INVENTORY SECURITY AGREEMENT
THIS INVENTORY SECURITY AGREEMENT (as from time to time amended, "this ISA" and
together with the Program Letters and Change Notices, as hereinafter defined,
"the Agreement") is between Boat Tree, Inc., a (check box and specify
jurisdiction) |X| Florida Corporation |_| general partnership |_|
limited partnership |_| sole proprietorship ("Dealer"), and
TRANSAMERICA COMMERCIAL FINANCE CORPORATION ("TCFC"), with its chief executive
office and principal place of business at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000.
The parties agree that this ISA amends and restates in its entirety an
existing Inventory Security Agreement and Power of Attorney between the parties
dated prior to the date hereof. The parties further agree as follows:
1. Definitions. In addition to terms defined elsewhere herein, "accessions,"
"account", "chattel paper," "deposit account," "document," "equipment,"
"fixture," "general intangibles," "goods," "instrument," and "inventory" have
the meanings assigned to them in Article 9, and "person" has the meaning
assigned to it in Article 1, of the Illinois Uniform Commercial Code (the "UCC")
as of the date of this ISA. "Program Letter" means each written agreement
entitled "Program Letter," as from time to time amended, between TCFC and Dealer
which refers to this ISA; "Change Notice" means any notice sent by TCFC to
Dealer, whether or not part of a billing statement, increasing or decreasing the
rate or amount of Charges (as hereinafter defined), adding or deleting Charges
or making any other change respecting Charges or the time for payment of future
Advances or adding product lines to be financed and specifying the terms of such
financing; and "affiliate" means any person that (i) directly or indirectly
controls, is controlled by or is under common control with Dealer, (ii) directly
or indirectly owns 5% or more of Dealer, (iii) is a director, partner, manager,
or officer of Dealer or an affiliate of Dealer, or (iv) any natural person
related to Dealer or an affiliate of Dealer.
2. Advances and Approvals.
(a) Dealer may from time to time apply to TCFC, directly or in the
manner provided in paragraph (b) of this section, for an extension of credit
under the agreement (any such extension of credit, an "Advance").
(b) Whenever any person from whom Dealer purchases or may purchase
inventory or who advises TCFC that it has sold, or may sell, inventory to Dealer
(a "Seller") requests in any manner (e.g., orally, in writing, or by electronic
transmission) that TCFC finance, or confirm that it will finance (an
"Approval"), the acquisition of inventory by Dealer from such Seller, such
request shall be an application by Dealer for an Advance equal to the purchase
price of such inventory. Dealer shall be obligated for all obligations incurred
by TCFC on account of the issuance of each Approval. Whenever TCFC makes such an
Advance, it shall be paid by TCFC to such Seller, except that TCFC may offset
any amount owed by such Seller to TCFC, including
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without limitation any discount, payment or other benefit owned by such Seller
to TCFC ("TCFC's Offset"). Dealer agrees that it has no right to any TCFC's
Offset.
(c) TCFC shall not be obligated to issue any Approval or make any
Advance. If TCFC decides in its discretion to issue an Approval or make an
Advance, the Approval or Advance may be in the amount requested or a lesser
amount, and made upon such conditions, as TCFC determined. Each Advance shall be
deemed made when it is entered by TCFC as a receivable on its books. All
Advances for all purposes shall be treated as a single loan.
(d) Any Invoice (which term shall include paper based or electronically
transmitted invoices) from a Seller received by TCFC, pertaining to inventory
shipped or to be shipped to Dealer, shall be rebuttably presumptive evidence
that TCFC has financed the acquisition of such inventory for Dealer and that the
amount of such invoice is the original principal amount of Dealer's obligation
to TCFC on account of such inventory.
3. Grant and Perfection of Security Interest.
(a) Dealer hereby grants to TCFC a security interest in all of the
Collateral as security for all indebtedness. Said security interest in any item
of Inventory shall be deemed a purchase money security interest to the extent of
the Advance made in connection with the acquisition of such inventory.
