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Exhibit 10.4
BNY FINANCIAL CORPORATION
FACTORING AGREEMENT
River Oaks Furniture, Inc. ("River Oaks")
R.O. West, Inc. ("R.O. West")
R.O. East, Inc. ("R.O. East")
Xxxxxx Manufacturing Company ("Xxxxxx")
0000 XxXxxxxxxx Xxxx.
Xxxxxx, XX 00000
We are pleased that each of River Oaks, R.O. West, R.O. East and
Xxxxxx (hereinafter referred to herein both individually and collectively by
the pronoun "you") have chosen us to act as each of your factor, effective as
of July 26, 1996 ("Effective Date"), and have agreed to do so upon the
following terms:
1. COVERED SALES; SECURITY INTEREST
(a) Except as provided in Paragraph 2(b) below, each of
you hereby assign and sell to us, as absolute owner, and we hereby purchase
from each of you, all Receivables, created on or after the Effective Date,
which arise from your sale of merchandise or rendition of services. Our
purchase of and acquisition of title to each Receivable will be effective as of
the date of its creation and will be entered on our books when you furnish us
with a copy of the respective invoice.
(b) Each of you hereby grant to us a continuing security
interest in all of your present and future Receivables, as security for all
Obligations.
2. CUSTOMER CREDIT APPROVAL
(a) Each of you shall submit to us the principal terms of
each of your customers' orders for our written credit approval. We may, in our
discretion, approve in writing all or a portion of your customers' orders,
either by establishing a credit line limited to a specific amount for a
specific customer, or by approving all or a portion of a proposed purchase
order submitted by you. No credit approval shall be effective unless in writing
and unless the goods are shipped or the services rendered within the time
specified in our written credit approval or within 45 days after the approval
is given, if no time is specified. After the customer has accepted delivery of
the goods or performance of the services, we shall then have the Credit Risk as
hereinafter defined (but not the risk of non-payment for any other reason), to
the extent of the dollar amount specified in the credit approval, on all
Receivables evidenced by invoices which arise from orders approved by us in
writing except for those Receivables evidenced by invoices less than $150.00
and invoices evidencing charges for samples supplied to your customers. We
shall have neither the Credit Risk nor the risk of non-payment for any other
reason on Receivables arising from orders not approved by us in writing. We
may withdraw our credit approval or withdraw or adjust a credit line at any
time before you ship the goods or render the services.
(b) Notwithstanding anything to the contrary contained
herein, in the event that you have submitted a customer's order to us for
credit approval and we have declined to provide you with a credit approval for
such order (hereinafter a "Declined Order"), you may at your option elect to
submit such Declined Order to an Approved Outside Factor and sell and assign
the Receivable arising from such Declined Order to such Approved Outside
Factor, provided that (i) you must sell and assign to us all Receivables
arising from your customers' orders which you submit to us for our written
credit approval, if such written credit approval is in fact given by us; (ii)
we shall continue to have a security interest in all of your Receivables,
whether or not sold and assigned to us hereunder, subject to a customary parity
agreement with an Approved Outside Factor; and (iii) you shall continue to be
obligated to pay us the Minimum Volume Charge provided for herein.
(c) The representations made by you in Paragraph 7(a)
hereof shall apply only with respect to Receivables which you sell and assign
to us hereunder. The credits referred to in Paragraph 7(c) and the invoices and
payments referred to in Paragraph 8 shall be deemed to be only those orders,
credits, invoices, and payments evidencing, relating to or giving rise to such
Receivables.
