MASTER PURCHASE ORDER ASSIGNMENT AGREEMENT
THIS AGREEMENT is made on the 21st day of July, 2000, by and between
TRANSCAP TRADE FINANCE, an Illinois general partnership (the "CONTRACTOR") and
MAJESCO SALES, INC., a New Jersey corporation (the "MANUFACTURER"), as follows:
BACKGROUND OF AGREEMENT:
A. The parties have signed an agreement in principle to enter into a
purchase order assignment program under which the Manufacturer will
assign customer purchase orders to the Contractor and request the
Contractor to purchase the required materials to fulfill such purchase
orders; the Contractor will retain the Manufacturer to manufacture,
process and ship ordered goods; and fees will be paid to the
Manufacturer for its services upon payment to the Contractor for the
goods,
B. The parties desire to enter into a formal agreement to set forth the
terms and provisions of the purchase order assignment program.
THEREFORE, in consideration of the services to be performed, the
payments to be made, and the obligations to be assumed as set forth in this
Agreement, the parties agree as follows:
1. DEFINITIONS. In this Agreement, the following frequently used terms
are defined as set forth in this (paragraph)1:
(a) The "CERTIFICATE" means the Purchase Order Package Certificate
required to be delivered with each request for assignment of a purchase order.
The form of Certificate is attached to this Agreement as Exhibit "A" and made a
part hereof.
(b) With respect to each purchase order submitted for assignment
hereunder, the Certificate will define the "PRODUCT" (the end product to be
delivered to the customer), the "CUSTOMER" (the business entity which issues the
purchase order), the "MATERIALS" (the materials required to produce the
Product), the "PREMISES" (Manufacturer's facility or such other facility
identified in the Certificate where the Materials will be delivered and Products
will be produced), the "P.O. PRICE" (the purchase price to be paid by the
Customer for the Products), the "P.O. DELIVERY DATE" (the date on which Products
are to be delivered to the Customer as set forth in the Certificate), and the
"MATERIALS DELIVERY DATE" (the date on which the Materials are to be delivered
to the Manufacturer as set forth in the Certificate). In those instances in
which the Manufacturer is primarily engaged in the warehousing and distribution
business, Materials and Products may refer to the same goods.
(c) A purchase order delivered to the Manufacturer in the ordinary
course of its business is referred to as a "P.O." A P.O. which meets all of the
requirements of (paragraph) 3 below is deemed to be unconditionally accepted
by Contractor and is referred to as an "ACCEPTED P.O." The date on which the
Contractor delivers notice of acceptance of the assignment of the P.O. is
referred to as the "ACCEPTANCE DATE". When an Accepted P.O. is made null and
void pursuant to this Agreement, it is referred to as a "CANCELED P.O." Under
certain circumstances, when a P.O.
is not assignable to the Contractor, the Contractor will accept an assignment of
the proceeds of the P.O. In such cases, the terms P.O. and Accepted P.O. will
mean the proceeds of such P.O. or Accepted P.O. as the case may be.
(d) A financial institution engaged in the practice of lending sums to
the Manufacturer secured at least in part by Manufacturer's accounts receivable
is referred to as the "ACCOUNTS RECEIVABLE LENDER". The Accounts Receivable
Lender involved in this transaction (if any) is identified on Addendum I
attached hereto. A "SENIOR LENDER" is any financial institution (including the
Accounts Receivable Lender) which is engaged in lending sums to the Manufacturer
secured by liens on some or all of the Manufacturer's assets. Each Senior Lender
involved in this transaction (if any) is also identified on Addendum I.
(e) The inventory of Products produced for satisfaction of a P.O. is
referred to as the "P.O. INVENTORY"; the invoice rendered upon delivery of
Products pursuant to a P.O. is referred to as the "P.O. INVOICE"; and payments
received on account of P.O. Invoices (whether paid by the Customer, the Accounts
Receivable Lender, the Manufacturer, or any other party) are referred to as the
"P.O. PROCEEDS".
(f) The Manufacturer may repurchase an Accepted P.O. pursuant to
(paragraph) 8(b) below. In the absence of such repurchase, an Accepted P.O.
becomes a "DELINQUENT P.O." if the P.O. Price is not paid to the Contractor by
the earliest of (i) the due date for payment of the P.O. Invoice, (ii) ninety
(90) days following the Funding Date if Contractor issues its letter of credit
or purchase order, (iii) thirty (30) days following the Funding Date if
Contractor advances funds by other than issuing its letter of credit or purchase
order, or (iv) the date on which the Accepted P.O. is canceled.
(g) If a lock box collection procedure is established pursuant to this
Agreement, the term "LOCK BOX" refers to the Contractor's lock box account; and
the term "LOCK BOX BANK" means the bank at which the Contractor establishes the
Lock Box and so notifies Manufacturer in writing. The Lock Box and Lock Box Bank
involved in this transaction (if any) are identified on Addendum II attached
hereto.
(h) The "FUNDING DATE" is the date on which the Contractor makes its
first Materials purchase in connection with an Accepted P.O. or issues its
letter of credit or purchase order or otherwise advances funds to or for the
benefit of or on account of an Accepted P.O., whichever is earlier. The
"CLEARANCE DATE" is the date on which the Contractor (or the Lock Box Bank) has
received full payment of the P.O. Price in connection with an Accepted P.O. in
fully collected funds.
(i) The Manufacturer will perform its obligations in accordance with
the "MANUFACTURER'S SPECIFICATIONS" which are set forth on Exhibit "B" attached
hereto and will be paid a "MANUFACTURER'S FEE" computed in accordance with the
provisions of (paragraph) 7(c) below. The Manufacturer's obligations are secured
by a "SECURITY AGREEMENT" described in (paragraph) 10 below.
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(j) The Contractor will be paid a "COMMITMENT FEE" (computed and paid
pursuant to (paragraph) 6 below), the "CONTRACTOR'S DEAL FEES" (computed and
paid pursuant to (paragraph) 7 below), and "CONTRACTOR'S EXPENSES" (computed and
paid pursuant to (paragraph) 9 below). For purposes of computing the waiver of
portions of the Commitment Fee, the term "PRODUCT VOLUME" means the aggregate of
(a) the face amounts of all letters of credit issued by Contractor plus (b) the
aggregate amount of funds advanced by Contractor by other than issuing its
letters of credit, in connection with an Accepted P.O, for which a P.O. Invoice
is issued on or before the date on which payment of the Commitment Fee is due;
and "MINIMUM VOLUME" means Product Volume which equals or exceeds $3,200,000.
(k) If the Manufacturer is required to make a "SECURITY DEPOSIT" (as
defined in (paragraph) 3(b)(i)), the Security Deposit will be maintained in
accordance with (paragraph) 10.1.
