Exhibit 10.39
AGREEMENT FOR WHOLESALE FINANCING
(Unsecured -- Negative Covenant)
This Agreement for Wholesale Financing ("Agreement") is made as of February 25,
2000 between Deutsche Financial Services Corporation ("DFS") and Comteq Federal,
Inc., ______________a |_| SOLE PROPRIETORSHIP, |_| PARTNERSHIP, |xx|
CORPORATION, |_| LIMITED LIABILITY COMPANY (check applicable term) ("Dealer"),
having a principal Place of business located at 7503 Standish Place, Rockville,
MD 20855.
WHEREAS, Dealer and DFS heretofore entered into that certain Agreement for
Wholesale Financing dated July 17, 1997, as amended (the "Prior Agreement"), and
WHEREAS, Dealer has requested an unsecured credit facility from DFS; and
WHEREAS, Dealer and DFS desire to amend and restate the Prior Agreement to,
among other things, allow DFS to extend unsecured credit to Dealer.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby mutually amend and restate the Prior Agreement so that in its
entirety it reads as follows:
1. Extension of Credit. Subject to the terms of this Agreement, DFS may
extend credit to Dealer from time to time to purchase inventory from DFS
approved vendors ("Vendors") and for other purposes. Upon DFS's advance
of 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 genera1 terms of Dealer's financing arrangement with DFS. Upon
agreeing to finance a particular item of inventory for Dealer, DFS will
send Dealer a Statement of Transaction identifying such inventory and the
applicable financial terms. Unless Dealer notifies DFS in writing of any
objection within fifteen (15) days after a Statement of Transaction is
mailed to Dealer: (a) the amount shown on such Statement of Transaction
will be an account stated; (b) Dealer will have agreed to all rates,
charges and other terms shown on such Statement of Transaction; (c)
Dealer will have agreed that DFS is financing the items of inventory
referenced in such Statement of Transaction at Dealer's request; and (d)
such Statement of Transaction will be incorporated herein by reference,
will be made a part hereof as if originally set forth herein, and will
constitute an addendum hereto. If Dealer objects to the terms of any
Statement of Transaction, Dealer agrees to pay DFS for such inventory in
accordance with the most recent terms for similar inventory to which
Dealer has not objected (or, if there are no prior terms, at the lesser
of 16% per annum or at the maximum lawful contract rate of interest
permitted under applicable law), but Dealer acknowledges that DFS may
then elect to terminate Dealer's financing program pursuant to Section
16, 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. No Security Interest. Dealer has not granted, and will not in the future
grant, a security interest to any third party in any of Dealer's assets
including, but not limited to, Dealer's inventory financed by DFS (other
than as may arise by operation of law, or which are being terminated in
connection herewith, or liens on equipment which is the subject of
capital leases or purchase money indebtedness ("Permitted
Encumbrances")). Dealer has not executed, and will not execute, any
financing statements or authorize the execution of any financing
statements on Dealer's behalf.
4. Affirmative Warranties and Representations. Dealer warrants and
represents to DFS that: (a) Dealer's assets are not now and will not
become subject to the security interest, lien, encumbrance or claim of
any person, other than the Permitted Encumbrances; (b) Dealer will at all
times be duly organized, existing, in good standing, qualified and
licensed to do business in each state, county, or parish in which the
failure to so qualify or be licensed could reasonably be expected to have
a material adverse effect on Dealer's financial or business condition or
could reasonably be expected to adversely affect a material portion of
Dealer's assets (collectively, a "Material Adverse Effect"); (c) Dealer
has the right and is duly authorized to enter into this Agreement; (d)
Dealer's execution of this Agreement does not constitute a breach of any
agreement to which Dealer is now or hereafter becomes bound which could
cause a Material Adverse Effect; (e) there are and will be no actions or
proceedings pending or threatened against Dealer which could have a
Material Adverse Effect; (f) Dealer has paid and will pay when due all
taxes, levies, assessments and governmental charges of any nature except
those being contested by Dealer in good faith; (g) Dealer will promptly
supply DFS with such information concerning it or any guarantor as DFS
hereafter may reasonably request; (h) Dealer will give DFS thirty (30)
days prior written notice of any change in Dealer's identity, name, form
of business organization, ownership or principal place of business; (i)
Dealer will observe and perform all matters required by any lease,
license, concession or franchise necessary to the maintenance and
operation of its business; (j) Dealer will advise DFS of the commencement
of material legal proceedings against Dealer or any guarantor and (k)
Dealer will comply with all applicable laws and will conduct its business
in a manner which preserves and protects Dealer's assets.
