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EXHIBIT 10.14
CITIFINANCIAL RETAIL SERVICES DEALER AGREEMENT
The undersigned, Shopsmith, Inc. and Shopsmith Woodworking Promotions (each
referred to herein as "Dealer"), each hereby agrees to honor credit cards
("Cards") issued by CitiFinancial Retail Services Division of Travelers Bank &
Trust, fsb, a Delaware state chartered bank, or any of their affiliated
financial entities (collectively called "Creditor") to Buyers (hereinafter
defined) who have revolving credit Accounts (hereinafter defined) established by
the Creditor and upon which the Creditor will accept delivery of Transaction
Slips (hereinafter defined), documenting transactions on Accounts. For good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Dealer covenants and agrees with Creditor as follows:
1) DEFINITIONS. As used herein, the following terms shall have the following
meanings:
a) "Account" - a revolving charge account entered into by Creditor with
one or more Buyers pursuant to which goods and/or services may be
purchased from time to time by one or more Buyers from Dealer.
b) "Account Agreement" - a revolving charge agreement between Creditor
and Buyer(s), establishing an Account, and any other applications,
notes, contracts, or documents in connection therewith.
c) "Applications"- buyer credit applications.
d) "Buyer" - this includes each person who signs an Account Agreement as
Buyer to obtain credit for personal, family, or household use.
e) "Chargeback" - reimbursement by Dealer to Creditor with respect to one
or more Accounts/Transaction Slips, such that Dealer will become owner
of the Accounts and/or Transaction Slips.
f) "Purchase" - a purchase by a Buyer of goods and/or services from
Dealer which is charged to an Account and becomes an obligation
thereunder.
g) "Return" - the return or adjustment of part or all of a Purchase or
the price of a Purchase which is or will be shown as a credit to an
Account.
h) "Transaction Slip" - an original receipt documenting a Purchase or a
Return signed by the Buyer. In the case of Purchases, each
"Transaction Slip" grants Creditor a security interest in the goods
purchased.
2) ESTABLISHING AND OWNERSHIP OF ACCOUNTS. Dealer agrees and understands that
Creditor, and not Dealer, will establish and own all Accounts and
Transaction Slips and related documents, and that Creditor is the party
extending the credit on the Accounts, subject to Dealer's obligation to
purchase the Accounts and Transaction Slips from Creditor as provided
herein. All information relating to Buyers is owned by Creditor and may be
used by Creditor for any purpose deemed appropriate by Creditor, PROVIDED,
HOWEVER, that Creditor will not sell Buyers' information to third parties.
Dealer will give Creditor the right of first refusal to finance all of
Dealer's customer credit purchases, Creditor, in its sole discretion, will
determine whether the Buyer meets the Creditor's credit criteria and
whether to establish an Account in such Buyer's name, and the terms of such
Account, including whether to later modify the terms of, or to terminate,
the Account. Buyers approved by Creditor for an Account will be issued
Account Identification Cards which, subject to the terms of this Agreement,
Dealer will honor in connection with bona fide consumer credit transactions
for the purchase from Dealer of goods and services; provided that Creditor
has not otherwise advised Dealer. Creditor will make all credit decisions
and will establish all Accounts under Delaware law.
3) DELIVERY OF TRANSACTION SLIPS.
a) Dealer's written advice to Creditor of a Transaction Slip shall
constitute Dealer's request for Creditor to accept the Transaction
Slip and to pay the Dealer for the Transaction Slip as agreed by
Creditor and Dealer from time to time. Subject to the terms of this
Agreement, Creditor will accept or refuse, in its complete discretion,
Transaction Slips executed by Buyers, and will pay Dealer the total
amount of the Transaction Slip less any amount agreed to by the
parties hereto.
b) Dealer agrees and understands that the Creditor owns all right, title
and interest in every Transaction Slip executed by a Buyer in
connection with credit transactions on Accounts, including the payment
obligation represented by such Transaction Slips and the security
interest in the goods and services covered by such Transaction Slips,
unless and until Dealer purchases a Transaction Slip from Creditor as
provided in this Agreement.
c) Except with respect to Transaction Slips which Dealer purchases from
Creditor, Dealer agrees that it is not authorized to receive payments,
and that the Creditor has the sole right to receive payments, on all
Accounts and related Transaction Slips submitted to Creditor.
