INTERNATIONAL HOLDINGS, INC.
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Date of Agreement: 2/11/00
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Full Legal Name of Business: AMERICAN QUANTUM CYCLES, INC. ("Associate")
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All DBA's: None
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which represents that all of which name(s) have been properly filed and
published as Required by applicable law and the Principals ("Principals") listed
below, all the above whose mailing address are: 000 Xxxxxxxx Xxxx, Xxxxxxxxx, XX
00000. Legal Form of Business: Corporation If Corporation/Limited Liability
Company/Partnership then: State of Incorporation/registration: Georgia and
INTERNATIONAL HOLDINGS, INC. ("IHI"), 0000 Xxxxxxx Xxxxx, Xxxxx X, Xxxxxxx, XX
00000, agree as follows and establish the following factoring Agreement
("Agreement" or "Factor Agreement"):
A. Associate desires to sell IHI from time to time to certain of Associate's
accounts, contracts, contract rights and other forms of obligations for the
payment of money and proceeds thereof arising out of bona fide contract to
sell and/or sale and/or lease of Goods and Services (please see Exhibit C
for complete definition of these, which are termed "Receivables" ).
Receivables submitted to IHI are an accurate and undisputed statement of
indebtedness by Customer to Associate as a result of an absolute sale /
lease and not on consignment, or on approval, or hold basis, or subject to
any other contingency, excepting only, in the case of a Purchase Order or
Contract, the production and/or delivery of the Goods and Services required
therein.
B. The Approval as an Associate Letter dated 02/11/00 and the Application To
Become An Associate dated 02/11/00 are incorporated in this Agreement By
reference. It is agreed that this Agreement is intended only to benefit
parties signatory to it and not to benefit any third parties.
C. Performance of this Agreement shall be construed in accordance with and
governed by the laws of the State of GEORGIA. In any action brought under
or arising out of this Agreement, Associate and IHI hereby consent to the
jurisdiction of any competent court within the County of DEKALB, State of
GEORGIA and consent to service or process by any means authorized by
GEORGIA law.
D. The Authorized Representatives are:
Name Title Signature
Xxxxxxx X. Xxxxx President /s/ Xxxxxxx X. Xxxxx
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Xxxx Xxxxxx COO /s/ Xxxx Xxxxxx
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E. If Associate is a corporation / limited liability company / partnership
(collectively the "Company" ): Resolution Authorizing Execution of a Factor
Agreement and Sale of Receivables to INTERNATIONAL HOLDINGS, INC. RESOLVED,
that Associate, a Company, is hereby authorized by action of its board of
directors of governing body (collectively the "Board" ) unanimously adopted
to enter into an Agreement with IHI, or successive agreements, extensions
or amendments as provided in the Agreement between the Company and IHI,
which will provide, among other things, for the sale, assignment and
transfer of Receivables of the Company's books to account to IHI on such
items and conditions as the Company and IHI may determine from time to
time. FURTHER RESOLVED, that the Authorized Representatives set out in
Paragraph D above be each of them acting alone hereby authorized and
directed to do any of the following on behalf of the Company as such
individual may approve as necessary or desirable in order to carry out the
intent and purpose of these Resolutions and to effectuate the sale,
assignment and transfer of Receivables to IHI, such action and approval to
be conclusively evidenced by the execution by such individual(s) of the
relevant document or taking of the necessary action: to execute the
Agreement with IHI, including such successive agreements, extensions,
additional documentation or amendments as provided in the Agreement between
the Company and IHI, for amounts and on terms and conditions which the
Authorized Representative shall determine from time to time is in the best
interests of the Company.
I HEREBY certify that the foregoing is a true and correct copy of a resolution
adopted by the Board of the Company held on , 20 . And that said resolution is
still in full force and effect.
/s/ Xxxxxxx X. Xxxxx /s/ Xxxx Xxxxxx
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President /Managing Member / Secretary / Member / Authorized Partner
Authorized Partner Chairman of the Board Secretary of the Board
F. The terms and conditions set forth above and in Articles I - XV (Exhibit
A), the Commission Schedule (Exhibit B), Definitions (Exhibit C) and other
Exhibits which follow are hereby agreed to as of the date set forth above.