2. SUBMISSION OF P.O.'S FOR ASSIGNMENT. Subject to the terms of this
Agreement, the Manufacturer may request that the Contractor accept an assignment
of each P.O. submitted to and accepted by Manufacturer and make Material
purchases to fulfill the P.O. Each such request shall be made pursuant to a
completed and signed Certificate delivered to the Contractor.
3. ACCEPTANCE OF P.O. ASSIGNMENTS.
(a) Subject to the conditions and requirements set forth in this
(paragraph) 3, Contractor agrees to accept or decline acceptance of the
assignment of a P.O. submitted to Contractor pursuant to the provisions of
(paragraph) 2 above (in Contractor's absolute discretion) by delivery of written
notice to Manufacturer. Contractor will use its best efforts to deliver such
acceptance by 5:00 p.m. on or before the fourth full business day after
Contractor receives the Certificate.
(b) Notwithstanding the provisions of (paragraph) 3(a) above,
Contractor shall not accept the assignment of any P.O. which does not meet the
following requirements:
(i) Contractor's funding commitment with respect to the P.O. shall
not exceed 50% of the P.O. Price, provided, however, that Contractor
may exceed such limitation upon the deposit by the Manufacturer with
the Contractor of a Security Deposit (the "Security Deposit") in an
amount equal to the aggregate amount of capital required to purchase
Materials and deliver Products to a Customer in connection with the
P.O. minus the lesser of 50% of the P.O. Price or 85% of the advance to
be made by the Receivable Lender for such P.O. Price;
(ii) The P.O. shall have been approved for an advance rate of not
less than 80% of the P.O. Price by an Accounts Receivable Lender
acceptable to Manufacturer;
(iii) Manufacturer shall have on deposit with Contractor a
Security Deposit as set forth in (paragraph) 10.1 hereof;
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(iv) Upon the purchase of Materials required for the P.O., or upon
any other advance of funds in connection with the P.O., the
Contractor's aggregate outstanding funding pursuant to this Agreement
shall not exceed the sum of $1,600,000;
(v) An original, signed copy of the Certificate shall have been
delivered to the Contractor;
(vi) All information contained on the Certificate shall be
verified by Contractor to ensure (to Contractor's satisfaction) that
the Materials Delivery Date and P.O. Delivery Date are reasonable and
that the P.O. is bona fide (which verification may include, without
limitation, direct confirmation from the Customer and any vendors); and
(vii) The Manufacturer shall have delivered to the Contractor such
additional information and documentation as the Contractor may have
from time to time requested.
(c) Notwithstanding the other provisions of this (paragraph) 3, the
Contractor's acceptance of the assignment of a P.O. shall be made null and void
and the P.O. shall be deemed a Canceled P.O. upon the occurrence of any one of
the following:
(i) The failure of the Contractor to obtain accepted orders for
Materials at prices and on other terms and conditions acceptable to the
Contractor within five (5) business days following the Acceptance Date,
and Contractor's notice to the Manufacturer thereof. Upon delivery of
such notice to Manufacturer, Contractor's rights and interests in and
to the P.O. will be terminated absolutely and Contractor shall have no
obligation whatsoever to Manufacturer with respect to such P.O.;
(ii) The failure of a vendor of Materials to deliver Materials
which conform to Contractor's specifications to the Premises on or
before the Material Delivery Date. Upon such failure of delivery,
Contractor shall have the right to require Manufacturer to purchase the
Materials from Contractor and shall assign to Manufacturer the right to
receive those Materials which have not then arrived at the Premises;
(iii) The cancellation of the P.O. prior to delivery of Products
to the Customer. Upon such cancellation, Manufacturer shall pay
Contractor such sums as are required pursuant to (paragraph)8 below;
and
(iv) The failure of the Manufacturer to obtain (if so requested by
Contractor) a waiver and release of Contractor by the Customer of any
and all liability for breach of any and all express or implied
warranties or product liability claims with respect to the Products or
the use and distribution thereof.
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(d) A P.O. shall be deemed an Accepted P.O. only when (i) the P.O. is
submitted for assignment by the Manufacturer pursuant to a Certificate or such
other form of submission to which the Contractor may from time to time consent,
(ii) the Contractor shall deliver notice of acceptance of assignment to the
Manufacturer pursuant to subparagraph (a) or, in the absence of such notice of
acceptance, the Contractor shall purchase Materials with respect to the P.O. or
otherwise advance of funds in connection with the P.O., (iii) the P.O. shall
meet each of the requirements of subparagraph (b) above unless otherwise waived
by the Contractor, and (iv) none of the events described in subparagraph (c)
above shall have occurred prior to delivery of the Products to the Customer
pursuant to the P.O. Until such time as each of the aforedescribed requirements
and conditions is satisfied in full, Contractor's acceptance of an assigned P.O.
shall be deemed conditional and subject to revocation at any time.
4. APPOINTMENT OF MANUFACTURER.
(a) Subject to the other provisions of this Agreement, with respect to
all Accepted P.O.'s (and only so long as such P.O. remains an Accepted P.O.)
Contractor hereby appoints the Manufacturer as Contractor's exclusive source for
acceptance of Materials at the Premises, performance of all manufacturing,
processing and warehousing requirements with respect to the conversion of
Materials into Products, and the delivery of Products to Customers, and the
Manufacturer hereby accepts such appointment. Manufacturer agrees to perform all
of its obligations pursuant to this (paragraph) 4 in a good and workmanlike
manner, to utilize quality control procedures consistent with the standards of
Manufacturer and the industry, and to otherwise comply with each of the
Manufacturer's Specifications.
(b) So long as any Materials or Products are located at the Premises or
are scheduled for delivery to the Premises, Manufacturer agrees to warehouse all
Materials and Products and, with respect to such warehousing obligations,
Manufacturer agrees to perform in accordance with all of the Manufacturer's
Specifications.
(c) Manufacturer further agrees that with respect to Materials
purchased by Contractor pursuant to (and in accordance with) a Certificate which
are not (or cannot be) used in connection with the applicable Accepted P.O.,
upon Contractor's written notice:
(i) Manufacturer shall purchase such Materials from Contractor
within three (3) days following Contractor's notice for a purchase
price equal to Contractor's costs for the Materials; or
(ii) If Manufacturer fails to make such purchase of Materials,
such Materials shall be sold by Contractor and the proceeds thereof
applied first to Contractor's costs for the Materials, and the balance,
if any, to Manufacturer.
