EXHIBIT 10.1

 

WHOLESALE SECURITY AGREEMENT

 

A.            INVENTORY:   The undersigned dealers (individually a “Debtor” and
collectively the “Debtors”) are now or may hereafter be engaged in the business
of selling at retail the following described types of property and such other
property as may be described from time to time in any agreement which is
supplemental hereto (all of which property, with all attachments, accessories,
exchanges, replacement parts, repairs and additions thereto, are herein
collectively called “Inventory”):

 

Description of Inventory: All present and future inventory, including trucks,
trailers, chassis and glider kits, financed by Secured Party.  For purposes
hereof, inventory financed by Secured Party shall mean (i) any inventory for
which Secured Party has made an advance to or on behalf of a Debtor to allow a
Debtor to acquire or retain any rights therein (including payments to the seller
thereof) or (ii) for which Secured Party has made an advance to, and at the
request of, a Debtor secured by specific items of inventory, and for which there
is any money owing to Secured Party in respect thereof.

 

B.            ADVANCES:   Debtors hereby request the below named secured party
(“Secured Party”) to make loans (herein individually called an “Advance” and
collectively called “Advances”) from time to time to Debtor, the proceeds of
which will be used by a Debtor for the purpose of acquiring Inventory from any
manufacturer or distributor of such Inventory (each of such manufacturers and
distributors, and their successors and assigns, is herein called a
“Manufacturer”) and for other good and valid business purposes.  Each Debtor
hereby directs Secured Party to pay on Debtor’s behalf any invoices, or
electronic remittance advises, presented to Secured Party from time to time
which evidence the sale by a Manufacturer to a Debtor of one or more items of
Inventory. Debtors hereby agree that any such payment by Secured Party to a
Manufacturer shall be deemed an Advance hereunder for all purposes of this
Agreement.  Debtors acknowledge and agree that any Advance made pursuant hereto
shall be at Secured Party’s sole discretion and that no Advance made will
obligate Secured Party to make any additional Advance. All Advances made by
Secured Party to Debtors under this Agreement shall constitute one loan.

 

In addition, Secured Party has established an aggregate internal credit limit
for all the Debtors in the amounts set forth on Schedule A hereto (the “Internal
Credit Limit”). In the event any of the Debtors (i) terminate requesting
Advances from Secured Party under the Internal Credit Limit established for a
particular manufacturer or for used Inventory (ii) allows another finance source
to commence financing Inventory for which an Internal Credit Limit has been
established by Secured Party or (iii) is in default under this Agreement and
Secured Party terminates this Agreement (each such event shall be referred to
herein as a “Termination Event”) the Debtors shall pay to Secured Party an
amount equal to:

 

(a)  3% of the original Internal Credit Limit established for such manufacturer
or used Inventory, if the Termination Event occurs on or before the first annual
anniversary of the date of this Agreement (“Months 1-12”); and

 

(b)  2% of the original Internal Credit Limit established for such manufacturer
or used Inventory, if the Termination Event occurs on or before the second
anniversary of this Agreement (“Months 13-24”); and

 

(c)  1% of the original Internal Credit Limit established for such manufacturer
or used Inventory, if the Termination Event occurs on or before the third annual
anniversary of the date of this Agreement (“Months 25-36”); and

 

With no payment due following a Termination Event after Month 36.

 

Notwithstanding the foregoing, any delayed payment program, privileges or
concessions afforded or provided Debtors by the manufacturers and/or
distributors of any items of Inventory, which allows Debtors to delay the
payment for such items of Inventory after receipt of the same from such
manufacturers and/or distributors of such items of Inventory, shall not be
considered financing from another financing source, which would require the
payment of the percentage amounts specified above by Debtors.

 

C.            STATEMENT OF ACCOUNT:  Secured Party will furnish to a Debtor from
time to time a statement of Debtor’s individual account with Secured Party,
prepared from Secured Party’s records showing all applicable credits and debits,
including all Advances, other charges and payments with respect to each item of
Inventory against which an Advance has been made hereunder (any error in the
identification of one or more items of Inventory on such statement shall not
prejudice Secured Party’s security interest therein).   Each such statement
shall be considered prima facie evidence of each Debtor’s account.

