DEALER LOAN AND SECURITY AGREEMENT
FINOVA Capital rporation P.C. Universe, Inc.
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1060 First Avenue Exact Legal Name
Suite 100 2302 N. Dixie Highway
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King of Prussia, PA 19406 Street Address
Boca Raton, FL 33431
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City, State, Zip Code
Gentlemen:
1. We are an authorized dealer of goods manufactured and/or distributed by
various manufacturers and distributors (hereinafter called "Manufacturer"). As
such, we from time to time buy goods from Manufacturer to be held by us as our
inventory (or sale by us in the normal course of our business. We may, as more
fully set forth herein, from time to time obtain loans from you in order to
finance the purchase of certain of such goods, including parts and accessories
therefor, from Manufacturer, and desire by this Agreement to set forth in
writing our understanding of our loan arrangements with you and secure repayment
of such loans and other related debts and liabilities we may have to you,
whether now existing or hereafter arising.
2. Upon our request from time to time, you may, at your sole discretion and
without any obligation to do so, make loans to us, under such terms and with
such condi tions as you shall specify, to enable us to acquire rights in
inventory from Manufacturers pre-approved by you for financing programs. We
understand that each such loan will be solely at your discretion, and we
expressly disclaim any right to expect otherwise, either from the course of our
dealing, our need therefor, your dealings with others, your arrange ments with
Manufacturer, or otherwise. Conversely, nothing herein will prevent us from
obtaining financing from other sources, provided that you are completely
satisfied that such other financing will not jeopardize our ability to comply
with our financial obligations to you and that adequate procedures will be
implemented to absolutely assure your abili ty to identify your Collateral.
Accordingly, we will obtain both your written permission prior to arranging such
other financing and such acknowledgements and undertakings from our other
lenders as you may require.
We understand that certain terms and conditions applicable to loans
obtained by us from you will be set forth in materials to be made available from
time to time to us and other dealers, the terms of which, as revised from time
to time, being deemed incorporated herein by reference. We understand that these
materials are subject to change by you at any time and from time to time, and
expressly assume the responsibility of confirming directly with you, upon our
request for each loan, the exact terms and conditions then being stated by you,
including without limitation rate of interest and terms of repayment. In no
event will we view such materials as a commitment or other otter on your part to
lend, and we will have no right to any loan under any particular terms until
actually made and under the terms so made. We understand and agree that the full
amount of each loan will be paid to you on its due date without deduction for
any sums due from Manufacturer or any Credit Memo that may have been issued to
you, unless you have previously notified us that you have received and applied
the amount of the Credit Memo issued by the Manufacturer.
We understand that you may, from time to time, issue advices to us. Such
advices may include, but need not be limited to, periodic or monthly statements
of our account, periodic letter advices in the nature of statements of account,
issued from time to time, and letter forms or other forms of notices of due
dates of finance plan payments and of the specific terms of loans which we have
with you. Unless we, within ten (10) days from the date of any such advice, give
you written and itemized objection to the corn tents of such advice, we shall be
fully bound thereby and acknowledge that the content of such advice is true,
correct, and complete, and accurately reflects our obligations to you as of the
date thereof.
In connection with each loan requested, we will deliver to you such other
writings as you shall require, which may include notes or other appropriate
evidence of debt. Such notes or other evidence of debt, Manufacturer invoices,
and other like materials as may be revised from time to time ("Collateral
Documents'), together with this Agreement, contain our entire understanding, and
we acknowledge that we will not be relying upon any prior o21 or written
promises or undertakings or future oral promises between us. No modification
hereof or of the Collateral Documents will be binding upon you unless in a
writing duty executed on your behalf by an officer holding the rank of Vice
President or higher.
We hereby authorize you to disburse the proceeds of each loan directly to
Manufacturer on our behalf. Further, we shall and hereby authorize Manufacturer
to deliver its invoice for Inventory, together with all Certificates of Origin,
directly to you. You many assume that all such invoices so submitted are
authentic and accurate and that they have been submitted on our behalf and with
our permission. Receipt by you from us or Manufacturer of an invoice for
Inventory shall be your authority to make a loan to us under terms and
conditions then being stated by you. In addition we shall and hereby authorize
the Manufacturer to issue all Credit Memos directly to you.
