FIRST AMENDMENT
TO FACTORING AGREEMENT
THIS FIRST AMENDMENT (this "Amendment") to the Factoring Agreement is
entered into as of the 25th day of July, 2006, by and between
ITECHEXPRESS, Inc. and Drug Consultants, Inc. (individually and
collectively, "Customer") and SYSTRAN Financial Services Corporation
("SYSTRAN").
RECITALS:
A. As of November 8, 2005, Customer and SYSTRAN executed a certain
Factoring Agreement and Addendum to Factoring Agreement (the "Factoring
Agreement"), setting forth the terms upon which SYSTRAN would purchase
certain Bills from Customer; and
B. In connection with the Factoring Agreement, Customer executed and
delivered to SYSTRAN certain other documents, agreements, guarantees,
deposit account control agreements, consents, certificates, assignments,
and financing statements in connection with the obligations referred to in
the Factoring Agreement (all of the foregoing, together with the Factoring
Agreement, are hereinafter collectively referred to as the "Transaction
Documents"); and
C. Customer has requested that SYSTRAN amend and modify certain terms and
covenants in the Factoring Agreement, and SYSTRAN is willing to do so upon
the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements
and promises contained herein, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties hereto
for themselves and their successors and assigns do hereby agree, represent
and warrant as follows:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Factoring Agreement.
2. Paragraph 6.1 and 6.4 under Section 6, entitled, "RECOURSE,
DISPUTES AND CHARGEBACKS," of the Factoring Agreement are hereby amended to
recite as follows:
6.1 All of The Xxxx(s) are purchased by SYSTRAN from Customer with
Recourse. All of The Xxxx(s) may be Chargedback to Customer at any
time after one hundred twenty (120) days for a Commercial Account and
steamship companies, and sixty (60) days for Transportation Account(s)
after the purchase date of The Xxxx(s) if not collected from Debtor
within such period or at any time, if SYSTRAN determines, in its sole
discretion, that The Xxxx(s) is not collectible. All of The Xxxx(s)
owing by Canadian Debtors or logistics companies are subject to
Chargeback sixty (60) days from the date of purchase by SYSTRAN. All
Special Purchase Bills are subject to Chargeback sixty (60) days from
the date of purchase by SYSTRAN. SYSTRAN shall not deem a disputed
Xxxx or Special Purchase Xxxx uncollectible without allowing Customer
a reasonable time to settle the dispute not to exceed fourteen (14)
days from notice of dispute. It is within SYSTRAN's discretion as to
when The Xxxx(s) over such time periods may be Chargedback to
Customer.
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6.4 CLEARANCE DAYS. Clearance Days shall mean (i) three (3) business
days. For all purposes and computations under this Agreement,
Clearance Days will be added to the date on which any payment is
received by SYSTRAN.
The remainder of Section 6 shall remain as originally written.
2. The Addendum to the Factoring Agreement shall be deleted in its
entirety and replaced with the following:
Addendum to Factoring Agreement dated November 8, 2005
This Addendum is to the Factoring Agreement (the "Agreement") between
Systran Financial Services Corporation ("SYSTRAN") and ITECHEXPRESS, Inc.
and Drug Consultants, Inc. (individually and collectively, the "Customer").
Section 2, entitled, "Purchase of Bills", paragraph 2.4 of the Agreement is
amended to include the following:
Customer may mail all Bills directly to account debtors. All Bills so
directly mailed by Customer must be stamped with SYSTRAN's notice of
assignment as noted below. Customer will provide copies of all Bills,
together with signed copies of the respective proof of delivery prior
to SYSTRAN considering them for purchase. Nothing in the Addendum
shall obligate SYSTRAN to purchase any Xxxx owing by the account
debtors, listed above. Customer must obtain SYSTRAN's consent prior
to adding any account debtors to the list of direct mailed parties.
Remit Only To:
Systran Financial Services Corp.
XX Xxx 00000-0000
Xxxxxxxx, XX 00000-0000
This account is sold, assigned, and payable only to SYSTRAN.
The remainder of Section 2 shall remain as originally written.
Paragraph 18.1 of the Factoring Agreement is amended by adding the
following language:
Customer may request that Systran perform the necessary due diligence
in order to consider the Customer as a candidate for conversion to an
Asset Based Loan ("ABL"). In the event Customer selects this option
and the conversion to ABL is approved, additional credit underwriting
and new loan documentation may be required by Systran pursuant to its
lending criteria and the Early Termination Premium will be waived.
The remainder of Section 18 shall remain as originally written
3. Exhibit A of the Factoring Agreement shall be deleted in its
entirety and replaced with the following:
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Exhibit A to Factoring Agreement dated November 8, 2005
The terms used in this Exhibit A have the same definitions as those
used in the Factoring Agreement. In case of conflict of definition,
the definitions in this Exhibit "A" shall prevail.
Customer shall pay a discount fee of sixty-five hundredths of one
percent (0.65%) of the face amount of all Bills purchased by Systran
("Discount Fee").
In addition, Customer will pay a one time fee of 0.50% on all Bills
that remain unpaid following the expiration of an initial ninety (90)
days from the date that SYSTRAN originally purchased the Xxxx. This
fee shall be deemed incurred and due on the 91ST day and shall be
reflected on Customer's settlement statement.
