EXHIBIT 2.43
UNITED FACTORS, L.L.C. CLIENT #:_________________
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement ("Agreement") is executed this 10 day
of April, 1996 between VULCAN ENERGY CORPORATION, a Texas corporation
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("Seller"), and UNITED FACTORS, L.L.C., a Texas limited liability company
("Purchaser").
RECITALS
A. Seller desires to obtain cash on an accelerated basis by selling
to Purchaser certain rights to payment for goods sold or leased and services
rendered to third parties evidenced by one or more invoices ("Invoice[s]")
constituting accounts receivable ("Account[s] Receivable") due Seller from a
customer ("Customer").
B. Seller and Purchaser desire to establish a contractual format
under which Seller would sell and Purchaser would purchase certain Accounts
Receivable owed Seller by Customer.
C. This Agreement shall serve as a the master agreement between
Seller and Purchaser concerning the purchase and sale of certain Accounts
Receivable of Customer.
NOW, THEREFORE, in consideration of the promises and undertakings set
forth herein, the benefits accruing to Seller and Purchaser, and other good and
valuable consideration, Seller and Purchaser hereby agree as follows:
AGREEMENTS
1. Purchase and Sale of Accounts Receivable. Seller hereby sells,
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assigns, transfers, conveys and delivers to Purchaser and Purchaser hereby
purchases and receives from Seller all right, title and interest of Seller in
and to the Accounts Receivable due from Customer to Seller, including, without
limitation, the full power and authority to collect the Accounts Receivable
through legal action or otherwise. In order to qualify as an Accounts Receivable
under this Agreement, a specific Invoice of an approved Customer must have been
approved by Purchaser in Purchaser's sole and absolute discretion. Evidence of
acceptance of an Account Receivable shall be indicated on Purchaser's standard
Accounts Receivable Verification Report ("ARVR") form. The ARVR shall identify
the Customer, the number(s) of the Invoice(s), the purchase price, the initial
payment and the Contingent Reserve (defined below).
2. Purchase Price. The purchase price ("Purchase Price") of a
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qualifying Account Receivable will be determined out of the initial payment made
by Purchaser indicated on the ARVR (which shall be 80% of the net invoice), plus
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an amount ("Bonus") equal to:
(a) an additional 18.75% of the applicable Invoice if the
Invoice is paid within 10 days from the date of the initial
payment; or
(b) an additional 17.50% of the applicable Invoice if the
Invoice is paid between 11 and 20 days from the date of the
initial payment; or
(c) an additional 16.50% of the applicable Invoice if the
Invoice is paid between 21 and 36 days from the date of the
initial payment; or
(d) an additional 15.25% of the applicable Invoice if the
Invoice is paid between 37 and 40 days from the date of the
initial payment; or
(e) an additional 14.00% of the applicable Invoice if the
Invoice is paid between 41 and 50 days from the date of the
initial payment.
The difference, if any, between the Purchase Price and the amount
paid on the Invoice shall be the "Fee" earned by Purchaser. The
Bonus shall be reduced, as set forth in Section 10 of this
Agreement, by (i) the shortage of payments on the Invoice
aggregating less than the full amount of the Invoice, and/or (ii)
partial payments on an Invoice. The percentage amounts indicated
above to determine the Bonus shall be called the "Bonus
Percentage."
3. Contingent Reserve. Each ARVR shall provide for a hypothetical
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contingent reserve (the "Contingent Reserve") representing a holdback from the
Purchase Price for the Invoice. The Contingent Reserve shall be held by
Purchaser to secure performance of Purchaser's offset, deduction and other
rights set forth in this Agreement, and to absorb any losses caused by a
Customer not paying the full amount of an Invoice. The Contingent Reserve may
not only be applied by Purchaser to the specific Invoice for which it is created
in the applicable ARVR, but also on any other Accounts Receivable acquired by
Purchaser under this Agreement. The Contingent Reserve as to each Invoice shall
be promptly paid by Purchaser to Seller to the extent there is an adjustment in
the Purchase Price in accordance with Section 2 of this Agreement. Upon the
termination of this Agreement, or sooner in Purchaser's sole and absolute
discretion, any unused portion of the Contingent Reserve shall be paid by
Purchaser to Seller, without interest thereon.
4. Qualifying Accounts Receivable. Purchaser shall have no
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obligation to acquire any Accounts Receivable from Seller under this Agreement.
If Seller desires to sell an Invoice to Purchaser, however, the terms of the
purchase and sale shall be governed by this Agreement. Purchaser reserves the
right to reject any and all requests by Seller to sell an Account Receivable to
Purchaser. All Accounts Receivable sold to Purchaser under this Agreement shall
contain terms that payment is due within 30 days of invoice, shall be on invoice
forms acceptable to Purchaser, and Seller must furnish Purchaser with proof of
delivery of goods and/or services satisfactory to Purchaser. Original invoices,
together with appropriate copies, shall also be furnished to Purchaser at the
time of any acquisition of an Account Receivable under this Agreement.
