AGREEMENT FOR WHOLESALE FINANCING
This Agreement for Wholesale Financing ("Agreement") is made as of April 15,
1998 among Deutsche Financial Services Corporation ("DFS"), Computer Hardware
Maintenance Company, Inc. ("CHMC"), Corporate Access, Inc. ("Access"), and U.S.
Communications, Inc. ("USC") (CHMC, Access and USC are sometimes hereinafter
referred to individually and/or collectively as "Dealer"), each having a
principal place of business located at the address indicated on the signature
pages hereto.
RECITALS
Dealer has requested that DFS provide Dealer with a credit facility for
inventory acquisition purposes. CHMC, Access, and USC are each a wholly-owned
subsidiary of Condor Technology Solutions, Inc., all of which Dealers do
business among each other and with third parties substantially as an integrated
family of companies, and accordingly, each Dealer desires to have the
availability of one common credit facility instead of separate credit
facilities. Each Dealer has requested that DFS extend such a common credit
facility. Each Dealer acknowledges that DFS will be lending against, and relying
on a lien upon, substantially all of Dealer's assets even though the proceeds of
any particular advance made hereunder may not be advanced directly to such
Dealer, and that such Dealer will nevertheless benefit by the making of all such
advances by DFS and the availability of a single credit facility of a size
greater than each might independently warrant.
1. Extension of Credit.
(a) 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. Each Dealer hereby
further confirms its understanding that the funds availability to it
hereunder will be reduced by the then aggregate outstanding amount of
advances to all Dealers collectively. 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.
(b) Appointment of Condor Technology Solutions, Inc. as Agent.
Each of CHMC, Access and USC hereby appoints Condor Technology
Solutions. Inc. as its agent and attorney-in-fact to take any action or
execute any document or instrument necessary or appropriate for the
administration of the Collateral and the credit facilities hereunder and
under any other agreements related hereto. DFS shall be entitled to rely
absolutely and without duty of inquiry or investigation upon any
agreement, request, communication or other notice given and/or executed
by Condor Technology Solutions. Inc. Upon DFS' request, each Dealer
shall execute and deliver to DFS a Power of Attorney, in form acceptable
to DFS, confirming and restating the power of attorney granted herein.
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
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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 fifteen (15) 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 17, 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 inventory, equipment, fixtures,
accounts, contract rights, chattel paper, security agreements,
instruments, deposit accounts, reserves, documents, and general
intangibles; and all judgments, claims, insurance policies, and
payments owed or made to Dealer thereon; all whether now owned or
hereafter acquired, all attachments, accessories, accessions, returns,
repossessions, exchanges, substitutions and replacements thereto, 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 ------- 9.
Notwithstanding the foregoing, the above described conveyance shall not
be deemed to include the conveyance of any government contract or other
contractual agreement, which by its terms or applicable law may not be
conveyed; it being understood, however, that in any such situation(s),
DFS' security interest shall include (i) the entirety of the Dealer's
right, title and interest in and to all accounts receivable and all
other proceeds directly or indirectly arising from such government
contract or other contractual agreement and (ii) all other rights and
interests which the Dealer may lawfully convey to DFS.
4. Affirmative Warranties and Representations. Dealer warrants and
represents to DFS that: (a) Dealer has good title to all Collateral;
(b) DFS' security interest in the Collateral is not now and will not
become subordinate to the security interest, lien, encumbrance or claim
of any person other than as provided in that certain Intercreditor and
Subordination Agreement between DFS and First Union Commercial
Corporation ("First Union") and that certain Intercreditor
Subordination Agreement between DFS and IBM Credit Corporation ("IBM
Credit") regarding such parties' respective interests in and to certain
of Dealer's assets; (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 and will be no actions
or proceedings pending or threatened against Dealer not fully covered
by insurance which might
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result in any material adverse change in Dealer's financial or business
condition or which might in any way materially 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
except for such taxes, etc. which are being contested by Dealer in good
faith and for which reasonable reserves have been established in
accordance with generally accepted accounting principles, consistently
applied; (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.
