EXHIBIT 10.01
ACCOUNT TRANSFER AGREEMENT
This Account Transfer Agreement (this "Agreement") is dated this [20th] day
of November, 2007, and is between Xxxxx Fargo Bank, National Association through
its Xxxxx Fargo Business Credit operating division ("WFBC") and CARGO CONNECTION
LOGISTICS CORP., A DELAWARE CORPORATION (individually or collectively, the
"Seller"). This Agreement shall become effective as of the day it is accepted by
WFBC as indicated at the end hereof by the date and signature on behalf of WFBC.
WHEREAS, WFBC is in the business of purchasing accounts receivable
("accounts"); and
WHEREAS, Seller desires, from time to time during the term of this
Agreement, to sell accounts to WFBC; and
WHEREAS, the parties hereto desire to enter into this Agreement to govern
the purchase and sale of accounts;
NOW THEREFORE, in consideration of the premises, the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. OFFER OF ACCOUNTS. At its election from time to time during the term of
this Agreement, Seller agrees to offer for sale to WFBC certain of its accounts
arising out of sales of goods, or services rendered, by Seller, and to sell to
WFBC no less than $1,000,000 a month and no more than $3,000,000 a month, of
such accounts on the terms set forth in this Agreement such of the offered
accounts as WFBC may accept for purchase. WFBC shall have the absolute right in
its sole discretion to reject any or all offered accounts, whether or not WFBC
has previously purchased accounts of any particular account debtor hereunder.
The parties agree that without the prior consent of WFBC, the maximum face
amount of accounts that WFBC may purchase hereunder at any time, together with
the then outstanding face amount of outstanding accounts previously purchased by
WFBC from Seller hereunder, will not exceed Three Million Dollars and no cents
($3,000,000.00) (the "Maximum Credit Facility"). WFBC's consent to purchase
accounts in excess of such amount may be evidenced by WFBC's acceptance for
purchase of such offered accounts.
2. PURCHASE AND SALE OF ACCOUNTS. Each account purchased by WFBC hereunder
shall be purchased with recourse by WFBC against Seller as to the financial
ability of the applicable account debtor to pay such account, and all losses
incurred by WFBC from the financial inability of such account debtor to pay such
account shall be borne solely by Seller; and WFBC and Seller agree that any
account which WFBC purchases that has not been paid within 90 days of invoice
date conclusively establishes the financial inability of the applicable account
debtor to pay such account and Seller will immediately pay the sums due and
owing under such account to WFBC. Nothing in this Agreement shall be construed
to relieve Seller from liability for any breach by Seller of any representation,
warranty, or agreement of Seller contained herein. Notwithstanding any provision
of this Agreement to the contrary, it is contemplated by and the intention of
the parties hereto that certain accounts of Seller may be considered and
purchased as one account (herein a "schedule") and the term "account" and
"accounts" as used herein may also refer to a "schedule" or "schedules," as the
case may be.
In connection with each offer by Seller of accounts to WFBC, Seller
agrees to deliver to WFBC a written assignment of such accounts, together with a
copy of all invoices relating to such accounts, and
Account Transfer Agreement - Page 1
evidence of delivery of the related goods or performance of the related services
(and, if requested, the original purchase orders from the applicable customers),
all in a form satisfactory to WFBC. In order for an account to be eligible for
purchase by WFBC, the related invoice must set forth, as the sole address for
payment, the following post office box: X.X. XXX 000000, XXXXXX, XXXXX 00000
(or, upon notice from WFBC, another post office box of WFBC (or a third party
designated by WFBC)) and, in the case of payments to be effected by wire
transfer or other electronic means, the related invoice must set forth as the
sole bank account for such payments, a bank account of WFBC (or a third party
designated by WFBC). WFBC's acceptance for purchase of offered accounts shall be
evidenced by WFBC's tendered of the Initial Payment to Seller or otherwise
delivering to Seller a schedule of accounts accepted for purchase by WFBC.
Seller's assignment of offered accounts shall not be effective as to any
accounts not accepted for purchase by WFBC.
