EXHIBIT 10.13
ASSIGNMENT OF CONTRACT
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THIS ASSIGNMENT OF CONTRACT ("Assignment") is entered into as of
December 29, 1994 by and between CPS ACQUISITION CORP., a Georgia corporation
("Assignor"), and GREYHOUND FINANCIAL CORPORATION, a Delaware corporation
("Assignee").
R E C I T A L S:
A. CPS Systems, Inc., a Texas corporation ("Company"), as borrower, and
Assignee, as lender, have entered into a Revolver Loan and Security Agreement
(as from time to time renewed, amended, restated or replaced, "Revolver Loan
Agreement") dated as of December 29, 1994, pursuant to which Assignee has agreed
to lend to Assignor a sum not to exceed One Million Dollars ($1,000,000)
("Revolver Loan").
B. Assignor, as borrower, and Assignee, as lender, have entered into a
Term Loan Agreement (as from time to time, renewed, amended, restated or
replaced, "Term Loan Agreement"; and the Revolver Loan Agreement and Term Loan
Agreement collectively, "Credit Facilities Loan Agreements"), pursuant to which
Assignee has loaned to Parent a sum not to exceed One Million Five Hundred
Thousand Dollars ($1,500,000) ("Term Loan"; and the Revolver Loan and Term Loan
collectively, "Loans").
C. The proceeds of the Term Loan will be used by Assignor to pay a
portion of the acquisition costs of all the capital stock of Company pursuant to
that Stock Purchase Agreement ("Stock Purchase Agreement") dated as of November
11, 1994, by and among PHF Associates, Inc. (to whose interest Assignor has
succeeded), as buyer, and Xxxxxxx Xxxxxxxx, Xxxx X. Xxxxxxxx, Xxxxxx X.
Xxxxxxxx, Xxxxxx X. XxXxxx, Xxxxx X. Xxxxxxx, Xx., Xxxxxxxxx X. Xxxxxxxxxx,
Xxxxxxx X. Xxxxxxx, XX and Xxxxxxx X. Xxxxxxxxx (collectively "Sellers"), as
sellers, and that Escrow Agreement ("Escrow Agreement") dated as of December 29,
1994 among Assignor, Sellers, Comerica Bank-Texas ("Escrow Agent"), and Xxxxxxx
X. Xxxxxxxx ("Sellers' Representative"). The Stock Purchase Agreement and Escrow
Agreement are hereinafter referred to collectively as the "Contract."
D. To facilitate repayment of the obligations of Assignee under the
Credit Facilities Loan Agreements and all other documents now or hereafter
evidencing, securing or otherwise pertaining to the Loans ("Credit Facilities
Documents"), Assignor has agreed to assign to Assignee, inter alia, all of
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Assignor's right, title, and interest in and to the Contract and any benefits
due and to become due or arising from the use or enjoyment of the Contract
(which, together with any additions, extensions or modifications thereto and all
products and proceeds thereof, are herein referred to as the "Collateral").
E. All capitalized terms used but not defined herein shall have the
same meaning ascribed to such terms in the Term Loan Agreement.
A G R E E M E N T:
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee agree as follows:
1. The Assignment. Assignor hereby absolutely, irrevocably and
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unconditionally grants, assigns, and transfers to Assignee all of Assignor's
right, title, and interest in and to the Collateral, including but not limited
to any and all benefits arising thereunder. The interest of Assignee by virtue
of this Assignment is deemed to be vested as of the date hereof, and shall
extend to and cover any and all modifications, extensions, renewals and
replacements of the Collateral.