 

D.            SECURITY INTEREST:  To secure payment of all Advances which
Secured Party may elect to make pursuant hereto from time to time and all other
obligations of Debtors owing hereunder, Debtors hereby grants to Secured Party a
security interest in the following described collateral (all herein collectively
called “Collateral”):  all present and future Inventory and all chattel paper,
documents, certificates of title, certificates of origin, general intangibles,
instruments, accounts and contract rights now existing or hereafter arising with
respect thereto, and all cash and non-cash proceeds of any of the foregoing. 
Debtors agree that at any time and from time to time, upon the request of
Secured Party, Debtors will promptly (i) deliver to Secured Party all Collateral
other than Inventory, (ii) mark all chattel paper, documents and instruments and
Debtors’ books of account, ledger cards and other records relative to the
Collateral with a notation satisfactory to Secured Party disclosing that they
are subject to Secured Party’s security interest, (iii) execute and deliver to
Secured Party such instruments, statements and agreements as Secured Party may
request to evidence further each Advance and the security interests granted
hereunder, provided, however, a Debtor’s failure to comply with such request
shall not affect or limit Secured Party’s security interest or other rights in
and to the Collateral, and (iv) permit Secured Party or its representatives to
examine the Collateral and Debtors’ books and records and Debtors agree to pay
to Secured Party the greater of Secured Party’s standard fee or actual costs
relating to such examinations immediately upon receipt of Secured Party’s
invoice therefore.   Debtors agrees that Secured Party may directly collect any
amount owed to Debtors with respect to the Collateral (hereafter referred to as
an “Account”) and credit Debtors with all sums received by Secured Party. 
Debtors agree that Secured Party may from time to time at its discretion contact
any account debtor to confirm and verify the terms of sale, payments made on an
Account, and any modifications claimed to be made by the Debtors with such
account debtor.  Debtors agree that Secured Party may at any time notify an
account debtor of the assignment of said Account and revoke the authority of the
undersigned to collect the same and should the Secured Party at any time receive
any checks, drafts, money orders or other instruments or orders for money
payable to a Debtor to apply to an Account, Secured Party is irrevocably
appointed attorney-in-fact for each such Debtor to endorse each such instrument
with the name of the Debtor and collect the same.

 

E.             PAYMENT:   Debtors agrees to pay to Secured Party, promptly as
billed, interest and charges on the unpaid balance of all Advances outstanding
from time to time, computed in accordance with the terms hereof.   Upon the sale
of any item of Inventory the amount of the Advance applicable thereto shall
become immediately due and payable without notice or demand.  Except as
otherwise provided herein, all Advances will be immediately due and payable one
hundred twenty (120) days following written notice by Secured Party to Debtors
that no additional Advances will be made to Debtors under the terms of this
Agreement (a “Notice of Intent to Discontinue Advances”). Further, except
following an Event of Default, as provided for herein, and notwithstanding the
giving of a Notice of Intent to Discontinue Advances, Secured Party shall not
discontinue advances to the extent of its existing Internal Credit Limit, for a
period of 120 days from the date of its Notice of Intent to Discontinue
Advances. Upon the suspension and/or termination of any Peterbilt franchise or
any license to sell Class 8 trucks by a governmental authority relating to a
particular dealership location, Secured Party may demand payment within thirty
(30) days of all Advances, which relate to the dealership location covered by
such franchise or license termination. Should the Peterbilt franchises and/or
licenses representing more than twenty-five percent (25.0%) of the Advances to
Debtors by dollar volume be suspended and/or terminated, Secured Party may

 

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demand payment of all Advances then outstanding to Debtors, in which event such
Advances, as well as all accrued but unpaid interest, shall be paid by Debtors
within thirty (30) days of such demand. Should there be a material change in the
management or control of Debtors, Secured Party may demand payment of all
Advances then outstanding, as well as all accrued but unpaid interest, in which
event Debtors shall pay such amounts within 120 days of such demand. All amounts
payable pursuant hereto are payable at Secured Party’s address set forth below
or at such other address as Secured Party may specify from time to time in
writing.   Any instrument or agreement, which is executed by Debtors and
specifies an amount payable shall evidence indebtedness and not payment.  All
payments made by Debtors to Secured Party with reference to this Agreement shall
be applied first to an indebtedness which is not secured, then to delinquency
charges, then to interest, then to insurance payments, then to any other fees or
other amount payable hereunder other than the indebtedness secured by a purchase
money security interest in the Collateral, until all of such indebtedness is
paid in full, and then to the indebtedness secured by a purchase money security
interest in the Collateral in the order in which that indebtedness was
incurred.  This provision controls over any conflicting provision or language in
this Agreement or in any other agreement between Debtors and Secured Party
unless the parties mutually agree in writing in a subsequent agreement to
override this provision. Secured Party’s application of any payment is
conditional and subject to review and reapplication until all of Debtors’
obligations under this Agreement are paid in full.

 

F.             INTEREST AND CHARGES:  Debtors agrees to pay Secured Party
interest, curtailments and other charges in accordance with the terms and
conditions of Rider A, attached hereto and incorporated herein by reference, on
or before the 15th of each month.  Curtailments and other charges may be subject
to change from time to time and will be effective 30 days following written
notice to Debtors. If any manufacturer, distributor or other third party fails
to provide an interest or other subsidy for Debtors, Debtors will be responsible
for and pay to Secured Party all such charges.  For any such charges, or other
amounts due hereunder, not paid within 10 days of its due date, Debtors agrees
to pay to Secured Party a delinquency charge calculated thereon at the rate of
1½ % per month for the period of delinquency or, at Secured Party’s option, 5%
of such past due amounts, provided that such delinquency charge is not
prohibited by law, otherwise at the highest rate the Debtors can legally
obligate themselves to pay and/or Secured Party can legally collect (provided
such delinquency charges may not exceed those set out herein).

