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Exhibit 10.26
[BOMBARDIER LOGO]
INVENTORY SECURITY AGREEMENT
AND POWER OF ATTORNEY
BOMBARDIER
CAPITAL
1. PARTIES: The parties to this Agreement are Bombardier Capital Inc. (BCI) and
the Dealer who has signed at the end of this Agreement ("Dealer").
2. ADVANCES: At Dealer's request, BCI, at its option, will advance funds for
the acquisition of Dealer's Inventory (Inventory), or for such other purpose
satisfactory to BCI, secured, in whole part, by a security interest in the
Collateral described in Paragraph 4 below. In each case, BCI will send Dealer a
schedule or schedules as described in Paragraph 3 below. If Dealer does not
agree with the schedule(s), it must immediately notify BCI in writing of any
objections. Dealer's failure to notify BCI of its objections within seven (7)
days shall constitute an acceptance of the schedule(s).
3. PAYMENT: Dealer shall repay BCI in accordance with either or a combination
of the following Plans, which shall be chosen at the sole discretion of BCI:
a) Pay As Sold Plan: BCI shall deliver to Dealer a schedule or schedules
listing each item of Inventory on which BCI has advanced funds and the
amount of the advance. Immediately upon the sale of each item of
Inventory, Dealer will pay to BCI the total amount due on that item.
Dealer will pay to BCI the total amount due on unsold Inventory within
the period established from time to time by BCI or upon demand by BCI
whichever first occurs and will pay such curtailments as BCI may
require.
b) Scheduled Payment Plan: BCI shall deliver to Dealer a schedule or
schedules listing the repayment terms for the Inventory on which it
has advanced funds and the amount of the advance. Dealer will
thereafter pay to BCI the payment due, when due or upon demand by BCI,
whichever comes first, as shown on the schedule(s) BCI supplies
Dealer.
Under either Plan, Dealer agrees that:
a) Dealer will pay BCI financing and service charges, insurance charges
(if any), and late charges according to and upon receipt of the
billing statements which BCI delivers to Dealer and within the time
specified by BCI.
b) BCI, at its discretion, may at any time and without notice to Dealer
apply or reapply any monies received from Dealer in payment of any
Dealer's obligations or liabilities to BCI, in such order of
application as BCI may determine.
c) The specific interest rate(s) charged to Dealer are stated on
individual financial program letters, which letters may be obtained by
the Dealer from BCI representatives. The interest rates charged at any
given time are determined by the financial programs in force for the
specific products that Dealer purchases under this Agreement, and
Dealer and BCI agree that the rates charged may fluctuate over time
and may vary depending on factors such as the type and brand of
Inventory purchased, time of year, age of the Inventory, and/or
payment habits of Dealer.
d) It is the intention of BCI to conform to all applicable laws governing
the rates of interest that may be charged. If the amount contracted
for, charged or received by BCI exceeds the maximum amount permitted
by law, it is agreed that such excess will be considered an error and
canceled immediately and, if already paid, shall be refunded to the
Dealer or, at BCI's option, applied to other outstanding liabilities
of Dealer to BCI.
4. COLLATERAL:
a) In order to secure repayment to BCI of all extensions of credit made
by BCI under this Agreement, and to secure payment of all other debts
or liabilities and performance of all obligations of Dealer to BCI,
whether now existing or hereafter existing, Dealer agrees that BCI
shall have and hereby grants to BCI a security interest in all of the
rights, titles and interests (whether now existing or hereafter
arising or acquired from time to time) of the Dealer in, to and under
all Inventory, including but not limited to, all goods manufactured
and/or sold by any manufacturer, distributor or seller, which
inventory is owned by Dealer or in which Dealer has an interest, the
purchase of which was financed or floorplanned by BCI for the Dealer
of whatever kind or nature, wherever located, and all returns,
repossessions, exchanges, substitutions, replacements, attachments,
parts, accessories and accessions thereto and thereof, and all other
goods used or intended to be used in conjunction therewith and all
proceeds and products thereof, and documents relating thereto (the
"Collateral").
b) Dealer shall execute and deliver such financing statements and
amendments thereto and all further
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writings as BCI shall request to accomplish the purpose of this
Agreement and Dealer shall bear all the costs of recording and
perfection.
