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Exhibit 10.8
ASSIGNMENT AND TRANSFER OF RECEIVABLES AGREEMENT
Effective Date: March 17, 1997
THE PARTIES:
ASSIGNOR:
TELECOMMUNICATION SYSTEMS, INC. a/k/a
TCS APPLIED TECHNOLOGIES
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxx 000
Xxxxxxxxx, XX 00000
ASSIGNEE:
Commerce Funding Corporation
0000 Xxx Xxxxxxx Xxxx #000
Xxxxxx, XX 00000
The parties hereby agree as follows:
In consideration of the Assignment Price, Assignor hereby sells,
absolutely, unconditionally and irrevocably assigns and transfers to Assignee,
its successors and assigns, all of Assignor's rights, title, and interest in the
accounts receivable(s) under all Contracts, Subcontracts, Purchase Orders,
Letter Agreements, etc. (hereinafter referred to as "Contract") from Assignor's
Account Debtor (hereinafter referred to as "Obligor") referenced below:
Total Receivables Assigned: All assigned accounts
receivable
Assignment Price due Assignor: 92% of accounts receivable
Percentage of Debt: 92%
Contract No. / Obligor: Various Purchase Orders / Various
Obligors
Invoice Number(s): To be determined
* * IMPORTANT NOTICE * *
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.
Assignee is entitled to any and all such payments from Obligor
including but not limited to insurance proceeds, proceeds resulting from claims
and settlements under the Contract. To the extent Assignee receives payment for
items excluded from this Assignment (hereinafter referred to as "Exchange
Items"), those payments will be remitted to Assignor.
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Assignor will advise Obligor to pay all amounts arising under the
Contract to Assignee or Assignee's designee, and Assignor agrees that any
payments that it may receive under the Contract shall be remitted immediately to
Assignee. Assignor shall implement an assignment of proceeds to the Assignee
pursuant to the assignment rights under the Uniform Commercial Code Regulation
or applicable Federal Acquisition Regulation.
Upon receipt of payment from the Obligor, Assignee agrees to make
payment by check to Assignor for the difference (hereinafter referred to as
"Holdback") between the payment received and the total of the Assignment Price
and the processing fees accrued in accordance with this Assignment. In the
event Assignor elects to receive holdbacks by wire transfer, there will be a
$16.00 wire transfer charge. Furthermore, there will be a $16.00 wire transfer
charge for net fundings under $5,000.00.
In consideration for the valuable service and the Assignment Price paid
hereunder, the Assignor agrees to pay the Assignee a processing fee specified in
the Fee Agreement. Furthermore, Assignor agrees to pay Assignee an
administrative close out fee not to exceed $1,000.00 in the event Assignor
elects to terminate prior to the last day of each term as stated in the Fee
Agreement. In the event there is no funding activity for ninety (90) consecutive
days, then CFC may terminate this agreement without notice and may setoff the
$1,000.00 termination fee against any funds or property of the Assignor which it
is holding or subsequently acquires.
In the event that the Assignor converts monies due and owing to the
Assignee under any of the assignments created herein, without the express
written consent of the Assignee, such action shall constitute an event of
default, and in the event of default, the Assignor hereby authorizes and
empowers (i) Xxx X. Xxxxxx or, (ii) Xxxxx X. Xxxxxxx, Esq. or Xxxx X. Xxxxxxxx,
both members of the Virginia Bar and both with the law firm of Xxxxxxx, Xxxxx &
Xxxxxxx, P.C. or, (iii) any other member of the Virginia Bar, to confess
judgment against the Assignor for the principal amount(s) assigned which were
converted by the Assignor, interest, attorneys fees, and costs and expenses
incurred in collecting any amounts owing to the Assignee under this Agreement
and hereby waives protest, presentation and demand.
The parties understand and agree that any conversion by the Assignor of
monies that are properly due and owing to the Assignee under the assignments
created herein, without the express written consent of the Assignee, shall
constitute fraudulent conduct by the Assignor and shall entitle the Assignee to
recover, among other things, compensatory and punitive damages from the Assignor
in a court of law and may
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constitute criminal conduct punishable under applicable State Law.
In the event that an invoice remains unpaid for more than ninety (90)
days from the date funds were advanced by Assignee, the Assignor agrees to
replace that invoice with another invoice of equal or greater value, or buy the
invoice back. Assignee may elect to perform all of the obligations and duties
required to be performed by Assignor under the Assignment, however, Assignor
shall immediately indemnify Assignee and hold the Assignee harmless for any
claim which may result from the action, fault or negligence of Assignor,
including, without limitation, any legal fees, costs and expenses incurred by
Assignee in defending any such claims.