5. Negative Covenants. Dealer will not at any time (without DFS' prior
written consent): (a) other than distributions in the ordinary course of
its business which in the aggregate as to all Dealers do not exceed Five
Hundred Thousand Dollars ($500,000) per annum, sell, lease or otherwise
dispose of or transfer any of its assets; (b) rent, lease, demonstrate,
consign, or use any Collateral except for pledges thereof under Dealer's
agreements with First Union and with IBM Credit, as such parties' rights
are limited, however, by certain intercreditor agreements by each of
First Union and IBM Credit with DFS; or (c) merge or consolidate with
another entity in a transaction pursuant to which a Dealer is not the
survivor.
6. Insurance. Dealer will promptly 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.
7. Financial Statements. Dealer will deliver to DFS: (a) within one
hundred twenty (120) 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 reasonably
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 reasonably satisfactory
to DFS; and (c) within ten (10) days after reasonable 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 in all material respects 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.
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8. Reviews. Dealer grants DFS an irrevocable license to enter Dealer's
business locations during normal business hours with twenty-four (24)
hours notice to Dealer (no such notice being required however, if Dealer
is in default) 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.
9. 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 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 and counterclaims Dealer may have
against DFS.
10. 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)
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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.
11. 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 15 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
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.
12. Default. Dealer will be in default under this Agreement if: (a) Except
for a breach described in subsection 12(d) below, 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 and such breach is
not cured within ten (10) days of Dealer's receipt of written notice of
such breach; (b) any guarantor of Dealer's debts to DFS breaches any
terms, covenants, warranties or representations contained in any
guaranty or other agreement between such guarantor and DFS, revokes or
attempts to revoke any such guaranty agreement, or repudiates such
guarantor's liability thereunder; (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 within five (5) days of 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;
(g) money judgment(s) issue against Dealer or any guarantor which
exceed in the aggregate as to all Dealers and any guarantor, at any
time $1,000,000; (h) an attachment, sale or seizure issues or is
executed against any assets of Dealer or of any guarantor which is not
satisfied or released within fifteen (15) days; (i) the undersigned
dies while Dealer's business is operated as a sole proprietorship, any
general partner dies while Dealer's business is operated as a general
or limited partnership, or any member dies while Dealer's business is
operated as a limited liability company, as applicable; (j) 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,
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any guarantor or any member while Dealer's business is
operated as a limited liability company, as applicable, makes a general
assignment for the benefit of creditors; (n) Dealer, any guarantor or
any member while Dealer's business is operated as a limited liability
company, as applicable, becomes insolvent or voluntarily or
involuntarily becomes subject to the Federal Bankruptcy Code, any state
insolvency law or any similar law (which, with respect to an
involuntary proceeding, remains undismissed for more than thirty (30)
days, provided, however, if at any time an order for relief is entered,
then notwithstanding the foregoing, such event shall constitute an
immediate default hereunder); (o) any receiver is appointed for any
assets of Dealer, any guarantor or any member while Dealer's business
is operated as a limited liability company, as applicable; (p) any
guaranty of Dealer's debts to DFS is terminated; (q) Dealer loses any
franchise, permission, license or right to sell or deal in any
Collateral which DFS finances; or (r) Dealer or any guarantor
misrepresents Dealer's or such guarantor's financial condition or
organizational structure.
13. 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.
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.
14. 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.
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15. 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.
16. 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.
17. 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.
18. 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.
19. 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. Xxxxx, Xxxxxxxx 00000-0000, Attention: General Counsel, or
such other address as the parties may hereafter specify in writing.
20. 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.
21. 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.
22. 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.
23. 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. Notwithstanding any of the foregoing, this Agreement replaces
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in its entirety and renders null and void each and every separate
Agreement for Wholesale Financing previously entered into from time to
time between a Dealer and DFS, and any amendments and addenda thereto.
24. 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.
25. 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. 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.
26. BINDING ARBITRATION.
26.1 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.
26.2 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
8
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.
26.3 Discovery. Discovery permitted in any arbitration proceeding
commenced hereunder is limited as follows. No later than
thirty (30) days after the filing 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.
26.4 Exemplary or Punitive Damages. The Arbitrator(s) will not have
the authority to award exemplary or punitive damages.
26.5 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.
26.6 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.
