Floor Plan Financing Agreement 41-1621676 Borrower’s Name Tax I.D. number Featherlite, Inc. Address: 13380 US Hwy 63 & 9, Cresco, IA 52136
Exhibit
10.25
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Regions
Bank
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Floor
Plan Financing Agreement
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00-0000000
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Borrower’s
Name
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Tax
I.D. number
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Featherlite,
Inc.
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|
|
Address:
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|
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00000
XX Xxx 00 & 0, Xxxxxx, XX 00000
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Aggregate
amount of line of credit
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Date
of Agreement
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Place
of Agreement
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$2,000,000.00
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December
19, 2005
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Birmingham,
AL
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In
this
Agreement, we,
us,
and
our
mean
Regions Bank. You
and
your
mean the
Borrower. This Agreement
means
the Floor Plan Financing Agreement. Capitalized terms used in this Agreement
and
not otherwise defined are used with the meanings set forth in Schedule
I.
Any
undefined terms shall have the meaning as set forth in the Alabama Uniform
Commercial Code.
SECTION I
LINE
OF CREDIT COMMITMENT
1.1 Your
line of credit.
You have
received a line of credit from us in the aggregate amount shown. Under the
conditions stated below, we will advance money to you, or on your behalf, up
to
the amount of your line of credit. In return, you promise to perform all of
your
Obligations under this Agreement and to pay to our order the amount of all
advances we have made, plus interest and other charges due under this
Agreement.
1.2 Payments
by you.
You
agree to make monthly payments to us of all accrued interest, beginning on
the
15th
day of
the first month immediately following the date of this Agreement as set forth
above, and on the same day of each month thereafter. You also agree to make
principal payments as described below. If we request, you agree to sign at
any
time a Note payable to our order for the amount outstanding under your line
of
credit.
1.3 Future
advances, line of credit.
It is
expressly understood that this Agreement is intended to and does secure not
only
the line of credit, but also future advances and any and all present and future
Indebtedness, Obligations and liabilities, direct or contingent, of you to
us,
whether now existing or hereafter arising, and any and all extensions, renewals,
modifications and refinancing of same, or any part thereof, existing at any
time
before actual cancellation of this Agreement.
1.4 Purpose
of line of credit.
You have
obtained this line of credit in order to finance your purchase of Goods for
resale at retail unless otherwise agreed to by us in writing.
1.5 Allocation
of line of credit.
Your
line of credit is allocated as follows:
| a. |
New
Goods.
|
Supplier Available
Credit
[
]
Advances
for new Goods requested through _______________________________________ $0.00
ACH.
If
checked, we will make advances to the Supplier
_______________________________________ $0.00
or
Suppliers shown at the right. _______________________________________ $0.00
(i) We
may
make advances to the Supplier or Suppliers, or any other persons whom they
designate, when we receive electronic requests through the Automated Clearing
House(ACH) from a Supplier for Goods delivered or sold to you. The amount of
the
advance that we make on your behalf to the Supplier will be for the amount
indicated on the electronic payment request. You agree that we may, at our
option, make these advances even though the electronic payment requests are
not
accompanied or preceded by the original invoices. We are not obligated to accept
and pay any electronic payment request when the amount you owe us, including
interest, exceeds the available credit or when honoring the payment request
will
exceed your available credit.
[
]
Advances
for new Goods requested _______________________________________ $0.00
by
draft.
If
checked, we will make advances _______________________________________ $0.00
to
the
Supplier or Suppliers shown at the right _______________________________________ $0.00
|
(ii)
|
We
may make advances to the Supplier or Suppliers, or any other person
whom
they designate, when we receive sight or cash drafts from a Supplier
for
Goods delivered or sold to you. The amount of the advance that we
make on
your behalf to the Supplier will be for the amount of the invoice.
You
agree that we may, at our option, make these advances even though
the
drafts are not accompanied by the original invoices. We are not obligated
to accept and pay any draft when the amount you owe us, including
interest, exceeds the available credit or when honoring the payment
request will exceed your available
credit.
|
[X]
Advances
for new Goods not requested by draft.
If
checked, we will make advances up to an aggregate amount of $2,000,000.00
for the
amount of your purchase price of new Goods, when requested directly by you
and
accompanied by the xxxx of sale and other evidence of your ownership (such
as a
certificate of title for a vehicle), satisfactory to us, free and clear of
all
liens and encumbrances, satisfactory to us, for the Goods purchased. At our
option, you may supply us with copies of these documents. If no figure is listed
above, the credit limit under this section is the available credit. We are
not
obligated to accept and pay any draft when the amount you owe us, including
interest, exceeds the available credit or when honoring the payment request
will
exceed your available credit.
b. Used
Goods.
[
] Advances
for used Goods.
If
checked, we will make advances for your purchase of used Goods limited to
$0.00.
If no
figure is listed, the credit limit is the aggregate amount of your line of
credit less the amount of credit already extended for your purchase of new
Goods, if any. We will make these advances under the following
conditions:
|
(i)
|
You
agree to request an advance by supplying us with the xxxx of sale
and
other evidence of your ownership (such as certificate of title for
a
vehicle), satisfactory to us, for the Goods being purchased. At our
option, you may supply us with copies of these
documents.
|
|
(ii)
|
We
are not obligated to make advances for more than 0.00%
of
the N/A
trade-in value of the Goods as determined by the N/A
publication for the month in which such advance is requested, if
the Goods
are vehicles, or that percentage of your purchase price if the Goods
are
not vehicles.
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(iii)
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You
have not exceeded your available line of credit and when honoring
the
payment request will not exceed your available
credit.
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(iv)
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If
the goods are used vehicles, the vehicles cannot be used as demonstrators
and must fall within the following model years N/A
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1.6 Demonstrators
and daily rentals.
We agree
that the Goods may be used as demonstrators and/or daily rentals in our sole
discretion and upon our prior consent. We may, at any time, revoke our consent
to the use of any and/or all Goods as demonstrators and/or daily
rentals.
1.7 Interest.
You
agree to pay us interest on the amount of the outstanding balance that you
owe
us. Interest on all amounts advanced pursuant to this Agreement is
calculated:
[X]
on
the basis of the actual number of days outstanding divided by 360.
1.8 Your
interest rate. For
advances for New Goods, your interest rate is equal to the Commercial
Base Rate
index
rate (the “Index”) plus 50
basis
points and for advances for Used Goods, your interest rate is equal to the
Index
plus N/A
basis
points. When the Index changes, your interest rate will increase or decrease
correspondingly. Such rate change may occur each day.
1.9 Reduction
of outstanding amounts.
You
agree to pay us the amount we have advanced on your line of credit for the
purchase of Goods as follows:
a. New
Goods.
If you
have not sold New Goods within 270
days of
the date we made an advance for the purchase of those Goods, you agree to make
an immediate principal payment of 5.00
percent
of the amount of the advance, due and payable by the 15th
day of
the month immediately following the month end. You agree to make additional
principal payments of 10.00
percent
of the amount of the advance 95
days
thereafter. If you have not sold New Goods within 540
days of
the date we made an advance for the purchase of those Goods, you agree to pay
us
immediately in full the balance you owe on that advance. At our option, if
you
have not sold New Goods on or before April 1 of the year immediately following
the model year of the New Goods, you agree to make additional principal payments
sufficient to curtail the amount you owe us, on the advance for the purchase
of
those Goods, down to 100% of clean NADA
value
for such Goods, and such Goods will then be treated as “Used Goods” subject to
the principal reduction requirements of Section 1.9b. hereinafter.
b. Used
Goods.
