COMMERCIAL FINANCING AGREEMENT
Exhibit 10.2
Commercial Financing Agreement (the "Agreement") made this 29th day of July 2011 between MIDAS MEDICI GROUP HOLDINGS, INC., a Delaware corporation, with an office for the transaction of business at 000 Xxxx Xxxxxx 00xx Xxxxx, Xxx Xxxx, XX, 00000, STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation, with an office for the transaction of business at 000 Xxxxxxx Xxxxx, Xxxx, XX, 00000 known or trading as "Consonus" and "Strategic Technology" (jointly, severally and collectively, the "Company"), and XXXxXXX CAPITAL CORPORATION, an Alabama corporation with offices for the transaction of business located at 000 Xxxxxxx Xxxxxx, XX, XX, 00000; 00 Xxxxx Xxxxxx – Xxxxxxxx X, Xxxxxxxxxx, XX 00000; and 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxx 00000 ("Xxxxxx Capital"). Company and Xxxxxx Capital agree and shall be legally bound as follows:
1. Purpose of Agreement. Company desires to obtain short-term financing by selling, transferring, setting over and assigning to Xxxxxx Capital certain accounts receivable and invoices held by Company in return for making a Line of Credit available to Company.
2. Definitions.
2.1 "Account Receivable" shall mean any right to payment from Customers for goods sold, or leased, and delivered, or services rendered, which is not evidenced by an instrument or chattel paper.
2.2 “Avnet Receivable” shall mean an Account Receivable which solely deals with the sale or lease of goods, software, inventory and other products supplied or sold by AVNET, INC. to Company.
2.3 “Available Advance Amount” shall mean the sum of the Purchase Prices for all Purchased Receivables which are not subject to a Customer Dispute, and which have not been paid and shall constitute the amount of funds available for the Company to borrow from Xxxxxx Capital under the Line of Credit.
2.4 "Customer" shall mean Company's customer or account debtor.
2.5 "Collateral" shall mean the intangible or tangible property given as security for the Obligations of Company under this agreement.
2.6 "Customer Dispute" shall mean a claim or disagreement asserted by Customer against Company at any time, of any kind whatsoever, whether valid or invalid that reduces the amount collectible from a Customer by Xxxxxx Capital, which is not resolved by the Customer and the Company within fifteen (15) days or invoices unpaid after ninety days.
2.7 “Default” shall have the meaning set forth in section 24 hereof.
2.8 “Line of Credit” shall mean the Line of Credit described on Exhibit “B” which Xxxxxx Capital is making available to the Company
2.9 “Lockbox Account” shall mean the account established and maintained by Xxxxxx Capital for the purpose of receiving collections on account of any Accounts Receivable.
2.10 “Misdirected Payment” shall mean any payment received by the Company, its principals, agents or employees instead of Xxxxxx Capital on any Account Receivable listed on the Invoice Schedule or otherwise sold to Xxxxxx Capital pursuant to section 9 and section 21 of this Agreement which are not delivered to Xxxxxx Capital in accordance with the terms of section 9 of this Agreement.
2.11 “Obligations” shall mean any sums which have or may become due by the Company to Xxxxxx Capital pursuant to this Agreement, any sums which have or may become due by the Company to Xxxxxx Bridge Loan Company, Inc. (“Xxxxxx Bridge”) under the terms of the $244,400.00 Promissory Note executed in connection herewith (the “Note”), and any other advances, debts, obligations, liabilities, or indebtedness of the Company to Xxxxxx Capital, direct or indirect, absolute or contingent, due or to become due, liquidated or unliquidated, determined or undetermined, now existing or hereafter arising, including all future advances or loans which may be made at the option of Xxxxxx Capital to the Company at the Company’s request or in accordance with the terms of the Transaction Documents, and specifically including any and all interest, fees, attorney fees, and cost pertaining thereto, or which accrue after an order for relief is entered against Company in any bankruptcy proceedings.
2.12 “Purchased Receivables” shall mean the Accounts Receivable purchased by Xxxxxx Capital and set forth on the Invoice Schedule.
2.13 "Warranty" shall mean to guarantee, as a material element of this Agreement. Each separate warranty herein shall be deemed to be an independent condition to Xxxxxx Capital's duties and obligations under this agreement.
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3. Tender of Accounts Receivable; Invoices.
3.1 The Company will tender to Xxxxxx Capital for purchase pursuant to this Agreement all of the Accounts Receivable (other than the Avnet Receivables) by delivering to Xxxxxx Capital all invoices to such Customers promptly after the creation thereof. Xxxxxx Capital will forward said invoices to the Company's Customers, in accordance with Xxxxxx Capital's standard procedures, together with a notice by the Company to its Customers, in the form prescribed by Xxxxxx Capital, of the assignment of payment of said invoices to Xxxxxx Capital.
3.2 In each instance where the Company delivers its Accounts Receivable to Xxxxxx Capital, the Company must simultaneously deliver to Xxxxxx Capital an original invoice, a copy of such invoice, and satisfactory proof or evidence of shipment or delivery of goods or services to which the Accounts Receivable relate.
3.3 Xxxxxx Capital will conduct such examination, verification, and credit investigation of the invoices and the account debtors as it considers necessary, and will notify the Company as to which of the individual Accounts Receivable tendered by the Company, if any, Xxxxxx Capital elects to purchase from the Company. All such examinations, verifications or investigations shall be conducted in a reasonable manner and Xxxxxx Capital may coordinate any such activities with the Company. Xxxxxx Capital shall have the absolute right, in its sole discretion, to reject any or all of the Accounts Receivable tendered to it by the Company. From time to time Xxxxxx Capital’s underwriting department may ask the Customer to sign an invoice verification notice in a form substantially the form annexed hereto as Exhibit “C”.
4. Assignment. Those Accounts Receivable which Xxxxxx Capital elects to purchase from the Company shall be listed in an "Invoice Delivery Schedule" (such form, together with any schedules and attachments thereto is hereinafter referred to as an "Invoice Schedule"), executed by the Company and accepted by Xxxxxx Capital from time to time throughout the term of this Agreement. Upon acceptance by Xxxxxx Capital of an Invoice Schedule, the Company shall have been deemed to have sold, assigned, transferred, conveyed and delivered to Xxxxxx Capital, and Xxxxxx Capital shall be deemed to have purchased and received from the Company, all right, title, and interest of the Company in and to the Accounts Receivable listed on the Invoice Schedule, subject to Xxxxxx Capital’s obligations under section 5.2 hereof as to the application of proceeds collected on such Accounts Receivables. Upon the assignment of an Account Receivable, Xxxxxx Capital shall have all of the rights of an unpaid seller of any goods, the sale of which gives rise to each Account Receivable, including the right of stoppage in transit, reclamation and replevin. Notwithstanding the foregoing, if the Company or Xxxxxx Capital fails to include in any Invoice Schedule a particular Account Receivable tendered by the Company to Xxxxxx Capital, but Xxxxxx Capital nonetheless includes such Account Receivable in the Available Advance Amount, then Xxxxxx Capital shall be presumed conclusively to have purchased, and the Company shall be presumed conclusively to have sold, such Account Receivable pursuant to this Agreement, and such Account Receivable shall be governed by the terms and conditions (including, without limitation, the Company's representations and warranties to Xxxxxx Capital) of this Agreement. It is understood and agreed that Xxxxxx Capital is not assuming any of the responsibilities or obligations of Company under such Accounts Receivable but that it is simply taking an assignment of the right to be paid on such Accounts Receivable which Company has fulfilled in the ordinary course of its business operations. It is also understood and agreed that Xxxxxx Capital will have no obligation whatsoever to buy any Accounts Receivable from the Company at any time.
The sale, assignment, transfer, conveyance and delivery of Accounts Receivable by the Company to Xxxxxx Capital is without recourse such that the Company shall have no liability with respect to the payment of such Accounts Receivable to Xxxxxx Capital or any other party, provided that nothing in this sentence shall be deemed to release, compromise, modify or waive the Company’s obligation to pay the Obligations under this Agreement.
5. Purchase Price, Allocation of Collections.
5.1 Purchase Price. Xxxxxx Capital agrees to buy the Accounts Receivable set forth on the Invoice Schedule from the Company at the Purchase Price Percentage on Exhibit “B” attached of the face value of each such acceptable invoice (respectively the "Purchase Price" and "Purchased Receivable"). The Purchase Price for each Purchased Receivable shall be made available for borrowing by the Company under the Line of Credit provided that no Default exists under this Agreement and shall be paid upon collection to Company in accordance with the terms of section 5.2 hereof. The sum of the Purchase Prices for all Purchased Receivables which are not subject to a Customer Dispute, and which have not been paid shall constitute the Available Advance Amount in connection with the Line of Credit.
5.2 Allocation of Account Receivable Collections. Subject to the terms of the intercreditor agreement by and between Xxxxxx Capital and Avnet, Inc. all collections of Account Receivables received by Xxxxxx Capital shall first be applied, to the extent available, toward payment of the then existing Obligations, and then if any surplus remains, to the Company, and Company hereby irrevocably authorizes Xxxxxx Capital to apply all such collections in such manner.
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6. Collection of Accounts Receivable. Commencing on the date of this Agreement, Xxxxxx Capital shall administer the collection of all Accounts Receivable originated by the Company and shall forward an Aged Accounts Receivable Schedule to the Company weekly. Xxxxxx Capital shall have the right of endorsement on all payments received in connection with each Account Receivable and the Company hereby appoints Xxxxxx Capital the attorney-in-fact and agent of the Company for this purpose, which appointment is coupled with an interest and is irrevocable during the term of this Agreement. Xxxxxx Capital shall have no liability to the Company for any mistake in the application of any payment received by it with respect to any Account Receivable, so long as it acts in good faith without gross negligence.
7. Cross-Collateralization. If a "Default" (as defined in this Agreement) shall have occurred and be continuing, Xxxxxx Capital shall have the right, which may be exercised in its sole and absolute discretion at any time and from time to time during the continuance of such Default, to apply, subject to the terms of the intercreditor agreement between Xxxxxx Capital and Avnet, Inc., all amounts collected with respect to Accounts Receivable as follows, before any payment from such collections shall be made to the Company: (i) against the Obligations; (ii) to the payment of all fees accrued hereunder, whether or not such fees have become due and payable pursuant to the terms of this Agreement; and (iii) to the payment of any and all other liabilities and Obligations of the Company to Xxxxxx Capital pursuant to this Agreement, the “Mortgage”, the "Security Agreement" and any other agreement entered into between Xxxxxx Capital and the Company concurrently herewith (the "Transaction Documents"). For purposes of this paragraph, "Company" shall mean and include each person named as the Company in the preamble of this Agreement and any shareholder, parent, subsidiary, controlling person or other affiliate.