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4) DELIVERY OF TRANSACTION SLIPS: DEALER'S RISK AND CREDITOR'S OBLIGATIONS
WITH RESPECT THERETO. The procedures governing payment for Transaction
Slips and Dealer's risks and Creditor's obligations with respect thereto,
shall be as follows:
a) Dealer's Risk. Any Purchase consummated by Dealer which in good faith
judgement of Creditor (i) was fraudulent, (ii) was evidenced by a
Transaction Slip which is not in all respected legible, or in which
the Purchase is not as represented, warranted, or agreed therein, or
for which an infirmity in documentation otherwise exists, (iii) was
without Creditor's approval if so required hereunder, (iv) was in
violation of any of the rules governing Purchases, or (v) otherwise
was without compliance with any applicable warranty or representation
of Dealer contained in this Agreement or any applicable term or
condition of this Agreement, or the Account Agreement, shall be at
Dealer's risk, and Creditor shall have no obligation to accept, or pay
for, any Transaction Slip representing any such Purchase, and shall
have no liability to Dealer therefor; but Creditor shall, in its sole
and absolute discretion, have the option of accepting the same upon
investigation, but no such acceptance by Creditor of any such
Transaction Slip or Purchase shall be deemed a waiver of Creditor's
rights hereunder with respect to any other or subsequent Transaction
Slip or Purchase.
b) Delivery of, and Payment for, Transaction Slips.
i) Dealer will deliver to Creditor (in the manner and time specified
by Creditor) with respect to each Account; the Dealer's
invoice/sales form; the Transaction Slip(s) signed by the Buyer,
evidencing the original and any subsequent purchases; and any
other documentation relating to Applications and Accounts as
agreed to by the parties.
ii) If Dealer is unable to deliver a document requested by Creditor
within the specified time frame for whatever reason, Creditor may
immediately charge back the Account and/or Transaction Slip. The
Chargeback amount of any Account and/or Transaction Slip shall be
a sum equal to the then unpaid net balance due thereon (including
any accrued but unpaid finance charges thereon), plus any and all
costs (including reasonable attorney's fees) incurred by Creditor
in connection with enforcing this Agreement. Upon payment to
Creditor of the amount of the Chargeback, the Accounts and/or
Transaction Slips shall be transferred by appropriate endorsement
or assignment to Dealer, but all such endorsements and
assignments shall be without recourse upon Creditor and without
warranties, express or implied on the part of the Creditor.
Creditor's right to demand Chargeback is not waived because of
its failure to make prompt Chargeback. Creditor's right to charge
back any Account and/or Transaction Slip as set forth herein
shall not be affected by any modification by Creditor of any
Account and/or Transaction Slip. With respect to any Account
and/or Transaction Slip for which Creditor charges back to Dealer
hereunder. Dealer further waives any right to require Creditor
(i) to proceed against any person; (ii) to proceed against or
exhaust its rights with respect to collection of any of the
Accounts, (iii) to obtain any determination by any court or
governmental agency with respect to any breach of the elements or
events constituting any breach; or (iv) pursue any other remedy
in Creditor's power as against any other personsor property.
c) Chargeback. In any of the following circumstances, Creditor may charge
back to Dealer any Transaction Slip that Creditor has accepted from
Dealer, and Dealer shall immediately pay Creditor the amount
represented by the Transaction Slip, plus interest on the Transaction
Slip accrued and unpaid as of the date of the chargeback, plus
Creditor's out-of-pocket costs incurred, if any, in attempting to
collect on the Transaction Slip, but less any acquisition charge, if
any, previously paid by Dealer to Creditor;
i) the Transaction is not completed to Creditor's reasonable
satisfaction;
ii) the Transaction Slip is a duplicate of an item previously
paid;
iii) the Buyer disputes the execution of the Transaction Slip, or
the sale, deliver, quality, or performance of the goods or
services;
iv) the Buyer contends that it did not authorize the transaction
represented by the Transaction Slip or did not authorize the
transaction in the amount shown on the Transaction Slip;
v) the Buyer alleges that a credit adjustment was requested and
refused, or that a credit adjustment was issued by Dealer but
Creditor did not receive the credit;
vi) the price of the goods or services shown on the Transaction
Slip differs from the amount shown on the receipt deliverd to
the Buyer at the time of the transaction;
vii) Dealer did not obtian authorization from Creditor for the
transaction requested by the Transaction Slip;
viii) in a transaction other than an authorized mail or telephone
order, the Transaction Slip is not signed by the Buyer;
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ix) Creditor determines that Dealer has violated or not complied
with any term, condition, covenant, warranty, or other
provision of this Agreement or any other agreement between the
parties, or any of Creditor's procedures, in connection with
the Transaction Slip or the transaction to which it relates;
or
x) Creditor determines that the Transaction Slip is fraudulent or
that the related transaction is not a bona fide transaction in
Dealer's ordinary course of business, or is subject to any
claim of illegality, cancellation, rescission, avoidance, or
offset for any reason whatsoever, including without limitation
negligence, fraud, or dishonesty on the part of Dealer or any
of its agents or employees.
d) Adjustment of Transaction Slips. Creditor shall, within a reasonable
time following the chargeback of a transaction to Dealer and payment
by Dealer to Creditor of amounts due under this Agreement, assign to
Dealer (without recourse to Creditor) Creditor's interest in the
Transaction Slip that was charged back. Dealer understands and agrees
that the obligation on its part to purchase Transaction Slips from
Creditor does not preclude Creditor from enforcing any other remedies
available to it.