Assignor hereby irrevocably appoints and constitutes Assignee, or any
of Assignee's Agents designated by Assignee so to act, its true and lawful
attorney-in-fact to act on behalf of Assignor in the collection of the accounts
receivable due hereunder. Assignor shall provide such further written documents
and perform such other acts as Assignee may consider necessary to further
evidence or secure to Assignee the interests of Assignor assigned hereunder.
Assignor agrees that nothing herein requires Assignee to purchase Receivables
and Invoices from Assignor unless Assignee determines in its sole and absolute
discretion that it will receive full payment on any invoices purchased.
In the event that the Obligor elects not to make the payment herein
assigned for whatever reason under the Contract within ninety (90) days of this
Assignment, Assignee shall have full recourse against the Assignor and its
guarantors, if any, and the Assignor shall immediately pay to Assignee all sums
due under the Assignment, the Fee Agreement and the Guarantee, including without
limitation, any and all accrued processing fees applicable plus reasonable
attorney's fees and costs of collection.
Assignor represents and warrants that 1) it has good and marketable
title to the Accounts Receivable free and clear of all security interests,
liens, claims and encumbrances and that it will warrant and defend the same
against all claims and demands of all persons, 2) the purpose of the assignment
is to assist the Assignor financially in performing its obligation to the
Obligor under the contract being assigned pursuant to this agreement, 3)
Assignor understands that federal tax lien searches will be ordered by Assignee
on a periodic basis and that the charge for these searches will be taken out of
Holdbacks or Exchange Items received by Assignee. (The average charge for an FTL
search is approximately $45.00 with the actual fee being determined by (the
location of the Assignor's filing jurisdiction), 4) in the event Assignor
becomes a debtor or a creditor in a bankruptcy proceeding or in an assignment
for the benefit of
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creditors or receivership proceeding, Assignor agrees to reimburse Assignee for
any legal fees and costs incurred by Assignee in connection with such
proceedings and to grant Assignee immediate relief from the automatic stay to
permit the Assignee to pursue its legal rights against the Assignor and the
property of the Assignor's bankruptcy estate.
This Assignment Agreement and all representations, warranties,
covenants, powers, and rights herein contained shall be interpreted and
construed in accordance with the laws of the Commonwealth of Virginia. The terms
and conditions of this Assignment Agreement are severable so that in the event
any portions of this Assignment Agreement shall be finally determined by any
court of competent jurisdiction to be invalid or unenforceable, such provision
shall be deemed void and the remainder of this Assignment Agreement shall
continue in full force and effect.
Assignor agrees to reference Assignee's "Payment Instructions" on all
invoices submitted for payment under the Contract. Assignor will be responsible
for immediate reimbursement to Assignee of any invoices paid directly to
Assignor under this Agreement. Failure by Assignor to remit such reimbursement
to Assignee shall constitute a Default under this Agreement causing all amounts
advanced by Assignee to Assignor under this Agreement or any other Agreement to
be immediately due and payable. In the event of a Default and/or a shortfall has
been determined on an invoice, it is understood that fundings, Holdbacks and
Exchange Items may be applied to cover such defaults or shortfalls.
Assignee may setoff any obligations owing to it by the Assignor against
any funds or property held by the Assignee with notice to the Assignor.
This agreement shall continue in full force and effect until terminated
in writing by either party as follows: A written termination notice by CFC shall
take effect 60 days after receipt of the notice by Assignor or its agents or
representatives. A written termination notice by Assignor shall take effect
sixty (60) days after receipt by CFC, its agents or representatives.
The Assignor hereby waives the right to a trial by jury with respect to
any action, claim, suit or proceeding in respect of or arising out of this
Agreement, the Fee Agreement or related guaranties. The foregoing represents the
entire agreement of the parties, including all obligations and warranties of
Assignor, and supersedes all prior communications, both oral and written.
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Neither this Agreement nor any other Agreement pursuant to this
contract financing arrangement shall be deemed accepted or constitute an offer
or be binding upon Assignee until accepted and executed by Assignee's authorized
officer at its principal office in Vienna, Virginia.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be duly executed as of the day and year first above written.
ASSIGNOR Sworn to and subscribed t
TELECOMMUNICATION SYSTEMS, INC. a/k/a
TCS APPLIED TECHNOLOGIES before me this 18th day of
March, 1997
By: /s/ Xxxxxxx X. Xxxx /s/ Xxxxx X. Xxxxx
-------------------- ------------------------
Notary Public
Name: Xxxxxxx X. Xxxx
Title: President/Owner My commission expires:
Date: 03/18/97 06/02/99
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[SEAL]
ASSIGNEE Sworn to and subscribed
Commerce Funding Corporation before me this ____day of
_________________ 19_____
By:______________________ _________________________
Name: Xxxx Geraerdta Notary Public
Title: Vice President My commission expires:
Date:_______________________ _____________________
