PURCHASING AGREEMENT
This
Purchasing Agreement is made as of the day of November j , 2005, by and
among the undersigned, ROYAL SPRING WATER, INC.
, a Nevada corporation,
(hereinafter called "CLIENT")
and AMERICAN BUSINESS FINANCE LLC, 000 X.
Xxxx, Xxxxxx Xxxxxxxx, 00000, a Oklahoma
limited liability company
(hereinafter called "PURCHASER"). CLIENT and PURCHASER agree as
follows:
1.
PURPOSE OF AGREEMENT.
CLIENT
desires to obtain financing in the amount of up to One Million Dollars
($1,000,000) ("Purchasing Limit") by selling and assigning to PURCHASER Accounts
(as hereinafter defined) at a discount below face value.
2.
DEFINITIONS.
"ACCOUNT"
means and includes all of CLIENT'S present and future right to payment for
goods, merchandise, or inventory sold, rented, or leased, or for services
rendered, including without limitation, those which are not evidenced by
instruments or chattel paper, and whether or not they have been earned by
performance. This definition shall include the definition of "accounts" as
that
term is used in the Uniform Commercial Code of the State where the collateral
is
located.
"ADVANCES"
means all funds remitted to CLIENT by PURCHASER and at CLIENTS request from
the
sale and assignment of CLIENT'S Accounts to PURCHASER.
"BASE
FEE" means Base Index plus 2%.
"BASE
INDEX" means the higher of (but in no event less than 8.25% per
annum):
(A)
the
highest prime rate published daily in The
Wall Street Journal
under
"Money Rates" or in such other nationally published source as PURCHASER may,
from time to time hereafter, reasonably designate in writing, whether such
rate
is actually ever charged or paid; or
(B)
in
the event governmental actions are instituted that unduly control market
forces,
the rate for 90-day dealer-placed commercial paper (or the mid-point in the
range of such rate, if more than one rate is published), as then most recently
quoted either in the Federal Reserve Rate Report which customarily appears
in
the Friday issue of The
Wall Street Journal
under
"Money Rates" or in such other nationally published source as PURCHASER may,
from time to time hereafter, reasonably designate in writing
"CUSTOMER"
means CLIENT'S customer or the account debtor.
"COLLATERAL"
means the intangible or tangible property given as security to PURCHASER by
CLIENT for any obligations and liabilities of CLIENT to PURCHASER under this
Agreement.
"CUSTOMER
DISPUTE" means any claim by a Customer against CLIENT, of any kind whatsoever,
valid or invalid, that reduces or potentially reduces the amount collectible
from Customer by PURCHASER.
"LIABILITIES"
means any and all advances, obligations and indebtedness of CLIENT to PURCHASER
of any and every kind and nature, howsoever created, arising or evidenced and
howsoever owned, held or acquired, whether now or hereafter existing, whether
now due or to become due, direct or indirect and whether arising or existing
underwritten or oral agreement or by operation of law.
3.
PURCHASE: GENERAL TERMS.
3.1
Purchasing Fee. CLIENT agrees to offer and PURCHASER agrees to buy
Accounts from CLIENT at a discount (purchasing fee) of 1.5%. Such fee shall
be
charged against CLIENT'S reserve account. An additional discount of 0.25% will
be charged on any invoice remaining open more than 60 days. Should CLIENT sell
to PURCHASER more than $200,000 but less than $400,000 in invoices in any month,
the purchasing fee will be 1.30%. Should CLIENT sell to PURCHASER more than
$400,000 in invoices in any month, the purchasing fee will be 1.10%
3.2
Reserve. PURCHASER may reserve and withhold an amount in a reserve
account equal to 20% of the gross face amount of all Accounts purchased
("Reserve Account"). Said Reserve Account may be held by PURCHASER and applied
by PURCHASER against charge-backs or any obligations of CLIENT to PURCHASER,
and
said Reserve Account is not due and payable to CLIENT until any and all
potential obligations owing by CLIENT to PURCHASER or reasonably anticipated
claims are fully paid and satisfied. CLIENT gives to PURCHASER a security
interest in this Reserve Account, which secures all obligations arising under
this Agreement.
3.3
Approval. PURCHASER reserves the right not to purchase an Account unless
such Account is first submitted to PURCHASER by CLIENT for approval. PURCHASER
is not obligated to buy any Account from CLIENT.
3.4
Sole Property. Upon the purchase of an Account by PURCHASER, all payments
on said Accounts shall be the sole property of PURCHASER. Any interference
by
CLIENT with this payment will result in civil and/or criminal
liability.
3.5
Additional Fees/Discounts and Reserve Program.PURCHASER will
fund to CLIENT up to 80% of the face value of each Account. The reserve will
be
deducted by PURCHASER from the Accounts at the time of purchase. Additional
fees/discounts may be taken by PURCHASER from the Reserve Account as described
in (A) through (E) below.
