EXHIBIT 10.8.4
SECURITY AGREEMENT
(Accounts, Chattel Paper, and Inventory)
(hereafter the "Agreement")
For value received, the undersigned, FIRST TEAM FORD, LTD., a Florida limited
partnership ("Debtor") grants to Comerica Bank, a Michigan banking corporation,
whose address is 000 X. Xxxxxxxxx Xxxxxx, P. O. Box 75000, National Dealer
Services - 3517, Detroit, Michigan 48275-3517 ("Bank"), a continuing security
interest in (a) Debtor's Accounts Receivable, (b) Debtor's interest in the goods
which has given rise to any Account Receivable, (c) Debtor's Property in
Possession of Bank, (d) Debtor's Inventory, and (e) the Proceeds and products of
all the above, to secure payment of any and all sums, indebtedness and
liabilities of any and every kind now owing or later to become due to the Bank
from Debtor during the term of this Agreement, however created, incurred,
evidenced, acquired or arising, whether under any note(s), guaranty(ies), letter
of credit agreement(s), evidence(s) of indebtedness or under any other
instrument, obligation, guaranty, contract or agreement or dealing of any and
every kind now existing or later entered into between the Debtor and the Bank,
or otherwise, and whether direct, indirect, primary, secondary, fixed,
contingent, joint or several, due or to become due, together with interest and
charges, and including, without limit, all present and future indebtedness or
obligations of third parties to the Bank which is guaranteed by the Debtor and
the present or future indebtedness originally owing by the Debtor to third
parties and assigned by third parties to the Bank, and any and all renewals,
extensions or modifications of any of them (the "Indebtedness").
1. DEFINITIONS. As used in this Agreement:
1.1 "Account(s) Receivable" or "Debtor's Account(s) Receivable" means
all of the following now owned or later acquired by Debtor wherever located: all
accounts, general intangibles (including, without limit, Tax Refunds, trade
names, trade styles and goodwill, trademarks, copyrights and patents, and
applications for them, trade and proprietary secrets, formulae, designs,
blueprints and plans, customer lists, software programs, literary rights,
licenses and permits, insurance policies, insurance proceeds, beneficial
interests in trusts, and minute books and other books and records), chattel
paper, contract rights, deposit accounts, documents and instruments.
1.2 "Collateral" means any and all property of Debtor in which Bank now
has or by this Agreement now or later acquires a security interest.
1.3 "Debtor's Property in Possession of Bank" means goods, instruments,
documents, policies and certificates of insurance, deposits, money or other
property now owned or later acquired by Debtor or in which Debtor now has or
later acquires an interest and which are now or later in possession of Bank, or
as to which Bank now or later controls possession by documents or otherwise.
1.4 "Environmental Law" means any laws, ordinances, directives, orders,
statutes, or regulations an object of which is to regulate or improve health,
safety, or the environment, including, without limit, the Comprehensive
Environmental Response, Compensation and
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Liability Act of 1980, as amended (42 USC 9601 et seq.),the Resource
Conservation and Recovery Act, as amended (42 USC 6901 et seq.), and such
similar environmental protection laws as enacted in the State of Florida.
1.5 "Hazardous Materials" means each and all of the following:
hazardous materials and/or substances as defined in any Environmental Law,
petroleum, petroleum by-products, natural gas, flammable explosives, radioactive
materials, and toxic materials.
1.6 "Inventory" or "Debtor's Inventory" means all goods wherever
located, now owned or later acquired by Debtor, which are held for sale or lease
or furnished or to be furnished under any contract of service (including,
without limit, any such goods which are returned to or repossessed by Debtor),
or which are raw materials, work in process or materials used or consumed in
Debtor's business and any other property constituting "inventory" under the
Uniform Commercial Code.
1.7 "Proceeds" has the meaning assigned it in Article 9 of the Uniform
Commercial Code, as of the date of this Agreement, and also includes, without
limit, cash or other property which were proceeds and are recovered by a
bankruptcy trustee or otherwise as a preferential transfer by Debtor.
1.8 "Tax Refunds" means refunds or claims for refunds of any taxes at
any time paid by Debtor to the United States of America, any state, city, county
or any other governmental entity.
1.9 "Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of Florida, as amended from time to time.
1.10 Except as otherwise provided in this Agreement, all terms in this
Agreement have the meanings assigned to them in Article 9 (or, absent definition
in Article 9, in any other Article) of the Uniform Commercial Code, as of the
date of this Agreement.
2. WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and
agrees as follows:
2.1 Bank at its option may disburse loan proceeds directly to the
seller of any Collateral to be acquired with proceeds of loans from Bank.
2.2 Debtor shall (a) furnish to Bank, in form and at intervals as Bank
may request, information adequate to identify the Inventory, its cost and
location, and reports with respect to the acquisition and sale of Inventory; (b)
evidence to Bank, in form and at intervals as Bank may request, the account
balances and the nature and extent of those Accounts Receivable in which Debtor
has rights, the names and addresses of all account debtors and reports with
respect to the payments on and aging of Accounts Receivable; (c) keep adequate
records of the Collateral and other records as Bank shall determine to be
appropriate; and (d) allow Bank to examine, inspect and make abstracts from, or
copy any of Debtor's books and records (relating to the Collateral or otherwise
and whether printed or in magnetic tape or discs or in
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other machine readable form), and only upon an uncured Default or Event of
Default (as defined herein) arrange for verification of Accounts Receivable
directly with account debtors or by other methods acceptable to Bank.
2.3 Debtor shall at the request of Bank (a) xxxx its records and the
Collateral to clearly indicate the security interest of Bank under this
Agreement, and (b) deliver to Bank all accounting and other records pertaining
to, and all writings evidencing, the Collateral or any portion of it, together
with all books, records and documents of Debtor related to it in whatever form
kept by Debtor, whether printed or in magnetic tape or discs or in other machine
readable form or otherwise, and all forms, programs, software and other
materials and instructions necessary or useful to Bank, to monitor the
Collateral or enforce its rights under this Agreement.
2.4 At the time any Collateral becomes, or is represented to be,
subject to a security interest in favor of Bank, Debtor shall be deemed to have
warranted that (a) Debtor is the lawful owner of the Collateral and has the
right and authority to subject it to a security interest granted to Bank; (b)
none of the Collateral is subject to any security interest other than that in
favor of Bank and there are no financing statements on file, other than in favor
of Bank; and (c) Debtor acquired its rights in the Collateral in the ordinary
course of its business.
2.5 On each occasion on which Debtor evidences to Bank the account
balances on and the nature and extent of Debtor's Accounts Receivable, Debtor
shall be deemed to have warranted that except as otherwise indicated (a) each of
those Accounts Receivable is valid and enforceable without performance by Debtor
of any act; (b) each of those account balances are in fact owing, (c) there are
no setoffs, recoupments, credits, contra accounts, counterclaims or defenses
against any of those Accounts Receivable, (d) as to any Accounts Receivable
represented by a note, trade acceptance, draft or other instrument or by any
chattel paper or document, (e) Debtor has not received with respect to any
Account Receivable, any notice of the death of the related account debtor, nor
of the dissolution, liquidation, termination of existence, insolvency, business
failure, appointment of a receiver for assignment for the benefit of creditors
by, or filing of a petition in bankruptcy by or against, the account debtor, and
(f) as to each Account Receivable, the account debtor is not an affiliate of
Debtor, the United States of America or any department, agency or
instrumentality of it, or a citizen or resident of any jurisdiction outside of
the United States.
2.6 Debtor will keep the Collateral free at all times from any and all
claims, liens, security interests and encumbrances other than those in favor of
Bank. Debtor will not, without the prior written consent of Bank, sell, transfer
or lease, or permit or suffer to be sold, transferred or leased, any or all of
the Collateral, except for Inventory in the ordinary course of its business and
will not return any Inventory to its supplier. Bank or its agents or attorneys
may at all reasonable times inspect the Collateral and may enter upon all
premises where the Collateral is kept or might be located.
2.7 If Bank, acting in its sole discretion, redelivers Collateral to
Debtor or Debtor's designee for the purpose of
(a) the ultimate sale or exchange thereof, or
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(b) presentation, collection, renewal, or registration of
transfer thereof, or
(c) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing therewith preliminary to sale or
exchange,
such redelivery shall be in trust for the benefit of Bank and shall not
constitute a release of Bank's security interest therein or in the proceeds or
products thereof unless Bank specifically so agrees in writing. If Debtor
requests any such redelivery, Debtor will deliver with such request a duly
executed financing statement in form and substance satisfactory to Bank. Any
proceeds of Collateral coming into Debtor's possession as a result of any such
redelivery shall be held in trust for Bank and forthwith delivered to Bank for
application on the Indebtedness. Bank may (if, in its sole discretion, it elects
to do so) deliver the Collateral or any part of the Collateral to Debtor, and
such delivery by Bank shall discharge Bank from any and all liability or
responsibility for such Collateral.
