CONTRACT FOR THE SALE OF GOODS
(Includes Grant of Purchase Money Security
Interest)
THIS CONTRACT FOR THE SALE OF GOODS (the "Agreement") is made and entered into
as of this 10th day of August, 2000 ("Effective Date") by and between
Chasin of Long Beach, Inc. dba Colbie Pacific Capital with its principal
offices at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx XX 00000 (the
"Seller") and Xxxxx Telecom, Inc. a Delaware corporation with principal
offices at 00 Xxxxxxx Xxxxx, Xxxx Xxxxxxxxx, XX 00000 (the "Buyer").
Recitals
This Agreement is made and entered into with reference to the following facts,
all of which are hereby incorporated into, and made a material part of this
Agreement.
A. Seller entered into a Loan and Security Agreement with an entity known as
Cyberlight, Inc. (the "Cyberlight Agreement"). Pursuant to the Cyberlight
Agreement, Colbie was granted a security interest in certain assets of
Cyberlight, Inc.
B. The Cyberlight Agreement went into default. Cyberlight, Inc. filed for
relief under Chapter 7 of the Bankruptcy Code, and Seller was granted
relief from the automatic stay in order to foreclose upon its collateral
granted by Cyberlight, Inc. to Seller to secure the obligations under the
Cyberlight Agreement.
C. Buyer desires to purchase two Magellan Switches and accessories described
as: CDR Format DBF; Fraud Detection; Software Version 4.33; Two (2) X0000
XXX Xxxxxx XX based platforms, 64 ports each; redundant CPU's and power
supplies.
D. Seller is willing to sell to Buyer the equipment in a private foreclosure
sale, pursuant to its rights under the Cyberlight Agreement and applicable
provisions of the California Commercial Code, including but not limited to
Sec 9504.
NOW, THEREFORE, for and inconsideration of the foregoing recitals, the mutual
covenants, agreements, representations, and warranties contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereby enter into the following
Agreement.
Paragraph 1. Sales of Goods
1.01 Seller shall transfer and deliver to Buyer, and Buyer shall pay for and
accept, the Goods, pursuant to the terms and conditions of this Agreement.
Paragraph 2 Delivery of Goods
2.01 The Goods are presently being store at 000 Xxxxxxxx Xxxx., 0xx Xxxxx, Xxx
Xxxxxxx, XX 00000. Upon execution of this Agreement and payment of the
first installment payment as more fully set forth in Par. 7 below, Buyer
may take possession of the Goods, moving them to 000 Xxxxxxxx Xxxx., Xxxxx
000, Xxx Xxxxxxx, XX 00000.
2.02 All shipping, storage rental fees and all other costs of any nature
associated with or related to the Goods shall be the sole and absolute
responsibility of the Buyer.
Paragraph 3. Identification - Risk of Loss
3.01 Identification of the Goods under Commercial Code Section 2501 shall occur
on the Effective Date. Upon identification, the risk of loss shall pass to
Buyer.
Paragraph 4. Title
4.01 Title to the Goods shall vest with Buyer on the Effective Date, subject to
the terms and conditions of this Agreement.
Paragraph 5. Disclaimer of Express Warranties
5.01 Seller warrants that the Goods are as described in this Agreement, but no
other express warranty is made with respect to the Goods. Any description
of the Goods contained in the Agreement is for the sole purpose of
identifying them, is not part of the basis of the bargain, and does not
constitute a warranty that the Goods will conform to that description. If
any model or sample was shown to Buyer, that model or sample was used
merely to illustrate the general type and quality of the Goods and not to
represent that the Goods would necessarily conform to the model or sample.