PURCHASER
retains the right in its sole absolute discretion, and in respect of which
PURCHASER shall have no liability, to revise said reserve from time to time
if
in PURCHASER'S judgment it is necessary to protect CLIENT with regard to any
obligations owing by CLIENT to PURCHASER, or to protect PURCHASER against
possible returns, claims or defenses of CLIENT'S Customers or any other
contingencies.
| (A) |
CLIENT
shall pay PURCHASER a charge based on the daily balance of outstanding
Advances multiplied by the Base Fee. The fee shall be computed
on the
basis of actual days elapsed and a 360-day year. The Base Index
in effect
shall be determined by PURCHASER on a daily basis, with adjustments
to
such BASE INDEX to be made on the same date as any change in
the Base
Index is determined by PURCHASER, which index shall be used in
computing
the Base Fee which is payable until the next announced change
in the Base
Index. Such fee will be calculated monthly and charged against
CLIENT'S
Reserve Account.
|
| (B) |
The
net balance of reserve funds shall be paid in accordance with
the
provisions of Article 3.2. The reserve releases will be made
available by
PURCHASER to CLIENT an each business day of each month. Reserve
releases
are made only on Accounts that are paid by Customers, or charged
back,
repurchased or otherwise settled by CLIENT in
full.
|
If
an
Event of Default has occurred and is continuing, or, in the event CLIENT shall
cease selling Accounts to PURCHASER, PURCHASER shall not pay the amount in
the
Reserve Account until all Accounts have been collected or Purchaser has
determined, in its sole discretion, that it will make no further efforts to
collect any Accounts and all sums due PURCHASER hereunder have been
paid.
| (C) |
Concurrent
with execution and acceptance of this Agreement, CLIENT will
pay to
PURCHASER a documentation and closing fee of $1,000.00. The
closing fee
shall be payable on the initial purchase
date.
|
| (D) |
CLIENT
agrees to pay PURCHASER a facility fee of 0.50% of the Purchasing
Limit at
funding. The facility fee shall be charged against the CLIENT'S
Reserve
Account at the beginning of year two (2) and, upon renewal, all
subsequent
years thereafter.
|
3.6
Minimum Purchasing Fees. It is agreed by and between CLIENT and PURCHASER
that, in consideration of the facility granted herein, CLIENT will sell to
PURCHASER a minimum of One Hundred Twenty-Five Thousand Dollars ($I25,000)
of
Accounts per month. In the event CLIENT fails to sell to PURCHASER the minimum
Accounts required herein and PURCHASER, therefore, does not receive the minimum
Purchasing Fees as set forth herein in any month, CLIENT shall remit to
PURCHASER the difference between the fees earned and the minimum Purchasing
Fees
required herein. The minimum amount charged will be calculated by subtracting
the amount sold from the minimum and multiplying by the Purchasing
Fee.
3.7
Required Forms. When CLIENT offers Accounts to PURCHASER for sale,
PURCHASER shall receive documentation which corresponds with said invoice(s),
appropriate to the business of CLIENT, as required by PURCHASER from time to
time. CLIENT will submit a minimum of one (1) Schedule of Accounts per
week.
3.8
Receipt of Payment. In the event CLIENT (or any of its affiliates,
subsidiaries, shareholders, directors, officers, employees, agents or those
persons acting for or in concert with CLIENT) shall receive any cash, checks,
notes, drafts or any other payment relating to and/or proceeds of the
Collateral, no later than the first business day following receipt thereof,
CLIENT shall deliver the same or cause the same to be delivered to PURCHASER,
at
PURCHASER' S account at a bank for the deposit of such payments, and,
thereafter, CLIENT shall (1) deposit or cause the same to be deposited, in
kind,
in the special account so established by PURCHASER for application on account
of
the Liabilities as provided in Section 3.9 below and (ii) maintain copies of
checks and, upon request, forward to PURCHASER, on a daily basis, copies of
all
checks or other items of payment and deposit slips related thereto, together
with a collection report in form and substance satisfactory to PURCHASER. All
cash payments and all checks, drafts, or similar items of payment by or for
the
account of CLIENT shall be the sole and exclusive property of PURCHASER
immediately upon the earlier of the receipt of such items by PURCHASER or the
receipt of such items by CLIENT. Provided, however, that (1) for the purpose
of
computing fees hereunder such items shall be applied by PURCHASER on account
of
the Liabilities five business days after same have been deposited into
PURCHASER' S operating bank account, and (ii) no such item received by PURCHASER
shall constitute payment to PURCHASER unless such item is actually collected
by
the bank at which PURCHASER maintains its operating account and such collection
is credited to PURCHASER' S account. In the event CLIENT elects to deliver
to
PURCHASER on account of the Liabilities payment other than by good funds, such
payment shall be applied by PURCHASER on account of the Liabilities five
business days after the date the same is deposited into PURCHASER' S operating
bank account. Notwithstanding anything to the contrary herein, all such items
of
payment shall, solely for the purpose of determining the occurrence of an Event
of Default, be deemed received upon actual receipt by PURCHASER, unless the
same
is subsequently dishonored for any reason whatsoever. All payments made by
or on
behalf of and all credits due any CLIENT maybe applied and reapplied in whole
or
in part to any of the Liabilities to the extent and in the manner PURCHASER
deems advisable.