3. PURCHASE PRICE OF RECEIVABLES
The purchase price of Receivables is the net face amount thereof less
our commission. The term "net face amount" means the gross face amount of the
invoice, less returns, discounts (which shall be determined by us where
optional terms are given), anticipation reductions or any other unilateral
deductions taken by customers, and credits, and allowances to customers of any
nature. The purchase price will be credited to your account, which shall be a
joint account for all of you which shall be under the name of River Oaks
Furniture, Inc. (any subsequent reference herein to "your account" shall mean
this account) and remitted to River Oaks on the "Settlement Date" (hereinafter
described). River Oaks, who each of you hereby irrevocably appoint as your
agent shall, as you have advised us, act as your agent to receive the purchase
price of Receivables, distribute the proceeds thereof to each of you as needed
and requested by you of River Oaks and as otherwise appropriate, and River Oaks
shall be the recipient of all reports and information on your behalf. The
Settlement Date for each Receivable on which we have the Credit Risk and which
is not due from a department or chain store shall be three (3) business days
after the
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day on which the Receivable is actually collected by us or becomes 120 days
past due, whichever is earlier. The Settlement Date for all other Receivables
shall be three (3) business days after the day on which the Receivable is
actually collected by us. We may deduct, from the amount payable to you on any
Settlement Date, reserves for all Obligations then chargeable to your account
and Obligations which, in our sole judgment, may be chargeable to any of your
accounts thereafter ("Reserves").
4. INTEREST; COMMISSIONS
For our services, we shall charge to your account
(i) monthly, as of the last day of each month,
interest on the average daily balance of all amounts charged and chargeable to
your account hereunder (said amounts being herein collectively called "Interest
Bearing Obligations") which are outstanding during such month at the rate then
being charged under the Credit Agreement; provided, however, that said interest
rate shall in no event be higher than the highest rate permitted by New York
law. Interest shall be calculated on the basis of the actual number of days
elapsed over a year of 360 days. Upon and after the occurrence of an Event of
Default, and during the continuation thereof, the Interest Bearing Obligations
shall bear interest at the Default Rate.
(ii) monthly, as of the 15th day of each month, a
commission at the rate of four-tenths of one percent (.4%) of the gross face
amount of each invoice evidencing a Receivable purchased hereunder during such
month on terms not exceeding sixty (60) days (including dating), plus an
additional one-eighth of one percent (1/8%) for each additional thirty (30)
days or portion thereof of selling terms; provided, however, that if you change
the terms of any invoice (whether or not we consent to such change, it being
understood that nothing in this provision diminishes our rights or your
obligations under any other provision hereof including but not limited to
paragraph 8), then the commission on the gross face amount of that invoice
shall be the commission hereinabove set forth plus 1/4% for each thirty (30)
days or portion thereof of such change. Our commission on any invoice
evidencing a Receivable purchased hereunder shall not be less than $4.00,
provided that with respect to invoices transmitted to us electronically (via a
system acceptable to us), our commission shall not be less than $2.00.
(iii) the aggregate amount of Receivables with
respect to which you are obligated to pay commissions and which you sell and
assign to us ("Volume") shall not be less than $125,000,000.00 ("Minimum") in
each Contract Year during which this agreement is in effect, or the part of the
last Contract Year during which this agreement is in effect if it is terminated
before the end of a Contract Year ("Partial Last Year"). If the Volume in any
Contract Year or Partial Last Year (if any) is less than the Minimum, we shall
charge to your account the difference ("Minimum Volume Charge") between the
commission on the Minimum, and the commission on the Volume for the Contract
Year or Partial Last Year, respectively. We shall compute the Minimum Volume
Charge, if any, on a calendar quarterly basis and charge your account therefor
for each calendar quarter in the month following the end of such calendar
quarter, or in the month following the effective date of termination of this
agreement in the case of a Partial Last Year. However, if an Event of Default
occurs, and if we so elect, and whether or not we then or thereafter exercise
any of our rights of termination hereunder (including but not limited to our
rights under Paragraph 9(a) (ii)), we may on or at any time after the
occurrence of such Event of Default compute and charge your account for the
Minimum Volume Charge for the period starting on such occurrence and ending on
the next date as of which you may terminate this Agreement under Paragraph 9(a)
(i), and, for the purpose only of computing such Minimum Volume Charge, we may
assume that your Volume for the period will be zero, subject, of course, to
subsequent adjustment if such Volume in fact is more than zero.
(iv) notwithstanding anything to the contrary
contained herein, in the event that during the first or second Contract Year
you are a party to a factoring agreement with any Approved Outside Factor, then
the Minimum shall be $100,000,000.00 if you are a party to such an agreement
during the first Contract Year and $115,000,000.00 if you are a party to such
an agreement during the second Contract Year. During the third and any
subsequent Contract Years, the Minimum will be $125,000,000.00 regardless of
whether you are a party to such an agreement.
