Exhibit 10.5
AMENDMENT TO
FACTORING AGREEMENT
Amendment # 2
Dated March 22, 1999
The FACTORING AGREEMENT dated AUGUST 5, 1997 (the "Agreement"), between Bay View
Funding, a California corporation, and THE ROSE GROUP CORPORATION, a
corporation, is hereby amended in the specific section(s) as follows:
First paragraph, Page 1: Buyer's additional name shall be BAY VIEW BANK.
FURTHER, any and all references to Buyer shall mean: BAY VIEW FUNDING and BAY
VIEW BANK. FURTHER, Buyer's additional name affects all other related documents.
1.4 "ADVANCE PERCENTAGE" shall be EIGHTY FIVE percent (85%).
2.2 ACCEPTANCE OF RECEIVABLES. Buyer shall have no obligation to purchase
any Receivable listed on a Schedule of Accounts. Upon acceptance, Buyer
shall pay to Seller the Advance Percentage of the face amount of each
Receivable Buyer desires to purchase. Such payment shall be the "Advance"
with respect to such Receivable. The purchase price of any Receivables
purchased hereunder shall be the sum of the Advance, plus any Reserve
payable by Buyer to Seller relating to such Receivable. The aggregate amount
of all outstanding Advances shall not at any time exceed the lesser of
$200,000 (the Maximum Credit) or an amount equal to the sum of all
undisputed Purchased Receivables multiplied by the Advance Percentage.
Seller shall not request and Buyer shall not make an Advance that would
cause the resulting total of all Advances to exceed the foregoing
limitation. In the event the aggregate outstanding Obligations shall at any
time exceed the foregoing limitation, Seller shall immediately repay the
Advances in the amount of such excess.
3.8 MONTHLY MINIMUM FEE. Buyer would not have entered into this Agreement
and agreed to provide Seller with the factoring arrangements hereunder
unless Seller guaranteed Buyer that the sum of the Finance Fees and
Factoring Fees paid to Buyer in each month would be at least ONE HALF OF ONE
percent (.5%) of the Maximum Credit (the "Monthly Minimum Fee"). In the
event the aggregate Finance Fees, and Factoring Fees paid during any month
is less than the Monthly Minimum Fee, then Seller shall pay to Buyer the
amount of any deficiency (the "Supplemental Fee"). The Supplemental Fee, if
any, for any month shall be calculated and due and payable on the first
business day of the succeeding month.
Section 13. EFFECTIVENESS: TERM. This Agreement shall only become effective upon
execution and delivery by Seller and acceptance by Buyer and, unless earlier
terminated as provided in this Agreement, shall continue in full force and
effect for an initial term of 12 MONTHS periods. Unless earlier terminated as
provided in this Agreement, all Obligations shall be due and payable in full at
the expiration of the last renewal term. This Agreement may be terminated prior
to the end of the initial term (a "Term") as follows: (a) Seller may
terminate this Agreement at any time after giving Buyer at least thirty (30)
days prior written notice and paying Buyer an Early Termination Fee equal to TWO
percent (2%) of the Maximum Credit (the "Early Termination Fee"). Any such
termination shall be effective upon payment to Buyer in full of all Obligations,
including the Early Termination Fee; and (b) This Agreement shall automatically
terminate following the occurrence of an Event of Default under Section 9. Upon
any such termination following an Event of Default, all Obligations, including
the Early Termination Fee, shall be due and payable in full.
Notwithstanding the foregoing, any termination of this Agreement shall not
affect Buyer's security interest in the Collateral and Buyer's ownership of the
Purchased Receivables, and this Agreement shall continue to be effective, and
Buyer's rights and remedies hereunder shall survive such termination, until all
transactions entered into and Obligations incurred hereunder or in connection
herewith have been completed and satisfied in full.
The Amendment affects only the above listed Section(s) of the Agreement and all
other provisions of the Agreement shall remain unchanged and in force as written
or thereafter amended in writing.
