Legal AR Form

LEGAL AR FORM

This Assignment of Accounts Receivable and Security Agreement (the "Agreement") is made as of between Assignor Name: , an entity type Individual Corporation LLC Partnership organized under the laws of , with principal place of business at ; and Assignee Name: , an entity type Individual Corporation LLC Partnership organized under the laws of , with principal place of business at .

Recitals

WHEREAS, Assignor owns or has the right to receive payment of certain accounts, accounts receivable, contract rights and other obligations for the payment of money arising in the ordinary course of Assignor's business (collectively, the "Receivables"); and

WHEREAS, Assignor desires to assign to Assignee, and Assignee desires to accept, an assignment of the Receivables as security and to grant Assignee a security interest in the Receivables to secure performance of Assignor's obligations as set forth in this Agreement; and

WHEREAS, the parties intend by this Agreement to create a present assignment and a security interest in the Receivables and the proceeds thereof, subject to the terms and conditions set forth below.

Now Therefore

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Assignment; Scope

1.1 Assignment. Assignor hereby absolutely assigns, transfers and conveys to Assignee all present and after-acquired rights, title and interest in and to the Receivables and the proceeds thereof, including all invoices, claims, causes of action and collections related thereto, whether now existing or hereafter arising, to secure repayment and performance of all obligations of Assignor to Assignee.

1.2 Schedule of Receivables. The Receivables subject to this Agreement are described in Schedule A attached hereto and incorporated herein. Provide a description of assigned receivables, account numbers, original customer names, and any exceptions below.

2. Security Interest; Filings

2.1 Grant of Security Interest. To secure the performance of all present and future obligations of Assignor to Assignee, Assignor grants to Assignee a continuing security interest in the Receivables, including all proceeds and products thereof, and all accounts, contract rights and related documents, instruments and accessions.

2.2 Financing Statements. Assignor authorizes Assignee to file one or more financing statements, amendments, continuations and other documents under the Uniform Commercial Code or similar laws naming Assignor as debtor and describing the Receivables as collateral. Assignor shall execute financing statements and other documents reasonably requested by Assignee.

3. Representations and Warranties

Assignor represents and warrants to Assignee as of the date hereof and continuing until all obligations secured hereby are satisfied:

(a) Assignor has good and marketable title to the Receivables, free and clear of any security interest, lien, claim or encumbrance except those disclosed in writing to Assignee;

(b) Each Receivable assigned hereunder arises from bona fide sales of goods or services in the ordinary course of Assignor's business and is not subject to any known bona fide dispute, defense or setoff except as disclosed in Schedule A;

(c) No prior assignment, sale or transfer of the Receivables has been made that would impair Assignee's rights hereunder except as disclosed in writing to Assignee.

4. Covenants

Assignor covenants that until the obligations secured hereby are satisfied in full, Assignor shall: (i) maintain accurate books and records of the Receivables and make them available to Assignee upon request; (ii) notify Assignee promptly of any dispute, complaint or claim affecting a Receivable; (iii) not create or permit any lien or security interest on the Receivables other than as permitted by this Agreement; and (iv) collect Receivables in Assignor's ordinary course of business and remit proceeds as required herein.

5. Collections; Application of Proceeds

5.1 Collections. Assignor shall collect Receivables in its own name unless Assignee directs otherwise in writing. Assignor shall hold any proceeds of Receivables in trust for Assignee and shall promptly remit such proceeds to Assignee in the manner specified by Assignee.

5.2 Application. Proceeds received by Assignee shall be applied to amounts due and payable in the following order: (a) reasonable costs and expenses of collection and enforcement (including attorneys' fees); (b) accrued interest, if any; and (c) principal and other obligations in accordance with this Agreement.

6. Default; Remedies

6.1 Events of Default. Any one or more of the following shall constitute an Event of Default: (a) failure by Assignor to perform any material obligation under this Agreement; (b) Assignor's insolvency, appointment of a receiver, commencement of bankruptcy or similar proceedings; or (c) any representation or warranty by Assignor proving to have been false or misleading in any material respect when made.

6.2 Remedies. Upon the occurrence and during continuation of an Event of Default, Assignee may, without notice or demand other than any notice expressly required by applicable law, exercise any or all rights and remedies available at law or in equity, including taking possession of Receivables, collecting accounts, applying proceeds to indebtedness, accelerating obligations, and filing or enforcing financing statements. Assignee's remedies shall be cumulative.

7. Notices

All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally or by certified mail, return receipt requested, or by nationally recognized overnight courier to the addresses set forth below or to such other address as a party may designate by written notice to the other party.

8. Costs and Expenses

If Assignee undertakes any action to enforce this Agreement or collect amounts due hereunder, Assignor shall reimburse Assignee for all reasonable costs and expenses incurred, including attorneys' fees, court costs and fees for filing or recording financing statements, whether or not a lawsuit is commenced.

9. Governing Law; Venue

This Agreement shall be governed by and construed in accordance with the laws of the state of , without regard to conflict of laws principles. The parties submit to the exclusive jurisdiction of the courts located in that state for any dispute arising out of or relating to this Agreement.

10. Entire Agreement; Severability

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral. If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be severed and the remainder of the Agreement shall remain in full force and effect.

11. Amendments; Waiver; Counterparts

No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. Failure or delay by either party to exercise any right shall not constitute a waiver of that right. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

12. Miscellaneous

The parties acknowledge that the relationship created by this Agreement is solely that of creditor and debtor and does not constitute a partnership, joint venture, employment or agency relationship. Assignor agrees to execute and deliver such further instruments and take such further actions as Assignee may reasonably request to effectuate the intent and purposes of this Agreement.

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