EXHIBIT 10.62
BUSINESS FINANCING AGREEMENT
This Business Financing Agreement ("Agreement") is made as of April 21, 1998
between DEUTSCHE FINANCIAL SERVICES CORPORATION ("DFS") and CAPITAL ASSOCIATES
TECHNOLOGY GROUP, INC., A Corporation ("Dealer"), having a principal place of
business located at 0000 Xxxxxxxxxx Xxxx., Xxxxx, XX 00000
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1. DEFINITIONS
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1.1 SPECIAL DEFINITIONS. The following terms will have the following
meanings in this Agreement, Agreement for Wholesale Financing and in
the Other Agreements:
"ACCOUNTS": all accounts, leases, contract rights, chattel
paper, choses in action and instruments, including any lien or
other security interest that secures or may secure any of the
foregoing, plus all books, invoices, documents and other
records in any form evidencing or relating to any of the
foregoing, now owned or hereafter acquired by Dealer.
"ACCOUNTS RECEIVABLE FACILITY": a credit facility extended
pursuant to this Agreement.
"AGREEMENT FOR WHOLESALE FINANCING": any Agreement for
Wholesale Financing, as amended from time to time, which
Dealer has executed in conjunction with inventory financing
extended by DFS.
"AVERAGE CONTRACT BALANCE": the amount determined by dividing:
(a) the sum of the Daily Contract Balances (as defined in
SECTION 2.1.1) for a billing period; by, (b) the actual number
of days in such billing period.
"DEFAULT": the events or occurrences enumerated in SECTION 6.
"ENTITY": any individual, association, firm, corporation,
partnership, limited liability company, trust, governmental
body, agency or instrumentality whatsoever.
"GUARANTOR": a guarantor of any of the Obligations.
"INVENTORY": all of Dealer's presently owned and hereafter
acquired goods which are held for sale or lease.
"OBLIGATIONS": all liabilities and indebtedness now or
hereafter arising, owing, due or payable from Dealer to DFS
(and any of its subsidiaries and affiliates), including any
third party claims against Dealer satisfied or acquired by
DFS, whether primary or secondary, joint or several, direct,
contingent, fixed or otherwise, and whether or not evidenced
by instruments or evidences of indebtedness, and all
covenants, agreements (including consent to binding
arbitration), warranties, duties and representations, whether
such Obligations arise under this Agreement, the Other
Agreements or any other agreements previously, now or
hereafter executed by Dealer and delivered to DFS or by
operation of law.
"OTHER AGREEMENTS": all security agreements (including the
Agreement for Wholesale Financing), mortgages, leases,
instruments, documents, guarantees, schedules, certificates,
contracts and similar agreements heretofore, now or hereafter
executed by Dealer and delivered to DFS or delivered by or on
behalf of Dealer to a third party and assigned to DFS by
operation of law or otherwise.
"PRIME RATE": the rate of interest which Chase Manhattan Bank
publicly announces from time to time as its prime rate or
reference rate; provided, however, that for purposes of this
Agreement, the interest rate charged to Dealer will at no time
be computed on a Prime Rate of less than Six percent ( 6% per
annum. The Prime Rate will change and take effect for purposes
of this Agreement on the day that Chase Manhattan Bank
announces any change in its Prime Rate or reference rate.
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2. CREDIT FACILITY/INTEREST RATES/FEES
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2.1 ACCOUNTS RECEIVABLE FACILITY. Subject to the terms of this
Agreement, DFS agrees to provide to Dealer an Accounts Receivable
Facility of Six Million DOLLARS ($ 6,000,000.00). DFS will not be
obligated to advance funds if a Default has occurred hereunder.
2.1.1 INTEREST. Dealer agrees to pay interest to DFS on the Daily
Contract Balance at a rate equal to the Prime Rate plus one
half of one percent ( .50% %) per annum. Such interest will:
(i) be computed based on a 360 day year; (ii) be calculated
each day by multiplying the Daily Rate (as defined below) by
the Daily Contract Balance (as defined below); and (iii)
accrue from the date that DFS authorizes any Electronic
Transfer (as defined in SECTION 3.10 herein) or otherwise
makes an advance under the Accounts Receivable Facility until
DFS receives the full and final payment of the principal debt
which Dealer owes to DFS, subject to the terms of SECTION 3.8
herein. The "Daily Rate" is the quotient of the applicable
annual rate provided herein divided by 360. The "Daily
Contract Balance" is the amount of the outstanding principal
debt which Dealer owes to DFS on the Accounts Receivable
Facility at the end of each day (including the amount of all
Electronic Transfers authorized) after DFS has credited the
payments which it has received on the Accounts Receivable
Facility, subject to the terms of SECTION 3.8 herein.
2.1.2 FEES. Dealer agrees to pay to DFS an advance fee equal to zero
percent ( 0%) on each advance to Dealer under the Accounts
Receivable Facility.
2.1.3 MAXIMUM INTEREST. 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.
2.2 PAYMENTS. DFS will send Dealer a monthly billing statement(s)
identifying all charges due on Dealer's account with DFS. The
interest and fee 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 fifteen (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). Dealer will also pay DFS $100
for each of Dealer's checks 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). DFS may adjust the billing statement at any time to conform
to applicable law and this Agreement. Dealer waives the right to
direct the application of any payments hereafter received by DFS on
account of the Obligations. DFS will have the continuing exclusive
right to apply and reapply any and all such payments in such manner
as DFS may deem advisable notwithstanding any entry by DFS upon its
books and records.
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2.3 ONE LOAN. DFS may combine all of DFS' advances to Dealer or on
Dealer's behalf, whether under this Agreement or any Other
Agreements, 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.
3. ACCOUNTS RECEIVABLE FACILITY - ADDITIONAL PROVISIONS
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3.1 SCHEDULES. Dealer will, no less than weekly or as otherwise agreed
to, furnish DFS with a schedule of Accounts ("Schedule") which will:
(a) describe all Accounts created or acquired by Dealer since the
last Schedule furnished DFS; (b) inform DFS of any rejection of goods
by any obligor, delays in delivery of goods, non-performance of
contracts and of any assertion of any claim, offset or counterclaim
by any obligor; and (c) inform DFS of any adverse information
relating to the financial condition of any obligor.
