AGREEMENT FOR WHOLESALE FINANCING
(SECURITY AGREEMENT - ARBITRATION)
This Agreement for Wholesale Financing ("Agreement") is made as of 8/1 , 1993
between ITT Commercial Finance Corp. ("ITT") and Boat Tree, Inc. , a |_| SOLE
PROPRIETORSHIP, |_| PARTNERSHIP, |X| CORPORATION (check applicable term)
("Dealer"), having a principal place of business located at 0000 Xxxxx Xxxxxx.;
Xxxxxxx, XX 00000 .
1. Subject to the terms of this Agreement, ITT, in its sole discretion, may
extend credit to Dealer from time to time to purchase inventory from ITT
approved vendors. ITT may combine all of ITT's advances to Dealer or on Dealer's
behalf, whether under this Agreement or any other agreement, to make one debt
owed by Dealer. ITT's decision to advance funds on any inventory will not be
binding until the funds are actually advanced. Dealer agrees that ITT 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 ITT, or with
respect to which ITT reasonably feels insecure.
2. Dealer and ITT agree that certain financial terms of any advance made by ITT
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 from time to time of vendor
discounts or other incentives, prevailing economic conditions, ITT's floor
planning volume with Dealer and with Dealer's vendors, and other economic
factors which may vary over time. Dealer and ITT 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 ITT. Upon agreeing to
finance a particular item of inventory for Dealer, ITT will send Dealer a
Statement of Transaction identifying such inventory and the applicable financial
terms. Unless Dealer notifies ITT 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 the items of inventory
referenced in such Statement of Transaction are being financed by ITT 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 term so
of any Statement of Transaction, Dealer agrees to pay ITT 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 acknowledged that ITT may then elect to terminate Dealer's financing
program pursuant to Section 12, and cease making additional advances to
CMF 1 AWF (A) 05/92
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Dealer. Any termination for that reason, however, will not accelerate the
maturities of advances previously made unless Dealer shall otherwise be in
default of this Agreement.
3. To secure payment of all Dealer's current and future debts to ITT,
whether under this Agreement or any current or future guaranty or other
agreement, Dealer grants ITT a security interest in all Dealer's inventory,
equipment, fixtures, accounts, contract rights, chattel paper, instruments,
reserves, documents and general intangibles, whether now owned or hereafter
acquired, all attachments, accessories, accessions, substitutions and
replacements thereto and all proceeds thereof. All such assets are as defined in
the Uniform Commercial Code and referred to herein as the "Collateral". All
Collateral financed by ITT, and all proceeds thereof, will be held in trust by
Dealer for ITT, with such proceeds being payable in accordance with Section 7.
4. Dealer represents that all Collateral will be kept at Dealer's principal
place of business listed above, and, if any, the following other locations
Dealer will give ITT at least 30 days prior written notice of any change in
Dealer's identity, name, form of business organization, ownership, principal
place of business, Collateral locations or other business locations.
5. Dealer will: (a) only exhibit and sell Collateral financed by ITT to buyers
in the ordinary course of business; (b) not rent, lease, demonstrate, transfer
or use any Collateral financed by ITT without ITT's prior written consent; (c)
execute all documents ITT requests to perfect ITT's security interest in the
Collateral; (d) deliver to ITT immediately upon each request, and ITT may
retain, each Certificate of Title or Statement of Origin issued for Collateral
financed by ITT; and (e) immediately provide ITT with copies of Dealer's annual
financial statements upon their completion (which in no event shall exceed 120
days after the end of Dealer's fiscal year), and all other information regarding
Dealer that ITT requests from time to time. All financial information Dealer
delivers to ITT will accurately represent Dealer's financial condition either as
of the date of delivery, or, if different, the date specified therein, and
Dealer acknowledges ITT's reliance thereon.
6. Dealer will: (a) pay all taxes and fees assessed against Dealer or the
Collateral when due; (b) immediately notify ITT of any loss, theft or damage to
any Collateral; (c) keep the Collateral insured for its full insurable value
under a property insurance policy with a company acceptable to ITT, naming ITT
as a loss-payee and containing standard lender's loss payable and termination
provisions; and (d) provide ITT with written evidence of such insurance coverage
and loss-payee and lender's clauses. If Dealer fails to pay any taxes, fees or
other obligations which may impair ITT's interest in the Collateral, or fails to
keep the Collateral insured, ITT may pay such taxes, fees or obligations and pay
the costs to insure the Collateral, and the amounts paid will be: (i) an
additional debt owed by Dealer to ITT; and (II) due and payable immediately in
full. Dealer grants ITT an irrevocable license to enter Dealer's business
locations during normal business hours without notice to Dealer to: (A) account
for and inspect all Collateral; (B) verify Dealer's compliance with this
Agreement; and (c) examine and copy Dealer's books and records related to the
Collateral.