3.9
Application of Payments and Collections. CLIENT irrevocably waives the
right to direct the application of any and all payments and collections at
any
time or times hereafter received by PURCHASER from or on behalf of CLIENT,
and
CLIENT does hereby irrevocably agree that PURCHASER shall have the continuing
exclusive right to apply and reapply any and all such payments and collections
received at any time or times hereafter by PURCHASER or its agent against the
Liabilities, in such manner as PURCHASER may deem advisable, notwithstanding
any
entry by PURCHASER upon any of its books and records.
3.10
Repurchase of Accounts. CLIENT will repurchase from PURCHASER any and all
Accounts not paid within 90 days from date of invoice at One Hundred Percent
(100%) face value in one of the following manners or combination thereof at
PURCHASER'S option: (1) By submitting new Accounts, (2) By deducting said amount
from the Reserve Account due CLIENT, or (3) By requesting payment from CLIENT.
All short payments, discounts and any other obligations CLIENT may have to
PURCHASER
will be deducted in the same manner.
Notwithstanding
the repurchase of an Account by CLIENT, any such Account so repurchased shall
remain as Collateral in which the security interest of PURCHASER shall continue
as provided for under this Agreement.
3.11
Reimbursable Expenses. PURCHASER incurs certain routine expenses and
audit fees in the course of performing its functions with respect to the
Accounts, a portion of which PURCHASER shall be entitled to deduct from the
reserve account. However, PURCHASER shall not be entitled to any deductions
for
routine expenses not specifically listed in this paragraph. The following is
an
itemization of the routine deductions to which PURCHASER shall be entitled:
all
travel expenses of auditors to CLIENT'S place of business, long distance
telephone charges, legal fees incurred in collecting the Accounts, postage,
creditreporLs, wire transfers, overnight mail delivery, internet reporting
fees,
UCC searches, judgment searches, tax lien searches, filing fees, ACH transfers,
incoming wires, returned items, bank charges, over line fees and over advance
fees.
3.12
Notification. CLIENT shall notify and inform all Customers that the
Customers must make payments directly to a lockbox under PURCHASER'S control.
Further, CLIENT hereby authorizes PURCHASER, in PURCHASER'S sole discretion,
to
notify any customer of CLIENT of the purchase of Customer's Account by
PURCHASER.
3.13 Assignment.
CLIENT shall from time to time sell, transfer and assign Accounts to
PURCHASER and said Accounts shall be identified by separate and subsequent
written assignments on a form to be provided to CLIENT by
PURCHASER.
3.14
Double Payments. Should PURCHASER receive a double payment on an Account
or other payment which is not identified, PURCHASER shall carry these sums
as
open items and shall return them to said Payer upon proper identification.
After
six months following receipt of such payments, PURCHASER may, if it so elects,
consider such payment or unidentified items as credits towards any outstanding
obligations of CLIENT.
3.15
Maximum Account. The outstanding amount in CLIENT'S account with
PURCHASER (that is, amounts advanced by PURCHASER to CLIENT) shall not exceed
the amount of One Million Dollars ($500,000.00) during the term of this
Agreement.
4.
TERMINATION
The
initial Termination Date shall be twenty four months from the date of
the initial purchase of Accounts by PURCHASER hereunder (the "Termination Date")
and this Agreement shall be automatically renewed for successive periods of
twelve months (the "Renewal Date") unless terminated as follows:
(a) PURCHASER
may terminate the Agreement at any time after the date of this Agreement by
giving CLIENT thirty (30) days prior written notice of such termination, by
certified mail; or
(b)
CLIENT may terminate this Agreement on the Termination Date or any Renewal
Termination Date by giving PURCHASER ninety (90) days prior written notice
of
such termination, by certified mail: or
(c)
After
the end of the first year of this Agreement, and upon renewal, CLIENT may
terminate this Agreement by giving PURCHASER irrevocable written notice of
its
intent to make such termination at least ninety (90) days prior thereto,
provided, that, in order for notice of such termination by CLIENT to become
effective, CLIENT shall, on the date specified for such termination, pay to
PURCHASER, in cash or by federal wire transfer, the total amount of the
Liabilities outstanding to the date of such termination, and CLIENT shall also
pay to PURCHASER, as liquidated damages, an amount equal to 5% of the Purchasing
Limit.
