EXHIBIT 10.12
PURCHASE AND SALE AGREEMENT
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THIS AGREEMENT is made by and between CORPORATE STRATEGIES, L.L.C., a Texas
limited liability company ("Factor"), whose address is 0000 Xx. Xxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, and PRO2, INC., a Texas corporation, whose
address is 0000 Xx. Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the "Seller").
WHEREAS, Factor is engaged in, among other things, the business of
purchasing accounts receivable and other rights to payment from persons or firms
selling goods or rendering services to others, and Seller desires from time to
time to sell accounts receivable and other rights to Factor pursuant to the
terms of this Agreement;
DEFINITIONS
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"Account Debtor" shall mean the party or parties obligated to pay a
Receivable.
"Agreement" shall mean this Purchase and Sale Agreement, together with the
Schedules attached hereto.
"Collateral" shall have the meaning ascribed thereto in the Security
Agreement.
"Dispute" shall mean any dispute, deduction, claim, offset, defense or
counterclaim of any kind asserted by an Account Debtor and pertaining to a
Receivable or the goods or services giving rise thereto.
"Factor" shall have the meaning given in the first paragraph of this
Agreement.
"Legal Holiday" shall mean any day on which national banks doing business
in the State of Texas are closed for regular business.
"Payments" shall have the meaning given in Section 31 of this Agreement
"Purchase Price" shall have the meaning given in Section 6 of this
Agreement.
"Receivables" shall mean the accounts receivable and other forms of rights
to payment described on Schedule A attached hereto and/or as set forth on a
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supplemental Schedule A to be attached in the future and signed by Factor and
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Seller.
"Reserve Account" shall have the meaning given in Section 7 of this
Agreement.
"Reserve Payment Worksheet" shall have the meaning given in Section 14 of
this Agreement.
"Security Agreement" shall mean that certain Security Agreement between
Factor and Seller executed of even date herewith.
"Seller" shall have the meaning given in the first paragraph of this
Agreement.
"UCC" shall mean the Texas Uniform Commercial Code.
AGREEMENT
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For and in consideration of the mutual promises herein contained, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Factor and Seller hereby agree as follows:
1. Purchase and Sale of Accounts Receivable and other Rights. Seller
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hereby sells, assigns, transfers, conveys and delivers to Factor, as an outright
conveyance and not as a security interest all right, title and interest of
Seller in the Receivables and other forms of rights to payment described on
Schedule A attached hereto and made a part hereof. Seller represents and
warrants that in the event invoices are attached to Schedule A, such invoices
represent true and correct copies of invoices for the Receivables. In the event
Schedule A is not attached to this Agreement at the time of its original
execution, the parties agree that actual purchases of receivables will be
evidenced by the completion and execution by both parties of Schedule A in the
future. Whether or not an initial Schedule A is attached to this Agreement, it
is anticipated that additional Receivables will be sold by Seller to Factor
(although Factor is not agreeing to purchase any particular Receivable or any
additional Receivables hereby), and such future purchases will be evidenced by
the completion and execution of additional schedules in form similar to Schedule
A. Upon execution by both Factor and Seller of such a supplemental schedule,
the accounts receivable described therein shall become Receivables subject in
all respects to the terms of this Agreement. Seller acknowledges that this
Agreement is an "Account Purchase Transaction" and that the purchase price,
discount fees and all other monies paid to Factor pursuant to this Agreement are
"discounts in, or charged under the account purchase transaction" between Factor
and Seller as those terms are used in Finance Code Section 339.004 of the Texas
Codes.
2. Returned Receivables. Seller has herein represented and warranted
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to Factor that all Receivables are free and clear of any Disputes. Seller
hereby acknowledges that Factor would not purchase any Receivable if Factor had
knowledge that the same was subject to a Dispute. Seller agrees that should
Seller or Factor discover that any Receivables are subject to a Dispute, Factor
shall have the right to return such Receivables to Seller in accordance with
this Section 2 and other applicable Sections of this Agreement. Seller must
immediately notify Factor of any Disputes upon receipt of its knowledge thereof.