3.2 AVAILABLE CREDIT. On receipt of each Schedule, DFS will credit Dealer
with such amount as DFS may deem advisable up to eighty-five percent
( 85 %) of the net amount of the eligible Accounts listed in such
Schedule. DFS will loan Dealer such amounts so credited or a part
thereof as requested provided that at no time will such outstanding
loans exceed Dealer's maximum Accounts Receivable Facility from time
to time established by DFS. No loans need be made by DFS if the
Dealer is in Default.
3.3 INELIGIBLE ACCOUNTS. DFS will have the sole right to determine
eligibility of Accounts and, without limiting DFS' discretion in that
regard, the following Accounts will be deemed ineligible: (a)
Accounts created from the sale of goods and services on non-standard
terms and/or that allow for payment to be made more than thirty (30)
days from the date of sale; (b) Accounts unpaid more than ninety (90)
days from date of invoice; (c) all Accounts of any obligor with fifty
percent (50%) or more of the outstanding balance unpaid for more than
ninety (90) days from the date of invoice; (d) Accounts for which the
obligor is an officer, director, shareholder, partner, member, owner,
employee, agent, parent, subsidiary, affiliate of, or is related to
Dealer or has common shareholders, officers, directors, owners,
partners or members; (e) consignment sales; (f) Accounts for which
the payment is or may be conditional; (g) Accounts for which the
obligor is not a commercial or institutional entity or is not a
resident of the United States or Canada; (h) Accounts with respect to
which any warranty or representation provided in SUBSECTION 3.4 is
not true and correct; (i) Accounts which represent goods or services
purchased for a personal, family or household purpose; (j) Accounts
which represent goods used for demonstration purposes or loaned by
the Dealer to another party; (k) Accounts which are progress payment,
barter, or contra accounts; and (l) any and all other Accounts which
DFS deems to be ineligible. If DFS determines that any Account is or
becomes an ineligible Account, immediately upon notice thereof from
DFS, Dealer will pay to DFS an amount equal to the monies loaned by
DFS for such ineligible Account.
3.4 WARRANTIES AND REPRESENTATIONS. For each Account which Dealer lists
on any Schedule, Dealer warrants and represents to DFS that at all
times: (a) such Account is genuine; (b) such Account is not evidenced
by a judgment or promissory note or similar instrument or agreement;
(c) it represents an undisputed bona fide transaction completed in
accordance with the terms of the invoices and purchase orders
relating thereto; (d) the goods sold or services rendered which
resulted in the creation of such Account have been delivered or
rendered to and accepted by the obligor; (e) the amounts shown on the
Schedules, Dealer's books and records and all invoices and statements
delivered to DFS with respect thereto are owing to Dealer and are not
contingent; (f) no payments have been or will be made thereon except
payments turned over to DFS; (g) there are no offsets, counterclaims
or disputes existing or asserted with respect thereto and Dealer has
not made any agreement with any obligor for any deduction or discount
of the sum payable thereunder except regular discounts allowed by
Dealer in the ordinary course of its business for prompt payment; (h)
there are no facts or events which in any way impair the validity or
enforceability thereof or reduce the amount payable thereunder from
the amount shown on the Schedules, Dealer's books and records and the
invoices and statements delivered to DFS with respect thereto; (i)
all persons acting on behalf of obligors thereon have the authority
to bind the obligor; (j) the goods sold or transferred giving rise
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thereto are not subject to any lien, claim, encumbrance or security
interest which is superior to that of DFS; and (k) there are no
proceedings or actions known to Dealer which are threatened or
pending against any obligor thereon which might result in any
material adverse change in such obligor's financial condition.
3.5 NOTES. Loans made pursuant to this Agreement need not be evidenced
by promissory notes unless otherwise required by DFS in DFS' sole
discretion.
3.6 CERTAIN CHARGES. Dealer will: (a) reimburse DFS for all charges made
by banks, including charges for collection of checks and other items
of payment, and (b) pay DFS' fees for transfers of funds to or from
the Dealer; provided however, that Dealer will not pay for Wire
Transfer fees. DFS may, from time to time, announce its fees for
transfers of funds to or from the Dealer, including the issuance of
Electronic Transfers.
3.7 COLLECTIONS. Unless otherwise directed by DFS, to expedite
collection of Accounts for the benefit of DFS, Dealer shall notify
all of its obligors to make payment of the Accounts to one or more
lock-boxes under the sole control of DFS. The lock-box, and all
accounts into which the proceeds of any such lock-box(es) are
deposited, shall be established at banks selected by the Dealer and
satisfactory to DFS in its sole discretion. Dealer shall issue to any
such banks an irrevocable letter of instruction, in form and
substance acceptable to DFS, directing such banks to deposit all
payments or other remittances received in the lock-box to such
account or accounts as DFS shall direct, for application against the
outstanding balance of the Obligations. All funds deposited in the
lock-box or any such account immediately shall become the property of
DFS, and any disbursements of the proceeds in the lock-box or any
such account will only be made to DFS. Dealer shall obtain the
agreement of such banks to waive any offset rights against the funds
so deposited. DFS assumes no responsibility for such lock-box
arrangement, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits which any banks
accept thereunder. All remittances which Dealer receives in payment
of any Accounts, and the proceeds of any of the other Collateral,
shall be: (i) kept separate and apart from Dealer's own funds so that
they are capable of identification as DFS' property; (ii) held by
Dealer as trustee of an express trust for DFS' benefit; and (iii)
shall be immediately deposited in such accounts designated by DFS.
All proceeds received or collected by DFS with respect to Accounts,
and reserves and other property of Dealer in possession of DFS at any
time or times hereafter, may be held by DFS without interest to
Dealer until all Obligations are paid in full or applied by DFS on
account of the Obligations. DFS may release to Dealer such portions
of such reserves and proceeds as DFS may determine. Upon the
occurrence and during the continuance of a Default, DFS may notify
the obligors that the Accounts have been assigned to DFS, collect the
Accounts directly in its own name and charge the collection costs and
expenses, including attorneys' fees, to Dealer. DFS has no duty to
protect, insure, collect or realize upon the Accounts to preserve
rights in them.
