EX-10.1
2
v123759_ex10-1.htm
FACTORING
AND SECURITY AGREEMENT
THIS
FACTORING AND SECURITY AGREEMENT is made as of August 13, 2008 by and between
TXP CORPORATION, a Nevada Corporation (“Seller”) and LANDRY MARKS PARTNERS LP, a
Texas limited partnership (“Purchaser”).
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.
“Account”–
this
term shall have the same definition as given to it in the Uniform Commercial
Code.
1.2.
“Advance”
–
for
each Purchased Account, the Face Amount minus Initial Discount minus the
product
of (A) the Reserve Percentage multiplied by (B) the Face Amount.
1.3.
“Account
Debtor” –
this
term shall have the same definition as given to it in the Uniform Commercial
Code.
1.4.
“Avoidance
Claim”
- any
claim that any payment received by Purchaser from or for the account of an
Account Debtor is avoidable under the Bankruptcy Code or any other debtor
relief
statute.
1.5.
“Chosen
State” -
Texas.
1.6.
“Clearance
Days”
-
three
(3) business days for all payments.
1.7.
“Closed”
- a
Purchased Account is closed upon the first to occur of (i) receipt of full
payment by Purchaser or (ii) the unpaid Face Amount has been charged to the
Reserve Account by Purchaser pursuant to the terms hereof.
1.8.
Section
not used.
1.9.
“Collateral”
- all
now
owned and hereafter acquired Accounts and other receivables, Instruments
and
other forms of obligations and rights to payment of the Seller, Chattel Paper,
including Promissory Notes, Investment Property, Documents, and General
Intangibles, together with the proceeds thereof (including proceeds of
proceeds), all goods, services and inventory represented by such Accounts
and
all such goods, services and inventory that may be returned by the company’s
customers, and all proceeds of any insurance thereon.
1.10.
“Discounts”–
the
Initial Discount and the Additional Discount.
1.11.
“Eligible
Account” -
an
Account which is acceptable for purchase as determined by Purchaser in the
exercise of its reasonable sole credit or business judgment.
1.12.
“Events
of Default”
- See
Section 14.1.
1.13.
“Face
Amount”
- the
face amount due on a Purchased Account at the time of Purchase.
1.14.
“Additional
Discount” –
a
discount in the amount of one percent (1%) of the Face Amount of a Purchased
Account.
1.15.
Section
not used.
1.16.
“Initial
Discount”–
two
percent (2%) of the Face Amount.
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1.17.
“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.
1.18.
“Ineligible
Account Date”
- the
date which is sixty (60) days from the date on which a Purchased Account
was
purchased or ninety (90) days from the invoice date of a Purchased Account,
whichever comes first.
1.19.
“Maximum
Amount”-
$1,500,000
1.20.
“Misdirected
Payment Fee”
-
fifteen percent (15%) of the amount of any payment on account of a Purchased
Account which has been received by Seller and not delivered in kind to Purchaser
on the second business day following the date of receipt by Seller.
1.21.
“Missing
Notation Fee”–
fifteen
percent (15%) of the Face Amount.
1.22.
“Obligations”
- all
present and future obligations owing by Seller to Purchaser whether or not
for
the payment of money, whether or not evidenced by any note or other instrument,
whether direct or indirect, absolute or contingent, due or to become due,
joint
or several, primary or secondary, liquidated or unliquidated, secured or
unsecured, original or renewed or extended, whether arising before, during
or
after the commencement of any bankruptcy case in which Seller is a Debtor.
1.23.
“Parties”
-
Seller
and Purchaser.
1.24.
“Purchase
Price”
- the
Face Amount less the Discounts.
1.25.
“Purchased
Accounts”–
Eligible Accounts purchased hereunder which have not been
Repurchased.
1.26.
“Repurchased”
-
an
Account has been repurchased when Seller has paid to Purchaser the then unpaid
Face Amount.
1.27.
“Required
Reserve Amount” -
the
Reserve Percentage multiplied by the unpaid balance of Purchased Accounts.
1.28.
“Reserve
Account”
- a
bookkeeping account on the books of the Purchaser representing an unpaid
portion
of the Purchase Price, maintained by Purchaser to ensure Seller's performance
with the provisions hereof.
1.29.
“Reserve
Percentage”–
fifteen
percent (15%).
1.30.
“Reserve
Shortfall”
- the
amount by which the Reserve Account is less than the Required Reserve
Amount.
1.31.
“Schedule
of Accounts”
- a form
supplied by Purchaser from time to time wherein Seller lists such of its
Accounts as it requests that Purchaser purchase under the terms of this
Agreement.
2.
Sale;
Purchase Price; Billing; Reserve
2.1.
Assignment
and Sale.
2.1.1.
Seller shall sell to Purchaser as absolute owner, with full recourse, such
of
Seller's Accounts as are listed from time to time on Schedules of Accounts,
a
specimen copy of which is annexed hereto as Exhibit
B.
2.1.2.
Each Schedule of Accounts shall be accompanied by such documentation supporting
and evidencing the Account as Purchaser shall from time to time
request.
