Exhibit 10.12
BUSINESS LOAN AGREEMENT (ASSET BASED)
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Borrower: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
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THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated November 2, 2004, is made
and executed between Petmed Express, Inc. ("Borrower") and RBC CENTURA
BANK ("lender") on the following terms and conditions. Borrower has
received prior commercial loans from lender or has applied to lender for a
commercial loan or loans or other financial accommodations, including
those which may be described on any exhibit or schedule attached to this
agreement ("loan"). Borrower understands and agrees that: (A) in the
granting, renewing, or extending any loan, lender is relying upon
Borrower's representations, warranties and agreements as set forth in this
Agreement; (B) the granting, renewing, or any Loan by Lender at all times
shall be subject to lender's sole judgment and discretion; and (C) all
such Loans shall be and remains subject to the terms and conditions of
this Agreement.
TERM. This Agreement shall be affective as of November 2, 2004, and shall
continue in full force and effect until such time as all of borrower's
Loans in favor of lender have been paid in full, including principal,
interests, costs, expenses, attorney's fees, and other fees and charges,
or until November 1 2005.
ADVANCED AUTHORITY. The following person currently is authorized, except
as provided in this paragraph, to request advances and authorize payments
under the line of credit until lender receives from borrower, at lender's
address shown above, written notice of revocation of his or her authority:
Xxxxx Xxxxxxxxxx. Borrowing base advances:
Inventory advances shall be on 50 % of eligible inventory including a sub
limit, which limit reliance on prescription drug inventory to a maximum of
$2,000,000.00 ($4,000,000.00 prescription inventory at 50% advance rate).
The bank reserves the right to request an inventory audit at any time.
Stale dated inventory shall be excluded from the borrowing base. This will
be checked annually by the company's auditor.
LINE OF CREDIT. Lender agrees to make Advances to borrower from time to
time from the date of this agreement to the Expiration Date, provided the
aggregate amount of such Advances outstanding at any time does not exceed
the Borrowing Base. Within the foregoing limits, Borrower may borrow,
partially or wholly prepay and reborrow under this Agreement as follows:
Conditions Precedent to Each Advance. Lender's obligation to make
any Advance to or for the account of borrower under this Agreement
is subject to the following conditions precedent, with all
documents, instruments, opinions, report, and other items required
under this Agreement to be in form and substance satisfactory to
Lender:
(1) Lender shall have received evidence that this Agreement
and all Related Documents have been duly authorized,
executed, and delivered by Borrower to Lender.
(2) Lender shall have received such opinions of counsel,
supplemental opinion and documents that Lender may request.
(3) The security interests in the collateral shall have been
duly authorized, created, and perfected with first lien
priority and shall be in full force an effect
(4) All guaranties required by Lender for the credit
facility (ies) shall have been executed by each Guarantor,
delivered to Lender, and be in full force and effect.
(5) Lender, at this option and for its sole benefit, shall
have conducted and audit of Borrower's Inventory, Books,
records, and operations, and Lender shall be satisfied as
to their condition.
(6) Borrower shall have paid to lender all fees, costs, and
expenses specified in this Agreement and the related
Documents as are then due and payable.
(7) There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under
this agreement and Borrower shall have delivered to Lender
the compliance certificate called for in the paragraph
below title "Compliance Certificate".
Making Loan Advances. Advances under this credit facility, as well
as directions for payment from borrower's accounts, may be requested
orally or writing by authorized persons. Lender may, but need not,
require that oral requests be confirmed in writing. Each advance
shall be conclusively deemed to have been made at the request of and
for the benefits of Borrower (1) when credited to any deposit
account of Borrower maintained with Lender or (2) when advanced in
accordance with the instructions of an authorized person. Lender, at
its option, may set a cutoff time, after which all requests for
Advances will be treated as having been requested on the next
succeeding Business Day.
Mandatory Loan Repayments. If at any time the aggregate principal
amount of the outstanding Advances shall exceed the applicable
Borrowing Base, Borrower, immediately upon written or oral notice
from Lender, shall pay to Lender an amount equal to the difference
between the outstanding and all accrued unpaid interest, together
with all other applicable fees, costs and charges, if any, not yet
paid.
Loan Account. Lender shall maintain on its books a record of
account in which Lender shall make entries for each Advance and such
other debits and credits as shall be appropriate in connection with
the credit facility. Lender shall provide Borrower periodic
statements of Borrower's account, which statements shall be
considered to be correct and conclusively binding on Borrower unless
Borrower notifies Lender to the contrary within thirty (30) days
after Borrower's receipt of any such statement which Borrower deems
to be incorrect.
COLLATERAL. To secure payment of the Primary Credit Facility and
performance of all other loan, obligations and duties owed by Borrower to
Lender, Borrower (and others, if required) shall grant to lender Security
Interests in such property and assets as lender may require. Lender's
Security Interests in the collateral shall be continuing liens and shall
include the proceeds and products of the collateral, including without
limitations the proceeds of any insurance. With respect to the collateral,
Borrower agrees and represents and warrants to Lender.
Perfection of Security Interests. Borrower agrees to execute all
documents perfecting Lender's Security Interests and to take
whatever actions are requested by Lender to perfect and continue
Lender's Security Interests in the collateral. Upon request of
Lender, Borrower will deliver to lender any and all of the documents
evidencing or constituting the Collateral and Borrower will note
Lender's interests upon any and all chattel paper and instruments if
not delivered to lender for possession by lender. Contemporaneous
with the execution of this Agreement, Borrower will execute one or
more UCC financing statements and any similar statements as may be
required by applicable law, and lender will file such financing
statements and all such similar statements as may be required in the
appropriate location or locations Borrower hereby appoints Lender as
its irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect or to continue any Security interest.
Lender may at any time, and without further authorization from
Borrower, file a carbon, photograph, facsimile, or other
reproduction of any financing statement for use as a financing
statement. Borrower will reimburse Lender for all expenses for the
perfection, termination, and the continuation of the perfection of
Lender's security interest in the Collateral. Borrower promptly
will notify Lender before any change in Borrower's name including
any change to the assumed business names of Borrower. Borrower also
promptly will notify before any change in Borrower's Social Security
Number or Employer Identification Number. Borrower further agrees
to notify Lender in writing prior to any change in address or
location of Borrower's principal governance office or should
Borrower merge or consolidate with any other entity.
Collateral Records. Borrower does now, and at all times hereafter
shall, keep correct and accurate records of the Collateral, all of
which records shall be available to Lender or Lender's
representative upon demand for inspection and copying at any
reasonable time. With respect to the inventory, Borrower agrees to
keep and maintain such records as Lender may require, including
without limitation information concerning Eligible Inventory and
records itemizing and describing the kind, type, quality, and
quantity of Inventory, Borrower's Inventory costs and selling
prices, and the daily withdrawals and additions to Inventory.
Records related to Inventory are or will be located at. The above
is an accurate and complete list of all locations at which Borrower
keeps or maintains business records concerning Borrower's
collateral.
Collateral Schedules. Concurrently with the execution and delivery
of this Agreement, Borrower shall execute and deliver to Lender
schedules of Inventory and schedules of Eligible Inventory in form
and substance satisfactory to the Lender. Thereafter supplemental
schedules shall be delivered according to the following schedule:
Representations and Warranties Concerning Inventory. With respect
to the Inventory, Borrower represents and warrants to Lender: (1)
All Inventory represented by Borrower to be Eligible Inventory for
purposes of this Agreement conforms to the requirements of the
definition of Eligible Inventory; (2) All Inventory values listed on
schedules delivered to Lender will be true and correct, subject to
immaterial variance; (3) The value of the Inventory will be
determined on a consistent accounting basis; (4) Except as agreed to
the contrary by Lender in writing, all Eligible Inventory is now and
at all times hereafter will be in Borrower's physical possession and
shall not be held by others on consignment, sale on approval, or
sale or return; (5) Except as reflected in the Inventory schedules
delivered to Lender, all Eligible Inventory is now and at all times
hereafter will be of good and merchantable quality, free from
defects; (6) Eligible Inventory is not now
Exhibit 10.12 Page 1 of 29
BUSINESS LOAN AGREEMENT (ASSET BASED)
(Continued) Page 2
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and will not at any time hereafter be stored with a bailee,
warehouseman, or similar party without Lender's prior written
consent, and, in such event, Borrower will concurrently at the time
of bailment cause any such bailee, warehouseman, or similar party to
issue and deliver to Lender, in form acceptable to Lender, warehouse
receipts in Lender name evidencing the storage of Inventory; and (7)
Lender, its assigns, or agents shall have the right at any time and
at Borrower's expense to inspect and examine the Inventory and to
check and test the same as to quality, quantity, value, and
condition.
CONDITIONS PRECENDENT TO EACH ADVANCE. Lender's obligation to make the
initial Advance and each subsequent Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the
conditions set forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall provide to Lender the following
documents for the Loan: (1) the Note; (2) Security Agreements
granting to Lender security interests in the Collateral; (3)
financing statements and all other documents perfecting Lender's
Security Interests; (4) evidence of insurance as required below; (5)
guaranties; (6) together with all such Related Documents as Lender
may require for the Loan; all in form and substance satisfactory to
Lender and Lender's counsel.
Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions,
duly authorizing the execution and delivery of this Agreement, the
Note and the Related Documents. In addition, Borrower shall have
provided such other resolutions, authorizations, documents and
instruments as Lender or its counsel, may require.
Fees and Expenses Under This Agreement. Borrower shall have paid to
Lender all fees, costs, and expenses specified in this Agreement and
Related Documents as are then due and payable.
Representation and Warranties. The representations and warranties
set forth in this Agreement, in the Related Documents, and in any
document or certificate delivered to Lender under this Agreement are
true and correct.
No Event of Default. There shall not exist at the time of any
Advance a condition which would constitute an Event of Default under
this Agreement or under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
Lender, as of the date of this Agreement, as of the date of each
disbursement of loan proceeds, as of the date of any Loan, and at all
times any Indebtedness exists:
Organization. Borrower is a corporation for profit which is, and at
all times shall be, duly organized, validly existing, and in good
standing under and by virtue of the laws of the State of Florida.
Borrower has the full power and authority to own its properties and
to transact the business in which it is presently engaged or
presently proposes to engage. Borrower maintains an office at 0000
XX 00xx Xxx., Xxxxxxx Xxxxx, XX 00000. Unless Borrower has
designated otherwise in writing, the principal office is the office
at which Borrower keeps its books and records including its records
concerning the Collateral. Borrower will notify Lender prior to any
change in the location of Borrower's state of organization or any
change in Borrower's name. Borrower shall do all things necessary
to preserve and to keep in full force and effect its existence,
rights and privileges, and shall comply with all regulations, rules,
ordinances, statutes, orders and decrees of any governmental or
quasi-governmental authority or court applicable to Borrower and
Borrower's business activities.
Assumed Business Name. Borrower has filed or recorded all documents
or filings required by law relating to all assumed business names
used by Borrower. Excluding the name of Borrower, the following is
a complete list of all assumed business names under which Borrower
does business: None.
Authorization. Borrower's execution, delivery, and performance of
this Agreement and all the Related Documents have been duly
authorized by all necessary action by Borrower and to not conflict
with, result in a violation of, or constitute a default under (1)
any provision of (a) Borrower's articles of incorporation or
organization, or bylaws, or (b) any agreement or other instrument
binding upon Borrower or (2) any law, governmental regulation, court
decree, or order applicable to Borrower or to Borrower's properties.
Financial Information. Each of Borrower's financial statements
supplied to Lender truly and completely disclosed Borrower's
financial condition as of the date of the statement, and there has
been no material adverse change in Borrower's financial condition
subsequent to the date of the most recent financial statement
supplied to Lender. Borrower has no material contingent obligations
except as disclosed in such financial statements.
Legal Effect. This Agreement constitutes, and any instrument or
agreement Borrower is required to give under this Agreement when
delivered will constitute legal, valid, and binding obligations of
Borrower enforceable against Borrower in accordance with their
respective terms.
Properties. Except as contemplated by this Agreement or as
previously disclosed in Borrower's financial statements or in
writing to Lender and as accepted by Lender, and except for property
tax liens for taxes not presently due and payable, Borrower owns and
has good title to all of Borrower's properties free and clear of all
Security Interests, and has not executed any security documents or
financing statements relating to such properties. All of Borrower's
properties are titled in Borrower's legal name, and Borrower has not
used or filed a financing statement under any other name for at
least the last five (5) years.
Hazardous Substances. Except as disclosed to and acknowledged by
Lender in writing, Borrower represents and warrants that: (1) During
the period of Borrower's ownership of Borrower's Collateral, there
has been no use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance
by any person on, under, about or from any of the Collateral. (2)
Borrower has no knowledge of, or reason to believe that there has
been (a) any breach or violation of any Environment Laws; (b) any
use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any Hazardous Substance on, under, about or
from the Collateral by any prior owners or occupants of any of the
Collateral; or (c) any actual or threatened litigation or claims of
any kind by any person relating to such matters. (3) Neither
Borrower nor any tenant, contractor, agent or other authorized user
of any of the Collateral shall use, generate, manufacture, store,
treat, dispose of or release any Hazardous Substance on, under,
about or from any of the Collateral; and any such activity shall be
conducted in compliance with all applicable federal, state, and
local laws, regulations, and ordinances, including without
limitation all Environmental Laws. Borrower authorizes Lender and
its agents to enter upon the Collateral to make such inspections and
tests as Lender may deem appropriate to determine compliance of the
Collateral with this section of the Agreement. Any inspections or
tests made by Lender shall be at Borrower's expense and for Lender's
purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to
any other person. The representations and warranties contained
herein are based on Borrower's due diligence in investigating the
Collateral for hazardous waste and Hazardous Substances. Borrower
hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Borrower becomes liable for
cleanup or other costs under any such laws, and (2) agrees to
indemnify and hold harmless Lender against any and all claims,
losses, liabilities, damages, penalties, and expenses which Lender
may directly or indirectly sustain or suffer resulting from a breach
of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened
release of a hazardous waste or substance on the Collateral. The
provisions of this section of the Agreement, including the
obligation to indemnify, shall survive the payment of the
Indebtedness and the termination, expiration or satisfaction of this
Agreement and shall not be affected by Lender's acquisition of any
interest in any of the Collateral, whether by foreclosure or
otherwise.
Litigation and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for
unpaid taxes) against Borrower is pending or threatened, and no
other event has occurred which may materially adversely affect
Borrower's financial condition or properties , other than
litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower's knowledge, all of Borrower's tax
returns and reports that are or were required to be filed, have been
filed, and all taxes, assessments and other governmental charges
have been paid in full, except those presently being or to be
contested by Borrower in good faith in the ordinary course of
business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
Interests on or affecting any of the Collateral directly or
indirectly securing repayment of Borrower's Loan and Note, that
would be prior or that may in any way be superior to Lender's
Security Interests and rights in and to such Collateral.
Binding Effect. This Agreement, the Note, all Security Agreements
(if any), and all Related Documents are binding upon the signers
thereof, as well as upon their successors, representatives and
assigns, and are legally enforceable in accordance with their
respective terms.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so
long as this Agreement remains in effect, Borrower will:
Notices of Claims and Litigation. Promptly inform Lender in writing
of (1) all material adverse changes in Borrower's financial
condition, and (2) all existing and all threatened litigation,
claims, investigations, administrative proceedings or similar
actions affecting Borrower or any Guarantor which could materially
affect the financial condition of Borrower or the financial
condition of any Guarantor.
Financial Records. Maintain its books and records in accordance
with GAAP, applied on a consistent basis, and permit Lender to
examine and audit Borrower's books and records at all reasonable
times.
Exhibit 10.12 Page 2 of 29
BUSINESS LOAN AGREEMENT (ASSET BASED)
(Continued) Page 3
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Financial Statements. Furnish Lender with the following:
Annual Statements. As soon as available, but in no event
later than ninety (90) days after the end of each fiscal year,
Borrower's balance sheet and income statement for the year
ended, audited by a certified public accountant satisfactory
to Lender.
Interim Statements. As soon as available, but in no event
later than 15 days after the end of each month, Borrower's
balance sheet and profit and loss statement for the period
ended, prepared by Borrower.
Tax Returns. As soon as available, but in no event later than
(30) days after the applicable filing date for the tax
reporting period ended, Federal and other governmental tax
returns, prepared by Borrower.
Additional Requirements. Corporate financial statements
(unaudited) required monthly 15 days after each month.
Borrowing base certificate required monthly 15 days after each
month.
Corporate financial statements (10-Q) required quarterly 45
days after each quarter.
Corporate financial statements, audited (10-K) required
annually 90 days after each year.
Business plan required annually 45 days after each year.
All financial reports required to be provided under this Agreement
shall be prepared in accordance with GAAP, applied on a consistent
basis, and certified by Borrower as being true and correct.
Additional Information. Furnish such additional information and
statements, as Lender may request from time to time.
Financial Covenants and Ratios. Comply with the following covenants
and ratios:
Tangible Net Worth Requirements. Maintain a minimum Tangible
net Worth of not less than: $14,000,000.00. Other Net Worth
requirements are as follows: Minimum tangible net worth of at
least $14,000,000.00 (TNW means Shareholder equity minus all
assets that would be classified as intangible under GAAP, net
of amortization).
Other Requirements. Borrower not to incur additional
indebtedness in excess of $500,000.00 (in aggregate) without
prior written consent of the Bank.
Borrower must maintain a minimum of $2,000,000.00 of product
liability insurance at all times.
