EXHIBIT 10.36
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Security Agreement") is made this 31st day of
December, 2001, by Syndicated Transportation Service Group, Inc., successor by
merger of ▇▇▇▇▇▇▇ Transportation, Inc. ("Grantor"), in favor of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as joint tenants (together, "Secured Party").
WHEREAS, Secured Party and Grantor are, together with other parties,
parties to an Agreement and Plan of Merger and Reorganization ("Merger
Agreement") pursuant to which Secured Party exchanged all of the shares of the
common stock of ▇▇▇▇▇▇▇ Food Service, Inc. and ▇▇▇▇▇▇▇ Transportation, Inc. for,
among other considerations, a $1,266,420 promissory note (the "Promissory Note")
of Syndicated Food Service International, Inc. f/k/a Floridino's International
Holdings, Inc. ("SFSI"); and
WHEREAS, pursuant to the terms of the Merger Agreement, Grantor agreed
to grant to Secured Party a security interest in the Collateral (as defined
below) to secure compliance with the Liabilities (as defined in Section 1
below);
WHEREAS, capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Merger Agreement or in the Promissory Note;
NOW THEREFORE, in consideration of the premises and the covenants and
promises in this Security Agreement, the legal sufficiency of which the parties
acknowledge, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement:
"COLLATERAL" means all of the Grantor's property described on Exhibit
A, consisting of motor vehicles, in which a security interest and lien is
granted under this Security Agreement.
"LIABILITIES" means the obligations of SFSI under the Promissory Note.
2. SECURITY INTEREST IN COLLATERAL.
As security for the prompt payment and performance of the Liabilities,
Secured Party shall have, and Grantor does hereby grant to Secured Party, a
security interest in the Collateral, wherever located, and all products,
proceeds, including, without limitation, insurance proceeds, of the Collateral
and all rights and remedies of Grantor in relation to the Collateral.
Immediately upon execution of this Security Agreement, Grantor, at Grantor's
expense, shall cause the Secured Party's lien against the Collateral to be
reflected on each certificate of title issued for the Collateral, and upon
securing the new certificates of title, as amended to reflect the liens, Grantor
shall deliver all the certificates of title to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, with address
at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Escrow Agent")
who shall hold in escrow such certificates of title and (i) upon the occurrence
of an Event of Default (which has not been cured within the permitted periods)
deliver them to the Secured Party to be sold as per Section 4 hereof or (ii)
return them to Grantor upon payment of the Promissory Note.
3. COVENANTS OF THE GRANTOR; REPRESENTATIONS AND WARRANTIES OF
THE GRANTOR.
(a) COVENANTS. Grantor agrees to do all reasonable acts and things
and deliver or cause to be delivered any other documents as Secured Party may
deem necessary to establish and maintain a valid security interest in the
Collateral (free of all other liens and claims) to secure the payment and
performance of the Liabilities. Grantor authorizes Secured Party, at the expense
of Grantor, to execute and file a financing statement or statements on its
behalf in those public offices deemed advisable or necessary by Secured Party
to protect the security interests of Secured Party granted in this Agreement.
If permitted by law, Grantor agrees that a carbon, photographic or other
reproduction of this Security Agreement or of a financing statement may be filed
as a financing statement.
(b) NOTICE OF CHANGES. Grantor agrees to give immediate notice to
Secured Party of any change in the name of Grantor or the location of its chief
executive office or places where it conducts business.
(c) REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants to Secured Party that the execution, delivery and performance of this
Security Agreement by Grantor does not require the approval of its shareholders
or any third party, and will not violate or conflict with, or result in an event
of default under, (i) any law or requirement binding on Grantor, (ii) Grantor's
articles of incorporation or by-laws, or (iii) any contract or agreement to
which Grantor is a party.
4. POWER TO SELL OR COLLECT COLLATERAL. Upon the occurrence of an
Event of Default and at any time after the occurrence of such Event of Default
(with the Event of Default not having previously been cured), Secured Party
shall have, in addition to all other rights and remedies, the remedies of a
secured party under the Uniform Commercial Code including, without limitation,
the right to realize on the Collateral, and for that purpose Secured Party may,
so far as Grantor can give authority and take and act for Grantor in connection
with the Collateral, Secured Party shall give to Grantor at least ten (10) days'
prior written notice of the time and place of any public sale of Collateral or
of the time after which any private sale or any other intended disposition is to
be made, which Secured Party and Grantor agree is commercially reasonable and
Grantor or its affiliates retain equitable rights of redemption and can purchase
Collateral at such sale.
