Secured Loan Agreement - Newstart Centre Inc. and USA Wade Cook Seminars Inc.
SECURED LOAN AGREEMENT THIS SECURED LOAN AGREEMENT (hereinafter referred to as "Agreement") is made and entered into on this 4th day of FEBRUARY, 1997, by and between NEWSTART CENTRE, INC., a Utah Corporation with its principal place of business in Salt Lake County, State of Utah, (hereinafter referred to as "Debtor") and USA WADE COOK SEMINARS, Inc. of C/O 11275 SOUTH LOAFER CANYON ROAD, ELKRIDGE, UT. 84651 (hereinafter referred to as "Secured Party"). RECITALS: A. WHEREAS, DEBTOR is engaged in the business of buying, leasing and selling motor vehicles to the general public, and B. WHEREAS, DEBTOR desires to borrow working capital for the purchase of automobiles to sale or lease, and C. WHEREAS, Secured Party desires to loan working capital to Debtor, NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties hereto hereby agree as follows: 1. Loan. Secured Party hereby lends to Debtor, receipt of which is hereby acknowledged, the sum of $125,000.00 payable to Debtor in certified funds concurrent with the execution of this Agreement and the other documents/instruments referred to below. 2. Loan Documents. a) Execution and delivery by Debtor. Debtor hereby agrees to execute, by and through its authorized representatives, and to deliver to Secured Party, the following instruments/ documents to effect the loan described in paragraph 1 above. 1) Promissory Note dated the 4th day of FEBRUARY, 1997, a copy of which is attached hereto as Exhibit "A". 2) Certificate of Delivery and Receipt of Documents, a copy of which is attached hereto as Exhibit "B". b) Execution and delivery by Secured Party. Secured Party hereby agrees to execute and deliver to Debtor the Certificate of Delivery and Receipt of Documents dated the 4th of FEBRUARY, 1997, (Exhibit "B"). 3. Grant of Lien. Debtor hereby grants to Secured Party a continuing lien against each vehicle (hereinafter the "vehicles") purchased with Secured Party's funds to secure the payment and performance of each and every obligation, liability and undertaking of Debtor under the loan documents and Debtor hereby represents and warrants to secured Party that Debtor is or, after acquisition by Debtor, will be the owner of the of the vehicles and possesses all requisite power and authority to execute and deliver this Agreement and to grant to Secured Party a lien as to all of the vehicles or any replacements thereof. 4. No Other Security Interests/Liens. No financing statement or lien covering the vehicles has been given or filed by Debtor with any filing officer, and the said vehicles are or will be free from any adverse liens, security interests, claims or encumbrances of any kind. 5. Taxes and Assessments. All taxes, assessments and other governmental charges including Utah State sales tax, county property tax, and license and registration fees upon the vehicles will, to the best of Debtor's knowledge, have been paid and shall continue to be paid as they become due and payable. 1 <PAGE> 6. Substitution of Collateral. Secured Party consents and acknowledges that Debtor, from time to time, may sell, transfer or assign any or all of the said vehicles or leases covering the vehicles. Secured Party further agrees to cooperate with and to execute and deliver to Debtor such additional documents as may be necessary to sell or otherwise dispose of any of the vehicles provided Debtor, within a reasonable time, replaces such vehicles(s) with other vehicles(s) of equal or greater value and lists Secured Party as the sole lien holder on the titles to any such replacement vehicles. 7. Evidence of Title. Debtor shall, within thirty (30) days after the receipt thereof, deliver to Secured Party copies of any and all title and/or registration documents relating to any of the motor vehicles covered by this Agreement showing Secured Party as the sole lienholder. Debtor shall not further mortgage, pledge, grant or permit to exist any lien against or security interest in, or encumbrance on, any of the vehicles without the prior written consent of Secured Party. 8. Insurance. Debtor shall maintain, or cause Lessees to maintain, at Debtor's or Lessee's expense, proper insurance coverage on the vehicles covered by this Agreement upon terms and with limits of coverage reasonably required by the existing custom and usage in the motor vehicle leasing industry and all rights, duties and obligations of Debtor and Lessees with respect to insurance coverage of the vehicles, including, without limitation, payment of premiums, use of proceeds and disposition of policies shall be as are standard in the auto leasing industry. 9. Licenses and Permits. Debtor shall keep in effect all licenses, permits and franchises required by law or contract relating to the vehicles and shall pay, when due, all fees and other charges pertaining thereto. 10. Miscellaneous. (a) Entire Agreement. This Agreement, together with all of the documents/instruments listed herein constitute the entire agreement between the parties. There are no terms, obligations, covenants, representatives, statements, or conditions between the parties, other than those contained herein. No variations or modifications of this Agreement or waiver of any of the terms or provisions hereof shall be deemed valid unless in writing and signed by both parties. (b) Grace Period. In the event of a non-monetary default, Debtor shall have thirty (30) days after receipt of written notice thereof from Secured Party in which to cure such default. (c) Amendments. Neither this Agreement nor any provisions hereof may be changed, waived, discharged or terminated orally and may only be modified or amended by an instrument in writing, signed by Secured Party and Debtor. (d) Binding Effect. This Agreement shall be binding upon Debtor and Debtor's successors and assigns. This Agreement shall inure to the benefit of Secured Party, and Secured Party's heirs, personal representatives, successors and assigns. (e) Notices. Except as otherwise provided herein, all notices and other communications under this Agreement shall be in writing and shall be deemed given when delivered or, if mailed, then