(d)
Upon
the occurrence of any Event of Default by CLIENT or termination, however
occurring, PURCHASER may terminate this Agreement immediately, without notice.
Upon the effective date of termination, whether such termination is pursuant
to
the occurrence of an Event of Default or otherwise, all obligations shall become
immediately due and payable without notice or demand, including any and all
minimums fees provided herein.
(e)
Upon
termination, however occurring, CLIENT covenants and agrees that CLIENT shall
deliver to PURCHASER such documents, agreements, releases and indemnification's
as PURCHASER may require in order to release and indemnify PURCHASER from any
and all claims and causes of action arising out of this Agreement. CLIENT
covenants and agrees that PURCHASER shall be under no obligation to release
its
lien and security interest in the Collateral until such time as PURCHASER has
received such documentation.
No
termination of this Agreement, however occurring, shall affect the Liabilities
and obligations of CLIENT or the rights, powers and remedies of PURCHASER under
this Agreement or the security interest granted PURCHASER hereunder with respect
to existing or future Collateral, until all Liabilities have been paid in
full.
5.
GRANT OF SECURITY INTEREST.
5.1
To
induce PURCHASER to enter into this Agreement, CLIENT gives to PURCHASER as
Collateral for the repayment of any and all its obligations and Liabilities
to
PURCHASER a security interest in CLIENT'S present and future accounts,
instruments, documents, chattel paper, general intangibles, deposit accounts,
investment property, commercial tort claims, letter of credit rights, letters
of
credit and inventory, as more fully described as follows: (hereafter
collectively called Collateral): (a) all Accounts, whether now existing or
hereafter arising; all chattel papers, documents and instruments, whether now
existing or hereafter arising relating to Accounts; all rights now or hereafter
existing in and to all security agreements, leases, and other contracts securing
or otherwise relating to Accounts or such chattel papers, documents and
instruments, (b) all general intangibles of any kind, whether now existing
or
hereafter arising; all chattel papers, documents and instruments whether now
existing or hereafter arising relating to general intangibles; all rights now
or
hereafter existing in and to all security agreements, leases, and contracts
securing or otherwise relating to general intangibles or such chattel papers,
documents and instruments; and (c) the proceeds, products, additions to,
substitutions for and accessions of any property described in subparagraphs
(a)
and (b) above.
6.
WARRANTIES AND COVENANTS BY CLIENT.
CLIENT
warrants and/or covenants that during the term of this Agreement and so long
as
any Liabilities or obligations to PURCHASER remain unpaid that:
(a)
CLIENT is a Nevada corporation duly organized, existing, and in good standing
under the laws of the state or country of its incorporation, as represented
at
the beginning of this Agreement, qualified or licensed to do business in all
other countries, states and provinces in which the laws thereof require
CLIENT to be so qualified and/or licensed;
(b)
CLIENT has not, during the preceding five (5) years, been at any other location
or known as or used any other corporate or fictitious name, except as disclosed
to PURCHASER.
(c)
CLIENT has the corporate power and authority to make, deliver and perform this
Agreement and the other agreements hereunder and has taken all corporate action
necessary to be taken by it to authorize the sale of its Accounts on the terms
and conditions of this Agreement;
(d)
CLIENT'S business is solvent.
(e)
CLIENT will file all federal, state and local tax returns and other reports
CLIENT is required by law to file, maintain adequate reserves for the payment
of
all taxes, assessments, governmental charges, and other similar charges, and
pay
promptly, when due, all such taxes, assessments, and other charges.
(f)
To
the best of CLIENT'S information and knowledge, each Customer's business is
solvent,
(g)
CLIENT is, at the time of purchase by PURCHASER, the lawful owner of and has
good and undisputed title to the Accounts purchased by PURCHASER.
(h)
Each
Account offered for sale to PURCHASER is an accurate and undisputed statement
of
obligations by Customer to CLIENT for a sum certain which is due and payable
in
thirty days or less or on such other terms, as are acceptable to PURCHASER
in
its discretion, which are expressly set forth on the face of all
invoices.
(I)
Each
Account offered for sale to PURCHASER is an accurate statement of a bona fide
sale, delivery and acceptance of merchandise or performance of service by CLIENT
to Customer.
(j) CLIENT
does not own, control or exercise dominion over, in any way whatsoever, the
business of any Customer or the Accounts to be purchased by
PURCHASER.
(k)
All
financial records, statements, books or other documents shown to PURCHASER
by CLIENT at any time, either before or alter the signing of this
Agreement
are true and accurate.
