Recitals
WHEREAS, Purchaser and Seller intend to accomplish a true sale of Accounts under this Agreement. In that sale, Purchaser will receive all right, title, and interest of Seller in the Accounts, and, subject to the terms of the Agreement, Purchaser will assume the risk that Purchaser will not collect the Account from the Account Debtor due solely to Insolvency of the Account Debtor;
NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. The following terms used herein shall have the following meaning. All capitalized terms used herein and not defined shall have that meaning set forth in the Uniform Commercial Code.
2.1 “Accounts” – all contract rights, documents, notes, instruments and all other forms of obligations owed to or owned by Seller, all general intangibles relating thereto, all proceeds thereof, all guaranties, supporting obligations and security therefore, and all goods and rights represented thereby and arising therefrom, including, but not limited to, returned, reclaimed and repossessed goods and the rights of stoppage in transit, replevin and reclamation.
2.2 “Avoidance Claim” – means the assertion, complaint, judgment or otherwise against Purchaser, any payment Purchaser received with respect to any Account, whether the amount related thereto was paid by the Account Debtor, the Seller, on behalf of Seller or for its benefit, or any lien granted to Purchaser is avoidable (or recoverable from Purchaser) under the Bankruptcy Code, any other debtor relief statute, including, but not limited to, preference claims, fraudulent transfer claims, or through receivership, assignment for the benefit of creditors or any equivalent recovery law, rule or regulation which relates to the adjustment of debtor and creditor relations.
- “Closed” – an Account will be considered Closed at the end of the day (i) on which the Account is paid in full, (ii) on which Purchaser charges the Account back to Seller pursuant to Section 3.6, or (iii) on which the Open Non-Recourse Account is closed out on Purchaser’s ledger pursuant to Section 3.7.
2.4 “Collateral” – all of Seller’s now owned or hereafter acquired Accounts, Equipment, Inventory, Goods, Financial Assets, Chattel Paper, Electronic Chattel Paper, Letters of Credit, Letter of Credit Rights, General Intangibles, Investment Property, Deposit Accounts, Instruments, the Reserve, Commercial Tort Claims, Supporting Obligations, Carrier Liens, all books, records, files and computer data related to the foregoing, and all proceeds of the foregoing.
2.5 “Credit Approved Account” – shall mean any Eligible Account for which Purchaser has given its prior written approval of the credit standing of the Account Debtor and the terms of the sale of the goods or services, and Purchaser has not withdrawn such approval.
2.6 “Discount Fee” – shall mean a one-time factoring fee calculated as a percentage of the Gross Invoice Amount of an Account. The percentage is set at the Factoring Rate, and this Discount Fee accrues, one-time, at the time that Purchaser purchases the Account.
2.7 “Double Brokered” – An Account and corresponding invoice presented to Purchaser that was accepted by Seller from an Account Debtor under the assumption that Seller will provide the service under its own authority, and Seller subsequently re-brokers or sub-contracts the service to another carrier or broker.
2.8 “Dispute” – any dispute, deduction, claim, offset, defense or counterclaim of any kind whatsoever, regardless of whether the same is in an amount greater than, equal to or less than the Account concerned, regardless of whether the same is valid or bona fide, regardless of whether the same in whole or in part relates to the Account on which payment is being withheld or other Accounts or goods or services already paid for, and regardless of whether the same arises by reason of an act of God, civil strife, war, currency restriction, foreign political restriction or regulation, or the like, or any other reason.
2.9 “Eligible Account” – an Account which is acceptable for purchase as determined by Purchaser, in its sole discretion.
2.10 Factoring Rate” – the Discount Fee rate that Seller elects in Decipher.
2.11 “Invalid Invoice Fee” – ten percent (10%) of the Gross Invoice Amount of any purchased Account as liquidated damages for failure to comply with Section 5.1(a) herein.
2.12 “Insolvent” or “Insolvency” – shall mean the initiation of any proceeding by or against the Account Debtor under the United States Bankruptcy Code or any other debtor relief statute, the initiation of an assignment for the benefit of creditors with respect to an Account Debtor, or the failure of an Account Debtor to pay any Credit Approved Account solely due to the financial inability to pay. The burden of proof as to the Insolvency of an Account Debtor shall rest solely on the Seller, with it being presumed that at all relevant times an Account Debtor is not Insolvent.
2.13 “Late Payment Fee” – shall mean an additional factoring fee calculated as a percentage of the Gross Invoice Amount of an Account. The percentage is set, outlined in your factoring agreement, based on the Factoring Rate and the stated time intervals at which the Account remains Open. The Late Payment Fee accrues, outlined in your factoring agreement, one-time, at the beginning of the day that starts each of the time intervals at which the Account remains Open.