"Collateral" means the following property or interests in property of Dealer,
whether now or hereafter existing, owned, licensed, leased, consigned, acquired;
or arising and whenever located: (i) inventory, accounts, chattel paper,
documents, equipment, fixtures, general intangibles and instruments, (including
without limitation and whether or not included in the foregoing, Seller Credits,
deposit accounts, certificates of deposit) and books, records, disks, and tapes,
(ii) all accessions, accessories and replacements to or of the foregoing, and
(iii) all proceeds and products of the foregoing; "Indebtedness" means all
present and future indebtedness and obligations of Dealer to TCFC or to any
person that directly or indirectly controls, is controlled by or is under common
control with TCFC (a "TCFC Affiliate"), whether or not arising under the
Agreement, of whatever kind, now due or to become due, absolute or contingent,
and whether joint, several or joint and several, including without limitation
any indebtedness and obligations arising under guaranty agreements; and "Seller
Credits" means all of Dealer's rights to any price protection payments, rebates,
discounts, credits, factory holdbacks, incentive payments and other amounts
which at any time are due Dealer from a Seller with respect to, or in connection
with, any inventory acquired from such Seller.
(b) Dealer shall provide TCFC such financing statements, certificates
or originor title and other writings, in form and substance satisfactory to
TCFC, and take such other action as TCFC may request from time to time to
establish and maintain a perfected security interest in the Collateral.
4. Representations and Warranties of Dealer. Dealer represents and warrants that
at the time of execution of this ISA and at the time of each Approval and each
Advance, unless Dealer
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has given written notice to the contrary to TCFC prior to such Approval or
Advance, that;
(a) Dealer, if not an individual, is the type of organization set forth
at the beginning of this ISA, is in good standing and has all the necessary
authority to enter into and perform the Agreement and Dealer does not and will
not violate its charter or bylaws if a corporation, or partnership agreement if
a partnership, or any law, regulation or agreement binding upon it, by entering
into and performing the Agreement.
(b) Dealer keeps its records respecting accounts and chattel paper at
its chief executive office and principal place of business identified below. The
only locations at which Collateral is located are listed in the section entitled
"Business and Warehouse Locations" (together with additional business and
warehouse locations of Dealer in the United States of which Dealer gives TCFC at
least 30 days prior written notice, the "Permitted Location").
(c) All information supplied by Dealer to TCFC, including any
financial, credit or accounting statements or application for credit, in
connection with the Agreement is true, correct and complete.
5. Covenants of Dealer.
(a) Until sold as permitted by the Agreement, Dealer shall own all
inventory which has been financed in whole or in part by an Advance, whether or
not such advance is outstanding ("Prime Inventory"), free and clear of all
liens, security interests, claims and other encumbrances, whether arising by
agreement or operation of law ("Liens"), other than the security interest
granted to TCFC in this ISA, other security interest subordinate thereto to
which TCFC has consented in writing and other Liens in favor of TCFC.
(b) Dealer shall (i) keep all Collateral at Permitted Locations and
keep all tangible Collateral in good order, repair and operating condition and
insured as required herein; (ii) promptly file all tax returns required by law
and promptly pay all taxes, fees, and other governmental charges for which it is
liable, including without limitation all governmental charges against the
Collateral; (iii) permit TCFC, without notice, to inspect the Collateral during
normal business hours and at any other time TCFC deems desirable; (iv) keep
complete and accurate records of its business, including inventory and sales,
and permit TCFC to inspect and copy such records upon request; (v) provide TCFC
with Dealer's year-end balance sheet and annual profit and loss statement for
each of its fiscal years prepared in accordance with generally accepted
accounting principles, consistently applied, within 20 days after the same are
prepared but in no event later than 120 days after the end of each fiscal year;
(vi) furnish TCFC with such additional information regarding the Collateral and
Dealer's business and financial condition as TCFC may from time to time
reasonably request; and (vii) immediately notify TCFC of any material adverse
change in Dealer's prospects, business, operations or condition (financial or
otherwise) or in the Collateral.
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(c) Dealer shall not (i) use (except for demonstration for sale), rent,
lease, sell, transfer, consign or dispose of Collateral except for sales of
inventory at retail in the ordinary course of Dealer's business; (ii) sell
inventory to an affiliate; (iii) engage in any other material transaction not in
the ordinary course of Dealer's business; (iv) change its business in any
material manner or its structure or be a party to a merger or consolidation, (v)
change its name without at least 30 days prior written notice to TCFC; (vi)
change its chief executive office or office where it keeps its records with
respect to accounts or chattel paper; or (vii) finance on a secured basis with
any third party without the prior written consent of TCFC the acquisition of
inventory of the same brand as any inventory financed or to be financed by TCFC.