when mailed, if mailed by registered or certified mail, postage prepaid, addressed as follows: If to Secured Party, to: USA WADE COOK SEMINARS, INC. C/O 11275 SOUTH LOAFER CANYON ROAD ELKRIDGE, UT. 84651 If to Debtor, to: NEWSTART CENTRE, INC. 2 <PAGE> Such addresses may be changed by notice to the other parties given in the same manner as above provided. Any notice given hereunder shall be deemed given as of the date delivered or mailed. (f) Severability. If any term or provision of this Agreement shall, to any extent, be determined by a court of competent jurisdiction to be void, voidable or unenforceable, such void, voidable or unenforceable term or provision shall not affect any other term or provision of this Agreement. (g) Governing Law. This Agreement and all matters relating hereto shall be governed by, construed and interpreted in accordance with the laws of the State of Utah, County of Salt Lake. (h) Termination. This Agreement shall terminate upon the full and complete performance and satisfaction by Debtor of all of its obligations to Secured Party under this Agreement or any other instrument referred to herein requiring performance by Debtor. IN WITNESS WHEREOF, Debtor and Secured Party have executed this Secured Loan Agreement effective as of the date first above written. DEBTOR: NEWSTART CENTRE, INC. By /s/ illegible [add signature] SECURED PARTY: USA WADE COOK SEMINARS, INC. By /s/ illegible [add signature] 3 <PAGE> PROMISSORY NOTE (Secured) $ $125,000,000 Date: 4 FEB 97 FOR VALUE RECEIVED the undersigned hereby promise to pay to USA WADE COOK SEMINARS, INC. at C/O 11275 SOUTH LOAFER CANYON ROAD, ELKRIDGE, UT. 84651 or at such other place as the holder hereof may designate in writing, the principal sum of ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS AND NO/100 ($ $125,000.00), payable in forty-eight (48) consecutive equal monthly payments, including interest as provided below, of ($3,606.88) each, commencing with the first payment on the 21st day of MARCH, 1997, and continuing with a like payment on the 21st day of each and every consecutive month thereafter until the entire remaining unpaid principal balance has been paid in full, subject to the following additional terms and conditions: 1. Interest. Interest shall accrue on the unpaid principal balance at the simple rate of SEVENTEEN percent (17.00%) per annum. 2. Application of Payments. Payments shall be applied first toward the payment and satisfaction of accrued and unpaid interest, if any, and the remainder shall be applied toward the reduction of principal. Principal and interest shall be payable only in lawful money of the United States of America. 3. Prepayment. The undersigned shall have the right, without penalty, to pre-pay any part or all of the unpaid principal balance due hereunder, in which event subsequent monthly payments shall be reduced proportionately, or, upon payment in full of all interest, entire principal balance, together with all accrued interest and any accrued costs or attorney's fees as provided herein, shall be paid in full on or before FEBRUARY 4th, 2001. 4. Default/Late Charges/Acceleration. In the event any installment payment due hereunder or any portion thereof is not made within thirty (30) days after its due date and such default is occasioned by the default of any lessee, then, to that extent, Debtor shall have sixty (60) days from such due date to repossess the subject motor vehicle(s), re-lease the same and resume making monthly installment payments pursuant to the Note. Any installment payment or any portion thereof not paid within the said sixty-day (60) period shall be added on to the end of the term covered by the Note and the final due date for such payment or part thereof, together with any accrued interest thereon shall be extended by one month for each such installment payment missed. 5. No Waiver. The acceptance of any installment or payment after the occurrence of a default or event giving rise to the right of acceleration provided for in the previous paragraph shall not constitute a waiver of such right of acceleration with respect to any subsequent default or event. 6. Costs of Collection/Attorneys' Fees, etc. In the event any payment due under this Note is not made, or any obligation provided to be satisfied or performed under any instrument given to secure payment of the obligations evidenced hereby is not satisfied or performed, at the time and in the manner required, the undersigned agrees to pay all costs and expenses (regardless of the particular nature thereof and whether incurred with or without suit and before or after the judgement) which may be incurred by the holder hereof in connection with the enforcement of any of his rights under this Note or under any such other instrument, or any right arising out of the breach thereof, including but not limited to, reasonable expenses incurred in foreclosing on the collateral securing payment hereof, court costs, and reasonable attorneys' fees. 4 <PAGE> 7. Notice. Any notice or demand hereunder shall be deemed to have been given to and received by the undersigned when personally delivered or when deposited in the U.S. mail, certified or registered mail, return receipt requested, postage pre-paid, and addressed to the undersigned at the address set forth below or at such other address as the undersigned may hereafter designate in writing to the holder hereof. This note shall be governed by and construed in accordance with the laws of the State of Utah. NEWSTART CENTRE, INC. By /s/ Robert J. Atmore 5 <PAGE> CERTIFICATE OF DELIVERY AND RECEIPT OF DOCUMENTS I, ROBERT J. ATMORE, of/for NEWSTART CENTRE, INC. do hereby certify that on the 4th day of FEBRUARY, 1997 I delivered to USA WADE COOK SEMINARS, INC. of C/O 11275 SOUTH LOAFER CANYON ROAD, ELKRIDGE, UT. 84651 one (1) original and/or one (1) copy of each of the following documents: (i) Secured Loan Agreement dated on the 4th day of FEBRUARY, 1997, between NEWSTART CENTRE, INC., as Debtor, and USA WADE COOK SEMINARS, INC. as Secured Party. (ii) Promissory Note dated the 4th day of FEBRUARY, 1997. DATED this 4th day of FEBRUARY, 1997 NEWSTART CENTRE, INC. By /s/ Robert J. Atmore 6