8. Over-Advances. While it is anticipated that the amount of the outstanding Obligations shall be less than the Available Advance Amount, Xxxxxx Capital may, as part of this Commercial Financing Agreement and to ease the Company's short-term cash-flow problems, permit the Company to carry an Over-Advance. An Over-Advance is defined as the amount the Obligations are in excess of the current Available Advance Amount. Upon the establishment of each such Over-Advance amount at the Company’s request, or upon the establishment of an Over-Advance amount due to a reduction of the Available Advance Amount and the continuance of such Over-Advance for a period of five days, Xxxxxx Capital, in its sole judgment, shall have the right to charge the Company a one-time processing and administrative fee of up to three percent of each such amount so established as an Over-Advance. Notwithstanding anything contained herein to the contrary, Xxxxxx Capital may terminate the Over-Advance facility at any time without notice to the Company as it deems fit. Additional interest shall accrue on the outstanding Over-Advance balance at the rate of two percent per month. In the event that Xxxxxx Capital terminates the Over-Advance or does not consent to the Over-Advance in the first instance, the Company shall immediately make a payment to Xxxxxx Capital in the amount necessary to eliminate the Over-Advance.
9. Collection of Accounts Receivable.
9.1 The Company will instruct all of its Customers obligated with respect to its Accounts Receivable to mail or deliver payments on such Accounts Receivable directly to Xxxxxx Capital at its address set forth in the preamble of this Agreement or to such other address that Xxxxxx Capital may specify in a written notice to the Company. Each invoice shall bear the following instructions prominently displayed in large bold type:
“This invoice has been assigned to Xxxxxx Capital Corporation for the account of MIDAS MEDICI GROUP HOLDINGS, INC., a Delaware corporation and STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation known or trading as "Consonus" and "Strategic Technology" and must be paid to Xxxxxx Capital Corporation, P. O. Xxx 00000, Xxxxxxxxxx, XX 00000.”
or
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“This invoice has been assigned to Xxxxxx Capital Corporation for the account of MIDAS MEDICI GROUP HOLDINGS, INC., a Delaware corporation known or trading as "Consonus" and "Strategic Technology" and must be paid to Xxxxxx Capital Corporation, P. O. Xxx 00000, Xxxxxxxxxx, XX 00000.”
or
“This invoice has been assigned to Xxxxxx Capital Corporation for the account of STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation known or trading as "Consonus" and "Strategic Technology" and must be paid to Xxxxxx Capital Corporation, P. O. Xxx 00000, Xxxxxxxxxx, XX 00000.”
Such instructions shall not be rescinded or modified without Xxxxxx Capital's prior written consent. If, despite such instructions, the Company shall receive any payments with respect to any Accounts Receivable purchased by Xxxxxx Capital, it shall receive such payments in trust for the benefit of Xxxxxx Capital, shall segregate such payments from its other funds, and shall deliver or cause to be delivered to Xxxxxx Capital, in the same form as so received with all necessary endorsements, all such payments received as soon as practicable, but in no event later than three (3) business days after the receipt thereof by the Company. If the Company fails to turn over to Xxxxxx Capital any checks or other form of payment received by it, or in the event the Company deposits any such checks or payments into its own account, the Company must deliver to Xxxxxx Capital either the payment in the identical form received or the cash equivalent of the amount of the Misdirected Payment within three (3) business days. If the Company fails to deliver such value within said three (3) business days or if the Company shall present any invoice to Xxxxxx Capital for an advance against which merchandise has not been shipped, services have not been rendered or work performed (an “Invalid Invoice”), this shall be an event of default of this contract, and in addition, as the exact costs to Xxxxxx Capital of such actions by the Company are difficult if not impossible to calculate, the Company shall pay to Xxxxxx Capital the entire invoice amount at once plus liquidated damages equal to twenty-five percent of the amount so deposited or the Invalid Invoice amount submitted to Xxxxxx Capital.
9.2 Xxxxxx Capital shall have the full power and authority to collect each Account Receivable, through legal action or otherwise, and may, in its sole discretion, settle, compromise, or assign (in whole or in part) the claim for any of the Accounts Receivable, or otherwise exercise any other right now existing or hereafter arising with respect to any of the Accounts Receivable, if such action will facilitate collection, provided, however, that the Company shall first be afforded fifteen (15) days, before any such collection or other action is taken by Xxxxxx Capital, to resolve any Account Receivable that is the subject of a Customer Dispute consistent with the meaning ascribed to such defined term under section 2.5. The amount of any reduction resulting from any such settlement, compromise, assignment or other collection action shall reduce the balance otherwise due to the Company hereunder. The Company acknowledges and agrees that Xxxxxx Capital shall have the sole and exclusive right to commence legal action to collect any Account Receivable, subject to the Company’s prior right to resolve a Customer Dispute as describe above in this section 9.2. To allow an interval for checks to clear the federal banking system, Xxxxxx Capital shall have the right to extend constructive receipt of payments that Xxxxxx Capital receives on behalf of the Company by three business days for in state checks received and by five business days for out of state checks received.
9.3 Should Company receive and deposit or otherwise convert into cash any payment from any account debtor when such payment was due Xxxxxx Capital, and because the damage to Xxxxxx Capital cannot be quantified, the Company may be held liable to Xxxxxx Capital as liquidated damages for three times the amount of such converted payment or five thousand dollars, whichever is the larger amount (the “Misdirected Payment Fee”), unless the proceeds of such converted payment are turned over to Xxxxxx Capital within three (3) business days in accordance with section 9.1 hereof. The enforcement or non-enforcement of these damages shall not be considered a waiver of any remedy or default, nor shall it be construed a precedent for future discretionary actions available to Xxxxxx Capital.
9.4 If Xxxxxx Capital shall agree, upon the Company’s request, that certain Account Debtors' invoices be eligible for financing between the thirty-first and sixtieth days beyond their due date, then these invoices shall be deemed "Special Risk," and a further charge of one and one-half percent for each fifteen-day period in which each of these invoices is outstanding will be collected by Xxxxxx Capital, but ninety days after the origination date these Special Risk invoices shall be deemed a Customer Dispute and shall be charged back to the Company's account.
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10. Payment of Expenses and Taxes; Indemnification. The Company will (a) pay or reimburse Xxxxxx Capital for all of Xxxxxx Capital's out-of-pocket costs and expenses incurred in connection with the preparation and execution of, and any amendment, supplement or modification to, the Transaction Documents and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the fees and disbursements of counsel to Xxxxxx Capital, (b) pay or reimburse Xxxxxx Capital for all costs and expenses actually incurred by Xxxxxx Capital and paid by Xxxxxx Capital in connection with the enforcement or preservation of any rights under the Transaction Documents, and the verification of the Accounts Receivable and the credit worthiness of the Customers, including without limitation, fees and disbursements of counsel to Xxxxxx Capital; (c) pay, indemnify, and hold Xxxxxx Capital harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from, any delay in paying any stamp, excise, and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, the Transaction Documents; (d) pay for monthly statements at $0.73 each plus all postage expended by Xxxxxx Capital to mail invoices and otherwise collect the accounts; (e) pay the fees and interest set forth on Exhibit “B” attached hereto and made a part thereof; (f) pay for field examinations at the rate of eight hundred fifty dollars per person per day plus expenses; (g) pay, indemnify and hold Xxxxxx Capital harmless from and against any and all claims, liabilities, obligations, losses, potential losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, whether threatened, pending or determined (including attorney's fees and court costs now or hereafter arising from this Agreement or any activities of the Company (referred to as the "indemnified liabilities"); provided that the Company shall have no obligation hereunder to Xxxxxx Capital with respect to indemnified liabilities arising from the gross negligence or willful misconduct of Xxxxxx Capital. The covenants of this paragraph shall survive the termination of this Agreement.
11. Term.
11.1 This Agreement shall be effective for a period commencing on the date hereof and continuing until the close of business on the second anniversary of the date hereof (the "Initial Term"), unless sooner terminated in accordance with section 12.4 hereof. This Agreement shall be deemed to be automatically renewed for an additional term of one year at the expiration of the Initial Term, and thereafter to be automatically renewed for succeeding one-year terms at the end of the first and each succeeding renewal term, unless the Company shall deliver written notice of cancellation to Xxxxxx Capital not earlier than ninety days and not later than sixty days prior to the expiration date of the Initial Term or any succeeding renewal term, or unless the Company shall terminated same in accordance with section 12.4 hereof. No such termination shall terminate or otherwise affect Company's obligations hereunder incurred or accrued prior to such termination.
11.2 The Company shall pay Xxxxxx Capital a one-time due diligence fee in the amount of $395.00 on the first day of the Initial Term, which amount, at the option of Xxxxxx Capital, may be deducted from any amounts otherwise due from Xxxxxx Capital to the Company.
11.3 The representations, warranties and covenants of the Company and the remedies of Xxxxxx Capital for a breach of such representations, warranties and/or covenants, shall survive the termination of this Agreement, and such termination shall not effect the rights of Xxxxxx Capital to enforce its remedies under the Transaction Documents against the Company or against any collateral after a default by the Company. Upon termination, the Company shall remain fully responsible to Xxxxxx Capital for the Obligations and any Purchased Receivables purchased prior to such termination. Additionally, Xxxxxx Capital shall maintain its security interest in the Collateral of the Company until all of its Obligations to Xxxxxx Capital have been paid in full. Both parties agree that they will sign mutual releases on the termination of this agreement and the satisfaction of all debt and obligations by the Company to Xxxxxx Capital; and that providing the debt and all obligations to Xxxxxx have been paid in full, Xxxxxx will promptly sign a UCC termination statement or statements and a mortgage satisfaction for the Company’s use.
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12. Facility Fee; Termination Fee; Credits.
12.1 The interest, fees and charges set forth on Exhibit “B” have been established after negotiations between the Company and Xxxxxx Capital on the assumption that the Company will maintain an outstanding balance on the Line of Credit averaging at least one million five hundred thousand dollars a month during the Initial Term and each renewal term.
12.2 In further consideration of Xxxxxx Capital's undertakings in this Agreement, the Company shall pay to Xxxxxx Capital a fee in an amount equal to one and four tenths percent per month on one million five hundred thousand as of the termination date of the Initial Term and of each renewal term, but the amount thereof shall be reduced by the total interest and fees paid by the Company to Xxxxxx Capital in each term.
12.3 An origination/commitment or underwriting fee of one percent of the Line of Credit established in Exhibit “B” shall be paid by the Company to Xxxxxx Capital at first funding during the Initial Term, and at the beginning of each succeeding term.
