EXHIBIT 10.74
(ACCOUNT - WITH ACTIVATION)
DEPOSIT ACCOUNT CONTROL AGREEMENT
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This Agreement is entered into as of June 23, 2004, among
SelectForce, Inc. ("Company"), Laurus Master Fund, Ltd. ("Lender"), and
Fleet National Bank, N.A. ("Bank") with respect to the following:
A. Bank has agreed to establish and maintain for Company
deposit account number 9485372398 (the "Account").
B. Company has assigned to Lender a security interest in the
Account and in checks and other payment instructions ("Checks") deposited
in the Account.
C. Company, Lender and Bank are entering into this Agreement
to evidence Lender's security interest in the Account and such Checks and
to provide for the disposition of net proceeds of Checks deposited in the
Account.
Accordingly, Company, Lender and Bank agree as follows:
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1. (a) This Agreement evidences Lender's control over the Account.
Notwithstanding anything to the contrary in the agreement between Bank
and Company governing the Account, Bank will comply with instructions
originated by Lender as set forth herein directing the disposition of
funds in the Account without further consent of the Company.
(b) Company represents and warrants to Lender and Bank that it has
not assigned or granted a security interest in the Account or any Check
deposited in the Account, except to Lender.
(c) Company will not permit the Account to become subject to any
other pledge, assignment, lien, charge or encumbrance of any kind, other
than Lender's security interest referred to herein.
2. During the Activation Period (as defined below), Bank shall prevent
Company from making any withdrawals from the Account. Prior to the
Activation Period, Company may operate and transact business through the
Account in its normal fashion, including making withdrawals from the
Account, but covenants to Lender it will not close the Account.
Furthermore, Bank agrees that it shall not permit Company to close the
Accounts without written approval from Lender. A reasonable period of
time following the commencement of the Activation Period, and continuing
on each Business Day thereafter, Bank shall transfer all collected and
available balances in the Account to Lender at its account specified in
the Notice (as defined below). The "Activation Period" means the period
which commences within a reasonable period of time not to exceed two
Business Days after Bank's receipt of a written notice from Lender in the
form of Exhibit A (the "Notice"). A "Business Day" is each day except
Saturdays, Sundays and Bank holidays. Funds are not available if, in the
reasonable determination of Bank, they are subject to a hold, dispute or
legal process preventing their withdrawal.
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3. Bank agrees it shall not offset, charge, deduct or otherwise
withdraw funds from the Account, except as permitted by Section 4, until
it has been advised in writing by Lender that all of Company's
obligations that are secured by the Checks and the Account are paid in
full. Lender shall notify Bank promptly in writing upon payment in full
of Company's obligations.
4. Bank is permitted to charge the Account:
(a) for its fees and charges relating to the Account or
associated with the Lockbox Service and this Agreement; and
(b) in the event any Check deposited into the Account is
returned unpaid for any reason or for any breach of warranty claim.
5. (a) If the balances in the Account are not sufficient to
compensate Bank for any fees or charges due Bank in connection with the
Account or this Agreement, Company agrees to pay Bank on demand the
amount due Bank. Company will have breached this Agreement if it has not
paid Bank, within five days after such demand, the amount due Bank.
(b) If the balances in the Account are not sufficient to
compensate Bank for any returned Check, Company agrees to pay Bank on
demand the amount due Bank. If Company fails to so pay Bank immediately
upon demand, Lender agrees to pay Bank within five days after Bank's
demand to Lender to pay any amount received by Lender with respect to
such returned Check. The failure to so pay Bank shall constitute a
breach of this Agreement.
(c) Company hereby authorizes Bank, without prior notice, from
time to time to debit any other account Company may have with Bank for
the amount or amounts due Bank under subsection 5(a) or 5(b).
6. (a) Bank will send information regarding deposits to the
Account to the address specified below for Company or as otherwise
specified in writing by Company to Bank, and will send a copy of each
such deposit advice to the address specified below for Lender.
(b) In addition to the original Bank statement provided to
Company, Bank will provide Lender with a duplicate of such statement.
