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EXHIBIT 10.1
AGREEMENT FOR WHOLESALE FINANCING
This Agreement for Wholesale Financing ("Agreement") is made as of May 11, 2001
between DEUTSCHE FINANCIAL SERVICES CORPORATION ("DFS") and Xxxx Industries,
Inc., a [ ] SOLE PROPRIETORSHIP, [ ] PARTNERSHIP, [X] CORPORATION, [ ] LIMITED
LIABILITY COMPANY (check applicable term) ("Dealer"), having a principal place
of business located at 0000 X. Xxxxx Xxxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx,
00000.
1. EXTENSION OF CREDIT. Subject to the terms of this Agreement, DFS may extend
credit to Dealer from time to time to purchase inventory from DFS approved
vendors ("Vendors") and for other purposes. If DFS advances funds to Dealer
following Dealer's execution of this Agreement, DFS will be deemed to have
entered into this Agreement with Dealer, whether or not executed by DFS.
DFS' decision to advance funds will not be binding until the funds are
actually advanced. DFS may combine all of DFS' advances to Dealer or on
Dealer's behalf, whether under this Agreement or any other agreement, and
whether provided by one or more of DFS' branch offices, together with all
finance charges, fees and expenses related thereto, to make one debt owed
by Dealer. DFS may, at any time and without notice to Dealer, elect not to
finance any inventory sold by particular Vendors who are in default of
their obligations to DFS, or with respect to which DFS reasonably feels
insecure. This is an agreement regarding the extension of credit, and not
the provision of goods or services.
2. FINANCING TERMS AND STATEMENTS OF TRANSACTION. Dealer and DFS agree that
certain financial terms of any advance made by DFS under this Agreement,
whether regarding finance charges, other fees, maturities, curtailments or
other financial terms, are not set forth herein because such terms depend,
in part, upon the availability of Vendor discounts, payment terms or other
incentives, prevailing economic conditions, DFS' floorplanning volume with
Dealer and with Dealer's Vendors, and other economic factors which may vary
over time. Dealer and DFS further agree that it is therefore in their
mutual best interest to set forth in this Agreement only the general terms
of Dealer's financing arrangement with DFS. Upon agreeing to finance a
particular item of inventory for Dealer, DFS will send Dealer a Statement
of Transaction identifying such inventory and the applicable financial
terms. Unless Dealer notifies DFS in writing of any objection within seven
(7) days after a Statement of Transaction is mailed to Dealer: (a) the
amount shown on such Statement of Transaction will be an account stated;
(b) Dealer will have agreed to all rates, charges and other terms shown on
such Statement of Transaction; (c) Dealer will have agreed that DFS is
financing the items of inventory referenced in such Statement of
Transaction at Dealer's request; and (d) such Statement of Transaction will
be incorporated herein by reference, will be made a part hereof as if
originally set forth herein, and will constitute an addendum hereto. If
Dealer objects to the terms of any Statement of Transaction, Dealer agrees
to pay DFS for such inventory in accordance with the most recent terms for
similar inventory to which Dealer has not objected (or, if there are no
prior terms, at the lesser of 16% per annum or at the maximum lawful
contract rate of interest permitted under applicable law), but Dealer
acknowledges that DFS may then elect to terminate Dealer's financing
program pursuant to Section 18, and cease making additional advances to
Dealer. However, such termination will not accelerate the maturities of
advances previously made, unless Dealer shall otherwise be in default of
this Agreement.
3. GRANT OF SECURITY INTEREST. To secure payment of all of Dealer's current
and future debts to DFS, whether under this Agreement or any current or
future guaranty or other agreement, Dealer grants DFS a security interest
in all of Dealer's (a) inventory and equipment distributed or sold by
Xxxxxx Micro, Inc. or any of its affiliates or subsidiaries, to Dealer, and
financed by DFS, whether now owned or hereafter acquired and wherever
located, and all present and future attachments, parts, accessories,
accessions, substitutions and replacements thereto, and all proceeds
thereof; (b) inventory and equipment manufactured by, and distributed or
sold to Dealer, by: 3Com
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Corporation; Acer America Corporation; AST Research, Inc.; Access
Graphics, Inc.; Advanced Logic Research, Inc; American Power Conversation;
APC; Apple Computer, Inc.; Canon U.S.A., Inc.; Cisco Systems, Inc.; Compaq
Computer Corporation; Comstor Corporation; Dell U.S.A., L.P.; Digital
Equipment Corporation; Epson America, Inc,; Extended Systems; Farallon
Computing, Inc.; Hewlett-Packard Company; Ingram Alliance, Inc.; Intel
Corporation; Iomega Corporation; Lexmark International, Inc.; Lotus
Development Corporation; Mac USA, Inc.; Matsushita Electric Corporation of
America; Maxtor Corporation; Xxxxxxx Electronics, Inc.; Merisel, Inc.;
Micronet Technology, Inc.; Microsoft Corporation; Microsource Technologies,
Inc.; Mitek Corporation; Mitsubishi Electronics America, Inc.; NEC
Technologies, Inc,; Nortel Networks Corporation; Novell; Oki America, Inc,
(Okidata Division) (OA); Panasonic Communications & Systems Company; PC
Wholesale, A Division of Comark, Inc.; Peripheral Land, Inc.; Procom
Technology, Inc.; QMS, Inc,; Quantum Corporation; Radius, Inc.; RasterOps
Corporation; Sony Corporation of America; Southland Micro Systems, Inc.