(I)
CLIENT shall not, under any circumstances or in any manner whatsoever, interfere
with any of PURCHASER'S rights under this Agreement.
(m)
CLIENT shall offer all of its Accounts to PURCHASER and will not purchase or
sell Accounts except to PURCHASER for the period of this Agreement.
(n)
Except as permitted by PURCHASER, CLIENT will not transfer, pledge or give
a
security interest in nor permit any lien upon any of its Collateral to any
other
party.
(o)
CLIENT shall not change or modify the terms of an original Account with any
Customer unless PURCHASER first consents to such change in writing. For example,
CLIENT may not extend credit to a Customer beyond thirty days without prior
written consent from PURCHASER.
(p)
CLIENT will maintain such insurance covering CLIENT'S business and/or the
property of CLIENT'S Customers as is customary for businesses similar to the
business of CLIENT and, at the request of PURCHASER, name PURCHASER as loss
payee of such insurance.
(q)
CLIENT will notify PURCHASER, in writing, at least thirty (30) days prior
thereto of CLIENT'S opening of any new office, Collateral location or one place
of business, or prior to the closing of CLIENT'S existing office or Collateral
locations.
(r)
CLIENT will immediately notify PURCHASER of any proposed or actual change of
CLIENT'S name, location, identity, legal entity or corporate
structure.
(s)
CLIENT will, when requested by PURCHASER, execute any written instruments and
do
any other things necessary to effectuate more fully the purposes and provisions
of this Agreement, including without limitation, executing and filing financing
statements in form and substance satisfactory to PURCHASER.
(t) All
of the Collateral is owned by CLIENT alone, free and clear of all liens, claims,
security interest(s) or encumbrances except those granted to PURCHASER or those
specifically disclosed in writing to PURCHASER.
(u) CLIENT
will furnish PURCHASER upon request satisfactory proof of payment and/or
compliance with all Federal, State and/or local tax requirements.
(v)
CLIENT will promptly notify PURCHASER of any attachment or any other
legal process levied against CLIENT or any of CLIENT'S Customers known to
CLIENT.
(x) CLIENT
will, immediately upon safe of Accounts to PURCHASER, make proper entries on
its
books and records disclosing the absolute sale of said Accounts to
PURCHASER.
(y)
CLIENT' S Federal Employment identification Number is
001A _____________ It
-)
(z)
CLIENT
will not offer its inventory as security for any loan or obligation. Client
will
not permit any lien or encumbrance of its inventory.
7.
DISPUTED ACCOUNTS.
7.1
Payment. CLIENT will immediately pay to PURCHASER the full amount of any
Account subject Loa Customer Dispute of any kind whatsoever.
7.2
Charge-Back. I f CLIENT does not fully settle a Customer Dispute with
immediacy, PURCHASER may, in addition to any other remedies under this
Agreement, charge or sell back the Account to CLIENT.
7.3
Invoicing Error. Mistaken, incorrect and erroneous invoicing,
submitted by CLIENT to PURCHASER may at PURCHASER'S discretion be deemed an
Account subject to a Customer Dispute and be charged-back to
CLIENT.
7.4
Notice and Settlement, CLIENT must immediately notify PURCHASER of any
disputes between Customer and CLIENT. PURCHASER may settle any dispute directly
with Customer. Such settlement does not relieve CLIENT of final responsibility
for payment of such Account.
8.
DISPOSAL OF DOCUMENTS.
CLIENT
authorizes PURCHASER, in its sole discretion, to make computer images of or
to
dispose of any documents, schedules, invoices or other papers delivered to
PURCHASER in connection with this Agreement at any time after said documents,
schedules, invoices or other papers have been delivered to
PURCHASER.
9.
HOLD IN TRUST.
CLIENT
agrees that any payments sent directly to CLIENT on purchased accounts are
the
sole and exclusive property of PURCHASER. In such circumstance CLIENT promises
not to negotiate said check or other forms of payment, but to hold same in
trust
and safekeeping for the benefit of PURCHASER and to turn over to PURCHASER
the
exact form of payment received. That is, CLIENT agrees to turn over to PURCHASER
immediately in kind any such check or other form of payment(s) which are
property of PURCHASER.
In
the
event CLIENT receives a check, or other form of payment owing to PURCHASER,
but
some portion of said payment is owing to CLIENT, CLIENT agrees to turn over
said
payment in kind to PURCHASER, and PURCHASER will remit CLIENT'S portion thereof,
provided that CLIENT is not indebted to or in Default with
PURCHASER.
10.
FINANCIAL RECORDS; AUDITS.
