[GRAPHIC OMITTED] FRANKLIN CAPITAL
CORPORATION
Agreement
entered into between
each of
International Broadcast Consultants of America, Inc.
D/B/A IBC
and
Franklin Capital Corporation
Franklin Capital Corporation
00 X. Xxxxxx Xxxxxx - Xxxxx 0000
Xxxxxxx XX 00000
Gentlemen:
We are pleased to confirm the following agreement by which you are to act as
sole factor for sales made by us to Home Shopping Network in terms of their
Purchase Order Numbers 686942 and 686943:
1 DEFINITIONS
1.1 "Banking Day" shall mean a day for dealings by and between banks,
excluding Saturday, Sunday and any day which sha1l be a legal holiday
in the City of Chicago, Illinois, and any other day on which banking
institutions are authorized to close in the City of Chicago, Illinois.
1.2 "Credit Risk" shall mean the risk of loss resulting solely and
exclusively from a Customer's failure to pay an amount due at maturity
because of its financial inability to pay.
1.3 "Customer Dispute" shall mean any cause for nonpayment of Receivables,
other than the financial inability of the Customer to pay, including,
without limitation, any a1leged or actual defense, offset, claim or
counterclaim whatsoever or howsoever arising.
1.4 "Customers" shall mean the account debtors obligated on the
Receivables.
1.5 "Default" shall mean the occurrence of anyone or more of the following
events:
1.5.1 nonpayment when due of any amount payable on any of the Obligations or
failure to perform or observe any agreement or meet obligation of ours
contained herein or in any other agreement out of which any of the
Obligations arose;
1.5.2 default by us in repayment when due of any indebtedness now or
hereafter owed for monies borrowed from anyone other than you;
1.5.3 any material statement, representation, or warranty of ours made orally
or in writing herein or in any other writing or statement at any time
furnished or made by us to you which is untrue in any material respect
as of the date furnished or made;
1.5.4 suspension of the operation of our present business;
1.5.5 any Obligor becomes insolvent or unable to pay its debts as they
mature, makes an assignment for the benefit of creditors, or a
proceeding, instituted by or against any Obligor alleging that such
Ob1igor is insolvent or unable to pay its debts as they mature, or a
petition under any provision of Title II of the United States Code
(entitled "Bankruptcy"), as amended, is brought by or against any
Obligor;
1.5.6 death of any Obligor who was a natural person. or death or withdrawal
of any partner of any Obligor which is a
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partnership or dissolution, merger. or consolidation of any Obligor
which is a corporation;
1.5.7 sale, transfer or exchange, either directly or indirectly, of a
controlling stock interest of any Obligor which is a corporation;
1.5.8 termination, repudiation, revocation or withdrawal of any guaranty for
the Obligations;
1.5.9 appointment of a receiver for any collateral pledged for the
Obligations or for any property in which we have an interest;
1.5.10 the Pension Benefit Guaranty Corporation shall commence proceedings
under Section 4042 of the Emp1oyee Retirement Income Security Act of
1974 (ERISA) to terminate any employee pension benefit plan of the
Obligor; or
1.5.11 you in good xxxxx xxxx the prospect of our payment or performance of
the Obligations to have been impaired.
1.5.12 any termination of this agreement by any Obligor except in strict
accordance with section 11.1.2 hereof.
1.9 "Payment Date" shall mean:
1.9.1 for each Receivable for which you do not bear the Credit Risk, the date
of deposit of Customer payment by you plus 5 Banking Days for
collection and clearance of checks. Payment Date may be delayed to the
next Banking Day following the day of application of remittances to
Receivables.
1.6 "Net Amount'. of Receivables shall mean the gross amount of
receivables, less maximum discounts, whether as an inducement for
prompt or early payment or from whatsoever other cause arising, less
returns, less credits or allowances of any nature at any time issued,
owing, granted or outstanding, and less also your commission and all
and any other charges or debits as set forth herein.
1.7 "Obligations" shall mean any and all of our obligations to you
hereunder without limitation, including but not limited to advances of
the purchase price of Receivables, all obligations of ours to you under
any note, contract of surety, guaranty, or accommodation, or with
respect to letters of credit or acceptances, sums owing to you for
goods and/or services purchased from any other firm factored or
financed by you, and all other obligations of ours to you, however and
whenever created, arising or evidenced, whether direct or indirect,
through assignment from third parties in the ordinary course of your
business, absolute, contingent or otherwise, now or hereafter existing
or due or to become due.
1.8 "Obligor" shall mean us and each other party primarily or secondarily,
directly or indirectly liable in respect of any of the Obligations.
1.10 "Prime Rate" shall mean the rate of interest announced by Bank of
America, Chicago, Illinois, or its successor from time to time as its
Prime Rate.