Seller hereby sells, transfers, assigns and otherwise conveys to WFBC (as a
sale by Seller and a purchase by WFBC, and not as a security interest) all
right, title and interest of Seller in and to all accounts accepted by WFBC of
purchase hereunder, together with all related rights (but not obligations) of
Seller with respect thereto, including all contract rights, guarantees, letters
of credit, liens in favor of Seller, insurance and other agreements and
arrangements of whatever character from time to time supporting or securing
payment of such accounts and all right, title and interest of Seller in any
related goods, including Seller's rights and remedies under Article 2, Part 7 of
the applicable Uniform Commercial Code ("UCC"). The foregoing sale, transfer,
assignment and conveyance does not constitute and is not intended to result in
an assumption by WFBC of any obligation of Seller or any other person in
connection with the accounts or related rights or under any agreement or
instrument relating thereto. Seller agrees to execute and deliver such bills of
sale, assignments, letters of credit, notices of assignment, financing
statements (including continuation statements) under the applicable UCC and
other documents, and make such entries and markings in its books and records,
and to take all such other actions (including the negotiation, assignment or
transfer of negotiable documents, letters of credit or other instruments) as
WFBC may request to further evidence or protect the sales and assignments of
accounts and related rights to WFBC hereunder, as well as WFBC's interest in any
returned goods referred to in Section 8 hereof.
3. TERMS OF ACCOUNTS. Except as otherwise may be agreed to in writing by
WFBC from time to time, the terms of sale offered to Seller to its account
debtors with respect to all accounts offered to WFBC for purchase hereunder
shall be NET 30. After an account has been purchased by WFBC, Seller shall not
have the right to vary the terms of sale set forth in the invoice relating to
such account, or any other aspect of the account, except in Seller's capacity as
agent for WFBC for purposes of collection of the accounts purchased by WFBC as
set forth in Section 8 hereof, and then only with the prior written consent of
WFBC.
4. PURCHASE PRICE. The purchase price for each account purchased hereunder
shall consist of and be paid the Initial Payment and the Reserve. The Initial
Payment shall be payable by WFBC to Seller on the business day that WFBC accepts
for purchase the related account, and the Reserve shall be payable by WFBC to
Seller within seven (7) business days after WFBC receives, in collected funds,
the Net amount of the related account (subject to WFBC's right to withhold
payment of Reserves hereunder, and subject to WFBC's right to withhold, offset
and charge, each as described below).
"Initial Payment" means Ninety-Five percent (95%) of the Net Amount of an
account. "Net Amount" of an account means the gross face amount payable pursuant
to the related invoice, less taxes and all permitted discounts, deductions and
allowances, calculated on the basis of the shortest payment period provided with
respect to such invoice. "Reserve" with respect to an account means aggregate
Account Transfer Agreement - Page 2
amount collected with respect to such account, less the sum of (i) the Initial
Payment with respect to such account and (ii) WFBC's Discount and Fees.
5. FIXED AND VARIABLE DISCOUNTS. WFBC's "Fixed Discount" means a discount
of 0.35% of the Net Amount of such account. WFBC's "Variable Discount" means a
discount computed on the Initial Payment from the date of payment of the Initial
Payment to the date of receipt by WFBC of the proceeds of collection of such
account at a per annum rate equal to WFBC's Prime Rate in effect on the date of
purchase of such account plus one percent (1.00%) per annum. WFBC's "Prime Rate"
shall mean the highest of the Prime Rate published by Xxxxx Fargo Bank, N.A. as
the base rate on corporate loans. In the event the Prime Rate as published by
Xxxxx Fargo Bank, N.A. ceases to exist or Xxxxx Fargo Bank, N.A. ceases
publishing a Prime Rate, the holder hereof will substitute a comparable index
which is outside the control of the holder. In the event of an error by Xxxxx
Fargo Bank, N.A., the "Prime Rate" will be based upon the Prime Rate as
corrected. Any increase or decrease in the Prime Rate shall be effective as of
the next business day following such adjustment and such adjusted Prime Rate
shall be the applicable Prime Rate in determining the rate of interest payable
hereunder.
