Exhibit 10.46
IBM Credit Corporation
AGREEMENT FOR WHOLESALE FINANCING
(SECURITY AGREEMENT)
TO: IBM CREDIT CORPORATION DATE: Jan 28, 1998
In the course of our business, we acquire inventory and
want you to finance our purchase of such inventory under the
following terms and conditions:
1. You may in your sole discretion from time to time decide
the amount of credit you extend to us, notwithstanding any
prior course of conduct between us. You may combine all of your
advances to make one debt owed by us.
2. You may in your sole discretion decide the amount of
funds, if any, you will advance on any inventory we may seek to
acquire. We agree that any decision to advance funds on any
inventory will not be binding on you until such time as the
funds are actually advanced.
3. All financing provided by you to us will be used
exclusively for the acquisition of inventory for which you have
approved us to receive financing pursuant to the terms of this
Agreement (the "Approved Inventory"). From time to time, you
will identify such trademarks and tradenames to us in writing.
When you advance funds, you may send us a Statement of
Transaction or other statement if you choose. If you do, we will
have acknowledged the debt to be an account stated and we will
have agreed to the terms of the financing programs
identified on such statement, unless we notify you in writing of
any question or objection within seven (7) days after it is
mailed to us.
4. To secure payment of all of our current and future debts
to you whether under this Agreement, any guaranty that we now
or hereafter execute, or any other agreement between us,
whether direct or contingent, we grant you a security interest in
all of our inventory, equipment, fixtures, accounts,
contract rights, chattel paper, instruments, reserves,
documents of title, deposit accounts and general intangibles,
whether now owned or hereafter acquired, and all attachments,
accessories, accessions, substitutions and/or replacements
thereto and all proceeds thereof. All of the above assets are
defined pursuant to the provisions of Article 9 of the Uniform
Commercial Code and are hereinafter collectively referred to as
the "Goods". This security interest is also granted to secure our
debts to all of your affiliates. We will hold all of the Goods
financed by you, and the proceeds thereof, in trust for you
and we will immediately account for and remit directly to you
all such proceeds when payment is required under the terms of our
financing program with you. You may directly collect any amount
owed to us with respect to the Goods and credit us with all
sums received by you. Your title, lien or security interest will
not be impaired by any payments we make to the seller or anyone
else or by our failure or refusal to account to you for proceeds.
5. Our principal place of business is located at: 00000
Xxxxxx Xxxx, Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, and we
represent that our business is conducted
as a______ SOLE PROPRIETORSHIP, ________PARTNERSHIP,
__XXX_____CORPORATION (check applicable term). We will notify
you immediately of any change in our identity, name, form of
ownership or management, and of any change in our principal
place of business, or any additions or discontinuances of
other business locations. The Goods will be kept at our
principal place of business. We will immediately notify you if
any of the Goods are kept at any other address. We and our
predecessors have done business during the last six (6) months
only under the following names:_Applied Intelligence Group,
Inc._. This paragraph is for informational
purposes only, and is not in any manner intended to limit the
extent of your security interest in the Goods.
6. We promise that the Goods are and will remain free from
all claims and liens superior to yours unless otherwise agreed to
by you, and that we will defend the Goods against all other
claims and demands. We will not rent, lease, lend,
demonstrate, pledge, transfer or secrete any of the Goods or
use any of the Goods for any purpose other than exhibition and
sale to buyers in the ordinary course of business, without
your prior written consent. We will execute all documents
you may request to confirm or perfect your security interest in
the Goods. We warrant and represent that we are not in default
in the payment of any principal, interest or other charges
relating to any indebtedness owed to any third party, and no
event has occurred under the terms of any agreement, document,
promissory note or other instrument, which with or without
the passage of time and/or the giving of notice
constitutes or would constitute an event of default thereunder.
We will promptly provide our year-end financial statement to you
after our fiscal year ends and, if requested by you, we will also
promptly provide our financial statement to you after each
calendar quarter. Each financial statement that we submit to you,
is and will be correct and will accurately represent our
financial condition. We further acknowledge your reliance on the
truthfulness and accuracy of each financial statement that we
submit to you in your extension of various financial
accommodations to us.
7. We will pay all taxes, license fees, assessments and
charges on the Goods when due. We will immediately notify you
of any loss, theft, or destruction of or damage to any of the
Goods. We will be responsible for any loss, theft or
destruction of Goods. We will keep the Goods insured for their
full insurable value against loss or damage under an "all risk"
insurance policy. We will obtain insurance under such terms
and in amounts as you may specify, from time to time, with
companies acceptable to you, with a loss-payee or mortgagee
clause payable to you to the extent of any loss to the
Goods and containing a waiver of all defenses against us that
is acceptable to you. We agree to provide you with written
evidence of the required insurance coverage and loss-payee or
mortgagee clause. We assign to you all amounts owed to us under
any insurance policy, and we direct any insurance company to
make payment directly to you to be applied to the unpaid debt
owed you. We further grant you an irrevocable power of attorney
to endorse any checks or drafts and sign and file all of the
necessary papers, forms and documents to initiate and settle
any insurance claims with respect to the Goods. If we fail to
pay any of the above-referenced costs, charges, or insurance
premiums, or if we fail to insure the Goods, you may pay such
costs, charges and insurance premiums, and the amounts paid will
be considered an additional debt owed by us to you.