 

G.            LOCATION/NAME OF DEBTORS:   (i) If a Debtor is a corporation,
limited liability company, limited partnership or other registered organization,
its state of organization is in the state set forth immediately below its
signature on the last page of this Agreement; (ii) if a Debtor is an individual,
his/her principal place of residence is at the address set forth immediately
below his/her signature on the last page of this Agreement; (iii) if a Debtor is
an organization, its place of business or if it has more than one place of
business its chief executive office, is located at the address set forth
immediately below its signature on the last page of this Agreement.   Each
Debtor agrees that it will not without the prior written consent of Secured
Party change its state of organization if it is a corporation, limited liability
company, limited partnership or other registered organization.   Debtors will
notify Secured Party in writing of a change in its chief executive office or its
place of business 30 days prior to such change. Each Debtor shall notify Secured
Party in writing of a change in its name 30 days prior to such change.   The
Debtors further represent and warrant that the Debtors identified on Schedule B
hereto own the premises identified on Schedule B where they operate the
dealerships.

 

H.            ADDITIONAL WARRANTIES AND AGREEMENTS: Each Debtor warrants and
agrees that: the Collateral is free from and will be kept free from all liens,
claims, security interests and encumbrances other than those created hereby;
that except as herein specifically permitted, no financing statement covering
the Collateral is now or will hereafter be on file in favor of anyone other than
Secured Party; the Inventory will be maintained in good operating condition,
repair and appearance and, absent the written consent of Secured Party, will not
be used for any purpose other than demonstration at or in reasonable proximity
to a Debtor’s place(s) of business or at industry trade shows, and any such
demonstration will be in conformity with all applicable governmental laws and
regulations; other than in the ordinary course of business, the Inventory will
not otherwise be removed from such places of business without the prior written
consent of Secured Party; Debtor shall use and maintain the Collateral in
compliance with any, insurance policies and all applicable laws; and,
notwithstanding Secured Party’s claim to proceeds, Debtors will not sell, rent,
lend, encumber, pledge, transfer, secrete or otherwise dispose of any of the
Collateral, nor will Debtors permit any such act; provided, however, as long as
an event of default has not occurred and is not then continuing hereunder,
Debtors may sell any (i) item of Inventory or (ii) chattel paper or accounts in
the regular course of a Debtor’s business and any purchaser thereof may acquire
such priority to Secured Party’s interest therein as prescribed under applicable
law. Upon the sale of an item of Inventory the amount of the Advance applicable
thereto shall become immediately due and payable and Debtors shall promptly pay
such amount in cash to Secured Party without notice or demand.   An item of
Collateral will not be considered as “sold” until the earlier of the date a
Debtor receives payment therefor or the date possession of such item of
Collateral is delivered to the purchaser thereof pursuant to a Retail Sales
Order, notwithstanding the Retail Sales Order may list an earlier date of sale.

 

Each Debtor further agrees, at its own cost and expense, to do everything
necessary or expedient to perfect and preserve the security interests of Secured
Party obtained hereunder; to defend any action, proceeding or claim affecting
the Collateral; to furnish Secured Party promptly with copies of its (i) balance
sheet, profit and loss statement and other fiscal year-end financial reports
within one hundred twenty (120) days of the close of each fiscal year of each
Debtor and (ii) month-end balance sheet and profit and loss statement within 30
days of the last day of each month, and with such other financial statements and
other information as Secured Party may reasonably request from time to time; to
pay all expenses incurred by Secured Party in enforcing its rights after the
occurrence of an event of default hereunder, including the reasonable fees of
any attorneys retained by Secured Party ; and to pay promptly all taxes,
assessments, license fees and other public or private charges when levied or
assessed against the Collateral, this Agreement, any supplemental agreements or
any accompanying notes.

 

Each Debtor represents, warrants and covenants as of the date of this Agreement
and as of the date of each Advance and request for an Advance that:

 

(a)   Debtor’s exact legal name is as set forth in the preamble of this
Agreement and Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the preamble of this
Agreement, has its chief executive offices at the location specified herein, and
is, and will remain, duly qualified and licensed in every jurisdiction wherever
necessary to carry on its business and operations;

 

(b)   Debtor has adequate power and capacity to enter into, and to perform its
obligations under this Agreement, each Note and any other documents evidencing,
or given in connection with, any of the Indebtedness (all of the foregoing are
called the “Debt Documents”);

 

(c)   This Agreement and the other Debt Documents have been duly authorized,
executed and delivered by Debtor and constitute legal, valid and binding
agreements enforceable in accordance with their terms, except to the extent that
the enforcement of remedies may be limited under applicable bankruptcy and
insolvency laws;

 

