Exhibit 10.53

 

PARTICIPATION AGREEMENT

 

Date:  eff November2, 2004

Amount of Credit:

 

Up to $5,000,000.00

 

 

 

Seller’s Share:

 

Purchaser’s Share:

 

 

 

 

 

$550,000.00

 

 

 

 

Interest Rate: Prime + 8%

 

Interest Rate: Prime + 8%

 

 

 

 

Method of determining Share:

 

See paragraph 5 below

(check one)

 

 

 

 

 

 

 

 

 

 

Seller:

Greenfield Commercial Credit, LLC

 

 

Purchaser:

James R. Colpitt Trust

 

 

Borrower:

Information Systems Consulting Corp., et al as described in the Credit
Documents.

 

 

Address:

10670 N. Central Express Way, Ste 600, Dallas, TX 75231

 

THIS PARTICIPATION AGREEMENT (“Agreement”), made effective November 2, 2004,
between the undersigned as Seller and Purchaser to provide for the sale and
purchase of a participation in the Credit described above to Borrower (“Credit”)
for the share indicated above, and to further delineate the rights, duties, and
liabilities of Seller and Purchaser in relation to the making and servicing of
the Credit and application of payments:

 

WITNESSETH:

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements herein contained, Seller and Purchasers agree as follows:

 

1.                                      Credit Documents; Disbursement of
Credit.  The Credit has been disbursed or will be disbursed by Seller to
Borrower by one or more disbursements in accordance with the agreements and
notes between Seller and Borrower.  The Credit is or shall be evidenced by loan
agreement and notes and other documentation; is secured by such security
agreements, real estate mortgages and other security documents and is

 

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guaranteed by guaranties (collectively the “Credit Documents”).  Copies of the
Credit Documents are either in possession of Purchaser or shall be forwarded to
Purchaser upon request.  The originals of the Credit Documents shall be retained
by Seller.

 

2.                                      Purchase of Participation.  Purchaser
shall remit to Seller, through Borrower, upon receipt of this Agreement signed
by Seller, funds equivalent to the principal amount of this participation..

 

3.                                      Interest Earned.         Interest shall
be earned in direct proportion to the share of the principal owned by Seller and
Purchaser, except that interest earned by Purchaser shall be calculated from
date of disbursement.

 

4.                                      Disclosure of
Information.                                                 To the extent not
already available to Purchaser, Seller shall use its best efforts to provide
Purchaser, promptly after Seller’s receipt of Purchaser’s written request
therefor, (a) such information as is then in Seller’s possession in respect of
the current status of principal and interest payments under the Credit Documents
and in respect of the current status of accrual of interest under the Credit
Documents, (b) copies of all current financial statements then in Seller’s
possession with respect to Borrower and each guarantor under the Credit
Documents, (c) current information then in Seller’s possession as to collateral
values and lien status, and (d) other current factual information then in
Seller’s possession bearing on the continuing creditworthiness of Borrower or
any guarantor under the Credit Documents; provided that nothing contained in
this paragraph shall impose any liability upon Seller for its failure to provide
Purchaser any such information or financial statements except for Seller’s own
bad faith, willful misconduct, or gross negligence; and provided that Seller
shall not be obligated to provide Purchaser with any information in violation of
applicable law or any contractual restrictions on the disclosure thereof.

 

5.                                      Loan Servicing and Application of
Payments.                                              Seller will service the
Credit and apply payments as follows:

 

a.                                       Seller will collect all payments, and,
when collected, promptly credit all such payments first to Borrower’s
Obligations to Seller as Lender under the Credit Documents until all such
Obligations are paid in full.  Thereafter, Seller will collect all payments,
and, when collected, promptly credit all such payments to such of Purchaser’s
Share as shall have been advanced by it under this Agreement.  For further
clarity, it is the intention of this Agreement that Purchaser shall have the
benefit of any equity in the Collateral as defined in the Credit Documents, to
the extent of advances made by it up to $550,000.00, but only after Borrower’s
Obligations to Seller as Lender have been paid in full.  Provided, however, that
Purchaser shall have the immediate benefit of any security interest Seller may
have in all Datatek accounts, except the Assigned Datatek Accounts as defined in
the Intercreditor Agreement. Purchaser acknowledges that Seller’s interest in
such Accounts (other than the Assigned Datatek Accounts), and therefore
Purchaser’s, is subordinate to Wells Fargo Business Credit, Inc. and the
Internal Revenue Service.