3.8 COLLECTION DAYS. All payments and all amounts received on any
Account will be credited by DFS to Dealer's account (subject to final
collection thereof) after allowing three (3) business days for
collection of checks or other instruments.
3.9 POWER OF ATTORNEY. Dealer irrevocably appoints DFS (and any person
designated by it) as Dealer's true and lawful Attorney with full
power to at any time, in the discretion of DFS (whether or not
Default has occurred) to: (a) endorse the name of Dealer upon any of
the items of payment or proceeds and deposit the same in the account
of DFS for application to the Obligations; (b) sign the name of
Dealer to verify the accuracy of the Accounts; (c) sign the name of
Dealer on any document or instrument that DFS shall deem necessary or
appropriate to perfect and maintain perfected the security interests
in the Collateral under this Agreement and the Other Agreements; and
(d) initiate and settle any insurance claim and endorse Dealer's name
on any check, instrument or other item of payment. In the event of a
Default, Dealer irrevocably appoints DFS (and any person designated
by it) as Dealer's true and lawful Attorney with full power to at any
time, in the discretion of DFS to: (i) demand payment, enforce
payment and otherwise exercise all of Dealer's rights, and remedies
with respect to the collection of any Accounts; (ii) settle, adjust,
compromise, extend or renew any Accounts; (iii) settle, adjust or
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compromise any legal proceedings brought to collect any Accounts;
(iv) sell or assign any Accounts upon such terms, for such amounts
and at such time or times as DFS may deem advisable; (v) discharge
and release any Accounts; (vi) prepare, file and sign Dealer's name
on any Proof of Claim in Bankruptcy or similar document against any
obligor; (vii) endorse the name of Dealer upon any chattel paper,
document, instrument, invoice, freight xxxx, xxxx of lading or
similar document or agreement relating to any Account or goods
pertaining thereto; and (viii) take control in any manner of any item
of payments or proceeds and for such purpose to notify the Postal
Authorities to change the address for delivery of mail addressed to
Dealer to such address as DFS may designate. The power of attorney is
for value and coupled with an interest and is irrevocable so long as
any Obligations remain outstanding and by DFS exercising such right,
DFS shall not waive any right against Dealer until the Obligations
are paid in full.
3.10 CONTINUING REQUIREMENTS. Advances hereunder will be made by DFS, at
Dealer's direction, by paper check, electronic transfer by Automated
Clearing House ("ACH"), Fed Wire Funds Transfer ("Fed Wire") or such
other electronic means as DFS may announce from time to time (ACH,
Fed Wire and such other electronic transfer are collectively referred
to as "Electronic Transfers"). If Dealer does not request advances be
made in a specific method of transfer, DFS may determine from time to
time in its sole discretion what method of transfer to use. Dealer
will: (a) if from time to time required by DFS, immediately upon
their creation, deliver to DFS copies of all invoices, delivery
evidences and other such documents relating to each Account; (b) not
permit or agree to any extension, compromise or settlement or make
any change to any Account; (c) affix appropriate endorsements or
assignments upon all such items of payment and proceeds so that the
same may be properly deposited by DFS to DFS' account; (d)
immediately notify DFS in writing which Accounts may be deemed
ineligible as defined in SUBSECTION 3.3; (e) xxxx all chattel paper
and instruments now owned or hereafter acquired by it to show that
the same are subject to DFS' security interest and immediately
thereafter deliver such chattel paper and instruments to DFS with
appropriate endorsements and assignments to DFS; (f) within ten (10)
days after the end of each month, provide DFS with a detailed aging
of its Accounts for each month, together with the names and addresses
of all obligors.
3.11 RELEASE. Dealer releases DFS from all claims and causes of action
which Dealer may now or hereafter have for any loss or damage to it
claimed to be caused by or arising from: (a) any failure of DFS to
protect, enforce or collect, in whole or in part, any Account; (b)
DFS' notification to any obligors thereon of DFS' security interest
in any of the Accounts; (c) DFS' directing any obligor to pay any sum
owing to Dealer directly to DFS; and (d) any other act or omission to
act on the part of DFS, its officers, agents or employees, except for
willful misconduct. DFS will have no obligation to preserve rights to
Accounts against prior parties. Dealer waives all rights of offset
and counterclaims Dealer may have against DFS.
3.12 REVIEW. Dealer grants DFS an irrevocable license to enter Dealer's
business locations during normal business hours with 24 hour notice(
no notice will be required hereunder if a Default has occurred) to
Dealer to: (a) account for and inspect all Collateral; (b) verify
Dealer's compliance with this Agreement; and (c) review, examine, and
make copies of Dealer's books, records, files and business procedures
and practices. Dealer further agrees to pay DFS a review fee of Seven
Hundred Fifty DOLLARS ($ 750.00 ) for any such review, inspection or
examination made by DFS. DFS may, without notice to Dealer and at any
time or times hereafter, verify the validity, amount or any other
matter relating to any Account by mail, telephone, or other means, in
the name of Dealer or DFS.
4. SECURITY - COLLATERAL
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4.1 GRANT OF SECURITY INTEREST. To secure payment of all of Dealer's
current and future Obligations and to secure Dealer's performance of
all of the provisions under this Agreement and the Other Agreements,
Dealer grants DFS a security interest in all of Dealer's inventory,
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
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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. Dealer covenants
with DFS that DFS may realize upon all or part of any Collateral in
any order it desires and any realization by any means upon any
Collateral will not bar realization upon any other collateral.
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. 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 this Agreement.