5. WAIVERS AND AMENDMENT. Except as otherwise expressly set forth
in this Agreement, Grantor waives demand, notice of protest, notice of
acceptance of this Security Agreement, Collateral received or delivered or
other action taken in reliance and all other demands and notices of any
description. With respect to both Liabilities and Collateral, Grantor assents to
any extension or postponement of the time of payment or any other indulgence, to
any substitution, exchange, or release of Collateral, to the addition or release
of any party or person primarily or secondarily liable, to the acceptance of
partial payments thereon and the settlement, compromise or adjustment of any
thereof, all in such manner and at such time or times as Secured Party may deem
advisable. Secured Party has no duty as to the collection or protection of the
Collateral, or any income from the Collateral, nor as to the preservation of
rights against prior parties. Secured Party may exercise its rights with respect
to Collateral without regard to other sources of reimbursement for any
Liability. Secured Party shall not be deemed to have waived any of these rights
upon or under Liabilities or Collateral unless the waiver be in writing and
signed by Secured Party. No delay or omission on the part of Secured Party in
exercising any right operates as a waiver of that right or any other right. A
waiver on any one occasion shall not be construed as a bar to the exercise of
any right on any future occasion. All rights and remedies of Secured Party as to
the Liabilities or Collateral whether evidenced hereby or by any other
instrument or papers shall be cumulative and may be exercised singly,
successively or together. Secured Party may, from time to time, without notice
to Grantor (a) release its security interest in any of the property securing any
of the Liabilities and permit any substitution or exchange for any such property
which Secured Party agrees to do upon reasonable advance notice from Grantor in
connection with the replacement of property in the ordinary course of Grantor's
business subject to the understanding that any replacement property will be
subject to this Security Agreement; and (b) resort to the Collateral for the
payment of any of the Liabilities whether or not it shall have resorted to any
other property or shall have proceeded against any party primarily or
secondarily liable for any of the Liabilities. Secured Party is not liable for
any error or omission or delay of any kind occurring in the liquidation of any
Collateral, including the settlement, collection of any Collateral or for any
resulting damage, unless the error, omission or delay is adjudged to be gross
negligence or willful misconduct on the part of Secured Party. This Security
Agreement may be amended only by a writing duly signed by Secured Party and
Grantor.
6. EXPENSES, PROCEEDS OF COLLATERAL. Grantor shall pay to Secured
Party on demand any and all expenses, including reasonable attorneys' fees,
incurred or paid by Secured Party in protecting or enforcing its rights upon or
under Liabilities or the Collateral. After deducting all expenses, the residue
of any proceeds of collection or sale of the Collateral shall be applied first
to the payment of interest and then on principal payments on the Promissory
Note, and any excess shall be returned to Grantor. To the extent Grantor makes a
payment or payments to Secured Party or Secured Party enforces its security
interest and lien, and the payments or the proceeds of the enforcement are set
off or are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a
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trustee or receiver or any other party under any Bankruptcy Law, state or
federal law, common law or equitable cause, in whole or in part, then to the
extent of recovery, the liability originally intended to be satisfied shall be
revived and continued in full force and effect as if the payment had not been
made or such enforcement or setoff had not occurred and shall be Liabilities
secured by the Collateral. Secured Party may, at any time or times, pay,
acquire, satisfy, or discharge any security interest, lien, encumbrance or claim
asserted by any person against the Collateral, with no obligation to determine
validity. All sums paid by Secured Party under the provisions of this paragraph
and any existing or other charges relating thereto shall be repaid to Secured
Party by Grantor on demand, and shall bear interest at the rate applicable under
me Liabilities.
7. NOTICES. All notices and other communications provided for
herein shall be dated and in writing and shall be deemed to have been duly given
(x) on the date of delivery, if delivered personally or by telecopier, receipt
confirmed, (y) on the second following business day, if delivered by a
recognized overnight courier service, or (z) seven days after mailing, if sent
by registered or certified mail, return receipt requested, postage prepaid, in
each case, to the party to whom it is directed at the following address (or at
such other address as any party hereto shall hereafter specify by notice in
writing to the other parties hereto):
(i) If to Secured Parties, to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at the following address:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇, ext. 201
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇
(ii) If to Grantor:
Syndicated Transportation Service Group, Inc.
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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(iii) If to the Escrow Agent
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇
8. GENERAL. This Security Agreement and all rights and
obligations hereunder, including matters of construction, validity and
performance, shall be governed by the Indiana Uniform Commercial Code and other
applicable laws of the State of Indiana, without regard to principles of
conflicts of law. Whenever possible each provision of this Security Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition without invalidating the
remainder of such provision or the remaining provisions of this Security
Agreement. Grantor recognizes that Secured Party has relied on this Security
Agreement in approving the Merger Agreement and agrees that such reliance by
Secured Party shall be sufficient consideration for this Security Agreement. The
rights and privileges of Secured Party shall inure to the benefit of its
respective successors and assigns; provided that this Security Agreement can
only be assigned to the assignee, if any, of the Promissory Note.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be
executed by its officers duly authorized as of the date first above written.
GRANTOR
SYNDICATED TRANSPORTATION
SERVICE GROUP, INC.
(SUCCESSOR BY MERGER TO
▇▇▇▇▇▇▇ TRANSPORTATION, INC.)
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SECURED PARTY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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EXHIBIT A
DESCRIPTION OF COLLATERAL
(MOTOR VEHICLES)
12/20/2001 PAGE 1
▇▇▇▇▇▇▇ Transportation INC.
