AGREEMENT FOR WHOLESALE FINANCING FOR
MICROAGE COMMERCIAL CREDIT DEALERS
(SECURITY AGREEMENT - ARBITRATION)
This Agreement for Wholesale Financing ("Agreement") is made as of February
26, 1997 between Deutsch Financial Services Corporation ("DFS") and Business
Technologies Systems, Inc. a Corporation, ("Dealer"), having principal place of
business located at 0000 X. Xxxxxxxxx Xxxx, Xxx. X-0, Xxxxxxx Xxxxx, XX 00000.
Extension of Credit. Dealer is a computer reseller that has entered into an
agreement with MicroAge Computer Centers, Inc. ("MCCI") Subject to the
terms of this Agreement, DFS may extend credit to Dealer from time to time
to purchase inventory from MCCI and other 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 and to the terms of the financing
programs agreed to from time to time in writing between DFS and MCCI and/or
other approved Vendors, as the case may be, and which are identified 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 DFS 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 15% per annum o r 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 18, 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.
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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, instrument, deposit accounts,
reserves, documents, and general intangibles (specifically including
without limitations, all vendor, manufacturer and dealer authorizations and
medallions); and all judgements, 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 al 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. DFS' title, lien or security interest will not be impaired by
any payments made by Dealer to MCCI or anyone else or by Dealer's failure
or refusal to account to DFS for proceeds.
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) Deler will deliver
to DFS immediately upon each request, and DFS may retain, each Certificate
or 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 the 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 agreements
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) 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 palce of business designated in this Agreement; (m) Dealer
will promptly supply DFS with such information concerning ir or any
guarantor as DFS hereafter may reasonable 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 is 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 and books and records to any other
location; (p) Dealer will observe and perform all matters required by any
lease, licenses, 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.
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5. Negative Covenants. Dealer will not at any time (without DFS' prior written
consent): (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.
6. Insurance. Dealer will immediately notify DFS of any loss, theft, or damage
to any Collateral. Dealer will keep the Collateral 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 year a reasonably detailed
balance sheet as of the last day of such fiscal year and a reasonably
detailed income statement covering Dealer's operations foe 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; and
(c) within ten (10) days after request therefor by DFS, and 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 an 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 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.
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 SP terms pertaining to any Collateral financed by DFS, if
DFS determined 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 ot
amended the terms of its financing program. The proceeds of any Collateral
received by Dealer will be held by Dealer in trust for DFS' benefit, for
application as provided in this Agreement. Dealer will send all payments to
DFS' branch office(s) responsible for Dealer's account. DFS may apply; (i)
payments to reduce finance charges first and then principal, regardless of
Dealer's instructions; and (ii) principal payments to the oldest (earliest)
invoice for Collateral financed by DFS, but, in any event, all principal
payments will first be applied to such Collateral which is sold, lost,
stolen,
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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 including, without limitation, any set-off or refusal to
pay or perform any of Dealer's obligations to DFS under this Agreement as a
result of any dispute with or claim against MCCI or any other Vendor; and
(3) indemnify and hold DFS harmless against all claims and defenses
asserted by any buyer of the Collateral relating to the condition of, or
any representations regarding, any of the Collateral. Dealer waives all
rights of offset and couterclaims 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
charges subsidy shall be paid or payable by any third party. Dealer
acknowledges that DFS intends to strictly conform to the applicable usury
laws governing this Agreement. Regardless of any provision contained herein
or in any other document executed or delivered in connection herewith or
therewith, DFS shall never be deemed to have contracted for, charged or be
entitled to receive, collect to 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 if 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 payment 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.
Page 206
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 (tp 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. SECURITY INTEREST GRANTED TO MCCI, RELEASE GIVEN TO MCCI, AND MCCI FEE. To
secure payment of all of Dealer's current and future debts to MCCI under
all agreements now or hereafter entered into between MCCI and Dealer,
whether direct o contingent, Dealer also grants MCCI a security interest in
all of Dealer's inventory, equipment, fixtures, accounts, contract rights,
chattel paper, instruments, reserves, documents, deposit accounts and
general intangibles (specifically including, without limitation, all
vendor, manufacturer and dealer authorizations and medallions); and all
judgements, 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; provided, however,
MCCI's security interest in Dealer's assets specified above shall be fully
subordinate and inferior to DFS' security interest in all of such assets.
Dealer, on behalf of itself and its respective officers, directors,
shareholders, partners, agents, employees, representatives, affiliated
entities, spouses, heirs, successors and assigns ("Releasing Parties")
hereby release, acquit and forever discharge MicroAge Commercial Credit,
MCCI and their respective officers, directors, shareholders, partners,
agents, employees, representatives, affiliated entities, successors, and
assigns ("Released Parties") from any and all obligations, claims, debts,
demands, liabilities, covenants, contracts, agreements, undertakings,
costs, attorneys' fees, accounts, claims, actions or causes of action,
whether known or unknown, which any of the Releasing Parties has, had or
claims to have against any of the Released Parties, arising, directly or
indirectly, out of any matter, negotiation, conversation, contract,
agreement or for any other reason whatsoever, from the beginning of the
world to the date hereof. Dealer acknowledges, agrees and accepts that: (a)
Dealer shall periodically pay a fee to MCCI to cover MCCI's administrative
expenses relating to Dealer's inventory and/or accounts receivable
financing programs with DFS ("Fee"); (b) DFS shall be acting solely on
behalf of MCCI as MCCI's agent to xxxx Dealer for the Feeand collect the
Fee from Dealer; (c) the amount of the Fees and the frequency at which
Dealer is billed fro the Fee will vary from time to time and will be
determined solely by MCCI; (d) the Statement of Transaction shall include
the Fee in the total amount of charges owed, but the amount of the Fee may
not be shown separately; (e) the entire Fee collected by DFS shall be
remitted to MCCI and DFS will not retain any portion of the Fee; (f) DFS'
billing and collection of the Fee shall be remitted to MCCI and DFS will
not retain any portion of the Fee; (f) DFS' billing and collection of the
Fee shall not, in any way or manner whatsoever affect any or all of
Dealer's liabilities and obligations owed to DFS, whether under this
Agreement, Dealer's financing program with DFS or otherwise; (g) any
dispute that may arise with respect to the Fee shall involve only MCCI and
Dealer, shall not involve DFS and will not in any way or manner whatsoever
affect any or all of Dealer's liabilities and obligations owed to DFS; and
(h) DFS may apply payments that DFS receives from Dealer first to the
amounts due DFS under Dealer's financing program with DFS, and then to the
Fee for remittance to MCI, regardless of Dealer's instructions to DFS.