2.14 “Maximum Factoring Advances Percentage” – shall mean, as of the date of determination by Purchaser, in its sole discretion, an amount up to the percentage set forth in the Application of the Purchase Price of all outstanding Accounts purchased from Seller by Purchaser.
2.15 “Minimum Monthly Discount Fee” — shall be the average Discount Fees earned in the three months with the highest total Discount Fees during either the Original Term or any Renewal Term, as of the date calculated.
2.16 “Missing Notation Fee” – ten percent (10%) of the Gross Invoice Amount of any purchased Account as liquidated damages for failure to comply with Section 3.8.
2.17 “Misdirected Payment Fee” – ten percent (10%) of the amount of any payment on account of a purchased Account which has been received by Seller and not delivered to Purchaser on the business day following receipt by Seller.
2.18 “Obligations” – shall mean and include each and all of the following: the obligation to pay and perform when due all debts and all obligations, liabilities, covenants, agreements, guaranties, warranties and representations of Seller to Purchaser, of any and every kind and nature, whether heretofore, now or hereafter owing, arising, due or payable from Seller to Purchaser howsoever created, incurred, acquired, arising or evidenced; whether primary, secondary, direct, absolute, contingent, fixed, secured, unsecured, or otherwise; whether as principal or guarantor; liquidated or unliquidated; certain or uncertain; determined or undetermined; due or to become due; as a result of present or future advances or otherwise; joint or individual; pursuant to or caused by Seller’s breach of this Agreement or any other present or future agreement or instrument, or created by operation of law or otherwise; evidenced by a written instrument or oral; created directly between Purchaser or owed by Seller to a third party and acquired by Purchaser from a third party; monetary or nonmonetary.
2.19 “Open” – shall mean an Account that is not Closed.
2.20 “Reserve” – a bookkeeping account on the books of Purchaser representing an unpaid portion of the Purchase Price, maintained by Purchaser to ensure Seller’s performance with the provisions hereof.
2.21 “Shadow Tender” – An Account and corresponding invoice presented to Purchaser that was a load accepted by Seller from an Account Debtor under the assumption that Seller will provide the service, but Seller tenders the load to another motor carrier improperly leased on and in contravention of the requirements set forth in 49 C.F.R. 376, et. seq.
3.1 Sale of Accounts. Seller shall present to Purchaser Eligible Accounts for purchase pursuant to this Agreement in a form acceptable to Purchaser in Purchaser’s sole discretion. For each Eligible Account, Seller shall present to Purchaser at the time of purchase all supporting bills of lading, receiving documents, shipping receipts, shipper contracts, rate confirmations, lumper receipts, receiver stickers, manifests, instruments and such other documents that Purchaser may require evidencing the Accounts. Seller agrees that it will do all of its business through Purchaser as Seller’s sole factor and Seller hereby assigns and sells to Purchaser, as absolute owner, all Accounts. Purchaser shall be under no obligation to purchase Seller’s Accounts and shall only purchase Eligible Accounts.
3.2 Purchase Price of Accounts. The Purchase Price of each Eligible Account accepted by Purchaser shall be the gross face amount of the Account (the “Gross Invoice Amount”) less all credits, discounts and allowances, granted to, or claimed by, the Account Debtor and disclosed to Purchaser prior to Purchaser’s purchase of the Eligible Account.
3.3 Factoring Fees. Purchaser shall charge Seller the Discount Fees and any Late Payment Fees for each Account purchased under this Agreement. All factoring fees under this Agreement shall be computed on the Gross Invoice Amount of each Account purchased under this Agreement. Factoring fees shall accrue for each Account purchased under this Agreement until the Account is Closed.
3.4 Reserve. Purchaser shall charge and retain an amount equal to the inverse of the Maximum Factoring Advances Percentage, which amount shall be held as the Reserve. Purchaser may, from time to time, at its sole discretion, charge the aggregate Reserve with: (a) any Account that Purchaser may require that Seller repurchase under this Agreement, and related losses; (b) anticipated fees identified and payable under this Agreement; or (c) any other obligation due to Purchaser under this Agreement. Purchaser agrees to maintain the Reserve mentioned herein, the maintenance of which, however, shall not vest the Seller any right, title, or interest therein, it being understood that the amounts held as the Reserve shall be kept as a reserve to pay the Obligations of the Seller incurred under the provisions of this Agreement. Provided that there is no Event of Default, Purchaser, in its sole discretion, may initiate rebates to Seller from the Reserve. Purchaser, in its sole discretion, may adjust the percentage of the Reserve.