(fka Sunland Micro Company); Storage Dimensions, Inc.; Sun Microsystems
Computer Corporation; SuperMac Technology, Inc.; Synnex Information
Technologies; Tech Data Corporation; Tektronix, Inc.; Toshiba America
Information Systems, Inc.; Viking Components, Inc.; VisionTek, Inc. (fka
Desktop Sales, Inc.); Word Perfect; Zenith Data Systems Corporation;
(Groupe Bull); Zenith Electronics Corporation, or any of their respective
subsidiaries or affiliated companies, or bearing any trademark or tradename
of 3Com Corporation; Acer America Corporation; AST Research, Inc.; Access
Graphics, Inc.; Advanced Logic Research, Inc.; American Power Conversation;
APC; Apple Computer, Inc.; Canon U.S.A., Inc.; Cisco Systems, Inc.; Compaq
Computer Corporation; Comstor Corporation; Dell U.S.A., L.P.; Digital
Equipment Corporation; Epson America, Inc.; Extended Systems; Farallon
Computing, Inc.; Hewlett-Packard Company; Ingram Alliance, Inc.; Intel
Corporation; Iomega Corporation; Lexmark International, Inc.; Lotus
Development Corporation; Mac USA, Inc.; Matsushita Electric Corporation of
America; Maxtor Corporation; Xxxxxxx Electronics, Inc.; Merisel, Inc.;
Micronet Technology, Inc.; Microsoft Corporation; Microsource Technologies,
Inc.; Mitek Corporation; Mitsubishi Electronics America, Inc.; NEC
Technologies, Inc.; Nortel Networks Corporation; Novell; Oki America, Inc.
(Okidata Division) (OA); Panasonic Communications & Systems Company; PC
Wholesale, A Division of Comark, Inc.; Peripheral Land, Inc.; Procom
Technology, Inc.; QMS, Inc.; Quantum Corporation; Radius, Inc.; RasterOps
Corporation; Sony Corporation of America; Southland Micro Systems, Inc.
(fka Sunland Micro Company); Storage Dimensions, Inc.; Sun Microsystems
Computer Corporation; SuperMac Technology, Inc.; Synnex Information
Technologies; Tech Data Corporation; Tektronix, Inc.; Toshiba America
Information Systems, Inc.; Viking Components, Inc.; VisionTek, Inc. (fka
Desktop Sales, Inc.); Word Perfect; Zenith Data Systems Corporation;
(Groupe Bull); Zenith Electronics Corporation, or any of their respective
subsidiaries or affiliated companies, when any such brand is financed by
DFS, whether now owned or hereafter acquired and wherever located, and all
present and future attachments, parts, accessories, accessions,
substitutions and replacements thereto, and all proceeds thereof; (c)
inventory and equipment now or hereafter financed by DFS for Dealer,
wherever located, and all present and future attachments, parts,
accessories, accessions, substitutions, and replacements thereto, and
products thereof, and all proceeds thereof; (d) accounts, contract rights,
chattel paper, instruments, reserves and general intangibles, owned by or
due Dealer, now or in the future, however these may be due Dealer and
wherever located, arising from any of the above described inventory and
equipment financed by DFS for Dealer, and all proceeds and products
thereof; and (e) rebates, discounts, credits and incentive payments, now or
hereafter due to Dealer relating to any of the above described inventory
and equipment and all proceeds thereof. All such assets are collectively
referred to herein as the "Collateral." All of such terms for which
meanings are provided in the Uniform Commercial Code of the applicable
state are used herein with such meanings. All Collateral financed by DFS,
and all proceeds thereof, will be held in trust by Dealer for DFS, with
such proceeds being payable in accordance with Section 10.
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4. COLLATERAL REPORTS; PAYDOWN. Dealer will forward to DFS by the sixth (6th)
day of each month (or the next business day) a Collateral Report (as
defined below) dated as of the 5th day of such month. Regardless of the SPP
terms pertaining to any Collateral financed by DFS, and notwithstanding any
scheduled payments made by Dealer after the Determination Date (as defined
below) or anything contained in the Agreement to the contrary, if DFS
determines, after reviewing the Collateral Report, after conducting an
inspection of the Collateral or otherwise, that (i) the total current
outstanding indebtedness owed by Dealer to DFS as of the date of the
Collateral Report, inspection or any other date on which a paydown is
otherwise required hereunder, as applicable (the "Determination Date"),
exceeds (ii) the Collateral Liquidation Value (as defined below) as of the
Determination Date, Dealer will immediately upon demand pay DFS the
difference between (i) Dealer's total current outstanding indebtedness owed
to DFS as of the Determination Date, and (ii) the Collateral Liquidation
Value as of the Determination Date. Any and all such paydown amounts will
be applied to the then oldest outstanding indebtedness owed by Dealer to
DFS.
The term "Collateral Report" is defined herein to mean a report compiled by
Dealer specifying the following information: (a) the total aggregate
wholesale invoice price of all of Dealer's inventory financed by DFS that
is unsold and in Dealer's possession and control as of the date of such
Report; and (b) the total outstanding balance owed to Dealer (and
specifically to Dealer's Xxxx Tech.logix division) on Dealer's Eligible
Accounts (as defined below) as of the date of such Report: in each case to
the extent DFS has a first priority, fully perfected security interest
therein; and (c) the total amount owed to Union Bank of California, N.A.
from Dealer as of the date of such Report ("Union Bank Outstandings"). In
addition, Dealer will (1) e-mail to DFS by the tenth (10th) day of each
month, the amount of the Union Bank Outstandings as of the last day of the
prior month, and (2) forward to DFS not more than twenty-five (25) days
following each fiscal quarter end, a copy of the borrowing base certificate
and supporting documentation that Dealer has provided to Union Bank of
California, N.A. or any successor lender.