2.8 Debtor acknowledges and agrees that the Bank has no obligation to
acquire or perfect any lien on or security interest in any asset(s), whether
realty or personalty, to secure payment of the Indebtedness, and Debtor is not
relying upon assets in which the Bank has or may have a lien or security
interest for payment of the Indebtedness.
2.9 Debtor will do all acts and things, and will execute all writings
reasonably requested by Bank to establish, maintain and continue a perfected and
first security interest of Bank in the Collateral, and will pay on demand
reasonable all costs and expenses of searches, filing and recording deemed
necessary by Bank to establish, determine or continue the validity and the
priority of Bank's security interest.
2.10 Debtor will pay promptly and within the time that they can be paid
without interest or penalty all taxes, assessments and similar imposts and
charges which at any time are or may become a lien, charge, or encumbrance upon
any of the Collateral, except to the extent contested in good faith and bonded
in a manner satisfactory to Bank. If Debtor fails to pay any of these taxes,
assessments, or other charges in the time provided above, Bank has the option
(but not the obligation) to do so and Debtor agrees to repay all amounts so
expended by Bank immediately upon demand, together with interest at the highest
default rate which could be charged by Bank to Debtor on any Indebtedness.
2.11 Debtor will keep the Inventory in good condition and will
safeguard and protect it from loss, damage or deterioration from any cause.
Debtor has and will maintain at all times (a) with respect to the Inventory,
insurance against fire and other risks customarily insured against under an
"all-risk" policy and other risks customarily insured against by persons engaged
in similar business to that of Debtor, and (b) public liability insurance and
other insurance as may be required by law or reasonably required by Bank, all of
which insurance shall be in amount, form and content, and written by companies
as may be satisfactory to Bank, naming Bank as sole payee as to the Inventory,
and Debtor will deliver to Bank evidence satisfactory to Bank that the required
insurance has been procured. If Debtor fails to maintain satisfactory insurance,
Bank has the option (but not the obligation) to do so and Debtor agrees to repay
all amounts so expended by Bank immediately upon demand, together with interest
at the highest default rate which could be charged by Bank to Debtor on any
Indebtedness.
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2.12 If any of the Collateral (or any records concerning the
Collateral) is located or kept by Debtor on leased premises, Debtor will: (a)
provide a complete and correct copy of all applicable leases to Bank, (b)
furnish or cause to be furnished to Bank from each landlord under such leases a
lessor's acknowledgment in form satisfactory to Bank authorizing, on Default,
Bank's entry on such premises to enforce its rights and remedies under this
Agreement and (c) comply with all such leases. Debtor's rights under all such
leases shall further be part of the Collateral, and included in the security
interest granted to Bank hereunder.
2.13 After uncured Default (as defined herein), Debtor shall neither
make nor permit any modification, compromise or substitution for any Account
Receivable without the prior written consent of Bank.
2.14 Debtor agrees to reimburse Bank upon demand for all fees and
expenses incurred by Bank (a) in seeking to collect the Indebtedness or any part
of it (through formal or informal collection actions, workouts or otherwise), in
defending the validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Debtor; (b) in connection with any proceeding (including, without
limit, bankruptcy, insolvency, administrative, appellate, or probate proceedings
or any lawsuit) in which Bank at any time is involved as a result of any lending
relationship or other financial accommodation involving Bank and Debtor; or (c)
incurred by Bank during the continuance of an Event of Default, which fees and
expenses relate to or would not have been incurred but for any lending
relationship or other financial accommodation involving Bank and Debtor. The
fees and expenses include, without limit, court costs, legal expenses,
reasonable attorneys' fees, paralegal fees, internal transfer charges for
in-house attorneys and paralegals and other services, and audit expenses.
2.15 Debtor at all times shall be in material compliance with all
applicable laws.
2.16 (a) Debtor is and shall be in material compliance with all
Environmental Laws. There are not and will not be Hazardous Materials on, in or
under any real or personal property ("Property") now or at any time owned,
occupied, or operated by Debtor which in any manner violates any Environmental
Law or which could be subject to remediation pursuant to any Environmental Law.
