INVENTORY FINANCING AND SECURITY AGREEMENT
This Agreement is entered into as of the year and date below written
between Conseco Finance Servicing Corp. and its affiliates ("Conseco Finance")
and the Dealer or Dealers (jointly and severally if more than one) who are
identified and who have signed this Agreement (collectively "Dealer").
1. ADVANCES. Provided that Dealer is not then in default hereunder and at
Dealer's request, Conseco Finance, at Conseco Finance's sole and
unconditional option, may advance funds for Dealer's acquisition of
Inventory ("Inventory"), or for such other purpose satisfactory to Conseco
Finance, secured by a security interest in the Collateral described in
Paragraph 3 hereof. In each case, Conseco Finance will send Dealer a
schedule(s) or billing statement(s) as described in Paragraph 2 hereof. If
Dealer does not agree with the schedule(s) or billing statement(s), it must
immediately notify Conseco Finance in writing of any objections within
seven (7) days from the date of the schedule(s) or billing statement(s)
and waiver of any objections or claims thereto and such schedule(s) and
billing statement(s) shall become a part of this agreement.
2. PAYMENT. Dealer shall repay Conseco Finance in accordance with either or a
combination of the following Plans, which shall be chosen at the sole
discretion of Conseco Finance and which may be specified by amendment to
this Agreement:
a) Pay As Sold Plan - Conseco Finance shall deliver to Dealer a schedule or
schedules listing the items of Inventory on which Conseco Finance has
advanced funds and the amount of the advance. Promptly after each item
of Inventory is sold, Dealer will pay to Conseco Finance the total
amount due on that item. Dealer will pay to Conseco Finance the total
amount due on unsold Inventory within the period established from time
to time by Conseco Finance or upon demand by Conseco Finance, whichever
first occurs, and will pay such curtailments as Conseco Finance may
require.
b) Scheduled Payment Plan - Conseco Finance shall deliver to Dealer a
schedule or schedules listing the repayment terms for the Inventory on
which it has advanced funds and the amount of the advance. Dealer will
thereafter pay to Conseco Finance the payment due, when due or upon
demand by Conseco Finance, whichever comes first, as shown on the
schedule(s) which Conseco Finance supplies Dealer.
Under either Plan, Dealer agrees that:
a) Dealer will pay Conseco Finance financing and service charges, and late
charges according to and upon receipt of the schedules or billing
statements which Conseco Finance delivers to Dealer and within the time
specified by Conseco Finance.
b) Conseco Finance at its discretion, may at any time and without notice to
Dealer apply or reapply any monies received from Dealer in payment of
any Dealer's obligations or liabilities to Conseco Finance or any
insurance proceeds received in such order of application as Conseco
Finance may determine.
3. COLLATERAL. As security for all present and future obligations of Dealer to
Conseco Finance of whatever kind, now due or to become due, absolute or
contingent, and whether joint, several or joint and several. Dealer hereby
grants to Conseco Finance a continuing security interest in all present and
hereafter acquired Inventory and other inventory of Dealer, all
replacements and substitutions thereof, all parts, additions and accessions
thereto and all returned and repossessed goods, all of Dealer's present and
hereafter acquired equipment, accounts, contract rights, chattel paper,
documents and general intangibles, and the proceeds and products of each of
the foregoing. Dealer also grants a security interest in and assigns to
Conseco Finance all present and future credits, rebates and hold backs
related to the Inventory to which Dealer is entitled and all rental and
other monies due or to become due from those who lease Inventory from
Dealer and the proceeds thereof. Dealer authorizes each payee of any of the
foregoing to pay such amounts directly to Conseco Finance. Dealer will
execute and deliver all documents necessary to evidence the assignment
(including, if requested, a separate assignment agreement), assist in
perfecting the security interests granted herein and will bear all costs of
recording and perfection. All of the above described property shall
hereinafter be referred to as the "Collateral."
