EXHIBIT 6(a)(i)
PURCHASE & SALE AGREEMENT
Name of Seller ("Seller"): TOTAL CONTROL INFORMATION,
a California limited partnership
Dated: February 20, 2001
Seller and FIDELITY FUNDING BUSINESS CREDIT, LTD. d/b/a USA FUNDING,
LTD., a Texas limited partnership ("Purchaser"), hereby agree to the terms and
conditions set forth in this Purchase & Sale Agreement ("Agreement"):
1. PURCHASE & SALE OF ACCOUNTS RECEIVABLE.
(a) Seller hereby offers to sell, assign, transfer, convey and deliver
to Purchaser, as absolute owner, all of the right, title and interest of Seller
in and to the following accounts ("Account" or "Accounts") which arise from
the sale of Seller's services or merchandise (herein collectively referred to
as the "Merchandise") as indicated by the box checked below, together with all
guarantees and security therefor, and all of Seller's right, title and interest
in the Merchandise purchased and represented by such Accounts, including all of
Seller's rights to returned goods and rights of stoppage in transit, replevin,
and reclamation as an unpaid vendor (with respect to each Account, such
guarantees, security and rights are herein called the "Related Rights"):
[CHECK ONE]
[ ] All of Seller's Eligible Accounts (as defined below) not to exceed
$______ (the "Commitment") outstanding at any time, which Eligible
Accounts Purchaser agrees to purchase on the terms and conditions set
forth herein, or
[X] Eligible Accounts totaling not less than $750,000 outstanding at any
time, in which case Purchaser shall be obligated (subject to the terms
and conditions stated below) to purchase Eligible Accounts totaling not
more than $2,500,000 (the "Commitment") outstanding at any time, or
[ ] Only those Eligible Accounts which Seller from time to time may wish to
sell but not to exceed $______ (the "Commitment") per month, which
Eligible Accounts Purchaser agrees to purchase on the terms and
conditions set forth herein;
provided, however, that in no case shall the purchase price payable hereunder
for all Eligible Accounts purchased at any one time be less than $5,000.00.
(b) Subject to the terms of this Agreement, Purchaser hereby agrees to
purchase Eligible Accounts and the Related Rights relating thereto acceptable to
Purchaser in its sole and absolute discretion. Purchaser shall not be obligated
to purchase any Eligible Accounts if (i) an Event of
Default or an event that, with the giving of notice, the passage of time or
both, would constitute an Event of Default has occurred and is continuing
hereunder, (ii) after such purchase is made, the aggregate face amount of all
outstanding Eligible Accounts which have been purchased by Purchaser would
exceed the Commitment, (iii) any condition precedent described below has not
been satisfied, or (iv) Purchaser has not determined to purchase such Eligible
Account in its sole and absolute discretion. "Eligible Accounts" means all
Accounts except the following: (1) any Account which has payment terms longer
than "net 30 days" or has been outstanding for more than 90 days from invoice
date, (ii) any Account as to which Purchaser does not have a valid and
perfected, first priority ownership or security interest, (iii) any Account that
is owed by a customer (an "Account Debtor") which is an affiliate of Seller or
an officer or employee of Seller, (iv) any Account that arises out of a sale
made or services performed outside of the United States of America or that is
owed by an Account Debtor located outside the United States of America, (v) any
Account that is owed by an Account Debtor which is a creditor or supplier of
Seller or which has asserted any defense or contested any liability with respect
to such Account, (vi) if twenty-five percent (25%) or more of the aggregate
amount of Accounts owed by an Account Debtor to the Seller have been outstanding
more than 90 days from invoice date, all Accounts of such Account Debtor, (vii)
any Account that is considered a "progress" billing, (viii) any retainages, and
(ix) any Account which has not been approved by Purchaser, in its sole and
absolute discretion, as an Eligible Account. A credit investigation by Purchaser
shall not be deemed an acceptance of an Account and Purchaser shall be free to
reject any Account submitted by Seller if Purchaser deems the Account
unacceptable, even though Purchaser may have previously approved such Account
Debtor. Purchaser shall have no obligation to purchase any Eligible Accounts
hereunder until it shall have received, in form and substance satisfactory to
it, (a) a release executed by Imperial Bank releasing all liens and security
interests in the Collateral (as defined in paragraph 7), (b) continuing
guarantees by TCI Management, Inc. of the obligations of Seller hereunder, (c)
validity guarantees by Xxxxx Xxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxx, and Xxxxxxx
XxXxxxxx, (d) an escrow agreement satisfactory to Purchaser in its sole
discretion with respect to escrowing of the source code for software of Seller
related to the Collateral, (e) a Trademark Security Agreement and Copyright
Security Agreement upon terms and conditions satisfactory to Purchaser in its
sole discretion, and (f) a Security Agreement of TCI Management, Inc.
(c) No single Account Debtor's total purchased and outstanding Accounts
shall ever constitute more than 20% of Seller's Accounts purchased and
outstanding for all of Seller's Account Debtors. In the event any single
Account Debtor's total purchased and outstanding Accounts exceed the
concentration limit set forth above, Purchaser may in its sole discretion
increase the Seller's Reserve Accounts to cover such excess on a dollar for
dollar basis.
(d) Accounts shall be submitted to Purchaser on a Schedule of Accounts
listing each Account separately. The Schedule of Accounts shall be in the form
attached hereto as Exhibit "A," and shall be signed by a person acting or
purporting to act on behalf of Seller. There shall be no more than one Schedule
of Accounts submitted each week unless Purchaser otherwise agrees in writing.
At the time the Schedule of Accounts is presented, Seller shall also deliver to
Purchaser one copy of an invoice for each Account listed on such Schedule of
Accounts, evidence of shipment of the Merchandise covered by such invoice, the
original of the Account Debtor's purchase order and
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a copy of the contract between Seller and the Account Debtor giving rise to such
Account. All invoices relating to Accounts shall plainly state on their face
that amounts payable thereunder are payable only to Purchaser at the remittance
address set forth below. Payment by Purchaser of the sum specified in paragraph
2(a) below shall constitute acceptance of an Account by Purchaser at which time
such Account shall become an Eligible Account.
(e) Any and all Eligible Accounts shall be purchased with full recourse
against Seller, including but not limited to, recourse as to the insolvency or
other financial inability of the Account Debtor to pay. Any Eligible Accounts
not paid after 90 days from invoice date shall be repurchased by Seller, by
means of Seller paying directly to Purchaser the face amount of each such
Eligible Account, Purchaser deducting such face amount from the purchase price
for the next Eligible Accounts purchased hereunder or Purchaser charging such
face amount against the Reserve Account, as Purchaser may elect in its sole
discretion.