A MINIMUM MONTHLY DISCOUNT FEE OF $3,500.00 (THREE THOUSAND FIVE HUNDRED
DOLLARS) WILL BE CHARGED TO THE SELLER FOR THE DURATION OF THE AGREEMENT. IF THE
AGREEMENT IS TERMINATED PRIOR TO THE EXPIRATION FOR ANY REASON, THE MINIMUM
MONTHLY DISCOUNT FEE WILL BE ASSESSED TO THE SELLER FOR THE REMAINDER OF THE
CONTRACT, NOT TO EXCEED A TOTAL OF $42,000.00 (FORTY TWO THOUSAND DOLLARS).
6. DEFAULT AND REMEDIES. The occurrence of any of the following events
shall be events of default hereunder: Seller shall fail to pay any indebtedness
to WFBC when due or repurchase any Account when required hereunder; Seller shall
breach any term, provision, promise, warranty, representation or covenant under
this Agreement, or under any other agreements, contracts, between Seller and
WFBC or obligation to WFBC; the appointment of any receiver or trustee of all or
a substantial portion of the assets of Seller; Seller shall become insolvent or
unable to pay debts as they mature, shall make a general assignment for the
benefit of creditors or shall voluntarily file a petition under the United
States Bankruptcy Code or any similar law; any involuntary petition in
bankruptcy shall be filed against Seller and is not dismissed within 60 days or
an order for relief is entered against Seller under the United States Bankruptcy
Code; any levies, attachment, executions, tax assessments or similar process
shall be issued against the Collateral; any financial statements, profit and
loss statements, or schedules, other statements or documents furnished by Seller
to WFBC are false or incorrect in any material respect; any documents submitted
by Seller to WFBC for the purchase of an Account are mistaken, fraudulent,
incorrect and/or erroneous in any material respect, or if the Seller fails to
submit any document required by WFBC under this Agreement for the purchase of
that Account or if any guarantor withdraws a guaranty of this agreement. Upon
the occurrence of an event of default, WFBC may declare immediately due and
payable, and to charge back, all indebtedness of Customer to WFBCI, including
without limitation (i) outstanding purchased Accounts and (ii) all other fees,
costs and expenses as required hereunder and exercise any or all rights
available to a secured creditor with respect to the Seller and the Collateral
(as defined below) under the Uniform Commercial Code (the "UCC"). After the
occurrence of an event of default, interest shall accrue on any unpaid balance
due to WFBC at the default rate of 18%.
7. RESERVE. Should WFBC deem itself to be insecure hereunder, and in any
event upon the occurrence of an event of default hereunder, WFBC may at its
election, withhold payment of the Initial Payment and/or the Reserve with
respect to any or all accounts purchased hereunder to the extent necessary to
accumulate a reserve in an amount up to the sum of (a) the total Initial
Payments made by WFBC with respect to accounts purchased by WFBC hereunder which
remain uncollected, plus (b) the
Account Transfer Agreement - Page 3
total of WFBC's Discount and Fees owed to WFBC with respect to such accounts and
(c) such other amounts which may become owed by Seller to WFBC. Seller hereby
authorizes WFBC to offset and charge any and all amounts for which Seller may be
obligated to WFBC pursuant to the terms of this Agreement against the amounts so
withheld, and at WFBC's election, against any funds of Seller in the possession
or control of WFBC, from whatever source. However, if, on any business day that
WFBC regularly makes a payment to Seller for accounts purchased, none of the
foregoing conditions exist, no other breach of this Agreement by Seller exists
and WFBC determines, in its sole discretion, that the Reserve is adequate to
cover the total of (a), (b) and (c) above, after taking into account the
following described distribution, then WFBC shall distribute to Seller all funds
it then has on hand that it has collected from accounts that WFBC has not then
purchased.