26.7 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 26.6), 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
9
defending such action or proceeding.
26.8 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.
26.9 Survival After Termination. The agreement to arbitrate will
survive the termination of this Agreement.
27. 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.
28. 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 New Jersey.
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.
29. Joint and Several Liability. Notwithstanding anything herein to the
contrary, each Dealer is primarily and jointly and severally liable for
all debts to DFS hereunder or under any other agreement between DFS and
Dealer. If and to the extent a Dealer shall be deemed a guarantor of the
other Dealer hereunder, such Dealer's joint liability for any such
obligations of such other Dealer shall be deemed to be a guaranty of
payment and performance, and not of collection. A default by one Dealer
shall be deemed a default by all Dealers.
30. Confidentiality. DFS shall keep confidential, and will cause its
directors, officers, employees, counsel, agents and representatives to
keep confidential, all confidential or proprietary information of any
Dealer (the proprietary nature of which shall be promptly determined by
the Dealer following DFS' request therefor) and documents obtained by
it in connection with the consummation of the transactions contemplated
hereby (including, without limitation, this Agreement) from all persons
(other than DFS and its directors, officers, employees, counsel, agents
and representatives), unless such information is disclosed following
DFS' receipt of Condor Technology Solutions, Inc.'s consent to such
disclosure. Information shall not be deemed to be confidential or
proprietary if (i) it is or becomes generally available in the public
domain (other than as a result of its disclosure after the date of this
Agreement by DFS or its directors, officers, employees, counsel, agents
or representatives), (ii) it is or has become generally available to
the public without violating the terms of this section, (iii) it is or
becomes lawfully obtainable from other sources or (iv) it is required
to be disclosed to comply with applicable law, rules or regulations or
a court order issued by a court of competent jurisdiction; it being
understood and agreed that (a) any such disclosure pursuant to this
clause (iv) shall be limited to confidential or proprietary information
which DFS may be legally required to disclose pursuant to such law,
rule, regulation or court order and (b) unless otherwise prohibited by
court order or applicable law, DFS shall promptly notify Condor
Technology Solutions, Inc. of DFS' receipt of any court order requiring
disclosure of confidential or proprietary information of the Dealer.
DFS acknowledges and agrees that all confidential and proprietary
information in DFS' possession, custody or control shall be returned to
Condor Technology Solutions, Inc. upon payment in full of all
obligations and termination of this Agreement. DFS' obligations under
this section shall survive the payment in full of the obligations
hereunder.
10
IN WITNESS WHEREOF, Dealer and DFS have executed this Agreement as of
the date first set forth hereinabove.
THIS CONTRACT CONTAINS BINDING ARBITRATION, JURY WAIVER AND PUNITIVE DAMAGE
WAIVER PROVISIONS.
COMPUTER HARDWARE MAINTENANCE COMPANY, INC.
Attest:
By: /s/Xxxxxxx X. Xxxxxxx, Xx.
--------------------------
Print Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Attorney-In-Fact
(Assistant) Secretary Address: 0000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
CORPORATE ACCESS, INC.
Attest:
By: /s/Xxxxxxx X. Xxxxxxx, Xx.
--------------------------
Print Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Attorney-In-Fact
(Assistant) Secretary Address: 000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
U.S. COMMUNICATIONS, INC.
Attest:
By: /s/Xxxxxxx X. Xxxxxxx, Xx.
--------------------------
Print Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Attorney-In-Fact
(Assistant) Secretary Address: 000 Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, XX 00000
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Print Name: Xxxxxxx Xxxxxxxxx
Title: Regional Marketing Manager
11
GUARANTY
TO: DEUTSCHE FINANCIAL SERVICES CORPORATION
In consideration of financing provided or to be provided by you to
Computer Hardware Maintenance Company Inc., Corporate Access Inc. and U.S.
Communications Inc. ("Dealers"), and for other good and valuable consideration
received, we jointly, severally, unconditionally and absolutely guaranty to you,
from property held separately, jointly or in community, the immediate payment
when due of all current and future liabilities owed by Dealers to you, whether
such liabilities are direct, indirect or owed by Dealers to a third party and
acquired by you ("Liabilities"). We will pay you on demand the full amount of
all sums owed by Dealers to you, together with all costs and expenses
(including, without limitation, reasonable attorneys' fees). We also indemnify
and hold you harmless from and against all (a) losses, costs and expenses you
incur and/or are liable for (including, without limitation, reasonable
attorneys' fees) and (b) claims, actions and demands made by Dealers or any
third party against you, which in any way relate to any relationship or
transaction between you and Dealers.
