AMENDMENT TO ACCOUNT TRANSFER AGREEMENT
Exhibit
10.1
AMENDMENT
TO ACCOUNT TRANSFER AGREEMENT
This
Amendment dated this 26th
day of
March, 2008, shall modify that certain Account Transfer Agreement dated
December
6, 2007
as
amended (the “Agreement”) by and between Xxxxx Fargo Bank, National Association
acting through its Xxxxx Fargo Business Credit operating division (“WFBC”) and
Digerati
Networks, Inc. (“Customer”).
For
good
and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, WFBC and Customer agree as follows:
Sections
1, 5 and 10 of the Agreement are deleted in its entirety and replaced with
the
following:
“1.
Offer
of Accounts.
At its
election from time to time during the term of this Agreement, Seller agrees
to
offer for sale to WFBC certain of its accounts arising out of sales of goods,
or
services rendered, by Seller, and to sell to WFBC no less than $350,000 nor
more
than $5,000,000 a month, of such accounts on the terms set forth in this
Agreement such of the offered accounts as WFBC may accept for purchase. WFBC
shall have the absolute right in its sole discretion to reject any or all
offered accounts, whether or not WFBC has previously purchased accounts of
any
particular account debtor hereunder. The parties agree that without the prior
consent of WFBC, the maximum face amount of accounts that WFBC may purchase
hereunder at any time, together with the then outstanding face amount of
outstanding accounts previously purchased by WFBC from Seller hereunder, will
not exceed Five Million Dollars and no cents ($5,000,000.00), (the “Maximum
Credit Facility”). WFBC’s consent to purchase accounts in excess of such amount
may be evidenced by WFBC’s acceptance for purchase of such offered
accounts.”
“5.
Fixed
and Variable Discounts.
For all
domestic accounts, WFBC’s “Fixed Discount” means a discount of 0.0349% of the
Net Amount of such account for accounts paid within 1 day and an additional
0.0349% of the Net Amount of such account for each additional 1 day period
that
an account remains unpaid thereafter.
For
all
foreign accounts, WFBC’s “Fixed Discount” means a discount of 1.02% of the Net
Amount of such account for accounts paid within 1 day and an additional 0.0349%
of the Net Amount of such account for each additional 1 day period that an
account remains unpaid thereafter.
Termination
Fee.
If the
Agreement is terminated by WFBC upon the occurrence of an Event of Default,
or
is terminated by Seller, in view of the impracticability and extreme difficulty
of ascertaining actual damages and by mutual agreement of the parties as to
a
reasonable calculation of WFBC's lost profits as a result thereof, in addition
to payment of all principal, interest, fees, expenses and other Obligations,
Seller shall pay WFBC upon the effective date of such termination a fee in
an
amount equal to three-tenths percent (0.3%) of the Maximum Credit Facility
plus
the then outstanding principal balance of any Advances under this Credit
Facility. Such fee shall be presumed to be the amount of damages sustained
by
WFBC as the result of termination and Seller acknowledges that it is reasonable
under the circumstances currently
existing.”
“10. Representations,
Warranties and Covenants of Seller.
Seller
hereby represents and warrants to WFBC with respect to each account offered
by
Seller to WFBC hereunder that (i) Seller is the sole owner of such account,
which account is free and clear of any liens, claims, equities or encumbrances
whatsoever, and upon each purchase by WFBC of such account, WFBC will own such
account free and clear of any liens, claims, equities or encumbrances whatsoever
and the consideration received by Seller from WFBC for such account is fair
and
adequate, (ii) Seller is the sole oblige under such account, and has full power
and is duly authorized to sell, assign and transfer such account to WFBC
hereunder, and the date of sale of such account is not more than 60
days
after the date of the original invoice relating to such account, (iii) Seller
has no knowledge of any fact which would lead it to expect that, at the date
of
sale of such account to WFBC, such account will not be paid in the
full stated
amount when due, (iv) such account arises out of a bona fide sale of conforming
goods or the bona fide rendition of services by Seller, and all underlying
goods
have been delivered to the account debtor, or all underlying services have
been
rendered by Seller, in complete fulfillment of all of the terms and conditions
of a fully executed, delivered and unexpired contract with the account debtor,
and the account debtor has accepted the goods or services to which
the account
relates, (v) unless WFBC agrees to the contrary in writing, such account
is denominated
and payable only in United States dollars,
(vi) such account constitutes the legal, valid and binding payment obligation
of
the account debtor, enforceable in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the enforcement
of
creditor’s rights generally), (vii) such account is current and not past due,
has not been paid by or on behalf of the account debtor in whole or in part,
and
is not and will not
be
subject to any dispute, rescission, set-off, recoupment, defense or claim by
the
account debtor, whether relating to price, quality, workmanship, delay in
delivery, set-off, counterclaim or otherwise, and the account debtor has not
and
will not claim any defense of any kind or character (other than
bankruptcy or
insolvency arising after the date of sale of such account to WFBC hereunder)
against payment of such account, and (viii) as of the date of purchase by WFBC
of such account the account debtor with respect to such account is not a debtor
in any bankruptcy proceedings, insolvent, undergoing composition or adjustment
of debts or unable to make payment of its obligations when due. Seller further