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13. 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 nd 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 no accurate when
made; (d) Dealer fails to pay any portion of Dealer's debts to DFS when due
end 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 judgement issues against Dealer or any grantor, (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, any general partner dies wile Dealer's business
is operated as a general or limited partnership, or any ember dies while
Dealer's business is p\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; (1) 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 Collateal which DFS finances; (r) Dealer fails, at
any time, to be in good standing with MCCI pursuant to the terms of any of
Dealer's agreements heretofore or hereafter entered into with MCCI; (s)
Dealer or any guarantor misrepresents Dealer's or such guarantor's
financial condition or organizational structure; or (t) 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.
14. Rights of DFS Upon Default. In the event of a default:
(a) DFS may at any time at DFS' election, without notice or demand to
Dealer, do any one or more of the following; declare all or any
part of the debt Dealer owes DFS immediately due and payable,
together with all costs and expenses of DFS' collection activity,
including, without limitation, all reasonable attorneys' fees;
exercise any or all rights under applicable law (including,
without limitation, the right to possess, transfer and dispose of
the Collateral); and/or cease extending any additional credit to
Dealer (DFS' right to cease extending credit shall not be
continued 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.
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(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.
15. Sale of Collateral. Dealer agrees that of 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
judgement. 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.
16. Power of Attorney. Dealer grants DFS as 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 and omitted information and correct errors in any
document 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.
17. Information. DFS may provide to any third party any credit, financial or
other information on Dealer that DFS may from time to time possess. DFS may
obtain from any Vendor any credit, financial or other information regarding
Dealer that such Vendor my from time to time possess.
18. Termination. Either party may terminate this Agreement at ant time by
written notice received by other party. If DFS terminates this Agreement,
Dealer agrees that if Dealer (a) is not in default hereunder, 30 days prior
notice of termination is reasonable and sufficient (although this provision
shall not be construed to mean that shorter periods may not, in particular
circumstances, also be reasonable and sufficient); or (b) is in default, no
prior notice of termination is required. Dealer will not be relieved from
any obligation to DFS arising out of DFS' advance or commitments made
before the effective termination date of the 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.
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19. 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.
20. Notices. Except as otherwise stated herein, all notices, arbitration
claims, responses, requests and documents will be sufficiently given or
severed 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 tin writing.
21. NO ORAL AGREEMENTS. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES
TO EXTEND OR RENEW SUCH DEBTS ARE NOT ENFORCEABLE. TO PROTECT DEALER AND
DFS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ALL AGREEMENTS COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, EXCEPT AS SPECIFICALLY
PROVIDED HEREIN OR AS THE PARTIES MAY LATER AGREE IN WRITING TO MODIFY IT.
THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
22. 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. Dealer waives and renounces all rights and
benefits Dealer may now have or hereafter acquire as third-party
beneficiaries or otherwise under the terms of any agreements heretofore or
hereafter entered into by and between DFS and MCCI.
23. 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.
24. Supplement. If Dealer and DFS have heretofore executed other agreements in
connection with all of 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.
25. Receipt of Agreement. Dealer acknowledges that it has received a true and
complete copy f this Agreement. Dealer acknowledges that it has read and
understood this Agreement. Notwithstanding anything herein to the contract:
(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.
Page 210
26. Miscellaneous. Time is of the essence regarding Dealer's performance of its
obligations to DFS notwithstanding any course of dealing or custom of DFS'
part to grant extensions of time. Dealer's liability under this Agreement
is direct and unconditional and will not be affected by the release or
nonperfection of any security interest granted hereunder. DFS will have the
right to refrain from or postpone enforcement of this Agreement or any
other agreements between DFS and Dealer without prejudice and the failure
to strictly enforce these agreements will not be construed as having
created a course of dealing between DFS and Dealer contrary to the specific
terms of the agreements or as having modified, released or waived the same.
The express terms of this Agreement will not be modified by any course of
dealing, usage of trade, or custom of trade which may deviate from the
terms hereto. 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
attorney's 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.
27. BINDING ARBITRATION.
27.1 Arbitrable Claims. Except as other wise 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 or 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. 27.2 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.
Page 211
27.3 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 by
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 e
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. 27.4 Exemplary or Punitive Damages. The
Arbitrator(s) will not have the authority to award exemplary or
punitive damages. 27.5 Confidentially 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 judgement 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. 27.6
Prejudgement 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 prejudgement 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. 27.7 Attorney's 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 27.6), the party bringing
such action will be liable for and immediately pay all of the
other part's costs and expenses (including attorneys' fees)
incurred to stay or dismiss such action and removes\ 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. 27.8 Limitations.
Any arbitration proceeding must be instituted: (a) with respect
to any Dispute fro 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
Page 212
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.
27.9 Survival After Termination. The agreement to arbitrate will
survive the termination of this Agreement.
28. 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.
29. 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.
Page 213
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 of more of them, are hereby authorized and empowered on
behalf of this corporation: to obtain financing from Deutsch 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 thereof; from time to time to supplement or amend any such
agreement; 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."
IN WITNESS WHEREOF, I have executed and affixed the seal of the
corporation on the date stated below.
Date: 2/26, 1997 /s/ Assistant Secretary
(Assistant Secretary)
Business Technology Systems, Inc.
