Exhibit 10.5
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is entered into as of
June 13, 2014 by and among INDUSTRIAL SERVICES OF AMERICA, INC., a
Florida corporation ("Parent"), ISA INDIANA, INC., an Indiana corporation
("ISA Inc."), ISA LOGISTICS LLC, a Kentucky limited liability company
("ISA Logistics"), ISA REAL ESTATE, LLC, a Kentucky limited liability
company ("ISA Real Estate"), ISA INDIANA REAL ESTATE, LLC, a Kentucky
limited liability company ("Indiana Real Estate"), WESSCO, LLC, a
Delaware limited liability company ("Wessco"), 0000 XXXXX XXXX LLC, a
Kentucky limited liability company ("7021 Grade"), 0000 XXXXX XXXX LLC, a
Kentucky limited liability company ("7124 Grade"), and 0000 XXXXX XXXX
LLC, a Kentucky limited liability company ("7200 Grade"; Parent, ISA
Inc., ISA Logistics, ISA Real Estate, Indiana Real Estate, Wessco, 7021
Grade, 7124 Grade, and 7200 Grade, each a "Grantor" and collectively,
"Grantors") and XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national
banking association ("Lender").
Pursuant to a Credit Agreement of even date herewith between
Grantors and Lender (as amended, restated or otherwise modified from time
to time, the "Credit Agreement"), Lender has agreed to make certain
advances and other extensions of credit to Borrowers. As a condition to
making advances and other extensions of credit under the Credit
Agreement, Lender has required the execution and delivery of this
Agreement by each Grantor.
1. DEFINITIONS.
(a) All capitalized terms not otherwise defined in
this Agreement shall have the meanings given them in the Credit
Agreement.
(b) The following terms, when used in this Agreement
(whether or not capitalized), shall have the meanings given them in the
Code, except that (i) for purposes of this Agreement, the meaning of such
terms will not be limited by reason of any limitation on the scope of the
Code, and (ii) to the extent the definition of any category or type of
Collateral is expanded by any amendment, modification or revision to the
Code, such expanded definition will apply automatically as of the date of
such amendment, modification or revision: "Accession", "Account",
"Chattel Paper", "Commercial Tort Claim", "Commodity Account", "Deposit
Account", "Document", "Equipment", "Fixture", "General Intangible",
"Goods", "Instrument", "Inventory", "Investment Property", "Letter-of-
Credit Right", "Letter of Credit", "Money", "Securities Account" and
"Supporting Obligations".
2. GRANT OF SECURITY INTEREST. Each Grantor grants and
transfers to Lender, for the benefit of Lender and each Bank Product
Provider, a continuing security interest (the "Security Interest") in all
of the following property of such Grantor or in which such Grantor has
rights, whether presently existing or acquired after the date of this
Agreement (collectively, together with all Proceeds, the "Collateral")
(a) Accounts;
(b) Chattel Paper;
(c) Commercial Tort Claims;
(d) Deposit Accounts;
(e) Documents;
(f) General Intangibles;
(g) Goods, including Equipment and Fixtures;
(h) Instruments;
(i) Inventory;
(j) Investment Property;
(k) Letters of Credit and Letter-of-Credit Rights;
(l) Money and other assets of Grantor that now or later come into
possession, custody, or control of Lender;
(m) all Accessions and Supporting Obligations; and
all books and records relating to the above property and all proceeds (as
such term is defined in the Code) and products, whether tangible or
intangible of any of the above property, all proceeds of any condemnation
award relating to any of the above property, all proceeds of insurance
covering or relating to any or all of the above property and all rebates
and returns relating to any of the above property (all such proceeds,
collectively, "Proceeds").
3. OBLIGATIONS SECURED. The obligations secured by the Security
Interest are the payment and performance of:
(a) all present and future Obligations and the guaranty of
such Obligations by any Grantor; and
(b) all now existing or subsequently arising obligations of
each Grantor and rights of Lender under this Agreement.
4. AUTHORIZATION TO FILE FINANCING STATEMENTS. Each Grantor
authorizes Lender to file financing statements describing the Collateral
to perfect Lender's Security Interest in the Collateral, and Lender may
describe the Collateral as "all personal property" or "all assets" or
describe specific items of Collateral including without limitation any
Commercial Tort Claims. All financing statements filed before the date of
this Agreement to perfect the Security Interest were authorized by each
Grantor and are ratified.