12.4 In the event Company requests that this Agreement terminates prior to the expiration of the Initial Term or the current renewal term, then this Agreement shall terminate upon the Company’s payment to Xxxxxx Capital a termination fee in an amount equal to one and four tenths percent per month on one million five hundred thousand through the end of the current term, reduced by the total interest and fees paid by the Company to Xxxxxx Capital in such current term.
13. Disputed Accounts Receivable, Re-Purchase, etc.
13.1 Notice of Dispute. Company agrees to immediately notify Xxxxxx Capital of any Customer Dispute between Company and any of its Customers.
13.2 Disputed Purchased Receivable. In the event a Purchased Receivable is subject to a Customer Dispute of any kind, whether or not the same is valid or with merit, Xxxxxx Capital may, in addition to any other remedy it may have under this Agreement, remove the unpaid portion of such Purchased Receivable from the Available Advance Amount. Invoices unpaid after ninety days from any Customer shall be deemed to be the subject of a Customer Dispute and shall be notwithstanding the foregoing, the unpaid portion thereof shall be immediately removed from the Available Advance Amount. Disputed Purchased Receivables which are removed from the Available Advance Amount remain the Collateral of Xxxxxx Capital and any payment thereon received by the Company shall be remitted to the Lockbox Account and applied to the outstanding balance of the Obligations.
14. Warranties By Company. As an inducement to and as a condition of Xxxxxx Capital's willingness to enter into this Agreement, and with full knowledge that the truth and accuracy of the warranties in this Agreement are being relied upon by Xxxxxx Capital, Company warrants as follows:
14.1 By its execution of each Invoice Schedule with respect to Accounts Receivable or acceptance of the Purchase Price with respect to a Purchased Receivable that:
14.1.1 The Company is the sole owner of such Purchased Receivable and such Purchased Receivable has not been previously assigned or encumbered in any manner; the Company has the full power and authority to sell such Purchased Receivable and its sale to Xxxxxx Capital has been duly authorized;
14.1.2 The goods or services listed or referred to in the Purchased Receivable have been shipped or rendered to the Customer, and the prices and terms of shipment set forth therein conform in all material respects to the terms of any related purchase order or agreement with the Customer;
14.1.3 The invoice representing the Purchased Receivable correctly sets forth the full purchase price of the goods and services covered thereby, and such amount, less only the applicable trade discounts and allowances stated therein, if any, is due and owing from the Customer, subject to no set-offs, deductions, disputes, contingencies or counterclaims against the Company or the invoice, and payment thereof is not contingent upon fulfillment of any obligation other than delivery of the goods or services referred to in such invoice; and Company represents that its invoices do not represent a delivery of merchandise or services upon consignment, guaranteed sale, or similar term.
14.2 Company is validly existing and in good standing under the laws of the state in which it is incorporated and is properly licensed and authorized to operate the business it conducts under its corporate name or any trade name of and is authorized to do business in every jurisdiction in which it conducts business.
14.3 Company does business as and conducts business under the following tradenames - "Consonus", and "Strategic Technology".
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14.4 Company is, or will be at the time of the purchase by Xxxxxx Capital, the lawful owner of and have good and undisputed title to the Purchased Receivables.
14.5 Company does not own, control or exercise dominion over, in any way whatsoever, the business of any account-debtor/Customer whose Accounts Receivable are to be purchased by Xxxxxx Capital and shall not change or modify the terms of any Account Receivable with any Customer unless Xxxxxx Capital first consents to such change in writing. By way of example only, Company shall not extend a Customer's credit beyond thirty (30) days without Xxxxxx Capital's prior written consent.
14.6 All financial records, statements, books or other documents of Company furnished to Xxxxxx Capital for review at any time, either before or after the signing of this Agreement, are true and accurate in all material respects. Company has no outstanding state, federal, or local tax liabilities, and has filed all tax returns or other documents as required by law.
14.7 Company will not, under any circumstances or in any manner whatsoever, interfere with any of Xxxxxx Capital's rights under this Agreement or misdirect any purchase as defined in the attached Exhibit “G”.
14.8 Company shall not factor, finance, give a security interest or sell any of its Accounts Receivable (other than the Avnet Receivables) to any person or entity other than Xxxxxx Capital during the term of this Agreement, nor shall any Accounts Receivable to be purchased under this Agreement be previously sold, pledged or encumbered by Company or any other person or entity in any manner whatsoever.
14.9 Company shall not permit the placement of any lien, security interest, or encumbrance on its fixtures, inventory, or other personal property and chattels except with the prior written consent of Xxxxxx Capital and shall maintain its property, inventory, and fixtures in good order and in an operating state, condition, and repair.
Upon the breach of any of the warranties above, the Company will immediately pay to Xxxxxx Capital the entire unpaid balance of the Obligations of the Company to Xxxxxx Capital.
15. Security Interest. To secure the payment of the Obligations, Company hereby grants, conveys and mortgages to Xxxxxx Capital the Collateral as defined in the Security Agreement.
16. Financing Statements, Security Agreement and Transaction Documents. The Company and/or its principals shall execute such security agreements as Xxxxxx Capital may reasonably request to perfect the security interest granted hereunder, including but not limited to the Security Agreement, (a true copy of which is annexed hereto, made a part hereof and is marked Exhibit "D"), Corporate Resolutions (a true copy of which is annexed hereto, made a part hereof and is marked Exhibit "E"); the Performance Covenant and Waiver (a true copy of which is annexed hereto, made a part hereof and is marked Exhibit "F"); the Misdirected Payment Agreement (a true copy of which is annexed hereto, made a part hereof and is marked Exhibit “G”), a Tax Form 8821 and 2848 (a true copy of which is annexed hereto, made a part hereof and is marked Exhibit “H”) listing Xxxxxx Capital Corporation as Appointee for the purpose of notification of delinquent payroll tax, corporate tax or unemployment tax, a validity guaranty (a true copy of which is annexed hereto, made a part hereof and is marked Exhibit "I"), a monthly report authorization, the Note and the Mortgage (as that term is defined on Exhibit “B”). The Company hereby authorizes Xxxxxx Capital or its agents or assigns to sign and execute on its behalf, any and all necessary forms to evidence the foregoing or to perfect the security interest granted hereunder or thereunder. Further, the Company consents to Xxxxxx Capital publishing a tombstone announcement or other brief announcement of their experience/story for its marketing endeavors.
17. Financial Records. During the term of this Agreement, Company agrees to provide Xxxxxx Capital with such financial statements and records and such other information as may be reasonably requested by Xxxxxx Capital from time to time, and each quarter, within twenty days following the end of the respective quarter, shall furnish current financial statement, an updated customer list with customer names, contact names, addresses, and phone numbers, as well as a complete and current payables-aging report.
18. Notice of Levy. Company shall promptly notify Xxxxxx Capital of the Company’s knowledge of any attachment or any other legal process levied against Company or any of Company's Customers. Company's failure to do so shall be a material Default hereunder.
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19. No Pledge. Company shall not, at any time during the term of this Agreement, pledge the credit of Xxxxxx Capital to any person or business for any purpose whatsoever.
20. Book Entry. Company shall, immediately upon the sale of an Account Receivable to Xxxxxx Capital, make proper entries on its books and records disclosing the absolute sale and assignment of such Account to Xxxxxx Capital.
21. Misdirected Payments. All remittances received by the Company on any Account Receivable sold to Xxxxxx Capital shall be held by the Company in trust as a fiduciary for Xxxxxx Capital, separate and apart from the Company’s own properties and funds. Notwithstanding that the Company has agreed to pay the Misdirected Payment Fee, the Company shall, on the next banking day following the date of receipt of the Misdirected Payment, deliver to Xxxxxx Capital either the payment in the identical form received or the cash equivalent of the amount of the Misdirected Payment. No amounts received by the Company and turned over to Xxxxxx Capital in compliance with section 9.1 shall be deemed a Misdirected Payment or incur a Misdirected Payment Fee. In the event any goods shall be returned to, reclaimed, or repossessed by the Company, such goods shall be held by the Company in trust as a fiduciary for Xxxxxx Capital, separate and apart from the Company’s own property and subject to Xxxxxx Capital’s direction and control.
22. Attorney’s Fees. The Company agrees to reimburse Xxxxxx Capital on demand for the following:
22.1 the actual amount of all fees, costs, and expenses, including but not limited to attorneys’ fees, which Xxxxxx Capital may incur in any action to enforce this Agreement or any related transaction, or in connection with any federal or state bankruptcy or insolvency proceeding commenced by or against the Company, (including but not limited to any complaint to determine non-dischargeablility of the guarantor’s obligations); and
22.2 the actual fees, expenses, and costs, including but not limited to photocopying (which, if performed by Xxxxxx Capital’s employees, shall be at a rate of $.25/page), travel, expert witness fees, attorneys’ fees, and all other fees, costs, and expenses incurred in complying with any subpoena or other legal process attendant to any litigation in which the Company is a party.
23. Power of Attorney. Company irrevocably appoints Xxxxxx Capital, or any person designated by Xxxxxx Capital, its special attorney-in-fact, or agent, with power to: (1) strike out Company's address on all invoices or statements of account mailed to Customers and substitute Xxxxxx Capital's address (leaving in the Company name as xxxxxx); (2) receive and open all mail addressed to Company or to Company's trade name via Xxxxxx Capital address; (3) endorse the name of Company or Company's trade name on any checks or other evidences of payment, invoices or other documents that may come into the possession of Xxxxxx Capital on Accounts Receivable or on which Xxxxxx Capital holds a security interest; (4) in Company's name, or otherwise, demand, xxx for, collect, and subject to Company's prior written approval, compromise, prosecute, or defend any action, claim, or proceedings and give releases for any and all monies due or to become due, provided, however, that the Company shall first be afforded fifteen (15) days, before any such demand, suit, collection or other action is taken by Xxxxxx Capital, to resolve any Account Receivable that is the subject of a Customer Dispute consistent with the meaning ascribed to such defined term under section 2.5; (5) do any and all things reasonably necessary and proper to carry out the purpose intended by this Agreement. The authority granted Xxxxxx Capital shall remain in full force and effect until all Accounts Receivable sold and/or assigned to Xxxxxx Capital have been paid in full.
Notwithstanding anything in this section 23 or any other provision to this Agreement to the contrary, Xxxxxx Capital shall have no power or authority to (i) offer, promise or provide any products or services in the name of or on behalf of the Company to any Customer or any other party or bind or obligate the Company with respect thereto or (ii) make or extend any warranty, representation, guaranty or promise regarding the products or services of the Company, in the name or on behalf of the Company, to any Customer or any other party or bind or obligate the Company with respect thereto.
