Exhibit 10.1

 

INVENTORY FINANCING AGREEMENT

 

This Inventory Financing Agreement (as from time to time amended and together
with any Transaction Statements, as hereinafter defined, “Agreement”) is between
Wells Fargo Commercial Distribution Finance, LLC (“Lender”), with its chief
executive office and principal place of business at 10 South Wacker Drive,
Chicago, Illinois 60606 and Asien’s Appliance, Inc., a California corporation
(“Dealer”) with its chief executive office and principal place of business at
1801 Piner Road, Santa Rosa, California 95403.

 

1. Extensions of Credit. Subject to the terms of this Agreement, Lender may
extend credit to or on behalf of Dealer from time to time to enable Dealer to
purchase inventory from Lender-approved vendors (“Vendors”) and for other
purposes. Vendor approval is an ongoing process and depends, in part, on the
total value of invoices approved by Lender with any given Vendor at any point in
time. The total value of invoices approved by Lender with a vendor is subject to
one or more maximum amounts separate from the amount of Dealer’s credit line.
Lender’s decision to advance funds is at Lender’s discretion. Lender may combine
all of Lender’s advances to Dealer or on Dealer’s behalf, whether under this
Agreement or any other agreement, whether provided by one or more of Lender’s
branch offices, and whether administered as separate sublimits, multiple
accounts, or otherwise, together with all finance charges, fees and expenses
related thereto, to constitute one debt and loan owed by Dealer. Without
limiting the discretionary nature of this credit facility, Lender may, without
notice to Dealer, elect not to finance any inventory sold by particular Vendors
who are in default to Lender, who have exceed or will exceed (if such inventory
is financed) the applicable maximum amount established for that Vendor, with
respect to which Lender reasonably feels insecure. All advances and other
transactions hereunder are for business purposes and not for personal, family,
household or any other consumer purposes.

 

2. Financing Terms. Lender and Dealer agree to set forth in this Agreement only
the general terms of Dealer’s financing arrangement with Lender as certain
financial terms depend, in part, on factors which vary from time to time,
including without limitation, the availability of Vendor discounts, payment
terms or other incentives, Lender’s floorplanning volume with Dealer and Vendor
and other economic factors. Upon agreeing to finance an item of inventory for
Dealer, Lender will transmit, send or otherwise make available to Dealer a
“Transaction Statement” which is a record that may be authenticated and which
identifies the Collateral financed and/or the advance made and the terms and
conditions of repayment of such advance. Dealer agrees that Dealer’s failure to
notify Lender in writing of any objection to a Transaction Statement within
thirty (30) days after a Transaction Statement is transmitted, sent or otherwise
made available to Dealer shall constitute Dealer’s (a) acceptance of all terms
thereof, (b) agreement that Lender is financing such inventory at Dealer’s
request, and (c) agreement that such Transaction Statement will be incorporated
herein by reference. If Dealer objects to the terms of any Transaction
Statement, Dealer will pay Lender 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), subject to
termination of this Agreement by Lender and its rights under the termination
provision contained herein. To the extent Vendor program subsidies are
applicable to Dealer’s financing program (each a “Lender Credit”), with respect
to any advance Lender makes to a Vendor on behalf of Dealer, Lender may apply
against any such amount owed to Vendor any amount Lender is owed from such
Vendor for any such Lender Credit; provided, however, in the event Vendor does
not remit any such Lender Credit, Dealer agrees to pay the full amount of such
Lender Credit.

 

3. Security Interest.

 

(a) Dealer hereby grants to Lender a security interest in all of the Collateral
as security for all Obligations.

 

(b) “Collateral” means all personal property of Dealer, whether such property or
Dealer’s right, title or interest therein or thereto is now owned or existing or
hereafter acquired or arising, and wherever located, including without
limitation, all Accounts, Inventory, Equipment, Fixtures, other Goods, General
Intangibles (including without limitation, Payment Intangibles), Chattel Paper
(whether tangible or electronic), Instruments (including without limitation,
Promissory Notes), Deposit Accounts, Investment Property and Documents and all
Products and Proceeds of the foregoing. Without limiting the foregoing, the
Collateral includes Dealer’s right to all Vendor Credits (as defined below).
Similarly, the Collateral includes, without limitation, all books and records,
electronic or otherwise, which evidence or otherwise relate to any of the
foregoing property, and all computers, disks, tapes, media and other devices in
which such records are stored. For purposes of this Section 3 only, capitalized
terms used in this Section 3, which are not otherwise defined, shall have the
meanings given to them in Article 9 of the Illinois Uniform Commercial Code.

 

(c) “Obligations” means all indebtedness and other obligations of any nature
whatsoever of Dealer to Lender, whether such indebtedness or other obligations
arise under this Agreement or any other existing or future agreement between or
among Dealer and Lender or otherwise, and whether for principal, interest, fees,
Charges, expenses, indemnification obligations or otherwise, and whether such
indebtedness or other obligations are existing, future, direct, indirect,
acquired, contractual, noncontractual, joint and/or several, fixed, contingent
or otherwise.

 

(d) “Vendor Credits” means all of Dealer’s rights to any price protection
payments, rebates, discounts, credits, factory holdbacks, incentive payments and
other amounts which at any time are due Dealer from a Vendor.

 

 

 

 

4. Representations and Warranties. Dealer represents and warrants that at the
time of execution of this Agreement and at the time of each approval and each
advance hereunder: (a) Dealer does not conduct business under any trade styles
or trade names except as disclosed by the Dealer to Lender in writing and has
all the necessary authority to enter into and perform this Agreement and Dealer
will not violate its organizational documents, or any law, regulation or
agreement binding upon it, by entering into or performing its obligations under
this Agreement; (b) Dealer will only keep Collateral at locations within the
U.S. which have been disclosed to Lender either (i) in writing prior to the
execution of this Agreement or (ii) upon thirty (30) days written notice, and,
in either case, which have been approved by Lender (“Permitted Locations”); (c)
this Agreement correctly sets forth Dealer’s true legal name, the type of its
organization (if not an individual), the state in which Dealer is incorporated
or otherwise organized, and Dealer’s organizational identification number, if
any; (d) all information supplied by Dealer to Lender, including any financial,
credit or accounting statements or application for credit, in connection with
this Agreement is true, correct and complete; (e) Dealer has good title to all
Collateral; and (f) there are no actions or proceedings pending or threatened
against Dealer which might result in any material adverse change in Dealer’s
financial or business condition.

