AMENDED AND RESTATED ACCOUNTS RECEIVABLE PURCHASE AND SECURITY AGREEMENT
AMENDED
AND RESTATED
THIS
AMENDED AND RESTATED ACCOUNTS RECEIVABLE PURCHASE AND SECURITY AGREEMENT (this
“Agreement”) is made and entered into as of the 24 day of
February, 2006 (the “Effective Date”), by and between PLATINUM
IT CONSULTING, INC., a corporation organized and existing under the laws of
the
State of Delaware (referred to throughout this Agreement as “you” ), and
ROCKLAND CREDIT FINANCE LLC, a Maryland limited liability company (referred
to
throughout this Agreement as “we”
or
“us”).
BACKGROUND
On
or
about August 24, 2004, you entered into an Accounts Receivable Purchase and
Security Agreement (as amended, the “Existing Agreement”) with Capital Growth
Asset Based Bridge Loan Fund II, LLC (“Capital Growth”) setting forth the terms
of a factoring arrangement between you and Capital Growth. Pursuant to an
Assignment and Assumption Agreement dated December__, 2005, between us and
Capital Growth, we purchased from Capital Growth and Capital Growth sold and
assigned to us all of Capital Growth’s right, title and interest under the
Existing Agreement, including but not limited to all then outstanding accounts
receivable theretofore sold by you and purchased by Capital Growth pursuant
to
such factoring arrangement. You have requested an extension of the factoring
arrangement and we are willing to grant such extension upon the amended and
restated terms set forth below.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the Existing Agreement is hereby amended and
restated in its entirety as follows:
1.
PURCHASE
AND SALE OF ACCOUNTS RECEIVABLE
1.1.
Scope of Agreement. This Agreement contains the general terms and
conditions under which, from time to time during the Term, you may offer and
sell to us and we may accept and purchase from you in our sole and absolute
discretion certain of your Accounts specifically identified to this Agreement
pursuant to Paragraph 1.2. As used herein, the term “Accounts”
means, collectively, accounts, contract rights and other
forms of obligation
arising in the ordinary course of business from the sale or lease of goods
or
rendition of services.
1.2.
Implementation. Each purchase and sale of Accounts hereunder shall be
evidenced by our mutual execution of an Assignment and Transfer of Accounts
Receivable substantially in the form of Exhibit A (each an
“Assignment”). (An Account identified in a duly executed
Assignment, including the rights appurtenant thereto pursuant to Paragraph
1.3,
is hereinafter called an “Assigned Account.”) Each purchase of
Accounts shall be subject to all of the terms and conditions of this Agreement,
which terms and conditions shall be deemed incorporated by reference into each
Assignment. An Account shall be deemed accepted by us upon and only upon our
execution and delivery to you of the applicable Assignment. In connection with
evaluating Accounts proposed for factoring hereunder, we reserve the right
to
conduct such due diligence and verifications and to impose such related
requirements as we may reasonably determine, including but not limited to
investigating the credit rating and/or credit history of the customer obligated
on the Account and requiring an enforceable written contract between you and
such customer upon terms acceptable to us.
1.3.
Effect of Assignment. Without the necessity for further action, each
Assignment shall automatically vest in us all of your right, title and interest
in and to the Assigned Accounts together with (a) full power to collect, ▇▇▇
for, compromise, assign, in whole or in part, or in any other manner enforce
collection thereof in our name or otherwise, (b) any notes or drafts related
thereto, (c) the contracts under which such Accounts arose, (d) your books
and
records relating thereto, whether written or recorded electronically on
computer-readable discs or any other digital or machine-readable form or medium
(“Account Records”), (e) any returned, rejected or repossessed
goods (if any) giving rise to such Accounts, (f) your rights as an unpaid vendor
or lienor, (g) all rights of stoppage in transit, replevin, repossession and
reclamation, (h) all deposits and security therefor and guarantees thereof,
(i)
all rights to insurance proceeds resulting therefrom, and (j) all payments
or
other proceeds of the foregoing in any form (all of the foregoing being included
in the term “Assigned Accounts”). Nothing contained in this Agreement or any
Assignment shall be deemed to constitute an assumption by us of any liability
with respect to or impose any duty or obligation upon us in favor of any Account
Debtor or any other third party in connection with the Accounts.
1.4.
Account Documentation. Upon acceptance by us of any Assignment, you will
deliver to us: (a) copies of all documents evidencing the Accounts listed
thereon and (b) such other documentation as we require, in form satisfactory
to
us in all respects.
1.5.
Exclusivity. During the Term of this Agreement, you will not sell,
factor, assign, or pledge any of your Accounts except to us or for our benefit
under this Agreement, nor will you obtain or utilize any third-party line of
credit except as we may otherwise agree in writing in our sole and absolute
discretion.
2.
FEES
AND
PAYMEMT
2.1.