10.1
CLIENT shall keep books of accounts and prepare financial statements and shall
cause to be furnished to PURCHASER the following (all of the foregoing and
following to be kept and prepared in accordance with generally accepted
accounting principles, unless CLIENT'S certified public accountants concur
in
any changes therein and such changes are disclosed to PURCHASER and are
consistent with then generally accepted accounting principles): (1) as soon
as
available, but not later than forty-five (45) days after the close of each
fiscal year of CLIENT hereafter, reviewed financial statement of CLIENT,
including balance sheet, income statement, as at the end of such year provided
by a firm of independent certified public accountants reasonably acceptable
to
PURCHASER and selected by CLIENT; (ii) as soon as available, but not later
than
thirty (30) days after the end of each month hereafter, an unaudited balance
sheet, a year-to-date income statement, fairly presenting the financial position
and results of operations of CLIENT for such period; and (iii) such other data
and information (financial and otherwise) as PURCHASER, from time to time,
may
reasonably request, bearing upon or related to the Collateral, CLIENT'S
financial condition and/or results of operations;
10.2
PURCHASER (by any of its officers, employees or agents) shall have the right,
at
any time during CLIENT's usual business hours, to inspect any of the business
locations or premises of CLIENT, the Collateral, all books and records related
to the Accounts or the collection thereof as well as those related to CLIENT's
general business and financial condition, and the right at any time to discuss
CLIENT's affairs and finances and the Accounts with any attorney, accountant,
creditor or Customer of CLIENT.
11.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT.
11.1
Events of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default", (a) CLIENT shall receive payment
on any Account and fails to deliver said payment to PURCHASER; (b) CLIENT or
any
person that is a guarantor of CLIENT shall fail to pay any obligations to
PURCHASER when due and payable or declared due and payable; (c) CLIENT shall
breach any term, provision, covenant, warranty or representation under this
Agreement, or under any other agreements, contracts between CLIENT and PURCHASER
or obligation of CLIENT to PURCHASER; (d) the appointment of any receiver or
trustee of all or a substantial portion of the assets of CLIENT; (e) CLIENT
shall become insolvent or unable to pay debts as they mature, shall make a
general assignment for the benefit of creditors or /hall voluntarily file under
any bankruptcy or similar law; (I) any involuntary petition in bankruptcy shall
be filed against CLIENT and not be dismissed within 60 days; (g) any levies
of
attachment, executions, tax assessments or similar process shall be issued
against the Collateral and shall not be released within ten days thereof, (h)
any financial statements, profit and loss statements, borrowing certificates
or
schedules, or other statements furnished by CLIENT to PURCHASER prove false
or
incorrect in any material respect; (1) CLIENT shall refuse to provide any
financial statements, profit and loss statements, borrowing certificates or
schedules, or other statements required by PURCHASER; (j) any guarantor of
the
liabilities and obligations shall be in default under any agreements to which
it
is a party, or demand is made on any such guarantor under the terms of any
guaranty to which guarantor is a party; or (k) there shall occur any change
in
the ownership of CLIENT.
11.2
Remedies. Upon and after an Event of Default, PURCHASER shall have the
following rights and remedies: (a) All of the rights and remedies of a secured
party under the Uniform Commercial Code or other applicable law, all of which
rights and remedies shall be cumulative, and non exclusive, to the extent
permitted by law, in addition to any other rights and remedies contained in
this
Agreement and in all of the other agreements; (b) The right to open mail to
CLIENT and collect any and all amounts due CLIENT from Account Debtors; (c)
The
right to (I) enter upon the premises of CLIENT, without any obligation to pay
rent, through self-help and without judicial process, without first obtaining
a
final judgment or giving CLIENT notice and opportunity for a hearing on the
validity of PURCHASER'S claim, or any other place or places where the Collateral
is located and kept, and remove the Collateral therefrom to the premises of
PURCHASER or any agent of PURCHASER, for such time as PURCHASER may desire,
in
order to effectively collect or liquidate the Collateral, and/or (ii) require
CLIENT to assemble the Collateral and make it available to PURCHASER at a place
to be designated by PURCHASER, in its sole discretion; (d) The right to (I)
demand payment of the Accounts; (ii) enforce payment of the Accounts, by legal
proceedings or otherwise; (iii) exercise all the CLIENT'S rights and remedies
with respect to the collection of the Accounts; (iv) settle, adjust, compromise,
extend or renew the Accounts; (v) settle, adjust or compromise any legal
proceedings brought to collect the Accounts; (vi) if permitted by applicable
law, sell or assign the Accounts; (vii) discharge and release the Accounts;
(viii) take control, in any manner, of any item of payment or proceeds referred
to in Section 3.9; (ix) prepare, File and sign CLIENT'S name on any proof of
claim in bankruptcy or similar document against any Account Debtor; (x) prepare,