If you
have not sold used Goods within N/A
days of
the date we made an advance for the purchase of those Goods, you agree to make
an immediate principal payment of 0.00
percent
of the amount of the advance, due and payable by the 15th
day of
the month immediately following the month end. You agree to make additional
principal payments of 0.00
percent
of the amount of the advance every N/A
days
thereafter until the Goods are sold. If the Goods have not been sold within
N/A
days of
the date we made an advance for the purchase of those Goods, you agree to pay
us
immediately in full the balance that you owe on that advance.
c. Repayment
upon sale.
Upon the
sale of Goods for which we made an advance for the purchase of such Goods,
you
agree, on the first to occur of seven (7) Calendar Days after the sale or
forty-eight (48) hours after the collection of the sale proceeds, to make an
immediate payment of principal sufficient to pay, in full, the proportion of
the
advance allocable to the Goods sold, as determined by us and in our sole
discretion.
d. Accounting
for unsold units after audit. Within
five (5) Business Days after any audit, all Goods unaccounted for during the
audit must be presented to us for inspection or, alternatively, you shall pay
us
for such Goods in the amount and pursuant to the schedule set forth in Paragraph
1.9(c) above.
1.10 Security
for your line of credit. As
security for all of your Obligations and for all of your other present or future
Indebtedness to us, including indirect and contingent Obligations, you grant
us
a security interest in the Collateral, including, but not limited to, the Goods.
In addition, you grant us a security interest in all Documents relating to
the
Collateral, any after-acquired similar property, any returned or unearned
premiums on insurance insuring the Goods; any deposit now or in the future
held
by us in which you have an interest, and any property, securing any non-consumer
loans you have with us. Any other security agreement that you have entered
with
us will continue to be in effect. You also assign to us all of your rights
in
any and all factory repurchase agreements. Any prior security interest that
you
have granted to us will continue to be in effect. Notwithstanding anything
to
the contrary contained herein, Regions Bank explicitly excludes consumer loans
from the security interest granted pursuant to this provision.
1.11 Previous
agreements.
If you
have an existing floor plan line of credit agreement with us that has an
outstanding balance, that agreement will continue in effect until you have
paid
all sums that you owe us under that agreement for advances, interest, and other
charges. The available amount of credit that you have under this Agreement
will
be reduced by the amount of your outstanding balance under the earlier
agreement.
1.12 Crediting
of payments.
Payments
received before 1 p.m. Central Time on a Business Day will be credited to your
account no later than the next Business Day. Posting of payments may be delayed
up to five (5) Business Days if the payment is not accompanied by the payment
coupon (if provided), the payment is not made by check or money order, the
payment is not received in the envelope (if provided), or if the payment is
not
mailed to the location designated by us for payment. Checks or money orders
drawn on non-US banks shall not be accepted.
1.13 Returned
item charges.
You
agree that if you submit a check, draft, negotiable order of withdrawal or
like
instrument in payment of an amount owing on your account and the instrument
is
not paid or is dishonored , you will pay a returned item charge in such amount
as allowed by Law. You agree that we may re-present, by electronic means or
otherwise, an instrument for payment. You will still be responsible for the
return item charge even if, upon re-presentation, the instrument is paid. All
returned item charges will be added to the principal amount owing under your
account and will accrue finance charges at the interest rate set forth in
Section 1.7 until paid in full. You
agree that we may, in our discretion, add the amount of the return item charge
to the electronic re-presentation of the instrument that was
unpaid.
1.14 Late
charge. You
will pay a late charge of five percent (5%) on any amount due to be paid
to us
under this Agreement, if your payment is not received by
the
15th
day of
each month.
SECTION II
WARRANTIES,
REPRESENTATIONS AND COVENANTS
2.1 Warranty
of title.
You
warrant that you have good and absolute title to all existing Goods, and have
good right, full power and lawful authority to sell, convey, and grant a
security interest that the same is free and clear of all grants, reservations,
security interests, liens, charges, and encumbrances whatsoever, including
conditional sales contracts, security agreements, financing statements, and
anything of a similar nature, and that you shall and will warrant and forever
defend the title thereto and the quiet use and enjoyment thereof unto us, our
successors and assigns, against the lawful claims of all Persons
whomsoever.
2.2 Formation
and qualification.
You
warrant that each Loan Party which is a corporation is duly incorporated,
validly existing and in good standing under the Laws of the jurisdiction of
its
incorporation and is duly qualified to do business in all states in which the
Loan Parties transact business. Each Loan Party which is a partnership, limited
liability company, trust or other entity is duly formed and validly existing
under the Laws of the jurisdiction of its formation and is duly registered
in
all jurisdictions where it engages in any form of business transaction. Each
Loan Party which is a corporation, limited partnership or limited liability
company is in good standing in all states in which such Loan Party transacts
business and each Loan Party has all requisite power and authority to conduct
its business.
2.3 Loan
documents.
The
execution, delivery and performance of the Loan Documents by each Loan Party
are
within such Loan Party’s power and authority, have been duly authorized by all
necessary action and do not and will not (a) require any Authorization which
has
not been obtained, (b) contravene the Charter Documents of any Loan Party,
any
applicable Laws or Other Requirements or any agreement or restriction binding
on
or affecting any Loan Party, or (c) result in or require the creation or
imposition of any Lien upon or with respect to any property now or in the future
owned by any Loan Party, including the Goods (other than Liens in favor of
us).
No Authorization which has not been obtained is required for the creation of
the
Liens or the enforcement by us of our Remedies under the Loan Documents. Each
Loan Document, when executed and delivered, will constitute the legal, valid
and
binding obligation of each Loan Party which is a party to or bound by such
Loan
Document, enforceable against such Loan Party in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency or other similar
Laws affecting the rights of creditors generally.
2.4 Financial
information.
The
Financial Statements of each Loan Party which have been furnished to us fairly
present such Loan Party’s financial condition as of the dates of such Financial
Statements and the results of operations for the periods covered by such
Financial Statements in accordance with generally accepted accounting principles
consistently applied (or such other method of preparation approved by us in
writing), and since the respective dates of such Financial Statements, there
has
been no material adverse change in the financial condition, operations,
properties or prospects of such Loan Parties. Each Loan Party has filed all
tax
returns required to be filed by it, and has paid all taxes due pursuant to
such
returns or in respect of any of its properties (except for any such taxes which
are being actively contested in good faith by appropriate proceedings), and
to
the best knowledge of each Loan Party, no basis exists for additional
assessments which have not been adequately reserved against in the Financial
Statements referred to above or otherwise disclosed in writing to
us.
2.5 Your
corporate resolution.
If a
corporation, you agree, before requesting your initial advance and as a
condition to our issuing such advance, to provide us with a corporate resolution
duly signed by a person or persons with appropriate authority evidencing the
authority of your officers or agents to request advances or otherwise transact
business with us in connection with this Agreement. Such corporate resolution
must be signed by your secretary or assistant secretary, include duly adopted
resolutions of your Board of Directors so authorizing such officers and certify
that each such officer holds the office beside his or her name.
2.6 Litigation
and other matters.
You
acknowledge that, except as otherwise disclosed in writing to us: (a) no actions
or other proceedings affecting or relating to the Goods are pending or, to
the
best knowledge of each Loan Party, threatened, (b) no actions or other
proceedings are pending or, to the best knowledge of each Loan Party, threatened
against or affecting any Loan Party or any property of any Loan Party which,
if
determined adversely to such Loan Party, could materially impair the financial
condition, operations, properties or prospects of such Loan Party or the ability
of such Loan Party to perform its Obligations under the Loan Documents, and
(c)
you have given notice to us of any other matters which you are required to
disclose to us under this Agreement.