2. PURCHASE PRICE AND FEES.
(a) Purchaser shall purchase an Eligible Account at a purchase price
equal to the face amount of such Eligible Account less the Reserve Percentage
(as defined in paragraph 4 below) of such face amount which shall be credited
to the applicable Reserve Account. The purchase price for any Eligible Accounts
shall be advanced by Purchaser to Seller on the date of purchase as directed by
Seller. Seller shall pay to Purchaser a line maintenance fee (the "Discount")
for each Eligible Account purchased hereunder equal to 0.40% of the face amount
of the Eligible Account in question; provided that the Discount for any
Eligible Account bearing terms in excess of the standard net 30-day terms shall
be increased by 1.00% for each additional 30 days or fraction thereof. The
Discount for an Eligible Account shall be due and payable on the earlier of the
90th day after the related invoice date and the date on which Purchaser
collects such Eligible Account. Seller hereby authorizes Purchaser to deduct
any Discount payable hereunder from the purchase price of Eligible Accounts or
to charge such Discount against the Reserve Accounts or collections on the
related Eligible Account, as Purchaser elects at its sole discretion.
(b) Seller shall pay to Purchaser an annual commitment fee in the amount
of 0.50% of the Commitment, payable on the date of the first purchase hereunder
and on each anniversary of the date of this Agreement during the Term (as
defined in paragraph 14). Seller hereby authorizes Purchaser to deduct the
commitment fee from the purchase price for Eligible Accounts or to charge the
commitment fee against the Reserve Account, as Purchaser elects at its sole
discretion.
(c) Seller shall pay to Purchaser interest on the daily balance of all
sums (the "Advances") remitted, paid, or otherwise advanced by Purchaser to
Seller or for Seller's benefit (including but not limited to the purchase price
of Eligible Accounts purchased by Purchaser hereunder), net of all payments
received from Seller's Account Debtors or otherwise received by Purchaser on the
Seller's behalf, which are credited to the Seller's account. Interest shall be
charged on the Advances at a rate (the "Interest Rate"), equal to the greater
of (i) 10.50% per annum and (ii) the Prime Rate in effect from time to time
plus 3.5% per annum but in no event to exceed the maximum rate permitted by
applicable law. If the Prime Rate changes after the date hereof, the Interest
Rate shall be
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automatically increased or decreased, as the case may be, if required hereunder,
without notice to Seller from time to time as of the effective time of each
change in the Prime Rate. Interest shall be due and payable on the last day of
each calendar month and may, in Purchaser's sole discretion, be charged against
the Reserve Accounts or other sums that may be due to Seller hereunder. As used
herein, the term "Prime Rate" means the rate as published from time to time by
The Wall Street Journal as the base rate for corporate loans at large commercial
banks (if more than one such rate is published, the Prime Rate will be the
higher or highest of the rates published). If such rate is no longer published
by The Wall Street Journal, then Purchaser shall, in its sole discretion select
the base or prime rate for corporate loans at a large commercial bank as the
"Prime Rate." All interest accruing hereunder shall be calculated on the basis
of actual days elapsed (including the first day but excluding the last) plus
three (3) business days and a year of 360 days.
(d) Subject to the limitations set forth in subparagraph (f) below, in the
event that the aggregate amount actually paid to Purchaser pursuant to paragraph
2(a) as Discount (the "Discount Fee") during any calendar month is less than
$3,500 (the "Monthly Minimum Discount"), Seller shall, if so required by
Purchaser, pay to Purchaser additional Discount for such calendar month in an
amount equal to the Monthly Minimum Discount minus the aggregate Discount Fee
actually paid to Purchaser during such month. The additional fee payable
hereunder for any calendar month shall be due and payable within five business
days after the end of such calendar month. Seller hereby authorizes Purchaser to
deduct any such additional fee from the purchase price for Eligible Accounts or
to charge any such additional fee against the Reserve Accounts, as Purchaser
elects at its sole discretion.
(e) Seller shall pay to Purchaser a liquidation fee ("Liquidation Fee") in
the amount of five percent of the face amount of each Eligible Account
outstanding at any time during a Liquidation Period (as defined below). For
purposes of this section, "Liquidation Period" means a period beginning on the
earliest date of (i) the commencement against or by Seller of any voluntary or
involuntary case under the federal Bankruptcy Code, (ii) the general assignment
by Seller for the benefit of its creditors, (iii) the appointment or taking
possession by a receiver, liquidator, assignee, custodian or similar official
of all or a substantial part of Seller's assets, or (iv) the cessation of
business of Seller, and ending on the date on which Purchaser has actually
received all fees, costs, expenses and other amounts owing to it hereunder. The
Liquidation Fee shall be paid either by means of Purchaser charging the
Liquidation Fee against the Reserve Accounts or by Seller paying the amount of
the Liquidation Fee directly to Seller, as Purchaser may elect in its sole
discretion. The Liquidation Fee is in addition to any termination fee provided
for in paragraph 14. The Liquidation Fee shall be payable on the earlier to
occur of (i) the date on which Purchaser collects the applicable Eligible
Account and (ii) the 90th day from invoice date of the Eligible Account.
(f) The parties hereto intend to contract in strict compliance with
applicable usury law from time to time in effect. In furtherance thereof, the
parties hereto stipulate and agree that none of the terms and provisions
contained in this Agreement shall ever be construed to create a contract to
pay, for the use, forbearance or detention of money, interest in excess of the
maximum amount of interest permitted to be charged by applicable law from time
to time in effect. Neither Seller nor any present or future guarantor or any
other person hereafter becoming liable for the payment of the
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obligations of Seller hereunder shall ever be liable for unearned interest
thereon or shall ever be required to pay interest thereon in excess of the
maximum amount that may be lawfully charged under applicable law from time to
time in effect, and the provisions of this paragraph shall control over all
other provision of the Agreement which may be in conflict therewith. If any
indebtedness or obligations owed by the Seller under this Agreement is prepaid
or accelerated and as a result any amounts held to constitute interest are
determined to be in excess of the legal maximum, or Purchaser shall otherwise
collect moneys which are determined to constitute interest which would otherwise
increase the interest on all or any part of such obligations to an amounts in
excess of that permitted to be charged by applicable law then in effect, then
all such sums determined to constitute interest in excess of such legal limit
shall, without penalty, be promptly applied to reduce the then outstanding
principal of the related indebtedness or obligations or, at Purchaser's option
returned to the Seller or the other payor thereof upon such determination. In
determining whether or not any amount paid or payable, under any circumstance,
exceeds the maximum amount permitted under applicable law, Seller and the
Purchaser shall to the greatest extent permitted under applicable law,
characterize any non-principal payment as an expense, fee or premium rather than
as interest, and amortize, prorate, allocate and spread the total amount of
interest throughout the entire contemplated term of this Agreement in accordance
with the amounts outstanding from time to time hereunder and the Maximum Rate
from time to time in effect under applicable law in order to lawfully charge the
maximum amount of interest permitted under applicable law. If at any time the
rate at which interest is payable hereunder exceeds the Maximum Rate, the amount
outstanding hereunder shall bear interest at the Maximum Rate only, but shall
continue to bear interest at the Maximum Rate until such time as the total
amount of interest accrued hereunder equals (but does not exceed) the total
amount of interest which would have accrued hereunder had there been no Maximum
Rate applicable hereto. In the event applicable law provides for an interest
ceiling under Chapter 303 of the Texas Finance Code, that ceiling shall be the
indicated (weekly) rate ceiling and shall be used when appropriate in
determining the maximum rate permitted by applicable law. As used in this
paragraph, (i) the term "applicable law" means the laws of the State of Texas or
the laws of the United States of America, whichever laws allow the greater
interest, as such laws now exist or may be changed or amended or come into
effect in the future, and (ii) the term "MAXIMUM RATE" means, at the time of
determination, the maximum rate of interest which, under applicable law, may
then be changed hereunder. The parties agree that this Agreement shall not be
subject to Chapter 346 of the Texas Finance Code.