8
COMMERCIAL FINANCING AGREEMENT
24. Default. Any one or more of the following shall constitute a default hereunder (a "Default") provided same is not cured by the Company within fifteen (15) days after receipt (or thirty (30) days after receipt, if the Default does not pertain to the payment of money) of written notice from Xxxxxx Capital:
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24.1
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Company's failure to pay any indebtedness or Obligations (including legal fees and expenses) to Xxxxxx Capital when due;
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24.2
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Company's breach of any term, provision, warranty, or representation under this Agreement, or under any other agreement or contract between Company and Xxxxxx Capital, or Obligation of Company to Xxxxxx Capital;
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24.3
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Xxxxxx Capital shall reasonably believe that Company is failing to tender all of its Accounts Receivable, which are not Avnet Receivables, to Xxxxxx Capital for purchase;
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24.4
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The Company shall instruct any Customer to mail or deliver payment on Accounts Receivable to the Company or to any person other than Xxxxxx Capital;
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24.5
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The appointment of any receiver or trustee for all or a substantial portion of the assets of Company, the filing of a general assignment for the benefit of creditors by Company or a voluntary or involuntary filing under any bankruptcy or similar law which is not dismissed within 60 days;
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24.6
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The issuance of any levies of attachment, execution, tax assessments, or similar process against the Accounts Receivable which is not either released within ten days or contested in good faith by the Company with adequate reserves set aside therefor to the reasonable satisfaction of Xxxxxx Capital;
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24.7
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If any financial statements, profits-and-loss statements, borrowing certificates or schedules, or other statements furnished by Company to Xxxxxx Capital prove false or incorrect in any material respect.
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24.8
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Failure of the Company to pay all taxes to every government agency in a timely manner, except for those taxes being contested in good faith by the Company with adequate reserves set aside therefor to the reasonable satisfaction of Xxxxxx Capital;
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24.9
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Notwithstanding the fifteen (15) day notice period set forth above, the failure of the Company to timely deliver to Xxxxxx Capital any Misdirected Payment remittance received by the Company on a Purchased Account in accordance with section 9.1 hereof;
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24.10
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Insolvency, bankruptcy, or dissolution of the Company or a guarantor of any of the Transaction Documents which is not dismissed within 60 days;
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24.11
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Failure of the Company to maintain the financial covenants set forth on Exhibit “B: and comply with the other covenants set forth in Exhibit “B”;
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24.12
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Notwithstanding the fifteen (15) day notice period set forth above, failure of the Company to cure a Default under the Misdirected Payment Agreement, the Performance Covenant or a Validity Guaranty within three (3) days after receipt of written notice from Xxxxxx Capital;
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24.13
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Company's breach of any term, provision, warranty, or representation under any other agreement or contract between Company and CapitalPartners Leasing LLC and/or Xxxxxx Bridge Loan Company, Inc., or obligation of this Company to CapitalPartners Leasing LLC and/or Xxxxxx Bridge Loan Company, Inc.; or
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24.14
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The occurrence of an event of default or a default in connection with Company’s obligations to YENNI CAPITAL, INC. a New York corporation as Agent on behalf of the each of the Purchasers under that certain Securities Purchase Agreement or the Purchasers thereto or the documents and agreements executed in connection therewith,
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9
COMMERCIAL FINANCING AGREEMENT
25. Remedies Upon Default. In the event of any Default Xxxxxx Capital shall have the following cumulative rights and remedies:
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25.1
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Declare the Obligations immediately due and payable;
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25.2
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Enforce the security interest given hereunder;
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25.3
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Require Company to assemble any Collateral secured hereunder and the records pertaining thereto and make them available to Xxxxxx Capital at a place designated by Xxxxxx Capital;
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25.4
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Enter the premises of Company and take possession of any Collateral not then in its possession and of the records pertaining thereto and any other collateral;
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25.5
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Grant extensions, compromise claims, and settle Accounts Receivable for less than face value, all without prior notice to Company;
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25.6
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Use, in connection with any assembly or disposition of the collateral, any trademark, trade name, trade style, copyright, patent right, or technical process used or utilized by Company; and
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25.7
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Return any surplus realized and hold Company liable for any deficiency.
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25.8
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Interest shall accrue on any outstanding Obligations (including unpaid legal fees and expenses) at the rate of one and one-half percent per month; and
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25.9
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Any and all other remedies allowed at law or under the Alabama Commercial Code.
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26. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators, successors, and assigns of both Company and Xxxxxx Capital.
27. Cumulative Rights. All rights, remedies, and powers granted to Xxxxxx Capital in this Agreement, or in any note or other Agreement given by Company to Xxxxxx Capital, are cumulative and may be exercised singularly or concurrently with such other rights as Xxxxxx Capital may have. These rights may be exercised from time to time as to all or any part of the pledged collateral as Xxxxxx Capital in its discretion may determine.
28. Written Waiver. Xxxxxx Capital shall not be deemed to have waived any right or remedy it may have hereunder unless such waiver is in writing and signed by Xxxxxx Capital. A waiver by Xxxxxx Capital of a right or remedy under this Agreement on one occasion shall not be deemed a waiver of a right or remedy on any subsequent occasion.
29. Governing Law and Jurisdiction.
29.1 This Agreement is, and shall be deemed to be, a contract entered into under and pursuant to the laws of the State of Alabama and shall be in all respects governed, construed, applied and enforced in accordance with the laws of the State of Alabama. No defense given or allowed by the laws of any other state or country shall be interposed in any action or proceeding hereon unless such defense is also given or allowed by the laws of the State of Alabama. The parties agree that Alabama bears a reasonable relationship to this transaction.
29.2 The parties hereto agree to submit to personal jurisdiction in the State of Alabama in any action or proceeding arising out of this Agreement and, in furtherance of such agreement, they hereby agree and consent that without limiting other methods of obtaining jurisdiction, that personal jurisdiction in any such action or proceeding may be obtained within or without the jurisdiction of any court located in Alabama and that any process or notice or motion or other application to any such court in connection with any such action or proceeding may be served by registered or certified mail, return receipt requested, to or by personal service at their last known address whether such address be within or without the jurisdiction of any such court. In the event of litigation between Xxxxxx Capital and the Company, the Company agrees that any requirement for a bond, be it for any order or other action in court, shall not exceed two hundred and fifty dollars.
10
COMMERCIAL FINANCING AGREEMENT
30. Invalid Provisions. If any provision of this Agreement shall be declared illegal or contrary to law, it is agreed that such provision shall be disregarded and this Agreement shall continue in force as though such provisions had not been incorporated herein. If a law, which applies to this Agreement and which sets maximum loan charges, is finally interpreted so that the fees and commissions charged by Xxxxxx Capital to Company or other charges collected or to be collected in connection with this Agreement exceed the permitted limits under any applicable law or statute, then: (i) any such fee or commission shall be reduced by the amount necessary to reduce the charges to the permitted limit; and (ii) any sums already collected from the Company which exceed permitted limits will be applied and shall be deemed to have been payments in reduction of the obligations hereunder.
31. Further Instruments. Company agree that, upon request from time to time of Xxxxxx Capital, it will, at its expense, execute, acknowledge and deliver all such additional instruments and further assurances and will do or cause to be done all such further acts and things as may be reasonably necessary to fully establish, confirm or perfect from time to time the security interest of Xxxxxx Capital in the Collateral and to fully establish, confirm or perfect from time to time the intention of this Agreement.
32. No Jury Trial. The Company hereby irrevocably and unconditionally waives, and Xxxxxx Capital by its acceptance of this Agreement irrevocably and unconditionally waives, any and all right to trial by jury in any action, suit or counterclaim arising in connection with, out of or otherwise relating to this Agreement.
33. Entire Agreement. This instrument contains the entire Agreement between the parties. Any addendum or modification hereto must be signed by both parties in order to have any force or effect.
34. Notices. All notices, demands or requests (collectively, "Notice") made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party or parties to whom or to which such Notice is being sent, by certified or registered mail, return receipt requested, reputable overnight courier or delivered by hand with receipt acknowledged in writing to the addresses first hereinabove set forth. All notices shall be deemed given as follows: (a) if by hand, immediately upon delivery along with said receipt evidencing such by hand delivery; (b) if certified or registered mail, return receipt requested, postage prepaid on the fifth (5th) business day after mailing; if by nationally recognized overnight courier or any other overnight delivery service, on the first business day after dispatch. All notices may be given either by a party or such party's attorneys.
35. Effective Date. This Agreement shall be effective only upon its execution by a duly authorized officer of Xxxxxx Capital.
36. Duplicate Originals. This Agreement may be executed in any number of duplicate originals and each such duplicate original shall be deemed to constitute but one and the same instrument.
37. Headings, Etc. The headings, titles and captions of various paragraphs of this Agreement are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.
38. Permitted Encumbrances. Xxxxxx Capital acknowledges and consents to Company or CONSONUS TECHNOLOGIES, INC.’s existing secured or lease obligations to Qwest Communications Company, LLC, Branch Banking and Trust Company successor to United Carolina Bank, Network Appliance, Inc., Citicorp Vendor Finance, Inc., and Cisco Systems Capital Corporation and the security interest securing same as evidenced by UCC filed as 2010 0664676 in the Office of the Department of State of Delaware, 001466623 in the Office of the Secretary of State of North Carolina, 20070035917F in the Office of the Secretary of State of North Carolina, 20070037184C in the Office of the Secretary of State of North Carolina, and 20090010574K in the Office of the Secretary of State of North Carolina, respectively. Xxxxxx Capital further consents to the existing secured lending relationship between the Company and AVNET, INC., along with the security interest securing same, provided AVNET, INC. enters into an Intercreditor Agreement with and acceptable to Xxxxxx Capital. Xxxxxx Capital further consents to the new lending relationship between the Company and YENNI CAPITAL, INC. a New York corporation as Agent on behalf of the each of the Purchasers under that certain Securities Purchase Agreement, along with the security interest securing same, provided YENNI CAPITAL, INC. a New York corporation as Agent on behalf of the each of the Purchasers under that certain Securities Purchase Agreement enters into a Subordination and Standstill Agreement with and acceptable to Xxxxxx Capital.
11
COMMERCIAL FINANCING AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.
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COMPANY:
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MIDAS MEDICI GROUP HOLDINGS, INC., a Delaware corporation
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||
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By:
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/s/Xxxxxxx M. Kachidza
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| Print Name: Xxxxxxx M. Kachidza | |||
| Title: President | |||
| STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation | |||
| By: | /s/ Xxxx Xxxxxxx | ||
| Print Name: Xxxx Xxxxxxx | |||
| Title: Executive Chairman | |||
| XXXXXX CAPITAL: | XXXXXX CAPITAL CORPORATION | ||
| By: | /s/ Xxx Xxxxxxxxxx | ||
| Print Name: Xxx Xxxxxxxxxx | |||
| Title: EVP, a duly authorized officer | |||
12
Exhibit "B"
EXHIBIT "B"
Line of Credit
Effective immediately, upon the mutual execution of this Agreement and the Transaction Documents, Xxxxxx Capital hereby opens and extends to the Company an accounts receivable line of credit in the amount of $3,000,000.00 for the Company. In exchange for said line, Company shall pay a commitment fee of $30,000.00 upon execution of this document, and on the first day of each renewal term hereunder.