(v) all bank charges for wire transfers.
5. MATURED FUNDS
On the last day of each month, we shall credit your account with
interest at the Matured Funds Rate in effect during such month on the average
daily balance during such month of any amounts payable by us to River Oaks as
agent hereunder (as confirmed by us by appropriate credit to your account with
us) which are not drawn by River Oaks as agent on the Settlement Date, while
held by us after the Settlement Date.
6. CHARGES; BALANCES; RESERVES
We may charge to your account all Obligations. Unless otherwise
specified, all Obligations, including any debit balance in your account, shall
be payable on demand. Recourse to security will not be required at any time.
All credit balances or other sums at any time standing to your credit and all
Reserves on our books, and all of your property in our possession at any time
or in the possession of any parent, affiliate or subsidiary of ours or on or in
which we or any of them have a lien or security interest, may be held and
reserved by us as security for all Obligations. We will account to River Oaks
monthly and each monthly accounting statement will be fully binding on you and
will constitute an account stated, unless, within thirty (30) days after such
statement is mailed to River Oaks or within thirty (30) days after the mailing
of any adjustment thereof we may make, River Oaks give us specific written
notice of exceptions.
7. REPRESENTATIONS AND WARRANTIES; DISPUTES; RETURNS; CHARGEBACKS
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(a) You warrant and represent that you have good title to
the Receivables free of any encumbrance except in our favor; each Receivable
purchased hereunder is a bona fide, enforceable obligation created by the
absolute sale and delivery of goods or the rendition of services in the
ordinary course of business; your customer is unconditionally obligated to pay
at Settlement the full amount of each Receivable purchased hereunder without
defense, counterclaim or offset, real or alleged; all documents in connection
therewith are genuine; and the customer will accept the goods or services
without alleging any Dispute. We shall not be entitled to declare a Default or
Event of Default (as such terms are defined in the Credit Agreement) under
Section 10.1(f) of the Credit Agreement if the foregoing representations and
warranties shall prove incorrect without prior knowledge by you, our sole
remedy being set forth in subsection (d) below for such a misrepresentation.
(b) You further represent and warrant that (i) your
address set forth above is that of your chief place of business and chief
executive office and the location of all "Collateral" (as hereinafter defined)
and of your books and records relating to the Receivables; (ii) by a separate
writing you have disclosed to us the locations of all of your other places of
business as well as all Trade Names); and (iii) except after 30 days prior
written notice to us of your intention to do so, you will not make any change
in your name or corporate structure (whether by merger, reorganization or
otherwise) nor make any other change which would have the effect of rendering
inaccurate or incomplete the representations contained in this subparagraph
(b).
(c) You shall promptly provide us with duplicate
originals of all credits which you issue to your customers and immediately
notify us of any merchandise returns or Disputes. You will settle all Disputes
at no cost or expense to us; our practice is to allow you a reasonable time to
do so. Should we so elect, we may at any time in our discretion (i) withdraw
your authority to issue credits to your customers without our prior written
consent; (ii) litigate Disputes or settle them directly with the customers on
terms acceptable to us; or (iii) direct you to set aside, identify as our
property and procure insurance satisfactory to us on any Retained Goods. All
Retained Goods (and the proceeds thereof) shall be (A) held by you in trust for
us as our property; and (B) subject to a security interest in our favor as
security for the Obligations; and (C) disposed of only in accordance with our
express written instructions.
(d) Our Credit Risk, if any, on a Receivable shall
immediately terminate without any action on our part in the event that (i) your
customer asserts a Dispute (regardless of merit) as a ground for non-payment of
the Receivable or returns or attempts to return the goods represented thereby;
or (ii) any warranty as to the Receivable is breached. We may charge to your
account at any time the gross face amount of any Receivable purchased hereunder
(or portion thereof) on which we do not then have the Credit Risk, together
with interest thereon from the due date of such Receivable to the date of
chargeback; such action on our part shall not be deemed a reassignment of such
Receivable and will not impair our rights thereto or security interest therein,
which will continue to be effective until all Obligations are fully satisfied.