Our guaranty will not be released, discharged or affected by, and we
hereby irrevocably consent to, any: (a) change in the manner, place, interest
rate, finance or other charges, or terms of payment or performance in any
current or future agreement between you and Dealers, the release, settlement or
compromise of or with any party liable for the payment or performance thereof or
the substitution, release, non-perfection, impairment, sale or other disposition
of any collateral thereunder; (b) change in Dealer's financial condition; (c)
interruption of relations between Dealers and you or us; (d) claim or action by
Dealers against you; and/or (e) increases or decreases in any credit you may
provide to Dealers. We will pay you even if you have not: (i) notified Dealers
that it is in default of the Liabilities, and/or that you intend to accelerate
or have accelerated the payment of all or any part of the Liabilities, or (ii)
exercised any of your rights or remedies against Dealers, any other person or
any current or future collateral. This Guaranty is assignable by you and will
inure to the benefit of your assignee. If Dealers hereafter undergo any change
in ownership, identity or organizational structure, this Guaranty will extend to
all current and future obligations which such new or changed legal entity owes
to you.
We irrevocably waive: notice of your acceptance of this Guaranty,
presentment, demand, protest, nonpayment, nonperformance, notice of breach or
default, notice of intent to accelerate and notice of acceleration of any
indebtedness of Dealers, any right of contribution from other guarantors,
dishonor, the amount of indebtedness of Dealers outstanding at any time, the
number and amount of advances made by you to Dealers in reliance on this
Guaranty and any claim or action against Dealers; all other demands and notices
required by law; all rights of offset and counterclaims against you or Dealers;
all defenses to the enforceability of this Guaranty (including, without
limitation, fraudulent inducement). We further waive all defenses based on
suretyship or impairment of collateral, and defenses which the Dealers may
assert on the underlying debt, including but not limited to, failure of
consideration, breach of warranty, fraud, payment, statute of frauds,
bankruptcy, lack of legal capacity, statute of limitations, lender liability,
deceptive trade practices, accord and satisfaction and usury. We also waive all
rights to claim, arbitrate for or xxx for any punitive or exemplary damages. In
addition, we hereby irrevocably subordinate to you any and all of our present
and future rights and remedies: (a) of subrogation against Dealer to any of your
rights or remedies against Dealer, (b) of contribution, reimbursement,
indemnification and restoration from Dealer; and (c) to assert any other claim
or action against Dealer directly or indirectly relating to this Guaranty, such
subordinations to last until you have been paid in full for all Liabilities. All
of our waivers and subordinations herein will survive any termination of this
Guaranty.
