Account Purchase Agreement
Exhibit
10.25
|
1.
|
Parties. The parties to
this Account Purchase Agreement ("Agreement") are as
follows:
|
|
a.
|
Crown
Financial, LLC ("Crown"); and
|
|
b.
|
All
American Plazas, Inc. ("All American").
|
The parties agree as
follows:
|
2.
|
Definitions. The
following terms are defined for the purposes of this
Agreement:
|
|
a.
|
"Account Schedule" means
the schedule provided periodically by All American pursuant to this
Agreement. Account Schedules shall identify all uncollected accounts
receivable produced or owned by All American and provide an aging on those
accounts. "Account Schedule" includes the Initial Account
Schedule.
|
|
b.
|
"Accounts" shall mean
the accounts shown in the current Account
Schedule.
|
|
c.
|
"Coverage Ratio" shall
mean the ratio of the amount of Eligible Accounts to the amount of the
Outstanding Advance.
|
|
d.
|
"Default" shall have the
meaning set forth in Section 10,
Default.
|
|
e.
|
"Direct Account Debtors"
shall mean the account debtors on the Direct
Accounts.
|
|
f.
|
"Direct Accounts" shall
mean the 15 Accounts shown on the current Account Schedule with the
largest value for the corresponding Eligible
Account.
|
|
g.
|
"Direct Expenses" shall
mean expenses described in Section 6, Fees and
Expenses.
|
|
h.
|
"Eligible Accounts"
shall be the portions of Accounts with an aging that is less than
60 days that Crown does not reasonably deem to be doubtful of
collection.
|
|
i.
|
"Initial Account Schedule"
shall mean the Account Schedule provided by All American in
connection with the closing of this Agreement and attached as Schedule A
to this Agreement.
|
|
j.
|
"Initial Advance" shall
be the lesser of 80% of the sum of Eligible Accounts on the Initial
Account Schedule or
$1,275,000.
|
|
k.
|
"Outstanding Advance"
shall mean the Initial Advance by Crown pursuant to this Agreement
plus any additional advances less any payments received by Crown, net of
fees and expenses.
|
|
1.
|
"Repurchase Price" shall
have the meaning set forth in ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇▇▇.
|
|
m.
|
"True Up" shall mean the
process specified in Section 7,
True-Up.
|
|
n.
|
"Wind Up Period" shall
mean the period described in Section 10, Termination and
Wind-Up.
|
|
3.
|
Conditions to Funding.
Each of the following are a condition to funding the Initial
Advance:
|
|
a.
|
All
American shall have provided an irrevocable instruction to each of the
Direct Account Debtors to make payment directly to Crown and Crown shall
have received from each of the Direct Account Debtors acknowledgment
of that instruction and confirmation of the amount of the account and that
the account is not subject to dispute or
offset.
|
1
|
b.
|
Crown
and All American shall have entered into a Security Agreement and Mortgage
in form and substance satisfactory to
Crown.
|
|
c.
|
Crown
shall have received a personal guaranty from ▇▇▇▇▇ ▇▇▇▇▇▇ in form and
substance satisfactory to it.
|
|
d.
|
Crown
shall have confirmed to its satisfaction the accuracy of the Initial
Account Schedule.
|
|
4.
|
Initial
Account Purchase and Acquisition of New
Accounts
|
|
a.
|
At
the closing of this Agreement, Crown shall purchase the Accounts listed on
the Initial Account Schedule by paying to All American the Initial
Advance.
|
|
b.
|
During
the term of this Agreement and without additional payment, Crown shall
acquire ownership of any new accounts originated by All
American.
|
|
5.
|
Reporting.
|
|
a.
|
On
the first business day of each month while this Agreement is in
force, All American shall provide to Crown an updated and current
Account Schedule current as of the end of the immediately preceding month
including the following: (i) the information on the Initial Account
Schedule as to all Accounts (including Accounts originated in the
preceding month); (ii) all collections on the Accounts in the preceding
month; (iii) the amounts remaining outstanding on each Account; and (iv)
whether any Account is doubtful of
collection.
|
|
b.
|
All
American shall also provide, within two business days of request by Crown,
all available information for any of the Accounts, including any
supporting or backup documents for each individual Account and the
contents of the vendor file for the account
debtor.
|
|
c.
|
By
the twenty-fifth day of each month, All American shall provide Crown with
a Balance Sheet and Income Statement for the previous
month.
|
|
6.
|
Fees
and Expenses
|
|
a.