This Amendment shall become effective when it is accepted and executed by an
authorized officer of Buyer.
AGREED:
SELLER:
THE ROSE GROUP CORPORATION
BY: /s/ Xxxxxxx X. Xxxx
-----------------------------
(PRINT NAME AND TITLE)
DATE: 3/22/99
BUYER:
BAY VIEW FUNDING
BY: /s/
-----------------------------
(AUTHORIZED SIGNER)
DATE: 3/22/99
BUYER:
BAY VIEW BANK
BY: /s/
-----------------------------
(AUTHORIZED SIGNER)
DATE: 3/22/99
FACTORING AGREEMENT
This Factoring Agreement (the "Agreement") is made as of AUGUST 5, 1997, by and
between Concord Growth Corporation ("Buyer") having a place of business at 0000
Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000, and THE ROSE GROUP
CORPORATION, a CORPORATION ("Seller") having its principal place of business and
chief executive office at 00000 00XX XXXXX #000, XXXXXXXXXX, XX 00000.
Additional location where collateral is domiciled: 00 XXXXXXXXXXX XXXX, XXXXXX
XXXXX, XX 00000.
Section 1. DEFINITIONS. When used herein, the following terms shall have the
following meanings:
1.1 "ACCOUNT BALANCE" shall mean, on any given day, the gross amount of all
Purchased Receivables unpaid on that day.
1.2 "ACCOUNT DEBTOR" shall have the meaning set forth in the Uniform
Commercial Code and shall include any person liable on any Purchased Receivable,
including without limitation, any guarantor of the Purchased Receivable and any
issuer of a letter of credit or banker's acceptance.
1.3 "ADJUSTMENTS" shall mean all discounts, allowances, returns, disputes,
counterclaims, offsets, defenses, rights of recoupment, rights of return,
warranty claims, or short payments, asserted by or on behalf of any Account
Debtor with respect to any Purchased Receivable.
1.4 "ADVANCE PERCENTAGE" shall be SEVENTY FIVE percent (75%).
1.5 "COLLECTIONS" shall mean all good funds received by Buyer from or on
behalf of an Account Debtor with respect to Purchased Receivables.
1.6 "INSOLVENT" shall mean with respect to an Account Debtor that such
Account Debtor has filed, or has had filed against it, any bankruptcy case, or
has made an assignment for the benefit of creditors.
1.7. "SCHEDULE OF ACCOUNTS" shall mean a Xxxx of Sale signed by a
representative of Seller which accurately identifies the Receivables which
Buyer, at its election, may purchase, and includes for each such Receivable the
correct amount owed by the Account Debtor, the name and address of the Account
Debtor, the invoice number, and the invoice date.
1.8 "PAYMENT PERIOD" shall be 90 calendar days from an invoice date.
1.9 "PURCHASED RECEIVABLES" shall mean all Receivables arising out of the
invoices and other agreements identified on or delivered with any Schedule of
Accounts delivered by Seller to Buyer which Buyer elects to purchase and for
which Buyer makes an Advance.
1.10 "RECEIVABLE" shall mean all Receivable arising out of the invoices and
other agreements identified on or delivered with any Schedule of Accounts
delivered by Seller to Buyer which Buyer elects to purchase and for which Buyer
makes an Advance.
1.11 "RECONCILIATION PERIOD" shall, unless otherwise notified by Buyer to
Seller, mean a WEEKLY calendar period.
1.12 "REPURCHASED RECEIVABLE" shall refer to a Purchased Receivable which
the Seller has become obligated to Repurchase under Section 4.1 hereof.
1.13 "WRITE OFF PERIOD" shall mean twelve (12) calendar months from the date
Buyer purchases a Receivable.
1.14 "DISPUTE" shall mean a dispute, claim, or defense of any kind
whatsoever, whether valid of invalid, asserted by an Account Debtor, that may
reduce the amount collectible by Buyer from Account Debtor.