3. TRANSFER. Upon Purchaser's acceptance of each Eligible Account,
Purchaser shall be the sole owner and holder of such Eligible Account and the
Related Rights relating thereto. Seller hereby sells, transfers, conveys and
assigns to Purchaser all its right, title and interest in and to each Eligible
Account together with all Related Rights, effective at the time of acceptance
thereof by Purchaser. Seller agrees to execute and deliver to Account Debtors
obligated under Eligible Accounts such written notices of sale of the Eligible
Accounts as Purchaser may request.
4. RESERVE ACCOUNTS. Purchaser shall create and maintain a reserve account
("the Reserve Account") in the amount of 20.00% (the "Reserve Percentage") of
the face amount of the Eligible Accounts purchased hereunder out of any payments
or credits otherwise to be made to Purchaser with respect to such Eligible
Accounts. In no event shall the aggregate amount of the
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Reserve Account at any time equal less than the Reserve Eligible Accounts
remaining unpaid. Purchaser may charge against the Reserve Accounts any amount
for which Seller may be obligated to Purchaser at any time, whether under the
terms of this Agreement, or otherwise, including but not limited to any damages
suffered by Purchaser as a result of Seller's breach of any provision of
paragraph 5 hereof (whether intentional or unintentional), any losses due to an
Account Debtor's insolvency or other financial inability to pay or any Disputes
(as defined under paragraph 5(e) hereof), any Adjustments or other amounts due
under paragraph 16 hereof and any attorneys' fees and disbursements due under
paragraph 17 hereof. Seller recognizes that the balances in the Reserve Accounts
represent bookkeeping entries and not cash funds. It is further agreed that with
respect to the balances in the Reserve Accounts, Purchaser is authorized to
withhold such payments and credits otherwise due to Seller under the terms of
this Agreement for reasonably anticipated claims such as, for example,
chargebacks or credits against Seller for Account Debtor claims. On the 10th or
25th day of any calendar month Purchaser shall calculate the amount required to
be maintained in the Reserve Account and shall pay to Seller any excess credited
to the Reserve Account over the amount then required to be maintained therein,
provided that (i) no Event of Default or an event that, with the giving of
notice, the passage of time or both, would constitute an Event of Default has
occurred and is continuing, and (ii) Seller has not ceased selling Accounts to
Purchaser. If an Event of Default or an event that, with the giving of notice,
the passage of time or both, would constitute an Event of Default has occurred
and is continuing, or, in the event Seller shall cease selling Accounts to
Purchaser, Purchaser shall not disburse any amounts in the Reserve Accounts
until all Accounts have been collected or Purchaser has determined, in its sole
discretion, that it will make no further efforts to collect any Accounts listed
on any Schedules of Accounts and all sums due Purchaser hereunder have been
paid. Purchaser shall make available to Seller, through Purchaser's computer
link capabilities or otherwise, within 15 days of the close of the preceding
calendar month, a summary or statement of Seller's account, prepared from
Purchaser's records, which will conclusively be deemed correct and accepted by
Seller unless Seller gives Purchaser a written statement of exceptions within 30
days after receipt of such extract or statement.
5. SELLER'S REPRESENTATIONS AND COVENANTS. Seller represents, warrants
and covenants to Purchaser that:
(a) Seller is a limited partnership duly organized, validly existing and
in good standing under the laws of the state of its organization and is
qualified and authorized to do business and is in good standing in all states
in which such qualification and good standing are necessary or desirable. The
execution, delivery and performance by Seller of this Agreement do not and will
not constitute a violation of any applicable law or the limited partnership
agreement of Seller or any material breach of any other document, agreement or
instrument to which Seller is a party or by which Seller is bound. This
Agreement is a legal, valid and binding obligation of Seller enforceable
against it in accordance with its terms.
(b) Immediately prior to the execution and delivery of each Schedule of
Accounts, Seller will be the sole owner and holder of, and will have good and
marketable title to, each of the Accounts described thereon and the Related
Rights relating thereto, free and clear of all liens, security interests and
other adverse claims. Upon Purchaser's acceptance of each Eligible Account,
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it shall become the sole owner and holder of, and will have good and marketable
title to, such Eligible Account and the Related Rights relating thereto, free
and clear of all liens, security interests and other adverse claims.
(c) No Eligible Account or other Collateral shall be subject to any
lien, encumbrance, security interest or other claim of any kind or nature.
Seller will not transfer, pledge or give a security interest in any of its
Accounts to anyone other than Purchaser. Seller will not factor or sell any of
its Accounts except to Purchaser. There are no financing statements now on file
in any public office governing any property of Seller of any kind, real or
personal, in which Seller is named in or has signed as the debtor, except the
financing statement or statements filed or to be filed in respect of this
Agreement or those statements on file as of the date of this Agreement that have
been disclosed in writing by Seller to Purchaser. Seller will not execute any
financing statement in favor of any other person or entity, other than
Purchaser, during the Term.
(d) The amount of each Eligible Account is due and owing to Seller and
represents an accurate statement of a boa fide sale, delivery and acceptance of
Merchandise or performance of service by Seller to or for an Account Debtor. The
terms for payment of Eligible Accounts are 30 days from date of invoice and the
payment of such Eligible Accounts is not contingent upon the fulfillment by
Seller of any further performance of any nature whatsoever. Each Account
Debtor's business is solvent to the best of Seller's knowledge.