See Schedule 2.6.
2.7 Performance.
You
agree to perform, observe and comply with all provisions hereof and of all
other
Loan Documents and you agree to duly and punctually pay to us the sum of money
expressed in this Agreement with interest thereon, and all other sums required
to be paid by you pursuant to the provisions of this Agreement and the other
Loan Documents.
2.8 Compliance
with laws and other requirements.
You
shall comply in all material respects with all applicable Laws relating to
the
Goods and shall obtain and maintain all authorizations, consents, approvals,
orders, licenses, permits, exemptions or other action by or from, or any filing,
registration or qualification required in connection with the
Goods.
2.9 Your
obligations regarding the Goods.
You
agree to keep the Goods free and clear from any debt, lien, security interest,
encumbrance or claim, except those stated in Schedule II,
if any;
which are the only debts, liens, security interests, encumbrances or claims
on
the Goods.
2.10 Documents
from you.
You
agree to supply us with copies of any present or future agreements you have
with
your Suppliers. You agree to deliver to us original title Documents (e.g.,
certificates of title, manufacturer’s statements of origin, bills of sale) on
the Goods whenever we request. You agree to deliver these Documents to us
promptly.
2.11 Books
and records.
You
shall at all times maintain (a) full and complete books of account and other
records with respect to the Goods and your business and operations, and (b)
complete copies of all Authorizations issued in connection with the Goods,
and
shall permit us and our agents, upon request from time to time, to inspect
and
copy any of such books, records and other documents.
2.12 Estoppel
affidavits.
You
shall, within ten (10) days after written request from us, furnish a written
statement, duly acknowledged, setting forth the unpaid principal of and interest
on the line of credit and any other Indebtedness owed by you to us and whether
or not any offsets or defenses exist against any principal and interest owed.
You shall, within ten (10) days after written request from us, furnish a written
estoppel certificate from your landlord, in form and substance acceptable to
us,
duly acknowledged, setting forth any defaults, offsets or defenses under the
lease between the landlord and you and stating the nature of any such defaults,
offsets or defenses.
2.13 Landlord’s lien
waiver.
You
shall, within ten (10) days after written request from us, furnish a written
statement, duly acknowledged, from your landlord waiving all of the landlord’s
lien rights in the Goods.
2.14 Reporting
requirements. You
shall
cause to be delivered to us, in form and detail satisfactory to us:
a. Promptly
after discovery by you, notice of (i) any dispute between you and any agency
or
Person relating to any of the Goods, the adverse determination of which could
adversely affect the Goods in any material respect, (ii) any material adverse
change in the financial condition, operations, properties or prospects of any
Loan Party to the Agreement, including, but not limited to, any and all
Guarantors, (iii) any event which has or may have a material adverse impact
on
the Goods, and (iv) the occurrence of any Event of Default or event which,
with
the giving of notice and/or the passage of time, could become an Event of
Default;
b. Within
ninety (90) days after the end of each fiscal year of each Loan Party, audited
Financial Statements for such Loan Party for and as at the end of such fiscal
year, and upon request by us from time to time, quarterly audited Financial
Statements for each Loan Party and copies of any audited Financial Statements
prepared for each Loan Party, in each case certified in a manner acceptable
to
us and updated periodically at our sole discretion; and
c. Within
thirty (30) days after the end of each calendar month, monthly unaudited
Financial Statements pertaining to you and your business which business is
the
subject of this Agreement.
d. Such
other Documents or information relating to any Loan Party, the Goods or the
transactions contemplated by this Agreement as we may reasonably request from
time to time. We are authorized at any time and from time to time to directly
contact any Person or agency to verify any information provided by you or for
any other purpose relating to any Loan Party, the line of credit, the Goods
or
the transactions contemplated by this Agreement or the Loan Documents executed
in connection with this Agreement.
2.15 Documents
and other information.
All
Documents and other information delivered to us pursuant to any of the Loan
Documents are and will be complete and correct in all material respects at
the
time of delivery to us.
2.16 Power
of attorney.
You
grant us a power of attorney to execute in your name any Documents we believe
are necessary or helpful to perfect or protect our security interest or to
sell
or transfer any of the Goods. You agree that this power cannot be canceled
as
long as you are indebted to us.
2.17 Other
creditors.
You
agree to give us ten (10) days written notice before obtaining floor plan
financing from any other creditor. You also agree to give us copies of any
agreements you have with other creditors.
2.18 Location
of the security.
You
agree not to change the location or use of the Goods without obtaining our
written permission in advance. See
Schedule 2.18.
2.19 Disposing
of the security.
You
agree not to sell, transfer, or dispose of the Goods except in the ordinary
course of business, without our prior written permission. You also agree to
let
us receive, endorse and apply any payments resulting from transfer or disposal
of the Goods. You agree not to release any of the Goods (including inventory)
without our prior written permission.
2.20 Inspection
rights and easements.
In
addition to other inspection rights, you shall and hereby do grant and convey
to
us, our agents, representatives, contractors, and employees, to be exercised
by
us, periodically as deemed necessary by us and in our sole discretion, an
easement and license to enter on the Premises, at any time and from time to
time, for the purpose of making such audits, tests, inspections, and
examinations, as we, in our sole discretion, deem necessary, convenient, or
proper to determine the condition and use of the Goods, to make an inventory
of
the Goods, and to determine whether the ownership, use and operation of the
Goods are in compliance with all federal, state, and local laws, ordinances,
rules, and regulations, including, without limitation, environmental laws,
health and public accommodation laws, the ADA and the Rehabilitation Act, as
applicable, and ordinances, rules and regulations relating thereto.
Notwithstanding the grant of the above easement and license to us, we shall
have
no obligation to perform any such inspections, or to take any remedial action.
All the costs and expenses incurred by us with respect to any inspections which
we may conduct or take pursuant to this paragraph, including, without
limitation, the fees of any engineers, laboratories, and contractors, shall
be
repaid by you, with interest, and shall be secured by this Agreement and the
other Documents executed in connection with this Agreement. Further, any audit
or examination conducted by us is for our sole use and benefit, and is not
for
your benefit. Our inspection rights, audits and examinations are for our
business purposes, and may not be relied upon by you for your business purposes
apart from the requirements of this Agreement.
2.21 Demonstrators.
If you
plan to use any of the Goods as a demonstration model, you must first give
us
notice in writing of your intention to do so and provide us with a written
description of the Goods to be so used.
2.22 Taxes
and liens.
You
agree to pay promptly, when and as due, and, if requested, will exhibit promptly
to us, receipts for the payment of all taxes and other expenses incurred and
impositions of every nature whatsoever imposed, levied or assessed or to be
imposed, levied or assessed upon or against the Goods or any charge which,
if
unpaid, would become a lien or charge upon the Goods. You will not allow any
statutory or other lien to be created or to remain outstanding upon any of
the
Goods.
