EXHIBIT 4.6
AGREEMENT FOR WHOLESALE FINANCING
This Agreement for Wholesale Financing ("Agreement") is made as of 17
September, 1996 between DEUTSCHE FINANCIAL SERVICES CORPORATION ("DFS") and
XXXXXXX MANAGEMENT SYSTEMS CORPORATION, a [__]SOLE PROPRIETORSHIP, [_]
PARTNERSHIP, [X]CORPORATION, [_] LIMITED LIABILITY COMPANY (check applicable
term) ("Dealer"), having a principal place of business located at 00000
Xxxxxxxxx Xxxx Xxxxx 000 Xxxxxx, XX 00000.
1. Extension of Credit. Subject to the terms of this Agreement, DFS may
extend credit to Dealer from time to time to purchase inventory from
DFS approved vendors ("Vendors") and for other purposes. If DFS
advances funds to Dealer following Dealer's execution of this
Agreement, DFS will be deemed to have entered into this Agreement with
Dealer, whether or not executed by DFS. DFS' decision to advance
funds will not be binding until the funds are actually advanced. DFS
may combine all of DFS' advances to Dealer or on Dealer's behalf,
whether under this Agreement or any other agreement, and whether
provided by one or more of DFS' branch offices, together with all
finance charges, fees and expenses related thereto, to make one debt
owed by Dealer. DFS may, at any time and without notice to Dealer,
elect not to finance any inventory sold by particular Vendors who are
in default of their obligations to DFS, or with respect to which DFS
reasonably feels insecure. This is an agreement regarding the
extension of credit, and not the provision of goods or services.
2. Financing Terms and Statements of Transaction. Dealer and DFS agree that
certain financial terms of any advance made by DFS under this Agreement,
whether regarding finance charges, other fees, maturities, curtailments or
other financial terms, are not set forth herein because such terms depend,
in part, upon the availability of Vendor discounts, payment terms or other
incentives, prevailing economic conditions, DFS' floorplanning volume with
Dealer and with Dealer's Vendors, and other economic factors which may vary
over time. Dealer and DFS further agree that it is therefore in their
mutual best interest to set forth in this Agreement only the general terms
of Dealer's financing arrangement with DFS. Upon agreeing to finance a
particular item of inventory for Dealer, DFS will send Dealer a Statement
of Transaction identifying such inventory and the applicable financial
terms. Unless Dealer notifies DFS in writing of any objection within
fifteen (15) days after a Statement of Transaction is mailed to Dealer: (a)
the amount shown on such Statement of Transaction will be an account
stated; (b) Dealer will have agreed to all rates, charges and other terms
shown on such Statement of Transaction; (c) Dealer will have agreed that
DFS is financing the items of inventory referenced in such Statement of
Transaction at Dealer's request; and (d) such Statement of Transaction will
be incorporated herein by
reference, will be made a part hereof as if originally set forth herein,
and will constitute an addendum hereto. If Dealer objects to the terms of
any Statement of Transaction, Dealer agrees to pay DFS for such inventory
in accordance with the most recent terms for similar inventory to which
Dealer has not objected (or, if there are no prior terms, at the lesser of
16% per annum or at the maximum lawful contract rate of interest permitted
under applicable law), but Dealer acknowledges that DFS may then elect to
terminate Dealer's financing program pursuant to SECTION 17, and cease
making additional advances to Dealer. However, such termination will not
accelerate the maturities of advances previously made, unless Dealer shall
otherwise be in default of this Agreement.
3. GRANT OF SECURITY INTEREST. To secure payment of all of Dealer's
current and future debts to DFS, whether under this Agreement or any
current or future guaranty or other agreement, Dealer grants DFS a
security interest in all of Dealer's inventory, equipment, fixtures,
accounts, contract rights, chattel paper, security agreements,
instruments, deposit accounts, reserves, documents, and general
intangibles; and all judgments, claims, insurance policies, and
payments owed or made to Dealer thereon; all whether now owned or
hereafter acquired, all attachments, accessories, accessions, returns,
repossessions, exchanges, substitutions and replacements thereto, and
all proceeds thereof. All such assets are collectively referred to
herein as the "Collateral". All of such terms for which meanings are
provided in the Uniform Commercial Code of the applicable state are
used herein with such meanings. All Collateral financed by DFS, and
all proceeds thereof, will be held in trust by Dealer for DFS, with
such proceeds being payable in accordance with SECTION 9.
