or other indulgence which may occur or be
granted by the Bank shall impair the Bank's rights or liens hereunder.
13. Partnership Applicants; Multiple Applicants, Etc. If the Applicant is a
partnership, its obligation hereunder shall continue in force, and apply,
notwithstanding any change in the membership of such partnership, however
arising, or the release of any partner from liability. If more than one entity
and/or person signs this Agreement whether as Order Party or Account Party, (i)
each of them shall be jointly and severally liable hereunder and all the terms
and provisions regarding liabilities, obligations and property of such entities
and/or persons shall apply to any liabilities, obligations and property of any
and all of them and (ii) each of them hereby agrees that, without notice to or
further consent by the other, the liability of any Applicant hereunder may from
time to time, in whole or in part, be renewed, extended, modified, released or
reduced by the Bank without affecting or releasing in any way the liability of
the other Applicant.
14. Arbitration; Jurisdiction and Venue; Service of Process; appointment of
Agent; Waiver; Action. (a) Any dispute, controversy or claim arising out of or
in relation to (i) this Agreement or any Application or Credit or letter of
indemnity issued hereunder or (ii) the breach, dishonor, termination or
invalidity thereof, shall be submitted to and finally settled by arbitration
administered by the International Center for Letter of Credit Arbitration, Inc.
(the "Center") under its Rules of Arbitration (1996) and any subsequent revision
thereof adhered to by the Bank (the "Rules"). The Applicant and the Bank shall
each appoint one arbitrator from the Center's List of Accredited Arbitrators,
and said arbitrators shall appoint the presiding arbitrator. All such
arbitrations shall be held in the City and State of New York, shall be
conducted, recorded and documented in the English language, and shall be subject
to and governed by the laws of the State of New York. No arbitration or other
proceeding in respect of any matter arising under or in connection with the
Credits, the Applications or this Agreement may be brought by the Applicant
against the Bank unless commenced, in compliance with the Rules, within one (1)
year after (i) the expiration date of the applicable Credit or (ii) the alleged
breach shall have purportedly occurred, whichever is earlier.
(b) The Applicant hereby irrevocably consents for itself and its
Property, with respect to any legal proceeding for the recognition or
enforcement of any award, to the nonexclusive jurisdiction of (i) any court of
record located in the City and State of New York and (ii) the United States
District Court for the Eastern or Southern District of the State of New York and
agrees that (1) each such court shall be a proper forum for any such action or
suit and (2) a final judgment in any such action or suit shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided in law. Service of process in any such action or suit may be
made upon the Applicant by mailing a copy of the summons to the Applicant either
at the address set forth below or at the Applicant's last address appearing in
the Bank's records. In addition, if the Applicant is organized or incorporated
in a jurisdiction outside the United States of America, the Applicant designates
the Consul General or equivalent official of the country of incorporation of the
Applicant as the true and lawful agent and attorney-in-fact of the Applicant for
receipt of summons, writs and notices in connection with any such action or
suit.
(c) The Applicant hereby waives:
(i) the right to interpose any claim, setoff, or counterclaim, or any
nature or description whatsoever and any defense based upon the statute of
limitations, laches, waiver, estoppel or setoff, howsoever described;
(ii) any immunity it or its Property may now or hereafter have from
suit, jurisdiction, attachment (whether prior to judgment or in aid of
execution), execution or other legal process;
(iii) any claim against the Bank for consequential, punitive, or
special damages; and
(iv) notice of acceptance of this Agreement.
15. Assignment and Applicable Law. This Agreement may not be assigned by the
Applicant without the prior written consent of the Bank. The Bank may assign or
sell participations in all or any part of the Credit or this Agreement to
another entity and the Bank may disseminate credit information relating to the
Applicant in connection with any proposed participation. This Agreement and all
rights, obligations and liabilities arising hereunder shall be binding upon and
inure to the benefit of the Bank and the Applicant and their respective
successors and permitted assigns and shall be governed by, and construed in
accordance with, the internal laws of the jurisdiction in which the branch of
the Bank to which this Agreement is addressed is located, without reference to
that jurisdiction's principles of
6
<PAGE>
conflicts of law, and to the extent that there is any conflict between such laws
and the Uniform Customs and Practice, the Uniform Customs and Practice shall
control.
Demand Deposit A/C #________________________
THE TERMS AND CONDITIONS SET FORTH ABOVE
HAVE BEEN READ AND ARE HEREBY ACCEPTED AND
MADE APPLICABLE TO THIS AGREEMENT AND THE
CREDIT.
WE WARRANT THAT NO SHIPMENT OR PAYMENT
TO BE MADE IN CONNECTION WITH THIS
AGREEMENT IS IN VIOLATION OF UNITED Rent-A-Wreck of America, Inc.
STATES TRADE, CURRENCY CONTROL OR OTHER (Order Party)
REGULATIONS. WE FURTHER WARRANT THAT THE
AGREEMENT BELOW HAS BEEN DULY AND
VALIDLY EXECUTED BY OR ON BEHALF OF THE 11460 Conridge Drive, #120
ACCOUNT PARTY. Owings Mills, Maryland 21117
(Address)
/s/Kenneth L. Blum, Jr. President
---------------------------------
(Authorized Signature) (Title)
3 Jun. 1997
---------------------------------
(Date)
7
<PAGE>
- --------------------------------------------------------------------------------
(The following is to be executed if the Order Party is not also the Account
Party)
Part III.
AUTHORIZATION AND AGREEMENT OF ADDITIONAL PARTY
NAMED AS ACCOUNT PARTY
To: ISSUER
We join in the request to you to issue the Credit, naming us as Account Party
and, in consideration thereof, we irrevocably agree (i) that the above Applicant
(the Order Party) has sole right to give instructions and make agreements with
respect to the Application, the Credit and the disposition of documents and we
have no right or claim against you or your correspondent in respect of any
matter arising in connection with any of the foregoing, and (ii) to be bound by
all the terms of this Agreement. The Order Party is authorized to assign or
transfer to you all or any part of any security held by the Order Party for our
obligations arising in connection with this transaction and, upon any such
assignment or transfer, you will be vested with all powers and rights in respect
of the security transferred or assigned to you and you may enforce your rights
under this Agreement against us or our property in accordance with the terms of
this Agreement.
------------------------------
(Name)
------------------------------
(Address)
------------------------------
(Authorized Signature) Title)
------------------------------
(Date)
- --------------------------------------------------------------------------------
FOR BANK USE ONLY
L.C.# Collateral Type #
Comp. Cus. # Comm.
L.C.O.# Approval
8
FINANCING STATEMENT Identifying File No.____
ALL INFORMATION MUST BE TYPEWRITTEN OR PRINTED IN INK.
SIGNATURES MUST BE IN INK.
If transaction or transactions wholly or partially subject to
recordation tax indicate amount of taxable debt here. $__________ .
This financing statement dated 6/10/97 is presented to a filing officer for
filing pursuant to Uniform Commercial Code.
1. DEBTOR
Name Rent A Wreck Leasing
----------------------------------------------------------------------
Address 11460 Cronridge Drive, Suite 120, Owings Mills, Maryland 21117
-----------------------------------------------------------------
2. SECURED PARTY
Name The Chase Manhattan Bank
----------------------------------------------------------------------
Address 200 Jericho Quadrangle, Jericho, NY 11753
------------------------------------------------------------------
Person and Address to whom Statement is to be Returned if Different
from above.
3. Maturity date of obligation (if any) 5/31/2002
--------------------------------------
4. This financing statement covers the following types (or items) of property:
(List)
All present and future accounts, contract rights, instruments, documents,
and chattel paper, all returned and repossessed goods relating thereto, all
proceeds thereof, and all books, records, and other property relating to
any of the foregoing.
CHECK |X| THE LINES WHICH APPLY
5. |_| (If collateral is crops) The above described crops are growing or are
to be grown on: (describe estate)
|_| (If collateral is goods which are or are to become fixtures) The above
described goods are affixed or to be affixed to: (describe real estate)
|_| (Proceeds of collateral are also covered)
|_| (Products of collateral are also covered)
/s/Kenneth L. Blum,Jr. - President
- --------------------------------------
(Signature of Debtor)
Rent A Wreck Leasing
- --------------------------------------
Type of Print Above Name on Above Line
Signature Illegible - VP
- -------------------------------------- -----------------------------------
(Signature of Debtor) (Signature of Secured Party)
The Chase Manhattan Bank
- -------------------------------------- -----------------------------------
Type or Print Above Signature on Above Line Type or Print Above Signature on
Above Line
Form Name: General Security Agreement
Document Number: Legal 336 Sort Order 18
CHASE
GENERAL SECURITY AGREEMENT
The undersigned executes and delivers this General Security Agreement
(the "Security Agreement") to THE CHASE MANHATTAN BANK (Chase) and its
affiliates, including subsidiaries, whether now existing or hereafter created
(collectively, "Chase"), having an office located at 380 Madison Avenue, New
York, NY 10017 , in consideration of one or more loans, letters of credit or
other financial accommodation made, issued or extended by Chase to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, Chase shall have the rights, remedies and benefits
hereinafter set forth.
Definitions. The term "Liabilities" shall include any and all
indebtedness, obligations and liabilities of the undersigned to Chase and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by Chase, now or hereafter existing, arising
directly between the undersigned and Chase or acquired outright, conditionally,
as a participation or as collateral security from another by Chase, absolute or
contingent, joint and/or several, secured or unsecured, due or not due,
contractual or tortuous, liquidated or unliquidated, arising by operation of law
or otherwise, direct or indirect, including, but without limiting the generality
of the foregoing, indebtedness, obligations or liabilities to Chase of the
undersigned as a member of any partnership, syndicate, association or other
group, and whether incurred by the undersigned as principal, surety, endorser,
guarantor, accommodation party or otherwise.
The term "Collateral" means all personal property and fixtures of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including but not limited to, the balance of every deposit account,
now or hereafter existing, of the undersigned with Chase and any other claim of
the undersigned against Chase, now or hereafter existing, and all money, goods
(including equipment, farm products and inventory), instruments, securities,
documents, chattel paper, accounts, contract rights, general intangibles,
credits, claims, demands, precious metals and any other property, rights and
interests of the undersigned, and shall include the proceeds, products and
accessions of and to any thereof.
The term "Obligor" means the undersigned or any maker, drawer,
acceptor, endorser, guarantor, surety, accommodation party or other person
liable upon or for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Grant of Security Interest. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to Chase a security interest in, a
general lien upon and/or right of set-off against the Collateral.
Maintenance of Collateral. At any time and from time to time, the
undersigned will: (a) deliver and pledge to Chase, endorsed and/or accompanied
by such instruments of assignment and transfer in such form and substance as
Chase may request, any and all instruments, documents and/or chattel paper as
Chase may specify in its demand; (b) give, execute, deliver, file and/or record
any notice, statement, instrument, document, agreement or other papers that may
be necessary or desirable, or that
<PAGE>
Chase may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable Chase to exercise and
enforce its rights hereunder or with respect to such security interest; (c) keep
and stamp or otherwise mark any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contract rights
in such manner as Chase may require; (d) permit representatives of chase at any
time to inspect its inventory and to inspect and make abstracts from the
undersigned books and records pertaining to inventory, accounts, contract
rights, chattel paper, instruments and documents; and (e) obtain Chase's consent
prior to any change of name, address, legal entity status, location of books and
records or location of Collateral. The right is expressly granted to chase, at
its discretion, to notify warehousemen or any other persons in possession of
Collateral of Chase's security interest therein and to file one or more
financing statements under the Uniform Commercial Code executed by chase alone
naming the undersigned as debtor and Chase as secured party and indicating
therein the types of describing the items of Collateral herein specified. A
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement. Without the prior written consent of Chase
the undersigned will not file or authorize or permit to be filed in any
jurisdiction any such financing or like statement in which Chase is not named as
the sole secured party. With respect to the Collateral, or any part thereof,
which at any time shall come into the possession or custody or under the control
of Chase or any of its agents, associates, or correspondents, for any purpose,
the right is expressly granted to Chase, at its discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to Chase; and to exercise or cause its nominee to exercise all or any
powers with respect to the Collateral with same force and effect as an absolute
owner thereof; all without notice (except such notice as may be required by
applicable law and cannot be waived) and without liability except to account for
property actually received by it. Without limiting the generality of the
foregoing, payments, distributions and/or dividends, in securities, property or
cash, including without limitation dividends representing stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
Collateral or any part thereof or resulting from any split-up, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be paid directly to and retained by Chase and held by it until
applied as herein provided, as additional collateral security pledged under and
subject to the terms hereof. Chase shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
associates, or correspondents.
Insurance. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as Chase may approve, at
the undersigned's expense, and, upon Chase's request, the policies shall be duly
endorsed in Chase's favor and delivered to Chase. If the undersigned shall
default in this regard, Chase shall have the right to insure and charge the cost
to the undersigned. Chase assumes no risk or responsibility in connection with
the payment or nonpayment of losses, Chase's only responsibility being to credit
the undersigned with any insurance payment received on account of losses. In the
event of any default under this Security Agreement, Chase shall have power of
attorney to cancel, assign, or surrender any insurance policy or policies and to
collect the return premiums due thereon and to apply the proceeds thereof to the
Liabilities secured hereby. The undersigned will immediately notify Chase in
writing of any damage to or loss of any of the Collateral which is tangible
property.
Collection and Disposition. Chase at its discretion may, whether any of
the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, sue 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 shall
be under no obligation to do so, or Chase may extend the time of payment,
arrange for payment in 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 undersigned. Chase
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. Chase may use or
<PAGE>
operate any of the Collateral for the purpose of preserving the Collateral or
its value in the manner and to the extent Chase deems appropriate, but Chase
shall be under no obligation to do so.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of Chase, assemble the
Collateral at such place or places as Chase designates in its request, and, to
the extent permitted by applicable law, Chase shall have the right, with or
without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. Chase shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, with respect to the Collateral, or any part thereof, which
shall then be or shall thereafter come into the possession or custody of Chase
or any of its agents, associates or correspondents, Chase may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as Chase may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk
all or any of the Collateral, at any broker's board or at public or private
sale, in any reasonable manner permissible under the Uniform Commercial Code
(except that, to the extent permitted thereunder, the undersigned hereby waives
the requirements of said Code), and Chase or anyone else may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity or
redemption, of the undersigned, any such demand, notice or right and equity
being hereby expressly waived and released. The undersigned will pay to Chase
all expenses (including reasonable attorneys' fees and legal expenses incurred
by Chase) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the Liabilities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement of any of the Collateral or
receipt of the proceeds thereof, by litigation or otherwise, including expense
of insurance; and all such expenses shall be Liabilities secured by this
Security Agreement. Chase, at any time, at its option, may apply the net cash
receipts from the Collateral to the payment of principal of and/or interest on
any of the Liabilities, whether or not then due, making proper rebate of
interest or discount. Notwithstanding that Chase, whether in its own behalf
and/or on behalf of another or others, may continue to hold Collateral and
regardless of the value thereof, the undersigned shall be and remain liable for
the payment in full, principal and interest, of any balance of the Liabilities
and expenses at any time unpaid. Chase may exercise its rights with respect to
Collateral without resorting to or regard to other collateral or sources of
reimbursement for the Liabilities.
