SECURITY AGREEMENT

 

SECURITYAGREEMENT, dated as of July 23, 2001, between Miller Industries, Inc., aTennessee corporation ("Parent"), and each of its Subsidiarieslisted on the signature pages hereto as a "Grantor" (Parent and suchSubsidiaries, collectively, the "Grantors", and individually, a"Grantor"), THE CIT Group/Business Credit, Inc., in itscapacity as the Collateral Agent for the Lenders, and BANK OF AMERICA, N.A., asExisting Titled Collateral Agent for the Lenders.

WITNESSETH:

WHEREAS,pursuant to that certain Credit Agreement dated as of the date hereof by andamong the Grantors, the Collateral Agent, the Existing Titled Collateral Agent,Bank of America, N.A., as Administrative Agent, Syndication Agent and Letter ofCredit Issuer, and the Lenders (including all annexes, exhibits and schedulesthereto, as from time to time amended, restated, supplemented or otherwisemodified, the "Credit Agreement"), the Lenders have agreed to make theLoans and cause the issuance of the Letters of Credit on behalf of the Grantors;

WHEREAS,in order to induce the Agents, the Letter of Credit Issuer and the Lenders toenter into the Credit Agreement and the other Loan Documents and to induce theLenders to make the Loans and cause the issuance of the Letters of Credit asprovided for in the Credit Agreement, the Grantors have agreed to grant acontinuing Lien on the Collateral (as hereinafter defined) to secure theObligations;

NOW,THEREFORE, in consideration of the premises and mutual covenants hereincontained and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties hereto agree asfollows:

1.       DEFINED TERMS.The following terms shall have the following respective meanings:

"Accounts"means all of each Grantor’s now owned or hereafter acquired or arisingaccounts, as defined in the UCC, including any rights to payment for the sale orlease of goods or rendition of services, whether or not they have been earned byperformance.

"ChattelPaper" means all of each Grantor’s now owned or hereafter acquiredchattel paper, as defined in the UCC, including electronic chattel paper.

"Contracts"means all contracts and agreements to which any Grantor is a party orbeneficiary of, including the Intercompany Security Documents and theIndependent Distributor Security Documents.

 

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"Documents"means all documents, as such term is defined in the UCC, including bills oflading, warehouse receipts or other documents of title, now owned or hereafteracquired by any Grantor.

"Equipment"means all of each Grantor’s now owned and hereafter acquired machinery,equipment, furniture, furnishings, fixtures, and other tangible personalproperty (except Inventory), including embedded software, vehicles with respectto which a certificate of title has been issued (including all such propertyconsisting of Titled Collateral), tow trucks, wreckers, wrecker bodies and otherfleet vehicles, aircraft, dies, tools, jigs, molds and office equipment, as wellas all of such types of property leased by any Grantor and all of each Grantor’srights and interests with respect thereto under such leases (including, withoutlimitation, options to purchase), together with all present and future additionsand accessions thereto, replacements therefor, component and auxiliary parts andsupplies used or to be used in connection therewith, and all substitutes for anyof the foregoing, and all manuals, drawings, instructions, warranties and rightswith respect thereto; wherever any of the foregoing is located.

"ExistingCertificates of Title" means each certificate of title or othercomparable instrument with respect to wreckers, vehicles and other Collateralowned by the Borrowers that, as of the Closing Date, notes the Junior Creditors’Agent (or Bank of America) as the lienholder thereon.

"ExistingTitled Collateral" means all wreckers, vehicles and other Collateralfor which an Existing Certificate of Title has been issued as of the ClosingDate.

"GeneralIntangibles" means all of each Grantor’s now owned or hereafteracquired general intangibles, choses in action and causes of action and allother intangible personal property of each Grantor of every kind and nature(other than Accounts), including, without limitation, all contract rights,payment intangibles, Proprietary Rights, corporate or other business records,inventions, designs, blueprints, plans, specifications, patents, patentapplications, trademarks, service marks, trade names, trade secrets, goodwill,copyrights, computer software, customer lists, registrations, licenses,franchises, tax refund claims, any funds which may become due to any Grantor inconnection with the termination of any employee benefit plan or any rightsthereto and any other amounts payable to any Grantor from any employee benefitplan, rights and claims against carriers and shippers, rights toindemnification, business interruption insurance and proceeds thereof, property,casualty or any similar type of insurance and any proceeds thereof, proceeds ofinsurance covering the lives of key employees on which any Grantor isbeneficiary, rights to receive dividends, distributions, cash, Instruments andother property in respect of or in exchange for pledged equity interests orInvestment Property, and any letter of credit, guarantee, claim, securityinterest or other security held by or granted to any or for the benefit of anyGrantor (including all rights under the Intercompany Security Documents and theIndependent Distributor Security Documents).

"IndependentDistributor Security Documents" means all distributor agreements,security agreements, financing statements, guarantees and other documents,instruments and agreements executed or delivered in connection with any and allAccounts and other obligations owing to any Grantor by any of such Grantor’sIndependent Distributors.

 

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"Instruments"means all instruments, as such term is defined in the UCC, now owned orhereafter acquired by any Grantor.

"Inventory"means all of each Grantor’s now owned and hereafter acquired inventory, goodsand merchandise, wherever located, to be furnished under any contract of serviceor held for sale or lease, including all tow trucks, wreckers and wrecker bodies(including all such property consisting of Titled Collateral), all returnedgoods, raw materials, work-in-process, finished goods (including embeddedsoftware), other materials and supplies of any kind, nature or description whichare used or consumed in any Grantor’s business or used in connection with thepacking, shipping, advertising, selling or finishing of such goods, merchandise,and all documents of title or other Documents representing them.

"InvestmentProperty" means all of each Grantor’s right title and interest in andto any and all of the following, whether now owned or hereafter arising oracquired: (a) securities whether certificated or uncertificated; (b) securitiesentitlements; (c) securities accounts; (d) commodity contracts; or (e) commodityaccounts.

"PaymentAccount" means each bank account established pursuant to this SecurityAgreement, to which the proceeds of Accounts and other Collateral are depositedor credited, and which is maintained in the name of the Collateral Agent or anyGrantor, as the Collateral Agent may determine, on terms acceptable to theCollateral Agent.

"ProprietaryRights" means all of any Grantor’s now owned and hereafter arising oracquired licenses, franchises, permits, patents, patent rights, copyrights,works which are the subject matter of copyrights, trademarks, service marks,trade names, trade styles, patent, trademark and service mark applications, andall licenses and rights related to any of the foregoing, and all other rightsunder any of the foregoing, all extensions, renewals, reissues, divisions,continuations, and continuations-in-part of any of the foregoing, and all rightsto sue for past, present and future infringement of any of the foregoing.

"RestrictedAccount" means bank account number 0037-8291-1498, maintained with Bankof America by Parent and titled Escrow Licensing (Restricted).

"SupportingObligations" means all supporting obligations as such term is definedin the UCC.

"TitledCollateral" means all now existing or hereafter arising Collateral thatis (a) covered by a certificate of title or other comparable instrument issuedunder a statute of a state under the law of which indication of a securityinterest on such certificate or instrument is required as a condition ofperfection, and (b) not subject to a purchase money Lien in favor of anothercreditor which is permitted under clause (j) of the definition of"Permitted Liens" in the Credit Agreement, and in any event TitledCollateral shall include all Existing Titled Collateral.

"UCC"means the Uniform Commercial Code, as in effect from time to time, of the Stateof Georgia or of any other state the laws of which are required as a resultthereof to be applied in connection with the issue of perfection of securityinterests.

 

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All other capitalizedterms used but not otherwise defined herein have the meanings given to them inthe Credit Agreement or in Annex A thereto. All other undefined terms containedin this Security Agreement, unless the context indicates otherwise, have themeanings provided for by the UCC to the extent the same are used or definedtherein.

2.       GRANTOF LIENS.

(a)     Assecurity for all Obligations, the Grantors hereby grant to the Collateral Agent,for the benefit of the Agents, the Letter of Credit Issuer and the Lenders, acontinuing security interest in, lien on, assignment of and right of set-offagainst, all of the following property and assets of the Grantors, whether nowowned or existing or hereafter acquired or arising, regardless of where located:

(i)       allAccounts;

(ii)       allInventory;

(iii)      allcontract rights;

(iv)     all Chattel Paper;

(v)      all Documents;

(vi)      allInstruments;

(vii)     allSupporting Obligations;

(viii)    allGeneral Intangibles;

(ix)      allEquipment;

(x)       allInvestment Property;

(xi)     allmoney, cash, cash equivalents, securities and other property of any kind of eachGrantor held directly or indirectly by the Collateral Agent or any Lender;

(xii)    allof each Grantor’s deposit accounts, credits, and balances with and otherclaims against the Collateral Agent or any Lender or any of their Affiliates orany other financial institution with which any Grantor maintains deposits,including any Payment Accounts;

(xiii)   allof the Grantors’ commercial tort claims;

(xiv)   allbooks, records and other property related to or referring to any of theforegoing, including books, records, account ledgers, data processing records,computer software and other property and General Intangibles at any timeevidencing or relating to any of the foregoing; and

 

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(xv)    allaccessions to, substitutions for and replacements, products and proceeds of anyof the foregoing, including, but not limited to, proceeds of any insurancepolicies, claims against third parties, and condemnation or requisition paymentswith respect to all or any of the foregoing.