8. CERTAIN SECURITY. For the purpose of securing WFBC in the payment of any
and all sums of money that may become due and owing WFBC from Seller by reason
of this Agreement and securing WFBC in the performance by Seller of Seller's
obligations hereunder, Seller hereby grants to WFBC a security interest in (i)
all of Seller's present and future inventory, accounts, account and contract
rights, contracts and the proceeds therefrom, together with all notes, drafts,
acceptances, documents, instruments, chattel paper, general intangibles and
products and proceeds thereof including all returned or repossessed goods, (ii)
all amounts withheld by WFBC pursuant to Section 7 hereof and (iii) all funds of
Seller in the possession or control of WFBC, from whatever source (all, the
"Collateral"). Seller agrees to execute and deliver such financing statements
under the applicable UCC and other documents, and make such entries and markings
in its books and records and to take all such other actions, as WFBC may request
to further evidence, perfect, preserve or protect the security interest granted
to WFBC hereunder. WFBC shall have all rights and remedies in respect of the
security interest herein granted as are provided in this Agreement, the UCC and
other applicable law, including the right at any time, before or after any
default by Seller of any of its obligations hereunder, to notify account debtors
and obligors on instruments to make payments to WFBC (or its designee) and to
take control of proceeds to which WFBC is entitled, and to apply proceeds to (in
addition to other obligations of Seller to WFBC) the reasonable attorneys' fees
and legal expenses incurred by WFBC in connection with the disposition of
collateral or the other exercise of rights and remedies by WFBC.
In the event a security interest has heretofore been granted and given to
WFBC by Seller in a prior agreement(s) to secure certain obligations, then, in
such event, and not withstanding anything in this Agreement to the contrary,
including paragraph 16 hereof, the security interest granted and given to WFBC
is in renewal and extension, and not in extinguishment of, all such prior
security interests and are valid and subsisting liens to secure all prior,
existing and new obligations of Seller to WFBC hereunder and under any such
prior agreements, which obligations are likewise herein renewed and extended.
9. COLLECTION OF RECEIVABLES. To the extent necessary, WFBC hereby appoints
Seller as agent for WFBC for purposes of collection of accounts purchased by
WFBC hereunder. As WFBC's agent for the collection of accounts purchased by WFBC
hereunder, Seller agrees to collect accounts sold to WFBC in accordance with
Seller's customary practices and in compliance with applicable law. Seller will
furnish to WFBC, upon request, any and all papers, documents and records in its
possession or control related to accounts purchased by WFBC hereunder, or
related to Seller's business relationship with the respective account debtors,
and agrees to cooperate fully with WFBC on all matters related to collection of
accounts purchased by WFBC hereunder. WFBC reserves the right to terminate such
agency at any time or without cause or notice to Seller. Seller authorizes WFBC
to forward directly to account debtors statements or invoices on accounts
purchased by WFBC hereunder, and to request payment at such address or to such
bank account or lock box as may be designated by WFBC. Seller agrees that, if
any payment made to Seller on any account purchased by WFBC from Seller
hereunder,
Account Transfer Agreement - Page 4
Seller (i) will hold such payment in trust for WFBC, (ii) will not commingle
such payment with any funds of Seller, and (iii) WILL DELIVER SUCH PAYMENT TO
WFBC, IN THE EXACT FORM RECEIVED, BY THE CLOSE OF BUSINESS ON THE NEXT BUSINESS
DAY FOLLOWING RECEIPT THEREOF BY SELLER. Seller shall pay a misdirected payment
fee in the amount of fifteen percent (15%) of the amount of any payment on
account of a purchased Account which has been received by Customer and not
delivered in kind to WFBC on the next business day following the date of receipt
by Seller. If any goods relating to an account purchased by WFBC hereunder shall
be returned to or repossessed by Seller, Seller shall give prompt notice thereof
to WFBC and shall hold such goods in trust for WFBC, separate and apart from
Seller's own property, and such goods shall be owned solely by WFBC and be
subject to WFBC's direction and control. Seller shall properly store and protect
such goods and agrees to cooperate fully with WFBC in any subsequent disposition
thereof for the benefit of WFBC.