Fees
The Company shall pay a Invoice Service Fee on all monies borrowed equal to 0.80% charged monthly on the daily outstanding principal balance of the Obligations.
Interest
Interest shall be charged by Xxxxxx Capital on all advances or purchases at the Prime Rate plus two percent on an annualized basis charged daily, collected at the end of each month.
Advances, Purchase Price Percentage
Provided Company is not in Default in connection with the Agreement, Xxxxxx Capital shall, upon Company’s request, make advances to the Company on the Line of Credit, provided the sum of the Obligations outstanding hereunder plus the requested advance, is less than the current Available Advance Amount. All such advances made to Company by Xxxxxx Capital shall constitute an Obligation hereunder. Xxxxxx Capital is further authorized to make monthly advances on the Line of Credit in the amount necessary to pay the installments due to Xxxxxx Bridge on the Note.
The Line of Credit shall be revolving, e.g. amounts advanced thereunder may be repaid and reborrowed from time to time subject to the terms of this Agreement and provided that the maximum amount outstanding thereunder shall not exceed the lesser of $3,000,000 or the Available Advance Amount. All amounts received by Xxxxxx Capital in the Lockbox Account shall be applied to the outstanding balance of the Obligations in accordance with the Commercial Financing Agreement.
The Purchase Price Percentage shall be ninety percent of each invoice with concentration limited to twenty percent of eligible accounts receivables. Xxxxxx Capital may upon notice to Company decrease this Purchase Price Percentage on a particular newly submitted Purchased Receivable in its sole discretion.
If Xxxxxx Capital exercises its right under section 13.2 of the Agreement to charge back or cause customer to repurchase an account deemed the subject to a Customer Dispute, Xxxxxx Capital shall nevertheless continue to collect the account. If payment on the account is made to the Company on an account deemed the subject to a Customer Dispute, the proceeds will be immediately deposited in the Lockbox Account, and credited to the Obligations in accordance with the terms of the Agreement. Failure by the Company to deliver the proceeds of an account deemed the subject to a Customer Dispute to Xxxxxx Capital shall be deemed a Misdirected Payment.
Miscellaneous Covenants
The Company represents and warrants that funds provided to the Company by Xxxxxx Capital shall only and exclusively be used for Company purposes; the transfer or use of any such funds by any affiliates or parent of the Company shall constitute a material breach of this Agreement.
13
Exhibit "B"
Prime Rate
The Prime Rate as used herein shall be the greater of the prime rate as published in the Wall Street Journal as the "Prime Rate" (base rate on corporate loans posted by at least 75% of the nation's 30 largest banks) or five percent per annum. The Prime Rate is a reference rate used by Xxxxxx Capital in computing and adjusting interest. It is subject to increase, decrease or change, and is only one of the reference rates or indices that the Xxxxxx Capital uses. Xxxxxx Capital may lend to others at rates of interest at, or greater or less than, the Prime Rate or the rate provided herein. The Prime Rate may change as often as daily. Any change in the interest rate resulting from a change in the Prime Rate shall take effect upon the change in the Prime Rate. In the event a "Prime Rate" is not published in the Wall Street Journal then the Prime Rate used herein shall be the greater of the highest prime rate of the three largest banks located in New York, as they shall announce or publish from time to time as their prime rate or five percent per annum. Interest from date on the outstanding unpaid principal balance shall be computed on the basis of a 360 day year by multiplying the product of the principal amount outstanding and the applicable rate by the actual amount of days elapsed and dividing by 360.
Lockbox
Collections shall be made to a lockbox located in Ridgefield, Connecticut, or Birmingham, Alabama, as mutually agreed on by the Company and Xxxxxx Capital.
Mortgage and Promissory Note
In connection herewith, Company shall execute and deliver to Xxxxxx Bridge a $244,400 Promissory Note. As security for this $244.400.00 Promissory Note and as additional security for the Obligations, WEATHERWISE USA, INC., a Delaware corporation shall execute and deliver to Xxxxxx Capital and Xxxxxx Bridge an Open-End Mortgage, Assignment of Rents and Security Agreement (the “Mortgage”) pertaining to the property located at 00 Xxxxx 00xx Xxxxxx, Xxxxxxxxxx, XX, 00000 along with such other documents and agreements required by Xxxxxx Capital or Xxxxxx Bridge and pertaining to such property as Xxxxxx Capital or Xxxxxx Bridge shall from time to time require. Company shall cause the Mortgage to be recorded in the appropriate public office, and to furnish Xxxxxx Capital and Xxxxxx Bridge, at Company’s expense, a title insurance policy or binder, in an amount acceptable to Xxxxxx Capital and Xxxxxx Bridge, issued by a title insurance company acceptable to Xxxxxx Capital and Xxxxxx Bridge, showing the mortgage to be a valid first lien on the fee simple title to the property, subject to current year's taxes, and to such exceptions as shall be acceptable to the Xxxxxx Capital. In addition Company shall deliver to or cause to be delivered to Xxxxxx Capital and Xxxxxx Bridge i) all leases affecting the property along with estoppel certificates and attornment agreements acceptable to Xxxxxx Capital and Xxxxxx Bridge executed by all tenants of the property, and ii) all other documents and agreements from time to time required by the title insurance company pertaining to the Mortgage.
14
Exhibit "D"
SECURITY AGREEMENT
Agreement (the "Agreement") made this 29th day of July, 2011, between MIDAS MEDICI GROUP HOLDINGS, INC., a Delaware corporation, with an office for the transaction of business at 000 Xxxx Xxxxxx 00xx Xxxxx, Xxx Xxxx, XX, 00000, STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation, with an office for the transaction of business at 000 Xxxxxxx Xxxxx, Xxxx, XX, 00000 known or trading as "Consonus" and "Strategic Technology" (hereinafter jointly, severally and collectively the "Company"), and CONSONUS TECHNOLOGIES, INC., a Delaware corporation, with an office for the transaction of business at 000 Xxxxxxx Xxxxx, Xxxx, XX, 00000, (hereinafter the “Accommodation Company”) and XXXxXXX CAPITAL CORPORATION, an Alabama corporation with offices for the transaction of business located at 000 Xxxxxxx Xxxxxx, XX, XX, 00000; 00 Xxxxx Xxxxxx – Xxxxxxxx X, Xxxxxxxxxx, XX 00000; and 0000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxx 00000 ("Xxxxxx Capital"). Company, Accommodation Company, and Xxxxxx Capital agree and shall be legally bound as follows:
W I T N E S S E T H
WHEREAS, Xxxxxx Capital and Company have this day entered into a commercial financing agreement and other related documents wherein Xxxxxx Capital has agreed to purchase, at a discount, certain accounts receivables and/or invoices of the Company under certain terms and conditions (collectively the "Commercial Financing Agreement"); and
WHEREAS, in order to secure the Company's payment of any sums which may become due under the Commercial Financing Agreement, Company and Accommodation Company is granting Xxxxxx Capital a security interest in all of its personal property and assets of any nature, including but not limited to its inventory, equipment, trade fixtures, good will, and accounts receivables all as more particularly set forth below;
NOW, THEREFORE, it is agreed as follows:
1. Granting of Security Interest. To secure the Obligations (as that term is defined in the Commercial Financing Agreement) and payment of any sums which have or may become due by the Company or Accommodation Company to Xxxxxx Capital pursuant to the Commercial Financing Agreement, and also to secure any other indebtedness or liability of the Company or Accommodation Company to Xxxxxx Capital, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including all future advances or loans which may be made at the option of Xxxxxx Capital to the Company or Accommodation Company, Company and Accommodation Company hereby grants and conveys to Xxxxxx Capital a security interest in, and mortgages to Xxxxxx Capital the "Collateral" as defined in paragraph 2 below. The Company, Accommodation Company, and Xxxxxx Capital agree that at the termination of this agreement both parties shall exchange mutual releases of all claims, each against the other, and that no liens against the Company’s or Accommodation Company’s assets shall be lifted until such releases are signed by both parties.
2. "The Collateral". All of the following, whether now existing or hereafter arising, shall be deemed secured and mortgaged by this Agreement (the "Collateral"): (a) all of the Company's or Accommodation Company’s accounts, proceeds from accounts, contract rights, instruments, documents, chattel paper, copyrights, patents, computer codes, software, trademarks, other intellectual property rights, any property rights not specifically set forth herein which may be specific to the business of the company, and general intangibles, as such terms are defined in the Uniform Commercial Code, as enacted in the State of Alabama ("UCC"); (b) all forms of obligations owing to the Company or Accommodation Company, including but not limited to all tax refunds and tax refund claims, letters of credit and all proceeds thereof; (c) all guarantees, security, and liens which the Company or Accommodation Company may hold for the payment or performance of any item of Collateral (including, without limitation, all rights of stoppage in transit, replevin, and reclamation and as an unpaid vendor or lienor); (d) all rights to goods represented by any item of Collateral or the sale of which goods gave rise to any item of Collateral including, without limitation, all rights upon return, replevin, or repossession of such goods, all documents of title, warehouse receipts, bills of lading, books, records and other documents relating to any of the Collateral; (e) the Company's and the Accommodation Company’s goodwill; (f) all books, records, and lists, in whatever form maintained; (g) all the Company's and Accommodation Company’s inventory, wherever located, whether in the Company's or Accommodation Company’s or some other person's possession, including, without limitation, all raw materials, supplies work in process, and finished products manufactured by and/or held for sale or lease or to be furnished in connection with the Company's or Accommodation Company’s business, as well as any and all computer code, software, software products, or databases; (h) all equipment (as defined in the UCC), whether in the Company's or Accommodation Company’s or some other person's possession, including, without limitation, all machinery, accessories, motors, controls, engines, dies, tools, jigs, benches, tables, computers and data fixtures, and all substitutions, accretions, replacements, and additions thereto and all other component and auxiliary parts used in connection therewith or attached thereto; (i) any other property of the Company or Accommodation Company of any kind or nature coming into Xxxxxx Capital's actual or constructive possession, custody or control, or in transit to Xxxxxx Capital or his agent for whatever purpose, and all proceeds of any item of Collateral and all proceeds of such proceeds, including, without limitation, all payments under any indemnity, warrant or guaranty payable with respect to the Collateral, all awards for taking by eminent domain, and all proceeds of fire or other insurance.