Purchase Price. The purchase price for each Assigned Account purchased by
us on or after the Effective Date shall be the net face value of the Account
less the applicable Discount Fee (the “Purchase Price”),
subject to the adjustments provided in Paragraph 2.3.
2.2.
Discount Fee. As used herein, with respect to any Assigned Account,
“Discount Fee” means a percentage of the gross amount of the
applicable Advance Payment based on the number of days elapsing from and
including the date of our acceptance of the Account to and including the date
on
which we shall have collected the Account in full in good funds, all as set
forth more particularly in the table immediately below, provided that in no
event shall the Discount Fee be less than twenty-five dollars
($25.00)
1
|
Days
Elapsed
|
Discount
Fee
|
|
|
1-30
|
1.4%
|
|
|
Over
30
|
0.70
% for each period of 15 days or any portion
thereof
|
2.3.
Payment.
2.3.1.
Upon our acceptance of each Assigned Account, we will pay to you on account
of
the Purchase Price an amount equal to the applicable Advance Rate multiplied
by
the net face value of such Account (the “Advance Payment”);
provided, however, that at our election and upon notice to you at any time
after
the occurrence of an Event of Default, the Advance Rate shall be reduced by
thirty percent (30%) (or such lesser percentage as we in our sole and absolute
discretion may determine) for any or all subsequent Assignments or individual
Assigned Accounts. As used herein, the term “Advance Rate”
means (i) fifty percent (50%) with respect to any Assigned
Account owing by OCE
Business Systems, Inc., (ii) seventy percent (70%) with respect to Assigned
Accounts arising out of permanent employee placements, and (iii) eighty-five
percent (85%) with respect to all other Assigned Accounts. With respect to
any
Assigned Account, on or before the fifth business day following the date on
which we have collected such Account in full in good funds, we will pay to
you
the balance of the Purchase Price for such Account, if any, minus all returns,
credits, allowances and discounts on the shortest or, at our option, on any
alternative terms of sale offered by you to Account Debtors, and all other
unpaid sums, liabilities, and Obligations with respect to such Account charged
or chargeable to your account under Section 3 or otherwise under this Agreement
(“Chargebacks”).
2.3.2.
Upon our receipt of any payment with respect to an Account other than an
Assigned Account, so long as you are not in default of any your Obligations
hereunder, we shall remit such payment to you or, at your request, apply such
payment as you may direct, subject to any then outstanding Chargebacks.
Remittances required by this subparagraph 2.3.2 will be paid to you weekly
except as otherwise directed by you.
2.3.3.
With respect to any Assigned Account, if due to the passage of time the excess
of the net face value of the Account over our Advance Payment is less than
the
accrued Discount Fee: (a) the Purchase Price of such Account shall deemed to
be
the amount of the Advance Payment and you shall be entitled to no further
payment in respect thereof; and (b) you shall be liable to us for the amount
of
such deficiency as the same may accrue until collection.
2.4.
Minimum Volume fee. Any provision of this Agreement to the contrary
notwithstanding, if as of the close of any month the average monthly aggregate
net face value of all Accounts offered by you and purchased by us during the
three-month period then ended (fee “Actual Monthly Volume”) is
less than One Hundred Fifty Thousand Dollars ($150,000) (the “Guaranteed
Monthly Volume”), you will pay to us as a supplemental fee for the
month then ended an amount (the “Minimum Volume Fee”) equal to
the product of (i) the excess of the Guaranteed Monthly Volume over the Actual
Monthly Volume multiplied by (ii) the Discount Fee we would have earned on
such
amount assuming collection within 30 days.
2.5.
Noncompliance Fees. Without limiting any of our general rights and
remedies for breaches of this Agreement by you:
2.5.1.
If
you fail for any reason to include the legend required by the last sentence
of
Subparagraph 3.1.1 on any invoice representing an Account, we may assess and
if
so you will pay on demand a missing notation fee in the amount of fifteen
percent (15%) of the net face value of such Account.
2.5.2.
If
you receive any payment on an Account and fail to comply with the provisions
of
Subparagraph 3.1.3, we may assess and if so you will pay on demand a misdirected
payment fee in the amount of fifteen percent (15%) of the net face value of
such
Account.
2.6.
Exit Fee. If
you
elect to terminate this Agreement pursuant to Subparagraph 8.2.1 and the
effective date of termination is other than the last day of the current Term
or
any subsequent one-year renewal period, as the case may be, you will pay to
us
on or before the termination date an exit fee equal to the Discount Fees we
would have earned each month on the Guaranteed Monthly Volume (assuming
collection within 30 days) multiplied by the number of months remaining in
the
Term, duly prorated as necessary for any partial months. Such fee shall be
in
addition to, and not in lieu of, the Minimum Volume Fee, if any, assessable
for
the month in which this Agreement is terminated.
2.7.
Charge in Lieu of Payment. In our sole discretion, we may charge your
account for all fees and other amounts you are required to pay us under this
section.
3. COLLECTION
OF ACCOUNTS
3.1.
Collection Procedure.