Debtor has not disposed of, manufactured, treated, stored, handled, used,
transported, or generated Hazardous Materials, and shall not in the future do
any of the above acts in violation of any Environmental Law.
(b) Debtor shall promptly conduct all investigations, testing,
removal and other actions necessary to clean up and remove all Hazardous
Materials on or affecting the Property in accordance with all Environmental
Laws. These actions will not be deemed to cure any breach of this Section.
(c) Debtor shall defend, indemnify and hold harmless Bank, its
employees, agents, shareholders, officers, and directors from and against any
and all claims, damages, fines, expenses, liabilities or causes of action of
whatever kind, including without limit consultant fees, legal expenses, and
reasonable attorneys' fees, suffered by any of them as a direct or indirect
result of any actual or asserted violation of any Environmental Law or of
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any remediation relating to the Property required by any Environmental Law.
(d) Upon twenty (20) days notice to Debtor (except in an
emergency or where not practical under applicable law), Bank may (but is not
obligated to) enter on the Property or take such other actions as it deems
appropriate to inspect, test for, clean up, remove, minimize the impact of, or
advise governmental agencies of the possible existence of any Hazardous
Materials upon Bank's receipt of any notice from any source asserting the
existence of any Hazardous Materials in violation of Environmental Laws. All
costs and expenses so incurred by Bank, including without limit consultant fees,
legal expenses, and reasonable attorneys' fees, shall be payable by Debtor upon
demand, together with interest at the highest default rate which could be
charged by Bank to Debtor on any Indebtedness.
(e) The provisions of this Section shall survive the repayment
of the Indebtedness, the satisfaction of all other obligations of Debtor to
Bank, the discharge or termination by Bank of any lien or security interest from
Debtor, and the foreclosure of or exercise of rights as to any Collateral.
(f) Debtor acknowledges that there may have been environmental
problems with regard to the Property prior to the date hereof, but that any and
all such environmental problems have been fully disclosed in writing to Bank.
2.17 Debtor acknowledges and agrees that if any Guaranty is executed by
the Debtor in connection with or related to this Agreement, all waivers
contained in that Guaranty shall be and are incorporated by reference into this
Agreement.
3. COLLECTION OF PROCEEDS.
3.1 Debtor agrees to collect and enforce payment of all Accounts
Receivable until Bank shall direct Debtor to the contrary and, from and after
this direction, Debtor agrees to fully and promptly cooperate and assist Bank
(or any other person as Bank shall designate) in the collection and enforcement
of all Accounts Receivable.
3.2 Debtor irrevocably authorizes Bank or any Bank employee or agent to
endorse the name of Debtor upon any checks or other items which are received in
payment of any Account Receivable or for any Inventory, and to do any and all
things necessary in order to reduce these items to money.
3.3 Bank shall have no duty as to the collection or protection of
Collateral or the proceeds of it, nor as to the preservation of any related
rights, beyond the use of reasonable care in the custody and preservation of
Collateral in the possession of Bank. Debtor agrees to take all steps necessary
to preserve rights against prior parties with respect to Debtor's Property in
Possession of Bank.
3.4 For the purpose of calculating interest on the Indebtedness, Debtor
understands that Bank imposes a minimum one business day delay in crediting
payments received by Bank on Accounts Receivable against the Indebtedness to
allow time for collection and Debtor
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agrees that Bank may, at Bank's option, make such credits only when payments are
actually collected by Bank in immediately available funds. Any credit of payment
by Bank prior to receipt by Bank of immediately available funds is conditional
upon Bank's receipt of those funds. For the purpose of calculating the principal
amount which Debtor may request to borrow from Bank under any borrowing
arrangements with Bank, Debtor understands that Bank may, at Bank's option, use
a method different from that used for the purpose of calculating interest.
3.5 If there is an uncured Default or Event of Default (as those terms
are defined in this Agreement), then Bank shall have the right to notify Debtor
at any time that the Indebtedness shall henceforth be on a Remittance Basis:
(a) Unless Bank otherwise agrees in writing, Debtor shall at
its sole expense establish and maintain, during the entire term of this
Agreement (or until Bank acting in its sole discretion shall notify Debtor that
the Indebtedness is no longer required to be on a Remittance Basis) a United
States post office lock box (the "Lock Box"), to which Bank shall have exclusive
access, and to which Debtor shall have no access. Debtor expressly authorizes
Bank, from time to time, to remove all contents from the Lock Box, for
disposition in accordance with this Agreement. Debtor agrees to notify all
account debtors and other parties obligated to it that all payments made on any
account, invoice or other collateral (other than payments by electronic funds)
shall be remitted, for the credit of Debtor, to the Lock Box, and Debtor shall
include a like statement on all invoices. Payments made by electronic funds
transfer shall be made directly to the Cash Collateral Account (defined below),
and Debtor shall so instruct its account debtors and other parties obligated to
it. Debtor shall execute all documents, authorizations and other agreements
necessary to establish the Lock Box, and Bank's exclusive access thereto.