e) Payments by Buyer. Dealer shall not accept payment by any Buyer on an
Account. Any payments so accepted in violation of this provision shall
be in trust for Creditor, and shall be delivered within three (3)
calendar days, excluding Sundays and holidays, to Creditor in the form
received except for any necessary endorsements, and shall not be
subject to any offset for any amounts due Dealer hereunder. Dealer
authorizes Creditor to endorse the name of Dealer when any form of
payment requires such endorsement and Dealer has failed to do so or
has done so improperly or inaccurately. If a significant number of
such payments received by Dealer in any calendar month are not
delivered within the time and in the manner provided, Creditor may, at
its option, demand immediate purchase by Dealer of all Account and
related Transaction Slips for their current net balance.
5) RETURNS, BUYER COMPLAINTS.
a) Returns. Dealer agrees to maintain a fair return policy and to make
adjustments with respect to Purchases and Accounts where appropriate.
If Dealer (i) accepts any goods for return; (ii) permits the
termination or cancellation of any services; or (iii) allows any price
adjustment, then Dealer shall not make any cash refund, but shall
complete and deliver promptly to Creditor a credit slip ("Credit Slip)
signed by Dealer and evidencing the full amount of the refund or
adjustment, and shall deliver to the Buyer a true and complete copy of
the Credit Slip at the time the refund or adjustment is made. Dealer
shall include on any Credit Slip a brief description of the goods
returned, services terminated or canceled, or refund or adjustment
made, together with the date and amount of the credit, in sufficient
detail to identify the transaction. The amount of a Credit Slip cannot
exceed the amount of the original transaction as reflected on the
Transaction Slip. The Credit Slip must reflect the full amount of the
refund or adjustment, and cannot be reduced by any charge paid by
Dealer to Creditor on the original Transaction Slip. Dealer may
process a Credit Slip for a Buyer only if Dealer has previously
completed the related purchase transaction with the same Buyer. If
twenty-five percent (25%) or more (in number) of such returns in any
calendar year are not delivered within the time and in the manner
provided, Creditor may, at its option, demand immediate purchase by
Dealer of all Account and related Transaction Slips (for their current
net balance) received from Dealer and then in Creditor's possession.
b) Buyer Complaints. Dealer acknowledges that, under applicable law,
Creditor may be subject to claims and defenses of Buyers arising out
of Purchases. Dealer agrees that it will immediately notify Creditor
of any such claim or defense asserted, or any complaint which may
become such a claim or defense, when the Dealer receives notice or
otherwise becomes aware thereof, as well as the action taken by Dealer
to resolve this dispute. Dealer shall make a good faith attempt to
resolve any dispute with respect to the quality, performance,
condition, or otherwise of the goods or services that are the subject
of any Purchase. Dealer shall keep written complaints and a log of
oral complaints for twenty-five (25) months. Dealer shall immediately
notify Creditor if Dealer is subject to any investigation or action
arising from alleged violations of law. Dealer agrees to indemnify and
hold Creditor harmless from any claim, loss, damage, or liability,
including attorney fees and costs, incurred by Creditor in connection
with any such complaint, claim, defense, or dispute, or the failure of
Dealer to notify Creditor thereof as provided herein.
c) Fair Credit Billing Act Compliance. Dealer agrees to fully and
promptly comply with all requests from Creditor for information and
assistance in connection with Creditor's resolution of any billing
error dispute with any Buyer.
6) PAYMENT. Dealer and Creditor shall agree from time to time, as evidence in
a pricing schedule or other documentation, upon (i) the fees and charges to
be paid by Dealer to Creditor in connection with this
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Agreement, which may include set-up charges to reimburse Creditor for its
costs and expenses in connection with establishing this program, costs of
supplying and imprinting Identification Cards, monthly service charges per
Account, transaction processing charges, an any other costs; and (ii) the
amount to be paid by Creditor to Dealer for any Transaction Slip as a
precentage of the amount of the Transaction Slip. In this regard, the
parties agree to share equally the cost of imprinting Account
Identification Cards for Accounts, if any, acquired by Creditor from Dealer
and the cost of customized Buyer credit applications.