Section 2. PURCHASE AND SALE OF RECEIVABLES
2.1 OFFER TO SELL RECEIVABLES. Seller may, on the terms provided herein, from
time to time factor, sell and assign to Buyer, Receivables acceptable to Buyer
in its sole discretion, at a discount below face
value. Seller will notify each Account Debtor of a Receivable purchased by Buyer
that all payments thereon must be made only to Buyer. Seller shall deliver to
Buyer a signed Schedule of Accounts along with copies of invoices and purchase
orders, contracts, and proof of delivery or service, with respect to any
Receivable for which a request for purchase is made. Buyer shall be entitled to
rely on all of the information provided by Seller to Buyer on the Schedule of
Accounts and rely on the signature on any Schedule of Accounts as an authorized
signature of Seller. Each invoice shall bear a notice, in form satisfactory to
Buyer, that it has been sold and assigned to and is payable only to Buyer.
2.2 ACCEPTANCE OF RECEIVABLES. Buyer shall have no obligation to purchase any
Receivable listed on a Schedule of Accounts. Upon acceptance, Buyer shall pay to
Seller the Advance Percentage of the face amount of each Receivable Buyer
desires to purchase. Such payment shall be the "Advance" with respect to such
Receivable. The purchase price of any Receivables purchased hereunder shall be
the sum of the Advance, plus any Reserve payable by Buyer to Seller relating to
such Receivable. The aggregate amount of all outstanding Advances shall not at
any time exceed the lesser of $350,000 (the Maximum Credit) or an amount equal
to the sum of all undisputed Purchased Receivables multiplied by the Advance
Percentage. Seller shall not request and Buyer shall not make an Advance that
would cause the resulting total of all Advances to exceed the foregoing
limitation. In the event the aggregate outstanding Obligations shall at any time
exceed the foregoing limitation, Seller shall immediately repay the Advances in
the amount of such excess.
2.3 EFFECTIVENESS OF SALE TO BUYER. Effective upon Buyer's payment of an
Advance, and for and in consideration therefore and in consideration of the
covenants of this Agreement, Seller will have absolutely sold, transferred and
assigned to Buyer, all of Seller's right, title and interest in and to each
Purchased Receivable and all monies due or which may become due on or with
respect to such Purchased Receivable.
2.4 ESTABLISHMENT OF A RESERVE. Upon the purchase by Buyer of each Purchased
Receivable, Buyer shall, unless waived by Buyer in its sole discretion,
establish a Reserve. The Reserve shall be the amount by which the face amount of
the Purchased Receivable exceeds the Advance, less all accrued fees and
Adjustments on the Purchased Receivable (the "Reserve"). The Reserve shall be a
book balance maintained on the records of Buyer and shall not be a segregated
fund.
Section 3. COLLECTIONS, CHARGES AND REMITTANCES
3.1 COLLECTIONS. All Collections will go directly to Buyer and Buyer shall apply
all Collections to Seller's Obligations hereunder in such order and manner as
Buyer may determine. Seller will hold in trust and safekeeping, as the sole
property of Buyer, and immediately turn over to Buyer, in identical form
received, any payment on a Purchased Receivable that comes into Seller's
possession. In the event Seller comes into possession of a remittance comprising
payments of both a Purchased Receivable and Receivable which has not been
purchased by Buyer, Seller shall hold same in accordance with the provisions set
forth above and immediately turn same over to Buyer, in identical form received.
Upon collection of such item, Buyer shall remit to Seller its portion thereof.
Seller agrees to indemnify and save Buyer to harmless from and against any and
all claims, loss, costs and expenses caused by or arising out of the Receivables
or any attempt by Buyer to collect same or resolve any Dispute.
3.2 FACTORING FEE. Seller shall pay to Buyer upon purchase of Receivables by
Buyer, a Factoring Fee ("Factoring Fee"), calculated by taking the
gross face value of a Purchased Receivable and multiplying it by ONE TENTH OF
ONE percent (.01%).