7. (a) Bank will not be liable to Company or Lender for any
expense, claim, loss, damage or cost ("Damages") arising out of or
relating to its performance under this Agreement other than those Damages
which result directly from its acts or omissions constituting negligence
or intentional misconduct.
(b) In no event will Bank be liable for any special, indirect,
exemplary or consequential damages, including but not limited to lost
profits.
(c) Bank will be excused from failing to act or delay in
acting, and no such failure or delay shall constitute a breach of this
Agreement or otherwise give rise to any liability of Bank, if (i) such
failure or delay is caused by circumstances beyond Bank's reasonable
control, including but not limited to legal constraint, emergency
conditions, action or inaction of governmental, civil or military
authority, fire, strike, lockout or other labor dispute, war, riot,
theft, flood, earthquake or other natural disaster, breakdown of public
or private or common
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carrier communications or transmission facilities, equipment failure, or
negligence or default of Company or Lender or (ii) such failure or delay
resulted from Bank's reasonable belief that the action would have
violated any guideline, rule or regulation of any governmental authority.
(d) Bank shall have no duty to inquire or determine whether
Company's obligations to Lender are in default or whether Lender is
entitled to provide the Notice to Bank. Bank may rely on notices and
communications it believes in good faith to be genuine and given by the
appropriate party.
(e) Notwithstanding any of the other provisions in this
Agreement, in the event of the commencement of a case pursuant to Title
11, United States Code, filed by or against Company, or in the event of
the commencement of any similar case under then applicable federal or
state law providing for the relief of debtors or the protection of
creditors by or against Company, Bank may act as Bank deems necessary to
comply with all applicable provisions of governing statutes and shall not
be in violation of this Agreement as a result.
(f) Bank shall be permitted to comply with any writ, levy
order or other similar judicial or regulatory order or process concerning
the Account or any Check and shall not be in violation of this Agreement
for so doing.
8. Company and Lender shall jointly and severally indemnify Bank
against, and hold it harmless from, any and all liabilities, claims,
costs, expenses and damages of any nature (including but not limited to
allocated costs of staff counsel, other reasonable attorney's fees and
any fees and expenses) in any way arising out of or relating to disputes
or legal actions concerning Bank's provision of the services described in
this Agreement. This section does not apply to any cost or damage
attributable to the gross negligence or intentional misconduct of Bank.
Company's and Lender's obligations under this section shall survive
termination of this Agreement.
9. Company and Lender shall jointly and severally pay to Bank, upon
receipt of Bank's invoice, all costs, expenses and attorneys' fees
(including allocated costs for in-house legal services) incurred by Bank
in connection with the enforcement of this Agreement and any instrument
or agreement required hereunder, including but not limited to any such
costs, expenses and fees arising out of the resolution of any conflict,
dispute, motion regarding entitlement to rights or rights of action, or
other action to enforce Bank's rights in a case arising under Title 11,
United States Code. Company agrees to pay Bank, upon receipt of Bank's
invoice, all costs, expenses and attorneys' fees (including allocated
costs for in-house legal services) incurred by Bank in the preparation
and administration of this Agreement (including any amendments hereto or
instruments or agreements required hereunder).
10. Termination and Assignment of this Agreement shall be as follows:
(a) Lender may terminate this Agreement by providing notice to
Company and Bank that all of Company's obligations which are secured by
Checks and the Account are paid in full. Lender may also terminate or it
may assign this Agreement upon 30 day's prior written notice to Company
and Bank. Bank may terminate this Agreement upon 30 days' prior written
notice to Company and Lender. Company may not terminate this Agreement
except with the written consent of Lender and upon prior written notice
to Bank.
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(b) Notwithstanding subsection 10(a), Bank may terminate this
Agreement at any time by written notice to Company and Lender if either
Company or Lender breaches any of the terms of this Agreement, or any
other agreement with Bank.
11. (a) Each party represents and warrants to the other parties
that (i) this Agreement constitutes its duly authorized, legal, valid,
binding and enforceable obligation; (ii) the performance of its
obligations under this Agreement and the consummation of the transactions
contemplated hereunder will not (A) constitute or result in a breach of
its certificate or articles of incorporation, by-laws or partnership
agreement, as applicable, or the provisions of any material contract to
which it is a party or by which it is bound or (B) result in the
violation of any law, regulation, judgment, decree or governmental order
applicable to it; and (iii) all approvals and authorizations required to
permit the execution, delivery, performance and consummation of this
Agreement and the transactions contemplated hereunder have been obtained.