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4. DEALER'S DUTIES. So long as this Agreement remains in effect, Dealer
represents, warrants and agrees that it shall:
a) Sell and deliver Inventory and any Collateral only in the ordinary
course of business and shall not otherwise sell, transfer, encumber,
lease or use any item of collateral in which Conseco Finance has a
security interest without Conseco Finance's prior written consent;
b) Keep accurate and complete records of the Collateral and permit Conseco
Finance to inspect the Collateral at reasonable time and to inspect and
make copies of the Dealer's books and records;
c) Promptly report and pay all taxes and other charges against the
Collateral and discharge all liens, encumbrances, assessments and
charges that are against or attached to the Collateral;
d) Pay all transportation and storage charges on the Collateral;
e) Pay all rents, if any, for the use of premises on which Dealer keeps any
Collateral;
f) Keep the Collateral insured for full value against all insurable risks
with Conseco's Finance named as the loss payee, as its interest may
appear, and notify Conseco Finance in writing ten (10) days before
changing or canceling such policies;
g) Indemnify and hold harmless Conseco Finance from any claims or defenses
asserted by any customer or buyer of any item of Inventory or
Collateral, by reason of: (a) the condition of any items(s) sold; and
(b) any representations made by Dealer about the items(s);
h) Assure that all financial statements provided to Conseco Finance to
induce it to extend or continue to extend credit to Dealer have been and
will be true and correct in all respects and fairly and truthfully
represent the financial conditions of the party whose statement is
presented.
If Dealer should fail to pay any such tax or lien or obtain insurance for
the Collateral, Conseco Finance may, but shall not be obligated to, do so
on Dealer's behalf and demand from Dealer repayment for all expenditures
together with interest at the highest contract rate allowed by law.
5. DEFAULTS. Any of the following shall constitute a default hereunder:
failure by Dealer to make prompt payments as required herein or to fulfill
any promise or agreement with Conseco Finance, whether or not contained
herein; death or dissolution of Dealer; assignment of assets or property by
Dealer for the benefit of creditors; Dealer's ceasing to do business as a
going concern; the filing of a petition by or against Dealer; the issuance
of an order of attachment against Dealer or any property of Dealer; damage
to or destruction of a substantial part of the Collateral; any change in
the Dealer's financial condition or means or ability to pay deemed by
Conseco Finance to be adverse, or the occurrence of any other event as a
result of which Conseco Finance deems itself insecure; if any warranty,
representation or statement made or furnished to Conseco Finance by or on
behalf of Dealer proves to have been false when made or furnished.
6. REMEDIES. If Dealer defaults, Conseco Finance can, at its option and
without notice, demand immediate payment of all obligations and amounts due
under this agreement and any other indebtedness owed to Conseco Finance.
Conseco Finance shall have all the rights and remedies of a secured party
under the Uniform Commercial Code in effect in the jurisdiction where the
Collateral is kept including, but not limited to, the right to enter any of
Dealer's premises, with or without legal process, but without force, to
take possession and remove the Collateral. At Conseco Finance's request,
Dealer will assemble and prepare for removal and make available to Conseco
Finance at place to be designated by Conseco Finance all Inventory and
Collateral. Dealer stipulates and agrees that: a private sale of the
Inventory and Collateral for the amount owed to Conseco Finance at that
time, less a reasonable restocking charge and costs of sale, shall be a
commercially reasonable method of disposition; the delivery of any part of
the Collateral to the distributor or manufacturer thereof with a request
that the Collateral as provided for in a repurchase agreement with Conseco
Finance is a commercially reasonable disposition of such items; and that
seven (7) days written notice of public sale date or the date after which a
private sale may occur is reasonable notice. Conseco Finance shall not be
chargeable with responsibility for the accuracy or validity of any document
or for the existence or value of any Collateral. Dealer shall pay Conseco
Finance's actual attorney's fees, legal expenses and any repossession costs
incurred by it in enforcing this Agreement after default by Dealer and
such amount shall become part of the obligations hereunder. To the extent
not prohibited by law, Dealer waives all valuation and exemption laws and
releases all rights of appeal after payment in full.
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7. MODIFICATION AND INTEGRATION. This agreement is an integrated writing and
contains the entire agreement between the parties and cannot be modified or
amended except by a writing and signed by both Conseco Finance and Dealer.
Notwithstanding the foregoing, the following will be sufficiently proved by
the business records of Conseco Finance which shall conclusively establish
the matters contained therein: (a) description of specific Collateral; (b)
amount of advances owed to Conseco Finance; (c) time extensions; and (d)
the rate and amount of financing and service charges, curtailments and late
charges. Any provision of this agreement found upon judicial interpretation
or construction to be void or prohibited by law, including any provision
related to interest, shall not invalidate the remaining provisions hereon.