5. PAYMENT AND RE-ASSIGNMENT.
(a) Upon delivery of Products to the Customer pursuant to an
Accepted P.O., Manufacturer shall issue a P.O. Invoice (and deliver any other
related documents required by the
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applicable P.O. for issuance of an invoice on account of such P.O.) to the
Customer for the full P.O. Price. Upon Contractor's direction, the P.O. Invoice
so issued shall be in the name of the Contractor and shall direct the Customer
to make payment to the Contractor (or the Lock Box, if applicable). Manufacturer
shall immediately pay to the Contractor any sums from time to time received by
the Manufacturer from the Customer or any other party other than the Contractor
on account of a P.O. Invoice. Upon Contractor's demand, each P.O. Invoice shall
be prepared on such invoice form as Contractor may designate.
(b) At such time as Contractor has received payment in full on
account of a P.O. Invoice, the Contractor shall re-assign the applicable
Accepted P.O. and all rights with respect thereto to the Manufacturer and the
Manufacturer shall accept such re-assignment. The re-assignment shall be
evidenced by a Re-Assignment and Release of Purchase Order in the form of
Exhibit "C" attached hereto.
(c) Sums received by the Contractor on account of a P.O. Invoice
shall be applied by the Contractor for the satisfaction of the expenses, fees
and charges described in this Agreement pursuant to the priorities of payment
set forth in (paragraph) 7 below. Provided, however, that Manufacturer shall pay
all sums due Contractor upon a Delinquent P.O. in the manner and pursuant to the
terms of (paragraph) 8 below.
6. COMMITMENT FEE.
(a) Subject to the provisions of this (paragraph) 6, Manufacturer
shall pay Contractor a Commitment Fee in consideration of Contractor's
commitment to reserve and have available sufficient funds to purchase Materials
or to otherwise advance funds in connection with a P.O. for Product Volume in
amounts equal to or exceeding the Minimum Volume as contemplated by this
Agreement. The Commitment Fee shall be in the sum of $140,800 and shall be paid
by Manufacturer on the earlier of twelve months following the date of this
Agreement or the date of termination of this Agreement. In the event the term of
this Agreement is renewed for one or more twelve month renewal terms, for each
such renewal, Manufacturer shall pay Contractor a Commitment Fee in the sum of
$140,800, which fee shall be paid by Manufacturer on the earlier of twelve
months following the date of the renewal of this Agreement or the date of
termination of this Agreement. The Commitment Fee for the initial term of this
Agreement is deemed by the parties to have been earned by the Contractor upon
the signing of this Agreement, as of which date the Contractor has reserved the
requisite funds. The Commitment Fee for each renewal term of this Agreement is
deemed by the parties to have been earned by the Contractor upon each renewal
date of this Agreement, as of which date the Contractor has reserved the
requisite funds.
(b) Notwithstanding the provisions of subparagraph (a) above, all
or a portion of the Commitment Fee shall be waived in accordance with the
provisions of this subparagraph (b). If Product Volume for the initial term or
any renewal thereof as of the due date for payment of the Commitment Fee equals
or exceeds the Minimum Volume, the entire Commitment Fee shall be waived by the
Contractor. If Product Volume for the initial term or any renewal thereof as of
the due date for payment of the Commitment Fee does not equal or exceed the
Minimum Volume,
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Contractor shall waive that portion of the Commitment Fee equal to the
Commitment Fee multiplied by a fraction, the numerator of which is the Product
Volume as of the due date for payment of the Commitment Fee, and the denominator
of which is the Minimum Volume.
7. COMPENSATION OF CONTRACTOR AND MANUFACTURER.
(a) Payments received by the Contractor on account of Accepted P.O.'s
will be applied in the following order of priority:
(i) First, to pay Contractor's Expenses to the extent that such
expenses are then due pursuant to the terms of (paragraph) 9.
(ii) Second, to the payment of the Contractor's Deal Fees in
connection with the Accepted P.O. and all other Accepted P.O.'s that
became Accepted P.O.'s concurrently with such Accepted P.O.;
(iii) Third, to pay any shortage then existing in the Security
Deposit as set forth in (paragraph) 10.1;
(iv) Fourth, to reimburse the Contractor for the cost of Materials
and for other advances made in connection with a P.O. (without regard
to term or prompt payment discounts) purchased in connection with the
Accepted P.O. and all other Accepted P.O.'s that became Accepted P.O.'s
concurrently with such Accepted P.O.; and
(v) Fifth, to the payment of the Manufacturer's Fee in connection
with the Accepted P.O.
(b) The Contractor's Deal Fees with respect to each Accepted P.O. shall
be as follows:
(i) A transaction initiation and set-up fee in a sum equal to 4.4%
of the aggregate of (a) the face amounts of all letters of credit
issued by Contractor (or other financial accommodations) plus (b) all
funds advanced by Contractor by other than issuing its letters of
credit; plus
(ii) A daily maintenance fee in a sum equal to 0.067% of the
aggregate of the face amounts of all letters of credit issued by
Contractor (or other financial accommodations) and all funds advanced
by Contractor by other than issuing its letters of credit which remain
outstanding for more than sixty (60) days; plus
(iii) A Materials advance fee in a sum equal to the Applicable
Daily Rate (as hereinafter defined) multiplied by the aggregate amount
outstanding on all letters of credit (or other financial
accommodations) and all funds advanced by Contractor by other than
issuing its letters of credit on account of purchases of Materials or
other advances made in connection with a P.O. multiplied by the number
of days from the
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earliest of (A) the date on which any such letter of credit or purchase
order or financial accommodation is negotiated into cash by any person,
or (B) the date funds are advanced by other than issuing a letter of
credit or purchase order, to and including the Clearance Date. The
"Applicable Daily Rate" shall mean the prime rate as in effect from
time to time at the American National Bank, Chicago, Illinois, plus 4%,
divided by 360.
(iv) In the event of a Delinquent P.O., a late payment fee in a
sum equal to 0.067% of the outstanding portion of the P.O. Price
multiplied by the number of days from the date an Accepted P.O. becomes
a Delinquent P.O. to and including the Clearance Date.
Notwithstanding the foregoing, if the sum of the transaction initiation and
set-up fee and the daily maintenance fee is not equal to or greater than $5,000
with respect to an Accepted P.O., the minimum aggregate amount payable by
Manufacturer to Contractor for the transaction initiation and set-up fee and the
daily maintenance fee with respect to such accepted P.O. shall be equal to
$5,000.
(c) The Manufacturer's Fee with respect to each Accepted P.O. shall be
equal to the collected P.O. Proceeds with respect to such Accepted P.O. less all
sums payable pursuant to subparagraphs (a)(i), (ii), (iii) and (iv) above and
less 100% of all term discounts or discounts for prompt payment.