We acknowledge that the term "Prime Rate", as used in the Collateral
Documents in reference to the rate of interest applicable to loans to us, will
mean the average of the Prime Rates (the base rate for corporate loans at large
U.S. money center commercial banks) quoted In the Wall Street Journal under the
caption "Money Rates', and agree that the interest rate applicable to our loans
from you will automatically change from time to time effective upon each change
in the published Prime Rate. We further agree that interest on our loans from
you will be calculated on the basis of a 360 day year but will be chargeable for
the actual days that principal is outstanding in the then current year.
3. We acknowledge that our financial arrangements with you are completely
independent of our arrangements with Manufacturer, and that neither you nor
Manufacturer are an agent for or acting on behalf of the other. We are not
relying, in our understanding with you, on any statements, promises or
representations, oral or written, made by Manufacturer, whether or not
purportedly on your behalf, relating to the subject matter hereof and of our
loans with you. Although we may receive official literature, brochures and other
written materials disseminated by you through Manufacturer, we expressly assume
the risk that the materials so received are the most current, up to date
materials then authorized by you to be disseminated. None of our obligations to
you will be affected or impaired, or be subject to any defense, setoff,
counterclaim, crossclaim or recoupment, by reason of any claim which we now or
hereafter have against Manufacturer or its agents, including without limitation
any claim for breach of express or implied warranty of title, or otherwise
related to the condition of the Collateral or our dealings with Manufacturer.
4. As used herein, the following terms shall have the following meaning:
a) "Inventory' means all present and future inventory. as that
term is defined in the Pennsylvania Uniform Commercial Code ('Code, together
will all parts and accessories, and all replacements, substitutions and
additions thereof or thereto.
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b) "Accounts" means all present and future Accounts, as that
term is defined in the Code.
c) "General Intangibles" means all present and future General
Intangibles, as that tens is defined in the Code, and shall include, without
limitation, all Credit Memos and other sums due from Manufacturer, all books,
records, ledgers, journals, check books, computer tapes and disks, print
outs and other information and sources of information, and all licenses,
permits, franchises, lradenames and other rights and privileges used or useful
in the conduct of our business and the sale of Inventory.
d) "Proceeds" means present and future Proceeds, as that term is
defined in the Code, and shall include, without limitation, insurance payable by
reason of loss or damage to any of the Collateral. All Proceeds received by us
will be held in trust (or you unfit our loans are paid, and we will promptly
deliver all Proceeds to you.
e) "Collateral" means, individually and collectively, Inventory,
Accounts, General Intangibles and Proceeds.
5. a) In order to secure repayment to you of each loan made by you to
us the proceeds of which enable us to acquire rights in or the use of Inventory,
we hereby grant to you a purchase money security interest in such Inventory,
the Proceeds thereof and all General Intangibles related thereto, to secure
repayment of such loan. It is intended by this subparagraph (a) that only the
Inventory so acquired, with Proceeds and related General Intangibles, will
secure the loan the proceeds of which enabled us to acquire rights in or the use
of such Inventory.
b) In order to secure repayment to you of all debts and liabilities
we may now or hereafter have to you under this Agreement or any other agreement,
whether such debt or liability be obtained by you by assignment, negotiation
or otherwise, and whither direct or indirect, primary or secondary, absolute
or contingent, or otherwise, including but not limited to all loans made by you
to us to finance the purchase of Inventory, we hereby grant to you a security
interest in all of our Inventory and in all Accounts and General Intangibles no
matter how obtained by us, whither now existing or hereafter acquired, and the
Proceeds of all of the foregoing.
c) All payments made by us will be deemed to be applied by you first
to the loan (i) the proceeds of which enabled us to acquire rights in or
the use of Inventory which we have previously sold and (ii) with the earliest
due date.
6. We hereby represent to you that all information provided by us to you in
connection with our application for each loan from you is and will be complete
and accurate in every respect. WE WILL IMMEDIATELY NOTIFY YOU IN WRITING OF ANY
CHANGE IN ANY OF THIS INFORMATION.