 

5. Covenants.

 

(a) Until sold as permitted by this Agreement, Dealer shall own all Collateral
financed by Lender free and clear of all liens, security interests, claims and
other encumbrances, whether arising by agreement or operation of law
(collectively “Liens”), other than Liens in favor of Lender and subordinate
Liens in favor of other persons with respect to which Lender shall have first
consented in writing.

 

(b) Dealer will: (1) keep all Collateral at Permitted Locations and keep all
tangible Collateral safe and secure, in good order, repair and operating
condition and insured as required by Lender; (2) promptly file all tax returns
required by law and promptly pay all taxes, fees, and other governmental charges
for which it is liable, including without limitation all governmental charges
against the Collateral or this Agreement; (3) permit Lender and its designees,
without notice, to inspect the Collateral during normal business hours and at
any other time Lender deems desirable (and Dealer hereby grants Lender and its
designees an irrevocable license to enter Dealer’s business locations during
normal business hours without notice to Dealer to account for and inspect all
Collateral and to examine and copy Dealer’s books and records related to the
Collateral), and in connection with any inspection, provide Lender and its
designees safe and secure access to the Collateral and comply with any request
made by Lender or its designees to move the Collateral in order to provide such
safe and secure access; (4) keep complete and accurate records of its business,
including inventory, accounts and sales, and permit Lender and its designees to
inspect and copy such records upon request; (5) furnish Lender with such
additional information regarding the Collateral and Dealer’s business and
financial condition as Lender may from time to time reasonably request
(including without limitation financial statements and projections more
frequently than set forth below); (6) immediately notify Lender of any material
adverse change in Dealer’s prospects, business, operations or condition
(financial or otherwise) or in any Collateral; (7) execute (or cause any third
party in possession of Collateral to execute) all documents Lender requests to
perfect and maintain Lender’s security interest in the Collateral; (8) deliver
to Lender immediately upon each request by Lender (and Lender may retain) each
certificate of title or statement of origin issued for Collateral financed by
Lender; (9) at all times be duly organized, existing, in good standing,
qualified and licensed to do business in each jurisdiction in which the nature
of its business or property so requires and, when requested, provide Lender with
documentation evidencing the same; (10) notify Lender of the commencement of any
material legal proceedings against Dealer or any Guarantor (as defined below);
and (11) comply with all laws, rules and regulations applicable to Dealer,
including without limitation, the USA PATRIOT ACT and all laws, rules and
regulations relating to import or export controls or anti-money laundering.

 

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(c) Dealer will not without Lender’s prior written consent: (1) use (except for
demonstration for sale), rent, lease, sell, transfer, consign, license, encumber
or otherwise dispose of Collateral except for sales of inventory at retail in
the ordinary course of Dealer’s business; (2) engage in any other material
transaction not in the ordinary course of Dealer’s business; (3) change its
business in any material manner or its organizational structure or be a party to
a merger or consolidation or change its registration to a registered
organization other than as specified above; (4) change its name without giving
Lender at least thirty (30) days’ prior written notice thereof; (5) change the
state in which it is incorporated or otherwise organized (except upon thirty
(30) days’ prior written notice to Lender); (6) change its chief executive
office or office where it keeps its records with respect to accounts or chattel
paper; (7) finance on a secured basis with any Vendor or any third party the
acquisition of inventory of the same brand as any inventory financed or to be
financed by Lender; (8) store inventory financed by Lender with any third party;
or (9) sell or otherwise transfer inventory to a Dealer Affiliate. “Dealer
Affiliate” means any person that: (i) directly or indirectly controls, is
controlled by or is under common control with Dealer, (ii) directly or
indirectly owns 5% or more of Dealer, (iii) is a director, partner, manager, or
officer of Dealer or an affiliate of Dealer, or (iv) any natural person related
to Dealer or an affiliate of Dealer.

 

6. Insurance. All risk of loss, damage to or destruction of Collateral shall at
all times be on Dealer. Dealer shall keep tangible Collateral insured for full
value against all insurable risks under policies delivered to Lender and issued
by insurers satisfactory to Lender with loss payable to Lender. Lender is to be
provided with any written notice of cancellation or change in such policies
within two (2) Business Days of the issuance of such notice. Lender is
authorized, but not required, to act as attorney-in-fact for Dealer in adjusting
and settling any insurance claims under any such policy and in endorsing any
checks or drafts drawn by insurers. Dealer shall promptly remit to Lender in the
form received, with all necessary endorsements, all proceeds of such insurance
which Dealer may receive. Lender, at its election, shall either apply any
proceeds of insurance it may receive toward payment of the Obligations or pay
such proceeds to Dealer. For purposes of this Agreement, “Business Day” means
any day the Federal Reserve Bank of Chicago is open for the transaction of
business.

 

7. Financial Statements. Unless waived by Lender, Dealer will deliver to Lender,
in a form satisfactory to Lender (a) Dealer’s year-end balance sheet and annual
profit and loss statement for each of its fiscal years, within twenty (20) days
after the same are prepared but in no event later than one hundred twenty (120)
days after the end of each fiscal year; (b) within forty-five (45) days after
the end of each of Dealer’s fiscal quarters, a reasonably detailed balance sheet
and income statement as of the last day of such quarter covering Dealer’s
operations for such quarter; and (c) within ten (10) days after Lender’s
request, any other information relating to the Collateral or the financial
condition of Dealer or any Guarantor.

 

8. Payment Terms.

 

(a) Dealer will immediately pay Lender the principal amount of the Obligations
owed Lender on each item of Collateral financed by Lender on the earliest
occurrence of any of the following events: (i) when such Collateral is lost,
stolen or damaged; (ii) for Collateral financed under any pay-as-sold (“PAS”)
terms, when such Collateral is sold, transferred, rented, leased, otherwise
disposed of, unaccounted for, or its payment term has matured; (iii) for
Collateral financed under any scheduled payment program (“SPP”) terms, in strict
accordance with the installment payment schedule; (iv) in strict accordance with
any curtailment schedule for such Collateral; and (v) when otherwise required
under the terms of this Agreement. The PAS, SPP and curtailment terms are or may
be set forth in a Transaction Statement. Lender may apply: (1) payments to
reduce finance charges first and then principal, regardless of Dealer’s
instructions; and (2) principal payments to the oldest (earliest) invoice for
Collateral financed by Lender, but, in any event, all principal payments, may,
in Lender’s sole discretion, first be applied to such Collateral which is sold,
lost, stolen, damaged, rented, leased, or otherwise disposed of or unaccounted
for. Any payment hereunder which would otherwise be due on a day which is not a
Business Day, shall be due on the next succeeding Business Day, with such
extension of time included in any calculation of applicable finance charges.