6. Payment by Dealer to TCFC
(a) Dealer shall pay TCFC the amount of any Advance made to finance the
acquisition of any item of inventory immediately upon the earlier of (i) the
sale of such item, and shall hold the entire sale proceeds therefrom in the same
form as received IN TRUST for TCFC until paid to TCFC and, on written request
from TCFC, separate and apart from Dealer's other funds and property, (ii) the
"Due in Full Date" with respect to such Advance, which shall be 210 days after
such Advance was made unless otherwise provided for in the Agreement, or (iii)
the date such item has been damaged or destroyed or without TCFC's consent is
returned to a Seller or is otherwise not located at a Permitted Location. Any
such payment shall be applied by TCFC to such Advance. An Advance made to
finance the acquisition of a number of items of Inventory shall be allocated
among such items in proportion to Seller's respective invoice prices therefor at
the time of sale to Dealer.
(b) TCFC in its discretion may by notice to Dealer authorize Dealer to
pay TCFC on a scheduled liquidation program in whole or in part or discontinue
any such program at any time. While a scheduled liquidation program is in
effect, payments on Advances shall be applied on Advances in the order billed.
(c) Anything in the Agreement to the contrary notwithstanding, at
TCFC's request, Dealer shall immediately pay TCFC the amount necessary to reduce
the sum of outstanding Approvals with respect to inventory received by Dealer,
Advances (excluding any Advance with respect to inventory not received by Dealer
if made on receipt by TCFC of an electronically transmitted invoice) and accrued
Charges to an amount which does not exceed the aggregate invoice price to Dealer
of Prime Inventory in Dealer's possession in which TCFC has a perfected first
priority Lien. An Approval shall be deemed outstanding to the extent of its face
amount, less the amount of Advances with respect thereto.
(d) Dealer shall pay fees, charges and interest (collectively,
"Charges") with respect to each Advance in accordance with the Agreement;
provided, however, TCFC may at any time with Dealer's agreement increase or
decrease the rate or amount of any Charges, add or delete Charges or make any
other change respecting Charges applicable to outstanding and future Advances by
giving Dealer a Change Notice specifying such change at least 15 days prior to
such change.
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Dealer shall be deemed to have agreed to such change if, after the giving of
such Change Notice and before such change becomes effective, Dealer does not
give TCFC notice that no additional Advances which would be subject to such
change should be made. Dealer shall pay TCFC its customary Charge for any check
or other item which is returned unpaid to TCFC. Unless otherwise provided in the
Agreement, the following additional provisions shall be applicable to Charges:
(i) any reference to "rime Rate" shall mean for any calendar month the highest
of the following rates: (A) the highest "prime rate" published in the "Money
Rates" column of the Wall Street Journal on the first Business Day of such month
(a "Business Day" being any day the Federal Reserve Bank of Chicago is open for
the transaction of business); or (B) the highest of the rates publicly announced
on such date by Continental Bank, N.A., The First National Bank of Chicago or
The Northern Trust Company, as their respective reference, prime, corporate base
or similar benchmark rate, whether or not such announced rates are the lowest
rates charged by such banks; or (C) the highest of the commercial paper rates
for any term published in the Federal Reserve statistical release (H.15) for the
date coincident with or most recently preceding the first Business Day of such
month; (ii) all Charges shall be paid by Dealer monthly within 15 days after the
month in which such Charges accrue, (iii) if a monthly rate of interest is
provided for in the Agreement with respect to an Advance, interest on each
Advance and principal indebtedness related thereto shall be computed each
calendar month on the sum of the daily balances thereof during such month
divided by 30 and multiplied by the monthly rate provided for in the Agreement;
(iv) if an annual rate of interest is provided for in the Agreement with respect
to an Advance, interest on each Advance and principal indebtedness related
thereto shall be computed each calendar month on the sum of the daily balances
thereof during such month divided by 30 and multiplied by one-twelfth of the
annual rate provided for in the Agreement; (v) interest on an Advance made at
the request of a Seller shall begin to accrue on the earlier of the ship date
referred to in the Seller's invoice or the date such Advance is entered by TCFC
as a receivable on its books (the "Start Date"); provided, however, if there is
a free floor period with respect to such inventory, interest with respect to the
Advance shall begin to accrue the number of days after the Start Date equal of
the number of days in such free floor period; (vi) interest on any other Advance
shall begin to accrue on the date TCFC makes such Advance; (vii) for the purpose
of computing Charges, any payment shall be deemed credited 3 Business Days after
received by TCFC at the place for payment provided for in the Agreement or, if
paid to TCFC at any other place, 3 Business Days after deposited by TCFC,
provided, however, in either case, if TCFC has furnished Dealer a form of
remittance advice to be completed and returned with payments, such payment shall
not be deemed credited prior to the Business Day the completed remittance advice
with respect to such payment is received by TCFC; (viii) for the purpose of
computing Charges, any payment received by TCFC after noon where payment is to
be made shall be deemed received by TCFC on the next Business Day; and (ix)
Charges not paid when due, at the option of TCFC shall become principal
Indebtedness and shall bear interest at the Default Rate stated in the Agreement
or, if none, the highest rate applicable from time to time to any Advances after
the due date thereof (the "Default Rate").