The term "Eligible Accounts" is defined herein to include all of Dealer's
accounts receivable except for: (a) accounts created from the sale of goods
and services on non-standard terms and/or that allow for payment to be made
more than thirty (30) days from the date of sale; (b) accounts unpaid more
than ninety (90) days from date of invoice; (c) all accounts of any obligor
with fifty percent (50%) or more of the outstanding balance unpaid for more
than ninety (90) days from the date of invoice; (d) accounts which the
obligor is an officer, director, shareholder, partner, member, owner,
employee, agent, parent, subsidiary, affiliate of, or is related or has
common shareholders, officers, directors, owners, partners or members; (e)
consignment sales; (f) accounts for which the payment is or may be
conditional; (g) accounts for which the obligor is not a commercial or
institutional entity or is not a resident of the United States or Canada;
(h) accounts with respect to which any warranty or representation provided
herein is not true and correct; (i) accounts which represent goods or
services purchased for a personal, family or household purpose; (j)
accounts which represent goods used for demonstration purposes or loaned by
Dealer to another party; (k) accounts which are progress payment, barter or
contra accounts; (l) accounts which are discounts, rebates, bonuses or
credits for returned goods owed to Dealer by any third party; (m) accounts
which are being financed by DFS pursuant to a Business Financing Agreement
or other comparable document between Dealer and DFS; and (n) any and all
other accounts which DFS deems to be ineligible. DFS may, with notice to
Dealer and at any time or times hereafter, verify the validity, amount or
any other matter relating to any Eligible Account by mail, telephone, or
other means, in the name of Dealer or DFS.
The term "Collateral Liquidation Value" is defined herein to mean: (i) one
hundred percent (100%) of the total aggregate wholesale invoice price of
all of Dealer's Xxxx Tech.logix division's inventory and demonstration
equipment financed by DFS that is unsold and in Dealers possession and
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control; and (ii) one hundred percent (100%) of the DFS Account Portion (as
defined below): in each case as of the date of the Collateral Report and to
the extent DFS has a first priority, fully perfected security interest
therein.
The term "DFS Account Portion" is defined herein to mean (a) all
collections of Eligible Accounts during the preceding month (such amounts
to be provided by Union Bank to DFS pursuant to biweekly reports) arising
from the sales of inventory of Dealer's Xxxx Tech.logix division and
financed by DFS for Dealer, multiplied by (b) the quotient of (i) the
amount due DFS from Dealer ("DFS Outstandings") divided by (ii) the sum of
(x) DFS Outstandings plus (y) Union Bank Outstandings: in each case as of
the date of the Collateral Report, but in no event to exceed Ten Million
Dollars ($10,000,000).
If Dealer from time to time is required to make immediate payment to DFS of
any past due obligation discovered during any Collateral review, upon
review of a Collateral Report or at any other time, Dealer agrees that
acceptance of such payment by DFS shall not be construed to have waived or
amended the terms of its financing program.
5. AFFIRMATIVE WARRANTIES AND REPRESENTATIONS. Dealer warrants and represents
to DFS that: (a) Dealer has good title to all Collateral; (b) provided that
they are perfected by DFS in accordance with applicable law, DFS' security
interests in the Collateral financed by DFS are not now and will not become
subordinate to the security interest, lien, encumbrance or claim of any
person; (c) Dealer will execute all documents DFS requests to perfect and
maintain DFS' security interest in the Collateral; (d) Dealer will deliver
to DFS immediately upon each request, and DFS may retain, each Certificate
of Title or Statement of Origin issued for Collateral financed by DFS; (e)
Dealer will at all times be duly organized, existing, in good standing,
qualified and licensed to do business in each state, county, or parish, in
which the nature of its business or property so requires; (f) Dealer has
the right and is duly authorized to enter into this Agreement; (g) Dealer's
execution of this Agreement does not constitute a breach of any agreement
to which Dealer is now or hereafter becomes bound; (h) there are no actions
or proceedings pending or threatened against Dealer which might reasonably
be expected to result in any material adverse change in Dealer's financial
or business condition or which might in any way reasonably be expected to
adversely affect any of Dealer's assets; (i) Dealer will maintain the
Collateral in good condition and repair; (j) Dealer has duly filed and will
duly file all tax returns required by law; (k) Dealer has paid and will pay
when due all taxes, levies, assessments and governmental charges of any
nature; (l) Dealer will keep and maintain all of its books and records
pertaining to the Collateral at its principal place of business designated
in this Agreement; (m) Dealer will promptly supply DFS with such
information concerning it or any guarantor as DFS hereafter may reasonably
request; (n) all Collateral will be kept at Dealer's principal place of
business listed above, and such other locations, if any, of which Dealer
has notified DFS in writing or as listed on any current or future Exhibit
"A" attached hereto which written notice(s) to DFS and Exhibit A(s) are
incorporated herein by reference; (o) Dealer will give DFS thirty (30) days
prior written notice of any change in Dealer's identity, name, form of
business organization, ownership, management, principal place of business,
Collateral locations or other business locations, and before moving any
books and records to any other location; (p) Dealer will observe and
perform all matters required by any lease, license, concession or franchise
forming part of the Collateral in order to maintain all the rights of DFS
thereunder; (q) Dealer will advise DFS of the commencement of material
legal proceedings against Dealer or any guarantor; and (r) Dealer will
comply with all applicable laws and will conduct its business in a manner
which preserves and protects the Collateral and the earnings and incomes
thereof.
6. NEGATIVE COVENANTS. Dealer will not at any time: (a) other than in the
ordinary course of its business, sell, lease or otherwise dispose of or
transfer any of its assets without DFS' prior written consent,; (b) rent,
lease, demonstrate, consign, or use any Collateral financed by DFS without
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DFS' prior written consent; or (c) merge or consolidate with another entity
without providing DFS with forty-five (45) days prior written notice.