3.5 Credit Risk. Purchaser shall assume the risk of nonpayment with respect to Credit Approved Accounts if and only if: (a) nonpayment is due solely to Insolvency of the Account Debtor; (b) the Account Debtor has, at maturity and thereafter, received and finally accepted the goods or services giving rise to the Account, and there is no Dispute; (c) all of Seller’s representations and warranties with respect to the Account are true and correct at all times; and (d) there is no Event of Default under this Agreement. If any of the foregoing conditions is not met as to any Account, Purchaser will not assume the risk of nonpayment of the Account, and Purchaser shall have full recourse to Seller in the event the Account is not paid in full when it is due. Purchaser shall have the right to withdraw its approval of the credit standing of any Account Debtor or of the amount or terms of any sale, at any time before actual delivery of the goods or rendition of the services. Purchaser shall not be liable in any manner or respect for refusing to give any such approval or for so withdrawing any such approval and may do so for any reason. Without limiting the foregoing, Purchaser’s approval shall automatically be withdrawn if any terms are changed or if delivery of goods or rendition of services is made more than 30 days after the approved delivery date, or more than 30 days after the date of approval if no delivery date is specified. If the amount of any sale is increased without Purchaser’s prior written consent, Purchaser’s approval shall only apply to the original amount approved.
3.6 Repurchase Rights. Purchaser may require that Seller immediately repurchase, by payment of the then unpaid face amount of any purchased Account, together with any unpaid fees and other amounts owed relating to the purchased Account on demand, or at Purchaser’s option, by Purchaser’s charge to the Reserve, upon the following events: (a) the breach of any of the representations, warranties, covenants, or promises in this Agreement with regard to an unpaid Account; (b) the occurrence of a Dispute of any kind, regardless of validity; (c) the Account Debtor’s assertion of a claim of loss of any kind against Seller and/or Purchaser; (d) when the Credit Approved Account is not paid 90 days after such Account is purchased for any reason whatsoever other than the Insolvency of the Account Debtor, or if any Account as to which Purchaser has not assumed the risk of nonpayment is unpaid at its maturity; (e) the Seller fails to deliver to Purchaser any supporting bills of lading, receiving documents, shipping receipts, shipper contracts, rate confirmations, lumper receipts, receiver stickers, manifests, instruments or such other documents that Purchaser may require evidencing the purchased Account; and (f) when any of the other conditions for Purchaser’s assumption of the risk of an Insolvency of the Account Debtor under this Agreement is not satisfied.
3.7 Closure of Non-Recourse Account. Purchaser shall close on Purchaser’s ledger any Open Credit Approved Account that is fully in compliance with subparagraphs (a) through (d), inclusive, of Section 3.5 above, as of the earliest of the following dates:
(a) the date that a proceeding or petition is filed by or against the Account Debtor under any state or federal bankruptcy or insolvency law or that an assignee for benefit of creditors or a trustee is appointed for the Account Debtor; or
(b) if not sooner Closed, the end of the day that is 90 days past the invoice date on any Credit Approved Account, if such Credit Approved Account remains unpaid by the Account Debtor due solely to an Insolvency of the Account Debtor as of said date.
Factoring fees that accrued on the Credit Approved Account, prior to the time that the Credit Approved Account is Closed, will not be refunded. Further, if, after a Credit Approved Account is Closed pursuant to this Section 3.7, it is determined that the Credit Approved Account is not in compliance with subparagraphs (a) through (d), inclusive, of Section 3.5 above, Purchaser may reopen the Credit Approved Account on Purchaser’s ledger, and such Account shall be subject to the provisions of Section 3.6 above.
3.8 Assignments and Other Documentation. All bills and invoices for all Accounts assigned to or purchased by Purchaser hereunder shall bear the following legend: “This account has been assigned to and is owned by and payable only to OpenRoad Financial Services Inc. at PO BOX 484, Dallas, OR 97338. Any objection to this invoice must be reported to Purchaser, at said address.” In the event that Seller sends to an Account Debtor any invoice evidencing a purchased Account, which does not contain such notation (or such other notation otherwise acceptable to Purchaser as provided for in this Section), it will be impracticable or extremely difficult to determine the resulting damages suffered by Purchaser. It is therefore agreed that Seller shall immediately pay to Purchaser as liquidated damages the Missing Notation Fee. This Section shall not be construed to create any liability on the part of Purchaser for any errors in affixing said notation to any bills or invoices generated by Purchaser on behalf of Seller. Seller shall immediately provide to Purchaser such additional information as requested by Purchaser relating to any Account.