 

(b) If Dealer (i) fails to immediately remit funds to Lender upon the maturity
of Dealer’s applicable payment terms with respect to such advance or upon the
sale, transfer, rental, lease, loss, theft, damage, or other disposition of or
inability to account for any inventory financed by Lender for Debtor (a “sale
out of trust” or “SOT”) or (ii) is required to make immediate payment to Lender
of any past due obligation discovered during any Collateral review, or at any
other time, then Lender’s acceptance of any payment with respect to such past
due obligation (whether in full or partial satisfaction of such obligation)
shall not be construed to have waived or amended the terms of its financing
program. Dealer will send all such payments to Lender as directed.

 

(c) Any Vendor Credit granted to Dealer for any Collateral will not reduce the
Obligations Dealer owes Lender until Lender has received payment therefor as set
forth below. Dealer will: (i) pay Lender even if any Collateral is defective or
fails to conform to any warranties extended by any third party; and (ii))
indemnify and hold Lender harmless against all claims and defenses asserted by
any buyer of any Collateral. Dealer waives all rights of setoff Dealer may have
against Lender. Dealer will not assert against Lender any claim or defense
Dealer may have against any Vendor and any such claims or defenses shall not
affect Dealer’s liabilities or obligations to Lender.

 

(d) Any advances which are not used to acquire inventory, as contemplated
hereby, shall be paid on demand unless otherwise provided in this Agreement or
in any Transaction Statement. In order to adequately secure Dealer’s Obligations
to Lender, Dealer shall, at Lender’s request, immediately pay Lender the amount
necessary to reduce the sum of Lender’s outstanding advances with respect to
inventory received by Dealer to an amount which does not exceed the aggregate
invoice price to Dealer of the inventory in Dealer’s possession which (i) is
financed by Lender, and (ii) in which Lender has a perfected first priority
lien.

 

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(e) All payments due by Dealer to Lender under this Agreement or otherwise shall
be made by check made on a United States bank, ACH, EDI or federal wire, in each
case drawn on an account established in the name of Dealer. Payment in any other
form may delay processing or be returned to Dealer, and may cause Dealer to
incur a late payment fee. Lender policy bars payment by cash or cash equivalents
and any such payments will be declined; Lender reserves the right to decline
other forms of payment, including but not limited to, cashier’s checks, money
orders, bank drafts, third-party checks and traveler’s checks. In the event of
any such payment decline, Dealer’s debt will remain outstanding and
interest/fees permitted under Dealer’s agreement may accrue until acceptable
payment is received. Lender will recognize and credit payments according to its
payment recognition policies from time to time in effect, or as otherwise
agreed. Information regarding Lender’s payment recognition policy is available
from Dealer’s Lender representative, the Lender website, or will be communicated
pursuant to Section 10(b) below.

 

9. Calculation of Charges.

 

(a) Dealer shall pay fees, charges and interest (collectively, “Charges”) with
respect to each advance in accordance with the Agreement. Dealer shall pay
Lender its customary Charge for any check or other item which is returned unpaid
to Lender. Unless otherwise provided in the Agreement, the following additional
provisions shall be applicable to Charges: (i) any reference to “Prime Rate,”
“One month Libor,” and/or “Three Month Libor” shall mean, for any calendar
month, an interest rate (calculated on a 360-day year basis as set forth herein)
equal to the highest “prime rate,” “One month Libor,” and/or “Three month Libor”
rate, respectively, as published in the “Money Rates” column of The Wall Street
Journal on the first Business Day of such month; If for any reason such rate is
no longer published in The Wall Street Journal, Lender shall select such
replacement index as Lender in its sole discretion determines most closely
approximates such rate; (ii) all Charges shall be paid by Dealer monthly
pursuant to the terms of the billing statement in which such Charges appear;
(iii) interest on each advance and principal amount of the Obligations related
thereto shall be computed for any period by dividing the interest rate provided
in each applicable Transaction Statement by 360 (the quotient of which is herein
referred to as the “Daily Rate”), and then multiplying the Daily Rate by either
(A) the average principal balance outstanding during such period, or (B) the
actual principal balance outstanding on each day during such period; (iv)
interest on an advance shall begin to accrue on the Start Date, which shall be
defined as the earlier of: (A) the invoice date referred to in the Vendor’s
invoice; or (B) the ship date referred to in the Vendor’s invoice; or (C) the
date Lender makes such advance; provided, however, if a Vendor fails to fully
pay, by honoring or paying any Lender Credit or otherwise, the interest or other
cost of financing such inventory during the period between the Start Date and
the end of the Free Floor Period (as defined below), then Dealer shall pay such
interest to Lender on demand as if there were no Free Floor Period with respect
to such inventory; (v) for the purpose of computing Charges, any payment will be
credited pursuant to Lender’s payment recognition policies, as in effect from
time to time; (vi) advances or any part thereof not paid when due (and Charges
not paid when due, at the option of Lender, shall become part of the principal
amount of the Obligations and) shall bear interest at the Default Rate (as
defined below); and (vii) all interest rates provided or referenced in
Transaction Statements, including all references to base rate, prime rate and
additions to base rate or prime rate, are provided and referenced on the basis
of a 360-day year. The method of calculating interest provided in this Section
9(a) (i.e., the interest rate calculated based on a year of 360 days, for the
actual number of days elapsed) will result in a higher effective rate than the
quoted numeric rate provided in the Transaction Statement. For purposes of this
Agreement, the following definitions shall apply: “Default Rate” shall mean the
default rate specified in Dealer’s financing program with Lender, 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; “Free Floor Period ” shall mean a
period equal to the number of days during which a Vendor agrees to assume the
cost of financing Collateral purchased by Dealer by granting Lender a Lender
Credit.

 

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(b) Lender intends to strictly conform to the usury laws governing this
Agreement. Regardless of any provision contained herein, in any Transaction
Statement, or in any other document, Lender shall never be deemed to have
contracted for, charged or be entitled to receive, collect or apply as interest,
any amount in excess of the maximum amount allowed by applicable law. If Lender
ever receives any amount which, if considered to be interest, would exceed the
maximum amount permitted by law, Lender will apply such excess amount to the
reduction of the unpaid principal balance which Dealer owes, and then will pay
any remaining excess to Dealer. In determining whether the interest paid or
payable exceeds the highest lawful rate, Dealer and Lender shall, to the maximum
extent permitted under applicable law, (1) 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, (2) exclude voluntary
pre-payments and the effect thereof, and (3) spread the total amount of interest
throughout the entire term of this Agreement so that the interest rate is
uniform throughout such term. Dealer agrees to pay an effective rate of interest
that is the sum of (i) the interest rate provided in this Agreement, including
as provided in each accepted Transaction Statement, as may be amended as
provided herein; and (ii) any additional rate of interest resulting from any
other charges or fees paid or to be paid by Dealer pursuant to this Agreement
and that are determined to be interest or in the nature of interest.