Paragraph 6. Disclaimer of Implied Warranties
6.01 THE GOODS SOLD UNDER THIS CONTRACT ARE PURCHASED BY THE BUYER "AS IS' AND
THE SELLER DOES NOT WARRANT THAT THEY ARE OF MERCHANTABLE QUALITY OR THAT
THEY CAN BE USED FOR ANY PARTICULAR PURPOSE. THIS PROVISION IS NOT INTENDED
TO LIMIT, ENHANCE OR OTHERWISE MODIFY ANY APPLICABLE MANUFACTURE'S WARRANTY
IN PLACE WITH RESPECT TO THE GOODS.
Paragraph 7. Price and Payment
7.01 The total price to be paid by Buyer will be Five Hundred Sixty Eight
Thousand Dollars ($568,000) (the "Purchase Price"). On August 10, 2000,
Buyer shall pay to Seller the sum of $10,000. Commencing October 1, 2000,
and continuing on the 1st day of each successive month thereafter, Buyer
shall pay additional monthly installments of $10,000 for a series of ten
(10) payments. On August 1, 2001, Buyer shall pay to Seller the sum of
$458,000.
7.02 Payment shall be made by lawful money of the United States, In the event
any installment payment is not paid when due, or if Buyer defaults to
Seller on any of its Obligations, Seller may, at its option, declare the
entire amount owed under this Agreement, due and payable.
Paragraph 8. Grant of Purchase Money Security Interest
8.01 In order to secure Buyer's Obligations to Seller under this Agreement,
Buyer grants to Seller a security interest in the Goods, and all proceeds
thereof, including but not limited to insurance proceeds. The term
"Obligations" as used in this Agreement, shall mean and include each and
all of the following: the obligations evidenced by the Agreement, the
obligation to pay all installment payments set forth in Paragraph 7 above,
and to perform when due all other debts and all obligations, liabilities,
covenants, agreements, guarantees, warranties and representations of Buyer
to Seller, of any and every kind and nature, whether heretofore, now or
hereafter owing, arising, due and payable from Buyer to Seller.
Paragraph 9. Buyer's Covenants With Respect To The Goods
9.01 Buyer, at its expense, shall keep and maintain (i) the Goods insures
against loss or damage by fire, theft, explosion, earthquake, flood,
sprinklers, natural disasters and all other hazards and risks ordinarily
insured against by other owners or users of such properties and interests
in properties in similar businesses for the full insurable value thereof;
(ii) business interruption insurance and public liability and property
damage insurance relating to Buyer's ownership and use of its assets. All
such policies of insurance (except those of public liability and property
damage) shall contain an endorsement in a form satisfactory to Seller
showing loss payable to Seller and all proceeds payable thereunder shall be
payable to Seller and upon receipt by Seller shall be applied on account of
Buyer's Obligations. In the event Seller at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required
above or to pay any premium in whole or in part relating thereto, then
Seller, without waiving or releasing any obligation or default by Seller
hereunder, may at any time or times hereafter, but shall be under no
obligation to do so, obtain and maintain such policies of insurance and pay
such premiums and take any other action with respect thereto which Seller
in its sole and absolute discretion deems advisable. All sums so disbursed
by Seller, including reasonable attorneys' fees, court costs, expenses and
other charges relating thereto, shall be a part of Buyer's Obligations and
payable on demand.
Paragraph 10. Buyer's Negative Covenants
10.01 Buyer covenants and agrees that it shall not: (a) grant a security
interest in or permit a lien, claim or encumbrance upon any of the
Collateral in favor of any Person other than Seller, and shall provide
written notice to Seller within ten days of Buyer obtaining any knowledge
of the foregoing; (b) permit any levy, attachment or restraint to be made
affecting any of its assets; (c) permit any receiver, trustee or assignee
for the benefit of Sellers to be appointed to take possession of any or all
of its assets; (d) other than in the ordinary course of its business, sell,
lease or otherwise dispose of or transfer, whether by sale, merger,
consolidation or otherwise, any of its assets; (e) merge or consolidate
with any other person or entity; (f) acquire all or any material interest
in any other person or entity; (g) enter into any transaction not in the
ordinary course of its business; (h) under any circumstances or in any
manner whatsoever, interfere with any of Seller's rights under this
Agreement.