represents and warrants to WFBC that (a) the execution, delivery and performance
of this Agreement by Seller have been duly authorized and this Agreement
constitutes the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, (b) Seller is not a debtor in
any
bankruptcy proceedings, insolvent, undergoing composition or adjustment of
debts
or unable to make payment of its obligations when due and no petition in
bankruptcy has been filed by or against Seller or any affiliate thereof, nor
has
Seller or any of its affiliates filed any petition seeking an arrangement of
its
debtors or for any other relief under the United States Bankruptcy Code (the
“Bankruptcy
Code”),
and no
application for appointment of a receiver or trustee for all or a substantial
part of the property of Seller or any affiliate thereof is pending, nor has
Seller or any affiliate thereof made any assignment for the benefit of
creditors, (c) Seller is not in default of any debt or obligation to any lender
or other creditor, and (d) Seller’s principle place of business, chief executive
office, location where the records concerning its books of account and contract
rights are kept, and location of any property subject to the security interest
granted in Section 7 hereof, unless changed upon notice to WFBC complying with
the next following sentence and Section 15 of this Agreement, is its
“Address
for Notices”
described in Section 15 hereof, (e) Seller and each Guarantor is solvent, is
able to pay its or his debts as they become due, and has no outstanding liens,
suits, garnishments, bankruptcies, or court actions which could render it or
him
insolvent, (f) all federal, state, county, city, and other taxes, including
without limitation, income taxes, payroll taxes, real estate taxes, and sales
taxes which are due and owing by Seller have been paid, and by the execution
hereof, Seller certifies that all future taxes, of any kind and character,
will
be paid when due. Seller agrees not to change the location of its principal
place of business or chief executive office, the location where its records
concerning its books of account or contract rights are kept, or the location
of
any property subject to the security interest granted in Section 7 hereof,
without giving at least 15 days advance written notice thereof to
WFBC.
Each
representation and warranty of Seller contained in this Agreement shall be
deemed to be made at and as of the date hereof and at and as of the date of
each
sale of accounts to WFBC hereunder.
Seller
agrees to indemnify and hold WFBC harmless against any breach by Seller of
any
representation, warranty or agreement of Seller contained in this Agreement,
and
against any claims or damages arising out of the manufacture, sale, possession
or use of, or otherwise relating to, goods, or the performance of services,
associated with or relating to accounts or related rights purchased (or with
respect to which a security interest is granted) hereunder.
Seller
agrees to notify WFBC immediately of any breach by Seller of any representation,
warranty or agreement of Seller contained herein or should any representation,
warranty or agreement made herein become untrue or false at any time. Seller
further agrees to notify WFBC immediately of the assertion by any account debtor
of any dispute or other claim (including any defense or offset asserted by
any
account debtor) with respect to any account sold to WFBC hereunder, or with
respect to any related goods or services. Upon WFBC’s request, Seller agrees to
settle, at its own expense and for the benefit of WFBC any such dispute or
claim
upon such terms as WFBC may in its sole discretion deem advisable or (ii) to
assign the related account to Seller, without recourse to WFBC, and charge
any unpaid balance with respect thereof (up to the amount of the Initial Payment
with respect thereto and WFBC’s Discount and Fees (through the date of such
change) with respect thereto) against any amounts withheld by WFBC from Reserves
pursuant to Section 6 hereof or against such other funds, WFBC may require
Seller to pay (and Seller hereby agrees to pay) to WFBC on demand any such
unpaid balance. Seller agrees to notify WFBC in advance of the filing of any
voluntary bankruptcy proceeding or any other voluntary insolvency
proceeding.”
Except
as
specifically set forth herein, the Agreement is unchanged and is in full force
and effect.
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XXXXX
FARGO BANK, NATIONAL
ASSOCIATION
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Digerati
Networks, Inc
a
Texas Corporation
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By:
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Xxxxx
X. XxXxxxx
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By:
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Xxxxxx
X. Xxxxx
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(Print)
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By:
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/s/
Xxxxx X. XxXxxxx
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By:
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/S/
Xxxxxx X. Xxxxx
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(Sign)
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(Sign)
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Title:
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Vice
President-Division Manager
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Title:
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CEO
& President
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Date:
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March
26, 2008
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Date:
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March
26, 2008
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