/s/ JWW
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INITIALS
5. Investigations by Purchaser. Prior to the purchase of any Account
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Receivable or any time thereafter, Purchaser shall have the right to conduct
such investigations of the Customer and the transaction giving rise to the
Account Receivable as Purchaser deems appropriate. Purchaser shall have the
right periodically to verify that the Customer owing the Account Receivable is
satisfied with the goods and/or services furnished by Seller in connection
therewith and to conduct credit searches on the Customer. Any investigations or
other information obtained by Purchaser with respect to the Customer is for the
sole benefit of Purchaser.
6. Notification to Customer. Purchaser shall have the right to require
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acknowledgement from the Customer of the sale of an Account Receivable and
direct that all payments made on the Account Receivable purchased by Purchaser
shall be made directly to Purchaser.
7. Representations and Warranties of Seller. As an inducement for
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Purchaser to enter into this Agreement, and with knowledge that the truth and
accuracy of such representations and warranties are being relied upon by
Purchaser (notwithstanding any investigation by Purchaser), Seller represents
and warrants to Purchaser that:
(a) Seller is the sole owner and beneficiary of the Accounts
Receivable and has not previously assigned, transferred or
encumbered the Accounts Receivable or any interest therein, in
whole or in part.
(b) Seller has the full power and authority to sell the Accounts
Receivable to Purchaser and has duly authorized its sale to
Purchaser in accordance with this Agreement.
(c) The applicable Invoice is for the amount stated in the
corresponding ARVR and there are no setoffs, deductions,
disputes, contingencies or counterclaims against Seller of any
kind whatsoever which could affect payment on the Accounts
Receivable.
(d) No sums have been collected on any Invoice, the full amount of
each Invoice is presently due and owing to Seller and payment
thereon by Customer is not contingent upon fulfillment of any
other obligation at any time.
(e) The Accounts Receivable are the result of a bona fide sale and
delivery of goods or performance of services rendered by Seller
to Customer.
(f) All financial information concerning Seller or Customer delivered
by Seller to Purchaser in connection with this Agreement or the
purchase and sale of Accounts Receivable are true, accurate and
complete in all material respects.
(g) Seller will not modify the terms of the Accounts Receivable with
Customer unless Purchaser's prior written consent is given.
(h) Seller has all requisite licenses, patents and trademarks to
allow it to lawfully complete the transaction made the subject of
each Invoice.
8. Covenants of Seller. Seller hereby covenants and agrees with Purchaser
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as follows:
(a) Should Seller receive payment of all or any portion of an Account
Receivable, Seller shall promptly notify Purchaser and shall hold
all checks and other payments in trust for Purchaser and shall
deliver to Purchaser such checks and other payments within two
(2) business days of receipt of same.
(b) Seller shall deliver to Purchaser upon request such resolutions
or certificates as Purchaser may reasonably request from time to
time to evidence Seller's power and authority to act under this
Agreement.
(c) Seller shall not change its corporate structure, existence or
name without the prior written consent of Purchaser, which
consent shall not be unreasonably withheld.
(d) Seller shall not sell, transfer, pledge, encumber or grant a
security interest in any of the Accounts Receivable to any
person, firm, association, corporation or business entity of any
type or character other than to Purchaser.
(e) Seller shall promptly notify Purchaser of any disagreement or
dispute with Customer.
9. Nonrecourse Nature of Sale. If the Account Receivable is not paid by
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Customer for a reason other than a breach by Seller of its representations,
warranties and covenants under this Agreement, Seller shall not be liable to
Purchaser; accordingly, Purchaser is assuming the credit risk associated with
payment by Customer on each Invoice. If Seller has not breached any of its
representations, warranties or covenants set forth in this Agreement, any loss
sustained by Purchaser shall only be collected out of the Contingent Reserve.