Representations and Warranties. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing; (b) it has the power to execute and deliver this Security Agreement
and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance ; (c) such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its organizational documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets; (d) to the best of undersigned's knowledge, all governmental and
other consents that are required to have been obtained by it with respect to
this Security Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; (e) its obligations
under this Security Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with its terms except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally; (f) all financial statements
and related information furnished and to be furnished to Chase from time to time
by the undersigned are true and compete and fairly present the financial or
other information stated therein as at such dates or for the periods covered
thereby; (g) there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of the undersigned, threatened against or affecting the
<PAGE>
undersigned before any court, governmental agency or arbitrator, which involve
forfeiture of any assets of the undersigned or which may materially adversely
affect the financial condition, operations, properties or business of the
undersigned or the ability of the undersigned to perform its obligation under
this Security Agreement; and (h) there has been no material adverse change in
the financial condition of he undersigned since the last such financial
statements or information. If the undersigned is an individual, the undersigned
represents and warrants the correctness of clauses (c), (d), (e), (f), (g) and
(h) above to the extent applicable to an individual.
Additional Collateral. If at any time the Collateral shall be
unsatisfactory to Chase, upon the demand of Chase the undersigned will furnish
such further security or make such payment on account of the Liabilities as will
be satisfactory to Chase.
Default. IF any of the following events of default shall occur (each an
"Event of Default"):
(a) any Obligor shall default in the performance of any of its
agreements herein or in any instrument or document delivered
pursuant to this Security Agreement or the Liabilities (including a
failure to comply with the preceding paragraph);
(b) if any Obligor is an individual, Obligor shall die or be declared
incompetent;
(c) any Obligor
(i) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such
debts become due;
(ii) shall make an assignment for the benefit of
creditors;
(iii) shall file a petition in bankruptcy or for any relief
under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt,
dissolution or liquidation;
(iv) shall have any such petition filed against it and the
same shall remain undismissed for a period of 30 days
or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its
property;
(d) any action, suit, proceeding or investigation against or affecting
any Obligor before any court or governmental agency which involves
forfeiture of any assets of any Obligor shall have been commenced;
or
(e) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against any
Obligor and shall continue unsatisfied and in effect for a period
of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
THEN, unless and to the extent that Chase shall otherwise elect, all of the
Liabilities shall become and be due and payable forthwith. THE RIGHTS OF CHASE
SET FORTH IMMEDAITELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY
OTHER RIGHT OF CHASE UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF CHASE
TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR
CONDITION OR EVENT).
Setoff. In the event that any amount becomes due and payable hereunder
and Chase shall have demanded payment thereof from the undersigned, in addition
to all other rights and remedies, Chase (including subsidiaries and each and
every affiliate) is hereby irrevocably authorized, without prior notice to the
undersigned, to set off any balances held for the account of or any other
liability owing by chase or any such affiliate to the undersigned at any of
Chase's (or such subsidiary's or affiliate's) offices, in Dollars or any other
currency, against any of the obligations of the undersigned to Chase, as Chase
may elect.
<PAGE>
Notices. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if delivered by and or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of Chase as first set
forth above, or (c) of the undersigned or chase at such other address as the
undersigned or Chase shall specify to the other in writing.
Entire Agreement, Amendment and Waiver. This Security Agreement
constitutes the entire agreement between the undersigned and Chase in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Chase in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder.
General Waivers. The undersigned hereby waive(s) presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "Secured
Documents"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair Chase's
enforcement of this Security Agreement or release any Collateral from Chase's
security interest hereunder. By way of example, but not in limitation of Chase's
rights under this Security Agreement, Chase does not have to give any
undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default;
(d) any action which Chase does or does not take regarding any Obligor
or any other person or any other collateral securing the
Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair Chase's enforcement of its security interests. By way of example,
but not in limitation of Chase's rights under this Security Agreement, Chase may
do any of the following without notice to the undersigned except to the extent
that notice to the undersigned is required under another Secured Document or in
each case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part
of the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or
property which is in Chase's possession as collateral security for
the Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to Chase in whole or in part
for the Liabilities, or accept any additional parties or
guarantors;
(f) delay or refrain from exercising any of Chase's rights;
(g) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(h) apply any money or property of undersigned or that of any other
party liable to Chase for any part of the Liabilities in any order
you choose.
<PAGE>
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE OR ANY
FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Rights Cumulative. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies to
which Chase may be entitled either by operation of law or pursuant to any other
document or instrument delivered or from time to time to be delivered to Chase
in connection with any of the Liabilities.
Governing Law; Jurisdiction. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
Connecticut, or New Jersey, depending on the location of the Chase office set
forth in this Security Agreement. The undersigned consent(s) to the nonexclusive
jurisdiction and venue of the state or federal courts located in such state. In
the event of a dispute hereunder, suit may be brought against the undersigned in
such courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute shall
be binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
Commercial Transaction. IF THE UNDERSIGNED IS A CONNECTICUT DOMICILED
ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT THIS
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY AND
ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND HEARING AND
ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES IN CONNECTION
WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
Assignment. Chase may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral, and thereafter shall be
fully discharged from all responsibility with respect to the Collateral so
assigned, transferred and/or delivered. Such transferee shall be vested with all
the powers and rights of Chase hereunder with respect to such Collateral, but
Chase shall retain all rights and powers hereby given with respect to any of the
Collateral not so assigned, transferred or delivered.
Waiver of Presentment, etc. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
Miscellaneous. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. The Chase Manhattan Bank (Chase) shall act for itself and
its affiliates as collateral agent hereunder. This Security Agreement shall be
binding upon the heirs, executors, administrators, assigns or successors of the
undersigned; shall constitute a continuing agreement, applying to all existing
as well as future transactions between Chase and the undersigned that shall be
at any time closed; and shall so continue in force notwithstanding any change in
any partnership party hereto, whether such change occurs through death,
retirement or otherwise.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
cause this instrument to be duly executed by his proper officer(s) this 4th day
of June, 1997.
Address for Notices:
11460 Cronridge Drive Rent A Wreck Leasing
- ------------------------------------- --------------------------------
Suite 120 By: /s/ Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Owings Mills, Maryland 21117 Print Name: Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Telecopier No. ( ) Title: President
----------------------- --------------------------------
FINANCING STATEMENT Identifying File No.____
ALL INFORMATION MUST BE TYPEWRITTEN OR PRINTED IN INK.
SIGNATURES MUST BE IN INK.
If transaction or transactions wholly or partially subject to
recordation tax indicate amount of taxable debt here. $__________ .
This financing statement dated 6/10/97 is presented to a filing officer for
filing pursuant to Uniform Commercial Code.
1. DEBTOR
Name Rent A Wreck Operation, Inc.
----------------------------------------------------------------------
Address 11460 Cronridge Drive, Suite 120, Owings Mills, Maryland 21117
-----------------------------------------------------------------
2. SECURED PARTY
Name The Chase Manhattan Bank
----------------------------------------------------------------------
Address 200 Jericho Quadrangle, Jericho, NY 11753
------------------------------------------------------------------
Person and Address to whom Statement is to be Returned if Different
from above.
3. Maturity date of obligation (if any) 5/31/2002
--------------------------------------
4. This financing statement covers the following types (or items) of property:
(List)
All present and future accounts, contract rights, instruments, documents,
and chattel paper, all returned and repossessed goods relating thereto, all
proceeds thereof, and all books, records, and other property relating to
any of the foregoing.
CHECK |X| THE LINES WHICH APPLY
5. |_| (If collateral is crops) The above described crops are growing or are
to be grown on: (describe estate)
|_| (If collateral is goods which are or are to become fixtures) The above
described goods are affixed or to be affixed to: (describe real estate)
|_| (Proceeds of collateral are also covered)
|_| (Products of collateral are also covered)
/s/Kenneth L. Blum,Jr. - President
- --------------------------------------
(Signature of Debtor)
Rent A Wreck Operation, Inc.
- --------------------------------------
Type of Print Above Name on Above Line
Signature Illegible - VP
- -------------------------------------- -----------------------------------
(Signature of Debtor) (Signature of Secured Party)
The Chase Manhattan Bank
- -------------------------------------- -----------------------------------
Type or Print Above Signature on Above Line Type or Print Above Signature on
Above Line
Form Name: General Security Agreement
Document Number: Legal 336 Sort Order 18
CHASE
GENERAL SECURITY AGREEMENT
The undersigned executes and delivers this General Security Agreement
(the "Security Agreement") to THE CHASE MANHATTAN BANK (Chase) and its
affiliates, including subsidiaries, whether now existing or hereafter created
(collectively, "Chase"), having an office located at 380 Madison Avenue, New
York, NY 10017 , in consideration of one or more loans, letters of credit or
other financial accommodation made, issued or extended by Chase to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, Chase shall have the rights, remedies and benefits
hereinafter set forth.
Definitions. The term "Liabilities" shall include any and all
indebtedness, obligations and liabilities of the undersigned to Chase and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by Chase, now or hereafter existing, arising
directly between the undersigned and Chase or acquired outright, conditionally,
as a participation or as collateral security from another by Chase, absolute or
contingent, joint and/or several, secured or unsecured, due or not due,
contractual or tortuous, liquidated or unliquidated, arising by operation of law
or otherwise, direct or indirect, including, but without limiting the generality
of the foregoing, indebtedness, obligations or liabilities to Chase of the
undersigned as a member of any partnership, syndicate, association or other
group, and whether incurred by the undersigned as principal, surety, endorser,
guarantor, accommodation party or otherwise.
The term "Collateral" means all personal property and fixtures of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including but not limited to, the balance of every deposit account,
now or hereafter existing, of the undersigned with Chase and any other claim of
the undersigned against Chase, now or hereafter existing, and all money, goods
(including equipment, farm products and inventory), instruments, securities,
documents, chattel paper, accounts, contract rights, general intangibles,
credits, claims, demands, precious metals and any other property, rights and
interests of the undersigned, and shall include the proceeds, products and
accessions of and to any thereof.
The term "Obligor" means the undersigned or any maker, drawer,
acceptor, endorser, guarantor, surety, accommodation party or other person
liable upon or for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Grant of Security Interest. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to Chase a security interest in, a
general lien upon and/or right of set-off against the Collateral.
Maintenance of Collateral. At any time and from time to time, the
undersigned will: (a) deliver and pledge to Chase, endorsed and/or accompanied
by such instruments of assignment and transfer in such form and substance as
Chase may request, any and all instruments, documents and/or chattel paper as
Chase may specify in its demand; (b) give, execute, deliver, file and/or record
any notice, statement, instrument, document, agreement or other papers that may
be necessary or desirable, or that
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Chase may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable Chase to exercise and
enforce its rights hereunder or with respect to such security interest; (c) keep
and stamp or otherwise mark any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contract rights
in such manner as Chase may require; (d) permit representatives of chase at any
time to inspect its inventory and to inspect and make abstracts from the
undersigned books and records pertaining to inventory, accounts, contract
rights, chattel paper, instruments and documents; and (e) obtain Chase's consent
prior to any change of name, address, legal entity status, location of books and
records or location of Collateral. The right is expressly granted to chase, at
its discretion, to notify warehousemen or any other persons in possession of
Collateral of Chase's security interest therein and to file one or more
financing statements under the Uniform Commercial Code executed by chase alone
naming the undersigned as debtor and Chase as secured party and indicating
therein the types of describing the items of Collateral herein specified. A
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement. Without the prior written consent of Chase
the undersigned will not file or authorize or permit to be filed in any
jurisdiction any such financing or like statement in which Chase is not named as
the sole secured party. With respect to the Collateral, or any part thereof,
which at any time shall come into the possession or custody or under the control
of Chase or any of its agents, associates, or correspondents, for any purpose,
the right is expressly granted to Chase, at its discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to Chase; and to exercise or cause its nominee to exercise all or any
powers with respect to the Collateral with same force and effect as an absolute
owner thereof; all without notice (except such notice as may be required by
applicable law and cannot be waived) and without liability except to account for
property actually received by it. Without limiting the generality of the
foregoing, payments, distributions and/or dividends, in securities, property or
cash, including without limitation dividends representing stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
Collateral or any part thereof or resulting from any split-up, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be paid directly to and retained by Chase and held by it until
applied as herein provided, as additional collateral security pledged under and
subject to the terms hereof. Chase shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
associates, or correspondents.
Insurance. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as Chase may approve, at
the undersigned's expense, and, upon Chase's request, the policies shall be duly
endorsed in Chase's favor and delivered to Chase. If the undersigned shall
default in this regard, Chase shall have the right to insure and charge the cost
to the undersigned. Chase assumes no risk or responsibility in connection with
the payment or nonpayment of losses, Chase's only responsibility being to credit
the undersigned with any insurance payment received on account of losses. In the
event of any default under this Security Agreement, Chase shall have power of
attorney to cancel, assign, or surrender any insurance policy or policies and to
collect the return premiums due thereon and to apply the proceeds thereof to the
Liabilities secured hereby. The undersigned will immediately notify Chase in
writing of any damage to or loss of any of the Collateral which is tangible
property.
Collection and Disposition. Chase at its discretion may, whether any of
the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, sue 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 shall
be under no obligation to do so, or Chase may extend the time of payment,
arrange for payment in 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 undersigned. Chase
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. Chase may use or
<PAGE>
operate any of the Collateral for the purpose of preserving the Collateral or
its value in the manner and to the extent Chase deems appropriate, but Chase
shall be under no obligation to do so.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of Chase, assemble the
Collateral at such place or places as Chase designates in its request, and, to
the extent permitted by applicable law, Chase shall have the right, with or
without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. Chase shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, with respect to the Collateral, or any part thereof, which
shall then be or shall thereafter come into the possession or custody of Chase
or any of its agents, associates or correspondents, Chase may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as Chase may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk
all or any of the Collateral, at any broker's board or at public or private
sale, in any reasonable manner permissible under the Uniform Commercial Code
(except that, to the extent permitted thereunder, the undersigned hereby waives
the requirements of said Code), and Chase or anyone else may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity or
redemption, of the undersigned, any such demand, notice or right and equity
being hereby expressly waived and released. The undersigned will pay to Chase
all expenses (including reasonable attorneys' fees and legal expenses incurred
by Chase) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the Liabilities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement of any of the Collateral or
receipt of the proceeds thereof, by litigation or otherwise, including expense
of insurance; and all such expenses shall be Liabilities secured by this
Security Agreement. Chase, at any time, at its option, may apply the net cash
receipts from the Collateral to the payment of principal of and/or interest on
any of the Liabilities, whether or not then due, making proper rebate of
interest or discount. Notwithstanding that Chase, whether in its own behalf
and/or on behalf of another or others, may continue to hold Collateral and
regardless of the value thereof, the undersigned shall be and remain liable for
the payment in full, principal and interest, of any balance of the Liabilities
and expenses at any time unpaid. Chase may exercise its rights with respect to
Collateral without resorting to or regard to other collateral or sources of
reimbursement for the Liabilities.
