CHRYSLER CREDIT
SECURITY AGREEMENT AND MASTER CREDIT AGREEMENT
(Non-Chrysler Corporation Dealer)
This Security Agreement and Master Credit Agreement (hereinafter called the
"Agreement"), made as of this 25th day of October, 1993, is by and between
Landers Oldsmobile-GMC, Inc., having its principal place of business at 1701 I-
30 Frontage Road, Benton Ar 72015 (hereinafter called "Debtor"), and Chrysler
Credit Corporation, a Delaware corporation, having offices located at 27777
Franklin Rd., Southfield, Michigan 48034-8286 (hereinafter called "Secured
Party").
WHEREAS, Debtor is engaged in business as an authorized dealer of GMC &
Oldsmobile 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 General Motors 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 by making loans or advances to
Debtor to finance the acquisition by Debtor of Vehicles.
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 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, loans or advances provided by Secured
Party directly to either Debtor or to the seller of Vehicles to Debtor are
herein 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 be 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 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 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 agreed 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 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.
In consideration of Secured Party's making 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 the date of repayment to
Secured Party of the full amount thereof. 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.
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,
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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. 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 limitation 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
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.
3.1 All said security set forth in Paragraph 3.0 shall hereinafter collectively
be called "Collateral". Debtor hereby expressly agrees that the term
"proceeds" as used in Paragraph 3.0 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,
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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 damage 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,
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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 terminate this
Agreement, refuse to advance funds hereunder, 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
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fail to pay when due any other amount owing to Secured Party under any
other agreement between Secured Party and Debtor, 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
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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 as 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,
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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 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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Landers Oldsmobile-GMC, Inc. Chrysler Credit Corporation
1701 I-30 Frontage Road 10801 Executive Center Drive Suite 101
Benton Ar 72015 Little Rock Ar 72211
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
Landers Oldsmobile-GMC, Inc.
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(Debtor)
/s/ Bob Landers By /s/ Steve Landers
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(WITNESS)
illegible Title President
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(WITNESS)
CHRYSLER CREDIT CORPORATION
By illegible
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Title illegible
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PROMISSORY NOTE
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AMOUNT CITY STATE DATE
$7,100,000.00 Benton Arkansas October 25, 1993
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ON DEMAND, FOR VALUE RECEIVED, the undersigned promise(s) to pay to the order of
CHRYSLER CREDIT CORPORATION, a Delaware Corporation, at its office at 10801
Executive Center Drive, Suite 101, Little Rock Ar 72211 or at such other place
as the holder hereof may direct in writing, the sum of Seven Million One Hundred
Thousand Dollars ($7,100,000.00), in lawful money of the United States of
America, together with interest thereon from the date hereof until paid at the
rate or rates established from time to time, pursuant to paragraph 2.0 of that
certain Security Agreement and Master Credit Agreement dated ______________,
19__, between the undersigned and Chrysler Credit Corporation, which interest
shall be payable monthly in like lawful money; provided, however, that the rate
of interest payable hereunder shall not exceed the maximum rate of interest
permitted by applicable law.
The undersigned agrees to pay reasonable attorneys fees if this note is placed
in the hands of an attorney for collection.
The makers, sureties, guarantors and endorsers hereof severally waive
presentment for payment, protest and notice of protest and non-payment of this
note, and consents to any extension, renewal or postponement of the time of
payment of this note, without notice, at the option of the holder.
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DEALER BY ITS
Landers Oldsmobile-GMC, Inc. /s/ Steve Landers President
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