5. COLLECTION ACCOUNT. Any money or other cash Proceeds
received by Lender in respect of the Collateral will be deposited into a
non-interest bearing account over which such Grantor shall have no
control, and the same shall, for all purposes, be deemed Collateral, and
such money and cash shall be applied to the Obligations as set forth in
the Credit Agreement or this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF GRANTOR. Each Grantor
represents and warrants to Lender that:
(a) Grantor's legal name is exactly as set forth on the
first page of this Agreement, its chief executive office and principal
place of business are set forth on Schedule A, and all of Grantor's
organizational documents or agreements delivered to Lender are complete
and accurate in every respect;
(b) Grantor has legal title to and has possession or control
of the Collateral;
(c) Grantor has the exclusive right to grant a security
interest in the Collateral;
(d) all Collateral is genuine, free from Liens, adverse
claims, setoffs, default, prepayment, defenses and conditions precedent
of any kind or character, except the Security Interest created by this
Agreement and Permitted Liens;
(e) all statements contained in this Agreement and, where
applicable, regarding the Collateral are true and complete in all
material respects;
(f) no financing statement covering any of the Collateral,
and naming any secured party other than Lender and holders of Permitted
Liens, is on file in any public office;
(g) all Persons appearing to be obligated on Collateral have
authority and capacity to contract and are bound as they appear to be;
(h) all property subject to Chattel Paper has been properly
registered and filed in compliance with law and to perfect the interest
of Grantor in such property;
(i) all Accounts and other rights to payment comply with all
applicable laws concerning form, content and manner of preparation and
execution, including where applicable Federal Reserve Regulation Z and
any state consumer credit laws;
(j) Schedule A lists all real property owned or leased by Grantor;
(k) Schedule A provides a complete and correct list of: (i) all
registered copyrights and copyright applications owned by Grantor, (ii)
all intellectual property licenses entered into by Grantor; (iii) all
registered patents and patent applications owned by Grantor; and (iv) all
registered trademarks and trademark applications owned by Grantor;
(l) Schedule A contains a listing of all of Deposit Accounts,
Securities Accounts and Commodity Accounts of Grantor, including, with
respect to each bank, securities intermediary or commodity intermediary:
(a) the name and address of such entity, and (b) the account numbers of
the Deposit Accounts, Securities Accounts or Commodity Accounts
maintained with such entity;
(m) The Inventory and Equipment of Grantor are not stored with a
bailee, warehouseman, processor or similar party and are located only at,
or in-transit between or to, the locations identified on Schedule A;
(n) Each Account that is identified as an Eligible Account in a
borrowing base certificate or daily collateral report submitted to Lender
is (i) a bona fide existing payment obligation of the applicable Account
Debtor created by the sale and delivery of Inventory or the rendition of
services to such Account Debtor in the ordinary course of Grantor's
business, (ii) owed to Grantor, and (iii) not excluded as ineligible by
virtue of one or more of the excluding criteria set forth in the
definition of Eligible Accounts in the Credit Agreement; and
(o) Each item of Inventory that is identified as Eligible
Inventory in a borrowing base certificate or daily collateral report
submitted to Lender, is (i) of good and merchantable quality, free from
known defects, and (ii) not excluded as ineligible by virtue of one or
more of the excluding criteria set forth in the definition of Eligible
Inventory in the Credit Agreement.
(p) Schedule A lists all motor vehicles, Equipment and other
Collateral are evidenced by certificates of title.
7. COVENANTS OF GRANTOR.
(a) Each Grantor covenants and agrees:
(i) to permit Lender to exercise its rights, remedies, and powers
under the Credit Agreement, this Agreement, the other Loan Documents and
under law;
(ii) not to change its name, or, as applicable, its chief
executive office, its principal residence or the jurisdiction in which it
is organized without giving Lender thirty (30) days prior written notice;
and
(iii) not to change the places where Grantor keeps any
Collateral or Grantor's records concerning the Collateral (other than
transfers of Collateral between locations of the Grantors existing as of
the date hereof) without (A) giving Lender 30 days prior written notice
of the address to which Grantor is moving same, and (B) delivering to
Lender a fully executed Collateral Access Agreement with respect to such
location if not owned by Grantor; and
(iv) to cooperate with Lender in perfecting all security interests
granted by this Agreement and in obtaining such agreements from third
parties as Lender deems necessary, proper or convenient in connection
with the preservation, perfection or enforcement of any of its rights
with regard to Collateral or access to Collateral.