5. WARRANTIES AND REPRESENTATIONS
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5.1 AFFIRMATIVE WARRANTIES AND REPRESENTATIONS. Except as otherwise
specifically provided in the Other Agreements, Dealer warrants and
represents to DFS that: (a) Dealer has good title to all Collateral;
(b) DFS' security interest in the Accounts will at all times
constitute a perfected, first security interest in such Accounts and
will not become subordinate to the security interest, lien,
encumbrance or claim of any Entity; (c) Dealer will execute all
documents DFS requests to perfect and maintain DFS' security interest
in the Collateral and to fully consummate the transactions
contemplated under this Agreement and the Other Agreements; (d)
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; (e) Dealer has the right and is duly authorized to enter
into this Agreement; (f) Dealer's execution of this Agreement does
not constitute a breach of any agreement to which Dealer is now or
hereafter becomes bound; (g) there are and will be no actions or
proceedings pending or threatened against Dealer which might result
in any material adverse change in Dealer's financial or business
condition or which might in any way adversely affect any of Dealer's
assets; (h) Dealer will maintain the Collateral in good condition and
repair; (i) Dealer has duly filed and will duly file all tax returns
required by law; (j) Dealer has paid and will pay when due all taxes,
levies, assessments and governmental charges of any nature; (k)
Dealer will maintain a system of accounting in accordance with
generally accepted accounting principles and account records which
contain such information in a format as may be requested by DFS; (l)
Dealer will keep and maintain all of its books and records pertaining
to the Accounts 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) 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; (o) 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; (p) Dealer will advise DFS of the
commencement of material legal proceedings against Dealer or any
Guarantor; (q) 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; and (r) 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.
5.2 NEGATIVE COVENANTS. Dealer will not at any time (without DFS' prior
written consent): (a) grant to or in favor of any Entity a security
interest in or permit to exist a lien, claim or encumbrance in the
Accounts which is superior to the interest of DFS; (b) other than in
the ordinary course of its business, sell, lease or otherwise dispose
of or transfer any of its assets; (c) merge or consolidate with
another Entity; (d) acquire the assets or ownership interest of any
other Entity; (e) enter into any transaction not in the ordinary
course of business; (f) guarantee or indemnify or otherwise become in
any way liable with respect to the obligations of any Entity, except
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by endorsement of instruments or items of payment for deposit to the
general account of Dealer or which are transmitted or turned over to
DFS on account of the Obligations except for any Guaranty of the
obligations of the Dealer's parent to the provider(s) of Dealer's
parent's working capital credit facility; (g) redeem, retire,
purchase or otherwise acquire, directly or indirectly, any of
Dealer's capital stock; (h) make any change in Dealer's capital
structure or in any of its business objectives or operations which
might in any way adversely affect the ability of Dealer to repay the
Obligations; (i) make any distribution of Dealer's assets not in the
ordinary course of business; (j) incur any debts outside of the
ordinary course of business except renewals or extensions of existing
debts and interest thereon; and (k) make any loans, advances,
contributions or payments of money or in goods to any affiliated
entity or to any officer, director, stockholder, member or partner of
Dealer or of any such entity (except for compensation for personal
services actually rendered, or dividends to the Dealer's parent).
5.3 FINANCIAL STATEMENTS. Dealer will deliver to DFS: (a) within ninety
(90) days after the end of each of Dealer's fiscal years, a
reasonably detailed balance sheet as of the last day of such fiscal
year and a reasonably detailed income statement covering Dealer's
operations for such fiscal year, in a form satisfactory to DFS; (b)
within forty-five (45) days after the end of each of Dealer's fiscal
quarters, a reasonably detailed balance sheet as of the last day of
such quarter and an income statement covering Dealer's operations for
such quarter in a form satisfactory to DFS; (c) within ten (10) days
after request therefor by DFS, any other report requested by DFS
relating to the Collateral or the financial condition of Dealer.
Dealer warrants and represents to DFS that all financial statements
and information relating to Dealer or any Guarantor which have been
or may hereafter be delivered by Dealer or any Guarantor to DFS are
true and correct and have been and will be prepared in accordance
with generally accepted accounting principles consistently applied
and, with respect to such previously delivered statements or
information, there has been no material adverse change in the
financial or business condition of Dealer or any Guarantor since the
submission to DFS, either as of the date of delivery, or, if
different, the date specified therein, and Dealer acknowledges DFS'
reliance thereon.
6. DEFAULT
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6.1 DEFINITION. Dealer will be in default under this Agreement if: (a)
Dealer breaches any terms, warranties or representations contained
herein or in any Other Agreements and such breach is not cured within
three (3) days of Dealer's receipt of written notice of such breach;
(b) any Guarantor of Dealer's debts to DFS breaches any terms,
warranties or representations contained in any guaranty or Other
Agreements and such breach is not cured within three (3) days of
Dealer's receipt of written notice of such breach; (c) any
representation, statement, report, or certificate made or delivered
by Dealer or any Guarantor to DFS is not accurate when made and such
breach is not cured within three (3) days of Dealer's receipt of
written notice of such breach; (d) Dealer fails to pay any of the
Obligations when due and payable; (e) Dealer abandons any Collateral
and such breach is not cured within three (3) days of Dealer's
receipt of written notice of such breach; (f) Dealer or any Guarantor
is or becomes in default in the payment of any debt owed to any third
party in excess of $50,000.00 and such breach is not cured within
three (3) days of Dealer's receipt of written notice of such breach;
(g) a money judgment issues against Dealer or any Guarantor in excess
of $50,000.00 and such breach is not cured within three (3) days of
Dealer's receipt of written notice of such breach;; (h) an
attachment, sale or seizure issues or is executed against any assets
of Dealer or of any Guarantor; (i) Dealer or any Guarantor shall
cease existence as a corporation, partnership, limited liability
company or trust, as applicable; (j) Dealer or any Guarantor ceases
or suspends business; (k) Dealer, 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;
(l) 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;
(m) any receiver is appointed for any assets of Dealer, any Guarantor
AR000010 8/97 7
or any member while Dealer's business is operated as a limited
liability company, as applicable; (n) any guaranty of Dealer's debt
to DFS is terminated;(o) Dealer or any Guarantor misrepresents
Dealer's or such Guarantor's financial condition or organizational
structure.
6.2 RIGHTS OF DFS. 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 of the Obligations 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.