(d)   No approval, consent or withholding of objections is required from any
governmental authority or instrumentality with respect to the entry into, or
performance by Debtor of any of the Debt Documents, except any already obtained;

 

(e)   The entry into, and performance by, Debtor of the Debt Documents will not
(i) violate any of the organizational documents of Debtor or any judgment,
order, law or regulation applicable to Debtor, or (ii) result in any breach of
or constitute a default under any contract to which Debtor is a party, or result
in the creation of any lien, claim or encumbrance on any of Debtor’s property
(except for liens in favor of Secured Party) pursuant to any indenture,
mortgage, deed of trust, bank loan, credit agreement, or other agreement or
instrument to which Debtor is a party;

 

(f)    There are no suits or proceedings pending in court or before any
commission, board or other administrative agency against or affecting Debtor
which could, in the aggregate, have a material adverse effect on Debtor, its
business or operations, or its ability to perform its obligations under the Debt
Documents, nor does Debtor have reason to believe that any such suits or
proceedings are threatened;

 

(g)   All financial statements delivered to Secured Party in connection with the
Indebtedness have been prepared in accordance with generally accepted accounting
principles, and since the date of the most recent financial statement, there has
been no material adverse change in Debtor’s financial condition;

 

(h)   The Collateral is not, and will not be, used by Debtor for personal,
family or household purposes;

 

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(i)    The Collateral is, and will remain, in good condition and repair;

 

(j)    Debtor is, and will remain, the sole and lawful owner, and in possession
of, the Collateral, and has the sole right and lawful authority to grant the
security interest described in this Agreement; and

 

(k)   The Collateral is, and will remain, free and clear of all liens, claims
and encumbrances of any kind whatsoever, except for (i) liens in favor of
Secured Party,  (ii) liens for taxes not yet due or for taxes being contested in
good faith and which do not involve, in the judgment of Secured Party, any risk
of the sale, forfeiture or loss of any of the Collateral, and (iii) inchoate
materialmen’s, mechanic’s, repairmen’s and similar liens arising by operation of
law in the normal course of business for amounts which are not delinquent (all
of such liens are called “Permitted Liens”).

 

(l) Debtor is and will remain in material compliance with all laws and
regulations applicable to it including, without limitation, (i) ensuring that no
person who owns a controlling interest in or otherwise controls Debtor is or
shall be (Y) listed on the Specially Designated Nationals and Blocked Person
List maintained by the Office of Foreign Assets Control (“OFAC”), Department of
the Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation or (Z) a person designated
under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders,
and (ii) compliance with all applicable Bank Secrecy Act (“BSA”) laws,
regulations and government guidance on BSA compliance and on the prevention and
detection of money laundering violations. As used herein, “material compliance”
means compliance that will not result in a material adverse effect on the
Guarantor, its business or operations, or its ability to perform its obligations
under this Guaranty.

 

I.              FINANCING STATEMENTS: If permitted by law, Debtors agrees that a
carbon, photographic or other reproduction of this Agreement or of a financing
statement may be filed as a financing statement. Each Debtor authorizes Secured
Party to file a financing statement describing the Collateral.

 

J.             INSURANCE AND RISK OF LOSS: Debtors shall at all times bear all
risk of loss, damage to or destruction of the Collateral.  Debtors agree to
procure forthwith and maintain insurance on the Inventory, for the full
insurable value thereof and for the life of this Agreement, in the form of Fire
Insurance with Extended Coverage or Combined Additional Coverage, as
appropriate, and Collision, Theft and/or Vandalism and Malicious Mischief
Coverage when appropriate, plus such other insurance as Secured Party may
specify from time to time, all in form and amount and with insurers satisfactory
to Secured Party.  Debtors agree to deliver promptly to Secured Party
certificates, or if requested, policies of insurance satisfactory to Secured
Party, each with a standard long-form loss-payable endorsement naming Secured
Party or assigns as loss-payee as their interests may appear.  Each policy shall
provide that Secured Party’s interest therein will not be invalidated by the
acts, omissions or neglect of anyone other than Secured Party, and will contain
insurer’s agreement to give 30 days prior written notice to Secured Party before
the cancellation of or any material change in the policy will be effective as to
Secured Party, whether such cancellation or change is at the direction of
Debtors or insurer.  Secured Party’s acceptance of policies in lesser amounts or
risks will not be a waiver of a Debtor’s foregoing obligation.  Debtors assign
to Secured Party all proceeds of such insurance, including returned and unearned
premiums, not to exceed the sum of all amounts payable pursuant hereto. Debtors
direct all insurers to pay such proceeds directly to Secured Party.

 

K.            PERFORMANCE BY SECURED PARTY: If any Debtor fails to perform any
of its obligations hereunder, Secured Party may perform the same, but shall not
be obligated to do so, for the account of such Debtor to protect the interest of
Secured Party or Debtor or both, at Secured Party’s option, and Debtors shall
immediately repay to Secured Party any amounts paid by Secured Party in such
performance together with interest thereon at five percent (5.0%) above the
interest rate then being charged Debtors by Secured Party on Advances made
pursuant to this Agreement, not to exceed the maximum amount or rate allowed by
law.