(b) Whether or not Debtor is required by Bank to maintain a
Lock Box under this paragraph, any and all cash, checks, drafts and other
instruments for the payment of money received by Debtor at any time, in full or
partial payment of any of the Collateral shall forthwith, upon receipt, be
transmitted and delivered to Bank (properly endorsed, where required, so that
such items may be collected by Bank). Any such items received by Debtor shall
not be commingled with any other of Debtor's funds or property, but will be held
separate and apart from Debtor's own funds or property, and upon express trust
for the benefit of Bank until delivery is made to Bank.
(c) All items or amounts which are remitted to the Lock Box or
otherwise delivered by or for the benefit of Debtor to Bank on account of
partial or full payment of, or any other amount payable with respect to, any of
the Collateral shall, at Bank's option, (i) be applied to the payment of the
Indebtedness, whether then due or not, in such order of application as Bank may
determine in its sole discretion, or, (ii) shall be deposited to the credit of a
non-interest bearing deposit account in the name of Comerica Bank for the
benefit of Debtor (the "Cash Collateral Account") to be established by Debtor
with Bank pursuant to this paragraph, as security for payment of the
Indebtedness. Debtor shall have no right whatsoever to withdraw any funds so
deposited. Debtor further grants to Bank a first security interest in and lien
on all funds on deposit in such account. To the extent collected funds remain at
any time on deposit in the Cash Collateral Account after payment and discharge
in full of the
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Indebtedness (provided there is then no Default hereunder), Bank shall release
such surplus collected funds to Debtor. Debtor hereby irrevocably authorizes and
directs Bank to endorse all items received for deposit to the Cash Collateral
Account, notwithstanding the inclusion on any such item of a restrictive
notation, e.g., "paid in full", "balance of account", or other restriction.
(d) Debtor agrees that Bank shall not be liable for any loss
or damage which Debtor suffers or may suffer as a result of Bank's processing of
items or its exercise of any other rights or remedies under this Agreement,
including without limitation indirect, special or consequential damages, loss of
revenues or profits, or any claim, demand or action by any third party arising
out of or in connection with the processing of items or the exercise of any
other rights or remedies hereunder. Debtor further agrees to indemnify and hold
Bank harmless from and against all such third party claims, demands or actions,
including without limitation litigation costs and reasonable attorney fees.
4. DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.
4.1 Reference is made to that certain Motor Vehicle Floor Planning
Agreement and Security Agreement being entered into contemporaneously with this
Agreement by and between Debtor and Bank (the "Floorplan Agreement"). The
Floorplan Agreement is hereby incorporated into and made a part hereof. Upon the
occurrence of any of the following events (each an "Event of Default"), Debtor
shall be in default under this Agreement:
(a) Any Default or Event of Default under the Floorplan
Agreement as if such Defaults or Events of Default were set out in full herein
(and if the Floorplan Agreement shall no longer be in effect, then such Defaults
or Events or Default shall continue to be applicable to this Agreement); or
(b) Any failure or neglect to comply with, or breach of, any
of the terms, provisions, warranties or covenants of this Agreement; or
(c) Any failure to pay the Indebtedness when due, or such
portion of it as may be due, by acceleration or otherwise; or
(d) Bank has a reasonable basis to fear deterioration, removal
or waste of the Collateral.