Seller authorizes WFBC to collect, xxx for and give releases for, in the
name of Seller or WFBC in WFBC's sole discretion, all amounts due on accounts
sold to WFBC hereunder. Seller specifically authorizes WFBC to endorse, in the
name of Seller, all checks, drafts, trade acceptances or other forms of payment
tendered by account debtors in payment of accounts sold to WFBC hereunder and
made payable to Seller. WFBC shall have no liability to Seller for any mistake
in the application of any payment received with respect to any account; provided
WFBC has not acted in bad faith or has not be grossly negligent, it being the
specific intent of the parties hereto that WFBC shall have no liability
hereunder for its own negligence. Seller hereby waives notice of nonpayment of
any account sold to WFBC hereunder as well as any and all other notices with
respect to such accounts, demands or presentations for payment, and agrees that
WFBC may extend or renew from time to time the payment of, or vary, reduce the
amount payable under or compromise any of the terms of, any account purchased by
WFBC, in each case without notice to or the consent of Seller. Seller further
authorizes WFBC (or its designee) to open and remove the contents of any post
office box of Seller or WFBC (or its designee) which WFBC believes contains mail
relating to accounts, and in connection therewith or otherwise, to receive, open
and dispose of mail addressed to Seller which WFBC believes may relate to
accounts, and in order to further assure receipt by WFBC (or its designee) of
mail relating to such accounts, to notify other parties including customers and
postal authorities to change the address for delivery of such mail addressed to
Seller at such address as WFBC may designate. WFBC agrees to use reasonable
measures to preserve the contents of any such mail which does not relate to
accounts purchased hereunder and to deliver same to Seller (or, at the election
of WFBC, to notify Seller of the address where Seller may take possession of
such contents; provided, if Seller does not take possession of such contents
within 30 days after notice from WFBC to take possession thereof, WFBC may
dispose of such contents without any liability to Seller.) Seller hereby
irrevocably appoints WFBC (and any employee, agent or other person designated by
WFBC, any of whom may act without joinder to the others) as Seller's
attorneys-in-fact and agents, in Seller's name, place, and stead, to take all
actions, execute and deliver all notices, negotiate such instruments and other
documents, as may be necessary or advisable to permit WFBC (or its designee) to
take any and all of the actions described in this paragraph or to carry out the
purpose and intent thereof, as fully and for all intents and purposes as Seller
could itself do, and hereby ratifies and confirms all that said
attorneys-in-fact and agents may do or cause to be done by virtue hereof.
10. REPRESENTATIONS,WARRANTIES AND COVENANTS OF SELLER. Seller hereby
represents and warrants to WFBC with respect to each account offered by Seller
to WFBC hereunder that (i) Seller is the sole owner of such account, which
account is free and clear of any liens, claims, equities or encumbrances
whatsoever, and upon each purchase by WFBC of such account, WFBC will own such
account free and clear of any liens, claims, equities or encumbrances whatsoever
and the consideration received by Seller from WFBC for such account is fair and
adequate, (ii) Seller is the sole obligee under
Account Transfer Agreement - Page 5
such account, and has full power and is duly authorized to sell, assign and
transfer such account to WFBC hereunder, and the date of sale of such account is
not more than 60 days after the date of the original invoice relating to such
account, (iii) Seller has no knowledge of any fact which would lead it to expect
that, at the date of sale of such account to WFBC, such account will not be paid
in the full stated amount when due, (iv) such account arises out of a bona fide
sale of conforming goods or the bona fide rendition of services by Seller, and
all underlying goods have been delivered to the account debtor, or all
underlying services have been rendered by Seller, in complete fulfillment of all
of the terms and conditions of a fully executed, delivered and unexpired
contract with the account debtor, and the account debtor has accepted the goods
or services to which the account relates, (v) such account is denominated and
payable only in United States dollars and constitutes the legal, valid and
binding payment obligation of the account debtor, enforceable in accordance with
its terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditor's rights generally), (vi) such account is
current and not past due, has not been paid by or on behalf of the account
debtor in whole or in part, and is not and will not be subject to any dispute,
recision, set-off, recoupment, defense or claim by the account debtor, whether
relating to price, quality, workmanship, delay in delivery, set-off,