(e) You warrant that you will not grant a security
interest in any of your Receivables to anyone except us (and us as agent under
the Credit Agreement) or an Approved Outside Factor, or in any of your
inventory to anyone except us (and us as agent under the Credit Agreement)
without our prior written consent.
(f) You shall, upon our request, use your best efforts,
consistent with applicable law and contract, to immediately stop the delivery
of goods to a customer for whom we have issued our credit approval or
established a credit line if we have elected to withdraw such approval or
withdraw or adjust such credit line pursuant to Paragraph 2(a).
8. INVOICING; PAYMENTS; RETURNS; NOTIFICATION
(a) Each of your invoices and all copies thereof shall bear a
notice (in form satisfactory to us) that it is owned by and payable directly
and only to us at locations designated by us, and you shall furnish us with
duplicate originals of your invoices accompanied by a confirmatory assignment
thereof. Your failure to furnish such specific assignments shall not diminish
our rights. You shall procure and hold in trust for us and furnish to us at our
request satisfactory evidence of each shipment and delivery or rendition of
services. Each invoice shall bear the terms stated on the customer's order, as
submitted to us, whether or not the order has been approved by us, and no
change from the original terms of the order shall be made without our prior
written consent. Any such change not so approved by us shall automatically
terminate our Credit Risk, if any, on the Receivable arising from your
performance of the order. You will hold in trust for us and deliver to us any
payments received from your customers in the form received, and hereby
irrevocably authorize us to endorse your name on all checks and other forms of
payment. Each payment made by a customer shall first be applied to Receivables,
if any, on which we have the Credit Risk, and the balance, if any, of such
payment shall be applied to other Receivables due from such customer. You
understand that we shall not be liable for any selling expenses, orders,
purchases, contracts or taxes of any kind resulting from any of your
transactions, and you agree to indemnify us and hold us harmless with respect
thereto, which indemnity shall survive termination of this agreement.
(b) We shall have the right to communicate with and instruct the
account debtors on your general intangibles to make payments in respect thereof
directly to us.
9. TERMINATION
(a) This agreement shall remain in full force and effect
until terminated as follows:
(i) This agreement shall remain in full force and
effect unless either party gives the other written notice of termination no
less than sixty (60) days prior to and effective as of the third anniversary of
the Effective Date and thereafter, no less than sixty (60) days prior to and
effective as of the anniversary of the Effective Date in any year; or
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(ii) Upon the termination of our obligations to
make Advances pursuant to Section 10.1(A) of the Credit Agreement.
(iii) Notwithstanding anything to the contrary
herein, you may terminate this agreement at any time upon ninety (90) days
written notice, provided that you pay to us all Obligations including the
Minimum Volume Charge for the balance of the three year term or, after the
third anniversary of the Effective Date, any one year term, based on a Minimum
of $125,000,000.
(b) On the effective date of termination all Obligations
shall become immediately due and payable in full without further notice or
demand. Our rights with respect to Obligations owing to us, or chargeable to
your account, arising out of transactions having their inception prior to the
effective date of termination, will not be affected by termination. Without
limiting the foregoing, all of our security interests and other rights in and
to all Collateral shall continue to be operative until such Obligations have
been fully and finally satisfied or you have given us an indemnity satisfactory
to us.
(c) If there is a credit loss borne by us with respect to
your customer Xxxxxx Furniture, Inc., then if we so elect, this agreement may
not be terminated by you until one year from the earliest date on which you
would otherwise have been permitted to terminate or in the alternative, you may
pay us the Minimum Volume Charge for one additional year after the effective
date of termination.
10. DEFINITIONS
As used herein
"Approved Outside Factor" shall have the meaning set forth in
the Credit Agreement.
"Bank" shall mean The Bank of New York, New York, New York.
"Collateral" shall mean all Receivables, Retained Goods,
credit balances, and any other property in our possession or in the possession
of any parent, affiliate or subsidiary of ours and any other security for the
Obligations, whether coming into existence or into our or their possession
before, on or after the effective date of termination and all proceeds thereof.