All of the foregoing,together with the Real Estate covered by the Mortgages, all equity interests inSubsidiaries pledged to the Collateral Agent, and all other property of theGrantors in which the Collateral Agent or any Lender may at any time be granteda Lien as collateral for the Obligations, is herein collectively referred to asthe "Collateral"; provided, that, notwithstanding anythingherein to the contrary, the Collateral shall not include (A) any personalproperty that is leased by any Grantor or any rights of such Grantor under suchlease (other than such Grantor’s rights to payment under such leaseconstituting Accounts or General Intangibles for money due or to become due) ifand for so long as the grant of a security interest by such Grantor in suchpersonal property or lease violates the terms of such Grantor's lease of suchpersonal property; provided that the Grantor shall be deemed to have granted asecurity interest in such leased personal property, and such personal propertyshall be included in the Collateral, at such time that such grant no longerviolates such lease; (B) any Proprietary Rights that a Grantor has an interestin pursuant to a license, permit, agreement or instrument with a third-party ifand for so long as the grant of a security interest by such Grantor in suchProprietary Rights violates the terms of such Grantor's license, permit,agreement or instrument with such third-party; provided that the Grantor shallbe deemed to have granted a security interest in such Proprietary Rights, andsuch Proprietary Rights shall be included in the Collateral, at such time thatsuch grant no longer violates such license, permit, instrument or agreement; or(C) the Restricted Account; provided that the Collateral shall include eachGrantor’s right to receive proceeds and payments from the Restricted Account.

(b)       Assecurity for all Obligations, the Grantors hereby grant to the Existing TitledCollateral Agent, for the benefit of the Agents, the Letter of Credit Issuer andthe Lenders, a continuing security interest in, lien on, assignment of and rightof set-off against, all of the Existing Titled Collateral, the ExistingCertificates of Title, and all proceeds thereof (including insurance proceeds).

(c)       Allof the Obligations shall be secured by all of the Collateral, including all ofthe Existing Titled Collateral.

3.       PERFECTIONAND PROTECTION OF SECURITY INTEREST.

(a)       TheGrantors shall, at their expense, perform all steps requested by the CollateralAgent at any time to perfect, maintain, protect, and enforce the Agent’sLiens, including: (i) executing, delivering and/or filing and recording ofthe Mortgages, Patent and Trademark Agreement, and executing and filingfinancing or continuation statements, and amendments thereof, in form andsubstance reasonably satisfactory to the Collateral Agent; (ii) deliveringto the Collateral Agent the originals of all Instruments, Documents, tangibleChattel Paper, certificated Investment Property, and all other Collateral ofwhich the Collateral Agent determines it should have physical possession inorder to perfect and protect the Agent’s Liens therein, duly pledged, endorsedor assigned to the Collateral Agent without restriction;

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(iii) deliveringto the Collateral Agent warehouse receipts covering any portion of theCollateral located in warehouses and for which warehouse receipts are issued,and delivering to the Collateral Agent or its representative certificates oftitle covering any portion of the Titled Collateral, together with duly executedapplications for the notation of the Agent’s Liens on such certificates oftitle; (iv) when an Event of Default has occurred and is continuing,transferring Inventory to warehouses or other locations designated by theCollateral Agent; (v) placing notations on the Grantors’ books of account todisclose the Agent’s Liens; (vi) obtaining control agreements in form andsubstance acceptable to the Collateral Agent from securities intermediaries withrespect to financial assets (including Investment Property) in the possession ofsecurities intermediaries and providing the Collateral Agent control of allelectronic Chattel Paper in such manner as the Collateral Agent may require;(vii) assigning and delivering to the Collateral Agent all SupportingObligations, including letters of credit on which any Grantor is namedbeneficiary, with the written consent of the issuer thereof; and (viii) takingsuch other steps as are deemed necessary or desirable by the Collateral Agent tomaintain and protect the Agent’s Liens. To the extent permitted by applicablelaw, the Collateral Agent may file, without any Grantor’s signature, one ormore financing statements disclosing the Agent’s Liens. The Grantors agreethat a carbon, photographic, photostatic, or other reproduction of this SecurityAgreement or of a financing statement is sufficient as a financing statement.

(b)       Ifany Collateral is at any time in the possession or control of any warehouseman,bailee, consignee or any of the Grantors’ agents or processors, then theGrantors shall (i) notify the Collateral Agent thereof and shall use reasonableefforts to obtain a bailee, consignee or similar letter acknowledged by suchPerson that notifies such Person of the Agent’s Liens in such Collateral andinstructs such Person to hold all such Collateral for the Collateral Agent’saccount subject to the Collateral Agent’s instructions, and (ii) deliver tothe Collateral Agent such UCC financing statements as the Collateral Agent mayreasonably request naming such Person as debtor. If at any time any Collateralis located in any operating facility of a Grantor that is leased by suchGrantor, then such Grantor shall use reasonable efforts to obtain writtenlandlord lien waivers or subordinations, in form and substance reasonablysatisfactory to the Collateral Agent, that waive or subordinate all present andfuture Liens which the owner or lessor of such premises may be entitled toassert against the Collateral, provided that the provisions of this sentenceshall not apply to Collateral of the RoadOne Borrowers until January 1, 2002.

(c)       Fromtime to time the Grantors shall, upon the Collateral Agent’s request, executeand deliver confirmatory written instruments pledging to the Collateral Agent,for the ratable benefit of the Agents, the Letter of Credit Issuer and theLenders, the Collateral, but the Grantors’ failure to do so shall not affector limit the Agent’s Liens or any other rights of the Collateral Agent or anyLender in and to the Collateral with respect to the Grantors. So long as theCredit Agreement is in effect and until all Obligations have been fullysatisfied, the Agent’s Liens shall continue in full force and effect in allCollateral (whether or not deemed eligible for the purpose of calculating theAvailability or as the basis for any advance, loan, extension of credit, orother financial accommodation).

(d)       TheGrantors (i) represent and warrant to the Collateral Agent and the Lenders thatthe Grantors do not have any commercial tort claims (as defined in Revised

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Article 9of the UCC) as of the date hereof, and (ii) agree to promptly notify theCollateral Agent in writing of any hereafter arising commercial tort claims inwhich any Grantor is a plaintiff and is seeking damages in excess of $250,000(or, if a specific amount of damages are not pled, which could reasonably beexpected to exceed $250,000) and, in connection therewith, shall promptlyexecute and deliver to the Collateral Agent a confirmation of the Lien grantedhereunder in such claims and such UCC financing and amendment statements as theCollateral Agent may reasonably request in order to perfect the Agent’s Lienstherein.

4.       LOCATION OF COLLATERAL.     The Grantors represent and warrant to the Collateral Agent and the Lenders that:(a) Schedule I (as updated from time to time by delivery by the Grantorsto the Collateral Agent of a written supplemental schedule with respect thereto,such written supplemental schedule to be provided at least thirty (30) daysprior to any change in such schedule) is a correct and complete list of eachGrantor’s chief executive office, the location of its books and records, thelocations of the Collateral, and the locations of all of its other places ofbusiness; and (b) Schedule I (as updated from time to time by delivery bythe Grantors to the Collateral Agent of a written supplemental schedule withrespect thereto, such written supplemental schedule to be provided at leastthirty (30) days prior to any change in such schedule) correctly identifies anyof such facilities and locations that are not owned by the Grantors and setsforth the names of the owners and lessors or sublessors of such facilities andlocations. The Grantors covenant and agree that they will not (i) maintain anyCollateral at any location other than those locations listed for the Grantors onSchedule I, (ii) otherwise change or add to any of such locations, or(iii) change the location of their chief executive office from the locationidentified in Schedule I, or the jurisdiction of any Grantor’sjurisdiction of incorporation or organization from the jurisdiction identifiedin Schedule II, unless they give the Collateral Agent at least thirty(30) days’ prior written notice thereof and execute any and all financingstatements and other documents that the Collateral Agent reasonably requests inconnection therewith. Without limiting the foregoing, each Grantor representsthat all of its Inventory (other than Inventory in transit) is, and covenantsthat all of its Inventory will be, located either (x) on premises owned by suchGrantor, (y) on premises leased by such Grantor, or (z) in a warehouse or with abailee or consignee.

5.       JURISDICTIONOF ORGANIZATION.  Each Grantor represents and warrants to the Collateral Agent and the Lenders,and agrees with the Collateral Agent and the Lenders, that Schedule IIhereto identifies the jurisdiction in which such Grantor is incorporated ororganized and the identification number, if any, provided by such jurisdictionof incorporation or organization.**6.       TITLE TO, LIENS ON, AND SALE ANDUSE OF COLLAGERAL.  The Grantors represent and warrant to the Collateral Agent and the Lenders andagree with the Collateral Agent and the Lenders that: (a) all of the Collateralis and will continue to be owned by the Grantors free and clear of all Lienswhatsoever, except for Permitted Liens; (b) the Agent’s Liens in theCollateral will not be subject to any prior Lien except for those Liensidentified in clauses (a), (c), (d) and (e) of thedefinition of Permitted Liens; and (c) the Grantors will use, store, andmaintain the Collateral with all reasonable care and will use such Collateralfor lawful purposes only.