3.3 FINANCE FEE. Seller shall pay to Buyer as earned for each Fee Period for
Purchased Receivables, a fee calculated by taking 0.9% of the gross face value
of a Purchased Receivable for every 10 day period or fraction thereof ("Fee
Period") from the date said Purchased Receivable is first purchased by Buyer
until the date said Purchased Receivable is paid in full or otherwise
repurchased by Seller or otherwise written off by Buyer within the Write Off
Period.
3.4 ACCOUNTING. Seller shall immediately upon sale of Receivables to Buyer, make
proper entries on its books and records disclosing the sale thereof to Buyer.
Seller will immediately furnish Buyer financial statements, tax records and
other information as reasonably requested by Buyer. Buyer shall prepare and send
to Seller after the close of business for each calendar month, an accounting of
the transactions for that calendar month, including the amount of all Purchased
Receivables, all Collections, Adjustments, Factoring Fees, and Finance Fees. The
accounting shall be deemed correct and conclusive unless Seller makes written
objection to Buyer within thirty (30) days after the date Buyer mails the
accounting to Seller.
3.5 REFUND TO SELLER. Provided that there does not then exist an Event of
Default, as defined in Section 9, or any event or condition that with notice,
lapse of time or otherwise would constitute an Event of Default, Buyer shall
refund to Seller, the amount, if any, which Buyer owes to Seller at the end of
the Reconciliation Period according to the accounting prepared by Buyer for that
Reconciliation Period (the "Refund"). The Refund shall be an amount equal to:
3.5.1 The Reserve as of the beginning of that Reconciliation Period,
plus
3.5.2 The Reserve created for each Purchased Receivable purchased
during that Reconciliation Period, minus
3.5.3 The total for that Reconciliation Period of:
3.5.3.1 Finance Fee;
3.5.3.2 Factoring Fee;
3.5.3.3 Adjustments;
3.5.3.4 Repurchase Receivables, to the extent Buyer has agreed to
accept payment thereof by deduction from the Refund; and
3.5.3.5 The Reserve for the Account Balance as of the first day of the
following Reconciliation Period. In the event the formula set forth in
this Section 3.5 results in an amount due to Buyer from Seller, Seller
shall immediately make such payment to Buyer.
3.6 FACILITY FEE. Seller shall pay Buyer on the date hereof, a facility fee (the
"Faculty Fee") in the amount of NA percent (0.00%) of the Maximum Credit, which
fee is fully earned and non-refundable as of the date of this Agreement.
3.7 AUDIT FEES. Buyer or its designee may conduct NA examinations of the
Collateral and Seller's operations, unless an Event of Default has occurred and
is continuing, in which event the number of audits conducted will be in Buyer's
reasonable discretion. Seller shall pay Buyer audit fees not to exceed $575.00
per day plus expenses per audit. Audit fees shall be payable upon demand by
Buyer.
3.8 MONTHLY MINIMUM FEE. Buyer would not have entered into this Agreement and
agreed to provide Seller with the factoring arrangements hereunder unless Seller
guaranteed Buyer that the sum of the Finance Fees and Factoring Fees paid to
Buyer in each month would be at least NA percent (0%) of the Maximum Credit (the
"Monthly Minimum Fee"). In the event the
aggregate Finance Fees, and Factoring Fees paid during any month is less than
the Monthly Minimum Fee, then Seller shall pay to Buyer the amount of any
deficiency (the "Supplemental Fee"). The Supplemental Fee, if any, for any month
shall be calculated and due and payable on the first business day of the
succeeding month.