Representations and Warranties. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing; (b) it has the power to execute and deliver this Security Agreement
and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance ; (c) such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its organizational documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets; (d) to the best of undersigned's knowledge, all governmental and
other consents that are required to have been obtained by it with respect to
this Security Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; (e) its obligations
under this Security Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with its terms except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally; (f) all financial statements
and related information furnished and to be furnished to Chase from time to time
by the undersigned are true and compete and fairly present the financial or
other information stated therein as at such dates or for the periods covered
thereby; (g) there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of the undersigned, threatened against or affecting the
<PAGE>
undersigned before any court, governmental agency or arbitrator, which involve
forfeiture of any assets of the undersigned or which may materially adversely
affect the financial condition, operations, properties or business of the
undersigned or the ability of the undersigned to perform its obligation under
this Security Agreement; and (h) there has been no material adverse change in
the financial condition of he undersigned since the last such financial
statements or information. If the undersigned is an individual, the undersigned
represents and warrants the correctness of clauses (c), (d), (e), (f), (g) and
(h) above to the extent applicable to an individual.
Additional Collateral. If at any time the Collateral shall be
unsatisfactory to Chase, upon the demand of Chase the undersigned will furnish
such further security or make such payment on account of the Liabilities as will
be satisfactory to Chase.
Default. IF any of the following events of default shall occur (each an
"Event of Default"):
(a) any Obligor shall default in the performance of any of its
agreements herein or in any instrument or document delivered
pursuant to this Security Agreement or the Liabilities (including a
failure to comply with the preceding paragraph);
(b) if any Obligor is an individual, Obligor shall die or be declared
incompetent;
(c) any Obligor
(i) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such
debts become due;
(ii) shall make an assignment for the benefit of
creditors;
(iii) shall file a petition in bankruptcy or for any relief
under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt,
dissolution or liquidation;
(iv) shall have any such petition filed against it and the
same shall remain undismissed for a period of 30 days
or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its
property;
(d) any action, suit, proceeding or investigation against or affecting
any Obligor before any court or governmental agency which involves
forfeiture of any assets of any Obligor shall have been commenced;
or
(e) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against any
Obligor and shall continue unsatisfied and in effect for a period
of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
THEN, unless and to the extent that Chase shall otherwise elect, all of the
Liabilities shall become and be due and payable forthwith. THE RIGHTS OF CHASE
SET FORTH IMMEDAITELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY
OTHER RIGHT OF CHASE UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF CHASE
TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR
CONDITION OR EVENT).
Setoff. In the event that any amount becomes due and payable hereunder
and Chase shall have demanded payment thereof from the undersigned, in addition
to all other rights and remedies, Chase (including subsidiaries and each and
every affiliate) is hereby irrevocably authorized, without prior notice to the
undersigned, to set off any balances held for the account of or any other
liability owing by chase or any such affiliate to the undersigned at any of
Chase's (or such subsidiary's or affiliate's) offices, in Dollars or any other
currency, against any of the obligations of the undersigned to Chase, as Chase
may elect.
<PAGE>
Notices. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if delivered by and or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of Chase as first set
forth above, or (c) of the undersigned or chase at such other address as the
undersigned or Chase shall specify to the other in writing.
Entire Agreement, Amendment and Waiver. This Security Agreement
constitutes the entire agreement between the undersigned and Chase in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Chase in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder.
General Waivers. The undersigned hereby waive(s) presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "Secured
Documents"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair Chase's
enforcement of this Security Agreement or release any Collateral from Chase's
security interest hereunder. By way of example, but not in limitation of Chase's
rights under this Security Agreement, Chase does not have to give any
undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default;
(d) any action which Chase does or does not take regarding any Obligor
or any other person or any other collateral securing the
Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair Chase's enforcement of its security interests. By way of example,
but not in limitation of Chase's rights under this Security Agreement, Chase may
do any of the following without notice to the undersigned except to the extent
that notice to the undersigned is required under another Secured Document or in
each case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part
of the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or
property which is in Chase's possession as collateral security for
the Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to Chase in whole or in part
for the Liabilities, or accept any additional parties or
guarantors;
(f) delay or refrain from exercising any of Chase's rights;
(g) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(h) apply any money or property of undersigned or that of any other
party liable to Chase for any part of the Liabilities in any order
you choose.
<PAGE>
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE OR ANY
FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Rights Cumulative. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies to
which Chase may be entitled either by operation of law or pursuant to any other
document or instrument delivered or from time to time to be delivered to Chase
in connection with any of the Liabilities.
Governing Law; Jurisdiction. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
Connecticut, or New Jersey, depending on the location of the Chase office set
forth in this Security Agreement. The undersigned consent(s) to the nonexclusive
jurisdiction and venue of the state or federal courts located in such state. In
the event of a dispute hereunder, suit may be brought against the undersigned in
such courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute shall
be binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
Commercial Transaction. IF THE UNDERSIGNED IS A CONNECTICUT DOMICILED
ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT THIS
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY AND
ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND HEARING AND
ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES IN CONNECTION
WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
Assignment. Chase may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral, and thereafter shall be
fully discharged from all responsibility with respect to the Collateral so
assigned, transferred and/or delivered. Such transferee shall be vested with all
the powers and rights of Chase hereunder with respect to such Collateral, but
Chase shall retain all rights and powers hereby given with respect to any of the
Collateral not so assigned, transferred or delivered.
Waiver of Presentment, etc. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
Miscellaneous. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. The Chase Manhattan Bank (Chase) shall act for itself and
its affiliates as collateral agent hereunder. This Security Agreement shall be
binding upon the heirs, executors, administrators, assigns or successors of the
undersigned; shall constitute a continuing agreement, applying to all existing
as well as future transactions between Chase and the undersigned that shall be
at any time closed; and shall so continue in force notwithstanding any change in
any partnership party hereto, whether such change occurs through death,
retirement or otherwise.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
cause this instrument to be duly executed by his proper officer(s) this 4th day
of June, 1997.
Address for Notices:
11460 Cronridge Drive Rent A Wreck Operation, Inc.
- ------------------------------------- --------------------------------
Suite 120 By: /s/ Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Owings Mills, Maryland 21117 Print Name: Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Telecopier No. ( ) Title: President
----------------------- --------------------------------
FINANCING STATEMENT Identifying File No.____
ALL INFORMATION MUST BE TYPEWRITTEN OR PRINTED IN INK.
SIGNATURES MUST BE IN INK.
If transaction or transactions wholly or partially subject to
recordation tax indicate amount of taxable debt here. $__________ .
This financing statement dated 6/10/97 is presented to a filing officer for
filing pursuant to Uniform Commercial Code.
1. DEBTOR
Name Rent A Wreck One Way
----------------------------------------------------------------------
Address 11460 Cronridge Drive, Suite 120, Owings Mills, Maryland 21117
-----------------------------------------------------------------
2. SECURED PARTY
Name The Chase Manhattan Bank
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Address 200 Jericho Quadrangle, Jericho, NY 11753
------------------------------------------------------------------
Person and Address to whom Statement is to be Returned if Different
from above.
3. Maturity date of obligation (if any) 5/31/2002
--------------------------------------
4. This financing statement covers the following types (or items) of property:
(List)
All present and future accounts, contract rights, instruments, documents,
and chattel paper, all returned and repossessed goods relating thereto, all
proceeds thereof, and all books, records, and other property relating to
any of the foregoing.
CHECK |X| THE LINES WHICH APPLY
5. |_| (If collateral is crops) The above described crops are growing or are
to be grown on: (describe estate)
|_| (If collateral is goods which are or are to become fixtures) The above
described goods are affixed or to be affixed to: (describe real estate)
|_| (Proceeds of collateral are also covered)
|_| (Products of collateral are also covered)
/s/Kenneth L. Blum,Jr. - President
- --------------------------------------
(Signature of Debtor)
Rent A Wreck One Way
- --------------------------------------
Type of Print Above Name on Above Line
Signature Illegible - VP
- -------------------------------------- -----------------------------------
(Signature of Debtor) (Signature of Secured Party)
The Chase Manhattan Bank
- -------------------------------------- -----------------------------------
Type or Print Above Signature on Above Line Type or Print Above Signature on
Above Line
Form Name: General Security Agreement
Document Number: Legal 336 Sort Order 18
CHASE
GENERAL SECURITY AGREEMENT
The undersigned executes and delivers this General Security Agreement
(the "Security Agreement") to THE CHASE MANHATTAN BANK (Chase) and its
affiliates, including subsidiaries, whether now existing or hereafter created
(collectively, "Chase"), having an office located at 380 Madison Avenue, New
York, NY 10017 , in consideration of one or more loans, letters of credit or
other financial accommodation made, issued or extended by Chase to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, Chase shall have the rights, remedies and benefits
hereinafter set forth.
Definitions. The term "Liabilities" shall include any and all
indebtedness, obligations and liabilities of the undersigned to Chase and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by Chase, now or hereafter existing, arising
directly between the undersigned and Chase or acquired outright, conditionally,
as a participation or as collateral security from another by Chase, absolute or
contingent, joint and/or several, secured or unsecured, due or not due,
contractual or tortuous, liquidated or unliquidated, arising by operation of law
or otherwise, direct or indirect, including, but without limiting the generality
of the foregoing, indebtedness, obligations or liabilities to Chase of the
undersigned as a member of any partnership, syndicate, association or other
group, and whether incurred by the undersigned as principal, surety, endorser,
guarantor, accommodation party or otherwise.
The term "Collateral" means all personal property and fixtures of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including but not limited to, the balance of every deposit account,
now or hereafter existing, of the undersigned with Chase and any other claim of
the undersigned against Chase, now or hereafter existing, and all money, goods
(including equipment, farm products and inventory), instruments, securities,
documents, chattel paper, accounts, contract rights, general intangibles,
credits, claims, demands, precious metals and any other property, rights and
interests of the undersigned, and shall include the proceeds, products and
accessions of and to any thereof.
The term "Obligor" means the undersigned or any maker, drawer,
acceptor, endorser, guarantor, surety, accommodation party or other person
liable upon or for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Grant of Security Interest. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to Chase a security interest in, a
general lien upon and/or right of set-off against the Collateral.
Maintenance of Collateral. At any time and from time to time, the
undersigned will: (a) deliver and pledge to Chase, endorsed and/or accompanied
by such instruments of assignment and transfer in such form and substance as
Chase may request, any and all instruments, documents and/or chattel paper as
Chase may specify in its demand; (b) give, execute, deliver, file and/or record
any notice, statement, instrument, document, agreement or other papers that may
be necessary or desirable, or that
<PAGE>
Chase may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable Chase to exercise and
enforce its rights hereunder or with respect to such security interest; (c) keep
and stamp or otherwise mark any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contract rights
in such manner as Chase may require; (d) permit representatives of chase at any
time to inspect its inventory and to inspect and make abstracts from the
undersigned books and records pertaining to inventory, accounts, contract
rights, chattel paper, instruments and documents; and (e) obtain Chase's consent
prior to any change of name, address, legal entity status, location of books and
records or location of Collateral. The right is expressly granted to chase, at
its discretion, to notify warehousemen or any other persons in possession of
Collateral of Chase's security interest therein and to file one or more
financing statements under the Uniform Commercial Code executed by chase alone
naming the undersigned as debtor and Chase as secured party and indicating
therein the types of describing the items of Collateral herein specified. A
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement. Without the prior written consent of Chase
the undersigned will not file or authorize or permit to be filed in any
jurisdiction any such financing or like statement in which Chase is not named as
the sole secured party. With respect to the Collateral, or any part thereof,
which at any time shall come into the possession or custody or under the control
of Chase or any of its agents, associates, or correspondents, for any purpose,
the right is expressly granted to Chase, at its discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to Chase; and to exercise or cause its nominee to exercise all or any
powers with respect to the Collateral with same force and effect as an absolute
owner thereof; all without notice (except such notice as may be required by
applicable law and cannot be waived) and without liability except to account for
property actually received by it. Without limiting the generality of the
foregoing, payments, distributions and/or dividends, in securities, property or
cash, including without limitation dividends representing stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
Collateral or any part thereof or resulting from any split-up, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be paid directly to and retained by Chase and held by it until
applied as herein provided, as additional collateral security pledged under and
subject to the terms hereof. Chase shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
associates, or correspondents.
Insurance. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as Chase may approve, at
the undersigned's expense, and, upon Chase's request, the policies shall be duly
endorsed in Chase's favor and delivered to Chase. If the undersigned shall
default in this regard, Chase shall have the right to insure and charge the cost
to the undersigned. Chase assumes no risk or responsibility in connection with
the payment or nonpayment of losses, Chase's only responsibility being to credit
the undersigned with any insurance payment received on account of losses. In the
event of any default under this Security Agreement, Chase shall have power of
attorney to cancel, assign, or surrender any insurance policy or policies and to
collect the return premiums due thereon and to apply the proceeds thereof to the
Liabilities secured hereby. The undersigned will immediately notify Chase in
writing of any damage to or loss of any of the Collateral which is tangible
property.
Collection and Disposition. Chase at its discretion may, whether any of
the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, sue 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 shall
be under no obligation to do so, or Chase may extend the time of payment,
arrange for payment in 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 undersigned. Chase
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. Chase may use or
<PAGE>
operate any of the Collateral for the purpose of preserving the Collateral or
its value in the manner and to the extent Chase deems appropriate, but Chase
shall be under no obligation to do so.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of Chase, assemble the
Collateral at such place or places as Chase designates in its request, and, to
the extent permitted by applicable law, Chase shall have the right, with or
without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. Chase shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, with respect to the Collateral, or any part thereof, which
shall then be or shall thereafter come into the possession or custody of Chase
or any of its agents, associates or correspondents, Chase may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as Chase may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk
all or any of the Collateral, at any broker's board or at public or private
sale, in any reasonable manner permissible under the Uniform Commercial Code
(except that, to the extent permitted thereunder, the undersigned hereby waives
the requirements of said Code), and Chase or anyone else may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity or
redemption, of the undersigned, any such demand, notice or right and equity
being hereby expressly waived and released. The undersigned will pay to Chase
all expenses (including reasonable attorneys' fees and legal expenses incurred
by Chase) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the Liabilities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement of any of the Collateral or
receipt of the proceeds thereof, by litigation or otherwise, including expense
of insurance; and all such expenses shall be Liabilities secured by this
Security Agreement. Chase, at any time, at its option, may apply the net cash
receipts from the Collateral to the payment of principal of and/or interest on
any of the Liabilities, whether or not then due, making proper rebate of
interest or discount. Notwithstanding that Chase, whether in its own behalf
and/or on behalf of another or others, may continue to hold Collateral and
regardless of the value thereof, the undersigned shall be and remain liable for
the payment in full, principal and interest, of any balance of the Liabilities
and expenses at any time unpaid. Chase may exercise its rights with respect to
Collateral without resorting to or regard to other collateral or sources of
reimbursement for the Liabilities.
