EXHIBIT 10.5
INTERPARTY AGREEMENT
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THIS INTERPARTY AGREEMENT is made as of the 26th day of November 1997 by
and between SMC COMMUNICATIONS GROUP INC and XXXXX XXXXXXXX doing business as
SMC GROUP (the "Creditor"), and ACCESS CAPITAL, INC., a New York corporation
("Access Capital").
WITNESSETH:
WHEREAS, the Creditor has extended certain loans and financial
accommodations to Telenetics Corporation (the "Company") pursuant to certain
loan agreements and instruments executed and to be executed in connection
therewith (collectively, the "Creditor Agreements"); and
WHEREAS, the Company is indebted to the Creditor, which indebtedness is
secured by a security interest in certain assets of the Company, including
accounts, inventory and equipment (the "Creditor Collateral") pursuant to the
Creditor Agreements; and
WHEREAS, pursuant to the terms of a Factoring Agreement of even date with
the Company (the "Factoring Agreement"), pursuant to which Access Capital will,
from time to time, purchase certain accounts receivable billed by the Company to
its customers (such accounts receivable, together with the proceeds thereof,
being referred to herein as the "Accounts Receivable");and
WHEREAS, pursuant to a Security Agreement of even date (the "Access
Security Agreement"), Access Capital desires to acquire, and the Creditor is
willing to permit Access Capital to obtain the following (collectively, the
'Access Collateral'): (1) a first priority security interest in all of the
Accounts Receivable of the Company (including, without limitation, the Accounts
Receivable purchased and not purchased by Access Capital), together with the
contract rights and other general intangibles related to its Accounts Receivable
and the proceeds thereof and (2) a second priority security interest,
subordinate and junior to the security interest of the Creditor in the other
assests of the Company;
WHEREAS, the Creditor and Access Capital wish to enter into certain
agreements with respect to the administration of their respective security
interests in the Creditor Collateral and the Access Collateral;
NOW, THEREFORE, the parties hereto agree as follows:
1. The Creditor consents to the execution and delivery by the Company of
the Factoring Agreement and the Access Security Agreement and agrees that Access
Capital shall acquire title to such of the Accounts Receivable as it shall
purchase from the Company pursuant to the Factoring Agreement free and clear of
any security interest of the Creditor in the Accounts Receivable of the Company.
2. Notwithstanding any provisions to the contrary in the Creditor
Agreements or the Access Security Agreement, the respective orders or priorities
which would ordinarily result from the time of granting and the time and place
of perfection of the respective security interests of the Creditor and Access
Capital under the Uniform Commercial Code as in effect in any jurisdiction or
otherwise:
(a) the security interest of Access Capital in all the assets of the
Company (including the Accounts Receivable purchased and not purchased by
Access Capital), together with the contract rights and other general
intangibles related to such Accounts Receivable and the proceeds thereof
shall be superior to and have priority over the security interest of the
Creditor in the Access Collateral; and
(b) the security interest of the Creditor in the Creditor Collateral
(other than the Access Collateral) shall be superior to and have priority
over the security interest of Access Capital.
3. Access Capital agrees to give the Creditor notice of any default,
acceleration or enforcement of its security interest under the Factoring
Agreement, and the Creditor agrees to give to Access Capital notice of any
default, acceleration or enforcement of its security interest under the Creditor
Agreements, in each case prior to or concurrently with the giving of such notice
to the Company.
4. At such time as the Company's obligations to the Creditor pursuant to
the Creditor Agreements shall have been paid and discharged in full, the
Creditor will assign its security interest in all of the Creditor Collateral to
Access Capital and deliver to Access Capital all instruments and documents
included in the Creditor Collateral and in the possession of the Creditor. The
Company consents and agrees to such transfer and agrees that any such
instruments and documents shall thereafter be held by Access Capital subject to
the provisions of the Access Security Agreement. The cost and expense of
effectuating such assignment shall be borne by the Company.
5. The Creditor shall not assign or transfer any claim against or interest
of any kind in the Creditor Collateral to any person while this Agreement
remains in effect unless such person shall execute an agreement reasonably
satisfactory to Access Capital to be bound by this Agreement.
6. Access Capital shall not assign or transfer any claim against or
interest of any kind in the Access Collateral to any person while this Agreement
remains in effect unless such person shall execute an agreement reasonably
satisfactory to SMC Group to be bound by this Agreement.
7. In the event of commencement of foreclosure or other exercise of
remedies under the Creditor Agreements and under the Factoring Agreement and
Security Agreement, the Creditor and Access Capital will cooperate in the
exercise of their respective remedies.
8. (a) All notices and reports required to be given hereunder shall be hand
delivered or sent by prepaid certified mail, return receipt requested (confirmed
by telefax if possible) and shall be deemed to have been given when received.
Notices and reports to the Creditor shall be addressed to the Creditor at:
SMC Group
00000 Xxxxx Xxxxxxx
Xxxx Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Telephone No.: (000) 000 0000
Telefax No.: (000) 000 0000
and notices and reports to Access Capital shall be addressed to Access Capital
at:
Access Capital, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Client Services Department
Telephone No.: (000) 000-0000
Telefax No.: (000) 000-0000
or such other person or at such other address as either the Creditor or Access
Capital may from time to time specify.
(b) Access Capital will give the Creditor prompt notice of any
amendment to or extension or termination of the Factoring Agreement or the
Security Agreement, and of any other agreement, document or instrument relating
to or affecting the Access Collateral or providing for the extension to the
Company of additional credit. The Creditor will give Access Capital prompt
notice of any amendment to or extension or termination of the Creditor
Agreements, and of any other agreement, document or instrument relating to or
affecting the Creditor Collateral or providing for the extension to the Company
of additional credit. In each case, the notifying party shall provide the other
party with a copy of any agreement, document or instrument referred to in its
notice.
9. If any dispute shall arise between the parties hereto with respect to
this Agreement or with respect to the rights or obligations hereunder of either
party, the parties agree to submit to arbitration in New York City in accordance
with the rules of the American Arbitration Association then obtaining.
10. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
11. THE PARTIES HERETO DO HEREBY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SMC COMMUNICATIONS GROUP INC and
XXXXX XXXXXXXX doing business as
SMC GROUP
By: /s/ XXXXX XXXXXXXX
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Xxxxx Xxxxxxxx
President/Proprietor
ACCESS CAPITAL, INC.
By: /s/ XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
Title: Vice President
The undersigned acknowledge receipt of
a copy of the foregoing Agreement and
consent to the provisions thereof:
TELENETICS CORPORATION
By: /s/ XXXXXXX ARMANI
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Xxxxxxx Armani
President & Chief Executive Officer