(b) Each Grantor agrees with regard to the Collateral, unless
Lender agrees otherwise in writing:
(i) not to use any Collateral for any unlawful purpose or in
any way that would void any insurance required to be carried on such
Collateral;
(ii) to insure the Collateral, with Lender named as first lender
loss payee and additional insured, in form, substance and amounts, under
agreements, against risks and liabilities, and with insurance companies
satisfactory to Lender;
(iii) to keep, in accordance with GAAP, complete and accurate
records regarding all Collateral, and to permit Lender to inspect the
same and make copies thereof at any reasonable time (and with such notice
as may be required by the Credit Agreement);
(iv) not to sell, pledge or dispose of, nor permit the transfer by
operation of law of, any of the Collateral or any interest in the
Collateral, except sales of Inventory to buyers in the ordinary course of
Grantor's business;
(v) not to permit any lien on the Collateral, including without
limitation, liens arising from the storage of Inventory, except for Liens
in favor of Lender and Permitted Liens;
(vi) if requested by Lender, to receive and use reasonable
diligence to collect Accounts, in trust and as the property of Lender,
and to immediately endorse as appropriate and deliver collections or
payments on such Accounts or proceeds thereof to Lender daily in the
exact form in which they are received;
(vii) not to commingle Accounts, Proceeds or collections
with other property;
(viii) to give only normal allowances and credits consistent
with past practices and in the ordinary course of business and to advise
Lender thereof immediately in writing if they affect any Accounts in any
material respect;
(ix) on Lender's demand, to deliver to Lender returned property
resulting from, or payment equal to, such allowances or credits on any
Accounts or to execute such documents and do such other things as Lender
may reasonably request for the purpose of perfecting, preserving and
enforcing its security interest in such returned property;
(x) from time to time, when requested by Lender, to prepare
and deliver a schedule of all Collateral subject to this Agreement and to
assign in writing and deliver to Lender all Accounts, contracts, leases
and other Chattel Paper, Instruments, Documents and other evidences
thereof;
(xi) to deliver to Lender (i) notice of any Commercial Tort
Claim it may have against any Person, including a detailed description of
such Commercial Tort Claim and, upon receipt of such description by
Lender the description of Collateral set forth in Section 1 of this
Agreement shall be deemed to be amended to include such description of
each such Commercial Tort Claim, and (ii) such documents as Lender may
require to grant Lender a security interest in Grantor's rights in such
Commercial Tort Claim;
(xii) to deliver to Lender any Instrument, Document or Chattel
Paper constituting Collateral with a value greater than $25,000, duly
endorsed or assigned by Grantor to Lender;
(xiii) to provide any service and do any other acts which
may be necessary to maintain, preserve and protect all Collateral and, as
appropriate and applicable, to keep all Collateral in good and saleable
condition, to deal with the Collateral in accordance with the standards
and practices adhered to generally by users and manufacturers of like
property, and to keep all Collateral free and clear of all defenses,
rights of offset and counterclaims;
(xiv) not to withdraw any funds from any Deposit Account
pledged to Lender pursuant to this Agreement, except for Grantor's
principal operating account, xxxxx cash accounts expressly excluded from
the requirement to deliver a Control Agreement pursuant to the Credit
Agreement, and local operating accounts with Branch Banking and Trust
Company used for payments to vendors to the extent expressly excluded
from the requirement to deliver a Control Agreement pursuant to the
Credit Agreement (provided that the only source of funds for such
accounts shall be the Loan Parties' accounts with Lender) and any Deposit
Accounts which are specifically and exclusively used for payroll, payroll
taxes and other employee wage and benefit payments to or for employees of
Grantor ("Excluded Deposit Accounts");
(xv) not to open or establish any Deposit Account, Securities
Account, or Commodities Account unless Lender has control of such account
as contemplated in the Code (but excluding Excluded Deposit Accounts) and
to close such Deposit Accounts as are necessary to cause Grantors to
comply with Section 4.10 of the Credit Agreement; and
(xvi) not to consign any of its Inventory or sell any of its
Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale.