 

L.             EVENTS OF DEFAULT:  Time is of the essence.  An event of default
shall occur if: (a) any Debtor fails to pay when due any amount owed by it to
Secured Party or any successor or assignee of Secured Party under this Agreement
or under the terms of any promissory note delivered in conjunction with this
Agreement or under any other agreement by and between any Debtor or guarantor
and the Transportation Finance division of Secured Party, within five Business
Days of Secured Party having made written demand of Debtors for the payment of
the same, or if any Debtor fails to pay when due any amount owed by it to
Secured Party or any affiliate (including without limitation, any direct or
indirect parent, subsidiary or sister entity), successor or assignee of Secured
Party under any other document, agreement or instrument related to, within five
Business Days of Secured Party having made written demand of Debtors for the
payment of the same; (b) an event of default occurs in the performance or
observance of any other term or provision to be performed or observed by any
Debtor, any affiliate of any Debtor or any guarantor of Debtors’ obligations
under this Agreement of any provision hereunder or under any other instrument or
agreement furnished to Secured Party or to any affiliate of Secured Party by any
Debtor, any affiliate of any Debtor or any guarantor of Debtors’ obligations
under this Agreement; (c) any representation or warranty made by Debtors herein
or in any document or certificate furnished by any Debtor to Secured Party or to
any affiliate of Secured Party was incorrect in any material respect when made;
(d) any Debtor becomes insolvent or ceases to do business as a going concern;
(e) any of the Collateral is lost or destroyed, no insurance is in force to
cover such loss or destruction and Debtors do not pay an amount to Secured Party
equal to the value of the lost or destroyed Collateral within thirty (30)
Business Days of any Debtor’s notice of such loss of destruction; (f) any Debtor
or any guarantor of Debtors’ obligations under this Agreement makes an
assignment for the benefit of creditors or takes advantage of any law for the
relief of debtors; (g) a petition in bankruptcy, or for an arrangement,
reorganization or similar relief is filed by or against any Debtor or any
guarantor of Debtors’ obligations under this Agreement , which is not contested
by such Debtor or guarantor and thereafter dismissed within 90 days from the
date a Debtor or guarantor receives notice of the filing of the same; (h) any
property of any Debtor having a value in excess of one-percent of the Collateral
is attached and such attachment is not contested and or resolved within ninety
(90) days thereof and if part of the Collateral, paid off after such ninety(90)
day period, or a trustee or receiver is appointed for any Debtor or any
guarantor of Debtors’ obligations under this Agreement or for a substantial part
of its property, or Debtor or any guarantor of Debtors’ obligations under this
Agreement applies for such appointment; (i) Debtor or any guarantor of Debtors’
obligations under this Agreement take any action looking to its dissolution or
liquidation; (j) Any Debtor, or any guarantor of the Debtors’ obligations,
ceases to exist as a legal entity or a Debtor or any guarantor of Debtors’
obligations under this Agreement or any party in control of a Debtor or any
guarantor of Debtors’ obligations under this Agreement takes any action looking
to a Debtor’s or such guarantor’s dissolution as a legal entity; ( (m) there
shall be a material adverse change in any of the: (i) condition (financial or
otherwise), business, performance, prospects, operations or properties of any
Debtor or any guarantor of Debtors’ obligations under this Agreement,
(ii) legality, validity or enforceability of this Agreement or any guaranty,
(iii) perfection or priority of the lien granted in favor of to Secured Party
pursuant to this Agreement, (iv) ability of any Debtor or any guarantor of
Debtors’ obligations under this Agreement to repay the indebtedness or perform
its obligations under this Agreement or guaranty (v) rights and remedies of the
Secured Party under the Agreement; (o) if there shall occur an
(i) appropriation, (ii) confiscation, (iii) retention, or (iv) seizure of
Control custody or possession of the Collateral by any governmental authority
including, without limitation, any municipal, state, federal or other
governmental entity or any governmental agency or instrumentality (all such
entities, agencies, and instrumentalities shall hereinafter be collectively
referred to as “Governmental Authority”); (p) if anyone in the control of a
Debtor is accused or alleged or charged (whether or not subsequently arraigned,
indicted or convicted) by any Governmental Authority to have used the Collateral
in connection with the commission of any crime (other than a misdemeanor moving
violation); (q) any guarantor or surety of any of the Debtors’ obligations
terminates such guaranty of suretyship agreement or breaches, or repudiates its
obligations; (r) there shall be a death of a majority owner of any Debtor or a
guarantor of the obligations of any Debtor under this Agreement; or (s) Any
Debtor fails to promptly pay any excise taxes, sales taxes, payroll taxes,
income or other taxes due and owing by a Debtor within ten (10) days from the
date Debtor is notified by Secured Party that such taxes have not been paid,
unless Debtor has taken lawful action to protest and/or contest such taxes; or
(t) except for the security interest, lien or reservation of title in favor of
Secured Party or as otherwise granted herein, there shall be any lien, claim or
encumbrance on any of the Collateral securing the indebtedness hereunder of
Debtors to Secured Party, which is not contested by Debtors and regarding which,
Debtors have not taken steps acceptable to Secured Party to bond against such
lien, claim or encumbrance or not taken such other action as is acceptable to
Secured Party, with respect to such contest. Secured Party’s inaction with
respect to an event of default shall not be a waiver of such default and Secured
Party’s waiver of any default shall not be a waiver of any other default.