4.2 Upon the occurrence of any Event of Default, and which is not cured
within any applicable curative period provided for in the Floorplan Agreement
(and which curative period is applicable to any of the defaults or Events of
Default set forth herein, and also, which notice and curative period is hereby
incorporated into and made a part hereof), Bank may at its discretion and
without prior notice to Debtor declare any or all of the Indebtedness to be
immediately due and payable, and shall have and may exercise any one or more of
the following rights and remedies:
(a) exercise all the rights and remedies available to Bank
under the Floorplan
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Agreement;
(b) exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to secured parties under the provisions of
the Uniform Commercial Code and other applicable law;
(c) institute legal proceedings to foreclose upon and against
the lien and security interest granted by this Agreement, to recover judgment
for all amounts then due and owing as Indebtedness, and to collect the same out
of any of the Collateral or the proceeds of any sale of it;
(d) institute legal proceedings for the sale, under the
judgment or decree of any court of competent jurisdiction, of any or all of the
Collateral; and/or
(e) personally or by agents, attorneys, or appointment of a
receiver, enter upon any premises where the Collateral or any part of it may
then be located, and take possession of all or any part of it and/or render it
unusable; and without being responsible for loss or damage to such Collateral,
(1) hold, store, and keep idle, or lease,
operate, remove or otherwise use or permit the use of the Collateral or any part
of it, for that time and upon those terms as Bank, in its sole discretion, deems
to be in its own best interest, and demand, collect and retain all resulting
earnings and other sums due and to become due from any party, accounting only
for net earnings, if any (unless the Collateral is retained in satisfaction of
the Indebtedness, in which case no accounting will be necessary), arising from
that use (which net earnings may be applied against the Indebtedness) and
charging against all receipts from the use of the Collateral or from its sale,
by court proceedings or pursuant to subsection (ii) below, all other costs,
expenses, charges, damages and other losses resulting from that use; and/or
(2) sell, lease, dispose of, or cause to be
sold, leased or disposed of, all or any part of the Collateral at one or more
public or private sales, leasings or other dispositions, at places and times and
on terms and conditions as Bank may deem fit, without any previous demand or
advertisement; and except as provided in this Agreement, all notice of sale,
lease or other disposition, and advertisement, and other notice or demand, any
right or equity of redemption, and any obligation of a prospective purchaser or
lessee to inquire as to the power and authority of Bank to sell, lease or
otherwise dispose of the Collateral or as to the application by Bank of the
proceeds of sale or otherwise, which would otherwise be required by, or
available to Debtor under, applicable law are expressly waived by Debtor to the
fullest extent permitted.
At any sale pursuant to this Section 4.2,
whether under the power of sale, by virtue of judicial proceedings or otherwise,
it shall not be necessary for Bank or a public officer under order of a court to
have present physical or constructive possession of the Collateral to be sold.
The recitals contained in any conveyances and receipts made and given by Bank or
the public officer to any purchaser at any sale made pursuant to this Agreement
shall, to the extent permitted by applicable law, conclusively establish the
truth and accuracy
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of the matters stated (including, without limit, as to the amounts of the
principal of and interest on the Indebtedness, the accrual and nonpayment of it
and advertisement and conduct of the sale); and all prerequisites to the sale
shall be presumed to have been satisfied and performed. Upon any sale of any of
the Collateral, the receipt of the officer making the sale under judicial
proceedings or of Bank shall be sufficient discharge to the purchaser for the
purchase money, and the purchaser shall not be obligated to see to the
application of the money. Any sale of any of the Collateral under this Agreement
shall be a perpetual bar against Debtor with respect to that Collateral.
4.3 Debtor shall (at any time) at the request of Bank, notify the
account debtors or obligors of the security interest of Bank in any Accounts
Receivable and direct payment of it to Bank. Bank may, itself, upon the
occurrence of any Event of Default so notify and direct any account debtor or
obligor and may take control of any proceeds to which it may be entitled under
this Agreement.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank first upon all expenses
authorized by the Uniform Commercial Code and all reasonable attorney fees and
legal expenses incurred by Bank; the balance of the proceeds of the sale or
other disposition shall be applied in the payment of the Indebtedness, first to
interest, then to principal, then to remaining Indebtedness and the surplus, if
any, shall be paid over to Debtor or to such other person(s) as may be entitled
to it under applicable law. Debtor shall remain liable for any deficiency, which
it shall pay to Bank immediately upon demand.
4.5 Nothing in this Agreement is intended, nor shall it be construed,
to preclude Bank from pursuing any other remedy provided by law for the
collection of any or all of the Indebtedness or for the recovery of any other
sum to which Bank may be or become entitled for the breach of this Agreement by
Debtor. Nothing in this Agreement shall reduce or release in any way any rights
or security interests of Bank contained in any existing agreement between Debtor
and Bank, nor shall anything in this Agreement modify the terms of any
Indebtedness owing to Bank on a demand basis.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized officer of Bank. No
waiver of any default or forbearance on the part of Bank in enforcing any of its
rights under this Agreement shall operate as a waiver of any other default or of
the same default on a future occasion or of any rights.