2.23 Property
insurance.
a. You
shall
procure for, deliver to, and maintain for the benefit of us during the term
of
this Agreement, insurance policies in an aggregate amount not less than the
aggregate amount of the advances outstanding on your line of credit (or such
greater amount as we may specify from time to time) combined
single limit in
such
amounts as we shall require, insuring the Goods, while in transit and otherwise,
against fire, extended coverage, and such other insurable hazards, casualties
and contingencies as we may require. The form of such policies and the companies
issuing them shall be acceptable to us, and, unless otherwise agreed by us
in
writing, shall provide for coverage without coinsurance or deductibles. All
policies shall contain a New York standard, non-contributory
endorsement making losses payable to us. At least fifteen (15) days prior to
the
expiration date of all such policies, renewals thereof satisfactory to us shall
be delivered to us. You shall deliver to us receipts evidencing the payment
of
all such insurance policies and renewals.
b. We
hereby
are authorized and empowered, at our option, to adjust or compromise any loss
under any insurance policies on the Goods, and to collect and receive the
proceeds from any such policy or policies. Each insurance company hereby is
authorized and directed to make payment for all such losses directly to us
instead of to you and us jointly. After deducting from said insurance proceeds
any expenses incurred by us in the collection or handling of said funds, we
may
apply the net proceeds, at our option, either toward repairing or restoring
the
Goods, or as a credit on any portion of your Indebtedness selected by us,
whether then matured or to mature in the future, or at our option, such sums
either wholly or in part may be used to repair the Goods or for any other
purpose and in a manner satisfactory to us, all without affecting the Lien
of
this Agreement for the full amount secured hereby before such payment took
place. We shall not be liable to you or otherwise responsible for any failure
to
collect any insurance proceeds due under the terms of any policy regardless
of
the cause of such failure, nor shall we bear any risk of loss as to the
Goods.
c. If
required by us, you shall pay on the first day of each month, in addition to
any
regular installment of principal and interest and other charges with respect
to
the Indebtedness secured hereby, one-twelfth (1/12th) of the yearly premiums
for
insurance maintained pursuant to the provisions of this paragraph. Such amount
shall be used by us to pay such insurance premiums when due. Such added payments
shall not be, nor be deemed to be, trust funds, but may be commingled with
the
general funds of ours, and no interest shall be payable in respect thereof.
Upon
our demand, you agree to deliver to us such additional moneys as are necessary
to make up any deficiencies in the amounts deposited by you with us pursuant
to
this paragraph to enable us to pay such insurance premiums when due. In the
event of an Event of Default hereunder or of a default by you under any of
the
Documents executed in connection with this Agreement, we may apply such sums
to
the reduction of the Indebtedness secured hereby in any manner selected by
us.
2.24 If
we buy insurance.
If you
do not or cannot insure the Goods, we have the right to buy coverage insuring
only our interest or insuring both your and our interest. In either case, we
may
demand reimbursement from you or make an advance to pay the cost. However,
we
have no obligation to acquire, maintain or replace any policy.
2.25 Care
of the Goods.
You
will preserve and maintain the Goods in good condition and repair, and shall
not
commit or suffer any waste. If the Goods or any part thereof are damaged by
fire
or any other cause, you shall give immediate written notice of the same to
us.
We hereby are authorized to enter upon the Premises and inspect the Goods,
and
to inspect your or your agent’s records with respect to the ownership, use,
management and operation of the Goods, at any time during normal business
hours.
2.26 Information
about sales.
At our
request, you agree to tell us the name and address of any person who buys or
has
bought any of the Goods. You also agree to deliver to us all of the Documents
you have concerning any sale. You agree to give us this information and these
Documents promptly.
2.27 Your
warranty on advances.
You
agree that you will not request an advance or cause a request to be made on
your
behalf unless you are in strict compliance with all of the terms of this
Agreement. You agree that each request by you for an advance will constitute
your new promise and representation that you are in strict compliance with
all
terms of this Agreement.
2.28 Security
documents and costs.
You
agree to sign at any time any Documents we request in order to perfect or
protect our security interest. You agree to pay reasonable costs related to
perfecting or protecting our security interest, including filing fees and
reasonable attorney’s fees. A reproduction of this signed Agreement or a signed
financing statement is sufficient as a financing statement. You authorize us
to
add any information to this Agreement which would be necessary to make it an
effective financing statement.
2.29 List
of Goods.
We may
from time to time give you a listing of the Goods for which we have made an
advance or a listing of the amount of the outstanding balance on your line
of
credit. You agree to examine this list within three (3) Business Days of when
you receive it and notify us immediately in writing if you claim any of the
information is wrong. If you fail to notify us, you agree that you may not
question or dispute the accuracy of any information on the list.
2.30 Our
rights to the security.
You may
not take any action that would give someone else a security interest in the
Goods unless we agree in writing. You agree that our claims to the Goods take
precedence over any other claims, except those listed above. You agree that
we
may at any reasonable time inspect and audit the Goods and inspect, audit and
photocopy any Documents relating to the Goods.
2.31 Further
assurances; after-acquired property.
a. At
any
time, and from time to time, upon our request, you at your expense, will make,
execute and deliver or cause to be made, executed and delivered to us and,
where
appropriate, cause to be recorded and/or filed and from time to time thereafter
to be re-recorded and/or re-filed at such time and in such offices and places
as
shall be deemed desirable by us any and all such other and further instruments
of further assurance, certificates and other Documents as may, in our opinion
be
necessary or desirable in order to effectuate, complete, or perfect, or to
continue and preserve your Obligations, and the priority of this Agreement
as a
first and prior lien upon all of the Goods, whether now owned or hereafter
acquired by you. Pursuant to Paragraph 2.16, we may make, execute, and record
any and all such instruments, certificates, and Documents for and in your name,
and you hereby irrevocably appoint us as your agent and attorney-in-fact so
to
do. The lien and rights hereunder automatically will attach, without further
act, to all after-acquired Goods.
b. Without
limitation to the generality of the other provisions of this Agreement,
including subparagraph (a) of this paragraph, it hereby expressly is covenanted,
agreed and acknowledged that the Lien and rights hereunder automatically will
attach to any further, greater, additional, or different estate, rights, titles
or interests in or to any of the Goods at any time acquired by you by whatsoever
means. In consideration of our making the Loan, and to secure the line of
credit, the future Indebtedness and Obligations set forth above, you hereby
grant, bargain, sell and convey to us, on the same terms as set forth in this
Agreement and intended to be a part hereof, all such after-acquired property
and
estates.
c. You
shall
appear in and defend all actions and other proceedings purporting to affect
any
of the Goods or our rights or interests under the Loan Documents (and we may,
at
your expense, appear in and defend any such action or other proceeding as we
may
determine), and you shall take or cause to be taken such further action and
execute and deliver or cause to be executed and delivered such further documents
as we from time to time may reasonably require to maintain, perfect, protect,
assure and confirm our rights and interests (including rights and interests
in
the Goods), your Obligations and the intention of the Loan Parties.
2.32 Notice
of shipment or receipt of Goods.
At our
request, you agree to give us notice of the shipment or your receipt, or both,
of any Goods for which we have made an advance.
2.33 Credit
information.
In
addition to any credit reports that we usually make in the ordinary course
of
business, you authorize us to give any information we have about this line
of
credit and you to any of your present or future suppliers and other
creditors.
2.34 Notices.
We will
send any notices to you at the address you have given us in this Agreement
unless you have requested that we send notices to you at a different address.
You agree that we do not have to honor any request to send notices to a
different address if you do not make that request in writing. We will have
a
reasonable time to change our records after we receive your request and may
continue to send notices to your previous address until our records are changed.
Until our records are changed, you agree that any notices addressed to your
prior address shall be binding upon you. You agree that we have given you notice
when we have deposited in the mail, postage prepaid, the notice addressed to
you. You agree that any notice to us must be in writing, mailed to the address
under “Place of Agreement’’ above and that it is not effective until we actually
receive it.
2.35 Credit
limit.