7) WARRANTIES AND REPRESENTATIONS OF DEALER. Dealer makes the following
warranties and representations, with the understanding and agreement that
Creditor shall have relied upon such warranties and representations
notwithstanding any inspection or knowledge on its part of anything
inconsistent therewith:
a) In General. (i) Dealer is and will continue to be a bona fide business
entity, duly licensed, organized, qualified and validly existing in
good standing under applicable laws, with all requisite power and
authority to carry on its business where and as now conducted, to
execute and perform this Agreement, and to deliver Accounts and
Transaction Slips to Creditor hereunder; (ii) with respect to each
Account or Transaction Slip thereunder at the time of delivery of the
same to Creditor, Dealer will provide Creditor with clear title to the
Account and all Transaction Slips thereunder, and has the right and
authority to provide the same to Creditor free and clear of any lien,
security interest, encumbrance, or claim whatsoever, (iii) no
representation or warranty by Dealer contains or will contain any
untrue statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained therein not
misleading, and all representations and warranties of Dealer survive
this Agreement; and (iv) the execution, delivery and performance of
this Agreement and all documents to be delivered by the Dealer will
not violate the terms of, conflict with or result in the breach of or
constitute a default under any agreement to which Dealer is a party or
by which Dealer is bound.
b) Accounts. With respect to any Account, (i) the Account is genuine,
legally valid, and a binding and enforceable agreement, and does not
contain any forged or unauthorized signature, and all Buyers were of
full age and were competent and had the capacity to contract and are
not employees of Dealer; (ii) all statements of fact, all information
concerning Buyer, and all statements made by Buyer in connection with
Buyer's Application for, and the opening of, the Account are true and
correct in all respects, and do not omit or fail to disclose any
material facts, and Dealer (including any of Dealer's agents,
employees. salespersons, or officers) has not advised or requested
Buyer or any other person to misstate, conceal or fail to disclose any
information; and (iii) Dealer has fully complied with, the Account is
valid under, and there are no violations of any and all applicable
laws, regulations, ordinances, orders, consent decrees or the like
governing consumer credit transactions, advertising or the Dealer
specifically or any other aspect of the application or Account
Agreement for opening and establishment of the Account, and Buyer was
given copies of all documents required by law or otherwise to be given
to Buyer at the times such copies are required by law or Creditor in
its procedures to be so given to Buyer.
c) Purchases. With respect to any Purchase and the Transaction Slip
related thereto, at the time of such Purchase and thereafter; (i) the
Purchase was a bona fide sale of goods and/or services to the Buyer by
Dealer, all goods were delivered (or at the time of the Purchase,
arranged to be delivered and actually later delivered) and/or services
performed (or at time of the Purchase, arranged to be performed and
actually later performed) to the acceptance and satisfaction of Buyer,
or delivery receipt was signed by Buyer after completion or delivery,
and there are no unpaid bills for labor or materials that might give
rise to any liens by operation of law or otherwise, (ii) Creditor's
right to money due and to become due for the Purchase is not subject
to any defense (except payment), offset, counterclaim or recoupment
whatsoever (including, but not limited to, lack or absence of
consideration, fraud, misrepresentation, any unfair or deceptive act
or practice, or any breach of warranty or guarantee with respect to
the goods and/or services) by or on behalf of the Buyer, and there are
no undisclosed agreements, concessions, claims or litigation of any
nature whatsoever affecting any Purchase, and Creditor's security
interest in goods will be prior to any other lien or encumbrance and
enforceable against any other persons; (iii) any downpayment was made
in cash and/or trade-in allowance and no note, loan, post-dated check,
or other form of deferred obligation was taken in connection with such
downpayment (other than any deferred downpayment authorized by
Creditor and fully disclosed in the Transaction Slip), and no portion
of any downpayment was or will be made by Dealer or any person other
than the Buyer; (iv) neither Buyer nor any other person has exercised
nor shall exercise at any time any right of rescission or cancellation
of the Purchase; (v) the sale and transaction surrounding the
Purchase, including but not limited to sale of insurance and extended
warranties, and any disclosures in connection therewith were made in
full compliance with all applicable law and procedures established by
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Creditor and of which Dealer was notified in writing; (vi) Dealer has
fully complied with all rules or other provisions governing Purchases
set forth in this Agreement or otherwise established from time to time
by Creditor procedures; (vii) the identification of the Purchase and
the amounts shown on any Transaction Slip are bona fide, true,
correct, and genuine, and have not been altered or misstated, and the
goods delivered and/or services performed are the identical and actual
goods or services described in the Transaction Slip, and the
Transaction Slip represents a bona fide obligation as described
therein; (viii) the Buyer's signature on the Transaction Slip is
genuine and not forged and was made by the Buyer whose signature it
purports to be, and Dealer has obtained a driver's license or
equivalent photographic identification verifying the Buyer's identity
and has noted the Buyer's driver's license number or other appropriate
identification number or source of identification on the Transaction
Slip; and (ix) any Transaction Slip relating to a sale by telephone or
mail is genuine, was duly authorized by Buyer, and relates to a bona
fide sale. Any fraudulent telephone or mail applications of
Transactions Slips will immediately be charged back to the Dealer.