8. You have the right to enter upon our premises from time
to time, as you in your sole discretion may determine for your
sole benefit, and all without any advance notice to us, to:
examine the Goods; appraise them as security; verify their
condition and non-use; verify that all Goods have been properly
accounted for; verify that we have complied with all terms and
provisions of this Agreement; and assess, examine, and make
copies of our books and records. Any collection by you of any
amounts we owe under our financing programs with you at or
during your examination of the Goods does not relieve us of our
continuing obligation to pay our indebtedness owed to you in
accordance with the terms of such financing programs.
9. We agree to immediately pay you the full amount of the
principal balance owed you on each item of inventory financed by
you at the time such inventory is sold, lost, stolen,
destroyed, or damaged, whichever occurs first, unless you
have agreed in writing to provide financing to us on other terms.
We also agree to provide you, upon your request, an inventory
report which describes all the Approved Inventory in our
possession (excluding any inventory financed by you under the
Demonstration and Training Equipment Financing Option and the
Rental Equipment Financing Option). Regardless of the terms of
any scheduled payment financing program with you, if you
determine, after conducting an inspection of all of our
inventory, that the current outstanding indebtedness owed
by us to you exceeds the aggregate wholesale invoice price of
the Approved Inventory in our possession, we agree to immediately
pay to you an amount equal to the difference between such
outstanding indebtedness and the aggregate wholesale invoice
price of such inventory. We will make all payments to you at
your appropriate branch office. Any checks or other
instruments delivered to you to be applied against our
outstanding obligations will constitute conditional payment until
the funds represented by such instruments are actually received
by you. You may apply payments to reduce finance charges
first and then principal, irrespective of our instructions.
Further, you may apply principal payments to the oldest
(earliest) invoice for the inventory financed by you, but,
in any case, all principal payments will first be applied to
such inventory which is sold, lost, stolen, destroyed, damaged,
or otherwise disposed of. If we sign any instrument for
the amount of credit extended, it will be evidence of our
obligation to pay and will not be payment. Any discount,
rebate, bonus, or credit for the inventory granted to us by any
third party will not, in any way, reduce the debt we owe you,
until you have received payment in cash.
10. During each year or part of a year in which you have
extended credit to us, we will pay you finance charges on the
total amount of credit extended to us in the amount agreed to
between us from time to time. The period, during which any
third party provides a finance charge subsidy for us, will
be included in the calculation of the annual percentage rate of
the finance charges. Such finance charges may be applied by you
to cover any amounts expended for your: appraisal and
examination of the Goods; maintenance of facilities for
payment; assistance in support of our retail sales; your
commitments to manufacturers or distributors to finance shipments
of Goods to us; recording and filing fees; expenses incurred
in obtaining additional collateral or security; and any
costs and expenses incurred by you arising out of the financing
you extend to us. We also agree to pay you additional charges
which will include: late payment fees; flat charges; charges
for receiving NSF checks from us; renewal charges; and any other
charges applicable to our financing program with you. Unless we
hereafter otherwise agree in writing, the finance charge and
additional charges agreed upon will be your applicable finance
charge and additional charges for the class of Goods involved,
prevailing from time to time at your principal place of business.
You will send us, at monthly or other intervals, a statement of
all charges due on our account with you. We will have
acknowledged the charges due, as indicated on the statement, to
be an account stated, unless we object in writing to you within
seven (7) days after it is mailed to us. This statement may
be adjusted by you at any time to conform to applicable law and
this Agreement. If any manufacturer or distributor fails to
provide a finance charge subsidy for us, as agreed, we will
be responsible for and pay to you all finance charges billed to
our account.