(d) Sums due on account of the expenses and fees described in
subparagraphs (a)(i), (ii), (iii) and (iv) above shall be paid as and when
proceeds are received with respect to the applicable Accepted P.O. The
Manufacturer's Fee will be paid not later than the second business day after the
Clearance Date and after satisfaction of all costs, fees and expenses having a
higher priority then due and owing.
8. REPURCHASE; REASSIGNMENT.
(a) Contractor shall have the right to require the Manufacturer to
immediately purchase any Delinquent P.O. (and inventory of Materials and
Products in the case of a Canceled P.O.) for an amount equal to the full amount
outstanding under the P.O. Invoice (or the P.O. Price in the case of a canceled
P.O.). Any such payment by the Manufacturer shall be deemed to be P.O. Proceeds
and shall be applied in accordance with the priorities and terms set forth in
(paragraph) 7 above.
(b) In the event that Manufacturer makes all payments due on a
Delinquent P.O. or Canceled P.O. pursuant to the provisions of subparagraph (a)
above, Contractor shall thereupon immediately assign to Manufacturer all of
Contractor's rights and interests in and to the P.O. Invoice and the P.O.
Proceeds and any Materials or Products in the possession of Contractor or
Manufacturer with respect to such Delinquent P.O.
9. CONTRACTOR'S EXPENSES. Immediately upon Contractor's demand,
Manufacturer shall pay or reimburse Contractor for all Contractor's Expenses.
Contractor's Expenses include all reasonable expenses, fees, and costs incurred
by Contractor in connection with the creation of and
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performance of this Agreement and the transactions contemplated hereby,
including without limitation, the expenses of Contractor's representative at the
Premises, insurance and credit insurance premiums, audit costs, attorney's fees,
Contractor's travel expenses, Lock Box Bank charges, and filing fees.
Contractor's demand for payment of Contractor's Expanses will be made in writing
and will include reasonable documentation of the expenses for which
reimbursement is demanded. Contractor acknowledges receipt of the sum of $5,000
deposited by Manufacturer to be applied towards the payment of Contractor's
Expenses.
10. SECURITY INTERESTS. As security for the performance by Manufacturer
of each of its obligations under this Agreement, Manufacturer hereby grants the
following security interests to the Contractor:
(a) A security interest in all of Manufacturer's assets in accordance
with the provisions of the Security Agreement in form satisfactory to
Contractor. Provided, however, that such grant of security interest shall be
subordinate to the lien of the Senior Lender (if any) in any common collateral.
(b) The right to set-off against any and all amounts due to the
Manufacturer hereunder any sums which are due to the Contractor hereunder which
have become past due and delinquent under this Agreement.
(c) All of the Manufacturer's rights and interests in, and right of
payment from, the Accounts Receivable Lender of all sums paid or payable by the
Accounts Receivable Lender from time to time to the Manufacturer. Manufacturer
agrees to direct the Accounts Receivable Lender to make such payments to
Contractor pursuant to such written direction as Contractor may request from
time to time.
(d) All checks, notes, deposits, drafts, and other instruments of
payment on account of or related to an Accepted P.O. Manufacturer hereby
irrevocably designates and appoints the Contractor (and all persons designated
by the Contractor) as the Manufacturer's true and lawful attorney-in-fact and
agent-in-fact and Contractor (or Contractor's agent) may, without notice to
Manufacturer:
(i) At any time endorse by writing or stamping Manufacturer's name
on any checks, notes, deposits, drafts or other instruments of payment
on account of, relating to, or representing the proceeds of an Accepted
P.O. or any other collateral described herein or in the Security
Agreement (collectively the "Collateral") which come into the
possession of the Contractor or are under Contractor's control and
deposit the same to the account of the Contractor for application to
all sums due from the Manufacturer to the Contractor hereunder; and
(ii) At any time after the occurrence of a default by the
Manufacturer hereunder or pursuant to the Security Agreement, in
Manufacturer's or Contractor's name, demand payment of, enforce payment
of, exercise all of Manufacturer's rights and remedies with respect to,
settle, adjust, compromise, initiate and prosecute legal
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proceeding with respect to, and otherwise take all actions with respect
to the Collateral which are, in the Contractor's sole discretion,
necessary or desirable in order to fulfill Manufacturer's obligations
under this Agreement and otherwise realize the full economic value of
the Collateral.
10.1 SECURITY DEPOSIT. (a) The Security Deposit shall be held and
applied by the Contractor as follows:
(i) Contractor shall hold the Security Deposit in such
depositaries as it determines and may commingle the same with other
funds from time to time in Contractor's possession. No interest or
other earnings shall be payable on account of sums held as a Security
Deposit.
(ii) Upon the occurrence of a default as set forth in (paragraph)
18(c) below, Contractor may, in its discretion and without prior
notice, apply all or any portion of the Security Deposit to pay or
otherwise satisfy Manufacturer's obligations hereunder. Contractor
shall, as soon as practicable following any such application, notify
Manufacturer thereof and provide a full accounting of such application.
(b) When funds are applied in the manner set forth in (paragraph)
10.l(a)(ii) above, a "shortage" is created in an amount equal to all sums so
applied. Manufacturer shall, within five (5) business days following
notification of any shortage, pay to the Contractor, as and for a portion of
the Security Deposit, the sum of such shortage.
(c) Upon termination of this Agreement and the payment of all sums then
due the Contractor by the Manufacturer hereunder, Contractor shall promptly pay
the Security Deposit to Manufacturer.
11. GUARANTY. It is a condition to the signing of this Agreement and
the performance by the Contractor of any of its obligations hereunder that the
persons and entities listed on Addendum III attached hereto execute and deliver
to the Contractor a Guaranty in form and substance satisfactory to Contractor
under which said guarantor(s) guaranty the Manufacturer's obligations to
Contractor hereunder.
12. COVENANTS OF CONTRACTOR. Provided that Manufacturer performs each
of its obligations in the manner set forth in this Agreement, the Contractor
covenants and agrees as follows:
(a) To use reasonable efforts to place orders for Materials identified
on Certificates for Accepted P.O.'s for purchase by Contractor and delivery to
the Premises on terms consistent with the terms set forth in the Certificate.
(b) Following timely delivery and acceptance of Materials at the
Premises, to promptly pay for all such Materials in accordance with the terms of
purchase.
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(c) To release Materials located at the Premises in such quantity and
at such times as are necessary to permit Manufacturer to meet the terms of
Accepted P.O.'s.
(d) Upon termination of this Agreement and performance by Manufacturer
of all of its obligations hereunder, to promptly execute, deliver and file (if
Manufacturer so requests) any instruments and documents reasonably necessary to
terminate and release any and all security interests granted to Contractor by
Manufacturer pursuant to this Agreement.