3.9 COSTS AND EXPENSES. Seller shall pay to Buyer immediately upon Buyer's
demand, all fees and expenses, including reasonable fees and expenses of
attorneys and other professionals, incurred by Buyer in connection with any and
all of the following: (a) preparing, amending, supplementing, restating,
negotiating or enforcing the Factoring Agreement, or any of the other Document
or any waivers or consents in connection with the foregoing, (b) perfecting,
protecting or enforcing Buyer's interest in the Collateral, (c) collecting the
Obligations, or (d) defending or in any way addressing any claims made or
litigation initiated by or against Buyer as a result of Buyer's relationship
with Seller or any guarantor, or (e) the costs incurred by Buyer in establishing
and maintaining the Lockbox. All such fees and expenses shall be payable to
Buyer whether incurred before, during or after any bankruptcy case or insolvency
proceeding involving Seller, any guarantor or any Account Debtor. At Buyer's
option, all fees, costs, expenses and other charges provided for in this
Agreement, or in any other Document may be charged to Seller's account of Seller
maintained by Buyer either by (a) deducting such amounts from any Remittance
otherwise payable to Seller pursuant to this Agreement, (b) deducting such
amounts from any Advance requested by Seller and made by Buyer, or (c) treating
such amounts as additional Advances.
Section 4. RECOURSE AND REPURCHASE OBLIGATIONS
4.1 SELLER'S AGREEMENT TO REPURCHASE. Seller agrees to pay to Buyer on demand,
the full face amount, or any unpaid portion of, any Purchased Receivable:
4.1.1 Which remains unpaid for the Payment Period, unless prior to the
expiration of the Payment Period, the subject Account Debtor has become
Insolvent; or
4.1.2 With respect to which there has been any breach of warranty or
representation set forth in Section 6 hereof or any breach of any
covenant contained in this Agreement; or
4.1.3 With respect to which the Account Debtor asserts any Dispute.
Section 5. POWER OF ATTORNEY. In order to carry out the sale of Purchased
Receivables to Buyer hereunder, Seller does hereby irrevocably appoint Buyer and
its successors and assigns as Seller's true and lawful attorney in fact, with
respect to Purchased Receivables and hereby authorizes Buyer, regardless of
whether there has been an Event of Default, (a) to sell, assign, transfer or
pledge the whole or any part of the Purchased Receivables; (b) to demand,
collect, receive, xxx, and give releases to any Account Debtor for the monies
due or which may become due upon or with respect to the Purchased Receivables
and to compromise, prosecute, or defend any action, claim, case or proceeding
relating to the Purchased Receivables, including the filing of a claim or the
voting of such claims in any bankruptcy case, all in Buyer's name or Seller's
name as Buyer may choose; (c) to prepare, file and sign Seller's name on any
notice, claim, assignment, demand, draft or notice of or satisfaction of lien or
mechanic's lien or similar document; (d) to receive, open, and dispose of all
mail addressed to Seller for the purpose of collecting the Purchased
Receivables; (e) to endorse Seller's name on any checks or other forms of
payment on the Purchased Receivable; and (f) to do all acts and things necessary
or expedient, in furtherance of any such purposes.
Section 6. REPRESENTATIONS, WARRANTIES, AND COVENANTS.
6.1 RECEIVABLES' WARRANTIES, REPRESENTATIONS AND COVENANTS. To induce Buyer to
buy Receivables and to render its services to Seller, and with full knowledge
that the truth and accuracy of the following are being relied upon by the Buyer
in determining whether to accept Receivables as Purchased Receivables, Seller
represents, warrants, covenants and agrees, with respect to each Schedule of
Accounts delivered to Buyer and each Receivable described therein, that:
6.1.1 Seller is the absolute owner of each Receivable set forth in the
Schedule of Accounts and has full legal right to sell, transfer and
assign such Receivables;
6.1.2 The correct face amount of each Receivable is as set forth in the
Schedule of Accounts and is not in Dispute;
6.1.3 The payment of each Receivable is not contingent upon the
fulfillment of any obligation or contract, past or future, and any and
all obligations required of the Seller have been fulfilled as of the
date of the Schedule of Accounts;
6.1.4 Each Receivable set forth on the Schedule of Accounts is based on
the actual sale and delivery of goods and/or services actually rendered
on terms not to exceed 30 days, does not represent a sale to a parent,
subsidiary or affiliate of Seller, is presently due and owing to
Seller, is not past due or in default, has not been previously sold,
assigned, transferred, or pledged, is not a consignment sale or xxxx
and hold transaction, and is free of any and all liens, security
interests or encumbrances in favor of Buyer or any other division of or
affiliate of Buyer;
6.1.5 There are no defenses, offsets, or counterclaims against any of
the Purchased Receivables, and no agreement has been made under which
the Account Debtor may claim any deduction or discount, except as
otherwise stated in the Schedule of Accounts;
6.1.6 At the time that Buyer makes an Advance relating to a Receivable,
the Account Debtors set forth in the Schedule of Accounts, are then not
insolvent and Seller has no knowledge that the Account Debtors are
insolvent or may become insolvent within the Payment Period;
6.1.7 Seller shall not take or permit any action to countermand
notification to Account Debtors of Buyer's ownership of Purchased
Receivables.