1.11 "Receivables" shall mean all accounts, instruments, contractual rights,
chattel paper, documents and general intangibles arising from our
Sales, and the proceeds thereof, and all security and guarantees
therefor, whether now existing or hereafter created.
1.12 "Sales" shall mean the sale of goods and/or the rendition of services
by us
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in the ordinary course of our business to Customers here in the United
States of America or such other areas as we may from time to time
authorize.
2 SALE AND APPROVAL; PURCHASE PRICE; COMMISSION; ADVANCES; RESERVE
2.1 We hereby assign and sell to you as absolute owner, with recourse, our
entire interest in all of our present and future Receivables.
2.2 Notwithstanding any other provision of this Agreement, each of OUT
Receivables is assigned and sold to you under this Agreement with full
recourse.
2.3 All orders for Sales may be submitted to you for credit approval prior
to shipment of the goods or rendition of the services so ordered, and
each approved Sale shall be made only in accordance with such approval.
All credit approvals must be in writing. Receivables arising from
orders approved or unapproved by you, in whole or in part, shall be
sold to you with full recourse to us. A credit approval shall not be
effective if
2.3.1 the approved terms of sale are changed,
2.3.2 delivery of the goods to the Customer is not made by us within
forty-five (45) days after the shipping date specified in our request
for credit approval, or, if no such date is specified, within
forty-five (45) days after the date of the credit approval, or
2.3.3 the invoice representing the Sale is not delivered to you within five
(5) days after the shipment date. Credit approval may be by credit
line.
2.4 While a credit line remains in force, Receivables (or parts thereof)
in excess of such line will succeed amounts within the line which are
paid by or credited to the Customer; the succession of Receivables (or
parts thereof) shall take place in the order of maturity and shall be
limited to amounts then so paid or credited. The right of succession
ceases when the line is canceled, withdrawn or expires.
2.5 We will provide you with listings of Receivables in form satisfactory
to you, together with Customers' invoices, Shipping documents, and such
other documents and proof of delivery/rendition as you may at any time
require. Billing on invoices by whomever done shall be conclusive
evidence of assignment and sale hereunder of such Receivables whether
or not we execute any other instrument with regard thereto. We hereby
agree and undertake that we will ensure that all invoices to Customers
shall bear the following notation plainly on the face thereof: "This
invoice has been sold and assigned to Franklin Capital Corporation of
00 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000. Payment to ourselves or
any other person or entity cannot and will not constitute a valid
discharge of this debt, as only Franklin Capital Corporation is
entitled to receive payment hereof and give a receipt therefor". All
remittances obtained by us against Receivables will he received in
trust for you. We agree and undertake not to bank any such remittances,
but to turn over to you tl1e identical remittances in kind as promptly
as possible~ provided, however, that nothing herein authorizes us to
collect Receivables.
2.6 The purchase price of Receivables is to be the Net Amount thereof,
which, less any charges and reserves, will be due and payable on the
Payment Date. We shall pay you a commission in an amount equal to zero
percent (0%) of the gross amount of such Receivables for the first
thirty (60) day term or part thereof, in view of the six percent (6%)
fee being paid to you pursuant to the rider attached hereto, plus zero
point
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six seven (0.67%) of such gross amount for each additional day or part
thereof, provided, however, that the minimum commission for any
Receivable shall be Five Dollars ($5.00), further provided, however,
that the minimum commissions paid by us each contract year shall be
thirteen thousand eight hundred dollars ($13,800). You may retain from
sums payable to us a reserve, which reserve may be revised from time to
time at your discretion, in order to provide for Customer Disputes,
possible credit losses on unapproved Receivables. Sums owing to you for
goods/services purchased by us from any other firm factored or
otherwise financed by you, and the Obligations. A discount. credit, or
allowance may not be claimed by us, but may be claimed solely by the
Customer; no third party beneficiary rights are created hereby.
2.7 Prior to Payment Date, upon our request and at your sole discretion,
you may advance to us up to eighty percent (80 %) of the purchase price
of Receivables less charges and reserves. Any additional amounts
advanced to us shall also be subject to this Agreement.
4.1 We hereby appoint you as our attorney-in-fact to receive, open, and
dispose of all mail addressed to us pertaining to Receivables; to
endorse our name upon any notes, acceptances, checks, drafts, money
orders, and other evidences of payment of Receivables that may come
into your possession and to deposit or otherwise collect the same; and
to do all other acts and things necessary to carry out the terms of
this Agreement. this power, being coupled with an interest, is
irrevocable while any Receivable or Obligation shall re1Ilain unpaid.
You, as attorney-in-fact, shall not be liable for any errors of
judgment or mistake of fact.