8. POWERS OF LENDER. Each Grantor appoints Lender its attorney
in fact to perform any of the following powers, which are coupled with an
interest, are irrevocable until termination of this Agreement and may be
exercised from time to time by Lender's officers and employees, or any of
them, whether or not an Event of Default has occurred:
(a) to perform any obligation of Grantor hereunder in
Grantor's name or otherwise;
(b) to give notice to Account Debtors or others of Lender's
rights in the Collateral, to enforce or forebear from enforcing the same
and to make extension or modification agreements;
(c) to release Persons liable on Collateral and to give
receipts and compromise disputes;
(d) to release or substitute security;
(e) to resort to security in any order;
(f) to prepare, execute, file, record or deliver notes,
assignments, schedules, designation statements, initial financing
statements and amendments, continuation statements, termination
statements, statements of assignment, applications for registration or
like papers to perfect, preserve or release Lender's interest in the
Collateral;
(g) to receive, open and read mail addressed to Grantor;
(h) to take cash, instruments for the payment of money and
other property to which Lender is entitled;
(i) to verify facts concerning the Collateral by inquiry of
obligors thereon, or otherwise, in its own name or a fictitious name;
(j) to endorse, collect, deliver and receive payment under
instruments for the payment of money constituting or relating to
Collateral;
(k) to prepare, adjust, execute, deliver and receive
payment under insurance claims, and to collect and receive payment of and
endorse any instrument in payment of loss or returned premiums or any
other insurance refund or return, and to apply such amounts received by
Lender, at Lender's sole option, toward repayment of the Obligations or
replacement of the Collateral;
(l) to exercise all rights, powers and remedies which
Grantor would have, but for this Agreement, with respect to all
Collateral;
(m) to enter onto Grantor's premises to inspect the
Collateral during normal business hours;
(n) to make withdrawals from and to close deposit accounts
or other accounts with any financial institution, wherever located, into
which Proceeds may have been deposited, and to apply funds so withdrawn
to payment of the Obligations;
(o) to preserve or release the interest evidenced by
chattel paper to which Lender is entitled hereunder and to endorse and
deliver any evidence of title to such interest; and
(p) to do all acts and things and execute all documents in
the name of Grantor or otherwise, deemed by Lender as necessary, proper
and convenient in connection with the preservation, perfection, priority
or enforcement of Lender's rights.
9. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS.
Each Grantor agrees to pay, prior to delinquency, all insurance premiums,
taxes, charges, liens and assessments against the Collateral, and upon
the failure of such Grantor to do so, Lender at its option may pay any of
them and shall be the sole judge of the legality or validity and the
amount necessary to discharge the same. Any such payments made by Lender
shall be Obligations under the Credit Agreement. Any such payments made
by Lender shall be obligations of Grantors to Lender, due and payable
immediately upon demand, together with interest at a rate determined in
accordance with the provisions of the Credit Agreement, and shall be
secured by the Collateral, subject to all terms and conditions of this
Agreement.
10. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default" under this Agreement:
(a) any default in the payment or performance of any
obligation, or any defined or described event of default, under (i) the
Credit Agreement, any other Loan Document, or any other contract or
instrument evidencing any Obligation or other Indebtedness to Lender, or
(ii) any other agreement between any Grantor and Lender, including
without limitation any loan agreement, relating to or executed in
connection with any Obligation or other Indebtedness of a Grantor to
Lender;
(b) any representation or warranty made by a Grantor in this
Agreement shall prove to be incorrect, false or misleading in any
material respect when made; and
(c) a Grantor shall fail to timely observe or perform any
covenant or other obligation or agreement set forth in this Agreement.