4. AFFIRMATIVE WARRANTIES AND REPRESENTATIONS. Dealer warrants and represents
to DFS that: (a) Dealer has good title to all Collateral; (b) DFS' security
interest in the Collateral financed by DFS is not now and will not become
subordinate to the security interest, lien, encumbrance or claim of any
person; (c) Dealer will execute all documents DFS requests to perfect and
maintain DFS' security interest in the Collateral; (d) Dealer will deliver
to DFS immediately upon each request, and DFS may retain, each Certificate
of Title or Statement of Origin issued for Collateral financed by DFS; (e)
Dealer will at all times be duly organized, existing, in good standing,
qualified and licensed to do business in each state, county, or parish, in
which the nature of its business or property so requires; (f) Dealer has
the right and is duly authorized to enter into this Agreement; (g) Dealer's
execution of this Agreement does not constitute a breach of any agreement
to which Dealer is now or hereafter becomes bound; (h) there are 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; (i)
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Dealer will maintain the Collateral in good condition and repair, (j)
Dealer has duly filed and will duly file all tax returns required by law;
(k) Dealer has paid and will pay when due all taxes, levies, assessments
and governmental charges of any nature; (l) Dealer will keep and maintain
all of its books and records pertaining to the Collateral at its principal
place of business designated in this Agreement; (m) Dealer will promptly
supply DFS with such information concerning it or any guarantor as DFS
hereafter May reasonably request; (n) all Collateral will be kept at
Dealer's principal place of business listed above, and such other
locations, if any, of which Dealer has notified DFS in writing or as listed
on any current or future Exhibit "A" attached hereto which written
notice(s) to DFS and Exhibit A(s) are incorporated herein by reference; (o)
Dealer will give DFS thirty (30) days prior written notice of any change in
Dealer's identity, name, form of business organization, ownership,
management, principal place of business, Collateral locations or other
business locations, and before moving any books and records to any other
location; (p) Dealer will observe and perform all matters required by any
lease, license, concession or franchise forming part of the Collateral in
order to maintain all the rights of DFS thereunder; (q) Dealer will advise
DFS of the commencement of material legal proceedings against Dealer or any
guarantor; and (r) Dealer will comply with all applicable laws and will
conduct its business in a manner which preserves and protects the
Collateral and the earnings and incomes thereof.
5. NEGATIVE COVENANTS. Dealer will not at any time (without 60 days prior
written notice to DFS): (a) other than in the ordinary course of its
business, sell, lease or otherwise dispose of or transfer any of its
assets; (b) rent, lease, demonstrate, consign, or use any Collateral
financed by DFS; or (c) merge or consolidate with another entity, wherein
Dealer is not the surviving entity.
6. INSURANCE. Dealer will immediately notify DFS of any loss, theft or damage
to any Collateral. Dealer will keep the Collateral insured for its full
insurable value under an "all risk" property insurance policy with a
company acceptable to DFS, naming DFS as a lender loss-payee or mortgagee
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 or mortgagee endorsement.
7. 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
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statement covering Dealer's operations for such quarter, in a form
satisfactory to DFS; and (c) within ten (10) days after request therefor
by DFS, any other report requested by DFS relating to the Collateral or
the financial condition of Dealer. Dealer warrants and represents to DFS
that all financial statements and information relating to Dealer or any
guarantor which have been or may hereafter be delivered by Dealer or any
guarantor are true and correct and have been and will be prepared in
accordance with generally accepted accounting principles consistently
applied and, with respect to such previously delivered statements or
information, there has been no material adverse change in the financial or
business condition of Dealer or any guarantor since the submission to DFS,
either as of the date of delivery, or, if different, the date specified
therein, and Dealer acknowledges DFS' reliance thereon.