(e) There are and shall be no set-offs, allowances, discounts, deductions,
counterclaims, or Disputes with respect to any Eligible Account, either at the
time it is accepted by Purchaser for purchase or prior to the date it is to be
paid. "Dispute," as used in the last preceding sentence, shall mean any claim by
an Account Debtor against Seller, of any kind whatsoever, valid or invalid, that
is asserted by the Account Debtor as a basis for refusing to pay an Eligible
Account either in whole or in part. Seller agrees to inform Purchaser in writing
immediately upon learning that there exists or may exist any Account which is
subject to any contra account, charge back, credit, consignment, right to return
merchandise, or other matter which diminishes or may diminish the dollar amount
or timely collection of such Account. Seller shall accept no returns and shall
grant no allowance or credit to any Account Debtor without notice to and the
prior written approval of Purchaser. Seller shall provide to Purchaser for each
Account Debtor on Eligible Accounts that have been purchased, a weekly report in
form and substance satisfactory to Purchaser itemizing all such returns and
allowances made during the previous week with respect such Eligible Accounts and
a check (or wire transfer) payable to Purchaser for the amount thereof.
(f) The address set forth below Seller's signature hereon is, and for at
least the past six months has been, Seller's mailing address, its chief
executive office and principal place of business. The street and other business
addresses set forth below Seller's signature hereon are, and for at least the
past six months have been, the offices where all of the books and records
concerning the Eligible Accounts are maintained and the location of all
Collateral. Seller shall not change its mailing address, chief executive office,
principal place of business or place where such records are maintained or the
Collateral is kept without 30 days prior written notice to Purchaser. Seller has
not
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been a party to a merger or consolidation with or acquired all or substantially
all of the assets of any person or entity during the past five years.
(g) Seller shall maintain its books and records in accordance with
generally accepted accounting principles and shall reflect on its books the
absolute sale of the Eligible Accounts and the Related Rights to Purchaser.
Seller shall furnish Purchaser, upon request, such information and statements
as Purchaser shall request from time to time regarding Seller's business
affairs, financial condition and results of its operations. Without limiting
the generality of the foregoing. Seller shall provide Purchaser, on or prior to
the 30th day of each month, unaudited consolidated and consolidating financing
statements with respect to the prior month and, within 90 days after the end of
each of Seller's fiscal years, reviewed annual consolidated and consolidating
financial statements and such certificates relating to the foregoing as
Purchaser may request including, without limitation, a monthly certificate from
the president and chief financial officer of Seller stating whether any Events
of Default have occurred and stating in detail the nature of the Events
of Default. Seller will furnish to Purchaser upon request a current listing of
all open and unpaid accounts payable and accounts receivable, and such other
items of information that Purchaser may deem necessary or appropriate from time
to time. Unless otherwise expressly provided herein or unless Purchaser
otherwise consents, all financial statements and reports furnished to Purchaser
hereunder shall be prepared and all financial computations and determinations
pursuant hereto shall be made in accordance with generally accepted accounting
principles, consistently applied.
(h) Purchaser shall have the right, at any time and from time to time,
to audit Seller's books, records and operations during normal business hours.
Seller shall pay all costs associated with such audits which shall be $750 per
day per person plus reasonable out-of-pocket expenses.
(i) Seller has paid and will pay all taxes and governmental charges
imposed with respect to sales of the Merchandise and furnish to Purchaser upon
request satisfactory proof of payment and compliance with all federal, state
and local tax requirements.
(j) Seller will promptly notify Purchaser of (i) the filing of any
lawsuit against Seller involving amounts greater than $10,000 and (ii) any
attachment or any other legal process levied against Seller.
(k) Seller has served or caused to be served any and all preliminary
notices required by law to perfect or enforce any mechanic's lien or stop
notice or bonded stop notice for the Eligible Accounts and the information
contained in those notices is true and correct to the best of Seller's
knowledge. Waivers and releases for all labor, services, equipment or material
of Seller and others will be submitted on Purchaser's form concurrently with
each Schedule of Accounts.
(l) The application ("Application") made by Seller in connection with
this Agreement, and the statements made therein are true and correct at the time
that this Agreement is executed. There is no fact which Seller has not disclosed
to Purchaser in writing which could materially adversely affect the properties,
business or financial condition of Seller, or any of the Eligible
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Accounts or Collateral, or which it is necessary to disclose in order to keep
the foregoing representations and warranties from being misleading.
(m) Seller is engaged primarily in commercial, manufacturing or industrial
pursuits. In no event shall the funds paid to Seller hereunder be used directly
or indirectly for consumer personal, family household or agricultural purposes,
but shall be used solely for business or investment activities.
(n) Seller does not do business, and for the past five years has not done
business, under any trade or assumed name except as indicated:
_______________________________________________________________.
(o) Seller shall not merge or consolidate with or transfer or assign all
or substantially all of its assets and properties to any person or entity
without Purchaser's prior written consent.
(p) Attached hereto is a schedule listing all trademarks, copyrights,
patents and similar items as described in Sections 7(f), 7(g), and 7(h) which
are owned by Seller and which have been filed or registered, including filing
and/or registration information.
(q) Seller represents and warrants to Purchaser that it has
contemporaneously with execution of this Agreement delivered pursuant to the
terms of the Escrow Agreement described in Section 1(b) of this Agreement the
source code for Seller's software. Seller agrees to from time to time if it
materially modified its software deliver an updated version of the source code
into the escrow established by the Escrow Agreement. Additionally, Seller agrees
to do so at any time upon the request of Purchaser.
(r) Seller will keep and maintain adequate insurance by insurers
acceptable to Purchaser with respect to its business and all Collateral. Such
insurance shall be with respect to loss, damages and liability in amounts not
less than reasonably requested by Purchaser and shall include at a minimum
insurance for worker's compensation, general premises liability, fire, casualty,
theft and high risk. Seller shall cause Purchaser to be named an additional
insured and loss payee under all policies of insurance covering any of the
collateral, to the extent of Purchaser's interest. Seller shall deliver copies
of each insurance policy to Purchaser upon request.
(s) Seller is conducting and will conduct its business in compliance with
all applicable laws and has conducted and is in compliance with all licenses and
permits required under any such laws.
(t) Seller will permit Purchaser and all representatives and agents of
Purchaser, including independent appraisers and other persons and entities, to
inspect any of the Collateral at any time during normal business hours.
6. NOTICE OF PURCHASE. Seller shall execute and deliver to Purchaser
and/or file at such times and places as Purchaser may designate such financing
statements, continuations thereof and
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amendments thereto as are necessary or desirable to give notice of Purchaser's
purchase of the Eligible Accounts under the Uniform Commercial Code in effect
in any applicable jurisdiction.