(e) Unless otherwise provided in the Agreement (i) all payments shall
be made at such place as TCFC shall from time to time designate, and (ii) all
payments and other amounts received
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by TCFC pursuant to the Agreement, including without limitation insurance
proceeds and proceeds of Seller Credits, shall be applied to Indebtedness,
whether or not due, in such order as TCFC in its discretion shall determine. All
payments stated to be due on a day which is not a Business Day shall be due on
the preceding Business Day.
(f) Subject to the section entitled "Savings Provisions", any statement
with respect to any indebtedness sent to Dealer by TCFC shall be subject to
subsequent adjustment by TCFC but shall be presumed accurate evidence of
indebtedness and information covered thereby, unless TCFC shall have received
written notice from Dealer specifying any error within 30 days after the date
such statement is received by Dealer. Notwithstanding such notice by Dealer to
TCFC, Dealer's obligation to make payments to TCFC with respect to such
statement shall not be waived or extended unless and until TCFC consents in
writing to such waiver or extension.
(g) All Advances not made to finance the acquisition of inventory shall
be paid on demand unless otherwise provided in the Agreement. TCFC may at any
time, at its discretion, change the time for payment of future Advances or add
product lines to be financed and the terms of such financing by giving Dealer a
Change Notice specifying such change.
7. Insurance. All risk of loss, damage to or destruction of Collateral shall at
all times be on Dealer. Dealer shall keep tangible Collateral insured for full
value against all insurable risks under policies delivered to TCFC and issued by
insurers satisfactory to TCFC with loss payable to TCFC under long-form
mortgagee endorsements as its interest may appear subject to cancellation or
change only upon 30 days (10 days for non-payment of premium) written notice to
TCFC. TCFC is authorized, but not required, to act as attorney-in-fact for
Dealer in adjusting and settling any insurance claim under any such policy and
in endorsing any checks or drafts drawn by insurers. Dealer shall promptly remit
to TCFC in the form received, with all necessary endorsements, all proceeds of
such insurance which Dealer may receive. TCFC, at its election, shall either
apply any proceeds of insurance it may receive toward payment of Indebtedness or
pay such proceeds to Dealer. If Dealer fails to obtain such insurance by the
time provided herein, TCFC may, but shall not be obligated to, procure such
insurance and the cost thereof shall be a part of the Indebtedness payable by
Dealer on demand.
8. Power of Attorney. Dealer authorizes TCFC to execute or endorse on behalf of
Dealer any instruments, chattel paper, financing statements and amendments
thereto, or other writings comprising Collateral or evidencing financings under
the Agreement or evidencing or perfecting the security interest granted hereby,
as attorney-in-fact for Dealer. This power of attorney and the other powers of
attorney granted herein are irrevocable and coupled with an interest.
9. Credit Information. Dealer authorizes TCFC to investigate or make inquiries
of former or current creditors or other persons and provide to any creditors or
other persons any and all financial, credit or other information regarding or
relating to Dealer, whether supplied by Dealer to TCFC or otherwise obtained by
TCFC, with such authority to continue throughout the term of the Agreement.