4.7 After Default, Debtor irrevocably appoints Bank or any employee or
agent of Bank (which appointment is coupled with an interest) the true and
lawful attorney of Debtor (with full power of substitution) in the name, place
and stead of, and at the expense of, Debtor:
(a) to demand, receive, xxx for and give receipts or
acquittances for any moneys due or to become due on any Account Receivable and
to endorse any item representing any payment on or proceeds of the Collateral;
(b) with respect to any Collateral, to assent to any or
all extensions or
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postponements of the time of its payment or any other indulgence in connection
with it, to the substitution, exchange, or release of Collateral, to the
addition or release of any party primarily or secondarily liable, to the
acceptance of partial payments on it and the settlement, compromise or
adjustment of it, all in a manner and at times as Bank shall deem advisable;
(c) to make all necessary transfers of all or any part of the
Collateral in connection with any sale, lease or other disposition made pursuant
to this Agreement;
(d) to adjust and compromise any insurance loss on the
Inventory and to endorse checks or drafts payable to Debtor in connection with
the insurance;
(e) to execute and deliver for value all necessary or
appropriate bills of sale, assignments and other instruments in connection with
any sale, lease or other disposition of the Collateral. Debtor ratifies and
confirms all that its said attorney (or any substitute) shall lawfully do under
this Agreement. Nevertheless, if requested by Bank or a purchaser or lessee,
Debtor shall ratify and confirm any sale, lease or other disposition by
executing and delivering to Bank or the purchaser or lessee all proper bills of
sale, assignments, releases, leases and other instruments as may be designated
in any request; and
(f) to execute and file in the name of and on behalf of Debtor
all financing statements or other filings deemed necessary or desirable by Bank
to evidence, perfect or continue the security interests granted in this
Agreement.
4.8 Upon the occurrence of an Event of Default, which Event of Default
remains uncured after any applicable curative period provided for in the
Floorplan Agreement, Debtor also agrees, upon request of Bank, to assemble the
Collateral and make it available to Bank at any place designated by Bank which
is reasonably convenient to Bank and Debtor.
5. MISCELLANEOUS.
5.1 This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Florida.
5.2 This Agreement shall be terminated only by the filing of a
termination statement in accordance with the applicable provisions of the
Uniform Commercial Code, but the obligations contained in Section 2.16 of this
Agreement shall survive termination. Until terminated, the security interest
created by this Agreement shall continue in full force and effect and shall
secure and be applicable to all advances now or later made by Bank to Debtor,
whether or not Debtor is indebted to Bank immediately prior to the time of any
advance, and to all other Indebtedness.
5.3 Notwithstanding any prior revocation, termination, surrender or
discharge of this Agreement, the effectiveness of this Agreement shall
automatically continue or be reinstated, as the case may be, in the event that
(a) any payment received or credit given by the Bank in respect of the
Indebtedness is returned, disgorged or rescinded as a preference, impermissible
setoff, fraudulent conveyance, diversion of trust funds, or otherwise under any
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applicable state or federal law, including, without limitation, laws pertaining
to bankruptcy or insolvency, in which case this Agreement shall be enforceable
against Debtor as if the returned, disgorged or rescinded payment or credit had
not been received or given, whether or not the Bank relied upon this payment or
credit or changed its position as a consequence of it; or (b) any liability is
imposed, or sought to be imposed, against the Bank relating to the environmental
condition of, or the presence of Hazardous Materials on, in or about, any
Property given as Collateral to the Bank whether this condition is known or
unknown, now exists or subsequently arises (excluding only conditions which
arise after any acquisition by the Bank of any such Property, by foreclosure, in
lieu of foreclosure or otherwise, to the extent due to the wrongful act or
omission of the Bank), in which case this Agreement shall be enforceable to the
extent of all liability, costs and expenses (including without limit reasonable
attorney fees) incurred by the Bank as the direct or indirect result of any
environmental condition or Hazardous Materials. In the event of continuation or
reinstatement of this Agreement, Debtor agree(s) upon demand by the Bank to
execute and deliver to the Bank those documents which the Bank determines are
appropriate to further evidence (in the public records or otherwise) this
continuation or reinstatement, although the failure of Debtor to do so shall not
affect in any way the reinstatement or continuation. If Debtor does not execute
and deliver to the Bank upon demand such documents, the Bank and each Bank
officer is irrevocably appointed (which appointment is coupled with an interest)
the true and lawful attorney of Debtor (with full power of substitution) to
execute and deliver such documents in the name and on behalf of Debtor.
