SECURITY AGREEMENT AND MASTER CREDIT AGREEMENT [LOGO] CHRYSLER
FINANCIAL
This Security Agreement and Master Credit Agreement (hereinafter called the
"Agreement"), made as of this 15 day of May, 1996, and effective September 1,
1984 or the date hereof, whichever is later, is by and between Lake Xxxxxx
Chrysler Plymouth Jeep Eagle, LLC, having its principal place of business at
00000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, XX 00000 (hereinafter called "Debtor"),
and Chrysler Financial Corporation, a Michigan corporation, having officers
located at 00000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000 (hereinafter
called "Secured Party").
WHEREAS, Debtor is engaged in business as an authorized dealer of Chrysler
Corporation and desires Secured Party to finance the acquisition by Debtor in
the ordinary course of its business of new and unused vehicles sold and
distributed by Chrysler Corporation and/or other authorized sellers and of used
vehicles (all such unused and used vehicles being hereinafter collectively
called the "Vehicles").
WHEREAS, Secured Party is willing to provide wholesale financing to Debtor to
finance the acquisition of Vehicles by Debtor (1) by agreeing with Chrysler
Corporation to purchase from Chrysler Corporation receivables evidencing credit
sales of Vehicles by Chrysler Corporation to Debtor, and (2) by making loans or
advances to Debtor to finance the acquisition by Debtor of Vehicles from other
sellers.
NOW, THEREFORE, in consideration of the mutual premises herein contained and
other good and valuable consideration paid by each party to the other, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1.0 Financing - Secured Party agrees to extend to Debtor wholesale financing as
follows:
(a) to purchase receivables from Chrysler Corporation evidencing credit
sales of Vehicles by Chrysler Corporation to Debtor, at 100% of the
face amount of such receivables; or
(b) by making loans or advances to Debtor to finance the acquisition by
Debtor of Vehicles from sellers thereof, on the terms and conditions
set forth in Paragraph 2.1 herein or as set forth in the Vehicle
financing terms and conditions as they may be made available to Debtor
from time to time by Secured Party.
For the purposes of this Agreement, amounts applied by Secured Party to
acquire Debtor's receivables from Chrysler Corporation as contemplated by
clause (a) are herein called "Receivable Purchase Advances", and loans or
advances provided by Secured Party directly to either Debtor or to the
seller of Vehicles to Debtor as contemplated by clause (b) are herein
called "Direct Loan Advances", and all such amounts, loans and advances
provided by Secured Party contemplated by clause (a) and clause (b) are
herein collectively called "Advances". Debtor acknowledges that (x) the
maximum amount of Advances which will be made by Secured Party hereunder
will be established from time to time by Secured Party in its sole
discretion and (y) all such Advances shall by made on and shall be subject
to the terms and conditions of this Agreement. It is understood and agreed
that the making of any Advance hereunder shall be at the option of the
Secured Party and shall not be obligatory, and that the right of Debtor to
request that Secured Party make Advances may be terminated at any time by
Secured Party at its election without notice.
2.0 Evidence of Advances and Payment Terms - Each Receivable Purchase Advance
shall be evidenced by and made against a Credit Sale Agreement of Chrysler
Corporation delivered to Secured Party, and Secured Party shall be entitled
to make Receivable Purchase Advances against such Credit Sale Agreement
appropriately completed and executed on behalf of Debtor by Chrysler
Corporation by facsimile signature or otherwise under Power of Attorney
given by Debtor, without any duty to inquire as to the continued
effectiveness of such power or to verify with Debtor the amount of, or
Vehicles listed upon, such Credit Sale Agreement and each such Credit Sale
Agreement shall evidence the valid and binding payment obligation of
Debtor. Each Direct Loan Advance shall be made at such time as Debtor shall
request in accordance with the then-effective Vehicle financing terms and
conditions referred to above. Debtor will execute and deliver to Secured
Party from time to time its demand promissory notes in aggregate principal
amount equal to that amount agreeed to by Debtor and Secured Party from
time to time, such demand promissory notes (the "Promissory Notes") to
evidence the liability of Debtor to Secured Party on account of all Direct
Loan Advances and to constitute additional evidence of Debtor's obligation
in respect of the receivables underlying the Receivable Purchase Advances.