2.8 We shall pay to you on demand any advances or charges at any time
outstanding on our account.
2.9 You will render a statement of account monthly, and such statement
shall be binding upon us absent manifest error.
3 INTEREST
3.1 Interest, shall be charged for the number of days that advances of the
purchase price are made prior to Payment Date and for the number of
days that advances or other charges to our account remain outstanding
at the rate of three percent (3%) per annum plus the Prime Rate;
except, however, that the interest shall in no event be less than
eleven percent (11%) per annum. Interest shall be computed on the basis
of a year of three hundred and sixty (360) days, for actual days
elapsed. Changes in the interest rate shall be effected monthly to
reflect changes in the Prime Rate. with changes to such interest rate
to take effect as hereinbefore provided. For the purpose of interest
calculation, commissions earned during each month shall be deemed
charged to our account on the fifteenth (15th) day of each month.
4 POWER OF ATTORNEY
5 SECURITY INTEREST
5.1 All of Debtor's right, title and interest in all property of Debtor of
any kind or nature, now existing or hereafter acquired and wherever
located, including, without limitation, all accounts, inventory,
equipment, general intangibles, chattel paper, deposit accounts,
documents, instruments, investment property and all accessions and
additions thereto, substitutions therefor, and all replacements,
products and proceeds thereof; to secure all of the Obligations. We
further sell and assign to you all our right, title, and interest in
and to the goods (unless released by you) represented by Receivables as
well as goods returned by or repossessed from Customers, all of our
rights as an unpaid vendor or lienor, all of our rights of stoppage in
transit, replevin and reclamation relating thereto, and all of our
rights against third parties with respect thereto; we will cooperate
with you in exercising any rights with respect to the goods. In
addition, we hereby grant you a security interest in the reserve
established pursuant to Sections 2.5 and 2.6 hereof, to secure all of
the Obligations.
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6 REPRESENTATIONS, WARRANTIES AND COVENANTS
6.1 We represent and warrant that we are fully authorized to enter into
this Agreement and perform hereunder and covenant that we will continue
to be so for the duration of this Agreement.
6.2 We represent and warrant that we are solvent.
6.3 We represent and warrant that our Receivables are, and covenant that
they shall be, at the time of their creation bona fide and existing
obligations of our Customers arising out of our Sales, free and clear
of all security interests, liens, setoff, claims and counterclaims
whatsoever and howsoever arising.
6.4 We represent and warrant that our inventory is not subject to any
security interest, lien or encumbrance whatsoever, and we covenant that
we shall not permit it to become so encumbered without your prior
written consent.
6.5 We represent and warrant with respect to each Receivable as it arises:
6.5.1 We will have made delivery of the goods or will have rendered the
services ordered;
6.5.2 The Customer will accept or has accepted the goods and/or services;
6.5.3 No Customer Dispute will exist in any respect;
6.5.4 We will have preserved and will continue to preserve any liens and any
rights to liens available by virtue of Sales;
6.5.5 The Customer will not be our affiliate; and
6.6 The goods delivered or services rendered conform in all respects with
the purchase order placed with us by the Customer.
7 CUSTOMER DISPUTES, CHARGEBACKS AND RETURNS
7.1 We will notify you promptly and will settle all Customer Disputes, but
you have the right all times to do so directly and to compromise,
adjust, or litigate all such Customer Disputes. If a Customer Dispute
exists or is asserted with regard to any Receivable, or if we breach
any representation, warranty or covenant with respect to any
Receivable, you may charge back to our account the gross amount of such
Receivable, as well as all other Receivables owing by the same
Customer. You may charge back to our account at any time any unapproved
Receivable, whether before or after its due date. A chargeback shall
not be deemed a reassignment, or sale of the Receivable, and title
thereto and to the goods represented thereby shall remain vested in you
until you execute a reassignment. All returned, replevied, and
reclaimed goods coming into our possession shall be held in trust by us
for you.
8 BOOKS AND RECORDS; FINANCIAL STATEMENTS
8.1 You and your representatives shall at all reasonable times have the
right to examine all of our books and records. We agree to prepare and
furnish you within forty-five (45) days after the close of each
quarter, financial statements unaudited and in such form and detail as
you may reasonably require. We also agree to have prepared, and to
furnish to you within ninety (90) days after the close of our fiscal
year, financial statements which have been audited by an independent
certified public accountant suitable to you.
9 INDEMNITY
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9.1 We agree to and hereby indemnify and hold you harmless from all losses,
costs and expenses incurred by you in connection with Receivables for
which credit approval has not been given in connection with Receivables
which are unpaid at maturity for reasons other than the Customer's
financial inability to pay. Further, agree to, and hereby indemnify and
hold you harmless from any liability for duties, forwarder's fees,
storage, shipping charges, sales or excise taxes or other expenses in
connection with the Receivables and for any losses occasioned by claims
of Customers under Receivables. This indemnity shall survive the
termination of this Agreement.