Corporate Name
1990 MCCI. MicroAge is a registered trademark of MicroAge Computer Centers, Inc.
MicroAge is an international sales organization of independently owned and
operated company-owned, franchised and affiliated locations.
Page 214
AMENDMENT TO AGREEMENT FOR WHOLESALE FINANCING
This Amendment to Agreement for Wholesale Financing is made to that certain
Agreement for Wholesale Financing entered into by and between Business
Technology Systems, Inc. ("Dealer") and Deutsche Financial Services ("DFS") on
February 26, 1997, as amended ("Agreement").
FOR VALUE RECEIVED, Dealer and DFS agree to amend the Agreement to provide
as follows (capitalized terms shall have the same meaning as determined in the
Agreement unless otherwise indicated:
Dealer will forward to DFS at least once each calendar week a
Collateral Report (as defined below) dated no earlier than seven (7)
days prior to the sate of delivery of each such Collateral Report to
DFS. Regardless of the SPP terms pertaining to any Collateral financed
by DFS, and notwithstanding any scheduled payments made by Dealer after
the Determination Date (as defined below), if DFS determines, after
reviewing the Collateral Report, after conducting an inspection of the
Collateral or otherwise, that (i) the total current outstanding
indebtedness owed by Dealer to DFS as of the date of the Collateral
Report, inspection or any other date on which a paydown is otherwise
required hereunder, as applicable (the "Determination Date"), exceeds
(ii) the Collateral Liquidation Value (as defined below) as of the
Determination Date, Dealer will immediately upon demand pay DFS the
difference between (i) Dealer's total current outstanding indebtedness
owed to DFS as of the Determination Date, and (ii) the Collateral
Liquidation Value as of the Determination Date.
The term "Collateral Report" is defined herein to mean a report
complied y Dealer specifying the following information: (a) the total
aggregate wholesale invoice price of all of Dealer's inventory financed
by DFS that is unsold and in Dealer's possession and control as of the
date of such Report; and (b) the total outstanding balance owed to
Dealer on Dealer's Eligible Accounts (as defined below) as of the date
of such Report: in each case to the extent DFS has a first priority,
fully perfected security interest therein.
The term "Eligible Accounts" is defined herein to include all of
Dealer's accounts receivable except for: (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 which the obligor is an officer, director,
shareholder, partner, member, owner, employee, agent,
Page 215
parent, subsidiary, affiliate of, or is related 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 herein 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 Dealer to another party; (k)
accounts which are progress payment, barter or contra accounts; (l)
accounts which are discounts, rebates, bonuses or credits for returned
goods owed to Dealer by any third party; (m) accounts which are being
financed by DFS pursuant to a Business Financing Agreement or other
comparable document between Dealer and DFS; and (n) any and all other
accounts which DFS deems to be ineligible.
The term "Collateral Liquidation Value" is defined herein to mean: (i)
one hundred percent (100%) of the total aggregate wholesale invoice
price of al of Dealer's inventory financed by DFS that is unsold and in
Dealer's possession and control excluding all in-use and demonstration
inventory; (ii) seventy percent (70%) of the total outstanding balance
of Dealer's Eligible Accounts (Except to the extent payment for any
such Account is in the Blocked Account (as defined below); (iii) one
hundred percent (100%) of all funds held in Dealer's bank account which
has been blocked in favor of DFS, pursuant to a lockbox agreement
executed by the bank in which such account is located, in form and
substance satisfactory to DFS (the "Blocked Account") and pursuant to
which agreement, Dealer hereby agrees to direct its obligors to make
payment to the lockbox set forth therein; and (iv) one hundred percent
(100%) of current proceeds and proceeds in transit due from Dealer's
credit card clearing company, as reflected on the credit card clearing
company's report dated as of the date of the Collateral Report: in each
case as of the date of the Collateral Report and to the extent DFS has
a first priority, fully perfected security interest therein.
If Dealer from time to time is required to make immediate Payment to
DFS of any past due obligation discovered during any Collateral audit;
upon review of a Collateral Report or at any other time, Dealer agrees
that acceptance of such payment by DFS shall not be construed to have
waived or amended the terms of its financing program.
From time to time Dealer may request that DFS release funds held in the
Blocked Account to Dealer. DFS agrees, so long as Dealer is not in
default to DFS, to release to Dealer.
Page 216
from the Blocked Account, upon request and submitted by Dealer of an
updated Collateral Report in form and substance satisfactory to DFS, an
amount not to exceed the positive difference, if any, between (i) the
Collateral Liquidation Value, minus (ii) one hundred percent (100%) of
Dealer's outstanding indebtedness to DFS as of the date of Dealer's
request.
All other terms as they appear in the Agreement, to the extent consistent with
the foregoing, are ratified and remain unchanged and in full force and effect.
IN WITNESS WHEREOF, Dealer and DFS have executed this Amendment to
Agreement for Wholesale Financing this 26 day of Feb., 1997.
BUSINESS TECHNOLOGY SYSTEMS, INC.
By: /s/ Xxx Xxxxx
Title: President
ATTEST:
DEUTSCHE FINANCIAL SERVICES CORPORATION
/s/ Assistant Secretary
(Assistant) Secretary By: /s/ Branch Manager
Title: Branch Manager
Page 217
EXTENSION AGREEMENT
Exhibit A
This Extension Agreement ("Agreement") is entered into as of this 26th day
of August 1998, by and among Deutsche Financial Services Corporation (DFS"),
Business Technology Systems, Inc., a Florida Corporation ("Borrower"), and Xxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx X. Xxxxxx, Xx., and Colmena Corporation (collectively
"Guarantor") collectively the "Parties."
RECITALS
A. DFS has extended a credit facility to Borrower pursuant to the terms of the
Agreement for Wholesale Financing (Security Agreement - Arbitration) dated on or
about February 26, 1997, as amended (collectively the "Loan Document") providing
for inventory financing for Borrower.