8) PURCHASE BY DEALER. In the event it shall at any time appear to Creditor
that a breach of any one or more of the warranties or representations
contained in this Agreement, or the nonfulfillment of any agreement or
covenant contained in this Agreement has occurred or exists in respect of
any Account or Purchase or Transaction Slip hereunder or with respect to
any Purchase for which Creditor has no obligation or liability to Dealer
under the provisions of this Agreement but Creditor has previously paid for
the Transaction Slip from Dealer, with or without knowledge of any fact or
event giving rise to Creditor's right not to be obligated or liable
therefor, or in the event Buyer asserts a claim or defense based upon, or
fails to pay because of, an alleged breach of warranty, alleged
misrepresentation with respect to the goods sold, or alleged failure of
Dealer to provide adequate service to Buyer, Dealer agrees to immediately
purchase such Account and/or Transaction Slip from Creditor. The purchase
price of any Account and/or Transaction Slip which Dealer is required to
purchase hereunder shall be a sum equal to the then unpaid net balance due
thereon (including any accrued but unpaid finance charge thereon), plus any
and all costs (including reasonable attorney's fees) incurred by Creditor
in connection with the enforcement of the Account. If Dealer fails to pay
the purchase price to Creditor within fifteen (15) days of Creditor's
demand therefor, Creditor may, at its option, demand immediate purchase by
Dealer of all Accounts and Transaction Slips (for their current net
balances) arising from Purchases from Dealer. If in any calendar month
Creditor demands that Dealer purchase Accounts or Transaction Slips having
current net balances in excess of twenty-five (25%) of the total balances
at the end of the month of all Accounts and Transaction Slips from Dealer,
Creditor may, at its option, demand immediate purchase by Dealer of all
Accounts and Transaction Slips from Dealer for the current net balances
thereof. Additionally, in the event Dealer becomes insolvent, executes an
assignment for the benefit of creditors, or is a party to any action,
voluntary or involuntary, under applicable bankruptcy laws, Creditor may,
at its option, demand immediate purchase by Dealer of all Accounts and
Transaction Slips from Dealer for the current net balances thereof. Upon
payment to Creditor of the purchase price, the Accounts and/or Transaction
Slips shall be transferred by appropriate endorsement or assignment to
Dealer, but all such endorsements and assignments shall be without recourse
upon Creditor and without warranties, express or implied, on the part of
the Creditor. Creditor's right to demand purchase is not waived because of
its failure to make prompt demand for purchase. Dealer's obligation to
purchase any Account and/or Transaction Slip as set forth herein shall not
be affected by any modification by Creditor of any Account. With respect to
any Account and/or Transaction Slip for which Creditor demands purchase by
Dealer hereunder, Dealer further waives any right to require Creditor (i)
to proceed against any person; (ii) to proceed against any of the Accounts;
(iii) to obtain any determination by any court or governmental agency with
respect to any breach of the elements or events constituting any breach; or
(iv) to pursue any other remedy in Creditor's power as against any other
persons or property.
9) ADDITIONAL COVENANTS OF DEALER. Dealer shall apply any policies regarding
refunds equally to cash and credit Buyers. Dealer, if requested by
Creditor, shall provide Creditor with true copies of any and all product
and warranty information concerning the goods or services covered by a
Purchase. Dealer guarantees all performance and warranties and all service
or similar agreements made by the manufacturer, Dealer or any other person
relating to goods and/or services that are the subject of any Purchase,
even if such performance, warranty, service or similar agreements are not
immediately effective, and, unless such agreement provides otherwise,
Dealer agrees to provide repairs and service to Buyer or other owner of the
goods or recipient of the services at Dealer's usual rates or charges. If
an Account or Transaction Slip acquired includes a charge for a warranty,
service, or similar agreement, Dealer agrees, in the event the Buyer moves
out of Dealer's service area, to either arrange for warranty or service
demanded by customer to be performed by other qualified persons or to
refund
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the unearned portion of the charge assessed for such warranty, service, or
similar agreement. Dealer shall provide Creditor with such information as
Creditor shall deem necessary or appropriate with respect to the financial
condition or otherwise of Dealer, and shall make available to Creditor for
examination at all reasonable times, the books of Dealer's business
pertaining to financing goods and services. Dealer shall immediately notify
Creditor of any material information of which it becomes aware with respect
to any Account, including, but not limited to, the death, move from the
service area, loss of employment, adverse change in financial condition or
change in marital status of any Buyer, termination of an Account, the loss
or theft or unauthorized use of any Card, or any dispute or claim with
respect to the goods or services which were the subject matter of any
Purchase.
10) FORMS FURNISHED BY CREDITOR. Dealer shall only use the forms, including but
not limited to the Application, Account Agreement, Credit Slip and
Transaction Slip, that are approved in writing by Creditor. Dealer's
liabilities for compliance with applicable law with respect to sufficiency
of document contents does not apply to any document or form provided by
Creditor, but shall apply to any other failures or omissions by Dealer or
its agents related to any such document furnished by Creditor, including,
but not limited to, Dealer's failure to complete properly any such document
or form, or failure to deliver copies to Buyers.