Except as provided above, all computations made to determine
compliance with the requirements contained in this paragraph
shall be made in accordance with generally accepted accounting
principles, applied on a consistent basis, and certified by
Borrower as being true and correct.
Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with
respect to Borrower's properties and operations, in form, amounts,
coverages and with insurance companies acceptable to Lender.
Borrower, upon request of Lender, will deliver to Lender from time
to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages will
not be cancelled or diminished without at least ten (10) days prior
written notice to Lender. Each insurance policy also shall include
an endorsement providing that coverage in favor of Lender will not
be impaired in any way by any act, omission or default of Borrower
or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest for
the Loans, Borrower will provide Lender with such lender's loss
payable or other endorsements as Lender may require.
Insurance Reports. Furnish to Lender, upon request of Lender,
reports on each existing insurance policy showing such information
as Lender may reasonably request, including without limitation the
following: (1) the name of the insurer; (2) the risks insured; (3)
the amount of the policy; (4) the properties insured; (5) the then
current property values on the basis of which insurance has been
obtained, and the manner of determining those values; and (6) the
expiration date of the policy. In addition, upon request of Lender
(however not more often than annually), Borrower will have an
independent appraiser satisfactory to Lender determine, as
applicable, the actual cash value of replacement cost of any
Collateral. The cost of such appraisal shall be paid by Borrower.
Guaranties. Prior to disbursement of any Loan proceeds, furnish
executed guaranties of the Loans in favor of Lender, executed by the
guarantors named below, on Lender's forms, and in the amounts and
under the conditions set forth in those guaranties.
Names of Guarantors Amounts
------------------- -------
Southeastern Veterinary Exports, Unlimited
Inc.
First Image Marketing, Inc. Unlimited
Other Agreements. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and
any other party and notify Lender immediately in writing of any
default in connection with any other such agreements.
Loan Proceeds. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender
in writing.
Taxes, Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitations all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon
any of Borrower's properties, income, or profits.
Performance. Perform and comply, in a timely manner, with all
terms, conditions, and provisions set forth in this Agreement, in
the Related Documents, and in all other instruments and agreements
between Borrower and Lender. Borrower shall notify Lender
immediately in writing of any default in connection with and
agreement.
Operations. Maintain executive and management personnel with
substantially the same qualifications and experience as the present
executive and management personnel; provide written notice to Lender
of any change in executive an management personnel; conduct its
business affairs in a reasonable and prudent manner.
Environmental Studies. Promptly conduct and complete., at
Borrower's expense, all such investigations, studies, samplings and
testings as may be requested by Lender or any governmental authority
relative to any substance, or any waste or by-product of any
substance defined as toxic or a hazardous substance under applicable
federal, state, or local law, rule, regulation, order or directive,
at or affecting any property or any facility owned, leased or used
by Borrower.
Compliance with Governmental Requirements. Comply with all laws,
ordinance, and regulations, now or hereafter in effect, of all
governmental authorities applicable to the conduct of Borrower's
properties, businesses and operations, and to the use or occupancy
of the Collateral, including without limitation, the Americans With
Disabilities Act. Borrower may contest in good faith any such law,
ordinance, or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Borrower has
notified Lender in writing prior to doing so and so long as, in
Lender's sole opinion, Lender's interests in the Collateral are not
jeopardized. Lender may require Borrower to post adequate security
or a surety bond, reasonably satisfactory to Lender, to protect
Lender's interest.
Inspection. Permit employees or agents of Lender at any reasonable
time to inspect any and all Collateral for the Loan or Loans and
Borrower's other properties and to examine or audit Borrower's
books, accounts, and records and to make copies and memoranda of
Borrower's books, accounts, and records. If Borrower now or at any
time hereafter maintains any records (including without limitation
computer generated records and computer software programs for the
generation of such records) in the possession of a third party,
Borrower, upon request of Lender, shall notify such party to permit
Lender free access to such records at all reasonable times and to
provide Lender with copies of any records it may request, all at
Borrower's expense.
Compliance Certificates. Unless waived in writing by Lender,
provide Lender at least annually, with a certificate executed by
Borrower's chief financial officer, or other officer or person
acceptable to Lender, certifying that the representations and
warranties set forth in this Agreement are true and correct as of
the date of the certificate and further certifying that, as of the
date of the certificate, no Event of Default exists under this
Agreement.
Environmental Compliance and Reports. Borrower shall comply in all
respects with any and all Environmental Laws; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on Borrower's part or on the part of any third party, on
property owned and/or occupied by Borrower, any environmental
activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal, state or
local government authorities; shall furnish to Lender promptly and
in any event within thirty (30) days after receipt thereof a copy of
any notice, summons, lien, citation, directive, letter or other
communication from any governmental agency or instrumentality
concerning any intentional or unintentional action or omission on
Borrower's part in connection with any environmental activity
whether or not there is damage to the environment and/or other
natural resources.
Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
Exhibit 10.12 Page 3 of 29
BUSINESS LOAN AGREEMENT (ASSET BASED)
(Continued) Page 4
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assignments, financing statements, instruments, documents and other
agreements as Lender or its attorneys may reasonably request to
evidence and secure the Loans and to perfect all Security Interests.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that
would materially affect Lender's interest in the Collateral of if Borrower
fails to comply with any provision of this Agreement or any Related
Documents, including but not limited to Borrower's failure to discharge or
pay when due any amounts Borrower is required to discharge or pay under
this Agreement or any Related Documents, Lender on Borrower's behalf may
(but shall not be obligated to ) take any action that Lender deems
appropriate, including but not limited to discharging or paying all taxes,
liens, security interests, encumbrances and other claims, at any time
levied or placed on any Collateral and paying all costs for insuring,
maintaining preserving any Collateral. All such expenditures incurred or
paid by Lender for such purposes will then bear interest at the rate
charged under the Not from the date incurred or paid by Lender to the date
of repayment by Borrower. All such expenses will become a part of the
indebtedness and, at Lender's option, will (A) be payable on demand; (B)
be added the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of
any applicable insurance policy; or (2) the remaining term of the Note; or
(C) be treated as a balloon payment which will be die and payable at the
Note's maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while
this Agreement is in effect, Borrower shall not, without the prior written
consent of Lender:
Indebtedness and Liens. (1) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume indebtedness for borrowed
money, including capital leases, (2) sell, transfer, mortgage,
assign, pledge, lease, grant a security interest in, or encumber any
of Borrower's assets (except as allowed as Permitted Liens), or (3)
sell with recourse any of Borrower's accounts, except to Lender.
Continuity of Operations. (1) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (2) cease operations, liquidate, merge, transfer, acquire
or consolidate with any other entity, change its name, dissolve or
transfer or sell Collateral out of the ordinary course of business,
or (3) pay any dividends on Borrower's stock (other than dividends
payable in its stock), provided, however that notwithstanding the
foregoing, but only so long as no Event of Default has occurred and
is continuing or would result from the payment of dividends, if
Borrower is a "Subchapter S Corporation" (as defined in the Internal
Revenue Code of 1986, as amended), Borrower may pay cash dividends
on its stock to its shareholders from time to time in amounts
necessary to enable the shareholders to pay income taxes and make
estimated income tax payments to satisfy their liabilities under
federal and state law which arise solely from their status as
Shareholders of a Subchapter S Corporation because of their
ownership of shares of Borrower's stock, or purchase or retire any
of Borrower's outstanding shares or alter or amend Borrower's
capital structure.
Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance
money or assets to any other person, enterprise or entity, (2)
purchase, create or acquire any interest in any other enterprise or
entity, or (3) incur any obligation as surety or guarantor other
than in the ordinary course of business.
Agreements. Borrower will not enter into any agreement containing
any provisions which would be violated or breached by the
performance of Borrower's obligations under this Agreement or in
connection herewith.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan
to Borrower, where under this Agreement or under any other agreement,
Lender shall have no obligation to make Loan Advances or to disburse Loan
proceeds if: (A) Borrower or any Guarantor is in default under the terms
of this Agreement or any of the Related Documents or any other agreement
that Borrower or any Guarantor has with Lender: (B) Borrower or any
Guarantor dies, becomes incompetent or becomes insolvent, files a petition
in bankruptcy or similar proceedings, or is adjudged a bankrupt; (c) there
occurs a material adverse change in Borrower's financial condition, in the
financial condition of any Guarantor, or in the value of any collateral
securing any Loan; or (D) any Guarantor seeks, claims or otherwise
attempts to limit, modify of revoke such Guarantor's guaranty of the Loan
or any other loan with Lender; or (E) Lender in good xxxxx xxxxx itself
insecure, even though no Event of Default shall have occurred.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts
Borrower holds jointly with someone else and all accounts Borrower may
open in the future. However, this does not include any XXX or Xxxxx
accounts, or any trust accounts for which setoff would be prohibited by
law. Borrower authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the Indebtedness against any
and all such accounts, and, at Lender's option, to administratively freeze
all such accounts to allow Lender to protect Lender's charge and setoff
rights provided in this paragraph.
DEFAULT. Each of the following shall constitute an Event of Default under
this Agreement:
Payment Default. Borrower fails to make any payment when due under
the Loan.
Other Defaults. Borrower fails to comply with or to perform any
other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents or to comply with or to
perform any term, obligation, covenant or condition contained in any
other agreement between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults
under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other
creditor or person that may materially affect any of Borrower's or
any Grantor's property or Borrower's or any Grantor's ability to
repay the Loans or perform their respective obligations under this
Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this
Agreement or the Related Documents is false of misleading in any
material respect, either now or at the time made or furnished or
becomes false of misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence
as a going business, the insolvency of Borrower, the appointment of
a receiver for any part of Borrower's property, any assignment for
the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower.
Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure
of any collateral document to create a valid and perfected security
interest or lien) at any time and for any reason.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceedings, self-help,
repossession or any other method, by any creditor of Borrower or by
any governmental agency against any collateral securing the Loan.
This includes a garnishment of any of Borrower's accounts, including
deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Borrower as to the
validity or reasonableness of the claim which is the basis of the
creditor of forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits
with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness. In the event
of a death, Lender, at its option, may, but shall not be required
to, permit the Guarantor's estate to assume unconditionally the
obligations arising under the guaranty in a manner satisfactory to
Lender, and, in doing so, cure any Event of Default.
Change in Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of the loan is impaired.
Insecurity. Lender in good faith believes itself insecure.
Right to Cure. If any default, other than a default on
Indebtedness, is curable and if Borrower or Grantor, as the case may
be, has not been given a notice of a similar default within the
preceding twelve (12) months, it may be cured if Borrower or
Grantor, as the case may be, after receiving written notice from
Lender demanding cure of such default: (1) cure the default within
fifteen (15) days; or (2) if the cure requires more than fifteen
(15) days, immediately initiate steps which Lender deems in Lender's
sole discretion to be sufficient to cure the default and thereafter
continue and complete all reasonable and necessary steps sufficient
to produce compliance as soon as reasonable practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur,
except where otherwise provided in this Agreement or the Related
Documents, all commitments and obligations of Lender under this Agreement
or the Related Documents or any other agreement immediately will terminate
(including and obligation to make further Loan Advances or disbursements),
and, at Lender's option, all indebtedness immediately will become due and
payable, all without notice of any kind to Borrower, except that in the
case of an Event of Default of the type described in the "Insolvency"
subsection above, such acceleration shall be automatic and not optional.
In addition, Lender shall have all the rights and remedies provided in the
Related Documents or available at law, in equity, or otherwise. Except as
may be prohibited by applicable law, all of Lender's rights and remedies
shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not
Exhibit 10.12 Page 4 of 29
BUSINESS LOAN AGREEMENT (ASSET BASED)
(Continued) Page 5
===========================================================================
exclude pursuit of any other remedy, and an election to make expenditures
or to take action to perform an obligation of Borrower or of any Grantor
shall not affect Lender's right to declare default and to exercise its
rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Agreement
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all
of Lender's costs and expenses, including Lender's reasonable
attorneys' fees and Lender's legal expenses, incurred in connection
with the enforcement of this Agreement. Lender may hire or pay
someone else to help enforce this Agreement, and Borrower shall pay
the costs and expenses of such enforcement. Costs and expenses
include Lender's reasonable attorney's fees and legal expenses
whether or not there is a lawsuit, including reasonable attorneys'
fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services.
Borrower also shall pay all court costs and such additional fees as
may be directed by the court.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
Consent to Loan Participation. Borrower agrees and consents to
Lender's sale or transfer, whether now or later, or one or more
participation interests in the Loan to one or more purchasers,
whether related or unrelated to Lender. Lender may provide, without
any limitation whatsoever, to any one or more purchasers, or
potential purchases, any information or knowledge Lender may have
about Borrower or about any other matter relating to the Loan, and
Borrower hereby waives any rights to privacy Borrower may have with
respect to such matters. Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices
of any repurchase of such participation interests. Borrower also
agrees that the purchasers of any such participation interests will
be considered as the absolute owners of such interests in the Loan
and will have all the rights granted under the participation
agreement or agreements governing the sale of such participation
interests. Borrower further waives all rights of offset or
counterclaim that it may have now or later against Lender or against
any purchases of such a participation interest and unconditionally
agrees that either Lender or such purchaser may enforce Borrower's
obligation under the Loan irrespective of the failure or insolvency
of any holder of any interest in the Loan. Borrower further agrees
that the purchaser of any such participation interests may enforce
its interests irrespective of any personal claims or defenses that
Borrower may have against Lender.
Governing Law. This Agreement will be governed by, construed and
enforced in accordance with federal law and laws of the State of
Florida. This Agreement has been accepted by Lender in the State of
Florida.
Chose of Venue. If there is a lawsuit, Borrower agrees upon
Lender's request to submit to the jurisdiction of the courts of Palm
Beach County, State of Florida.
No Waiver by Lender. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any
other provision of this Agreement. No prior waiver by Lender, nor
any course of dealing between Lender and Borrower, or between Lender
and any Grantor, shall constitute a waiver of any of Lender's rights
or of any of Borrower's or any Grantor's obligations as to any
future transaction. Whenever the consent of Lender is required
under this Agreement, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such
consent may be granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall
be given in writing, and shall be effective when actually delivered,
when actually received by telefacsimile (unless otherwise required
by law), when deposited with a nationally recognized overnight
courier, or, if mailed, when deposited in the United States mail, as
first class, certified or registered mail postage prepaid, directed
to the addresses shown near the beginning of this Agreement. Any
party may change its address for notices under this Agreement by
giving written notice to the other parties, specifying that the
purpose of the notice is to change the party's address. For notice
purposes, Borrower agrees to keep Lender informed at all times of
Borrower's current address. Unless otherwise provided or required
by law, if there is more than one Borrower, any notice given by
Lender to any Borrower is deemed to be notice given to all
Borrowers.
Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or unenforceable
as to any circumstance, that finding shall not make the offending
provision illegal, or unenforceable as to any other circumstance.
If feasible, the offending provision shall be considered modified so
that is becomes legal, valid and enforceable. If the offending
provision cannot be so modified, it shall be considered deleted from
this Agreement. Unless otherwise required by law, the illegality,
invalidity, or unenforceability of any provision of this Agreement
shall not affect the legality, validity of enforceability of any
other provision of this Agreement.
Subsidiaries and Affiliates of Borrower. To the extent the context
of any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the
word "Borrower" as used in this Agreement shall include all of
Borrower's subsidiaries and affiliates. Notwithstanding the
foregoing however, under no circumstances shall this Agreement be
construed to require Lender to make any Loan or other financial
accommodation to any of Borrower's subsidiaries or affiliates.
Successors and Assigns. All covenants and agreements by or on
behalf of Borrower contained in this Agreement or any Related
Documents shall bind Borrower's successors and assigns and shall
inure to the benefit of Lender and its successors and assigns.
Borrower shall not, however, have the right to assign Borrower's
rights under this Agreement or any interest therein, without the
prior written consent of Lender.
Survival of Representations and Warranties. Borrower understands
and agrees that in extending Loan Advances, Lender is relying on all
representations, warranties, and covenants made by Borrower in this
Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement or the Related Documents.
Borrower further agrees that regardless of any investigation made by
Lender, all such representations, warranties and covenants will
survive the extension of Loan Advances and delivery to Lender of the
Related Documents, shall be continuing in nature, shall be deemed
made and redated by Borrower at the time each Loan Advance is made,
and shall remain in full force and effect until such time as
Borrower's indebtedness shall be paid in full, or until this
Agreement shall be terminated in the manner provided above,
whichever is the last to occur.
Time is of the Essence. Time is of the essence in the performance
of this Agreement.
DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Agreement. Unless specifically
stated to the contrary, all references to dollar amounts shall mean
amounts in lawful money of the United States of America. Words and terms
used in the singular shall include the plural, and the plural shall
include the singular, as the context may require. Words and terms not
otherwise defined in this Agreement shall have the meanings attributed to
such terms in the Uniform Commercial Code. Accounting words and terms not
otherwise defined in this Agreement shall have the meanings assigned to
them in accordance with generally accepted accounting principles as in
effect on the date of this Agreement:
Advance. The word "Advance" means a disbursement of Loan funds
made, or to be made, to Borrower or on Borrower's behalf under the
terms and conditions of this Agreement.
Agreement. The word "Agreement" means this Business Loan Agreement
(Asset Based), as this Business Loan Agreement (Asset Based) may be
amended or modified from time to time, together with all exhibits
and schedules attached to this Business Loan Agreement (Asset Based)
from time to time.
Borrower. The word "Borrower" means Petmed Express, Inc. and
includes all co-signers and co-makers signing the Note.