Representations and Warranties. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing; (b) it has the power to execute and deliver this Security Agreement
and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance ; (c) such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its organizational documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets; (d) to the best of undersigned's knowledge, all governmental and
other consents that are required to have been obtained by it with respect to
this Security Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; (e) its obligations
under this Security Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with its terms except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally; (f) all financial statements
and related information furnished and to be furnished to Chase from time to time
by the undersigned are true and compete and fairly present the financial or
other information stated therein as at such dates or for the periods covered
thereby; (g) there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of the undersigned, threatened against or affecting the
<PAGE>
undersigned before any court, governmental agency or arbitrator, which involve
forfeiture of any assets of the undersigned or which may materially adversely
affect the financial condition, operations, properties or business of the
undersigned or the ability of the undersigned to perform its obligation under
this Security Agreement; and (h) there has been no material adverse change in
the financial condition of he undersigned since the last such financial
statements or information. If the undersigned is an individual, the undersigned
represents and warrants the correctness of clauses (c), (d), (e), (f), (g) and
(h) above to the extent applicable to an individual.
Additional Collateral. If at any time the Collateral shall be
unsatisfactory to Chase, upon the demand of Chase the undersigned will furnish
such further security or make such payment on account of the Liabilities as will
be satisfactory to Chase.
Default. IF any of the following events of default shall occur (each an
"Event of Default"):
(a) any Obligor shall default in the performance of any of its
agreements herein or in any instrument or document delivered
pursuant to this Security Agreement or the Liabilities (including a
failure to comply with the preceding paragraph);
(b) if any Obligor is an individual, Obligor shall die or be declared
incompetent;
(c) any Obligor
(i) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such
debts become due;
(ii) shall make an assignment for the benefit of
creditors;
(iii) shall file a petition in bankruptcy or for any relief
under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt,
dissolution or liquidation;
(iv) shall have any such petition filed against it and the
same shall remain undismissed for a period of 30 days
or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its
property;
(d) any action, suit, proceeding or investigation against or affecting
any Obligor before any court or governmental agency which involves
forfeiture of any assets of any Obligor shall have been commenced;
or
(e) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against any
Obligor and shall continue unsatisfied and in effect for a period
of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
THEN, unless and to the extent that Chase shall otherwise elect, all of the
Liabilities shall become and be due and payable forthwith. THE RIGHTS OF CHASE
SET FORTH IMMEDAITELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY
OTHER RIGHT OF CHASE UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF CHASE
TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR
CONDITION OR EVENT).
Setoff. In the event that any amount becomes due and payable hereunder
and Chase shall have demanded payment thereof from the undersigned, in addition
to all other rights and remedies, Chase (including subsidiaries and each and
every affiliate) is hereby irrevocably authorized, without prior notice to the
undersigned, to set off any balances held for the account of or any other
liability owing by chase or any such affiliate to the undersigned at any of
Chase's (or such subsidiary's or affiliate's) offices, in Dollars or any other
currency, against any of the obligations of the undersigned to Chase, as Chase
may elect.
<PAGE>
Notices. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if delivered by and or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of Chase as first set
forth above, or (c) of the undersigned or chase at such other address as the
undersigned or Chase shall specify to the other in writing.
Entire Agreement, Amendment and Waiver. This Security Agreement
constitutes the entire agreement between the undersigned and Chase in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Chase in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder.
General Waivers. The undersigned hereby waive(s) presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "Secured
Documents"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair Chase's
enforcement of this Security Agreement or release any Collateral from Chase's
security interest hereunder. By way of example, but not in limitation of Chase's
rights under this Security Agreement, Chase does not have to give any
undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default;
(d) any action which Chase does or does not take regarding any Obligor
or any other person or any other collateral securing the
Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair Chase's enforcement of its security interests. By way of example,
but not in limitation of Chase's rights under this Security Agreement, Chase may
do any of the following without notice to the undersigned except to the extent
that notice to the undersigned is required under another Secured Document or in
each case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part
of the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or
property which is in Chase's possession as collateral security for
the Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to Chase in whole or in part
for the Liabilities, or accept any additional parties or
guarantors;
(f) delay or refrain from exercising any of Chase's rights;
(g) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(h) apply any money or property of undersigned or that of any other
party liable to Chase for any part of the Liabilities in any order
you choose.
<PAGE>
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE OR ANY
FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Rights Cumulative. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies to
which Chase may be entitled either by operation of law or pursuant to any other
document or instrument delivered or from time to time to be delivered to Chase
in connection with any of the Liabilities.
Governing Law; Jurisdiction. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
Connecticut, or New Jersey, depending on the location of the Chase office set
forth in this Security Agreement. The undersigned consent(s) to the nonexclusive
jurisdiction and venue of the state or federal courts located in such state. In
the event of a dispute hereunder, suit may be brought against the undersigned in
such courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute shall
be binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
Commercial Transaction. IF THE UNDERSIGNED IS A CONNECTICUT DOMICILED
ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT THIS
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY AND
ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND HEARING AND
ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES IN CONNECTION
WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
Assignment. Chase may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral, and thereafter shall be
fully discharged from all responsibility with respect to the Collateral so
assigned, transferred and/or delivered. Such transferee shall be vested with all
the powers and rights of Chase hereunder with respect to such Collateral, but
Chase shall retain all rights and powers hereby given with respect to any of the
Collateral not so assigned, transferred or delivered.
Waiver of Presentment, etc. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
Miscellaneous. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. The Chase Manhattan Bank (Chase) shall act for itself and
its affiliates as collateral agent hereunder. This Security Agreement shall be
binding upon the heirs, executors, administrators, assigns or successors of the
undersigned; shall constitute a continuing agreement, applying to all existing
as well as future transactions between Chase and the undersigned that shall be
at any time closed; and shall so continue in force notwithstanding any change in
any partnership party hereto, whether such change occurs through death,
retirement or otherwise.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
cause this instrument to be duly executed by his proper officer(s) this 4th day
of June, 1997.
Address for Notices:
11460 Cronridge Drive Rent A Wreck One Way
- ------------------------------------- --------------------------------
Suite 120 By: /s/ Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Owings Mills, Maryland 21117 Print Name: Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Telecopier No. ( ) Title: President
----------------------- --------------------------------
FINANCING STATEMENT Identifying File No.____
ALL INFORMATION MUST BE TYPEWRITTEN OR PRINTED IN INK.
SIGNATURES MUST BE IN INK.
If transaction or transactions wholly or partially subject to
recordation tax indicate amount of taxable debt here. $__________ .
This financing statement dated 6/10/97 is presented to a filing officer for
filing pursuant to Uniform Commercial Code.
1. DEBTOR
Name Bundy American Corporation
----------------------------------------------------------------------
Address 11460 Cronridge Drive, Suite 120, Owings Mills, Maryland 21117
-----------------------------------------------------------------
2. SECURED PARTY
Name The Chase Manhattan Bank
----------------------------------------------------------------------
Address 200 Jericho Quadrangle, Jericho, NY 11753
------------------------------------------------------------------
Person and Address to whom Statement is to be Returned if Different
from above.
3. Maturity date of obligation (if any) 5/31/2002
--------------------------------------
4. This financing statement covers the following types (or items) of property:
(List)
All present and future accounts, contract rights, instruments, documents,
and chattel paper, all returned and repossessed goods relating thereto, all
proceeds thereof, and all books, records, and other property relating to
any of the foregoing.
CHECK |X| THE LINES WHICH APPLY
5. |_| (If collateral is crops) The above described crops are growing or are
to be grown on: (describe estate)
|_| (If collateral is goods which are or are to become fixtures) The above
described goods are affixed or to be affixed to: (describe real estate)
|_| (Proceeds of collateral are also covered)
|_| (Products of collateral are also covered)
/s/Kenneth L. Blum,Jr. - President
- --------------------------------------
(Signature of Debtor)
Bundy American Corporation
- --------------------------------------
Type of Print Above Name on Above Line
Signature Illegible - VP
- -------------------------------------- -----------------------------------
(Signature of Debtor) (Signature of Secured Party)
The Chase Manhattan Bank
- -------------------------------------- -----------------------------------
Type or Print Above Signature on Above Line Type or Print Above Signature on
Above Line
Form Name: General Security Agreement
Document Number: Legal 336 Sort Order 18
CHASE
GENERAL SECURITY AGREEMENT
The undersigned executes and delivers this General Security Agreement
(the "Security Agreement") to THE CHASE MANHATTAN BANK (Chase) and its
affiliates, including subsidiaries, whether now existing or hereafter created
(collectively, "Chase"), having an office located at 380 Madison Avenue, New
York, NY 10017 , in consideration of one or more loans, letters of credit or
other financial accommodation made, issued or extended by Chase to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, Chase shall have the rights, remedies and benefits
hereinafter set forth.
Definitions. The term "Liabilities" shall include any and all
indebtedness, obligations and liabilities of the undersigned to Chase and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by Chase, now or hereafter existing, arising
directly between the undersigned and Chase or acquired outright, conditionally,
as a participation or as collateral security from another by Chase, absolute or
contingent, joint and/or several, secured or unsecured, due or not due,
contractual or tortuous, liquidated or unliquidated, arising by operation of law
or otherwise, direct or indirect, including, but without limiting the generality
of the foregoing, indebtedness, obligations or liabilities to Chase of the
undersigned as a member of any partnership, syndicate, association or other
group, and whether incurred by the undersigned as principal, surety, endorser,
guarantor, accommodation party or otherwise.
The term "Collateral" means all personal property and fixtures of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including but not limited to, the balance of every deposit account,
now or hereafter existing, of the undersigned with Chase and any other claim of
the undersigned against Chase, now or hereafter existing, and all money, goods
(including equipment, farm products and inventory), instruments, securities,
documents, chattel paper, accounts, contract rights, general intangibles,
credits, claims, demands, precious metals and any other property, rights and
interests of the undersigned, and shall include the proceeds, products and
accessions of and to any thereof.
The term "Obligor" means the undersigned or any maker, drawer,
acceptor, endorser, guarantor, surety, accommodation party or other person
liable upon or for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Grant of Security Interest. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to Chase a security interest in, a
general lien upon and/or right of set-off against the Collateral.
Maintenance of Collateral. At any time and from time to time, the
undersigned will: (a) deliver and pledge to Chase, endorsed and/or accompanied
by such instruments of assignment and transfer in such form and substance as
Chase may request, any and all instruments, documents and/or chattel paper as
Chase may specify in its demand; (b) give, execute, deliver, file and/or record
any notice, statement, instrument, document, agreement or other papers that may
be necessary or desirable, or that
<PAGE>
Chase may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable Chase to exercise and
enforce its rights hereunder or with respect to such security interest; (c) keep
and stamp or otherwise mark any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contract rights
in such manner as Chase may require; (d) permit representatives of chase at any
time to inspect its inventory and to inspect and make abstracts from the
undersigned books and records pertaining to inventory, accounts, contract
rights, chattel paper, instruments and documents; and (e) obtain Chase's consent
prior to any change of name, address, legal entity status, location of books and
records or location of Collateral. The right is expressly granted to chase, at
its discretion, to notify warehousemen or any other persons in possession of
Collateral of Chase's security interest therein and to file one or more
financing statements under the Uniform Commercial Code executed by chase alone
naming the undersigned as debtor and Chase as secured party and indicating
therein the types of describing the items of Collateral herein specified. A
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement. Without the prior written consent of Chase
the undersigned will not file or authorize or permit to be filed in any
jurisdiction any such financing or like statement in which Chase is not named as
the sole secured party. With respect to the Collateral, or any part thereof,
which at any time shall come into the possession or custody or under the control
of Chase or any of its agents, associates, or correspondents, for any purpose,
the right is expressly granted to Chase, at its discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to Chase; and to exercise or cause its nominee to exercise all or any
powers with respect to the Collateral with same force and effect as an absolute
owner thereof; all without notice (except such notice as may be required by
applicable law and cannot be waived) and without liability except to account for
property actually received by it. Without limiting the generality of the
foregoing, payments, distributions and/or dividends, in securities, property or
cash, including without limitation dividends representing stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
Collateral or any part thereof or resulting from any split-up, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be paid directly to and retained by Chase and held by it until
applied as herein provided, as additional collateral security pledged under and
subject to the terms hereof. Chase shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
associates, or correspondents.
Insurance. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as Chase may approve, at
the undersigned's expense, and, upon Chase's request, the policies shall be duly
endorsed in Chase's favor and delivered to Chase. If the undersigned shall
default in this regard, Chase shall have the right to insure and charge the cost
to the undersigned. Chase assumes no risk or responsibility in connection with
the payment or nonpayment of losses, Chase's only responsibility being to credit
the undersigned with any insurance payment received on account of losses. In the
event of any default under this Security Agreement, Chase shall have power of
attorney to cancel, assign, or surrender any insurance policy or policies and to
collect the return premiums due thereon and to apply the proceeds thereof to the
Liabilities secured hereby. The undersigned will immediately notify Chase in
writing of any damage to or loss of any of the Collateral which is tangible
property.
Collection and Disposition. Chase at its discretion may, whether any of
the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, sue 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 shall
be under no obligation to do so, or Chase may extend the time of payment,
arrange for payment in 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 undersigned. Chase
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. Chase may use or
<PAGE>
operate any of the Collateral for the purpose of preserving the Collateral or
its value in the manner and to the extent Chase deems appropriate, but Chase
shall be under no obligation to do so.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of Chase, assemble the
Collateral at such place or places as Chase designates in its request, and, to
the extent permitted by applicable law, Chase shall have the right, with or
without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. Chase shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, with respect to the Collateral, or any part thereof, which
shall then be or shall thereafter come into the possession or custody of Chase
or any of its agents, associates or correspondents, Chase may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as Chase may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk
all or any of the Collateral, at any broker's board or at public or private
sale, in any reasonable manner permissible under the Uniform Commercial Code
(except that, to the extent permitted thereunder, the undersigned hereby waives
the requirements of said Code), and Chase or anyone else may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity or
redemption, of the undersigned, any such demand, notice or right and equity
being hereby expressly waived and released. The undersigned will pay to Chase
all expenses (including reasonable attorneys' fees and legal expenses incurred
by Chase) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the Liabilities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement of any of the Collateral or
receipt of the proceeds thereof, by litigation or otherwise, including expense
of insurance; and all such expenses shall be Liabilities secured by this
Security Agreement. Chase, at any time, at its option, may apply the net cash
receipts from the Collateral to the payment of principal of and/or interest on
any of the Liabilities, whether or not then due, making proper rebate of
interest or discount. Notwithstanding that Chase, whether in its own behalf
and/or on behalf of another or others, may continue to hold Collateral and
regardless of the value thereof, the undersigned shall be and remain liable for
the payment in full, principal and interest, of any balance of the Liabilities
and expenses at any time unpaid. Chase may exercise its rights with respect to
Collateral without resorting to or regard to other collateral or sources of
reimbursement for the Liabilities.