10. Closing of Invoice. Upon Purchaser's good faith determination that a
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particular transaction relating to an Invoice has been completed, Purchaser
shall close out such transaction by collecting its Fee out of the Contingent
Reserve, then adjusting payment of the Purchase Price (and making any additional
payments to Seller in accordance with Section 2 of this Agreement), and then
applying any remaining Contingent Reserve not applied on the Purchase Price to
other Accounts Receivable acquired by Purchaser under this Agreement, or
refunding the unused Contingent Reserve to Seller. Purchaser shall be entitled
to a Fee on each Invoice calculated as follows: (i) if an Invoice is paid in
full by a single payment, the "Fee" shall be the difference between the
Purchase Price and the amount collected on the Invoice; (ii) if an Invoice is
paid in full but with more than one payment, the "Fee" shall be the difference
between the Purchase Price (calculated using a weighted average of the Bonus
taking into account different Bonus Percentages applied on the amount collected
with each payment); (iii) if an Invoice is closed with a single payment
constituting less than the entire amount of the Invoice, the Bonus shall be
reduced by the shortage of funds paid on the Invoice; and (iv) if an Invoice is
closed but with more than one payment aggregating less than the full amount of
the Invoice, the Bonus shall be reduced by the
/s/ JWW
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Initials
Page2
shortage of funds paid on the Invoice and calculated by using a weighted average
determined by applying the Bonus Percentage on the amount collected with each
payment.
11. Right to Settle Accounts Receivable. Purchaser may, in its good faith
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discretion, settle or compromise any Account Receivable due to a disagreement or
dispute with the Customer, including, without limitation, invoicing error,
dissatisfaction with the goods and/or services rendered by Seller or the
inability or difficulty of the Customer to pay the full amount of the Account
Receivable.
12. No Assumption. Purchaser does not, by this Agreement, assume any
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obligations of Seller under any Account Receivable.
13. Security Agreement. Contemporaneous with the execution of this
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Agreement, Seller is entering into a security agreement ("Security Agreement")
with Purchaser, whereby Seller is granting to Purchaser a first lien and
security interest in the Accounts Receivable and the other rights and
appurtenances relating thereto. Any default by Seller under the Security
Agreement shall additionally constitute a default by Seller under this
Agreement.
14. Remedies. In the event of a breach by Seller of any of its
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representations, warranties and covenants set forth in this Agreement, or in
the event Seller otherwise defaults on its obligations hereunder, Purchaser
may exercise any one or more of the following remedies, to the maximum extent
allowed by law:
(a) Require Seller to immediately pay to Purchaser all unpaid amounts
owing on the Accounts Receivable, plus the maximum Fee that
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Purchaser would have earned on each Invoice on which a loss was
incurred by Purchaser.
(b) Enforce Purchaser's rights and remedies under the Security
Agreement.
(c) Enter Seller's business premises and take possession of all books
and records relating to the Accounts Receivable.
(d) Exercise any other rights or remedies available at law or in
equity.
15. Termination. This Agreement shall continue in full force and effect
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for 1 year and shall thereafter be renewed 6 months at a time until terminated
by either party upon 30 days written notice to the other. No termination shall
relieve either party of any rights or obligations accrued as of the date of
termination.
16. Further Assurances. Seller and Purchaser agree to execute such
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further documents as may be reasonably required by the other to further the
intent of this Agreement.
17. Application Fee. Seller shall be charged an initial application fee
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of $350.00. For each new Customer thereafter approved. Purchaser shall be
entitled to a $30.00 charge to be deducted from the Purchase Price as an
application fee. No such charge shall be levied except on Accounts Receivable
actually acquired by Purchaser under this Agreement.
18. Attorney-in-Fact. Seller hereby irrevocably appoints Purchaser, or
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any person designated by Purchaser, its true and lawful special attorney-in-fact
and agent, with power to do the following.
(a) Receive, open and dispose of all mail addressed to Seller.
(b) Endorse the name of Seller on any notes, acceptances, checks,
drafts, money orders or other remittances for payment of the
Accounts Receivable.
(c) Endorse the name of Seller on any invoice, freight, or express
xxxx or xxxx of lading, storage receipt, warehouse receipt or
other instrument or document in respect to any Account
Receivable.
(d) Sign the name of Seller to drafts against Seller, assignments or
verifications of Accounts Receivable and notices to Customer.
(e) Send notices and file liens against third parties to the same
extent that Seller could do so.
(f) Do all other acts and things necessary to carry out the intent of
this Agreement.
19. Waiver. The waiver by Purchaser of any breach or default of this
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Agreement on the part of Seller shall not be construed as a waiver of any
subsequent breach or default. Moreover, the failure by Purchaser to exercise
any right or remedy hereunder shall not operate as a waiver of such right in the
future, and all rights and remedies herein provided are cumulative.
20. Attorney's Fees. In the event of a breach by Seller of any of its
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representations, warranties or covenants set forth herein and a lawsuit or other
legal proceeding is initiated seeking enforcement or interpretation of this
Agreement or otherwise relating thereto, Purchaser shall be entitled to recover
its reasonable attorneys' fees.
21. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Texas.
22. Severability. If any provision of this Agreement is held illegal or
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unenforceable, such illegality or unenforceability shall not affect the
remainder of this Agreement.