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; or (b)
merge or consolidate with another entity.
6. Insurance. Dealer will keep the inventory insured for its full insurable
value under an "all risk" property insurance policy with a company
acceptable to DFS. Dealer will provide DFS with written evidence of such
property insurance coverage upon request.
7. Financial Statements. Dealer will deliver to DFS: (a) within ninety (90)
days after the end of each of Dealer's fiscal years, a reasonably
detailed balance sheet as of the last day of such fiscal year and a
reasonably detailed income statement covering the consolidated operations
of PC Connection, Inc. and its subsidiaries (including Dealer) for such
fiscal year, in a form reasonably 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 the consolidated operations of PC
Connection, Inc. and its subsidiaries (including Dealer) for such
quarter, in a form reasonably satisfactory to DFS; and (c) within ten
(10) days after request therefor by DFS, any other report reasonably
requested by DFS relating to the inventory 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 in all material respects and have been and will be prepared
in accordance with generally accepted accounting principles consistently
applied and, with respect to such previously delivered statements or
information, there has been no material adverse change in the financial
or business condition of Dealer or any guarantor since the submission to
DFS, either as of the date of delivery, or, if different, the date
specified therein, and Dealer acknowledges DFS' reliance thereon, other
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than the corporate restructuring which occurred on or about December 31,
1999 pursuant to which Dealer became a wholly-owned subsidiary of PC
Connection, Inc.
8. Reviews. Dealer grants DFS an irrevocable license to enter Dealer's
business locations during normal business hours upon 24 hours notice to
Dealer, unless Dealer is in default hereunder in which case no prior
notice to Dealer shall be required, to (a) verify Dealer's compliance
with this Agreement; (b) account for and inspect all inventory; and (c)
examine and copy Dealer's books and records related to the inventory.
9. Payment Terms. Dealer will immediately pay DFS the principal indebtedness
owed DFS on each item of inventory financed by DFS (as shown on the
Statement of Transaction identifying such inventory) on the earliest
occurrence of any of the following events: (a) for inventory financed
under Pay-As-Sold ("PAS") terms (as shown on the Statement of Transaction
identifying such inventory), when such inventory is sold, transferred,
rented, leased, otherwise disposed of or matured; (b) in strict
accordance with any curtailment schedule for such inventory (as shown on
the Statement of Transaction identifying such inventory); (c) for
inventory financed under Scheduled Payment Program ("SPP") terms (as
shown on the Statement of Transaction identifying such inventory), in
strict accordance with the installment payment schedule; and (d) when
otherwise required under the terms of any financing program agreed to in
writing by the parties. If Dealer from time to time is required to make
immediate payment to DFS of any past due obligation, Dealer agrees that
acceptance of such payment by DFS shall not be construed to have waived
or amended the terms of its financing program. 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 inventory financed by DFS,
but, in any event, all principal payments will first be applied to such
inventory 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 inventory will not
reduce the debt Dealer owes DFS until DFS has received payment therefor
in cash. Dealer will: (1) pay DFS even if any inventory is defective or
fails to conform to any warranties extended by any third party; (2) not
assert against DFS any claim or defense Dealer has against any third
party; and (3) indemnify and hold DFS harmless against all claims and
defenses asserted by any buyer of the inventory relating to the condition
of, or any representations regarding, any of the inventory. Dealer waives
all rights of offset and counterclaims Dealer may have against DFS.