2. Purpose. This Assignment is made for the purpose of securing all
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obligations of Assignor to Assignee ("Obligations"), including, without
limitation, the following:
2.1 Payment of the Revolver Loan, the advances of which shall
be evidenced by a Revolver Loan Promissory Note dated as of even date
herewith and made payable by Company to Assignee in the original face
amount of One Million Dollars ($1,000,000), and any renewals,
amendments, restatements or replacements of such promissory note (such
promissory note, as from time to time renewed, amended, restated or
replaced, "Revolver Loan Note"), together with accrued interest,
according to the terms of the Revolver Loan Note;
2.2 Payment of the Term Loan, the advance of which is
evidenced by a Term Loan Promissory Note dated as of even date herewith
and made payable by Assignor to Assignee in the original face amount of
One Million Five Hundred Thousand Dollars ($1,500,000) and any
renewals, amendments, restatements or replacements of such promissory
note (such promissory note, as from time to time renewed, amended,
restated or replaced, collectively, "Term Loan Note"; and the Revolver
Loan Note and Term Loan Note, collectively, "Notes"), together with
accrued interests, according to the terms of the Term Loan Note;
2.3 Payment, performance, observance and satisfaction of all
representations, warranties, covenants [including, without limitation,
the covenants to pay Fees (as defined in the Revolver Loan Agreement)],
and conditions contained in the Credit Facilities Documents, including,
without limitation, this Assignment, on the part of Assignor and/or
Company;
2.4 The repayment of all monies expended by Assignee pursuant
to the provisions of the Credit Facilities Documents, together with
interest thereon from the date of expenditure at the Default Rate (as
defined in the Revolver Loan Agreement); and
2.5 Any and all other liabilities or obligations of Assignor
and/or Company to Assignee, direct or indirect, absolute or contingent,
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due or to become due, whether now existing or which may hereafter arise
in any manner.
3. License.
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3.1 General. Subject to the terms and conditions of this
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Assignment, including without limitation, the provisions of Paragraph 3.2,
Assignee confers upon Assignor a license ("License") to utilize, collect and
retain the benefits of the Collateral until the occurrence of an Event of
Default (as defined in Paragraph 6.1). Upon the occurrence of an Event of
Default, the License may be revoked by written notice of revocation to Assignor
and immediately upon such revocation, Assignee may utilize, collect and retain
the benefits of the Collateral without further notice.
3.2 Assignee's Right to Distributions. If Assignor is entitled
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to any distribution under the Contract for any reason, except on account of a
claim which is based upon an actual expense of Assignor and arises from a breach
of a warranty made by Seller under the Contract and is being distributed when no
Event of Default exists, such distribution shall be remitted to Assignee and
shall be applied as a prepayment of the Obligations in accordance with the terms
of the Term Loan Agreement. Any distributions which are received by Assignor
under the Contract and are not entitled to be received and retained by Assignor
will be held by Assignor in trust for Assignee, will not be commingled with the
general funds of Assignor and will be immediately remitted to Assignee.
4. Protection of security. Notwithstanding anything herein to the
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contrary, if an Event of Default exists or Assignee determines such action to be
necessary in order to prevent the termination of the Contract, the loss of any
material benefit to Assignor or Assignee under the Contract, or the incurrence
of any material detriment to Assignor or Assignee under the Contract, or to be
necessary in order to protect and preserve the right, title and interest of
Assignee hereunder in and to the Contract, Assignee may, but without obligation
to do so:
4.1 Execution of Loan Documents. Execute, acknowledge, obtain
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and deliver all documents (including, without limitation, notices,
requests and instructions) or things necessary or required as a term,
covenant or condition of the Contract, or which may be necessary or
proper under the Contract;
4.2 Performance of Assignor's Obligations. Perform any
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obligation which Assignor has failed to perform when due under the
Contract, or satisfy any condition of the Contract;
4.3 Enforcement of Other Party's Obligations. Demand and
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receive all performances due under or with respect to the Contract,
take all lawful actions for the enforcement thereof (including, without
limitation, the filing of claims and the commencement of arbitration,
litigation or other lawful proceedings), compromise and settle any
claim or cause of action in Assignor arising from any of the Contract,
and give acquittances and other sufficient discharges relating thereto;
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4.4 Make Concessions. Make concessions to other parties to the
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Contract; and
4.5 Exercise Assignor's Rights Under Contracts, etc. Exercise
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any and all other rights and remedies to which Assignor may have under
the Contract and/or are otherwise available to Assignor at law, in
equity or by statute.