You
agree not to request or cause a request to be made for advances which would
exceed your available aggregate line of credit. If your aggregate line of credit
is apportioned among different Suppliers or among new or used Goods, you also
agree not to request or cause a request to be made for advances which would
exceed the amount available under the applicable separate limit on your line
of
credit. We do not have to make any advance that would exceed any limit on all
or
part of your line of credit. We may, in our discretion, allow advances exceeding
your available line of credit, in the aggregate or as apportioned; however,
this
exercise of discretion shall not constitute an agreement by us to increase
the
agreed upon line of credit as set forth in this Agreement. We do not have to
allow advances exceeding your available line of credit even if we have done
so
on previous occasions. In the event we allow advances exceeding your available
line of credit as apportioned, your available aggregate line of credit shall,
nevertheless, be reduced by the total advance, including the excess amount
over
the apportioned line of credit.
2.36 Reduction
of line of credit.
We can
lower the amount of your line of credit whenever we reasonably believe that
your
ability to repay us all or part of the amount of your line of credit has changed
or that the value of our security interest has changed. If we choose to reduce
all or part of your line of credit (but not call your entire balance due
immediately), we will notify you that your line of credit has been reduced.
If
you owe us an amount in excess of the reduced line of credit, you will not
have
any available line of credit for advances and must immediately pay us the amount
in excess of the reduced line of credit.
2.37 Cancellation
of line of credit.
This
Agreement may be canceled, with or without cause, as to future advances by
either party giving the other party written notice. The Agreement will continue
in effect for all advances incurred before the effective date of
cancellation.
2.38 Reevaluation
of line of credit.
We may
reevaluate your line of credit at any time. You agree to supply us with any
information we request relating to your creditworthiness or financial condition
and the security for this Agreement. If you fail to respond promptly or
completely, we may immediately and without notice obtain this information
elsewhere, or reduce or terminate your line of credit.
2.39 Change
of terms.
You
agree that we may change any term or condition of this Agreement by giving
you
at least thirty (30) days prior written notice. You expressly agree and
understand that any such change shall be applicable to the balance outstanding
as of the effective date of the change. You may refuse to accept such change
and
terminate your line of credit by notifying us in writing at least one (1) day
prior to the effective date of the change and paying off your balance under
the
existing terms of this Agreement.
2.40 Waiver
of your rights.
To the
extent permitted by Law, the Loan Parties waive all rights of exemption in
the
Goods under the Laws of this or any other state; notice of the acceptance of
the
Guaranty; and demand, presentment, notice of dishonor, protest, and
suit.
2.41 Your
compliance.
You
agree that if we do not insist upon strict compliance with the terms of this
Agreement, we will not have waived or otherwise given up our right to insist
upon your strict compliance at a later date.
2.42 Additional
representations, warranties and covenants.
The Loan
Parties agree to the further and additional representations, warranties and
covenants as are expressly set forth in Schedule
III,
if
any.
SECTION
III
EVENTS
OF DEFAULT; REMEDIES
3.1 Events
of default.
We may,
to the extent permitted by Law or this Agreement, call your entire account
immediately due and payable if you are in default. You will be in default,
if:
a. you
do
not make a payment due even if we have previously allowed you to make late
payments;
b. you
fail
to perform one or more of your Obligations or covenants to us, under this
Agreement;
c. any
Loan
Party misrepresented a fact in requesting this or any other Loan with
us;
d. you
default on any obligation to us under any other agreement or to any other
creditor;
e. there
is
a change in the financial affairs of any Loan Party that we believe will
increase our risk of not being repaid;
f. a
material portion of the Goods is lost, stolen, damaged, destroyed, sold,
encumbered, seized, or attached;
g. we
reasonably believe that you will be unable to repay us or that our security
interest is unsafe;
h. any
Loan
Party dies or ceases to exist;
i. any
Loan
Party changes its legal name without obtaining our prior written authorization,
ceases doing business, is dissolved, merged or consolidated;
j. an
Event
of Default shall occur under the Note;
k. any
representations and warranties from you set forth herein and all other
representations, warranties and certifications to us in the Loan Documents
or in
any other Document delivered under or in connection with the Loan Documents
proves to have been incorrect in any material respect when made;
l. you
are
enjoined by any court or other governmental agency from performing any
Obligations;
m. you
engage in wholesale floor planning, in excess of that which, in our sole
opinion, occurs in the normal course of a retail automobile business, without
our prior written consent;
n. after
receiving our written approval to engage in wholesale floor planning at a
certain percentage and/or volume, you increase the percentage and/or volume
of
your business engaged in wholesale floor planning without obtaining our prior
written approval;
o. any
Loan
Party is dissolved or liquidated or merged with or into any other Person; or
for
any period of more than ten (10) days any Loan Party which is a corporation,
partnership, limited liability company, trust or other entity ceases to exist
in
its present form and (where applicable) in good standing and duly qualified
under the Laws of the jurisdiction of its incorporation or formation and any
other state where it transacts business; or all or substantially all of the
assets of any Loan Party are sold or otherwise transferred;
p. any
Loan
Party ceases to be managed and controlled by the Person or Persons who managed
and controlled such Loan Party as of the date of this Agreement, or any Loan
Party assigns or attempts to assign any rights or interests under any Loan
Document without our prior written consent; or any Loan Document becomes or
is
claimed by any Loan Party to be unenforceable against any Loan Party;
or
q. any
Loan
Party is subject to an order for relief by the bankruptcy court, or is unable
or
admits in writing its inability to pay its debts as they mature or makes an
assignment for the benefit of creditors; or any Loan Party applies for or
consents to the appointment of any receiver, trustee or similar official for
it
or for all or any part of its property (or any such appointment is made without
its consent and the appointment continues undischarged and unstayed for sixty
(60) days); or any Loan Party institutes or consents to any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, dissolution,
custodianship, conservatorship, liquidation, rehabilitation or similar
proceeding relating to it or to all or any part of its property under the Laws
of any jurisdiction (or any such proceeding is instituted without its consent
and continues undismissed and unstayed for sixty (60) days); or any judgment,
writ, warrant of attachment or execution, garnishment or similar process is
issued or levied against any of the Goods or any other property of any Loan
Party and is not released, vacated or fully bonded within sixty (60) days after
its issue or levy.
3.2 Sales
subsequent to event of default.
You
agree that, upon the occurrence of an Event of Default, you shall not sell,
lease, dispose of or otherwise convey any interest to any third party in any
of
the Goods without our prior written consent.
3.3 Remedies.
Notwithstanding any language in this Agreement to the contrary, upon the
occurrence of any Event of Default, we may, without notice to or demand upon
you, which are expressly waived by you (except for notices or demands otherwise
required by applicable Laws to the extent not effectively waived by you and
any
notices or demands specified in the Loan Documents), exercise any one or more
of
the following Remedies as we may determine.
a. we
may
declare the unpaid principal of the line of credit and the Note and all accrued
interest and other amounts payable under the Loan Documents to be immediately
due and payable and we may set off any deposits or securities of any Loan Party
held by us toward the payment of the Indebtedness;
b. we
may
perform any of your Obligations in such manner as we may determine;
c. we
may
proceed to protect, exercise and enforce any and all other Remedies provided
under the Loan Documents, any other agreements between you and us, or by
applicable Laws;
d. we
may
take possession of the Goods without judicial process and enter upon any
Premises for the purpose of taking possession of, securing, removing and/or
disposing of the Goods including, but not limited to, the placement of a
designated representative on the Premises, without interference from you and
without any liability for rent, storage, utilities or other sums;
e. we
may
post notifications on all Goods, in form and substance acceptable to us,
notifying any and all third parties of our lien and security interest in the
Goods and of your default under this Agreement;
f. we
may
sell, lease or otherwise dispose of any or all of the Goods, whether in its
then
condition or after further processing or preparation, at public or private
sale;
and unless the Goods threaten to decline speedily in value or are of a type
customarily sold on a recognized market, we shall give to you at least ten
(10)
days’ prior notice of the time and place of any public sale of the Goods or of
the time after which any private sale or other intended disposition of the
Goods
is to be made, all of which you agree shall be reasonable notice of any sale
or
disposition of the Goods;
g. we
may
permit you to sell all or part of the Goods in which event all
sale proceeds
shall be
paid to us and we shall apply the sale proceeds first to pay, in full, the
proportion of the advance allocable to the Goods sold and second to satisfy
all
of your other outstanding Indebtedness to us, however occurring, all in our
sole
discretion.
h. we
may
increase your interest rate by up to three percent (3%) during the pendency
of
any Event of Default.