10. Calculation of Charges. Dealer will pay finance charges to DFS on the
outstanding principal debt which Dealer owes DFS for each item of
inventory financed by DFS at the rate(s) shown on the Statement of
Transaction identifying such inventory, 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 inventory identified on such
Statement of Transaction until DFS receives full payment of the principal
debt Dealer owes DFS for each item of such inventory in good funds 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 inventory 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 inventory financed by DFS will be
calculated from the invoice date of such inventory, regardless of any
period during which any finance charge subsidy shall be paid or payable
by any third party. Dealer acknowledges that DFS intends to strictly
conform to the applicable usury laws
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governing this Agreement. Regardless of any provision contained herein or
in any other document executed or delivered in connection herewith or
therewith, DFS shall never be deemed to have contracted for, charged or
be entitled to receive, collect or apply as interest on this Agreement
(whether termed interest herein or deemed to be interest by judicial
determination or operation of law), any amount in excess of the maximum
amount allowed by applicable law, and, if DFS ever receives, collects or
applies as interest any such excess, such amount which would be excessive
interest will be applied first to the reduction of the unpaid principal
balances of advances under this Agreement, and, second, any remaining
excess will be paid to Dealer. In determining whether or not the interest
paid or payable under any specific contingency exceeds the highest lawful
rate, Dealer and DFS shall, to the maximum extent permitted under
applicable law: (A) characterize any non-principal payment other than
payments which are expressly designated as interest payments hereunder)
as an expense or fee rather than as interest; (B) exclude voluntary
pre-payments and the effect thereof; and (C) spread the total amount of
interest throughout the entire term of this Agreement so that the
interest rate is uniform throughout such term.
11. Billing Statement. DFS will send Dealer a monthly billing statement
identifying all charges due on Dealer's account with DFS. The charges
specified on each billing statement will be: (a) due and payable in full
immediately on receipt; and (b) an account stated, unless DFS receives
Dealer's written objection thereto within 15 days after it is mailed to
Dealer. If DFS does not receive, by the 25th day of any given month,
payment of all charges accrued to Dealer's account with DFS during the
immediately preceding month, Dealer will (to the extent allowed by law)
pay DFS a late fee ("Late Fee") equal to the greater of $5 or 5% of the
amount of such finance charges (payment of the Late Fee does not waive
the default caused by the late payment). DFS may adjust the billing
statement at any time to conform to applicable law and this Agreement.
12. Default. Dealer will be in default under this Agreement if: (a) Dealer
breaches any terms, warranties or representations contained herein, in
any Statement of Transaction to which Dealer has not objected as provided
in Section 2, or in any other agreement between DFS and Dealer; (b) any
guarantor of Dealer's debts to DFS breaches any terms, warranties or
representations contained in any guaranty or other agreement between the
guarantor and DFS; (c) any representation, statement, report or
certificate made or delivered by Dealer or any guarantor to DFS is not
accurate when made; (d) Dealer fails to pay any portion of Dealer's debts
to DFS when due and payable hereunder or under any other agreement
between DFS and Dealer; (e) Dealer or any guarantor is or becomes in
default in the payment of any debt owed to any third party in an amount
over $1,000,000; (f) a money judgment issues against Dealer or any
guarantor over $l,0000,000 in excess of insurance; (g) an attachment,
sale or seizure issues or is executed against any assets of Dealer or of
any guarantor; (h) Dealer or any guarantor shall cease existence as a
corporation, partnership, limited liability company or trust, as
applicable; (i) Dealer or any guarantor ceases or suspends business; (j)
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; (k) 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; (l) 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; (m) any guaranty of Dealer's debts to
DFS is terminated; (n) Dealer loses any franchise, permission, license or
right necessary for the operation of its business; (q) Dealer or any
guarantor misrepresents Dealer's or such guarantor's financial condition
or organizational structure in any material respect; (o) DFS determines
in good faith that it is insecure with respect to the payment of any part
of Dealer's obligation to DFS; or (p) there shall occur a material
adverse change in the financial or other condition or business prospects
of Dealer or any guarantor.
13. 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
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expenses of DFS' collection activity, including, without
limitation, all reasonable attorneys' fees; exercise any or all
rights under applicable law; and/or cease extending any additional
credit to Dealer (DFS' right to cease extending credit shall not
be construed to limit the discretionary nature of this credit
facility).
(b) DFS may, without notice, apply a default finance charge to
Dealer's outstanding principal indebtedness equal to the default
rate specified in Dealer's financing program with DFS, if any, or
if there is none so specified, at the lesser of 3% per annum above
the rate in effect immediately prior to the default, or the
highest lawful contract rate of interest permitted under
applicable law. All of DFS' rights and remedies are cumulative.
DFS' failure to exercise any of DFS' rights or remedies hereunder
will not waive any of DFS' rights or remedies as to any past,
current or future default.