B. The loans made under the terms of the Load Document ("Loans") are secured
by a first priority perfected lien and security interest in all of Borrower's
inventory, equipment, fixtures, accounts, contract rights, chattel paper,
instruments, reserves, documents of title, deposit accounts and general
intangibles, now owned or hereafter acquired by Borrower, and al attachments,
accessories, accessions, substitutions and/or replacements thereto, and all
proceeds thereof (collectively referred to herein as the "Collateral").
Financing Statements perfecting DFS' security interest in the Collateral were
properly recorded. The value of the Collateral has always exceeded the amount of
the Loans.
C. Borrower's obligations and liabilities to DFS have been unconditionally
guaranteed by Guarantor pursuant to the certain Guaranty agreements dated August
5, 1997 by Xxx Xxxxx and Xxxxx Xxxxx, dated May 1, 1998 by Xxxxxxx X. Xxxxxx,
Xx. and dated May 1, 1998, by Colmena Corporation (collectively the "Guaranty").
D. As of the date hereof, the Loans made to Borrower pursuant to the Loan
Document are past due, Borrower's primary breach of the Loan Document being its
failure topay principal payments to DFS when due, including the payment due June
15, 1998, in the sum of $43,229.81, payment due June 25, 1998 in the sum of
$68,233.21 and a payment due July 5, 1998 in the sum of $151.59. Borrower
acknowledges that the indebtedness due to DFS pursuant tothe Loan Document is
$348,858.39 which represents principal as of the close of business on August 14,
1998 of $345,473.78, interest charges of $3,384.61 through July 31, 1998, plus
additional interest charges from August 1, 1998 at the per annum rate of Prime
plus 6.5% pursuant to the Loan Document, as well as fees and expenses incurred
by DFS (collectively the "Debt"). Pursuant to the terms hereof, DFS agrees to
extend the payment of the Debt, including the past due obligations.
E. Borrower and Guarantor have requested that DFS extend the payment of the
Debt, including the past due obligations in lieu of enforcing DFS' rights and
remedies.
Page 218
F. In exchange for the agreements, representations, covenants, releases and
confirmations of Borrower and the Guarantor contained and referenced herein, DFS
willing to agree such extension.
G. Borrower acknowledges that DFS hasperformed all obligations on its part to
be performed under the Loan Document and Borrower has no offsets nor defenses to
the payment of the sums due DFS.
NOW, THEREFORE, for and in consideration of the above premises, the mutual
promises and covenants contained herein, and for such other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. DFS Extension
Subject to the terms and conditions set forth herein, DFS will extend
the payment of the Debt, including the past due obligations in lieu of
exercising its rights and remedies under the Loan Document unless and
until such time as Borrower or the Guarantor are in default of any the
provisions of this Agreement, the Loan Document or the Guaranty.
2. Repayment Terms.
A. Borrower hereby surrenders to DFS all of DFS' inventory
Collateral. The Parties further agree that the inventory will be
surrendered to DFS for the purpose of its liquidation and
application to the Debt. Borrower further acknowledges that such
liquidation will discharge Borrower's obligations to DFS only to
the extent of the net proceeds of such liquidation and that
Borrower and Guarantor shall remain liable for the balance of the
Debt owed to DFS. Borrower and Guarantor waive prior notice of
private or public sale of the Collateral and of their right to
redeem same. DFS' return of any inventory to a vendor is hereby
deemed commercially reasonable. Additionally, DFS' disposition of
other Collateral is hereby deemed commercially reasonable if DFS
solicits at least ten bids by companies who purchase the type of
collateral and sells that collateral tot he highest bidder. DFS
is authorized to contact any vendor which does or did business
with Borrower in order to request that all credit memos be
forwarded directly to DFS. DFS will provide Borrower an
accounting of funds received from the disposition of collateral
upon written request.
B. Borrower will continue to collect its Accounts and will remit all
of the proceeds thereof to DFS. Borrower will surrender the
Accounts and other Collateral to DFS and all records and
documents relating thereto upon written request from DFS.
C. DFS shall maintain its security interest and lien against the
Collateral until The Debt is irrevocably paid in full by Borrower
or Guarantor. DFS will cause it's UCC form-one Financing
Statements to be terminated within areasonable time after DFS is
paid in full
Page 219
D. DFS will release Borrower and the Guarantor after all obligations
to DFS Under this Agreement, the Load Document and the Guaranty
have irrevocably been paid in full. As more fully described in
Paragraph 8 below, Borrower and Guarantor release DFS from any
claims they may have at this time.
E. The Debt will be paid to DFS by Borrower or Guarantor by paying
DFS the Debt in good funds by Noon eastern time on or before
September 15, 1998.
F. Borrower and Guarantor consent to the entry of a Consent
Arbitration Award for the sum of $348,858.39 plus interest
charges at the per annum rate of Prime plus 6.5% pursuant to the
Loan Document, as well as fees and expenses incurred by DFS from
August 1, 1998 in favor of DFS as provided in Exhibit A, attached
hereto ("Award") and pursuant to the binding arbitration
provisions as set out in the Loan Document and Guaranty. All
funds received by DFS from the liquidation of the Collateral and
Borrower's and Guarantors' payments will be credited against the
Debt and Award. DFS may file the Award with the American
Arbitration Association after the date of Borrower's default
under this Agreement. The arbitration Award shall be entered
upon: 1) the filing with the American Arbitration Association of
a sworn affidavit by DFS or its attorney setting forth the
default in this Agreement and the balance due; and 2) providing
the Borrower and Guarantor 10 days to file a counter-affidavit
rebutting DFS' affidavit. A copy of said affidavit and any
arbitration pleadings shall be mailed by DFS to Borrower and
Guarantor via Federal Express at their address provided herein. A
copy of any counter-affidavits and arbitration pleadings shall be
mailed by Borrower and Guarantor via Federal Express at DFS'
address provided herein. UPON DEFAULT, BORROWER AND GUARANTOR
SPECIFICALLY REAFFIRM THEIR CONSENT TO BINDING ARBITRATION AND
THE ENTRY OF AN AWARD AGAINST THEM WITHOUT ADDITIONAL SERVICE OF
PROCESS OTHER THAN BY FEDERAL EXPRESS OR HEARING AS MAY BE
REQUIRED BY THE ARBITRATION RULES. FURTHER, BORROWER AND
GUARANTOR SHALL NOT OPPOSE THE CONFIRMATION OF AN ARBITRATION
AWARD AS A FINAL JUDGMENT IF APPLIED FOR BY DFS IN A COURT OF
COMPETENT JURISDICTION.