The maximum liability of Debtor under this Agreement shall at any time be
equal to the aggregate principal amount of all Advances at the time
outstanding hereunder plus interest and such other amounts as may be due
under this Agreement. Debtor will pay to Secured Party on demand the
aggregate principal amount of all Advances from time to time outstanding,
and will pay upon demand the interest due thereon and such other additional
charges as Secured Party shall determine from time to time.
Notwithstanding any inconsistent terms of any agreement between Debtor and
Chrysler Corporation in respect of Debtor's liability under any Credit Sale
Agreement, in consideration of Secured Party's making of Receivable
Purchase Advances and Direct Loan Advances, Debtor will pay to Secured
Party interest at the rate(s) per annum designated by Secured Party from
time to time on the amount of each Advance made by Secured Party hereunder
from the date of such Advance until date of repayment to Secured Party of
the full amount thereof. For the purposes of the preceding sentence, each
Receivable Purchase Advance shall be deemed to have been made by Secured
Party on the date on which payment shall have been made by Secured Party to
Chrysler Corporation for the related receivable of Debtor purchased by
Secured Party from Chrysler Corporation. Secured Party will give notice to
Debtor of the interest rate(s) established by it from time to time under
the terms hereof, and each such notice shall constitute an agreement
between Debtor and Secured Party as to the applicability to the Advances of
the interest rate(s) contained therein, to be applicable from the dates
stated in such notice until such interest rate(s) are changed by subsequent
notice given by Secured Party pursuant to this sentence. All interest
accrued on the Advances shall be payable monthly by Debtor, and shall be
due upon receipt by Debtor of the statement of Secured Party setting forth
the amount of such accrued interest.
00-000-0000 (1/96)
2.1 Debtor agrees that financing pursuant to this Agreement shall be used
exclusively for the purpose of acquiring Vehicles for Debtor's inventory
and debtor shall not sell or otherwise dispose of such Vehicles except by
sale in the ordinary course of business. If so requested by Secured Party,
Debtor agrees to maintain a separate bank account into which all cash
proceeds of such sales or other dispositions of such Vehicle will be
deposited. Debtor further agrees that upon the sale of each Vehicle with
respect to which an Advance has been made by Secured Party, Debtor will
promptly remit to Secured Party the total amount then outstanding of
Secured Party's Advance on each such Vehicle unless other terms of
repayment have been agreed to by Secured Party. Debtor agrees to hold in
trust for Secured Party and shall forthwith remit to Secured Party, to the
extent of any unpaid and past due indebtedness hereunder, all proceeds of
each Vehicle when received by Debtor, or to allow Secured Party to make
direct collection thereof and credit debtor with all sums received by
Secured Party.
3.0 Security - Debtor hereby grants to Secured Party a first and prior security
interest in and to each and every Vehicle financed hereunder, whether now
owned or hereafter acquired by way of replacement, substitution, addition
or otherwise, together with all additions and accessions thereto and all
proceeds thereof, subject only to any prior security interest in a Vehicle
financed by a Receivable Purchase Advance which has been granted by Debtor
to Chrysler Corporation and assigned by Chrysler Corporation to Secured
Party in connection with the making of such Receivable Purchase Advance.
