CROSS DEFAULT AND CROSS COLLATERALIZATION AGREEMENT
THIS AGREEMENT dated this 22nd day of August, 1997, is entered into by GENERAL MOTORS ACCEPTANCE CORPORATION, A NEW YORK CORPORATION, (hereinafter referred to as "GMAC"), on the one hand, and MIDWAY CHEVROLET, INC., A TEXAS CORPORATION; PLAINS CHEVROLET, INC., A TEXAS CORPORATION; QUALITY NISSAN, INC., A TEXAS CORPORATION; WESTGATE CHEVROLET, INC., A TEXAS CORPORATION, SAHARA NISSAN, INC., D/B/A NISSAN WEST, a Nevada Corporation, and CROSS-CONTINENT AUTO RETAILERS, INC., on the other hand (collectively referred to herein as "BORROWERS").
W I T N E S S E T H
WHEREAS, the BORROWERS are indebted to GMAC under various promissory notes, security agreements, mortgages, guaranties and other agreements (collectively referred to herein as "loan documents"), and
WHEREAS, GMAC may hereafter make additional loans, advances, and other extensions of credit to BORROWERS; and
WHEREAS, GMAC is willing to extend credit evidenced by the loan documents to BORROWERS if BORROWERS agree to provide additional security by cross default and cross collateralizing all of said existing, proposed, and future loans, advances, or extensions of credit to them individually and/or collectively; and
WHEREAS, BORROWERS have requested that GMAC release certain parties from their guaranty agreements by which they had previously guaranteed all of certain BORROWERS' indebtedness to GMAC; and
WHEREAS, it is the intention of BORROWERS and GMAC that all collateral in which GMAC now has or may hereafter obtain a lien on or security in from any and/or all of Borrowers shall secure payment and performance of all loans, advances, and other extensions of credit now or hereafter made by GMAC to any and/or all of BORROWERS.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is acknowledged, including the inducement of GMAC, in its sole discretion, to extend credit to BORROWERS, IT IS AGREED as follows:
(1) DEFINITIONS: As used in this Agreement, the terms listed below shall have the following meaning:
(a) OBLIGATIONS shall mean any liability, indebtedness, or obligation of
BORROWERS, either individually and/or collectively, to GMAC
of every kind and nature, now existing or hereafter arising, whether
created directly or acquired by assignment, whether matured or
unmatured, and any costs or expense, including reasonable attorneys,
fees incurred in the collection or enforcement of any such obligation;
(b) SECURITY AGREEMENT shall mean any existing or future agreements
between BORROWERS, individually and/or collectively, and GMAC which
creates or provides for a security interest in or lien upon any of the
assets or property (tangible or intangible, real or personal) of
BORROWERS, including but not limited to security agreements, deeds of
trust, mortgages, and wholesale floorplan agreements.
(2) CROSS-COLLATERALIZATION: All collateral now or hereafter subject to a security interest or lien of GMAC pursuant to any or all of the Security Agreements between BORROWERS and GMAC shall secure any and all Obligations, and any proceeds of any collateral may he applied to any of the Obligations as GMAC may see fit, subject to applicable law.
(3) CROSS DEFAULT: In addition to and not in substitution for any provisions in any of the Security Agreements evidencing obligations, it is agreed that any default or breach by BORROWERS, individually and/or collectively, in payment or default of a material nature under any agreement evidencing an Obligation shall, at the option of GMAC, constitute a default under each and all loan documents executed by any of the BORROWERS in favor of GMAC.
(4) EFFECT ON OTHER AGREEMENTS: This Agreement shall constitute an amendment and supplement of each Security Agreement now or hereafter executed and shall augment and be in add