7. INSURANCE. Dealer will immediately notify DFS of any loss, theft or damage
to any Collateral. Dealer will keep the Collateral insured for its full
insurable value under an "all risk" property insurance policy with a
company acceptable to DFS, naming DFS as a lender loss-payee and containing
standard lender's loss payable and termination provisions. Dealer will
provide DFS with written evidence of such property insurance coverage and
lender's loss-payee endorsement.
8. FINANCIAL STATEMENTS. Dealer will deliver to DFS: (a) within ninety (90)
days after the end of each of Dealer's fiscal years, a reasonably detailed
balance sheet as of the last day of such fiscal year and a reasonably
detailed income statement covering Dealer's operations for such fiscal
year, in a form satisfactory to DFS; (b) within forty-five (45) days after
the end of each of Dealer's fiscal quarters, a reasonably detailed balance
sheet as of the last day of such quarter and an income statement covering
Dealer's operations for such quarter, in a form satisfactory to DFS; and
(c) within ten (10) days after request therefor by DFS, any other report
requested by DFS relating to the Collateral or the financial condition of
Dealer. Dealer warrants and represents to DFS that all financial statements
and information relating to Dealer or any guarantor which have been or may
hereafter be delivered by Dealer or any guarantor are true and correct and
have been and will be prepared in accordance with generally accepted
accounting principles consistently applied and, with respect to such
previously delivered statements or information, there has been no material
adverse change in the financial or business condition of Dealer or any
guarantor since the submission to DFS, either as of the date of delivery,
or, if different, the date specified therein, and Dealer acknowledges DFS'
reliance thereon.
9. REVIEWS. Dealer grants DFS an irrevocable license to enter Dealer's
business locations during normal business hours without notice to Dealer
to: (a) account for and inspect all Collateral; (b) verify Dealer's
compliance with this Agreement; and (c) examine and copy Dealer's books and
records related to the Collateral.
10. PAYMENT TERMS. Dealer will immediately pay DFS the principal indebtedness
owed DFS on each item of Collateral financed by DFS (as shown on the
Statement of Transaction identifying such Collateral) on the earliest
occurrence of any of the following events: (a) when such Collateral is
lost, stolen or damaged; (b) for Collateral financed under Pay-As-Sold
("PAS") terms (as shown on the Statement of Transaction identifying such
Collateral), when such Collateral is sold, transferred, rented, leased,
otherwise disposed of or matured; (c) in strict accordance with any
curtailment schedule for such Collateral (as shown on the Statement of
Transaction identifying such Collateral); (d) for Collateral financed under
Scheduled Payment Program ("SPP") terms (as shown on the Statement of
Transaction identifying such Collateral), in strict accordance with the
installment payment schedule; and (e) when otherwise required under the
terms of any financing program agreed to in writing by the parties.
Regardless of the SPP terms pertaining to any Collateral financed by DFS,
if DFS determines that the current outstanding debt which Dealer owes to
DFS exceeds the aggregate wholesale invoice price of such Collateral in
Dealer's possession, Dealer will immediately upon demand pay DFS the
difference between such outstanding debt and the aggregate wholesale
invoice price of such Collateral. If Dealer from time to time is required
to make immediate payment to DFS of any past due obligation discovered
during any Collateral review, or at any other time, Dealer agrees that
acceptance of such payment by DFS shall not be construed to have waived or
amended the terms of its financing program. The proceeds of any Collateral
received by Dealer will be held by Dealer in trust for DFS' benefit, for
application as provided in this Agreement. Dealer will send all payments to
DFS' branch office(s) responsible for Dealer's account, DFS may apply: (i)
payments to reduce finance charges first and then principal, regardless of
Dealer's instructions; and (ii) principal payments to the oldest (earliest)
invoice for
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Collateral financed by DFS, but, in any event, all principal payments will
first be applied to such Collateral which is sold, lost, stolen, damaged,
rented, leased, or otherwise disposed of or unaccounted for. Any third
party discount, rebate, bonus or credit granted to Dealer for any
Collateral will not reduce the debt Dealer owes DFS until DFS has received
payment therefor in cash. Dealer will: (1) pay DFS even if any Collateral
is defective or fails to conform to any warranties extended by any third
party; (2) not assert against DFS any claim or defense Dealer has against
any third party; and (3) indemnify and hold DFS harmless against all claims
and defenses asserted by any buyer of the Collateral relating to the
condition of, or any representations regarding, any of the Collateral.
Dealer waives all rights of offset Dealer may have against DFS.