All
our
costs, expenses and charges in exercising any such Remedies shall be payable
by
you to us in accordance with this Agreement.
Each
of
our Remedies provided in the Loan Documents is cumulative and not exclusive
of,
and shall not prejudice, any other Remedy provided in the Loan Documents or
by
applicable Laws. Each Remedy may be exercised from time to time as often as
deemed necessary by us, and in such order and manner as we may determine. No
failure or delay on our part in exercising any Remedy shall operate as a waiver
of such Remedy; nor shall any single or partial exercise of any Remedy preclude
any other or further exercise of such Remedy or of any other Remedy. No
application of payments, or any advances or other action by us, will cure or
waive any Event of Default or prevent acceleration, or continued acceleration,
of amounts payable under the Loan Documents or prevent the exercise, or
continued exercise, of any Remedies of ours. Notwithstanding anything to the
contrary, the exercise by us of any Remedy shall not obligate us or cause us
to
be deemed to have taken possession of, managed or operated your business nor
shall we be liable for any business losses incurred during the exercise of
any
Remedy.
3.4 Indemnification.
You
shall indemnify, defend and save and hold us harmless from and against, and
shall pay on demand, any and all losses, liabilities, damages, costs, expenses
and charges (including the reasonable fees, charges and disbursements of
internal and external legal counsel) suffered or incurred by us as a result
of
(a) any failure of you to perform any of your Obligations under any Loan
Document, (b) any failure of any representation or warranty by you to be correct
in all respects when made, (c) any claim, demand or cause of action, or any
action or other proceeding, whether meritorious or not, brought or asserted
against any Indemnitee which relates to or arises out of the Loan Documents,
the
Loan, the Goods or any transaction contemplated by, or the relationship between
you and us or any action or inaction by us under, the Loan Documents;
provided
that no
Indemnitee shall be entitled to indemnification for matters caused solely by
such Indemnitee’s gross negligence or willful misconduct. Any obligation of
yours under this paragraph shall survive the making and repayment of the Loan,
the expiration or termination of this Agreement, and shall be secured by any
agreements now or in the future securing the Loan or any Guaranty.
3.5 Collection
costs, attorney’s fees and other expenses.
If you
are in default and we have to refer your account to an attorney to xxx or take
other steps to collect or secure amounts advanced pursuant to this Agreement
you
and your Guarantor(s) agree to pay our reasonable costs, including a reasonable
attorney’s fee. You agree to bear sole responsibility for and promptly pay or
cause to be paid all costs and expenses relating to the performance of your
Obligations or the delivery to us of any Documents or other items or information
under or in connection with any of the Loan Documents, and any taxes (other
than
income or gross receipts taxes generally applicable to banks), costs, expenses,
fees or charges payable or determined to be payable in connection with the
execution, delivery, filing or recording of, or otherwise with respect to,
any
Loan Document or any other Document delivered under or in connection with any
Loan Document.
You
shall
pay to us on demand all costs, expenses and charges of ours in connection with
the approval of the Loan by us and the negotiation, preparation, execution,
delivery, administration, supplement, modification, amendment, waiver and
enforcement of, and any other action taken by us under or otherwise to protect
or defend its rights and interests in respect of, any Loan Document, and any
litigation, dispute, action or other proceeding (including, without limitation,
bankruptcy proceedings) relating thereto, including, without limitation,
recording fees, filing fees, search fees, the reasonable fees and disbursements
of our legal counsel and other out-of-pocket expenses, and the charges of our
internal legal counsel.
SECTION IV
MISCELLANEOUS
4.1 Alternative
dispute resolution.
a. Agreement
to Arbitrate.
In
mutual consideration of the line of credit, you for yourself, your heirs,
successors and assigns (“the Borrower”) and we (the “Lender” and all of its
directors, officers, employees, agents, parent corporations, subsidiary
corporations, corporations affiliated with Lender by direct or indirect common
ownership, and the assignee of this contract) agree with limited exceptions,
that any and all disputes, claims, or controversies of any kind and nature
between us arising out of or relating to the relationship between us will be
resolved through mandatory, binding arbitration. This agreement to arbitrate
covers claims that (a) arise out of or relate to this Agreement; (b) arise
out
of or relate to any past transactions or dealings between us; (c) arise out
of
or relate to any future transactions or dealings between us; and (d) disputes
about whether any claims, controversies, or disputes between us are subject
to
arbitration to the extent permitted by federal law. Because you and we have
agreed to arbitration, both
of us are waiving our rights to have disputes resolved in court by a judge
or
jury except as set forth below.
Exceptions
to Arbitration.
Notwithstanding any language in this Agreement to the contrary, in the event
of
a Default in payment under the line of credit, the Lender may seek its remedies
in an action at law or in any permitted non-judicial manner (such as, but not
limited to, the right of self-help repossession under Article 9A of the Uniform
Commercial Code; and, its decision to do so shall not be deemed to be a waiver
of its right thereafter to insist upon and seek specific enforcement of its
rights under this Agreement, in the event that the Borrower shall assert a
counterclaim or right of setoff in such judicial or non-judicial
action.
Arbitration
to Be Conducted by an Arbitration Administrator.
The
party seeking arbitration shall select one of the following two arbitration
administrators: National Arbitration Forum or JAMS/Endispute. Except as modified
hereby, the arbitration shall be conducted according to the rules and procedures
of the selected Administrator. We will obtain a copy of the Administrator’s
rules and procedures for you at your request.
Law
Applicable to Arbitration Proceedings.
The
arbitrator is required to follow all substantive law applicable to any dispute,
including the statute of limitations. The arbitrator will be bound by the
Federal Rules of Evidence, and must respect any applicable attorney-client
privilege, attorney work-product privilege, and any other applicable privilege.
The arbitrator is required to issue a written decision setting forth the
decision and the reasons for that decision. You and we agree that the
arbitrator’s decision will be final, binding, and enforceable in any court of
competent jurisdiction.
Judicial
Review of Arbitrator’s Decision.
You and
we agree that the arbitrator’s decision CANNOT
BE APPEALED.
The
arbitrator’s decision is subject to judicial review only on the grounds set
forth in Title 0, Xxxxxxx 00 xx xxx Xxxxxx Xxxxxx Code, as well as on the ground
that the decision, findings, or rationale of the decision is manifestly
inconsistent with the terms of this Agreement, any loan agreement, or the
governing law.
No
Class Actions or Joinder of Additional Parties.