Borrowing Base. The words "Borrowing Base" mean, as determined by
Lender from time to time, the lesser of (1) $6,000,000.00 or (2)
50.000% of the aggregate amount of Eligible Inventory.
Business Day. The words "Business Day" mean a day on which
commercial banks are open in the State of Florida.
Collateral The word "Collateral" means all property and assets
granted as collateral security for a Loan, whether real or personal
property, whether granted directly or indirectly, whether granted
now or in the future, and whether granted in the form of a security
interest, mortgage, collateral mortgage, deed of trust, assignment,
pledge, crop pledge, chattel mortgage, collateral chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale,
trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or
otherwise. The word Collateral also includes without limitation all
collateral described in the Collateral section of this Agreement.
Eligible Inventory. The words "Eligible Inventory" mean at any
time, all of Borrower's Inventory as defined below except:
(1) Inventory which is not owned by Borrower free and clear
of all security interests, liens, encumbrances, and claims
of third parties.
Exhibit 10.12 Page 5 of 29
BUSINESS LOAN AGREEMENT (ASSET BASED)
(Continued) Page 6
===========================================================================
(2) Inventory which Lender, in its sole discretion, deems to
be obsolete, unsalable, damaged, defective, or unfit for
further processing.
(3) Inventory advances shall be based on 50% of eligible
inventory including a sub limit, which will limit reliance
on prescription drug inventory to a maximum of
$2,000,000.00 ($4,000,000.00 prescription inventory at 50%
advance rate). The Bank reserves the right to request an
inventory audit at any time.
Stale dated inventory shall be excluded from the borrowing
base. This will be checked annually by the company auditor.
Environmental Laws. The words "Environmental Laws" mean any and all
state, federal and local statutes, regulations and ordinances
relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 ("XXXX"), the
Hazardous Materials Transportation Act, 49 U.S.C Section 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the
events of default set forth in this Agreement in the default section
of this Agreement.
Expiration Date. The words "Expiration Date" mean the date of
termination of Lender's commitment to lend under this Agreement.
GAAP. The word "GAAP" means generally accepted accounting
principles.
Grantor. The word "Grantor" means each and all of the persons or
entities granting a Security Interest in any Collateral for the
Loan, including without limitation all Borrowers granting such a
Security Interest.
Guarantor. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Loan.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to
Lender, including without limitation a guaranty of all or part of
the Note.
Hazardous Substances. The words "Hazardous Substances" mean
materials that, because of their quantity, concentration or
physical, chemical or infectious characteristics, may cause or pose
a present or potential hazard to human health or the environment
when improperly used, treated, stored, disposes of, generated,
manufactured, transported or otherwise handled. The words
"Hazardous Substances" are used in their very broadest sense and
include without limitation any and all hazardous or toxic
substances, materials or waste as defined by or listed under the
Environmental Laws. The term "Hazardous Substances" also includes,
without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness
evidence by the Note or Related Documents, including all principal
and interest together with all other indebtedness and costs and
expenses for which Borrower is responsible under this Agreement or
under any of the Related Documents.
Inventory. The word "Inventory" means all of Borrower's raw
materials, work in process, finished goods, merchandise, parts and
supplies, of every kind and description, and goods held for sale or
lease or furnished under contracts of service in which Borrower now
has or hereafter acquires any right, whether held by Borrower or
others, and all documents of title, warehouse receipts, bills of
lading, and all other documents of every type covering all or any
part of the foregoing. Inventory includes inventory temporarily out
of Borrower's custody or possession and all returns on Accounts.
Lender. The word "Lender" means RBC CENTURA BANK, its successors
and assigns,
Loan. The word "Loan" means any and all loans and financial
accommodations from Lender to Borrower whether now or hereafter
existing, and however evidenced, including without limitation those
loans and financial accommodations described herein or described on
any exhibit or schedule attached to this Agreement from time to
time.
Note. The word "Note" means the Note executed by Petmed Express,
Inc. in the principle amount of $6,000,000.00 dated November 2,
2004, together with all renewals of, extensions of, modifications
of, refinancings of, consolidations of, and substitutions for the
note or credit agreement.
Permitted Liens. The words "Permitted Liens" mean (1) liens and
security interests securing Indebtedness owed by Borrower to Lender;
(2) liens for taxes, assessments, or similar charges either not yet
due or being contested in good faith; (3) liens of materialmen,
mechanics, warehousemen, or carriers, or other like liens arising in
the ordinary course of business and securing obligations which are
not yet delinquent; (4) purchase money liens or purchase money
security interests upon or in any property acquired or held by
Borrower in the ordinary course of business to secure indebtedness
outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled "Indebtedness
and Liens"; (5) liens and security interests which, as of the date
of this Agreement, have been disclosed to and approved by the Lender
in writing; and (6) those liens and security interests which in the
aggregate constitute an immaterial and insignificant monetary amount
with respect to the net value of the Borrower's assets.
Primary Credit Facility. The words "Primary Credit Facility" mean
the credit facility described in the Line of Credit section of this
Agreement.
Related Documents. The words "Related Documents" mean all
promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of
trust, security deeds, collateral mortgages, and all other
instruments, agreements and documents, whether now or hereafter
existing, executed in connection with the Loan.
Security Agreement. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants,
arrangements, understandings or other agreements, whether created by
law, contract, or otherwise, evidencing, governing, representing, or
creating a Security Interest.
Security Interest. The word "Security Interest" mean, without
limitation, any and all types of collateral security, present and
future, whether in the form of alien, charge, encumbrance, mortgage,
deed of trust, security deed, assignment, pledge, crop pledge,
chattel mortgage, collateral chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt,
lien or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever
whether created by law, contract, or otherwise.
Tangible Net Worth. The words "Tangible Net Worth" mean Borrower's
total assets excluding all intangible assets (i.e., goodwill,
trademarks, patents, Copyrights, organizational expenses, and
similar intangible items, but including leaseholds and leasehold
improvements) less total debt.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS
LOAN AGREEMENT (ASSET BASED) IS DATED NOVEMBER 2, 2004.
BORROWER:
PETMED EXPRESS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------
Xxxxx Xxxxxxxxxx, Treasurer
of Petmed Express, Inc.
LENDER:
RBC CENTURA BANK
By: /s/ Xxxxxxx X. Park
---------------------
Authorized Signer
Exhibit 10.12 Page 6 of 29
CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL
===========================================================================
Corporation: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:
THE CORPORATION'S EXISTENCE. The complete and correct name of the
Corporation is Petmed Express, Inc. ("Corporation"). The Corporation is a
corporation for profit which is, and at all times shall be, duly
organized, validly existing, and in good standing under and by virtue of
the laws of the State of Florida. The Corporation has the full power and
authority to own its properties and to transact the business in which it
is presently engaged or presently proposes to engage. The Corporation
maintains an office at 0000 XX 00xx Xxx, Xxxxxxx Xxxxx, XX 00000. Unless
the Corporation has designated otherwise in writing, the principal office
is the office at which the Corporation keeps its books and records. The
Corporation will notify Lender prior to any change in the location of The
Corporation's state of organization or any change in The Corporation's
name. The Corporation shall do all things necessary to preserve and to
keep in full force and effect its existence, rights and privileges, and
shall comply will all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or court
applicable to the Corporation and The Corporation's business activities.
RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation, or
if the Corporation is a close cooperation having no Board of Directors
then at a meeting of the Corporation's shareholders, duly called and held
on May 31, 2001, at which a quorum was present and voting, or by other
duly authorized action in lieu of a meeting, the resolutions set forth in
this Resolution were adopted.
OFFICER. The following named person is an officer of Petmed Express, Inc.:
NAMES TITLES AUTHORIZED ACTUAL SIGNATURE
----- ------ ---------- ----------------
Xxxxx Xxxxxxxxxx Treasurer Y \s\ Xxxxx X. Xxxxxxxxxx
ACTIONS AUTHORIZED. The authorized person listed above may enter into any
agreements of any nature with Lender, and those agreements will bind the
Corporation. Specifically, but without limitation, the authorized,
empowered, and directed to do the following for and behalf of the
Corporation:
Borrow Money: To borrow, as a cosigner or otherwise, from time to
time from Lender, on such terms as may be agreed upon between the
Corporation and Lender, such sum or sums of money as his or her
judgment should be borrowed, without limitation.
Execute Notes: To execute and deliver to Lender the promissory note
or notes, or other evidence of the Corporation's credit
accommodations, on Lender's forms, at such rates of interest and on
such terms as may be agreed upon, evidencing the sums of money so
borrowed or any of the Corporation's indebtedness to Lender, and
also to execute and deliver to Lender one or more renewals,
extensions, modifications, refinancings, consolidations, or
substitutions for one or more of the notes, or any other evidence of
credit accommodations.
Grant Security. To mortgage, pledge, transfer, endorse,
hypothecate, or otherwise encumber and deliver to Lender any
property now or hereafter belonging to the Corporation or in which
the Corporation now or hereafter may have an interest, including
without limitation all of the Corporation's real property and all of
the Corporation's personal property (tangible or intangible), as
security for the payment of any loans or credit accommodations so
obtained, any promissory notes so executed (including any amendments
to or modifications, renewals, and extensions, of such promissory
notes), or any other or further indebtedness of the Corporation to
Lender at any time owing, however the same may be evidenced. Such
property may be mortgaged, pledged, transferred, endorsed,
hypothecated or encumbered at the time such loans are obtained or
such indebtedness is incurred, or at any other time or times, and
may in addition to or in lieu of any property theretofore mortgaged,
pledged, transferred, endorsed, hypothecated or encumbered.
Execute Security Documents. To execute and deliver to Lender the
forms of mortgage, deed of trust, pledge agreement, hypothecation
agreement, and other security agreements and financing statements
which Lender may require and which shall evidence terms and
conditions under and pursuant to which such liens and encumbrances,
or any of them, are given; and also to execute and deliver to Lender
any other written instruments, any chattel paper, or any kind of
nature, which Lender may deem necessary or proper in connection with
or pertaining to the giving of the liens and encumbrances.
Negotiate Items. To draw, endorse, and discount with Lender all
drafts, trade acceptances, promissory notes, or other evidences of
indebtedness payable to or belonging to the Corporation or in which
the Corporation may have an interest, and either to receive cash for
the same or to cause such proceeds to be credited to the
Corporations' account with Lender, or to cause such other
disposition of the proceeds derived therefrom as he or she may deem
advisable.
Further Acts. In the case of lines of credit, to designate
additional or alternate individuals as being authorized to request
advances under such liens, and in all cases, to do and perform such
other acts and things, to pay any and all fees and costs, and to
execute and deliver such other documents and agreements as the
officer may in his or her discretion deem reasonably necessary or
proper in order to carry into effect the provisions of this
Resolution. The following person currently is authorized, except as
provided in this paragraph, to request advances and authorize
payments under the line of credit until Lender receives from the
Corporation, at Lender's address shown above, written notice of
revocation of his or her authority: Xxxxx Xxxxxxxxxx. Borrowing
Base Advances:
Inventory advances shall be based on 50% of eligible inventory
including a sub limit, which will limit reliance on prescription
drug inventory to a maximum of $2,000,000.00 ($4,000,000.00
prescription inventory at 50% advance rate). The Bank reserves the
right to request an inventory audit at any time. Stale dated
inventory shall be excluded from borrowing base. This will be
checked annually by the company's auditor.
ASSUMED BUSINESS NAMES. The Corporation has filed or recorded all
documents or filings required by law to all assumed business names used by
the Corporation. Excluding the name of the Corporation, the following is
a complete list of all assumed business names under which the Corporation
does business: None.
NOTICES TO LENDER. The Corporation will promptly notify Lender in writing
at Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (A) change in the Corporation's
name; (B) change in the Corporation's assumed business name(s); (C) change
in the management of the Corporation; (D) change in the authorized
signer(s); (E) change in the Corporation's principal office address; (F)
change in the Corporation's state or organization; (G) conversion of the
Corporation to a new or different type of business entity; or (H) change
in any other aspect of the Corporation that directly or indirectly relates
to any agreements between the Corporation and Lender. No change in the
Corporation's name or state of organization will take effect until after
the Lender has received notice.
Exhibit 10.12 Page 7 of 29
CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL
(Continued) Page 2
===========================================================================
ADDITIONAL RESOLUTION PROVISION. Signatures showing participation in the
request and processing of any matter covered by this resolution by any two
of the designated officers in any role, including without limitation
attestation of signatures by the Secretary, shall be sufficient to satisfy
the requirements of this resolution.
CERTIFICATION CONCERNING OFFICERS AND RESOLUTIONS. The officer named
above is duly elected, appointed, or employed by or for the Corporation,
as the case may be, and occupies the position set opposite his or her
respective name. This Resolution now stands of record on the books of the
Corporation, is in full force and effect, and has not been modified or
revoked in any manner whatsoever.
NO CORPORATE SEAL. The Corporation has no corporate seal, and therefore,
no seal is affixed to this Resolution.
CONTINUING VALIDITY. Any and all acts authorized pursuant to this
Resolution and performed prior to the passage of this Resolution are
hereby ratified and approved. This Resolution shall be continuing, shall
remain in full force and effect and Lender may rely on it until written
notice of its revocation shall have been delivered to and received by
Lender at Lender's address shown above (or such addresses as Lender may
designate from time to time). Any such notice shall not affect any of the
Corporation's agreements or commitments in effect at the time notice is
give.
IN TESTIMONY WHEREOF, I have hereunto set my hand and attest that the
signature set opposite the name listed above is his or her genuine
signature.
I have read all the provisions of this Resolution, and I personally and on
behalf of the Corporation certify that all statements and representations
made in this Resolution are true and correct. This Corporate Resolution to
Borrow / Grant Collateral is dated November 2, 2004.
----------------
CERTIFIED TO AND ATTESTED BY:
/s/ Xxxxx X. Xxxxxxxxxx
--------------------------------
Xxxxx Xxxxxxxxxx, Treasurer of Petmed Express, Inc.
Note: If the officer signing this Resolution is designated by the
foregoing document as one of the officers authorized to act on the
Corporations' behalf, it is advisable to have this Resolution signed by at
least one non-authorized officer of the Corporation.
===========================================================================
Exhibit 10.12 Page 8 of 29
CORPORATE RESOLUTION TO GRANT COLLATERAL / GUARANTEE
===========================================================================
Borrower: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
Corporation: First Image Marketing, Inc.
0000 XX 00xx Xxx
Xxxxxxx Xxxxx, XX 00000
===========================================================================
I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:
THE CORPORATION'S EXISTENCE. The complete and correct name of the
Corporation is First Image Marketing, Inc. ("Corporation"). The
Corporation is a corporation for profit which is, and at all times shall
be, duly organized validly existing, and in good standing under by virtue
of the laws of the State of Florida. The Corporation has the full power
and authority to own its properties and to transact the business in which
it is presently engaged or presently proposes to engage. The Corporation
maintains an office at 0000 XX 00xx Xxx, Xxxxxxx Xxxxx, XX 00000. Unless
the Corporation has designated otherwise in writing, the principal office
is the office at which the Corporation keeps its nooks and records. The
Corporation will notify Lender prior to any change in location of the
Corporation's state of organization or any change in privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or court
applicable to the Corporation and The Corporation's business activities.
RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation, or
if the Corporation is a close cooperation having no Board of Directors
then at a meeting of the Corporation's shareholders, duly called and held
on January 29, 1996, at which a quorum was present and voting, or by other
duly authorized action in lieu of a meeting, the resolutions set forth in
this Resolution were adopted.
OFFICER. The following named person is an officer of Petmed Express, Inc.:
NAMES TITLES AUTHORIZED ACTUAL SIGNATURE
----- ------ ---------- ----------------
Xxxx Xxxxx Director Y \s\ Xxxx Xxxxx
ACTIONS AUTHORIZED. The authorized person listed above may enter into any
agreements of any nature with Lender, and those agreements will bind the
Corporation. Specifically, but without limitation, the authorized,
empowered, and directed to do the following for and behalf of the
Corporation:
Guaranty. To guarantee or act as surety for loans or other
financial accommodations to Borrower from Lender on such guarantee
or surety terms as may be agreed upon between the officer of the
Corporation and Lender and in such sum or sums of money as in his or
her judgment should be guaranteed or assured, (the "Guaranty").
Grant Security. To mortgage, pledge, transfer, endorse, hypothecate,
or otherwise encumber and deliver to Lender any property now or
hereafter belonging to the Corporation or in which the Corporation
now or hereafter may have an interest, including without limitation
all of the Corporations' real property and all of the Corporation's
personal property (tangible or intangible), as security for the
Guaranty, and as a security for the payment of any loans, any
promissory notes, or any other or further indebtedness of Petmed
Express, Inc. to Lender at any time owing, however the same may be
evidenced. Such property may be mortgaged, pledged, transferred,
endorsed, hypothecated or encumbered at the time such loans are
obtained or such indebtedness is incurred, or at any other time or
times, and may be either in addition to or in lieu of any property
theretofore mortgaged, pledged, transferred, endorsed, hypothecated
or encumbered. The provisions of this Resolution authorizing or
relating to the pledge, mortgage, transfer, endorsement,
hypothecation, granting of a security interest in, or in any way
encumbering, the assets of the Corporation shall include, without
limitation, doing so in order to lend collateral security for the
indebtedness, now or hereafter existing, and of any nature
whatsoever, of Petmed Express, Inc. to Lender. The Corporation has
considered the value to itself of lending collateral in support of
such indebtedness, and the Corporation represents to Lender that the
Corporation is benefited by doing so.