8. REVIEWS. Dealer grants DFS a right to enter Dealer's business locations
during normal business hours without notice to Dealer to: (a) account for
and inspect all Collateral; (b) verify Dealer's compliance with this
Agreement; and (c) examine and copy Dealer's books and records related to
the Collateral.
9. PAYMENT TERMS. Dealer will immediately pay DFS the principal indebtedness
owed DFS on each item of Collateral financed by DFS (as shown on the
Statement of Transaction identifying such Collateral) on the earliest
occurrence of any of the following events: (a) when such Collateral is
lost, stolen or damaged; (b) for Collateral financed under Pay-As-Sold
("PAS") terms (as shown on the Statement of Transaction identifying such
Collateral), when such Collateral is sold, transferred, rented, leased,
otherwise disposed of or matured; (c) in strict accordance with any
curtailment schedule for such Collateral (as shown on the Statement of
Transaction identifying such Collateral); (d) for Collateral financed under
Scheduled Payment Program ("SPP") terms (as shown on the Statement of
Transaction identifying such Collateral), in strict accordance with the
installment payment schedule; and (e) when otherwise required under the
terms of any financing program agreed to in writing by the parties.
Regardless of the SPP terms pertaining to any Collateral financed by DFS,
if DFS determines that the current outstanding debt which Dealer owes to
DFS exceeds the aggregate wholesale invoice price of such Collateral in
Dealer's possession, Dealer will immediately upon demand pay DFS the
difference between such outstanding debt and the aggregate wholesale
invoice price of such Collateral. If Dealer from time to time is required
to make immediate payment to DFS of any past due obligation discovered
during any Collateral audit, or at any other time, Dealer agrees that
acceptance of such payment by DFS shall not be construed to have waived or
amended the terms of its financing program. The proceeds of any Collateral
received by Dealer will be held by Dealer in trust for DFS' benefit, for
application as provided in this Agreement. Dealer will send all payments to
DFS' branch
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office(s) responsible for Dealer's account. DFS may apply: (i) payments to
reduce finance charges first and then principal, regardless of Dealer's
instructions; and (ii) principal payments to the oldest (earliest) invoice
for Collateral financed by DFS, but, in any event, all principal payments
will first be applied to such Collateral which is sold, lost, stolen,
damaged, rented, leased, or otherwise disposed of or unaccounted for. Any
third party discount, rebate, bonus or credit granted to Dealer for any
Collateral will not reduce the debt Dealer owes DFS until DFS has received
payment therefor in cash. Dealer will: (1) pay DFS even if any Collateral
is defective or fails to conform to any warranties extended by any third
party; (2) not assert against DFS any claim or defense Dealer has against
any third party; and (3) indemnity and hold DFS harmless against all claims
and defenses asserted by any buyer of the Collateral relating to the
condition of, or any representations regarding, any of the Collateral.
Dealer waives all rights of offset and counterclaims Dealer may have
against DFS.