11. CALCULATION OF CHARGES. Dealer will pay finance charges to DFS on the
outstanding principal debt which Dealer owes DFS for each item of
Collateral financed by DFS at the rate(s) shown on the Statement of
Transaction identifying such Collateral, unless Dealer objects thereto as
provided in Section 2. The finance charges attributable to the rate shown
on the Statement of Transaction will: (a) be computed based on a 360 day
year; (b) be calculated by multiplying the Daily Charge (as defined below)
by the actual number of days in the applicable billing period; and (c)
accrue from the invoice date of the Collateral identified on such Statement
of Transaction until DFS receives full payment in good funds of the
principal debt Dealer owes DFS for each item of such Collateral in
accordance with DFS' payment recognition policy and DFS applies such
payment to Dealer's principal debt in accordance with the terms of this
Agreement. The "Daily Charge" is the product of the Daily Rate (as defined
below) multiplied by the Average Daily Balance (as defined below). The
"Daily Rate" is the quotient of the annual rate shown on the Statement of
Transaction divided by 360, or the monthly rate shown on the Statement of
Transaction divided by 30. The "Average Daily Balance" is the quotient of
(i) the sum of the outstanding principal debt owed DFS on each day of a
billing period for each item of Collateral identified on a Statement of
Transaction, divided by (ii) the actual number of days in such billing
period. Dealer will also pay DFS $100 for each check returned unpaid for
insufficient funds (an "NSF check") (such $100 payment repays DFS'
estimated administrative costs; it does not waive the default caused by the
NSF check). The annual percentage rate of the finance charges relating to
any item of Collateral financed by DFS will be calculated from the invoice
date of such Collateral, regardless of any period during which any finance
charge subsidy shall be paid or payable by any third party. Dealer
acknowledges that DFS intends to strictly conform to the applicable usury
laws governing this Agreement. Regardless of any provision contained herein
or in any other document executed or delivered in connection herewith or
therewith, DFS shall never be deemed to have contracted for, charged or be
entitled to receive, collect or apply as interest on this Agreement
(whether termed interest herein or deemed to be interest by judicial
determination or operation of law), any amount in excess of the maximum
amount allowed by applicable law, and, if DFS ever receives, collects or
applies as interest any such excess, such amount which would be excessive
interest will be applied first to the reduction of the unpaid principal
balances of advances under this Agreement, and, second, any remaining
excess will be paid to Dealer. In determining whether or not the interest
paid or payable under any specific contingency exceeds the highest lawful
rate, Dealer and DFS shall, to the maximum extent permitted under
applicable law: (A) characterize any non-principal payment (other than
payments which are expressly designated as interest payments hereunder) as
an expense or fee rather than as interest; (B) exclude voluntary
pre-payments and the effect thereof; and (C) spread the total amount of
interest throughout the entire term of this Agreement so that the interest
rate is uniform throughout such term.
12. BILLING STATEMENT. DFS will send Dealer a monthly billing statement
identifying all charges due on Dealer's account with DFS. The charges
specified on each billing statement will be: (a) due and payable in full
immediately on receipt; and (b) an account stated, unless DFS receives
Dealer's written objection thereto within seven (7) days after it is mailed
to Dealer. If DFS does not receive, by the 25th day of any given month,
payment of all charges accrued to Dealer's account with DFS
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during the immediately preceding month, Dealer will (to the extent allowed
by law) pay DFS a late fee ("Late Fee") equal to the greater of $5 or 5%
of the amount of such finance charges (payment of the Late Fee does not
waive the default caused by the late payment). DFS may adjust the billing
statement at any time to conform to applicable law and this Agreement.
13. DEFAULT. Dealer will be in default under this Agreement if: (a) Dealer
breaches any terms, warranties or representations contained herein, in any
Statement of Transaction to which Dealer has not objected as provided in
Section 2, or in any other agreement between DFS and Dealer; (b) any
guarantor of Dealer's debts to DFS breaches any terms, warranties or
representations contained in any guaranty or other agreement between the
guarantor and DFS; (c) any representation, statement, report or certificate
made or delivered by Dealer or any guarantor to DFS is not accurate when
made; (d) Dealer fails to pay any portion of Dealer's debts to DFS when due
and payable hereunder or under any other agreement between DFS and Dealer;
(e) Dealer abandons any Collateral; (f) Dealer or any guarantor is or
becomes in default in the payment of any debt owed to any third party in
excess of $500,000, and such default remains unwaived or uncured beyond any
applicable cure period; (g) a money judgment issues against Dealer or any
guarantor in excess of $500,000 and Dealer neither pays nor settles such
judgment within thirty (30) days of its issuance; (h) an attachment, sale
or seizure is executed against any assets of Dealer arising from a claim
against Dealer in excess of $500,000; (i) any guarantor dies; (k) Dealer or
any guarantor shall cease existence as a corporation, partnership, limited
liability company or trust, as applicable; (l) Dealer or any guarantor
ceases or suspends business; (m) Dealer or any guarantor makes a general
assignment for the benefit of creditors; (n) Dealer or any guarantor
becomes insolvent or voluntarily or involuntarily becomes subject to the
Federal Bankruptcy Code, any state insolvency law or any similar law; (o)
any receiver is appointed for any assets of Dealer or any guarantor; (p)
any guaranty of Dealer's debts to DFS is terminated; (q) Dealer or any
guarantor misrepresents Dealer's or such guarantor's financial condition or
organizational structure; (r) there shall occur a material adverse change
in the financial or other condition or business prospects of Dealer or any
guarantor; or (s) DFS determines in good faith that it is insecure with
respect to any of the Collateral or the payment of any part of Dealer's
obligation to DFS.
14. RIGHTS OF DFS UPON DEFAULT. In the event of a default:
(a) DFS may at any time at DFS' election, without notice or demand to
Dealer, do any one or more of the following: declare all or any part of
the debt Dealer owes DFS immediately due and payable, together with all
costs and expenses of DFS' collection activity, including, without
limitation, all reasonable attorneys' fees; exercise any or all rights
under applicable law (including, without limitation, the right to
possess, transfer and dispose of the Collateral); and/or cease extending
any additional credit to Dealer (DFS' right to cease extending credit
shall not be construed to limit the discretionary nature of this credit
facility).
(b) Dealer will segregate and keep the Collateral in trust for DFS, and in
good order and repair, and will not sell, rent, lease, consign,
otherwise dispose of or use any Collateral, nor further encumber any
Collateral.
(c) Upon DFS' oral or written demand, Dealer will immediately deliver the
Collateral to DFS, in good order and repair, at a place specified by
DFS, together with all related documents; or DFS may, in DFS' sole
discretion and without notice or demand to Dealer, take immediate
possession of the Collateral together with all related documents.