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2.1.3.
Purchaser shall have the right, but not the obligation, to purchase from
Seller
such Accounts as Purchaser in its sole discretion determines to be Eligible
Accounts, so long as the aggregate Face Amount of Accounts, less payments
received on such Accounts does not exceed, before and after such purchase,
the
Maximum Amount.
2.1.4.
Purchaser shall pay the Advance, less any amounts due to Purchaser from Seller,
of any Purchased Account, to Seller whereupon the Accounts shall be deemed
purchased hereunder.
2.2.
Billing.
Purchaser may send a monthly statement to all Account Debtors itemizing their
account activity during the preceding billing period. All Account Debtors
will
be instructed to make payments to Purchaser prior
to
an Account being purchased by Purchaser.
2.3.
Reserve
Account.
2.3.1.
Seller shall pay to Purchaser, on demand, the amount of any Reserve
Shortfall.
2.3.2.
Provided no Event of Default has occurred which is continuing, Purchaser
shall
pay to Seller upon Seller's request, any amount by which the Reserve Account
exceeds the Required Reserve Amount; provided, that Seller shall be entitled
to
make such demand not more than twice in any one (1) month, Notwithstanding,
Purchaser may retain all Reserve Amounts to be applied to Seller’s Obligations.
2.3.3.
Purchaser may charge the Reserve Account with any Obligation, including any
amounts due from Seller to Purchaser hereunder.
2.3.4.
Purchaser may pay any amounts due Seller hereunder by a credit to the Reserve
Account;
2.3.5.
Upon termination of this Agreement, Purchaser may retain the Reserve
Account:
2.3.5.1.
for forty-five (45) days thereafter to be applied to payment of any Obligations
that were unknown to Purchaser at the time of termination, and
2.3.5.2.
unless and until Seller has executed and delivered to Purchaser a general
release in the form of Exhibit A hereto.
3.
Authorization
for Purchases.
Subject
to the terms and conditions of this Agreement, Purchaser is authorized to
purchase Accounts upon telephonic, facsimile or other instructions received
from
anyone purporting to be an officer, employee or representative of Seller.
4.
Additional
Discounts, Fees and Expenses.
Seller
shall pay to Purchaser:
4.1.
Additional
Discount.
The
Additional Discount, on all accounts not Closed within 45 days after purchase
will be charged on the 46st
day
after purchase and every 15 days thereafter, which amount may also be charged
against the Reserve Account until such Account is Closed.
4.2.
Misdirected
Payment Fee.
Any
Misdirected Payment Fee immediately upon its accrual.
4.3.
Missing
Notation Fee.
The
Missing Notation Fee on any Invoice that is sent by Seller to an Account
Debtor
which does not contain the notice as required by Section 10.5
hereof,
which fee shall be due and payable immediately upon demand from
Purchaser.
4.4.
Section
not used.
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4.5.
Out-of-pocket
Expenses.
The
reasonable, out-of-pocket expenses directly incurred by Purchaser in the
negotiation, execution, administration and/or enforcement of this Agreement,
such as wire transfer fees, legal fees, postage and audit fees.
5.
Repurchase
Of Accounts.
Purchaser may require that Seller repurchase, by payment of the then unpaid
Face
Amount thereof, together with any unpaid Discounts and/or fees relating to
the
Purchased Account within five (5) business days after written demand from
Purchaser, or, immediately without written demand or notice from Purchaser,
at
Purchaser's option, by Purchaser's charge to the Reserve Account:
5.1.
Any
Purchased Account, the payment of which has been disputed by the Account
Debtor
obligated thereon, Purchaser being under no obligation to determine the merit
or
validity of such dispute;
5.2.
Any
Purchased Account for which Seller has breached its warranty under Section
12
hereunder;
5.3.
Any
Purchased Account owing from an Account Debtor which in Purchaser’s reasonable
credit judgment has become insolvent;
5.4.
All
Purchased Accounts upon the occurrence of an Event of Default, or upon the
termination date of this Agreement; and
5.5.
Any
Purchased Account which remains unpaid beyond the Ineligible Account
Date.
6.
Security
Interest.
6.1.
As
collateral securing the Obligations, Seller grants to Purchaser a continuing
first priority security interest in and to the Collateral.
6.2.
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.
7.
Clearance
Days.
For all
purposes under this Agreement, Clearance Days will be added to the date on
which
any payment is received by Purchaser.
8.
Authorization
to Purchaser.
8.1.