"Contract Year" shall mean the twelve month period beginning
on July 26 of each year.
"Credit Agreement" shall mean the Revolving Credit and Term
Loan Agreement by and among River Oaks Furniture, Inc., R.O. West, Inc., R.O.
East, Inc., and Xxxxxx Manufacturing Company, as Borrowers, us as Agent and as
Lender and the Lenders which are party thereto from time to time, of even date
herewith, as supplemented and amended.
"Credit Risk" shall mean the risk of loss resulting solely and
exclusively from the financial inability of your customer to pay at maturity a
Receivable purchased hereunder.
"Declined Order" shall have the meaning set forth in Paragraph
2(b).
"Default Rate" shall have the meaning set forth in the Credit
Agreement.
"Dispute" shall mean any cause for nonpayment of Receivables,
including, without limitation, any alleged defense, counterclaim, offset,
dispute or other claim whether arising from or relating to the sale of goods or
rendition of services or arising from or relating to any other transaction or
occurrence, except for financial inability of your customer to pay a Receivable
at Settlement.
"Effective Date" shall mean the date set forth in the
introductory paragraph hereto.
"Eurodollar Rate" shall have the meaning set forth in the
Credit Agreement.
"Event of Default" shall mean the occurrence of any of the
events set forth in Paragraph 9(a) (ii).
"Interest Bearing Obligations" shall have the meaning set
forth in Paragraph 4(b)(i) hereof.
"Matured Funds Rate" shall mean the rate of interest,
announced by us from time to time, as the rate applicable to matured funds,
such rate to be adjusted automatically on the effective date of any change in
such rate as announced by us.
"Minimum" shall have the meaning set forth in Paragraph 4(b)
(iii) hereof.
"Minimum Volume Charge" shall have the meaning set forth in
Paragraph 4(b) (iii) hereof.
"Obligations" means all amounts of any nature whatsoever,
direct or indirect, absolute or contingent, due or to become due, arising or
incurred heretofore or hereafter, arising under this or any other agreement or
by operation of law, now or hereafter owing by you to us or to any parent,
subsidiary or affiliate of ours. Said amounts include, but are not limited to,
loans, debts and liabilities heretofore or hereafter acquired by purchase or
assignment from other present or future clients of ours, or through
participation. Without limiting the foregoing, Obligations shall include the
amounts of all Advances, loans, interest, commission, customer late
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payment charges and bank related charges, costs, fees, expenses, taxes and all
Receivables charged or chargeable to your account hereunder.
"Partial Last Year" shall have the meaning set forth in
Paragraph 4(b) (iii) hereof.
"Receivables" shall mean all amounts and all forms of
obligations now or hereafter owing to you (including but not limited to
accounts, instruments, contract rights, documents and chattel paper) and
general intangibles relating to the sale of goods or the rendition of services;
and all proceeds of the foregoing.
"Reports" shall have the meaning set forth in Paragraph 12(d)
hereof.
"Reserves" shall have the meaning set forth in Paragraph 3
hereof.
"Retained Goods" shall mean returned or repossessed
merchandise or other goods which by sale resulted in Receivables theretofore
assigned to us.
"Settlement Date" shall have the meaning set forth in
Paragraph 3.
"Trade Names" shall mean all trade names or styles,
trademarks, divisions or other names under which you conduct business.
"Volume" shall have the meaning set forth in Paragraph 4(b)
(iii) hereof.
11. PLACE OF PAYMENT; NEW YORK LAW AND COURT
(a) All Obligations shall be paid at our office in New
York, New York.
(b) This agreement shall be governed by and construed
according to the laws of the State of New York. All terms used herein, unless
otherwise defined herein, shall have the meanings given in the New York Uniform
Commercial Code.
(c) You agree that all actions and proceedings relating
directly or indirectly to this Agreement or any ancillary agreement or any
other obligations shall be litigated in The Federal District Court of The
Southern District of New York or, at our option, in any other courts located in
New York State or elsewhere as we may select and that such courts are
convenient forums and you submit to the personal jurisdiction of such courts.