file and sign CLIENTS name on any notice of lien, assignment or satisfaction
of
lien or similar document in connection with the Accounts; (xi) do all acts
and
things necessary, in PURCHASER'S sole discretion, to fulfill CLIENT'S
obligations under this Agreement; (xii) endorse the name of CLIENT upon any
chattel paper, document, instrument, invoice, freight xxxx, xxxx of lading
or
similar document or agreement relating to the Accounts and inventory; (xiii)
use
CLIENT'S stationery and sign the name of CLIENT to verifications of the Accounts
and notices thereof to Account Debtors; (xiv) use the information recorded
on or
contained in any data processing equipment and computer hardware and software
relating to the Accounts and inventory to which CLIENT has access; (xv) require
CLIENT to repurchase the uncollected Accounts; (xvi) cease purchasing Accounts
from CLIENT; and (xvii) reduce the advance rate on eligible Accounts; (e) The
right to (I) sell or to otherwise dispose of all or any Collateral in its then
condition, or after any further manufacturing or processing thereof, at public
or private sale or sales, with such notice as may be required by law, in lots
or
in bulk, for cash or on credit, all as PURCHASER, in its sole discretion, may
deem advisable; (ii) adjourn such sales from time to time, with or without
notice; (iii) conduct such sales on CLIENT'S premises or elsewhere and use
CLIENT'S premises without charge for such sales for such time or times as
PURCHASER may see fit; (iv) use, in connection with any assembly or disposition
of the Collateral, without charge, CLIENT'S labels, patents, copyrights, rights
of use of any name, trade secrets, trade names, trademarks and advertising
matter, or any property of a similar nature, as it pertains to the Collateral
used by CLIENT and PURCHASER may purchase all or any part of the Collateral
at
public or, if permitted by law, private sale and, in lieu of actual payment
of
such purchase price, may set off the amount of such price against the
Liabilities. The proceeds realized from the sale of any Collateral shall be
applied first to the reasonable costs, expenses and attorneys' fees and expenses
incurred by PURCHASER for collection and for acquisition, completion,
protection, removal, storage, sale and delivery of the Collateral and
second to liabilities and obligations owed PURCHASER by CLIENT. If any
deficiency shall arise, CLIENT shall remain liable to PURCHASER
therefore.
12.
MISCELLANEOUS.
12.1
Conditions of Initial Advance. The obligation of PURCHASER to make any
Advances under the Agreement on the closing date is subject to the satisfaction
of the following conditions precedent: (a) All Uniform Commercial Code financing
statements required, or in PURCHASER'S opinion, advisable to be filed in order
to create, in favor of PURCHASER, a perfected lien on the Collateral with
respect to which a lien can be perfected by means of filing a Uniform Commercial
Code financing statement, shall have been properly riled in each office in
each
jurisdiction in which such filings are required or, in PURCHASER'S opinion,
advisable; and (b) All other documents and legal matters in connection with
the
transactions contemplated by the Agreement and the other agreements shall be
satisfactory in form and substance to PURCHASER and its counsel.
12.2
Expenses and Attorneys' Fees.
CLIENT
agrees to pay to PURCHASER all costs and expenses (including without
limitation the reasonable attorney's fees of PURCHASER'S legal counsel) incurred
by PURCHASER in connection with the documentation, interpretation and
enforcement of PURCHASER'S rights under this Agreement, any other documents
executed in connection with this Agreement, and all amendments, modifications
and supplements thereof or thereto.
12.3
Power of Attorney. In order to carry out this Agreement and avoid
unnecessary notification to Customers, CLIENT irrevocably appoints PURCHASER,
or
any person designated by PURCHASER, its special attorney in fact, or agent,
with
power of substitution, and with power to: (a) strike out CLIENT'S address on
all
invoices, accounts, etc. mailed to Customers and insert PURCHASER'S address;
(b)
receive, open and dispose of all mail addressed to CLIENT or to CLIENT'S
fictitious trade name via PURCHASER'S address; (c) endorse the name of CLIENT
or
CLIENT'S fictitious trade name on any checks or other evidences of
payment that may come into the possession of PURCHASER on Accounts purchased
by
PURCHASER or pursuant to Default and on any other documents relating to any
of
the Accounts or to Collateral; (d) in CLIENT'S name, or otherwise, demand,
xxx
for, collect, and give releases for any and all monies due or to become due
on
Accounts; (e) compromise, prosecute, or defend any action, claim or proceeding
as to said Accounts; (f) upon the happening of an event of Default notify the
Post Office authorities to change the address for delivery of mail addressed
to
CLIENT to such address as PURCHASER may designate; (g) sell in whole or in
part
for cash, credit or property to others or to itself at any public or private
with respect to or otherwise deal with any of the Collateral as fully and
completely as if PURCHASER were the absolute owner thereof; (h) from time to
time offer a trade discount
to CLIENT'S Customers; (1) do any and all things necessary and proper to carry
out the purpose intended by this Agreement. The authority granted PURCHASER
shall remain in full force and effect until all assigned Accounts are paid
in
full and any obligations of CLIENT to PURCHASER is discharged.