We have made an independent investigation of the financial condition of
Dealer and give this Guaranty based on that investigation and not upon any
representation made by you. We have access to current and future Dealer
financial information which enables us
1
to remain continuously informed of Dealer's financial condition. We represent
and warrant to you that we have received and will receive substantial direct or
indirect benefit by making this Guaranty and incurring the Liabilities. We will
provide you with financial statements on us each year within ninety (90) days
after the end of Dealer's fiscal year end. We warrant and represent to you that
all financial statements and information relating to us or Dealer which have
been or may hereafter be delivered by us or Dealer to you are true and correct
and have been and will be prepared in accordance with generally accepted
accounting principles consistently applied and, with respect to previously
delivered statements and information, there has been no material adverse change
in the financial or business condition of us or Dealer since the submission to
you, either as of the date of delivery, or if different, the date specified
therein, and we acknowledge your reliance thereon. This Guaranty will survive
any federal and/or state bankruptcy or insolvency action involving Dealer. We
are solvent and our execution of this Guaranty will not make us insolvent. If
you are required in any action involving Dealer to return or rescind any payment
made to or value received by you from or for the account of Dealer, this
Guaranty will remain in full force and effect and will be automatically
reinstated without any further action by you and notwithstanding any termination
of this Guaranty or your release of us. Any delay or failure by you, or your
successors or assigns, in exercising any of your rights or remedies hereunder
will not waive any such rights or remedies. 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 debt are not enforceable. To protect
us and you from misunderstanding or disappointment, any agreements we reach
covering such matters are contained in this writing, which is the complete and
exclusive statement of the agreement between us, except as specifically provided
herein or as we may later agree in writing to modify it. Notwithstanding
anything herein to the contrary: (a) you may rely on any facsimile copy,
electronic data transmission or electronic data storage of this Guaranty, any
agreement between you and Dealer, any Statement of Transaction, billing
statement, invoice from a vendor, financial statements or other report, 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 Guaranty or any other agreement
between you and us, and for all evidentiary purposes before any arbitrator,
court or other adjudicatory authority. We may terminate this Guaranty by a
written notice to you, the termination to be effective sixty (60) days after you
receive and acknowledge it, but the termination will not terminate our
obligations hereunder for Liabilities arising prior to the effective termination
date. We have read and understood all terms and provisions of this Guaranty. We
acknowledge receipt of a true copy of this Guaranty and of all agreements
between you and Dealer. The meanings of all terms herein are equally applicable
to both the singular and plural forms of such terms.
BINDING ARBITRATION. 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
Guaranty, and whether directly or indirectly relating to: (a) this Guaranty
and/or any amendments and addenda hereto, or the breach, invalidity or
termination hereof; (b) any previous or subsequent agreement between you and us;
(c) any act committed by you or by any parent company, subsidiary or affiliated
company of you (the "DFS Companies"), or by an 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 you
and Dealer or you and us; and/or (d) any other relationship, transaction,
dealing or agreement between you and Dealer or you and us (collectively the
"Disputes"), will be
2
subject to and resolved by binding arbitration.
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 arbitrations will be in the Division of the Federal Judicial
District in which AAA maintains a regional office that is closest to Dealer.
Discovery permitted in any arbitration proceeding commenced hereunder is
limited as follows: No later than thirty (30) days after the filing 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.
The Arbitrator(s) will not have the authority to award exemplary or
punitive damages.
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 Guaranty may be entered as a
judgment or order in any state or federal court and may be entered as a judgment
or order within the federal judicial district which includes the residence of
the party against whom such award or order was entered. This Guaranty concerns
transactions involving commerce among the several states. The Federal
Arbitration Act ("FAA") will govern all arbitration(s) and confirmation
proceedings hereunder.
Nothing herein will be construed to prevent your or our 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 your or our right to compel arbitration of any Dispute.
If either we or you bring any other action for judicial relief with
respect to any Dispute (other than those set forth in the immediately preceding
paragraph), 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 we or you bring or appeal 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 we xxx you or institute any arbitration
claim or counterclaim against you in which you are the prevailing party, we
3
will pay all costs and expenses (including attorneys' fees) incurred by you in
the course of defending such action or proceeding.
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 with
respect to such Dispute. Except as otherwise stated herein, all notices,
arbitration claims, responses, requests and documents will be sufficiently given
or served if mailed or delivered: (i) to us at our address below; (ii) to you at
000 Xxxxxxxxx Xxxxxx Xxxxx, Xx. Xxxxx, Xxxxxxxx 00000-0000, Attention: General
Counsel; or such other address as the parties may specify from time to time in
writing.
The agreement to arbitrate will survive the termination of this
Guaranty.
IF THIS GUARANTY 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. WE WAIVE ANY RIGHT TO A JURY TRIAL IN
ANY SUCH PROCEEDING.
We acknowledge and agree that this Guaranty and all agreements between
Dealer and you have been substantially negotiated, and will be performed, in the
state of New Jersey. Accordingly, we agree 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 will control and govern
all arbitration proceedings hereunder.
THIS GUARANTY CONTAINS BINDING ARBITRATION, JURY WAIVER AND PUNITIVE DAMAGES
WAIVER PROVISIONS.
Date: April 15, 1998
Condor Technology Solutions Inc.