In addition, Customer will pay a fee at an annual rate equal to Prime
(defined below) plus 1.50% per annum of all funds employed to purchase
Bills (the "Prime Plus Fee"). "Prime" Prime Rate. The Prime Plus Fee
shall be calculated on the basis of a 360-day year and the actual
number of days elapsed in each month. Funds employed shall be
calculated by SYSTRAN on a daily basis based upon bills unpaid and
outstanding, less the Deposit. A change in the Prime Plus Fee due to
a Prime Rate change will be effective upon the date of the change,
which will be indicated on the settlement statement. "Prime Rate"
means the prime commercial rate of interest per annum as determined
from time to time by Xxxxx Fargo Bank, N.A., or any other money center
bank that Systran selects, at the bank's main office and designated as
the bank's "Prime Rate," from time to time in effect.
A managed account shall also be created for all Bills that SYSTRAN
does not purchase (the "Managed Account"). The deposit on the Managed
Account is 100%."
4. Conditions of Effectiveness. This Amendment shall become
effective as of July 25, 2006, upon satisfaction of all of the following
conditions precedent:
(a) SYSTRAN shall have received one (1) duly executed copies of this
Amendment; and
(b) The representations contained in this Amendment shall be true and
accurate.
5. Customer represents and warrants that after giving effect to this
Amendment, (a) each and every one of the representations and warranties
made by or on behalf of Customer in the Factoring Agreement is true and
correct in all respects on and as of the date hereof, except to the extent
that any of such representations and warranties related, by the expressed
terms thereof, solely to a date prior hereto; (b) Customer has duly and
properly performed, complied with and observed each of its covenants,
agreements and obligations contained in the Factoring Agreement; and (c) no
event has occurred or is continuing, and no condition exists which would
constitute a default or an event of default.
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6. Amendment to Factoring Agreement. (a) Upon the effectiveness of
this Amendment, each reference in the Factoring Agreement to "Factoring
Agreement," "Agreement," the prefix "herein," "hereof," or words of similar
import, and each reference in the Transaction Documents to the Factoring
Agreement, shall mean and be a reference to the Factoring Agreement as
amended hereby. (b) Except as modified herein, all of the representations,
warranties, terms, covenants and conditions of the Factoring Agreement, the
Transaction Documents and all other agreements executed in connection
therewith shall remain as written originally and in full force and effect
in accordance with their respective terms, and nothing herein shall affect,
modify, limit or impair any of the rights and powers which either party may
have thereunder. The amendment set forth herein shall be limited precisely
as provided for herein, and shall not be deemed to be a waiver of,
amendment of, consent to or modification of any of either party's rights
under or of any other term or provisions of the Factoring Agreement, any
Transaction Document, or other agreement executed in connection therewith,
or of any term or provision of any other instrument referred to therein or
herein or of any transaction or future action on the part of Customer which
would require the consent of SYSTRAN and/or Customer, as the case may be,
including, without limitation, waivers of events of default which may exist
after giving effect hereto. Customer and SYSTRAN as applicable, each
ratifies and confirms each term, provision, condition and covenant set
forth in the Factoring Agreement and the Transaction Documents and
acknowledges that the agreement set forth therein continue to be legal,
valid and binding agreements, and enforceable in accordance with their
respective terms.
7. Authority. Each party to this Agreement hereby represents and
warrants to the other that (a) it has legal power and authority to execute
and deliver this Amendment; (b) the officer executing this Amendment on
behalf of such party has been duly authorized to execute and deliver the
same and bind such party with respect to the provisions provided for
herein; (c) the execution and delivery hereof by such party and the
performance and observance by such partyof the provisions hereof do not
violate or conflict with the articles of incorporation, regulations or by
laws of such party or any law applicable to such party or result in the
breach of any provision of or constitute a default under any agreement,
instrument or document binding upon or enforceable against such party; and
(d) this Amendment constitutes a valid and legally binding obligation upon
such party in every respect.
8. Counterparts. This Amendment may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be an
original, but all of which together shall constitute one and the same
document. Separate counterparts may be executed with the same effect as if
all parties had executed the same counterparts.
9. Governing Law. This Amendment shall be governed by and construed
in accordance with the law of Oregon.
IN WITNESS WHEREOF, Customer and SYSTRAN have hereunto set their hands
as of the date first set forth above.
[SIGNATURE PAGE TO FOLLOW]
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SYSTRAN Financial Services Corporation
By: /Xxxxxxxx Xxxxxx/
_______________________________________
Title: VP
_______________________________________
Dated: 7/25/06
_______________________________________
ITECHEXPRESS, Inc.
By: /Xxxxx Xxxxx/
_______________________________________
Print Name: Xxxxx Xxxxx
_______________________________________
Title: Director
_______________________________________
Dated: 7/24/06
_______________________________________
Drug Consultants, Inc.
By: /Xxxxx Xxxxx/
_______________________________________
Print Name: Xxxxx Xxxxx
_______________________________________
Title: Director
_______________________________________
Dated: 7/24/06
_______________________________________
CONSENT OF GUARANTOR
Each of the undersigned, being a guarantor of Customer's obligations
to SYSTRAN pursuant to a certain guaranty agreement with SYSTRAN, hereby
consents and agrees to be bound by the terms, conditions and execution of
the above Amendment and hereby further agrees that guarantor's obligations
shall be continuing as provided in said guaranty agreement, and said
guaranty agreement shall remain as written originally and continue in full
force and effect in all respects.
Date: 7/24/06 /Xxxxx Xxxxxxx/
_________ ______________________________
Xxxxx Xxxxxxx
Date: 7/24/06 /Xxxxx More/
_________ ______________________________
Xxxxx Xxxxx
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