All sums expended by Assignee pursuant to this Paragraph 4 shall be payable by
Assignor to Assignee upon demand, together with interest thereon from the date
of expenditure until paid at the Default Rate (as defined in the Term Loan
Agreement); and shall be secured by this Assignment and all other security for
the Obligations.
5. Power of Attorney. Assignee is hereby appointed Assignor's true and
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lawful attorney-in-fact (coupled with an interest) for and on behalf of
Assignor, whether in the name of Assignor or Assignee or otherwise, to take any
of the actions permitted to it under Paragraph 4. The power of attorney given
herein is a power coupled with an interest and shall be irrevocable until all
the Obligations have been fully paid and performed. Assignee shall have the
option, but not any duty, to exercise any power given to it hereunder.
6. Event of Default; Remedies; Assignee's Right to Perform.
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6.1 Event of Default. The occurrence of any of the following
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events or conditions shall constitute an Event of Default:
6.1.1 A default or violation shall occur under any of
the provisions of Paragraph 7.1 or 7.2;
6.1.2 A default or violation in the performance of
Assignor's Obligations under this Assignment (other than
those referred to elsewhere in this Paragraph 6.1) which
continues unremedied (a) for a period of five (5) Business
Days (as defined in the Term Loan Agreement) after notice
of such default or violation to Assignor in the case of
any default or violation which can be cured by the payment
of money alone or (b) for a period of twenty (20) Business
Days after notice to Assignor in the case of any other
default or violation;
6.1.3 Any representation or warranty of Assignor
contained herein or in any certificate furnished to
Assignee hereunder by or on behalf of Assignor proves to
be, in any material respect, false or misleading as of the
date deemed made;
6.1.4 Assignor shall (a) generally not be paying its
debts as they become due, (b) file, or consent by answer
or otherwise to the filing against it of, a petition for
relief or reorganization, arrangement or liquidation or
any other petition in bankruptcy or insolvency under the
laws of any jurisdiction, (c) make an assignment for the
benefit of its creditors, (d) consent to the
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appointment of a custodian, receiver, trustee or other officer with
similar powers for itself, the Contract (as defined in Paragraph
7.4) or any substantial part of its property, (e) be adjudicated
insolvent, (f) dissolve or commence to wind-up its affairs or (g)
take any action for purposes of the foregoing; or a petition for a
relief or reorganization, arrangement or liquidation or any other
petition in bankruptcy or insolvency or the appointment of a
custodian, receiver, trustee or other officer with similar powers
under the laws of any jurisdiction is filed against it or a
custodian, receiver, trustee or other officer with similar power is
appointed for Assignor or the Contract and such proceeding is not
dismissed and/or appointment vacated within ninety (90) days
thereafter;
6.1.5 Any levy, execution or seizure of any portion of the
Collateral or the institution of any legal action or proceeding
adversely affecting Assignor's or Assignee's interest in the
Contract; or
6.1.6 An "Event of Default" as defined elsewhere in any of the
Credit Facilities Documents.
6.2 Remedies. At any time after an Event of Default has occurred and
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while it is continuing, Assignee may exercise any and all rights and
remedies which Assignee may have under the Credit Facilities
Documents, including, without limitation, this Assignment, and/or are
otherwise available to it at law, in equity or by statute.
6.3 Assignee's Right to Perform. Without limiting Assignee's rights
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under any other Paragraph, if Assignor fails or refuses to pay or
perform any Obligation (including, without limitation, any obligations
to maintain insurance) hereunder, then at any time thereafter, and
without notice to or demand upon Assignor and without waiving or
releasing any other right, remedy or recourse Assignee may have,
Assignee may (but shall not be obligated to) pay or perform such
obligation in the manner Assignee determines to be necessary or
appropriate for the account of and at the expense of Assignor. All sums
expended by Assignee pursuant to this Paragraph 6.3 shall be payable by
Assignor to Assignee upon demand, together with interest thereon from
the date of expenditure until paid at the Default Rate; and shall be
secured by this Assignment and all other security for the Obligations.