Representations and Warranties. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing; (b) it has the power to execute and deliver this Security Agreement
and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance ; (c) such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its organizational documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets; (d) to the best of undersigned's knowledge, all governmental and
other consents that are required to have been obtained by it with respect to
this Security Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; (e) its obligations
under this Security Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with its terms except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally; (f) all financial statements
and related information furnished and to be furnished to Chase from time to time
by the undersigned are true and compete and fairly present the financial or
other information stated therein as at such dates or for the periods covered
thereby; (g) there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of the undersigned, threatened against or affecting the
<PAGE>
undersigned before any court, governmental agency or arbitrator, which involve
forfeiture of any assets of the undersigned or which may materially adversely
affect the financial condition, operations, properties or business of the
undersigned or the ability of the undersigned to perform its obligation under
this Security Agreement; and (h) there has been no material adverse change in
the financial condition of he undersigned since the last such financial
statements or information. If the undersigned is an individual, the undersigned
represents and warrants the correctness of clauses (c), (d), (e), (f), (g) and
(h) above to the extent applicable to an individual.
Additional Collateral. If at any time the Collateral shall be
unsatisfactory to Chase, upon the demand of Chase the undersigned will furnish
such further security or make such payment on account of the Liabilities as will
be satisfactory to Chase.
Default. IF any of the following events of default shall occur (each an
"Event of Default"):
(a) any Obligor shall default in the performance of any of its
agreements herein or in any instrument or document delivered
pursuant to this Security Agreement or the Liabilities (including a
failure to comply with the preceding paragraph);
(b) if any Obligor is an individual, Obligor shall die or be declared
incompetent;
(c) any Obligor
(i) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such
debts become due;
(ii) shall make an assignment for the benefit of
creditors;
(iii) shall file a petition in bankruptcy or for any relief
under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt,
dissolution or liquidation;
(iv) shall have any such petition filed against it and the
same shall remain undismissed for a period of 30 days
or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its
property;
(d) any action, suit, proceeding or investigation against or affecting
any Obligor before any court or governmental agency which involves
forfeiture of any assets of any Obligor shall have been commenced;
or
(e) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against any
Obligor and shall continue unsatisfied and in effect for a period
of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
THEN, unless and to the extent that Chase shall otherwise elect, all of the
Liabilities shall become and be due and payable forthwith. THE RIGHTS OF CHASE
SET FORTH IMMEDAITELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY
OTHER RIGHT OF CHASE UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF CHASE
TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR
CONDITION OR EVENT).
Setoff. In the event that any amount becomes due and payable hereunder
and Chase shall have demanded payment thereof from the undersigned, in addition
to all other rights and remedies, Chase (including subsidiaries and each and
every affiliate) is hereby irrevocably authorized, without prior notice to the
undersigned, to set off any balances held for the account of or any other
liability owing by chase or any such affiliate to the undersigned at any of
Chase's (or such subsidiary's or affiliate's) offices, in Dollars or any other
currency, against any of the obligations of the undersigned to Chase, as Chase
may elect.
<PAGE>
Notices. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if delivered by and or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of Chase as first set
forth above, or (c) of the undersigned or chase at such other address as the
undersigned or Chase shall specify to the other in writing.
Entire Agreement, Amendment and Waiver. This Security Agreement
constitutes the entire agreement between the undersigned and Chase in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Chase in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder.
General Waivers. The undersigned hereby waive(s) presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "Secured
Documents"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair Chase's
enforcement of this Security Agreement or release any Collateral from Chase's
security interest hereunder. By way of example, but not in limitation of Chase's
rights under this Security Agreement, Chase does not have to give any
undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default;
(d) any action which Chase does or does not take regarding any Obligor
or any other person or any other collateral securing the
Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair Chase's enforcement of its security interests. By way of example,
but not in limitation of Chase's rights under this Security Agreement, Chase may
do any of the following without notice to the undersigned except to the extent
that notice to the undersigned is required under another Secured Document or in
each case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part
of the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or
property which is in Chase's possession as collateral security for
the Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to Chase in whole or in part
for the Liabilities, or accept any additional parties or
guarantors;
(f) delay or refrain from exercising any of Chase's rights;
(g) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(h) apply any money or property of undersigned or that of any other
party liable to Chase for any part of the Liabilities in any order
you choose.
<PAGE>
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE OR ANY
FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Rights Cumulative. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies to
which Chase may be entitled either by operation of law or pursuant to any other
document or instrument delivered or from time to time to be delivered to Chase
in connection with any of the Liabilities.
Governing Law; Jurisdiction. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
Connecticut, or New Jersey, depending on the location of the Chase office set
forth in this Security Agreement. The undersigned consent(s) to the nonexclusive
jurisdiction and venue of the state or federal courts located in such state. In
the event of a dispute hereunder, suit may be brought against the undersigned in
such courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute shall
be binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
Commercial Transaction. IF THE UNDERSIGNED IS A CONNECTICUT DOMICILED
ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT THIS
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY AND
ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND HEARING AND
ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES IN CONNECTION
WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
Assignment. Chase may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral, and thereafter shall be
fully discharged from all responsibility with respect to the Collateral so
assigned, transferred and/or delivered. Such transferee shall be vested with all
the powers and rights of Chase hereunder with respect to such Collateral, but
Chase shall retain all rights and powers hereby given with respect to any of the
Collateral not so assigned, transferred or delivered.
Waiver of Presentment, etc. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
Miscellaneous. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. The Chase Manhattan Bank (Chase) shall act for itself and
its affiliates as collateral agent hereunder. This Security Agreement shall be
binding upon the heirs, executors, administrators, assigns or successors of the
undersigned; shall constitute a continuing agreement, applying to all existing
as well as future transactions between Chase and the undersigned that shall be
at any time closed; and shall so continue in force notwithstanding any change in
any partnership party hereto, whether such change occurs through death,
retirement or otherwise.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
cause this instrument to be duly executed by his proper officer(s) this 4th day
of June, 1997.
Address for Notices:
11460 Cronridge Drive Bundy American Corporation
- ------------------------------------- --------------------------------
Suite 120 By: /s/ Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Owings Mills, Maryland 21117 Print Name: Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Telecopier No. ( ) Title: President
----------------------- --------------------------------
FINANCING STATEMENT Identifying File No.____
ALL INFORMATION MUST BE TYPEWRITTEN OR PRINTED IN INK.
SIGNATURES MUST BE IN INK.
If transaction or transactions wholly or partially subject to
recordation tax indicate amount of taxable debt here. $__________ .
This financing statement dated 6/10/97 is presented to a filing officer for
filing pursuant to Uniform Commercial Code.
1. DEBTOR
Name Rent A Wreck of America, Inc.
----------------------------------------------------------------------
Address 11460 Cronridge Drive, Suite 120, Owings Mills, Maryland 21117
-----------------------------------------------------------------
2. SECURED PARTY
Name The Chase Manhattan Bank
----------------------------------------------------------------------
Address 200 Jericho Quadrangle, Jericho, NY 11753
------------------------------------------------------------------
Person and Address to whom Statement is to be Returned if Different
from above.
3. Maturity date of obligation (if any) 5/31/2002
--------------------------------------
4. This financing statement covers the following types (or items) of property:
(List)
All present and future accounts, contract rights, instruments, documents,
and chattel paper, all returned and repossessed goods relating thereto, all
proceeds thereof, and all books, records, and other property relating to
any of the foregoing.
CHECK |X| THE LINES WHICH APPLY
5. |_| (If collateral is crops) The above described crops are growing or are
to be grown on: (describe estate)
|_| (If collateral is goods which are or are to become fixtures) The above
described goods are affixed or to be affixed to: (describe real estate)
|_| (Proceeds of collateral are also covered)
|_| (Products of collateral are also covered)
/s/Kenneth L. Blum,Jr. - President
- --------------------------------------
(Signature of Debtor)
Rent A Wreck of America, Inc.
- --------------------------------------
Type of Print Above Name on Above Line
Signature Illegible - VP
- -------------------------------------- -----------------------------------
(Signature of Debtor) (Signature of Secured Party)
The Chase Manhattan Bank
- -------------------------------------- -----------------------------------
Type or Print Above Signature on Above Line Type or Print Above Signature on
Above Line
Form Name: General Security Agreement
Document Number: Legal 336 Sort Order 18
CHASE
GENERAL SECURITY AGREEMENT
The undersigned executes and delivers this General Security Agreement
(the "Security Agreement") to THE CHASE MANHATTAN BANK (Chase) and its
affiliates, including subsidiaries, whether now existing or hereafter created
(collectively, "Chase"), having an office located at 380 Madison Avenue, New
York, NY 10017 , in consideration of one or more loans, letters of credit or
other financial accommodation made, issued or extended by Chase to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, Chase shall have the rights, remedies and benefits
hereinafter set forth.
Definitions. The term "Liabilities" shall include any and all
indebtedness, obligations and liabilities of the undersigned to Chase and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by Chase, now or hereafter existing, arising
directly between the undersigned and Chase or acquired outright, conditionally,
as a participation or as collateral security from another by Chase, absolute or
contingent, joint and/or several, secured or unsecured, due or not due,
contractual or tortuous, liquidated or unliquidated, arising by operation of law
or otherwise, direct or indirect, including, but without limiting the generality
of the foregoing, indebtedness, obligations or liabilities to Chase of the
undersigned as a member of any partnership, syndicate, association or other
group, and whether incurred by the undersigned as principal, surety, endorser,
guarantor, accommodation party or otherwise.
The term "Collateral" means all personal property and fixtures of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including but not limited to, the balance of every deposit account,
now or hereafter existing, of the undersigned with Chase and any other claim of
the undersigned against Chase, now or hereafter existing, and all money, goods
(including equipment, farm products and inventory), instruments, securities,
documents, chattel paper, accounts, contract rights, general intangibles,
credits, claims, demands, precious metals and any other property, rights and
interests of the undersigned, and shall include the proceeds, products and
accessions of and to any thereof.
The term "Obligor" means the undersigned or any maker, drawer,
acceptor, endorser, guarantor, surety, accommodation party or other person
liable upon or for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Grant of Security Interest. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to Chase a security interest in, a
general lien upon and/or right of set-off against the Collateral.
Maintenance of Collateral. At any time and from time to time, the
undersigned will: (a) deliver and pledge to Chase, endorsed and/or accompanied
by such instruments of assignment and transfer in such form and substance as
Chase may request, any and all instruments, documents and/or chattel paper as
Chase may specify in its demand; (b) give, execute, deliver, file and/or record
any notice, statement, instrument, document, agreement or other papers that may
be necessary or desirable, or that
<PAGE>
Chase may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable Chase to exercise and
enforce its rights hereunder or with respect to such security interest; (c) keep
and stamp or otherwise mark any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contract rights
in such manner as Chase may require; (d) permit representatives of chase at any
time to inspect its inventory and to inspect and make abstracts from the
undersigned books and records pertaining to inventory, accounts, contract
rights, chattel paper, instruments and documents; and (e) obtain Chase's consent
prior to any change of name, address, legal entity status, location of books and
records or location of Collateral. The right is expressly granted to chase, at
its discretion, to notify warehousemen or any other persons in possession of
Collateral of Chase's security interest therein and to file one or more
financing statements under the Uniform Commercial Code executed by chase alone
naming the undersigned as debtor and Chase as secured party and indicating
therein the types of describing the items of Collateral herein specified. A
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement. Without the prior written consent of Chase
the undersigned will not file or authorize or permit to be filed in any
jurisdiction any such financing or like statement in which Chase is not named as
the sole secured party. With respect to the Collateral, or any part thereof,
which at any time shall come into the possession or custody or under the control
of Chase or any of its agents, associates, or correspondents, for any purpose,
the right is expressly granted to Chase, at its discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to Chase; and to exercise or cause its nominee to exercise all or any
powers with respect to the Collateral with same force and effect as an absolute
owner thereof; all without notice (except such notice as may be required by
applicable law and cannot be waived) and without liability except to account for
property actually received by it. Without limiting the generality of the
foregoing, payments, distributions and/or dividends, in securities, property or
cash, including without limitation dividends representing stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
Collateral or any part thereof or resulting from any split-up, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be paid directly to and retained by Chase and held by it until
applied as herein provided, as additional collateral security pledged under and
subject to the terms hereof. Chase shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
associates, or correspondents.
Insurance. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as Chase may approve, at
the undersigned's expense, and, upon Chase's request, the policies shall be duly
endorsed in Chase's favor and delivered to Chase. If the undersigned shall
default in this regard, Chase shall have the right to insure and charge the cost
to the undersigned. Chase assumes no risk or responsibility in connection with
the payment or nonpayment of losses, Chase's only responsibility being to credit
the undersigned with any insurance payment received on account of losses. In the
event of any default under this Security Agreement, Chase shall have power of
attorney to cancel, assign, or surrender any insurance policy or policies and to
collect the return premiums due thereon and to apply the proceeds thereof to the
Liabilities secured hereby. The undersigned will immediately notify Chase in
writing of any damage to or loss of any of the Collateral which is tangible
property.
Collection and Disposition. Chase at its discretion may, whether any of
the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, sue 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 shall
be under no obligation to do so, or Chase may extend the time of payment,
arrange for payment in 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 undersigned. Chase
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. Chase may use or
<PAGE>
operate any of the Collateral for the purpose of preserving the Collateral or
its value in the manner and to the extent Chase deems appropriate, but Chase
shall be under no obligation to do so.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of Chase, assemble the
Collateral at such place or places as Chase designates in its request, and, to
the extent permitted by applicable law, Chase shall have the right, with or
without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. Chase shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, with respect to the Collateral, or any part thereof, which
shall then be or shall thereafter come into the possession or custody of Chase
or any of its agents, associates or correspondents, Chase may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as Chase may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk
all or any of the Collateral, at any broker's board or at public or private
sale, in any reasonable manner permissible under the Uniform Commercial Code
(except that, to the extent permitted thereunder, the undersigned hereby waives
the requirements of said Code), and Chase or anyone else may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity or
redemption, of the undersigned, any such demand, notice or right and equity
being hereby expressly waived and released. The undersigned will pay to Chase
all expenses (including reasonable attorneys' fees and legal expenses incurred
by Chase) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the Liabilities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement of any of the Collateral or
receipt of the proceeds thereof, by litigation or otherwise, including expense
of insurance; and all such expenses shall be Liabilities secured by this
Security Agreement. Chase, at any time, at its option, may apply the net cash
receipts from the Collateral to the payment of principal of and/or interest on
any of the Liabilities, whether or not then due, making proper rebate of
interest or discount. Notwithstanding that Chase, whether in its own behalf
and/or on behalf of another or others, may continue to hold Collateral and
regardless of the value thereof, the undersigned shall be and remain liable for
the payment in full, principal and interest, of any balance of the Liabilities
and expenses at any time unpaid. Chase may exercise its rights with respect to
Collateral without resorting to or regard to other collateral or sources of
reimbursement for the Liabilities.