 

(c) If a Benchmark Transition Event (as defined below) occurs, Lender may (1)
replace the One month Libor and/or Three month Libor with (i) an alternate rate
of interest that has been selected by Lender as the replacement for One month
Libor or Three month Libor, as applicable, which rate may be, without
limitation, a forward-looking term rate based on the secured overnight financing
rate (“SOFR”) published by the Federal Reserve Bank of New York or the Prime
Rate or another benchmark selected by Lender, plus (ii) a spread adjustment
selected by Lender (collectively, the “Benchmark Replacement”), and (2) make
technical, administrative and/or operational changes, including without
limitation, (i) the margins or adders which may, from time to time, be added to
the Benchmark Replacement, (ii) the timing and frequency of determining rates,
and (iii) the payment of interest or other Charges and other administrative
matters as may be, in each case, appropriate, in the sole discretion of Lender,
to reflect the adoption of the Benchmark Replacement and to permit the
administration thereof by Lender in such manner as Lender may determine
(collectively, the “Benchmark Replacement Conforming Changes”). The Benchmark
Replacement shall replace all references to the One month Libor or Three month
Libor, as applicable, and the Benchmark Replacement Conforming Changes shall
become effective, on the date(s) set forth in a written notice thereof to Dealer
(the “Benchmark Replacement Notice”) without any amendment or other modification
to the Agreement and without any further action or consent of Dealer and/or any
other person or entity; and, for the avoidance of doubt, the Benchmark
Replacement and the Benchmark Replacement Conforming Changes shall be effective
with respect to all then outstanding Obligations, as well as any and all
Obligations arising thereafter. A “Benchmark Transition Event” means the
occurrence of one or more of the following events with respect to One month
Libor or Three month Libor: (a) a public statement or publication of information
by or on behalf of the administrator of One month Libor or Three month Libor, or
any successor administrator (collectively, “Benchmark Administrator”) or a
regulatory supervisor for or any insolvency or resolution official with
authority over the Benchmark Administrator announcing that: (i) the Benchmark
Administrator has ceased or will cease to provide One month Libor or Three month
Libor, permanently or indefinitely; or (ii) One month Libor or Three month Libor
is no longer representative of underlying markets; or (b) notice is provided by
Lender to Dealer of Lender’s intention to adopt a new benchmark to replace One
month Libor or Three month Libor; or (c) entrance by Lender and Dealer into a
written agreement to adopt a new benchmark to replace One month Libor or Three
month Libor.

 

10. Billing Statement/Fees; Right to Modify Charges and Other Terms.

 

(a) Lender will transmit, send or otherwise make available to Dealer a monthly
billing statement identifying all charges due on Dealer’s account with Lender.
The charges specified on each billing statement will be (1) due and payable in
full immediately on receipt, unless otherwise stated in writing in your billing
statement, transaction statement or other written document provided by Lender,
and (2) an account stated, unless Lender receives Dealer’s written objection
thereto within fifteen (15) days after it is transmitted, sent or otherwise made
available to Dealer. If Lender does not receive, by the 25th day of any given
month, payment of all charges accrued to Dealer’s account with Lender during the
immediately preceding month, Dealer will (to the extent allowed by law) pay
Lender a late fee equal to the greater of $5 or 5% of the amount of such charges
(payment of such fee does not waive the default caused by the late payment).
Lender may adjust the billing statement at any time to conform to applicable law
and this Agreement.

 

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(b) Lender may charge one or more fees in connection with the servicing and
administration of Dealer’s account. From time to time, Lender may provide
written notice to Dealer of new or changed fees, interest and/or other finance
charges (including without limitation, increases or decreases in the periodic
rate or amount of finance charges, the method of computing finance charges and
when and how finance charges, and principal payments, are payable), policies,
practices and other charges and/or credit terms (collectively, “Fees and Terms”)
payable by, or applicable to, Dealer or relating to Dealer’s account generally,
or in connection with specific services, or events, to be effective as of the
notice date, or such other future effective date as Lender shall advise, with
respect to existing Obligations owing by Dealer to Lender and/or to Obligations
incurred or arising after such notice or future effective date, as the case may
be, all as Lender may elect by so indicating in such notice. Such notice may be
delivered by mail, courier or electronically in a separate writing or website
posting, or set forth in the Transaction Statement and/or the billing statement.
Dealer shall be deemed to have accepted such Fees and Terms by either (1) making
any request for financing after the effective date of such notice, or (2)
failing to notify Lender in writing of any objection to a Transaction Statement,
billing statement or written notice advising of such Fees and Terms within
fifteen (15) days after such notice has been sent to Dealer. If Dealer objects
to the Fees and Terms, such Fees and Terms shall not be imposed, but Lender may
charge or implement the last Fees and Terms to which Dealer has not objected,
and may elect to terminate Dealer’s financing program.

 

11. Default. The occurrence of one or more of the following events shall
constitute a default by Dealer (a “Default”): (a) Dealer shall fail to pay any
Obligations hereunder or other amounts, however or wherever documented, owed to
Lender or to any person that at any time directly or indirectly controls, is
controlled by, or is under common control with Lender (a “Lender Affiliate”)
when due or any remittance for any such Obligations or such other amounts is
dishonored when first presented for payment; (b) any representation made to
Lender by Dealer or by any guarantor, surety, issuer of a letter of credit or
any person other than Dealer primarily or secondarily liable with respect to any
Obligations (a “Guarantor”) shall not be true when made or if Dealer or any
Guarantor shall breach any covenant, warranty or agreement to or with Lender;
(c) Dealer (including, if Dealer is a partnership or limited liability company,
any partner or member of Dealer) or any Guarantor shall die, become insolvent or
generally fail to pay its debts as they become due or, if a business, shall
cease to do business as a going concern; (d) any letter of credit or other form
of collateral provided by Dealer or a Guarantor to Lender with respect to any
Obligations or Collateral shall terminate or not be renewed at least sixty (60)
days prior to its stated expiration or maturity; (e) Dealer abandons any
Collateral; (f) any Guarantor shall revoke, terminate or limit, or take any
action purporting to revoke, terminate or limit, any guaranty or other assurance
of payment relating to any Obligations; (g) Dealer or any Guarantor shall make
an assignment for the benefit of creditors, or commence a proceeding with
respect to itself under any bankruptcy, reorganization, arrangement, insolvency,
receivership, dissolution or liquidation statute or similar law of any
jurisdiction, or any such proceeding shall be commenced against it or any of its
property (an “Automatic Default”); (h) an attachment, sale or seizure shall be
issued or shall be executed against any assets of Dealer or of any Guarantor;
(i) Dealer shall lose, or shall be in default of, any franchise, license or
right to deal in any Collateral which Lender finances; (j) Dealer, Guarantor or
any third party shall file any correction or termination statement with respect
to any Uniform Commercial Code (the “UCC”) filing made by Lender in connection
herewith; (k) a material adverse change shall occur in the business, operations
or condition (financial or otherwise) of Dealer (including, if Dealer is a
partnership or limited liability company, any partner or member of Dealer) or
any Guarantor or with respect to the Collateral; (l) Dealer or any Guarantor
fails to pay any debt or perform any other obligation owed to any third party;
(m) Dealer or any Guarantor defaults under the terms of any agreement with any
Lender Affiliate; or (n) Lender in good faith believes the prospect of payment
of any Obligations is impaired or Lender deems itself insecure.