Seller hereby irrevocably authorizes Purchaser at Seller's 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 Purchaser or Seller, any and all cash, checks, commercial
paper,
drafts, remittances and other instruments and documents relating to the
Collateral, the Purchased Accounts or the proceeds thereof, (b) take or bring,
in the name of Purchaser or Seller, all steps, actions, suits or proceedings
deemed by Purchaser necessary or desirable to effect collection of or other
realization upon the Accounts and other Collateral, (c) after an Event of
Default, change the address for delivery of mail to Seller and to receive
and
open mail addressed to Seller, (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 granted
to Seller by such account debtor), without affecting any of the Obligations,
(e)
pay any sums necessary to discharge any lien or encumbrance which is senior
to
Purchaser's security interest in the Collateral, which sums shall be included
as
Obligations hereunder, and in connection with which sums interest shall accrue
and shall be due and payable at the lesser of 18% per annum or the highest
lawful rate, (f) file in the name of Seller or Purchaser or both, (1) mechanics
lien or related notices or (2) claims under any payment bond, in connection
with
goods or services sold by Seller in connection with the improvement of realty,
and (g) notify any Account Debtor obligated with respect to any Account,
that
the underlying Account has been assigned to Purchaser by Seller and that
payment
thereof is to be made to the order of and directly and solely to Purchaser,
and
(h) communicate directly with Seller’s Account Debtors to verify the amount and
validity of any Account created by Seller.
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8.2.
Seller authorizes Purchaser at any time and from time to time to file any
initial financing statements and amendments thereto that:
8.2.1.
indicate the Collateral as all account of the Seller or words of similar
effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the UCC, or as being of an equal or lesser
scope or with greater detail;
8.2.2.
contain any other information required by Article 9 of the UCC for the
sufficiency or filing office acceptance of any financing statement or amendment,
including (i) whether the Seller is an organization, the type of organization,
and any organization identification number issued to the Seller;
8.2.3.
contain a notification that the Seller has granted a negative pledge to the
Purchaser, and that any subsequent lienor may be tortuously interfering with
Purchaser’s rights; and
8.2.4.
advises third parties that any notification of Seller’s Account Debtors will
interfere with Purchaser’s collection rights.
8.3.
Seller hereby releases and exculpates Purchaser, its officers, employees
and
designees, from any liability arising under this Agreement or in furtherance
thereof, whether of omission or commission, and whether based upon any error
of
judgment or mistake of law or fact, except for gross negligence and willful
misconduct. In no event will Purchaser have any liability to Seller for lost
profits, punitive, exemplary, speculative or other special or consequential
damages, except for gross negligence and willful misconduct. Without limiting
the generality of the foregoing, Seller releases Purchaser from any claims
which
Seller may now or hereafter have arising out of Purchaser's endorsement and
deposit of checks issued by Seller's customers stating that they were in
full
payment of an Account, but issued for less than the full amount which may
have
been owed on the Account
8.4.
Seller authorizes Purchaser to accept, indorse and deposit on behalf of Seller
any checks tendered by an Account Debtor “in full payment” of its obligation to
Seller. Seller hereby waives, and agrees that it shall not assert against
Purchaser any claim arising therefrom, irrespective of whether such action
by
Purchaser effects an accord and satisfaction of Seller's claims under the
Uniform Commercial Code, or otherwise.
9.
ACH
Authorization.
In
order to satisfy any of the Obligations, Purchaser is hereby authorized by
Seller to initiate electronic debit or credit entries through the ACH system
to
any deposit account maintained by Seller wherever located.
10.
Covenants
By Seller.
10.1.
Seller shall not, without the prior written consent of Purchaser 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.
10.2.
From time to time as requested by Purchaser, at the sole expense of Seller,
Purchaser or its designee shall have unrestricted access, during reasonable
business hours if prior to an Event of Default and at any time if on or after
an
Event of Default, to all premises where the Collateral is located for the
purposes of inspecting (and removing, if after the occurrence of an Event
of
Default) any of the Collateral, including Seller's books and records, and
Seller
shall permit Purchaser or its designee to make copies of such books and records
or extracts therefrom as Purchaser may request.
10.3.
Seller shall furnish to Purchaser on a monthly basis such financial statements
and other financial information as Purchaser may from time to time request.
All
such financial statements shall show all material contingent liabilities
and
shall accurately and fairly present the results of operations and the financial
condition of Seller at the dates and for the period indicated. Without
limitation of the foregoing, Seller shall furnish to Purchaser the following
statements:
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10.3.1.
Income
statements of the Seller dated as of the last day of each month, to be delivered
within 20 days after the end of each month and certified by Seller as true,
correct, and complete, and yearly income statements of Seller to be delivered
within 90 days after the end of each fiscal year and certified by Seller
as
true, correct, and complete.
10.3.2.
Schedules
containing the aging of accounts receivable and accounts payable of the Seller
dated as of the last day of each month, to be delivered within 5 business
days
after the end of each month and certified by the Seller to be true, correct
and
complete.
10.3.3.
Annual
balance sheets and financial statements from Seller within 105 days of the
end
of each fiscal year of the reporting party, which are true and correct in
all
respects, have been prepared in accordance with GAAP, and fairly present
the
financial condition(s) of the person(s) referred to therein as of the date(s)
indicated.
10.3.4.
If Seller fails to furnish or cause to be furnished promptly any report required
above, or if Purchaser reasonably deems such reports to be unacceptable,
Purchaser may elect (in addition to exercising any other right and remedy)
to
conduct an audit of all books and records of Seller and/or prepare the statement
or statements which Seller failed to procure and deliver. Such audit shall
be
made and such statement or statements shall be prepared by an independent
firm
of certified public accountants to be selected by Purchaser. Seller shall
pay
all reasonable expenses of the audit and other services, which expenses shall
be
immediately due and payable.