10 APPLICABLE LAW
10.1 This Agreement shall be governed by, construed and enforced according
to the laws of the State of Illinois.
11 EFFECTIVE DATE; TERMINATION; BINDING EFFECT
11.1 If accepted by you, this Agreement shall be effective on the July 16th,
1999 and shall continue in full force and effect until:
11.1.1 six months from such effective date and from year to year thereafter
until terminated (on any such anniversary date) by our giving to you
not less than ninety (90) days prior written notice; or
12.1 We shall pay all reasonable expenses incurred by you in connection with
the execution of this Agreement, including expenses incurred in
connection with the filing of financing statements, continuation
statements, all and any credit reports, record searches and reasonable
attorneys' fees. We shall also pay to you such wire transfer and
similar fees as you charge from time to time and, in connection with
your examinations of our books and records, such examination fees as
you charge
11.1.2 terminated by you at any time by giving to us not less than ninety (90)
days prior written notice. This Agreement may be terminated at any time
by you without notice, to us should any Default occur. Upon
termination, we will pay all of our Obligations to you, and in any
event we will remain liable to you for any deficiency remaining after
determination of our liability hereunder and liquidation of any
collateral. Also, upon termination you may withhold any payment to us
unless supplied with an indemnity satisfactory to you. This Agreement
shall bind us, Our successors and assigns and shall inure to the
benefit of you, your successors and assigns; we agree that you may
delegate your duties and obligations hereunder.
12 EXPENSES; ATTORNEYS' FEES; NO WAIVER; SEVERABILITY; NOTICES; HEADINGS
from time to time as well as your postage, out-of-pocket, travel and
other expenses which you may incur in respect of this Agreement. Upon
liquidation of any collateral, settlement or prosecution of Customer
Disputes, or enforcement of any obligation of ours hereunder, you may
charge to our account all costs and expenses incurred, plus fifteen
percent (15%) of the amount involved. If collection is by or through an
attorney, all attorneys's costs, expenses and fees shall
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constitute Obligations hereunder. No delay, indulgence, or failure on
your part in exercising any right, privilege, or option hereunder shall
operate as a waiver of such or of any other right, privilege, or
option, and no waiver, amendment, or modification of any provision of
this Agreement shall be valid, unless in writing signed by you and then
only to the extent therein stated. Should any provision of this
Agreement be prohibited by or invalid under applicable law, the
validity of the remaining provisions shall not be affected thereby. Any
notices, requests, demands or other communications given by you under
this Agreement may be sent by mail, telex, telegraph, delivery,
telecopy, or facsimile to our most current address as reflected in your
records. The headings used herein are intended to be for convenience of
reference only and shall not define or limit the scope, extent or
intent or otherwise affect the meaning, interpretation, or construction
of any portion of this Agreement.
13 ENTIRE AGREEMENT; WAIVER OF JURY TRIAL
13.1 This Agreement embodies our entire agreement and is the sole memorial
as to the subject matter and supersedes all prior agreements as to the
subject matter. EACH OF US HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING RELATING TO TRANSACTIONS UNDER THIS
AGREEMENT.
13.2 In this Agreement the singular shall encompass the plural and the
masculine shall encompass the other two genders.
14 TRADE STYLES
14.1 Receivables under this Agreement shall include those created by our
doing business under the following trade styles, all of which have-been
duly and properly registered: (If none, state "NONE"):
IBC, Inc
15 Should we receive a final commitment in writing from a bona fide third
party experienced in factoring and/or receivables financing to replace
this Agreement, we grant you the unilateral right to renegotiate the
terms of this Agreement to meet the terms detailed in the written final
commitment from such third party.
16 Our aggregate outstanding Obligations under this Agreement shall not
exceed $600,000.00 at any time, without your prior written consent.
Signed,
7/19/99
/s/ XXXX XXXXXXXXX /s/ XXXXXXX X. XXXXX
-------------------------- --------------------------
Xxxx Xxxxxxxxx Xxxxxxx X. Xxxxx
Notary Public
State of Florida
My Comm. Exp: 08/13/01
Comm. #: CC371726
By: Xxxx Xxxxxxxxx, for and on behalf of International Broadcast Consultants of
America, Inc. D/B/A IBC
Witnessed By:
Please Print Full Name and Address of Witness in Block Capitals Alongside
Signature
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ACCEPTANCE
The foregoing Factoring Agreement is accepted in Chicago, Illinois on this the
FRANKLIN CAPITAL CORPORATION
By
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Its
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