 

6

 

 

12. Rights and Remedies Upon Default. Upon the occurrence of a Default, Lender
shall have all rights and remedies of a secured party under the UCC as in effect
in any applicable jurisdiction and other applicable law and all the rights and
remedies set forth in this Agreement. Lender may terminate any obligations it
has under this Agreement and any outstanding credit approvals immediately and/or
declare any and all Obligations immediately due and payable without notice or
demand. Dealer waives notice of intent to accelerate, and of acceleration of any
Obligations. Lender may enter any premises of Dealer, with or without process of
law, without force, to search for, take possession of, and remove the
Collateral, or any part thereof. If Lender requests, Dealer shall cease
disposition of and shall assemble the Collateral and make it available to
Lender, at Dealer’s expense, at a convenient place or places designated by
Lender. Lender may take possession of the Collateral or any part thereof on
Dealer’s premises and cause it to remain there at Dealer’s expense, pending sale
or other disposition. Dealer agrees that the sale of inventory by Lender to a
person who is liable to Lender under a guaranty, endorsement, repurchase
agreement or the like shall not be deemed to be a transfer subject to UCC §9-618
or any similar provision of any other applicable law, and Dealer waives any
provision of such laws to that effect. Dealer agrees that the repurchase of
inventory by a Vendor pursuant to a repurchase agreement with Lender shall be a
commercially reasonable method of disposition. Dealer shall be liable to Lender
for any deficiency resulting from Lender’s disposition, including without
limitation a repurchase by a Vendor, regardless of any subsequent disposition
thereof. Dealer is not a beneficiary of, and has no right to require Lender to
enforce, any repurchase agreement. If Dealer fails to perform any of its
obligations under this Agreement, Lender may perform the same in any form or
manner Lender in its discretion deems necessary or desirable, and all monies
paid by Lender in connection therewith shall be additional Obligations and shall
be immediately due and payable without notice together with interest payable on
demand at the Default Rate. All of Lender’s rights and remedies shall be
cumulative. At Lender’s request, or without request in the event of an Automatic
Default, Dealer shall pay all Vendor Credits to Lender as soon as the same are
received for application to the Obligations. Dealer authorizes Lender to collect
such amounts directly from Vendors and, upon request of Lender, shall instruct
Vendors to pay Lender directly. Dealer irrevocably waives any requirement that
Lender retain possession and not dispose of any Collateral until after trial or
final judgment or appeal thereof. Lender’s election to extend or not extend
credit to Dealer is solely at Lender’s discretion and does not depend on the
absence or existence of a Default. If a Default is in effect, and without regard
to whether Lender has accelerated any Obligations, Lender may, without notice,
apply the Default Rate.

 

13. Power of Attorney. Dealer authorizes Lender to: (a) file financing
statements and amendments thereto describing Lender as “Secured Party,” Dealer
as “Debtor” and indicating the Collateral; (b) authenticate, execute or endorse
on behalf of Dealer any instruments, chattel paper, certificates of title,
manufacturer statements of origin, builder’s certificate, or other notices or
records comprising or related to Collateral or evidencing financing under the
Agreement or evidencing or maintaining the perfection of the security interest
granted hereby, as attorney-in-fact for Dealer; and (c) supply any omitted
information and correct errors in any documents between Lender and Dealer. This
power of attorney and the other powers of attorney granted herein are
irrevocable and coupled with an interest.

 

14. Collection and Other Costs. In the event of a Default, Dealer shall pay to
Lender on demand all reasonable attorneys’ fees and legal expenses and other
costs and expenses incurred by Lender in connection with establishing,
perfecting, maintaining perfection of, protecting and enforcing its Lien on the
Collateral and collecting any Obligations, or in connection with any
modification of this Agreement, any Default or in connection with any action or
proceeding for possession or under any receivership, assignment for benefit of
creditors, bankruptcy or other insolvency laws (including, without limitation,
filing a proof of claim, motion for stay relief or monitoring such proceeding
under any such laws to the full extent permitted under such law), involving the
Dealer, any Guarantor or any Collateral. All fees, expenses, costs and other
amounts described in this Section shall constitute Obligations, shall be secured
by the Collateral and interest shall accrue thereon at the Default Rate.

 

15. Information.

 

(a) To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account. When
Dealer opens an account, Lender will ask for the name(s), address(es), date(s)
of birth, and other information that will allow Lender to identify Dealer, and
its owner(s) and Guarantor(s) as applicable. Lender may also ask to see driver’s
licenses or other identifying documents related to Dealer, and its owner(s) and
Guarantors as applicable. Failure to comply with such requests will constitute a
Default under the Agreement.

 

(b) Dealer irrevocably authorizes Lender to investigate and make inquiries of
former, current, or future creditors or other persons and credit bureaus
regarding or relating to Dealer (including, to the extent permitted by law, any
equity holders of Dealer). Lender may provide to any Lender Affiliate or any
third parties any financial, credit or other information regarding Dealer
(including, to the extent permitted by law, any equity holders of Dealer) that
Lender may at any time possess, whether such information was supplied by Dealer
to Lender or otherwise obtained by Lender. Further, Dealer irrevocably
authorizes and instructs any third parties (including without limitation, any
Vendors or customers of Dealer) to provide to Lender any credit, financial or
other information regarding Dealer that such third parties may at any time
possess.