Any receivable that is not collected within 90 days of its purchase by Factor
pursuant to the terms hereof shall be deemed subject to a Dispute. Upon
Factor's election to return and charge-back a Receivable subject to a Dispute,
Seller shall pay to Factor the face amount of the invoice less the sum of any
payments theretofore received on such invoice by Factor and any unearned
discount. In order to fund such return and charge-back, Factor may, at its
option, take any one or more of the following actions: (a) charge the Reserve
Account for such amount, (b) subtract such amount from the Purchase Price for
the next Receivable sold by Seller to Factor, or (c) otherwise invoice Seller
for such amount, with such invoice being payable upon receipt. Upon payment to
Factor of such amount, Factor shall assign, transfer, convey and deliver such
Receivable to Seller without recourse.
3. Transfer of Related Interests. In addition to the Receivables,
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Seller hereby sells, assigns, transfers, conveys and delivers to Factor all
other rights, title and interests (but not obligations) now or hereafter
existing in connection with the Receivables, including, but not limited to,
liens, security interests and guarantees securing payment of the Receivables,
Seller's interest in returned goods arising with respect to the Receivables, and
all other rights and remedies of Seller related to the Receivables such as
rights of stoppage in transit, replevin, reclamation and lawsuits to collect the
Receivables. If any Receivable is ever represented by a promissory note or
other written evidence of obligation, Seller shall endorse and deliver the same
to Factor and take any other action requested by Factor to effectuate such
transfer.
4. Further Assurances. Seller agrees to execute and deliver to Factor
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such notices of assignment and other documents as Factor may request from time
to time to further document the sale and assignment of Receivables hereunder.
5. Terms - Seller's Customers. Except as may otherwise be agreed to in
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writing from time to time, all Receivables shall be due upon receipt by the
Account Debtor of the invoice from Seller, and invoices to be factored pursuant
hereto will be forwarded to the Account Debtor upon delivery of the goods or the
services that are the subject of the Receivable. Seller shall not vary the
terms of sale, terms of payment, or location of payment set forth in the invoice
relating to any Receivable without Factor's prior written consent, it being
understood that any Receivable is the property of Factor.
6. Purchase Price; Discounts. The Purchase Price (herein so called)
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for Receivables shall be the gross amount of the invoice, including any
miscellaneous charges such as sales taxes, less any early payment or special
discounts offered to Seller's customers as previously disclosed to Factor, and
less a discount equal to 10% of such gross amount of the invoice. As an
inducement for Seller to sell only invoices from which prompt payment can be
expected, Factor will remit a rebate as follows. If Factor receives payment of
an invoice within 30 days of the purchase thereof, a rebate of 7% of the gross
amount of the invoice will be remitted to Seller; if Factor receives payment of
an invoice after 30 days, but on or before 40 days of the purchase, a rebate of
6% of the gross amount of the invoice will be remitted to Seller; if Factor
receives payment of an invoice after 40 days of the purchase thereof, but on or
before 50 days of the purchase, a rebate of 5% of the gross amount of the
invoice will be remitted to Seller; if Factor receives payment of an invoice
after 50 days, but on or before 60 days of the purchase, a rebate of 4% of the
gross amount of the invoice will be remitted to Seller; if Factor receives
payment of an invoice after 60 days, but on or before 70 days of the purchase
thereof, a rebate of 3% of the gross amount of the invoice will be remitted to
Seller; if Factor receives payment of an invoice after 70 days, but on or before
80 days of the purchase thereof, a rebate of 2% of the gross amount of the
invoice will be remitted to Seller; if Factor receives payment of an invoice
after 80 days, but on or before 90 days of the purchase thereof, a rebate of 1%
of the gross amount of the invoice will be remitted to Seller; if Factor
receives payment of an invoice after 90 days, no rebate will be remitted to
Seller. The Purchase Price, less the deduction for the Reserve Account
described below, shall be paid only after execution by Seller and Factor of a
Schedule covering such Receivable. Any applicable rebates shall be credited to
the Reserve Account (as defined in Section 7) upon collection of each
Receivable.