(d) DFS may, without notice, apply a default finance charge to Dealer's
outstanding principal indebtedness equal to the default rate specified
in Dealer's financing program with DFS, if any, or if there is none so
specified, at the lesser of 3% per annum above the rate in effect
immediately prior to the default, or the highest lawful contract rate of
interest permitted under applicable law.
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All of DFS' rights and remedies are cumulative. DFS' failure to exercise
any of DFS' rights or remedies hereunder will not waive any of DFS'
rights or remedies as to any past, current or future default.
15. SALE OF COLLATERAL. Dealer agrees that if DFS conducts a private sale of
any Collateral by requesting bids from 10 or more dealers or distributors
in that type of Collateral, any sale by DFS of such Collateral in bulk or
in parcels within 120 days of: (a) DFS' taking possession and control of
such Collateral; or (b) when DFS is otherwise authorized to sell such
Collateral; whichever occurs last, to the bidder submitting the highest
cash bid therefor, is a commercially reasonable sale of such Collateral
under the Uniform Commercial Code. Dealer agrees that the purchase of any
Collateral by a Vendor, as provided in any agreement between DFS and the
Vendor, is a commercially reasonable disposition and private sale of such
Collateral under the Uniform Commercial Code, and no request for bids shall
be required. Dealer further agrees that 7 or more days prior written notice
will be commercially reasonable notice of any public or private sale
(including any sale to a Vendor). Dealer irrevocably waives any requirement
that DFS retain possession and not dispose of any Collateral until after an
arbitration hearing, arbitration award, confirmation, trial or final
judgment. If DFS disposes of any such Collateral other than as herein
contemplated, the commercial reasonableness of such disposition will be
determined in accordance with the laws of the state governing this
Agreement.
16. POWER OF ATTORNEY. Dealer grants DFS an irrevocable power of attorney to:
execute or endorse on Dealer's behalf any checks, financing statements,
instruments, Certificates of Title and Statements of Origin pertaining to
the Collateral; supply any omitted information and correct errors in any
documents between DFS and Dealer; initiate and settle any insurance claim
pertaining to the Collateral; and do anything to preserve and protect the
Collateral and DFS' rights and interest therein; provided, however, that
DFS may not exercise its power of attorney until it has provided Dealer
with notice of default and an opportunity to cure said default of at least
five (5) days. In the event such power of attorney is utilized by DFS, DFS
will promptly notify Dealer and provide Dealer with true and correct copies
of any and all documents executed by DFS pursuant thereto.
17. INFORMATION. DFS may provide to any third party any credit, financial or
other information on Dealer that DFS may from time to time possess. DFS may
obtain from any Vendor any credit, financial or other information regarding
Dealer that such Vendor may from time to time possess.
18. TERMINATION. Either party may terminate this Agreement at any time by
written notice received by the other party. If DFS terminates this
Agreement, Dealer agrees that if Dealer. (a) is not in default hereunder,
30 days prior notice of termination is reasonable and sufficient (although
this provision shall not be construed to mean that shorter periods may not,
in particular circumstances, also be reasonable and sufficient); or (b) is
in default hereunder, no prior notice of termination is required. Dealer
will not be relieved from any obligation to DFS arising out of DFS'
advances or commitments made before the effective termination date of this
Agreement. DFS will retain all of its rights, interests and remedies
hereunder until Dealer has paid all of Dealer's debts to DFS. All waivers
set forth within this Agreement will survive any termination of this
Agreement.
19. BINDING EFFECT. Dealer cannot assign its interest in this Agreement without
DFS' prior written consent, although DFS may assign or participate DFS'
interest, in whole or in part, without Dealer's consent. This Agreement
will protect and bind DFS' and Dealer's respective heirs, representatives,
successors and assigns.
20. NOTICES. Except as otherwise stated herein, all notices, arbitration
claims, responses, requests and documents will be sufficiently given or
served if mailed or delivered: (a) to Dealer at Dealer's principal place of
business specified above; and (b) to DFS at 000 Xxxxxxxxx Xxxxxx Xxxxx, Xx.
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Xxxxx, Xxxxxxxx 00000-0000, Attention: General Counsel, or such other
address as the parties may hereafter specify in writing.
21. NO ORAL AGREEMENTS. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES
TO EXTEND OR RENEW SUCH DEBTS ARE NOT ENFORCEABLE. TO PROTECT DEALER AND
DFS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ALL AGREEMENTS COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, EXCEPT AS SPECIFICALLY
PROVIDED HEREIN OR AS THE PARTIES MAY LATER AGREE IN WRITING TO MODIFY IT.
THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
22. OTHER WAIVERS. Dealer irrevocably waives notice of: DFS' acceptance of this
Agreement, presentment, demand, protest, nonpayment, nonperformance, and
dishonor. Dealer and DFS irrevocably waive all rights to claim any punitive
and/or exemplary damages.
23. SEVERABILITY. If any provision of this Agreement or its application is
invalid or unenforceable, the remainder of this Agreement will not be
impaired or affected and will remain binding and enforceable.
24. SUPPLEMENT. If Dealer and DFS have heretofore executed other agreements in
connection with all or any part of the Collateral, this Agreement shall
supplement each and every other agreement previously executed by and
between Dealer and DFS, and in that event this Agreement shall neither be
deemed a novation nor a termination of such previously executed agreement
nor shall execution of this Agreement be deemed a satisfaction of any
obligation secured by such previously executed agreement.