G. Borrower and Guarantor will pay DFS an extension fee in the sum
of $5,000.00 in good funds upon execution of this Agreement.
3. Expiration of Extension
DFS, Borrower and Guarantor further agree that DFS may immediately
proceed to enforce any and all remedies available to it under the Loan
Document, Guaranty, or under applicable law in the event the Borrower
or Guarantor fail to make any of the payments due or otherwise comply
with this Agreement when due. Time shall be of the essence with
respect to Borrower's and Guarantor's obligations under this
Agreement.
Page 220
4 Conditions Precedent.
The initial and ongoing effectiveness of this Agreement is subject to
the satisfaction of the following conditions precedent:
A. Execution and delivery to DFS of an original counterpart(s) of
this Agreement by Borrower and Guarantor and each of them.
B. Delivery of Incumbency Certificates of Borrower approving
the execution, delivery and performance of this Agreement
and the transactions contemplated herein, duly adopted by
the Board of Directors in the same form as Exhibit A.
5. Representations and Warranties.
Borrower represents and warrants to DFS that:
A. Borrower's execution, delivery and performance of this
Agreement is not subject to the prior consent approval of
any third party or governmental authority.
B. All the obligations, representations and warranties
contained in the Loan Document remain in full force and
effect as modified hereby.
C. The execution, delivery and performance of this Agreement by
Borrower Does not violate, contravene, or conflict with any
statute, rule, regulation, agreement or instrument or order
binding upon Borrower or any of them, or to which Borrower,
or any of them, is subject.
D. This Agreement constitutes the valid and binding obligation
of Borrower and is enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy
laws.
6. Covenants
Until the Debt is paid in full and all obligations and liabilities of
Borrower and the Guarantor, and each of them under the Agreement,
Guaranty and the Loan Document are performed and paid in full,
Borrower and Guarantor agree and covenant that:
A. Borrower is bound by the covenants and agreements set forth
in the Loan Document.
B. Borrower shall promptly notify DFS of: (i) any material
adverse change in The financial condition or business of
Borrower, the Guarantor, or any of them; (ii) any default
under any agreement, contract or other instrument in which
Borrower, or the Guarantor, or any of them, is a party or
which any of Borrower's or any of the Guarantor's properties
are bound, or any acceleration of the maturity of any
indebtedness owing by Borrower or the Guarantor, or any of
them; (iii) any adverse claim against or affecting Borrower
or the Guarantor, or any of them, or any of Borrower or
Guarantor property; (iv) any litigation, arbitration or
other claim or controversy which might become the subject of
litigation against Borrower or Guarantor, or any of them, or
affecting any of Borrower's or Guarantor's properties; and
(v) any bankruptcy proceeding filed by or against the
Borrower or Guarantor under Tile 11 U.S.C. or state
insolvency proceeding.
Page 221
C. Borrower authorizes, and consents to, the continuing
presence of DFS personnel on Borrower's business premises
during normal business hours for the purpose of inspecting
the Collateral and auditing of Borrower's books and records.
Borrower acknowledge and agrees that the presence of DFS
personnel on Borrower's premises shall be for purpose of
protecting DFS' interest in the Collateral and never deemed
as DFS' exercise and control over Borrower, the Collateral
or Borrower's business.
D. Borrower shall deliver all of the documents and instruments
requested by DFS in conjunction with this Agreement and the
Loan Document to maintain, confirm or protect its security
interest in the Collateral.
7. Default/Remedies.
Upon the occurrence of a default under this Agreement or under the
Loan Documents; (i) DFS shall be entitled to take such lawful action
as it deems appropriate (including without limitation, the institution
of arbitration proceedings, the commencement of judicial or
non-judicial proceedings to recover possession of the Collateral,
filing a claim in an attempt to obtain immediate possession of the
Collateral) for the purpose of collecting the indebtedness outstanding
under the Loans, and preserving or protecting the Collateral securing
the payment thereof; and (ii) DFS and Guarantor, and each of them,
except where prohibited by law or required under this Agreement or the
Loan Document, waive any notice of default, acceleration, termination
of extension or other notice requirements or provisions contained
within the Loan Document, or imposed by applicable law prior to DFS
undertaking any such actions.