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7.       ADDITIONALMORTGAGES. The Grantors, atthe Grantors' expense, will grant to the Collateral Agent Mortgages in any RealEstate acquired after the Closing Date as may be requested from time to time bythe Collateral Agent and/or the Required Lenders (collectively, the "AdditionalMortgages"). All such Mortgages shall be granted pursuant todocumentation reasonably satisfactory in form and substance to the CollateralAgent and shall constitute valid and enforceable Liens superior to and prior tothe rights of all third Persons and subject to no other Liens except forPermitted Liens. The Additional Mortgages shall be duly recorded or filed insuch manner and in such places as are required by law to establish, perfect,preserve and protect the Agent’s Liens required to be granted pursuant to theAdditional Mortgages and all taxes, fees and other charges payable in connectiontherewith shall be paid in full by the Grantors. Furthermore, the Grantors shallcause to be delivered to the Collateral Agent such opinions of counsel, titleinsurance and other related documents as may be reasonably requested by theCollateral Agent. Each action required by this Section 7 shall becompleted as soon as possible, but in no event later than 30 days after suchaction is requested to be taken by the Collateral Agent or the Required Lenders,as the case may be.
**8.       ACCESSAND EXAMINATION. Subject tothe **l**imitations imposed on the Collateral Agent and the Lenders in theCredit Agreement, the Collateral Agent, accompanied by any Lender which soelects, may at all reasonable times during regular business hours (and at anytime when a Default or Event of Default exists and is continuing) have accessto, examine, audit, make extracts from or copies of and inspect any or all ofthe Grantors’ records, files, and books of account and the Collateral, anddiscuss the Grantors’ affairs with the Grantors’ officers and management.The Grantors will deliver to the Collateral Agent any instrument necessary forthe Collateral Agent to obtain records from any service bureau maintainingrecords for the Grantors. The Collateral Agent may, at any time when a Defaultor Event of Default exists, and at the Grantors’ expense, make copies of anyor all of the Grantors’ books and records, or require the Grantors to deliversuch copies to the Collateral Agent. During the existence of an Event ofDefault, the Collateral Agent may, without expense to the Collateral Agent, usesuch of the Grantors’ respective personnel, supplies, and Real Estate as maybe reasonably necessary for maintaining or enforcing the Collateral Agent’sLiens. The Collateral Agent shall have the right, at any time, in the CollateralAgent’s name or in the name of a nominee of the Collateral Agent, to verifythe validity, amount or any other matter relating to the Accounts, Inventory,Equipment or other Collateral, by mail, telephone, or otherwise.
**9.       COLLATERAL REPORTING.The Grantors shall provide the Collateral Agent with the following documents atthe following times in form satisfactory to the Collateral Agent (in each caseprepared separately for the Miller Borrowers and the RoadOne Borrowers, as wellas on a combined basis): (a) together with each Borrowing Base Certificatedelivered pursuant to Section 5.2(l) of the Credit Agreement, or morefrequently if requested by the Collateral Agent, a schedule of the Grantors’Accounts created, credits given, cash collected and other adjustments toAccounts since the last such schedule; (b) on a monthly basis, within 30 daysafter the end of each month, or more frequently if requested by the CollateralAgent, an aging of the Grantors’ Accounts, together with a reconciliation tothe corresponding Borrowing Base Certificate and to the Grantors’ generalledger; (c) on a monthly basis, within 30 days after the end of each month, ormore frequently if requested by the Collateral Agent, an aging of the Grantors’accounts payable; (d) on a monthly basis, within 30 days after the end of eachmonth (or more frequently if

 

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requested by theCollateral Agent), a detailed calculation of Eligible Accounts, Eligible SecuredAccounts, Eligible Fleet Vehicles, Eligible Designated Subsidiary Accounts,Eligible Designated Subsidiary Inventory and Eligible Inventory; (e) on amonthly basis, within 30 days after the end of each month (or more frequently ifrequested by the Collateral Agent), Inventory and Eligible Fleet Vehiclesreports by category and location, together with a reconciliation to thecorresponding Borrowing Base Certificate and to the Grantors’ general ledger;(f) upon request, copies of invoices in connection with the Grantors’Accounts, customer statements, credit memos, remittance advices and reports,deposit slips, shipping and delivery documents in connection with the Grantors’Accounts and for Inventory and Equipment (including fleet vehicles) acquired bythe Grantors, purchase orders and invoices; (g) upon request, a statement of thebalance of all assets and liabilities, however arising, which are due to theGrantors from, or which are due from the Grantors to, or which otherwise arisefrom any transaction by the Grantors with, any Affiliate of the Grantors;(h) such other reports as to the Collateral of the Grantors as theCollateral Agent shall reasonably request from time to time; and (i) withthe delivery of each of the foregoing, a certificate of the Grantors executed bya Designated Financial Officer certifying as to the accuracy and completeness ofthe foregoing. If any of the Grantors’ records or reports of the Collateralare prepared by an accounting service or other agent, the Grantors herebyauthorize such service or agent to deliver such records, reports, and relateddocuments to the Collateral Agent, for distribution to the Lenders.
**10.       ACCOUNTS.

(a)     EachGrantor hereby represents and warrants to the Collateral Agent and the Lenders,with respect to the Grantor’s Accounts, that: (i) each existing Accountrepresents, and each future Account will represent, a bonafidesale or lease and delivery of goods by such Grantor, or rendition of services bysuch Grantor, in the ordinary course of such Grantor’s business; (ii) eachexisting Account is, and each future Account will be, for a liquidated amountpayable by the Account Debtor thereon on the terms set forth in the invoicetherefor or in the schedule thereof delivered to the Collateral Agent, withoutany offset, deduction, defense, or counterclaim, except those known to suchGrantor and disclosed to the Collateral Agent and the Lenders pursuant to thisSecurity Agreement; (iii) no payment will be received with respect to anyAccount, and no credit, discount, or extension, or agreement therefor will begranted on any Account, except as reported to the Collateral Agent and theLenders in Borrowing Base Certificates delivered in accordance with the CreditAgreement and this Security Agreement; (iv) each copy of an invoice delivered tothe Collateral Agent by such Grantor will be a genuine copy of the originalinvoice sent to the Account Debtor named therein; and (v) all goods described inany invoice representing a sale of goods will have been delivered to the AccountDebtor and all services of such Grantor described in each invoice will have beenperformed.

(b)       NoGrantor shall (i) re-date any invoice or sale; (ii) make sales on extendeddating beyond that customary in such Grantor’s business; or (iii) extend ormodify any Account except in accordance with Grantors’ past practices andprovided Grantors provide written notice thereof to the Collateral Agent. If anyGrantor becomes aware of any matter adversely affecting the collectibility ofany Account or the Account Debtor therefor involving an amount greater than$100,000, including information that reveals a material adverse change in

 

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theAccount Debtor’s creditworthiness, the Grantors will promptly so advise theCollateral Agent and exclude such Account from Eligible Accounts.

(c)       NoGrantor shall accept any note or other instrument (except a check or otherinstrument for the immediate payment of money) with respect to any Accountwithout the Collateral Agent’s written consent. If the Collateral Agentconsents to the acceptance of any such instrument, it shall be considered asevidence of the Account and not payment thereof and the Grantors will promptlydeliver such instrument to the Collateral Agent, endorsed by the applicableGrantor to the Collateral Agent in a manner satisfactory in form and substanceto the Collateral Agent.

(d)       TheGrantors shall notify the Collateral Agent promptly of all disputes and claimsin excess of $100,000 with any Account Debtor, and agrees to settle, contest, oradjust such dispute or claim at no expense to the Collateral Agent or anyLender. No discount, credit or allowance shall be granted to any such AccountDebtor without the Collateral Agent’s prior written consent, except fordiscounts, credits and allowances made or given in the ordinary course of theGrantors’ business when no Event of Default exists hereunder. The Grantorsshall promptly report each credit memorandum on Borrowing Base Certificates (oron supporting information delivered in connection therewith) submitted by them,and shall send the Collateral Agent a copy of each credit memorandum in excessof $50,000 promptly following the Collateral Agent’s request therefor. TheCollateral Agent may, at all times when an Event of Default exists hereunder,settle or adjust disputes and claims directly with Account Debtors for amountsand upon terms which the Collateral Agent or the Required Lenders, asapplicable, shall consider advisable and, in all cases, the Collateral Agentwill credit the Grantors’ Loan Account with the net amounts received by theCollateral Agent in payment of any Accounts.

(e)       Ifan Account Debtor returns any Inventory to a Grantor when no Event of Defaultexists, then the Grantors shall promptly determine the reason for such returnand, if appropriate, shall issue a credit memorandum to the Account Debtor inthe appropriate amount. The Grantors shall promptly report all returns onBorrowing Base Certificates (or on supporting information delivered inconnection therewith) submitted by them, and shall send the Collateral Agent areport of each return involving an amount in excess of $75,000 promptlyfollowing the Collateral Agent’s request therefor. Each such report shallindicate the reasons for the returns and the locations and condition of thereturned Inventory. In the event any Account Debtor returns Inventory to aGrantor when an Event of Default exists, the Grantors, upon the request of theCollateral Agent, shall: (i) hold the returned Inventory in trust for theCollateral Agent; (ii) segregate all returned Inventory from all of its otherproperty; (iii) dispose of the returned Inventory solely according to theCollateral Agent’s written instructions; and (iv) not issue any credits orallowances with respect thereto without the Collateral Agent’s prior writtenconsent. All returned Inventory shall be subject to the Collateral Agent’sLiens thereon. Whenever any Inventory is returned, the related Account shall bedeemed ineligible to the extent of the amount owing by the Account Debtor withrespect to such returned Inventory.
**11.       COLLECTION OF ACCOUNTS; PAYMENTS.

(a)     Until the Collateral Agent notifies the Grantorsto the contrary, the Grantors shall make collection of all Accounts and otherCollateral for the Collateral Agent, shall

 

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receiveall payments as the Collateral Agent’s trustee, and shall promptly (and in anyevent within one Business Day after receipt thereof) deliver all payments intheir original form duly endorsed in blank into a Payment Account establishedfor the account of the Grantors at a Clearing Bank acceptable to the CollateralAgent, which Payment Account shall be subject to a Blocked Account Agreement.All funds in any Payment Account shall be subject to the Collateral Agent’ssole control, and withdrawals by the Grantors shall not be permitted.

(b)       Promptlyfollowing the request of the Collateral Agent, (i) the Grantors shall establisha lock-box service for collections of Accounts at a Clearing Bank acceptable tothe Collateral Agent and subject to a Blocked Account Agreement and otherdocumentation acceptable to the Collateral Agent, and (ii) the Grantors shallinstruct all Account Debtors to make all payments directly to the addressestablished for such service. If, notwithstanding such instructions, any Grantorreceives any proceeds of Accounts, it shall receive such payments as theCollateral Agent’s trustee, and shall immediately deliver such payments to theCollateral Agent in their original form duly endorsed in blank or deposit theminto a Payment Account, as the Collateral Agent may direct. All collectionsreceived in any lock-box or Payment Account or directly by any Grantor or theCollateral Agent, and all funds in any Payment Account or other account to whichsuch collections are deposited shall be subject to the Collateral Agent’s solecontrol, and withdrawals by the Grantors shall not be permitted.