 

M.           REMEDIES UPON DEFAULT: Upon the occurrence of an event of default,
and at any time thereafter as long as the default continues, Secured Party may,
at its option, with or without notice to Debtors (i) declare this Agreement to
be in default, (ii) declare the indebtedness hereunder to be immediately due and
payable, (iii) declare all other debts then owing by Debtors to Secured Party or
any affiliates (including, without limitation, any direct or indirect parent,
subsidiary or sister entity), successor or assignee of Secured Party to be
immediately due and payable, and from and after acceleration, Each Debtor agrees
to pay interest on all amounts then owing at the rate of 1½ % per month, if not
prohibited by law, otherwise at the highest rate that a Debtor can legally
obligate itself to pay and/or Secured Party can legally collect, (iv) cancel any
insurance and credit any refund to the indebtedness, and (v) exercise all of the
rights and remedies of a secured party under the Uniform Commercial Code and any
other

 

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applicable laws, including, without limitation, the right to require Debtors to
assemble the Collateral and deliver it to Secured Party at a place to be
designated by Secured Party which is reasonably convenient to both parties.
Secured Party may buy at any sale and become the owner of the Collateral.
  Unless otherwise provided by law, any requirement of reasonable notice
regarding the sale or other disposition of Collateral which Secured Party may be
obligated to give will be met if such notice is mailed to Debtors at its address
shown herein at least ten days before the time of sale or other disposition. 
Secured Party may comply with any applicable state or federal law requirements
in connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.   Secured Party may sell the Collateral without giving any
warranties as to the Collateral.  Secured Party may specifically disclaim any
warranties of title, possession, quiet enjoyment, or the like.  This procedure
will not be considered to adversely affect the commercial reasonableness of any
sale of the Collateral.   If Secured Party sells any of the Collateral upon
credit, Debtors will be credited only with payments actually made by the
purchaser, received by Secured Party and applied to the indebtedness of the
purchaser.  In the event the purchaser fails to pay for the Collateral, Secured
Party may resell the Collateral and Debtors shall be credited with the proceeds
of the sale.   The inclusion of a trade name or division name in the
identification of any Debtor hereunder shall not limit Secured Party’s right,
after the occurrence of an event of default, to proceed against all of Debtors’
assets, including those held by any Debtor individually or under another trade
or division name.  Expenses of retaking, holding, preparing for sale, selling
and the like shall include (a) the reasonable fees of any attorneys retained by
Secured Party and (b) other legal expenses incurred by Secured Party.  Each
Debtor agrees that it is liable for and will promptly pay any deficiency
resulting from any disposition of Collateral after default.

 

N.            PERFECTION/POWER OF ATTORNEY: Each Debtor hereby appoints Secured
Party or any duly authorized officer or employee of Secured Party as such
Debtor’s attorney-in-fact to, in such Debtor’s or Secured Party’s name:
(a) prepare, execute and submit any notice or proof of loss in order to realize
the benefits of any insurance policy insuring the Collateral; (b) prepare,
execute and file any instrument which, in Secured Party’s opinion, is required
by law to perfect and give or modify public notice of Secured Party’s interest
in the Collateral; and (c) endorse such Debtor’s name on any remittance
representing proceeds of any insurance insuring the Collateral or the proceeds
of the sale, or other disposition of any of the Collateral (whether or not such
disposition is a default hereunder).  This power is coupled with an interest and
is irrevocable so long as any indebtedness secured hereunder remains unpaid.

 