8. Borrower's and Guarantors' Releases.
Borrower and Guarantor, and each of them for themselves and for their
respective agents, partners, servants, employees, attorneys, heirs,
successors and assigns, have this day RELEASED and by these presents
do RELEASE, ACQUIT and FOREVER DISCHARGE DFS and its predecessors,
successors, assigns, managers, shareholders, representatives, parent
corporations, subsidiaries and affiliates, agents, servants,
employees, attorneys, officers, and directors, each in their
respective corporate and individual capacities (collectively, the
"Released Parties") from any and all claims or cases of action, suit,
sums of money, accounts, reckonings, covenants, contracts,
controversies, agreements, promises, rights, variances, trespasses,
damages, judgements, executions, claims and demands whatsoever which
they have, which are based on facts or circumstances which arose or
existed from the beginning of time to the date hereof, whether known
or unknown, asserted or unasserted, equitable or at law, arising under
or pursuant to common or statutory law, rules or
Page 222
regulations, and which arose in the course of dealings between any of
the Released Parties and Borrower and Guarantor, or any of them, or
which are directly or indirectly attributable tro the Loan Document,
Guaranty or the rights, interest, covenants, or agreements evidenced
thereby, or any security therefor, all loan modification documents,
any documents or instruments executed or delivered in connction with
the foregoing, or the negotiation, execution, delivery,
administration, management, collection or enforcement thereof
(collectively, the "Applicable Transactions"). The foregoing release
shall relate to any and all claims and causes of action of any kind or
character relating to the Applicable transactions, growing out of or
in any way connected with or resulting from the acts, actions, or
omissions, of any of the Released Parties, or any agent, servant,
employee, attorney, officer or director of any of the Released
Parties, including, without limitation, any loss, costs, or damage
arising or incurred in connection with any usurious interest, breach
of fiduciary duty, breach of any duty of fair dealing, breach of
confidence, under influence, duress, economic coercion, conflict of
interest, negligence, bad faith, malpractice, intentional or negligent
infliction of mental distress, tortious interference with contractual
relations, tortious interference with corporate or partnership
governance or prospective business advantage, breach of contract,
deceptive trade practices, libel or slander (without admitting or
implying that any such claim or cause of action exists or has any
validity).
9. Guarantor's Consent. Guarantor hereby consents to the terms and
conditions contained in this Agreement. Guarantor further confirms and
agrees that neither the execution of this Agreement, nor the
consummation of the transactions described therein, shall in any way
effect or diminish the liability of the Guarantor under the terms of
the Guaranty previously, concurrently or hereafter executed by
Guarantor, and that such Guaranty continues in full force and effect.
10. Miscellaneous.
(a) Waivers. No failure to exercise, and no delay in exercising, on
the part of any Party, any right under this Agreement, the Guaranty or
the Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right. The rights of the
Parties in such documents shall be in addition to all other rights
provided by law. No notice or demand given in any case shall
constitute a waiver of the right to take other action in the same,
similar or other instances without such notice or demand. Nothing
herein or in the Loan Document shall be construed to be a waiver by
DFS of any rights under the Loan Document or Guaranty. DFS has not
waived any rights or remedies available to DFS, whether under the
Agreement, Loan Document, Guaranty or otherwise. Further, DFS has not
consented to, nor shall anything herein be construed to imply DFS'
consent to, a release of the liens and security interest in the
Collateral granted under the Loan Document.
(b) Survival of Representations and Warranties. All representations
warranties, covenants and conditions made in this Agreement, the Loan
Document, or the Guaranty shall survive the execution and delivery of
these documents.
Page 223
(c) Severability. Any provision of this Agreement held by an
arbitrator or a court of competent jurisdiction to be invalid or
unenforceable shall not impair or invalidate the remainder of this
Agreement and the effect thereof shall be confined to the provision so
held to be invalid or unenforceable.
(d) Applicable Law. This Agreement shall be deemed to have been made,
and to be performable in Georgia and shall be governed, except as
provided for in Paragraph 10(n), by and construed in accordance with
the laws of the State of Georgia.
(e) Successors and Assigns. This Agreement is binding upon and shall
inure to the benefit of DFS, Borrower, Guarantor, and each of them,
and their respective successors, heirs and assigns, except that
Borrower and Guarantor may not assign or transfer any of their rights
or obligations hereunder without the prior written consent of DFS.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one
and the same instrument. The original of this Agreement shall be
delivered to DFS by 5:00 p.m. E.D.T. on August 19, 1998.
(g) Notices. Any notice required or permitted to be given by DFS to
Borrower or Guarantor, or any of them, hereunder shall be conclusively
deemed to have been given and received if made in the following way:
(i) either (a) in a writing which is hand delivered to Borrower and
Guarantor at the addresses set forth below for such parties, or (b) in
a writing, transmitted by facsimile machine to the facsimile machine
numbers set forth below for such parties; and (ii) in a writing,
mailed by prepaid or recognized overnight courier (including without
limitation, Federal Express or Airborne), to the address specified
below; in each case such notice shall be deemed to have been given and
received on the day that it is transmitted or mailed as provided
herein. All parties will notify all other parties of a change n their
address or facsimile number.
DEUTSCHE FINANCIAL SERVICES CORPORATION
00000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxx Corporate Center
Xx. Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
With a copy to:
DEUTSCHE FINANCIAL SERVICES CORPORATION
000 Xxxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
Page 224
If to Borrower, Colmena and Xxxxxx, or any of them:
Attention: Xxxxxxx X. Xxxxxx, Xx.
Colmena Corp.
00000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Facsimile: (440) 871-
With a copy to:
Xxxxxxxxxxx, Xxxxx & Xxxxxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Xxx Xxxxx and Madhu Sethl, or either of them:
00000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
(h) The headings, captions and arrangements used in this Agreement
are for convenience only and shall not affect the interpretation of
this Agreement.
(i) Insurance. Borrower will continue to maintain and provide DFS
with Certificates of Insurance naming DFS as a loss payee covering the
Collateral at all Borrower's locations until the Debt is paid in full.
(j) Full and Independent Knowledge. Each Party hereto represents that
it has been represented by an attorney in conjunction with the
preparation and review of this Agreement, that its representative has
specifically discussed with its attorney the meaning and effect of
this Agreement, or had to opportunity to consult with an attorney and
that its representative has carefully read and understands the scope
and effect each provision contained herein. Each Party further
represents that it does not rely and has not relied upon any
representation or statement made by the other party hereto or any of
its representatives with regard to the subject matter, basis or effect
of this Agreement.
There are not unwritten agreements between the Parties. This Agreement may
only be amended by a writing signed by the Parties.
(k) Ownership Claims. Each Party hereto warrants and represents to
each of the other that it has not heretofore assigned or transferred,
or purported to assign or transfer, to any person or entity, and claim
or any portion thereof or interest therein, and agrees to indemnify,
defend and hold each other party harmless from and against any and all
claims based on or arising out of such assignment or transfer
purported assignment or transfer of claims or any portion thereof or
interest therein.