Further, Debtor also hereby grants to Secured Party a security interest in
and to all Chattel Paper, Accounts whether or not earned by performance and
including without limitations all amounts due from the manufacturer or
distributor of the Vehicles or any of its subsidiaries or affiliates,
Contract Rights, Documents, Instruments, General Intangibles, Consumer
Goods, Inventory of Automotive Parts, Accessories and Supplies, Equipment,
Furniture, Fixtures, Machinery, Tools, and Leasehold Improvements, whether
now owned or hereafter acquired by way of replacement, substitution,
addition or otherwise, together with all additions and accessions thereto
and all proceeds thereof, as additional security for each and every
indebtedness and obligation of Debtor as set forth herein. The security
interest hereby granted shall secure the prompt, timely and full payment of
(1) all Advances, (2) all interest accrued thereon in accordance with the
terms of this Agreement and the Promissory Notes, (3) all other
indebtedness and obligations of Debtor under the Promissory Notes, (4) all
costs and expenses incurred by Secured Party in the collection or
enforcement of the Promissory Notes or of the receivable underlying any
Receivable Purchase Advance or of the obligations of the Debtor under this
Agreement, (5) all monies advanced by Secured Party on behalf of Debtor for
taxes, levies, insurance and repairs to and maintenance of any Vehicle or
other collateral, and (6) each and every other indebtedness or obligation
now or hereafter owing by Debtor to Secured Party including any collection
or enforcement costs and expenses or monies advanced on behalf of Debtor in
connection with any such other indebtedness or obligations. Nothing in this
Agreement shall require Debtor, in respect of any Receivable Purchase
Advance, to proceed first under the security interest created by this
Agreement or first under the security interest granted by Debtor to
Chrysler Corporation to secure the receivable underlying such Receivable
Purchase Advance and assigned by Chrysler Corporation to Secured Party and
the remedies of Secured Party under such security interests shall be
cumulative.
3.1 All said security set forth in Paragraph 3.0 above shall hereinafter
collectively be called "Collateral". Debtor hereby expressly agrees that
the term "proceeds" as used in Paragraph 3.0 above shall include without
limitation all insurance proceeds on the Collateral, money, chattel paper,
goods received in trade including without limitation vehicles received in
trade, contract rights, instruments, documents, accounts whether or not
earned by performance, general intangibles, claims and tort recoveries
relating to the Collateral. Notwithstanding that Advances hereunder are
made from time to time with respect to specific Vehicles, each Vehicle and
the proceeds thereof and all other Collateral hereunder shall constitute
security for all obligations of Debtor to Secured Party secured hereunder.
3.2 Debtor hereby agrees that upon request of the Secured Party it will take
such action and/or execute and deliver to Secured Party any and all
documents (and pay all costs and expenses of recording the same), in form
and substance satisfactory to Secured Party, which will perfect in Secured
Party its security interest in the Collateral in which Secured Party has or
is to have a security interest under the terms of this Agreement.
3.3 Secured Party's security interest in the Collateral shall attach to the
full extent provided or permitted by law to the proceeds, in whatever form,
of any disposition of said Collateral or to any part thereof by Debtor
until such proceeds are remitted and accounted for as provided herein.
Debtor will notify Secured Party before Debtor signs, executes or
authorizes any financing statement regardless of coverage.
3.4 Debtor shall be responsible for all loss and damages to the Collateral and
agrees to keep Collateral insured against loss or damage by fire, theft,
collision, vandalism and against such other risks as Secured Party may
require from time to time. Insurance and policies evidencing such insurance
shall be with such companies, in such amount and such form as shall be
satisfactory to Secured Party. If so requested by Secured Party, any or all
such policies of insurance shall contain an endorsement, in form and
substance satisfactory to Secured Party., showing loss payable to Secured
Party as its interest may appear, and a certificate of insurance evidencing
such coverage will be provided to Secured Party.
4.0 Debtor's Warranties - Debtor warrants and agrees that the Collateral now is
and shall always be kept free of all taxes, liens and encumbrances, except
as specifically disclosed in Paragraph 4.1 below or provided for in
Paragraph 3.0 above, and Debtor shall defend the Collateral against all
other claims and demands whatsoever and shall indemnify, hold harmless and
defend Secured Party in connection therewith. Any sum of money that may be
paid by Secured Party in release or discharge of any taxes, liens or
encumbrances shall be paid to Secured Party on demand as an additional part
of the obligation secured hereunder. Debtor hereby agrees not to mortgage,
pledge or loan (except for designated demonstrators as agreed to in advance
by Secured Party in writing) the Vehicles and shall not license, title,
use, transfer or otherwise dispose of them, except as provided in this
Agreement. Debtor agrees that it will execute in favor of Secured Party any
form of document which may be required to evidence further Advances by
Secured Party hereunder, and shall execute such additional documents as
Secured Party may at any time request in order to conform or perfect
Debtor's title to or Secured Party's security interest in the Vehicles.