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7. Dealer will immediately pay ITT the principal indebtedness owed ITT on each
item of Collateral financed by ITT (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 ITT, if ITT determines
that the current outstanding debt owned by Dealer to ITT exceeds the aggregate
wholesale invoice price of such Collateral in Dealer's possession, Dealer will
immediately upon demand pay ITT 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 ITT of any past due obligation
discovered during any Collateral audit, or at any other time, Dealer agrees that
acceptance of such payment by ITT shall not be construed to have waived or
amended the terms of its financing program. Dealer agrees that the proceeds of
any Collateral received by Dealer shall be held by Dealer in trust for ITT's
benefit, for application as provided in this Agreement. Dealer will send all
payments to ITT's branch office(s) responsible for Dealer's account. ITT 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 ITT, 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 ITT until ITT has received
payment therefor in cash. Dealer will: (i) pay ITT even if any Collateral is
defective or fails to conform to any warranties extended by any third party;
(ii) not assert against ITT any claim or defense Dealer has against any third
party; and (iii) indemnify and hold ITT harmless against all claims and defenses
asserted by any buyer of the Collateral relating to the condition of, or any
representations regarding, any of the Collateral. Dealer waives all rights of
offset Dealer may have against ITT.
8. Dealer will pay ITT finance charges on the outstanding principal debt Dealer
owes ITT for each item of Collateral financed by ITT 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 ITT receives full payment of the principal debt Dealer owes ITT for each
item of such Collateral. 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
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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 ITT 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 ITT $100 for each check returned unpaid for insufficient funds (an "NSF
check") (such $100 payment repays ITT's estimated administrative costs; it does
not waive the default caused by the NSF check). Dealer acknowledges that ITT
intends to strictly conform to the applicable usury laws governing this
Agreement and understands that Dealer is not obligated to pay any finance
charges billed to Dealer's account exceeding the amount allowed by such usury
laws, and any such excess finance charges Dealer pays will be applied to reduce
Dealer's principal debt owed to ITT. The annual percentage rate of the finance
charges relating to any item of Collateral financed by ITT shall 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. ITT will
send Dealer a monthly billing statement identifying all charges due on Dealer's
account with ITT. The charges specified on each billing statement will be: (A)
due and payable in full immediately on receipt, and (B) an account stated,
unless ITT receives Dealer's written objection thereto within 15 days after it
is mailed to Dealer. If ITT does not receive, by the 25th day of any given
month, payment of all charges accrued to Dealer's account with ITT during the
immediately preceding month, Dealer will (to the extent allowed by law) pay ITT
a late fee ("Late Fee") equal to the greater of $5 or 5% of the amount of such
finance charges (such Late Fee repays ITT's estimated administrative costs; it
does not waive the default caused by the late payment). ITT may adjust the
billing statement at any time to conform to applicable law and this Agreement.
9. 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 ITT and Dealer, (b) any guarantor of Dealer's debts to
ITT breaches any terms, warranties or representations contained in any guaranty
or other agreement between the guarantor and ITT; (c) any representation,
statement, report or certificate made or delivered by Dealer or any guarantor to
ITT is not accurate when made; (d) fails to pay any portion of Dealer's debts to
ITT when due and payable hereunder or under any other agreement between ITT and
Dealer, (e) Dealer abandons any Collateral; (f) Dealer or any guarantor is or
becomes in default in the payment of any debt owned to any third party; (g) a
money judgment issues against Dealer or any guarantor; (h) an 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 or any general partner dies while Dealer's business is
operated as a general or limited partnership; (j) any guarantor dies; (k) Dealer
or any guarantor shall cease existence as a corporation, partnership or trust;
(l) Dealer or any guarantor ceases or suspends business; (m) Dealer or any
guarantor makes a general assignment for the benefit or creditors; (n) Dealer or
any Guarantor becomes insolvent or voluntarily or involuntarily becomes subject
to the Federal Bankruptcy Code, any state insolvency law or any similar law; (o)
any receiver is appointed for any of Dealer's or any guarantor's assets; (p) any
guaranty of Dealer's debts to ITT is terminated; (q) Dealer loses any franchise,
permission, license or right to sell or deal in any Collateral which ITT
finances; (r)
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Dealer or any guarantor misrepresents Dealer's or such guarantor's financial
condition or organizational structure; or (s) any of the Collateral becomes
subject to any lien, claim, encumbrance or security interest prior or superior
to ITT's. In the event of a default:
(i.) ITT may at any time at ITT's 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 ITT immediately due and payable, together will all costs and
expenses of ITT's collection activity, including, without limitation, all
reasonable attorney's 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 (ITT's
right to cease extending credit shall not be construed to limit the
discretionary nature of this credit facility).