Paragraph 11. Default
11.01 Default. Any one or more of the following events shall constitute
a default (each, a "Default") by Buyer under this Agreement (a) Buyer shall
fail to pay any of the Obligations when due, upon maturity or by
acceleration; (b) if Buyer fails or neglects to perform, keep or observe
any term, provision, condition or covenant on its part contained in this
Agreement; (c) if any representation and warranty under this Agreement, or
representation, warranty or other information contained in any statement,
report or certificate made or delivered by Buyer or any of its officers,
employees or agents to Seller was not true and correct when made or deemed
made; *d) if Seller shall reasonably determine in good faith that it is
insecure with respect to the repayment of all or any of Buyer's
Obligations; (e) an order or decree appointing a receiver, trustee,
custodian or liquidator shall have been issued with respect to Buyer or its
assets; (f) if all or any of Buyer's assets are attached, seized, subjected
to a writ or warrant, or are levied upon, by a Seller or come within the
possession or any receiver, trustee, custodian or assignee for the benefit
of Sellers; (g) Buyer shall fail to pay its debts to Sellers as they com
due or shall be insolvent; (h) Buyer shall seek relief under any
bankruptcy, insolvency, reorganization or similar law, or a proceeding is
commenced against Buyer under any bankruptcy, insolvency, reorganization or
similar law and not dismissed within sixty day; (i) if Buyer shall make an
assignment for the benefit of Sellers; (j) if any proceeding is filed or
commenced by or against Buyer for its dissolution or liquidation; (k) if
Buyer is enjoined, restrained or in any way prevented by judicial or
administrative order from conducting al or any part of its business
affairs; (l) if a notice of lien, levy or assessment is filed of record
with respect to all or any of Buyer's assets by the United States or any
department, agency or instrumentality thereof, or by any state, county,
municipality or other governmental agency or if any taxes or debts owing at
any time or times hereafter to any one or more of them becomes a lien,
whether xxxxxx or otherwise, upon all or any of Buyer's assets; (m) if a
judgment or other claim becomes alien or encumbrance upon all or any of
Buyer's assets; (n) the occurrence of any event, circumstance, or condition
which, after any applicable cure or notice period or lapse of time, or
both, would constitute a default under any material agreement, contract,
instrument or the like to which Buyer is a party of which any of Buyer's
property is subject, whether or not a party thereto exercises any of its
rights and remedies with respect to such default, or upon acceleration of
the maturity of any material indebtedness of Buyer; or (o) the destruction
or occurrence of substantial damage to the Collateral or any material
portion thereof, or which there is no or substantially no insurance
coverage in respect and/or for which not or substantially no insurance
coverage will be paid in respect thereto.