3.1.1.
During the term of this Agreement and continuing until all Assigned Accounts
and
all of your Obligations hereunder have been paid fully paid and performed,
you
shall promptly (and we at our option may) notify in writing all persons
obligated to make payments on or with respect to any Account (collectively,
“Account Debtors”) (i) that you have granted to us a security
interest in the Account or, if applicable, that the Account has been sold and
that the amount due or to become due has been assigned to us, (ii) that payment
is to be made to us (and not to you) into a designated lockbox over which we
have exclusive dominion, control and power of access and withdrawal (a
“Lockbox”), and (iii) that all checks and other items of
payment in respect of the Account are to be made payable to our order. You
will
(and we at our option may) obtain from each Account Debtor written
acknowledgment by such Account Debtor confirming its receipt of such notice.
On
and after the date hereof, you shall also include such notice plainly and
conspicuously as a legend on the face of each invoice you issue representing
an
Assigned Account.
3.1.2.
You hereby authorize us at our option and in our sole discretion to collect
and
receive payments directly from Account Debtors in our own name, If we elect
to
exercise this option with respect to any Account, you shall (and we at our
option may) include in the notices required under Subparagraph 3.1.1 a further
statement that the Account represented thereby has been sold and assigned to
us
and that the Account Debtor shall make all checks in respect of the Account
payable to us or our designee.
3.1.3.
If you receive any payment on any Account, you shall immediately remit such
payment in the form received (with any necessary endorsement) directly to us.
Until so remitted, you will hold such payment in trust for us separate and
apart
from all of your other funds.
3.2.
Power of Attorney. You hereby irrevocably constitute and appoint us, or
any of our agents or employees, as your lawful attorney-in-fact (without
requiring us to act as such), coupled with an interest, to exercise at any
time any
of
the
following powers: (i) to receive, endorse and deposit all payments from Account
Debtors; (ii) to transmit to any party the notices required by Subparagraph
3.1.1; (iii) to institute any proceedings deemed by us necessary to effect
collection of Accounts; (iv) to settle, compromise or litigate any dispute
concerning any Account; and (v) to execute in your name such documents,
instruments and affidavits as we may require from time to time in order to
evidence and perfect our security interest in the Collateral or (without waiving
your representation in Subparagraph 5.5.5) to satisfy any statutory condition
to
payment of an Account under applicable law. Any act of ours as your lawful
attorney-in-fact shall not render as liable for any acts of omission or
commission, nor for any error of judgment or mistake of fact or
law.
2
3.3.
Costs and Expenses.
You
will reimburse us on demand for any and all fees, costs, and expenses (including
but not limited to reasonable attorneys’ fees) incurred by us in connection with
protecting, maintaining, preserving or enforcing your Accounts and/or our
rights
under this Agreement or in connection with any bankruptcy, insolvency, or
similar proceeding involving you or your assets; making lien or title
examinations or filing notices with respect to your Accounts; defending or
prosecuting any action or proceeding related to this Agreement; and filing
and
recording financing statements (including amendments thereto and continuation
statements thereof) and termination statements under the UCC relating to
our
security interest in the Collateral.
3.4.
Disputes.
You
will notify us promptly of any Dispute concerning an Account. If we request
you
to do so, you will use your best efforts to settle the Dispute. Alternatively,
we may (but shall be under no obligation to) attempt to settle, compromise
or
litigate the Dispute upon such terms as we in our sole discretion deem
advisable, for your account and risk and at your sole expense. In no event
shall
you shall settle, compromise or adjust any Account or grant any additional
discounts, allowances or credits thereon without in each case our prior written
consent. As used herein, “Dispute” means any actual or alleged
defense, counterclaim, offset, dispute or other claim asserted by the Account
Debtor with respect to an Account other than the Account Debtor’s Insolvency.
“Insolvency,” with respect to an Account Debtor means the
financial inability of an Account Debtor to make payment at maturity unless
the
relevant Account is the subject of a Dispute.
3.5.
Indemnification.
You
will indemnify and defend us and hold us harmless from and against any and
all
liabilities, claims, costs and expenses (including but not limited to reasonable
attorneys’ fees and court costs) related to or arising out of our commercially
reasonable efforts to collect or attempt to collect any Account.
3.6.
No
Agency.
Any
provision of this Agreement to the contrary notwithstanding, nothing in this
Agreement shall be construed to constitute us as your agent or to obligate
us to
assume any or your obligations with respect to any Account. We will not
have any liability for any error or omission or delay occurring in the
settlement, collection or payment of any Account.
4.
RECOURSE
4.1.
Repurchase
of Accounts.