10. CALCULATION OF CHARGES. Dealer will pay finance charges to DFS on the
outstanding principal debt which Dealer owes DFS for each item of
Collateral financed by DFS at the rate(s) shown on the Statement of
Transaction identifying such Collateral, unless Dealer objects thereto as
provided in SECTION 2. The finance charges attributable to the rate shown
on the Statement of Transaction will: (a) be computed based on a 360 day
year; (b) be calculated by multiplying the Daily Charge (as defined below)
by the actual number of days in the applicable billing period; and (c)
accrue from the invoice date of the Collateral identified on such Statement
of Transaction until DFS receives full payment in good funds of the
principal debt Dealer owes DFS for each item of such Collateral in
accordance with DFS' payment recognition policy and DFS applies such
payment to Dealer's principal debt in accordance with the terms of this
Agreement. The "Daily Charge" is the product of the Daily Rate (as defined
below) multiplied by the Average Daily Balance (as defined below). The
"Daily Rate" is the quotient of the annual rate shown on the Statement of
Transaction divided by 360, or the monthly rate shown on the Statement of
Transaction divided by 30. The "Average Daily Balance" is the quotient of
(i) the sum of the outstanding principal debt owed DFS on each day of a
billing period for each item of Collateral identified on a Statement of
Transaction, divided by (ii) the actual number of days in such billing
period. Dealer will also pay DFS $100 for each check returned unpaid for
insufficient funds (an "NSF check") (such $100 payment repays DFS'
estimated administrative costs; it does not waive the default caused by the
NSF check). The annual percentage rate of the finance charges relating to
any item of Collateral financed by DFS will be calculated from the invoice
date of such Collateral, regardless of any period during which any finance
charge subsidy shall be paid or payable by any third party. Dealer
acknowledges that DFS intends to strictly conform to the applicable usury
laws governing this
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Agreement. Regardless of any provision contained herein or in any other
document executed or delivered in connection herewith or therewith, DFS
shall never be deemed to have contracted for, charged or be entitled to
receive, collect or apply as interest on this Agreement (whether termed
interest herein or deemed to be interest by judicial determination or
operation of law), any amount in excess of the maximum amount allowed by
applicable law, and, if DFS ever receives, collects or applies as interest
any such excess, such amount which would be excessive interest will be
applied first to the reduction of the unpaid principal balances of advances
under this Agreement, and, second, any remaining excess will be paid to
Dealer. In determining whether or not the interest paid or payable under
any specific contingency exceeds the highest lawful rate, Dealer and DFS
shall, to the maximum extent permitted under applicable law: (A)
characterize any non-principal payment (other than payments which are
expressly designated as interest payments hereunder) as an expense or fee
rather than as interest; (B) exclude voluntary pre-payments and the effect
thereof; and (C) spread the total amount of interest throughout the entire
term of this Agreement so that the interest rate is uniform throughout such
term.
11. BILLING STATEMENT. DFS will send Dealer a monthly billing statement
identifying all charges due on Dealer's account with DFS. The charges
specified on each billing statement will be: (a) due and payable in full
immediately on receipt; and (b) an account stated, unless DFS receives
Dealer's written objection thereto within 15 days after it is mailed to
Dealer. If DFS does not receive, by the 25th day of any given month,
payment of all charges accrued to Dealer's account with DFS during the
immediately preceding month, Dealer will (to the extent allowed by law) pay
DFS a late fee ("Late Fee") equal to the greater of $5 or 5% of the amount
of such finance charges (payment of the Late Fee does not waive the default
caused by the late payment). DFS may adjust the billing statement at any
time to conform to applicable law and this Agreement.
12. DEFAULT. Dealer will be in default under this Agreement if: (a) Dealer
breaches any terms, warranties or representations contained herein, in any
Statement of Transaction to which Dealer has not objected as provided in
SECTION 2, or in any other agreement between DFS and Dealer; (b) any
guarantor of Dealer's debts to DFS breaches any terms, warranties or
representations contained in any guaranty or other agreement between the
guarantor and DFS; (c) any representation, statement, report or certificate
made or delivered by Dealer or any guarantor to DFS is not accurate when
made; (d) Dealer fails to pay any portion of Dealer's debts to DFS when due
and payable hereunder or under any other agreement between DFS and Dealer;
(e) Dealer abandons any Collateral; (f) Dealer or any guarantor is or
becomes in default in the payment of any debt owed to any third party; (g)
a money judgment issues against Dealer or any guarantor; (h) an
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attachment, sale or seizure issues or is executed against any assets of
Dealer or of any guarantor; (i) the undersigned dies while Dealer's
business is operated as a sole proprietorship, any general partner dies
while Dealer's business is operated as a general or limited partnership, or
any member dies while Dealer's business is operated as a limited liability
company, as applicable; (j) any guarantor dies; (k) Dealer or any guarantor
shall cease existence as a corporation, partnership, limited liability
company or trust, as applicable; (l) Dealer or any guarantor ceases or
suspends business; (m) Dealer, any guarantor or any member while Dealer's
business is operated as a limited liability company, as applicable, makes a
general assignment for the benefit of creditors; (n) Dealer, any guarantor
or any member while Dealer's business is operated as a limited liability
company, as applicable, becomes insolvent or voluntarily or involuntarily
becomes subject to the Federal Bankruptcy Code, any state insolvency law or
any similar law; (o) any receiver is appointed for any assets of Dealer,
any guarantor or any member while Dealer's business is operated as a
limited liability company, as applicable; (p) any guaranty of Dealer's
debts to DFS is terminated; (q) Dealer loses any franchise, permission,
license or right to sell or deal in any Collateral which DFS finances; (r)
Dealer or any guarantor misrepresents Dealer's or such guarantor's
financial condition or organizational structure; or (s) DFS determines in
good faith that it is insecure with respect to any of the Collateral or the
payment of any part of Dealer's obligation to DFS.