(e) DFS may, without notice to Dealer and at any time or times
enforce payment and collect, by legal proceedings or otherwise,
Accounts in the name of Dealer or DFS; and take control of any
cash or non-cash items of payment or proceeds of Accounts and of
any rejected, returned, repossessed or stopped in transit goods
relating to Accounts. DFS may at its sole election and without
demand enter, with or without process of law, any premises where
Collateral might be and, without charge or liability to DFS
therefor do one or more of the following: (i) take possession of
the Collateral and use or store it in said premises or remove it
to such other place or places as DFS may deem convenient; (ii)
take possession of all or part of such premises and the
Collateral and place a custodian in the exclusive control
thereof until completion of enforcement of DFS' security
interest in the Collateral or until DFS' removal of the
Collateral and, (iii) remain on such premises and use the same,
together with Dealer's materials, supplies, books and records,
for the purpose of performing all acts necessary and incidental
to the collection or liquidation of such Collateral.
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.
6.3 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
AR000010 8/97 8
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.
7. MISCELLANEOUS
-------------
7.1 TERMINATION. This Agreement will continue in full force and effect
and be non-cancellable by Dealer (except that it may be terminated by
DFS upon thirty (30) days written notice to Dealer or in the exercise
of its rights and remedies upon Default by Dealer) for a period of
one (1) year from the first day of the first month following the date
hereof and for successive one (1) year periods thereafter, subject to
termination as to future transactions at the end of any such period
on at least sixty (60) days prior written notice by Dealer to DFS. If
such notice of termination is given by Dealer to DFS, such notice
will be ineffective unless Dealer pays to DFS all Obligations on or
before the termination date. Any termination of this Agreement by
Dealer or DFS will have the effect of accelerating the maturity of
all Obligations not then otherwise due.
7.1.1 TERMINATION PRIVILEGE. Despite anything to the contrary in
SECTION 7.1 of this Agreement, this Agreement may be
terminated by Dealer at any time upon sixty (60) days prior
written notice and payment to DFS of the following sum (in
addition to payment of all Obligations, whether or not by
their terms then due) which sum represents liquidated damages
for the loss of the bargain and not as a penalty, and the same
is hereby acknowledged by Dealer: (1) the product of (a) one
half of one percent (.50%) multiplied by (b) the highest
Average Contract Balance for the last 10 months (or entire
term of this Agreement if less than 12 months) prior to the
effective date of termination, multiplied by (2) the number of
months remaining in the original or renewal term; granted,
however that such liquidated damages will only be payable in
the event termination occurs during the first ten (1O) month
term of this Agreement. This sum will also be paid by Dealer
if the Agreement is terminated on account of Dealer's Default.
7.1.2 EFFECT OF TERMINATION. Dealer will not be relieved from any
Obligations 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 Obligations to
DFS. All waivers set forth within this Agreement will survive
any termination of this Agreement.
7.2 COLLECTION. Checks and other instruments delivered to DFS on
account of the Obligations will constitute conditional payment until
such items are actually paid to DFS.
7.3 DEMAND, ETC. 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. Dealer waives
all notices of default and non-payment at maturity of any or all of
the Accounts.
7.4 REIMBURSEMENT. Dealer will assume and reimburse DFS upon demand for
all expenses incurred by DFS in connection with the preparation of
this Agreement and the Other Agreements (including fees and costs of
outside counsel) and all filing and recording fees and taxes payable
in connection with the filing or recording of all documents under
this Agreement and the Other Agreements; provided, however, that such
reimbursement by Dealer hereunder will not exceed the sum of ONE
THOUSAND DOLLARS ($1,000.00).
7.5 ADDITIONAL OBLIGATIONS. DFS, without waiving or releasing any
Obligation or Default, may perform any Obligations that Dealer fails
or refuses to perform. All sums paid by DFS on account of the
foregoing and any expenses, including reasonable attorneys' fees,
will be a part of the Obligations, payable on demand and secured by
the Collateral.
7.6 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
AND THE OTHER AGREEMENTS, 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. DFS may, from time to time, announce in writing to Dealer
AR000010 8/97 9
its policies and procedures regarding its administration of this
facility, including, without limitation, DFS' fees for the transfer
of funds to or from Dealer, including Electronic Transfers; any
subsequent use by Dealer of this facility following any such
announcement shall constitute Dealer's acceptance of such revised
policies and procedures. 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. 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.
7.7 SEVERABILITY. If any provision of this Agreement or the Other
Agreements or the application thereof is held invalid or
unenforceable, the remainder of this Agreement and the Other
Agreements will not be impaired or affected and will remain binding
and enforceable.
7.8 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 any
such previously executed Other Agreement nor shall execution of this
Agreement be deemed a satisfaction of any obligation secured by such
previously executed Other Agreement. In the event of any conflict
between the terms of this Agreement and any previously executed
Business Financing Agreement between DFS and Dealer, the terms of
this Agreement shall control.
7.9 SECTION TITLES. The Section titles used in this Agreement are for
convenience only and do not define or limit the contents of any
Section.
7.10 BINDING EFFECT. Dealer cannot assign its interest in this Agreement
or any Other Agreements without DFS' prior written consent, although
DFS may assign or participate DFS' interest, in whole or in part,
without Dealer's consent. This Agreement and the Other Agreements
will protect and bind DFS' and Dealer's respective heirs,
representatives, successors and assigns.
7.11 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.
7.12 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 any
Schedule, statement, 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 Agreements, and for all evidentiary purposes before any
arbitrator, court or other adjudicatory authority.
7.13 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 third party any credit,
financial or other information regarding Dealer that such third party
may from time to time possess.
8. BINDING ARBITRATION
-------------------
8.1 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
AR000010 8/97 10
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 or any Other
Agreements and/or any amendments and addenda hereto or thereto, or
the breach, invalidity or termination hereof or thereof; (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 an 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.
8.2 ADMINISTRATIVE BODY. All arbitration hereunder will be conducted in
accordance with the Commercial Arbitration Rules of The American
Arbitration Association ("AAA"). If the AAA is dissolved, disbanded
or becomes subject to any state or federal bankruptcy or insolvency
proceeding, the parties will remain subject to binding arbitration
which will be conducted by a mutually agreeable arbitral forum. The
parties agree that all arbitrator(s) selected will be attorneys with
at least five (5) years secured transactions experience. The
arbitrator(s) will decide if any inconsistency exists between the
rules of any applicable arbitral forum and the arbitration provisions
contained herein. If such inconsistency exists, the arbitration
provisions contained herein will control and supersede such rules.