In the
event that (a) an Assigned Account becomes the subject of a Dispute, (b)
there
exists any breach of your representations, warranties or covenants under
this
Agreement with respect to an Assigned Account, (c) an Assigned Account is
not
paid on or before the expiration of ninety (90) days from its invoice date
(such
an Account being hereinafter referred to as a “Late
Account”),
or
(d) we reasonably deem ourselves insecure with respect to any Assigned Account
in light of material changes in the creditworthiness of the Account Debtor
or
otherwise, then and in any such event you shall immediately upon demand by
us
(whether written or oral) repurchase the Account from us for a purchase price
(the “Account
Repurchase Price”)
equal
to (i) the sum of the Advance Payment for such Account plus any and all accrued
fees hereunder (calculated to the date of repurchase) and unreimbursed costs
and
expenses associated with such Account minus
(ii) the
paid portion of such Account, if any. With respect to any Assigned Account
that
becomes the subject of a Dispute, your obligations under this paragraph are
irrespective of any accord and satisfaction of such Account as against the
Account Debtor by operation of Section 3-311 of the Uniform Commercial Code
as adopted and in effect in the applicable jurisdiction (the
“UCC”).
4.2.
Repurchase
on Default.
Without
limiting our other remedies under this Agreement or applicable law, upon
the
occurrence of an Event of Default as hereinafter defined, you shall immediately
upon demand by us (whether written or oral) repurchase from us all outstanding
Assigned Accounts for the aggregate Account Repurchase Price calculated in
accordance with Paragraph 4.1
5.
REPRESENTATIONS AND WARRANTIES
To
induce
us to purchase Accounts from time to time, you make the following
representations and warranties, each of which will survive the execution
and
delivery of this Agreement and will be deemed to be continuous and renewed
as of
the date of our acceptance of each Assignment. Such representations and
warranties shall survive the termination of this Agreement.
5.1.
General.
You are
a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware. The preamble to this agreement sets forth
truly
and accurately your exact legal name as registered in such jurisdiction.
You do
business exclusively under such name and do not use any trade name or other
fictitious name.
5.2.
Authority
and Enforceability.
You
represent and warrant that you have all requisite power and authority to
execute, deliver and perform this Agreement, including each Assignment delivered
hereunder. This Agreement has been duly and validly executed and delivered
by
you and constitutes your legal, valid, and binding obligation enforceable
against you in accordance with its terms. The execution, delivery and
performance of this Agreement by you does not contravene your articles of
incorporation, by-laws or operating or partnership agreement, as applicable,
or
any other agreement, instrument, or commitment to which you are a party or
by
which you or any of your assets or properties are bound.
5.3.
Place
of Business.
Your
principal place of business and your books and records relating to the Accounts
are located at the address set forth at the end of this Agreement.
5.4.
Collateral.
You are
the sole owner of the Collateral free and clear of all liens and encumbrances
(including liens and encumbrances subordinate to our lien and security
interest), except for those created by this Agreement or permitted by us
in
writing. As to inventory which is included in the Collateral, such inventory
is
not stored with any third-party bailee, warehouseman or similar party or
under
consignment to or from any person. All such inventory is currently salable
or
usable in the normal course of your business.
3
5.5.
With Respect to Accounts. You represent and warrant to us that, with
respect to each of your Accounts, whether now existing or hereafter
arising:
5.5.1. You
are
the sole owner of the Account free and clear of all liens and encumbrances
(including liens and encumbrances subordinate to our lien and security
interest), except for those created by this Agreement or permitted by us in
writing.
5.5.2. You
are
not affiliated with and do not own, control, or exercise dominion, in any way
whatsoever, over the business of the Account Debtor.
5.5.3. The
Account represents an accurate and undisputed statement of indebtedness of
the
Account Debtor on account of a bona fide sale or lease of goods or the
performance of services by you.
5.5.4. The
Account is the valid obligation of and is legally binding upon the Account
Debtor enforceable against the Account Debtor in accordance with its terms.
All
signatures and endorsements appearing on the invoices and documents relating
to
the Accounts are genuine, and all signatories and endorsers have full capacity
and authority and were fully authorized to contract for the purchase or lease
of
the goods and/or services giving rise to the Account.
5.5.5. The
Account is not subject to any Dispute, defense, offset, counterclaim or any
allowance, deduction, contingency or condition.
5.5.6. The
Account is not on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, sale on approval, consignment or any other
repurchase or return basis.
5.5.7. To
the
best of your knowledge based on due inquiry,
the Account Debtor is not Insolvent.
5.5.8. The
sale
of the Account to us is accurately and properly entered and reflected on your
books and records.
6. COVENANTS
6.1.
Periodic
Reports.
Until
full and indefeasible payment of all of your Obligations hereunder, you will
furnish to us the following information regarding your operations and financial
condition from time to time as specified:
6.1.1. Within
twenty (20) days after the close of each month a balance sheet, income
statement, and cash flow statement and copies of all bank statements and
reconciliations each as of the last day of such month and year to
date.
6.1.2. Within
five (5) days after the close of each month, (a) an accounts payable aging
and
list and (b) an accounts receivable aging and list (whether or not such accounts
are Assigned Accounts), in each case as of the last day of such month, in such
form and containing such detail as we may reasonably require.