13. Rights of DFS Upon on Default. In the event of a default:
(a) DFS may at any time at DFS' election, without notice or demand to
Dealer, do any one or more of the following: declare all or any part
of the debt Dealer owes DFS immediately due and payable, together with
all costs and expenses of DFS' collection activity, including, without
limitation, all reasonable attorneys' fees; exercise any or all rights
under applicable law (including, without limitation, the right to
possess, transfer and dispose of the Collateral); and/or cease
extending any additional credit to Dealer (DFS' right to cease
extending credit shall not be construed to limit the discretionary
nature of this credit facility).
(b) Dealer will segregate and keep the Collateral in trust for DFS,
and in good order and repair, and will not sell, rent, lease,
consign, otherwise dispose of or use any Collateral, nor further
encumber any collateral.
(c) Upon DFS' oral or written demand, Dealer will immediately deliver the
Collateral to DFS, in good order and repair, at a place specified by
DFS, together with all related documents; or DFS may, in DFS' sole
discretion
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and without notice or demand to Dealer, take immediate possession of
the Collateral together with all related documents.
(d) DFS may, without notice, apply a default finance charge to Dealer's
outstanding principal indebtedness equal to the default rate specified
in Dealer's financing program with DFS, if any, or if there is none so
specified, at the lesser of 3% per annum above the rate in effect
immediately prior to the default, or the highest lawful contract rate
of interest permitted under applicable law.
All of DFS' rights and remedies are cumulative. DFS' failure to
exercise any of DFS' rights or remedies hereunder will not waive any
of DFS' rights or remedies as to any past, current or future default.
14. SALE OF COLLATERAL. Dealer agrees that if DFS conducts a private sale of
any Collateral by requesting bids from 10 or more dealers or distributors
in that type of Collateral, any sale by DFS of such Collateral in bulk or
in parcels within 120 days of: (a) DFS' taking possession and control Or
such Collateral; or (b) when DFS is otherwise authorized to sell such
Collateral; whichever occurs last, to the bidder submitting the highest
cash bid therefor, is a commercially reasonable sale of such Collateral
under the Uniform Commercial Code. Dealer agrees that the purchase of any
Collateral by a Vendor, as provided in any agreement between DFS and the
Vendor, is a commercially reasonable disposition and private sale of such
Collateral under the Uniform Commercial Code, and no request for bids shall
be required. Dealer further agrees that 7 or more days prior written
notice will be commercially reasonable notice of any public or private sale
(including any sale to a Vendor). Dealer irrevocably waives any
requirement that DFS retain possession and not dispose of any Collateral
until after an arbitration hearing, arbitration award, confirmation, trial
or final judgment. If DFS disposes of any such Collateral other than as
herein contemplated, the commercial reasonableness of such disposition will
be determined in accordance with the laws of the state governing this
Agreement.
15. POWER OF ATTORNEY. Dealer grants DFS an irrevocable power of attorney
to: execute or endorse on Dealer's behalf any checks, financing
statements, instruments, Certificates of Title and Statements of
Origin pertaining to the Collateral; supply any omitted information
and correct errors in any documents between DFS and Dealer; initiate
and settle any insurance claim pertaining to the Collateral; and do
anything to preserve and protect the Collateral and DFS' rights and
interest therein.