Page 225
(l) Further Assurances. Each of the parties, without further
consideration agrees to execute and deliver such other documents and
take such other action as may be necessary to communicate more
effectively the subject matter hereof.
(m) Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement, the relationship resulting in or from this
Agreement or the breach of any duties hereunder will be settled by
Arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. All hearings will be held in
Atlanta, Georgia before an arbitrator who is a licensed attorney. A
judgement upon the award rendered by the arbitrator shall be entered
in a court of competent jurisdiction, including the United States
District Court, Eastern District of Pennsylvania. The Federal
Association Act (Title 9 United States Code Sections 1 shall govern
all arbitrations.
(n) Recitals. The above recitals are true and correct in all
respects.
This Agreement is EXECUTED as of the date first written above.
ATTEST: Business Technology Systems, Inc
A Florida corporation
/s/ Xxxxxxx X. Xxxxxx, Xx.
___________________________________ By:/s/ Xxxxxxx X. Xxxxxx, Xx.
Secretary
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: President
CORPORATE ACKNOWLEDGMENT
STATE OF Ohio )
)SS:
COUNTY OF Cuhahoga )
On the 26th day of August, 1998, before me personally came, Xxxxxxx X.
Xxxxxx, Xx., who being by me duly sworn, did depose and say that he is the
President of Business Technology Systems, Inc. known to me to be the person who
executed the within Extension Agreement on behalf of said corporation, and
acknowledged to me that they executed the same for the purposes therein stated.
Page 226
/s/ Xxx Xxxxx
-------------------------------
Xxx Xxxxx - Guarantor
Address
00000 Xxxxxxxx Xxxxxx,
Xxxx Xxxxx, XX 00000
INDIVIDUAL ACKNOWLEDGMENT
STATE OF Florida )
)SS:
COUNTY OF Palm Beach )
On this 1 day of June, 1999, before me, the subscriber, a Notary
Public, personally appeared Xxx Xxxxx known to me to be the person described in
and who executed the above Extension Agreement, and who acknowledged the
execution thereof to be her free act and deed.
My Commission Expires 5/7/2001
Notary Public:
/s/ Xxxxx Xxxxx
------------------------------
Xxxxx Xxxxx - Guarantor
Xxxxxxx
00000Xxxxxxxx Xxxxxx,
Xxxx Xxxxx, XX 00000
INDIVIDUAL ACKNOWLEDGMENT
STATE OF Florida )
)SS:
COUNTY OF Palm Beach )
On this 1 day of June, 1999, before me, the subscriber, a Notary
Public, personally appeared Xxxxx Xxxxx, known to me to be the person described
in and who executed the above Extension Agreement, and who acknowledged the
execution thereof to be his free act and deed.
My Commission Expires: 5/7/2001
Notary Public:
Page 227
/s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------------
Xxxxxxx X. Xxxxxx, Xx. - Guarantor
Address:
00000 Xxxxxxxxxx Xxxxxxxx, XX 00000
INDIVIDUAL ACKNOWLEDGMENT
STATE OF Ohio )
)SS:
COUNTY OF Cuhahoga )
On this 26th day of August, 1998, before me, the subscriber, a Notary
Public, personally appeared Xxxxxxx X. Xxxxxx, Xx., known to me to be the person
described in and who executed the above Extension Agreement, and who
acknowledged the execution thereof to be his free act and deed.
My Commission Expires: 10/12/99 Notary Public Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
Colmena Corporation - Guarantor
Address:
00000 Xxxxxxx Xx., Xxxxxxxx, XX 00000
CORPORATE ACKNOWLEDGMENT
STATE OF Ohio )
)SS:
COUNTY OF Cuhahoga )
On this 26th day of August, 1998, before me, the subscriber, a Notary
Public personally appeared Xxxxxxx X. Xxxxxx, Xx., know to me to be the person
described in and who executed the above Extension Agreement on behalf Colmena
Corporation as a duly authorized officer, and who acknowledged the execution
thereof to be his free act and deed.
My Commission expires: 10/12/99 Notary Public: Xxxxxx X. Xxxxx
DEUTSCHE FINANCIAL SERVICE CORPORATION,
A Florida Corporation
By: /s/ Xxx Xxxxx
Title: ________________
Page 228
INCUMBENCY CERTIFICATE
OF
Business Technology Systems, Inc.
I, Xxxxxxx X. Xxxxxx, Xx., hereby certify that:
I am the duly qualified and acting Secretary of Business Technology
Systems, Inc., and Florida corporation (the "Corporation").
I hereby certify that the following named individuals are duly elected and
appointed officers of the Corporation who are currently serving in their
respective offices on behalf of the Corporation. I further certify that the
signatures of said officers subscribed to the within instrument are true and
genuine signatures of said officers.
The officers of the Corporation are as follows:
Office Name Manual Signature
President Xxxxxxx X. Xxxxxx, Xx. /s/ Xxxxxxx X. Xxxxxx, Xx.
Chairman of the Board Xxxxxxx X. Xxxxxx, Xx. /s/ Xxxxxxx X. Xxxxxx, Xx.
Secretary Xxxxxxx X. Xxxxxx, Xx. /s/ Xxxxxxx X. Xxxxxx, Xx.
I further certify that President and Secretary are authorized to execute
and deliver any and all documents on behalf of the Corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal
of the Corporation this 25th day of August, 1998.
(SEAL)
/s/ Xxxxxxx X. Xxxxxx, Xx.
_______________________________
Xxxxxxx X. Xxxxxx, Xx., Secretary
Page 229
AMERICAN ARBITRATION ASSOCIATION
COMMERCIAL ARBITRATION TRIBUNAL
DEUTSCHE FINANCIAL SERVICES )
CORPORATION )
Claimant, ) Case No.
v. )
Business Technology Systems, Inc. )
a Florida Corporation ("Borrower"), )
Xxx Xxxxx, Xxxxx Xxxxx, )
Xxxxxxx X. Xxxxxx, Xx. and )
Colmena Corporation )
Respondents. )
CONSENT ARBITRATION AWARD
Duetsche Financial Services Corporation ("DFS"), Business Technology Systems,
Inc., a Florida Corporation ("Borrower"), and Xxx Xxxxx, Xxxxx Xxxxx, Xxxxxxx X.