3.9 Term of this Agreement; Minimum Monthly Discount Fee. This Agreement shall be in effect for the Original Term and shall automatically renew for consecutive Renewal Terms unless terminated by either party giving the other written notice not less than thirty (30) days prior to the end of the Original Term or any Renewal Term, which written notice shall clearly state its intention to terminate at the end of the current term. Purchaser may terminate this Agreement at any time after an Event of Default. As consideration for Purchaser making the necessary financial accommodations and foregoing other factoring opportunities available in the market place, Seller agrees to pay the Purchaser during the Original Term and for each Renewal Term, the Minimum Monthly Discount Fee. If, at the end of each monthly period, the Discount Fees paid by Seller is less than the Minimum Monthly Discount Fee, Purchaser may charge Seller with the amount of such deficiency. If Seller terminates this Agreement at any time prior to the expiration of the Original Term, or any subsequent Renewal Term, or if the Purchaser terminates this Agreement at any time upon the occurrence of an Event of Default, Seller shall remain obligated to pay the total of the Minimum Monthly Discount Fee for the time remaining for the Original Term or Renewal Term, as the case may be.
3.10 Invoice-Level Minimum Fee. Client agrees that each invoice factored under this Agreement may be subject to a minimum factoring fee. If the factoring fee calculated under the applicable rate structure is less than the minimum factoring fee, the minimum fee may apply. This minimum fee will be assessed on a per-invoice basis and is in addition to any other fees or charges set forth in this Agreement.
3.11 Seller’s Post-Termination Liability. After termination, Seller shall be liable to Purchaser for the full and prompt payment of the full amount of purchased Accounts, which are then outstanding and unpaid, disputed or undisputed, as well as any other then outstanding Obligation. Purchaser continues to have a security interest in the Collateral of Seller until all Obligations of Seller are paid in full.
3.12 Other Fees and Costs. Seller shall pay Purchaser all other fees and costs incurred hereunder immediately when due, including, but not limited to: any invoice fee, ACH Credit Transaction fee, WIRE fee, New Client Setup fee/ Origination Fee, check fee, fuel card vendor fees, $100 new address change fee, $50 bank change fee and, cover the UCC filing fee if Seller decides not to factor, if applicable, dispatching fee, with all of the foregoing at the rates or in the amounts as set forth in this Agreement or in Decipher.
Collateral, Grant of Security Interest, ACH Authorization; Online Access to Deposit Accounts.
4.1 Collateral. As security and collateral for the Obligations, Seller hereby grants Purchaser a continuing security interest in, and assigns to Purchaser, all of Seller’s right, title and interest in and to the Collateral.
4.2 Filing Authorization. Seller hereby authorizes Purchaser to file any document they deem necessary to perfect their security interest in the Collateral, including, but not limited to, financing statements and any applicable amendments or continuation statements.
4.3 ACH Authorization; Online Access to Deposit Accounts. In order to satisfy any of the Obligations and facilitate the purchase of Accounts, Purchaser is hereby authorized by Seller to initiate electronic debit or credit entries through the ACH Credit Transaction Fee. This authorization is irrevocable. In addition, to facilitate funding and the administration of this Agreement, at Purchaser’s request, Seller shall provide to Purchaser any and all login identifications and passwords required for online access to Deposit Accounts maintained by Seller. Purchaser is authorized to review Seller’s Deposit Accounts at any time, and Seller shall immediately notify Purchaser of any change in the login identifications or passwords for the Deposit Accounts.
4.4 [Reserved].
- Representations, Warranties and Covenants of Seller. To induce Purchaser to enter into this Agreement, Seller represents and warrants that each of the following representations and warranties now is and hereafter will continue to be true and correct in all respects and Seller has and will timely perform each of the following covenants:
5.1 Validity of Accounts. Seller represents, warrants and covenants, as to each Account sold and assigned hereunder that, (a) at the time of its creation and at the time it is assigned to Purchaser hereunder, the Account is a valid, bona fide account, representing an undisputed indebtedness incurred by the named Account Debtor for goods actually sold and delivered or for services completely rendered; (b) there are no setoffs, offsets or counterclaims, genuine or otherwise, against the Account; (c) the Account does not represent sale of goods or services provided to a parent, subsidiary or affiliate or a consignment, sale or return or a bill and hold transaction; (d) no agreement written, oral, or otherwise, exists permitting any deduction or discount (other than the discount stated on the invoice); (e) Seller is the lawful owner of the Account and has the right to sell and assign the same to Purchaser; (f) the Account is free of all security interests, liens and encumbrances other than those in Purchaser’s favor, (g) the Account is due and payable in accordance with its terms; and (h) without limiting the foregoing, Seller has not granted a security interest to a bank or any other creditor as to the Accounts and/or all of the “present and after acquired property” of the Seller. In the event that Seller breaches the warranty contained in Section 5.1(a), it will be impracticable or extremely difficult to determine the resulting damages suffered by Purchaser. It is, therefore, agreed that Seller shall immediately pay to Purchaser as liquidated damages the Invalid Invoice Fee for each purchased Account which violates the warranty contained in Section 5.1(a).