6.1.3. Copies
of
all receipts and other evidence of your payment of United States withholding,
FICA and applicable state and local payroll taxes, in each case as such payments
are made; and copies of any and all FICA and FUTA income tax withholding reports
when and as filed.
6.1.4. Within
sixty (60) days before the close of your fiscal year, a reasonable projection
(including assumptions) of your sales and net income and operating expenses
on a
monthly basis through the end of the next succeeding fiscal year.
6.1.5. Within
ninety (90) days following the close of your fiscal year, a balance sheet
and income statement as of the close of such fiscal year and for the year then
ended.
6.1.6. Copies
of
your federal income tax returns (together with all schedules) and extensions
requests, if any, when and as filed.
6.1.7. Such
additional financial information regarding your operations and financial
condition as we may require in our discretion from time to
time.
6.2. Standards.
All financial statements provided by
you
under
this Section 6 shall be prepared in accordance with generally accepted
accounting principles, consistently applied. You hereby represent and warrant
that any and all financial statements provided by you are and shall be true,
accurate and complete.
6.3. Field
Audits.
Upon
reasonable notice by us, you will permit any authorized representative
designated by us to visit your place or places of business during business
hours
and to inspect your books of account, records, correspondence and other
documents and to make copies thereof and extracts therefrom. You authorize
us to
discuss your affairs, finances and accounts with your employees, agents, and
independent certified public accountants or other parties preparing financial
statements and/or tax returns for you or on your behalf. Any such inspection
conducted after an Event of Default shall be at your sole cost and expense
and
you will reimburse us for such costs and expenses on demand.
6.4. Recordkeeping.
You
will maintain all shipping documents, delivery receipts and invoices relating
to
your Accounts available for inspection and copying by us, and you will deliver
them to us promptly upon our request. Each sale of Accounts will be reflected
as
a sale on your books and financial statements in accordance with generally
accepted accounting principles.
6.5 Other
Covenants. Until full and indefeasible payment of all of your Obligations
hereunder:
6.5.1.
You shall:
6.5.1.1. Maintain
insurance with responsible and reputable insurance companies or associations
in
such amounts and covering such risks as is consistent with past practice and/or
as is usually carried by companies engaged in similar businesses in the same
general areas in which you operate;
6.5.1.2. Maintain
and preserve of your assets and properties, real and personal, in good working
order and condition, ordinary wear and tear excepted;
6.5.1.3.
Preserve and maintain your corporate existence and good standing, rights,
franchises and privileges under applicable law;
6.5.1.4.
Pay and discharge before the same shall become delinquent (i) all taxes,
assessments and governmental charges or levies imposed upon you or your
property, and (ii) all lawful claims which, if unpaid, might by operation of
law
or otherwise become a lien upon your property;
6.5.1.5.
Maintain yourself in good standing with any and all federal and state licensing
and regulatory authorities and governmental agencies having jurisdiction over
your activities; and
4
6.5.1.6.
Comply fully with all laws, rules, regulations, and executive orders of federal,
state and municipal governments, bureaus, commissions, agencies or any of them
applicable to you or your assets or properties.
6.5.2.
Without our prior written consent, which consent may be withheld in our sole
and
absolute discretion, you shall not:
6.5.2.1.
Permit or consent to the creation or incurrence by you of any indebtedness
or
obligation for borrowed money, other than to us pursuant to this
Agreement;
6.5.2.2.
Make any material change in the nature of your business;
6.5.2.3.
Merge or consolidate with any other firm or corporation; or
6.5.2.4.
Grant, create, incur or suffer or permit to exist any mortgage, pledge, security
interest in or lien upon, or for any other purpose assign or transfer, either
absolutely or as collateral security, any of the Collateral except to or in
favor of us pursuant to this Agreement or as we may otherwise agree in
writing.
7. SECURITY
AGREEMENT
7.1.
Grant
of Security Interest; Collateral Defined.
To
secure payment and performance of (i) all of your obligations under this
Agreement, including, without limitation, repurchase and indemnity obligations
and obligations for costs and expenses, and (ii) any and all of your other
obligations, liabilities, covenants, duties and indebtedness to us, whether
now
existing or hereafter incurred or arising, by reason of any extension of credit,
opening of a letter of credit, acceptance, or loan by us, any guaranty by you
of
the obligations of any affiliate or other third party, or otherwise
(collectively, your “Obligations”), you hereby pledge, assign
and grant to us a continuing lien and security interest in the following
property, both now owned and existing and hereafter created, acquired and
arising, regardless of where located (collectively, the
“Collateral”):
7.1.1.
All of your accounts, whether or not accepted by us or specifically sold to
us;
7.1.2.
All of your goods, including but not limited to inventory and
equipment;
7.1.3.
All of your general intangibles, chattel paper, commercial tort claims, deposit
accounts, documents, instruments, investment properly, letter-of-credit rights,
letter of credit, and money;
7.1.4.