7. COLLATERAL. In order to secure the payment of all indebtedness and
obligations of Seller to Purchaser, whether presently existing or hereafter
arising, Seller hereby grants to Purchaser a security interest in and lien upon
all of Seller's right, title and interest in and to (a) the Reserve Accounts and
all payments (if any) due or to become due to Seller from the Reserve Accounts;
(b) all accounts, contract rights, general intangibles, receivables and claims
whether now existing or hereafter arising, all guaranties and security therefor
and all of Seller's right title and interest in the goods purchased and
represented thereby, if any, including all of Seller's rights in and to returned
goods and rights of stoppage in transit, replevin and reclamation as unpaid
vendor; (c) all inventory, wherever located and whether now or hereafter
existing, (including, but not limited to raw materials and work in process,
finished goods and materials used or consumed in the manufacture or production
thereof, goods in which Seller has an interest in mass or a joint or other
interest or rights of any kind, and goods which are returned to or repossessed
by Seller) and all accession thereto and products thereof and documents
therefor; (d) all furniture, fixtures, machinery and equipment, wherever located
and whether now or hereafter existing, and all parts thereof, accessions thereto
and replacements therefor and all documents and general intangibles covering or
relating thereto; (e) all books and records pertaining to the foregoing,
including but not limited to computer programs, data, certificates, records,
circulation lists, subscriber lists, advertiser lists, supplier lists, customer
lists, customer and supplier contracts, sales orders, and purchasing records;
(f) all trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and any other
designs or sources of business identifiers, indicia or of origin or similar
devices, all registrations with respect thereto, all applications with respect
to the foregoing, and all extensions and renewals with respect to any of the
foregoing, together with all of the goodwill associated therewith, in each case
whether now or hereafter existing, and all rights and interest associated with
the foregoing; (g) all copyrights, and all copyrights of works based on,
incorporated in, derived from or relating to works covered by such copyrights,
and all right, title and interest to make and exploit all derivative works based
on or adopted from works covered by such copyrights, all registrations with
respect thereto, all applications with respect to the foregoing, and all
extensions and renewals with respect to any of the foregoing, together with all
rights and interests associated with the foregoing; (h) all patents, patent
applications, and patentable inventions, all continuations, divisions, renewals,
extensions, modifications, substitutions, continuations-in-part, or reissues of
any of the foregoing, the right to xxx for past, present, and future
infringements of any of the foregoing, all income, royalties, profits, damages,
awards, and payments relating to or payable under any of the foregoing, and all
other rights and benefits relating to any of the foregoing throughout the world;
and (i) all proceeds of the foregoing (collectively, the "Collateral"). Seller
agrees to comply with all appropriate laws in order to perfect Purchaser's
security interest in and to the Collateral, to execute any financing statements,
continuations thereof, amendments thereto or additional documents as Purchaser
may require, to deliver to Purchaser a list of all locations of its inventory
and equipment and to obtain any landlord or mortgage lien waivers that Purchaser
may require. Seller shall provide written notice to Purchaser of any change in
the locations at which it keeps its inventory and equipment at least 30 days
prior to any such change.
-10-
8. COLLECTION.
(a) Seller shall notify all Account Debtors and take other necessary or
appropriate means to insure that all of Seller's Accounts, whether or not
purchased by Purchaser, shall be paid directly to the remittance address set
forth below. After collection by Purchaser, all payments on Collateral shall be
promptly remitted to Seller, subject to and following the exercise of
Purchaser's rights therein as a secured party and its rights to offset any sums
then owing by Seller hereunder.
(b) Purchaser, as the sole and absolute owner of the Eligible Accounts
purchased hereunder, shall have the sole and exclusive power and authority to
collect each such Eligible Account, through legal action or otherwise, and
Purchaser may, in its sole discretion, settle, compromise, or assign (in whole
or in part) any of such Eligible Accounts, or otherwise exercise any other
right now existing or hereafter arising with respect to any of such Eligible
Accounts. If Seller receives payment of all or any portion of any Eligible
Accounts or other Account, Seller shall notify Purchaser immediately and shall
hold all checks and other instruments so received in trust for Purchaser and
immediately shall deliver to Purchaser such checks and other instruments in the
form received with any necessary endorsements.
(c) Purchaser shall have the right at any time, either before or after
the occurrence of an Event of Default and without notice to Seller, to notify
any or all Account Debtors on the Eligible Accounts and the other Collateral of
the assignment thereof to Purchaser and to direct such Account Debtors to make
payment of all amounts due or to become due to Seller directly to Purchaser, and
to the extent permitted by law, to enforce collection thereof and to adjust,
settle or compromise the amount or payment thereof. Payments received by
Purchaser may, at the sole discretion of Purchaser, be applied by Purchaser to
the payment of the indebtedness and obligations of Seller to Purchase or held as
cash collateral for such indebtedness and obligations. All amounts and proceeds
(including instruments and writings) received by Seller in respect of the
Collateral shall be received in trust for the benefit of Purchaser hereunder,
shall be segregated from other funds of Seller and immediately shall be paid
over to Purchaser in the same form as so received (with any necessary
endorsement) to be applied in the same manner as payments received directly by
Purchaser.
(d) Seller acknowledges that Purchaser has exclusive ownership and
control of the post office box identified as the remittance address set forth
below. Seller further acknowledges and agrees that at all times Purchaser shall
have the exclusive right to dominion and control over such post office box.
Purchaser is hereby authorized to endorse and process, in accordance with
customary collection procedures, all checks and other remittance items received
by Purchaser at the remittance address from third party remitters, and to
deposit such checks and other remittance items. Seller shall pay or reimburse
Purchaser for all fees and charges incurred by Purchaser in connection with the
establishment and maintenance of the post office address referenced herein and
the transmittal of checks and other items from such address to Purchaser by
whatever means deemed appropriate by Purchaser from time to time. Seller shall
be responsible for all costs and expenses incurred by Purchaser in connection
with the foregoing.
-11-
9. POWER OF ATTORNEY. Seller grants to Purchaser an irrevocable power of
attorney authorizing and permitting Purchaser, at its option, with or without
notice to Seller to do any or all of the following:
(a) Endorse the name of Seller on any checks or other evidences of payment
whatsoever that may come into the possession of Purchaser regarding Eligible
Accounts or Collateral, including checks received by Purchaser pursuant to
paragraph 8 hereof;
(b) Receive, open and dispose of any mail addressed to Seller and put
Purchaser's address on any statements mailed to Account Debtors'
(c) Pay, settle, compromise, prosecute or defend any action, claim,
conditional waiver and release, or proceeding relating to Eligible Accounts or
Collateral;
(d) Upon the occurrence of an Event of Default, notify in the name of
Seller, the U.S. Post Office to change the address for delivery of mail
addressed to Seller to such address as Purchaser may designate (provided that
Purchaser shall turn over to Seller all such mail not relating to Eligible
Accounts or Collateral);
(e) Verify, sign, acknowledge, record, file for recording, serve as
required by law, any claim of mechanic's lien, stop notice or bonded stop notice
in the sole and absolute discretion of Purchaser relating to any Eligible
Account or Collateral;
(f) Insert all recording or service information in any mechanic's lien or
assignment of rights under stop notice/bonded stop notice which Seller has
signed in connection with this Agreement, recorded or served to enforce payment
of the Eligible Accounts or Collateral;
(g) Execute and file on behalf of Seller any financing statement deemed
necessary or appropriate by Purchaser to protect Purchaser's interest in and to
the Eligible Accounts or Collateral, or under any provision of this Agreement;
and
(h) To do all other things necessary and proper in order to carry out this
Agreement.