(ii.) Dealer will segregate and keep the Collateral in trust for ITT, and
in good order and repair, and will not exhibit, sell, rent, lease, further
encumber, otherwise dispose of or use any Collateral.
(iii.) Upon ITT's oral or written demand, Dealer will immediately deliver
the Collateral to ITT, in good order and repair, at a place specified by ITT,
together with all related documents; or ITT may, in ITT's sole discretion and
without notice or demand to Dealer, take immediate possession of the Collateral
together with all related documents.
(iv.) ITT 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 ITT, if any, or if there is none so specified,
at the lesser of 3% per annum above the rate in effective immediately prior to
the default, or the highest lawful contract rate of interest permitted under
applicable law.
All ITT's rights and remedies are cumulative. ITT's failure to exercise any of
ITT's rights or remedies hereunder will not waive any of ITT's rights or
remedies as to any past, current of future default.
10. Dealer agrees that if ITT 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 ITT of such Collateral in bulk or in parcels within 120
days of: (a) ITT's taking possession and control of such Collateral; or (b) when
ITT 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 ITT 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). If ITT disposes of any such
Collateral other than as herein contemplated, the
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commercial reasonableness of sch disposition will be determined in accordance
with the laws of the state governing this agreement.
11. Dealer grants ITT 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 ITT and Dealer, do
anything Dealer is obligated to do hereunder, initiate and settle any insurance
claim pertaining to the Collateral; and do anything to preserve and protect the
Collateral and ITT's rights and interest therein. ITT may provide to any third
party any credit, financial or other information on Dealer that ITT may from
time to time possess.
12. Time is of the essence. This Agreement is deemed to have been entered into
at the ITT branch office executing this Agreement. Either party may terminate
this Agreement at any time by written notice received by the other party. If ITT
terminates this Agreement, Dealer agrees that if Dealer: (a) is not in default
hereunder, 30 days prior notice of termination is reasonable and sufficient
although this provision shall not be construed to mean that shorter periods may
not, in particular circumstances, also be reasonable and sufficient); or (b) is
in default hereunder, no prior notice of termination is required. Dealer will
not be relieved from any obligation to ITT arising out of ITT's advances or
commitments made before the effective termination date of this Agreement. ITT
will retain all of its rights, interests and remedies hereunder until Dealer has
paid all Dealer's debts to ITT. Dealer cannot assign Dealer's interest in this
Agreement without ITT's prior written consent, although ITT may assign or
participate ITT's interest, in whole or in part, without Dealer's consent. This
Agreement will protect and bind ITT's and Dealer's respective heirs,
representatives, successors and assigns. All agreements or commitments to extend
or renew credit or refrain from enforcing payment of a debt must be in writing.
Any oral or other amendment or waiver claimed to be made to this Agreement that
is not evidenced by a written document executed by ITT and Dealer (except for
each Statement of Transaction that Dealer does not object to in the manner
stated in Section 2) will be null, void and have no force or effect whatsoever.
If any provision of this Agreement or its application is invalid or
unenforceable, the remainder or this Agreement will not be impaired or affected
and will remain binding and enforceable. If Dealer previously executed any
security agreement with ITT. This Agreement will only amend and supplement such
Agreement. If due terms hereof conflict with the terms of any such prior
security agreement, be terms of this Agreement will govern. Dealer agrees to pay
all of ITT's reasonable attorneys fees and expenses incurred by ITT in enforcing
ITT's rights hereunder.
13. BINDING ARBITRATION, Except as otherwise specified below, all actions,
disputes, claims and controversies under common law, statutory law or in equity
of any type of 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, 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
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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 ITT and
Dealer; and/or (c) any other relationship, transaction or dealing between ITT
and Dealer (collectively the Disputes"), will be subject to and resolved by
binding arbitration.