10.4.
Without expense to Purchaser, Purchaser may use any of Seller's personnel,
equipment, including computer equipment, programs, printed output and computer
readable media, supplies and premises for the collection of Accounts and
realization on other Collateral as Purchaser, in its sole discretion, deems
appropriate. Seller hereby irrevocably authorizes all accountants and third
parties to disclose and deliver to Purchaser at Seller's expense all financial
information, books and records, work papers, management reports and other
information in their possession relating to Seller.
10.5.
Before sending any Invoice to an Account Debtor, Seller shall xxxx same with
a
notice of assignment as may be required by Purchaser.
10.6.
Seller shall pay when due all payroll and other taxes, and shall provide
proof
thereof to Purchaser in such form as Purchaser shall reasonably require.
10.7.
Except as is set forth in the Intercreditor Agreement by and between Seller,
Purchaser and YA Global Investments, L.P., Seller shall not create, incur,
assume or permit to exist any lien upon or with respect to any Collateral
now
owned or hereafter acquired by Seller with the sole exception of existing
liens
filed on Sellers equipment.
10.8.
Seller shall maintain insurance on all insurable property owned or leased
by
Seller in the manner, to the extent and against at least such risks (in any
event, including but not limited to fire and business interruption insurance)
as
usually maintained by owners of similar businesses and properties in similar
geographic areas. All such insurance shall be in amounts and form and with
insurance companies acceptable to Purchaser in its reasonable discretion.
Seller
shall furnish to Purchaser: (a) upon written request, any and all information
concerning such insurance carried; (b) as requested by Purchaser, loss payee
endorsements (or their equivalent) in favor of Purchaser. All policies of
insurance shall provide for not less than thirty (30) day’s prior written
cancellation notice to Purchaser.
10.9.
Notwithstanding that Seller has agreed to pay the Misdirected Payment Fee,
Seller shall deliver in kind to Purchaser on the next banking day following
the
date of receipt by Seller of the amount of any payment on account of a Purchased
Account.
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10.10.
Avoidance
Claims.
10.10.1.
Seller shall indemnify Purchaser from any loss arising out of the assertion
of
any Avoidance Claim and shall pay to Purchaser on demand the amount
thereof.
10.10.2.
Seller shall notify Purchaser within two business days of it becoming aware
of
the assertion of an Avoidance Claim.
10.10.3.
This provision shall survive termination of this Agreement.
11.
Account
Disputes.
Seller
shall notify Purchaser promptly of and, if requested by Purchaser, will settle
all disputes concerning any Purchased Account, at Seller's sole cost and
expense. Purchaser may, but is not required to, attempt to settle, compromise,
or litigate (collectively, “Resolve”) the dispute upon such terms as Purchaser
in its sole discretion deem advisable, for Seller's account and risk and
at
Seller's sole expense. Upon the occurrence of an Event of Default Purchaser
may
Resolve such issues with respect to any Account of Seller.
12.
Representation
and Warranties .
Seller
represents and warrants that:
12.1.
It
is fully authorized to enter into this Agreement and to perform hereunder;
12.2.
This Agreement constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller 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
creditors’ rights generally); and
12.3.
Seller is in good standing in the State of its organization.
12.4.
Each Purchased Account is and will remain:
12.4.1.
a
bona fide existing obligation created by the sale and delivery of conforming
goods or the rendition of services in the ordinary course of Seller’s business,
and all underlying goods have been delivered to the Account Debtor, or all
underlying services have been rendered by the Seller, in complete fulfillment
of
all of the terms and conditions of the contract relating to payment of the
Account with the Account Debtor (a true and complete copy of which contract
having been delivered to Purchaser if the contract is written), and the Account
Debtor has accepted the goods or services to which the Account
relates;
12.4.2.
denominated and payable only in United States dollars and 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 creditors’ rights generally);
12.4.3.
current and not past due as of the date of purchase by Purchaser, and 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 the price, quality,
quantity, 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
such
sale of such account to Purchaser hereunder) against payment of such account;
;
12.5.
No
Purchased Account is from a sale of goods or rendition of services to an
entity
which is affiliated with Seller. Each Purchased Account has resulted from
an
“arms length” transaction with the applicable Account Debtor.
12.6.
Seller has not received notice of any actual, imminent, or threatened
bankruptcy, insolvency, or material impairment of the financial condition
of any
applicable Account Debtor liable under a Purchased Account.
Seller
has no knowledge of any fact which would lead it to expect that, as of the
date
of sale of such account to Purchaser, that such Account will not be paid
in the
full stated amount when due.
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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 Purchaser hereunder.
13.
Representation
and Warranties of Purchaser.