13. WARRANTIES AND REPRESENTATIONS OF MANUFACTURER. Manufacturer hereby
makes the following warranties and representations to Contractor, each of which
is deemed a material inducement to the Contractor to enter into and perform in
accordance with the provisions of this Agreement and each of which shall be
deemed renewed and restated as of the Acceptance Date of each Accepted P.O.:
(a) Manufacturer is a corporation duly organized, validly existing, and
in good standing under the laws of the state of its incorporation, and is
qualified or licensed as a foreign corporation to do business in every location
in which the laws require Manufacturer to be so qualified or licensed;
(b) Manufacturer has the right and power and is duly authorized and
empowered to enter into, execute, deliver, and perform this Agreement and all
agreements and documents described herein;
(c) The execution, delivery, and performance by Manufacturer of this
Agreement and all agreements and documents described herein does not constitute
a violation of any law, regulation, judgment, order, contract, charter, by-laws,
or other instrument to which Manufacturer is a party or is otherwise bound or
subject;
(d) Manufacturer is not in default under any loan agreement, mortgage,
lease, trust deed or similar agreement relating to the borrowing of money to
which Manufacturer is a party or is otherwise bound;
(e) Each P.O. submitted for assignment by the Manufacturer is a bona
fide purchase order and conforms in all respects to the representations
contained in the Certificate, which Certificate is true and correct in all
respects;
(f) The Manufacturer shall at all times maintain such types and amounts
of insurance coverage (including without limitation credit insurance) with
respect to Manufacturer's business operations, the Premises, the Materials and
the Products located upon the Premises and any Accepted P.O. as Contractor may
from time to time reasonably require, such insurance to name the Contractor as
an insured in the manner and to the extent required by Contractor from time to
time and, upon the failure to maintain such coverage, Contractor may purchase
the same and the cost thereof shall be deemed a Contractor's Expense;
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(g) Except with respect to the lien of the Accounts Receivable Lender
or as otherwise set forth on Exhibit "D" attached hereto, there are no liens,
judgments or claims affecting or relating to the Manufacturer or any of its
assets;
(h) Except as set forth on Exhibit "E", there are no suits,
administrative proceedings, arbitration proceedings or other arbitration
proceedings or investigations pending or (to the best of Manufacturer's
knowledge) threatened against Manufacturer or any of the guarantors;
(i) All of the financial information (including projections) provided
by the Manufacturer to the Contractor in connection with the Contractor's
consideration of the transaction contemplated by this Agreement are true and
accurate, contain no material misstatement of any facts, contain all material
information concerning the Manufacturer's financial condition, and do not omit
to state any facts which, if disclosed, would reflect adversely on the financial
condition of the Manufacturer or any of its Customers; and
(j) Manufacturer has duly filed all federal, state, county, local, and
foreign income, excise, sales, customs, property, withholding, social security
and other tax and information returns and reports required to be filed by it to
the date hereof, or in the alternative, has obtained extensions for filing
pursuant to established procedures, and has paid or made provision for payment
of all taxes (including interest and penalties) due and payable. Manufacturer
has no material liability for any taxes of any nature whatsoever.
14. PRODUCT WARRANTIES. Manufacturer expressly assumes and agrees to
make all product and service warranties (expressed or implied) to Customers with
respect to Products and further agrees to defend, indemnify and hold the
Contractor harmless from and against any claims, suits, obligations, costs, or
expenses (including reasonable attorney's fees and legal expenses) with respect
to all express or implied warranties in connection with the Products.
15. AUDIT RIGHTS. Manufacturer shall deliver to Contractor copies of
all information and documents submitted from time to time by the Manufacturer to
any Senior Lender simultaneously with the submission of such documents to such
Senior Lender; and shall deliver to Contractor monthly financial statements,
aged accounts receivable, aged accounts payable, and Manufacturer's and
Contractor's inventory schedules within fifteen (15) days following the end of
each month during the term hereof. In addition, Contractor shall have the right
to inspect, audit and copy any financial books, computer programs, and other
data containing financial information in connection with the Manufacturer at any
time during regular business hours upon not less than 24 hours' prior written
notice. Manufacturer agrees to prepare and maintain complete and accurate
business records with respect to the transactions contemplated by this
Agreement.
16. RELATIONSHIP OF THE PARTIES. The parties are independent
contractors and are not (and shall not be deemed to be) the partners, joint
venturers, agents or representatives of the other. Each party is exclusively
responsible for the conduct of its own business and is not authorized to bind
the other party in any manner whatsoever. Further in this regard:
12
(a) Manufacturer acknowledges that it has no ownership interest in any
P.O., Materials, work-in-process, or Products in connection with an Accepted
P.O. except as otherwise provided in this Agreement; and
(b) Contractor acknowledges that it has no ownership interest (other
than the security interests granted hereunder) in Manufacturer or in any of
Manufacturer's assets.
17. INDEMNIFICATION. Manufacturer agrees to indemnify, hold harmless
and defend Contractor from and against any loss, costs, (including reasonable
attorney's fees and costs), claims, suits or causes of action brought,
threatened or incurred by or against Contractor by reason of any of the
following:
(a) As a consequence of any breach of this Agreement by Manufacturer,
any breach of a warranty made by Manufacturer hereunder, or the failure of any
representation made by Manufacturer hereunder to be true;
(b) Any suit or threat of suit by any Customer, including, without
limitation, all claims under or with respect to Product warranties, except with
respect to any suit or claim arising or threatened solely by reason of
Contractor's acts or omissions to act which constitute a breach of Contractor's
obligations hereunder,
(c) Any suit or threat of suit by any of Manufacturer's employees,
former employees, securities holders or lenders, except with respect to any suit
or claim arising or threatened solely by reason of Contractor's acts or
omissions to act which constitute a breach of Contractor's obligations
hereunder;
(d) Any product liability claims of any kind, including, without
limitation, all claims under or with respect to Product warranties; and
(e) Environmental liability, if any; as a result of this Agreement or
any transaction contemplated by or engaged in pursuant to or on account of this
Agreement.
18. TERM AND TERMINATION; DEFAULT.
(a) Term of Agreement. This Agreement is for an initial term of twelve
months following the date hereof and shall continue thereafter for successive
twelve month renewal terms unless either party terminates the Agreement by
written notice to the other not later than thirty days prior to the end of the
initial term or any renewal term. Provided, however, that Contractor may also
terminate this Agreement immediately upon Manufacturer's default or at any time
following the initial term upon fifteen days' prior written notice to
Manufacturer.
(b) Obligations Upon Termination. Except for termination in the event
of Manufacturer's default, upon termination of this Agreement, each party shall
remain liable to perform all matured obligations under this Agreement which
remain unperformed as of the termination date as if this Agreement remained in
full force and effect. Upon termination for any reason and upon completion
13
of the foregoing obligations in the case of a termination upon Manufacturer's
default, all obligations hereunder shall terminate except the continuing
obligations of the parties under (paragraphs) 13, 14, 15 and 17 hereof.