13.1 All arbitration hereunder will be pursuant to either; (a) the Code of
Procedure in effect from time to time ("Code") of the National Arbitration forum
("NAF"), currently located at 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000; or (b) the Commercial Arbitration Rules ("Rules")
in effect from time to time of the American Arbitration Association ("AA"),
currently located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000. The
party first filing any claim for arbitration shall designate which arbitration
procedures are to be applied for all Disputes between Dealer and ITT, although
if either the NAF or AAA is dissolved, the procedures of the remaining
arbitration body must be used. A copy of the Code, Rules and any fee schedule of
the NAF or AAA may be obtained by contacting the NAF or AAA, as applicable. The
parties agree that all arbitrators selected shall be attorneys. The
arbitrator(s) will decide if any inconsistency exists between the Code, or
Rules, as applicable, and the arbitration provisions contained herein. If any
such inconsistency exists, the arbitration provisions contained herein will
control and supersede the Code, or Rules, applicable. The site of all
arbitration participatory bearings will be in the Division of the Federal
Judicial District of ITT's branch office closes to Dealer. The laws of the State
of Michigan will govern this Agreement; provided, however, that the Federal
Arbitration Act ("FAA"), to the extent inconsistent, will supersede the laws of
such state and govern. This Agreement concerns transactions involving commerce
among the several states. All arbitration proceedings, including testimony or
evidence at hearings, will be kept confidential, although any award or order
rendered by the arbitrator(s) or directors of arbitration pursuant to the terms
of this Agreement may be entered as a judgment or order and enforced by either
party in any state or federal court having competent jurisdiction.
13.2 Nothing herein will be construed to prevent ITT's 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 owned by either party to the other. Any such action
or remedy will not waive ITT's or Dealer's right to compel arbitration of any
Dispute. If either Dealer or ITT brings any other action for judicial relief
with respect to any Dispute, the party bringing the 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 ITT 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.
13.3 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
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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 Dealer at Dealer's principal place of business specified above; and (ii) to
ITT at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: General
Counsel, or such other address as the parties may specify from time to time in
writing. No arbitration hereunder will include, by consolidation, joinder or
otherwise, any third party, unless such third party agrees to arbitrate pursuant
to the arbitration provisions contained herein and the Code, or Rules, as
applicable.
14. If Section 13 of this Agreement or its application is invalid or
unenforceable, 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 ITT
waive any right to a jury trial in any such proceeding.
THIS CONTRACT CONTAINS BINDING ARBITRATION AND JURY WAIVER
PROVISIONS.
ITT COMMERCIAL FINANCE CORP. Boat Tree, Inc.
Dealer's Name
By: By:/s/ Xxx Xxxx
Print Name: Print Name:Xxxxxx X. Xxxx
Title: Title:Sole Corporate Officer
ATTEST: I hereby state that I am the
Sole Corporate Officer of Said
Corporation
(Assistant) Secretary
Print Name:
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
8
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, we hereby authorized
an empowered on behalf of this corporation: to obtain financing from ITT
Commercial Finance Corp. ("ITT") 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 ITT relating to the terms upon which such
financing may be obtained and security and/or other credit support is to be
furnished by this corporation therefor; from time to time to supplement or amend
any such agreements; and from time to time to pledge, assign, mortgage, grant
security interests, and otherwise transfer to ITT as collateral security for any
obligations of this corporation to ITT, whenever and however arising, any assets
of this corporation, whether now owned or hereafter acquired; the Board of
Directors hereby ratifying, approving and confirming all that any of said
officers, directors or agents have done or may do with respect to the
foregoing."
IN WITNESS WHEREOF, I have executed and affixed the seal of the corporation on
the date stated below.
Dated: , 19
Assistant Secretary
Corporate Name
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ADDENDUM TO AGREEMENT FOR WHOLESALE FINANCING
This Addendum is made to that certain Agreement for Wholesale Financing
entered into by and between Boat Tree, Inc. ("Dealer") and Deutsche Financial
Services Corporation ("DFS") on August 1, 1993, as amended ("Agreement").
FOR VALUE RECEIVED, DFS and Dealer agree that the following paragraph
is incorporated into the Agreement as if fully and originally set forth therein:
"Dealer will maintain a Tangible Net Worth and Subordinated
Debt in the combined amount of not less than Five Hundred
Thousand Dollars ($500,000.00).
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, if
applicable, on a consolidated basis."
Dealer waives notice of DFS' acceptance of this Addendum.
mrosenberg/boattree/addendum.01
1
All other terms and provisions of the Agreement, to the extent not
inconsistent with the foregoing, are ratified and remain unchanged and in full
force and effect.
IN WITNESS WHEREOF, Dealer and DFS have executed this Addendum on this
21st day of June, 1998.
BOAT TREE, INC.
/s/ Xxxxxx X.Xxxx, Xx.
ATTEST:
By:Xxxxxx X. Xxxx, Xx.
Title:President
----------------------------------
DEUTSCHE FINANCIAL SERVICES
CORPORATION
By:
Title:
mrosenberg/boattree/addendum.01
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