15
Exhibit "D"
3. Representations and Warranties. Company and Accommodation Company represents and warrants to Xxxxxx Capital as follows:
(a) To pay and perform all of the Obligations secured by this Agreement in accordance with their respective terms.
(b) To defend title to the Collateral against all persons and against all claims and demands whatsoever, which Collateral, except for the security interest granted hereby, is lawfully owned by the Company or Accommodation Company and is now free and clear of any and all liens, security interests, claims, charges, encumbrances, taxes and assessments except as may be set forth specifically herein.
(c) On reasonable demand of Xxxxxx Capital to do the following: (i) furnish further assurances of title; (ii) execute any written agreement or do any other acts reasonably necessary to effectuate the purposes and provisions of this Agreement; and (iii) execute any instrument or statement required by law or otherwise in order to perfect, continue or terminate the security interest of Xxxxxx Capital in the Collateral and pay all costs of filing in connection therewith.
(d) To retain possession of the Collateral during the existence of this Agreement and not to sell, exchange, assign, loan, deliver, lease, mortgage or otherwise dispose of same, other than in the ordinary course of business, without the written consent of Xxxxxx Capital. Although proceeds of the Collateral are covered herein, Xxxxxx Capital in no way has authorized sale of the Collateral by the Company or Accommodation Company other than in the ordinary course of business.
(e) To keep the Collateral at the principal office of the Company or Accommodation Company and not to remove the same, except in the ordinary course of business, without the prior written consent of Xxxxxx Capital.
(f) To keep the Collateral free and clear of all liens, charges, encumbrances, taxes and assessments except those that are being contested in good faith by the Company or Accommodation Company with adequate reserves set aside therefor to the satisfaction of Xxxxxx Capital.
(g) To pay, when due, all taxes, assessments, and license fees relating to the Collateral, except those that are being contested in good faith by the Company or Accommodation Company with adequate reserves set aside therefor to the satisfaction of Xxxxxx Capital.
(h) To keep the Collateral, at the Company's or Accommodation Company’s own cost and expense, in good repair and condition and not to misuse, abuse, waste, or allow to deteriorate except for normal wear and tear and to make the same available for inspection by Xxxxxx Capital at all reasonable times.
(i) To keep the Collateral insured against loss or potential loss by fire (including extended coverage), theft and other hazards as Xxxxxx Capital may require and to obtain collision insurance if applicable. Policies shall be in such form and amounts and with such companies as Xxxxxx Capital may designate. Policies shall be obtained from responsible insurers authorized to do business in the state in which the Collateral is located. Certificates of insurance or policies, payable to the respective parties as their interest may appear, shall be deposited with Xxxxxx Capital who is authorized, but under no duty, to obtain such insurance upon the failure of the Company or Accommodation Company to do so. Company and Accommodation Company shall give immediate written notice to Xxxxxx Capital and to insurers of loss or potential loss or damage to the Collateral and shall promptly file proofs of loss or potential loss with insurers. Company and Accommodation Company hereby appoints Xxxxxx Capital its attorney-in-fact in obtaining, adjusting and canceling any such insurance and endorsing settlement drafts and hereby assigns to Xxxxxx Capital all sums which may become payable under such insurance, including return premiums and dividends, as additional security for the Obligations.
(j) To immediately notify Xxxxxx Capital in writing of any change in or discontinuance of Company's or Accommodation Company’s place or places of business and/or residence.
16
Exhibit "D"
4. Events of Default. If any of the following occur ("Event of Default") provided same is not cured by the Company within fifteen (15) days after receipt (or thirty (30) days after receipt, if the Default does not pertain to the payment of money) of written notice from Xxxxxx Capital, Xxxxxx Capital may, but shall not be required to, without presentment or demand, declare the immediate payment of the Obligations, with all accrued interest, if any, and all applicable charges due thereunder:
(a) upon the non-payment by Company or Accommodation Company of any amount when due or any other default under the Commercial Financing Agreement or any other agreement between Xxxxxx Capital and the Company or Accommodation Company after the expiration of all applicable notice, grace or cure periods under the Commercial Financing Agreement or any such other agreement (without duplication of the notice and cure period in this Section 4);
(b) the failure by the Company or Accommodation Company to comply with or perform any provision of this Agreement;
(c) any false or misleading representations or warranties made or given by the Company or Accommodation Company in connection with this Agreement;
(d) upon the further surrender, transfer, pledging, assignment or granting of a security interest by Company or Accommodation Company in the Collateral without the prior written consent of Xxxxxx Capital, except for purchase money security interests for the acquisition of equipment by Company or Accommodation Company;;
(e) upon the attachment of the Collateral; or
(f) the appointment of any receiver or trustee for all or a substantial portion of the assets of Company or Accommodation Company which is not dismissed within 60 days;
(g) a general assignment for the benefit of creditors by Company or Accommodation Company or a voluntary or involuntary filing under any bankruptcy or similar law which is not dismissed within 60 days;
(h) the failure of the Company or Accommodation Company to pay all taxes to every government agency in a timely manner, except for those that are being contested in good faith by the Company or Accommodation Company with adequate reserves being set aside therefor to the satisfaction of Xxxxxx Capital.
5. Acceleration. In the event Company or Accommodation Company shall have failed to cure an Event of Default within the specified time period and Xxxxxx Capital has declared the Obligations due, interest on the Obligations and any other amounts due under the Performance Covenant or this Agreement shall accrue at the rate of one and one-half percent per month. This shall not constitute an extension of time for the payment of any Obligations or other sums due to Xxxxxx Capital.
6. Remedies. If any Event of Default shall occur, which remains uncured, Xxxxxx Capital, in addition to any other rights and remedies it may have at law, including those set forth below, and shall have and may exercise immediately and without demand, any and all rights and remedies granted to a secured party upon default under the UCC or such other measures as Xxxxxx Capital deems necessary to preserve its security interest in the Collateral.
(a) If an Event of Default shall occur and Xxxxxx Capital elects to declare the Obligations due and payable in accordance with this Agreement, and the Company or Accommodation Company fails to cure its default or pay the Obligations; Xxxxxx Capital may, but shall not be obligated to, sell, assign and deliver the Collateral at public or private sale, for cash, upon credit or for future delivery with or without advertisement of the time, place or terms of sale except that if the sale be a private sale, ten (10) days notice in writing from Xxxxxx Capital of the time and place of sale and the terms of sale shall be given to the Company or Accommodation Company. In case of any sale on credit or for future delivery, the Collateral sold shall be retained by Xxxxxx Capital until the sale price is paid, but Xxxxxx Capital shall incur no liability if the purchaser fails. to take up and pay for the Collateral sold, in which event the Collateral may again be sold. At any sale, Xxxxxx Capital may purchase the Collateral sold, free from all right of redemption of the Company or Accommodation Company which is hereby waived and released.
(b) In case of any sale, Xxxxxx Capital may first deduct all expenses of collection, sale and delivery of the Collateral sold and any expenses incidental thereto, including, but not limited to reasonable attorneys' fees, brokerage commissions and transfer taxes, and may then apply the residue to any liability of the Company under the Obligations, and shall return the surplus, if any, to the Company. Any sale conducted upon the foregoing terms shall be deemed commercially reasonable.
17
Exhibit "D"
(c) The Company and Accommodation Company agree that Xxxxxx Capital shall have the right to continue to retain the Collateral until such time that Xxxxxx Capital in its reasonable judgment believes that an advantageous price can be secured for the Collateral; Xxxxxx Capital shall not be liable to the Company or Accommodation Company for any loss or potential loss in the value of the Collateral by reason of any such retention of the Collateral by Xxxxxx Capital. If Xxxxxx Capital shall not commence to dispose of the Collateral within ninety (90) days after the right to dispose of the Collateral shall have accrued, then the Company or Accommodation Company shall have the right, at any time thereafter, and prior to the time that Xxxxxx Capital shall commence to dispose of the Collateral to request of Xxxxxx Capital that it dispose of the Collateral or the Company, or Accommodation Company, itself at its own cost and expense, have the right to dispose of the Collateral provided, however, that in the case of the former, Xxxxxx Capital shall not be obligated to dispose of the Collateral unless the net proceeds to be received therefrom shall be sufficient to satisfy in full the then obligations of the Company and Accommodation Company to Xxxxxx Capital, and that in the case of the latter, any disposition of the Collateral by the Company or Accommodation Company must be upon terms and conditions consented to by Xxxxxx Capital, and Xxxxxx Capital shall be obligated to give such consent if the net proceeds to be received from such disposition shall be sufficient to satisfy in full the then Obligations of the Company and Accommodation Company to Xxxxxx Capital.
(d) Xxxxxx Capital shall not be liable to the Company or Accommodation Company for any agents' or brokers' fees incurred in connection with the sale of the Collateral.
7. Uniform Commercial Code. The UCC of the State of Alabama shall govern the rights, duties and remedies of the parties and any provisions herein declared invalid under any law shall not invalidate any other provisions of this Agreement. The Company and Accommodation Company hereby authorizes Xxxxxx Capital or its agents or assigns to sign and execute on the Company's or Accommodation Company’s behalf any and all necessary UCC-1 forms to perfect the Security Agreement interest herein above granted to Xxxxxx Capital.
8. No Offsets. The Company and Accommodation Company covenant and warrant that it is now the owner of the Collateral and that there are no defenses or offsets to this Agreement or to the Performance Covenant which it secures.
9. Attorney-in-Fact. The Company and Accommodation Company hereby irrevocably appoints Xxxxxx Capital as its attorney-in-fact in connection with the Collateral and to execute and file on its behalf any financing statements, or other statements in connection therewith with the appropriate public office.
10. Joint and Several Liability. In the event this Agreement is executed by more than one person, firm or corporation, the liability of the "Company" hereunder shall be joint and several.
11. Reimbursement - The Company and Accommodation Company agree that, with or without notice or demand, it will reimburse Xxxxxx Capital, for all costs and expenses (including, without limitation, reasonable attorney's fees) incurred by Xxxxxx Capital in connection with the collection of the Obligations or any portion thereof or in any action or proceeding brought by Xxxxxx Capital to enforce the obligations of the Company and Accommodation Company under this Agreement. Xxxxxx Capital shall have the right but not the obligation to examine the Company's and Accommodation Company’s books and records at any time during reasonable business hours once per quarter, the expense of such field examination to be charged against the Company. In the event of a default under this agreement, Xxxxxx Capital shall have the right to examine the Company's and Accommodation Company’s books once a month and the Company and Accommodation Company shall pay for this expense.
12. Application of Payments - All moneys available to Xxxxxx Capital for application in payment or reduction of the Obligations may be applied by Xxxxxx Capital in such manner and in such amounts and at such time or times and in such order, priority and proportions as Xxxxxx Capital may see fit to the payment or reduction of such portion of the Obligations as Xxxxxx Capital may elect.