Execution by Debtor of notes, checks or other instruments for the amount
advanced shall be deemed evidence of Debtor's obligation and not payment
therefor until collected in full by Secured Party.
4.1 Disclosure of Taxes, Liens and Encumbrances -
(If there are any, list them here; if none, so state.)
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PLACE FILED DATE OF FILING NAME AND ADDRESS OF CREDITOR
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5.0 Signatory Authorization - Debtor hereby authorizes Secured Party or any of
its officers, employees, agents or any other person Secured Party may
designate to execute any and all documents pursuant to the terms and
conditions of that certain Power of Attorney and Signatory Authorization of
even date herewith.
6.0 Events of Default and Remedies/Termination - Time is of the essence herein
and it is understood and agreed that Secured Party may, at its option and
notwithstanding any inconsistent terms in any agreement between Debtor and
Chrysler Corporation and/or Secured Party with respect to the receivable
underlying any Receivable Purchase Advance by Secured Party, terminate this
Agreement, refuse to advance funds hereunder, convert outstanding
installment payment obligations to payment on Vehicle sale obligations, and
declare the aggregate of all Advances outstanding hereunder immediately due
and payable upon the occurrence of any of the following events (each
hereinafter called an "Event of Default"), and that Debtor's liabilities
under this sentence shall constitute additional obligations of Debtor
secured under this Agreement.
(a) Debtor shall fail to make any payment to Secured Party, whether
constituting the principal amount of any Advance, interest thereon or
any other payment due hereunder, when and as due in accordance with
the terms of this Agreement or with any demand permitted to be made by
Secured Party under this Agreement or any Promissory Note, or shall
fail to pay when due any other amount owing to Secured Party under
this Agreement or any Promissory Note, or shall fail in the due
performance or compliance with any other term or condition hereof or
thereof, or shall be in default in the payment of any liabilities
constituting indebtedness for money borrowed or the deferred payment
of the purchase price of property or a rental payment with respect to
property material to the conduct of Debtor's business;
(b) A tax lien or notice thereof shall have been filed against any of the
Debtor's property or a proceeding in bankruptcy, insolvency or
receivership shall be instituted by or against Debtor or Debtor's
property or an assignment shall have been made by Debtor for the
benefit of creditors;
(c) In the event that Secured Party deems itself insecure for any reason
or the Vehicles are deemed by Secured Party to be in danger of misuse,
loss, seizure or confiscation or other disposition not authorized by
this Agreement;
(d) Termination of any franchise authorizing Debtor to sell Vehicles;
(e) A misrepresentation by Debtor for the purpose of obtaining credit or
an extension of credit or a refusal by Debtor to execute documents
relating to the Collateral and/or Secured Party's security interest
therein or to furnish financial information to Secured Party at
reasonable intervals or to permit persons designated by Secured Party
to examine Debtor's books or records and to make periodic inspections
of the Collateral; or
(f) Debtor, without Secured Party's prior written consent, shall
guarantee, endorse or otherwise become surety for or upon the
obligations of others except as may be done in the ordinary course of
Debtor's business, shall transfer or otherwise dispose of any
proprietary, partnership or share interest Debtor has in his business,
or all or substantially all of the assets thereof, shall enter into
any merger or consolidation, if a corporation, or shall make any
substantial disbursements or use of funds of Debtor's business, except
as may be done in the ordinary course of Debtor's business, or assign
this Agreement in whole or in part or any obligation hereunder.