|
All
American shall pay to Crown $2,500 for expenses associated with this
transaction.
|
|
b.
|
All
American shall pay to Crown on the 15th
and the 30th
of each month that this Agreement is in effect, a fee equal to 2.5% of the
Outstanding Advance for the preceding
period.
|
|
c.
|
All
American shall owe Crown a minimum fee equal to 15% of the Initial Advance
for the first 90 days of this Agreement, whether or not All American
elects to pay off the obligation within 90-days of the start of the
agreement.
|
|
d.
|
Notwithstanding
the foregoing, All American shall pay Crown a fee on January 15, 2007
equal to a per diem rate of 0.166% applied to the Initial Advance for the
period from the funding of the Initial Advance to January 15,
2007.
|
|
e.
|
Crown
shall also be entitled to recoup from All American any expenses that Crown
incurs pursuant to the Security Agreement as well
as direct out of pocket expenses incurred by Crown to remedy or mitigate
the results of any breaches of warranties or falsity of representations by
All American under this
Agreement.
|
2
|
7.
|
True Up: On February 1,
2007 and on and 1st of each following
month, Crown and All American shall undertake the
following:
|
|
a.
|
All
American shall certify to Crown that is has complied with its warranties
and that its representations remain true and
correct.
|
|
b.
|
Crown
shall calculate the amount of the Outstanding Advance for each day of the
preceding period. The amount of the Outstanding Advance on any particular
day shall be reduced by the amount of payments on Direct Accounts received
by Crown prior to that day.
|
|
c.
|
Crown
shall determine the fee due it using the percentage set forth in Section
6, Fees and Expenses, pro-rated over the preceding period and applied to
the amount of the Outstanding Advance for each day of the preceding
period. Crown shall also determine the amount of Direct Expenses, if any,
to which it is entitled.
|
|
d.
|
Crown
shall retain payments in an amount equal to the fees and Direct Expenses
from collections on Direct Accounts. If the event that funds available to
Crown from collections on Direct Accounts are insufficient to pay Crown
its fees and Direct Expenses, All American shall pay to Crown any
deficiency within three business days of Crown's
demand.
|
|
e.
|
Crown
shall then calculate the Coverage Ratio. Within three business days
of the end of the preceding period, Crown shall provide this calculation
to All American along with a schedule of payments it received on Direct
Accounts for the preceding period and copies of its calculations of fees
and support for its determination of Direct
Expenses.
|
|
8.
|
Coverage Ratio Below 125%.
If the Coverage Ratio calculated by Crown falls below 125%, Crown
may, at its option,
|
|
a.
|
Require
All American to repurchase the Accounts pursuant to the provisions of
Section 12 below; or
|
|
b.
|
Require
All American to make additional payments direct to Crown to reduce the
amount of the Outstanding Advance so that the Coverage Ratio increases to
125%.
|
|
9.
|
Coverage Ratio Greater than
125%. If the Coverage Ration calculated by Crown is greater than
125%, then Crown at its option may make additional advances to All
American to reduce the amount of the Coverage Ratio;
or
|
|
10.
|
Default. Each of the
following events shall be considered a Default on this
Agreement:
|
|
a.
|
Failure
of All American to pay timely any amount due under this
agreement.
|
|
b.
|
Failure
of All American to observe any of the terms of this
agreement.
|
|
c.
|
Breach
of any warranty made by All American under this
Agreement.
|
|
d.
|
The
falsity of any representation made by All American pursuant to this
Agreement.
|
3
|
e.
|
Crown
reasonably deems itself insecure in connection with the repurchase
obligation under this
Agreement.
|
|
11.
|
Termination
and Winding Up.
|
|
a.
|
Crown
may terminate this Agreement in any of the following
events:
|
|
i.
|
The
Coverage Ratio drops below 125% and is not restored to 125% or more within
one week;
|
|
ii.
|
The
Occurrence of
a Default as defined in Section 10, Default;
or
|
|
iii.
|
Crown
has exercised its option to require repurchase pursuant to ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇▇▇.
|
|
b.
|
This
Agreement will terminate 6 months from the date of closing unless extended
by the written consent of both
parties.
|
|
c.
|
After
termination of this Agreement, the parties will wind up their
relationship. The Wind Up Period shall continue until either the amount of
the Outstanding Advance has been reduced to zero and Crown has recovered
all fees and Direct Expenses to which it is entitled or until the
repurchase obligation has been closed and funded. During the Wind Up
Period, fees shall continue to accrue on the amount of the Outstanding
Advance and Crown shall be entitled to recover Direct Expenses. During the
Wind Up Period, the parties shall continue to be bound by the terms of
this Agreement, except that Crown shall not be obligated by Section 9,
Coverage Ratio Greater than
125%.
|
|
12.
|
Repurchase Obligation.