11. REMEDIES. Upon the occurrence and during the continuation of
any Event of Default, Lender shall have the right to declare immediately
due and payable all or any Obligations (other than Obligations arising
under any Hedge Agreement, which may be accelerated pursuant to the
applicable Hedge Agreement) secured by this Agreement and to terminate
any commitments to make loans or otherwise extend credit under the Credit
Agreement. Lender shall have all other rights, powers, privileges and
remedies granted to a secured party upon default under the Code or
otherwise provided by law, including without limitation, the right to:
(a) contact all Persons obligated to a Grantor on any
Collateral and to instruct such Persons to deliver all Collateral
directly to Lender;
(b) sell, lease, license or otherwise dispose of any or all
Collateral;
(c) notify the United States Postal Service to change the
address for delivery of mail of Grantor to any address designated by
Lender;
(d) without notice to or consent by any Grantor, and without
the obligation to pay rent or other compensation, to take exclusive
possession of all locations where any Grantor conducts its business or
has any rights of possession and use the locations to store, process,
manufacture, sell, use and liquidate or otherwise dispose of Collateral;
(e) with regard to any Deposit Account, instruct the bank
maintaining such Deposit Account to pay the balance of such Deposit
Account to Lender or take such other action as Lender shall instruct; and
(f) with regard to any Securities Account or Commodity
Account, instruct the securities intermediary maintaining such Securities
Account or the commodity intermediary maintaining such Commodity Account,
as applicable, to pay the balance of such Securities Account or such
Commodity Account, as applicable, to Lender or take such other action as
Lender shall instruct; and
(g) without regard to the occurrence of waste or the
adequacy of security, apply for the appointment of a receiver for any
Grantor or for the assets of any Grantor and each Grantor waives any
objection to such appointment or to the right to have a bond or security
posted by Lender. Each Grantor hereby waives any objection or defense to
the appointment of any such receiver and any right that Grantor has or
may have to seek the posting of a bond or other security by Lender.
While an Event of Default exists:
(1) Each Grantor will deliver to Lender from time to time,
as requested by Lender, current lists of all Collateral;
(2) No Grantor will dispose of any Collateral except on
terms approved by Lender;
(3) at Lender's request, each Grantor will assemble and
deliver all Collateral, and books and records pertaining thereto, to
Lender at a reasonably convenient place designated by Lender; and
(4) Lender may, without notice to any Grantor, enter onto a
Grantor's premises and take possession of the Collateral.
12. CUMULATIVE RIGHTS. All rights, powers, privileges and
remedies of Lender shall be cumulative. No delay, failure or
discontinuance of Lender in exercising any right, power, privilege or
remedy hereunder shall affect or operate as a waiver of such right,
power, privilege or remedy; nor shall any single or partial exercise of
any such right, power, privilege or remedy preclude, waive or otherwise
affect any other or further exercise or the exercise of any other right,
power, privilege or remedy.
13. WAIVERS AND CONSENTS OF LENDER. Any waiver, permit, consent
or approval of any kind by Lender of any default, or any such waiver of
any provisions or conditions, must be in writing and shall be effective
only to the extent set forth in writing.
14. DISPOSITION OF COLLATERAL AND PROCEEDS; TRANSFER OF
INDEBTEDNESS. In disposing of Collateral, Lender may disclaim all
warranties of title, possession, quiet enjoyment and the like. Any
proceeds of any disposition of any Collateral, may be applied by Lender
to the payment of expenses incurred by Lender, including reasonable
attorneys' fees, and the balance of such proceeds may be applied by
Lender toward the payment of the Obligations in such order of application
as Lender may from time to time elect. Upon the transfer of all or any
part of the Obligations, Lender may transfer all or any part of the
Collateral and shall be fully discharged from all liability and
responsibility with respect to such transferred Collateral, and the
transferee shall be vested with all rights and powers of Lender
hereunder; but with respect to any Collateral not so transferred, Lender
shall retain all rights, powers, privileges and remedies. It is agreed
that public or private sales or other dispositions, for cash or on
credit, to a wholesaler or retailer or investor, or user of property of
the types subject to this Agreement, or public auctions, are all
commercially reasonable since differences in the prices generally
realized in the different kinds of dispositions are ordinarily offset by
the differences in the costs and credit risks of such dispositions. Each
Grantor agrees that, to the extent notice of sale shall be required by
law, at least 10 days' notice to such Grantor of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification and such notice shall constitute
a reasonable "authenticated notification of disposition" within the
meaning of Section 9-611 of the Code. Lender shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
given. Lender may adjourn any public or private sale from time to time,
and such sale may be made at the time and place to which it was so
adjourned. Each Grantor agrees that the internet shall constitute a
"place" for purposes of Section 9-610(b) of the Code. Each Grantor agrees
that any sale of Collateral to a licensor pursuant to the terms of a
license agreement between such licensor and such Grantor is sufficient to
constitute a commercially reasonable sale (including as to method, terms,
manner, and time) within the meaning of Section 9-610 of the Code. Each
Grantor grants to Lender a non-exclusive, worldwide and royalty-free
license to use or otherwise exploit all intellectual property rights of
such Grantor for the purpose of: (a) completing the manufacture of any
in-process materials following any Event of Default so that such
materials become saleable Inventory, all in accordance with the same
quality standards previously adopted by Grantor for its own
manufacturing; and (b) selling, leasing or otherwise disposing of any or
all Collateral following any Event of Default.