Attest:
By: /s/ Xxxxxxx X. Xxxx
-------------------
/s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------
Print Name: Xxxxxxx X. Xxxx
Print Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chief Executive Officer
Title: Secretary
4
ADDENDUM TO GUARANTY
AND AGREEMENT FOR WHOLESALE FINANCING
This Addendum is hereby made to (i) that certain Agreement for Wholesale
Financing dated as of April 15, 1998 executed by Computer Hardware Maintenance
Company, Inc., Corporate Access, Inc., and U.S. Communications, Inc.
(individually and/or collectively, "Dealer") and Deutsche Financial Services
Corporation ("DFS"), as amended, ("AWF"), and (ii) that certain Guaranty given
by Condor Technology Solutions, Inc. ("Guarantor") to DFS dated as of
April 15, 1998, as amended ("Guaranty"), unconditionally guaranteeing the
obligations of Dealer to DFS. All capitalized terms shall have the same
meaning used in the AWF unless otherwise defined herein.
FOR VALUE RECEIVED, DFS, Guarantor and Dealer agree as follows:
1. The following paragraphs are hereby incorporated into the Guaranty
and the AWF, where applicable, as if fully set forth therein:
Guarantor hereby agrees to cause an institution acceptable to DFS
to issue in favor of DFS one or more Irrevocable Letters of Credit,
in a total amount, form, substance and with expiration dates
satisfactory to DFS. Such Irrevocable Letter(s) of Credit shall,
among other things, be for the account of Guarantor, but provide
support both for the obligations of Guarantor under its Guaranty
and of the Dealer under its AWF and other agreements with DFS.
Guarantor hereby agrees that if at least sixty (60) days prior to
the expiration of the above referenced Irrevocable Letter(s) of
Credit or any subsequent Letter(s) of Credit issued in favor of DFS
as provided herein, any such Irrevocable Letter of Credit is not
extended for a term of twelve (12) months or longer, or a new
Irrevocable Letter of Credit in an amount, form and from an
institution acceptable to DFS and for a term of twelve (12) months
or longer, is not provided to DFS, an event of default shall have
occurred under the Guaranty and under the AWF, and DFS may declare
all sums owed by Dealer to DFS and/or by Guarantor to DFS to be
immediately due and payable. Upon such default, DFS may: (i)
exercise any and all of its rights under the AWF, Guaranty and at
law, including, but not limited to, the right to repossess the
Collateral from Dealer; and (ii) exercise any and all of its rights
to draw upon any such Irrevocable Letter of Credit. DFS agrees,
accordingly, that it will not draw upon or present any such
Irrevocable Letter of Credit unless a default has occurred.
2. The AWF shall be amended to provide as follows, and, to the extent
applicable, the following provision shall also amend the Guaranty:
Dealer will forward to DFS by the tenth (10th) day of each month a
Collateral Report (as defined below) dated as of the last day of
the prior 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.
1
The term "Collateral Report" is defined herein to mean a report
compiled by Dealer specifying 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 to the extent DFS has a first priority, fully perfected
security interest therein.
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 inventory financed by DFS that is
unsold and in Dealer's possession and control and to the extent DFS
has a first priority, fully perfected security interest therein;
and (ii) the amount of any Irrevocable Letter of Credit issued by
an institution acceptable to DFS, and in a form, amount and upon
such other terms as are acceptable to DFS, in its sole discretion:
in each case as of the date of the Collateral Report.
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.
3. The following provisions shall amend the AWF and, to the extent
applicable, the Guaranty:
Financial Covenants. So long as any obligation of Dealer and/or
Guarantor to DFS remains outstanding and/or the Guaranty and/or the
AWF remain in effect, the Dealer and the Guarantor will comply with
each of the financial covenants set forth below, all computed on a
consolidated basis at the Guarantor's level (the Guarantor and all
of its subsidiaries, including but not limited to each Dealer,
being the "Consolidated Group"):
(a) Net Worth. The Consolidated Group will maintain on a
consolidated basis for each quarter commencing with and including
the quarter ending immediately after the date hereof, Net Worth of
not less than (i) 75% of net income for all fiscal quarters
commencing with and including the fiscal quarter ending March 31,
1998 (but excluding net income for any fiscal quarter for which net
income is a negative number), plus (ii) 75% of the net proceeds
from the issuance or sale by any member of the Consolidated Group
of any of its equity securities (excluding the proceeds from the
exercise of employee stock options), plus (iii) $85,000,000.