The authority granted to Purchaser herein is irrevocable until this Agreement is
terminated and all amounts owed to Purchaser hereunder are fully satisfied.
10. DEFAULT AND REMEDIES. An event of default ("Event of Default") shall
be deemed to have occurred hereunder and Purchaser shall have no further
obligation to purchase Accounts and may immediately exercise its rights and
remedies with respect to the Eligible Accounts and the Collateral under this
Agreement, the Uniform Commercial Code, and applicable law, upon the happening
of one or more of the following:
(a) Seller shall fail to pay when due any amount owed to Purchaser,
whether arising hereunder or otherwise;
-12-
(b) There shall be commenced by or against Seller any voluntary or
involuntary case under the federal Bankruptcy Code, or any assignment shall be
made by Seller for the benefit of its creditors, or there shall be appointment
of a receiver or custodian for a substantial portion of Seller's assets;
(c) Seller shall become insolvent in that its debts are greater than the
fair value of its assets, or Seller is generally not paying its debts as they
become due;
(d) Any involuntary lien, garnishment, attachment or the like shall be
issued against or shall attach to the Eligible Accounts, the Collateral, any
other assets of Seller or any portion thereof;
(e) Seller shall suffer the entry against it of a final judgment for the
payment of money in excess of $25,000, unless the same is discharged within 30
days after the date of entry thereof or an appeal or appropriate proceeding for
review thereof is taken within such period and a stay of execution pending such
appeal is obtained;
(f) Seller shall breach any covenant or agreement made by it herein;
(g) Any warranty or representation set forth herein shall be untrue when
made or any report, certificate, schedule, financial statement, profit and loss
statement or other statement furnished by Seller, or by any other person on
behalf of Seller, to Purchaser is not true and correct when furnished;
(h) Seller shall have a federal or state tax lien filed against any of its
properties, or Seller shall fail to pay any federal or state tax when due, or
Seller shall fail to file any federal or state tax form when due;
(i) A material adverse change shall have occurred in Seller's financial
condition, business or operations or the value of the Collateral; or
(j) Seller shall have ceased the operation of its business.
Upon the occurrence of an Event of Default described in clauses (b) or (c) of
this Section 10, Seller immediately shall repurchase from Purchaser all
outstanding Eligible Accounts purchased by Purchaser from Seller hereunder at a
price equal to the aggregate face amount thereof and shall pay to Purchaser all
other amounts owing by Seller to Purchaser hereunder, whether or not then due,
all without demand, presentment, notice of demand or of dishonor and nonpayment,
or any other notice or declaration of any kind, all of which are hereby
expressly waived by Seller. During the continuation of any other Event of
Default, Purchaser, at any time, may require Seller to (and Seller shall)
repurchase from Purchaser all outstanding Eligible Accounts purchased by
Purchaser from Seller hereunder at a price equal to the aggregate face amount
thereof and pay to Purchaser all other amounts owing by Seller to Purchaser
hereunder, whether or not then due, all without notice, demand, presentment,
notice of demand or of dishonor and nonpayment, or any notice or declaration of
any kind, all of which are hereby expressly waived by Seller. In addition to,
and without
-13-
limitation of, the foregoing provisions of this Agreement, if an Event of
Default shall have occurred and be continuing, Purchaser may from time to time
in its discretion, without limitation and without notice except as expressly
herein: (a) exercise in respect of the collateral, in addition to other rights
and remedies provided for herein, or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code
(the "UCC") (whether or not the UCC applies to the affected Collateral); (b)
require Seller to, and Seller hereby agrees that it will at its expense,
assemble all or part of the Collateral as directed by Purchaser and make it
available to Purchaser at a place to be designated by Purchaser; (c) terminate
Purchaser's obligations under this Agreement and reduce its claim to judgment or
foreclose or otherwise enforce, in whole or in part, the security interest
created hereby by any available judicial procedure; (d) dispose of, at its
office, on the premises or Seller or elsewhere, all or any part of the
Collateral, as a unit or in parcels, by public or private proceedings; (e) buy
the Collateral, or any part thereof, at any public sale, or at any private sale
if the Collateral is of a type customarily sold in a recognized market or is of
a type that is the subject to widely distributed standard price quotations; (f)
apply by appropriate judicial proceedings for appointment of a receiver for the
Collateral, or any part thereof, and Seller hereby consents to any such
appointment; and (g) at its discretion, retain the Collateral in satisfaction of
the obligations due Purchaser hereunder whenever the circumstances are such that
Purchaser is entitled to do so under the UCC or otherwise. Seller agrees that,
to the extent notice of sale shall be required by law, at least five days'
notice to Seller of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
Purchaser shall not be obligated to make any sale of collateral regardless of
whether any notice of sale has been given. Purchaser may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. If any Event of Default shall have occurred
and be continuing, Purchaser may in its discretion apply any cash proceeds
received by Purchaser in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral, to any or all of the
following in such order as Purchaser may elect: (a) the repayment of all or any
portion of the obligations owed to Purchaser by Seller, whether hereunder or
otherwise; (b) the repayment of reasonable costs and expenses, including
reasonable attorneys' fees and legal expenses, incurred by Purchaser (whether or
not litigation has been commenced or a judgment has been issued, and if
litigation has been commenced, whether at trial or any appellate level) in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any Collateral, (iii) the exercise or enforcement of any of
the rights of Purchaser hereunder, or (iv) the failure of Seller to perform or
observe any of the provisions hereof; (c) the payment or other satisfaction of
any liens and other encumbrances upon any of the Collateral; (d) the
reimbursement of Purchaser for the amount of any obligations of Seller paid or
discharged by Purchaser, and of any expenses of Purchaser payable by Seller
hereunder; (e) by holding the same as Collateral; (f) the payment of any other
amounts required by applicable law (including, without limitation, Part 5 of
Article 9 of the UCC or any successor or similar applicable statutory
provision); and (g) by delivery to Seller or to whomsoever shall be lawfully
entitled to receive the same or as a court of competent jurisdiction shall
direct.