counterclaim or otherwise, and the account debtor has not and will not claim any
defense of any kind or character (other than bankruptcy or insolvency arising
after the date of sale of such account to WFBC hereunder) against payment of
such account, and (vii) as of the date of purchase by WFBC of such account the
account debtor with respect to such account is not a debtor in any bankruptcy
proceedings, insolvent, undergoing composition or adjustment of debts or unable
to make payment of its obligations when due and the account debtor is located
(within the meaning of Section 9-103 of the applicable UCC) and has its
principle executive offices within the United States. Seller further represents
and warrants to WFBC that (a) the execution, delivery and performance of this
Agreement by Seller have been duly authorized and this Agreement constitutes the
legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, (b) Seller is not a debtor in any bankruptcy
proceedings, insolvent, undergoing composition or adjustment of debts or unable
to make payment of its obligations when due and no petition in bankruptcy has
been filed by or against Seller or any affiliate thereof, nor has Seller or any
of its affiliates filed any petition seeking an arrangement of its debtors or
for any other relief under the United States Bankruptcy Code (the "Bankruptcy
Code"), and no application for appointment of a receiver or trustee for all or a
substantial part of the property of Seller or any affiliate thereof is pending,
nor has Seller or any affiliate thereof made any assignment for the benefit of
creditors, (c) Seller is not in default of any debt or obligation to any lender
or other creditor, and (d) Seller's principle place of business, chief executive
office, location where the records concerning its books of account and contract
rights are kept, and location of any property subject to the security interest
granted in Section 7 hereof, unless changed upon notice to WFBC complying with
the next following sentence and Section 15 of this Agreement, is its "Address
for Notices" described in Section 15 hereof, (e) Seller and each Guarantor is
solvent, is able to pay its or his debts as they become due, and has no
outstanding liens, suits, garnishments, bankruptcies, or court actions which
could render it or him insolvent, (f) all federal, state, county, city, and
other taxes, including without limitation, income taxes, payroll taxes, real
estate taxes, and sales taxes which are due and owing by Seller have been paid,
and by the execution hereof, Seller certifies that all future taxes, of any kind
and character, will be paid when due. Seller agrees not to change the location
of its principal place of business or chief executive office, the location where
its records concerning its books of account or contract rights are kept, or the
location of any property subject to the security interest granted in Section 7
hereof, without giving at least 15 days advance written notice thereof to WFBC.
Each representation and warranty of Seller contained in this Agreement
shall be deemed to be made at and as of the date hereof and at and as of the
date of each sale of accounts to WFBC hereunder.
Account Transfer Agreement - Page 6
Seller agrees to indemnify and hold WFBC harmless against any breach by
Seller of any representation, warranty or agreement of Seller contained in this
Agreement, and against any claims or damages arising out of the manufacture,
sale, possession or use of, or otherwise relating to, goods, or the performance
of services, associated with or relating to accounts or related rights purchased
(or with respect to which a security interest is granted) hereunder.
Seller agrees to notify WFBC immediately of any breach by Seller of any
representation, warranty or agreement of Seller contained herein or should any
representation, warranty or agreement made herein become untrue or false at any
time. Seller further agrees to notify WFBC immediately of the assertion by any
account debtor of any dispute or other claim (including any defense or offset
asserted by any account debtor) with respect to any account sold to WFBC
hereunder, or with respect to any related goods or services. Upon WFBC's
request, Seller agrees to settle, at its own expense and for the benefit of WFBC
any such dispute or claim upon such terms as WFBC may in its sole discretion
deem advisable or (ii) to assign the related account to Seller, without recourse
to WFBC, and charge any unpaid balance with respect thereof (up to the amount of
the Initial Payment with respect thereto and WFBC's Discount and Fees (through
the date of such change) with respect thereto) against any amounts withheld by
WFBC from Reserves pursuant to Section 6 hereof or against such other funds,
WFBC may require Seller to pay (and Seller hereby agrees to pay) to WFBC on
demand any such unpaid balance. Seller agrees to notify WFBC in advance of the
filing of any voluntary bankruptcy proceeding or any other voluntary insolvency
proceeding.