(b) The parties each agree that it shall be deemed to make and
renew each representation and warranty in subsection 11(a) on and as of
each day on which Company uses the services set forth in this Agreement.
12. (a) This Agreement may be amended only by a writing signed by
Company, Lender and Bank; except that Bank's charges are subject to
change by Bank upon 30 days' prior written notice to Company.
(b) This Agreement may be executed in counterparts; all such
counterparts shall constitute but one and the same agreement.
(c) This Agreement controls in the event of any conflict
between this Agreement and any other document or written or oral
statement. This Agreement supersedes all prior understandings, writings,
proposals, representations and communications, oral or written, of any
party relating to the subject matter hereof.
(d) This Agreement shall be interpreted in accordance with the
laws of the State of New York without reference to that state's
principles of conflicts of law.
13. Any written notice or other written communication to be given under
this Agreement shall be addressed to each party at its address set forth
on the signature page of this Agreement or to such other address as a
party may specify in writing. Except as otherwise expressly provided
herein, any such notice shall be effective upon receipt.
14. Nothing contained in the Agreement shall create any agency,
fiduciary, joint venture or partnership relationship between Bank and
Company or Lender. Company and Lender agree that nothing contained in
this Agreement, nor any course of dealing among the parties to this
Agreement, shall constitute a commitment or other obligation on the part
of Bank to extend credit to Company or Lender.
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In Witness Whereof, the parties hereto have executed this
Agreement by their duly authorized officers as of the day and year first
above written.
SELECTFORCE, INC.
("Company")
By: /s/ Geoffrey Ramsey
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Name: Geoffrey Ramsey
------------------------- Address for notices:
Title: CEO 2 Broadway
------------------------ Hamden, CT 06518
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LAURUS MASTER FUND, LTD.
("Lender")
By: /s/ David Grin
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Name: David Grin
------------------------- Address for notices:
Title: Managing Partner 825 Third Avenue, 14th Floor
------------------------ New York, NY 10022
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FLEET NATIONAL BANK, N.A.
("Bank")
By: /s/ Arthur E. Rhatigan, Jr. Address for notices:
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Name: Arthur e. Rhatigan, Jr. 1. CASH MANAGEMENT ACCOUNTS
-------------------------- ADMINISTRATION
Title: Sr. VP
------------------------ Fleet National Bank
575 Pigeon Hill Rd.
Windsor, CT 06095
Mail Stop: CT2-507-01-02
Phone: 860-725-2089
Fax: 1-800-391-0617
2. ARTHUR E. RHATIGAN, JR.
Fleet National Bank
157 Church Street
New Haven, CT 06510
Mail Stop: CT2-226-26-04
Phone: 203-752-4886
Fax: 203-752-4887
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EXHIBIT A
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DEPOSIT ACCOUNT CONTROL AGREEMENT
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[Letterhead of Lender]
To: Cash Management Accounts Administration
Fleet National Bank
575 Pigeon Hill Rd.
Windsor, CT 06095
Mail Stop: CT2-507-01-02
Phone: 860-725-2089
Fax: 1-800-391-0617
Re: SelectForce, Inc.
Account No. 9485372398
Ladies and Gentlemen:
Reference is made to the Deposit Account Control Agreement dated as
of June 23, 2004 (the "Agreement") among SelectForce, Inc., us and you
regarding the above-described account (the "Account"). In accordance
with Section 2 of the Agreement, we hereby give you notice of our
exercise of control of the Account and we hereby instruct you to transfer
funds to our account as follows:
Bank Name: _________________________
Bank Address: _________________________
ABA No.: _________________________
Account Name: _________________________
Account No.: _________________________
Beneficiary's Name: _________________________
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Very truly yours,
LAURUS MASTER FUND, LTD.
as Lender
By:___________________________
Name:_________________________
Title:________________________
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