15. GRANTOR NOT AN OBLIGOR. If any Grantor is not a Borrower or
Guarantor (an "Obligor") under some or all of the Obligations:
(a) Grantor authorizes Lender, from time to time, without
affecting Grantor's obligations under this Agreement, to enter into an
agreement with Obligor to change the interest rate on or renew the
Obligations or other Indebtedness to Lender; accelerate, extend,
compromise, or otherwise change the repayment terms or any other terms of
the Obligations or such Indebtedness; receive and hold, exchange,
enforce, waive, fail to perfect, substitute, or release Collateral,
including collateral not originally covered by this Agreement; sell or
apply any Collateral in any order; or release or substitute any borrower,
guarantor or endorser of the Obligations or such Indebtedness, or other
person.
(b) Grantor waives any defense by reason of any Obligor's or any
other person's defense, disability, or release from liability. Lender
can exercise its rights against the Collateral even if any Obligor or any
other person no longer is liable on the Obligations because of a statute
of limitations or for other reasons.
(c) Grantor agrees that it is solely responsible for keeping
itself informed as to the financial condition of the Obligors and of all
circumstances which bear upon the risk of nonpayment. Grantor waives any
right it may have to require Lender to disclose to Grantor any
information which Lender may now or hereafter acquire concerning the
financial condition of Obligors.
(d) Grantor waives all rights to notices of default or
nonperformance by Obligors. Grantor further waives all rights to notices
of the existence or the creation of new Obligations by any Obligor and
all rights to any other notices to any party liable on any of the
Obligations.
(e) Grantor represents and warrants to Lender that it will
derive benefit, directly and indirectly, from the collective
administration and availability of credit under the Obligations. Grantor
agrees that Lender will not be required to inquire as to the disposition
by any Obligor of funds disbursed by Lender.
(f) Until all obligations to Lender under the Obligations
have been paid in full and any commitments of Lender or facilities
provided by Lender with respect to the Obligations have been terminated,
Grantor waives any right of subrogation, reimbursement, indemnification
and contribution (contractual, statutory or otherwise), including without
limitation, any claim or right of subrogation under the Bankruptcy Code
(Title 11, United States Code) or any successor statute, which Grantor
may now or hereafter have against any Obligor with respect to the
Obligations. Grantor waives any right to enforce any remedy which
Lender now has or may hereafter have against any Obligor, and waives any
benefit of, and any right to participate in, any security now or
hereafter held by Lender.
(g) Grantor waives any right to require Lender to proceed
against any Obligor or any other person; proceed against or exhaust any
security; or pursue any other remedy. Further, Grantor consents to the
taking of, or failure to take, any action which might in any manner or to
any extent vary the risks of Grantor under this Agreement or which, but
for this provision, might operate as a discharge of Grantor.
(h) In the event any amount paid to Lender on any
Obligations or any interest in property transferred to Lender as payment
on any Obligations is subsequently recovered from Lender in or as a
result of any bankruptcy, insolvency or fraudulent conveyance proceeding,
Grantor shall be liable to Lender for the amounts so recovered up to the
fair market value of the Collateral whether or not the Collateral has
been released or the security interest terminated. In the event the
Collateral has been released or the security interest terminated, the
fair market value of the Collateral shall be determined, at Lender's
option, as of the date the Collateral was released, the security interest
terminated, or said amounts were recovered.