(c) Default
(i) Manufacturer shall be considered to be in default hereunder if
it either (A) fails to make any payment due Contractor hereunder within
five (5) business days of the due date thereof, or (B) fails in any
respect to perform any of its other obligations hereunder and such
failure continues unremedied for a period of three (3) business days
following Contractor's notice thereof, or (C) has made a representation
which proves to be false or breaches a warranty made hereunder, or (D)
files (or has filed against it) a petition (or otherwise initiates
proceedings) for bankruptcy, reorganization, receivership or other
proceedings for the protection of debtors, or (E) fails to make any
payment due to any third party on or before the due date therefor if
the failure to make such payment gives rise to or creates (or if
unremedied would give rise to or create) an encumbrance upon the
Products or any of them or otherwise restricts Contractor's sale or
disposition of the Products or any of them.
(ii) Without waiving or limiting any of Contractor's other rights
and remedies in the event of a default by Manufacturer, and in addition
to Contractor's right of set-off set forth in (paragraph) 10 above,
upon the occurrence of any event of default, Manufacturer shall be
liable for immediate payment to Contractor of all amounts due or to
become due to Contractor hereunder, including, without limitation,
Contractor's Expenses, Contractor's Deal Fees and the Commitment Fee.
Contractor shall further be entitled to reimbursement for all of its
costs of collection, whether or not suit has been filed or judgment
entered, including, without limitation, reasonable attorneys' fees and
legal expenses. All amounts owed to Contractor pursuant to this
(paragraph) 18(c) shall carry interest at the rate of 2% per month
from the
effective date of termination or, in the case of Contractor's costs of
collection, from the date such costs are incurred.
(iii) In the event of default by Manufacturer, and subject to any
agreements between Contractor and any Senior Lender, Contractor shall
further be entitled to exercise all the rights and remedies of a
secured party under the Uniform Commercial Code or as otherwise
provided under the Security Agreement. The proceeds of any amount
recovered by Contractor shall be applied, first, to the payment of
Contractor's reasonable costs and expenses in connection with the
enforcement of Contractor's rights and remedies hereunder; second,
toward the payment or satisfaction of all amounts owing Contractor
hereunder, including interest thereon; and third, any surplus to be
paid to Manufacturer or as a court of competent jurisdiction may
direct. In the case of a deficiency, Manufacturer shall remain liable
for such deficiency after such sale, with interest at the rate herein
provided.
14
19. MISCELLANEOUS PROVISION.
(a) CHOICE OF LAW, VENUE, JURISDICTION AND SERVICE, THIS AGREEMENT AND
ALL AGREEMENTS REFERRED TO HEREIN BETWEEN THE CONTRACTOR AND THE MANUFACTURER
(COLLECTIVELY THE "TRANSACTION DOCUMENTS") HAVE BEEN SUBMITTED TO THE
CONTRACTOR AT THE CONTRACTOR'S PRINCIPAL PLACE OF BUSINESS IN THE STATE OF
ILLINOIS, WILL BE PERFORMED BY THE PARTIES IN THE STATE OF ILLINOIS, AND SHALL
BE DEEMED TO HAVE BEEN MADE IN THE STATE OF ILLINOIS. THE VALIDITY OF EACH OF
THE TRANSACTION DOCUMENTS AND THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT
THEREOF, AND THE RIGHTS OF THE PARTIES THERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF THE STATE IN WHICH
SUIT IS INITIATED PERTAINING TO THIS AGREEMENT. FURTHER, THE CONTRACTOR AND THE
MANUFACTURER AGREE THAT ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR
RELATING TO THE TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY,
SHALL BE INSTITUTED IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS, EASTERN DIVISION, OR ANY COURT OF THE STATE OF ILLINOIS
LOCATED IN XXXX COUNTY, AND EACH PARTY IRREVOCABLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THOSE COURTS AND WAIVES ANY AND ALL OBJECTIONS TO JURISDICTION
OR VENUE THAT ANY SUCH PARTY MAY HAVE UNDER THE LAWS OF THE STATE OF ILLINOIS OR
OTHERWISE IN THOSE COURTS IN ANY SUCH SUIT, ACTION, OR PROCEEDING. FURTHER, TO
THE EXTENT PERMITTED BY LAW, SERVICE OF PROCESS SUFFICIENT FOR PERSONAL
JURISDICTION IN ANY ACTION AGAINST THE MANUFACTURER MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND BY FEDERAL EXPRESS OR OTHER
REPUTABLE OVERNIGHT COURIER, TO ITS ADDRESS FOR NOTICE AS PROVIDED IN THIS
AGREEMENT. MANUFACTURER AGREES THAT ANY FINAL JUDGMENT RENDERED AGAINST IT IN
ANY ACTION OR PROCEEDING SHALL BE CONCLUSIVE AS TO THE SUBJECT OF SUCH FINAL
JUDGMENT AND MAY BE ENFORCED IN OTHER JURISDICTIONS IN ANY MANNER PROVIDED BY
LAW.
(b) WAIVER OF RIGHT TO JURY TRIAL. MANUFACTURER AND CONTRACTOR
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT,
ANY OTHER AGREEMENT RELATED HERETO OR WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES,
AND THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDING ARISING OUT OF ANY
SUCH CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
SITTING WITHOUT A JURY.
15
(c) Notices. All notices required or permitted pursuant to this
Agreement shall be in writing and either personally delivered, sent by facsimile
transmission (provided evidence of transmission is maintained and the original
of the transmittal notice is sent by U.S. mail), or Federal Express or similar
overnight delivery service, addressed to the respective addresses or facsimile
number of the parties set forth on the last page of this Agreement, or at such
telephone numbers or other addresses as have from time to time been designated
by like notice. Notices given in the manner prescribed herein shall be deemed
given on the date sent or transmitted (as the case may be).
(d) Severability. The paragraphs of this Agreement are severable, and
in the event that any paragraph or portion of this Agreement is declared illegal
or unenforceable, the remainder of this Agreement will be effective and binding
upon the parties.
(e) Opinion of Counsel. It is an express condition to the closing of
the transactions contemplated by this Agreement that the Manufacturer cause to
be delivered to the Contractor an opinion of Manufacturer's counsel which is
satisfactory to Contractor.
(f) Waiver; Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof, and
supersedes all prior oral or written agreements, understandings, or
arrangements. No waiver of or modifications to the provisions of this Agreement
will be valid unless in writing and signed by all parties. This Agreement shall
be binding upon and inure to the benefit of the parties hereto, their
successors, assigns and legal representatives.