Execute Security Documents. To execute and deliver to Lender the
forms of mortgage, deed of trust, pledge agreement, hypothecation
agreement, and other security agreements and financing statements
which Lender may require and which shall evidence the terms and
conditions under and pursuant to which such liens and encumbrances,
or any of them, are given; and also to execute and deliver to Lender
any other written instruments, any chattel paper, or any other
collateral, or any kind of nature, which Lender may deem necessary
or proper in connection with or pertaining to the giving of the
liens and encumbrances.
Further Acts. To do and perform such other acts and things and to
execute and deliver such other documents and agreements as the
officer may in his or her discretion deem reasonably necessary or
proper in order to carry into effect the provisions of this
Resolution.
ASSUMED BUSINESS NAMES. The Corporation has filed or recorded all
documents or filings required by law relating to all assumed business
names used by the Corporation. Excluding the name of the Corporation, the
following is a complete list of all assumed business names under which the
Corporation does business: None.
NOTICES TO LENDER. The Corporation will promptly notify Lender in writing
at Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (A) change in the Corporation's
name; (B) change in the Corporation's assumed business name(s); (C) change
in the management of the Corporation; (D) change in the authorized
signer(s); (E) change in the Corporation's principal office address; (F)
change in the Corporation's state or organization; (G) conversion of the
Corporation to a new or different type of business entity; or (H) change
in any other aspect of the Corporation that directly or indirectly relates
to any agreements between the Corporation and Lender. No change in the
Corporation's name or state of organization will take effect until after
the Lender has received notice.
ADDITIONAL RESOLUTION PROVISION. Signatures showing participation in the
request and processing of any matter covered by this resolution by any two
of the designated officers in any role, including without limitation
attestation of signatures by the Secretary, shall be sufficient to satisfy
the requirements of this resolution.
CERTIFICATION CONCERNING OFFICERS AND RESOLUTIONS. The officer named
above is duly elected, appointed, or employed by or for the Corporation,
as the case may be, and occupies the position set opposite his or her
respective name. This Resolution now stands of record on the books of the
Corporation, is in full force and effect, and has not been modified or
revoked in any manner whatsoever.
NO CORPORATE SEAL. The Corporation has no corporate seal, and therefore,
no seal is affixed to this Resolution.
CONTINUING VALIDITY. Any and all acts authorized pursuant to this
Resolution and performed prior to the passage of this Resolution are
Exhibit 10.12 Page 9 of 29
CORPORATE RESOLUTION TO GRANT COLLATERAL / GUARANTEE
(Continued) Page 2
===========================================================================
hereby ratified and approved. This Resolution shall be continuing, shall
remain in full force and effect and Lender may rely on it until written
notice of its revocation shall have been delivered to and received by
Lender at Lender's address shown above (or such addresses as Lender may
designate from time to time). Any such notice shall not affect any of the
Corporation's agreements or commitments in effect at the time notice is
give.
IN TESTIMONY WHEREOF, I have hereunto set my hand and attest that the
signature set opposite the name listed above is his or her genuine
signature.
I have read all the provisions of this Resolution, and I personally and on
behalf of the Corporation certify that all statements and representations
made in this Resolution are true and correct. This Corporate Resolution to
Grant Collateral / Guarantee is dated November 2, 2004.
----------------
CERTIFIED TO AND ATTESTED BY:
/s/ Xxxx Xxxxx
---------------------
Xxxx Xxxxx, President of First Image Marketing, Inc.
Note: If the officer signing this Resolution is designated by the
foregoing document as one of the officers authorized to act on the
Corporations' behalf, it is advisable to have this Resolution signed by at
least one non-authorized officer of the Corporation.
===========================================================================
Exhibit 10.12 Page 10 of 29
CORPORATE RESOLUTION TO GRANT COLLATERAL / GUARANTEE
===========================================================================
Borrower: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
Corporation: Southeastern Veterinary Exports, Inc.
0000 XX 00xx Xxx
Xxxxxxx Xxxxx, XX 00000
===========================================================================
I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:
THE CORPORATION'S EXISTENCE. The complete and correct name of the
Corporation is Southeastern Veterinary Exports, Inc. ("Corporation"). The
Corporation is a corporation for profit which is, and at all times shall
be, duly organized validly existing, and in good standing under by virtue
of the laws of the State of Florida. The Corporation has the full power
and authority to own its properties and to transact the business in which
it is presently engaged or presently proposes to engage. The Corporation
maintains an office at 0000 XX 00xx Xxx, Xxxxxxx Xxxxx, XX 00000. Unless
the Corporation has designated otherwise in writing, the principal office
is the office at which the Corporation keeps its nooks and records. The
Corporation will notify Lender prior to any change in location of the
Corporation's state of organization or any change in privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or court
applicable to the Corporation and The Corporation's business activities.
RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation, or
if the Corporation is a close cooperation having no Board of Directors
then at a meeting of the Corporation's shareholders, duly called and held
on May 31, 2001, at which a quorum was present and voting, or by other
duly authorized action in lieu of a meeting, the resolutions set forth in
this Resolution were adopted.
OFFICER. The following named person is an officer of Southeastern
Veterinary Exports, Inc.:
NAMES TITLES AUTHORIZED ACTUAL SIGNATURE
----- ------ ---------- ----------------
Xxxxx Xxxxxxxxxx President Y \s\ Xxxxx X. Xxxxxxxxxx
ACTIONS AUTHORIZED. The authorized person listed above may enter into any
agreements of any nature with Lender, and those agreements will bind the
Corporation. Specifically, but without limitation, the authorized,
empowered, and directed to do the following for and behalf of the
Corporation:
Guaranty. To guarantee or act as surety for loans or other financial
accommodations to Borrower from Lender on such guarantee or surety
terms as may be agreed upon between the officer of the Corporation
and Lender and in such sum or sums of money as in his or her
judgment should be guaranteed or assured, (the "Guaranty").
Grant Security. To mortgage, pledge, transfer, endorse, hypothecate,
or otherwise encumber and deliver to Lender any property now or
hereafter belonging to the Corporation or in which the Corporation
now or hereafter may have an interest, including without limitation
all of the Corporations' real property and all of the Corporation's
personal property (tangible or intangible), as security for the
Guaranty, and as a security for the payment of any loans, any
promissory notes, or any other or further indebtedness of Petmed
Express, Inc. to Lender at any time owing, however the same may be
evidenced. Such property may be mortgaged, pledged, transferred,
endorsed, hypothecated or encumbered at the time such loans are
obtained or such indebtedness is incurred, or at any other time or
times, and may be either in addition to or in lieu of any property
theretofore mortgaged, pledged, transferred, endorsed, hypothecated
or encumbered. The provisions of this Resolution authorizing or
relating to the pledge, mortgage, transfer, endorsement,
hypothecation, granting of a security interest in, or in any way
encumbering, the assets of the Corporation shall include, without
limitation, doing so in order to lend collateral security for the
indebtedness, now or hereafter existing, and of any nature
whatsoever, of Petmed Express, Inc. to Lender. The Corporation has
considered the value to itself of lending collateral in support of
such indebtedness, and the Corporation represents to Lender that the
Corporation is benefited by doing so.
Execute Security Documents. To execute and deliver to Lender the
forms of mortgage, deed of trust, pledge agreement, hypothecation
agreement, and other security agreements and financing statements
which Lender may require and which shall evidence the terms and
conditions under and pursuant to which such liens and encumbrances,
or any of them, are given; and also to execute and deliver to Lender
any other written instruments, any chattel paper, or any other
collateral, or any kind of nature, which Lender may deem necessary
or proper in connection with or pertaining to the giving of the
liens and encumbrances.
Further Acts. To do and perform such other acts and things and to
execute and deliver such other documents and agreements as the
officer may in his or her discretion deem reasonably necessary or
proper in order to carry into effect the provisions of this
Resolution.
ASSUMED BUSINESS NAME. The Corporation has filed or recorded all
documents or filings required by law relating to all assumed business
names used by the Corporation. Excluding the name of the Corporation, the
following is a complete list of all assumed business names under which the
Corporation does business: None.
NOTICES TO LENDER. The Corporation will promptly notify Lender in writing
at Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (A) change in the Corporation's
name; (B) change in the Corporation's assumed business name(s); (C) change
in the management of the Corporation; (D) change in the authorized
signer(s); (E) change in the Corporation's principal office address; (F)
change in the Corporation's state or organization; (G) conversion of the
Corporation to a new or different type of business entity; or (H) change
in any other aspect of the Corporation that directly or indirectly relates
to any agreements between the Corporation and Lender. No change in the
Corporation's name or state of organization will take effect until after
the Lender has received notice.
ADDITIONAL RESOLUTION PROVISION. Signatures showing participation in the
request and processing of any matter covered by this resolution by any two
of the designated officers in any role, including without limitation
attestation of signatures by the Secretary, shall be sufficient to satisfy
the requirements of this resolution.
CERTIFICATION CONCERNING OFFICERS AND RESOLUTIONS. The officer named
above is duly elected, appointed, or employed by or for the Corporation,
as the case may be, and occupies the position set opposite his or her
respective name. This Resolution now stands of record on the books of the
Corporation, is in full force and effect, and has not been modified or
revoked in any manner whatsoever.
NO CORPORATE SEAL. The Corporation has no corporate seal, and therefore,
no seal is affixed to this Resolution.
CONTINUING VALIDITY. Any and all acts authorized pursuant to this
Resolution and performed prior to the passage of this Resolution are
Exhibit 10.12 Page 11 of 29
CORPORATE RESOLUTION TO GRANT COLLATERAL / GUARANTEE
(Continued) Page 2
===========================================================================
hereby ratified and approved. This Resolution shall be continuing, shall
remain in full force and effect and Lender may rely on it until written
notice of its revocation shall have been delivered to and received by
Lender at Lender's address shown above (or such addresses as Lender may
designate from time to time). Any such notice shall not affect any of the
Corporation's agreements or commitments in effect at the time notice is
give.
IN TESTIMONY WHEREOF, I have hereunto set my hand and attest that the
signature set opposite the name listed above is his or her genuine
signature.
I have read all the provisions of this Resolution, and I personally and on
behalf of the Corporation certify that all statements and representations
made in this Resolution are true and correct. This Corporate Resolution to
Grant Collateral / Guarantee is dated November 2, 2004.
----------------
CERTIFIED TO AND ATTESTED BY:
/s/ Xxxxx X. Xxxxxxxxxx
------------------------
Xxxxx Xxxxxxxxxx, President of
Southeastern Veterinary Exports, Inc.
Note: If the officer signing this Resolution is designated by the
foregoing document as one of the officers authorized to act on the
Corporations' behalf, it is advisable to have this Resolution signed by at
least one non-authorized officer of the Corporation.
Exhibit 10.12 Page 12 of 29
COMMERCIAL SECURITY AGREEMENT
===========================================================================
Grantor: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
===========================================================================
THIS COMMERCIAL SECURITY AGREEMENT dated November 2, 2004, is made and
executed between Petmed Express, Inc. ("Grantor") and RBC CENTURA BANK
("Lender").
GRANT OF SECURITY INTEREST. The valuable consideration, Grantor grants to
Lender a security interest in the Collateral to secure the Indebtedness
and agrees that Lender shall have the rights stated in this Agreement with
respect to the Collateral, in addition to all other rights which Lender
may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this agreement
means the following described property, whether now owned or hereafter
acquired, whether now existing or hereafter arising, and wherever located,
in which Grantor is giving to Lender a security interest for the payment
of the Indebtedness and performance of all other obligations under the
Note and this Agreement:
All inventory, Chattel Paper, Accounts, Equipment, Furniture,
Fixtures, Machinery, Receivables, Patents, Licenses, and General
Intangibles
In addition, the word "collateral" also includes all the following,
whether now owned or hereafter acquired, whether now existing or hereafter
acquired, whether now existing or hereafter arising, and wherever located:
(A) All accessions, attachments, accessories, tools, parts,
supplies, replacements of and additions to any of the collateral
described herein, whether added now or later.
(B) All products and produce of any of the property described in
this Collateral section.
(C) All accounts, general intangible, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease,
consignment or other disposition of any of the property described
in this Collateral section.
(D) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section, and sums due from a third
party who has damaged or destroyed the Collateral or from that
party's insurer, whether due to judgment, settlement or other
process.
(E) All records and data relation to any of the property described
in this Collateral section, whether in the form of writing,
photograph, microfilm, microfiche, or electronic media, together
with all of Grantor's right, title, and interest in and to all
computer software required to utilize, create, maintain, and
process any such records or data on electronic media.
Despite any other provision of this Agreement, Lender is not granted, and
will not have, a nonpurchase money security interest in household good, to
the extent such a security interest would be prohibited by applicable law.
In addition, if because of the type of any Property, Lender is required to
give a notice of the right to cancel under Truth in Lending for the
Indebtedness, then Lender will not have a security interest in such
Collateral unless and until such a notice is given.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Grantor's accounts with Lender (whether
checking, saving, or some other account). This includes all accounts
Grantor holds jointly with someone else and all accounts Grantor may open
in the future. However, this does not include any XXX or Xxxxx accounts,
or any trust accounts for which setoff would be prohibited by law. Grantor
authorizes Lender, to extent permitted by applicable law, to charge or
setoff all sums owing on the Indebtedness against any and all such
accounts, and, at Lender's option, to administratively freeze all such
accounts to allow Lender to protect Lender's charge and setoff rights
provided in this paragraph.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
With respect to the Collateral, Grantor represents and promises to Lender
that:
Perfection of Security Interest. Grantor agrees to take whatever
actions are requested by Lender to perfect and continue Lender's
security interest in the Collateral. Upon request of Lender, Grantor
will deliver to Lender any and all of the documents evidencing or
constituting the Collateral, and Grantor will note Lender's interest
upon any and all chattel paper and instruments if not delivered to
Lender for possession by Lender. This is a continuing Security
Agreement and will continue in effect even though all or any part of
the indebtedness is paid in full and even though for a period of
time Grantor may not be indebted to Lender.
Notices to Lender. Grantor will promptly notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may
designate from time to time) prior to any (1) change in Grantor's
name; (2) change in Grantor's assumed business name(s); (3) change
in the management of the Corporation Grantor; (4) change in the
authorized signer(s); (5) change in Grantor's principal office
address; (6) change in Grantor's state of organization; (7)
conversion of Grantor to a new or different type of business entity;
or (8) change in any other aspect of Grantor that directly or
indirectly relates to any agreements between Grantor and Lender. No
change in Grantor's name or state of organization will take effect
until after Lender has received notice.
No Violation. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor
is a party, and this certificate or articles of incorporation and
bylaws do not prohibit any term or condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral consists
of accounts, chattel paper, or general intangibles, as defined by
the Uniform Commercial Code, the Collateral is enforceable in
accordance with its terms, is genuine, and fully complies with all
applicable laws and regulations concerning form, content and manner
of preparation and execution, and all persons appearing to be
obligated as they appear to be on the Collateral. At the time any
account becomes subject to a security interest in favor of Lender,
the account shall be a good and valid account representing an
undisputed, bona fide indebtedness incurred by the account debtor,
for merchandise held subject to delivery instructions or previously
shipped or delivered pursuant to a contract of sale, or for services
previously performed by Grantor with or for account debtor. So long
as this Agreement remains in effect, Grantor shall not, without
Lender's prior written consent, compromise, settle, adjust, or
extend payment under or with regard to any such Accounts. There
shall be setoffs or counterclaims against any of the Collateral, and
no agreement shall have been made under which any deductions or
discounts may be claimed concerning the Collateral except those
disclosed to Lender in writing.
Location of the Collateral. Except in the ordinary course of
Grantor's business, grantor agrees to keep the Collateral (or to the
extent the Collateral consists of intangible property such as
account or general intangibles, the records concerning the
Collateral) at Grantor's address shown above or at such other
locations as are acceptable to Lender. Upon Lenders request, Grantor
will deliver to Lender in form satisfactory to Lender a schedule of
real properties and Collateral locations relating to Grantor's
operations, including without limitation the following: (1) all real
property Grantor owns or is purchasing; (2) all real property
Grantor is renting or leasing; (3) all storage facilities Grantor
owns, rents, leases, or uses; and (4) all other properties where
Collateral is or may be located.
Removal of the Collateral. Except in the ordinary course of
Grantor's business, including the sales of inventory, Grantor shall
not remove the Collateral from it's existing location without
Lender's prior written consent. To the extent that the Collateral
consists of vehicles, or other titled property, Grantor shall not
take or permit any action which would require application for
certificates of title for the vehicles outside the State of Florida,
with Lender's prior written consent. Grantor shall, whenever
requested, advise Lender of the exact location of the Collateral.
Transactions Involving Collateral. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business, or
as otherwise provided for in this Agreement, Grantor shall not sell,
offer to sale or otherwise transfer or dispose of the Collateral.
While Grantor is not in default under this Agreement, Grantor may
sell inventory, but only in the ordinary course of its business and
only to buyers who qualify as a buyer in the ordinary course of
business. A sale in the ordinary course of Grantor's business does
not include a transfer in partial or total satisfaction of a debt or
any bulk sale. Grantor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien, security
interest, encumbrance, or charge, other than the security interest
provided for in this Agreement, without the prior written consent of
Lender. This includes security interests even if junior in right to
the security interests granted under this Agreement. Unless waived
by Lender, all proceeds from any disposition of the Collateral (for
whatever reason) shall be held in trust for Lender and shall not be
commingled with any other funds; provided however, this requirement
shall not constitute consent by Lender to any sale or other
disposition. Upon receipt, Grantor shall immediately deliver any
such proceeds to Lender.