The site of all arbitration proceedings will be in the Division of
the Federal Judicial District in which AAA maintains a regional
office that is closest to Dealer.
8.3 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.
8.4 EXEMPLARY OR PUNITIVE DAMAGES. The Arbitrator(s) will not have the
authority to award exemplary or punitive damages.
8.5 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.
8.6 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.
AR000010 8/97 11
8.7 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 8.6), the party bringing such action will be liable
for and immediately pay all of the other party's costs and expenses
(including attorneys' fees) incurred to stay or dismiss such action
and remove or refer such Dispute to arbitration. If either Dealer or
DFS brings or appeals an action to vacate or modify an arbitration
award and such party does not prevail, such party will pay all costs
and expenses, including attorneys' fees, incurred by the other party
in defending such action. Additionally, if Dealer sues DFS or
institutes any arbitration claim or counterclaim against DFS in which
DFS is the prevailing party, Dealer will pay all costs and expenses
(including attorneys' fees) incurred by DFS in the course of
defending such action or proceeding.
8.8 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.
8.9 SURVIVAL AFTER TERMINATION. The agreement to arbitrate will survive
the termination of this Agreement.
9. 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.
10. 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 Colorado. Accordingly,
Dealer agrees that all Disputes will be governed by, and construed in
accordance with, the laws of such state, except to the extent inconsistent
with the provisions of the FAA which shall control and govern all
arbitration proceedings hereunder.
IN WITNESS WHEREOF, Dealer and DFS have executed this Agreement as of the
date first set forth hereinabove.
THIS CONTRACT CONTAINS BINDING ARBITRATION, JURY WAIVER AND PUNITIVE DAMAGE
WAIVER PROVISIONS.
Capital Associates Technology Group, Inc.
A Utah Corporation
f/k/a DBL, Inc.
-----------------------------------------
Dealer's Name
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/Xxxx Xxxxxxxx By: /s/Xxxxxxx X. XxXxxxx
------------------------------ ------------------------------------
Print Name: Xxxx Xxxxxxxx Print Name: Xxxxxxx X. XxXxxxx
------------------------------ ------------------------------------
Title: Credit Manager Title: SVP, CFO and Treasurer
------------------------------ ------------------------------------
By:
------------------------------------
Print Name:
------------------------------------
Title:
------------------------------------
ATTEST:
/s/Xxxxxx X. Xxxxxx
------------------------------------
Secretary
Print Name: Xxxxxx X. Xxxxxx
------------------------------------
AR000010 8/97 12
SECRETARY'S CERTIFICATE OF RESOLUTION
I certify that I am the Secretary or Assistant Secretary of the corporation
named below, and that the following completely and accurately sets forth certain
resolutions of the Board of Directors of the corporation adopted at a special
meeting thereof held on due notice (and with shareholder approval, if required
by law), at which meeting there was present a quorum authorized to transact the
business described below, and that the proceedings of the meeting were in
accordance with the certificate of incorporation, charter and by-laws of the
corporation, and that they have not been revoked, annulled or amended in any
manner whatsoever.
Upon motion duly made and seconded, the following resolution was
unanimously adopted after full discussion:
"RESOLVED, That the several officers, directors, and agents of this
corporation, or any one or more of them, are hereby authorized and empowered on
behalf of this corporation: to obtain financing from Deutsche Financial Services
Corporation ("DFS") in such amounts and on such terms as such officers,
directors or agents deem proper; to enter into financing, security, pledge and
other agreements with DFS relating to the terms upon which such financing may be
obtained and security and/or other credit support is to be furnished by this
corporation therefor; from time to time to supplement or amend any such
agreements; execute and deliver any and all assignments and schedules; and from
time to time to pledge, assign, mortgage, grant security interests, and
otherwise transfer, to DFS as collateral security for any obligations of this
corporation to DFS, whenever and however arising, any assets of this
corporation, whether now owned or hereafter acquired; the Board of Directors
hereby ratifying, approving and confirming all that any of said officers,
directors or agents have done or may do with respect to the foregoing."
I do further certify that the following are the names and specimen
signatures of the officers and agents of said corporation so empowered and
authorized, namely:
President: Xxxxx X. Xxxxxxxxxx /s/Xxxxx X. Xxxxxxxxxx
------------------------- -----------------------------
(Print Name) (Signature)
Vice-President: Xxxxx X. Xxxxxx /s/Xxxxx X. Xxxxxx
------------------------- -----------------------------
(Print Name) (Signature)
Secretary: Xxxxxx X. Xxxxxx /s/Xxxxxx X. Xxxxxx
------------------------- -----------------------------
(Print Name) (Signature)
SVP, CFO & Treasurer: Xxxxxxx X. XxXxxxx /s/Xxxxxxx X. XxXxxxx
------------------------- -----------------------------
(Print Name) (Signature)
Assistant Treasurer: Xxxx X. Xxxxxxxx /s/Xxxx X. Xxxxxxxx
------------------------- -----------------------------
(Print Name) (Signature)
IN WITNESS WHEREOF, I have executed and affixed the seal of the
corporation on the date stated below.
Dated: April 21, 1998 /s/Xxxxxx X. Xxxxxx
-----------------------------
(Assistant) Secretary
Xxxxxx X. Xxxxxx
Capital Associates Technology
Group, Inc.
-----------------------------
(SEAL) Corporate Name
AR000010 8/97 13
ADDENDUM TO BUSINESS FINANCING AGREEMENT AND
AGREEMENT FOR WHOLESALE FINANCING
This Addendum is made to (i) that certain Business Financing Agreement
executed on the 21st day of April, 1998, between CAPITAL ASSOCIATES TECHNOLOGY
GROUP, INC. ("Dealer") and DEUTSCHE FINANCIAL SERVICES CORPORATION ("DFS"), as
amended ("BFA") and (ii) that certain Agreement for Wholesale Financing between
Dealer and DFS dated July 15, 1991, as amended ("AWF").