Xxxxxx, Xx. and Colmena Corporation, (collectively "Respondents") hereby consent
to the entry of an arbitration award ("Award") in favor of DFS and against
Respondents, in the amount of $348,858.39 plus interest at the per annum rate of
Prime plus 6.5% from August 1, 1998 less such sums received by DFS pursuant to
the Extension Agreement dated as of August 19, 1998 a state the following:
WHEREAS, DFS and Respondents have agreed that all disputes between and among
them would be resolved by binding arbitration with the American Arbitration
Association;
WHEREAS, DFS and Respondents mutually desire to resolve all claims between them
and to avoid any further cost or inconvenience inherent in proceeding with an
arbitration claim, and to that ens, DFS and Respondents have entered into a
Extension Agreement (collectively "Settlement"), a true and accurate copy of
which is attached hereto as Exhibit 1 and incorporated herein by reference.
NOW THEREFORE, for and in consideration of the mutual covenants, conditions and
promises contained herein and/or in the Settlement, and other good an valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, DFS
and Respondents hereby agree as follows:
1. Respondents consent tot he entry of an Award in favor if DFS and
against Respondents in the amount of $348,858.39 plus interest at the per annum
rate of Prime plus 6.5% from August 1, 1998 less such sums received by DFS
pursuant to the Extension Agreement dated as of August 19, 1998. All funds
received by DFS from the liquidation of the Collateral and from the Respondents
will be credited against the Debt.
2. In the event Respondents do not comply with the provisions described
in the Settlement, DFS shall have the right to file the Award with the American
Arbitration Association upon the filing of an affidavit of proof setting forth
the amount of the debt together
Page 230
with the proof of service upon Respondents. Thereafter, DFS may move to confirm
the entry of the Award as a Judgement in a Federal or State court of competent
jurisdiction and Respondent shall not oppose the confirmation of the Award as a
final judgement if applied for by DFS. Service upon Respondents in such
confirmation action shall be sufficient if forwarded by Federal Express to
Respondents at the address contained in the Extension Agreement. The original
Award shall be held by DFS subject to a default in the payment terms of the
Settlement. The Award will be satisfied by the timely payment of the Debt, as
adjusted, by Respondent. The Federal Arbitration Act (Title 9 United States Code
Section 1 et seq.) Shall govern all such proceedings.
CONSENTED TO:
ATTEST: Business Technology Systems, Inc.
a Florida corporation
/s/ Secretary By: /s/ Richasrd X. Xxxxxx, Xx
Secretary
Name: Xxxxxxx X. Xxxxxx. Jr.
Title President
CORPORATE ACKNOWLEDGMENT
STATE OF OHIO )
) SS:
COUNTY OF Cuyahoga )
On the 26th day of August, 1998, before me personally came,
_______________________________ who being by me duly sworn, did depose and say
that he is the President of Business Technology Systems, Inc., known to me to be
the person who executed the within Extension Agreement on behalf of said
corporatio, and acknowledged to me that they executed the same for the purposes
therein stated.
/s/ Xxxxxx Xxxxx
Notary Public
My commission expires:
/s/ Xxx Xxxxx
Xxx Xxxxx
Guarantor
Page 231
INDIVIDUAL ACKNOWLEDGMENT
STATE OF Florida )
) SS:
COUNTY OF Palm Beach)
On this 1 day of June, 1999, before me, the subscriber, a Notary
Public, personally appeared Xxx Xxxxx, known to me to be the person described in
and who executed the above Extension Agreement, and who acknowledged the
execution thereof to be her free act and deed.
My Commission Expires: 5/7/2001
Notary Public: /s/ Xxxxxx X. Xxxx, Xx.
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
Guarantor
INDIVIDUAL ACKNOWLEDGMENT
STATE OF Florida )
) ss:
COUNTY OF Palm Beach)
On this 1 day of June, 1999, before me, the subscriber, a Notary
Public, personally appeared Xxxxx Xxxxx, known to me to be the person described
in and who executed the above Extension Agreement, and who acknowledged the
execution thereof to be his free act and deed.
My Commission expires 5/7/2001
Notary Public: /s/ Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx.
Guarantor
INDIVIDUAL ACKNOWLEDGMENT
STATE OF Ohio )
) ss:
COUNTY OF Cuyahoga )
On this 26th day of August, 1998, before me, the subscriber, a Notary
Public, personally appeared Xxxxxxx X. Xxxxxx, Xx., known to me to be the person
described in and who executed the above Extension Agreement, and who
acknowledged he execution thereof to be his free act and deed.
My Commission Expires Oct. 12, 1999
Notary Public: /s/ Xxxxxx X. Xxxxx
Page 232
/s/ Xxxxxxx X. Xxxxxx, Xx.
Colmena Corporation
Guarantor
CORPORATE ACKNOWLEDGMENT
STATE OF Ohio )
) SS:
COUNTY OF Cuyahoga )
On this 26th day of August, 1998, before me, the subscriber, a Notary
Public, personally appeared Xxxxxxx X. Xxxxxx, Xx., known to me to be the person
described in and who executed the above Extension Agreement on behalf of Colmena
Corporation as a duly authorized officer, and who acknowledged the execution
thereof to be his free act and deed.
My Commission Expires: Oct. 12, 1999
Notary Public: /s/ Xxxxxx X. Xxxxx
DEUTSCHE FINANCIAL SERVICES CORPORATION,
a Nevada Corporation
By: /s/ Senior Vic President (signature unreadable)
Name: _____________________
Title:_______________________
Page 233