(c)       TheCollateral Agent or the Collateral Agent’s designee may, at any time after theoccurrence of an Event of Default, notify Account Debtors that the Accounts havebeen assigned to the Collateral Agent and of the Collateral Agent’s securityinterest therein, and may collect them directly and charge the collection costsand expenses to the Loan Account as a Revolving Loan. So long as an Event ofDefault has occurred and is continuing, the Grantors, at the Collateral Agent’srequest, shall execute and deliver to the Collateral Agent such documents as theCollateral Agent shall require to grant the Collateral Agent access to any postoffice box in which collections of Accounts are received.

(d)       Ifsales of Inventory are made or services are rendered for cash, the Grantorsshall immediately deliver to the Collateral Agent or deposit into a PaymentAccount the cash which the Grantors receive.

(e)       Allpayments including immediately available funds received by the Collateral Agentat a bank account designated by it, will be the Collateral Agent’s soleproperty for its benefit and the benefit of the Lenders****and will becredited to the Loan Account (conditional upon final collection) after allowingone (1) Business Days for collection; provided, however, that suchpayments shall be deemed to be credited to the Loan Account immediately uponreceipt for purposes of (i) determining Availability, (ii) calculating theUnused Line Fee pursuant to Section 2.5 of the Credit Agreement, and(iii) calculating the amount of interest accrued thereon solely for purposes ofdetermining the amount of interest to be distributed by the Collateral Agent tothe Lenders (but not the amount of interest payable by the Grantors).
**12.       INVENTORY; PERPETUAL INVENTORY.

(a)       TheGrantors represent and warrant to the Collateral Agent and the Lenders andagrees with the Collateral Agent and the Lenders that all of the Inventory ownedby

 

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the Grantors is andwill be held for sale or lease, or to be furnished in connection with therendition of services, in the ordinary course of the Grantors’ business, andis and will be fit for such purposes. The Grantors will keep their Inventory ingood and marketable condition, except for damaged or defective goods arising inthe ordinary course of the Grantors’ business. The Grantors will not, withoutthe prior written consent of the Collateral Agent, acquire or accept anyInventory on consignment or approval, except pursuant to the NavistarConsignment Agreement provided the Navistar Intercreditor Agreement is in fullforce and effect. The Grantors agree that all Inventory produced by the Grantorsin the United States of America will be produced in accordance with the FederalFair Labor Standards Act of 1938, as amended, and all rules, regulations, andorders thereunder. The Grantors will conduct a physical count of the Inventoryat least once per Fiscal Year, and after and during the continuation of an Eventof Default, at such other times as the Collateral Agent requests. The Grantorswill maintain an inventory reporting system at all times consistent with pastpractices and reasonably acceptable to the Collateral Agent. The Grantors willnot, without the Collateral Agent’s written consent, sell any Inventory on abill-and-hold, guaranteed sale, sale and return, sale on approval, consignment,or other repurchase or return basis.

(b)       Inconnection with all Inventory financed by Letters of Credit, the Grantors will,at the Collateral Agent’s request, instruct all suppliers, carriers,forwarders, customs brokers, warehouses or others receiving or holding cash,checks, Inventory, Documents or Instruments in which the Collateral Agent holdsa security interest to deliver them to the Collateral Agent and/or subject tothe Collateral Agent’s order, and if they shall come into the Grantors’possession, to deliver them, upon request, to the Collateral Agent in theiroriginal form. The Grantors shall also, at the Collateral Agent’s request,designate the Collateral Agent as the consignee on all bills of lading and othernegotiable and non-negotiable documents.
**13.       EQUIPMENT.

(a)       EachGrantor represents and warrants to the Collateral Agent and the Lenders andagrees with the Collateral Agent and the Lenders that all of the Equipment ownedby such Grantor is and will be used or held for use in such Grantor’sbusiness, and is and will be fit for such purposes. Each Grantor shall keep andmaintain its Equipment in good operating condition and repair (ordinary wear andtear excepted) and shall make all necessary replacements thereof.

(b)       TheGrantors shall promptly inform the Collateral Agent of any additions to ordeletions from the Equipment with a fair market value in excess of $10,000,including the purchase, sale or other disposition of any fleet vehicle. TheGrantors shall not permit any Equipment to become a fixture with respect to realproperty or to become an accession with respect to other personal property withrespect to which real or personal property the Collateral Agent does not have aLien. The Grantors will not, without the Collateral Agent’s prior writtenconsent, alter or remove any identifying symbol or number on any of the Grantors’Equipment constituting Collateral.

(c)       Exceptas set forth in the Credit Agreement, no Grantor shall, without the CollateralAgent’s prior written consent, sell, lease as a lessor, or otherwise disposeof any of such Grantor’s Equipment.

 

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(d)       EachGrantor represents and warrants to the Agents and the Lenders that none of theEquipment included in the **[describe pre-closing Appraisal]** is subject toany Lien described in clause (j) of the definition of "PermittedLien".
**14.       DOCUMENTS,, INSTRUMENTS, AND CHATTEL PAPER.Each Grantor represents and warrants to the Collateral Agent and the Lendersthat (a) all Documents, Instruments, and Chattel Paper describing, evidencing,or constituting Collateral, and all signatures and endorsements thereon, are andwill be complete, valid, and genuine, and (b) all goods evidenced by suchDocuments, Instruments, and Chattel Paper are and will be owned by such Grantor,free and clear of all Liens other than Permitted Liens.
**15.       INDEPENDENT DISTRIBUTOR SECURITYDOCUMENTS.

(a)       EachGrantor represents and warrants to the Collateral Agent and the Lenders that (i)on or prior to the date hereof the Grantors have delivered to, or made availablefor review by, the Collateral Agent true and correct copies of each of theIndependent Distributor Security Documents as an effect on the date hereof, and(ii) each of such Independent Distributor Security Documents is in full forceand effect as of the date hereof and constitutes the valid and bindingobligation of each of the parties thereto.

(b)       TheGrantors shall (i) take all actions as may be necessary or as the CollateralAgent may reasonably request in order to maintain in full force and effect theIndependent Distributor Security Documents and all Liens of the Grantorsthereunder, as well as to enable the Collateral Agent to maintain and enforcethe Agent’s Liens therein, including the filing of all such UCC financing,amendment and continuation statements as may be necessary to maintain theperfection and priority of all such Liens or as the Collateral Agent mayreasonably request, and the giving of such notices to the IndependentDistributors as the Collateral Agent may reasonably request with respect to theAgent’s Liens in the Independent Distributor Security Documents, (ii) deliverto the Collateral Agent true and correct copies of all Independent DistributorSecurity Documents entered into or received by the Grantors after the datehereof, (iii) not amend, modify or supplement any of the Independent DistributorSecurity Documents in any respect without the Collateral Agent’s prior consent(except as may be necessary or requested under clause (i) hereof), whichconsent shall not be unreasonably withheld or delayed, and (iv) provide theCollateral Agent prompt written notice of any assertion by any IndependentDistributor that any of the Independent Distributor Security Documents is not alegal and binding obligation of such Independent Distributor in any respect orany attempted revocation or limitation by any Independent Distributor of any ofthe Independent Distributor Security Documents.

(c)       TheGrantors acknowledge and agree that the Collateral Agent shall have the right atany time upon prior notice to Parent to (i) review, examine and make copies ofthe Independent Distributor Security Documents and all of the Grantors’records relating thereto, and (ii) require the Grantors, at their sole cost andexpense, to execute and deliver to the Collateral Agent all such UCC-3assignments as the Collateral Agent may request in order to evidence of recordthe Agent’s Liens in the Independent Distributor Security Documents.

 

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(d)       TheGrantors acknowledge and agree that, notwithstanding any assignment of record tothe Collateral Agent of any UCC financing statements relating to the IndependentDistributor Security Documents or any other action taken by the Collateral Agentunder this Security Agreement with respect to the Independent DistributorSecurity Documents, (i) the provisions of Section 20(b) hereof shall apply tothe Independent Distributor Security Documents, and (ii) the Grantors shallremain responsible for ensuring that all necessary UCC amendment andcontinuation statements are timely and properly filed, and all other actions aretaken, in order to maintain the perfection and priority of all of the Liens ofthe Grantors under the Independent Distributor Security Documents.
**16.       CANADIANINTERCOMPANY SECURITY DOCUMENTS.

(a)       EachGrantor represents and warrants to the Collateral Agent and the Lenders that (i)on or prior to the date hereof the Grantors have delivered to the CollateralAgent true and correct copies of each of the Intercompany Security Documents asan effect on the date hereof, and (ii) each of the Intercompany SecurityDocuments is in full force and effect as of the date hereof and constitutes thevalid and binding obligation of each of the parties thereto.

(b)       TheGrantors shall (i) take all actions as may be necessary or as the CollateralAgent may reasonably request in order to maintain in full force and effect theIntercompany Security Documents and all Liens of the Grantors thereunder, aswell as to enable the Collateral Agent to maintain and enforce the Agent’sLiens therein, including the filing of all such financing, amendment andcontinuation statements as may be necessary to maintain the perfection andpriority of all such Liens or as the Collateral Agent may reasonably request,and the giving of such notices to the Designated Subsidiaries as the CollateralAgent may reasonably request with respect to the Agent’s Liens in theIntercompany Security Documents, (ii) deliver to the Collateral Agent true andcorrect copies of all Intercompany Security Documents entered into or receivedby the Grantors after the date hereof, (iii) not amend, modify or supplement anyof the Intercompany Security Documents in any respect without the CollateralAgent’s prior consent (except as may be necessary or requested under clause(i) hereof), which consent shall not be unreasonably withheld or delayed,and (iv) provide the Collateral Agent prompt written notice of any assertion byany Designated Subsidiary that any of the Intercompany Security Documents is nota legal and binding obligation of such Designated Subsidiary in any respect orany attempted revocation or limitation by any Designated Subsidiary of any ofthe Intercompany Security Documents.