14. Power of Attorney. Dealer grants DFS an irrevocable power of attorney to
supply any omitted information and correct errors in any documents
between DFS and Dealer; and to initiate and settle any insurance claim
pertaining to the inventory.
15. Information. DFS may provide to any third party upon request any credit
information on Dealer that DFS may from time to time possess or any
financial or other information on Dealer that DFS may from time to time
possess as required by law. DFS may obtain from any Vendor any credit,
financial or other information regarding Dealer that such Vendor may from
time to time possess.
16. Termination. Either party may terminate this Agreement at any time by
written notice received by the other party. If DFS terminates this
Agreement, Dealer agrees that if Dealer: (a) is not in default hereunder,
30 days prior notice of termination is reasonable and sufficient
(although this provision shall not be construed to mean that shorter
periods may not, in particular 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 DFS arising out of DFS' advances or commitments made before the
effective termination date of this Agreement. DFS will retain all of its
rights, interests and remedies hereunder until Dealer has paid all of
Dealer's debts to DFS. All waivers set forth within this Agreement will
survive any termination of this Agreement.
17. 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.
18. Notices. except as otherwise stated herein, all notices, arbitration
claims, responses, requests and documents will be sufficiently given or
served if mailed or delivered: (a) to Dealer at Dealer's principal place
of business specified above; and (b) to DFS at 655 Maryville Centre
Drive, St. Louis, Missouri 63141-5832, Attention: General Counsel, or
such other address as the parties may hereafter specify in writing.
19. 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.
20. 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.
21. 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.
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22. Supplement. If Dealer and DFS have heretofore executed other agreements
in connection with all or any part of the inventory and/or 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.
23. Receipt of Agreement. Dealer acknowledges that it has received a true and
complete copy of this Agreement. Dealer acknowledges that it has read and
understood this Agreement. Notwithstanding anything herein to the
contrary: (a) DFS may rely on any facsimile copy, electronic data
transmission or electronic data storage of this Agreement, any Statement
of Transaction (unless rejected by Dealer in accordance with Section 2
hereof), 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.
24. Miscellaneous. Time is of the essence regarding Dealer's performance of
its obligations to DFS notwithstanding any course of dealing or custom on
DFS' part to grant extensions of time. Dealer's liability under this
Agreement is direct and unconditional and will not be affected by the
release or nonperfection of any security interest granted hereunder. DFS
will have the right to refrain from or postpone enforcement of this
Agreement or any other agreements between DFS and Dealer without
prejudice and the failure to strictly enforce these agreements will not
be construed as having created a course of dealing between DFS and Dealer
contrary to the specific terms of the agreements or as having modified,
released or waived the same. The express terms of this Agreement will not
be modified by any course of dealing, usage of trade, or custom of trade
which may deviate from the terms hereof. If Dealer fails to pay any
taxes, fees or other obligations which may impair DFS' interest in the
inventory, or fails to keep the inventory insured, DFS may, but shall not
be required to, pay such taxes, fees or obligations and pay the cost to
insure the inventory, and the amounts paid will be: (a) an additional
debt owed by Dealer to DFS, which shall be subject to finance charges as
provided herein; and (b) due and payable immediately in full. Dealer
agrees to pay all of DFS' reasonable attorneys' fees and expenses
incurred by DFS in enforcing DFS' rights hereunder. The Section titles
used in this Agreement are for convenience only and. do not define or
limit the contents of any Section.
25. BINDING ARBITRATION.
25.1 Arbitrable Claims. Except as otherwise specified below, all
actions, disputes, claims and controversies under common law,
statutory law or in equity of any type or nature whatsoever
(including, without limitation, all torts, whether regarding
negligence, breach of fiduciary duty, restraint of trade, fraud,
conversion, duress, interference, wrongful replevin, wrongful
sequestration, fraud in the inducement, usury or any other tort,
all contract actions, whether regarding express or implied terms,
such as implied covenants of good faith, fair dealing, and the
commercial reasonableness of any inventory disposition, or any
other contract claim, all claims of deceptive trade practices or
lender liability, and all claims questioning the reasonableness or
lawfulness of any act), whether arising before or after the date
of this Agreement, and whether directly or indirectly relating to:
(a) this Agreement and/or any amendments and addenda hereto, or
the breach, invalidity or termination hereof; (b) any previous or
subsequent agreement between DFS and Dealer: (c) any act committed
by DFS or by any parent company, subsidiary or affiliated company
of DFS (the "DFS Companies"), or by any employee, agent, officer
or director of an DFS company whether or not arising within the
scope and course of employment or other contractual representation
of the DFS Companies provided that such act arises under a
relationship, transaction or dealing between DFS and Dealer;
and/or (d) any other relationship, transaction or dealing between
DFS and Dealer (collectively the "Disputes"), will be subject to
and resolved by binding arbitration.