Title. Grantor represents and warrants to Lender that Grantor holds
good and marketable title to the Collateral, free and clear of all
liens and encumbrances except for the lien of this Agreement. No
financing statement covering any of the collateral is on file in any
public office other than those which reflect the security interest
created by this Agreement or to which Lender has specifically
consented. Grantor shall defend Lender's rights in the Collateral
against the claims and demands of all other persons.
Repairs and Maintenance. Grantor agrees to keep and maintain, and to
cause others to keep and maintain, the Collateral in good order,
repaid and condition at all times while this Agreement remains in
effect. Grantor further agrees to pay when due all claims for work
done
Exhibit 10.12 Page 13 of 29
COMMERCIAL SECURITY AGREEMENT
(Continued) Page 2
===========================================================================
on or services rendered or material furnished in connection with the
Collateral so that no lien or encumbrance may ever attach to or be
filed against the Collateral.
Inspection or Collateral. Lender and Lender's designated
representatives and agents shall have the right at all reasonable
times to examine and inspect the Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all taxes,
assessments and liens upon the Collateral, its used or operation,
upon this Agreement, upon any promissory note or notes evidencing
the Indebtedness, or upon any of the other Related Documents.
Grantor may withhold any such payment or may elect to contest any
lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's
interest in the Collateral is not jeopardized in Lender's sole
opinion. If the Collateral is subjected to a lien which is not
discharged within fifteen (15) days, Grantor shall deposit with
Lender Cash, a sufficient corporate surety bond or other security
satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs, reasonable
attorneys' fees or other charges accrued as a result of foreclosure
or sale of the Collateral. In any contest Grantor shall defend
itself and Lender and shall satisfy any final adverse judgment
before enforcement against the Collateral. Grantor shall name Lender
as an additional obligee under any surety bond furnished in the
contest proceedings. Grantor further agrees to furnish Lender with
evidence that such taxes, assessments and governmental and other
charges have been paid in full and in a timely manner. Grantor may
withhold any such payments or may elect to contest any lien if
Grantor is in good faith conducting an appropriate proceeding to
contest the obligation to pay and so long as Lender's interest in
the Collateral is not jeopardized.
Compliance with Governmental Requirements. Grantor shall comply
promptly with all laws, ordinances, rules and regulations of all
governmental authorities now or hereafter in effect, applicable to
the ownership, production, disposition, or use of the Collateral,
including all laws or regulations relating to the undue erosion of
highly-erodible land or relating to the conversion of wetlands for
the production of an agricultural product or commodity. Grantor may
contest in good faith any such law, ordinance or regulation and
withhold compliance during any proceeding, including appropriate
appeals, so long as Lender's interest in the Collateral, in Lender's
opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this
Agreement remains a lien on the Collateral, used in violation of any
Environmental Laws or for the generation, manufacture, storage,
transportation, treatment, disposal, release or threatened release
Hazardous Substance. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the
Collateral for Hazardous Substances. Grantor hereby (1) releases and
waives any future claims against Lender for indemnity or
contribution in the event Grantor becomes liable for cleanup or
other costs under any future Environmental Laws, and (2) agrees to
indemnity and holds harmless Lender against any and all claims and
losses resulting from a breach of this provision of this Agreement.
This obligation to indemnity shall survive the payment of the
Indebtedness and the satisfaction of this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and
maintain all risks insurance, including without limitation fire,
theft, and liability coverage together with such other insurance as
Lender may require with respect to the Collateral, in form, amounts,
coverages and basis reasonably acceptable to Lender and issued by a
company or companies reasonably acceptable to Lender. Grantor, upon
request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to
Lender, including stipulations that coverages will not be cancelled
or diminished without at least ten (10) days' prior written notice
to Lender and not including any disclaimer of the insurer's
liability for failure to give such a notice. Each insurance policy
also shall include an endorsement providing that coverage in favor
of Lender will not be impaired in any way by any act, omission or
default of Grantor or any other person. In connection with all
policies covering assets in which Lender holds or is offered a
security interest, Grantor will provide Lender with such loss
payable or other endorsements as Lender may require. If Grantor at
any time fails to obtain or maintain any insurance as required under
this agreement, Lender may (but shall not be obligated) obtain such
insurance as Lender deems appropriate, including if Lender so
chooses "single interest insurance," which will cover only Lender's
interest in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify
Lender of any loss or damage to the Collateral. Lender may make
proof of loss if Grantor fails to do so within fifteen (15) days of
the casualty. All proceeds of any insurance on the Collateral,
including accrued proceeds thereon, shall be held by Lender as part
of the Collateral. If Lender consents to repair or replacement of
the damaged or destroyed Collateral, Lender shall, upon satisfactory
proof of expenditure, pay or reimburse Grantor from the proceeds for
the reasonable cost of repair or restoration. If Lender does not
consent to repair or replacement of the Collateral, Lender shall
retain a sufficient amount of the proceeds to pay all the
Indebtedness, and shall pay the balance to Grantor. Any proceeds
which have not been disbursed within six (6) months after their
receipt and which Grantor has not committed to the repair or
restoration of the Collateral shall be used to prepay the
Indebtedness.
Insurance Reserves. Lender may require Grantor to maintain with
Lender reserves for payment of insurance premiums, which reserves
shall be created by monthly payments from Grantor of the sum
estimated by Lender to be sufficient to produce, at least fifteen
(15) days before the premium due date, amounts at least equal to the
insurance premiums to be paid. If fifteen (15) days before payment
is due, the reserve funds are insufficient, Grantor shall upon
demand pay nay deficiency to Lender. The reserve funds shall be held
by Lender as a general deposit and shall constitute a non-interest-
bearing account which Lender may satisfy by payment of the insurance
premiums required to be paid by Grantor as they become due. Lender
does not hold the reserve funds in trust for Grantor, and Lender is
not the agent of Grantor for payment of the insurance premiums
required to be paid by Grantor. The responsibility for the payment
of the premiums shall remain Grantor's sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish to
Lender report on each existing policy of insurance showing such
information as Lender may reasonably request including the
following: (1) the name of insurer; (2) the risks insured; (3) the
amount of the policy; (4) the property insured; (5) the then current
value on the basis of which insurance has been obtained and the
manner of determining that value; and (6) the expiration date of the
policy. In addition, grantor shall upon request by Lender (however
not more often than annually) have an independent appraiser
satisfactory to Lender determine, as applicable, the cash value or
replacement cost of the Collateral.
Financing Statements. Grantor authorizes Lender to file a UCC
financing statement, or alternatively, a copy of this Agreement to
perfect Lender's request, Grantor additionally agrees to sign all
other documents that are necessary to perfect, protect, and continue
Lender's security interest in the Property. Grantor will pay all
filing fees, title transfer fees, and other fees and costs involved
unless prohibited by law or unless Lender is required by law to pay
such fees and costs. Grantor irrevocably appoints Lender to execute
documents necessary to transfer title if there is a default. Lender
may file a copy of this Agreement as a financing statement. If
Grantor changes Grantor's name or address, or the name or address of
any person granting a security interest under this Agreement
changes, Grantor will promptly notify the Lender of such change.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and
except as otherwise provided below with respect to accounts, Grantor may
have possession of the tangible personal property and beneficial use of
all the Collateral and may use it in any lawful manner not inconsistent
with this Agreement or the Related Documents, provided that Grantor's
right to possession and beneficial use shall not apply to any Collateral
where possession of the Collateral by Lender is required by law to perfect
Lender's security interest in such Collateral. Until otherwise notified by
Lender, Grantor may collect any of the Collateral consisting of accounts.
At any time and even though no Event of Default exists, Lender may
exercise its rights to collect the account and to notify account debtors
to make payments directly to Lender for application to the Indebtedness.
If Lender at any time has possession of any Collateral, whether before or
after an Event or Default, Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as
Lender, in Lender's sole discretion, shall deem appropriate under the
circumstances, by failure to honor any request by Grantor shall not of
itself be deemed to be a failure to exercise reasonable care. Lender shall
not be required to take any steps necessary to preserve any rights in the
Collateral against prior parties, nor to protect, preserve or maintain any
security interest given to secure the Indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails
to comply with any provision of this Agreement or any Related Document,
including but not limited to Grantor's failure to discharge or pay when
due any amounts Grantor is required to discharge or pay under this
Agreement or any Related Document, Lender on Grantor's behalf may (but
shall not be obligated to) take any action that Lender deems appropriate,
including but not limited to discharging or paying all taxes, liens,
security interest, encumbrances and other claims, at any time levied or
placed on the Collateral and paying all costs for during, maintaining and
preserving the Collateral. All such expenditures incurred or paid by
Lender for such purposes will then bear interest at the rate charged under
the Note from the date incurred or paid by Lender to the date of repayment
by Grantor. All such expenses will a part of the Indebtedness and, at
Lender's option, will (A) be payable on demand; (B) be added to the
balance of the Note and be apportioned and be payable with any installment
payments to become due during either (1) the term of any applicable
insurance policy; or (2) the remaining term of the Note; or (C) be treated
as a balloon payment which will be due and payable at the Note's maturity.
The Agreement also will secure payment of these amounts. Such right shall
be in addition to all other rights and remedies to which Lender may be
entitled upon Default.
DEFAULT. Each of the following shall constitute an Event of Default under
this Agreement:
Payment Default. Grantor fails to make any payment when due under the
Indebtedness.
Exhibit 10.12 Page 14 of 29
COMMERCIAL SECURITY AGREEMENT
(Continued) Page 3
===========================================================================
Other Defaults. Grantor fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement
or in any of the Related Documents or to comply with or to perform
any term, obligation. Covenant or condition contained in any other
agreement between Lender and Grantor.
Default in Favor of Third Parties. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Grantor's
property or Grantor's or any Grantor's ability to repay the
Indebtedness or perform their respective obligations under this
Agreement or any of the Related Documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this
Agreement or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.
Defective Collateralization. This Agreement or any of the Related
Documents ceased to be in full force and effect (including failure
of any collateral documents to create a valid and perfected security
interest or lien) at any time and for any reason.
Insolvency. The dissolution or termination of Grantor's existence as
a going business, the insolvency of Grantor, the appointment of a
receiver for any part of Grantor's property, any assignment for the
benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency
laws by or against Grantor.
Creditor or Forfeiture Proceeding. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self help,
repossession, or any other method, by any creditor of Grantor or by
any governmental agency against any collateral securing the
Indebtedness. This includes a garnishment on any of the Grantor's
accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by
Grantor as to the validity or reasonableness of the claim which is
the basis of the creditor or forfeiture proceeding and if Grantor
gives Lender written notice of the creditor or forfeiture proceeding
and deposits with Lender monies or a surety bond for the creditor or
forfeiture proceeding, in an amount determined by Lender, in its
sole discretion, as being an adequate reserve or bond for the
dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or Guarantor
dies or becomes incompetent or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness.
Adverse Change. A material adverse change occurs in Grantor's
financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is
curable and if Grantor has not been given a notice of a breach of
the same provision of this Agreement within the preceding twelve
(12) months, it may be cured if Grantor, after receiving written
notice from Lender demanding cure of such default: (1) cures the
default within fifteen (15) days; or (2) if the cure requires more
than fifteen (15) days, immediately initiates steps which Lender
deems in Lender's sole discretion to be sufficient to cure the
default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as
reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Even of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Florida Uniform Commercial Code. In addition and
without limitation, Lender may exercise any one or more of the following
remedies:
Accelerate Indebtedness. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to
pay, immediately due and payable, without notice of any kind to
Grantor.
Assemble Collateral. Lender may require Grantor to Deliver to Lender
all or any portion of the Collateral and any and all certificates of
title and other documents relating to the Collateral. Lender may
require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall have
full power to enter upon the property or Grantor to take possession
of and remove the Collateral. If the Collateral contains other goods
not covered by this Agreement at the time of repossession, Grantor
agrees Lender may take such other goods, provided that Lender makes
reasonable efforts to return them to Grantor after repossession.
Sell the Collateral. Lender shall have full power to sell, lease,
transfer, or otherwise deal with the Collateral or proceeds thereof
in Lender's own name or that of the Grantor. Lender may sell the
Collateral at public auction or private sale. Unless the Collateral
threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Lender will give Grantor, and other
persons as required by law, reasonable notice of the time and place
of the public sale, or the time after which any private sale or any
other disposition of the Collateral is to be made. However, no
notice need be provided to any person who, after Event of Default
occurs, enters into and authenticates an agreement waiving that
person's right to notification of sale. The requirements of
reasonable notice shall be met if such notice is given at least ten
(10) days before the time of the sale or disposition. All expenses
relation to the disposition of the Collateral, including without
limitation the expenses of retaking, holding, insuring, preparing
for sale and selling the Collateral, shall become a part of the
Indebtedness secured by this Agreement and shall be payable on
demand, with interest at the Note rate from date of expenditure
until repaid.
Appoint Receiver. In the event of a suit being instituted to
foreclose this Agreement, Lender shall be entitled to apply at any
time pending such foreclosure suit to the court having jurisdiction
thereof for the appointment of a receiver of any or all of the
Collateral, and of all rents incomes, profits, issues and revenues
thereof, from whatsoever source. The parties agree that the court
shall forthwith appoint such receiver with the usual powers and
duties of receivers in like cases. Such appointment shall be made by
the court as a matter of strict right to Lender and without notice
to Grantor, and without reference to the adequacy or inadequacy of
the value of the Collateral, or to Grantor's solvency or any other
party defendant to such suit. Grantor hereby specifically waives the
right to object to the appointment of a receiver and agrees that
such appointment shall be made as an admitted equity and as a matter
of absolute right to Lender, and consents to the appointment of any
officer or employee of Lender as receiver. Lender shall have the
right to have a receiver appointed to take possession of all or any
part of the Collateral, with the power to protect and preserve the
Collateral, to operate the Collateral preceding foreclosure or sale,
and to collect the Rents from the Collateral and apply the proceeds,
over and above the cost of the receivership, against the
Indebtedness. The receiver may serve without bond if permitted by
law. Lender's right to the appointment of a receiver shall exist
whether or not the apparent value of the Collateral exceeds the
Indebtedness by substantial amount. Employment by Lender shall not
disqualify a person from service as a receiver.
Collect Revenues, Apply Accounts. Lender, either itself or through a
receiver, may collect the payments, rents income, and revenues from
the Collateral. Lender may at any time in Lender's discretion
transfer any Collateral into Lender's own name or that of Lender's
nominee and receive the payments, rents income, and revenues
therefrom and hold the same as security for the Indebtedness or
apply it to payment of the Indebtedness in such order of preference
as Lender may determine. Insofar as the Collateral consists of
accounts, general intangibles, insurance policies, instruments,
chattel paper, chooses in action, or similar property, Lender may
demand, collect, receipt for, settle, compromise, adjust, xxx for,
foreclose, or realize on the Collateral as Lender may determine,
whether or not Indebtedness or Collateral is then due. For these
purposes, Lender may, on behalf of and in the name of Grantor,
receive, open and dispose of mail addressed to Grantor; change any
address to which mail and payments are to be sent; and endorse
notes, checks, drafts, money orders, documents of title, instruments
and items pertaining to payment, shipment, or storage of any
Collateral. To facilitate collection, Lender may notify account
debtors and obligors on any Collateral to make payments directly to
Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the Indebtedness due to Lender after
application of all amount received from the exercise of the rights
provided in this Agreement. Grantor shall be liable for a deficiency
even if the transaction described in this subsection is a sale of
accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and
remedies of a secured creditor under the provisions of the Uniformed
Commercial Code, as may be amended from time to time. In addition,
Lender shall have and may exercise ay or all other rights and
remedies it may have available at law, in equity, or otherwise.
Election of Remedies. Except as may be prohibited by applicable law,
all of Lender's rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election
by Lender to pursue any remedy shall not exclude pursuit of any
other remedy, and an election to make expenditures or to take action
to perform an obligation of Grantor under this Agreement, after
Grantor's failure to perform, shall not affect Lender's right to
declare a default and exercise its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this agreement:
Amendments. This agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of
Lenders costs and expenses, including Lender's reasonable attorneys'
fees and Lenders legal expenses, incurred in connection with the
enforcement of this Agreement. Lender may hire or pay
Exhibit 10.12 Page 15 of 29
COMMERCIAL SECURITY AGREEMENT
(Continued) Page 4
===========================================================================
someone else to help enforce this Agreement, and Grantor shall pay
the costs and expenses of such enforcement. Costs and expenses
include Lender's reasonable attorneys' fees and legal expenses
whether or not there is a lawsuit, including reasonable attorneys'
fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services.
Grantor also shall pay all court costs and such additional fees as
may be directed by the court.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
Governing Law. This Agreement will be governed by, construed and
enforced in accordance with federal law and the laws of the State of
Florida. This Agreement has been accepted by Lender in the State of
Florida.
Choice of Venue. If there is a lawsuit, Grantor agrees upon
Lender's request to submit to the jurisdiction of the courts of Palm
Beach County, State of Florida.
No Waiver by Lender. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement
shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision of this
Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Grantor, shall constitute a waiver of any of
Lender's rights or of any of Grantor's obligations as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance
shall not constitute continuing consent to subsequent instances
where such consent is required and in all cases such consent may be
granted or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement shall
be given in writing, and shall be effective when actually delivered,
when actually received by telefacsimile (unless otherwise required
by law), when deposited with a nationally recognized overnight
courier, or, if mailed, when deposited in the United States mail, as
first class, certified or registered mail postage prepaid, directed
to the addresses shown near the beginning of this Agreement. Any
party may change its address for notices under this Agreement by
giving written notice to the other parties, specifying that the
purpose of the notice is to change the party's address. For notice
purposes, Grantor agrees to keep Lender informed at all times of
Grantor's current address. Unless otherwise provided or required by
law, if there is more than one Grantor, any notice given by Lender
to any Grantor is deemed to be notice given to all Grantors.