(g) Assignment. Manufacturer may not transfer or assign its rights or
obligations hereunder without the prior written consent of the Contractor, and
any attempted transfer or assignment shall be null and void.
(h) Performance. Time is of the essence under this Agreement.
(i) Further Assurances. From and after the date hereof, each party will
execute all documents and take such further actions as the other may from time
to time reasonably request in order to carry out the transactions provided for
herein and accomplish the purposes contemplated hereby.
(i) Publication. Contractor shall have the right to publicize (by
"tombstone" or comparable publication) the Purchase Order Assignment Program
evidenced hereby (including the date and size of the facility but not the
specific terms hereof).
(j) Counterparts; Facsimile Delivery. This Agreement may be executed in
one or more counterparts, each of which taken together shall constitute one and
the same instrument, admissible into evidence. Delivery of an executed
counterpart of this Agreement by facsimile shall be equally as effective as
delivery of a manually executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by facsimile shall also
deliver a manually executed counterpart of this Agreement, but the failure to
deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
16
This Agreement has been signed at Northbrook, Illinois on the day and
year first above written.
CONTRACTOR: MANUFACTURER;
TRANSCAP TRADE MAJESCO SALES, INC.
FINANCE
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxx Xxxxxx
----------------------------------------- -----------------------------
Xxxxxxx Xxxx, Executive Vice President, Title: President
Transcap Associates, Inc., general
partner
Address: 000 Xxxxxx Xxxx. #000 Address: 000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000 Xxxxxx, Xxx Xxxxxx 00000
Facsimile: 000-000-0000 Facsimile:
17
EXHIBIT A
PURCHASE ORDER PACKAGE CERTIFICATE
This Certificate is executed
by___________________________________________________________________ , who is
the ______________________________________________________of MAJESCO SALES,
INC., a New Jersey corporation ("Manufacturer"), in connection with the Master
Purchase Order Agreement dated___________________________________, 2000, (the
"Agreement") with TRANSCAP TRADE FINANCE ("Contractor").
The undersigned certifies to Contractor that all of the information
contained in this Certificate is true, complete and accurate and is furnished to
Contractor to induce Contractor to purchase Materials in accordance with the
Agreement:
1. Customer Information
(a) Attached is a purchase order number _______ dated __________,
2000 in the total amount of $________________ (the "Purchase
Order") from the following customer ("Customer"), or
Manufacturer has received a bona fide indication of interest
from the following Customer.
Name:
Address:
Person in charge:
Phone Number:
(b) Attached is a true and complete credit history, payment
history and credit report on the Customer; or, in lieu
thereof, ___________________ approval or accepted letter of
credit.
(c) The Purchase Order is (check one):
[ ] Assignable to Contractor by Manufacturer without
Customer's consent; or
[ ] Not assignable without Customer's consent, but attached
is the consent of the Customer to assignment to Contractor;
[ ] Not assignable, but the proceeds of the Purchase Order
are assignable; or
A-1
[ ] Manufacturer has received indication of interest only.
2. Product Information
(a) Original (or a true, accurate and complete copy of) Purchase Order -
attached.
(b) Identification of "Product(s)":
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(c) Quantity of Product Ordered:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(d) Specifications of Product:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
3. Price and Delivery Information
(a) Aggregate Purchase Order Price:
-----------------------------------------
(b) Price per Unit of Product:
-----------------------------------------------
(c) Delivery Date ("P.O. Delivery Date")
-------------------------------------
(d) Terms as to liability for shipping cost, insurance, "process and hold",
risk of loss, etc.:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
4. Materials Information
Attached is an exhibit detailing: (a) the quantity and quality
specifications for all Materials needed to complete the Purchase Order
("Materials"); (b) the name,
A-2
address, contact person and phone number of each person from whom the
Materials may be purchased; and (c) confirmed current pricing and
delivery date(s) ("Material Delivery Date(s)") for all of the Material
and a copy of the applicable Purchase Orders.
5. Production Information
(a) The manufacturing/distributing facility at which the Product will be
manufactured/distributed (the "Premises"):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(b) Brief description of production processes and requirements:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
(c) Cost of Production:
------------------------------------------------------
(d) Units of Product per day:
------------------------------------------------
(e) Duration of production run to manufacture Product for the Purchase
Order:
-----------------------------------
6. Gross Margin
Here is the computation of Projected Net Gross Margin before
depreciation, including, without limitation, projections of the cost of
Materials and Manufacturer's Direct Costs:
7. Assignment of Purchase Order
Attached is an Assignment of the Purchase Order, duly executed by
authorized officers of Manufacturer.
A-3
8. Lender Consent (check one):
[ ] None of the Materials, work-in-process or inventory is subject to a
security interest; or
[ ] If any of the Materials, work-in-process or inventory of Manufacturer are
subject to a security interest, attached is the written consent and
release of each holder of a security interest, in form previously
approved by Contractor.
Dated:_______________________, 2000
MAJESCO SALES, INC.
By:
--------------------------------------
Title:
--------------------------------------
A-4
EXHIBIT A (continued)
ACCEPTANCE OF PURCHASE ORDER CERTIFICATE
The foregoing Purchase Order Certificate, as prepared and delivered by
Manufacturer, is hereby accepted and approved.
TRANSCAP TRADE FINANCE
By:
---------------------------------
Dated:
---------------------------------
A-5
EXHIBIT A (continued)
ASSIGNMENT OF PURCHASE ORDER
FOR VALUE RECEIVED, MAJESCO SALES, INC., a New Jersey corporation
("Assignor") hereby assigns, transfers and delivers to TRANSCAP TRADE FINANCE
("Assignee") all of Assignor's right, title and interest in, to and under that
certain Purchase Order, identified as follows, for the purposes, and pursuant to
the terms and conditions of that certain Master Purchase Order Purchase
Agreement, dated __________________ , 2000, between Assignor and Assignee:
Assignor's P.O. No.:
--------------------------------
Customer Name:
--------------------------------------
P.O. Date:
------------------------------------------
MAJESCO SALES, INC.
By:
--------------------------------------
Title:
--------------------------------------
A-6
EXHIBIT B
MANUFACTURER'S SPECIFICATIONS
The following are performance specifications, obligations, and
covenants (collectively the "Manufacturer's Specifications") required of
Manufacturer in connection with its obligations under the Purchase Order
Assignment Agreement to which this Exhibit is attached:
1. To deliver to each Customer a Purchase Order Acknowledgement on such
form as Contractor may accept directing that payment of each P.O. Invoice be
made to Contractor or the Lock Box Bank (if any).
2. To cooperate with Contractor concerning Contractor's placement of
orders for Materials.