11. EQUITABLE RELIEF. In the event that Seller commits any act or
omission which prevents or unreasonably interferes with: (a) Purchaser's
exercise of the rights and privileges arising
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under the power of attorney granted in paragraph 9 of this Agreement; or (b)
Purchaser's perfection of or levy upon the security interest granted in the
Collateral, including any seizure of any Collateral, such conduct will cause
immediate, severe, incalculable and irreparable harm and injury, and shall
constitute sufficient grounds to entitle Purchaser to an injunction, writ of
possession, or other applicable relief in equity, and to make such application
for such relief in any court of competent jurisdiction, without any prior notice
to Seller.
12. CUMULATIVE RIGHTS; WAIVERS. All rights, remedies and powers granted
to Purchaser in this Agreement, or in any other instrument or agreement given by
Seller to Purchaser or otherwise available to Purchaser in equity or at law, are
cumulative and may be exercised singularly or concurrently with such other
rights as Purchaser may have. These rights may be exercised from time to time as
to all or any part of the Eligible Accounts purchased hereunder or the
Collateral as Purchaser in its discretion may determine. In the event that the
transaction between Seller and Purchaser is construed to be a loan from
Purchaser to Seller, such loan shall be secured by the Eligible Accounts and the
Collateral and Purchaser shall have all rights and remedies available to a
lender in addition to its rights and remedies hereunder. Purchaser may not waive
its rights and remedies unless the waiver is in writing and signed by Purchaser.
A waiver by Purchaser of a right or remedy under this Agreement on one occasion
is not a waiver of the right or remedy on any subsequent occasion.
13. NOTICES. Any notice or communication with respect to this Agreement
shall be given in writing, sent by (i) personal delivery, or (ii) expedited
delivery service with proof of delivery, or (iii) United States mail, postage
prepaid, registered or certified mail, or (iv) prepaid telegram, telex or
telecopy, addressed to each party hereto at its address set forth below or to
such other address or to the attention of such other person as hereafter shall
be designated in writing by the applicable party sent in accordance herewith.
Any such notice or communication shall be deemed to have been given either at
the time of personal delivery or, in the case of delivery service or mail, as of
the date of first attempted deliver at the address and in the manner provided
herein, or in the case of telegram, telex or telecopy, upon receipt. Seller
hereby agrees that Purchaser may publicize the financing transaction
contemplated by this Agreement in newspapers, trade and similar publications
including, without limitation, the publication of a "tombstone".
14. TERM. The term of this Agreement shall be for one year from the date
hereof (the "Original Term"); provided that the term of this Agreement shall be
extended automatically for an additional year and for each succeeding year
unless written notice of termination is given by one party hereto to the other
party hereto at least sixty (60) days, but no more than ninety (90) days, prior
to the end of the Term or any extension thereof (the Original Term and any
extensions thereof are herein referred to as the "Term"). In the event that
during the Term this Agreement is terminated at any time for any reason, Seller
shall pay to Purchaser an early termination fee in an amount equal to (a) one
percent (1.00%) of the Commitment if this Agreement is terminated due to receipt
by Seller of an equity infusion or as a result of Seller securing an accounts
receivable line of credit from an institutional bank, or (b) two percent (2.00%)
of the Commitment if this Agreement is terminated for any other reason (but in
no event shall any such early termination fee exceed the maximum amount
permitted by applicable law). Any termination of this Agreement shall not affect
Purchaser's
-15-
security interest in the Collateral and Purchaser's ownership of the Eligible
Accounts and the Related Rights and Seller's obligations to make the payments
due hereunder, and this Agreement shall continue to be effective, until all
transactions entered into and obligations incurred hereunder have been
completed and satisfied in full.
15. RIGHT OF FIRST OFFER. Seller hereby agrees that in the event Seller
receives an offer either during or at the end of the Term from a third party to
provide financing or factoring to Seller, which offer Seller intends to accept,
it shall require the offeror to reduce such offer to a written commitment (the
"new commitment"). In addition, Seller will (a) notify Purchaser in writing of
the identity of the offeror and the complete terms of the new commitment and
(b) if, within 30 days after Purchaser's receipt of such notice and a signed
copy of the new commitment, Purchaser elects, in its sole discretion, to offer
to terminate this Agreement in accordance with Section 14 and match the new
commitment, accept Purchaser's offer.
16. CHARGES; INDEMNIFICATION. Seller shall pay to Purchaser its normal
and customary charges for the following items in connection with the
transactions contemplated hereby: long-distance telephone charges, reasonable
travel expenses, copying, legal fees incurred in collecting the Accounts or
enforcing this Agreement, postage, credit reports, lock box charges, wire
transfers, overnight mail delivery, UCC and tax lien searches and filing fees
("Adjustments"). The Seller hereby indemnifies and agrees to hold harmless and
defend Purchaser and Purchaser's officers, directors, shareholders, affiliates,
agents, employees and attorneys (collectively, the "Indemnified Persons") from
and against any and all claims, demands, actions, causes of action, judgments,
liabilities, damages and consequential damages, penalties,fines, costs, fees,
expenses and disbursements (including, without limitation, fees and expenses of
attorneys and other professional consultants and experts in connection with any
investigation or defense) of every kind, known or unknown, existing or hereafter
arising, foreseeable or unforeseeable, which may be imposed upon, threatened or
asserted against or incurred or paid by any Indemnified Person at anytime and
from time to time, because of, resulting from, in connection with or arising
out of any transaction, act, omission, event or circumstance in any way
connected with the Collateral or this Agreement (including but not limited to
enforcement of Purchaser's rights thereunder or the defense of Purchaser's
actions thereunder) (each, as "Indemnified Claims"), excluding with respect to
any Indemnified Persons, any of the foregoing resulting from such Indemnified
Person's gross negligence or willful misconduct. THE FOREGOING INDEMNIFICATION
SHALL APPLY WHETHER OR NOT SUCH INDEMNIFIED CLAIMS ARE IN ANY WAY OR TO
ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT
LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY INDEMNIFIED PERSON. Upon notification and demand, Seller agrees
to provide defense of any Indemnified Claim and to pay all costs and expenses
of counsel selected by any Indemnified Person in respect thereof. Any
Indemnified Person against whom any Indemnified Claim may be asserted reserves
the right to settle or compromise any such Indemnified Claim as such
Indemnified Person may determine in its sole discretion, and the obligations of
such Indemnified Person, if any, pursuant to any such settlement or compromise
shall be deemed included within the Indemnified Claims. Except as specifically
provided in this section, the Seller waives all notices from any Indemnified
Person. The provision of this paragraph 16 shall survive the
-16-
termination of this Agreement. Purchaser may, in its sole and absolute
discretion, deduct any Adjustments or other amounts owed under this paragraph
from the Reserve Accounts.