5.2 Liens. Seller shall not grant or permit or suffer to exist any lien upon or security interest in Seller’s current assets in favor of any party other than Purchaser without Purchaser’s written consent.
5.3 Solvency. Seller is a solvent entity in good standing under the laws of the state of its formation and qualified in all States where such qualification is required; the execution, delivery and performance of this Agreement has been duly authorized and is not in contravention of any applicable law, Seller’s corporate charter or by-laws, if applicable, or any agreement or order by which Seller is bound.
5.4 Corporate Name and Location. Seller shall not change its corporate name, company name, or trade name or the location of Seller’s office or open any new offices without giving Purchaser at least thirty (30) days prior written notice. At the present time, Seller represents, warrants and covenants that it only conducts business at the addresses listed herein.
5.5 Books and Records. All books and records pertaining to the Accounts or to any current assets owned by Seller shall be maintained solely and exclusively at the Seller’s address listed herein and no such books and records shall be moved or transferred without giving Purchaser thirty (30) days prior written notice.
5.6 No Sale of Property. Seller shall not sell, lease, transfer or otherwise dispose of all or substantially all of Seller’s property or assets or consolidate with or merge into or with any corporation or other entity without Purchaser’s prior written consent.
5.7 Trade Names. The trade names or styles set forth herein are the only trade names or styles under which Seller shall transact business; Accounts sold to Purchaser hereunder and represented by invoices bearing such trade names or styles are wholly owned by Seller; the undertaking, representations and warranties made in connection therewith shall be identical to and of the same force and effect as those made with respect to invoices bearing Seller’s corporate or business name; Seller’s use of any trade names or styles is in compliance with all laws regarding the use of such trade names or styles. Seller shall give Purchaser thirty (30) day’s prior written notice of the change of any trade name or style or Seller’s use of any new trade name or style.
5.8 No Discounts. No discounts, credits or allowances will be issued, granted or allowed by Seller to customers and no returns will be accepted without Purchaser’s prior written consent; provided, however, that until Purchaser notifies Seller to the contrary, Seller may presume Purchaser’s consent. Discounts, credits or allowances once issued may be claimed only by the customer.
5.9 Carrier. Seller is a motor carrier, who provides motor vehicle transportation for compensation; Seller is not a freight broker or person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier.
5.10 Complete Disclosure. There is no fact which Seller has not disclosed to Purchaser in writing which could materially adversely affect the properties, business or financial condition of Seller or any of the Collateral or which is necessary to disclose in order to keep the foregoing representations and warranties from being misleading.
5.11 No Double Brokering or Shadow Tendering. Seller will not knowingly accept to haul any load that has been Double Brokered or Shadow Tendered, nor will it attempt to Double Broker or Shadow Tender any load.
6.1 Duties Regarding Accounts.
- Seller shall, from time to time, execute and deliver to Purchaser confirmatory schedules of Accounts sold to Purchaser, together with the original of each invoice, acceptable evidence of shipment and such other documentation and proofs of delivery as Purchaser may require. Each invoice shall bear a notice, in form satisfactory to Purchaser, that it has been sold and assigned to and is payable only to Purchaser. Seller agrees to prepare all invoices, but Purchaser may do so at Purchaser’s option. Purchaser shall mail all invoices unless Purchaser decides, at its option, to permit Seller to mail invoices. Seller agrees to execute and deliver to Purchaser such further instruments of assignment, financing statements and instruments of further assurance as Purchaser may reasonably require. Seller hereby authorized Purchaser to execute on Seller’s behalf and file such Uniform Commercial Code (UCC) financing statements as Purchaser may deem necessary in order to perfect and maintain the security interests granted by Seller in accordance with this Agreement and any other agreement between Seller and Purchaser, and Seller further agrees that Purchaser may file this Agreement or a copy thereof as such UCC financing statement. Seller agrees to bear the cost of all filing fees, filing taxes, search reports, legal fees and other charges incurred by Purchaser in the perfection, protection and preservation of the rights and collateral security herein granted to Purchaser.
