REVOLVING FINANCING AND ASSIGNMENT AGREEMENT
Exhibit 10.1
REVOLVING FINANCING AND ASSIGNMENT AGREEMENT
THIS REVOLVING FINANCING AND ASSIGNMENT AGREEMENT (the “Agreement”) is made as of July 19, 2024 by and between Worksport New York Operations Corporation, a New York corporation and Worksport USA Operations Corporation a Colorado corporation (individually and collectively the “Client”) and Amerisource Funding, Inc., a Texas corporation (“Amerisource”) (each a “Party” and, collectively herein, the “Parties”).
1. Definitions. The following terms used herein shall have the following meaning. All capitalized terms not herein defined shall have the meaning set forth in the Uniform Commercial Code:
1.1 “ Advance Rate” - Shall be the amount under each respective Sub-Limit of the Total Credit Facility against which Borrower may borrow.
1.2. “Availability” - A calculation on a Daily Availability Report which reflects the total amount of Client’s Reserve Account which is available for disbursement to Client at a given point in time; equal to the Face Amount of all Purchased Accounts less the Required Reserve Amount.
1.3. “Closed” - A Purchased Account is closed upon the first to occur of: (a) receipt of full payment by Amerisource, or (b) the unpaid Face Amount has been charged to the Reserve Account by Amerisource pursuant to the terms hereof.
1.4. “Credit Facility” – The credit extended by Amerisource to Client and Guarantor evidenced by this Agreement, the Note, the Mortgage and the other Loan Documents.
1.5. “Daily Availability Report” - A report, a sample of which appears in Exhibit “A”, prepared by Amerisource from time to time reflecting a calculation of the portion of Client’s Reserve Account which is available for disbursement at a given point in time.
1.6. “Eligible Account” – Any Account that is not an Ineligible Account.
1.7. “Face Amount” - The face amount due on an Account at the time of purchase of such Account.
1.8. “Guarantor” – Individually or collectively as the context requires, WORKSPORT LTD., a Nevada corporation, and TERRAVIS ENERGY, INC., a Colorado corporation
1.9. “Guaranty” – Individually or collectively as the context requires, that certain Guaranty Agreement of even date herewith executed by Guarantor, in connection with this Credit Facility, and that certain Validity of Collateral Guaranty of even date herewith, executed by Xxxxxx Xxxxx, individually, in connection with this Credit Facility.
1.10. “Ineligible Account” – As defined in Section 2.2.2.
1.11. “Invoice” - The document that evidences or is intended to evidence an Account. Where the context so requires, reference to an Invoice shall be deemed to refer to the Account to which it relates.
1.12. “Invoice Transmittal” - A form wherein Client lists such of its Accounts as it requests that Amerisource purchase under the terms of this Agreement. For Accounts submitted by Client electronically to Amerisource, an Electronic Transfer of Sales document may serve as an Invoice Transmittal.
1.13. “Loan Documents” – This Agreement, the Mortgage, the Note, and every other document or instrument executed by Client or Guarantor in connection with this Credit Facility.
1.14. “Mortgage” – The one certain Amended, Restated, and Consolidated Mortgage, Security Agreement, assignment of Leases and Rents and Fixture Filing of even date herewith, executed by Worksport New York Operations Corporation, a New York corporation to Amerisource, covering the property described therein as security for the Obligations.
1.15. “Note” – The one certain Amended, Restated and Consolidated Promissory Note of even date herewith, executed by Client and payable to the order of Amerisource in connection with this Credit Facility, and secured by the Mortgage.
1.16. “Obligations” - All present and future obligations owing by Client to Amerisource arising hereunder or otherwise, whether arising before, during or after the commencement of any Bankruptcy Case in which Client is a Debtor.
1.17. “Purchased Accounts” - Accounts purchased by Amerisource from Client hereunder which have not been Closed.
1.18. “Repurchased” - An Account has been repurchased when Client has paid to Amerisource the then unpaid Face Amount.
1.19. “Required Reserve Amount” - The amount required to ensure Client’s performance with the provisions hereof held in Client’s Reserve Account including but not limited to a $500,000 plus six months of interest based upon Client’s initial draw against the Real Estate Sub-limit (the “Real Estate Sub-Limit Reserve”. The Real Estate Sub-Limit Reserve amount will increase over a two year period until it reaches $1,000,000.