25. RECEIPT OF AGREEMENT. Dealer acknowledges that it has received a true and
complete copy of this Agreement. Dealer acknowledges that it has read and
understood this Agreement. Notwithstanding anything herein to the contrary:
(a) DFS may rely on any facsimile copy, electronic data transmission or
electronic data storage of this Agreement, any Statement of Transaction,
billing statement, invoice from a Vendor, financial statements or other
reports, and (b) such facsimile copy, electronic data transmission or
electronic data storage will be deemed an original, and the best evidence
thereof for all purposes, including, without limitation, under this
Agreement or any other agreement between DFS and Dealer, and for all
evidentiary purposes before any arbitrator, court or other adjudicatory
authority.
26. MISCELLANEOUS. Time is of the essence regarding Dealer's performance of its
obligations to DFS notwithstanding any course of dealing or custom on DFS'
part to grant extensions of time. Dealer's liability under this Agreement
is direct and unconditional and will not be affected by the release or
nonperfection of any security interest granted hereunder. DFS will have the
right to refrain from or postpone enforcement of this Agreement or any
other agreements between DFS and Dealer without prejudice and the failure
to strictly enforce these agreements will not be construed as having
created a course of dealing between DFS and Dealer contrary to the specific
terms of the agreements or as having modified, released or waived the same.
The express terms of this Agreement will not be modified by any course of
dealing, usage of trade, or custom of trade which may deviate from the
terms hereof. If Dealer fails to pay any taxes, fees or other obligations
which may impair DFS' interest in the Collateral, or fails to keep the
Collateral insured, DFS may, but shall not be required to, pay such taxes,
fees or obligations and pay the cost to insure the Collateral, and the
amounts paid will be: (a) an additional debt owed by Dealer to DFS, which
shall be subject to finance charges as provided herein; and (b) due and
payable immediately in full.
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Dealer agrees to pay all of DFS' reasonable attorneys' fees and expenses
incurred by DFS in enforcing DFS' rights hereunder. The Section titles
used in this Agreement are for convenience only and do not define or limit
the contents of any Section.
27. BINDING ARBITRATION.
27.1 ARBITRABLE CLAIMS. Except as otherwise specified below, all
actions, disputes, claims and controversies under common law,
statutory law or in equity of any type or nature whatsoever
(including, without limitation, all torts, whether regarding
negligence, breach of fiduciary duty, restraint of trade, fraud,
conversion, duress, interference, wrongful replevin, wrongful
sequestration, fraud in the inducement, usury or any other tort,
all contract actions, whether regarding express or implied
terms, such as implied covenants of good faith, fair dealing,
and the commercial reasonableness of any Collateral disposition,
or any other contract claim, all claims of deceptive trade
practices or lender liability, and all claims questioning the
reasonableness or lawfulness of any act), whether arising before
or after the date of this Agreement, and whether directly or
indirectly relating to: (a) this Agreement and/or any amendments
and addenda hereto, or the breach, invalidity or termination
hereof; (b) any previous or subsequent agreement between DFS
and Dealer; (c) any act committed by DFS or by any parent
company, subsidiary or affiliated company of DFS (the "DFS
Companies"), or by any employee, agent, officer or director of a
DFS Company whether or not arising within the scope and course
of employment or other contractual representation of the DFS
Companies provided that such act arises under a relationship,
transaction or dealing between DFS and Dealer, and/or (d) any
other relationship, transaction or dealing between DFS and
Dealer (collectively the "Disputes"), will be subject to and
resolved by binding arbitration.
27.2 ADMINISTRATIVE BODY. All arbitration hereunder will be conducted
in accordance with the Commercial Arbitration Rules of The
American Arbitration Association ("AAA"). If the AAA is
dissolved, disbanded or becomes subject to any state or federal
bankruptcy or insolvency proceeding, the parties will remain
subject to binding arbitration which will be conducted by a
mutually agreeable arbitral forum. The parties agree that all
arbitrator(s) selected will be attorneys with at least five (5)
years secured transactions experience. The arbitrator(s) will
decide if any inconsistency exists between the rules of any
applicable arbitral forum and the arbitration provisions
contained herein. If such inconsistency exists, the arbitration
provisions contained herein will control and supersede such
rules. The site of all arbitration proceedings will be in the
Division of the Federal Judicial District in which AAA maintains
a regional office that is closest to Dealer.
27.3 Discovery. Discovery permitted in any arbitration proceeding
commenced hereunder is limited as follows. No later than thirty
(30) days after the fling of a claim for arbitration, the
parties will exchange detailed statements setting forth the
facts supporting the claim(s) and all defenses to be raised
during the arbitration, and a list of all exhibits and
witnesses. No later than twenty-one (21) days prior to the
arbitration hearing, the parties will exchange a final list of
all exhibits and all witnesses, including any designation of any
expert witness(es) together with a summary of their testimony; a
copy of all documents and a detailed description of any property
to be introduced at the hearing. Under no circumstances will the
use of interrogatories, requests for admission, requests for the
production of documents or the taking of depositions be
permitted. However, in the event of the designation of any
expert witness(es), the following will occur: (a) all
information and documents relied upon by the expert witness(es)
will be delivered to the opposing party, (b) the opposing party
will be permitted to depose the expert witness(es), (c) the
opposing party will be permitted to designate rebuttal expert
witness(es), and (d) the arbitration hearing will be continued
to the earliest possible date that enables the foregoing limited
discovery to be accomplished.
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27.4 EXEMPLARY OR PUNITIVE DAMAGES. The Arbitrator(s) will not have
the authority to award exemplary or punitive damages.
27.5 CONFIDENTIALITY OF AWARDS. All arbitration proceedings,
including testimony or evidence at hearings, will be kept
confidential, although any award or order rendered by the
arbitrator(s) pursuant to the terms of this Agreement may be
entered as a judgment or order in any state or federal court and
may be confirmed within the federal judicial district which
includes the residence of the party against whom such award or
order was entered. This Agreement concerns transactions
involving commerce among the several states. The Federal
Arbitration Act, Title 9 U.S.C. Sections 1 et seq., as amended
("FAA") will govern all arbitration(s) and confirmation
proceedings hereunder.