- If any remittances are made directly to Seller, Seller’s employees or agents or representatives, Seller shall act as trustee of an express trust for Purchaser’s benefit, hold the same as Purchaser’s property and deliver the same to Purchaser forthwith in kind. Failure to deliver misdirected payments in the form received within three (3) business days of receipt may, at the option of Purchaser, result in a ten percent (10%) charge on the amount of the misdirected payment. Purchaser and/or such designee of Purchaser may from time to time appoint or hereby appointed Seller’s attorney-in-fact to endorse Seller’s name on any and all checks or other forms of remittances received by Purchaser where such endorsement is required to effect collection and to transmit notices to customers, in Seller’s name or in Purchaser’s, that amounts owing by them have been assigned and are payable directly to Purchaser; this power, being coupled with an interest, is irrevocable.
- Purchaser may, at all times, have access to, inspect and make extracts from all of Seller’s records, files and books of account. Purchaser may, at any time after default by Seller hereunder, remove from Seller’s premises all such records, files and books relating to Accounts. Seller will promptly furnish Purchaser with all statements prepared by or for seller showing Seller’s financial condition and the results of Seller’s operations and such other statement as Purchaser may reasonably require. Seller authorized Purchaser to communicate directly with Seller’s independent certified public accountants, bookkeepers, or accountants, and shall authorize such persons to discuss Seller’s financial condition and statements directly with Purchaser.
6.2 [Reserved].
6.3. Monthly Statement. Purchaser shall render a monthly statement of account to Seller within twenty (20) days after the end of each month. Such statement of account shall constitute an account stated unless Seller makes written objection thereto within thirty (30) days from the date such statement is sent to Seller.
- Application of Payments. Checks, instruments and all other non-cash payments delivered to Purchaser in payment or on account of the Accounts or the Obligations constitute conditional payment only until such items are actually paid in cash to Purchaser. For the purpose of computing fees earned by Purchaser, credit therefore, and for bank wire transfers, shall be given up to three days after receipt by Purchaser. All payments made by or on behalf of, and all credits due to Seller, may be applied and reapplied in whole or in part to any of the Obligations to such extent and in such manner, as Purchaser shall determine in its sole discretion. Purchaser shall have the continuing exclusive right to apply and reapply any and all such payments in such manner as Purchaser shall determine in its sole discretion, notwithstanding any entry by Purchaser upon any of its books and records. Any payments received on any Account not factored by Purchaser shall be placed in the Reserve.
- Events of Default and Remedies.
8.1 Events of Default. The occurrence of any of the following acts or events shall constitute an Event of Default: (a) if Seller fails to make payment of any of the Obligations when due; (b) if Seller fails to make any remittance required by this Agreement; (c) if Seller commits any breach of any of the terms, representations, warranties, covenants, conditions or provisions of this Agreement, or of any present or future supplement or amendment hereto or of any other agreement between Seller and Purchaser; (d) if Seller becomes insolvent or unable to meet Seller’s debts as they mature; (e) if Seller delivers to Purchaser a false financial statement; (f) if Seller calls, or has called by a third party, a meeting of Seller’s creditors; (g) if Seller has commenced by or against Seller any bankruptcy proceeding, insolvency, arrangement or similar proceeding; (h) if Seller makes an assignment for the benefit of creditors; (i) if a receiver, receiver and manager, trustee or custodian is appointed in respect of Seller’s assets or any of them; (j) if Seller suspends or discontinues doing business for any reason; (k) if a receiver or trustee of any kind is appointed for Seller or any of Seller’s property; (l) if any guarantor of Seller’s Obligations shall become insolvent or have commenced by or against such guarantor any bankruptcy proceeding, insolvency, arrangement or similar proceeding; (m) if any guaranty of Seller’s obligations is terminated; (n) if any change of ownership occurs with respect to more than forty (40%) percent of Seller’s capital stock or similar equity interest; (o) if a notice of lien, levy or assessment is filed of record with respect to all or any of Seller’s assets by the United States or any department, agency or instrumentality thereof or by any state, county, municipal or other governmental agency; (p) if Seller presents an Account for purchase that has been Double Brokered or Shadow Tendered; (q) if Purchaser, in good faith, deems itself insecure with respect to the prospect of repayment or performance of the Obligations; or (r) if Seller restricts or removes Purchaser’s access to any electronic Account Debtor system or portal.
8.2 Remedies. Upon the occurrence of an Event of Default, Purchaser shall have the right to terminate this Agreement and all other arrangements existing between Seller and Purchaser forthwith and without notice, and the Obligations shall mature and become immediately due and payable, and Purchaser shall have the right to withhold any further payments to Seller until all Obligations have been paid in full. In addition, Purchaser shall have all of the rights of a secured party under the Uniform Commercial Code, including without limitation, the right to take possession of any collateral in which Purchaser has a security interest and to dispose of same at public or private sale and Seller will be liable for any deficiency. Purchaser shall not be required to proceed against any collateral but may proceed against Seller directly. In the event any action is brought to enforce, contest, challenge, modify or invalidate the terms of this Agreement, including, but not limited to, any lawsuit or arbitration, Seller agrees to pay Purchaser’s costs and reasonable attorney’s fees incurred therein.