O.            MISCELLANEOUS:   Waiver of any default shall not be a waiver of
any other default; all of Secured Party’s rights are cumulative and not
alternative.  No waiver or change in this Agreement or in any related agreements
shall bind Secured Party unless in writing signed by one of its officers.   The
term “Secured Party” shall include any assignee of Secured Party who is the
holder of this Agreement.  Secured Party or any assignee or successor of Secured
Party shall have the right to transfer, sell or assign all or any portion of
this Agreement or the indebtedness and/or obligations thereunder, without
notice, acknowledgement or consent from Debtors.  After assignment of this
Agreement by Secured Party, the assignor will not be the assignee’s agent for
any purpose. Each Debtor agrees that if Debtor receives written notice of an
assignment from Secured Party, Debtor will pay all amounts payable under this
Agreement to such assignee or as instructed by Secured Party.  Each Debtor also
agrees to confirm in writing receipt of the notice of assignment as may be
reasonably requested by Secured Party or assignee.  Each Debtor waives, as to
any non-affiliated third party assignee, for value, of Secured Party and will
not assert against any such non-affiliated third party assignee, for value, of
Secured Party, any claims in recoupment, abatement, reduction, defenses or
set-offs for breach of warranty, or for any other reason, which Debtor could
assert against Secured Party, except defenses, which cannot be waived under the
Uniform Commercial Code and the defense of payment by Debtor in full or partial
payment of all amounts owing to Secured Party. Upon request, Debtors will
execute a sworn statement verifying the then balance owing to Secured Party. g.
Upon full payment of all obligations secured by this Agreement, the assignee may
deliver all original papers to the assignor for each Debtor.   Each Debtor
waives all exemptions to the extent permitted by law.  Secured Party may correct
patent errors herein and fill in blanks. Any provision of this Agreement which
is for any reason held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent it is
invalid, illegal or unenforceable without invalidating the remaining provisions
hereof.  Each Debtor acknowledges receipt of a true copy and waives acceptance
hereof.   If any Debtor is a corporation, this Agreement is executed pursuant to
authority of its Board of Directors.  All of the terms and provisions of this
Agreement shall apply to and be binding upon each Debtor, its heirs, personal
representatives, successors and permitted assigns and shall insure to the
benefit of Secured Party, its successors, and assigns and shall bind all persons
who become bound as a debtor to this Security Agreement.  If more than one party
executes this Agreement the term “Debtor” means and includes each such party,
and the indebtedness and other obligations hereunder herein specifically
described is the joint and several obligation of each such party. .  In the
event any Debtor is deemed to be a surety, each Debtor agrees that its
obligations hereunder shall not be discharged or affected by any circumstances
which constitute a legal or equitable discharge of a guarantor or surety.
Secured Party may receive from and disclose to any individual, corporation,
business trust, association, company, partnership, joint venture, or other
entity (herein collectively, the “Entity”), including, without limiting the
generality of the foregoing, Secured Party’s parent or any affiliate or any
subsidiary of Secured Party and any credit reporting agency or other entity
whether or not related to Secured Party for any purpose, information about any
Debtor’s accounts, credit application and credit experience with Secured Party
and each Debtor authorizes any Entity to release to Secured Party any
information related to any Debtor’s accounts, credit experience and account
information regarding the Debtor. This shall be continuing authorization for all
present and future disclosures of each Debtor’s account information, credit
application and credit experience on Debtor made by Secured Party, or any Entity
requested to release such information to Secured Party.

 

P.             NOTICES:   Any notice or demand contemplated under this Agreement
shall be sent: to Secured Party and Debtors at the address set forth immediately
below their signatures on the last page of this Agreement or to such other
address or party as either party hereto may from time to time designate in
writing.  Notices shall be either personally delivered, telecopied or deposited
in the United States certified or registered mails, postage prepaid, addressed
as aforesaid with a return receipt requested and shall be deemed received when
delivered, if personally delivered, or on the delivery date noted on the return
receipt accompanying such notice or request, if mailed.

 

Q.            WAIVER OF JURY TRIAL: EACH DEBTOR AND SECURED PARTY AGREE THAT ANY
ACTION, SUIT OR PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, OR
THE RELATIONSHIP BETWEEN THE PARTIES, WILL BE TRIED TO A COURT OF COMPETENT
JURISDICTION BY A JUDGE WITHOUT A JURY, AS DEBTORS AND SECURED PARTY HEREBY
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR PROCEEDING.  THIS
PROVISION IS A MATERIAL INDUCEMENT FOR SECURED PARTY AND EACH DEBTOR TO ENTER
INTO THIS AGREEMENT.

 