11. FINANCIAL STATEMENTS. Seller represents and warrants that all financial
and other information provided by Seller to WFBC in connection with Seller's
factoring application to WFBC or to induce WFBC to enter into this Agreement is
true, complete and correct in all material respects. Seller agrees to furnish to
WFBC (i) within 120 days after the last day of each fiscal year of Seller a
consolidated statement of income and a consolidated statement of cash flows of
Seller for such fiscal year, and a consolidated balance sheet of Seller as of
the last day of the fiscal year, together with an auditor's report thereon by an
independent certified public accountant (if Seller generally obtains such an
auditor's report), (ii) within 30 days after the last day of each month, monthly
unaudited consolidated statements of income and statement of cash flows of
Seller for each month and unaudited consolidated balance sheets of Seller as of
the end of each month. Seller represents and warrants that each such statement
of income and statement of cash flows will fairly present, in all material
respects, the results of operations and cash flows of Seller for the period set
forth therein, and that each such balance sheet will fairly present, in all
material respects, the financial condition of Seller as of the date set forth
therein, all in accordance with generally accepted accounting principles applied
on a consistent basis, except as otherwise noted in the accompanying auditors'
report (or, with respect to unaudited financial statements, in the notes
thereto). Seller also agrees to furnish to WFBC, upon request, such additional
financial and business information concerning Seller and its business as WFBC
may reasonably request, including copies of its Form 941 returns filed with the
Internal Revenue Service and evidence of payment of related taxes. WFBC and its
agents, representatives and accountants have the right, at all times during
normal business hours and without prior notice to Seller, to conduct an audit or
other examination of the financial or business records of Seller and to examine
and make copies of all books and records of Seller for the purpose of assuring
or verifying compliance by Seller with the terms of this Agreement, and Seller
agrees to cooperate fully with WFBC and its agents, representatives, and
accountants in connection therewith. Seller agrees to properly reflect the
effect of this Agreement, and all sales related thereto, in all financial
reports and disclosures, written or otherwise, provided to Seller's creditors
and other interested parties. Seller specifically agrees that all accounts
purchased by WFBC will be excluded from Seller's reported accounts receivable
balances. Seller also specifically agrees to immediately notify WFBC of any
material adverse change in Seller's financial condition or business.
Account Transfer Agreement - Page 7
12. TAXES. All taxes and governmental charges of any kind imposed with
respect to the sale of goods or the rendering of services relating to accounts
purchased by WFBC hereunder shall be for the account of, and paid by, Seller.
13. TERMINATION. This Agreement shall not be terminated by either party
prior to twelve (12) months after the execution of this Agreement and shall be
automatically renewed for successive renewal terms of twelve (12) months each
unless terminated at the end of the initial term or any renewal term by any
party giving the other written notice of termination at least thirty (30) days
prior to the end of such period. SELLER MAY, AT ITS ELECTION, TERMINATE THIS
AGREEMENT AFTER THE INITIAL TWELVE (12) MONTH PERIOD FOLLOWING EXECUTION OF THIS
AGREEMENT UPON NINETY (90) DAYS WRITTEN NOTICE TO WFBC AND, PROVIDED NO EVENT OF
DEFAULT IS THEN OCCURRING, NO MINIMUM FEES UNDER PARAGRAPH 5 HEREOF SHALL BE
ASSESSED AFTER THE EXPIRATION OF THE NINETY (90) DAY PERIOD. WFBC may, at its
election, terminate this Agreement immediately and without the requirement of
notice to Seller if (i) Seller shall fail to perform any of its obligations
hereunder or shall breach any of its representations and warranties hereunder,
(ii) Seller or any of its affiliates shall become insolvent or suspend all or a
substantial part of its or their business, (iii) a petition under the Bankruptcy
Code or any other insolvency or debtor status shall be filed by or against
Seller or any affiliate or any receivership proceedings with respect thereto
shall commence, (iv) any guarantee of any of Seller's obligations hereunder
shall be terminated or become impaired, or (v) WFBC otherwise determines that it
is insecure hereunder.