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16. INFORMATION. DFS may provide to any third party (a) any standard
credit information in response to a credit request, and (b) any other
financial or other information on Dealer that DFS may from time to
time possess, as required by law. DFS may obtain from any Vendor any
credit, financial or other information regarding Dealer that such
Vendor may from time to time possess.
17. TERMINATION. Either party may terminate this Agreement at any time by
written notice received by the other party. If DFS terminates this
Agreement, Dealer agrees that if Dealer: (a) is not in default hereunder,
30 days prior notice of termination is reasonable and sufficient (although
this provision shall not be construed to mean that shorter periods may not,
in particular circumstance, also be reasonable and sufficient); or (b) is
in default hereunder, no prior notice of termination is required. Dealer
will not be relieved from any obligation to DFS arising out of DFS'
advances or commitments made before the effective termination date of this
Agreement. DFS will retain all of its rights, interests and remedies
hereunder until Dealer has paid all of Dealer's debts to DFS. All waivers
set forth within this Agreement will survive any termination of this
Agreement.
18. BINDING EFFECT. Dealer cannot assign its interest in this Agreement
without DFS' prior written consent, although DFS may assign or participate
DFS' interest, in whole or in part, without Dealer's consent. This
Agreement will protect and bind DFS' and Dealer's respective heirs,
representatives, successors and assigns.
19. NOTICES. Except as otherwise stated herein, all notices, arbitration
claims, responses, requests and documents will be sufficiently given or
served if mailed or delivered: (a) to Dealer at Dealer's principal place of
business specified above; and (b) to DFS at 000 Xxxxxxxxx Xxxxxx Xxxxx, Xx.
Xxxxx, Xxxxxxxx 00000-0000, Attention: General Counsel, or such other
address as the parties may hereafter specify in writing.
20. NO ORAL AGREEMENTS. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES
TO EXTEND OR RENEW SUCH DEBTS ARE NOT ENFORCEABLE. TO PROTECT DEALER AND
DFS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ALL AGREEMENTS COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, EXCEPT AS SPECIFICALLY
PROVIDED HEREIN OR AS THE PARTIES MAY LATER AGREE IN
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WRITING TO MODIFY IT. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES.
21. OTHER WAIVERS. Dealer irrevocably waives notice of: DFS' acceptance of
this Agreement, presentment, demand, protest, nonpayment, nonperformance,
and dishonor. Dealer and DFS irrevocably waive all rights to claim any
punitive and/or exemplary damages.
22. SEVERABILITY. If any provision of this Agreement or its application
is invalid or unenforceable, the remainder of this Agreement will not
be impaired or affected and will remain binding and enforceable.
23. SUPPLEMENT. If Dealer and DFS have heretofore executed other agreements in
connection with all or any part of the Collateral, this Agreement shall
supplement each and every other agreement previously executed by and
between Dealer and DFS, and in that event this Agreement shall neither be
deemed a novation nor a termination of such previously executed agreement
nor shall execution of this Agreement be deemed a satisfaction of any
obligation secured by such previously executed agreement.
24. RECEIPT OF AGREEMENT. Dealer acknowledges that it has received a true and
complete copy of this Agreement. Dealer acknowledges that it has read and
understood this Agreement. Notwithstanding anything herein to the
contrary: (a) DFS may rely on any facsimile copy, electronic data
transmission or electronic data storage of this Agreement, any Statement of
Transaction, billing statement, invoice from a Vendor, financial statements
or other reports, and (b) such facsimile copy, electronic data transmission
or electronic data storage will be deemed an original, and the best
evidence thereof for all purposes, including, without limitation, under
this Agreement or any other agreement between DFS and Dealer, and for all
evidentiary purposes before any arbitrator, court or other adjudicatory
authority.