5. DEALER'S DUTIES: Dealer agrees:
a) That upon purchase of each item of Inventory. Dealer shall deliver to
BCI upon request, the Certificate of Title or Certificate of Origin
issued for same, if any, and BCI shall have the right to have its
lien, encumbrance or security interest noted thereon and/or retain
such Certificate of Origin.
b) To sell and deliver Inventory only in the ordinary course of business
and not to use, rent or dispose of Collateral except as herein
provided, nor permit any encumbrance upon the Collateral without BCI's
prior written consent.
c) To keep all Collateral in good order, repair and operating condition
and to pay all transportation and storage charges on the Collateral.
d) To pay immediately all taxes, expenses, assessments and charges which
may now or hereafter be levied or assessed against the Collateral.
e) To hold any funds and proceeds payable to BCI, in the same form as
received, IN TRUST for BCI, separate and apart from Dealer's funds and
goods. BCI shall apply all amounts so received from Dealer toward the
payment of and liabilities of Dealer, in such order of application as
BCI may determine.
f) To reimburse BCI for BCI's expense and cost incurred in connection
with inspections of the Collateral, and its collection and
administration costs.
g) That for purposes of determining the rate of charge hereunder, any
other language herein to the contrary notwithstanding, charges shall
be deemed to have been accrued and accruing from the date of purchase
of each item of Inventory and shall be determined on an annualized
basis (without regard to any "free-flooring period").
h) Dealer agrees to keep all Collateral insured against risks covered by
standard forms of fire, theft and extended coverage insurance and such
other risks as may be required by BCI, in such amounts and under such
policies issued by such insurance company or companies as are
satisfactory to BCI. BCI shall be named either as a co-insured or
under a loss payable clause, to the extent its interest may appear.
Should Dealer fail to procure such insurance upon request, BCI may,
but is not obligated to, procure the same and collect the cost thereof
from Dealer.
i) To keep all of the Collateral only at its place(s) of business
referred to in Section 13 and to permit BCI to inspect the Collateral
during Dealer's business hours and at other reasonable times and to
inspect and make copies of Dealer's books and records.
j) Dealer shall at all times keep full and accurate records of its
business and Dealer shall upon demand, furnish BCI all such
information regarding Dealer's business and financial condition as BCI
may reasonably request.
k) That BCI may hold any sums or monies belonging to the Dealer which
come into the possession of BCI and may apply all or a portion of said
sums or monies to any outstanding indebtedness, liabilities or
obligations of the Dealer.
6. POWER OF ATTORNEY: Dealer grants to BCI:
a) A power of attorney under which BCI may a) execute on behalf of Dealer
any notes, chattel paper, UCC financing statements, amendments thereto
and continuations thereof (or similar statements of notice,
registration, amendment or continuation under the laws of any
jurisdiction), or other writing in connection with this Agreement or
the Collateral as BCI may require for the purpose of protecting,
maintaining or enforcing the Collateral or the security interest
granted to BCI in the Collateral and b) adjust, make, pursue, settle
and collect any insurance claim in connection with this Agreement, as
attorney-in-fact for Dealer.
7. DEFAULT: The following shall constitute default under this Agreement:
a) Any breach or failure of Dealer to observe or perform any of its
obligations, covenants or undertakings hereunder.
b) Misrepresentation by Dealer to BCI in connection with the business and
financial condition of Dealer or relating to Collateral.
c) Death or dissolution of Dealer, or if any action or proceedings to
dissolve Dealer be instituted.
d) Dealer becoming insolvent or making an assignment for the benefit of
creditors, or if a Petition in Bankruptcy is filed by or against
Dealer, or a complaint in equity or other proceedings for the
appointment of a receiver for Dealer is filed, or if proceedings for
reorganization or for composition with creditors under any law be
instituted by or against Dealer, or if any or all of the goods of
Dealer shall be attached.
e) BCI in good xxxxx xxxxx itself insecure.