27.6 PREJUDGMENT AND PROVISIONAL REMEDIES. Nothing herein will be
construed to prevent DFS' or Dealer's use of bankruptcy,
receivership, injunction, repossession, replevin, claim and
delivery, sequestration, seizure, attachment, foreclosure,
dation and/or any other prejudgment or provisional action or
remedy relating to any Collateral for any current or future debt
owed by either party to the other. Any such action or remedy
will not waive DFS' or Dealer's right to compel arbitration of
any Dispute.
27.7 ATTORNEYS' FEES. If either Dealer or DFS brings any other action
for judicial relief with respect to any Dispute (other than
those set forth in Section 27.6), the party bringing such action
will be liable for and immediately pay all of the other party's
costs and expenses (including attorneys' fees) incurred to stay
or dismiss such action and remove or refer such Dispute to
arbitration. If either Dealer or DFS brings or appeals an action
to vacate or modify an arbitration award and such party does not
prevail, such party will pay all costs and expenses, including
attorneys' fees, incurred by the other party in defending such
action. Additionally, if Dealer sues DFS or institutes any
arbitration claim or counterclaim against DFS in which DFS is
the prevailing party, Dealer will pay all costs and expenses
(including attorneys' fees) incurred by DFS in the course of
defending such action or proceeding.
27.8 LIMITATIONS. Any arbitration proceeding must be instituted: (a)
with respect to any Dispute for the collection of any debt owed
by either party to the other, within two (2) years after the
date the last payment was received by the instituting party; and
(b) with respect to any other Dispute, within two (2) years
after the date the incident giving rise thereto occurred,
whether or not any damage was sustained or capable of
ascertainment or either party knew of such incident. Failure to
institute an arbitration proceeding within such period will
constitute an absolute bar and waiver to the institution of any
proceeding, whether arbitration or a court proceeding, with
respect to such Dispute.
27.9 SURVIVAL AFTER TERMINATION. The agreement to arbitrate will
survive the termination of this Agreement.
28. INVALIDITY/UNENFORCEABILITY OF BINDING ARBITRATION. IF THIS AGREEMENT IS
FOUND TO BE NOT SUBJECT TO ARBITRATION, ANY LEGAL PROCEEDING WITH RESPECT
TO ANY DISPUTE WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE WITHOUT A JURY. DEALER AND DFS WAIVE ANY RIGHT TO A JURY TRIAL IN ANY
SUCH PROCEEDING.
29. GOVERNING LAW. Dealer acknowledges and agrees that this and all other
agreements between Dealer and DFS have been substantially negotiated, and
will be substantially performed, in the state of Missouri. Accordingly,
Dealer agrees that all Disputes will be governed by, and construed in
accordance with, the laws of such state, except to the extent inconsistent
with the provisions of the FAA which shall control and govern all
arbitration proceedings hereunder,
IN WITNESS WHEREOF. Dealer and DFS have executed this Agreement as of the
date first set forth hereinabove.
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THIS CONTRACT CONTAINS BINDING ARBITRATION, JURY WAIVER AND PUNITIVE DAMAGE
WAIVER PROVISIONS.
DEUTSCHE FINANCIAL SERVICES XXXX INDUSTRIES, INC.
CORPORATION
BY: /s/ XXXXXXXX XXXXX BY: /s/ XXXXXXX X. DOLL
------------------------- -----------------------------------
Print Name: Xxxxxxxx Xxxxx Print Name: XXXXXXX X. DOLL
----------------- ---------------------------
Title: VP Operations Title: SVP-CHIEF FINANCIAL OFFICER
---------------------- --------------------------------
ATTEST:
/s/ XXXXX XXXXXXX
---------------------------------------
(Assistant) Secretary
Print Name: Xxxxx Xxxxxxx
---------------------------
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SECRETARY'S CERTIFICATE OF RESOLUTION
I certify that I am the Secretary or Assistant Secretary of the corporation
named below, and that the following completely and accurately sets forth certain
resolutions of the Board of Directors of the corporation adopted at a special
meeting thereof held on due notice (and with shareholder approval, if required
by law), at which meeting there was present a quorum authorized to transact the
business described below, and that the proceedings of the meeting were in
accordance with the certificate of incorporation, charter and by-laws of the
corporation, and that they have not been revoked, annulled or amended in any
manner whatsoever.
Upon motion duly made and seconded, the following resolution was unanimously
adopted after full discussion:
"RESOLVED, That the several officers, directors, and agents of this
corporation, or any one or more of them, are hereby authorized and empowered on
behalf of this corporation: to obtain financing from Deutsche Financial Services
Corporation ("DFS") in such amounts and on such terms as such officers,
directors or agents deem proper; to enter into financing, security, pledge and
other agreements with DFS relating to the terms upon which such financing may be
obtained and security and/or other credit support is to be furnished by this
corporation therefor; from time to time to supplement or amend any such
agreements; and from time to time to pledge, assign, mortgage, grant security
interests, and otherwise transfer, to DFS as collateral security for any
obligations of this corporation to DFS, whenever and however arising, any assets
of this corporation, whether now owned or hereafter acquired; the Board of
Directors hereby ratifying, approving and confirming all that any of said
officers, directors or agents have done or may do with respect to the
foregoing."
IN WITNESS WHEREOF, I have executed and affixed the seal of the corporation
on the date stated below.
Dated: 5/11, 2001
/s/ Xxxxx Xxxxxxx
---------------------------------------
(Assistant) Secretary
XXXX INDUSTRIES, INC.
(SEAL)
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