(c)       TheGrantors acknowledge and agree that the Collateral Agent shall have the right atany time upon prior notice to Parent to (i) review, examine and make copies ofthe Intercompany Security Documents and all of the Grantors’ records relatingthereto, and (ii) require the Grantors, at their sole cost and expense, toexecute and deliver to the Collateral Agent all such assignments as theCollateral Agent may request in order to evidence of record the Agent’s Liensin the Intercompany Security Documents.

(d)       TheGrantors acknowledge and agree that, notwithstanding any assignment of record tothe Collateral Agent of any financing or similar statements relating to theIntercompany Security Documents or any other action taken by the CollateralAgent under this Security Agreement with respect to the Intercompany SecurityDocuments, (i) the provisions of

 

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 Section20(b) hereof shall apply to the Intercompany Security Documents, and (ii) theGrantors shall remain responsible for ensuring that all necessary amendment andcontinuation statements are timely and properly filed, and all other actions aretaken, in order to maintain the perfection and priority of all of the Liens ofthe Grantors under the Intercompany Security Documents.
**17.       TITLED COLLATERAL.**
(a)       TheGrantors agree that (i) the Collateral Agent and the Existing Titled CollateralAgent may engage the Custodial Administrator as their agent and custodialadministrator to administer and manage the certificates of title or othercomparable documents (including the Existing Certificates of Title) andaccomplish the perfection of the Agent’s Liens in the Titled Collateral,pursuant to the Custodial Administration Agreement, and (ii) the Grantors shallexecute an agreement or instrument satisfactory to the Custodial Administratorand the Collateral Agent granting power of attorney to the CustodialAdministrator for the purpose of administering and managing such certificates oftitle or other comparable documents and perfecting such Liens. The Grantorsagree that all fees and expenses of the Custodial Administrator, and all filingfees, taxes, and other amounts incurred in connection with such perfection andadministration shall be paid by the Grantors.

(b)       Uponrequest by the Custodial Administrator, and not later than five (5) BusinessDays following receipt thereof by any of the Grantors from the CustodialAdministrator, the Grantors shall execute and deliver to the CustodialAdministrator (i) all certificates of title or other comparable instrumentswhich the Custodial Administrator returns or delivers to the Grantors andinstructs the Grantors to execute in order to accomplish perfection of the Agent’sLiens on the Titled Collateral, (ii) any applications for notation of a securityinterest or other comparable forms required in conjunction with the executedcertificates of title to accomplish perfection of such Liens on the TitledCollateral which the Custodial Administrator delivers to and instructs theGrantors to execute or cause to be executed, and (iii) such other certificates,agreements, notices or other items as the Custodial Administrator or theCollateral Agent deem necessary to perfect such Liens on the Titled Collateral.

(c)       Withintwenty (20) days after the acquisition by any Grantor of any Titled Collateral,the Grantors will: (i) execute such certificate of title applications anddocuments as may be required to indicate the Agent’s Liens thereon; (ii)complete and execute any applications for notation of the Agent’s Liens orother comparable forms required by the applicable state's law in conjunctionwith the executed certificates of title in order to perfect the Agent’s Liensin the Titled Collateral; and (iii) file at its expense the items in clauses(i) and (ii), along with such other certificates, agreements,notices, or other comparable forms as may be necessary, with the appropriateGovernmental Authority in the applicable jurisdiction in order to perfect suchLiens.

(d)       TheGrantors will cause the appropriate Governmental Authority to deliver directlyto the Custodial Administrator, or if delivered to a Grantor, cause to bedelivered to the Custodial Administrator within five (5) Business Days afterreceipt thereof from the appropriate Governmental Authority by a Grantor, eitherthe original certificate of title with the Agent's Liens noted thereon or anewly issued certificate of title or comparable instrument, as applicable, with

 

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theAgent's Liens noted thereon, to be managed and administered in accordance withthe Custodial Administration Agreement.
**18.       RIGHTTO CURE. The CollateralAgent may, in its discretion, and shall, at the direction of the RequiredLenders, pay any amount or do any act required of the Grantors hereunder orunder any other Loan Document in order to preserve, protect, maintain or enforcethe Obligations, the Collateral or the Agent’s Liens therein, and which theGrantors fail to pay or do, including payment of any judgment against anyGrantor, any insurance premium, any warehouse charge, any finishing orprocessing charge, any landlord’s or bailee’s claim, and any other Lien uponor with respect to the Collateral. All payments that the Collateral Agent makesunder this Section 18 and all out-of-pocket costs and expenses thatthe Collateral Agent pays or incurs in connection with any action taken by ithereunder shall be charged to the Grantors’ Loan Account as a Revolving Loan.Any payment made or other action taken by the Collateral Agent under this Section 18shall be without prejudice to any right to assert an Event of Default hereunderand to proceed thereafter as herein provided.
**19.       POWEROF ATTORNEY. EachGrantor hereby appoints the Collateral Agent and the Collateral Agent’sdesignee as such Grantor’s attorney, with power: (a) to endorse suchGrantor’s name on any checks, notes, acceptances, money orders, or other formsof payment or security that come into the Collateral Agent’s or any Lender’spossession; (b) to sign such Grantor’s name on any invoice, bill of lading,warehouse receipt or other negotiable or non-negotiable Document constitutingCollateral, on drafts against customers, on assignments of Accounts, on noticesof assignment, financing statements, certificate of title applications and otherpublic record filings, and to file any such financing statements, applicationsand other filings by electronic means or otherwise with or without a signatureas authorized or required by applicable law or filing procedure; (c) so long asany Event of Default has occurred and is continuing, to notify the post officeauthorities to change the address for delivery of such Grantor’s mail to anaddress designated by the Collateral Agent and to receive, open and dispose ofall mail addressed to such Grantor; (d) to send requests for verification ofAccounts to customers or Account Debtors; (e) to complete in such Grantor’sname or the Collateral Agent’s name, any order, sale or transaction, obtainthe necessary Documents in connection therewith, and collect the proceedsthereof; (f) to clear Inventory through customs in such Grantor’s name, theCollateral Agent’s name or the name of the Collateral Agent’s designee, andto sign and deliver to customs officials powers of attorney in such Grantor’sname for such purpose; and (g) to do all things necessary to carry out theCredit Agreement and this Security Agreement. Each Grantor ratifies and approvesall acts of such attorney. None of the Lenders or the Collateral Agent nor theirattorneys will be liable for any acts or omissions or for any error of judgmentor mistake of fact or law except for their willful misconduct. This power, beingcoupled with an interest, is irrevocable until the Credit Agreement has beenterminated and the Obligations have been fully satisfied.
**20.       THECOLLATERAL AGENT’S AND THE LENDERS’ RIGHTS, DUTIES AND LIABILITIES.

(a)       TheGrantors assume all responsibility and liability arising from or relating to theuse, sale or other disposition of the Collateral. The Obligations shall not beaffected by

 

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anyfailure of the Collateral Agent or any Lender to take any steps to perfect theAgent’s Liens or to collect or realize upon the Collateral, nor shall loss ofor damage to the Collateral release the Grantors from any of the Obligations.Following the occurrence and during the continuation of an Event of Default, theCollateral Agent may (but shall not be required to), and at the direction of theRequired Lenders shall, without notice to or consent from any Grantor, sue uponor otherwise collect, extend the time for payment of, modify or amend the termsof, compromise or settle for cash, credit, or otherwise upon any terms, grantother indulgences, extensions, renewals, compositions, or releases, and take oromit to take any other action with respect to the Collateral, any securitytherefor, any agreement relating thereto, any insurance applicable thereto, orany Person liable directly or indirectly in connection with any of theforegoing, without discharging or otherwise affecting the liability of theGrantors for the Obligations or under the Credit Agreement or any otheragreement now or hereafter existing between the Collateral Agent and/or anyLender and the Grantors.

(b)       Itis expressly agreed by each Grantor that, anything herein to the contrarynotwithstanding, such Grantor shall remain liable under each of its contractsand each of its licenses to observe and perform all the conditions andobligations to be observed and performed by it thereunder. Neither theCollateral Agent nor any Lender shall have any obligation or liability under anycontract or license by reason of or arising out of this Security Agreement orthe granting herein of a Lien thereon or the receipt by the Collateral Agent orany Lender of any payment relating to any contract or license pursuant hereto.Neither the Collateral Agent nor any Lender shall be required or obligated inany manner to perform or fulfill any of the obligations of the Grantors under orpursuant to any contract or license, or to make any payment, or to make anyinquiry as to the nature or the sufficiency of any payment received by it or thesufficiency of any performance by any party under any contract or license, or topresent or file any claims, or to take any action to collect or enforce anyperformance or the payment of any amounts which may have been assigned to it orto which it may be entitled at any time or times.

(c)       TheCollateral Agent may at any time after an Event of Default shall have occurredand be continuing, without prior notice to any Grantor, notify Account Debtors,parties to the Contracts and obligors in respect of Instruments and ChattelPaper, that the Accounts and the right, title and interest of the Grantors inand under such Contracts, Instruments and Chattel Paper have been assigned tothe Collateral Agent, and that payments shall be made directly to the CollateralAgent, for itself and the benefit of the Lenders. Upon the request of theCollateral Agent, the Grantors shall so notify Account Debtors, parties toContracts and obligors in respect of Instruments and Chattel Paper.

(d)       TheCollateral Agent may at any time in the Collateral Agent’s own name or in thename of any Grantor communicate with Account Debtors, parties to contracts,obligors in respect of Instruments, and obligors in respect of Chattel Paper, toverify with such Persons, to the Collateral Agent’s satisfaction, theexistence, amount and terms of any such Accounts, contracts, Instruments orChattel Paper. If an Event of Default shall have occurred and be continuing, theGrantors, at their own expense, shall cause the independent certified publicaccountants then engaged by the Grantors to prepare and deliver to theCollateral Agent and each Lender at any time and from time to time promptly uponthe Collateral Agent’s request the following reports with respect to theGrantor: (i) a reconciliation of all Accounts; (ii) an aging of

 

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allAccounts; (iii) trial balances; and (iv) a test verification of such Accounts asthe Collateral Agent may request. The Grantors, at their own expense, shalldeliver to the Collateral Agent the results of each physical verification, ifany, which the Grantors may in their discretion have made, or caused any otherPerson to have made on its behalf, of all or any portion of its Inventory.
**21.       PATENT, TRADEMARK AND COPYRIGHT COLLATERAL.