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10. Default. The occurrence of one or more of the following events shall
constitute a default by Dealer (a"Default"), (a) Dealer shall fail to pay any
indebtedness when due; (b) any representation made to TCFC by Dealer or by any
guarantor, surety, issuer of a letter of credit or any person other than Dealer
primarily or secondarily liable with respect to any indebtedness (a"Guarantor")
shall not be true when made or Dealer or any Guarantor shall breach any warranty
or agreement to or with TCFC; (c) Dealer or any Guarantor shall die, become
insolvent or generally fail to pay its debts as they become due or, if a
business, shall cease to do business as a going concern; (d) any guaranty,
letter of credit, or other obligation of a Guarantor to TCFC with respect to any
indebtedness or Collateral shall terminate or not be renewed at least 30 days
prior to its stated expiration or maturity; (e) Dealer or any Guarantor shall
make an assignment for the benefit of creditors, or commence a proceeding with
respect to itself under any bankruptcy, reorganization, arrangement, insolvency,
receivership, dissolution or liquidation statute or similar law of any
jurisdiction, or any such proceeding shall be commenced against it or any of its
property (an "Automatic Default"); (f) a material adverse change shall occur in
the business, operations or condition (financial or otherwise) of Dealer or any
Guarantor or with respect to the Collateral; (g) any debt for borrowed money of,
or guaranteed by, Dealer or any Guarantor becomes due by acceleration or
otherwise prior to its due date by reason of a default; or (h) TCFC in good
faith believes the prospect of payment of any indebtedness is impair or deems
itself insecure.
11. TCFC's Rights and Remedies Upon Default. Upon the occurrence of a Default,
TCFC shall have all rights and remedies of a secured party under the UCC and
other applicable law and all the rights and remedies set forth in the Agreement.
TCFC may terminate the Agreement and any outstanding Approvals immediately
and/or declare any and all indebtedness immediately due and payable without
notice or demand. Dealer waives notice of intent to accelerate, and of
acceleration of, indebtedness. TCFC may enter any premises of Dealer, with or
without process of law, without force, to search for, take possession of, and
remove the Collateral, or any part thereof. If TCFC requests, Dealer shall cease
disposition of and shall assemble the Collateral and make it available to TCFC,
at Dealer's expense, at a convenient place or places designated by TCFC. TCFC
may take possession of the Collateral or any part thereof on Dealer's premises
and cause it to remain there at Dealer's expense, pending sale or other
disposition. Dealer agrees that the sale of inventory by TCFC to a person who is
liable to TCFC under a guaranty, endorsement, repurchase agreement or the like
shall not be deemed to be a transfer subject to Section 9-504(5) of the UCC or
any similar provision of any other applicable law, and Dealer waives any
provision to the contrary of such laws. Dealer agrees that repurchase of
inventory by a Seller pursuant to a repurchase agreement with TCFC shall be a
commercially reasonable method of disposition. Dealer shall be liable to TCFC
for any deficiency resulting from TCFC's disposition, including without
limitation a repurchase by Seller, regardless of any subsequent disposition
thereof. Dealer is not a beneficiary of, and has no right to require TCFC to
enforce, any repurchase agreement. Any notice of a disposition shall be deemed
reasonably and properly given if given to Dealer at least 10 days before such
disposition. If Dealer fails to perform any of its obligations under the
Agreement, TCFC may perform the same in any form or manner TCFC in its
discretion deems necessary of desirable, and all monies paid by TCFC in
connection therewith shall be additional
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indebtedness and shall be immediately due and payable without notice together
with interest payable on demand at the Default Rate. All of TCFC's rights and
remedies shall be cumulative. At TCFC's request, or without request in the event
of an Automatic Default, Dealer shall pay all Seller Credits to TCFC as soon as
the same are received for application to indebtedness. Dealer authorizes TCFC to
collect such amounts directly from Sellers and, upon request of TCFC, shall
instruct Sellers to pay TCFC directly.