1.20. “Reserve Account” - A bookkeeping account on the books of Amerisource where the Face Amount of all Purchased Accounts is initially credited, a portion of which is maintained by Amerisource to ensure Client’s performance with the provisions hereof.
1.21. “Reserve Shortfall” - The amount by which the Reserve Account is less than the Required Reserve Amount.
1.22. “Total Credit Facility” – Six million dollars ($6,000,000.00). The Total Credit Facility shall include the Revolving Accounts Receivable Sub-Limit and the Real Estate Sub-Limit. The Total Credit Facility may be reviewed and amended by Amerisource from time to time as necessary to accommodate Client’s growth in working capital needs.
1.22.1. “Revolving Accounts Receivable Sub-Limit”- The Total Credit Facility shall include availability under the Borrowing Base Report against Eligible Accounts Receivable of the Borrower at an advance rate of up to Eighty percent (80%) but not to exceed (a) the Total Credit Facility less (b) any amount outstanding under the Real Estate Term Sub-Limit. The eligibility of Accounts Receivable of the Borrower shall be determined by Amerisource in its reasonable commercial discretion in accordance with Amerisource’s then applicable lending practices. Amerisource shall notify Borrower in writing upon its exclusion of any Borrower’s accounts receivable from the Eligible Accounts Receivable.
1.22.2. “Real Estate Sub-Limit”- The Total Credit Facility shall include availability against eligible pledged real estate which amounts may be drawn against and under one or more individual commercial promissory notes, in amounts not to exceed Sixty Percent 60% of the loan to value based on the real estate appraisal acceptable to Amerisource.
2. Sale; Purchase Price; Reserve.
2.1. Assignment and Sale.
2.1.1. Client shall submit to Amerisource each day a sales ledger in electronic format, which shall be a complete and accurate detailed listing of all sales completed by the Client for that given date. All Invoices listed on each daily sales ledger shall represent Invoices billed in accordance with Generally Accepted Accounting Principles (“GAAP”) for goods legally delivered or services rendered and completed by Client for such day. Though an Invoice Transmittal may be included with each daily sales ledger, Client’s electronic submission of a sales ledger to Amerisource shall be effective as an Invoice Transmittal and shall automatically constitute the assignment and sale to Amerisource of any and all Invoices and Accounts included on such sales ledger, and all such Invoices and Accounts shall immediately become Purchased Accounts.
2.1.2. Each Invoice Transmittal shall be accompanied by such documentation supporting and evidencing the Accounts listed thereon as Amerisource shall from time to time request.
2.1.3. Amerisource’s initial payment of the Face Amount purchase price shall be applied and credited to Client’s Reserve Account.
2.2. Daily Availability Report; Reserve Account.
2.2.1. Client’s withdrawals, advances and disbursements from the Reserve Account shall be governed by a calculation of Availability, as determined by a Daily Availability Report to be prepared or modified by Amerisource from time to time and in its sole discretion, a sample of which appears in Exhibit “A”.
2.2.2. Each Daily Availability Report shall set forth a calculation of the amount available for withdrawal by Client, as well as the amounts which must be held in the Client’s Reserve Account as the Required Reserve Amount. Amounts may be held in the Reserve Account as Required Reserve Amount to ensure Client’s performance with the provisions hereof, as well as to secure Obligations and the Repurchase or anticipated Repurchase of the following ineligible or impaired Accounts (“Ineligible Accounts”): (a) Accounts, the payment of which has been disputed by the Account Debtor obligated thereon, Amerisource being under no obligation to determine the bona fides of such dispute, (b) any Account for which Client has breached its obligation under Section 13 herein, (c) any Account owing from an Account Debtor which in Amerisource’s reasonable credit judgment has become insolvent, (d) any Accounts owing from an Account Debtor in excess of the credit limit established by Amerisource for such Account Debtor, (e) all or any Purchased Accounts upon the occurrence of an Event of Default or upon the termination date of this Agreement, (f) Accounts over ninety (90) days from original invoice date, (g) Accounts owing by an Account Debtor is excess of 15% of Client’s total eligible Purchased Accounts outstanding (provided, however, a limit of up to $500,000 may be allowed for Rough Country and for select Account Debtors at the sole discretion of Amerisource based upon confirmation/verification, and any other items that may be required by Amerisource), (h) Accounts owing by entities related to Client by common ownership or control, (i) all Accounts owing by a given Account Debtor if at least 15% of such Account Debtor’s outstanding Accounts are deemed ineligible or impaired by Amerisource, (j) Accounts owing by Account Debtors domiciled outside of the United States of America or Canada, and (k) other Accounts or amounts which Amerisource determines from time to time in its sole reasonable credit or business judgment.