 

16. Termination. Unless sooner terminated as provided in this Agreement or by at
least thirty (30) days prior written notice from either party to the other, the
term of this Agreement shall be for one (1) year from the date hereof and from
year to year thereafter; provided, however, that Lender may terminate the
Agreement immediately by notice to Dealer if Dealer objects to any terms of any
Transaction Statement, billing statement or written notice advising of Fees and
Terms. Upon termination of the Agreement, all Obligations shall become
immediately due and payable without notice or demand. Upon any termination,
Dealer shall remain fully liable to Lender for all Obligations arising prior to
or after termination, and all of Lender’s rights and remedies and its security
interest shall continue until all Obligations to Lender are paid and all
obligations of Dealer are performed in full. If Lender makes advances in
reliance on a repurchase agreement from a Vendor, it may cease making such
advances if it has any concern as to whether such repurchase agreement will
cover future advances or be performed by such Vendor. No provision of the
Agreement shall be construed to obligate Lender to make any advances. All
waivers and indemnifications in Lender’s favor set forth in this Agreement will
survive any termination of this Agreement.

 

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17. Binding Effect. Dealer cannot assign its interest in this Agreement without
Lender’s prior written consent. Lender may assign or participate Lender’s
interest, in whole or in part, without Dealer’s consent. This Agreement will
protect and bind Lender’s and Dealer’s respective heirs, representatives,
successors and assigns, as the case may be.

 

18. Notices. Except as required by law or as otherwise provided herein, all
notices or other communications to be given under the Agreement or under the UCC
shall be in writing served either personally, by overnight courier, or by U.S.
mail, addressed to Dealer at its chief executive office shown below or to any
office to which Lender sends billing statements, or to Lender at its address
shown in the preamble hereto, to the attention of its Credit Department, or at
such other address designated by such party by notice to the other. Any such
communication shall be deemed to have been given upon delivery in the case of
personal delivery, one Business Day after deposit with an overnight courier or
two (2) calendar days after deposit in the U.S. mail, except that any notice of
change of address shall not be effective until actually received.

 

19. Severability. Except as set forth in Sections 22(e) and 22(k) of this
Agreement, 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.

 

20. Miscellaneous. Time is of the essence regarding Dealer’s performance of its
obligations to Lender. Lender may accept this Agreement by issuance of an
approval to a Vendor for the purchase of inventory by Dealer or by making an
advance hereunder. Dealer’s liability to Lender is direct and unconditional and
will not be affected by the release or nonperfection of any security interest
granted hereunder. Lender may refrain from or postpone enforcement of this
Agreement or any other agreements between Lender and Dealer without prejudice,
and the failure to strictly enforce these agreements will not create a course of
dealing which waives, amends or modifies such agreements. Any waiver by Lender
of a Default shall only be effective if in writing signed by Lender and
transmitted to Dealer. 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 Lender’s interest in the Collateral, or fails to
keep any Collateral insured, Lender may, but shall not be required to, pay such
amounts. Such paid amounts will be: (a) additional Obligations which Dealer owes
to Lender, which are subject to finance charges as provided herein and shall be
secured by the Collateral; and (b) due and payable immediately in full. Section
titles used herein are for convenience only, and do not define or limit the
contents of any Section. All words used herein shall be understood and construed
to be of such number and gender as the circumstances may require. This Agreement
may be validly executed in one or more multiple counterpart signature pages.
Notwithstanding anything herein to the contrary, Lender may rely on any
facsimile copy, electronic data transmission, or electronic data storage of:
this Agreement, any Transaction Statement, billing statement, financing
statement, authorization to pre-file financing statements, invoice from a
Vendor, financial statements or other reports, which will be deemed an original,
and the best evidence thereof for all purposes. This Agreement shall be
construed without presumption for or against any party who drafted all or any
portion of this Agreement. No modification of this Agreement shall bind Lender
unless in a writing signed by Lender and transmitted to Dealer. Among other
symbols, Lender hereby adopts “Wells Fargo Commercial Distribution Finance,
LLC,” “Wells Fargo Commercial Distribution Finance” or “Lender” as evidence of
its intent to authenticate a record.

 

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21. Limitation of Remedies and Damages. In the event there is any dispute under
this Agreement, the aggrieved party shall not be entitled to exemplary or
punitive damages so that the aggrieved party’s remedy in connection with any
action arising under or in any way related to this Agreement shall be limited to
a breach of contract action and any damages in connection therewith are limited
to actual and direct damages, except that Lender may seek equitable relief in
connection with any judicial repossession of, or temporary restraining order
with respect to, the Collateral.

 

22. BINDING ARBITRATION.

 

THIS SECTION CONTAINS A BINDING ARBITRATION CLAUSE THAT MAY AFFECT HOW YOU
RESOLVE DISPUTES.

 

(a) Arbitrable Claims. 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”) shall govern all arbitration(s) and confirmation
proceedings hereunder. 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, whether arising before or after the date of
this Agreement, and whether directly or indirectly arising from or 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 Lender and Dealer; (c) any act committed by Lender or by any parent
company, subsidiary or affiliated company of Lender (the “Lender Companies”), or
by any employee, agent, officer or director of a Lender Company, whether or not
arising within the scope and course of employment or other contractual
representation of the Lender Companies, provided that such act arises under a
relationship, transaction or dealing between Lender and Dealer; and/or (d) any
other relationship, transaction or dealing between Lender and Dealer
(collectively the “Disputes”), will be subject to and resolved by binding
arbitration. The arbitrator(s) shall decide whether the parties have agreed to
arbitrate, and whether this binding arbitration section covers, the particular
Dispute between the parties. Notwithstanding the foregoing, “Disputes” does not
include any dispute or controversy about the validity or enforceability of this
Binding Arbitration provision or any part thereof (including, without
limitation, the Class Action Waiver set forth below and/or this sentence); all
such disputes or controversies are for a court and not an arbitrator to decide.
However, any dispute or controversy that concerns the validity or enforceability
of the Agreement as a whole is for the arbitrator, not a court, to decide. For
the avoidance of doubt, if there is any conflict or inconsistency between this
Binding Arbitration provision and any other arbitration provision in any
previous or subsequent agreement between Lender and Dealer (other than a
subsequently executed Inventory Financing Agreement), the parties agree this
Binding Arbitration provision shall control and supersede any such other
arbitration provision. Moreover, the parties agree that either party may pursue
individual claims against the other that do not exceed Seventy-Five Thousand
Dollars ($75,000.00) in the aggregate through litigation as set forth hereafter.
Service of arbitration claims, arbitration pleadings and confirmation pleadings
or motions shall be effective if made by U.S. mail or overnight delivery to the
address for the party described herein. Any change of address for purposes of
service must be served by written notification to the other party at the address
listed in this Agreement. The parties also agree that service on a party’s
registered agent in the state where the party is organized is proper and
effective service on that party.