7. Payments on Accounts Purchased; Reserve Account. In addition to the
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discount set forth in Section 6 hereof, Factor shall deduct from the Purchase
Price of each Receivable an amount initially equal to 15.0% of the gross amount
of the Receivable, such deduction to be placed in an account under the exclusive
control of Factor (as further described in this Section 7, herein referred to as
the "Reserve Account"). The balance in the Reserve Account shall at all times
be maintained in a minimum account equal to no less than 15.0% of the aggregate
gross amount of all Receivables outstanding at a particular time; provided,
however, (i) the applicable percentage deduction from the Purchase Price
described in the immediately preceding section may be increased as necessary to
maintain such minimum balance, and (ii) the amount required to be maintained in
the Reserve Account as a percentage of the gross amount of all Receivables
outstanding may be increased or decreased upon notice by Factor to Seller. Upon
preparation of the Reserve Payment Worksheet (as such term is defined in Section
14 hereof), Factor shall release to Seller amounts, if any, in the Reserve
Account in excess of the balance required pursuant to this Section 7. The
Reserve Account shall accrue no interest.
8. Offset; Security Interest. Factor is authorized to offset and
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charge against the Reserve Account any amount for which Seller may become
obligated to Factor at any time under this Agreement or otherwise. In addition
to such right of offset and for the purpose of securing Factor in the payment of
any and all sums of money that may become due and owing to Factor from Seller,
Seller agrees to grants to Factor a lien and security interest in certain of its
assets, all pursuant to and as described in the Security Agreement. To the
extent that the sale to Factor of any Collateral is deemed inconsistent with the
granting of a security interest pursuant to the Security Agreement, the security
interest granted in the Security Agreement as to such Collateral only shall
automatically terminate and be of no further force and effect. The terms of the
prior sentence to the contrary notwithstanding, in the event a Receivable is
charged-back as provided in Section 2 hereof, such account shall then constitute
Collateral and be then subject to a new security interest in favor of Factor.
Seller agrees to execute financing statements from time to time to perfect
Factor's security interest in the Collateral.
9. Verification and Collection of Accounts. Seller hereby authorizes
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Factor to contact each Account Debtor at any time for purposes of verification
or collection of Receivables. Seller shall cooperate with Factor to the maximum
extent possible to provide information necessary for Factor to accomplish
verification or collection of any Receivable. Unless otherwise agreed by Factor
in writing, Seller shall provide the original invoice and any necessary copies
required by the Account Debtor and one copy to Factor ready for mailing with the
required postage to the Account Debtor. All invoices shall direct that payment
be made to a post office box or other address owned and controlled by Factor, to
be provided by Factor. If requested by Factor, Seller agrees to furnish
evidence of shipment of the related merchandise and/or performance of services
rendered, and a written assignment and xxxx of sale of such Receivable, all in a
form satisfactory to Factor, including the original purchase order from the
Account Debtor. If requested by Factor, all invoices for Receivables shall
plainly state on their faces in language acceptable to Factor that the amounts
payable thereunder have been sold to and are payable directly to Factor. If
payment is made to Seller under any circumstances, such payment shall be held in
trust by Seller for Factor and shall not be negotiated or commingled in any way
with any of Seller's funds. Seller shall, within 24 hours after receipt,
deliver any such payments to Factor in the original form as received by Seller.
In the event the form of such payment is made payable to Seller, Seller shall
endorse such instrument to the order of Factor. Seller agrees to furnish
Factor, upon request, any and all papers, documents or records of whatever
nature related directly or indirectly, to any Receivables.