Termination of this Agreement shall not affect the rights and obligations
of the parties hereunder with respect to transactions occurring on or prior to
the date of such termination, and this Agreement shall continue to govern the
rights and obligations of the parties hereto with respect to accounts purchased
by WFBC from Seller on or prior to the date of such termination. All security
interests granted or contemplated by this Agreement shall survive the
termination of this Agreement until all amounts payable to WFBC with respect to
transactions occurring on or prior to the date of termination have been paid to
WFBC, and Seller has performed all its obligations to WFBC with respect to such
transactions.
Seller agrees to reimburse WFBC upon demand for WFBC's attorneys' fees,
court costs, and other fees and expenses incurred in enforcing any of WFBC's
rights under this Agreement.
14. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF. SELLER HEREBY SUBMITS (IF FEDERAL JURISDICTION IS AVAILABLE) TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION, OR (IF FEDERAL JURISDICTION IS NOT
AVAILABLE) TO THE EXCLUSIVE JURISDICTION OF ANY TEXAS STATE COURT SITTING IN
DALLAS, TEXAS FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. SELLER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH SELLER MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT
IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SELLER HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Account Transfer Agreement - Page 8
15. AMENDMENTS; WAIVERS. This Agreement may be amended only in writing
signed by the parties hereto. No failure on the part of WFBC to exercise, and no
delay by WFBC in exercising, and no course of dealing by WFBC with respect to,
any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder by WFBC preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies of WFBC
hereunder are cumulative and not exclusive of any remedies provided by law.
16. NOTICES. All notices and other communications provided for herein shall
be given or made in writing and telecopied or delivered by courier or mail to
the intended recipient at the "Address for Notices" specified opposite its name
on the signature page hereto, or at such other address or telecopy number as
shall be designated by a party to the other party in the manner specified in
this Section 15. All such notices and other communications shall be deemed to
have been duly given when transmitted by telecopies (with receipt thereof
confirmed by telecopies) or personally delivered or, in the case of a mailed
notice, upon deposit in the United States Postal System postage prepaid and
properly addressed, in each case given or addressed as aforesaid.
17. CAPTIONS; FINAL AGREEMENT; COUNTERPARTS; SUCCESSORS AND ASSIGNS.
Captions and headings appearing herein are included solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement. This Agreement represents the final agreement between the
parties hereto with respect to the subject matter hereof, and supersedes all
prior proposals, negotiations, agreements and understandings, oral or written,
related to such subject matter. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement. This Agreement may not be assigned by Seller without the prior
written consent of WFBC. This Agreement may be assigned by WFBC, and any
accounts purchased by WFBC hereunder, together with all rights and interests
related thereto granted to WFBC hereunder, may be assigned by WFBC, all without
notice to or the consent of Seller. This Agreement shall be binding upon the
parties hereto and their respective successors and permitted assignees.
(INTENTIONALLY LEFT BLANK)
Account Transfer Agreement - Page 9
IN WITNESS WHEREOF, the parties hereto, heretofore duly authorized, have
executed this Agreement as of the date first set forth above.
CARGO CONNECTION LOGISTICS CORP.
a Delaware Corporation
Address for Notices:
Cargo Connection Logistics Corp.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
Date: 11/12/2007
--------------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Address for Notices:
Xxxxx Fargo Business Credit
00000 Xxxxxx Xx. Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000 By: /s/ Xxxxx X. XxXxxxx
-----------------------------
Name: Xxxxx X. XxXxxxx
Title: Division Manager
--------------------------
Date: 11/12/07
--------------------------
Account Transfer Agreement - Page 10