You hereby waive personal service of the summons, complaint or other process or
papers to be issued therein and hereby agree that service of such summons,
complaint, process or papers may be made by registered or certified mail
addressed to you at the address appearing herein.
12. REPORTS; RECORDS; ASSURANCES; WAIVERS; REMEDIES; ETC.
(a) Upon request you shall periodically furnish us with
statements showing your financial condition and the results of your operations.
We may at all times have access to, and inspect, audit, and make extracts from,
all of your records, files and books of account, and we may charge your account
with the costs, fees or expenses incurred in connection therewith.
(b) You shall perform all acts requested by us to perfect
and maintain our security interest and other rights in the Collateral.
(c) Failure by us to exercise any right, remedy or option
under this agreement or delay by us in exercising the same will not operate as
a waiver; no waiver by us will be effective unless we confirm it in writing and
then only to the extent specifically stated.
(d) We may charge to your account, when incurred by us,
the amount of reasonable legal fees (including fees, expenses and costs payable
or allocable to attorneys retained or employed by us) and other reasonable
costs, fees and expenses incurred by us in negotiating or preparing this
agreement and any legal documentation required by us or requested by you in
connection with this agreement or any amendments or supplements thereof, or in
enforcing our rights hereunder or in connection with the litigation of any
controversy arising out of this agreement, or in protecting, preserving or
perfecting our interest in, any Collateral, including without limitation all
taxes assessed or payable with respect to any Collateral, and the costs of all
public record filings, appraisals and searches relating to any Collateral. We
may also charge to your account our then standard price for furnishing to you
or your designees copies of any statements, records, files or other data
(collectively "Reports") requested by you or them other than Reports of the
kind furnished to you and our other clients on a regular, periodic basis in the
ordinary course of our business. We may file Financing Statements under the
Uniform Commercial Code without your signature or, if we so elect, sign and
file them as your agent.
(e) Our rights and remedies under this agreement will be
cumulative and not exclusive of any other right or remedy we may have hereunder
or under the Uniform Commercial Code or otherwise. Without limiting the
foregoing, if we exercise our rights as a secured party we may, at any time or
times, without demand, advertisement or notice, all of which you hereby waive,
sell the Collateral, or any part of it, at public or private sale, for cash,
upon credit, or otherwise, at our sole option and discretion, and we may bid or
become purchaser at any such sale, free of any right of redemption which you
hereby waive. After application of all Collateral to your Obligations (in such
order and manner as we in our sole discretion shall determine), you shall
remain liable to us for any deficiency.
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(f) We shall have no liability hereunder (i) for any
losses or damages (including indirect, special or consequential damages)
resulting from our refusal to assume, or delay in assuming, the Credit Risk, or
any malfunction, failure or interruption of communication facilities, or labor
difficulties, or other causes beyond our control; or (ii) for indirect, special
or consequential damages arising from accounting errors with respect to your
account with us. Our liability for any default by us hereunder shall be limited
to a refund to you of any commission paid by you during the period starting on
the occurrence of the default and ending when it is cured or waived, or when
this agreement is terminated, whichever is earlier.
(g) This agreement cannot be changed or terminated orally
and is for the benefit of and binding upon the parties and their respective
successors and assigns except that you may not assign or transfer any of your
rights or obligations under this Agreement without our prior written consent,
and no such assignment or transfer of any such obligation shall relieve you
thereof unless we have consented to such release in a writing specifically
referring to the obligation from which you are to be released. This agreement,
and any concurrent or subsequent written supplements thereto or amendments
thereof signed by both of us, represent our entire understanding and supersede
all inconsistent agreements and communications, written or oral, between your
and our officers, employees, agents and other representatives.
(h) This agreement shall not be effective unless signed
by you below, and signed by us at the place for our acceptance.
(i) Each of you irrevocably hereby grant to River Oaks a
power of attorney to execute any and all statements and documents, make any and
all requests, to issue any and all directions or instructions on each of your
behalfs, which when made or given shall be with the same binding force and
effect as if made directly by you.
(j) TO THE EXTENT LEGALLY PERMISSIBLE, BOTH YOU AND WE
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION RELATING TO TRANSACTIONS
UNDER THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
Very truly yours,
BNY FINANCIAL CORPORATION
AGREED TO on this 26th day of July, 1996.