All cash and non-cash proceeds and products of any of the foregoing, including
any claim against third parties in any way related to the
foregoing;
7.1.5.
All rights which you now have or hereafter may have to the payment of money
not
otherwise included in the foregoing, including without limitation tax refunds
and proceeds of insurance of every kind and description; and
7.1.6.
All books and records relating to any of the foregoing, including but not
limited to hard drives, compact disks, floppy disks, and/or other digital
storage media comprising such in whole or in part.
7.2.
Financing
Statements.
Pursuant to Section 9-502 of the UCC, you hereby authorize us to file such
financing statements (including amendments thereto and continuation statements
thereof) as we may reasonably require in order to perfect our security interest
in the Collateral
7.3.
Defined
Terms.
As used
in this Section, uncapitalized terms describing categories of Collateral shall
have the meaning, if any, respectively ascribed to such terms under the
UCC.
8.
TERM AND TERMINATION
8.1.
Expiration
and Renewal.
This
Agreement shall expire on the first anniversary of the date of the first above
written. Unless terminated in accordance with Paragraph 8.2, this Agreement
shall automatically renew for successive one (1) year periods without the
necessity of any further notice or action on the part of site party hereto.
(The
period of effectiveness of this Agreement is sometimes referred to herein as
the
“Term.”)
8.2.
Termination.
8.2.1.
Subject to Paragraph 2.6, you may terminate this Agreement by written notice
to
us not less than sixty (60) days prior to the effective date of termination
stipulated in such notice.
8.2.2.
We
may terminate this Agreement (i) at any time for our convenience by written
notes to you upon not less than ten (10) days prior to the effective date of
termination stipulated in such notice or (ii) immediately upon written or oral
notice to you upon the occurrence of an Event of Default.
8.3.
Survival
of Terms.
Notwithstanding the foregoing, the provisions of this Agreement and all of
our
rights and interests hereunder shall survive any termination pursuant to
Paragraph 8.2 and shall continue in full force and effect until all Assigned
Accounts and all of your Obligations hereunder have been paid fully paid and
performed.
8.4
Termination
Statement.
At any
time after later of (i) the effective date of the termination of this Agreement
or (ii) the date on which all Assigned Accounts and all of your Obligations
hereunder have been paid fully paid and performed, you may request and we will
deliver to you UCC termination statements with respect to any and all recorded
financing statements covering the Collateral then in our favor, provided
such
request is in writing and accompanied by a written general release by you in
our
favor in form and substance satisfactory to us and our counsel. To the maximum
extent permitted by law, you hereby waive any and all statutory rights under
Section 9-513 of the UCC to require us to deliver UCC termination statements
in
respect of the Collateral unless and until the conditions of this section have
been satisfied.
9.
DEFAULT AND REMEDIES
9.1.
Events
of Default.
As used
in this Agreement, “Event of Default” means any of the
following:
9.1.1.
Any material breach by you of any term, covenant, condition, representation
or
warranty under this Agreement.
9.1.2.
Without limiting the generality of the foregoing, the existence of unresolved
Disputes or any breach or breaches of your representations, warranties or
covenants under this Agreement affecting or with respect to Assigned Accounts
which, in the aggregate, constitute or exceed twenty-five percent (25%) (the
“Default
Percentage”),
by
face value or number, of all then outstanding Assigned Accounts.
9.1.3.
The accumulation of Late Accounts (whether or not then outstanding) since the
commencement of the Term which in the aggregate constitute or exceed, by face
value or number, the Default Percentage of all Assigned Accounts since the
inception of the Term.
5
9.1.4.
Any failure by you to pay or reimburse us, as the case may be, any monetary
amount to which we are entitled hereunder as and when the same shall become
due.
9.1.5.
Any material adverse change in your management, financial condition or business
prospects or those of any guarantor of your Obligations.
9.1.6.
The discontinuance or suspension of your present business
operation.
9.1.7.
Your becoming insolvent or unable, to meet your debts as they mature, or the
commencement against you of any proceeding for relief under any provision of
any
federal or state bankruptcy, insolvency or other similar law, or the filing
or issuance against you of any injunction, attachment, judgment or lien on
any
of your property, or the appointment of a receiver, custodian or trustee of
any
kind for you or any of your property.
9.1.8.
Any act of theft, embezzlement, fraud, conversion, misappropriation of funds
or
other willful act of dishonesty in connection with this Agreement by you or
any
of your directors, officers, employees, agents or representatives.
9.2.
Remedies. In addition to any other remedies available to us under
this Agreement or applicable law,
upon
and
after the occurrence of an Event of Default:
9.2.1.
We
will have the right to enforce against you immediate payment of all of your
Obligations.
9.2.2.
With respect to the Collateral, we will have and may exercise all of the rights
of a secured party under the UCC.
9.2.3.