25. MISCELLANEOUS. Time is of the essence regarding Dealer's performance of
its obligations to DFS notwithstanding any course of dealing or custom on
DFS' part to grant extensions of time. Dealer's liability under this
Agreement is direct and unconditional and will not be affected by the
release or nonperfection of any security interest granted hereunder. DFS
will have the right to refrain from or postpone enforcement of this
Agreement or any other agreements between DFS and Dealer without prejudice
and the failure to strictly enforce these agreements will not be construed
as having created a course of dealing between DFS and Dealer contrary to
the specific terms of the agreements or as having modified,
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released or waived the same. The express terms of this Agreement will not
be modified by any course of dealing, usage of trade, or custom of trade
which may deviate from the terms hereof. If Dealer fails to pay any taxes,
fees or other obligations which may impair DFS' interest in the Collateral,
or fails to keep the Collateral insured, DFS may, but shall not be required
to, pay such taxes, fees or obligations and pay the cost to insure the
Collateral, and the amounts paid will be: (a) an additional debt owed by
Dealer to DFS, which shall be subject to finance charges as provided
herein; and (b) due and payable immediately in full. Dealer agrees to pay
all of DFS' reasonable attorneys' fees and expenses incurred by DFS in
enforcing DFS' rights hereunder. The Section titles used in this Agreement
are for convenience only and do not define or limit the contents of any
Section.
26. BINDING ARBITRATION.
26.1 ARBITRABLE CLAIMS. Except as otherwise specified below, all actions,
disputes, claims and controversies under common law, statutory law or
in equity of any type or nature whatsoever (including, without
limitation, all torts whether regarding negligence, breach of
fiduciary duty, restraint of trade, fraud, conversion, duress,
interference, wrongful replevin, wrongful sequestration, fraud in the
inducement, usury or any other tort, all contract actions, whether
regarding express or implied terms, such as implied covenants of good
faith, fair dealing, and the commercial reasonableness of any
Collateral disposition, or any other contract claim, all claims of
deceptive trade practices or lender liability, and all claims
questioning the reasonableness or lawfulness of any act), whether
arising before or after the date of this Agreement, and whether
directly or indirectly relating to: (a) this Agreement and/or any
amendments and addenda hereto, or the breach, invalidity or
termination hereof; (b) any previous or subsequent agreement between
DFS and Dealer; (c) any act committed by DFS or by any parent company,
subsidiary or affiliated company of DFS (the "DFS Companies"), or by
any employee, agent, officer or director of a DFS Company whether or
not arising within the scope and course of employment or other
contractual representation of the DFS Companies provided that such act
arises under a relationship, transaction or dealing between DFS and
Dealer; and/or (d) any other relationship, transaction or dealing
between DFS and Dealer (collectively the "Disputes"), will be subject
to and resolved by binding arbitration.
26.2 ADMINISTRATIVE BODY. All arbitration hereunder will be conducted in
accordance with the Commercial Arbitration Rules of The American
Arbitration Association ("AAA"). If the AAA is dissolved, disbanded
or becomes subject 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
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forum. The parties agree that all arbitrator(s) selected will be
attorneys with at least five (5) years secured transactions
experience. The arbitrator(s) will decide if any inconsistency exists
between the rules of any applicable arbitral forum and the arbitration
provisions contained herein. If such inconsistency exists, the
arbitration provisions contained herein will control and supersede
such rules. The site of all arbitration proceedings will be in the
Division of the Federal Judicial District in which AAA maintains a
regional office that is closest to Dealer.
26.3 DISCOVERY. Discovery permitted in any arbitration proceeding
commenced hereunder is limited as follows. No later than thirty (30)
days after the filing of claim for arbitration, the parties will
exchange detailed statements setting forth the facts supporting the
claim(s) and all defenses to be raised during the arbitration, and a
list of all exhibits and witnesses. No later than twenty-one (21)
days prior to the arbitration hearing, the parties will exchange a
final list of all exhibits and all witnesses, including any
designation of any expert witness(es) together with a summary of their
testimony; a copy of all documents and a detailed description of any
property to be introduced at the hearing. Under no circumstances will
the use of interrogatories, requests for admission, requests for the
production of documents or the taking of depositions be permitted.
However, in the event of the designation of any expert witness(es),
the following will occur: (a) all information and documents relied
upon by the expert witness(es) will be delivered to the opposing
party, (b) the opposing party will be permitted to depose the expert
witness(es), (c) the opposing party will be permitted to designate
rebuttal expert witness(es), and (d) the arbitration hearing will be
continued to the earliest possible date that enables the foregoing
limited discovery to be accomplished.