11. Any of the following events will constitute a default by
us under this Agreement: we breach any of the terms, warranties
or representations contained in this Agreement or in any other
agreements between us or between us and any of your affiliates;
any guarantor of our indebtedness to you under this
Agreement or any other agreements breaches any of the terms,
warranties or representations contained in any guaranty or other
agreements between any guarantor and you; any representation,
statement, report or certificate made or delivered by us
or any of our representatives, employees or agents or by any
guarantor to you is not true and correct; we fail to pay any of
the liabilities or indebtedness owed to you or any of your
affiliates when due and payable under this Agreement or under any
other agreements between us or between us and any of your
affiliates; you determine that you are insecure with respect to
any of the Goods or the payment of our debt owed to you; we
abandon the Goods or any part thereof; we or any guarantor become
in default in the payment of any indebtedness owed to any third
party; a judgement issues on any money demand against us or
any guarantor; an attachment, sale or seizure is issued against
us or any of the Goods; any part of the Goods are seized or
taken in execution; the death of the undersigned if the
business is operated as a sole proprietorship or partnership,
or the death of any guarantor; we cease or suspend our business;
we or any guarantor make a general assignment for the
benefit of creditors; we or any guarantor become insolvent or
voluntarily or involuntarily become subject to the Federal
Bankruptcy Code, state insolvency laws or any act for the
benefit of creditors; any receiver is appointed for any of our
or any guarantor's assets, or any guaranty pertaining to
our indebtedness to you is terminated for any reason
whatsoever; we lose any franchise, permission, license or right
to sell or deal in any Goods which you finance; we or any
guarantor misrepresent our respective financial condition or
organizational structure; or you determine, in your sole
discretion, that the Goods, any other collateral given to you to
secure our indebtedness to you, or our or any guarantor's net
worth has decreased in value, and we have been unable, within the
time period prescribed by you, to either provide you with
additional collateral in a form and substance satisfactory to you
or reduce our total indebtedness by an amount sufficient to
satisfy you. In the event of a default:
(a) You may, at any time at your election, without notice or
demand to us do any one or more of the following: declare
all or any part of the indebtedness we owe you
immediately due and payable, together with all court costs
and all costs and expenses of your repossession and
collection activity, including, but not limited to, all
attorney's fees; exercise any or all rights of a secured
party under applicable law; and/or cease making any
further financial accommodations or extending any additional
credit to us. All of your rights and remedies are
cumulative.
(b) We will segregate, hold and keep the Goods in trust, in
good order and repair, only for your benefit, and we
will not exhibit, transfer, sell, further encumber, otherwise
dispose of or use for any other purpose whatsoever any of the
Goods.
(c) Upon your oral or written demand, we will immediately
deliver the Goods to you, in good order and repair, at a
place specified by you, together with all related documents;
or you may, in your sole discretion and without notice or
demand to us, take immediate possession of the Goods,
together with all related documents.
(d) We waive and release: any claims and causes of action
which we may now or ever have against you as a direct or
indirect result of any possession, repossession, collection
or sale by you of any of the Goods and the benefit of all
valuation, appraisal and exemption laws. If you seek to take
possession of any of the Goods by court process, we
irrevocably waive any notice, bonds, surety and security
relating thereto required by any statute, court rule or
otherwise.
(e) We appoint you or any person you may delegate as our duly
authorized Attorney-In-Fact to do, in your sole
discretion, any of the following: endorse our name on any
notes, checks, drafts or other forms of exchange received as
payment on any Goods for deposit in your account;
sell, assign, transfer, negotiate, demand, collect,
receive, settle, extend or renew any amounts due on any of
the Goods; and exercise rights we have in the Goods.
If we bring any action or assert any claim against you which
arises out of this Agreement, any other agreement or any of
our business dealings, in which we do not prevail, we agree to
pay you all costs and expenses of your defense of such action or
claim including, but not limited to, all attorney's fees. If
you fail to exercise any of your rights or remedies under this
Agreement, such failure will in no way or manner waive any of
your rights or remedies as to any past, current or future
default.
12. We agree that if you conduct a private sale of any Goods
by soliciting bids from ten (10) or more other dealers or
distributors in the type of Goods repossessed by or returned to
you hereunder, any sale by you of such property in bulk or in
parcels within 120 days of (a) your taking physical possession
and control of such Goods or (b) when you are otherwise
authorized to sell such Goods, whichever occurs last, to the
bidder submitting the highest cash bid therefor, will be deemed
to be a commercially reasonable means of disposing of the
same. We agree that commercially reasonable notice of any public
or private sale will be deemed given to us if you send us a
notice of sale at least seven (7) days prior to the date of any
public sale or the time after which a private sale will be made.
If you dispose of any such Goods other than as herein
contemplated, the commercial reasonableness of such sale will
be determined in accordance with the provisions of the
Uniform Commercial Code as adopted by the state whose laws govern
this Agreement.
We agree that you do not warrant the Goods. We will pay you in
full even if the Goods are defective or fail to conform to any
warranties extended by any third party. Our obligations to
you will not be affected by any dispute we may have with
any third party. We will not assert against you any claim or
defense we may have against any third party. We will indemnify
and hold you harmless against any claims or defenses asserted
by any buyer of the Goods by reason of: the condition
of any Goods; any representations made about the Goods; or for
any and all other reasons whatsoever.