10. Collection by Factor. Seller specifically authorizes Factor, to
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the extent permitted by applicable law, to notify each Account Debtor to pay
directly to Factor all accounts that are Receivables or Collateral, regardless
of whether Seller has defaulted hereunder. Factor is authorized, but not
obligated, to collect, xxx for and give releases for all monies or other items
of value due on all Receivables. Factor is hereby specifically authorized to
endorse all checks, drafts or other forms of trade acceptances that are made
payable to Seller, whether tendered in payment of Receivables or otherwise, and
to apply such payments against the applicable Receivables or, if such payment
does not relate to a particular Receivable, against any other obligation of
Seller to Factor. Seller hereby waives notice of nonpayment of any Receivables
as well as all other notices, demands or presentations for payment hereunder,
and Seller expressly agrees that Factor may extend or renew from time to time
the payment of any Receivable without notice to or consent by Seller. In the
event it becomes necessary for Factor to employ an attorney and incur other
expenses to collect any Receivable or to enforce any of the terms of this
Agreement by reason of a breach or default by Seller, Seller agrees to pay to
Factor an amount equal to all reasonable attorneys' fees, expenses and costs
incurred by Factor. In the event any merchandise represented by any Receivable
shall be returned to or repossessed by the Seller, such merchandise shall be
held by the Seller in trust for Factor, separate and apart from the Seller's own
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property, and subject to Factor's directions and control. With respect to any
returned or repossessed merchandise, Seller shall, at its sole cost and expense,
(a) provide proper storage therefor, (b) maintain adequate insurance coverage
thereon, (c) prepare the same for sale, (d) defend title thereto, (e) take any
other action necessary for the protection thereof, (f) pay all freight and
related shipping costs, and (g) be responsible for any other costs or expenses
incurred in connection with the foregoing, including, without limitation,
attorneys' fees.
11. Representations and Warranties of Seller. Seller hereby
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represents, warrants and guarantees to Factor that the information contained in
any application previously submitted by Seller, Seller's financial statements
and any other materials previously submitted in connection herewith is true,
correct and complete in all respects as of the date specified therein and fully
and accurately represent the financial condition of Seller as of the dates
specified, with no material adverse change having occurred in the financial
condition of the Seller since the dates of the financial statements; that all
federal, state and local tax returns and payments of any kind due or owing have
been filed or paid, and no part of the purchase price for any Receivable shall
be used to pay any wage or salary unless appropriate withholdings have been
deposited; that assignment of each Receivable will thereby vest in Factor
absolute ownership of each Receivable free from any liens, claims or equities of
third parties; that Seller is the sole owner of and has good, free and
unencumbered title to each Receivable; that execution and performance of this
Agreement has been fully authorized by all necessary actions; that no
assignment, pledge, security interest or encumbrance exists with respect to any
Receivable; that each Receivable is based upon a bona fide sale of goods or
services and represents a completed delivery or completed furnishing of property
or services in fulfillment of all the terms and provisions of a fully executed
and unexpired contract with the Account Debtor and is a valid and enforceable
obligation of the Account Debtor; that each Account Debtor has accepted goods or
services covered by the applicable Receivable; that all Receivables are current,
are not past due, have not been paid in whole or in part, are outstanding in the
amounts reflected in Schedule A and are not and will not be subject to any
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dispute or claim as to price, quality, quantity, physical condition,
workmanship, delay in shipment, set off, counterclaim or other defense, that no
product or service was provided on a guaranteed-sale basis or buy-back
agreement, and the Account Debtor has not and will not claim any defense of any
kind or character or object for any reason whatsoever against payment of such
Receivable; that Seller's chief executive office and the location where all
books and records pertaining to each Receivable are kept are at the address
shown below for notice to Seller; and no Receivable is subject to a Dispute.
Seller further represents and warrants that Seller is a corporation duly
organized, validly existing under the laws of the state of its incorporation and
in good standing under the laws of the State of Texas; that Seller is solvent,
properly licensed and authorized to operate the business under the trade name
represented within the meaning of any and all applicable federal, state or local
laws; that no petition in bankruptcy has been filed by or against Seller nor has
Seller filed any petition seeking an arrangement of its debts or for any other
relief under the Bankruptcy Code of the United States; that no application for
appointment of a receiver or trustee for all or a substantial part of Seller's
property is pending; and that Seller has made no assignment for the benefit of
creditors. Seller further warrants that Seller does not own, control or exercise
dominion over, in any way whatsoever, the business of any Account Debtor and
that the Account Debtor is solvent to the best knowledge and information of
Seller.
12. Certain Covenants of Seller. Seller covenants and agrees to (i)
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notify Factor in writing immediately upon any Dispute and upon imposition or
assessment of any lien, levy, tax lien, assessment or similar action against
Seller or any of Seller's assets; and (ii) furnish Factor, upon request, any and
all papers, documents or records of whatever nature related directly or
indirectly to any Receivables. Seller agrees that it will not, without prior,
written notice to Factor, (a) sell or factor accounts other than to Factor for
the period of this Agreement; (b) move either its chief executive office or the
location where books and records pertaining to the Receivable are kept to a
location outside of Houston, Texas; (c) change its legal name; (d) change its
state of incorporation; (e) use any trade name; (f) merge or consolidate with
any other corporation or entity; (g) dissolve or cease its operations as they
are now conducted; or (g) without Factor's written consent, take or omit taking
any actions that would render any of Seller's representations and warranties
incorrect or incomplete, or take any action that would cause or induce any
Account Debtor on any Receivable to fail to pay the Receivable in a timely
manner.