7. We will from time to time execute and/or deliver or cause to be executed
and/or delivered to you such financing statements, amendments to financing
statements, continuation statements, documents of title, manufacturers'
certificates of origin, warehouse receipts, bills of lading, vehicle titles,
waivers, consents and such other manner of things, and take all manner of
actions, as you may from time to time request which are in your sole opinion
necessary or desirable in order to pertect, protect, maintain, continue, realize
and/or enforce your rights and security interests granted herein. This shall
include, without limitation, the written waiver by the landlord of each location
at which any Collateral is located. A carbon, photographic or other reproduction
of this Agreement shall be sufficient as a financing statement and may be tiled
in any public office as a financing statement.
8. We will maintain the Inventory in excellent, salable condition,
consistent with the highest standards in the industry, and will comply with all
applicable laws relating to our use thereof. We will provide you or your
designated representatives with access, at any time, during normal business
hours, whether announced or unannounced, to each location at which any
Collateral is located, to inspect and examine the Inventory and other Collateral
and business records, including without limitation all financial records. We
agree, at our sole cost, to keep all Inventory insured against risks covered by
standard forms of tire, theft and extended coverage and such other risks as may
be reasonably required by you and under policies issued by an insurance company
or companies and in amounts satisfactory to you. You shall be named to the
extent your interest may appear under a Lender's Loss Payable Clause in such
policy, which shall provide that the insurance cannot be canceled without at
least thirty (30) days prior written notice to you and shall Insure you
notwithstanding any act or neglect on our part. At our expense, we shall furnish
you with evidence of the same in form satisfactory to you, and shall provide you
with a Certificate thereof naming you as certificate holder. We will promptly
remit to you in the forth received, with all necessary endorsements, any
Proceeds of such insurance. You may make and settle claims and endorse our name
on any checks or drafts. You may apply any Proceeds of insurance which may be
received by you toward payment of any obligations or liabilities owed to you by
us, whether or not then due, in such order of application as you may determine.
Loss, damage or destruction of all or any of the Collateral shall not
affect or diminish our liabilities to you and we assume all responsibility and
risk for the existence, character, quality, condition, value, and delivery of
Inventory.
9. We will pay and/or cause to be paid all taxes, levies and other
governmental charges and assessments payable on or with respect to the
Collateral and any premises at which the Collateral is located, which it unpaid
may result in a lien or imposition thereon. Such taxes, levies, charges and
assessments will be paid prior to the date that any penalty for late payment may
be assessed with respect thereto, and if requested by you we will, at our
expense, provide you with receipts or other evidence of payment in form
satisfactory to you.
10. We will not suffer or permit any lien, security interest, charge, claim
or encumbrance to be placed on any of the Collateral, other than in your favor,
or suffer or permit any interest to exist therein which is adverse to your own.
We represent that we are, and agree to remain, the sole and absolute owner of
the Collateral, until sold in the ordinary course of our business, and are and
will remain qualified under the terms of all applicable laws and under our
dealership arrangements with Manufacturer to conduct our business as presently
conducted, with all necessary governmental and other licenses, consents and
authorizations having been obtained.
11. At your option, without any obligation to do so, you may pay and
discharge taxes, liens, levies, security interests or other encumbrances against
the Collateral, may pay for insurance on and for the maintenance and
preservation of the Collateral and perform on our behalf any other obligation
required to be performed by us hereunder but which we have failed to so do. We
shall reimburse you on demand for any payment made or any expense incurred by
you pursuant to the authority hereof, with interest at the highest rate
chargeable on any of our loans with you, and will pay you a late charge of
1.5(degree)/ per month of the amount due to you, or the highest legally
permissible rate if lower.
12. We will furnish you such information regarding our business and
financial condition as you may request from time to time, including without
limitation such finanaal statements, in such forth and bearing such
certifications, as you shall require. We agree that you may audit or cause to be
audited our books and records at any and all times, during normal business
hours, whether announced or unannounced, and to permit you access to each
location at which any of our General Intangibles are located.