16. STATUTE OF LIMITATIONS. Until all Obligations shall have
been paid in full and all commitments by Lender to extend credit under
the Credit Agreement have been terminated, the power of sale or other
disposition and all other rights, powers, privileges and remedies granted
to Lender shall continue to exist and may be exercised by Lender at any
time and from time to time irrespective of the fact that the Obligations
or any part thereof may have become barred by any statute of limitations,
or that the personal liability of any Grantor may have ceased, unless
such liability shall have ceased due to the payment in full of all
Obligations and Indebtedness secured by this Agreement.
17. WAIVERS OF GRANTOR. Each Grantor waives any right to require
Lender to (a) proceed against any Grantor or any other Person, (b)
marshal assets or proceed against or exhaust any security from any
Grantor or any other Person, (c) perform any obligation of any Grantor
with respect to any Collateral; and (d) make any presentment or demand,
or give any notice of nonpayment or nonperformance, protest, notice of
protest or notice of dishonor hereunder or in connection with any
Collateral or Proceeds. Each Grantor further waives any right to direct
the application of payments or security for any Indebtedness of such
Grantor or indebtedness of customers of such Grantor.
18. JOINT AND SEVERAL LIABILITY. When there is more than one
Grantor named in this Agreement (a) the word "Grantor" shall mean all or
any one or more of them as the context requires, and (b) the obligations
of each Grantor hereunder are joint and several.
19. FURTHER ASSURANCES. At any time upon the request of Lender, each
Grantor will execute or deliver to Lender any and all financing
statements, fixture filings, security agreements, pledges, assignments,
endorsements, certificates of title, mortgages, deeds of trust and all
other documents (the "Additional Documents") that Lender may request and
in form and substance satisfactory to Lender, to create, perfect, and
continue perfection or to better perfect Lender's Liens in all of the
assets of such Grantor (whether now owned or subsequently arising of
acquired, tangible or intangible, real or personal), and in order to
fully consummate all of the transactions contemplated under this
Agreement and under the other Loan Documents. Without limiting the
foregoing, upon Lender's request, Grantors shall deliver to Lender all
certificates of title, notation of lien applications and other documents
desirable or necessary to give effect to Lender's first priority
perfected Lien in any motor vehicles or other titled Equipment. If any
Grantor refuses or fails to execute or deliver any requested Additional
Documents, such Grantor authorizes Lender to execute such Additional
Documents in such Grantor's name, and authorizes Lender to file such
executed Additional Documents in any appropriate filing office. Each
Grantor acknowledges that no Grantor is authorized to file any financing
statement or amendment with respect to any financing statement filed in
connection with this Agreement without the prior written consent of
Lender, subject to such Grantor's rights under Section 9-509(d)(2) of the
Code.
20. SUBROGATION RIGHTS. Until all Obligations shall have been
paid in full and all commitments by Lender to extend credit under the
Credit Agreement have been terminated, no Grantor shall have any right of
subrogation or contribution or similar right, and each Grantor waives any
benefit of or right to participate in any of the Collateral or any other
security now or subsequently held by Lender.
21. NOTICES. All notices, requests and demands required under
this Agreement must be given, and shall be deemed received, as provided
in Section 7.3 of the Credit Agreement at the address set forth below
each party's name on the signature page of this Agreement or to such
other address as any party may designate by written notice to all other
parties.
22. COSTS, EXPENSES AND ATTORNEYS' FEES. Each Grantor shall pay
to Lender immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys'
fees (to include outside counsel fees and, after the occurrence of an
Event of Default, all allocated costs of Lender's in-house counsel),
expended or incurred by Lender in connection with or related to this
Agreement, including, without limitation, all Lender Expenses, as set
forth in Section 7.4 of the Credit Agreement. Further, each Grantor
indemnifies Lender against all losses, claims, demands, liabilities and
expenses of every kind caused by property subject to this Agreement, all
in accordance with Section 7.7 of the Credit Agreement.
23. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement will be
binding upon and inure to the benefit of the heirs, executors,
administrators, legal representatives, successors and assigns of the
parties; provided that no Grantor may assign or transfer its interests,
rights, or obligations under this Agreement without Lender's prior
written consent. Lender may sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Lender's rights
and benefits under this Agreement and the other Loan Documents. This
Agreement may be amended or modified only in writing signed by Lender and
each Grantor, except as provided in Section 7(b)(xi) and Section 19 of
this Agreement.
24. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or any remaining provisions of this Agreement.
25. GOVERNING LAW. The validity of this Agreement and the
construction, interpretation, and enforcement of this Agreement, and the
rights of the parties, as well as all claims, controversies or disputes
arising under or related to this Agreement will be determined under,
governed by and construed in accordance with the laws of the Commonwealth
of Kentucky without regard conflicts of laws principles.
26. JURISDICTION. All actions or proceedings arising in
connection with this Agreement may be tried and litigated in the State
and, to the extent permitted by applicable law, federal courts located in
the City of Atlanta and the County of Xxxxxx, State of Georgia; provided
that any suit seeking enforcement against any Collateral or other
property may be brought, at Lender's option, in the courts of any
jurisdiction where Lender elects to bring such action or where such
Collateral or other property may be found. Each Grantor and Lender waive,
to the extent permitted under applicable law, any right they may have to
assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought.
27. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH GRANTOR AND LENDER WAIVE THEIR RESPECTIVE RIGHTS, IF
ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF
ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS,
AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH, A "CLAIM"). EACH
GRANTOR AND LENDER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGES FOLLOW]
_____________________________________________________
This Agreement has been duly executed as of the date set forth on
page 1.
GRANTORS:
INDUSTRIAL SERVICES OF AMERICA, INC.
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Interim Chief Executive Officer
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
ISA INDIANA, INC.
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Interim Chief Executive Officer
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
ISA LOGISTICS LLC
By: Industrial Services of America, Inc., its Sole Member
By/s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Interim Chief Executive Officer
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
[Signatures continue on the following pages]
_____________________________________________________
ISA REAL ESTATE, LLC
By: Algar, Inc., its Manager
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
ISA INDIANA REAL ESTATE, LLC
By: Algar, Inc., its Manager
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
WESSCO, LLC
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Interim Chief Executive Officer
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
[Signatures continue on the following pages]
_____________________________________________________
0000 XXXXX XXXX LLC
By: Algar, Inc., its Manager
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
0000 XXXXX XXXX LLC
By: Algar, Inc., its Manager
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
0000 XXXXX XXXX LLC
By: Algar, Inc., its Manager
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
Address:
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Fax No.: (000) 000-0000
Email: xxxxxxxxxxx@xxx-xxx.xxx
[Signatures continue on the following page]
_____________________________________________________
LENDER:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
Address:
Xxxxx Fargo Bank, National Association
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Email: Xxxxxx.X.Xxxxx@xxxxxxxxxx.xxx
_____________________________________________________
SCHEDULE A
1. Owned Real Property:
2. Copyrights, Trademarks, Patents and Licensing Agreements:
Part 1 - Trademarks Owned
Trademark Registration Registration Expiration
Number Date Date
Trademark Application/Serial Application
Application Number Date
Part 2 - Patents Owned
Patent Registration Registration Expiration
Description Number Date Date
Patent Application/Serial Application
Application Number Date
Part 3 - Copyrights Owned
Copyright
Registration Number Registration
Date
Part 4 - Other License Agreements
Name of Date of Licensor Term Licensed
Document Document Intellectual
Property
3. Motor Vehicle and Certificate of Title Collateral:
Type of Make Model Year VIN or Other Identifier
Collateral
4. Deposit Accounts, Securities Accounts, Commodity Accounts and other
Investment Accounts:
Part 1 - Deposit Accounts
Name and Address Account No. Purpose
of Bank
Part 2 - Securities Accounts, Commodity Accounts and other Investment Accounts
Name and Account No. Purpose Type of Balance as of
Address of Investments [Date]
Broker or
Other
Institution
5. Locations of Collateral and Books and Records:
Locations of Inventory, Equipment, Books and Records and Other Assets
Address Owned/Leased/Third Party* Name/Address
of Lessor or
Third Party,
as Applicable
*Grantors to Indicate in this column next to applicable address whether
the locations is owned by the Company, leased by the Company or owned and
operated by a third party (e.g., warehouse, processor, consignee, etc.)