*VEHICLE/Equipment SUMMARY FILE LISTING*
All Vehicles Regardless of Owner
VEHICLE SERIAL NUMBER/ LICENCE TAG &, CURRENT MILEAGE MAINTENANCE
TYPE VEHICLE CODE VEHICLE NAME TITLE NUMBER TAG EXP. / STATE MILEAGE DATE COAT LIFE
------- ------------ ------------ -------------- ---------------- --------------- -----------
Car 10 JEEP 206628A 60,167 $ 2,537.02
01/10/2002 / IN 10/11/2001
Car 5 5 586512L 33,251 $ 773.31
06/30/2001 / IN 12/16/2000
Other 486 486 53G4898 0 $ 0.00
01/31/2002 / IN 07/27/2001
Other 895 895 797435L 62,000 $ 876.75
01/31/2002 / IN 11/19/2001
Truck 100 100 104943 199,599 $ 4,366.40
07/31/2001 / IN 11/23/2001
Truck 101 101 104946 335,790 $ 5,736.08
07/31/2002 / IN 12/07/2001
Truck 102 102 104934 468,916 $ 4,451.67
03/31/2001 / IN 10/17/2001
Truck 105 105 104935 440,135 $ 3,751.91
03/31/2001 / IN 12/07/2001
Truck 106 106 195071 551,343 $ 8,879.42
03/31/2001 / IN 08/06/2001
Truck 107 107 28290C 588,901 $ 2,222.17
02/28/2002 / IN 10/01/2001
Truck 108 108 28288C 60,823 $ 2,912.93
02/28/2002 / IN 12/07/2001
Truck 11 11 104653 279,929 $ 8,486.08
03/31/2001 / IN 12/07/2001
Truck 110 110 104952 458,514 $ 3,535.44
03/31/2001 / IN 10/26/2001
Truck 12 12 28289C 25,791 $ 2,438.65
02/28/2002 / IN 12/03/2001
Truck 15 15 34978V 62,566 $ 217.95
02/28/2002 / IN 12/03/2001
Truck 47 47 195072 424,289 $ 5,075.37
03/31/2001 / IN 11/21/2001
Truck 73 73 104947 640,998 $ 5,034.13
03/31/2001 / IN 11/05/2001
Truck 74 74 201422 122,802 $ 3,488.37
03/31/2001 / In 12/05/2001
Truck 75 75 198936 171,105 $ 1,945.09
03/31/2001 / IN 12/05/2001
Truck 76 76 104951 388,828 $ 8,163.93
03/31/2002 / IN 11/09/2001
Truck 77 77 104949 508,286 $ 4,100.63
03/31/2001 / IN 12/08/2001
Truck 78 78 104941 446,585 $ 14,305.31
03/31/2001 / IN 11/09/2001
Truck 85 85 104937 655,600 $ 2,763.25
03/31/2001 / IN 12/06/2001
Truck 86 86 104959 576,596 $ 3,114.94
03/31/2002 / IN 04/24/1998
12/10/2001 PAGE 2
Truck 87 87 104948 596,456 $ 6,553.95
03/31/2001 / IN 10/16/2001
Truck 88 88 104936 368,940 $ 4,045.77
03/31/2001 / IN 10/07/2001
Truck 89 89 104940 565,528 $ 17,837.43
03/31/2001 / IN 12/07/2001
Truck 91 91 104938 328,564 $ 4,795.34
03/31/2001 / IN 08/10/2001
Truck 94 94 104939 499,329 $ 3,811.41
03/31/2001 / IN 09/18/2001
Truck 96 96 222,732 $ 850.75
03/30/2002 / IN 12/02/2001
Truck 97 97 104944 1,119,867 $ 1,317.52
03/31/2001 / IN 08/10/2001
Truck 98 98 104945 1,194,040 $ 1,554.87
03/31/2001 / IN 12/06/2001
Trailer 103 103 535279 9,019 $ 9,002.54
02/28/2000 / IN 09/03/1998
Trailer 104 104 536278 0 $ 3,942.94
02/28/2000 / IN 07/11/1996
Trailer 109 109 0 $ 4,123.94
IN
Trailer 112 112 0 $ 18,434.00
01/01/2000 / IN 07/20/1999
Trailer 701 701 536304 0 $ 19,116.64
10/30/1999 / IN 10/30/1998
Trailer 702 702 669 0 $ 13,235.91
02/28/2000 / IN 02/21/1996
Trailer 703 703 536270 107,307 $ 8,056.30
02/28/2000 / IN 11/26/1996
Trailer 704 704 3621 0 $ 10,085.07
02/28/2000 / IN 01/29/1996
Van 029 029 5364899 0 $ 0.00
01/31/2002 / IN 07/31/2001
81
Van 073 073 209569A 204,651 $ 53.20
01/31/2000 / IN 05/25/2001
Van 158 158 75,000 $ 125.00
03/31/2002 / IN 06/28/2001
Van 481 481 0 $ 0.00
IN
Van 577 577 0 $ 0.00
IN
Van 826 826 0 $ 23.90
IN
Van 92 92 105,184 $ 175.26
07/24/2001