Representations and Warranties. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing; (b) it has the power to execute and deliver this Security Agreement
and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance ; (c) such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its organizational documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets; (d) to the best of undersigned's knowledge, all governmental and
other consents that are required to have been obtained by it with respect to
this Security Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; (e) its obligations
under this Security Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with its terms except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally; (f) all financial statements
and related information furnished and to be furnished to Chase from time to time
by the undersigned are true and compete and fairly present the financial or
other information stated therein as at such dates or for the periods covered
thereby; (g) there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of the undersigned, threatened against or affecting the
<PAGE>
undersigned before any court, governmental agency or arbitrator, which involve
forfeiture of any assets of the undersigned or which may materially adversely
affect the financial condition, operations, properties or business of the
undersigned or the ability of the undersigned to perform its obligation under
this Security Agreement; and (h) there has been no material adverse change in
the financial condition of he undersigned since the last such financial
statements or information. If the undersigned is an individual, the undersigned
represents and warrants the correctness of clauses (c), (d), (e), (f), (g) and
(h) above to the extent applicable to an individual.
Additional Collateral. If at any time the Collateral shall be
unsatisfactory to Chase, upon the demand of Chase the undersigned will furnish
such further security or make such payment on account of the Liabilities as will
be satisfactory to Chase.
Default. IF any of the following events of default shall occur (each an
"Event of Default"):
(a) any Obligor shall default in the performance of any of its
agreements herein or in any instrument or document delivered
pursuant to this Security Agreement or the Liabilities (including a
failure to comply with the preceding paragraph);
(b) if any Obligor is an individual, Obligor shall die or be declared
incompetent;
(c) any Obligor
(i) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such
debts become due;
(ii) shall make an assignment for the benefit of
creditors;
(iii) shall file a petition in bankruptcy or for any relief
under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt,
dissolution or liquidation;
(iv) shall have any such petition filed against it and the
same shall remain undismissed for a period of 30 days
or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its
property;
(d) any action, suit, proceeding or investigation against or affecting
any Obligor before any court or governmental agency which involves
forfeiture of any assets of any Obligor shall have been commenced;
or
(e) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against any
Obligor and shall continue unsatisfied and in effect for a period
of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
THEN, unless and to the extent that Chase shall otherwise elect, all of the
Liabilities shall become and be due and payable forthwith. THE RIGHTS OF CHASE
SET FORTH IMMEDAITELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY
OTHER RIGHT OF CHASE UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF CHASE
TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR
CONDITION OR EVENT).
Setoff. In the event that any amount becomes due and payable hereunder
and Chase shall have demanded payment thereof from the undersigned, in addition
to all other rights and remedies, Chase (including subsidiaries and each and
every affiliate) is hereby irrevocably authorized, without prior notice to the
undersigned, to set off any balances held for the account of or any other
liability owing by chase or any such affiliate to the undersigned at any of
Chase's (or such subsidiary's or affiliate's) offices, in Dollars or any other
currency, against any of the obligations of the undersigned to Chase, as Chase
may elect.
<PAGE>
Notices. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if delivered by and or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of Chase as first set
forth above, or (c) of the undersigned or chase at such other address as the
undersigned or Chase shall specify to the other in writing.
Entire Agreement, Amendment and Waiver. This Security Agreement
constitutes the entire agreement between the undersigned and Chase in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Chase in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder.
General Waivers. The undersigned hereby waive(s) presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "Secured
Documents"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair Chase's
enforcement of this Security Agreement or release any Collateral from Chase's
security interest hereunder. By way of example, but not in limitation of Chase's
rights under this Security Agreement, Chase does not have to give any
undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default;
(d) any action which Chase does or does not take regarding any Obligor
or any other person or any other collateral securing the
Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair Chase's enforcement of its security interests. By way of example,
but not in limitation of Chase's rights under this Security Agreement, Chase may
do any of the following without notice to the undersigned except to the extent
that notice to the undersigned is required under another Secured Document or in
each case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part
of the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or
property which is in Chase's possession as collateral security for
the Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to Chase in whole or in part
for the Liabilities, or accept any additional parties or
guarantors;
(f) delay or refrain from exercising any of Chase's rights;
(g) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(h) apply any money or property of undersigned or that of any other
party liable to Chase for any part of the Liabilities in any order
you choose.
<PAGE>
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE OR ANY
FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Rights Cumulative. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies to
which Chase may be entitled either by operation of law or pursuant to any other
document or instrument delivered or from time to time to be delivered to Chase
in connection with any of the Liabilities.
Governing Law; Jurisdiction. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
Connecticut, or New Jersey, depending on the location of the Chase office set
forth in this Security Agreement. The undersigned consent(s) to the nonexclusive
jurisdiction and venue of the state or federal courts located in such state. In
the event of a dispute hereunder, suit may be brought against the undersigned in
such courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute shall
be binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
Commercial Transaction. IF THE UNDERSIGNED IS A CONNECTICUT DOMICILED
ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT THIS
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY AND
ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND HEARING AND
ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES IN CONNECTION
WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
Assignment. Chase may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral, and thereafter shall be
fully discharged from all responsibility with respect to the Collateral so
assigned, transferred and/or delivered. Such transferee shall be vested with all
the powers and rights of Chase hereunder with respect to such Collateral, but
Chase shall retain all rights and powers hereby given with respect to any of the
Collateral not so assigned, transferred or delivered.
Waiver of Presentment, etc. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
Miscellaneous. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. The Chase Manhattan Bank (Chase) shall act for itself and
its affiliates as collateral agent hereunder. This Security Agreement shall be
binding upon the heirs, executors, administrators, assigns or successors of the
undersigned; shall constitute a continuing agreement, applying to all existing
as well as future transactions between Chase and the undersigned that shall be
at any time closed; and shall so continue in force notwithstanding any change in
any partnership party hereto, whether such change occurs through death,
retirement or otherwise.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
cause this instrument to be duly executed by his proper officer(s) this 4th day
of June, 1997.
Address for Notices:
11460 Cronridge Drive Rent A Wreck of America, Inc.
- ------------------------------------- --------------------------------
Suite 120 By: /s/ Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Owings Mills, Maryland 21117 Print Name: Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Telecopier No. ( ) Title: President
----------------------- --------------------------------
FINANCING STATEMENT Identifying File No.____
ALL INFORMATION MUST BE TYPEWRITTEN OR PRINTED IN INK.
SIGNATURES MUST BE IN INK.
If transaction or transactions wholly or partially subject to
recordation tax indicate amount of taxable debt here. $__________ .
This financing statement dated 6/10/97 is presented to a filing officer for
filing pursuant to Uniform Commercial Code.
1. DEBTOR
Name URM Corporation
----------------------------------------------------------------------
Address 11460 Cronridge Drive, Suite 120, Owings Mills, Maryland 21117
-----------------------------------------------------------------
2. SECURED PARTY
Name The Chase Manhattan Bank
----------------------------------------------------------------------
Address 200 Jericho Quadrangle, Jericho, NY 11753
------------------------------------------------------------------
Person and Address to whom Statement is to be Returned if Different
from above.
3. Maturity date of obligation (if any) 5/31/2002
--------------------------------------
4. This financing statement covers the following types (or items) of property:
(List)
All present and future accounts, contract rights, instruments, documents,
and chattel paper, all returned and repossessed goods relating thereto, all
proceeds thereof, and all books, records, and other property relating to
any of the foregoing.
CHECK |X| THE LINES WHICH APPLY
5. |_| (If collateral is crops) The above described crops are growing or are
to be grown on: (describe estate)
|_| (If collateral is goods which are or are to become fixtures) The above
described goods are affixed or to be affixed to: (describe real estate)
|_| (Proceeds of collateral are also covered)
|_| (Products of collateral are also covered)
/s/Kenneth L. Blum,Jr. - President
- --------------------------------------
(Signature of Debtor)
URM Corporation
- --------------------------------------
Type of Print Above Name on Above Line
Signature Illegible - VP
- -------------------------------------- -----------------------------------
(Signature of Debtor) (Signature of Secured Party)
The Chase Manhattan Bank
- -------------------------------------- -----------------------------------
Type or Print Above Signature on Above Line Type or Print Above Signature on
Above Line
Form Name: General Security Agreement
Document Number: Legal 336 Sort Order 18
CHASE
GENERAL SECURITY AGREEMENT
The undersigned executes and delivers this General Security Agreement
(the "Security Agreement") to THE CHASE MANHATTAN BANK (Chase) and its
affiliates, including subsidiaries, whether now existing or hereafter created
(collectively, "Chase"), having an office located at 380 Madison Avenue, New
York, NY 10017 , in consideration of one or more loans, letters of credit or
other financial accommodation made, issued or extended by Chase to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, Chase shall have the rights, remedies and benefits
hereinafter set forth.
Definitions. The term "Liabilities" shall include any and all
indebtedness, obligations and liabilities of the undersigned to Chase and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by Chase, now or hereafter existing, arising
directly between the undersigned and Chase or acquired outright, conditionally,
as a participation or as collateral security from another by Chase, absolute or
contingent, joint and/or several, secured or unsecured, due or not due,
contractual or tortuous, liquidated or unliquidated, arising by operation of law
or otherwise, direct or indirect, including, but without limiting the generality
of the foregoing, indebtedness, obligations or liabilities to Chase of the
undersigned as a member of any partnership, syndicate, association or other
group, and whether incurred by the undersigned as principal, surety, endorser,
guarantor, accommodation party or otherwise.
The term "Collateral" means all personal property and fixtures of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including but not limited to, the balance of every deposit account,
now or hereafter existing, of the undersigned with Chase and any other claim of
the undersigned against Chase, now or hereafter existing, and all money, goods
(including equipment, farm products and inventory), instruments, securities,
documents, chattel paper, accounts, contract rights, general intangibles,
credits, claims, demands, precious metals and any other property, rights and
interests of the undersigned, and shall include the proceeds, products and
accessions of and to any thereof.
The term "Obligor" means the undersigned or any maker, drawer,
acceptor, endorser, guarantor, surety, accommodation party or other person
liable upon or for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Grant of Security Interest. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to Chase a security interest in, a
general lien upon and/or right of set-off against the Collateral.
Maintenance of Collateral. At any time and from time to time, the
undersigned will: (a) deliver and pledge to Chase, endorsed and/or accompanied
by such instruments of assignment and transfer in such form and substance as
Chase may request, any and all instruments, documents and/or chattel paper as
Chase may specify in its demand; (b) give, execute, deliver, file and/or record
any notice, statement, instrument, document, agreement or other papers that may
be necessary or desirable, or that
<PAGE>
Chase may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable Chase to exercise and
enforce its rights hereunder or with respect to such security interest; (c) keep
and stamp or otherwise mark any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contract rights
in such manner as Chase may require; (d) permit representatives of chase at any
time to inspect its inventory and to inspect and make abstracts from the
undersigned books and records pertaining to inventory, accounts, contract
rights, chattel paper, instruments and documents; and (e) obtain Chase's consent
prior to any change of name, address, legal entity status, location of books and
records or location of Collateral. The right is expressly granted to chase, at
its discretion, to notify warehousemen or any other persons in possession of
Collateral of Chase's security interest therein and to file one or more
financing statements under the Uniform Commercial Code executed by chase alone
naming the undersigned as debtor and Chase as secured party and indicating
therein the types of describing the items of Collateral herein specified. A
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement. Without the prior written consent of Chase
the undersigned will not file or authorize or permit to be filed in any
jurisdiction any such financing or like statement in which Chase is not named as
the sole secured party. With respect to the Collateral, or any part thereof,
which at any time shall come into the possession or custody or under the control
of Chase or any of its agents, associates, or correspondents, for any purpose,
the right is expressly granted to Chase, at its discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to Chase; and to exercise or cause its nominee to exercise all or any
powers with respect to the Collateral with same force and effect as an absolute
owner thereof; all without notice (except such notice as may be required by
applicable law and cannot be waived) and without liability except to account for
property actually received by it. Without limiting the generality of the
foregoing, payments, distributions and/or dividends, in securities, property or
cash, including without limitation dividends representing stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
Collateral or any part thereof or resulting from any split-up, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be paid directly to and retained by Chase and held by it until
applied as herein provided, as additional collateral security pledged under and
subject to the terms hereof. Chase shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
associates, or correspondents.
Insurance. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as Chase may approve, at
the undersigned's expense, and, upon Chase's request, the policies shall be duly
endorsed in Chase's favor and delivered to Chase. If the undersigned shall
default in this regard, Chase shall have the right to insure and charge the cost
to the undersigned. Chase assumes no risk or responsibility in connection with
the payment or nonpayment of losses, Chase's only responsibility being to credit
the undersigned with any insurance payment received on account of losses. In the
event of any default under this Security Agreement, Chase shall have power of
attorney to cancel, assign, or surrender any insurance policy or policies and to
collect the return premiums due thereon and to apply the proceeds thereof to the
Liabilities secured hereby. The undersigned will immediately notify Chase in
writing of any damage to or loss of any of the Collateral which is tangible
property.