12. Dealer's Claims Against Sellers. Dealer shall not assert against TCFC any
claim or defense Dealer may have against any Seller whether for breach of
warranty, misrepresentation, failure to ship, lack of authority, or otherwise,
including without limitation claims or defenses based upon charge backs, credit
memos, rebates, price protection payments or returns. Any such claims or
defenses or other claims or defenses Dealer might have against a Seller shall
not affect Dealer's liabilities or obligations to TCFC. Except as provided in
the section entitled "Savings Provisions," Dealer's obligation to pay TCFC for
Advances and Charges is absolute and Unconditional.
13. Notices. All notices to be given under the Agreement shall be in writing and
shall be served either personally, by deposit with a reputable overnight courier
with charges prepaid, or by deposit in the United States mail, first-class
postage prepaid or provided for, addressed to Dealer at its chief executive
office shown below or to any office to which TCFC sends billing statements, or
to TCFC at its address shown in the preamble hereto, attention its Credit
Department, or at such other address designated by such party by notice to the
other. Any Change Notice may be included in a billing statement. Any notice
shall be deemed to have been given upon delivery in the case of personal
delivery, one Business Day after deposit with an overnight courier of 2 calendar
days after deposit in the United States mail except that any notice of change of
address shall not be effective until actually received.
14. Term and Termination. Unless sooner terminated as provided in the Agreement
or by at least 30 days prior written notice from either part to the other, the
tem of the Agreement shall be for one year after the date of this ISA and from
year to year thereafter; provided, however, TCFC may terminate the Agreement
immediately by notice to Dealer in whole or only with respect to certain product
lines if Dealer shall lose or relinquish any right to sell or deal in any
product line of Prime Inventory. Upon termination of the Agreement, all
indebtedness (or, if the Agreement is terminated only with respect to certain
product lines, the indebtedness relative to such product lines) shall become
immediately due and payable without notice or demand. Upon any termination,
Dealer shall remain fully liable to TCFC for all indebtedness, including without
limitation Charges, arising prior to or after termination, and all TCFC's rights
and remedies and its security interest shall continue until all indebtedness is
paid and all obligations of Dealer are performed in full. If TCFC makes Advances
in reliance on a repurchase agreement from a Seller, it may cease making such
Advances if it has any concern as to whether such repurchase Agreement will
cover future Advances or be performed by such Seller. No provision of the
Agreement shall be construed to obligate TCFC to make any Advances.
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15. Submission to Jurisdiction: Waiver of Bond. Dealer hereby consents to the
jurisdiction of any local, state or federal court located within the State of
Illinois and waives any objection which Dealer may have based on improper venue
or forum no convniens to the conduct of any action or proceeding in any such
court and waives personal service of any and all process upon it, and consents
that all such service of process be made by mail or messenger directed to it in
the same manner as provided for notices to Dealer in this ISA and that service
so made shall be deemed to be completed upon the earlier or actual receipt or 3
days after the same shall have been posted to Dealer or Dealer's agent as set
forth below. Dealer hereby irrevocably appoints CT Corporation System as
Dealer's agent for the purpose of accepting the service of any process within
the State of Illinois. Nothing contained in this section shall affect the right
of TCFC to serve legal process in any other manner permitted by law or affect
the right of TCFC to bring any action or proceeding against Dealer or its
property in the courts of any other jurisdiction. Dealer waives, to the extent
permitted by law, any bond or surety or security upon such bond which might, but
for this waiver, be required of TCFC.
16. Governing Law. THE AGREEMENT SHALL BE CONSTRUED IN ALL RESPECTS IN
ACCORDANCE WITH, AND GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF
LAW PROVISIONS) OF THE STATE OF ILLINOIS, EXCEPT THAT QUESTIONS AS TO PERFECTION
OF TCFC'S SECURITY INTEREST AND THE EFFECT OF PERFECTION OR NON-PERFECTION SHALL
BE GOVERNED BY THE LAW WHICH WOULD BE APPLICABLE EXCEPT FOR THIS SECTION.
17. Jury Waiver. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO
EACH WAIVE ANY RIGHT TO A TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION, CAUSE OF
ACTION OR COUNTERCLAIM ARISING UNDER OR IN ANY WAY RELATED TO THE AGREEMENT, AND
UNDER ANY THEORY OF LAW OF EQUITY, WHETHER NOW EXISTING OR HEREAFTER ARISING.