2.2.3. Amerisource may require that Client Repurchase, by payment of the then unpaid Face Amount thereof or, at Amerisource’s option, by Amerisource’s adjustment to the Reserve Account any of the Accounts described in Section 2.2.2 above which are deemed uncollectible in Amerisource’s sole reasonable credit or business judgment. Any such Repurchase by Client shall not constitute reassignment of such Account.
2.2.4. Client shall pay to Amerisource on demand the amount of any Reserve Shortfall.
2.2.5. Amerisource may charge the Reserve Account with any Obligation. The Reserve Account, or any portion thereof, may also be held to secure the Obligations.
2.2.6. Amerisource may pay any amounts due Client hereunder by a credit to the Reserve Account.
2.2.7. Upon termination of this Agreement, Amerisource may retain the Reserve Account (i) sufficient to cover any Obligations that were either known or unknown to Amerisource at the time of termination, and (ii) unless and until Client has executed and delivered to Amerisource a general indemnity and mutual release in a form reasonably acceptable to Amerisource.
3. Authorization for Purchases. Subject to the terms and conditions of this Agreement, Amerisource is authorized to purchase Accounts and/or approve and release disbursement requests upon telephonic, facsimile or other instructions received from anyone purporting to be an officer, employee or representative of Client.
4. Interest Rate. So long as the Loan is not in default, Client shall pay to Amerisource on a monthly basis an interest rate equal to the lesser of (i) the prime rate plus 3.00% per annum and (ii) the Maximum Rate (as defined in the Note), to be calculated and charged monthly by Amerisource based on the average outstanding balance of all funds employed for all Obligations. The prime rate of interest shall be determined as published and updated from time to time in the Wall Street Journal, but in no event shall be less than 6.00% per annum (the “Floor”).
5. Commitment Fee. Client shall pay to Amerisource an initial Commitment Fee of 1.75% of the current Total Credit Facility. Fee is fully earned upon formal approval and issuance of commitment letter by Amerisource, payable one half at the time of Amerisource approval and commitment to Client and one half at the time of initial funding of the facility. Then thereafter the Client will pay to Amerisource an annual Commitment Fee of 1.00% on each anniversary date on the loan. Future renewals or extensions of the maturity date of this Agreement shall also include a Commitment Fee, calculated based on the Total Credit Facility in effect at the time of the renewal or extension. Increases in the Total Credit Facility prior to the maturity date shall only be assessed a Commitment Fee for the incremental amount of the actual increase in the Total Credit Facility.
6. Non-Usage Fee: A fee of 0.25% to be assessed quarterly on the difference between the Client’s average daily outstanding loan balance and the Total Credit Facility.
7. Over-Advances. As inducement to Client to maintain the Reserve Account at required levels to secure the Repurchase or anticipated Repurchase of ineligible or impaired Accounts, Client agrees to pay Amerisource on demand a per diem penalty of two tenths percent (0.20%) of the amount of any Reserve Shortfall after such Reserve Shortfall is present for three (3) business days.
8. Security Interest.
8.1. As collateral securing the Obligations, Client grants and assigns to Amerisource a continuing security interest in and to all of its, Accounts Receivable, the property located at 0000 Xxxxx Xxxxxxx Xxxxx Xxxx xx Xxxx Xxxxxx, Xxxx Xxxxxx Xxx Xxxx, and Inventory (the “Collateral”).
8.2. Springing Equipment Lien. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, with respect to Equipment, Amerisource will only take a security interest in, and file a UCC against, Allowed Equipment (as defined below) owned by Client in the event of either (i) an Event of Default under this Agreement, subject to notice and cure periods; or (ii) another lender requires a lien on an asset class already serving as Collateral. The Client maintains the right to use proceeds from Equipment financing as it sees fit with no required review nor approval by Amerisource unless the Client defaults on this loan. “Allowed Equipment” means Equipment other than Excluded Equipment. “Excluded Equipment” means the Equipment listed in Exhibit B attached hereto and incorporated herein for all purposes. To clarify, Lender does not have a lien on Excluded Equipment.
8.3. Notwithstanding the creation of the above security interest, the relationship of the Parties shall be that of purchaser and seller of Accounts, and not that of lender and borrower.