13. We will provide you with written notice of the following matters
Immediately upon the occurrence thereof:
a) A change in any Information provided by us to you herein, in
any application made by us in connection with any loan, or otherwise, including
without limitation, any change In the location of any Collateral or in any
other circumstances regarding the Collateral or our business operations;
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b) Loss, theft, or substantial damage or destruction of any of the
Collateral or related to our business operations generally; or
c) Any other matter which might have a material adverse affect on
our financial condition or operations or which, upon the giving of notice or
passage of time, or both, would result in an event of default by us hereunder.
14. Any one or more of the following shall be an event of default by us
under this Agreement:
a) Failure by us or any person jointly or otherwise liable
to you for our obligations to you, as surety, guarantor or otherwise ("Other
Obligor") to pay any amount due you, as and when due, contained or referred to
herein or in any other instrument, document, or agreement to which we or such
Other Obligor are a party or by which we or such Other Obligor are bound to
you, whether now existing or hereafter created; or
b) Failure by us or any Other Obligor to perform or comply with
any other obligation, covenant or liability contained or referred to herein
or in any other instrument, document, or agreement to which we or such Other
Obligor are a party or by which we or such Other Obligor are bound to you,
whether now existing or hereafter created, and such failure, it reasonably
susceptible of cure, is not cured within fifteen (15) days of the occurrence
thereof; or
c) If any warranty, representation, or statement made or furnished
to you by us or on our behalf or on behalf of an Other Obligor, including any
representation made on our behalf by Manufacturer, proves to be false,
misleading or incomplete in any respect; or
d) Loss, theft or substantial damage or destruction of any of the
Collateral, or the making of any levy, seizure, or attachment thereof or
thereon; or
e) Dissolution, merger, consolidation, sale or other disposition
of a controlling interest in our ownership or of substantially all of our
assets, termination of existence, insolvency, business failure, appointment
of a receiver, trustee, sequestrator, conservator, or other judicial
representative, whether similar or dissimilar, for us or for all or any part
of our property, assignment by us for the benefit of creditors or the
commencement of any proceeding by or against us under any provision of any
federal or state bankruptcy or insolvency laws; or
(f) Failure by us to pay any obligations) or liability(ies)
whatsoever, past, present or future, when due to any other creditor, or the
occurrence of any event of default by us under any agreement with any of our
respective creditors, including without limitation the occurrence of an event
of default under any lease relating to any premises upon which all or any part
of our Inventory or other Collateral is located; or
g) If we give notice of a Bulk Sale or intended Bulk Sale, or call
a meeting of our respective unsecured creditors or offer a composition or
extension to such creditors, or cease to operate our respective business.
15. Upon the occurrence of an event of default, you shall have the right to
repossess the Inventory and also any and all rights available under Ma Code,
including, without limitation, the right to declare any and all unpaid balances
of principal, interest, costs and expenses arising out of any and alt of our
obligations u,- liabilitie : '.o you. whether past, present or future, direct or
indirect, matured or unmatured, liquidated or unliquidated, immediately due and
payable without notice to or demand on us. We irevocably authorize you or your
agent to enter all premises to take possession of and remove the Inventory and
other Collateral and release you from any and all Ilahility with respect to such
entry or removal. We shall in case of default, if you so request, assemble and
deliver the Inventory and other Collateral, at our expense, to a place to be
designated by you. We shall pay all of the costs you incur in the enforcement of
any of our obligations to you or the collection of any liabilities owed to you
by us, including, without limitation, costs, expenses and reasonable attorneys'
tees. If any notification of intended disposition of any of the Inventory or
other Collateral is required by law, such notification s."all be deemed
reasonably and properly given if mailed by ordinary mail or overnight delivery
service at least ten (t0) days before such disposition, postage prepaid,
addressed to us, either at our address shown in this Agreement, or at such other
address as we may have designated to you in writing.
16. To the extent permitted by applicable law, we authorize you, your
designee, the Clerk of the Court, or any attorney of any Court, In the
Commonwealth of Pennsylvania or any other state, to appear for us at any time in
any and all actions and to confess judgment against us for all sums then owed !o
you, whether or not then payable, together with an attorney's tee of 15% of all
sums then owed and/or for the recovery of any or all of the Inventory In our
possession. Wherever this provision Is prohibited, unenforceable or unlawful, it
is deemed stricken from this Agreement.