11) PROCEDURES ESTABLISHED BY CREDITOR. The reference in this Agreement to
procedures established by Creditor shall be to such procedures established
from time to time by Creditor, including but not limited to the attached
Dealer Plan of Operation, of which Creditor notifies Dealer in writing or
otherwise. Dealer agrees that Creditor may change such procedures from time
to time as it deems necessary or appropriate and such changes will be
applicable to Dealer when Creditor gives Dealer notice thereof in writing
or otherwise.
12) ADVERTISING. Prior to use of Creditor's name or reference to Creditor's
financing in any piece of advertising through any medium, including but not
limited to, television, radio, telemarketing, print or mail solicitation
advertising or displays, Dealer must obtain Creditor's written approval for
such use or reference. Creditor may grant or withhold such approval in its
sole and absolute discretion.
13) INDEMNIFICATION OF CREDITOR. Dealer agrees to indemnify Creditor and hold
it harmless from, against and in respect of any damage, liability, loss,
deficiency, expense, and attorney fees and other costs of litigation,
including those arising from advertising, sale of insurance and the
enforcement of this indemnification ("Damages"), and agrees to reimburse
Creditor on demand for such Damages resulting from (a) any and all
liabilities of Dealer in every kind, nature and description, absolute and
contingent, arising at any time from or in connection with the business of
Dealer, and (b) any untrue or incorrect representation or breach of any
warranty or representation of Dealer contained in this Agreement or the
nonfulfillment of any agreement or covenant of Dealer contained in this
Agreement. This indemnification shall include, but not be limited to, any
class action or alleged class action which is at any time brought by or on
behalf of one or more persons. Dealer agrees to notify promptly Creditor of
the making of any claim or the commencement of any action by a person other
than Creditor which may give rise to an obligation of Dealer under this
Section. Creditor shall be subrogated to any causes of action or other
rights that Dealer may have against any manufacturer or other person or
entity to the extent necessary to insure that Creditor is fully
indemnified.
14) PARTIES. The term "Dealer" as used in this Agreement includes all parties
who sign this Agreement, other than Creditor or Creditor's affiliated
corporations. If more than one person and/or legal entity is included
within the term "Dealer", each such person and/or legal entity is obligated
jointly and severally under this Agreement. This Agreement shall inure to
the benefit of, and be fully enforceable by, any corporation affiliated
with Creditor with respect to any Account and/or Transaction Slip purchased
by such affiliated corporation from Dealer, or with respect to any Account
and/or Transaction Slip originated by Dealer and held or acquired at any
time by any affiliated corporation through merger, or otherwise. Any
corporation under ultimate common ownership with Creditor shall be
considered to be an affiliate of Creditor under this Agreement.
15) SPECIAL PROGRAMS. Dealer may offer the Buyers only the special programs
approved by Creditor and documented in the attached Dealer Plan of
Operation or in a manner acceptable to the Creditor.
16) AUTOMATED FUNDING.
a) Dealer authorizes Creditor, by electronic means, to initiate credit
entries to Dealer's account described in the ACH (Automated Funding)
Set-up Procedures and Information Sheet and to initiate debit entries
and adjustments for any discount due Creditor from Dealer, for any
offset to
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which Creditor is entitled, and for any credit entries made to such
account through error on the part of Creditor or as the result of
incorrect information provided by Dealer, and authorizes the bank or
other financial institution named in the ACH (Automated Funding)
Set-up Procedures and Information Sheet to make such credit or debit
entries to specified account. This authorization shall remain in
effect for ninety (90) days after the Agreement is terminated.
b) Dealer agrees to indemnify, defend and save harmless Creditor of, from
and against any claims, causes of action, loss, liability, cost and
expenses (including attorney's fees) which Dealer or any other person
or entity might have or claim to have against Creditor as a result of
or in any way related to the acts or omissions of any bank or other
financial institution handling the transfer of funds pursuant to this
authorization.
c) If Creditor initiates a credit entry in an amount greater than the
amount due Dealer and the funds transfer is completed, Dealer agrees
to reimburse Creditor for the amount by which the amount received
amount due.
d) Subparagraphs (a), (b) and (c) of this Paragraph 16 shall survive the
termination of this Agreement.
17) EQUIPMENT. Creditor may supply to Dealer one or more remote data entry
computer terminals and/or printers ("Equipment") used for credit
application processing and/or Contract preparation in Dealer's place of
business subject to the terms of this Agreement. Dealer agrees not to
reproduce any software provided to Dealer under this Agreement, and it is
agreed that such software and instruction manuals contain confidential
information which is proprietary to Creditor. Dealer will be responsible
for all costs related to repair and/or replacement of Equipment resulting
from Dealer's misuse of the Equipment. Creditor will provide normal
maintenance and replacement units for malfunctioning Equipment. Upon
Creditor's request, Dealer will provide a dedicated telephone line to
transmit the data entered on the Creditor's remote Equipment to the
Creditor's Service Center. Creditor agrees to provide a toll-free 800/880
telephone number for Dealer to use in transmitting the data on the
Equipment to the Creditor's Service Center. Upon termination of the
Agreement, Dealer will promptly return to Creditor all Equipment supplied
by Creditor hereunder in the same condition as received, except for
reasonable wear; otherwise, Dealer will make prompt payment to Creditor for
the replacement value or cost to repair said Equipment.