7. Representations Warranties and Covenants of Assignor. Assignor
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represents, warrants and covenants as follows (all of such representations,
warranties and covenants to remain in full force and effect until all of the
Obligations have been fully paid and performed):
7.1 No Assignments or Encumbrances. Assignor is the owner of good,
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legal and beneficial title to the Collateral free and clear of all
liens, security interests, encumbrances and claims of any kind, except
as expressly permitted in the Term Loan Agreement; no assignments,
pledges,
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encumbrances or other transfers whatsoever of the Collateral or any
interest therein or any rights or privileges or monies due and/or to
become due and payable thereunder have been made. Assignor will not
assign, pledge, encumber or otherwise transfer in any way, so long as
this Assignment shall remain in effect, the whole or any part of the
Collateral to anyone other than Assignee; and Assignor will not permit
or suffer to exist any lien, security interest, encumbrance or claim of
any kind upon the Collateral, except those in favor of Assignee or
except as expressly permitted in the Term Loan Agreement.
7.2 Contract in Full Force and Effect. The Contract is in full force
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and effect, and Assignor has not executed any other instrument and is
not subject to any restriction which might prevent or limit Assignee
from operating under the terms of this Assignment; except as otherwise
expressly permitted in the Term Loan Agreement, Assignor will maintain
the Contract in full force and effect; and Assignor will not, without
prior written consent of Assignee, which may be withheld in Assignee's
discretion, modify, waive, terminate or alter in any material way any
of the material terms of the Contract.
7.3 Performance and Benefits. Assignment hereby authorizes Sellers,
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Sellers' Representative and Escrow Agent to accept this Assignment.
Assignor hereby authorizes and directs Sellers, Sellers' Representative
and Escrow Agent that, upon written notice to such third party from
Assignee reciting the occurrence of an Event of Default and the
revocation of the License, all rights, benefits or monies due
thereunder, or in any way respecting the same, shall be made directly
to Assignee or its nominee as they become due. Assignor hereby relieves
Sellers, Sellers' Representative and Escrow Agent from any liability to
Assignor by reason of such delivery of benefits or payments being made
to Assignee or its nominee. Nevertheless, subject to the provisions of
Paragraph 4, until Assignee notifies Sellers, Sellers' Representative
or Escrow Agent in writing to render performance to Assignee or its
nominee, Assignor shall be entitled to collect all payments and receive
all benefits and performances pursuant to the License, but in all
events excluding any payments and distributions which Assignee is
entitled to retain pursuant to Paragraph 3.2. Assignor hereby directs
Sellers, Sellers' Representative and Escrow Agent to accept from
Assignee any tender of performance of any of Assignor's obligations
under the Contract and any exercise of Assignor's rights under the
Contract.
8. Mutual Agreements of Assignor and Assignee. Assignor and Assignee
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mutually agree as follows:
8.1 Effect of Assignment. Assignee, by accepting this
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Assignment:
8.1.1 Shall not be subject to any obligation or liability under
the Contract arising prior to its delivering to Assignor and the third
party obligated to perform thereunder or benefitted thereby its written
election ("Assumption Election") that it assumes
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Assignor's obligations, duties and liabilities under the Contract, but
any and all such obligations and liabilities (except for obligations
and liabilities arising after Assignee's Assumption Election) shall
remain Assignor's as though this Assignment had not been made; and
8.1.2 Shall not be under any obligation to exercise any of the
rights, remedies, or powers hereby granted to it, and no failure or
delay in exercising any of such rights, remedies, or powers shall
constitute a waiver thereof or of any default by Assignor.
8.2 No Limitation of Assignee's Rights. The rights, remedies and powers
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granted herein shall not be limited or otherwise affected by the value of the
Collateral as compared to amounts, if any, owed by Assignor to Assignee and may
be exercised by Assignee either independently of or concurrently with any other
right, remedy or power contained herein or in any of the other Credit Facilities
Documents or by law. The taking of this Assignment by Assignee shall not effect
the release of any other collateral now or hereafter held by Assignee as
security for the Obligations, and the taking of additional security for the
performance of the Obligations hereafter shall not effect a release or
termination of this Assignment or any terms or provisions hereof.