13. Successors and Assigns - Each reference herein to Xxxxxx Capital shall be deemed to include its successors and assigns, in whose favor the provisions of this guaranty shall also inure. Each reference herein to the Company or the Accommodation Company shall be deemed to include the heirs, executors, administrators, legal representatives, successors and assigns of the Company or the Accommodation Company, all of whom shall be bound by the provisions of this Agreement, provided, however, that the Company or Accommodation Company shall in no event or under any circumstance have the right, without obtaining the prior written consent of Xxxxxx Capital, to assign or transfer the Company's or Accommodation Company’s obligations and liabilities under this Agreement, in whole or in part, to any other person, party or entity.
14. Non-Waiver - No delay on the part of Xxxxxx Capital in exercising any right or remedy under this Agreement or failure to exercise the same shall operate as a waiver in whole or in part of any such right or remedy. No notice to or demand on the Company or Accommodation Company shall be deemed to be a waiver of the obligation of the Company or Accommodation Company or the right of Xxxxxx Capital to take further action without notice or demand as provided in this Agreement.
18
Exhibit "D"
15. Further Modification - This Agreement may only be modified, amended, changed or terminated by an agreement in writing signed by Xxxxxx Capital and the Company and Accommodation Company. No waiver of any term, covenant or provision of this Agreement shall be effective unless given in writing by Xxxxxx Capital and if so given by Xxxxxx Capital shall only be effective in the specific instance in which given.
16. Unconditional Agreement - The Company and Accommodation Company acknowledge that this Agreement and the Company's and Accommodation Company’s obligations under this Agreement are and shall at all times continue to be absolute and unconditional in all respects, and shall at all times be valid and enforceable irrespective of any other agreements or circumstances of any nature whatsoever which might otherwise constitute a defense to this Agreement and the obligations of the Company and Accommodation Company under this Agreement or the obligations of any other person or party relating to this Agreement or the obligations of the Company and Accommodation Company thereunder or otherwise with respect to the Obligations. This Agreement sets forth the entire agreement and understanding of Xxxxxx Capital, the Company and the Accommodation Company, and the Company and Accommodation Company absolutely, unconditionally and irrevocably waives any and all rights to assert any defense, set-off, counterclaim or cross claim of any nature whatsoever with respect this Agreement or the obligations of any other person or party (including, without limitation, Company or Accommodation Company) relating to this Agreement or the obligations of the Company or Accommodation Company hereunder or otherwise with respect to the Obligations in any action or proceeding brought by Xxxxxx Capital to collect the Obligations, or any portion thereof, or to enforce the obligations of the Company or Accommodation Company under this Agreement. The Company and Accommodation Company acknowledges that no oral or other agreements, understandings, representations or warranties exist with respect to the obligations of the Company or Accommodation Company under this Agreement, except those specifically set forth in this Agreement.
17. No Jury Trial - The Company and Accommodation Company hereby irrevocably and unconditionally waives, and Xxxxxx Capital by its acceptance of this Agreement irrevocably and unconditionally waives, any and all right to trial by jury in any action, suit or counterclaim arising in connection with, out of or otherwise relating to this Agreement.
18. No Subrogation - Notwithstanding any payments made by the Company or Accommodation Company pursuant to the provisions of this Agreement, the Company and Accommodation Company shall have no right of subrogation in and to the Commercial Financing Agreement or any other security held by or available to Xxxxxx Capital for the Obligations or the payment thereof until the Obligations have been paid in full to Xxxxxx Capital.
19. Actions and Proceedings. Xxxxxx Capital may, but shall not be obligated to appear in and defend any action or proceeding brought with respect to the Collateral and to bring any action or proceeding, in the name and on behalf of Company or Accommodation Company, which Xxxxxx Capital, in its discretion, feels should be brought to protect its interest in the Collateral.
20. Further Instruments. Company and Accommodation Company agree that, upon request from time to time of Xxxxxx Capital, it will, at its expense, execute, acknowledge and deliver all such additional instruments and further assurances and will do or cause to be done all such further acts and things as may be reasonably necessary to fully establish, confirm or perfect from time to time the security interest of Xxxxxx Capital in the Collateral.
21. Governing Law - This Agreement is, and shall be deemed to be, a contract entered into under and pursuant to the laws of the State of Alabama and shall be in all respects governed, construed, applied and enforced in accordance with the laws of the State of Alabama. No defense given or allowed by the laws of any other state or country shall be interposed in any action or proceeding hereon unless such defense is also given or allowed by the laws of the State of Alabama.
22. Jurisdiction - All of the parties hereto agree to submit to personal jurisdiction in the State of Alabama for any action or proceeding arising out of this Agreement and, in furtherance of such agreement, they hereby agree and consent that without limiting other methods of obtaining jurisdiction, that personal jurisdiction in any such action or proceeding may be obtained within or without the jurisdiction of any court located in Alabama and that any process or notice or motion or other application to any such court in connection with any such action or proceeding may be served by registered or certified mail, return receipt requested, to or by personal service at their last known address whether such address be within or without the jurisdiction of any such court.
19
Exhibit "D"
23. Notices - All notices, demands or requests (collectively, "Notice") made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party or parties to whom or to which such Notice is being sent, by certified or registered mail, return receipt requested, reputable overnight courier or delivered by hand with receipt acknowledged in writing to the addresses first hereinabove set forth. All notices (a) shall be deemed given when received in accordance herewith and (b) may be given either by a party or such party's attorneys.
24. Duplicate Originals - This Agreement may be executed in any number of duplicate originals and each such duplicate original shall be deemed to constitute but one and the same instrument.
25. Headings, Etc. - The headings, titles and captions of various paragraphs of this Agreement are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.
26. Permitted Encumbrances. Xxxxxx Capital acknowledges and consents to Company or Accommodation Company’s existing secured or lease obligations to Qwest Communications Company, LLC, Branch Banking and Trust Company successor to United Carolina Bank, Network Appliance, Inc., Citicorp Vendor Finance, Inc., and Cisco Systems Capital Corporation and the security interest securing same as evidenced by UCC filed as 2010 0664676 in the Office of the Department of State of Delaware, 001466623 in the Office of the Secretary of State of North Carolina, 20070035917F in the Office of the Secretary of State of North Carolina, 20070037184C in the Office of the Secretary of State of North Carolina, and 20090010574K in the Office of the Secretary of State of North Carolina, respectively. Xxxxxx Capital further consents to the existing secured lending relationship between the Company and AVNET, INC., along with the security interest securing same, provided AVNET, INC. enters into an Intercreditor Agreement with and acceptable to Xxxxxx Capital. Xxxxxx Capital further consents to the new lending relationship between the Company and YENNI CAPITAL, INC. a New York corporation as Agent on behalf of the each of the Purchasers under that certain Securities Purchase Agreement, along with the security interest securing same, provided YENNI CAPITAL, INC. a New York corporation as Agent on behalf of the each of the Purchasers under that certain Securities Purchase Agreement enters into a Subordination and Standstill Agreement with and acceptable to Xxxxxx Capital.
20
Exhibit "D"
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.
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MIDAS MEDICI GROUP HOLDINGS, INC., a Delaware corporation
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By:
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/s/Xxxxxxx M. Kachidza
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| Print Name: Xxxxxxx M. Kachidza | |||
| Title: President | |||
| STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation | |||
| By: | /s/ Xxxx Xxxxxxx | ||
| Print Name: Xxxx Xxxxxxx | |||
| Title: Executive Chairman | |||
| CONSONUS TECHNOLOGIES, INC., a Delaware corporation | |||
| By: | /s/ Xxxx Xxxxxxx | ||
| Print Name: Xxxx Xxxxxxx | |||
| Title: Executive Chairman | |||
| XXXXXX CAPITAL: | XXXXXX CAPITAL CORPORATION | ||
| By: | /s/ Xxx Xxxxxxxxxx | ||
| Print Name: Xxx Xxxxxxxxxx | |||
| Title: EVP, a duly authorized officer | |||
21
Exhibit "F"
PERFORMANCE COVENANT AND WAIVER
WHEREAS, MIDAS MEDICI GROUP HOLDINGS, INC., a Delaware corporation with principal office for the transaction of business at 000 Xxxx Xxxxxx 00xx Xxxxx, Xxx Xxxx, XX, 00000 and STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation with principal office for the transaction of business at 000 Xxxxxxx Xxxxx, Xxxx, XX, 00000 (hereinafter jointly, severally and collectively referred to as the "Company"), has entered into a commercial financing agreement and other related documents including a Security Agreement entered into by Company and CONSONUS TECHNOLOGIES, INC., a Delaware corporation, with an office for the transaction of business at 000 Xxxxxxx Xxxxx, Xxxx, XX, 00000, (hereinafter the “Accommodation Company”), dated as of the date hereof with XXXXXX CAPITAL CORPORATION, an Alabama corporation with an office for the transaction of business at 000 Xxxxxxx Xxxxxx, XX, XX, 00000; 00 Xxxxx Xxxxxx – Xxxxxxxx X, Xxxxxxxxxx, XX 00000; and 0000 Xxxxx Xxx. Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, (hereinafter respectively referred to as the "Commercial Financing Agreement" and "Xxxxxx Capital"), wherein Xxxxxx Capital has agreed to make a Line of Credit available to the Company under certain terms and conditions; and
WHEREAS, Xxxxxx Capital is willing to purchase the accounts receivable and/or invoices from the Company only if the undersigned executes and delivers this Performance Covenant and Waiver (also referred to herein as the "Guaranty") guarantying payment to Xxxxxx Capital of any of the Obligations of the Company (as defined herein) which may become due and payable in the manner hereinafter provided.
NOW THEREFORE, in consideration of Ten ($10.00) Dollars, and other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to induce Xxxxxx Capital to enter into the Commercial Financing Agreement, the undersigned covenants and agrees with Xxxxxx Capital as follows:
1. Guaranty of Obligations - The undersigned, jointly and severally, unconditionally guarantee to Xxxxxx Capital full payment and prompt and faithful performance by the Company of all of its present and future indebtedness and obligations to Xxxxxx Capital. The words "indebtedness" and "obligations" are used herein in their most comprehensive sense and include all the Obligations (as that term is defined in the Commercial Financing Agreement) any and all advances, debts, obligations, and liabilities of the Company heretofore including without limitation attorneys' fees, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether the Company may be liable individually or jointly with others, or whether recovery may be or hereafter become barred by any statute of limitations or otherwise become unenforceable. Said indebtedness and obligations guaranteed hereunder shall be collectively referred to herein as "Obligations."