Should the interest charged by Conseco Finance hereunder ever be determined
to exceed the highest lawful rate, then the rate shall automatically be
reduced to the highest lawful rate without invalidating this agreement.
8. POWER OF ATTORNEY. Dealer hereby irrevocably appoints Conseco Finance,
including any officer or employee of Conseco Finance as Conseco Finance may
designate, as its true and lawful attorney-in-fact with power of
substitution to do the following acts on behalf of Dealer; to prepare,
execute and deliver in the name of Dealer security agreements, financing
statements and Certificates of Title relating to Collateral; to endorse
Dealer's name upon any notes, check, drafts, money orders and other forms
of instruments made payable to Dealer; and generally to perform all acts
and do all things necessary and proper in discharge of the power hereby
conferred, including the making of affidavits and the acknowledgment of
instruments as fully as if done by the Dealer. The foregoing powers are
coupled within an interest and shall be irrevocable without the prior
written consent of Conseco Finance, as long as any obligations of Dealer to
Conseco Finance remain outstanding.
9. SELECTION OF INVENTORY; DISCLAIMER OF WARRANTY. Dealer has selected both
the Inventory and the supplier from whom Dealer acquired the Inventory and
Dealer assumes all responsibility and risk for the existence, character,
quality, condition and value of the Inventory. Dealer irrevocably waives
any claims against Conseco Finance with respect to the Inventory whether
for breach of warranty or otherwise. Any such claims shall not alter,
diminish or otherwise impair Dealer's liabilities or obligations to Conseco
Finance hereunder, such obligations being absolute, unconditional and
without right of set off.
10. TIME. Time is of the essence in the performance of Dealer's duties, but
Conseco Finance's failure to insist upon strict compliance with this
Agreement shall not be deemed a waiver of any of Conseco Finance's rights.
A waiver by Conseco Finance of any right or remedy under this Agreement on
any one occasion shall not be construed as a bar to or waiver of any right
or remedy on any future occasion.
11. ASSIGNMENT. Conseco Finance may assign this Agreement without the consent
of Dealer, but Dealer cannot assign this Agreement without the express
prior written consent of Conseco Finance. If assigned, this Agreement shall
be for the benefit of each assignee or the other successor in interest of
each party and shall bind them until terminated.
12. ARBITRATION. Any controversy or claim arising out of or related to this
Agreement, or the breach thereof, except for an action to recover,
repossess or replevy any collateral hereunder, shall be settled by
arbitration before three (3) arbitrators in the city geographically closest
to the Dealer's place of business in which a commercial division office of
Conseco Finance is located, in accordance with the Commercial Rules of
Arbitration of the American Arbitration Association. The provisions of the
Federal Arbitration Act. 9 U.S.C. par. 1 et. seq. shall apply to all
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arbitration proceedings hereunder. Any judgment or ruling of the
arbitrators shall be a final and binding award and may be entered in any
court having jurisdiction thereof.
13. TERMINATION. Either Conseco Finance or Dealer may terminate this agreement
by sending thirty (30) days written notice to each other, but termination
of this Agreement does not end Dealer's obligation to Conseco Finance for
those obligations which accrued prior to the effective date of the
termination; provided that Conseco Finance may terminate this Agreement
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immediately upon any default by the Dealer. If Dealer specifically requests
Conseco Finance to furnish a termination statement and such statement is
legally required, Conseco Finance shall execute and deliver such
termination statement within twenty (20) days after the effective date of
termination.
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14. CHOICE OF LAW. This Agreement shall be construed in accordance with laws of
the State of Georgia.
DEALER ACKNOWLEDGES RECEIPT OF A COPY OF THIS SECURITY AGREEMENT.
Effective as of the 3rd day of April, 2001.
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DEALER ALL Homes Corp.
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BY /s/ Xxxxxx X. Xxxxx
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TITLE Xxxxxx X. Xxxxx - President
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ADDRESS 0000 XxXxxxxxx Xxxxx; Xxxxxxxxxx, XX 00000
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ACCEPTED BY:
CONSECO FINANCE SERVICING CORP.
BY /s/ Xxxxx Xxxxxxx 4/9/01
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ITS A Xxxxx Xxxxxxx Credit Analyst
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