Collection and Disposition. Chase at its discretion may, whether any of
the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, sue 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 shall
be under no obligation to do so, or Chase may extend the time of payment,
arrange for payment in 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 undersigned. Chase
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. Chase may use or
<PAGE>
operate any of the Collateral for the purpose of preserving the Collateral or
its value in the manner and to the extent Chase deems appropriate, but Chase
shall be under no obligation to do so.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of Chase, assemble the
Collateral at such place or places as Chase designates in its request, and, to
the extent permitted by applicable law, Chase shall have the right, with or
without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. Chase shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, with respect to the Collateral, or any part thereof, which
shall then be or shall thereafter come into the possession or custody of Chase
or any of its agents, associates or correspondents, Chase may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as Chase may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk
all or any of the Collateral, at any broker's board or at public or private
sale, in any reasonable manner permissible under the Uniform Commercial Code
(except that, to the extent permitted thereunder, the undersigned hereby waives
the requirements of said Code), and Chase or anyone else may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity or
redemption, of the undersigned, any such demand, notice or right and equity
being hereby expressly waived and released. The undersigned will pay to Chase
all expenses (including reasonable attorneys' fees and legal expenses incurred
by Chase) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the Liabilities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement of any of the Collateral or
receipt of the proceeds thereof, by litigation or otherwise, including expense
of insurance; and all such expenses shall be Liabilities secured by this
Security Agreement. Chase, at any time, at its option, may apply the net cash
receipts from the Collateral to the payment of principal of and/or interest on
any of the Liabilities, whether or not then due, making proper rebate of
interest or discount. Notwithstanding that Chase, whether in its own behalf
and/or on behalf of another or others, may continue to hold Collateral and
regardless of the value thereof, the undersigned shall be and remain liable for
the payment in full, principal and interest, of any balance of the Liabilities
and expenses at any time unpaid. Chase may exercise its rights with respect to
Collateral without resorting to or regard to other collateral or sources of
reimbursement for the Liabilities.
Representations and Warranties. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing; (b) it has the power to execute and deliver this Security Agreement
and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance ; (c) such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its organizational documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets; (d) to the best of undersigned's knowledge, all governmental and
other consents that are required to have been obtained by it with respect to
this Security Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; (e) its obligations
under this Security Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with its terms except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally; (f) all financial statements
and related information furnished and to be furnished to Chase from time to time
by the undersigned are true and compete and fairly present the financial or
other information stated therein as at such dates or for the periods covered
thereby; (g) there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of the undersigned, threatened against or affecting the
<PAGE>
undersigned before any court, governmental agency or arbitrator, which involve
forfeiture of any assets of the undersigned or which may materially adversely
affect the financial condition, operations, properties or business of the
undersigned or the ability of the undersigned to perform its obligation under
this Security Agreement; and (h) there has been no material adverse change in
the financial condition of he undersigned since the last such financial
statements or information. If the undersigned is an individual, the undersigned
represents and warrants the correctness of clauses (c), (d), (e), (f), (g) and
(h) above to the extent applicable to an individual.
Additional Collateral. If at any time the Collateral shall be
unsatisfactory to Chase, upon the demand of Chase the undersigned will furnish
such further security or make such payment on account of the Liabilities as will
be satisfactory to Chase.
Default. IF any of the following events of default shall occur (each an
"Event of Default"):
(a) any Obligor shall default in the performance of any of its
agreements herein or in any instrument or document delivered
pursuant to this Security Agreement or the Liabilities (including a
failure to comply with the preceding paragraph);
(b) if any Obligor is an individual, Obligor shall die or be declared
incompetent;
(c) any Obligor
(i) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such
debts become due;
(ii) shall make an assignment for the benefit of
creditors;
(iii) shall file a petition in bankruptcy or for any relief
under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt,
dissolution or liquidation;
(iv) shall have any such petition filed against it and the
same shall remain undismissed for a period of 30 days
or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its
property;
(d) any action, suit, proceeding or investigation against or affecting
any Obligor before any court or governmental agency which involves
forfeiture of any assets of any Obligor shall have been commenced;
or
(e) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against any
Obligor and shall continue unsatisfied and in effect for a period
of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
THEN, unless and to the extent that Chase shall otherwise elect, all of the
Liabilities shall become and be due and payable forthwith. THE RIGHTS OF CHASE
SET FORTH IMMEDAITELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY
OTHER RIGHT OF CHASE UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF CHASE
TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR
CONDITION OR EVENT).
Setoff. In the event that any amount becomes due and payable hereunder
and Chase shall have demanded payment thereof from the undersigned, in addition
to all other rights and remedies, Chase (including subsidiaries and each and
every affiliate) is hereby irrevocably authorized, without prior notice to the
undersigned, to set off any balances held for the account of or any other
liability owing by chase or any such affiliate to the undersigned at any of
Chase's (or such subsidiary's or affiliate's) offices, in Dollars or any other
currency, against any of the obligations of the undersigned to Chase, as Chase
may elect.
<PAGE>
Notices. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if delivered by and or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of Chase as first set
forth above, or (c) of the undersigned or chase at such other address as the
undersigned or Chase shall specify to the other in writing.
Entire Agreement, Amendment and Waiver. This Security Agreement
constitutes the entire agreement between the undersigned and Chase in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Chase in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder.
General Waivers. The undersigned hereby waive(s) presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "Secured
Documents"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair Chase's
enforcement of this Security Agreement or release any Collateral from Chase's
security interest hereunder. By way of example, but not in limitation of Chase's
rights under this Security Agreement, Chase does not have to give any
undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default;
(d) any action which Chase does or does not take regarding any Obligor
or any other person or any other collateral securing the
Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair Chase's enforcement of its security interests. By way of example,
but not in limitation of Chase's rights under this Security Agreement, Chase may
do any of the following without notice to the undersigned except to the extent
that notice to the undersigned is required under another Secured Document or in
each case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part
of the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or
property which is in Chase's possession as collateral security for
the Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to Chase in whole or in part
for the Liabilities, or accept any additional parties or
guarantors;
(f) delay or refrain from exercising any of Chase's rights;
(g) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(h) apply any money or property of undersigned or that of any other
party liable to Chase for any part of the Liabilities in any order
you choose.
<PAGE>
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE OR ANY
FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Rights Cumulative. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies to
which Chase may be entitled either by operation of law or pursuant to any other
document or instrument delivered or from time to time to be delivered to Chase
in connection with any of the Liabilities.
Governing Law; Jurisdiction. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
Connecticut, or New Jersey, depending on the location of the Chase office set
forth in this Security Agreement. The undersigned consent(s) to the nonexclusive
jurisdiction and venue of the state or federal courts located in such state. In
the event of a dispute hereunder, suit may be brought against the undersigned in
such courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute shall
be binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
Commercial Transaction. IF THE UNDERSIGNED IS A CONNECTICUT DOMICILED
ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT THIS
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY AND
ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND HEARING AND
ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES IN CONNECTION
WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
Assignment. Chase may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral, and thereafter shall be
fully discharged from all responsibility with respect to the Collateral so
assigned, transferred and/or delivered. Such transferee shall be vested with all
the powers and rights of Chase hereunder with respect to such Collateral, but
Chase shall retain all rights and powers hereby given with respect to any of the
Collateral not so assigned, transferred or delivered.
Waiver of Presentment, etc. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
Miscellaneous. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. The Chase Manhattan Bank (Chase) shall act for itself and
its affiliates as collateral agent hereunder. This Security Agreement shall be
binding upon the heirs, executors, administrators, assigns or successors of the
undersigned; shall constitute a continuing agreement, applying to all existing
as well as future transactions between Chase and the undersigned that shall be
at any time closed; and shall so continue in force notwithstanding any change in
any partnership party hereto, whether such change occurs through death,
retirement or otherwise.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
cause this instrument to be duly executed by his proper officer(s) this 4th day
of June, 1997.
Address for Notices:
11460 Cronridge Drive URM Corporation
- ------------------------------------- --------------------------------
Suite 120 By: /s/ Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Owings Mills, Maryland 21117 Print Name: Kenneth L. Blum, Jr.
- ------------------------------------- --------------------------------
Telecopier No. ( ) Title: President
----------------------- --------------------------------
FINANCING STATEMENT Identifying File No.____
ALL INFORMATION MUST BE TYPEWRITTEN OR PRINTED IN INK.
SIGNATURES MUST BE IN INK.
If transaction or transactions wholly or partially subject to
recordation tax indicate amount of taxable debt here. $__________ .
This financing statement dated 6/10/97 is presented to a filing officer for
filing pursuant to Uniform Commercial Code.
1. DEBTOR
Name Central Life and Casualty Company, Limited
----------------------------------------------------------------------
Address 11460 Cronridge Drive, Suite 120, Owings Mills, Maryland 21117
-----------------------------------------------------------------
2. SECURED PARTY
Name The Chase Manhattan Bank
----------------------------------------------------------------------
Address 200 Jericho Quadrangle, Jericho, NY 11753
------------------------------------------------------------------
Person and Address to whom Statement is to be Returned if Different
from above.
3. Maturity date of obligation (if any) 5/31/2002
--------------------------------------
4. This financing statement covers the following types (or items) of property:
(List)
All present and future accounts, contract rights, instruments, documents,
and chattel paper, all returned and repossessed goods relating thereto, all
proceeds thereof, and all books, records, and other property relating to
any of the foregoing.
CHECK |X| THE LINES WHICH APPLY
5. |_| (If collateral is crops) The above described crops are growing or are
to be grown on: (describe estate)
|_| (If collateral is goods which are or are to become fixtures) The above
described goods are affixed or to be affixed to: (describe real estate)
|_| (Proceeds of collateral are also covered)
|_| (Products of collateral are also covered)
/s/Kenneth L. Blum,Jr. - President
- --------------------------------------
(Signature of Debtor)
Central Life and Casualty Company, Limited
- ------------------------------------------
Type of Print Above Name on Above Line
Signature Illegible - VP
- -------------------------------------- -----------------------------------
(Signature of Debtor) (Signature of Secured Party)
The Chase Manhattan Bank
- -------------------------------------- -----------------------------------
Type or Print Above Signature on Above Line Type or Print Above Signature on
Above Line
Form Name: General Security Agreement
Document Number: Legal 336 Sort Order 18
CHASE
GENERAL SECURITY AGREEMENT
The undersigned executes and delivers this General Security Agreement
(the "Security Agreement") to THE CHASE MANHATTAN BANK (Chase) and its
affiliates, including subsidiaries, whether now existing or hereafter created
(collectively, "Chase"), having an office located at 380 Madison Avenue, New
York, NY 10017 , in consideration of one or more loans, letters of credit or
other financial accommodation made, issued or extended by Chase to the
undersigned or to any person in respect of whose Liabilities (as defined below)
the undersigned now or hereafter guarantees or otherwise becomes liable for
payment. Accordingly, Chase shall have the rights, remedies and benefits
hereinafter set forth.
Definitions. The term "Liabilities" shall include any and all
indebtedness, obligations and liabilities of the undersigned to Chase and also
to others to the extent of their participations granted to or interests therein
created or acquired for them by Chase, now or hereafter existing, arising
directly between the undersigned and Chase or acquired outright, conditionally,
as a participation or as collateral security from another by Chase, absolute or
contingent, joint and/or several, secured or unsecured, due or not due,
contractual or tortuous, liquidated or unliquidated, arising by operation of law
or otherwise, direct or indirect, including, but without limiting the generality
of the foregoing, indebtedness, obligations or liabilities to Chase of the
undersigned as a member of any partnership, syndicate, association or other
group, and whether incurred by the undersigned as principal, surety, endorser,
guarantor, accommodation party or otherwise.
The term "Collateral" means all personal property and fixtures of the
undersigned, whether now or hereafter existing or now owned or hereafter
acquired and wherever located, of every kind and description, tangible or
intangible, including but not limited to, the balance of every deposit account,
now or hereafter existing, of the undersigned with Chase and any other claim of
the undersigned against Chase, now or hereafter existing, and all money, goods
(including equipment, farm products and inventory), instruments, securities,
documents, chattel paper, accounts, contract rights, general intangibles,
credits, claims, demands, precious metals and any other property, rights and
interests of the undersigned, and shall include the proceeds, products and
accessions of and to any thereof.
The term "Obligor" means the undersigned or any maker, drawer,
acceptor, endorser, guarantor, surety, accommodation party or other person
liable upon or for any of the Liabilities or Collateral.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Grant of Security Interest. As security for the payment of the
Liabilities, the undersigned hereby grant(s) to Chase a security interest in, a
general lien upon and/or right of set-off against the Collateral.
Maintenance of Collateral. At any time and from time to time, the
undersigned will: (a) deliver and pledge to Chase, endorsed and/or accompanied
by such instruments of assignment and transfer in such form and substance as
Chase may request, any and all instruments, documents and/or chattel paper as
Chase may specify in its demand; (b) give, execute, deliver, file and/or record
any notice, statement, instrument, document, agreement or other papers that may
be necessary or desirable, or that
<PAGE>
Chase may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable Chase to exercise and
enforce its rights hereunder or with respect to such security interest; (c) keep
and stamp or otherwise mark any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contract rights
in such manner as Chase may require; (d) permit representatives of chase at any
time to inspect its inventory and to inspect and make abstracts from the
undersigned books and records pertaining to inventory, accounts, contract
rights, chattel paper, instruments and documents; and (e) obtain Chase's consent
prior to any change of name, address, legal entity status, location of books and
records or location of Collateral. The right is expressly granted to chase, at
its discretion, to notify warehousemen or any other persons in possession of
Collateral of Chase's security interest therein and to file one or more
financing statements under the Uniform Commercial Code executed by chase alone
naming the undersigned as debtor and Chase as secured party and indicating
therein the types of describing the items of Collateral herein specified. A
photographic or other reproduction of this Security Agreement shall be
sufficient as a financing statement. Without the prior written consent of Chase
the undersigned will not file or authorize or permit to be filed in any
jurisdiction any such financing or like statement in which Chase is not named as
the sole secured party. With respect to the Collateral, or any part thereof,
which at any time shall come into the possession or custody or under the control
of Chase or any of its agents, associates, or correspondents, for any purpose,
the right is expressly granted to Chase, at its discretion, to transfer to or
register in the name of itself or its nominee any of the Collateral; to exchange
any of the Collateral for other property upon any reorganization,
recapitalization or other readjustment and in connection therewith to deposit
any of the Collateral with any committee or depositary upon such terms as it may
determine; to notify any account debtor or obligor on an instrument to make
payment to Chase; and to exercise or cause its nominee to exercise all or any
powers with respect to the Collateral with same force and effect as an absolute
owner thereof; all without notice (except such notice as may be required by
applicable law and cannot be waived) and without liability except to account for
property actually received by it. Without limiting the generality of the
foregoing, payments, distributions and/or dividends, in securities, property or
cash, including without limitation dividends representing stock or liquidating
dividends or a distribution or return of capital upon or in respect of the
Collateral or any part thereof or resulting from any split-up, revision or
reclassification of the Collateral or any part thereof or received in exchange
for the Collateral or any part thereof as a result of a merger, consolidation or
otherwise, shall be paid directly to and retained by Chase and held by it until
applied as herein provided, as additional collateral security pledged under and
subject to the terms hereof. Chase shall be deemed to have possession of any of
the Collateral in transit to or set apart for it or any of its agents,
associates, or correspondents.