13. Survival of Agreement, Representations, Warranties and Covenants.
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All warranties, representations and covenants made by Seller herein or in any
other instrument delivered by Seller or on Seller's behalf in connection with
this Agreement shall be considered to have been relied upon by Factor and shall
survive the purchase of the Receivables regardless of any investigation made by
Factor or on Factor's behalf and shall continue in full force and effect so long
as any amount due or to become due hereunder is outstanding and unpaid and so
long as this Agreement has not terminated. Specifically, all warranties,
representations and covenants made by Seller in this Agreement shall be deemed
reaffirmed by Seller upon execution of each supplemental Schedule A hereto.
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14. Reserve Payment Worksheet and Financial Statements. Factor shall
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prepare and provide to Seller on a weekly basis Reserve Payment Worksheets
(herein so called) showing aggregate outstanding Receivables as of the end of
the applicable period, total collections during the period, debits and credits
to the Reserve Account, present balance of the Reserve Account and discounts
charged. Seller shall provide to Factor as soon as practicable monthly balance
sheets and statements of income.
15. Interest on Unpaid Charges; Attorneys' Fees and Costs of
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Enforcement. All payment obligations of Seller to Factor provided herein not
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discharged when due shall bear interest, if demanded by Factor, at the rate of
18% per annum, payable on the first day of each month if demand is not sooner
made. If Seller defaults hereunder or if a Dispute arises, Seller shall pay all
costs of enforcement incurred by Factor against Seller or the Account Debtor as
appropriate, including but not limited to attorney's fees incurred.
16. Disputes; No Assumption of Liability by Factor; Indemnification.
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Seller shall immediately notify Factor of the assertion by any Account Debtor of
any Dispute. Seller has heretofore represented to Factor that no Receivable is
subject to a Dispute. Therefore, Seller shall settle, at its own expense, all
Disputes, subject to Factor's approval, but Factor shall have the right, in its
discretion, to settle any Dispute directly with the Account Debtor involved upon
such terms as Factor may deem advisable and at Seller's expense. Seller
specifically acknowledges and agrees that Factor is not assuming any liability
or obligation of any kind to any Account Debtor or in any way relating to the
Receivables. Seller hereby represents and warrants to Factor that no
Receivable, or any invoice, credit application, xxxx, billing memorandum,
correspondence, or any other documents relating to a Receivable contracts for or
charges anything of value that constitutes interest in excess of the maximum
non-usurious rate allowed to be charged such Account Debtor pursuant to
applicable law. Seller acknowledges that Factor, as the owner of a Receivable,
may be subject to a claim of usury by an Account Debtor in the event an invoice,
credit application, xxxx, billing memorandum, correspondence or other document
provides for the payment of interest or any other charge or fee which may deemed
to be interest, which is in excess of the maximum non-usurious rate allowed by
applicable law. In the event an Account Debtor raises a claim of usury in
connection with a Receivable, such Receivable shall be deemed to be subject to a
Dispute and subject to the charge-back provisions of this Agreement. Seller
shall promptly indemnify and hold harmless Factor from and against any and all
claims, causes of action, counterclaims and other liabilities and costs of any
kind (including attorneys' fees incurred by Factor in connection therewith) that
may be asserted against Factor by any Account Debtor or otherwise arising in
connection with the Receivables, except as may be based on the acts or omissions
of Factor.
17. Books and Records. Seller agrees to permit Factor access to all
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books and records of the Seller during normal business hours that relate to the
Collateral.
18. Taxes. All taxes and governmental charges imposed with respect to
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the sale of Receivables shall be charged to Seller, and Seller shall be liable
for all sales taxes and other taxes due in connection with any sale or rendering
of services resulting in a Receivable.