You hereby authorize and empower any attorney designated by us or any clerk
of
any court of record to appear for you in any court of record and confess
judgment against you without prior hearing, in favor of us for and in the amount
of your Obligations then outstanding plus costs of suit and attorneys’ fees in
an amount equal to 10% of the Obligations then outstanding. Such authority
and
power may be exercised on one or more occasions, from time to time, in the
same
or different jurisdictions, as often as we shall deem necessary or desirable,
for all of which this Agreement shall be a sufficient warrant.
9.2.4.
We
may notify the postal authorities to change the address for delivery of your
mail to such address as we may designate and shall have the right to receive,
open, and maintain in our custody any and all of your mail thereafter; provided,
however, that we will turn over to you any mail not related directly or
indirectly to the enforcement of our remedies hereunder.
9.3.
Remedies
Cumulative.
Each right, power and remedy provided for herein or otherwise existing shall
be
cumulative and concurrent
and shall be in addition to every other right, power and remedy existing
hereunder, by law or otherwise. The exercise by us of any one or more such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by us
of any
or all such other rights, powers or remedies,
10.
ARBITRATION
Any
claim
or demand arising out of any alleged breach of this Agreement or arising out
of
any dispute or controversy under or relating to this Agreement in which the
amount in controversy is $100,000 or less, other than any confession of judgment
proceeding pursuant to Subparagraph 9.2.3. shall be decided by a single
arbitrator under the Rules of the American Arbitration Association. The
prevailing party, as determined by the arbitrator, shall be awarded reasonable
attorneys’ fees and costs (including all arbitration fees and expenses of the
arbitrator) incurred by that party in connection with the arbitration and any
post-arbitration proceedings to enforce the award or otherwise. The award
rendered by the arbitrator shall be final and binding on both of us and judgment
on such award may be entered by either party in any court of competent
jurisdiction. The arbitration provisions hereof shall, with respect to such
controversy or dispute, survive the termination of this Agreement. Nothing
herein contained shall be deemed to give the arbitrator any authority, power,
or
right to alter, change, amend, modify, add to, or subtract from any of the
provisions of this Agreement.
11.
MISCELLANEOUS
11.1.
Notices. Notices shall be deemed given to a party when sent or dispatched
to such party by certified or registered mail or private overnight express
mail,
postage or charges prepaid, or by facsimile copy, at the address of such party
set forth below its signature hereto, or to such other notice address as a
party
may designate by written notice to the other party.
11.2.
Binding Effect. This Agreement will bind you and your successors and
assigns, and will inure to the benefit of us and our successors and
assigns.
11.3.
No Assignment. You may not assign or transfer any of your rights or
obligations under this Agreement without our prior written consent, which
consent may be withheld by us in our sole and absolute discretion. Any
assignment or transfer prohibited by this paragraph shall be null and
void.
11.4.
Complete
Agreement.
This
Agreement constitutes all of the amendments to the Existing Agreement intended
by the parties. In the event of any conflict between the terms of this
Agreement and
the
terms
of the Existing Agreement, the terms of this Agreement shall govern. This
Agreement may be amended or modified only by a written instrument signed by
both
parties.
11.5.
No
Waiver.
No delay
or failure by us in exercising any of our rights or remedies shall operate
as a
waiver of such or of any other right or remedy, and no waiver shall be valid
unless in writing signed by us and then only to the extent therein set
forth.
11.6.
Governing
Law, Etc.
This
Agreement shall be deemed to have been made in the State of Maryland and shall
be construed and enforced in accordance with, and the validity and performance
hereof shall be governed by, the laws of the State of Maryland, without regard
to conflict of laws principles.
11.7.
Venue
and
Jurisdiction. Any judicial or arbitral proceeding arising out of or relating
to this Agreement shall be brought and adjudicated (a) in the case of any
Original Claim made by you against us, solely in Baltimore, Maryland, and (b)
in
the case of any Original Claim made by us against you, in Baltimore, Maryland,
or, at our sole and exclusive option, anywhere within the jurisdiction where
you
are domiciled or have your principal place of business. As used in this
Paragraph, “Original Claim” means the first formally commenced
proceeding in connection with a matter or series of related matters, it being
understood and agreed that any subsequently asserted claim, defense or
counterclaim arising out of or relating to such matter or matters shall be
subject to the same venue as the Original Claim. For purposes of any judicial
proceeding under this Agreement, you hereby irrevocably consent, submit, and
waive any and all objections to the personal jurisdiction of the state and
federal courts of the State of Maryland over you and your
affiliates.
11.8.
Further Assurances. Each of us shall do, take, execute, acknowledge if
required and deliver such further and additional acts, actions, documents,
instruments or writings not specifically referred to herein as may be necessary,
required, proper, desirable or convenient for the purpose of fully effectuating
the provisions hereof.
6
11.9.
Construction.
This
Agreement has been negotiated by the parties and shall be construed and
interpreted fairly in accordance with its terms and without any strict
construction in favor of or against either party.