9. Authorization to Amerisource. Client hereby irrevocably authorizes Amerisource at Client’s reasonable expense, to exercise at any time any of the following powers until all of the Obligations have been paid in full: (a) receive, take, endorse, assign, deliver, accept and deposit, in the name of Amerisource or Client, any and all cash, checks, commercial paper, drafts, remittances and other instruments and documents relating to the Collateral or the proceeds thereof, (b) take or bring, in the name of Amerisource or Client, all steps, actions, suits or proceedings deemed by Amerisource necessary or desirable to effect collection of or other realization upon the Accounts and other Collateral in the event of Default by Client, (c) after continuance of an Event of Default and applicable cure period, change the address for delivery of mail to Client and to receive and open mail addressed to Client, (d) after an Event of Default, extend the time of payment of, compromise or settle for cash, credit, return of merchandise, and upon any terms or conditions, any and all Accounts or other Collateral which includes a monetary obligation and discharge or release any account debtor or other obligor (including filing of any public record releasing any lien or security interest granted to Client by such account debtor), without affecting any of the Obligations, (e) pay any sums necessary to discharge any lien, security interest or encumbrance which is senior to, may become senior to, or impairs Amerisource’s security interest in the Collateral, unless otherwise permitted herein, which sums shall be included as Obligations hereunder, and in connection with which sums the Delinquency Charge shall accrue and shall be due and payable, (f) in order to complete funding transfers or disbursements, or to satisfy any of the Obligations, initiate electronic debit or credit entries through the Automated Clearinghouse system to any deposit account maintained by Client wherever located, (g) file in the name of Client or Amerisource, or both, mechanic’s or materialman’s liens or related notices, or claims under any payment bond, in connection with goods or services sold by Client in connection with the improvement of realty, (h) notify any Account Debtor obligated with respect to any Account that the underlying Account has been assigned to Amerisource by Client and that payment thereof is to be made to the order of and paid directly and solely to Amerisource, and (i) communicate directly with Client’s Account Debtors to verify the amount and validity of any Account created by Client.
10. Covenants by Client.
10.1. Client shall deliver to Amerisource such documentation as may be requested by Amerisource from time to time, including but not limited to: (a) daily sales ledgers to be delivered to Amerisource in electronic format, (b) monthly internally-prepared financial statements, accounts receivable aging and accounts payable aging, to be delivered to Amerisource within 30 days of month-end; (c) quarterly 941 payroll tax filings and proof of payment; (d) annual CPA-prepared (reviewed or audited) financial statements, federal 1120 tax return, (e) annual proof of payment of real estate taxes (f) insurance certificates listing Amerisource as loss payee (g) and updated personal or corporate financial statements for each corporate Guarantor respectively, to be delivered to Amerisource within 90 days of year-end; and (h) any other report or documentation reasonably requested by Amerisource.
10.2. Client shall grant Amerisource, on or before the date of Closing and so long as any Obligations remain outstanding under this Agreement, viewing access to all bank accounts maintained by the Client.
10.3. Client shall direct all payments for Client’s Accounts to Amerisource’s P.O. Box address via a change of address letter to be sent to all of Client’s Account Debtors on Client’s letterhead. Client shall imprint this P.O. Box address as the sole remittance address on each and every Invoice and communication to all of its Account Debtors, without exception. Payments received by Amerisource shall be applied against the corresponding open Invoices purchased and ledgered by Amerisource and shall be applied to reduce the Client’s outstanding Obligations to Amerisource with a maximum of three days for check clearance.
10.4. Any and all checks or other payments received by Client from its Account Debtors or obligors shall be held in trust for Amerisource and shall not constitute the property of Client, and Client shall deliver such instruments in kind to Amerisource within five (5) banking days following the date of receipt by Client. Client shall pay to Amerisource fifteen percent (15%) of the amount of any payment received by Client and not delivered in kind to Amerisource within two banking days following the date of receipt by Client.
10.5. Client shall notify Amerisource promptly of and, if requested by Amerisource, will settle all disputes concerning any Purchased Account, at Client’s sole cost and expense.
10.6. After written notice by Amerisource to Client, and automatically, without notice, after an Event of Default, Client shall not, without the prior written consent of Amerisource in each instance, (a) grant any extension of time for payment of any of the Accounts, (b) compromise or settle any of the Accounts for less than the full amount thereof, (c) release in whole or in part any Account Debtor, or (d) grant any credits, discounts, allowances, deductions, return authorizations or the like with respect to any of the Accounts.
10.7. From time to time as requested by Amerisource, at the sole expense of Client, Amerisource or its designees shall have access, during reasonable business hours if prior to an Event of Default (shall be permitted no more than twice per calendar year) and at any time if after an Event of Default, to all premises where Collateral is located for the purposes of inspecting (and removing, if after the occurrence of an Event of Default) any of the Collateral, including Client’s books and records, and Client shall permit Amerisource or its designees to make copies of such books and records or extracts therefrom as Amerisource may request.
10.8. Client shall reimburse Amerisource for any out-of-pocket expenses directly incurred by Amerisource in the administration of this Agreement, including banking fees and fees for periodic field exams, lien searches or other expenses including fees for periodic field exams (which, absent an Event of Default, shall be permitted no more than twice per calendar year), banking fees, lien searches or other expenses, or the enforcement by Amerisource of any of the Borrower’s obligations thereunder.
10.9. Client shall pay when due all payroll and other taxes, and shall provide proof thereof to Amerisource in such form as Amerisource shall reasonably require.
10.10. Client shall not create, incur, assume or permit to exist any lien or security interest upon or with respect to any Collateral now owned or hereafter acquired by Client, unless otherwise stated herein. Amerisource agrees, in good faith, to assess its liens against the Collateral and will consider financing certain asset classes.
10.11. Client shall advise Amerisource in writing if it reschedules or extends the due date of any amounts owing from its account debtors.
10.12. Client shall indemnify Amerisource from any loss arising out of the assertion of any claim that any payment received by Amerisource from or for the account of an Account Debtor is avoidable under the Bankruptcy Code or any other debtor relief statute (“Avoidance Claim”). Client shall notify Amerisource within two business days of it becoming aware of the assertion of any Avoidance Claim. This provision of this Section 10 shall survive termination of this Agreement.
10.13. Client and Guarantors shall at all times maintain an aggregate Minimum Tangible Net Worth equal to or greater than $17,500,000.00, which shall be monitored and tested monthly starting at the month end of closing and at the end of every month thereafter until the end of the Loan.
11. Representation and Warranty. Client represents and warrants that:
11.1. Client is fully authorized to enter into this Agreement and to perform hereunder.
11.2. This Agreement constitutes its legal, valid and binding obligation.
11.3. Client is solvent and in good standing in the State of its organization.
11.4. The Purchased Accounts are and will remain:
11.4.1. Bona fide existing obligations created by the sale and delivery of goods or the rendition of services in the ordinary course of Client’s business.
11.4.2. Unconditionally owed and will be paid to Amerisource without defenses, disputes, offsets, counterclaims, or rights of return or cancellation.
11.4.3. Not sales to any entity which is affiliated with Client or in any way not an “arms length” transaction.
11.5. Client has not rescheduled or extended the due date of any amounts owing by its account debtors during the past twelve (12) months from the date hereof.
11.6. Client has not received notice nor does Client have knowledge of actual or imminent bankruptcy, insolvency, or material impairment of the financial condition of any account debtor.
12. Default.
12.1. Events of Default. Subject to any notice and cure provision in the Loan Documents or required by law, any of the following events will constitute an Event of Default hereunder: (a) Client defaults in the payment of any Obligations or in the performance of any covenant herein or provision hereof or of any other agreement now or hereafter entered into with Amerisource, any Event of Default described in the Mortgage, or any warranty or representation contained herein proves to be false in any way, howsoever minor, (b) Client or any Guarantor of all or any part of the Obligations becomes subject to any debtor-relief proceedings, (c) any Guarantor fails to perform or observe any of such Guarantor’s obligations to Amerisource or shall notify Amerisource of its intention to rescind, modify, terminate or revoke any guaranty of the Obligations, or any such guaranty shall cease to be in full force and effect for any reason whatever, (d) Amerisource for any reason, in good faith, deems itself insecure with respect to the prospect of repayment or performance of all or any part of the Obligations.
12.2. Waiver of Notice. Subject to any notice and cure provision in the Loan Documents or required by law, Client waives any other requirement that Amerisource inform Client by affirmative act or otherwise of any Event of Default hereunder. Further, Amerisource’s failure to charge or accrue interest or fees at any “Penalty”, “Default”, or “Past Due” rate shall not be deemed a waiver by Amerisource of its claim thereto.
12.3. Effect of Default. Upon the occurrence of any Event of Default, in addition to any rights Amerisource has under this Agreement or applicable law, Amerisource may immediately terminate this Agreement without notice, at which time all Obligations shall immediately become due and payable without notice.
12.4. Cure Time. Client shall have ten (10) days after notice from Amerisource to cure any default in the case of any default which can be cured by the payment of a sum of money or thirty (30) days after notice from Amerisource in the case of any other default.
13. Account Stated. Amerisource shall render to Client from time to time a statement setting forth the transactions arising hereunder. Each statement shall be considered correct and binding upon Client as an account stated, except to the extent that Amerisource receives, within sixty (60) days after the mailing of such statement, written notice from Client of any specific exceptions by Client to that statement, and then it shall be binding against Client as to any items to which it has not objected.
14. Waiver. No failure to exercise and no delay in exercising any right, power, or remedy hereunder shall impair any right, power, or remedy which Amerisource may have, nor shall any such delay be construed to be a waiver of any of such rights, powers, or remedies, or any acquiescence in any breach or default hereunder; nor shall any waiver by Amerisource of any breach or default by Client hereunder be deemed a waiver of any default or breach subsequently occurring. All rights and remedies granted to Amerisource hereunder shall remain in full force and effect notwithstanding any single or partial exercise of, or any discontinuance of action begun to enforce, any such right or remedy. The rights and remedies specified herein are cumulative and not exclusive of each other or of any rights or remedies that Amerisource would otherwise have. Any waiver, permit, consent or approval by Amerisource of any breach or default hereunder must be in writing and shall be effective only to the extent set forth in such writing and only as to that specific instance.
15. Termination. This term of this Agreement shall expire 24 months from the date of initial funding. Client may terminate the Agreement by giving Amerisource sixty (60) days written notice of termination prior to each maturity date. Otherwise, the maturity date shall be automatically extended for an additional 24 months from the most recent maturity date. Upon termination, Client shall pay the Obligations to Amerisource. In the event of termination of the Agreement prior to the maturity date, an Early Termination Fee equal to three percent (3%) of the Total Credit Facility shall apply if more than twelve months are remaining until maturity; otherwise, an Early Termination Fee equal to two percent (2%) of the Total Credit Facility shall apply.
16. Amendment. Neither this Agreement nor any provisions hereof may be changed, waived, discharged or terminated, nor may any consent to the departure from the terms hereof be given orally (even if supported by new consideration), but only by an instrument in writing signed by all parties to this Agreement. Any waiver or consent so given shall be effective only in the specific instance and for the specific purpose for which given.
17. Lien Termination. In recognition of Amerisource’s right to have its legal fees and other expenses incurred in connection with this Agreement secured by the Collateral, notwithstanding satisfaction in full of all other Obligations by Client, Amerisource shall not be required to record any terminations or satisfactions of any of Amerisource’s liens or security interests on the Collateral unless and until Client has executed and delivered to Amerisource a general indemnity and mutual release in a form acceptable to Amerisource. Client understands that this provision constitutes a waiver of its rights under §9-513 of the UCC.
18. Conflict. Unless otherwise expressly stated in any other agreement between Amerisource and Client, if a conflict exists between the provisions of this Agreement and the provisions of such other agreement, the provisions of this Agreement shall control.
19. Severability. In the event any one or more of the provisions contained in this Agreement is held to be invalid, illegal or unenforceable in any respect, then such provision shall be ineffective only to the extent of such prohibition or invalidity, and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
20. Relationship of Parties. The relationship of the Parties hereto shall be that of seller and purchaser of Accounts, and Amerisource shall not be a fiduciary of the Client, although Client may be a fiduciary of Amerisource. The Parties have, for the purposes of Chapter 306 of the Texas Finance Code, characterized the sale of accounts receivable pursuant to this Agreement as a purchase and sale transaction, and not a loan or other transaction for the use, forbearance or detention of money.
21. Legal Fees. Client agrees to reimburse Amerisource on demand for the actual amount of all reasonable costs and expenses, including attorneys’ fees and other legal fees, which Amerisource has incurred or may incur in: (a) negotiating, preparing, or administering this Agreement and any documents prepared in connection herewith or in any way arising out of this Agreement; (b) protecting, preserving or enforcing any lien, security interest or other right granted by Client to Amerisource or arising under applicable law, whether or not suit is brought, including but not limited to the defense of any Avoidance Claims; (c) complying with any subpoena or other legal process attendant to any litigation in which Client is a party; including photocopying, travel, and attorneys’ fees and expenses; (d) the actual amount of all costs and expenses, including reasonable attorneys’ fees, which Amerisource may incur in enforcing this Agreement and any documents prepared in connection herewith, or in connection with any federal or state insolvency proceeding commenced by or against Client, including those (i) arising out of the automatic stay, (ii) seeking dismissal or conversion of the bankruptcy proceeding, or (iii) opposing confirmation of Client’s plan thereunder.
22. Entire Agreement. This Agreement supersedes all other agreements and understandings between the Parties hereto, verbal or written, express or implied, relating to the subject matter hereof. No promises of any kind have been made by Amerisource or any third party to induce Client to execute this Agreement. No course of dealing, course of performance or trade usage, and no parole evidence of any nature, shall be used to supplement or modify any terms of this Agreement.
23. Choice of Law. This Agreement and all transactions contemplated hereunder and/or evidenced hereby shall be governed by, construed under, and enforced in accordance with the internal laws of the State of Texas.
24. Jury Trial Waiver. In recognition of the higher costs and delay which may result from a jury trial, the Parties hereto waive any right to trial by jury of any claim, demand, action or cause of action (a) arising hereunder, or (b) in any way connected with or related or incidental to the dealings of the Parties hereto or any of them with respect hereto, in each case whether now existing or hereafter arising, and whether sounding in contract or tort or otherwise; and each Party further waives any right to consolidate any such action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived; and each Party hereby agrees and consents that any such claim, demand, action or cause of action shall be decided by court trial without a jury, and that any Party hereto 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.
25. Venue; Jurisdiction. Except for the foreclosure of liens against the property described in the Mortgage (which shall be instituted in Erie County, New York), the Parties agree that any suit, action or proceeding arising out of the subject matter hereof, or the interpretation, performance or breach of this Agreement, shall, if Amerisource so elects, be instituted in any court sitting in Harris County, State of Texas (the “Acceptable Forums”). Each party agrees that the Acceptable Forums are convenient to it, and each party irrevocably submits to the jurisdiction of the Acceptable Forums, irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement, and waives any and all objections to jurisdiction or venue that it may have under the laws of the State of Texas or otherwise in those courts in any such suit, action or proceeding. Should such proceeding be initiated in any other forum, Client waives any right to oppose any motion or application made by Amerisource as a consequence of such proceeding having been commenced in a forum other than an Acceptable Forum.
26. Notice. All notices to Amerisource hereunder shall be deemed given in accordance with the Mortgage, Security Agreement, Assignment of Leases and Rents and Fixtures Filing.
27. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were upon the same instrument. Delivery of an executed counterpart of the signature page to this Agreement by facsimile, email or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement, and any Party delivering such an executed counterpart of the signature page to this Agreement by facsimile to any other Party shall thereafter also promptly deliver a manually executed counterpart of this Agreement to such other Party, provided that the failure to deliver such manually executed counterpart shall not affect the validity, enforceability, or binding effect of this Agreement.
28. Cross-Default. If the Client, Guarantor, or any Affiliates of Client (defined below) are in default under any other loans or advances of credit (including guaranty agreements or factoring obligations) held by the Amerisource (each an “Other Obligation”), or if there is a default in any of the terms, covenants, agreements, conditions or provisions set forth in the Note, or any other Loan Document, or any other instrument relating to the Note, or should the Amerisource conclude, in its sole reasonable discretion, that the prospect of payment of the Note, or of any Other Obligation, is impaired for any reason, then the Amerisource, at its option, may, subject to any notice and cure period in the Loan Documents, declare the entirety of the Note and any Other Obligation, together with all accrued but unpaid interest, immediately due and payable without notice, demand or presentment, or notice of intent to accelerate to the Client or any other person or party, all of which are hereby waived. The Amerisource’s failure to or delay in exercise of said option will not constitute a wavier on the part of the Amerisource of the right to exercise said option at any other time. Upon the occurrence of a default, the Amerisource shall also have the right to exercise any and all other rights, remedies and recourses now or hereinafter existing in equity, at law, by virtue of statute or otherwise, including, but not limited to, the right to foreclose any and all liens and security interests securing the Note, and/or any Other Obligation. “Affiliates of Client” means any entity in which 20% or more is owned by, or in which 20% or more voting control is held by, Client and/or any Guarantor, whether now or in the future.
29. Cross-Collateralization. Except as may be limited or prohibited by applicable law, the Client, Guarantor, and Affiliates of Client agree and acknowledge that the Loan Documents secure (a) the Note, as extended and/or modified, including interest, late charges, fees, expenses and other amounts as provided in the Note, and the other Loan Documents, (b) all other debts, obligations and liabilities of the Client, Guarantor, and/or Affiliates of Client, to the Amerisource of whatever kind or character, whether now existing or hereafter arising, secured or unsecured, direct or indirect, fixed or contingent, primary or secondary, joint or several, or both, including, without limitation, all present and future debts, obligations and liabilities of the Client, Guarantor, and/or Affiliates of Client (i) as principal, surety, endorser, guarantor, accommodation party or otherwise, (ii) arising by operation of law or otherwise, (iii) as a member of any partnership, joint venture, company, firm, trust or other association, (iv) payable to or in favor of third parties and hereafter acquired by the Amerisource with or without the knowledge, consent or insistence of the Client, Guarantor, and/or Affiliates of Client, or (v) relating to any services rendered by Amerisource for the benefit of the Client, Guarantor, and/or Affiliates of Client, including, without limitation, credit cards, treasury or cash management services all of which indebtedness is secured by the Loan Documents, and (c) all renewals, rearrangements, modifications and extensions of any of the foregoing.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year first above written.
| CLIENT: | AMERISOURCE: | |||
| Worksport New York Operations Corporation | Amerisource Funding, Inc. | |||
| X | X | |||
| Name: | Name: | |||
| Title: | Title: | Managing Director | ||
| Worksport USA Operations Corporation | ||||
| X | ||||
| Name: | ||||
| Title: | ||||
| Revolving Financing and Assignment Agreement |
| 9 |
Exhibit “A”
Worksport New York Operations Corporation
Worksport USA Operations Corporation
Borrowing Base / Daily Availability Report – SAMPLE
as of
_________, 2024
| ACCOUNTS RECEIVABLE | ||||
| 1) | Total A/R Ledger Balance | |||
| 2) | Plus: Addback Credits | |||
| 3) | Total Invoice Balance A/R Outstanding | |||
| 4) | Less: Over 90 Invoice Balance | |||
| 5) | Less: Dilutive Credits | |||
| 6) | Total A/R Outstanding < 90 Days | |||
| 7) | Ineligible A/R: | |||
| 8) | Less: Progress Billing Receivables | |||
|
9) |
Less: Miscellaneous Ineligibles | |||
| 10) | Less: Cross-Age Exclusions | |||
| 11) | Less: Specific Account Debtor OCLs | |||
| 12) | Less: Concentration Cap Exclusions | |||
| 13) | Eligible A/R | |||
| 15) | Total Eligible A/R | |||
| 16) | Less: Additional Reserves Held | |||
| 17) | Advance Rate: | 80% | ||
| 18) | Availability: | |||
| 19) | Less: Amounts Currently Outstanding: | |||
| 20) | Remaining Availability: | |||
* Over-Advance is the amount of any Reserve Shortfall.
| Revolving Financing and Assignment Agreement |
| 10 |
EXHIBIT B
(Excluded Equipment)
| Machine | Vendor | |
| SG1530 ; FLS1530 ; EBE2720 | Prima Power | |
| D7-3 HD1500 Cut to Length System | Cidan | |
| Quadra L1 Used | Starlight | |
| Quadra L1 New | Emmegi | |
| APS Auto Pusher | Razorgage | |
| Advance Bespoke Conveyor System | Advanced Enterprises (Automation) Ltd | |
| Manual Strip to Cover Application System | AGM Automation Systems Inc. | |
| Atuomatic Strip Cutting Station | AGM Automation Systems Inc. | |
| Mecal MC 305 Kosmos | Mecal USA | |
| Mecal MC 305 Kosmos | Mecal USA | |
| MU12000 60” Coil Xxxxxxx | Coilquip | |
| 2006 Combilift C8000 8,000 lb | Xxx’s Mechanical Services LLC | |
| Xxxxxxx T17 | Buffalo Materials Handling (BMH) | |
| Electric Order Picker | Refurbished Lifts, Inc. | |
| Ultimaker S5 | CAD MicroSolution Inc. | |
| Ultimaker S7 | MatterHackers | |
| Z1 Wide Cutter | Gerber Technologies |
| Revolving Financing and Assignment Agreement |
| 11 |