Power of Attorney. Grantor hereby appoints Lender as Grantor's
irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect, amend, or to continue the security
interest granted in this Agreement or to demand termination of
filings of other secured parties. Lender may at any time, and
without further authorization from Grantor, file a carbon,
photographic or other reproduction of any financing statement or
this Agreement for use as a financing statement. Grantor will
reimburse Lender for all expenses for the perfection and the
continuation of the perfection of Lender's security interest in the
Collateral.
Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or unenforceable
as to any other circumstance. If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and
enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement. Unless otherwise
required by law, the illegality, invalidity, or unenforceability of
any provision of this Agreement shall not affect the legality,
validity or enforceability of any other provision of this Agreement.
Successors and Assigns. Subject to any limitations stated in this
Agreement on transfer of Grantor's interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their
successors and assigns. If ownership of the Collateral becomes
vested in a person other than Grantor, Lender, without notice to
Grantor, may deal with Grantor's successors with reference to this
Agreement and the Indebtedness by way of forbearance or extension
without releasing Grantor from the obligations of this Agreement or
liability under the Indebtedness.
Survival of Representations and Warranties. All representations,
warranties, and agreements made by Grantor in this Agreement shall
survive the execution and delivery of this Agreement, shall be
continuing in nature, and shall remain in full force and effect
until such time as Grantor's Indebtedness shall be paid in full.
Time is of the Essence. Time is of the essence in the performance
of this Agreement.
DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Agreement. Unless specifically
stated to the contrary, all references to dollar amounts shall mean
amounts in lawful money of the United States of America. Words and terms
stated in the singular shall include the plural, and the plural shall
include the singular, as the context may require. Words and terms not
otherwise defined in this Agreement shall have the meanings attributed to
such terms in the Uniform Commercial Code:
Agreement. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Commercial Security Agreement from time to time.
Borrower. The word "Borrower" means Petmed Express, Inc. and
includes all co-signers and co-makers signing the Note.
Collateral. The word "Collateral" means all of Grantor's right,
title and interest in and to all the Collateral as described in the
Collateral Description section of this Agreement.
Default. The word "Default" means the Default set forth in this
Agreement in the section titled "Default".
Environmental Laws. The words "Environmental Laws" mean any and all
state, federal and local statutes, regulations and ordinances
relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 ("XXXX"), the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq., or other applicable state or federal laws, rules, or
regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the
events of default set forth in this Agreement in the default section
of this Agreement.
Grantor. The word "Grantor" means Petmed Express, Inc.
Guarantor. The word "Guarantor" means any guarantor, surety, or
accommodation party of any of the Indebtedness.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to
Lender, including without limitation a guaranty of all or part of
the Note.
Hazardous Substances. The words "Hazardous Substances" mean
materials that, because of their quantity, concentration or
physical, chemical or infectious characteristics, nay cause or pose
a present or potential hazard to human health or the environment
when improperly used, treated, stored, disposed of, generated,
manufactured, transported or otherwise handled. The words
"Hazardous Substances" are used in their very broadest sense and
include without limitation any and all hazardous or toxic
substances, materials or waste as defined by or listed under the
Environmental Laws. The term "Hazardous Substances" also includes,
without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness
evidenced by the Note or Related Documents, including all principal
and interest together with all other indebtedness and costs and
expenses for which Grantor is responsible under this Agreement or
under any of the Related Documents.
Lender. The word "Lender" means RBC CENTURA BANK, its successors
and assigns.
Note. The word "Note" means the Note executed by Petmed Express,
Inc. in the principal amount of $6,000,000.00 dated November 2,
2004, together with all renewals of, extensions of, modifications
of, refinancings of, consolidations of, and substitutions for the
note or credit agreement.
Property. The word "Property" means all of Grantor's right, title
and interest in and to all the Property as described in the
"Collateral Description" section of this Agreement.
Related Documents. The words "Related Documents" mean all
promissory notes, credit agreements, loan agreements, environmental
agreements and documents, whether now or hereafter existing,
executed in connection with the Indebtedness.
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
NOVEMBER 2, 2004.
Exhibit 10.12 Page 16 of 29
COMMERCIAL SECURITY AGREEMENT
(Continued) Page 5
===========================================================================
GRANTOR:
PETMED EXPRESS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------
Xxxxx Xxxxxxxxxx, Treasurer of Petmed Express, Inc.
Exhibit 10.12 Page 17 of 29
COMMERCIAL GUARANTY
===========================================================================
Borrower: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
Guarantor: First Image Marketing, Inc.
0000 XX 00xx Xxx
Xxxxxxx Xxxxx, XX 00000
===========================================================================
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTUNUE UNLIMITED GUARANTY. For good and valuable consideration, First
Image Marketing, Inc. ("Guarantor") absolutely and unconditionally
guarantees and promises to pay to RBC CENTURA BANK ("Lender") or its
order, in legal tender of the United States of America, the indebtedness
(as that term is defined below) of Petmed Express, Inc. ("Borrower") to
Lender on the terms and conditions set forth in this guaranty. Under this
Guaranty, the liability of Guarantor is unlimited and the obligations of
Guarantor are continuing.
INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty
includes any and all of Borrower's indebtedness to Lender and is used in
the most comprehensive sense and means and includes any and all of the
Borrower's liabilities, obligations and debts to Lender, now existing or
hereinafter incurred or created, including, without limitation, all loans,
advances, interest, costs, debts, overdraft indebtedness, credit card
indebtedness, lease obligations, and liabilities of Borrower, or any of
them, and any present or future judgments against Borrower, or any of
them; and whether any such Indebtedness is voluntarily or involuntarily
incurred, due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined; whether Borrower may be liable
individually or jointly with others, or primarily or secondarily, or as
guarantor or surety; whether recovery on the Indebtedness may be or may
become barred or unenforceable against Borrower for any reason whatsoever;
and whether the indebtedness arise from transactions which may be voidable
on account of infancy, insanity, ultra xxxxx, or other wise.
DURATION OF GUARANTY. This Guaranty will take effect when received by
Lender without the necessity of nay acceptance by Lender, or any notice to
Guarantor or to Borrower, and will continue in full force until all
Indebtedness incurred or contracted before receipt by Lender of any notice
of revocation shall have been fully and finally paid and satisfied and all
Guarantor's other obligations under this Guaranty shall have been
performed in full. If Guarantor elects to revoke this Guaranty, Guarantor
may only do so in writing, Guarantor's written notice of revocation must
be mailed to Lender, by certified mail, at Lender's address listed above
or such other place as Lender may designate in writing. Written revocation
of this Guaranty will apply only advances or new Indebtedness created
after actual receipt by Lender of Guarantor's written revocation. For this
purpose and without limitation, the term "new Indebtedness" does not
include Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to
bind Guarantor for all Indebtedness incurred by Borrower or committed by
Lender prior to receipt of Guarantor's written notice of revocation,
including any extensions, renewals, substitutions or modifications of the
Indebtedness. All renewals, extensions, substitutions, and modifications
of the Indebtedness granted after Guarantor's revocation, are contemplated
under this Guaranty and, specifically will not be considered to be new
Indebtedness. This Guaranty shall bind Guarantor's estate as to
Indebtedness created both before and after Guarantor's death or
incapacity, regardless of Lender's actual notice of Guarantor's death.
Subject to the foregoing, Guarantor's executor or administrator or other
legal representative may terminate this Guaranty in the same manner in
which Guarantor mind have terminated it and with the same effect. Release
of any other guarantor or termination of any other guaranty of the
Indebtedness shall not affect the liability of the Guarantors under this
Guaranty. It is anticipated that fluctuations may occur in the aggregate
amount of Indebtedness covered by this Guaranty, and Guarantor
specifically acknowledges and agrees that reductions in the amount of
Indebtedness, eve to zero dollars ($0.00), prior to Guarantor's written
revocation of this Guaranty shall not constitute a termination of this
Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,
successors and assigns so long as any of the guaranteed Indebtedness
remains unpaid and even though the Indebtedness guaranteed may from time
to time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either
before or after any revocation hereof, without notice or demand and
without lessening Guarantor's liability under this Guaranty from time to
time. (A) Prior to revocation as set forth above, to make one or more
additional secure or unsecured loans to Borrower, to lease equipment or
other goods to Borrowers, or otherwise to extend additional credit to
Borrower; (B) to alter, compromise, renew, extend, accelerate, or other
wise change one or more times the time for payment or other terms of the
Indebtedness or any part of the Indebtedness, including increases and
decreases of the rate interest on the Indebtedness; extensions may be
repeated and may be for longer than the original loan term; (C) to take
and hold security for the payment of this Guaranty or the Indebtedness,
and exchange, enforce, waive, subordinate, fail or decide not to perfect,
and release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to xxx, or deal with any
one or more of Borrower's sureties, endorsers, or other guarantors on any
terms or in any manner Lender may choose; (E) to determine how, when and
what application of payments and credits shall be made on the Indebtedness
(F) to apply such security and direct the order or manner of sale thereof,
including without limitation, any nonjudicial sale permitted by the terms
of the controlling security agreement or deed of trust, as Lender in its
discretion may determine; (G) to sell, transfer, assign or grant
participations in all or any part of the indebtedness; and (H) to assign
or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any kind
have been made to Guarantor which would limit or qualify in any way the
terms of this Guaranty; (B) This Guaranty is executed at Borrower's
request and not at the request of Lender; (C) Guarantor has full power,
right and authority to enter into this Guaranty; (D) the provisions of
this Guaranty do not conflict with or result in a default under any
agreement or other instrument binding upon Guarantor and do not result in
a violation of any law, regulation, court decree or other applicable to
Guarantor; (E) Guarantor has not and will not, without the prior written
consent of lender, sell lease, assign, encumber, hypothecate, transfer or
otherwise dispose of all or substantially all Guarantor's assets, or any
interest therein; (F) upon Lender's request, Guarantor will provide to
Lender financial and credit information in form acceptable to Lender, and
all such financial information which currently has been and all future
financial information which will be provided to Lender is and will be true
and correct in all material respects and fairly present Guarantor's
financial condition as of the dates the financial information is provided;
(G) no material adverse change has occurred in Guarantor's financial
condition since the date of the most recent financial statements provided
to Lender and no event has occurred which may materially adversely affect
Guarantor's financial condition; (H) no litigation, claim investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Guarantor is pending or threatened; (I) Lender has made no
representation to Guarantor as to the creditworthiness of Borrower; and
(J) Guarantor has established adequate means of obtaining from Borrower on
a continued basis information regarding borrower's financial condition.
Guarantor agrees to keep adequately informed from such means of any facts,
events or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request
for information, Lender shall have no obligation to disclose to Guarantor
any information or documents acquired by Lender in the course of its
relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor
waives any right to require Lender (A) to continue lending money or extend
other credit to Borrower; (B) to make any presentment, protest, demand, or
notice of any kind, including notice of any nonpayment of the Indebtedness
or of any nonpayment related to any collateral, or notice of any action or
nonaction on the part of Borrower, Lender, any surety, endorser, or other
guarantor in connection with the Indebtedness or in connection or in
connection with the creation of new or additional loans or obligations;
(C) to resort for payment or to proceed directly or at once against any
person, including Borrower or any other guarantor; (D) to proceed directly
against or exhaust any collateral held by Lender from Borrower, any other
guarantor, or any other person; (E) to pursue any other remedy within
Lender's power; (F) to commit any act or omission of any kind or at any
time, with respect to any matter whatsoever.
Guarantor also waives any and all rights or defenses arising by reason of
(A)any "one action" or "anti-deficiency" law or any other law which may
prevent Lender form binging any action, including a claim for deficiency,
against Guarantor before or after Lender's commencement or completion of
any foreclosure action, either judicially or by exercise of a power of
sale; (B) any election of remedies by Lender which destroys otherwise
adversely affects Guarantor's subrogation rights or Guarantor's rights to
proceed against Borrower for reimbursement, including without limitation,
any loss of rights Guarantor may suffer by reason of any law limiting,
qualifying, or discharging the Indebtedness; (C) any disability or other
defense of Borrower, of any other guarantor, or of any other person or by
reason of cessation of Borrower's liability from any cause whatsoever,
other than payment in full in legal tender, of the Indebtedness; (D) any
right to claim discharge of the Indebtedness on the basis of unjustified
impairment of any collateral for the Indebtedness; (E) Any statute of
limitations, if at any time any action or suit brought by Lender against
Guarantor is commenced, there is outstanding Indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or
(F) any defenses given to guarantors at law or any equity other than
actual payment and performance of the Indebtedness. If payment is made by
Borrower, whether voluntarily or otherwise, or by any third party, on the
Indebtedness and thereafter Lender is forced to remit the amount of that
payment to Borrower's trustee in bankruptcy or to any similar person under
any federal or state bankruptcy law or law for the relief of debtors, the
Indebtedness shall be considered unpaid for the purpose of the enforcement
of the Guaranty.
Guarantor further waives and agrees not to assert or claim at nay time any
deductions to the mount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar right, whether
such claim, demand or right may be asserted by the
Exhibit 10.12 Page 18 of 29
COMMERCIAL GUARANTY
(Continued) Page 2
===========================================================================
Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's
full knowledge of its significance and consequences and that, under
circumstance, the waivers are reasonable and not contrary to public policy
or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter
created, shall be superior to any claim that Guarantor may now have or
hereafter acquire against Borrower, whether or not Borrower becomes
insolvent. Guarantor hereby expressly subordinates any claim Guarantor may
have against Borrower, upon any account whatsoever, to any claim that
Lender may now or hereafter have against Borrower. In the event of
insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender
and shall be fist applied by Lender to the Indebtedness of Borrower to
Lender. Guarantor does hereby assign to Lender all claims which it may
have or acquire against Borrower or against any assignee or trustee in
bankruptcy or Borrower; provided however, that such assignment shall be
effective only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness. If Lender so requests, any notes or credit
agreements now or hereafter evidencing any debts or obligations of
Borrower to Guarantor shall be marked with a legend that the same are
subject to this Guaranty and shall be delivered to Lender. Guarantor
agrees, and Lender is hereby authorized, in the name of Guarantor, form
time to time to file financing statements and continuation statements and
to execute documents and to take such other actions as Lender deems
necessary or appropriate to perfect, preserve and enforce its rights under
this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Guaranty:
Amendments. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Guaranty. No alterations of or
amendment to this Guaranty shall be effective unless given in
writing signed by the parties sought to be charged or bound by the
alteration or amendment.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand the
all of Lenders costs and expenses, including Lender's reasonable
attorneys' fees and Lender's legal expenses, incurred in connection
with the enforcement of this Guaranty. Lender may hire or pay
someone else to help enforce this Guaranty, and Guarantor shall pay
the costs and expenses of such enforcement. Costs and expenses
include Lender's reasonable attorney's fees and legal expenses
whether or not there is a lawsuit, including reasonable attorneys'
fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction).
Appeals and any anticipated post-judgment collection services.
Guarantor also shall pay all court costs and such add ional fees as
may be directed by the court.
Caption Headings. Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Guaranty.
Governing Law. This Guaranty will be governed by, construed and
enforced in accordance with federal law and the laws of the state of
Florida. This Guaranty has been accepted by Lender in the State of
Florida.
Choice of Venue. If there is a lawsuit, Guarantor agrees upon
Lender's request to submit to the jurisdiction of the courts of Palm
Beach County, State of Florida.
Integration. Guarantor further agrees that Guarantor has read and
fully understands the terms of this Guaranty; Guarantor has had the
opportunity to be advised by Guarantor's attorney with respect to
this Guaranty; the Guaranty fully reflects Guarantor's intentions
and parol evidence is not required to interpret the terms of this
Guaranty. Guarantor hereby indemnifies and holds Lender harmless
from all losses, claims, damages, and costs (including Lender's
attorneys' fees) suffered or incurred by Lender as a result of any
breach by Guarantor of the warranties, representations and
agreements of this paragraphs.
Interpretation. In all cases where there is more than one Borrower
or Guarantor, then all words used in this Guaranty in the singular
shall be deemed to have been used in the plural where the context
and construction so require; and where there is more than one
Borrower named in this Guaranty or when this Guaranty is executed by
more than one Guarantor, the words "Borrower" and "Guarantor"
respectively shall mean all and nay one or more of them. The words
"Guarantor," "Borrower," and "Lender" include the heirs,
successors, assigns, and transferees of each of them. If a court
finds that any provision of this Guaranty is not valid or should not
be enforced, that fact by itself will not mean that the rest of the
Guaranty will not be valid or enforced. Therefore, a court will
enforce the rest of the provisions of this Guaranty even if a
provision of this Guaranty may be found to be invalid or
unenforceable. If any one or more of Borrower or Guarantor are
corporations, partnerships, limited liability companies, or similar
entities, it is not necessary for Lender to inquire into the powers
of Borrower or Guarantor or of the officers, directors, partners,
managers, or other agents acting or purporting to act on their
behalf, and any indebtedness made or created reliance upo9n the
professed exercise of such powers shall be guaranteed under this
Guaranty.