R.            GOVERNING LAW, JURISDICTION AND VENUE: THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
TEXAS WITHOUT REGARD TO THE CONFLICT OF LAW RULES OF SUCH STATE, AND SHALL NOT
BE AN EFFECTIVE CONTRACT UNTIL IT HAS BEEN ACCEPTED AND EXECUTED BY SECURED
PARTY IN THE STATE OF TEXAS.  TO THE EXTENT PERMITTED BY LAW, THE PARTIES HERETO
AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT,
ANY ACCOMPANYING PROMISSORY NOTES OR OTHER DOCUMENTS, SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF DALLAS,
STATE OF TEXAS.  THE PARTIES FURTHER AGREE THAT THE AFOREMENTIONED CHOICE OF
VENUE SHALL BE CONSIDERED MANDATORY AND NOT PERMISSIVE IN NATURE, THEREBY
PRECLUDING THE POSSIBILITY OF LITIGATION IN ANY JURISDICTION OTHER THAN THAT
SPECIFIED BY THIS PARAGRAPH.    SECURED PARTY AND DEBTORS, TO THE EXTENT THEY
MAY LEGALLY DO SO, HEREBY WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF FORUM NON CONVENES OR TO OBJECT TO VENUE IN ANY PROCEEDING BROUGHT IN
ACCORDANCE WITH THIS PARAGRAPH.    SECURED PARTY AND DEBTORS HEREBY STIPULATE
THAT THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF DALLAS, STATE OF
TEXAS SHALL HAVE PERSONAL JURISDICTION AND VENUE OVER THEM FOR THE PURPOSE OF
LITIGATING ANY DISPUTE, CONTROVERSY OR PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT, ANY ACCOMPANYING PROMISSORY NOTES OR OTHER DOCUMENTS.  TO THE
EXTENT PERMITTED BY LAW, SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION
IN ANY ACTION AGAINST A DEBTOR SHALL BE MADE UPON EACH SUCH DEBTOR BY SERVICE
UPON THE REGISTERED AGENT OF EACH SUCH DEBTOR, AT SUCH REGISTERED AGENT’S
ADDRESS, AS REFLECTED IN THE RECORDS OF THE SECRETARY OF STATE IN THE STATE OF
SUCH DEBTOR’S ORGANIZATION. DEBTORS AGREES THAT ANY FINAL JUDGMENT SHALL BE
CONCLUSIVE AS TO THE SUBJECT OF SUCH FINAL JUDGMENT AND MAY BE ENFORCED IN OTHER
JURISDICTIONS IN ANY MANNER PROVIDED BY LAW.

 

As used herein, the term “Business Day” shall mean any day other than: Saturday;
Sunday; or, any day the United States District Clerk’s Office for the Northern
District of Texas is closed.

 

4

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THIS WRITTEN AGREEMENT, INCLUDING RIDER A, REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. IF THE PARTIES HAVE PREVIOUSLY
EXECUTED ANY SECURITY AGREEMENTS RELATING TO THE SUBJECT MATTER HEREOF, THIS
AGREEMENT, INCLUDING RIDER A, IS INTENDED ONLY TO AMEND AND RESTATE SUCH WRITTEN
AGREEMENTS, AND WILL NOT BE DEEMED TO BE A NOVATION OR TERMINATION OF SUCH
WRITTEN AGREEMENTS. THIS AGREEMENT, INCLUDING RIDER A, SHALL APPLY TO ALL
ADVANCES MADE UNDER ANY SUCH PRIOR AGREEMENTS. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

UNLESS PROHIBITED BY LAW, EACH DEBTOR AND SECURED PARTY HEREBY AGREE THAT THIS
AGREEMENT SHALL NOT BE SUBJECT TO THE PROVISIONS OF TEXAS FINANCE CODE TITLE 4,
SUBTITLE B, CHAPTER 346.

 

This Agreement, and the Addendum and Amendment hereto of even date hereof, may
be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument
and shall become effective when one or more counterparts have been signed by
each party hereto, and any guarantor required thereunder, and delivered to the
other party hereto.

 

Rush Truck Centers of Alabama, Inc.

State of Organization: Delaware

Rush Truck Centers of Arizona, Inc.

State of Organization: Delaware

Rush Truck Centers of California, Inc.

State of Organization: Delaware

Rush Truck Centers of Colorado, Inc.

State of Organization: Delaware

Rush Truck Centers of Florida, Inc.

State of Organization: Delaware

Rush Truck Centers of New Mexico, Inc.

State of Organization: Delaware

Rush Truck Centers of Oklahoma, Inc.

State of Organization: Delaware

Rush Truck Centers of Tennessee, Inc.

State of Organization: Delaware

 

 

By:

 

/s/ W.M. “Rusty” Rush

 

 

Name:

W. M. “Rusty” Rush

 

 

Title:

President

 

 

Date:

September 20, 2005

 

 

RUSH TRUCK CENTERS OF TEXAS, L.P., A

Texas limited partnership

 

By:

RUSHTEX, INC., a Delaware corporation

 

 

General Partner

 

 

 

 

 

 

By:

/s/ W.M. “Rusty” Rush

 

 

 

 

Name:

W. M. “Rusty” Rush

 

 

 

Title: President

 

 

 

Date: September 20, 2005

 

5

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Address for all Debtors:

Rush Enterprises, Inc.

 

Attn: Legal Department

 

P. O. Box 34630

 

San Antonio, Texas 78265-4630

 

Telecopy:  830.626.5307

 

 

Agreed and Accepted at Irving, Texas

 

Secured Party:

General Electric Capital Corporation

 

 

By:

/s/ C. Daniel Clark

 

 

 

Name:

C. Daniel Clark

 

 

Title:

President and General Manager

 

 

Date:

September 20, 2005

 

 

Address:

300 E. Carpenter Frwy

 

 

 

Irving, TX 75062

 

 

Telecopy No:

469.586.2491

Attn: Legal Department

 

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