6.2 ADDITIONAL WARRANTIES, REPRESENTATIONS, AND COVENANTS. In addition to the
foregoing warranties, representations and covenants, to induce Buyer to buy
Receivables and to render its services to Seller, Seller hereby represents,
warrants, covenants and agrees that:
6.2.1 Seller will not assign, transfer, sell or grant any security
interest in any Collateral to any other party, without Buyer's prior
written consent;
6.2.2 The Seller's name, form of organization, place of business and
the place where the records concerning all receivables herein referred
to are kept is set forth at the beginning of this Agreement, and Seller
will give Buyer 30 days advance notice in writing if such name,
organization, place of business or record keeping is to be changed or a
new place of business or record keeping is to be added and shall
execute any documents necessary to perfect Buyer's interest in
Purchased Receivables and the Collateral;
6.2.3 Seller shall pay all of its normal gross payroll for employees,
and all federal and state taxes, as and when due, including without
limitation all payroll and withholding taxes and state sales taxes;
6.2.4 Seller has not, as of the xxxx Xxxxxx delivers to Buyer a
Schedule of Accounts, or as of the xxxx Xxxxxx accepts any Advance from
Buyer, filed a voluntary petition for relief under the United States
Bankruptcy code or had filed against it an involuntary petition for
relief;
6.2.5 Seller, if a corporation, is duly incorporated and, at all times,
in good standing under the laws of the State of DELAWARE and is duly
qualified in all States where such qualification is required. Seller
has all required licenses to operate its business and transacts
business under no trade names or trade styles other than NA.
Section 7. NOTICE OF ADJUSTMENTS. In the event of a breach of any of the
representations, warranties, or covenants set forth in Section 6, or in the
event any Dispute is asserted by any Account Debtor, Seller shall promptly
advise Buyer and shall, subject to the Buyer's approval, resolve such disputes
and advise Buyer of an Adjustment. Until the disputed Purchased Receivable is
repurchased by Seller and the full amount of the Purchased Receivable is paid,
Buyer shall remain the absolute owner of any Purchased Receivable which is
subject to Adjustment or repurchase under Section 4.1 hereof, and any rejected,
returned, or recovered personal property, with the right to take possession
thereof at any time.
Section 8. SECURITY INTEREST. In order to secure all of Seller's now existing or
hereafter arising obligations and indebtedness to Buyer, howsoever arising,
whether under this Agreement or otherwise (collectively the "Obligations"),
Seller hereby grants to Buyer a continuing lien upon and security interest in
all Seller's now existing or hereafter arising: Accounts Receivable and proceeds
thereof; Inventory; Contract Rights; Chattel Paper; books and records relating
to any of the above; and accessions, substitutions for and all replacements,
products, and cash and non-cash proceeds of the foregoing, in whatever form,
including, without limitation, all insurance proceeds and all claims against
third parties for loss or destruction of or damages to any of the foregoing
(collectively, the "Collateral").