Notices. Any notice required to be given under this Guaranty shall
be given in writing , and, except for revocation notices by
Guarantor, shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class,
certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Guaranty. All revocation
notices by Guarantor shall be in writing and shall be effective upon
delivery to Lender as provided in the section of this Guaranty
entitled "DURATION OF GUARANTY." Any party may change its address
for notices under this Guaranty by giving written notice to the
other parties, specifying that the purpose of the notice is to
change the party's address. For notice purposes, Guarantor agrees to
keep Lender informed at all times of Guarantor's current address.
Unless otherwise provided or required by law, if there is more than
one Guarantor, any notice given by Lender to any Guarantor is deemed
to be notice given to all Guarantors.
No waiver by Lender. Lender shall not be deemed to have waived any
rights under this Guaranty unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Guaranty
shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any
other provision of this Guaranty. No prior waiver by Lender, nor any
course of dealing between Lender and Guarantor, shall constitute a
waiver of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the consent of
Lender is required under this Guaranty, the granting of such consent
by Lender is required under this Guaranty, the granting of such
consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole
discretion of Lender.
Successors and Assigns. Subject to any limitations stated in this
Guaranty on transfer of Guarantor's interest, this Guaranty shall be
binding upon and inure to the benefit of the parties, their
successors and assigns.
DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Guaranty. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in
lawful money of the United States of America. Words and terms are used in
the singular shall include the plural, and the plural shall include the
singular, as the context may require. Words and terms not otherwise defied
in this Guaranty shall have the meaning attributed to such terms in the
Uniformed Commercial Code:
Borrower. The word "Borrower" means Petmed Express, Inc. and
includes all co-signers and co-makers signing the Note.
Guarantor. The word "Guarantor" means each and every person or
entity signing this Guaranty, including without limitation First
Image Marketing, Inc.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to
Lender, including without limitation a guaranty of all or party of
the Note.
Indebtedness. The word "Indebtedness" means Borrower's indebtedness
to Lender as more particularly described in this Guaranty.
Lender. The word "Lender" means RBC CENTURA BANK, its successors and
assigns.
Note. The word "Note" means and includes without limitation all of
Borrower's promissory notes and/or credit agreements evidencing
Borrower's loan obligations in favor of Lender, together with all
renewals of, extensions of, modifications of, refinancings of,
consolidations of and substitutions for promissory notes or credit
agreements.
Related Documents. The words "Related Documents" mean all promissory
notes, credit agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
Exhibit 10.12 Page 19 of 29
COMMERCIAL GUARANTY
(Continued) Page 3
===========================================================================
SUCH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF
THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND
DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE
UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION
OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS
GUARANTY EFFECTIVE. THIS GUARANTY IS DATED NOVEMBER 2, 2004.
GUARANTOR:
FIRST IMAGE MARKETING, INC.
By: /s/ Xxxx Xxxxx
-------------------
Xxxx Xxxxx, Director of First Image Marketing, Inc.
===========================================================================
Exhibit 10.12 Page 20 of 29
COMMERCIAL GUARANTY
===========================================================================
Borrower: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
Guarantor: Southeastern Veterinary Exports, Inc.
0000 XX 00xx Xxx
Xxxxxxx Xxxxx, XX 00000
===========================================================================
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTUNUE UNLIMITED GUARANTY. For good and valuable consideration,
Southeastern Veterinary Exports, Inc. ("Guarantor") absolutely and
unconditionally guarantees and promises to pay to RBC CENTURA BANK
("Lender") or its order, in legal tender of the United States of America,
the indebtedness (as that term is defined below) of Petmed Express, Inc.
("Borrower") to Lender on the terms and conditions set forth in this
guaranty. Under this Guaranty, the liability of Guarantor is unlimited and
the obligations of Guarantor are continuing.
INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty
includes any and all of Borrower's indebtedness to Lender and is used in
the most comprehensive sense and means and includes any and all of the
Borrower's liabilities, obligations and debts to Lender, now existing or
hereinafter incurred or created, including, without limitation, all loans,
advances, interest, costs, debts, overdraft indebtedness, credit card
indebtedness, lease obligations, and liabilities of Borrower, or any of
them, and any present or future judgments against Borrower, or any of
them; and whether any such Indebtedness is voluntarily or involuntarily
incurred, due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined; whether Borrower may be liable
individually or jointly with others, or primarily or secondarily, or as
guarantor or surety; whether recovery on the Indebtedness may be or may
become barred or unenforceable against Borrower for any reason whatsoever;
and whether the indebtedness arise from transactions which may be voidable
on account of infancy, insanity, ultra xxxxx, or other wise.
DURATION OF GUARANTY. This Guaranty will take effect when received by
Lender without the necessity of nay acceptance by Lender, or any notice to
Guarantor or to Borrower, and will continue in full force until all
Indebtedness incurred or contracted before receipt by Lender of any notice
of revocation shall have been fully and finally paid and satisfied and all
Guarantor's other obligations under this Guaranty shall have been
performed in full. If Guarantor elects to revoke this Guaranty, Guarantor
may only do so in writing, Guarantor's written notice of revocation must
be mailed to Lender, by certified mail, at Lender's address listed above
or such other place as Lender may designate in writing. Written revocation
of this Guaranty will apply only advances or new Indebtedness created
after actual receipt by Lender of Guarantor's written revocation. For this
purpose and without limitation, the term "new Indebtedness" does not
include Indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to
bind Guarantor for all Indebtedness incurred by Borrower or committed by
Lender prior to receipt of Guarantor's written notice of revocation,
including any extensions, renewals, substitutions or modifications of the
Indebtedness. All renewals, extensions, substitutions, and modifications
of the Indebtedness granted after Guarantor's revocation, are contemplated
under this Guaranty and, specifically will not be considered to be new
Indebtedness. This Guaranty shall bind Guarantor's estate as to
Indebtedness created both before and after Guarantor's death or
incapacity, regardless of Lender's actual notice of Guarantor's death.
Subject to the foregoing, Guarantor's executor or administrator or other
legal representative may terminate this Guaranty in the same manner in
which Guarantor mind have terminated it and with the same effect. Release
of any other guarantor or termination of any other guaranty of the
Indebtedness shall not affect the liability of the Guarantors under this
Guaranty. It is anticipated that fluctuations may occur in the aggregate
amount of Indebtedness covered by this Guaranty, and Guarantor
specifically acknowledges and agrees that reductions in the amount of
Indebtedness, eve to zero dollars ($0.00), prior to Guarantor's written
revocation of this Guaranty shall not constitute a termination of this
Guaranty. This Guaranty is binding upon Guarantor and Guarantor's heirs,
successors and assigns so long as any of the guaranteed Indebtedness
remains unpaid and even though the Indebtedness guaranteed may from time
to time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either
before or after any revocation hereof, without notice or demand and
without lessening Guarantor's liability under this Guaranty from time to
time. (A) Prior to revocation as set forth above, to make one or more
additional secure or unsecured loans to Borrower, to lease equipment or
other goods to Borrowers, or otherwise to extend additional credit to
Borrower; (B) to alter, compromise, renew, extend, accelerate, or other
wise change one or more times the time for payment or other terms of the
Indebtedness or any part of the Indebtedness, including increases and
decreases of the rate interest on the Indebtedness; extensions may be
repeated and may be for longer than the original loan term; (C) to take
and hold security for the payment of this Guaranty or the Indebtedness,
and exchange, enforce, waive, subordinate, fail or decide not to perfect,
and release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to xxx, or deal with any
one or more of Borrower's sureties, endorsers, or other guarantors on any
terms or in any manner Lender may choose; (E) to determine how, when and
what application of payments and credits shall be made on the Indebtedness
(F) to apply such security and direct the order or manner of sale thereof,
including without limitation, any nonjudicial sale permitted by the terms
of the controlling security agreement or deed of trust, as Lender in its
discretion may determine; (G) to sell, transfer, assign or grant
participations in all or any part of the indebtedness; and (H) to assign
or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any kind
have been made to Guarantor which would limit or qualify in any way the
terms of this Guaranty; (B) This Guaranty is executed at Borrower's
request and not at the request of Lender; (C) Guarantor has full power,
right and authority to enter into this Guaranty; (D) the provisions of
this Guaranty do not conflict with or result in a default under any
agreement or other instrument binding upon Guarantor and do not result in
a violation of any law, regulation, court decree or other applicable to
Guarantor; (E) Guarantor has not and will not, without the prior written
consent of lender, sell lease, assign, encumber, hypothecate, transfer or
otherwise dispose of all or substantially all Guarantor's assets, or any
interest therein; (F) upon Lender's request, Guarantor will provide to
Lender financial and credit information in form acceptable to Lender, and
all such financial information which currently has been and all future
financial information which will be provided to Lender is and will be true
and correct in all material respects and fairly present Guarantor's
financial condition as of the dates the financial information is provided;
(G) no material adverse change has occurred in Guarantor's financial
condition since the date of the most recent financial statements provided
to Lender and no event has occurred which may materially adversely affect
Guarantor's financial condition; (H) no litigation, claim investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Guarantor is pending or threatened; (I) Lender has made no
representation to Guarantor as to the creditworthiness of Borrower; and
(J) Guarantor has established adequate means of obtaining from Borrower on
a continued basis information regarding borrower's financial condition.
Guarantor agrees to keep adequately informed from such means of any facts,
events or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request
for information, Lender shall have no obligation to disclose to Guarantor
any information or documents acquired by Lender in the course of its
relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor
waives any right to require Lender (A) to continue lending money or extend
other credit to Borrower; (B) to make any presentment, protest, demand, or
notice of any kind, including notice of any nonpayment of the Indebtedness
or of any nonpayment related to any collateral, or notice of any action or
nonaction on the part of Borrower, Lender, any surety, endorser, or other
guarantor in connection with the Indebtedness or in connection or in
connection with the creation of new or additional loans or obligations;
(C) to resort for payment or to proceed directly or at once against any
person, including Borrower or any other guarantor; (D) to proceed directly
against or exhaust any collateral held by Lender from Borrower, any other
guarantor, or any other person; (E) to pursue any other remedy within
Lender's power; (F) to commit any act or omission of any kind or at any
time, with respect to any matter whatsoever.
Guarantor also waives any and all rights or defenses arising by reason of
(A)any "one action" or "anti-deficiency" law or any other law which may
prevent Lender form binging any action, including a claim for deficiency,
against Guarantor before or after Lender's commencement or completion of
any foreclosure action, either judicially or by exercise of a power of
sale; (B) any election of remedies by Lender which destroys otherwise
adversely affects Guarantor's subrogation rights or Guarantor's rights to
proceed against Borrower for reimbursement, including without limitation,
any loss of rights Guarantor may suffer by reason of any law limiting,
qualifying, or discharging the Indebtedness; (C) any disability or other
defense of Borrower, of any other guarantor, or of any other person or by
reason of cessation of Borrower's liability from any cause whatsoever,
other than payment in full in legal tender, of the Indebtedness; (D) any
right to claim discharge of the Indebtedness on the basis of unjustified
impairment of any collateral for the Indebtedness; (E) Any statute of
limitations, if at any time any action or suit brought by Lender against
Guarantor is commenced, there is outstanding Indebtedness of Borrower to
Lender which is not barred by any applicable statute of limitations; or
(F) any defenses given to guarantors at law or any equity other than
actual payment and performance of the Indebtedness. If payment is made by
Borrower, whether voluntarily or otherwise, or by any third party, on the
Indebtedness and thereafter Lender is forced to remit the amount of that
payment to Borrower's trustee in bankruptcy or to any similar person under
any federal or state bankruptcy law or law for the relief of debtors, the
Indebtedness shall be considered unpaid for the purpose of the enforcement
of the Guaranty.
Guarantor further waives and agrees not to assert or claim at nay time any
deductions to the mount guaranteed under this Guaranty for any claim of
setoff, counterclaim, counter demand, recoupment or similar tight, whether
such claim, demand or right may be asserted by the
Exhibit 10.12 Page 21 of 29
COMMERCIAL GUARANTY
(Continued) Page 2
===========================================================================
Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and
agrees that each of the waivers set forth above is made with Guarantor's
full knowledge of its significance and consequences and that, under
circumstance, the waivers are reasonable and not contrary to public policy
or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter
created, shall be superior to any claim that Guarantor may now have or
hereafter acquire against Borrower, whether or not Borrower becomes
insolvent. Guarantor hereby expressly subordinates any claim Guarantor may
have against Borrower, upon any account whatsoever, to any claim that
Lender may now or hereafter have against Borrower. In the event of
insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Lender and Guarantor shall be paid to Lender
and shall be fist applied by Lender to the Indebtedness of Borrower to
Lender. Guarantor does hereby assign to Lender all claims which it may
have or acquire against Borrower or against any assignee or trustee in
bankruptcy or Borrower; provided however, that such assignment shall be
effective only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness. If Lender so requests, any notes or credit
agreements now or hereafter evidencing any debts or obligations of
Borrower to Guarantor shall be marked with a legend that the same are
subject to this Guaranty and shall be delivered to Lender. Guarantor
agrees, and Lender is hereby authorized, in the name of Guarantor, form
time to time to file financing statements and continuation statements and
to execute documents and to take such other actions as Lender deems
necessary or appropriate to perfect, preserve and enforce its rights under
this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Guaranty:
Amendments. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Guaranty. No alterations of or
amendment to this Guaranty shall be effective unless given in
writing signed by the parties sought to be charged or bound by the
alteration or amendment.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand the
all of Lenders costs and expenses, including Lender's reasonable
attorneys' fees and Lender's legal expenses, incurred in connection
with the enforcement of this Guaranty. Lender may hire or pay
someone else to help enforce this Guaranty, and Guarantor shall pay
the costs and expenses of such enforcement. Costs and expenses
include Lender's reasonable attorney's fees and legal expenses
whether or not there is a lawsuit, including reasonable attorneys'
fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction).
Appeals and any anticipated post-judgment collection services.
Guarantor also shall pay all court costs and such add ional fees as
may be directed by the court.
Caption Headings. Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Guaranty.
Governing Law. This Guaranty will be governed by, construed and
enforced in accordance with federal law and the laws of the state of
Florida. This Guaranty has been accepted by Lender in the State of
Florida.
Choice of Venue. If there is a lawsuit, Guarantor agrees upon
Lender's request to submit to the jurisdiction of the courts of Palm
Beach County, State of Florida.
Integration. Guarantor further agrees that Guarantor has read and
fully understands the terms of this Guaranty; Guarantor has had the
opportunity to be advised by Guarantor's attorney with respect to
this Guaranty; the Guaranty fully reflects Guarantor's intentions
and parol evidence is not required to interpret the terms of this
Guaranty. Guarantor hereby indemnifies and holds Lender harmless
from all losses, claims, damages, and costs (including Lender's
attorneys' fees) suffered or incurred by Lender as a result of any
breach by Guarantor of the warranties, representations and
agreements of this paragraphs.
Interpretation. In all cases where there is more than one Borrower
or Guarantor, then all words used in this Guaranty in the singular
shall be deemed to have been used in the plural where the context
and construction so require; and where there is more than one
Borrower named in this Guaranty or when this Guaranty is executed by
more than one Guarantor, the words "Borrower" and "Guarantor"
respectively shall mean all and nay one or more of them. The words
"Guarantor," "Borrower," and "Lender" include the heirs,
successors, assigns, and transferees of each of them. If a court
finds that any provision of this Guaranty is not valid or should not
be enforced, that fact by itself will not mean that the rest of the
Guaranty will not be valid or enforced. Therefore, a court will
enforce the rest of the provisions of this Guaranty even if a
provision of this Guaranty may be found to be invalid or
unenforceable. If any one or more of Borrower or Guarantor are
corporations, partnerships, limited liability companies, or similar
entities, it is not necessary for Lender to inquire into the powers
of Borrower or Guarantor or of the officers, directors, partners,
managers, or other agents acting or purporting to act on their
behalf, and any indebtedness made or created reliance upo9n the
professed exercise of such powers shall be guaranteed under this
Guaranty.
Notices. Any notice required to be given under this Guaranty shall
be given in writing , and, except for revocation notices by
Guarantor, shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class,
certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Guaranty. All revocation
notices by Guarantor shall be in writing and shall be effective upon
delivery to Lender as provided in the section of this Guaranty
entitled "DURATION OF GUARANTY." Any party may change its address
for notices under this Guaranty by giving written notice to the
other parties, specifying that the purpose of the notice is to
change the party's address. For notice purposes, Guarantor agrees to
keep Lender informed at all times of Guarantor's current address.
Unless otherwise provided or required by law, if there is more than
one Guarantor, any notice given by Lender to any Guarantor is deemed
to be notice given to all Guarantors.
No waiver by Lender. Lender shall not be deemed to have waived any
rights under this Guaranty unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in
exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Guaranty
shall not prejudice or constitute a waiver of Lender's right
otherwise to demand strict compliance with that provision or any
other provision of this Guaranty. No prior waiver by Lender, nor any
course of dealing between Lender and Guarantor, shall constitute a
waiver of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the consent of
Lender is required under this Guaranty, the granting of such consent
by Lender is required under this Guaranty, the granting of such
consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole
discretion of Lender.
Successors and Assigns. Subject to any limitations stated in this
Guaranty on transfer of Guarantor's interest, this Guaranty shall be
binding upon and inure to the benefit of the parties, their
successors and assigns.
DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Guaranty. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in
lawful money of the United States of America. Words and terms are used in
the singular shall include the plural, and the plural shall include the
singular, as the context may require. Words and terms not otherwise defied
in this Guaranty shall have the meaning attributed to such terms in the
Uniformed Commercial Code:
Borrower. The word "Borrower" means Petmed Express, Inc. and
includes all co-signers and co-makers signing the Note.