In the event of a Default under this Agreement or in the event of
Termination of this Agreement, Crown may require All American to
repurchase from it the-Accounts and its other rights under this Agreement
and the documents executed pursuant to it. If Crown exercises its right to
require repurchase, All American shall pay the Repurchase Price to Crown
within three business days of exercise. The Repurchase Price shall be the
amount of the Outstanding Advance plus any fees and Direct Expenses due to
Crown. Until Crown has received the Repurchase Price, however, it shall be
entitled to collect the Accounts, but the amounts so received by Crown
shall reduce the amount of the Outstanding
Advance.
|
|
13.
|
Exclusivity:During the
term of this Agreement, All American shall not deal with any other factors
or assign any other accounts, contract rights, or monies due it without
the express written consent of
Crown.
|
|
14.
|
Representations and Warranties.
All American represents and warrants to Crown the
following:
|
|
a.
|
The
Initial Account Schedule and each Account Schedule subsequently provided
by All American shall be complete and accurate and shall correctly
represent all accounts
receivable.
|
|
b.
|
The
Coverage Ratio shall not fall below
125%.
|
|
c.
|
All
American shall not compromise any Account with the associated account
debtor without the prior written consent of
Crown.
|
|
d.
|
Contemporaneously
with this Agreement, All American is also executing a Mortgage of two
properties to secure its repurchase obligation under this Agreement. The
two properties that are the subject of that Mortgage are commonly known as
Strattanville and Frystown Gables, and are legally described in Exhibit A
to that Mortgage. The Strattanville and Frystown Gables properties have
appraised at over $10,000,000, collectively, and the amount due on the
prior debt on both properties is $6,500,000. All American will pay this
prior debt when it is due.
|
4
|
e.
|
The
letters of instruction sent to Account Debtors with respect to where
payments on account shall not be rescinded or altered by All American and
will continue in force until released by
Crown.
|
|
15.
|
Miscellaneous.
|
|
a.
|
Governing
Law. This Agreement shall be construed and enforced according to the laws
of the State of Texas.
|
|
b.
|
Account
Purchase. This Agreement is an account purchase transaction pursuant to
the Texas Finance Code.
|
|
c.
|
Wavier.
The waiver by Crown of any breach or default of this Agreement on the part
of All American shall not be construed as a waiver of any subsequent
breach or default. Moreover, the failure by Crown to exercise any right or
remedy hereunder shall not operate as a waiver of such right in the
future, and all rights and remedies herein provided are
cumulative.
|
|
d.
|
Entire
Agreement. This Agreement, along with the documents executed pursuant to
or in connection with it, is the entire agreement of the parties and may
only be amended or modified by a writing signed by the party or parties
sought to be bound.
|
|
e.
|
Notice:
|
|
i. If to
Crown:
|
▇▇. ▇▇▇▇▇▇▇ ▇. Tribe | |
| Crown Financial, LLC | ||
| ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ | ||
| ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ | ||
| 281.646.2905 | ||
| ▇▇▇.▇▇▇.▇▇▇▇ fax | ||
| ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ | ||
|
wire
transfer instructions:
|
Sterling
Bank - Houston, Texas
|
|
| ABA # 113 005 549 | ||
| Credit the Account of | ||
| Crown Financial, LLC | ||
| Acct. # 171 013 174 | ||
|
ii. If to All
American:
|
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇ | |
|
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
||
|
All
American Plazas, Inc.
|
||
|
▇.▇.
▇▇▇
▇▇▇,
|
||
| ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇. | ||
| ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
5
| With a copy to: | ||
| ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
| 2 Taconic Court | ||
| ▇▇ ▇▇▇ ▇▇▇ | ||
| ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇ |
|
f.
|
Wire
Transfer. All advances, fee payments and
repurchases shall be by wire transfer pursuant to the instructions
as set forth above.
|
Agreed
as of this
8th day of January 2007:
| Crown Financial, LLC | All American Plazas, Inc. |
| /s/ ▇▇▇▇▇▇▇ ▇. Tribe | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
| By: ▇▇▇▇▇▇▇ ▇. Tribe | By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
| Its Manager | Its President |
6