Paragraph 12. Remedies
12.01 If any Default shall be occurred, Buyer may exercise all the rights and
remedies of a secured party on default under the California Commercial Code
and all of the rights and remedies provided for in the Agreement and such
other rights and remedies as may be provided by law or otherwise (such
rights and remedies to be cumulative and non-exclusive). Seller also may:
(a0 declare Buyer's Obligations immediately due and payable; (b) enter,
with or without process of law, any premises where the Collateral is or may
be located and, without breach of the peace and without charge or liability
to Seller therefore, until Seller's completion of enforcement of its
security interests in the Collateral and/or until Sellers' removal of the
Collateral therefrom to such other place or places as Seller deems
convenient and in connection therewith (i) take possession of said premises
and of any of the Collateral located therein; (ii) place a receiver in
exclusive control of said premises and any of the Collateral located
therein; (iii) remove the Collateral (and any of Buyer's materials,
supplies, books and records) for the purpose of collecting the Collateral
and/or preparing the Collateral for disposition and/or disposing of the
Collateral; (c) sell or otherwise dispose of the Collateral (in its then
condition or after further manufacturing, processing or preparation
thereof, utilizing in connection therewith, without charge or liability to
Seller therefore, any of Buyer's assets) at public or private sale, as
Seller deems advisable for cash, or credit, or such other terms as Seller
deems acceptable; provided however, that Buyer shall be credited with the
net proceeds of such sale or other disposition only when such proceeds are
actually received by Seller and Seller may become the purchaser at any such
sale if permissible under applicable law. Buyer shall, if Seller requests,
assemble the Collateral and make it available to Seller at a place or
places to be designated by Seller which is reasonably convenient to Seller
and Buyer. Seller shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Seller may adjourn any
public or private sale from time to time by announcement at he time and
place fixed therefore, and such sale may without further notice, be made at
the time and place to which it was so adjourned. Buyer recognizes that if
Buyer fails to perform, observe or discharge any of its obligations under
this Agreement, not remedy of law will provide adequate relief to Seller;
therefore, Buyer agrees that Seller shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of
proving actual damages. Seller may enter the premises of Buyer and take
possession of the Collateral and of the records pertaining to the
Collateral. Buyer grants to Seller a right of entry to obtain possession of
such Collateral and records and further promises to store such Collateral
and records on the premises of Buyer without cost to Seller.
Paragraph 13. Interpretation and Parole Evidence
13.01 This writing is intended by the Parties as a final expression of their
agreement and understanding concerning the matters contained herein, and is
also intended as a complete and exclusive statement of the terms of their
agreement and understanding. No course of prior dealings between the
Parties and no usage of the trade shall be relevant to supplement or
explain any term used in the Agreement. Acceptance or acquiescence in a
course of performance rendered under this contact shall be relevant to
determine the meaning of this Agreement even though the accepting or
acquiescing Party has knowledge of the nature of performance and
opportunity of objection. Whenever a term defined by the California
Commercial Code is used in the Agreement, the definition contained in the
California Commercial Code shall control.
Paragraph 14. Authority of Seller's Agents
14.01 No agent, employee or representative of Seller has any authority to bind
Seller to any affirmation, representation, or warranty concerning the Goods
sold under this Agreement, and unless an affirmation, representation, or
warranty made by an agent, employee or representative is specifically
included within this written contract, is has not constituted a part of the
basis of this bargain and shall not in any way be enforceable.
Paragraph 15. Miscellaneous Provisions
15.01 No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by all the Parties. No waiver of any of
the provisions of this Agreement shall be deemed, or shall constitute, a
waiver of any other provision, whether or not similar, not shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed
in writing by the Party making the waiver. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute on and the same
instrument. The Parties shall promptly execute and deliver such additional
documents and instruments as shall be necessary to effectuate this
transaction.
15.02 This Agreement, and all rights and obligation of the Parties under this
Agreement, shall be construed in accordance with, and governed by, the
Uniform Commercial Code as enacted and in force in the State of California
of the Effective Date.
15.03 If any legal action or any arbitration or other proceeding is brought for
the interpretation or enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with
any of the provisions of the Agreement, the successful or prevailing Party
shall be entitled to recover from the non-prevailing or unsuccessful Party
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be
entitled.
15.04 Any dispute under this Agreement shall only be litigated in any court
having its situs within the County of Los Angeles, and the parties consent
and submit to the jurisdiction of any state or federal court located within
such venue which has original jurisdiction over matters which arise within
the County of Los Angeles.
15.05 If any provision of this agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
will continue in full force and effect without being impaired or
invalidated in any way.
15.06 This Agreement shall insure to the benefit of, and shall be binding upon,
each of the Parties, and each of their respective predecessors, successors,
assigns, representatives, heirs and devises.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
Effective Date.
"SELLER" "BUYER"
Chasin of Long Beach, Inc. dba Xxxxx Telecom, Inc.
Colbie Pacific Capital
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxx
------------------------------- ---------------------
Its: Vice President Its: President