(a)       EachGrantor represents and warrants to the Collateral Agent and the Lenders that (i)such Grantor does not have any interest in, or title to, any Patent, Trademarkor Copyright except as set forth in Schedule III hereto, (ii) theSecurity Agreement is effective to create a valid and continuing Lien on and,upon filing of the Copyright Security Agreement with the United States CopyrightOffice, perfected Liens in favor of the Collateral Agent on such Grantor’spatents, trademarks and copyrights and such perfected Liens are enforceable assuch as against any and all creditors of and purchasers from such Grantor, and(iii) upon filing of the Copyright Security Agreements with the United StatesCopyright Office and filing of the Patent and Trademark Agreements with theUnited States Patent and Trademark Office and the filing of appropriatefinancing statements, all actions necessary or desirable to protect and perfectthe Agent’s Lien on such Grantor’s patents, trademarks or copyrights shallhave been duly taken.

(b)       TheGrantors shall notify the Collateral Agent immediately if it knows or has reasonto know that any application or registration relating to any patent, trademarkor copyright (now or hereafter existing) may become abandoned or dedicated, orof any adverse determination or development (including the institution of, orany such determination or development in, any proceeding in the United StatesPatent and Trademark Office, the United States Copyright Office or any court)regarding any Grantor’s ownership of any patent, trademark or copyright, itsright to register the same, or to keep and maintain the same.

(c)       Inno event shall any Grantor, either directly or through any agent, employee,licensee or designee, file an application for the registration of any patent,trademark or copyright with the United States Patent and Trademark Office, theUnited States Copyright Office or any similar office or agency without givingthe Collateral Agent prompt written notice thereof, and, upon request of theCollateral Agent, the Grantors shall execute and deliver any and all PatentSecurity Agreements, Copyright Security Agreements or Trademark SecurityAgreements as the Collateral Agent may request to evidence the Agent’s Lien onsuch patent, trademark or copyright, and the General Intangibles of the Grantorsrelating thereto or represented thereby.

(d)       TheGrantors shall take all actions necessary or requested by the Collateral Agentto maintain and pursue each application, to obtain the relevant registration andto maintain the registration of each of the patents, trademarks and copyrights(now or hereafter existing), including the filing of applications for renewal,affidavits of use, affidavits of noncontestability and opposition andinterference and cancellation proceedings, unless the Grantors shall determinethat such patent, trademark or copyright is not material to the conduct of theirbusiness.

 

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(e)       Inthe event that any of the patent, trademark or copyright Collateral is infringedupon, or misappropriated or diluted by a third party, and such infringement,misappropriation or dilution could reasonably be expected to have a MaterialAdverse Effect, the Grantors shall notify the Collateral Agent promptly afterany Grantor learns thereof. The Grantors shall, in such case, promptly sue forinfringement, misappropriation or dilution and to recover any and all damagesfor such infringement, misappropriation or dilution, and shall take such otheractions as the Collateral Agent shall deem appropriate under the circumstancesto protect such patent, trademark or copyright Collateral.
**22.       INDEMNIFICATION.In any suit, proceeding or action brought by the Collateral Agent or any Lenderrelating to any Account, Chattel Paper, contract, Document, General Intangibleor Instrument for any sum owing thereunder or to enforce any provision of anyAccount, Chattel Paper, contract, Document, General Intangible or Instrument,the Grantors will save, indemnify and keep the Collateral Agent and the Lendersharmless from and against all expense (including reasonable and actual attorneys’fees and expenses), loss or damage suffered by reason of any defense, setoff,counterclaim, recoupment or reduction of liability whatsoever of the obligorthereunder, arising out of a breach by any Grantor of any obligation thereunderor arising out of any other agreement, indebtedness or liability at any timeowing to, or in favor of, such obligor or its successors from any Grantor,except in the case of the Collateral Agent or any Lender, to the extent suchexpense, loss, or damage is attributable to the gross negligence or willfulmisconduct of the Collateral Agent or such Lender as finally determined by acourt of competent jurisdiction. All such obligations of the Grantors shall beand remain enforceable against and only against the Grantors and shall not beenforceable against the Collateral Agent or any Lender.
**23.       LIMITATIONON LIENS ON COLLATERAL. TheGrantors will not create, permit or suffer to exist, and will defend theCollateral against, and take such other action as is necessary to remove, anyLien on the Collateral except Permitted Liens, and will defend the right, titleand interest of the Collateral Agent and the Lenders in and to any of theGrantors’ rights under the Collateral against the claims and demands of allPersons whomsoever.
**24.       NOTICEREGARDING COLLATERAL. TheGrantors will advise the Collateral Agent promptly, in reasonable detail, of anyLien (other than Permitted Liens) or claim made or asserted against any of theCollateral.
**25.       REMEDIES; RIGHTS UPONDEFAULT.

(a)       Inaddition to all other rights and remedies granted to it under this SecurityAgreement, the Credit Agreement, the other Loan Documents and under any otherinstrument or agreement securing, evidencing or relating to any of theObligations, if any Event of Default shall have occurred and be continuing, theCollateral Agent may exercise all rights and remedies of a secured party underthe UCC and otherwise at law or in equity. Without limiting the generality ofthe foregoing, the Grantors expressly agrees that in any such event theCollateral Agent, without demand of performance or other demand, advertisementor notice of any kind (except the notice specified below of time and place ofpublic or private sale) to or upon any Grantor or any other Person (all and eachof which demands, advertisements and notices are hereby expressly

 

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waivedto the maximum extent permitted by the UCC and other applicable law), mayforthwith enter upon the premises of each Grantor where any Collateral islocated through self-help, without judicial process, without first obtaining afinal judgment or giving any Grantor or any other Person notice and opportunityfor a hearing on the Collateral Agent’s claim or action and may collect,receive, assemble, process, appropriate and realize upon the Collateral, or anypart thereof, and may forthwith sell, lease, assign, give an option or optionsto purchase, or sell or otherwise dispose of and deliver said Collateral (orcontract to do so), or any part thereof, in one or more parcels at a public orprivate sale or sales, at any exchange at such prices as it may deem acceptable,for cash or on credit or for future delivery without assumption of any creditrisk. The Collateral Agent or any Lender shall have the right upon any suchpublic sale or sales and, to the extent permitted by law, upon any such privatesale or sales, to purchase for the benefit of the Collateral Agent and theLenders, the whole or any part of said Collateral so sold, free of any right orequity of redemption, which equity of redemption each Grantor hereby releases.Such sales may be adjourned and continued from time to time with or withoutnotice. The Collateral Agent shall have the right to conduct such sales on anyGrantor’s premises or elsewhere and shall have the right to use any Grantor’spremises without charge for such time or times as the Collateral Agent deemsnecessary or advisable.

(b)       EachGrantor further agrees, at the Collateral Agent’s request, to assemble theCollateral and make it available to the Collateral Agent at places which theCollateral Agent shall select, whether at such Grantor’s premises orelsewhere. Until the Collateral Agent is able to effect a sale, lease, or otherdisposition of Collateral, the Collateral Agent shall have the right to hold oruse Collateral, or any part thereof, to the extent that it deems appropriate forthe purpose of preserving Collateral or its value or for any other purposedeemed appropriate by the Collateral Agent. The Collateral Agent shall have noobligation to any Grantor to maintain or preserve the rights of any Grantor asagainst third parties with respect to Collateral while Collateral is in thepossession of the Collateral Agent. The Collateral Agent may, if it so elects,seek the appointment of a receiver or keeper to take possession of Collateraland to enforce any of the Collateral Agent’s remedies (for the benefit of theCollateral Agent and the Lenders), with respect to such appointment withoutprior notice or hearing as to such appointment. The Collateral Agent shall applythe net proceeds of any such collection, recovery, receipt, appropriation,realization or sale to the Obligations as provided in the Credit Agreement, andonly after so paying over such net proceeds, and after the payment by theCollateral Agent of any other amount required by any provision of law, need theCollateral Agent account for the surplus, if any, to the Grantors. To themaximum extent permitted by applicable law, each Grantor waives all claims,damages, and demands against the Collateral Agent or any Lender arising out ofthe repossession, retention or sale of the Collateral except such as arisesolely out of the gross negligence or willful misconduct of the Collateral Agentor such Lender as finally determined by a court of competent jurisdiction. EachGrantor agrees that ten (10) days prior notice by the Collateral Agent of thetime and place of any public sale or of the time after which a private sale maytake place is reasonable notification of such matters. The Grantors shall remainliable for any deficiency if the proceeds of any sale or disposition of theCollateral are insufficient to pay all Obligations, including any attorneys’fees or other expenses incurred by the Collateral Agent or any Lender to collectsuch deficiency.

 

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(c)       Exceptas otherwise specifically provided herein, each Grantor hereby waivespresentment, demand, protest or any notice (to the maximum extent permitted byapplicable law) of any kind in connection with this Security Agreement or anyCollateral.