For purposes hereof, "Net Worth" shall mean total assets minus
all liabilities, all to be determined on a consolidated basis
in accordance with generally accepted accounting principles,
consistently applied. The Net Worth shall be measured on the
last day of each fiscal quarter.
(b) Fixed Charge Coverage Ratio. The Consolidated Group will
maintain on a consolidated basis for each quarter commencing with
and including the quarter ending immediately after the date hereof,
a Fixed Charge Coverage Ratio of not less than 2.00 to 1.00.
For purposes of the foregoing, "Fixed Charge Coverage Ratio" shall
mean the Consolidated Group's pro forma earnings before interest,
taxes, depreciation and amortization ("EBITDA"), plus rent expense,
minus cash taxes paid, minus cash capital expenditures, minus cash
dividends paid, divided by the Consolidated Group's rent expense,
plus interest expense, plus required principal payments on debt and
capital leases. The Fixed Charge Coverage Ratio shall be measured
on the last day of each fiscal quarter.
2
Each and every covenant compliance certificate, report, statement,
or other notice delivered under the Business Loan and Security
Agreement among First Union Commercial Corporation, Dealer,
Guarantor, and certain other of Guarantor's subsidiaries (as
amended from time to time, the "Credit Agreement"), pursuant to
Article VI, Section 3 of the Credit Agreement, shall also be
delivered to DFS, along with all supporting data.
4. The AWF and the Guaranty shall each be amended to provide that the
occurrence of a default under the terms of the Credit Agreement
shall also constitute a default under the AWF and the Guaranty (the
"Cross Default"). DFS shall not exercise its remedies based on a
Cross Default until after the expiration of the applicable grace
period which First Union Commercial Corporation ("First Union") has
granted to the Dealer or Guarantor for the curing of such default
to First Union, as presently stated in the Credit Agreement.
Each Dealer and Guarantor hereby waives notice of DFS' acceptance of this
Addendum. All other terms and conditions of the Guaranty and the AWF shall
remain unchanged and in full force and effect.
IN WITNESS WHEREOF, Guarantor, each Dealer and DFS have read this
Addendum, understand all the terms and provisions hereof and agree to be bound
thereby and subject thereto as of the 15th day of April, 1998.
CONDOR TECHNOLOGY SOLUTIONS, INC.
Attest:
By: /s/ Xxxxxxx X. Xxxx
/s/ Xxxxx Xxxxxxxxxxx --------------------
------------------------- Print Name: Xxxxxxx X. Xxxx
Xxxxx Xxxxxxxxxxx
Title: Chief Executive Officer
Business Development
Manager
COMPUTER HARDWARE MAINTENANCE COMPANY, INC.
Attest:
By: /s/Xxxxxxx X. Xxxxxxx, Xx.
/s/ Xxxxx Xxxxxxxxxxx --------------------------
------------------------- Print Name: Xxxxxxx X. Xxxxxxx, Xx.
Xxxxx Xxxxxxxxxxx
Title: Attorney-In-Fact
Business Development
Manager
CORPORATE ACCESS, INC.
Attest:
By: s/Xxxxxxx X. Xxxxxxx, Xx."Attorney in Fact"
/s/ Xxxxx Xxxxxxxxxxx -------------------------------------------
------------------------- Print Name: Xxxxxxx X. Xxxxxxx, Xx.
Xxxxx Xxxxxxxxxxx
Title: Attorney-In-Fact
Business Development
Manager
U.S. COMMUNICATIONS, INC.
Attest:
By: s/Xxxxxxx X. Xxxxxxx, Xx."Attorney in Fact"
/s/ Xxxxx Xxxxxxxxxxx -------------------------------------------
------------------------- Print Name: Xxxxxxx X. Xxxxxxx, Xx.
Xxxxx Xxxxxxxxxxx
Title: Attorney-In-Fact
Business Development
Manager
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
---------------------
Print Name: Xxxxxxx Xxxxxxxxx
Title: Regional Marketing Manager
3