FOR VALUE RECEIVED, DFS and Dealer agree as follows:
1. Section 3.2 of the BFA is hereby amended to read as follows, and, to
the extent applicable, the following provision shall also amend the AWF
(capitalized terms shall have the same meaning as defined in the BFA unless
otherwise indicated):
"3.2 AVAILABLE CREDIT; PAYDOWN. On receipt of each Schedule, DFS will
credit Dealer with such amount as DFS may deem advisable up to the
remainder of (a) eighty-five percent (85%) of the net amount of
eligible Accounts listed in such Schedule, minus (b) an amount equal to
one hundred percent (100%) of Dealer's outstanding indebtedness under
Dealer's Agreement for Wholesale Financing (the 'AWF') with DFS as in
effect from time to time (the 'Reserve Amount') (the remainder of (a)
minus (b) is referred to herein as the 'Available Credit').
In addition, in the event Dealer's outstanding loans under Dealer's
accounts receivable credit facility as set forth in SECTION 2.1 of this
Agreement at any time exceed Dealer's Available Credit, Dealer will
immediately pay to DFS an amount not less than the difference between
(i) Dealer's outstanding loans under Dealer's accounts receivable
credit facility as set forth in SECTION 2.1 of this Agreement, and (ii)
Dealer's Available Credit.
Furthermore, as an amendment to the AWF, in the event Dealer's Reserve
Amount exceeds at any time (a) eighty-five percent (85%) of the net
amount of Dealer's eligible Accounts, minus (b) Dealer's outstanding
loans under Dealer's accounts receivable credit facility as set forth
in; SECTION 2.1 of this Agreement, Dealer will immediately pay to DFS,
as a reduction of Dealer's total current outstanding indebtedness to
DFS under the AWF, the difference between (i) Dealer's Reserve Amount,
and (ii) (a) eighty-five percent (85%) of the net amount of Dealer's
eligible Accounts minus (b) Dealer's outstanding loans under Dealer's
accounts receivable credit facility as set forth in SECTION 2.1 of this
Agreement. DFS will loan Dealer, on request, such amount so credited or
a part thereof as requested provided that at no time will such
outstanding loans exceed Dealer's maximum accounts receivable credit
facility as set forth in SECTION 2.1 of this Agreement. No loans need
be made by DFS if the Dealer is in Default."
2. The following paragraph is hereby incorporated into the BFA as if
fully and originally set forth therein:
FACILITY FEE. Dealer agrees to pay DFS an annual facility fee in
connection with the Accounts Receivable Facility, payable in advance,
upon the execution of this Agreement, and on each anniversary thereof
through the term of this Agreement, each in an amount equal to one
hundred twenty-five one-thousandths of one percent (0.125%) of the
Accounts Receivable Facility (or such greater amount as shall from time
to time represent the sum of the maximum credit available under this
Agreement.) Once received by DFS, an annual facility fee shall not be
refundable by DFS for any reason; provided, however, that in the event
DFS terminates this Agreement on other than the anniversary date and
Dealer is not then in Default then DFS shall refund to Dealer a portion
of the facility fee equal to the number of whole months remaining in
the current annual term (or renewal term) of this Agreement multiplied
by an amount equal to one twelfth (1/12) of the facility fee paid by
Dealer for that term."
3. The following paragraph is incorporated into the AWF and BFA as if
fully and originally set forth therein:
"Dealer will at all times maintain:
(a) a Tangible Net Worth and Subordinated Debt in the combined amount
of not less than Nine Hundred Thousand Dollars ($900,000.00);
(b) a ratio of Debt minus Subordinated Debt to Tangible Net Worth and
Subordinated Debt of not more than five and seventy-five one-hundredths
to one (5.75:1); and
(c) a ratio of Current Tangible Assets to current liabilities of not
less than one and twenty one-hundredths to one (1.20:1).
For purposes of this paragraph: (i) 'Tangible Net Worth' means the book
value of Dealer's assets less liabilities, excluding from such assets
all Intangibles; (ii) 'Intangibles' means and includes general
intangibles (as that term is defined in the Uniform Commercial Code);
accounts receivable and advances due from officers, directors,
employees, stockholders and affiliates; leasehold improvements net of
depreciation; licenses; good will; prepaid expenses; escrow deposits;
covenants not to compete; the excess of cost over book value of
acquired assets; franchise fees; organizational costs; finance reserves
held for recourse obligations; capitalized research and development
costs; and such other similar items as DFS may from time to time
determine in DFS' sole discretion; (iii) 'Debt' means all of Dealer's
liabilities and indebtedness for borrowed money of any kind and nature
whatsoever, whether direct or indirect, absolute or contingent, and
including obligations under capitalized leases, guaranties or with
respect to which Dealer has pledged assets to secure performance,
whether or not direct recourse liability has been assumed by Dealer;
(iv) 'Subordinated Debt' means all of Dealer's Debt which is
subordinated to the payment of Dealer's liabilities to DFS by an
agreement in form and substance satisfactory to DFS; and (v) 'Current
Tangible Assets' means Dealer's current assets less, to the extent
otherwise included therein, all Intangibles. The foregoing terms will
be determined in accordance with generally accepted accounting
principles consistently applied, and on a non-consolidated basis."
4. Paragraph 8 of the AWF is hereby restated in its entirety to appear
as it did in the original AWF without giving effect to any Amendment thereto.
All other terms and provisions of the BFA and AWF, to the extent
consistent with the foregoing, are hereby ratified and will remain unchanged and
in full force and effect.
IN WITNESS WHEREOF, Dealer and DFS have both read this Addendum to the
Business Financing Agreement and Agreement for Wholesale Financing, understand
all the terms and provisions hereof and agree to be bound thereby and subject
thereto as of this day of April 21, 1998.
CAPITAL ASSOCIATES INTERNATIONAL, INC.