19. Termination. Seller and Factor recognize that future purchases of
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Receivables are to be made only with mutual consent of Seller and Factor,
through joint execution by Seller and Factor of a supplemental Schedule A.
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Accordingly, this Agreement shall continue in full force and effect unless and
until each of the following occur: (i) written notice of the termination of this
Agreement as it relates to future Receivables by any party hereto, (ii) the
payment in full of all obligations of Seller to Factor pursuant hereto and (iii)
the collection of all outstanding Receivables sold by Seller to Factor that, in
the sole discretion of Factor, can be collected. Either party may immediately
terminate this Agreement as to future transactions, without cause within its
sole discretion, and nothing contained in this Agreement shall constitute an
agreement or commitment to purchase any accounts until such accounts have been
approved by Factor and a supplemental Schedule describing such Receivables has
been executed by Factor and Seller. In the event Seller shall have breached any
provision of this Agreement or any other agreement with Factor, or if either
party shall have given notice to the other of the termination of this Agreement
as to future Receivables, the Reserve Account and any other monies, balances or
credits otherwise due by Factor to the Seller may be retained and applied by
Factor from time to time to reduce such obligations. The balance in the Reserve
Account shall not be released to Seller unless all of Seller's obligations
hereunder have been paid in full. Seller acknowledges that it has the
obligation hereunder to sell to Factor only Receivables that are free and clear
of any Dispute. As provided in Section 2(a) hereof, Factor has the right to
charge the Reserve Account for any Receivables that are returned and
charged-back to Seller as a result of a Dispute. Accordingly, in the event any
Receivable remains uncollected by Factor at the date of notice of termination of
this Agreement as to future Receivables, the Reserve Account shall not be
released to Seller until such time as Factor has determined, in its sole
discretion, that there are no uncollected Receivables subject to a Dispute.
Likewise, upon termination of this Agreement as to future Receivables, the
security interest granted to Factor by Seller pursuant to the Security Agreement
shall be released by Factor only upon determination by Factor, in its sole
discretion, that no additional obligations of Seller are owed to Factor
hereunder and no uncollected Receivable is subject to a Dispute. Termination of
this Agreement shall not affect the rights and obligations of the parties
accruing with respect to prior transactions.
20. Waiver. Any failure by Factor to exercise any of its rights
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hereunder, shall not be deemed to be a waiver by Factor of such or any other
rights, nor in any manner impair the subsequent exercise of the same or any
other right, and any waiver by Factor of any default shall not constitute a
waiver of any subsequent default.
21. Choice of Law; Venue. The parties hereto agree that the
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transaction described herein is expected to be a Qualified transaction, as
defined in Section 35.51 of the Texas Business and Commerce Code (although no
assurance is given that Factor will purchase any specific amount of Receivables
pursuant hereto), and that to the maximum extent permitted by applicable law,
all issues relating to the transaction described herein shall be construed
according to the laws of the State of Texas. Performance of this Agreement
shall be solely within Xxxxxx County, Texas. For purposes of any suit relating
to this Agreement, Factor and Seller submit themselves to the jurisdiction of
any court sitting in the State of Texas and further agree that venue in any suit
arising out of this Agreement shall be fixed in Xxxxxx County, Texas. Final
judgment in any suit shall be conclusive and may be enforced in any jurisdiction
within or without the United States of America, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of such
liability.
22. Entire Agreement. This Agreement represents the entire Agreement
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between the parties, and may not be amended or modified except by written
instrument executed by Factor and Seller. This Agreement supersedes and
replaces any prior agreement among the parties, oral or written. No
representations, whether oral or written, are being relied upon which are not
expressly set forth in this Agreement. The parties recognize that any oral
representations and prior written representations are "merged" into this
Agreement and no reliance can be placed thereon.
23. Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of the parties hereto and their respective administrators,
legal representatives, successors and assigns. Factor may, at its discretion,
sell or assign its rights and interests hereunder in any manner, by sale of
participation interest or otherwise.
24. Severability. If any provision of this Agreement shall, for any
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reason, be held to violate any applicable law, then the remaining portion of
this Agreement shall remain in full force and effect.