11.10. WAIVER
OF JURY TRIAL.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 10, ANY SUIT, ACTION
OR
PROCEEDING,
WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY EITHER PARTY HERETO
OR
ANY SUCCESSOR OR ASSIGN OF ANY PARTY UNDER OR WITH RESPECT TO THIS AGREEMENT
OR
WHICH IN ANY WAY RELATES, DIRECTLY OR INDIRECTLY, TO THIS AGREEMENT OR ANY
EVENT, TRANSACTION OR OCCURRENCE ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS AGREEMENT, OR THE DEALINGS OF THE PARTIES WITH RESPECT THERETO, SHALL
BE
TRIED ONLY BY A COURT AND NOT BY A JURY. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as
of the day and year first above written.
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PLATINUM
IT CONSULTING, INC.
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ROCKLAND CREDIT FINANCE LLC | |||||||
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By
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(SEAL)
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By |
 (SEAL) |
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[notarized
signature or authorized officer]
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| Name: |
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Print
Name: ▇▇▇▇▇ Tuzzle
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Title: |
President
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Title:
President
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Phone
#: ▇▇▇-▇▇▇-▇▇▇▇
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▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Fax
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Fax
#: ▇▇▇-▇▇▇-▇▇▇▇
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Taxpayer
I.D.#: __________________
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| State of _____________) | ||||||||
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)
TO WIT:
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County
of ___________)
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I
HEREBY
CERTIFY, that on this _____ day of _________________, 2006, before me, a Notary
Public of said State, personally appeared _______________________, as
______________________ and on behalf of Platinum IT Consulting, Inc. known
to me
(or satisfactorily proven) to be the person whose name is subscribed to the
foregoing instrument and acknowledged that he/she executed the same for the
purposes therein contained.
WITNESS
my hand and Notarial Seal.
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Notary
Public
My
Commission Expires:
7
EXHIBIT
A
TO
AMENDED AND RESTATED ACCOUNTS RECEIVABLE PURCHASE AND SECURITY
AGREEMENT
FORM
OF ASSIGNMENT
See
attached.
8
ASSIGNMENT
NO. _____
ASSIGNMENT
AND TRANSFER OF ACCOUNTS RECEIVABLE
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ASSIGNOR:
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ASSIGNEE:
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PLATINUM
IT CONSULTING, INC.
▇▇▇
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▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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ROCKLAND
CREDIT FINANCE LLC
▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
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1. Assignment
of Accounts.
Pursuant to and subject to the terms and conditions of that certain Amended
and
Restated Accounts Receivable Purchase and Security Agreement (the
“Factoring Agreement”), Assignor hereby sells, assigns and
transfers to Assignee all of its right, title and interest in and to the
Accounts arising from the invoices identified in Schedule
A.
2. Advance
Payment:
Assignor hereby acknowledges and confirms the payment by Assignee and the
receipt by Assignor of the Advance Payment shown on Schedule
A.
3. Representations
and Warranties.
Assignor hereby confirms, represents and warrants to Assignee that all
representations and warranties made by Assignor to Assignee in the Factoring
Agreement are true and correct in all respects on Effective Date of this
Assignment and that no Default
exists
under the Factoring Agreement on Effective Date.
4. Effective
Date.
The
effective date of the transfer of the Assigned accounts pursuant to this
Assignment (the “Effective Date”) shall be the date set forth
below as the effective date of Assignee’s acceptance,
5. Defined
Terms.
Capitalized terms used herein and not defined herein shall have the respective
meanings ascribed to such terms in the Factoring Agreement.
IN
WITNESS WHEREOF, the parties have executed this Assignment intending to be
legally bound as of the Effective Date.
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PLATINUM
IT CONSULTING, INC.
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ROCKLAND
CREDIT FINANCE LLC
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By
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By
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[signature
of authorized officer]
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Name:
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▇▇▇▇
▇▇▇
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Print
Name: ▇▇▇▇▇
TUZZLE
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Title:
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President
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Title: President
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Effective
Date of Acceptance : 3/7/06
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1
SCHEDULE
A
TO
ASSIGNMENT AND TRANSFER OF ACCOUNTS RECEIVABLE
Assignor:
PLATINUM IT CONSULTING, INC.
Assignment
#: ______________________
Effective
Date: _____________________
ASSIGNED
ACCOUNTS
The
Account(s) identified below and on the invoices, contracts and/or other evidence
thereof attached hereto, if any, is/are being sold, assigned and transferred
by
Assignor to ROCKLAND CREDIT FINANCE LLC pursuant to the foregoing
Assignment.
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ACCOUNT
DEBTOR
(CUSTOMER)
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INVOICE
NO.
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INVOICE
DATE
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P.O./CONTRACT
NO.
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NET
FACE
AMOUNT
($)
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TERMS
OF
SALE
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(A)
TOTAL AMOUNT OF THIS ASSIGNMENT:
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$
_____________
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(B)
ADVANCE RATE: ______%
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(C)
TOTAL ADVANCE REQUESTED (LINE A X LINE B):
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$
_____________
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2