 

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b.                                      Except as expressly provided herein to
the contrary, including, without limitation, the preceding paragraph,  all
rights pursuant to the Credit Documents and all Collateral held by Seller to
secure payment of the obligations of Borrower under the Credit Documents shall
be so held (and such rights shall be exercised or not exercised at the sole
option of Seller and without consent of the Purchaser) for the ratable benefit
of Seller and Purchaser and Purchaser shall have no right or responsibility to
exercise such rights or to require Seller to exercise such rights.  Purchaser
hereby acknowledges and agrees that neither this Agreement nor the participation
created hereby confer on Purchaser any right to vote on, approve, or sign
amendments or waivers of the Credit Documents or any other independent benefit
or any legal or equitable right, remedy or other claim under the Credit
Documents, except as otherwise provided in the Credit Documents.

 

c.                                       The participation shall be for the
account and risk, and at the pro rata out-of-pocket expense of participants, and
said participation may not be transferred by Purchaser, in whole or in part,
without the written consent of Seller.  It is also understood that Seller shall
have no independent responsibility for the performance of Borrower’s obligation,
or for failure or delay in exercising any rights or powers any rights or powers
given Seller by the Credit Documents.

 

d.                                      At its option, from time to time and at
any time, Seller shall be entitled
to:                                               (a) grant one or more
additional participations in the obligations of Borrower under the Credit
Documents upon terms similar to this agreement or otherwise; or (b) pay to
Purchaser all principal, interest, and fees then owing to Purchaser hereunder in
respect of its pro rata Participation, thereby terminating this agreement.
Notwithstanding any other provision in this Agreement, in addition to the rights
of Seller, Purchaser shall have the right, at any time that Borrower is not in
default to Seller under the Credit Documents, to be repaid by the Borrower for
all principal, interest, and fees then owing to Purchaser hereunder and under
the note between the Borrower and Purchaser dated as of the date hereof (the
“Note”), thereby terminating this agreement, the participation created
hereunder, and the Note.

 

e.                                       Seller shall keep proper books of
account, files and records, reflecting the participation evidenced hereby, and
allow Purchaser or federal or state banking authorities having authority to
examine Purchaser, to inspect same and obtain copies of such accounts, files and
records, at Seller’s expense.

 

6.                                      Purchaser’s Warranties.      Purchaser
represents and warrants that (a) it has independently reviewed the Credit
Documents and all other documents related thereto in the possession of Seller
and requested by Purchaser, including without limitation the Intercreditor
Agreement dated March 12, 2004 between Greenfield Commercial Credit, LLC and
Wells Fargo Business Credit, Inc., and that there shall be no recourse on, or
any liability incurred by, Seller for any misstatement (whether material or
immaterial) or omission (whether negligent or otherwise) of any person contained
in any such documents or otherwise, (b) Purchaser has conducted, to the extent
it deems

 

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necessary, an independent investigation of Borrower, including, without
limitation, an investigation relating to the creditworthiness of Borrower, and
the risk involved to Purchaser in the advance of its funds pursuant to the
Credit Documents, and (c) Purchaser has not relief upon Seller for any such
investigation or assessment of risk.