Seller is not authorized to sell, assign, transfer or otherwise convey any
Collateral without Buyer's prior written consent, except for the sale of
finished inventory in the Seller's usual course of business. Seller agrees to
sign and to allow Buyer to file UCC financing statements, in a form acceptable
to Buyer. Seller agrees to deliver to Buyer the originals of all instruments,
chattel paper and documents evidencing or related to Receivables.
Section 9. DEFAULT. The occurrence of any one of more of the following shall
constitute an Event of Default hereunder: (i) Seller fails to pay or perform any
Obligation as and when due; (ii) there shall be commenced by or against Seller
any voluntary or involuntary case under the United States Bankruptcy Code, or
any assignment for the benefit of creditors, or appointment of a receiver or
custodian for any of its assets, or Seller makes or sends notice of a bulk
transfer; (iii) Seller or any guarantor of the Obligations shall become
insolvent in that its debts are greater than the fair value of its asserts, or
Seller is generally not paying its debts as they become due or is left with
unreasonably small capital; (iv) any lien, garnishment, attachment, execution or
the like is issued against or attaches to the Seller, the Purchased
Receivables, or the Collateral, not subject to subsection 9viii; (v) Seller
shall breach any covenant, agreement, warranty, or representation set forth
herein; (vi) Seller delivers any documents, financial statements, schedule or
report to Buyer which is false or incorrect in any material respect; (vii) any
present or future guarantor of the Obligations revokes, terminates or fails to
perform any of the terms of any guaranty, endorsement or other agreement of such
party in favor of Buyer or any affiliate of Buyer; or (viii) any judgment
involving an amount in excess of $25,000 (twenty-five thousand dollars) is
issued against the Seller, the Purchased Receivables, or the Collateral and
remains undischarged for fifteen (15) days thereafter.
Section 10. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default,
the Obligations shall bear interest at a rate per annum equal to the per annum
rate of the Finance Fee and Factoring Fee, and Buyer may, without implying any
obligation to buy Receivables, cease buying Receivables or extending any
financial accommodations to Seller, and (i) declare all Obligations immediately
due and payable; (ii) withhold any further payments to Seller until all
Obligations have been paid in full; (iii) notify all Account Debtors to pay
Buyer directly, whether such Receivable is a Purchased Receivable or not; (iv)
direct the U.S. Post Office or other party to forward mail to an address
specified by Buyer; (v) exercise all rights under the power of attorney set
forth in Section 5 above with respect to all Collateral and all remedies set
forth herein; (vi) settle, compromise, adjust or litigate Receivables on such
terms as Buyer deems necessary to protect its rights in said Receivables; (vii)
proceed against Seller or any guarantor directly without any obligations to
proceed against the Collateral; (viii) remove from Seller's premises and take
possession of the Collateral and dispose of same at public or private sale; (ix)
exercise any right or remedy with respect to Seller or the Collateral granted
under applicable law or this Agreement.
The Seller will pay to Buyer immediately upon demand all reasonable fees and
expenses of attorneys and other professionals that Buyer incurs in enforcing
this Agreement or any other agreement executed in connection herewith,
protecting or enforcing its interest in the Purchased Receivables or the
Collateral, or collection of the Purchased Receivables and the Obligations.
Section 11. SEVERABILITY, WAIVER OF RIGHTS. This Agreement constitutes the
entire Agreement between the parties and may not be notified or amended or any
right or remedy of Buyer waived, except by agreement of the parties in writing.
In the event that any provision of this Agreement is deemed invalid by reason of
law, this Agreement will be construed as not containing such provision and the
remainder of the Agreement shall remain in full force and effect. This Agreement
shall be binding upon the Seller and Buyer and their successors and assigns, but
may not be assigned by Seller without Buyer's written consent. Any delay or
failure by Buyer to exercise any right or remedy hereunder shall not operate as
a waiver thereof. A waiver by Buyer of a right or a remedy on one occasion shall
not be deemed a waiver of the right or remedy on any subsequent occasion.