ATTEST: By: /s/Xxxxxxx X. XxXxxxx
---------------------------------
Xxxxxxx X. XxXxxxx
/s/Xxxxxx X. Xxxxxx Title: Sr.V.P. - CFO and Treasurer
------------------------------- -------------------------------
Secretary
Xxxxxx X. Xxxxxx
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/Xxxx Xxxxxxxx
----------------------------------
Title: Credit Manager
----------------------------------
GUARANTY
TO: DEUTSCHE FINANCIAL SERVICES CORPORATION
In consideration of financing provided or to be provided by you to CAPITAL
ASSOCIATES TECHNOLOGY GROUP, INC. ("Dealer"), 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 Dealer
to you, whether such liabilities are direct, indirect or owed by Dealer to a
third party and acquired by you ("Liabilities"). We will pay you on demand the
full amount of all sums owed by Dealer 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 Dealer
or any third party against you, which in any way relate to any relationship or
transaction between you and Dealer.
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 Dealer, 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 Dealer and you or us; (d) claim or action by
Dealer against you; and/or (e) increases or decreases in any credit you may
provide to Dealer. We will pay you even if you have not: (i) notified Dealer
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 Dealer, 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 Dealer hereafter undergoes any change in its
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 Dealer, any right of contribution from other guarantors,
dishonor, the amount of indebtedness of Dealer outstanding at any time, the
number and amount of advances made by you to Dealer in reliance on this Guaranty
and any claim or action against Dealer; all other demands and notices required
by law; all rights of offset and counterclaims against you or Dealer; 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 Dealer 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
US000700 3/96 1
representation made by you. We have access to current and future Dealer
financial information which enables us 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
US000700 3/96 2
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 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, cation 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
US000700 3/96 3
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 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 Colorado. 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 21, 1998
--------------------------------
CORPORATE GUARANTOR:
Capital Associates International, Inc.
(Name of Corporate Guarantor)
By: /s/Xxxxxxx X. XxXxxxx
----------------------------------
[Print Name: Xxxxxxx X. XxXxxxx ]
----------------------------------
Title: Sr.V.P.- CFO and Treasurer
----------------------------------
By: /s/Xxxxxx X. Xxxxxx
----------------------------------
[Print Name: Xxxxxx X. Xxxxxx ]
----------------------------------
Title: Secretary
----------------------------------
Address of Guarantor(s):
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
---------------------------------------
Xxxxxxxx, Xxxxxxxx 00000
---------------------------------------
---------------------------------------
US000700 3/96 4
SECRETARY'S CERTIFICATE
I hereby certify that I am the Secretary or Assistant Secretary of Capital
Associates International, Inc. ("Guarantor") and that execution of the above
Guaranty was ratified, approved and confirmed by the Shareholders at a meeting,
if necessary, and pursuant to a resolution of the Board of Directors of
Guarantor at a meeting of the Board of Directors duly called, and which is
currently in effect, which resolution was duly presented, seconded and adopted
and reads as follows:
"BE IT RESOLVED that any officer of this corporation is hereby authorized
to execute a guaranty of the obligations of CAPITAL ASSOCIATES TECHNOLOGY GROUP,
INC. ("Dealer") to Deutsche Financial Services Corporation on behalf of the
corporation, which instrument may contain such terms as the above named persons
may see fit including, but not limited to a waiver of notice of the acceptance
of the guaranty; presentment; demand; protest; notices of nonpayment,
nonperformance, dishonor, the amount of indebtedness of Dealer outstanding at
any time, any legal proceedings against Dealer, and any other demands and
notices required by law; and any right of contribution from other guarantors."
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal on this 21st day of April, l998.
(SEAL) Secretary: /s/Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx
US000700 3/96 5
ADDENDUM TO GUARANTY
This Addendum is made to that certain Guaranty entered into by and between
CAPITAL ASSOCIATES INTERNATIONAL, INC. ("Guarantor") and DEUTSCHE FINANCIAL
SERVICES CORPORATION ("DFS") on April 21, 1998, as amended ("Guaranty).
FOR VALUE RECEIVED, DFS and Guarantor agree that the following paragraph is
incorporated into the Guaranty as if fully and originally set forth therein:
"Guarantor will at all times maintain a Tangible Net Worth and Subordinated
Debt in the combined amount of not less than Twelve Million Dollars
($12,000,000.00).
For purposes of this paragraph: (i) 'Tangible Net Worth' means the book
value of Guarantor's assets less liabilities, excluding from such assets
all Intangibles; (ii) 'Intangibles' means and includes general intangibles
(as that term is defined in the Uniform Commercial Code); accounts
receivable and advances due from officers, directors, employees,
stockholders and affiliates; leasehold improvements net of depreciation;
licenses; good will; prepaid expenses; escrow deposits; covenants not to
compete; the excess of cost over book value of acquired assets; franchise
fees; organizational costs; finance reserves held for recourse obligations;
capitalized research and development costs; and such other similar items as
DFS may from time to time determine in DFS' sole discretion; (iii) 'Debt'
means all of Guarantor's liabilities and indebtedness for borrowed money of
any kind and nature whatsoever, whether direct or indirect, absolute or
contingent, and including obligations under capitalized leases, guaranties,
or with respect to which Guarantor has pledged assets to secure
performance, whether or not direct recourse liability has been assumed by
Guarantor; and (iv) 'Subordinated Debt' means all of Guarantor's Debt which
is subordinated to the payment of Guarantor's liabilities to DFS by an
agreement in form and substance satisfactory to DFS. The foregoing terms
shall be determined in accordance with generally accepted accounting
principles consistently applied, and, if applicable, on a consolidated
basis."
All other terms and provisions of the Guaranty, to the extent not
inconsistent with the foregoing, are ratified and remain unchanged and in full
force and effect.
1
IN WITNESS WHEREOF, Guarantor and DFS have executed this Addendum on this
21st day of April 1998.
CAPITAL ASSOCIATES INTERNATIONAL, INC.
ATTEST:
By: /s/Xxxxxxx X. XxXxxxx
-----------------------------------
/s/Xxxxxx X. Xxxxxx Title: Sr.V.P. - CFO and Treasurer
--------------------------------- -------------------------------
Secretary Xxxxxxx X. XxXxxxx
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/Xxxx Xxxxxxxx
-----------------------------------
Titl Credit Manager
-----------------------------------
2