12.4
Hold Harmless. CLIENT shall hold PURCHASER harmless against any
Customer's dissatisfaction arising from PURCHASER'S
collecting or attempting to collect any Accounts.
12.5
Survival of Obligations Upon Termination of Agreement. Except as
otherwise expressly provided for in this Agreement
and in the other agreements, no termination or cancellation (regardless of
cause
or procedure) of this Agreement or the other agreements shall in any way affect
or impair the powers, obligations, duties, rights and Liabilities of CLIENT
or
PURCHASER in anyway or respect relating to: (a) Any transaction or event
occurring prior to such termination or cancellation; (b)
The
Collateral; and/or (c) Any of the undertakings, agreements, covenants,
warranties and representations of CLIENT or PURCHASER contained in this
Agreement or the other agreements. All such undertakings, agreements, covenants,
warranties and representations shall survive such termination or
cancellation.
12.6
Binding on Future Parties. This Agreement inures to the benefit of and is
binding upon the heirs, executors, administrators,
successors and assigns of the parties to it, but nothing herein shall be
interpreted or construed as consenting to or otherwise authorizing the
assignment of the Agreement by CLIENT.
12.7
Cumulative Rights., All rights, remedies and powers granted to PURCHASER
in this Agreement, or in any note or other agreement given by CLIENT to
PURCHASER, are cumulative and may be exercised from time to time as to all
or
any part of the pledged Collateral as PURCHASER in its discretion may
determine.
12.8
Written Waiver. PURCHASER may not waive its rights and remedies unless
the waiver is in writing and signed by PURCHASER.
A waiver by PURCHASER of a right or remedy under this Agreement on one occasion
is not a waiver of the right or remedy on any subsequent occasion.
12.9
Invalid Provisions. If any provision of this Agreement shall be declared
illegal or contrary to law, it is agreed that such
provision shall be disregarded and this Agreement shall continue in force as
though such provision had not been incorporated herein.
12.10 Governing
Law: Jurisdiction; Venue, Waiver of Jury Trial and Service of
Process.
(A)
THIS
AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA, APPLICABLE
TO
AGREEMENTS
EXECUTED, DELIVERED AND PERFORMED WITHIN SUCH STATE, AND CLIENT HEREBY
AGREES
TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN OKLAHOMA
COUNTY,
OKLAHOMA, AND WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS UPON CLIENT AND
CONSENTS
THAT ALL SUCH SERVICE OF PROCESS BE CERTIFIED MAIL DIRECTED TO CLIENT AT
ITS
ADDRESS
AS IT APPEARS AT THE FOOT OF THIS AGREEMENT AND SERVICE SO MADE SHALL BE
DEEMED TO
BE
COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED
IN THE
U. S. MAILS,
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID. CLIENT WAIVES
ANY
OBJECTION
BASED ON FORUM NON CONVENIENT, AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED
HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS
IS
DEEMED
APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION SHALL AFFECT PURCHASER'S
RIGHT
TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT PURCHASER'S
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST CLIENT OR ITS PROPERTY IN
THE
COURTS
OF
ANY OTHER JURISDICTION.
(B)
EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF
ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT
OR ANY
OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH,
OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF
THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR
THE
TRANSACTIONS RELATED HERETO OR THERETO. IN EACH CASE WHETHER NOW EXISTING
OR
HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH
PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
day
of
November, 2005. ACTIONS
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PART TO THIS
AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF
THEIR RIGHT TO TRIAL BY JURY.
12.11 Entire
Agreement. This
instrument contains the entire Agreement between the parties. Any addendum
or
modification
hereto will be in writing, signed by both parties and attached
hereto.
IN
WITNESS WHEREOF, the
parties hereunto have set their hand and seal as of the day and year specified
at the beginning hereof
|
ROYAL
SPRING WATER, INC.
|
|
|
Xxxx
Xxxxx
|
|
|
Its:
President and Secretary
|
SEAL
Accepted
this 2 day
of
Po
utr o
ber , 20 ob
,
at
Edmond,
Oklahoma.
"PURCHASER"
AMERICAN
BUSINESS FINANCE
LLC
000
X.
Xxxx
Xxxxxx,
Xxxxxxxx 0000.0
THE
STATE
OF __________ ~Y _______ !
THE
COUNTY OF ____________________________
BEFORE
ME, the undersigned authority, on this date personally appeared Xxxx Xxxxx,
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes
and consideration therein expressed.
GIVEN
UNDER MY HAND AND SEAL this
| day of November, 2005. | ||