17. Any law, custom or usage to the contrary notwithstanding, you shall
have the right at all times to enforce the covenants and provisions of this
Agreement in strict accordance with the terms hereof, notwithstanding any
conduct or custom on your part in refraining from so doing al any time or times.
Your failure at any time to Invoke your rights under the covenants and
provisions of this Agreement strictly in accordance with the same shall not be
construed as having created a custom in any way or manner contrary to the
specific terms and provisions of this Agreement or as having in any way or
manner modified, altered or waived the same. Time is of the essence in our
performance hereunder and under all other agreements with you. All of your
remedies are cumulative and not alternative, and can be exercised in any order
and in any manner, separately or simultaneously, and from time to time until all
liabilities and obligations to you are satisfied in full.
18. This Agreement may be assigned by you, but we may not assign this
Agreement without your prior written consent. It you assign this Agreement, you
shall have no further obligation hereunder. All of your rights hereunder shall
inure to the benefit of your successors and assigns and ail our obligations
shall bind our successors and assigns. H there be more than one party obligated
to you under this Agreement, their obligations hereunder shall be joint and
several, and the terms "we' "us' or 'our as used herein shall refer to them
jointly and severally.
19. We authorize and empower you or your employees, agents or
representatives, on our behalf, and in our name, to complete and supply any
omission or blank spaces in this Agreement and in any documents or financing
statements executed by us and including amendments and continuations thereof
under the Code; to execute and/or have acknowledged any form of security
instruments, notes, drafts and documents; and to make any requisite affidavits
which may be necessary or required by you, and/or which you may desire to
evidence or secure advances made by you pursuant to the terms of this Agreement
All of the foregoing may be executed in such forth and substance as you in your
sole discretion may deem necessary or proper, and this power o1 attorney, being
coupled with an interest, is Irrevocable.
20. Our officers, by execution hereof, warrant and represent to you that we
are a duly formed corporation and are qualified to do business in the states) in
which our places) of business is.(are) located; and, at a Board of Directors
meeting duly convened, our otficer(s) were properly authorized to execute and
deliver this Agreement and all other documents whether hereunder or otherwise;
that the execution and delivery of this Agreement does not contravene the
Articles of Incorporation, By-Laws, or any agreement, document or instrument to
which we are a party or by the terms of which we are bound.
21. Any provision or part thereof in this Agreement found upon judicial
Interpretation or construction to be prohibited by law shall be Ineffective to
the extent of such prohibition, without invalidating the remaining provisions
hereof. All words used shall be understood and construed to be of such gender or
number as the circumstances may reasonably require.
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22. THIS AGREEMENT SHALL BE DEEMED EFFECTIVE WHEN ACCEPTED AND EXECUTED BY
YOU IN THE COMMONWEALTH OF PENNSYLVANIA, AND THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
23. AS AN INDEPENDENT COVENANT, WE IRREVOCABLY CONSENT TO THE JURISDICTION
OF THE COURTS OF COMMON PLEAS OF PHILADELPHIA, PENNSYLVANIA AND/OR THE UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA IN ANY AND ALL
ACTIONS BETWEEN US WHETHER UNDER THIS AGREEMENT OR OTHERWISE AND TO THE SERVICE
OF PROCESS THEREIN BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO US AT THE
ADDRESS AS SET FORTH HEREIN OR ON YOUR RECORDS, AND IRREVOCABLY WAIVE JURY TRIAL
AND THE RIGHT THERETO IN ANY AND ALL ACTIONS BETWEEN US, WHETHER UNDER THIS
AGREEMENT OR OTHERWISE.
WE HEREBY ACKNOWLEDGE THAT WE HAVE READ AND UNDERST D ALL OF T E TERMS AND
PROVISIONS OF THIS AGREEMENT
Intending to be legally bound, signed and delivered on, July 29, 1997
P.C. Univ se, Inc.
(Corporate Name )
BY: July 29, 1997
President
Attest: July 29, 1997
Secretary
(CORPORATE SEAL)
APPROVED AND ACCEPTED IN KING OF PRUSSIA, PENNSYLVANIA
FINOVA CAPITAL CORPORATION
(Secured Party)
BY:
DATE:
Federal Tax ID#65-0620192