You
agree that you will not serve as a class representative or participate as a
class member in an arbitration proceeding, that only your claims will be
addressed in the arbitration proceeding, and that additional parties cannot
be
added to the arbitration proceeding unless you and we agree in writing before
the arbitration. A dispute between us that is required to be arbitrated under
this Agreement, will be arbitrated only between us, even if there are additional
parties to the dispute or even if you make allegations that your dispute should
be handled as a class action.
Severability
and Reformation.
If it is
ever determined that some portion of this section is void, voidable, or
unenforceable, or if the inclusion of some provision in this section would
render the Agreement unenforceable, you and we agree that the void, voidable,
or
unenforceable provision or the provision that renders the section unenforceable
will be severed from the remainder of the Agreement, leaving the remainder
of
the Agreement enforceable. You and we further agree that a court may reform
any
portion of this Agreement found to be void, voidable, or unenforceable, or
the
inclusion of which would render this Agreement unenforceable.
Replacement
of Existing Arbitration Agreements.
You and
we agree that this Alternative Dispute Resolution Agreement supersedes and
replaces any prior Alternative Dispute Resolution Agreement between
us.
Federal
Arbitration Act Applies. The
parties understand and agree that this arbitration agreement is made pursuant
to
a transaction involving interstate commerce and shall be governed by the Federal
Arbitration Act.
b. THE
PARTIES UNDERSTAND AND AGREE (i) THAT THIS ARBITRATION AGREEMENT IS MADE
PURSUANT TO A TRANSACTION INVOLVING INTERSTATE COMMERCE AND SHALL BE GOVERNED
BY
THE FEDERAL ARBITRATION ACT, 9 U.S.C. SECTION 1-16 (THE “FAA”); (ii) THAT THE
ARBITRATOR SHALL APPLY APPLICABLE SUBSTANTIVE LAW CONSISTENT WITH THE FAA;
(iii)
THAT EACH OF THEM IS WAIVING RIGHTS TO SEEK REMEDIES IN COURT, INCLUDING THE
RIGHT TO A JURY TRIAL; (iv) THAT PRE-ARBITRATION DISCOVERY IN ARBITRATION
PROCEEDINGS IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT PROCEEDINGS;
(v) THAT THE ARBITRATORS’ AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR
LEGAL REASONING, AND (vi) EITHER PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION
OF RULINGS BY THE ARBITRATORS, IS STRICTLY LIMITED TO APPEALS PERMITTED BY
THE
FAA.
c. THE
VENUE
FOR ARBITRATION UNDER THIS PARAGRAPH SHALL BE IN THE CITY OF BIRMINGHAM, STATE
OF ALABAMA.
4.2 Waiver
of trial by jury. In
the
event that the foregoing alternative dispute resolution is deemed unenforceable
by a court of competent jurisdiction, then, the parties to this Agreement desire
to avoid the additional time and expense related to a jury trial of any dispute
arising hereunder. Therefore, it is mutually agreed by and between the parties
hereto, and for their successors and assigns, that they shall and hereby do
waive trial by jury of any claim, counterclaim, or third-party claim, including
any and all claims of injury or damages, brought by either party against the
other arising out of or in any way connected with this Agreement and the
relationship which arises here from. The
parties acknowledge and agree that this waiver is knowingly, freely, and
voluntarily given, is desired by the parties, and is in the best interest of
the
parties.
4.3 Missing
/ incomplete information.
In the
event we and you fail to complete any of the blanks requiring information to
be
included within the first page of this Agreement, you agree that we may supply
the missing information based upon our standard and customary credit
policies.
4.4 Beneficiary.
No third
party shall have any legally enforceable rights in this Agreement. Nothing
contained in this Agreement shall create any contractual relationship between
Regions Bank and any person or entity other than you.
4.5 General
deposits.
Nothing
in this Agreement shall be construed to create a written agreement between
you
and us which would require that monies advanced pursuant to this Agreement
be
paid only to a particular identified or identifiable person or that any such
advances be made and payable only for a specific or particular purpose. Any
deposits of advances pursuant to the terms of this Agreement shall constitute
general deposits and shall not constitute special deposits or deposits in escrow
or trust. The parties hereto expressly disclaim the creation of any fiduciary
or
trust relationship between them, or with any third party.
4.6 Unenforceable
provisions.
If any
section of this Agreement is not enforceable, that will not affect the validity
of any other section. However, if the enactment or expiration of any applicable
Law has the effect of rendering any provision of this Agreement unenforceable
according to its terms, at our option, we may choose to declare your account
due
at once.
4.7 Damages
limited.
You
agree that we are not liable for incidental or consequential damages, including
without limitation, lost sales or lost profits, arising from our breach of
this
Agreement or our failure to make advances.
4.8 Waiver.
You
agree that our failure, in any one or more instances, to insist on the
performance of any of the terms of this Agreement or to exercise any right
or
privilege conferred herein or the waiver of any breach of any terms of this
Agreement shall not thereafter be construed as a waiver of such terms, which
shall continue in force as if such waiver had not occurred.
4.9 Choice
of law.
You and
we agree that the terms of this Agreement including, without limitation,
available rates of interest, shall be governed by applicable federal law and
the
law of the State of Alabama.
4.10 Entire
agreement.
You
agree that this written Agreement plus any other Documents that you signed
when
you signed this Agreement contain the entire agreement between you and us.
We
have not made any promises or representations to you that are not stated in
this
Agreement or those other Documents.
4.11 Signatures.
You
agree
that you sign this Agreement under seal, and you agree to all the terms of
this
Agreement. You also acknowledge that we have given you a completed copy of
this
Agreement.
| /s/ Xxx Xxxxx | /s/ Xxxxx X. Xxxxxxx | ||
|
|
|
||
|
Xxx
Xxxxx
Dealer
Credit Wholesale VO
REGIONS BANK |
Xxxxx
X. Xxxxxxx
Vice President Borrower:
FEATHERLITE, INC.
|
SCHEDULE
I
DEFINITIONS
AND ACCOUNTING TERMS
Certain
defined terms.
When
used in this Agreement, the following terms have the following
meanings.
“Additional
Collateral Agreements”
means
agreements pledging collateral or granting a security interest and any
assignments or other agreements now or in the future securing the Loan or any
Guaranty.
“Affiliate”
means,
as to any Person, any other Person that directly or indirectly controls or
is
controlled by or under common control with the Person specified.
“Asset
Shrinkage Factor”
means
the amount of dealer Total Trust Position as defined expressed as a percentage
of liquid or near liquid assets. This factor is calculated as follows: 1) Cash
on hand or in the Bank plus; 2) Contracts in transit plus; 3) Accounts
receivable -Vehicles plus; 4) New and used inventory minus; 5) New and used
floor plan liability divided by; 6) The sum of items 1 through 4
above.
“Authorization”
means
any authorization, consent, approval, order, license, permit, exemption or
other
action by or from, or any filing, registration or qualification with, any
governmental agency or other Person.
“Business
Day”
means
any day not a Saturday, Sunday or legal holiday in the State of
Alabama.
“Charter
Documents”
means
(a) in the case of a corporation, its articles of incorporation and bylaws,
(b)
in the case of a partnership, its partnership agreement and any certificate
or
statement of partnership, (c) in the case of a limited liability company, its
articles of organization and operating agreement, and (d) in the case of a
trust
or any other entity, its formation documents, in each case as amended from
time
to time.
“Collateral”
means
the Goods and all products and proceeds derived from the Goods.
“Contracts
in Transit”
means
very short term receivables, these are receivables from the finance companies
that contracted the sale of inventories; however, cash has not yet been
received. (This
definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the
Agreement.)