 

(b) Administrative Body. All arbitration hereunder will be conducted with
either: (1) The American Arbitration Association (“AAA”) pursuant to its
Commercial Arbitration Rules; (2) United States Arbitration & Mediation
(“USA&M”) pursuant to its Consolidated Arbitration Rules; or (3) JAMS pursuant
to its Streamlined Arbitration Rules & Procedures (exclusive in each case of any
rules regarding class action proceedings which are prohibited hereunder). The
party first filing an arbitration claim shall designate which arbitration forum
and rules are to be applied for all Disputes between the parties. The
arbitration rules are currently found at www.adr.org for AAA, at
www.usam-midwest.com for USA&M and at jamsadr.com for JAMS. AAA claims may be
filed in any AAA office. Claims filed with USA&M shall be filed in its Midwest
office located at 720 Olive Street, Suite 2020, St. Louis, Missouri 63101.
Claims filed with JAMS shall be filed in its Chicago office located at 71 S.
Wacker Drive, Suite 3090, Chicago, Illinois 60606. If neither AAA, USA&M nor
JAMS is willing or able to serve as the arbitration administrator, and the
parties are unable to agree upon a substitute arbitrator, then the arbitrator
will be selected by the court. All arbitrator(s) selected shall be attorneys
with at least five (5) years experience in either secured transactions,
bankruptcy or creditor’s rights. All arbitrations shall be conducted by one
arbitrator except as specifically set forth below or unless all parties agree
otherwise. For all individual claims exceeding Two Million Dollars
($2,000,000.00), exclusive of interest, costs and attorney’s fees, a party may
demand that the arbitration be conducted by a panel of three (3) arbitrators
instead of one arbitrator; provided that the requesting party shall pay all
costs and arbitrator compensation associated with the additional two
arbitrators. The parties shall select the arbitrator(s) using the procedures set
forth in the arbitration rules of the applicable arbitral forum. The
arbitrator(s) shall decide if any inconsistency exists between the rules of the
applicable arbitral forum and the arbitration provisions contained herein. If
such inconsistency exists, the arbitration provisions contained herein shall
control and supersede such rules. The arbitrator(s) shall follow the terms of
this Agreement and the applicable law, including without limitation, the
attorney-client privilege and the attorney work product doctrine.

 

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(c)   Hearings. The parties desire to resolve any Disputes that may arise in the
most efficient and cost-effective manner. With this desire in mind, each party
hereby consents to a documentary hearing for all arbitration claims by
submitting the Dispute to the arbitrator(s) by written briefs and affidavits,
along with relevant documents. However, arbitration claims will be submitted by
way of an oral hearing if any party submits a written request for an oral
hearing within forty (40) days after service of the claim and that party remits
the appropriate deposit for their assessed share of the increased costs, fees
and arbitrator compensation (as decided and billed by the administrator) that
result from an oral hearing within ten (10) days of when those fees are due.
Each party agrees that failure to timely pay all fees and arbitrator
compensation billed to the party requesting the oral hearing will be deemed such
party’s consent to submitting the Dispute to the arbitrator(s) on documents and
such party’s waiver of its request for an oral hearing. If a party shall
demonstrate through affidavits, financial statements and tax returns produced to
the arbitrator and other parties that it does not have the ability to pay the
fees and arbitrator compensation, that party may request that the fees and
arbitrator compensation be waived and assessed after a decision is rendered. The
site of all oral arbitration hearings will be in the Division of the Federal
Judicial District in which the designated arbitration association maintains a
regional office that is closest to Dealer or in Chicago, Illinois.

 

(d) Discovery. In an effort to reduce costs for all parties and except as
otherwise provided, the use of interrogatories, requests for admission, requests
for the production of documents or the taking of depositions shall not be
permitted. Instead, the parties agree that in any arbitration proceeding
commenced hereunder, they shall engage in a limited exchange of information and
documents as follows: (1) no later than sixty (60) days after the filing and
service of a claim for arbitration, the parties in contested cases shall
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; (2) upon request, a party shall provide a summary of the proposed
testimony of any witness within fourteen (14) days of the request; (3) in cases
of extraordinary circumstances and for good cause shown, the arbitrator(s) may
allow a party to make a limited request for production of documents; (4) no
later than twenty-one (21) days prior to the oral 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; (5) in the event a party designates any expert
witness(es), the following will apply: (i) all information and documents relied
upon by the expert witness(es) will be delivered to the opposing party; (ii) the
opposing party will be permitted to depose the expert witness(es); (iii) the
opposing party will be permitted to designate rebuttal expert witness(es); and
(iv) the arbitration hearing will be continued to the earliest possible date
that enables the foregoing limited discovery to be accomplished; (6) in cases
where the amount of the individual Dispute or any individual counterclaim is in
excess of Two Million Dollars ($2,000,000.00), exclusive of interest, costs and
attorney’s fees, the parties agree that the following additional discovery and
motion practice shall be permitted: (i) up to three depositions per side with
each lasting no more than seven hours; and (ii) dispositive motions including,
but not limited to, motions for summary judgment; the arbitrator shall be
authorized to rule on any dispositive motion filed. The arbitrator shall have
the power to resolve any Disputes with regard to the above limited exchange of
information and documents.

 

10

 

 

(e) EXEMPLARY OR PUNITIVE DAMAGES. DEALER AND LENDER AGREE THAT BY ENTERING INTO
THIS AGREEMENT, DEALER AND LENDER WAIVE THEIR RIGHT TO SEEK EXEMPLARY OR
PUNITIVE DAMAGES AND FURTHER AGREE THAT THE ARBITRATOR(S) SHALL NOT HAVE THE
AUTHORITY TO AWARD EXEMPLARY OR PUNITIVE DAMAGES TO ANY PARTY. IF THIS SPECIFIC
PROVISION IS FOUND TO BE INVALID OR UNENFORCEABLE, THEN THE ENTIRETY OF THIS
BINDING ARBITRATION SECTION SHALL BE NULL AND VOID WITH RESPECT TO SUCH
PROCEEDING, SUBJECT TO THE RIGHT TO APPEAL THE LIMITATION OR INVALIDATION OF
THIS PROVISION.

 

(f) Confidentiality/Confirmation 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 confirmed as a judgment or order in any state or federal court
of competent jurisdiction as set forth hereinbelow and pursuant to the FAA.