2. Default A default shall occur hereunder upon any default, which is not cured by the Company within fifteen (15) days after receipt (or thirty (30) days after receipt, if the Default does not pertain to the payment of money) of written notice from Xxxxxx Capital, in the payment or performance of any instrument (including without limitation the Commercial Financing Agreement), or of the Obligations hereby guaranteed after the expiration of all applicable notice, grace or cure periods under the Commercial Financing Agreement or any such other instrument (without duplication of the notice and cure period in this section 2). In the event of any of the foregoing, the Obligations hereby guaranteed shall become, for the purpose of this Agreement, due and payable by the undersigned forthwith without further demand or notice.
3. Authority of Officers - Xxxxxx Capital shall not be required to inquire into the powers of the Company or the officers, directors, agents, acting or purporting to act in its behalf, and any Obligations made or created in reliance upon the professed exercise of such powers shall be deemed to be guaranteed hereunder.
4. Rights are Independent - The Obligations of the undersigned are independent of the obligations of the Company under the Commercial Financing Agreement, and separate action or actions may be brought and prosecuted by Xxxxxx Capital against the undersigned whether or not the Company is joined in any such action or actions.
5. Partnership or Association - If the Company is a partnership or other association, this Agreement shall be extended to and include, in addition to the undersigned, the person or persons for the time being and from time to time carrying on the business now conducted by the Company, notwithstanding any change or changes in the name, structure, and/or membership of the Company.
22
Exhibit "F"
6. Financial Condition of Company - The undersigned represent to Xxxxxx Capital that they are now and will be completely familiar with the business, operation, and overall economic condition of the Company and they hereby waive and relinquish any duty on the part of Xxxxxx Capital to disclose any matter, fact, or thing relating to the business, operation, or financial condition of the Company now known or hereafter known by Xxxxxx Capital.
7. Guarantor's Direct Benefit - The undersigned hereby represent and warranty that it is in their direct economic interest to assist the Company because of the undersigned's position(s) in and/or economic relation(s) with the Company.
8. Joint and Several Liability - All of the obligations of the undersigned (if more than one) hereunder shall be joint and several.
9. Application of Payments - All moneys available to Xxxxxx Capital for application in payment or reduction of the Obligations may be applied by Xxxxxx Capital in such manner and in such amounts and at such time or times and in such order, priority and proportions as Xxxxxx Capital may see fit to the payment or reduction of such portion of the Obligations as Xxxxxx Capital may elect.
10. Modifications and Extensions - The undersigned hereby consents that from time to time, before or after any default by Company, with notice to or assent from the undersigned, any security at any time held by or available to Xxxxxx Capital for any obligation of Company for all or any portion of the Obligations, may be exchanged, surrendered or released and any obligation of Company, may be changed, altered, renewed, extended, continued, surrendered, compromised, waived or released in whole or in part, or any default with respect thereto waived, and may extend further credit in any manner whatsoever to Company, and generally deal with Company or any such security as Xxxxxx Capital may see fit; and the undersigned shall remain bound under this Guaranty notwithstanding any such exchange, surrender, release, change, alteration, renewal, extension, continuance, compromise, waiver, inaction, extension of further credit or other dealings.
11. Waiver of Notice - The undersigned hereby waives (a) notice of acceptance of this Performance Covenant and Waiver and Guaranty and notice of the making any advance by Xxxxxx Capital to Company under the Commercial Financing Agreement; (b) presentment and demand for payment of the Obligations or any portion thereof; (c) protest and notice of dishonor or default to the undersigned or to any other person or party with respect to the Obligations or any portion thereof; (d) all notices to which the undersigned might otherwise be entitled provided notice is given to the Company if required pursuant to the terms of the Commercial Financing Agreement and; (e) any demand for payment under this Guaranty.
12. Guaranty of Payment - This is a guaranty of payment and not of collection and the undersigned further waives any right to require that any action be brought against Company or any other person or party or to require that resort be had to any security.
13. Successors and Assigns - Each reference herein to Xxxxxx Capital shall be deemed to include its successors and assigns, in whose favor the provisions of this Guaranty shall also inure. Each reference herein to the undersigned shall be deemed to include the heirs, executors, administrators, legal representatives, successors and assigns of the undersigned, all of whom shall be bound by the provisions of this Guaranty, provided, however, that the undersigned shall in no event or under any circumstance have the right, without obtaining the prior written consent of Xxxxxx Capital, to assign or transfer the undersigned's obligations and liabilities under this Guaranty, in whole or in part, to any other person, party or entity.
14. Non-Waiver - No delay on the part of Xxxxxx Capital in exercising any right or remedy under this Guaranty or failure to exercise the same shall operate as a waiver in whole or in part of any such right or remedy. No notice to or demand on the undersigned shall be deemed to be a waiver of the obligation of the undersigned or the right of the Xxxxxx Capital to take further action without notice or demand as provided in this Guaranty.
15. Further Modification - This Performance Covenant and Waiver may only be modified, amended, changed or terminated by an agreement in writing signed by Xxxxxx Capital and the undersigned. No waiver of any term, covenant or provision of this Guaranty shall be effective unless given in writing by Xxxxxx Capital and if so given by Xxxxxx Capital shall only be effective in the specific instance in which given.
16. Unconditional Guaranty - The undersigned acknowledges that this Performance Covenant and Waiver and the undersigned's obligations under this guaranty are and shall at all times continue to be absolute and unconditional in all respects, and shall at all times be valid and enforceable irrespective of any other agreements or circumstances of any nature whatsoever which might otherwise constitute a defense to this guaranty and the obligations of the undersigned under this guaranty or the obligations of any other person or party (including, without limitation, the Company) relating to this guaranty or the obligations of the undersigned thereunder or otherwise with respect to the Obligations. This Performance Covenant and Waiver sets forth the entire agreement and understanding of Xxxxxx Capital and the undersigned, and the undersigned absolutely, unconditionally and irrevocably waives any and all rights to assert any defense, set-off, counterclaim or cross claim of any nature whatsoever with respect this guaranty or the obligations of any other person or party (including, without limitation, the Company) relating to this guaranty or the obligations of the undersigned hereunder or otherwise with respect to the Obligations in any action or proceeding brought by Xxxxxx Capital to collect the Obligations, or any portion thereof, or to enforce the obligations of the undersigned under this guaranty. The undersigned acknowledges that no oral or other agreements, understandings, representations or warranties exist with respect to the obligations of the undersigned under this guaranty, except those specifically set forth in this guaranty.
23
Exhibit "F"
17. No Jury Trial - The undersigned hereby irrevocably and unconditionally waives, and Xxxxxx Capital by its acceptance of this guaranty irrevocably and unconditionally waives, any and all right to trial by jury in any action, suit or counterclaim arising in connection with, out of or otherwise relating to this guaranty.
18. No Subrogation - Notwithstanding any payments made by the undersigned pursuant to the provisions of this guaranty, the undersigned shall have no right of subrogation in and to the Commercial Financing Agreement or any other security held by or available to Xxxxxx Capital for the Obligations or the payment thereof until the Obligations have been paid in full to Xxxxxx Capital.
19. Governing Law - This guaranty is, and shall be deemed to be, a contract entered into under and pursuant to the laws of the State of Alabama and shall be in all respects governed, construed, applied and enforced in accordance with the laws of the State of Alabama. No defense given or allowed by the laws of any other state or country shall be interposed in any action or proceeding hereon unless such defense is also given or allowed by the laws of the State of Alabama. If a law, which applies to this Agreement and which sets maximum loan charges, is finally interpreted so that the fees charged by Xxxxxx Capital to the undersigned or other charges collected or to be collected in connection with this Agreement or the Commercial Financing Agreement exceed the permitted limits under any applicable law or statute, then: (i) any such charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (ii) any sums already collected from the undersigned which exceeded permitted limits will be applied and shall be deemed to have been payments in reduction of any sum owed by the Company.
20. Jurisdiction - All of the parties hereto agree to submit to personal jurisdiction in the State of Alabama in any action or proceeding arising out of this guaranty and, in furtherance of such agreement, they hereby agree and consent that without limiting other methods of obtaining jurisdiction, that personal jurisdiction in any such action or proceeding may be obtained within or without the jurisdiction of any court located in Alabama and that any process or notice or motion or other application to any such court in connection with any such action or proceeding may be served by registered or certified mail, return receipt requested, to or by personal service at their last known address whether such address be within or without the jurisdiction of any such court.
21. Notices - All notices, demands or requests (collectively, "Notice") made pursuant to, under or by virtue of this guaranty must be in writing and sent to the party or parties to whom or to which such Notice is being sent, by certified or registered mail, return receipt requested, reputable overnight courier or delivered by hand with receipt acknowledged in writing to the addresses first hereinabove set forth. All notices (a) shall be deemed given when received in accordance herewith and (b) may be given either by a party or such party's attorneys.
22. Severability - In case any right of Xxxxxx Capital herein shall be held to be invalid, illegal, or unenforceable, such invalidity, illegality and/or unenforceability shall not affect any other right granted hereby. When such interpretation is appropriate, any word denoting gender used herein shall include all persons, natural or artificial, and words used in the singular shall include the plural. The undersigned agree(s) that upon request from Xxxxxx Capital, it will, at its expense, execute, acknowledge, and deliver all such additional instruments and further assurances and will do or cause to be done all such further acts and things as may be reasonably necessary to fully establish, confirm the intentions of this Agreement.
23. Duplicate Originals - This Performance Covenant and Waiver may be executed in any number of duplicate originals and each such duplicate original shall be deemed to constitute but one and the same instrument.
24. Headings, Etc. - The headings, titles and captions of various paragraphs of this guaranty are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.
24
Exhibit "F"
IN WITNESS WHEREOF, the undersigned has duly executed this Performance Covenant and Waiver as of the 29th day of July, 2011.
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MIDAS MEDICI GROUP HOLDINGS, INC., a Delaware corporation
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By:
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/s/Xxxxxxx M. Kachidza
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| Print Name: Xxxxxxx M. Kachidza | |||
| Title: President | |||
| STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation | |||
| By: | /s/ Xxxx Xxxxxxx | ||
| Print Name: Xxxx Xxxxxxx | |||
| Title: Executive Chairman | |||
| CONSONUS TECHNOLOGIES, INC., a Delaware corporation | |||
| By: | /s/ Xxxx Xxxxxxx | ||
| Print Name: Xxxx Xxxxxxx | |||
| Title: Executive Chairman | |||
| WEATHERWISE USA, INC., a Delaware corporation | |||
| By: | /s/ Xxxxxxx M. Kachidza | ||
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Print Name: Xxxxxxx M. Kachidza
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|||
| Title: President | |||
XXXXXX CAPITAL:
| XXXXXX CAPITAL CORPORATION | ||
| By: | /s/ Xxx Xxxxxxxxxx | |
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Xxx Xxxxxxxxxx, a duly authorized officer
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25