23. Entire Agreement. This Agreement and the following documents
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constitute the entire agreement and understanding between Seller and Purchaser:
(a) Officers Certification;
/s/ FWW
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Page3 Initials
(c) Security Agreement;
(d) UCC Financing Statement;
(e) Guaranty; and
(f) Notice(s) to Customer(s).
24. Modifications. This Agreement may only be modified by a written
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instrument signed by Seller and Purchaser.
25. Binding Effect. Subject to the provisions hereof, this Agreement shall
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be binding upon and inure to the benefit of Seller and Purchaser and their
respective heirs, successors and assigns.
26. Arbitration. All parties to this agreement shall be subject to
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arbitration as follows:
(a) Binding Arbitration. Upon the request of Purchaser, all
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disputes ("Disputes") between the parties relating, in whole or in part, to this
Agreement, shall be resolved by binding arbitration administered by the American
Arbitration Association (the "AAA") and, to the maximum extent applicable, the
Federal Arbitration Act. Judgement upon the award rendered by the arbitrators
may be entered in any court having jurisdiction. Arbitration proceedings shall
be conducted in Houston, Texas. Arbitrators shall be empowered to impose
sanctions and to take such other actions as the arbitrators deem necessary to
the same extent as a judge under the Federal Rules of Civil Procedure, the Texas
Rules of Civil Procedure and applicable law. These arbitration provisions shall
survive any termination or amendment of this Agreement. If any of these
arbitration provisions are found to be unlawful or unenforceable, such
illegality or unenforceability shall not affect the legality or
enforceability of the remaining parts.
(b) No Waiver; Preservation of Remedies. No provision of, nor
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the exercise of any rights under, this Section 26 shall limit the right of any
party, to seek, use, and employ ancillary remedies, judicial or otherwise, for
the purposes of realizing upon, preserving, protecting, or foreclosing upon any
property, real or personal, which is involved in a Dispute, including, without
limitation, rights and remedies relating to (1) forclosing against any
collateral, (2) exercising self-help remedies (including setoff rights), or (3)
obtaining provisional or ancillary remedies such as injunctive relief,
sequestration, attachment and garnishment. The institution and maintenance of an
action for judicial relief or pursuit of provisional or ancillary remedies shall
not constitute a waiver of the right of Purchaser, to submit the Dispute to
arbitration nor render inapplicable these arbitration provisions.
(c) Scope of Award: Modification or Vacation of Award:
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Qualifications. The arbitrators shall resolve all Disputes in accordance with
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applicable substantive law. Any arbitrators shall be practicing attorneys
licensed to practice law in the State of Texas and shall be knowledgeable in the
subject matter of the Dispute. With respect to a Dispute in which the claim or
amount in controversy does not exceed $250,000.00, a single arbitrator (who
shall have authority to render a maximum award of $250,000.00, including all
damages of any kind and costs, fees and the like) shall be chosen and shall
decide the dispute. With respect to a Dispute in which the claim or amount in
controversy exceeds $250,000.00, the Dispute shall be decided by a majority vote
of three arbitrators. The arbitrators may grant any remedy or relief that the
arbitrators deem just and equitable and within the scope of the Section 26. The
arbitrators may also grant such ancillary relief as is necessary to make the
award effective. In all arbitration proceedings in which the amount in
controversy exceeds $250,000.00, the arbitrators shall make specific, written
findings of fact and conclusions of law, and the parties shall have in addition
to the limited statutory right to seek vacation or modification of an award
pursuant to applicable law, the right to seek vacation or modification of any
award that is based in whole, or in part, on an incorrect or erroneous ruling of
law by appeal to an appropriate court having jurisdiction.
UNITED FACTORS, L.L.C.
By: /s/ Xxxxxxx X. Tribe
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Name: XXXXXXX X. TRIBE
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Title: MANAGER
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"PURCHASER"
VULCAN ENERGY CORPORATION
By: /s/ F. Worthy Xxxxxx
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Name: F. WORTHY XXXXXX
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Title: PRESIDENT
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"SELLER"
STATE OF TEXAS (S)
(S)
COUNTY OF XXXXXX (S)
This instrument was acknowledged before me on April 10, 1996, by F. WORTHY
XXXXXX, the president of Vulcan Energy Corp., a Texas Corp., on behalf of said
company.
Page 4
[Notary Seal Appears Here] /s/ Xxxx X. Xxxxxx
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Notary Public in and for
the State of Texas
STATE OF TEXAS (S)
(S)
COUNTY OF XXXXXX (S)
This instrument was acknowledged before me on April 10, 1996, by XXXXXXX X.
TRIBE, the Manager of United Factors, L.L.C., a Texas limited liability company,
on behalf of said company.
/s/ Xxxx X. Xxxxxx
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[Notary Seal Appears Here] Notary Public in and for
the State of Texas
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Page 5 INITIALS