 

(g) Prejudgment and Provisional Remedies. Notwithstanding the foregoing, any
party may file, in a court of competent jurisdiction, an action for bankruptcy,
receivership, injunction, repossession, replevin, claim and delivery,
sequestration, seizure, attachment, foreclosure, and/or any other prejudgment or
provisional action or remedy relating to any Collateral or to preserve a party’s
assets for any current or future debt owed by either party to the other. The
purpose of such action or remedy is solely the protection of a party’s rights,
to maintain the status quo pending the confirmation of any award arising in
arbitration or for possession of Collateral and not for the award of money
damages. Arbitration shall be the sole action and remedy for a party to recover
money damages, except as otherwise provided herein. The filing of any such
action or remedy shall not waive any party’s right to compel arbitration of any
Dispute.

 

(h) Attorneys’ Fees. The arbitrator(s) shall have the authority to award all
attorney’s fees, interest charges and expenses as set forth in this Agreement,
in accordance with applicable law, including, but not limited to, the following
events: (a) either party brings any other action for judicial relief with
respect to any Dispute, the arbitrator(s) shall have the authority to award all
costs and expenses (including attorneys’ fees) incurred to stay or dismiss such
action and remove or refer such Dispute to arbitration; (b) either party brings
or appeals an action to vacate or modify an arbitration award, the arbitrator(s)
shall have the authority to award all costs and expenses(including attorneys’
fees) incurred in defending such action; and/or (c) either party sues the other
party or institutes any arbitration claim or counterclaim against the other
party, the arbitrator(s) shall have the authority to award all costs and
expenses (including attorneys’ fees) incurred in the course of defending such
action or proceeding.

 

(i) 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 by or on behalf of the
payor was received and applied in respect of such debt by the payee; and (b)
with respect to any other Dispute, within two (2) years after the date the
incident giving rise thereto occurred, whether or not any damage was sustained
or capable of ascertainment or either party knew of such incident. Failure to
institute an arbitration proceeding within such period will constitute an
absolute bar and waiver to the institution of any proceeding, whether
arbitration or a court proceeding, with respect to such Dispute. Notwithstanding
the foregoing, this limitations provision will be suspended temporarily as of
the date any of the following events occur and will not resume until the date
following the date either party is no longer subject to (i) bankruptcy, (ii)
receivership, (iii) any proceeding regarding an assignment for the benefit of
creditors, or (iv) any legal proceeding, civil or criminal, that prohibits
either party from foreclosing any interest it might have in the collateral of
the other party.

 

(j) Survival After Termination. The agreement to arbitrate will survive the
termination of this Agreement.

 

(k) CLASS ACTION WAIVER. DEALER AND LENDER AGREE THAT BY ENTERING INTO THIS
AGREEMENT, DEALER AND LENDER WAIVE THEIR RIGHT TO PARTICIPATE IN A CLASS ACTION,
PRIVATE ATTORNEY GENERAL ACTION OR OTHER REPRESENTATIVE ACTION AGAINST THE OTHER
IN A COURT OR IN ARBITRATION. DEALER AND LENDER FURTHER AGREE THAT EACH MAY
BRING DISPUTES AGAINST EACH OTHER ONLY IN THEIR INDIVIDUAL CAPACITY AND NOT AS A
PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING.
Further, unless both Dealer and Lender agree otherwise, arbitration claims may
not be joined or consolidated in the arbitration proceeding. In no event shall
the arbitrator have authority to preside over any form of representative or
class proceeding or to issue any relief that applies to any person or entity
other than Dealer and/or Lender individually. If this Class Action Waiver is
found to be invalid or unenforceable in whole or in part, then the entirety of
this Binding Arbitration section (except for this sentence) shall be null and
void with respect to such proceeding, subject to the right to appeal the
limitation or invalidation of the Class Action Waiver.

 

23. Governing Law. All Disputes will be governed by, and construed in accordance
with, the laws of Illinois without regard to the conflict of law rules, except
to the extent inconsistent with the provisions of the FAA, which will control
and govern all arbitration proceedings hereunder.

 

24. WAIVER OF RIGHT TO JURY TRIAL. ANY PROCEEDING WITH RESPECT TO ANY DISPUTE
THAT IS TRIED IN COURT, INCLUDING ANY DISPUTE TRIED IN COURT AS A RESULT OF ANY
PORTION OF THE AGREEMENT TO ARBITRATE BEING FOUND TO BE UNENFORCEABLE, INVALID,
OR WAIVED BY THE PARTIES, WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY
A JUDGE WITHOUT A JURY. DEALER AND LENDER WAIVE ANY RIGHT TO A JURY TRIAL IN ANY
SUCH PROCEEDING.

 

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25. JURISDICTION AND VENUE. Each party submits to, consents to, and accepts the
following courts’ personal jurisdiction over the party and the selection of such
courts as the exclusive forum for all litigation:

 

(a) Confirming, Vacating, Modifying or Correcting Awards – All litigation
regarding confirming, vacating, modifying or correcting an arbitration award
shall be brought exclusively in (1) any state or federal court of competent
jurisdiction within the federal judicial district wherein the award was made or
which includes the residence of the party against whom such award or order was
entered, or (2) in the United States District Court for the Northern District of
Illinois, or (3) in the Circuit Court of Cook County, Illinois.

 

(b) Prejudgment and Provisional Remedies - All litigation regarding Prejudgment
and Provisional remedies shall be brought exclusively in any court (1) where the
Dealer is located, (2) where the Collateral is located, (3) the United States
District Court for the Northern District of Illinois, or (4) the Circuit Court
of Cook County, Illinois.

 

(c)   All Other Disputes - Any other legal proceeding with respect to any
Dispute that is not otherwise subject to arbitration, either because the
agreement to arbitrate is found to be unenforceable, is found to be invalid, or
is waived by the parties, shall be brought exclusively in the United States
District Court for the Northern District of Illinois or the Circuit Court of
Cook County, Illinois.

 

THIS CONTRACT CONTAINS BINDING ARBITRATION, CLASS ACTION WAIVER, JURY WAIVER,
PUNITIVE DAMAGE WAIVER AND OTHER PROVISIONS THAT LIMIT DEALER’S RIGHTS. DEALER
HAS READ THE TERMS AND CONDITIONS OF THIS CONTRACT AND KNOWINGLY AND VOLUNTARILY
AGREES THERETO.

 

Dated: September 25, 2020.

 

DEALER: ASIEN’S APPLIANCE, INC.

 

By: /s/ Robert Douglas Patterson   Print Name:  Robert Douglas Patterson  
Title: President  

 

(Attach copy of Driver’s License or State ID card for parties signing in their
individual capacity)

 

WELLS FARGO COMMERCIAL DISTRIBUTION FINANCE, LLC

 

By: /s/ Michele Cohan   Print Name: 

Michele Cohan

  Title: Authorized Signor  

 

 

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