G. Principals are individuals associated with Associate who, as consideration
and a material inducement to IHI for agreeing to enter into this Agreement,
agree jointly and severally enter into, to be bound by and honor its terms and
conditions. For all purposes, herein Principals are to be regarded as Associates
and may also be so interchangeably addressed.
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Principal Principal Principal
AMERICAN QUANTUM CYCLES, INC. INTERNATIONAL HOLDINGS, INC.
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(Associate)
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By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx X. Xxxx
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(Title) C.O.O. (Title) C.E.O.
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EXHIBIT A
(1) IHI to take immediate possession of the Goods and Services at the sole cost
and expense of the Associate which shall take place at the business location of
the Associate or at any other location designated by IHI, (2) in the event that
Associate does not assemble and make the Goods and Services available to IHI
within the designated time period in the written notice provided by IHI to the
Associate, then Associate grants to IHI the absolute right to: (a) enter the
business premises of Associate or any other business premises where the Goods
and Services are located for the express purpose of IHI obtaining possession of
the Goods and Services, (b) store the Goods and Services at the business
premises of Associate or elsewhere after the notice of default has been provided
to the Associate, (3) Associate grants an absolute right to IHI to conduct a
public or private sale and dispose of the Goods and Services, in its/their then
condition or following any commercially reasonable preparation or process to
complete work in process, at the business premises of the Associate or elsewhere
at IHI's sole option. The right of storage and sale of the Goods and Services
shall be at no cost or expense to IHI. Upon the sale of any/all of the Good and
Services, IHI shall pay from the proceeds of the sale in the following order of
priority: (1) cost of taking and storage of the Goods and Services, (2) the cost
of the sale, (3) all obligations owing by Associates to IHI including all
preparation or process costs set out above, and (4) if there are any proceeds of
the sale then remaining Associate shall be paid the remaining proceeds. In the
event that Associate elects to terminate this Agreement, it expressly waives all
claims of any nature it may allege/have against IHI. Subsequent to the
termination of this Agreement by either party, should any claim, legal action,
etc., be made against IHI by a Customer, Vendor, or others, whether or not suit
is filed, Associate's obligations under this Agreement will continue after
termination of this Agreement until all such items are finally
adjudicated/resolved/paid in full by Associate/reimbursed in full to IHI by
Associate for all amounts IHI has expended to resolve such item, including Legal
Costs. IHI's election to waive any provision or breach at any given time shall
not be deemed a waiver of any subsequent breach or waiver of such provision at
any subsequent time. This Agreement and amendments thereto; etc., shall not be
construed against the party preparing it, but shall be construed as if all
parties prepared the Agreement in accordance with the laws of the applicable
jurisdiction.
COMMISSION SCHEDULE (EXHIBIT B)
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1. PRIMARY COMMISSIONS: A Primary Commission is charged based on the face
amount of the Gross Receivable (see Exhibit A, Article III for definition)
that IHI has purchased on the date of its purchase and from time to time
thereafter based on additional Initial Payments as set out herein, The
Primary Commission varies based upon the percentile ratio of the sum of all
Initial Payments, Letters of Guarantee, and Letters of Credit made/issued
to the actual amount of that Gross Receivable ("Initial Payment
Percentage"), without deduction due at any intervening payments made by
Associate/Customers and received by IHI, as follows:
Initial Payment Percentage Primary Commission Percent
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Less than 25% 2%
25%-39.99% 3%
40%-59.99% 4%
60%-79.99% 5%
80% or more 6%
2. ADMINISTERED COMMISSION: Administered Commissions are charged as set out in
the attached Administered Commission Exhibit. Administered Commissions are
also charged on any fundings in excess of the approved Initial Payment
Percentage. Administered Commissions are charged on the earlier of the date
of IHI's purchase of the applicable Receivable or on the date of the
agreement between Associate and IHI giving rise to the Administered
Commission unless otherwise specified in such agreement.