9.1 Indemnity. Seller shall indemnify and hold Purchaser harmless from and against any and all claims, debts,
losses, demands, actions, causes of action, lawsuits, Avoidance Claims, damages, penalties, judgments, liabilities, costs and expenses (including, without limitation, attorneys’ fees), of any kind or nature which Purchaser may sustain or incur in connection with, or arising from, this Agreement, any other present or future agreement, or the breach by Seller of any representation, warranty, covenant or provision contained herein or therein, or any other transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered by Purchaser relating in any way to Seller. Notwithstanding any other provision of this Agreement to the contrary, the indemnity agreement set forth in this Section shall survive termination of this Agreement. If Seller fails to honor this Section of the Agreement after termination thereof, Purchaser shall have the right to re-file its UCC-1 financing statement and shall have the right to pursue any and all rights and remedies against Seller as contemplated by this Agreement, any law or in equity. Purchaser may, in its sole discretion, hold or supplement a Reserve to account for any Avoidance Claim.
9.2 Collection Agencies and Collection Affiliates. Seller shall forthwith pay to Purchaser or to the Collection Agency the amount of all actual collection agency fees and all other costs incurred by Purchaser under and pursuant to this Agreement, or any other present or future agreement, or in connection with any transaction, or with respect to the Collateral or the defense or enforcement of Purchaser’s interests. All collection agencies fees and costs to which Purchaser may be entitled pursuant to this Section shall immediately become part of Seller’s Obligations and shall be due on demand.
9.3 Attorneys’ Fees and Costs. Seller shall forthwith pay to Purchaser the amount of all actual attorneys’ fees and all other costs incurred by Purchaser under and pursuant to this Agreement, or any other present or future agreement, or in connection with any transaction, or with respect to the Collateral or the defense or enforcement of Purchaser’s interests (whether or not Purchaser files a lawsuit against Seller), including any proceedings in Bankruptcy Court. In the event Purchaser files any lawsuit predicated on a breach of this Agreement or is any way related to this Agreement, the Purchaser shall be entitled to recover its costs and attorneys’ fees, including, but not limited to, attorneys’ fees and costs incurred. All attorneys’ fees and costs to which Purchaser may be entitled pursuant to this Section shall immediately become part of Seller’s Obligations and shall be due on demand.
9.4 Prohibition Against Assignment. The provisions of this Agreement shall be binding upon and inure to the benefit of the respective successors, assigns, heirs, beneficiaries and representatives of the parties; however, that Seller may not assign or transfer any of its rights under this Agreement without the prior written consent of Purchaser, and any prohibited assignment shall be void. No consent by Purchaser to any assignment shall relieve Seller or any guarantor from its liability for the Obligations. Without limiting the generality of the foregoing, all rights and benefits of Purchaser under this Agreement may be exercised by any institution with which Purchaser maintains any rediscount, factoring or other relationship and by any other person or entity designated by Purchaser.
9.5 [Reserved].
9.6 No Lien Termination without Release. In recognition of the Purchaser’s right to have its attorneys’ fees and other expenses incurred in connection with this Agreement secured by Collateral, notwithstanding payment in full of all Obligations by Seller, Purchaser shall not be required to record any terminations or satisfactions of any of Purchaser’s liens on the Collateral unless and until Seller has executed and delivered to Purchaser a general release in a form suitable to Purchaser. Seller understands that this provision constitutes a waiver of its rights under in Section 9-513 of the UCC.
9.7 Amendment. The terms and provisions of this Agreement may not be waived, altered, modified or amended except in a writing executed by Seller and a duly authorized officer, employee, or agent of Purchaser.
9.8 Credit Reports. Seller authorizes Purchaser to obtain credit reports for Seller and all guarantors at any time, in Purchaser’s sole discretion.
9.9 Governing Law, Jurisdiction; Venue. This Agreement and all acts and transactions hereunder and thereunder and all rights and Obligations of Purchaser and Seller shall be governed, construed and interpreted in accordance with the internal laws of the State of Oregon. Seller: (i) agrees that all actions or proceedings relating directly or indirectly hereto shall, at the option of Purchaser, be litigated in courts located within said state, and, that, at the option of Purchaser, the exclusive venue therefore shall be Polk County, State of Oregon; (ii) consents to the jurisdiction and venue of any such court and consents to service of process in any such action or proceeding by personal delivery or any other method permitted by law; and (iii) waives any and all rights Seller may have to object to the jurisdiction of any such court, or to transfer or change the venue of any such action or proceeding.