REMEDIES: If Dealer defaults, BCI can, at its option and without notice,
demand immediate payment of all obligations under this Agreement and any
other indebtedness owed to BCI. BCI shall have all the rights and remedies
of a secured party under the Uniform Commercial Code in effect in the
jurisdiction where the
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Collateral is kept including, but not limited to, the right to enter any
of Dealer's premises with or without legal process, but without force,
and to take possession and remove the Collateral. At BCI's request and to
the extent Dealer may lawfully do so, Dealer will assemble, prepare for
removal and make available to BCI at a place to be designated by BCI
which is reasonably convenient to both parties such items of Collateral
as BCI may deem sufficient to cover all of Dealer's obligations to BCI.
Dealer agrees that private sale of any item financed by BCI at the amount
owed to BCI on that item, less a reasonable restocking charge shall be a
commercially reasonable method of disposition. Five (5) days written
notice of public sale date or the date after which a private sale may
occur shall be a reasonable notice. BCI shall not be chargeable with
responsibility for the accuracy or validity of any document or for the
existence or value of any Collateral. Dealer further agrees to pay
reasonable attorney's fees and legal expenses incurred by BCI in
enforcing this Agreement after default by Dealer. To the extent not
prohibited by law, Dealer waives all valuation and exemption laws and
releases all right of appeal after payment in full.
9. TIME AND ACKNOWLEDGEMENT: Time is of the essence in the performance of
Dealer's duties, but the failure of BCI to enforce its rights under this
Agreement shall not be deemed a waiver of BCI's rights under this
Agreement. Dealer will not assert against BCI any claim or defense Dealer
may have against any seller of goods to Dealer. Dealer acknowledges
receipt of a copy of this Agreement.
10. ASSIGNMENT: This Agreement may be assigned by BCI but Dealer may not
assign this Agreement without the prior written consent of BCI.
11. MODIFICATION: This Agreement may not be modified, altered or amended in
any manner whatsoever, except by a further agreement in writing signed by
both Dealer and BCI.
12. GOVERNING LAW: The validity, enforceability and interpretation of this
Agreement shall be governed by the laws of the State of New York.
13. DEALER BUSINESS AND WAREHOUSE ADDRESSES: (Attach a schedule if more space
required.)
See Schedule A attached hereto.
Effective as of the_________day of____________________ 19__.
WITNESS: DEALER:
(OR ATTEST)
HOMEMAX TENNESSEE, INC.
/s/ L. Xxxxxx XxXxxxxxx, Xx. HOMEMAX
---------------------------- TENNESSEE, INC.
L. Xxxxxx XxXxxxxxx, Xx. CORPORATE
---------------------------- SEAL
Secretary
By: /s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
Accepted by:
BOMBARDIER CAPITAL INC.
By: ______________________________________
Title:
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ACKNOWLEDGMENT BY DEALER IF INDIVIDUAL(S) OR PARTNERSHIP
STATE OF _________________
COUNTY OF _______________
On this the ____ day of ________________,19 ____ before me personally appeared
__________________________ ____________________________________________________
known to me to be the person(s) whose name(s) is (are) subscribed to the
foregoing Inventory Security Agreement and Power of Attorney and acknowledged
that he (they) voluntarily executed the same for the purposes therein contained.
In Witness Whereof I Hereunto set my hand and Official Seal.
__________________________________________
Notary Public
ACKNOWLEDGMENT BY DEALER IF A CORPORATION OR LLC
STATE OF North Carolina
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COUNTY OF Wake
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On this the 29th of October, 1999. before me personally appeared Xxxxxxx X.
Xxxxxxxxxx who acknowledged himself to be the President of HomeMax Tennessee,
Inc., a corporation/LLC, and that he, being authorized by the Board of
Directors/Members, voluntarily executed the foregoing Inventory Security
Agreement and Power of Attorney for the purposes therein contained, by signing
the name of the corporation/LLC by himself.
In Witness Whereof I Hereunto set my hand and Official Seal.
/s/ Xxxxxxxx Xxxxxx
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Notary Public
My Commission expires 10/9/2002
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