5.4 This Agreement and all the rights and remedies of Bank under this
Agreement shall inure to the benefit of Bank's successors and assigns and to any
other holder who derives from Bank title to or an interest in the Indebtedness
or any portion of it, and shall bind Debtor and the heirs, legal
representatives, successors and assigns of Debtor.
5.5 If there is more than one Debtor, all undertakings, warranties and
covenants made by Debtor and all rights, powers and authorities given to or
conferred upon Bank are made or given jointly and severally.
5.6 In addition to Bank's other rights, any indebtedness owing from
Bank to Debtor can be set off and applied by Bank on any Indebtedness at any
time(s) either before or after maturity or demand without notice to anyone.
5.7 Bank assumes no duty of performance or other responsibility under
any contracts contained within the Collateral.
5.8 All notices given under this Agreement shall be given in the manner
set forth in the Floorplan Agreement (whether or not the Floorplan Agreement is
still in effect as of the date of the giving of any such notice).
5.9 A carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement under the Uniform Commercial Code
and may be filed by Bank in any filing office.
5.10 No single or partial exercise, or delay in the exercise, of any
right or power
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under this Agreement, shall preclude other or further exercise of the rights and
powers under this Agreement.
5.11 The unenforceability of any provision of this Agreement shall not
affect the enforceability of the remainder of this Agreement.
5.12 No amendment or modification of this Agreement shall be effective
unless the same shall be in writing and signed by Debtor and an authorized
officer of Bank.
5.13 This Agreement constitutes the entire agreement of Debtor and Bank
with respect to the subject matter of this Agreement.
5.14 To the extent that any of the Indebtedness is payable upon demand,
nothing contained in this Agreement shall modify the terms and conditions of
that Indebtedness nor shall anything contained in this Agreement prevent Bank
from making demand, without notice and with or without reason, for immediate
payment of any or all of that Indebtedness at any time(s), whether or not an
Event of Default has occurred.
6. STATEMENT OF BUSINESS NAME, RESIDENCE AND LOCATION OF COLLATERAL.
Debtor warrants, covenants and agrees as follows:
6.1 Debtor's chief executive office is located in the County of
Seminole, State of Florida.
Mailing Address: 0000 Xxxxxxx 00-00 Xxxxx, Xxxxxxx, Xx 00000.
This location is leased by the Debtor.
6.2 (Intentionally Deleted)
6.3 Any other places of business of Debtor are indicated below:
none
6.4 Debtor's correct legal name is set forth at the end of this
Agreement, and Debtor also does business under the tradename "Xxx Xxxxxx
Seminole Ford." During the past five years, Debtor has not conducted business
under any other name except as set forth in any appropriately labeled schedule
attached to this Agreement.
6.5 Until Bank is advised in writing by Debtor to the contrary, all
notices, requests and demands required under this Agreement or by law shall be
given to, or made upon, Debtor at the address indicated in Section 6.1 above.
6.6 The Collateral (or any records concerning the Collateral) will be
kept at Debtor's address(es) above and/or in the County of Seminole, State of
Florida.
Mailing Address: 0000 Xxxxxxx 00-00 Xxxxx, Xxxxxxx, Xx 00000.
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This location is leased by the Debtor.
6.7 Debtor will give Bank not less than 90 days prior written notice of
all contemplated changes in Debtor's name, identity, corporate structure, and/or
any of the above addresses, but the giving of this notice shall not cure any
default caused by this change.
7. APPLICABILITY OF THIS AGREEMENT. This Agreement secures all of the
Indebtedness (as that term is defined herein), including without limitation the
following loan and credit transactions with Bank:
(1) $10,000,000.00 New Car Floorplan Line to Debtor.
(2) $1,000,000.00 Revolving Credit Facility to Debtor.
8. JURY WAIVER.
8.1 DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.
FIRST TEAM FORD, LTD., a Florida
limited partnership, by its sole general partner:
FIRST TEAM MANAGEMENT, INC., a Florida
corporation
By: _______________________________________________
X. Xxxxxx Peacock, as its Vice President
(CORPORATE SEAL)
Date executed: ______________, 1996
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