Guarantor. The word "Guarantor" means each and every person or
entity signing this Guaranty, including without limitation First
Image Marketing, Inc.
Guaranty. The word "Guaranty" means the guaranty from Guarantor to
Lender, including without limitation a guaranty of all or party of
the Note.
Indebtedness. The word "Indebtedness" means Borrower's indebtedness
to Lender as more particularly described in this Guaranty.
Lender. The word "Lender" means RBC CENTURA BANK, its successors and
assigns.
Note. The word "Note" means and includes without limitation all of
Borrower's promissory notes and/or credit agreements evidencing
Borrower's loan obligations in favor of Lender, together with all
renewals of, extensions of, modifications of, refinancings of,
consolidations of and substitutions for promissory notes or credit
agreements.
Related Documents. The words "Related Documents" mean all promissory
notes, credit agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
Exhibit 10.12 Page 22 of 29
COMMERCIAL GUARANTY
(Continued) Page 3
===========================================================================
SUCH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF
THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND
DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE
UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION
OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS
GUARANTY EFFECTIVE. THIS GUARANTY IS DATED NOVEMBER 2, 2004.
GUARANTOR:
SOUTHEASTERN VETERINARY EXPORTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------
Xxxxx Xxxxxxxxxx, President of Southeastern Veterinary Exports, Inc.
===========================================================================
Exhibit 10.12 Page 23 of 29
AGREEMENT TO PROVIDE INSURANCE
===========================================================================
Grantor: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
===========================================================================
INSURANCE REQUIREMENTS. Grantor, Petmed Express, Inc. ("Grantor"),
understands that insurance coverage is required in connection with the
extending of a loan or the providing of other financial accommodations to
Grantor by Lender. These requirements are set forth in the security
documents for the loan. The following minimum insurance coverages must be
provided on the following described collateral (the "Collateral"):
Collateral: All Inventory and EquipmentAll .
Type: All risks, including fire, theft and liability.
Amount: Loan Amount.
Basis: Replacement value.
Endorsements: Lender loss payable clause with stipulation that will
not be cancelled or diminished without a
minimum of thirty (30) days prior written notice to Lender.
Comments: Customer #.
Latest Delivery Date: By the loan closing date.
INSURANCE COMPANY. Grantor may obtain insurance from any insurance
company Grantor may choose that is reasonably acceptable to Lender.
Grantor understands that credit may not be denied solely because insurance
was not purchased through Lender.
INSURANCE MAILING ADDRESS. All documents and other materials relating to
insurance for this loan should be mailed, delivered or directed to the
following address:
RBC CENTURA BANK
X.X. Xxx 0000
Xxxxx Xxxxx, XX 00000
FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, on the
latest delivery date stated above, proof of the required insurance as
provided above, with an effective date of November 2, 2004, or earlier.
Grantor acknowledges and agrees that if Grantor fails to provide any
required insurance or fails to continue such insurance in force, Lender
may do so at Grantor's expense as provided in the applicable security
document. GRANTOR ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYUSICAL
DAMAGE TO THE COLLATERAL, UP TO AN AMOUNT EQUAL TO THE LESSER OF (1) THE
UNPAID BALANCE OF THE DEBT, EXCLUDING ANY UNEARNED FINANCE CHARGES, OR (2)
THE VALUE OF THE COLLATERAL; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL
MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC
LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE
REQUIREMENTS OF ANY FINANCIAL RESPONSIBILITY LAWS.
AUTHORIZATION. For purposes of insurance coverage on the Collateral,
Grantor authorizes Lender to provide to any person (including any
insurance agent or company) all information Lender deems appropriate,
whether regarding the Collateral, the loan or other financial
accommodations, or both.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO
PROVIDE INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
NOVEMBER 2, 2004.
GRANTOR:
PETMED EXPRESS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------
Xxxxx Xxxxxxxxxx, Treasurer of Petmed Express, Inc.
Exhibit 10.12 Page 24 of 29
NOTICE OF INSURANCE REQUIREMENTS
===========================================================================
Grantor: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
===========================================================================
TO: ATTN: Insurance Agent DATE: November 2, 2004
RE: Policy Number(s):
Insurance Companies/Company:
Dear Insurance Agent:
Grantor, Petmed Express, Inc. ("Grantor") is obtaining a loan from RBC
CENTURA BANK. Please send appropriate evidence of insurance to RBC
CENTURA BANK, together with the requested endorsements, on the
following property, which Grantor is giving as security for the loan.
Collateral: All Inventory and EquipmentAll .
Type: All risks, including fire theft and liability.
Amount: Loan Amount.
Basis: Replacement value.
Endorsements: Lender loss payable clause with stipulation
that coverage will not be cancelled or diminished without a
minimum of thirty (30) days prior written notice to Lender.
Comments: Customer #.
Latest Delivery Date: By the loan closing date.
GRANTOR:
PETMED EXPRESS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------
Xxxxx Xxxxxxxxxx, Treasurer of Petmed Express, Inc.
Exhibit 10.12 Page 25 of 29
PROMISSORY NOTE
===========================================================================
Borrower: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
===========================================================================
Principal Amount: $6,000,000.00 Initial Rate: 3.490%
Date of Note: November 2, 2004
PROMISE TO PAY. Petmed Express, Inc. ("Borrower") promises to pay to RBC
CENTURA BANK ("Lender"), or order, in lawful money of the United States of
America, the principal amount of Six Million & 00/100 Dollars
($6,000,000.00) or so much as may be outstanding, together with interest
on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each
advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on November 1, 2005. In
addition, Borrower will pay regular monthly payments of all accrued unpaid
interest due as of each payment date, beginning December 1, 2004, with all
subsequent interest payments to be due on the same day of each month after
that. Unless otherwise agreed or required by applicable law, payments
will be applied first to any unpaid collection costs; then to any late
charges; then to any accrued unpaid interest; and then to principal. The
annual interest rate for this Note is computed on a 365/360 basis; that
is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding by the actual number of days the
principal balance is outstanding. Borrower will pay Lender at Lender's
address shown above or at such other place as Lender may designate in
writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
change from time to time based on changes in an independent index which is
the LIBOR Base Rate (the "Index"). The Index is not necessarily the
lowest rate charged by Lender on its loans. If the Index becomes
unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower the
current Index rate upon Borrower's request. The interest rate change will
not occur more often than each month. The "LIBOR Base Rate: is the London
Interbank Offer Rate for U.S. dollars for a term of one month which
appears on the Telerate Page 3750, Bloomberg Professional screen BBAM (or
any generally recognized successor method or means of publication) as of
11:00 a.m., London time, two (2) London business days prior to the day on
which the rate will become effective. The rate will initially become
effective on the date of the Note as shown on the face of the Note.
Thereafter, the rate will change and a new rate will become effective on
the first calendar day of each succeeding month. If for any reason, the
London Interbank Offer Rate is not available, the "LIBOR Base Rate" shall
mean the rate per annum which banks charge each other in a market
comparable to England's Eurodollar market on short-term money in U.S.
dollars for an amount substantially equivalent to the principal amount due
under this Note, as determined at 11:00 A.M. London time, two (2) London
Business days prior to the day on which the rate will become effective, as
determined in Bank's sole discretion. Bank determination of such interest
rate shall be conclusive, absent manifest error. Borrower understands
that Lender may make loans based on other rates as well. The Index
currently is 1.990% per annum. The interest rate to be applied to the
unpaid principal balance of this Note will be at a rate of 1.500
percentage pints over the Index, resulting in an initial rate of 3.490%
per annum. NOTICE: Under no circumstances will the effective rate of
interest on this Note be more than the maximum rate allowed by applicable
law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be
subject to refund upon early payment (whether voluntary or as a result of
default), except as otherwise required by law. Except for the foregoing,
Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue
to make payments of accrued unpaid interest. Rather, early payments will
reduce the principal balance due. Borrower agrees not to send Lender
payments marked "paid in full", "without recourse", or similar language.
If Borrower sends such a payment, Lender may accept it without losing any
of Lender's rights under this Note, and Borrower will remain obligated to
pay any further amount owed to Lender. All written communications
concerning disputed amounts, including any check or other payment
instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or
delivered to: RBC CENTURA BANK, Boca Raton, FL, Lending Service Center
(FL), 0000 XXX Xxxx., Xxxxx 000X, Xxxx Xxxxx Xxxxxxx, XX 00000.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be
charged 5.000% of the unpaid portion of the regularly scheduled payment.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 18.000% per annum, if
and to the extent that the increase does not cause the interest rate to
exceed the maximum rate permitted by applicable law.
DEFAULT. Each of the following shall constitute an event of default
("Event of Default") under this Note:
Payment Default. Borrower fails to make any payment when due under
this Note.
Other Defaults. Borrower fails to comply with or to perform any
other term, obligation, covenant or condition contained in this Note
or in any of the related documents or to comply with or to perform
any term, obligation, covenant or condition in any other agreement
between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor defaults
under any loan, exte3nsion of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other
creditor or person that may materially affect any of Borrower's
property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the related
documents.
False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this
Note or the related documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false
or misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower's existence
as a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower's property, any assignment for the
benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower.
Creditor of Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by
any governmental agency against any collateral securing the loan.
This includes a garnishment of any of Borrower's accounts, including
deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Borrower as to the
validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits
with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness evidenced by
this Note. In the event of a death, Lender, at its option, may, but
shall not be required to, permit the Guarantor's estate to assume
unconditionally the obligations arising under the guaranty in a
manner satisfactory to Lender, and, in doing so, cure any Event of
Default.
Change In Ownership. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure Provisions. If any default, other than a default in payment is
curable and if Borrower has not been given a notice of a breach of
the same provision of this Note within the preceding twelve (12)
months, it may be cured if Borrower, after receiving written notice
from Lender demanding cure of such default: (1) cures the default
within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately initiates steps which Lender deems in
Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately
due, and then Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower will pay Lender the
amount of these costs and expenses, which includes, subject to any limits
under applicable law, Lender's reasonable attorneys' fees and Lender's
Legal expenses whether or not there is a lawsuit, including reasonable
attorneys' fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), and
appeals. If not prohibited by applicable law, Borrower also will pay any
court costs, in addition to all other sums provided by law.
Exhibit 10.12 Page 26 of 29
PROMISSORY NOTE
(Continued) Page 2
===========================================================================
GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Florida. This
Note has been accepted by Lender in the State of Florida.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's
request to submit to the jurisdiction of the courts of Palm Beach County,
State of Florida.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if
Borrower makes a payment on Borrower's loan and the check or preauthorized
charge with which Borrower pays is later dishonored.
COLLATERAL. Borrower acknowledges this Note is secured by the following
collateral described in the security instrument listed herein: inventory,
chattel paper, accounts, equipment and general intangibles described in a
Commercial Security Agreement dated November 2, 2004.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note may be requested orally by Borrower or as provided in this
paragraph. All oral requests shall be confirmed in writing on the day of
the request. All communications, instructions, or directions by telephone
or otherwise to Lender are to be directed to Lender's office shown above.
The following person currently is authorized, except as provided in this
paragraph, to request advances and authorize payments under the line of
credit until Lender receives from Borrower, at Lender's address shown
above, written notice of revocation of his or her authority: Xxxxx
Xxxxxxxxxx. Borrowing Base Advances:
Inventory advances shall be based on 50% of eligible inventory including a
sub limit, which will limit reliance on prescription drug inventory to a
maximum of $2,000,000.00 ($4,000,000.00 prescription inventory at 50%
advance rate). The Bank reserves the right to request an inventory audit
at any time. Stale dated inventory shall be excluded from the borrowing
base. This will be checked annually by the company's auditor. Borrower
agrees to be liable for all sums either: (A) advanced in accordance with
the instructions of an authorized person or (B) credited to any of
Borrower's accounts with Lender. The unpaid principal balance owing on
this Note at any time may be evidenced by endorsements on this Note or by
Lender's internal records, including daily computer print-outs. Lender
will have no obligation to advance funds under this Note if : (A)
Borrower or any guarantor is in default under the terms of this Note or
any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (B)
Borrower or any guarantor ceases doing business or is insolvent; (C) any
guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; (D)
Borrower has applied funds provided pursuant to this Note for purposes
other than those authorized by Lender; or (E) Lender in good faith
believes itself insecure.
ADDITIONAL DEFAULT PROVISION. Loan shall be in default upon the death,
dissolution, merger, consolidation or termination of existence of any
party.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon
Borrower, and upon Borrower's heirs, personal representatives, successors
and assign, and shall inure to the benefit of Lender and its successors
and assigns.
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING
AGENCIES. Please notify us if we report any inaccurate information about
your account(s) to a consumer reporting agency. Your written notice
describing the specific inaccuracy(ies) should be sent to us at the
following address: RBC CENTURA BANK, Boca Raton, FL, Lending Service
Center (FL), 0000 XXX Xxxx., Xxxxx 000X, Xxxx Xxxxx Xxxxxxx, XX 00000
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this
fact will not affect the rest of the Note. Borrower does not agree or
intend to pay, and Lender does not agree or intend to contract for,
charge, collect take, reserve or receive (collectively referred to herein
as "charge or collect"), any amount in the nature of interest or in the
nature of a fee for this loan, which would in any way or event (including
demand, prepayment, or acceleration) cause Lender to charge or collect
more for this loan than the maximum Lender would be permitted to charge
collect by federal law or the law of the State of Florida (as applicable).
Any such excess interest or unauthorized fee shall, instead of anything
stated to the contrary, be applied first to reduce the principal balance
of this loan, and when the principal has been paid in full, be refunded to
Borrower. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed
by law, waive presentment, demand for payment, and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone.
All such parties also agree that Lender may modify this loan without the
consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and
several.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLTED COPY OF THIS PROMISSORY NOTE.
BORROWER:
PETMED EXPRESS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------
Xxxxx Xxxxxxxxxx, Treasurer of Petmed Express, Inc.
===========================================================================
Exhibit 10.12 Page 27 of 29
COMPLIANCE AGREEMENT
===========================================================================
Borrower: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
===========================================================================
This COMPLIANCE AGREEMENT is attached to and by this reference is made
a part of the Promissory Note, dated November 2, 2004, and executed in
connection with a loan or other financial accommodations between RBC
CENTURA BANK and Petmed Express, Inc.
COMPLIANCE AGREEMENT
In consideration of the above-referenced Lender lending funds (the
"Loan") to Borrower, the undersigned, as borrower (the "Obligor")
agrees, upon request of Lender or upon request of any person acting on
behalf of Lender, to fully cooperate with Lender or such person to
correct any inaccurate term or provision of, mistake in, or omission
from any document associated with the closing of the loan. Failure or
refusal of Obligor to execute the aforementioned required additional
documents, or to correct those already executed, shall constitute a
default under the terms of the Loan documents and shall give Lender the
right to pursue any available remedy, including, but not limited to,
the right to declare all sums secured by the Loan documents immediately
due and payable. The rights and powers of Lender under this Compliance
Agreement shall inure to the benefit of any subsequent holder of said
Loan documents.
THIS COMPLIANCE AGREEMENT IS EXECUTED ON NOVEMBER 2, 2004.
BORROWER:
PETMED EXPRESS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------
Xxxxx Xxxxxxxxxx, Treasurer of Petmed Express, Inc.
===========================================================================
Exhibit 10.12 Page 28 of 29
DISBURSEMENT REQUEST AND AUTHORIZATION
===========================================================================
Borrower: Petmed Express Inc. Lender: RBC CENTURA BANK
0000 XX 00xx Xxx Xxxx Xxxxx, XX
Xxxxxxx Xxxxx, XX 00000 Lending Service Center (FL)
0000 XXX Xxxx. Xxxxx 000X
Xxxx Xxxxx Xxxxxxx, XX 00000
===========================================================================
LOAN TYPE. This is a Variable Rate Nondisclosable Revolving Line of
Credit Loan to a Corporation for $6,000,000.00 due on November 1, 2005.
The reference rate (LIBOR Base Rate, currently 1.990%) is added to the
margin of 1.500%, resulting in an initial rate of 3.490.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
[ ] Personal, Family, or Household Purposes or Personal Investment.
[X] Business (Including Real Estate Investment).
SPECIFIC PURPOSE. The specific purpose of this loan is: Support
short-term cash/working capital requirement.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds
will be disbursed until all of Lender's conditions for making the loan
have been satisfied. Please disburse the loan proceeds of
$6,000,000.00 as follows:
Amount paid to others on Borrower's behalf: $0.00
Other Disbursements: $6,000,000.00
$6,000,000.00 Funds available for disbursement ____________
Note Principal: $6,000,000.00
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed
the following charges:
Prepaid Finance Charges Paid in Cash: $10,000.00
$10,000.00 Loan Fees ($5,000.00 Paid
POC)
Other Charges Paid in Cash: $41.00
$31.00 UCC-1 Filing Fee (FL)
$10.00 Overnight courier fee
____________
Total Charges Paid in Cash: $10,041.00
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER
REPRESENTS AND WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE
IS TRUE AND CORRECT AND THAT THERR HAS BEEN NO MATERIAL ADVERSE CHANGE
IN BORROWER'S FINANCIAL CONDITION AS DISCLOSED IN BORROWER'S MOST
RECENT FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS DATED
NOVEMBER 2, 2004.
BORROWER:
PETMED EXPRESS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------
Xxxxx Xxxxxxxxxx, Treasurer of Petmed Express, Inc.
===========================================================================
Exhibit 10.12 Page 29 of 29