25. Headings, Construction. The headings contained in this Agreement
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are for reference purposes only and shall not modify or affect the terms of this
Agreement in any manner.
26. Saturday, Sunday or Legal Holiday. If any day provided in this
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Agreement for the performance of any obligation should fall on a Saturday,
Sunday or Legal Holiday, the compliance with such obligation or delivery shall
be deemed acceptable on the next business day following such day.
27. Receipt of Payment. Any payment received by Factor on a Saturday,
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Sunday or Legal Holiday, or any payment that is received by Factor after 3:00
p.m., shall be deemed received on the next day that is not a Saturday, Sunday or
Legal Holiday.
28. Notices. Any notice, demand or request permitted, required or
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desired to be given under this Agreement shall be in writing and shall be deemed
effectively given when actually hand delivered or when sent by United States
certified or registered mail, return receipt requested, postage prepaid, or sent
by private, receipted carrier guaranteeing same-day or next-day delivery,
addressed as follows:
If to Factor: Corporate Strategies, L.L.C.
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
000 Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
If to Seller: PRO2, INC.
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
000 Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
29. Determination of Purchase Price. The Purchase Price of the
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Receivables has been determined pursuant to negotiations between Factor and
Seller and represents the fair market value thereof, after due consideration has
been given to the nature of the Receivable, the probability of prompt collection
thereof, the credit worthiness of the Account Debtor, the payment history of the
Account Debtor and other economical factors relative to the Receivables.
Further, in arriving at the Purchase Price, consideration has been given to
services rendered and services that will be rendered in the future by Factor in
connection with credit investigations of Account Debtor, supervising the
ledgering of accounts purchased, supervising the collection of accounts
purchased, and the assumption of certain credit risks. The parties hereto
acknowledge that the purchase of the Receivables by Factor constitutes an
outright conveyance by the Seller to Factor.
30. Provision Regarding Usury. Nothing contained herein, nor any
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course of dealing in the future, shall be construed to be anything other than an
outright purchase and sale of such Receivables. All right, title and interest
of the Seller has been conveyed to Factor and such transaction is not subject to
a security interest in the Receivables and the Purchase Price paid to Seller by
Factor constitutes consideration for the acquisition of the Receivables and
under no circumstances shall be construed as a loan and no consideration herein
set forth is for the use, forbearance or detention of money. Nothing contained
herein shall be construed as to require the payment of interest; however, should
a court of competent jurisdiction rule that any consideration paid hereunder are
in fact or in law to be treated as interest, in no event shall Seller be
obligated to pay that interest at a rate in excess of the maximum amount
permitted by law, and all agreements, conditions, or stipulations contained
herein, if any, which may in any event or contingency whatsoever operate to
bind, obligate, or compel Seller to pay a rate of interest exceeding the maximum
rate of interest permitted by law shall be without binding force or effect at
law or in equity to the extent only of the excess of interest over such maximum
rate of interest permitted by law. Also in such event, Factor may "spread" all
charges characterized as interest over the entire term of all transactions with
Seller and will refund to Seller the excess of any payments made over the
highest lawful rate. It is the intention of the parties hereto that in the
construction and interpretation of this Agreement, the foregoing sentence shall
be given precedence over any other agreement, condition, or stipulation herein
contained which is in conflict with same.
31. Power of Attorney. For so long as this Agreement has not been
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terminated, Factor is hereby irrevocably authorized as Seller's
Attorney-in-Fact, with full authority in the place of Seller and in the name of
Seller or otherwise, in Factor's discretion, to take any action and to execute
any instrument which Factor may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(a) To endorse in the name of Seller, and to take all actions
necessary to collect for deposit to Factor's account, all checks, drafts and
other forms of trade acceptances, negotiable instruments and other forms of
payment (hereinafter collectively referred to as the "Payments") which are
tendered in payment of Receivables or in payment of insurance claims relating to
the Receivables, or which are received by Factor. The authorization includes,
without limitation, the power to open, cash, endorse, deposit and otherwise
collect all such Payments in the event they are not made payable to Factor;
(b) To contact Account Debtors at any time in order to verify
and/or collect Receivables;
(c) To contact the Internal Revenue Service and other State and
local taxing authorities in order to ascertain Seller's tax liability;
(d) To obtain and adjust insurance required to be paid to Factor;
(e) To ask, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Receivables;
(f) To file, at Seller's expense, any claims or take any action or
institute any proceedings which Factor may deem necessary or desirable for the
collection of any of the Receivables or any of the collateral securing payment
of the Receivables or otherwise to enforce the rights of Factor with respect to
the Receivables.