(d)       EACHGRANTOR HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES ALL RIGHTS WHICHIT HAS UNDER CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR UNDER ANYSIMILAR PROVISION OF APPLICABLE LAW TO NOTICE AND TO A JUDICIAL HEARING PRIOR TOTHE ISSUANCE OF A WRIT OF POSSESSION ENTITLING THE COLLATERAL AGENT OR ANYLENDER, OR THE SUCCESSORS AND ASSIGNS OF THE Collateral AGENT OR SUCH LENDER, TOPOSSESSION OF THE COLLATERAL UPON AN EVENT OF DEFAULT. WITHOUT LIMITING THEGENERALITY OF THE FOREGOING AND WITHOUT LIMITING ANY OTHER RIGHT WHICH THECollateral AGENT OR THE LENDERS MAY HAVE, EACH GRANTOR CONSENTS THAT IF THECollateral AGENT OR ANY LENDER FILES A PETITION FOR AN IMMEDIATE WRIT OFPOSSESSION IN COMPLIANCE WITH SECTIONS 44-14-261 AND 44-14-262 OF THE OFFICIALCODE OF GEORGIA OR UNDER ANY SIMILAR PROVISION OF APPLICABLE LAW, AND THISWAIVER OR A COPY HEREOF IS ALLEGED IN SUCH PETITION AND ATTACHED THERETO, THECOURT BEFORE WHICH SUCH PETITION IS FILED MAY DISPENSE WITH ALL RIGHTS ANDPROCEDURES HEREIN WAIVED AND MAY ISSUE FORTHWITH AN IMMEDIATE WRIT OF POSSESSIONIN ACCORDANCE WITH CHAPTER 14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR INACCORDANCE WITH ANY SIMILAR PROVISION OF APPLICABLE LAW, WITHOUT THE NECESSITYOF AN ACCOMPANYING BOND AS OTHERWISE REQUIRED BY SECTION 44-14-263 OF THEOFFICIAL CODE OF GEORGIA OR BY ANY SIMILAR PROVISION UNDER APPLICABLE LAW.
**26.       GRANTOF LICENSE TO USE PROPRIETARY RIGHTS.For the purpose of enabling the Collateral Agent to exercise rights and remediesunder this Security Agreement (including, without limiting the terms of Section25****hereof, in order to take possession of, hold, preserve, process,assemble, prepare for sale, market for sale, sell or otherwise dispose ofCollateral) at such time as the Collateral Agent shall be lawfully entitled toexercise such rights and remedies, each Grantor hereby grants to the CollateralAgent, for the benefit of the Collateral Agent and the Lenders, an irrevocable,nonexclusive license (exercisable without payment of royalty or othercompensation to any Grantor) to use, license or sublicense any ProprietaryRights now owned or hereafter acquired by such Grantor, and wherever the samemay be located, and including in such license access to all media in which anyof the licensed items may be recorded or stored and to all computer software andprograms used for the compilation or printout thereof.
**27.       LIMITATIONON THE COLLATERAL AGENT’S AND THE LENDERS’ DUTY IN RESPECT OF COLLATERAL.The Collateral Agent and each Lender shall use reasonable care with respect tothe Collateral in its possession or under its control. Neither the CollateralAgent nor any Lender shall have any other duty as to any Collateral in itspossession or control or in the possession or control of any agent or nominee ofthe Collateral Agent or such Lender, or any income thereon or as to thepreservation of rights against prior parties or any other rights pertainingthereto.
** **
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28.       MISCELLANEOUS.

(a)       **Reinstatement**. This Security Agreement shall remain in full forceand effect and continue to be effective should any petition be filed by oragainst any Grantor for liquidation or reorganization, should any Grantor becomeinsolvent or make an assignment for the benefit of any creditor or creditors orshould a receiver or trustee be appointed for all or any significant part of anyGrantor’s assets, and shall continue to be effective or be reinstated, as thecase may be, if at any time payment and performance of the Obligations, or anypart thereof, is, pursuant to applicable law, rescinded or reduced in amount, ormust otherwise be restored or returned by any obligee of the Obligations,whether as a "voidable preference," "fraudulent conveyance,"or otherwise, all as though such payment or performance had not been made. Inthe event that any payment, or any part thereof, is rescinded, reduced, restoredor returned, the Obligations shall be reinstated and deemed reduced only by suchamount paid and not so rescinded, reduced, restored or returned.

(b)       **Notices**. Except asotherwise provided herein, whenever it is provided herein that any notice,demand, request, consent, approval, declaration or other communication shall ormay be given to or served upon any of the parties by any other party, orwhenever any of the parties desires to give and serve upon any other party anycommunication with respect to this Security Agreement, each such notice, demand,request, consent, approval, declaration or other communication shall be inwriting and shall be given in the manner, and deemed received, as provided forin the Credit Agreement.

(c)       **Severability**. Whenever possible, each provision of this SecurityAgreement shall be interpreted in a manner as to be effective and valid underapplicable law, but if any provision of this Security Agreement shall beprohibited by or invalid under applicable law, such provision shall beineffective to the extent of such prohibition or invalidity without invalidatingthe remainder of such provision or the remaining provisions of this SecurityAgreement. This Security Agreement is to be read, construed and applied togetherwith the Credit Agreement and the other Loan Documents which, taken together,set forth the complete understanding and agreement of the Collateral Agent, theLenders and the Grantors with respect to the matters referred to herein andtherein.

(d)       **No Waiver; Cumulative Remedies**. Neither the Collateral Agent norany Lender shall by any act, delay, omission or otherwise be deemed to havewaived any of its rights or remedies hereunder, and no waiver shall be validunless in writing, signed by the Collateral Agent and then only to the extenttherein set forth. A waiver by the Collateral Agent of any right or remedyhereunder on any one occasion shall not be construed as a bar to any right orremedy which the Collateral Agent would otherwise have had on any futureoccasion. No failure to exercise nor any delay in exercising on the part of theCollateral Agent or any Lender, any right, power or privilege hereunder, shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, power or privilege hereunder preclude any other or future exercisethereof or the exercise of any other right, power or privilege. The rights andremedies hereunder provided are cumulative and may be exercised singly orconcurrently, and are not exclusive of any rights and remedies provided by law.None of the terms or provisions of this Security

 

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Agreement may bewaived, altered, modified or amended except by an instrument in writing, dulyexecuted by the Collateral Agent and the Grantors.

(e)       **Limitation by Law**. All rights, remedies and powers provided inthis Security Agreement may be exercised only to the extent that the exercisethereof does not violate any applicable provision of law, and all the provisionsof this Security Agreement are intended to be subject to all applicablemandatory provisions of law that may be controlling and to be limited to theextent necessary so that they shall not render this Security Agreement invalid,unenforceable, in whole or in part, or not entitled to be recorded, registeredor filed under the provisions of any applicable law.

(f)       **Termination of this SecurityAgreement**. Subject to Section 28(a)****hereof, this SecurityAgreement (other than Section 22) and the license granted pursuant toSection 26 hereof shall terminate upon the satisfactory collateralization of allLetters of Credit, the payment in full of all other Obligations (other thanindemnification Obligations as to which no claim has been asserted), and thetermination of all Commitments.

(g)       **Successors and Assigns.**This Security Agreement and allobligations of the Grantors hereunder shall be binding upon the successors andassigns of the Grantors (including any debtor-in-possession on behalf of anyGrantor) and shall, together with the rights and remedies of the CollateralAgent, for the benefit of the Collateral Agent, the Letter of Credit Issuer andthe Lenders, hereunder, inure to the benefit of the Collateral Agent and theLenders, all future holders of any instrument evidencing any of the Obligationsand their respective successors and assigns. No sales of participations, othersales, assignments, transfers or other dispositions of any agreement governingor instrument evidencing the Obligations or any portion thereof or interesttherein shall in any manner affect the Lien granted to the Collateral Agent, forthe benefit of the Collateral Agent, the Letter of Credit Issuer and theLenders, hereunder. No Grantor may assign, sell, hypothecate or otherwisetransfer any interest in or obligation under this Security Agreement.

(h)       **Counterparts**. This Security Agreement may be executed in anynumber of separate counterparts, each of which shall collectively and separatelyconstitute one and the same agreement.

(i)       **Governing Law**. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OFTHE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE OBLIGATIONS ARISINGHEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS MADE AND PERFORMED INTHAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACHGRANTOR HEREBY CONSENTS AND AGREES THAT THE STATE COURTS OF THE STATE OF GEORGIAOR THE FEDERAL COURTS LOCATED IN FULTON COUNTY, GEORGIA, SHALL HAVE EXCLUSIVEJURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY GRANTOR,THE COLLATERAL AGENT AND THE LENDERS PERTAINING TO THIS SECURITY AGREEMENT ORANY OF THE

 

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OTHER LOAN DOCUMENTS ORTO ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OFTHE OTHER LOAN DOCUMENTS, PROVIDED, THAT THE COLLATERAL AGENT, THELENDERS AND EACH GRANTOR ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAYHAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF SUCH JURISDICTIONS, AND, PROVIDED,FURTHER, NOTHING IN THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TOPRECLUDE THE COLLATERAL AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION INANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FORTHE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THECOLLATERAL AGENT. EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCHJURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH GRANTORHEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONALJURISDICTION, IMPROPER VENUE OR FORUMNONCONVENIENS ANDHEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMEDAPPROPRIATE BY SUCH COURT. EACH GRANTOR HEREBY WAIVES PERSONAL SERVICE OF THESUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT ANDAGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BYREGISTERED OR CERTIFIED MAIL ADDRESSED TO THE BORROWERS’ AGENT AT THE ADDRESSSET FORTH IN SECTION 13.8 OF THE CREDIT AGREEMENT AND THAT SERVICE SOMADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF ORFIVE (5) BUSINESS DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

(j)       **Waiver of Jury Trial**. BECAUSE DISPUTES ARISING IN CONNECTION WITHCOMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY ANEXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERALLAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTESARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCHAPPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OFTHE JUDICIAL SYSTEM AND OF ARBITRATION, TO THE EXTENT PERMITTED BY APPLICABLELAW, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT ORPROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,OR OTHERWISE, AMONG THE COLLATERAL AGENT, THE LENDERS, THE LETTER OF CREDITISSUER AND ANY GRANTOR ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTALTO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS SECURITY AGREEMENT ORANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.