18. Inconsistent Provisions. Except as provided in the section entitled "Savings
Provisions", in the event of an inconsistency between this ISA and any Program
Letter, such Program Letter shall control. All Program Letters shall be
cumulative. In the event of an inconsistency between two Program Letters or a
Program Letter and a Change Notice, the later dated of the two shall control.
19. Savings Provisions. All agreements between TCFC and Dealer, whether now
existing or thereafter arising, and whether written or oral, are hereby limited
by this section. In no contingency, whether by reason of acceleration of the
maturity of the amounts due hereunder or otherwise, shall Charges contracted
for, charged, received, paid or agreed to be paid to TCFC exceed the maximum
amount permissible under applicable law. If, from any circumstance whatsoever,
Charges would otherwise be payable to TCFC in excess of the maximum lawful
amount, the Charges shall be reduced to the maximum amount permitted under
applicable law; and, if from any circumstance, TCFC shall have received anything
of value deemed interest by applicable law in excess of the maximum lawful
amount, an amount equal to any excess of
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Interest shall be applied to the reduction of the principal amount of
indebtedness and not to the payment of Charges, or if such excessive interest
exceeds the unpaid balance of the principal amount of indebtedness, such excess
shall be refunded to Dealer. All Charges paid or agreed to be paid to TCFC, to
the extent permitted by applicable law, shall be amortized, prorated, allocated
and spread throughout the full term of the Agreement (including any free floor
periods) until payment in full of all principal obligations owing by Dealer so
that the Charges for such full term shall not exceed the maximum amount
permitted by applicable law.
20. Limitation of Remedies and Damages. TCFC and Dealer agree that in the event
there is any dispute under the Agreement, the aggrieved party's remedy in
connection with any action arising under or in any way related to the Agreement
shall be limited to a breach of contract action and any damages in connection
therewith are limited to actual and direct damages.
21. Miscellaneous.
(a) Time is of the essence in the performance of Dealer's obligations
under the Agreement. Any waiver by TCFC of a Default shall only be effective if
in writing signed by TCFC and any waiver of a Default in a particular instance
or of a particular Default shall not be a waiver of other Defaults or of the
same kind of Default at another time. No modification of the Agreement shall
bind TCFC unless in writing signed by TCFC.
(b) The Agreement shall insure to the benefit of TCFC and its
successors and assigns and may be assigned by TCFC in whole or in part.
References to TCFC shall be deemed to refer to TCFC and its successors and
assigns. Dealer may not assign the Agreement without the prior written consent
of TCFC. The Agreement shall be binding upon the parties hereto and their
respective heirs, personal representatives, successors and assigns.
(c) Dealer shall pay to TCFC on demand all reasonable attorneys' fees
and legal expenses and other costs and expenses incurred by TCFC in connection
with establishing, perfecting, maintaining perfection of, protecting and
enforcing its Lien in the Collateral and collecting indebtedness, or in
connection with any modification of the Agreement or any Default.
(d) Any provisions of the Agreement found upon judicial interpretation
or construction to be prohibited by law shall be ineffective to the extent of
such prohibition, without invalidating the remaining provisions hereof.
(e) All words used shall be understood and construed to be of such
number and gender as the circumstances may require. Headings are for reference
purposes only and shall not determine the meaning or interpretation of the
Agreement.
22. Business and Warehouse Locations. (Include whether owned(o) or Leased (L):
Misc\invsecag
10
Address City County State Zip O/L
0000 Xxxxx Xxxxxx Xxxxxxx Xxxxxx XX 00000 L
23. Effectiveness. This ISA shall not become a contract until accepted by TCFC
in Illinois. Acceptance may be by facsimile signature. Dealer waives notice of
acceptance.
24. Integration: Final Writing. THIS WRITTEN AGREEMENT AND THE OTHER WRITINGS
REFERRED TO HEREIN REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES, EMBODY THE
ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO AND SUPERSEDE ALL PRIOR AGREEMENTS
AND UNDERSTANDINGS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. UNLESS EXPRESSLY PROVIDED IN THE AGREEMENT, THE AGREEMENT DOES NOT
TERMINATE ANY SECURITY AGREEMENT BETWEEN TCFC AND DEALER.
Dated: , 199 DEALER
ATTEST: BOAT TREE, INC.