26.4 EXEMPLARY PUNITIVE DAMAGES. The Arbitrator(s) will not have the
authority to award exemplary or punitive damages.
26.5 CONFIDENTIALITY OF AWARDS. All arbitration proceedings, including
testimony or evidence at hearings, will be kept confidential, although
any award or order rendered by the arbitrator(s) pursuant to the terms
of this Agreement may be entered as a judgment or order in any state
or federal court and may be confirmed within the federal judicial
district which includes the residence of the party against whom such
award or order was entered. This Agreement concerns transactions
involving commerce among the several states. The Federal Arbitration
Act, Title 9 U.S.C. Sections 1 et seq., as amended ("FAA") will govern
all arbitration(s) and confirmation proceedings hereunder.
26.6 PREJUDGMENT AND PROVISIONAL REMEDIES. Nothing herein will be
construed to prevent DFS' or Dealer's use of bankruptcy, receivership,
injunction, repossession, replevin, claim and delivery, sequestration,
seizure, attachment,
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foreclosure, dation and/or any other prejudgment or provisional action
or remedy relating to any Collateral for any current or future debt
owed by either party to the other. Any such action or remedy will not
waive DFS' or Dealer's right to compel arbitration of any Dispute.
26.7 ATTORNEYS' FEES. If either Dealer or DFS brings any other action for
judicial relief with respect to any Dispute (other than those set
forth in SECTION 26.6), the party bringing such action will be liable
for and immediately pay all of the other party's costs and expenses
(including attorneys'' fees) incurred to stay or dismiss such action
and remove or refer such Dispute to arbitration. If either Dealer or
DFS brings or appeals an action to vacate or modify an arbitration
award and such party does not prevail, such party will pay all costs
and expenses, including attorneys' fees, incurred by the other party
in defending such action. Additionally, if Dealer sues DFS or
institutes any arbitration claim or counterclaim against DFS in which
DFS is the prevailing party, Dealer will pay all costs and expenses
(including attorneys' fees) incurred by DFS in the course of defending
such action or proceeding.
26.8 LIMITATIONS. Any arbitration proceeding must be instituted: (a) with
respect to any Dispute for the collection of any debt owed by either
party to the other, within two (2) years after the date the last
payment was received by the instituting party; and (b) with respect to
any other Dispute, within two (2) years after the date the incident
giving rise thereto occurred, whether or not any damage was sustained
or capable of ascertainment or either party knew of such incident.
Failure to institute an arbitration proceeding within such period will
constitute an absolute bar and waiver to the institution of any
proceeding, whether arbitration or a court proceeding, with respect to
such Dispute.
26.9 SURVIVAL AFTER TERMINATION. The agreement to arbitrate will survive
the termination of this Agreement.
27. INVALIDITY/ UNENFORCEABILITY OF BINDING ARBITRATION. IF THIS AGREEMENT IS
FOUND TO BE NOT SUBJECT TO ARBITRATION, ANY LEGAL PROCEEDING WITH RESPECT
TO ANY DISPUTE WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE WITHOUT A JURY. DEALER AND DFS WAIVE ANY RIGHT TO A JURY TRIAL IN ANY
SUCH PROCEEDING.
28. GOVERNING LAW. Dealer acknowledges and agrees that this and all other
agreements between Dealer and DFS have been substantially negotiated, and
will be substantially performed, in the slate of Maryland. Accordingly,
Dealer agrees that all Disputes will be governed by, and construed in
accordance with, the laws
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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.
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxxxx Guest
-----------------------------------
Print Name: Xxxxxxx Guest
----------------------------
Title: Regional Vice President
---------------------------------
XXXXXXX MANAGEMENT SYSTEMS CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Print Name: Xxxx X. Xxxxxx
------------------------------------
Title: President
------------------------------------
By: ____________________________________
Print Name: ____________________________
Title: _________________________________
ATTEST:
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------
(Assistant) Secretary)
Print Name: Xxxxxxx X. Xxxxxx
---------------------------
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