Insurance. The undersigned shall keep insured all Collateral which is
tangible property for full value, with such coverage as Chase may approve, at
the undersigned's expense, and, upon Chase's request, the policies shall be duly
endorsed in Chase's favor and delivered to Chase. If the undersigned shall
default in this regard, Chase shall have the right to insure and charge the cost
to the undersigned. Chase assumes no risk or responsibility in connection with
the payment or nonpayment of losses, Chase's only responsibility being to credit
the undersigned with any insurance payment received on account of losses. In the
event of any default under this Security Agreement, Chase shall have power of
attorney to cancel, assign, or surrender any insurance policy or policies and to
collect the return premiums due thereon and to apply the proceeds thereof to the
Liabilities secured hereby. The undersigned will immediately notify Chase in
writing of any damage to or loss of any of the Collateral which is tangible
property.
Collection and Disposition. Chase at its discretion may, whether any of
the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, sue 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 shall
be under no obligation to do so, or Chase may extend the time of payment,
arrange for payment in 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 undersigned. Chase
shall not be required to take any steps necessary to preserve any rights against
prior parties to any of the Collateral. Chase may use or
<PAGE>
operate any of the Collateral for the purpose of preserving the Collateral or
its value in the manner and to the extent Chase deems appropriate, but Chase
shall be under no obligation to do so.
Upon default hereunder or in connection with any of the Liabilities
(whether such default be that of the undersigned or of any other party obligated
thereon), the undersigned shall, at the request of Chase, assemble the
Collateral at such place or places as Chase designates in its request, and, to
the extent permitted by applicable law, Chase shall have the right, with or
without legal process and with or without prior notice or demand, to take
possession of the Collateral or any part thereof and to enter any premises for
the purpose of taking possession thereof. Chase shall have the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not such Code is in effect in the jurisdiction where
the rights and remedies are asserted).
In addition, with respect to the Collateral, or any part thereof, which
shall then be or shall thereafter come into the possession or custody of Chase
or any of its agents, associates or correspondents, Chase may sell or cause to
be sold at any location selected by it and reasonable under the circumstances,
in one or more sales or parcels, at such price as Chase may deem best, and for
cash or on credit or for future delivery, without assumption of any credit risk
all or any of the Collateral, at any broker's board or at public or private
sale, in any reasonable manner permissible under the Uniform Commercial Code
(except that, to the extent permitted thereunder, the undersigned hereby waives
the requirements of said Code), and Chase or anyone else may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely,
free from any claim or right of whatsoever kind, including any equity or
redemption, of the undersigned, any such demand, notice or right and equity
being hereby expressly waived and released. The undersigned will pay to Chase
all expenses (including reasonable attorneys' fees and legal expenses incurred
by Chase) of, or incidental to, the enforcement of any of the provisions hereof
or of any of the Liabilities, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement of any of the Collateral or
receipt of the proceeds thereof, by litigation or otherwise, including expense
of insurance; and all such expenses shall be Liabilities secured by this
Security Agreement. Chase, at any time, at its option, may apply the net cash
receipts from the Collateral to the payment of principal of and/or interest on
any of the Liabilities, whether or not then due, making proper rebate of
interest or discount. Notwithstanding that Chase, whether in its own behalf
and/or on behalf of another or others, may continue to hold Collateral and
regardless of the value thereof, the undersigned shall be and remain liable for
the payment in full, principal and interest, of any balance of the Liabilities
and expenses at any time unpaid. Chase may exercise its rights with respect to
Collateral without resorting to or regard to other collateral or sources of
reimbursement for the Liabilities.
Representations and Warranties. If the undersigned is other than an
individual, the undersigned represents and warrants that: (a) it is duly
organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing; (b) it has the power to execute and deliver this Security Agreement
and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance ; (c) such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its organizational documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any of
its assets; (d) to the best of undersigned's knowledge, all governmental and
other consents that are required to have been obtained by it with respect to
this Security Agreement have been obtained and are in full force and effect and
all conditions of any such consents have been complied with; (e) its obligations
under this Security Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with its terms except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency or other
similar laws affecting creditors' rights generally; (f) all financial statements
and related information furnished and to be furnished to Chase from time to time
by the undersigned are true and compete and fairly present the financial or
other information stated therein as at such dates or for the periods covered
thereby; (g) there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of the undersigned, threatened against or affecting the
<PAGE>
undersigned before any court, governmental agency or arbitrator, which involve
forfeiture of any assets of the undersigned or which may materially adversely
affect the financial condition, operations, properties or business of the
undersigned or the ability of the undersigned to perform its obligation under
this Security Agreement; and (h) there has been no material adverse change in
the financial condition of he undersigned since the last such financial
statements or information. If the undersigned is an individual, the undersigned
represents and warrants the correctness of clauses (c), (d), (e), (f), (g) and
(h) above to the extent applicable to an individual.
Additional Collateral. If at any time the Collateral shall be
unsatisfactory to Chase, upon the demand of Chase the undersigned will furnish
such further security or make such payment on account of the Liabilities as will
be satisfactory to Chase.
Default. IF any of the following events of default shall occur (each an
"Event of Default"):
(a) any Obligor shall default in the performance of any of its
agreements herein or in any instrument or document delivered
pursuant to this Security Agreement or the Liabilities (including a
failure to comply with the preceding paragraph);
(b) if any Obligor is an individual, Obligor shall die or be declared
incompetent;
(c) any Obligor
(i) shall generally not, or be unable to, or shall admit
in writing its inability to, pay its debts as such
debts become due;
(ii) shall make an assignment for the benefit of
creditors;
(iii) shall file a petition in bankruptcy or for any relief
under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt,
dissolution or liquidation;
(iv) shall have any such petition filed against it and the
same shall remain undismissed for a period of 30 days
or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its
property;
(d) any action, suit, proceeding or investigation against or affecting
any Obligor before any court or governmental agency which involves
forfeiture of any assets of any Obligor shall have been commenced;
or
(e) one or more judgments, decrees or orders for the payment of money
in excess of $50,000 in the aggregate shall be rendered against any
Obligor and shall continue unsatisfied and in effect for a period
of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
THEN, unless and to the extent that Chase shall otherwise elect, all of the
Liabilities shall become and be due and payable forthwith. THE RIGHTS OF CHASE
SET FORTH IMMEDAITELY ABOVE ARE WITHOUT LIMITATION OF, AND IN ADDITION TO, ANY
OTHER RIGHT OF CHASE UNDER ANY OTHER DOCUMENT EVIDENCING OR EXECUTED IN
CONNECTION WITH THE LIABILITIES (INCLUDING BUT NOT LIMITED TO ANY RIGHT OF
ACCELERATION OF PAYMENT PURSUANT TO THE PROVISIONS THEREOF OR ANY RIGHT OF CHASE
TO MAKE DEMAND FOR PAYMENT THEREUNDER WITHOUT REFERENCE TO ANY PARTICULAR
CONDITION OR EVENT).
Setoff. In the event that any amount becomes due and payable hereunder
and Chase shall have demanded payment thereof from the undersigned, in addition
to all other rights and remedies, Chase (including subsidiaries and each and
every affiliate) is hereby irrevocably authorized, without prior notice to the
undersigned, to set off any balances held for the account of or any other
liability owing by chase or any such affiliate to the undersigned at any of
Chase's (or such subsidiary's or affiliate's) offices, in Dollars or any other
currency, against any of the obligations of the undersigned to Chase, as Chase
may elect.
<PAGE>
Notices. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if delivered by and or overnight courier or five days
after mailing to the address (a) of the undersigned set forth below the
undersigned's execution of this Security Agreement, (b) of Chase as first set
forth above, or (c) of the undersigned or chase at such other address as the
undersigned or Chase shall specify to the other in writing.
Entire Agreement, Amendment and Waiver. This Security Agreement
constitutes the entire agreement between the undersigned and Chase in respect of
the subject matter hereof and may be amended only by a writing signed on behalf
of each party and shall be effective only to the extent set forth in that
writing. No delay by Chase in exercising any power or right hereunder shall
operate as a waiver thereof or of any other power or right; nor shall any single
or partial exercise of any power or right preclude other or future exercise
thereof, or the exercise of any other power or right hereunder.
General Waivers. The undersigned hereby waive(s) presentment, notice of
dishonor and protest of all instruments included in or evidencing the
Liabilities or the Collateral and any and all other notices and demands
whatsoever, whether or not relating to such instruments (the "Secured
Documents"). The undersigned waives all demands, notices and protests of every
kind which are not expressly required under this Security Agreement which are
permitted by law to be waived, and which would, if not waived, impair Chase's
enforcement of this Security Agreement or release any Collateral from Chase's
security interest hereunder. By way of example, but not in limitation of Chase's
rights under this Security Agreement, Chase does not have to give any
undersigned notice of any of the following:
(a) notice of acceptance of this Security Agreement;
(b) notice of loans made, credit extended, Collateral received or
delivered;
(c) any Event of Default;
(d) any action which Chase does or does not take regarding any Obligor
or any other person or any other collateral securing the
Liabilities;
(e) except as otherwise provided herein, enforcement of this Security
Agreement against the Collateral; or
(f) any other action taken in reliance on this Security Agreement.
The undersigned waives all rules of suretyship law and any other law
whatsoever which is legally permitted to be waived and which would, if not
waived, impair Chase's enforcement of its security interests. By way of example,
but not in limitation of Chase's rights under this Security Agreement, Chase may
do any of the following without notice to the undersigned except to the extent
that notice to the undersigned is required under another Secured Document or in
each case in which the agreement of such undersigned is required because such
undersigned is a principal party to a Liability and, as a matter of contract,
the agreement of such undersigned is required:
(a) change, renew or extend the time for repayment of all or any part
of the Liabilities;
(b) change the rate of interest or any other provisions with respect to
all or any part of the Liabilities;
(c) release, surrender, sell or otherwise dispose of any money or
property which is in Chase's possession as collateral security for
the Liabilities;
(d) fail to perfect any security interest in any Collateral;
(e) release or discharge any party liable to Chase in whole or in part
for the Liabilities, or accept any additional parties or
guarantors;
(f) delay or refrain from exercising any of Chase's rights;
(g) settle or compromise any and all claims pertaining to the
Liabilities and the Collateral; and
(h) apply any money or property of undersigned or that of any other
party liable to Chase for any part of the Liabilities in any order
you choose.
<PAGE>
THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE OR ANY
FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION, BE
TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Rights Cumulative. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies to
which Chase may be entitled either by operation of law or pursuant to any other
document or instrument delivered or from time to time to be delivered to Chase
in connection with any of the Liabilities.
Governing Law; Jurisdiction. This Security Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
Connecticut, or New Jersey, depending on the location of the Chase office set
forth in this Security Agreement. The undersigned consent(s) to the nonexclusive
jurisdiction and venue of the state or federal courts located in such state. In
the event of a dispute hereunder, suit may be brought against the undersigned in
such courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute shall
be binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
Commercial Transaction. IF THE UNDERSIGNED IS A CONNECTICUT DOMICILED
ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES THAT THIS
SECURITY AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY AND
ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND HEARING AND
ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES IN CONNECTION
WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
Assignment. Chase may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral, and thereafter shall be
fully discharged from all responsibility with respect to the Collateral so
assigned, transferred and/or delivered. Such transferee shall be vested with all
the powers and rights of Chase hereunder with respect to such Collateral, but
Chase shall retain all rights and powers hereby given with respect to any of the
Collateral not so assigned, transferred or delivered.
Waiver of Presentment, etc. The undersigned hereby waive(s)
presentment, notice of dishonor and protest of all instruments included in or
evidencing the Liabilities or the Collateral and any and all other notices and
demands whatsoever, whether or not relating to such instruments.
Miscellaneous. The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding the Liabilities
or Collateral of the undersigned shall apply to any Liability or any Collateral
of any or all of them. The Chase Manhattan Bank (Chase) shall act for itself and
its affiliates as collateral agent hereunder. This Security Agreement shall be
binding upon the heirs, executors, administrators, assigns or successors of the
undersigned; shall constitute a continuing agreement, applying to all existing
as well as future transactions between Chase and the undersigned that shall be
at any time closed; and shall so continue in force notwithstanding any change in
any partnership party hereto, whether such change occurs through death,
retirement or otherwise.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
cause this instrument to be duly executed by his proper officer(s) this 4th day
of June, 1997.
Address for Notices:
11460 Cronridge Drive Central Life and Casualty Company, Limited
- --------------------------------- ------------------------------------------
Suite 120 By: /s/ Kenneth L. Blum, Jr.
- --------------------------------- ------------------------------------------
Owings Mills, Maryland 21117 Print Name: Kenneth L. Blum, Jr.
- --------------------------------- ------------------------------------------
Telecopier No. ( ) Title: President
------------------- ------------------------------------------
AMENDMENT TO MANAGEMENT AGREEMENT
This Amendment to the Management Agreement (the "Agreement")
between Rent- A-Wreck of America, Inc., a Delaware corporation (the "Company")
and K.A.B., Inc., a Florida corporation ("Management Co.") dated June 30, 1993
is effective as of July 1, 1997.
Section 2.1 of the Agreement is replaced in its entirety with the following:
2.1 (a) During the term of the Agreement,
Management Co. shall be entitled to receive annual compensation in an
amount calculated pursuant to Sections 2.1(b) and (c), payable in
installments due within 45 days after the completion of each of the
Company's fiscal quarters. The Company may deduct therefrom any
withholding or deduction which may be required by law. In the event of
termination of this Agreement, the payment shall be prorated through
the date of termination. Management Co. represents and warrants that it
shall furnish services each year in an amount reasonably appropriate to
fulfill its management responsibilities hereunder.
(b) [RESERVED]
(c) The amount of compensation
payable to Management Co. shall be $250,000 per year. Notwithstanding
anything to the contrary herein, if the compensation amount for any
fiscal quarter as provided herein would cause the Company to report a
net loss (as calculated by the Company on the basis of the Company's
books and records in accordance with generally accepted accounting
principles consistently applied), the compensation shall be reduced to
the extent required to result in a breakeven bottom line for the
Company for the fiscal quarter; provided that any reduction of
compensation under this subparagraph shall be limited such that
Management Co. shall not receive less than $100,000 in any fiscal year.
All other provisions of the Agreement as amended to date shall remain unchanged
and in full force and effect.
RENT-A-WRECK OF AMERICA, INC.
By: /s/ William L. Richter
---------------------------------------
Print Name: William L. Richter
Its: Vice-Chairman of the Board
MANAGEMENT CO.
By: /s/
---------------------------------------
Kenneth L. Blum, Sr.
Its: Chairman and
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM FINANCIAL STATEMENTS IN
RENT-A-WRECK OF AMERICA, INC.'S FORM 10-QSB FOR
THE QUARTERLY PERIOD ENDED JUNE 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FORM 10QSB.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 1,107,123
<SECURITIES> 0
<RECEIVABLES> 1,698,949
<ALLOWANCES> 832,162
<INVENTORY> 0
<CURRENT-ASSETS> 2,150,589
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14,322
0
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</TABLE>