18) CREDIT INSURANCE. Dealer will be entitled to offer and sell credit
insurance with no liability on the part of the Creditor, subject to
Creditor's approval of insurance carrier and other matters related to the
sale of such insurance.
19) OFFSET BY CREDITOR. In addition to any other remedies available to Creditor
under this Agreement, Dealer agrees that Creditor has the right to offset
against any amounts due Dealer any amounts owed to Creditor by Dealer under
the provisions of this Agreement or otherwise, including, but expressly not
limited to, the purchase price of any Transaction Slip Dealer is required
to purchase due to fraud or otherwise, any payments received by Dealer in
connection with the Termination Slip purchased by Creditor, and any amounts
paid by Creditor to Buyers as a result of complaints or disputes relating
to the goods and/or services and/or insurance furnished by Dealer or the
servicing thereof.
20) MISCELLANEOUS. The liability of Dealer hereunder shall be absolute and
unconditional and shall not be subject to any reduction, setoff,
counterclaim or recoupment and shall not be limited or avoided on account
of any good faith action or inaction of Creditor with respect to any
Account and/or Transaction Slip. This Agreement shall be controlled,
construed and enforced in accordance with the substantive laws of the State
of Delaware. This Agreement represents the entire agreement and
understanding of the parties and no modification hereof or additions hereto
have been agreed to, or will be binding upon any party or its successors or
assigns, unless specifically set forth in writing in a document executed by
the parties or otherwise referred to herein. This Agreement shall be
binding upon the parties hereto and their successors and assigns. This
Agreement and all rights hereunder may not be assigned by Dealer without
the prior written consent of Creditor. Creditor has the right to assign
this Agreement and any Accounts or Transaction Slips thereunder at any time
to an affiliated person.
21) TERMINATION. Either party may elect to terminate this Agreement upon One
Hundred Fifty (150 days prior written notice given to the other party.
Notwithstanding any notice requirement, Creditor may terminate this
Agreement upon a material adverse change in the financial condition of the
Dealer or substantial breach by Dealer of the terms and conditions of this
Agreement. Any such notice or termination shall not affect any obligation
of either party hereto under the Agreement with respect to Transaction
Slips accepted by Creditor prior to such termination; provided that
Creditor's obligation to pay participation fees, if any, shall cease on
termination of this Agreement.
8
22) ENFORCEABILITY AND VALIDITY. The fact that any provision of this Agreement
may prove invalid or unenforceable under any law, rule, or regulation shall
not affect the validity or enforceability of any other provision of this
Agreement. No indulgences extended by either party hereto in any particular
instance or instances shall be construed as a waiver of any rights by that
party with respect to any other or future occurrence. Failure (intentional
or inadvertent) by Creditor to file or record a security interest in goods
that are the subject matter of any Purchase shall not impair Creditor's
rights nor be grounds for avoiding Dealer's obligations under this
Agreement. Repossession by Creditor of any goods that are the subject
matter of any Purchase, whether with or without notice to Dealer, shall not
impair Creditor's rights nor be grounds for avoiding Dealer's obligations
under this Agreement.
23) ACCEPTANCE BY CREDITOR. This Agreement shatl not be binding upon Creditor
in any manner whatsoever unless signed by an officer of Creditor or its
duly authorized agents or attorney, and becomes effective as of the
Effective Date.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date shown below.
FOR CREDITOR: FOR DEALER:
CITIFINANCIAL RETAIL SERVICES DIVISION SHOPSMITH, INC.
OF TRAVELERS BANK & TRUST, FSB
BV BV
Effective Date: 11-15-00 SHOPSMITH WOODWORKING PROMOTIONS
By
9
ADDENDUM
TO
THE CITIFINANCIAL RETAIL SERVICES DEALER AGREEMENT
WHEREAS, Shopsmith Inc/Shopsmith Woodworking Promotions ("Dealer") and The
Citifinancial Retail Servir are desirous of amending and supplementing the
Dealer Agreement, dated l1-15-00, including any addenda (the Agreement) by the
additional terms set forth in the Addendum;
NOW, THEREFORE, in consideration of the premises, Dealer and Creditor
agree as follows:
1) The parties acknowledge that Creditor will from time to time exercise its
right pursuant to SECTION 21 (MISCELLANEOUS) of the Agreement to assign
select accounts, effective the date indicated below, to an affiliated
company, Commercial Credit Corporation or other such entity notified to you
("Affiliate").