(k)       **Section Titles**. TheSection titles contained in this Security Agreement are and shall be withoutsubstantive meaning or content of any kind whatsoever and are not a part of theagreement between the parties hereto.

 

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(l)       **No Strict Construction**. The parties hereto have participatedjointly in the negotiation and drafting of this Security Agreement. In the eventan ambiguity or question of intent or interpretation arises, this SecurityAgreement shall be construed as if drafted jointly by the parties hereto and nopresumption or burden of proof shall arise favoring or disfavoring any party byvirtue of the authorship of any provisions of this Security Agreement.

(m)       **Adviceof Counsel**. Each of the parties represents to each other party heretothat it has discussed this Security Agreement and, specifically, the provisionsof Sections 25(d), 28(i) and Section 28(j), with its counsel.

(n)       **Benefitof the Lenders**. All Liens granted or contemplated hereby shall be forthe benefit of the Collateral Agent, the Letter of Credit Issuer and theLenders, and all proceeds or payments realized from Collateral in accordanceherewith shall be applied to the Obligations in accordance with the terms of theCredit Agreement.

(o)       **Existing Titled Collateral**.Each of the parties hereto acknowledges and agrees that (i) pursuant to theCredit Agreement, Bank of America has authorized the Collateral Agent to takeall actions, and exercise all rights and remedies, otherwise available to theExisting Titled Collateral Agent with respect to the Existing Titled Collateraland the Existing Certificates of Title, as more fully set forth in the CreditAgreement, and (ii) each reference herein to the "Collateral Agent" asit relates to Collateral that consists of Existing Titled Collateral, and therights and remedies of the Collateral Agent with respect thereto, shall bedeemed to include both the Collateral Agent and the Existing Titled CollateralAgent (it being understood that, in accordance with clause (i) above, theCollateral Agent shall have the full right and power to exercise all such rightsand remedies on behalf of the Existing Titled Collateral Agent).

[SIGNATURES COMMENCENext Page]

 

 

 

 

 

 

 

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INWITNESS WHEREOF, each of the parties hereto has caused this Security Agreementto be executed and delivered by its duly authorized officer as of the date firstset forth above.
 **GRANTORS:

ACKERMAN WRECKER      SERVICE, INC.      A-EXCELLENCE TOWING CO.      ALL AMERICAN TOWING SERVICES, INC.       ALLIED GARDENS      TOWING, INC.      ALLIED TOWING AND      RECOVERY, INC.      ALTAMONTE TOWING,      INC.      ANDERSON TOWING      SERVICE, INC.      APACO, INC.      ARROW WRECKER      SERVICE, INC.      A TO Z ENTERPRISES,      INC.      B&B ASSOCIATED      INDUSTRIES, INC.      B-G TOWING, INC.      BEAR TRANSPORTATION,      INC.      BEATY TOWING &      RECOVERY, INC.      BERT'S TOWING        RECOVERY           **CORPORATION      BOB BOLIN SERVICES,      INC.      BOB'S AUTO SERVICE,      INC.      BOB VINCENT AND        SONS WRECKER**     **SERVICE, INC.      BOULEVARD &        TRUMBULL TOWING,****INC.      BREWER'S, INC.      BRYRICH CORPORATION      C&L TOWING      SERVICES, INC.      CAL WEST TOWING,      INC.      CARDINAL CENTRE      ENTERPRISES, INC.      CEDAR BLUFF 24 HOUR      TOWING, INC.      CENTRAL VALLEY      TOWING, INC.      CENTURY HOLDINGS,      INC.      CHAD'S, INC.      CHAMPION CARRIER      CORPORATION      CHEVRON, INC.      CHICAGO METRO      SERVICES, INC.      CLARENCE CORNISH      AUTOMOTIVE**     **SERVICE, INC.      CLEVELAND VEHICLE      DETENTION      CENTER, INC.      COFFEY’S        TOWING, INC.**
 

 
 **COLEMAN’S        TOWING & RECOVERY, INC.      COMPETITION WHEELIFT, INC.      D.A. HANELINE,      INC.      DVREX,                              INC.      DICK'S TOWING      & ROAD SERVICE, INC.      DOLLAR      ENTERPRISES, INC.      DON'S TOWING,      INC.      DUGGER’S      SERVICES, INC.      DUN-RITE TOWING      INC.      DURU, INC.      E.B.T., INC.      EXPORT      ENTERPRISES, INC.      GARY’S TOWING        & SALVAGE POOL,**INC.      GOLDEN WEST        TOWING EQUIPMENT****INC.      GOOD MECHANIC        AUTO CO. OF RICHFIELD, INC.      GREAT AMERICA      TOWING, INC.      GREG'S TOWING,      INC.      H&H TOWING      ENTERPRISES, INC.      HALL'S TOWING      SERVICE, INC.      HENDRICKSON      TOWING, INC.      H.M.R.      ENTERPRISES, INC.      INTERSTATE TOWING      & RECOVERY, INC.      KAUFF'S, INC.      KAUFF’S OF FT.      PIERCE, INC.      KAUFF’S OF      MIAMI, INC.      KAUFFS OF PALM      BEACH, INC.      KEN'S TOWING,      INC.      KING AUTOMOTIVE      & INDUSTRIAL EQUIPMENT, INC.      LAZER TOW      SERVICES, INC.      LEVESQUE'S AUTO      SERVICE, INC.      LWKR, INC.      LINCOLN TOWING      ENTERPRISES, INC.      M&M TOWING      AND RECOVERY, INC.      MAEJO, INC.      MEL'S ACQUISITION      CORP.      MERL'S TOWING      SERVICE, INC.      MID AMERICA        WRECKER &**     **EQUIPMENT SALES,      INC. OF COLORADO      MIKE'S WRECKER      SERVICE, INC.**
 

 
 **MILLER        FINANCIAL SERVICES GROUP,  INC.        MILLER/GREENEVILLE,      INC.        MILLER        INDUSTRIES DISTRIBUTING, INC.        MILLER INDUSTRIES,      INC.        MILLER        INDUSTRIES INTERNATIONAL, INC.        MILLER INDUSTRIES      TOWING      EQUIPMENT INC.        MOORE'S SERVICE      & TOWING, INC.        MOORE'S TOWING      SERVICE, INC.        MOSTELLER’S      GARAGE, INC.        MURPHY'S                              TOWING, INC.        OFFICIAL TOWING,      INC.        O'HARE TRUCK      SERVICE, INC.        P.A.T., INC.        PIPES      ENTERPRISES, INC.        PRO-TOW, INC.        PULLEN'S TRUCK      CENTER, INC.        PURPOSE, INC.        RAR ENTERPRISES,      INC.        RANDY'S                              HIGH COUNTRY TOWING, INC.        RAY HARRIS, INC.        RMA ACQUISITION      CORP.        RRIC ACQUISITION      CORP.        RAY’S TOWING,      INC.        RECOVERY      SERVICES, INC.        RTIEX, INC.        RBEX INC.        ROAD ONE, INC.        ROADONE EMPLOYEE      SERVICES, INC.        ROAD ONE      INSURANCE SERVICES, INC.        ROAD ONE SERVICE,      INC.        ROADONE SPECIALIZED      TRANSPORTATION, INC.        ROADONE      TRANSPORTATION AND      LOGISTICS, INC.        R.M.W.S., INC.        SANDY'S AUTO      & TRUCK SERVICE, INC.        SAKSTRUP TOWING,      INC.        SONOMA CIRCUITS,      INC.        SOUTHERN WRECKER      CENTER, INC.        SOUTHERN WRECKER      SALES, INC.        SOUTHWEST      TRANSPORT, INC.        SPEED'S      AUTOMOTIVE, INC.**
 

 
 **SPEED'S RENTALS,      INC.      SROGA'S      AUTOMOTIVE SERVICES, INC.      SUBURBAN WRECKER      SERVICE, INC.      TEAM TOWING AND      RECOVERY, INC.      TED'S OF FAYVILLE,      INC.      TEXAS TOWING      CORPORATION      THOMPSON'S      WRECKER SERVICE, INC.TOW PRO CUSTOM        TOWING & HAULING, INC.      TREASURE COAST      TOWING, INC.      TREASURE COAST      TOWING OF MARTIN            COUNTY, INC.      TRUCK                              SALES & SALVAGE CO., INC.      WALKER TOWING,      INC.      WES'S SERVICE      INCORPORATED      WESTERN TOWING; MCCLURE/EARLEY           **ENTERPRISES, INC.      WHITEY’S      TOWING, INC.      WILTSE TOWING,      INC.      ZEBRA TOWING,      INC.      ZEHNER TOWING      & RECOVERY, INC.
 **
By:    * /s/ Frank Madonia*                                                             Frank Madonia                Attorney-in-fact          of each of the above-                referenced          Grantors  
 

 

 

 

 
 
 
**COLLATERAL AGENT:

The CIT      GROUP/COMMERCIAL SERVICES, INC.**
 

By:   * /s/      Arthur R. Cordwell  *                                             Name:    Arthur R. Cordwell                                                      Title:      V.P.                                                                         
 
**EXISTING TITLED      COLLATERAL AGENT:

BANK OF AMERICA, N.A.**
By:   */s/      Kevin M. Moore*                                                           Name:    Kevin M.      Moore                                                          Title:      Senior      V.P.                                                               

 

 

 

 
**SCHEDULE I**toSECURITY AGREEMENT
 

 

LOCATION OF COLLATERAL**
 

 

A.       Location of ChiefExecutive Office

B.       Location of Books andRecords

C.       Location of Collateral

D.        Location of all otherplaces of business

E.       Location of leasedfacilities and name of lessor/sublessor

 

 

 
**SCHEDULE II**toSECURITY AGREEMENT
 

JURISDICTION OFORGANIZATION(AND ORGANIZATIONNUMBER)**
 

 

 

 

 

 

 

 

 

 
**SCHEDULE III**toSECURITY AGREEMENT
 

 

PATENTS, TRADEMARKS ANDCOPYRIGHTS**
 

 

 

 

 

 

 

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