17. ATTORNEY'S FEES. Seller agrees to pay Purchaser all costs, fees and
expenses (including attorneys' fees) incurred by Purchaser in connection with
the negotiation, execution and delivery of this Agreement and the documents
contemplated hereby, and all renewals, extensions, amendments, modifications,
and restatements thereof. In addition, Seller agrees to reimburse Purchaser upon
demand for all other costs and expenses incurred by Purchaser in connection with
its due diligence review of Seller and the closing and consummation of the
transactions contemplated hereby, and all reasonable attorney's fees, court
costs and other expenses incurred by Purchaser in the enforcement of this
Agreement and protecting or enforcing its interest in the Eligible Accounts or
the Collateral, in collecting the Eligible Accounts or the Collateral, or in the
representation of Purchaser in connection with any bankruptcy case or insolvency
proceeding involving Seller, the Collateral, any Account Debtor, or any Eligible
Account. Seller hereby authorizes Purchaser, at its sole discretion, to deduct
such fees, costs and expenses from the purchase price for Eligible Accounts or
charge any such fees, costs and expenses against the Reserve Accounts, as
Purchaser elects at its sole discretion.
18. SEVERABILITY. Each and every provision, condition, covenant and
representation contained in this Agreement is, and shall be construed, to be a
separate and independent covenant and agreement. If any term or provision of
this Agreement shall to any extent be invalid or unenforceable, the remainder of
the Agreement shall not be affected thereby.
19. PARTIES IN INTEREST. All grants, covenants and agreements contained in
this Agreement shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that Seller may not
delegate or assign any of its duties or obligations under the Agreement without
the prior written consent of Purchaser. PURCHASER RESERVES THE RIGHT TO ASSIGN
ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT IN WHOLE OR IN PART TO ANY
PERSON OR ENTITY.
20. GOVERNING LAW; SUBMISSION TO PROCESS. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
TEXAS, WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW.
SELLER HEREBY IRREVOCABLY SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS, AND AGREES AND
CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING
RELATING TO THIS AGREEMENT, THE PURCHASE OF ELIGIBLE ACCOUNTS OR ANY OTHER
RELATIONSHIP BETWEEN PURCHASER AND SELLER BY ANY MEANS ALLOWED UNDER STATE OR
FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT, THE PURCHASE OF ELIGIBLE ACCOUNTS OR ANY OTHER RELATIONSHIP BETWEEN
PURCHASER AND SELLER
-17-
SHALL BE BROUGHT AND LITIGATED EXCLUSIVELY IN ANY ONE OF THE STATE OR FEDERAL
COURTS LOCATED IN DALLAS COUNTY, TEXAS HAVING JURISDICTION. THE PARTIES HERETO
HEREBY WAIVE AND AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE, THAT ANY SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT
THE VENUE THEREOF IS IMPROPER.
21. WAIVER OR JURY TRIAL, PUNITIVE AND CONSEQUENTIAL DAMAGES, ETC. EACH
OF SELLER AND PURCHASER HEREBY (A) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR
ASSOCIATED HEREWITH; (B) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (C) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS PARAGRAPH.
22. COMPLETE AGREEMENT. THIS AGREEMENT, THE WRITTEN DOCUMENTS EXECUTED
PURSUANT TO THIS AGREEMENT, IF ANY, AND THE ACKNOWLEDGMENT DELIVERED IN
CONNECTION HEREWITH SET FORTH THE ENTIRE UNDERSTANDING AND AGREEMENT OF THE
PARTIES HERETO WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREIN AND MAY NOT
BE CONTRADICTED BY EVIDENCE OR PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. NO MODIFICATIONS OR AMENDMENT OF OR SUPPLEMENT TO
THIS PURCHASE & SALE AGREEMENT OR TO SUCH ACKNOWLEDGMENT SHALL BE VALID OR
EFFECTIVE UNLESS THE SAME IS IN WRITING AND SIGNED BY THE PARTY AGAINST WHOM IT
IS SOUGHT TO BE ENFORCED.
[Balance of this page intentionally left blank]
The undersigned have entered into this Agreement on the date first above
written.
FIDELITY FUNDING BUSINESS TOTAL CONTROL INFORMATION,
CREDIT LTD. d/b/a USA a California limited partnership
FUNDING, LTD.
a Texas limited partnership
By: /s/ XXXXX X. XXXXXXXX By: /s/ XXXXXXX X. XXXXXXXX
----------------------------- --------------------------
Xxxxx X. Xxxxxxxx, President Name: Xxxxxxx X. XxXxxxxx
FFBC, Inc., its General Partner Title: CFO
REMITTANCE ADDRESS: MAILING ADDRESS OF SELLER:
P.O. Box 00000 Xxxxxxx Xxxxxx #000
Xxxxxx, XX 00000
MAILING ADDRESS: STREET ADDRESS OF SELLER:
0000 XXX Xxxxxxx, Xxxxx 000 00000 Xxxxxxx Xxxxxx #000
Xxxxxx, Xxxxx 00000 Xxxxxx, XX 00000
Attachments:
Schedule of Accounts
Schedule of Trademarks, Copyrights, Patents and the Like
-19-
SCHEDULE OF ACCOUNTS
DATE: SCHEDULE NO.
---------------------- -------------------------------
SELLER: TOTAL CONTROL INFORMATION
Total Number of Accounts Sold:
---------------
Total Amount Sold:
---------------------------
Reserve:
-------------------------------------
ACCOUNT INVOICE INVOICE INVOICE
DEBTOR NUMBER AMOUNT DATE
------- ------- ------- -------
The undersigned does hereby certify that he or she has made a thorough
inquiry into all matters certified herein and, based upon such inquiry and
experience does hereby certify that:
1. He or she is the duly elected, qualified, and acting _______________ of
Total Control Information ("Seller").
2. This Schedule of Accounts is being submitted to Fidelity Funding Business
Credit, Ltd. dba USA Funding, Ltd. ("Purchaser") pursuant to that certain
Purchase &
Sale Agreement dated as of January __, 2001, between Seller and
Purchaser (as from time to time supplemented or amended, the "Agreement).
3. All representations and warranties made by Seller in the Agreement or any
other instrument, document, certificate or other agreement executed in
connection therewith (collectively, the "Transaction Documents") delivered on or
before the date hereof are true on and as of the date hereof as if such
representations and warranties had been made as of the date hereof.
4. No Event of Default (as defined in the Agreement) or any event that, with
the giving of notice, the passage of time or both, would constitute an Event of
Default exists on the date hereof.
5. Seller has performed and complied with all agreements and conditions
required in the Transaction Documents to be performed or complied with by it on
or prior to the date hereof.
6. All information contained in this Schedule of Accounts is true, correct
and complete.
-1-
IN WITNESS WHEREOF, this instrument is executed by the undersigned as of
________________, 2001.
TOTAL CONTROL INFORMATION
By: ____________________________________
Name: ____________________________
Title: ___________________________
-2-
SCHEDULE OF TRADEMARKS,
COPYRIGHTS, PATENTS AND THE LIKE
-1-