Section 12. CHOICE OF LAW, JURISDICTION, WAIVER OF JURY TRIAL. This Agreement
has been transmitted by Seller to Buyer at Buyer's office in the State of
California and has been executed and accepted by Buyer in the State of
California. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California. Seller hereby irrevocably submits to
the jurisdiction of any California State or Federal court sitting in San
Francisco County in any action or proceeding arising out of or relating to this
Agreement, or any other agreements, and Seller hereby irrevocably agrees that
all claims with respect to such action or proceeding may be heard and determined
in such California State court or, to the extent permitted by law, in such
Federal court. Seller consents to the service of any and all process in any such
action or proceeding by the mailing of copies of such process to Seller's
address specified in the Agreement. SELLER HEREBY WAIVES ITS RIGHT TO TRIAL BY
JURY IN ANY SUIT OR PROCEEDING ARISING UNDER OR RELATING TO THIS AGREEMENT.
Section 13. EFFECTIVENESS: TERM. This Agreement shall only become effective upon
execution and delivery by Seller and acceptance by Buyer and, unless earlier
terminated as provided in this Agreement, shall continue in full force and
effect for an initial term of 12 MONTHS from the date hereof and shall be deemed
automatically renewed for successive 12 MONTHS periods. Unless earlier
terminated as provided in this Agreement, all Obligations shall be due and
payable in full at the expiration of the last renewal term. This Agreement may
be terminated prior to the end of the initial term (a "Term") as follows: (a)
Seller may terminate this Agreement at any time after giving Buyer at least
thirty (30) days prior written notice and paying Buyer an Early Termination Fee
equal to TWO percent (2%) of the Maximum Credit (the "Early Termination Fee").
Any such termination shall be effective upon payment to Buyer in full of all
Obligations, including the Early Termination Fee; and (b) This Agreement shall
automatically terminate following the occurrence of an Event of Default under
Section 9. Upon any such termination following an Event of Default, all
Obligations, including the Early Termination Fee, shall be due and payable in
full.
Notwithstanding the foregoing, any termination of this Agreement shall not
affect Buyer's security interest in the Collateral and Buyer's ownership of the
Purchased Receivables, and this Agreement shall continue to be effective, and
Buyer's rights and remedies hereunder shall survive such termination, until all
transactions entered into and Obligations incurred hereunder or in connection
herewith have been completed and satisfied in full.
Section 14. PARTICIPATIONS: ASSIGNMENTS. Seller understands that Buyer may from
time to time transfer and assign its rights under this Agreement to one or more
assignees. Seller hereby consents to these transfers and assignments by Buyer to
one or more assignees. Seller hereby consents that any such assignee may
exercise the rights of the Buyer hereunder. Seller further hereby consents and
acknowledges that any and all defenses, claims or counterclaims that it may have
against the Buyer shall be limited to, and may only be brought against, Buyer
and may not extend to any assignee, including, but not limited to the funding
obligations.
Seller and Buyer intend that any and all direct assignees of the Buyer of the
type set forth above shall be the third party beneficiaries of this Agreement.
IN WITNESS WHEREOF, Seller has executed and delivered this Agreement for
acceptance by Buyer as of the day and year above written. If this Agreement is
not witnessed by any authorized employee of Buyer, Seller must have their
signature acknowledged by a Notary Public.
SELLER CONCORD GROWTH CORPORATION WITNESS:
The Rose Group Corporation
By: /s/ XXXXXXX X. XXXX By:
----------------------------------- --------------------------------
Title: CHM-CEO Print Name:
-------------------------------- -------------------------
Signer's Driver's License No.
BUYER
CONCORD GROWTH CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Title: Assistant Vice President
-------------------------------
Date: 8-28-99
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INSTRUCTIONS TO NOTARY PUBLIC: Use an ACKNOWLEDGMENT FORM as the Buyer requires
identity verification.
State of New York
County of Rockland
Before me this 25th day of August 1997 came Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxxxxx
Notary Public, State of New York