Upon the occurrence of an Event of Default, Secured Party may take
immediate possession of said Vehicles without demand or further notice and
without legal process; and for the purpose and furtherance thereof, Debtor
shall, if Secured Party so requests, assemble the Vehicles and make them
available to Secured Party at a reasonably convenient place designated by
Secured Party and Secured Party shall have the right, and Debtor hereby
authorizes and empowers Secured Party to enter upon the premises wherever
said Vehicles may be, to remove same. In addition, Secured Party or its
assigns shall have all the rights and remedies applicable under the Uniform
Commercial Code or under any other statute or at common law or in equity or
under this Agreement. Such rights and remedies shall be cumulative. Debtor
hereby agrees that it shall pay all expenses and reimburse Secured Party
for any expenditures, including reasonable attorneys' fees and legal
expenses, in connection with Secured Party's exercise of any of its rights
and remedies under this Agreement.
7.0 Inspection: Vehicles/Books and Records - It is hereby understood and agreed
by and between Debtor and Secured Party that Secured Party shall have the
right of access to and inspection of the Vehicles and the right to examine
Debtor's books and records, which Debtor warrants are genuine in all
respects. Debtor hereby certifies to Secured Party that all Vehicles and
books and records shall be kept at the principal place of business of
Debtor as hereinabove stated or at such other locations as approved in
writing by Secured Party, and Debtor shall not remove or permit the removal
of the Vehicles or books and records during the pendency of this Agreement
except in the ordinary course of business and as authorized by Secured
Party.
7.1 Debtor agrees to furnish to Secured Party after the end of each month, for
so long as this Agreement shall be effective, balance sheets and statements
of profit and loss for each month with respect to Debtor's business in such
detail and at such times at Secured Party may require from time to time.
8.0 General - Debtor and Secured Party further covenant and agree that:
8.1 Any provision hereof prohibited by law shall be ineffective to the extent
of such prohibition without invalidating the remaining provisions hereof.
8.2 This Agreement shall be interpreted according to the laws of the State of
Debtor's principal place of business as identified above.
8.3 This Agreement cannot be modified or amended, except in writing by both
parties unless otherwise specifically authorized herein, and shall be
binding and inure to the benefit of each of the parties hereto and their
respective legal representatives, successors and assigns.
8.4 Interest to be paid in connection herewith shall never exceed the maximum
rate allowable by law applicable hereto, as the parties intend to strictly
comply with all law relating to usury. Notwithstanding any provision hereof
or any other document in connection herewith to the contrary, Debtor shall
not pay nor will Secured Party accept payment of any such excessive
interest, which excessive interest is hereby canceled, and Secured Party
shall be entitled at its option to refund any such interest erroneously
paid or credit the same to Debtor's obligations hereunder.
8.5 The terms and provisions of this Agreement and of any other agreement
between Debtor and Secured Party or Debtor, Secured Party and Chrysler
Corporation or Debtor and Chrysler Corporation with respect to the
Receivable underlying any Receivable Purchase Advance by Secured Party
should be construed together as one agreement; provided, however, in the
event of any conflict, the terms and provisions of this Agreement shall
govern such conflict.
8.6 No failure or delay on the part of Secured Party in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power preclude any other or further
exercise thereof or the exercise of any other right or power hereunder. The
remedies herein are in addition to those available in law or equity, and
Secured Party need not pursue any rights it might have as a Secured Party
before pursuing payment and performance by Debtor or any guarantor or
surety.
8.7 This Agreement may not be assigned by Debtor.
9.0 Notices - Any notice given hereunder shall be in writing and given by
personal delivery or shall be sent by U.S. Mail, postage prepaid, addressed
to the party to be charged with such notice at the respective address set
forth below:
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TO DEBTOR TO SECURED PARTY
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Lake Xxxxxx Chrysler Plymouth Jeep Eagle, LLC Chrysler Financial Corporation
00000 Xxxxxxxxx Xxxxxx Drive P.O. Box 560217
Cornelius, NC 28031 Xxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Xx. Attention: Branch Manager
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
Lake Xxxxxx Chrysler Plymouth Jeep Eagle, LLC
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(DEBTOR)
/s/ [illegible] By /s/ Xxxx X. Xxxxx, Xx.
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(WITNESS) Xxxx X. Xxxxx, Xx.
/s/ [illegible] Title Member
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(WITNESS)
CHRYSLER FINANCIAL CORPORATION
By /s/ [illegible]
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Title Zone Manager
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