ATTEST:
RIVER OAKS FURNITURE, INC.
Xxx Xxxx By: Xxxxxx X. Xxxxxx
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Asst. Secretary Title: VP
[SEAL]
ATTEST:
R.O. WEST, INC.
Xxx Xxxx By: Xxxxxx X. Xxxxxx
--------------------- ---------------------------
Asst. Secretary Title: VP
[SEAL]
ATTEST:
R.O. EAST, INC.
Xxx Xxxx By: Xxxxxx X. Xxxxxx
--------------------- ---------------------------
Asst. Secretary Title: VP
[SEAL]
ATTEST:
XXXXXX MANUFACTURING COMPANY
Xxx Xxxx By: Xxxxxx X. Xxxxxx
--------------------- ---------------------------
Asst. Secretary Title: VP
[SEAL]
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ACCEPTED at New York, New York, as of the above date.
ATTEST:
BNY FINANCIAL CORPORATION
Xxxxx By:
--------------------- -------------------------------
Secretary Title:
[SEAL]
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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ASSIGNMENT OF FACTORING PROCEEDS
River Oaks Furniture, Inc., as agent for itself, R. O. West, Inc., R.
O. East, Inc. and Xxxxxx Manufacturing Company, a Mississippi corporation
having its principal place of business at 0000 XxXxxxxxxx Xxxxxxxxx, Xxxxxx, XX
("Debtor") hereby assigns to BNY Financial Corporation, as agent for itself and
the Lenders party to the Revolving Credit and Term Loan Agreement dated
____________, 1996 (the "Credit Agreement"), a New York corporation having its
principal place of business at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000
("Assignee"), as collateral security for the obligations of Debtor all funds
now or hereafter payable to Debtor by BNY FINANCIAL CORPORATION ("Factor")
pursuant to the Factoring Agreement effective as of __________, 1996, as
amended, between Debtor and Factor ("Factoring Agreement"). Assignee
understands that the amount of funds, if any, that may be payable at any time
to the Debtor pursuant to the Factoring Agreement is uncertain, and that the
Factor is entitled to apply such sums to any indebtedness of Debtor to Factor.
This assignment shall not affect any of the rights of Factor under the terms
and conditions of the Factoring Agreement or applicable law, with respect to
any matter whatsoever including the right to"chargeback" to Debtor's account
any disputed invoices and other items and sums and the right to maintain
reserves. Any credit balance shown on any statement of account is provisional
only and is subject to such charges.
Debtor hereby directs Factor to pay to Assignee, and Factor agrees to
pay to Assignee, only such sums as Factor in its sole discretion determines to
be payable to Debtor from time to time pursuant to the Factoring Agreement and
in order to induce Factor to make such payments, Assignee hereby represents to
Factor that no other person or entity has or will have a right to payment
hereunder that is superior to Assignee's rights hereunder and that Assignee
alone will be entitled to all such payments. Assignee hereby agrees to
indemnify Factor and hold Factor harmless from any and all liability or expense
which may be incurred by Factor by reason of Factor making remittances to
Assignee hereunder.
This Assignment cannot be terminated by Debtor or Assignee alone, but
only by Factor's receipt of written termination notice from Debtor and
Assignee. Such notice shall be sent to:
BNY FINANCIAL CORPORATION
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxxxxx, V.P.
The validity, interpretation and enforcement of this agreement shall
be governed by the laws of New York State. This agreement shall bind and
benefit the parties and their respective successors and assigns and may be
modified only by a signed writing.
IN WITNESS WHEREOF, parties have executed and delivered this
agreement this ____ day of ___________, 19__.
RIVER OAKS FURNITURE, INC., As Agent
(Debtor)
Attest:
By:
-------------------------------- ------------------------------------
Asst. Secretary Title
[CORPORATE SEAL]
9
ACCEPTED AND AGREED:
BNY FINANCIAL CORPORATION, BNY FINANCIAL CORPORATION
as Agent (Factor)
(Assignee)
By: By:
----------------------------- ------------------------------------
Title Title