This Power of Attorney is irrevocable and coupled with an interest. Seller
hereby acknowledges that Seller is not entitled to any notice, demand or
presentation with respect to payment of any Receivable and agrees that Factor
may extend or renew from time to time the payment of any Receivable without
notice to or consent by Seller.
32. Joint and Several Obligations. If more than one party is executing
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this Agreement as Seller, each party agrees that its obligations hereunder are
joint and several, and that its obligations shall be not released, diminished,
impaired or affected by the occurrence of any one or more of the following
events, all of which may occur without notice to or consent of any other Seller:
(a) Any release, partial release, subordination or loss of any
security, guaranty or collateral and any time existing in connection with the
obligations contained herein;
(b) The death, insolvency, bankruptcy, disability or incapacity of
any Seller, guarantor, or any other party now or hereafter obligated hereon;
(c) Any renewal, extension, and/or rearrangement of all or any
portion of the obligations contained herein;
(d) Any neglect, delay, omission, failure or refusal of Factor to
take or prosecute any action for the collection of the obligations provided
herein;
(e) The unenforceability for any reason of all or any part of the
obligations contained herein against any Seller, guarantor or other party;
(f) The finding of any payment by any Seller to constitute a
preference under bankruptcy or similar debtor relief law;
(g) Any release or partial release of liability of any Seller,
guarantor or other party; and
(h) Any other action that might impair rights in the nature of
contribution or subrogation that any Seller might otherwise have.
33. No Obligation to Purchase Further Receivables. Seller specifically
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acknowledges and agrees that, anything herein to the contrary notwithstanding,
Factor has the right to approve or reject any or all future accounts receivable
proposed for sale under this Agreement IN ITS SOLE DISCRETION, and no course of
conduct or prior course of dealing shall establish any commitment, obligation or
agreement to purchase future accounts receivable.
34. Use of Facsimiles. The parties acknowledge and agree that it is
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anticipated that execution of this Agreement, as well as schedules or other
documents executed in connection herewith, may be evidenced by facsimile
signatures, and such documents containing facsimile signatures shall be of the
same force and effect as if original signatures had been obtained.
(Remainder of Page Intentionally Left Blank)
EXECUTED as of this 8th day of October, 2001.
FACTOR:
CORPORATE STRATEGIES, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx, President
SELLER:
PRO2, INC.,
By: /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, President
The undersigned, Xxxxx Xxxxxxxx, hereby joins in the execution of this
Purchase and Sale Agreement for the purpose of guarantying to the Purchaser that
any check or other payment of a Receivable delivered directly to or received
directly by Seller will be delivered to Purchaser within twenty-four hours of
such delivery to or receipt by Seller, in the form received by Seller, and the
undersigned shall indemnify and hold the Purchaser harmless from any cost,
liability or expense the Purchaser may incur on account of any failure of Seller
to comply with the foregoing.
EXECUTED as of this 8th day of October, 2001
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
SCHEDULE A
TO PURCHASE AND SALE AGREEMENT
DATED OCTOBER 8, 2001 BETWEEN
CORPORATE STRATEGIES, L.L.C. AND
PRO2, INC.
EXHIBIT "A"
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Receivables
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1. Invoice number 7070 in the amount of $7,050.00 dated September 28, 2001,
from Seller to Aspen Technology, Inc., a copy of which invoice is attached
hereto.
2. Invoice number 7071 in the amount of $5,550 dated September 28, 2001,
from Seller to Sprint PCS, a copy of which invoice is attached hereto.
3. Invoice number 7072 in the amount of $9,000 dated September 28, 2001,
from Seller to Aspen Technology, Inc., a copy of which invoice is attached
hereto.
4, Invoice number 7080 in the amount of $7,950.00 dated October 8, 2001,
from Seller to Aspen Technology, Inc., a copy of wich invoice is attached
hereto.