3. To notify Contractor immediately upon the receipt of Materials at
the Premises. Upon such delivery, to inspect the quality and quantity of
Materials and to notify Contractor of any deficiencies.
4. To permit Contractor's representative access to the Premises at all
times for the purpose of inspecting, safeguarding, and otherwise observing and
overseeing the storage of Materials and Products and the processing of Materials
into Products.
5. To take all actions necessary for the conversion of Materials into
Products and the shipment thereof to Customers in accordance with Accepted
P.O.'s, including without limitation, manufacturing, processing, packaging,
shipping, warehousing, fabricating and insuring Materials and Products in
accordance with the specifications set forth in the applicable Accepted P.O.,
and to deliver the same to the Customer on or before the P.O. Delivery Date.
6. To maintain and supply sufficient quantity and quality of equipment,
materials, labor and facilities (other than Materials) in order to perform each
of its obligations described in this Exhibit "B".
7. To maintain all inventories of Materials and Products in such
segregated locations upon the Premises as the Contractor may approve; to
properly identify such Materials and Products as being the property of the
Contractor and further identify the same by the P.O. and the Customer for which
such Materials or Products relate; and to implement such commercially
reasonable security procedures and devices as Contractor may require for the
preservation and segregation of Materials and Products, including without
limitation, the construction and maintenance of secured cages and storage rooms
for such Materials and Products. To not ship or otherwise release any Materials
or Products except with the prior written consent of the Contractor.
B-1
8. To ship all P.O. Inventory by such date, by such means, and under
such terms as required pursuant to the applicable P.O. and to deliver the P.O.
Inventory on or before the P.O. Delivery Date. Manufacturer shall further
provide Contractor with written notice of each shipment of P.O. Inventory
immediately following shipment thereof.
9. To prepare and deliver to the Contractor each P.O. Invoice
immediately following shipment of the P.O. Inventory.
10. To fully insure in the name of the Manufacturer and the Contractor
all P.O. Inventory during shipment to Customers in amounts, with carriers and on
terms and conditions acceptable to Contractor.
11. To direct all Customers to make payment with respect to a P.O.
Invoice to the Contractor or the Lock Box (if any) and to take no actions and
make no statements which direct (or have the effect of causing) any P.O.
Customer to make any payment with respect to any P.O. Invoice to anyone other
than the Contractor or the Lock Box.
12. To not accept any payment (including rebates, set-offs, and other
Customer adjustments) with respect to any P.O. Invoice other than through the
Contractor or the Lock Box.
13. To receive and hold in trust for the sole and exclusive benefit of
Contractor all sums and instruments representing payment of any P.O. Invoice and
all proceeds which for any reason come into the possession of Manufacturer, its
agents, representatives or any other party acting on behalf of Manufacturer, and
promptly to deliver or cause delivery of such sums to the Contractor.
14. To maintain in the name of Manufacturer and Contractor general
comprehensive liability insurance, with extended coverage and coverage against
theft and product liability and such other insurance and coverages as may be
commercially reasonable with exclusions, with carriers, and on terms and
conditions that may be acceptable to Contractor in its sole discretion.
15. To deliver to Contractor a list of unpaid accounts receivable
relating to P.O. Invoices as of last day of the preceding calendar month, such
list to be delivered by the 10th day of the next succeeding month and certified
as complete and accurate by a duly authorized officer of Manufacturer.
16. To not pledge any of its assets or cause or permit any lien or
security interest to be taken in any of its assets, except such liens as are
described on Exhibit "D" of this Agreement or are otherwise approved by
Contractor.
17. To provide Contractor with written notice immediately upon (i) the
filing or threat of filing of a bankruptcy petition by or against Manufacturer,
(ii) the initiation of foreclosure proceedings or other similar action against
Manufacturer or any of its assets, (iii) a request or demand made upon
Manufacturer to make, or for any reason Manufacturer makes, an assignment for
the benefit of its
B-2
creditors, or (iv) Manufacturer becomes unable to pay its bills in the ordinary
course of business as they become due.
18. To immediately notify Contractor of any pending or threatened
litigation, administrative proceeding, arbitration, or governmental
investigation concerning or relating to Manufacturer or any goods, services or
assets that are the subject of an Accepted P.O. or are pledged as collateral
pursuant to the Security Agreement.
B-3
EXHIBIT C
RE-ASSIGNMENT AND RELEASE OF PURCHASE ORDER
UPON AND SUBJECT TO PAYMENT OF the sum of $_____________ on or before
_______________, _______ ("Payment Date"), TRANSCAP TRADE FINANCE ("Assignor")
hereby assigns, transfers and delivers to MAJESCO SALES, INC. ("Assignee") all
of Assignor's right, title and interest in, to and under that certain Purchase
Order identified below, and hereby releases any claims in or with respect to
such Purchase Order. If payment is made after the Payment Date, such assignment
and release shall require payment of $______________________ for each day after
the Payment Date during which payment is not received. The applicable Purchase
Order is:
P.O. Invoice No.:
---------------------
Customer Name:
---------------------
P.O. Invoice Date:
---------------------
This Assignment shall become effective immediately upon receipt of good
funds in the amount described above.
TRANSCAP TRADE FINANCE
By:
------------------------------
Dated:
------------------------------
ACCEPTANCE
MAJESCO SALES, INC., a New Jersey corporation ("Assignee"), hereby
accepts the foregoing assignment of Purchase Order, and covenants and agrees to
fully perform all obligations with respect thereto and hereby releases Assignor
from responsibility for the performance of any such obligations whether required
before, on or after the date of this Acceptance. Assignee hereby authorizes
[Account Receivable Lender] to transfer the amount set forth above to Assignor
per Assignor's instructions.
Dated:
-------------------------
MAJESCO SALES, INC
By:
------------------------------
Title:
------------------------------
C-1
EXHIBIT D
EXCEPTIONS TO CONTRACTOR'S SENIOR XXXX
Xxxxxxxxx & Xxxxxxxxx
D-1
EXHIBIT E
PENDING LITIGATION, ETC.
E-1
ADDENDUM I
The Accounts Receivable Lender is:
Xxxxxxxxx & Xxxxxxxxx
The Senior Lenders other than the Accounts Receivable Lender are:
ADDENDUM II
In this Agreement:
(a) The "Lock Box Bank" is:
AMERICAN NATIONAL BANK
DEPT. 77-6132
XXXXXXX, XX 00000-0000
(b) The "Lock Box" is maintained in LOCK BOX ACCOUNT NO. 77-6132 at
the Lock Box Bank.
ADDENDUM III
The Guarantors pursuant to this Agreement are:
Xxxxx Xxxxxx
Xxx Xxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxx
