Exhibit 10.34
FACTORING AGREEMENT
This Agreement is entered into on the 18th day of July, 1996 by and
between Vertex Industries, Inc. (Factor), and NetWeave Corporation, a
Delaware corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("NWC").
1. Factor. The parties agree that Factor will operate as Factor for
certain of NWC's open receivables and future sales until such time
as this Agreement may be assigned or a different factor agreed upon.
2.. Assignment of Accounts.
2.1 NWC will assign absolute ownership and title of all accounts
receivable listed on the attached Schedule 1 which is attached
hereto and made a part of this Agreement to Vertex Industries,
Inc. Factor may agree to factor additional receivables in which
event NWC will supplement Schedule 1.
2.2 For convenience only, Factor agrees that written notice of this
assignment will not be sent to any client or customer of NWC and
that all payments on open accounts may be sent to NWC in the
ordinary course of business. NWC agrees that all such funds
received from its customers listed on the attached Schedule 1
(less certain amounts denominated Net Proceeds defined below)
are property of Factor and shall be received by NWC, if at all,
as trust funds and not as funds of NWC. NWC shall receive checks
made payable to it from accounts listed in Schedule 1, endorse
them and forward the checks directly to Factor or to any account
designated by Factor. In the alternative, NWC may deposit such
funds in a NWC denominated account so long as the funds are not
and can never be commingled with the general funds of the
corporation and, further, said account shall be a segregated
account denominated as a trust account for the benefit of Factor.
2.3 Factor will remit to NWC the net proceeds of these receivables as
that term is defined in Section 3 below subject to the
application of the net proceeds to any amount then due Factor
which remains unpaid.
2.4 As further assurance that all amounts factored shall be paid to
Factor, NWC shall grant Factor a security interest in all of the
assets and receivables of NWC subject to this agreement and not
otherwise subject to this Factor Agreement and shall from time to
time execute such documents necessary, including a Security
Agreement and UCC-1, to give effect to such security agreement.
3. Payments. NetWeave shall indicate on its invoices listed in
Schedule 1 that payments shall be made to NetWeave's account at
Barclays Bank. NetWeave shall direct Barclays Bank to remit all
payments made for invoices listed in Schedule 1 to Vertex in US
funds at:Valley National Bank, Passaic, New Jersey, ABA
(routing)#▇▇▇▇▇▇▇▇▇, A/C (account) #▇▇▇-▇▇▇-▇▇▇.
4. Net Proceeds. Net proceeds are those monies paid to NWC upon
Factor's acceptance of the invoice. Net proceeds may be up to 85%
of the face value of the invoice, less credits and discounts granted
to the customer, subject to Factor's approval.
5. Discount. After clearance of funds received from customer in
payment of an invoice, Factor shall remit to NWC the difference
between the receipt and the Net Proceeds, reduced by the Discount.
The discount is computed at 24 percent (24%) per year of the
advanced amount from the issuance of funds to the receipt of the
customer's payment.
6. Warranties. Each account assigned to Factor is warranted to be
based on an actual sale and delivery of goods or services; that
customer is liable for the payment of the entire invoiced amount;
that the receivable is fully collectible and not subject to offset
or counterclaim.
7. Notice to Customers. The original invoice that the customer
receives shall not contain a notice of this assignment to Factor
unless Factor determines in its sole discretion that it is in its
best interests to notify NWC's customers of the assignment. If
any such notice is determined to be sent, Factor shall advise
customers that payment is to be directed to the account of Factor.
NWC shall use its best efforts to collect all funds payable to
NWC which have been assigned to Factor.
8. Customer Disputes. Factor will make adjustments should a dispute
arise with a customer in regard to the receivable to cover
administrative and collection costs.
9. Recourse. If any receivable is not paid within ninety days from
the due date, NWC shall repurchase the receivable and reimburse
Factor for all expenses incurred as a result of the nonpayment and
shall pay factor the discount.
10. Governing Law. The law of New Jersey shall govern this Agreement
and the parties agree to the court of the State of New Jersey to be
the exclusive forum for the resolution of any dispute arising under
or related to this agreement.
s/▇▇▇▇▇▇ ▇. ▇▇▇▇, Pres. s/W. H. Highelyman, Chmn.
Vertex Industries, Inc. NetWeave Corporation
Factor