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25.2 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.
25.3 Discovery. Discovery permitted in any arbitration proceeding
commenced hereunder is limited as follows. No later than sixty
(60) 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. However, in the event of the
designation of any expert witness(es), the following will occur:
(a) all information and documents relied upon by the expert
witness(es) will be delivered to the opposing party, (b) the
opposing party will be permitted to depose the expert witness(es),
(c) the opposing party will be permitted to designate rebuttal
expert witness(es), and (d) the arbitration hearing will be
continued to the earliest possible date that enables the foregoing
limited discovery to be accomplished.
25.4 Exemplary or Punitive Damages. The Arbitrator(s) will not have the
authority to award exemplary or punitive damages.
25.5 Confidentiality of Awards. All arbitration proceedings, including
testimony of evidence at hearings, will be kept confidential,
although any award or order rendered by the arbitrator(s) pursuant
to the terms of this Agreement may be entered as a judgment or
order in any state or federal court and may be confirmed within
the federal judicial district which includes the residence of the
party against whom such award or order was entered. This Agreement
concerns transactions involving commerce among the several states.
The Federal Arbitration Act, Title 9 U.S.C. Sections 1 et seq., as
amended ("FAA") will govern all arbitration(s) and confirmation
proceedings hereunder.
25.6 Prejudgment and Provisional Remedies. Nothing herein will be
construed to prevent DFS' or Dealer's use of bankruptcy,
receivership, injunction, repossession, replevin, claim and
delivery, sequestration, seizure, attachment, foreclosure, dation
and/or any other prejudgment or provisional action or remedy
relating to any inventory and/or 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.
25.7 Attorneys' Fees. If either Dealer or DFS brings any other action
for judicial relief with respect to any Dispute (other than those
set forth in Section 25.6), the party bringing such action will be
liable for and immediately pay all of the other party's reasonable
costs and expenses including attorneys' fees) incurred to stay or
dismiss such action and remove or refer such Dispute to
arbitration. If either Dealer or DFS brings or appeals an action
to vacate or modify an arbitration award and such party DFS not
prevail, such party will pay all reasonable costs and expenses,
including reasonable attorneys' fees, incurred by the other party
in defending such action.
25.8 Limitations. Any arbitration proceeding must be instituted: (a)
with respect to any Dispute for the collection of any debt owed by
either party to the other, within two (2) years after the date the
last payment was received by the instituting party; and (b) with
respect to any other Dispute, within two (2) years after the date
the incident giving rise
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thereto occurred. 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
proceedings, with respect to such Dispute.
25.9 Survival After Termination. The agreement to arbitrate will
survive the termination of this Agreement.
26. 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.
27. 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 Commonwealth of Massachusetts.
Accordingly, Dealer agrees that all Disputes will be governed by, and
construed in accordance with, the laws of such state except to the extent
inconsistent with the provisions of the FAA which shall control and
govern all arbitration proceedings hereunder.
IN WITNESS WHEREOF, Dealer and DFS have executed this Agreement as of the
date first set forth hereinabove.
THIS CONTRACT CONTAINS BINDING ARBITRATION, JURY WAIVER AND PUNITIVE DAMAGE
WAIVER PROVISIONS.
DEUTSCHE FINANCIAL SERVICES CORPORATION Comteq Federal, Inc.
-----------------------------------
Dealer's Name
By: /s/ Mark B. Schafer
-------------------------------- By: /s/ Gary Sorkin
Print Name: Mark B. Schafer --------------------------------
------------------------- Print Name: Gary Sorkin
Title: Vice President - Operations ------------------------
----------------------------- Title: President
-----------------------------
By:
--------------------------------
Print Name:
------------------------
Title:
-----------------------------
ATTEST:
/s/ Dawn M. Cranford
-----------------------------------
(Assistant) Secretary
Print Name: DAWN M. CRANFORD
------------------------
8