 

7.                                      Administration and Seller’s Limited
Liability.                                       Neither Seller nor any of its
agents, officers or employees shall be liable for any action taken or omitted to
be taken by it or them under this agreement or any Credit Documents in good
faith and believed by it or them to be within the discretion or power conferred
upon it or them by this agreement or any Credit Documents, or be responsible for
the consequences or any error of judgment.  Seller will exercise the same care
in administering the Credit Documents as it exercises with respect to similar
transactions entered into solely for its own account and shall otherwise have no
liability or responsibility to Purchaser except for actions taken or omitted to
betaken by Seller which shall constitute gross negligence or willful
misconduct.  Unless indemnified to the satisfaction of Seller against loss,
cost, liability, and expense, Seller shall be under no duty to enforce any
rights, remedies, powers, or privileges with respect to any enforcement of the
obligations of Borrower under the Credit Documents and shall not be compelled to
do any act hereunder or there under or to take any action toward the exercise or
enforcement of the powers created by this agreement or any Credit Documents, or
to prosecute or defend any suit in respect hereof or thereof.  Seller shall not
be responsible in any manner to Purchaser for (a) the effectiveness,
enforceability, genuineness, validity, or due execution of the Credit Documents
or any other documents, (b) any representation, warranty, document, certificate,
report, or statement herein made or furnished under or in connection with any of
such documents, (c) the adequacy of collateral, if any, for the obligations of
Borrower under the Credit Documents, (d) the existence, priority, or perfection
of any liens or security interests granted or purported to be granted in
connection with the Credit Documents, or (e) observation of or compliance with
any of the terms, covenants, or conditions or any such documents on the part of
Borrower.

 

8.                                      No Repurchase
Obligation.                                             No amount paid by
Purchaser to purchase any participation in the obligations of Borrower under the
Credit Documents shall be considered a loan by Seller to Purchaser.  Seller
shall have no obligation to repurchase the participation sold under this
agreement upon any default by Borrower under any of its obligations or
otherwise.

 

9.                                      Benefit of
Agreement.                        None of the provisions of this agreement shall
inure to the benefit of Borrower or any person other than Seller and Purchaser;
consequently, Borrower and any person other than Purchaser or Seller shall not
be entitled to rely upon or raise a defense, in any manner whatsoever, the
failure of either Seller or Purchaser to comply with the provisions of this
Agreement.  Neither Seller nor Purchaser shall incur any liability to Borrower
or any other person for any act or omission of each other.

 

10.                               Relationship With
Participants.                   Neither the execution of this agreement, sharing
in the Credit Documents, nor any agreement to share profit or losses

 

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arising as a result of the transactions contemplated hereby is intended to be or
to create, and the foregoing shall be construed not to be or to create, any
partnership, joint venture, or other joint enterprise between Seller and
Purchaser; and neither the execution of this Agreement, nor the management and
administration of the Credit Documents and the related documents by Seller, nor
any other right, duty or obligation of Seller under or pursuant to this
Agreement is intended to be or to create any express, implied, or constructive
trust or other fiduciary relationship between Seller and Purchaser.

 

11.                               Choice of Law.                 This Agreement
shall be governed by and construed in accordance with the laws of the State of
Michigan.  Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

 

12.                               Entire
Agreement.                                           This Agreement (a) embodies
the entire agreement between the parties, supersedes all prior agreements and
understandings, if any relating to the subject matter hereof, and may be amended
only by an instrument in writing executed jointly by an authorized officer or
Seller and of Purchaser, and (b) has been executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes and all
of which constitute, collectively, one agreement; but in making proof of this
agreement, it shall not be necessary to produce or account for more than one
such counterpart.

 

Executed as of the date first above written.

 

 

SELLER:

 

 

 

GREENFIELD COMMERCIAL

 

CREDIT LLC

 

a Michigan limited liability company

 

By:

GCC Management, Inc.

 

Its:

Manager

 

 

 

By:

/s/ Donald G. Barr, Jr.

 

 

Donald G. Barr, Jr.

 

Its:

President

 

 

 

PURCHASER:

 

 

 

JAMES R. COLPITT TRUST

 

u/a dated 12/17/04

 

 

 

By:

/s/ James R. Colpitt

 

Its:

Trustee

 

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