Purchaser represents and warrants that:
13.1 It
is
fully authorized to enter into this Agreement and to perform
hereunder;
13.2 This
Agreement constitutes the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser 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
creditors’ rights generally); and
13.3 Purchaser
is in good standing in the State of its organization.
13.4 The
execution, delivery and performance of this Agreement has been duly authorized
by Purchaser's Board of Directors and will not violate any law or any order
of
any court or government agency applicable to Purchaser, as the case may be,
or
the Certificate of Incorporation or Bylaws of Purchaser, and will not result
in
any breach of or default under, or, except as expressly provided herein,
result
in the creation of any encumbrance upon any of the assets of Purchaser pursuant
to the terms of any agreement or instrument by which Purchaser or any of
its
assets may be bound. No approval of or filing with any governmental authority
is
required for Purchaser to enter into, execute or perform this
Agreement
14.
Default.
14.1.
Events
of Default.
The
following events will constitute an Event of Default hereunder:
14.1.1.
A
default or breach occurs which is not cured within any applicable grace period
or waived in writing in the payment of any amount with respect to any
indebtedness of Seller or any of Seller's affiliates in excess of $50,000
individually or in the aggregate, or in the performance, observance or
fulfillment of any provision contained in any agreement, contract, document
or
instrument to which Seller or any of Seller's affiliates is a party or to
which
any of their properties or assets are subject or bound (1) under or pursuant
to
which any indebtedness in excess of $50,000 individually or in the aggregate
was
issued, created, assumed, guaranteed or secured and such default or breach
continues for more than any applicable grace period or permits the holder
of any
such indebtedness to accelerate the maturity thereof, or (2) that is between
Seller or any of Seller's affiliates and Landry Marks or YA Global Investments
LP or their affiliates after giving effect to any required notice or cure
period
thereunder,
14.1.2.
Seller defaults in the payment of any Obligations or in the performance of
any
provision hereof or of any other agreement now or hereafter entered into
with
Purchaser, or any warranty or representation contained herein proves to be
false
in any way, howsoever minor,
Seller
or
any guarantor of the Obligations becomes subject to any debtor-relief
proceedings,
14.1.3.
any such guarantor fails to perform or observe any of such Guarantor's
obligations to Purchaser or shall notify Purchaser 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,
Purchaser
for any reason, in good faith, deems itself insecure with respect to the
prospect of repayment or performance of the Obligations;
14.1.4.
Seller:
|
| 14.1.4.1. |
Executes
an assignment for the benefit of creditors, or takes any action
in
furtherance thereof; or (B) admits in writing its inability to
pay, or
fails to pay, its debts generally as they become due; or (C) as
a debtor,
files a petition, case, proceeding or other action pursuant to,
or
voluntarily seeks the benefit or benefits of, Title 11 of the United
States Code as now or hereafter in effect or any other federal,
state or
local law, domestic or foreign, as now or hereafter in effect relating
to
bankruptcy, insolvency, liquidation, receivership, reorganization,
arrangement, composition, extension or adjustment of debts, or
similar
laws affecting the rights of creditors (Title 11 of the United
States Code
and such other laws being herein called "Debtor
Relief Laws"),
or takes any action in furtherance thereof; or (D) seeks the appointment
of a receiver, trustee, custodian or liquidator of the Project
or any part
thereof or of any significant portion of its other property;
or
|
Page
8 of
15
|
| 14.1.4.2. |
Suffers
the filing of a petition, case, proceeding or other action against
it as a
debtor under any Debtor Relief Law or seeking appointment of a
receiver,
trustee, custodian or liquidator of the Collateral or any part
thereof or
of any significant portion of its other property, and (A) admits,
acquiesces in or fails to contest diligently the material allegations
thereof, or (B) the petition, case, proceeding or other action
results in
entry of any order for relief or order granting relief sought against
it,
or (C) in a proceeding under Debtor Relief Laws, the case is converted
from one chapter to another, or (D) fails to have the petition,
case,
proceeding or other action permanently dismissed or discharged
on or
before the earlier of trial thereon or sixty (60) days next following
the
date of its filing; or
|
|
| 14.1.4.3. |
Conceals,
removes, or permits to be concealed or removed, any part of its
property,
with intent to hinder, delay or defraud its creditors or any of
them, or
makes or suffers a transfer of any of its property which may be
fraudulent
under any bankruptcy, fraudulent conveyance or similar law; or
makes any
transfer of its property to or for the benefit of a creditor at
a time
when other creditors similarly situated have not been paid; or
suffers or
permits, while insolvent, any creditor to obtain a lien upon any
of its
property through legal proceedings which are not vacated and such
lien
discharged prior to enforcement thereof and in any event within
sixty (60)
days from the date thereof; or
|
|
| 14.1.4.4. |
Fails
to have discharged within a period of ten (10) days any attachment,
sequestration, or similar writ levied upon any of its property;
or
|
|
| 14.1.4.5. |
Fails
to pay any final money judgment against it; provided
that,
Seller shall have the opportunity to cure such non-payment within
five (5)
business days after such default..
|
14.2.
Notice.
SELLER WAIVES ANY REQUIREMENT THAT PURCHASER INFORM SELLER BY AFFIRMATIVE
ACT OR
OTHERWISE OF ANY ACCELERATION OF SELLER’S OBLIGATIONS HEREUNDER. FURTHER,
PURCHASER'S FAILURE TO CHARGE OR ACCRUE INTEREST OR FEES AT ANY “DEFAULT” OR
“PAST DUE” RATE SHALL NOT BE DEEMED A WAIVER BY PURCHASER OF ITS CLAIM THERETO.
14.3.
Effect
of Default.
14.3.1.
Upon the occurrence of any Event of Default, in addition to any rights Purchaser
has under this Agreement or applicable law, Purchaser may immediately terminate
this Agreement, at which time all Obligations shall immediately become due
and
payable without notice.
15.
Account
Stated.
From
time to time during the term of this Agreement, Purchaser may render to Seller
a
statement setting forth the transactions arising hereunder. Each statement
shall
be considered correct and binding upon Seller as an account stated, except
to
the extent that Purchaser receives, within ten (10) days after the mailing
of
such statement, written notice from Seller of any specific exceptions by
Seller
to that statement, and then it shall be binding against Seller as to any
items
to which it has not objected.
Page
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15
16.
Waiver.
No
failure to exercise and no delay in exercising any right, power, or remedy
hereunder shall impair any right, power, or remedy which Purchaser 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 Purchaser of any breach or default by Seller hereunder be deemed
a
waiver of any default or breach subsequently occurring. All rights and remedies
granted to Purchaser 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 Purchaser would otherwise have. Any waiver, permit, consent
or
approval by Purchaser 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.
17.
Termination;
Effective Date.
17.1.
This Agreement will be effective when accepted by Purchaser and shall be
further
annually extended automatically unless Seller shall indicate its intention
to
terminate at least thirty days prior to the next annual anniversary date
hereof,
whereupon this Agreement shall terminate on such anniversary date
hereof.
17.2.
Purchaser may terminate this Agreement at any time upon giving Seller at
least
thirty (30) days prior written notice of termination, whereupon this Agreement
shall terminate on the earlier date of the date set forth in such written
notice
or on the anniversary date hereof.
17.3.
Purchaser
may, at its election, terminate this Agreement immediately and without the
requirement of notice to Seller upon an Event of Default hereunder.
17.4.
Upon
termination, Seller shall pay the Obligations to Purchaser, and Purchaser
shall
not purchase any Accounts from Seller.
Termination of this Agreement shall not affect the rights and obligations
of the
parties hereunder with respect to transactions occurring on or prior to the
date
of such termination, and this Agreement shall continue to govern the rights
and
obligations of the parties hereto with respect to accounts purchased by
Purchaser from
Seller on or prior to the date of such termination. All security interests
granted or contemplated by this Agreement shall survive the termination of
this
Agreement until all amounts payable to Purchaser with
respect to transactions occurring on or prior to the date of termination
have
been paid to Purchaser, and Seller has performed all its obligations to
Purchaser with respect to such transactions and all obligations under this
Agreement including but not limited to payment of any fees owing
hereunder.
18.
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.
19.
No
Lien Termination without Release.
In
recognition of the Purchaser's right to have its attorneys' fees and other
expenses incurred in connection with this Agreement secured by the Collateral,
notwithstanding payment in full of all Obligations by Seller, Purchaser shall
not be required to record any terminations or satisfactions of any of
Purchaser's liens on the Collateral unless and until Seller has executed
and
delivered to Purchaser a general release in the form of Exhibit A hereto.
Seller
understands that this provision constitutes a waiver of its rights under
§9-513
of the UCC.
20.
Conflict.
Unless
otherwise expressly stated in any other agreement between Purchaser and Seller,
if a conflict exists between the provisions of this Agreement and the provisions
of such other agreement, the provisions of this Agreement shall control.
21.
Survival.
All
representations, warranties and agreements of Seller herein contained shall
be
effective so long as any portion of this Agreement remains
executory.
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10
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22.
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.
23.
Enforcement.
This
Agreement and all agreements relating to the subject matter hereof is the
product of negotiation and preparation by and among each party and its
respective attorneys, and shall be construed accordingly.
24.
Relationship
of Parties.
The
relationship of the parties hereto shall be that of Seller and Purchaser
of
Accounts, and Purchaser shall not be a fiduciary of the Seller, although
Seller
may be a fiduciary of the Purchaser.
25.
Attorneys
Fees.
Seller
agrees to reimburse Purchaser within five (5) business days from on demand
for:
25.1.
the
actual amount of all costs and expenses, including attorneys' fees, which
Purchaser has incurred or may incur in:
25.1.1.
negotiating, preparing, or administering this Agreement and any documents
prepared in connection herewith, all of which shall be paid contemporaneously
with the execution hereof;
25.1.2.
any way arising out of this Agreement;
25.1.3.
protecting, preserving or enforcing any lien, security interest or other
right
granted by Seller to Purchaser or arising under applicable law, whether or
not
suit is brought, including but not limited to the defense of any Avoidance
Claims;
25.2.
the
actual costs, including photocopying (which, if performed by Purchaser's
employees, shall be at the rate of $.10/page), travel, and attorneys' fees
and
expenses incurred in complying with any subpoena or other legal process
attendant to any litigation in which Seller is a party;
25.3.
The
actual amount of all costs and expenses, including attorneys' fees, which
Purchaser 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 Seller, including those (i) arising out
the
automatic stay, (ii) seeking dismissal or conversion of the bankruptcy
proceeding or (ii) opposing confirmation of Seller's plan thereunder.
26.
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 Purchaser or any third
party
to induce Seller 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.
27.
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 Chosen State.
28.
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.
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29.
Venue;
Jurisdiction. Governing
Law; Venue; Submission to Jurisdiction.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF
TEXAS WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF, EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF THE SECURITY INTEREST GRANTED HEREUNDER, IN RESPECT OF
ANY
PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE
STATE OF
TEXAS. THIS AGREEMENT IS PERFORMABLE BY THE PARTIES IN DALLAS COUNTY,
TEXAS. SELLER AND PURCHASER EACH AGREE THAT DALLAS COUNTY,
TEXAS SHALL BE
THE
EXCLUSIVE VENUE FOR LITIGATION OF ANY DISPUTE OR CLAIM ARISING UNDER OR RELATING
TO THIS AGREEMENT, AND THAT SUCH COUNTY IS A CONVENIENT FORUM IN WHICH TO
DECIDE
ANY SUCH DISPUTE OR CLAIM. SELLER AND PURCHASER EACH CONSENT TO THE PERSONAL
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN DALLAS COUNTY,
TEXAS
FOR
THE LITIGATION OF ANY SUCH DISPUTE OR CLAIM. SELLER IRREVOCABLY WAIVES, TO
THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM
30.
Assignment.
Purchaser may assign its rights and delegate its duties hereunder. Upon such
assignment, Seller shall be deemed to have attorned to such assignee and
shall
owe the same obligations to such assignee and shall accept performance hereunder
by such assignee as if such assignee were Purchaser. This Agreement is not
assignable by Seller, unless consented to in writing by Purchaser.
31.
Indemnification.
Seller
agrees to indemnify, defend and hold the Indemnified Persons (hereinafter
defined) harmless from and against any and all loss, liability, obligation,
damage, penalty, judgment, claim, deficiency and expense (including interest,
penalties, attorneys’ fees and amounts paid in settlement) owing to any third
party to which any Indemnified Person may become subject arising out of or
based
upon this Agreement as well as any prior relationship of Seller with any
Indemnified Person, whether
by alleged or actual negligence of any Indemnified Person,
except
and to the extent caused by the gross negligence or willful misconduct of
any
Indemnified Person. Where used herein, the term “Indemnified Persons” shall mean
Purchaser and its partners, officers, members, employees, attorneys,
representatives, agents, affiliates, successors and assigns.
Waiver
and Release.
Seller,
by its execution of this Agreement, does hereby covenant, warrant and represent
that (i) Seller is not in default and no default exists under any prior
agreements or transactions with Purchaser, (ii) Seller releases, relinquishes
and waives any and all defenses to the enforceability of any prior agreements
or
transactions with Purchaser in connection therewith to which Seller may have
otherwise been entitled as of the date hereof, (iii) Seller relinquishes,
waives
and releases Purchaser from any and all claims known or unknown which Seller
may
or might have against Purchaser arising directly or indirectly out of or
from
any prior agreements or transactions between Seller and Purchaser, (iv) the
benefit received and to be received by Seller as a result of this Agreement
shall and does constitute sufficient and valuable consideration to Seller
for
entering into and performing its obligations under this Agreement, (v) the
execution, delivery and performance by Seller of this Agreement and the
consummation of the transaction contemplated thereby are (a) not prohibited
by
any indenture, contract or agreement, law or corporate or partnership documents,
including, but not limited to the Bylaws and Articles of Incorporation or
Certificate of Incorporation, as the case may be, if Seller is a corporation,
or
Seller’s partnership agreement, if Seller is a partnership, (b) duly authorized
by appropriate action of Seller, and (c) legally valid and binding obligations
of Seller and will continue to be such and enforceable against the Seller
according to their terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally), (vi) that
this
Agreement will be executed and delivered by properly authorized officers
of
Seller, (vii) Purchaser has no obligation to continue the prior agreements
or
enter into this Agreement except for the considerations herein expressed,
and
(viii) the representations and warranties set forth herein will survive the
execution and delivery of this Agreement.
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32.
Notice.
32.1.
All
notices required to be given to any party other than Purchaser shall be deemed
given upon the first to occur of (i) deposit thereof in a receptacle under
the
control of the United States Postal Service, (ii) deposit with a nationally
recognized overnight courier (such as Federal Express, Airborne, or a similar
courier), or (iii) actual receipt by such party or an employee or agent of
such
party.
32.2.
All
notices to Purchaser hereunder shall be deemed given upon actual receipt
by one
of the following officers of Purchaser: Xxxxxxx Xxxxx or Xxxxxx Xxxxxx. For
the
purposes hereof, notices hereunder shall be sent to the addresses hereafter,
or
to such other addresses as each such party may in writing hereafter indicate.
32.3.
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 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.
33.
True
Sales.
Seller
and Purchaser acknowledge and agree that the sale of accounts contemplated
and
covered hereby are fully intended by the parties hereto as true sales governed
by the provisions of Section 306.103 of the
Texas Finance Code and Section
9.109(e) of the
Texas Business and Commerce Code, as each may be amended
from
time to time, and, accordingly, legal and equitable title in all of Seller’s
accounts sold to and purchased by Purchaser from time to time hereunder will
pass to Purchaser.
34.
Proprietary
Information. Except
as
to the extent required by law, each of the parties agrees that it will not
disclose, and will not include in any public announcement, the name of the
other
party, unless expressly agreed to by the other party or unless and until
such
disclosure is required by law or applicable regulation, and then only to
the
extent agreed to or required. Neither party shall disclose or cause to be
disclosed (i) any proprietary information concerning each other, including,
without limitation, any information regarding actual or potential investments,
valuations, financial information, trade secrets and the like which is
proprietary in nature and non-public, (collectively, “Proprietary
Information”),
(ii)
the terms and provisions of this Agreement, or (iii) the existence or content
of
any consent or other action pursuant to this Agreement to any other person,
except as otherwise required by any regulatory authority, law or regulation,
or
by legal process, without the prior written consent of the other party.
35.
Securities
Laws Compliance.
Purchaser
acknowledges that United States securities laws and the rules and regulations
promulgated thereunder prohibit any person with material, non-public information
about a company from purchasing, selling, trading or entering into options,
puts, calls or other derivatives in respect of securities of such issuer
or from
communicating such information to any other person or entity. The undersigned
agrees not to engage in any such transactions in the securities of Seller
on the
basis of such information, not to “tip” or otherwise disclose to any such person
or entity such information, and to comply with applicable laws with respect
to
the Proprietary
Information or other confidential
information.
36.
No
Solicitation of Employees.
Each
Party covenants that for a period of one(1) year following the date of this
Agreement, such Party will not, directly or indirectly, solicit for employment
or hire any employee of the other Party or any of the other Party’s subsidiaries
with whom such Party has had contact or who became known to such Party in
connection with this Agreement and the transactions contemplated herein;
provided, however, that the foregoing provision will not prevent either Party
from employing any such person who contacts such Party on his or her own
initiative without any direct or indirect solicitation by or encouragement
from
the Party.
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IN
WITNESS WHEREOF, the Parties have executed this agreement on the day and
year
first above written.
|
SELLER:
| TXP
CORPORATION,
a
Nevada corporation |
| | | |
| |
By:
|
/s/
Xxxxxxx X. Xxxxxx
|
| | |
Xxxxxxx
X. Xxxxxx, President and CEO
|
| | | |
|
PURCHASER:
|
LANDRY
MARKS PARTNERS LP,
a
Texas limited
partnership
|
| | | |
| |
By:
|
Landry
Marks GP LLC, a Texas limited liability company, its General
Partner
|
| | | |
| |
By:
|
/s/
Xxxxxxx X. Xxxxx
|
| | |
Xxxxxxx
X. Xxxxx, Manager
|
| | | |
| |
Address:
|
0000
Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
|
| | |
Xxxxxx,
Xxxxx 00000
|
Page
14
of 15
EXHIBIT
A
GENERAL
RELEASE
FOR
GOOD
AND VALUABLE CONSIDERATION, the receipt and adequacy of which are hereby
acknowledged, the undersigned and each of them (collectively “Releasor”) hereby
forever releases, discharges and acquits Landry Marks Partners LP.
(“Releasee”), its parent, directors, partners, agents and employees, of and from
any and all claims of every type, kind, nature, description or character,
and
irrespective of how, why, or by reason of what facts, whether heretofore
existing, now existing or hereafter arising, or which could, might, or may
be
claimed to exist, of whatever kind or name, whether known or unknown, suspected
or unsuspected, liquidated or unliquidated, each as though fully set forth
herein at length, to the extent that they arise out of or are in way connected
to or are related to that certain
Factoring and Security Agreement dated
August
13, 2008
Releasor
agrees that the matters released herein are not limited to matters which
are
known or disclosed.
Releasor
acknowledges that factual matters now unknown to it may have given or may
hereafter give rise to Claims which are presently unknown, unanticipated
and
unsuspected, and it acknowledges that this Release has been negotiated and
agreed upon in light of that realization and that it nevertheless hereby
intends
to release, discharge and acquit the Releasee from any such unknown Claims.
Acceptance
of this Release shall not be deemed or construed as an admission of liability
by
any party released.
Releasor
acknowledges that either (a) it has had advice of counsel of its own choosing
in
negotiations for and the preparation of this release, or (b) it has knowingly
determined that such advise is not needed.
DATED:
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