“Cost
of Goods Sold”
means
the cost at which the dealer paid to acquire the inventories or services sold.
(This
definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the
Agreement.)
“Current
Ratio”
means
Current Assets divided by Current Liabilities. (This
definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the Agreement.)
Current
Liabilities shall exclude the $1.5 million subordinated promissory note and
any
portion of the U.S. Bank term notes not due within 12 months as per note
amortization schedule.
“Documents”
means
written documents and materials, including agreements, approvals, certificates,
consents, instruments, financing statements, reports, budgets, forecasts and
opinions.
“Events
of Default”
means
the events set forth in the Events of Default paragraph of the
Agreement.
“Financial
Statements”
means
balance sheets and income statements.
“Goods”
means
the inventory and all replacements, accessories and accessions and substitutions
thereof and therefrom, held for sale and financed under this Agreement, which
constitutes a part of the Collateral. (SEE
ATTACHED EXHIBIT A)
“Gross
Margin”
means
Gross Profit divided by Total Sales. (This
definition is not referenced in any other place in the
Agreement.)
“Gross
Profit”
means
Total Sales minus Cost of Goods Sold. (This
definition is not referenced in any other place in the
Agreement.)
“Guarantor”
means
any Person who has executed or is required to execute a Guaranty and such
Person’s successors and assigns.
“Guaranty”
means
any Guaranty executed in favor of Regions Bank in connection with the
Agreement.
“Indebtedness”
means,
with respect to any Person, all indebtedness, obligations and liabilities,
including (a) all liabilities which would be reflected on a balance sheet
prepared in accordance with generally accepted accounting principles, (b) all
obligations in respect of any guaranty, (c) all obligations in respect to any
capital lease, (d) all obligations, indebtedness and liabilities secured by
any
lien or security interest on any property or assets of such Person, and (e)
all
redeemable preferred stock of such Person.
“Indemnitees”
means
Regions Bank and its Affiliates, and the respective directors, officers, agents,
attorneys, employees, participants, successors and assigns of each.
“Index”
means
the Index set forth in Paragraph 1.8.
“Intangible
Assets”
means
any nonphysical asset, such as trademarks, trade names, copyrights, goodwill,
blue sky, or owner receivables which presume to give the firm a better position
in the marketplace. (This
definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the
Agreement.)
“Laws”
means
all federal, state and local laws, rules, regulations, ordinances and
codes.
“Lien”
means
any lien, mortgage, deed of trust, pledge, security interest or other charge
or
encumbrance.
“Leverage
Ratio”
means
Total Liabilities divided by Tangible Net Worth. (This
definition is not referenced in any other place in the
Agreement.)
“Loan”
means
the loan to be made by Regions Bank to the Borrower in the form of a line of
credit, pursuant to this Agreement and in an amount not to exceed the amount
set
forth in the Agreement.
“Loan
Documents”
means
this Agreement, the Note, if any, the Guaranty, if any, and any Additional
Collateral Agreements.
“Loan
Party”
means
(a) the Borrower, (b) any Guarantor which at the time has or may have any
obligation or liability (whether fixed, contingent or otherwise) under any
Guaranty executed or to be executed by it, (c) any Person executing any
Additional Collateral Agreements, and (d) in the case of any Loan Party which
is
a partnership, any general partner of such Loan Party.
“Net
Margin”
means
Net Profit divided by Total Sales. (This
definition is not referenced in any other place in the
Agreement.)
“Net
Profit”
means
profit remaining after considering all operating, selling, administrative,
financing, and other expenses. (This
definition is not referenced in any other place in the
Agreement.)
“New
Days Supply”
means
New Car Inventories divided by Cost of Goods Sold multiplied by the number
of
calendar days in the statement period. (This
definition is not referenced in any other place in the
Agreement.)
“Note”
means
the note, if any, executed by the Borrower in favor of Regions Bank to further
evidence the Loan.
“Obligations”
means
all covenants and obligations of the Loan Parties of every nature under the
Loan
Documents.
“Other
Requirements”
means
the terms, conditions and requirements of all Authorizations relating to the
Goods and all other Documents, agreements and restrictions relating to, binding
on or affecting the Goods.
“Person”
means
any person or entity, whether an individual, trustee, corporation, partnership,
joint stock company, trust, unincorporated organization, bank, business
association or firm, joint venture, governmental agency or
otherwise.
“Premises”
means
the physical location of the Goods.
“Remedy”
means
any right, power or remedy.
“Retained
Earnings”
means
an equity account, it’s the sum of profits retained since the Borrower’s
inception. (This
definition is not referenced in any other place in the
Agreement.)
“Supplier”
means
those persons identified in Section I, paragraph 1.5.
“Tangible
Net Worth”
means
Total Assets minus Intangible Assets minus Total Liabilities.
(This definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the
Agreement.)
“Total
Assets”
means
Current Assets plus Capital Assets plus All Other Assets which is all assets
held by the Borrower. (This
definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the
Agreement.)
“Total
Cash and Contracts”
means
all cash items held internally and externally. Contracts refers to contracts
in
transit (a type of a very short term receivable where the inventory has been
sold and contracted with a financial institution however, cash has not yet
been
received). (This
definition is not referenced in any other place in the
Agreement.)
“Total
Liabilities”
means
Current Liabilities plus Long-Term Liabilities which is all Indebtedness of
the
Borrower. (This
definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the
Agreement.)
“Total
Net Worth”
means
Total Assets minus Total Liabilities which is assets in excess of debt.
(This
definition is not referenced in any other place in the
Agreement.)
“Total
Sales”
means
the sum of proceeds from the sale of Goods and services from all of the
departments of the Borrower. (This
definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the
Agreement.)
“Total
Trust Position”
means
Cash plus Contracts in Transit plus Accounts Receivable Vehicles plus New
Vehicle Inventories plus Used Vehicle Inventories minus New Vehicle Flooring
Liability minus Used Vehicle Flooring Liability. (This
definition is only referenced in the definitions section as part of the
definition of other terms and is not referenced in the text of the
Agreement.)
“Used
Days Supply”
means
Used Vehicle Inventories divided by Cost of Goods Sold multiplied by the number
of calendar days in the statement period. (This
definition is not referenced in any other place in the
Agreement.)
“Working
Capital”
means
Current Assets minus Current Liabilities. (This
definition is not referenced in any other place in the
Agreement.)
SCHEDULE
II
DEBTS,
LIENS, SECURITY INTERESTS, ENCUMBRANCES OR CLAIMS
None,
except as described below
By
acknowledging the above statement, you are stating that none of the above items
exist on the aforementioned property pledged as security to Regions Bank. If,
in
fact, any items as listed above under Schedule II exist, this may be construed
as a breach of contract unless otherwise stated.
| 1. |
Amended
and restated loan agreement with U.S. Bank, including asset-based
revolving line of credit commitment of $14 million on receivables
and
inventory and $7.2 million in term loans on real estate and
equipment.
|
| 2. |
Wholesale
Finance Agreement with GE Commercial Distribution Finance in amount
of $25
million to finance new and used coaches held in
inventory.
|
| 3. |
Term
note in amount of $2.9 million with First Source Bank secured by
Beechjet
400 aircraft.
|
| 4. |
Consignment
agreements with Xxxxxxx Car Company for coach shells with payment
due when
the four (4) month consignment term expires or when the completed
coach is
financed by GE or sold, if sooner.
|
SCHEDULE
III
ADDITIONAL
REPRESENTATIONS, WARRANTIES AND COVENANTS
(SEE
PARAGRAPH 2.42)