(or witness) [Name of corporation, partnership or
individual]
By:
Title:
(Seal) Title:
Accepted in Illinois: Tax ID or S.S. No.:
TRANSAMERICA COMMERCIAL Dealer's Chief Executive Office and Principal
Place of Business
FINANCE CORPORATION
By: 0000 Xxxxx Xxxxxx
Title: Xxxxxxx, XX 00000
If Dealer is sole proprietor, enter home address:
If Dealer is a partnership, enter General Partners' names, home addresses and
Tax ID or S.S.Nos.:
11
RIDER TO INVENTORY AGREEMENT
This Rider is attached to and made a part of that certain Inventory
Security Agreement (the "ISA") by and between Boat Tree, Inc. and TCFC dated
July 2, 1992. All terms defined in the ISA which are not defined in this Rider
shall have the same meaning in this Rider as in the ISA. The following Sections
(s) of the ISA are amended as follows:
1. Section 5(b) Covenants of the ISA is amended to add at the end thereof the
following subsection (vii):
Provide TCFC with unaudited semi-annual balance sheet and profit and
loss statements for the first six (6) months of each fiscal year
prepared in accordance with generally accepted accounting principles,
consistently applied, within 20 days after the same are prepared but in
no event later than 45 days after the end of the related fiscal period.
Dealer: Boat Tree, Inc.
By:
Title:
Date:
12
RIDER FC TO INVENTORY AGREEMENT
All terms defined in the Inventory Security Agreement (the "ISA") by
and between Boat Tree, Inc. and TCFC to which this Rider is attached which are
not defined in this Rider shall have the same meaning in this Rider as in the
ISA. The following Section(s) of the ISA are amended as follows:
1. Section I Definitions of the ISA is hereby amended to add the
following definitions:
"Tangible Net Worth" as of any date means the sum of Dealer's
(x) net worth as reflected on its last twelve-month fiscal
financial statements, (y) net earnings since the end of the
fiscal year covered by such financial statements, both after
provision for taxes and with inventory determined on a first
in, first out basis and (z) debts owed to any guarantor,
affiliate or employee which are fully subordinated to TCFC's
satisfaction ("Subordinated Debt"); less the sum of: Dealer's
(i) intangible assets, including, without limitation,
unamortized leasehold improvements, goodwill, franchises,
licenses, patents, tradenames, copyrights, service marks,
brand names, and covenants not to compete; (ii) prepaid
expenses; (iii) franchise fees; (iv) notes, accounts
receivable and other amounts which are owed to it by any
guarantor, affiliate, or employee; (v) losses since the end of
the fiscal year covered by such financial statements; and (vi)
interest in the cash surrender value of any officer's or
shareholder's life insurance policies.
"Debt" means (i) debt for borrowed money or for the deferred
purchase price of property or services in respect of which
Dealer is liable, as obligor or otherwise or any commitment by
Dealer is liable, as obligor or otherwise or any commitment by
which Dealer assures a creditor against loss, (ii) obligations
under leases which shall have been or should be, in accordance
with generally accepted accounting principles ("GAAP"),
recorded as capitalized leases in respect of which obligations
Dealer is liable, and (iii) any unfunded obligation of Dealer
or any affiliate to a "multi-employer plan" as such term is
defined under the Employee Retirement Income Security Act of
1974, as amended, ("ERISA") required to be accrued by GAAP.
2. Section 5(b) Covenants of the ISA is amended to add at the end
thereof the following subsection(s):
(viii) provide TCFC with unaudited quarter-end balance sheet
and profit and loss statements for the first three (3)
quarters of each fiscal year prepared in accordance with
generally accepted accounting principles, consistently
applied,
mrosenberg/boattree/rider-fc.01
1
within 20 days after the same are prepared but in no event
later than 45 days after the end of the related fiscal
quarter.
3. Section 5(b) Covenants of the ISA is hereby amended to add at
the end thereof the following paragraph (d):
(d) So long as any of the Indebtedness remains outstanding or as long
as this Agreement remains in effect, even if no Indebtedness is outstanding,
Dealer shall maintain a ratio of Debt To Tangible Net Worth to exceed 4.5 to
1.0.
mrosenberg/boattree/rider-fc.01
2