2) Accounts that are purchased from Creditor and funded by Affiliate
("Affiliate Accounts") will differ from Accounts as described in the
Agreement as follows:
a) The creditor establishing the Account, effective the time of the
assignment, is the Dealer from which Affiliate purchases the Account
Agreement, as amended and Transaction Slip(s) if any:
b) The Affiliate Account is governed by the laws of the state where the
Dealer's retail business is located, including state limitations on
interest rates and fees govern the Affiliate Account;
c) The Dealer's representations and warranties and chargeback obligations
are applicable to Affiliate Accounts except that Dealer's obligation
is to repurchase the Account in the event of its breach of
representations, warranties, covenants, or other terms and conditions
of the Agreement.
3) All other provisions of the Agreement shall remain the same, except to the
extent they need to be modified or supplemented to conform to this
Addendum.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date below.
For Creditor For Dealer:
The Citifinancial Retail Services Shopsmith Inc.
Shopsmith Woodworking Promotions
Effective Date:
11-15-00
10
ADDENDUM
TO
THE CITIFINANCIAL RETAIL SERVICES DEALER AGREEMENT
WHEREAS, Shopsmith,/Shopsmith Woodworking Promotions ("Dealer") and The
Citifinancial Retail Services** ("Creditor") are desirous of amending and
supplementing The Citifinancial Retail Services Dealer Agreement dated 11-15-00
(hereinafter, the "Agreement") by the addition of the terms set forth in this
Addendum.
NOW, THEREFORE, in consideration of the premises, Dealer and Creditor agree
as follows:
1) Dealer will retain at its operations center with respect to each Account:
the Dealer's invoice/sales form; the Transaction Slips signed by the Buyer,
evidencing the original and any subsequent purchases; and any other
documentation relating to Applications and Accounts as agreed to by the
parties. The documentation and records maintained by Dealer will be
organized and stored such that Dealer can retrieve all relevant documents
and deliver them to Creditor at a location designated by Creditor within
thirty (30) business days of receiving a written request from Creditor for
documents relating to a particular Account or Application (identified by
name and approximate date of purchase). Such request will be deemed
received by Dealer at its executive office at 0000 Xxx Xxx, Xxxxxx XX 00000
when delivered by U.S. Mail, telefax, courier service, or by hand. Dealer
will permit representatives of Creditor to audit the above mentioned
documents at Dealer's premises during normal business hours upon two (2)
days prior notice to Dealer.
2) Dealer shall establish facilities, procedures and controls to assure the
secure, accurate, and accessible storage and retrieval of these documents
and records, using at least the same care it would use with respect to its
own essential records. All documents and records shall be maintained for
six (6) months longer than the minimum record retention requirement
provided under applicable law for the type of record or for such longer
time periods that Creditor may specify in writing to Dealer. Additionally
Dealer shall maintain records of specific Accounts identified by Creditor
for indefinite periods at Creditor's request in the event of litigation or
regulatory actions involving the affected Accounts.
3) If Dealer is unable to deliver a document requested by Creditor within the
specified time frame for whatever reason, Creditor may immediately
chargeback the Creditor's Account and/or Transaction Slip to the extent
that Creditor incurs actual monetary damages due to the absence of the
requested document in question. The Chargeback amount of any Account and/or
Transaction Slip shall be a sum equal to the then unpaid net balance due
thereon (including any accrued but unpaid finance charges thereon), plus
any and all costs (including reasonable attorney's fees) incurred by
Creditor in connection with enforcing this Agreement. Upon payment to
Creditor of the amount of the Chargeback, the Accounts and/or Transaction
Slips shall be transferred by appropriate endorsement or assignment to
Dealer, but all such endorsements and assignments shall be without recourse
upon Creditor and without warranties, express or implied on the part of the
Creditor. Creditor's right to demand Chargeback is not waived because of
its failure to make prompt Chargeback. Creditor's right to charge-back any
Account and/or Transaction Slip as set forth herein shall not be affected
by any modification by Creditor of any Account and/or Transaction Slip.
With respect to any Account and/or Transaction Slip for which Creditor
charges back to Dealer hereunder, Dealer further waives any right to
require Creditor (i) to proceed against any person; (ii) to proceed against
or exhaust its rights with respect to collection of any of the Accounts,
(iii) to obtain any determination by any court or governmental agency with
respect to any breach of the elements or events constituting any breach; or
(iv) pursue any other remedy in Creditor's power as against any other
persons or property.
4) Except as modified and supplemented by this Addendum, the terms and
provisions of the Agreement remain in full force and effect.
11
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the effective date below.
For Creditor: For Dealer:
Citifinancial Retail Services Shopsmith, Inc.
Shopsmith Woodworking Promotions
Effective Date:
11-15-00
** A Division of Travelers Bank & Trust, fsb