3. ACCRUED COMMISSIONS: Accrued Commissions are calculated based on the face
amount of Initial Payments/Letters of Credit/Guarantee and are charged at a
rate of 2% for each ten calendar days beginning with the date IHI funds the
Associate/causes the Letter of Credit/Guarantee (see Para. 7 for details of
Letter of Guarantee Accrued Commissions) to be issued, are fully earned for
each ten calendar day period on the first day of each period, and continue
to accrue until the date full payment in immediately available funds is
received by IHI.
4. IHI's Commission Percents are to be increased by fifty percent (50%) on
Dispute Receivables and on all payments received by Associate and not
remitted to IHI the same day as received, as set out in Article V, in
Exhibit A of the Agreement.
5. RESERVE FUND PAYMENTS BY IHI TO ASSOCIATE: The Associate's Reserve Fund is
the remainder after/payments are made to the Associate after an amount
equal to all of IHI's Cost and additional charges if any, Primary,
Administered and Accrued Commissions and Initial Payments in a Calendar
Month Unit's/Contract Receivable Units/Bulk Purchase Unit's (whichever is
applicable) purchase of Receivables have been paid to IHI in immediately
available funds. IHI reserves the right to close out Receivable(s)/Calendar
Month Unit/Contract Receivable Unit/Bulk Purchase Unit (whichever is
applicable) and reassign to Associate at then face value, without recourse
to IHI, the open/partially paid Receivables. (See Agreement for effect of
Disputes on the Reserve Fund.) While Letters of Credit and/or Letters of
Guarantee are outstanding, no Reserve funds will be paid to Associate.
6. REPURCHASE OF RECEIVABLES BY ASSOCIATE: Associate reserves the right to
repurchase at any time at then face value, without recourse to IHI, all
Receivables outstanding in a Calendar Month Unit/Contract Receivable
Unit/Bulk Purchase Unit by paying to IHI, in immediately available funds,
all of that Calendar Month Unit's/Contract Receivable Unit's/Bulk Purchase
Unit's outstanding Costs and additional charges if any, Primary,
Administered and Accrued Commissions, and Initial Payments. If a Dispute
exits, then such repurchase must include all Receivables then outstanding
on IHI's books of account.
7. LETTERS OF CREDIT and LETTERS OF GUARANTEE: At Associate's request and upon
IHI's and its bank's approval, IHI will cause IHI's bank to issue a Letter
of Credit or IHI will issue its Letter of Guarantee to Associate's Vendors;
etc. Each Letter is deemed an Initial Payment at date of issue and Primary
Commissions are charged as set out in Paragraph 1 above. For Letters of
Credit, Accrued Commissions are charged as set out in Paragraph 3 above. In
addition, Associate is to deposit with IHI 1% of its face amount in
immediately available funds to cover anticipated bank charges for issuance,
amendment, discrepancy, negotiation; etc.; at completion of the transaction
IHI will provide Associate an accounting of such charges and IHI and
Associate agree to pay to the other the amount required to reconcile this
account. For Letters of Guarantee, the Primary Commission must, at IHI's
option, be prepaid by the Associate to IHI in immediately available funds
prior to its issuance. The Accrued Commissions on Letters of Guarantee
while outstanding are set at one-half those of funded Initial Payments. If
IHI funds the Associate/third parties as required by the terms of the
Letter of Guarantee then, as of the date of the funding, those Accrued
Commissions that would be applicable will be charged to Associate (see
paragraphs 1 and 3 above). For both Letters of Credit and Letters of
Guarantee, at the date of actual funding the Accrued Commission is closed
out and re-opened as a cash Initial Payment.
SPECIAL PROGRAMS For Initial Payments, Primary, Administered and Accrued
Commissions and other terms and Costs and COMMISSION SCHEDULE (EXHIBIT B),
ADDENDUM B.1, or other special addendum agreed to by both parties.