13. We grant to you a power of attorney authorizing any of
your representatives to: execute or endorse on our behalf any
documents, financing statements and instruments evidencing our
obligations to you; supply any omitted information and
correct errors in any documents or other instruments executed by
or for us; do any and every act which we are obligated to perform
under this Agreement; and do any other things necessary to
preserve and protect the Goods and your rights and security
interest in the Goods. We further authorize you to provide to
any third party any credit, financial or other information on us
that is in your possession.
14. Time is of the essence in this Agreement. This Agreement
will be effective from the date of its acceptance at your branch
office. We acknowledge receipt of a true copy and waive
notice of your acceptance of it. If you commit to advance
funds under this Agreement, you will have accepted it. This
Agreement will remain in force until one of us gives notice to
the other that it is terminated. If we terminate this
Agreement, you may declare all or any part of the indebtedness we
owe you due and payable immediately. If this Agreement is
terminated, we will not be relieved from any obligation to you
arising out of your advances or commitments made before the
effective date of termination. Your rights under this
Agreement and your security interest in present and future Goods
will remain valid and enforceable until all our debts to you are
paid in full. We agree that we cannot assign this Agreement
without your prior written consent. This Agreement will
protect and bind your and our respective heirs, representatives,
successors and assigns. It can be varied only by a document
signed by your and our authorized representatives. If
any provision of this Agreement or its application is
invalid or unenforceable, the remainder of this Agreement will
not be impaired or affected and will remain binding and
enforceable. If we are a corporation, this Agreement is executed
with the authority of our Board of Directors, and with
shareholder approval, if required by the law. All notices you
send to us will be sufficiently given if mailed or delivered
to us at our address shown in paragraph 5.
15. The laws of the State of ___Illinois__________ will
govern this Agreement. We agree that venue for any lawsuit will
be in the State or Federal Court within the county, parish, or
district where your branch office, who provides the financial
accommodations, is located. We hereby waive any right to
change the venue of any action brought against us by you.
16. If we have previously executed any security agreements
relating to the Goods with you, we agree that this Agreement is
intended only to amend and supplement such written agreements,
and will not be deemed to be a novation or termination
of such written agreements. In the event the terms of this
Agreement conflict with the terms of any prior security agreement
that we previously executed with you, the terms of this
Agreement will control in determining the agreement between us.
17. We waive all exemptions and homestead laws to the maximum
extent permitted by law. We waive any statutory right to
notice or hearing prior to your attachment, repossession or
seizure of the Goods. We further waive any and all rights of set-
off we may have against you. We agree that any proceeding
in which we, or you or any of your affiliates, or our
assigns are parties, as to all matters and things arising
directly or indirectly out of this Agreement, or the relations
among the parties listed in this paragraph will be tried in a
court of competent jurisdiction by a judge without a jury. We
hereby waive any right to a jury trial in any such proceeding.
ATTEST:
/s/ Xxxxxx X. Xxxxx Applied Intelligence Group, Inc.
Secretary Customer
Print Name: Xxxxxx X. Xxxxx By: /s/ John X.Xxxx
Print Name: John X.Xxxx
(CORPORATE SEAL)
Title: Vice President &
Chief Financial Officer
SECRETARY'S CERTIFICATE OF RESOLUTION
I certify that I am the Secretary and the official custodian
of certain records, including the certificate of incorporation,
charter, by-laws and minutes of the meeting of the Board of
Directors of the corporation named below, and that the
following is a true, accurate and compared extract from the
minutes of the Board of Directors of the corporation adopted at a
special meeting thereof held on due notice, at which meeting
there was present a quorum authorized to transact the business
described below, and that the proceedings of the meeting were in
accordance with the certificate of incorporation, charter and by-
laws of the corporation, and that they have not been revoked,
annulled or amended in any manner whatsoever.
Upon motion duly made and seconded, the following resolution
was unanimously adopted after full discussion: "RESOLVED, That
the several officers, directors and agents of this corporation,
or any one or more of them, are hereby authorized and empowered
on behalf of this corporation: to obtain financing from IBM
Credit Corporation ("IBM Credit") in such amounts and on such
terms as such officers, directors or agents deem proper; to enter
into security and other agreements with IBM Credit relating to
the terms upon which financing may be obtained and security to be
furnished by this corporation therefor; from time to time to
supplement or amend any such agreements; and from time to time to
pledge, assign, guaranty, mortgage, grant security interest in
and, otherwise transfer to IBM Credit as collateral security for
any obligations of this corporation to IBM Credit and its
affiliated companies, whenever and however arising, any assets
of this corporation, whether now owned or hereafter acquired;
hereby ratifying, approving and confirming all that any of said
officers, directors or agents have done or may do in the
premises."
IN WITNESS WHEREOF, I have executed and affixed the seal of
the corporation on the date stated below.
Dated: January 28,1998
/s/ Xxxxxx X.Xxxxx
Secretary
Applied Intelligence Group, Inc.
Corporate Name