9.10 Waiver of Right to Jury Trial. PURCHASER AND SELLER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL IN ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN PURCHASER AND SELLER, AND ANY CONDUCT, ACTS OR OMISSIONS OF PURCHASER OR SELLER OR ANY OF THEIR DIRECTORS, MEMBERS, PARTNERS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH PURCHASER OR SELLER. PURCHASER AND SELLER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. PURCHASER AND SELLER FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
- Arbitration, if jury waiver unenforceable. If (but only if) a state or federal court determines for any reason that the jury trial waiver in this Agreement is not enforceable with respect to a dispute between the Parties, then any party hereto may require that said dispute be resolved by binding arbitration pursuant to this Section. The Parties realize that by agreeing to arbitrate such dispute, the Parties have waived their rights to trial by jury, as well as other rights that the party would have in court that are not available or are more limited in arbitration, such as the rights to discovery and to appeal. This agreement to submit to arbitration is presently effective but shall be enforced only in the event that the jury trial waiver in this Agreement is held unenforceable.
- The arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules, which arbitration shall take place in Polk County, State of Oregon.
- The arbitration shall be administered by a retired Judge or Justice selected by mutual written agreement of the parties. The rules of evidence applicable to proceedings at law in the State of Oregon will be applicable to the arbitration, and the arbitrator is at all times required to strictly conform to these rules. The arbitrator shall prepare in writing and provide to the parties an award including factual findings explaining the reasons on which their decision is based. Judgment on the award rendered by the arbitrator(s) may be entered in any court in Polk County, State of Oregon.
- Seller and Purchaser further agree that the filing of any law and motion hearings or the initiation of any hearings to obtain any form of a pre-judgment remedy shall not operate as a waiver of the parties right to submit and settle any dispute, controversy or claim arising out of relating to this agreement to arbitration. In furtherance of the foregoing, Purchaser shall be entitled to institute suit in order to obtain provisional relief in the form of prejudgment remedies, including, replevin, garnishment, attachment or the like without being held to have waived its right to compel arbitration on all remaining issues and, in such event, any claim that Seller may wish to assert shall be subject to arbitration.
- The arbitrator(s) shall not have the power to commit (a) errors of law or legal reasoning, (b) errors of fact, or (c) errors with regards to mixed questions of law and fact. In addition, the arbitrator(s) shall not reach factual conclusions unsupported by substantial evidence. Furthermore, the arbitrator(s) shall not have the power to render an award (a) not based on proper admissible evidence, (b) based on evidence not presented at the hearing, or (c) not in conformity with the substantive and procedural law of the State of Oregon.
- In any arbitration, arising out of or relating to this Agreement, the Obligations or any of the transactions contemplated hereby or thereby or the Seller or Purchaser’s actions in the negotiation, administration, or enforcement hereof or thereof, the arbitrator is not empowered to award punitive or exemplary damages and the parties waive any right to recover any such damages.
- If the arbitrator(s) exceed(s) any of the foregoing specific powers, the award may be vacated or corrected by filing a petition in state court for the State of Oregon. The award is subject to review for legal error, factual error, confirmation, correction or vacatur only in a state court of competent jurisdiction in Polk County, State of Oregon.
- In reviewing the award, the state court shall sit as if it were an appellate court, in all respects, including but not limited to the scope of review. The decision of the state court is, itself, subject to review by the appellate courts of the State of Oregon. The court shall have the power to review (a) whether the findings of fact rendered by the arbitrator(s) is/are supported by substantial evidence and (b) whether, as a matter of law based on such findings of fact the award should be confirmed, corrected or vacated. Upon such determination, judgment shall be entered in favor of either Party consistent therewith.
- If any portion of this arbitration provision is held invalid or unenforceable, the remainder shall still be valid and enforceable. The arbitrator(s) and/or supervising court shall both have the power to amend the arbitration procedures set forth herein so this agreement shall remain enforceable and binding.
- The parties each acknowledge that the arbitrator(s) will charge fees and costs to conduct the arbitration. The parties each agree to initially divide equally all arbitration fees and the compensation of the arbitrator(s). Notwithstanding the foregoing, the parties each further acknowledge that the arbitrator(s) may decide that one Party or the other is the prevailing Party in which event the non-prevailing Party will be obligated to reimburse the prevailing Party for all of the fees and costs imposed in connection with the arbitration.
503-687-2787 