8.3 Assignee May Assign. All of Assignor's right, title, and interest
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assigned hereunder may be reassigned by Assignee and any subsequent Assignee,
and the term "Assignee," as used herein, includes any subsequent Assignee. This
Assignment and the power of attorney contained herein are solely for the benefit
and protection of Assignee, its successors and assigns and are not intended to
confer upon any person other than the parties hereto and their successors and
assigns any right or remedies under or by reason of this instrument.
8.4 Additional Documents. At any time, and from time to time, Assignor
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will promptly and duly execute and deliver any and all such further assignments
and instruments as Assignee may deem advisable in its reasonable discretion in
order to obtain the full benefits of this Assignment and the rights and powers
herein contained.
8.5 Indemnification and Reimbursement. Assignee shall not be obligated
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to perform or discharge, and it does not hereby undertake to perform or
discharge, any obligation, duty, or liability under the Collateral, or under or
by reason of this Assignment, and Assignor shall and does hereby agree to
indemnify and defend Assignee against and hold it harmless from (a) any and all
liability, loss, or damage which it may or might incur under or by reason of
this Assignment and (b) any and all claims and demands whatsoever which may be
asserted against it by reason of any alleged obligation or undertaking on its
part to perform or discharge any of the terms or conditions contained in the
Collateral; provided, however, that the foregoing shall apply only to acts and
omissions occurring prior to the Assumption Election and any acts of Assignor
after such Assumption Election, and the foregoing shall not apply
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to the gross negligence or willful misconduct of Assignee. Should
Assignee incur any such liability, loss, or damage under the
Collateral, or under or by reason of this Assignment, or in the defense
against any such claims or demands, or in prosecuting any claim under
this Assignment, the amount thereof, including reasonable costs,
expenses, and any reasonable attorneys' fees, shall be payable by
Assignor to Assignee immediately upon demand, together with interest
thereon at the Default Rate, until paid, and the same shall be secured
by this Assignment and all other security for the Obligations.
8.6 Termination of Assignment. Upon the full payment and
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performance of all the Obligations, this Assignment shall become and be
void and of no effect, and Assignee shall execute and deliver to
Assignor a release of this Assignment.
9. No Waiver. No delay or omission on the part of Assignee in
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exercising any power, right, or remedy hereunder shall operate as a waiver of
any such power or right nor shall any single or partial exercise of any such
power or right preclude any other or further exercise thereof or the exercise of
any other power, right, or remedy of Assignee under this instrument or which may
be provided by law, it being understood that any extension or indulgence at any
time allowed by Assignee to Assignor shall be in reliance upon the understanding
that such shall not affect or prejudice the rights, powers, and remedies of
Assignee except to the extent specifically set forth in writing by Assignee and,
in that regard, that even any waiver granted in writing shall not be construed
as a waiver of any breach or default thereafter occurring.
10. Time of the Essence. In the construction and performance of this
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Assignment, time shall be deemed of the essence.
11. Binding Effect. This Assignment shall inure to the benefit of and
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be binding upon the parties hereto and their respective heirs, personal
representatives, successors, and assigns.
12. Notices. All notices, demands, documents, or other writings which
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are required or permitted to be given or served hereunder shall be given, and
shall be deemed delivered in accordance with the provisions of the Term Loan
Agreement.
13. Other Security. This assignment is in addition to, and not in
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limitation of, any rights in and to the Collateral which Assignee may acquire
under any of the other Credit Facilities Documents; and to the extent of any
ambiguity or inconsistency between this Assignment and any such other Credit
Facilities Documents, the provisions imposing the greatest obligation upon
Assignor and granting the most expansive rights to Assignee shall control.
14. CHOICE OF LAW: JURISDICTION: VENUE: AND WAIVER OF JURY TRIAL. THE
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CHOICE OF LAW, VENUE, JURISDICTION AND WAIVER OF JURY PROVISIONS OF THE TERM
LOAN AGREEMENT SHALL BE EQUALLY APPLICABLE TO THIS AGREEMENT AND ARE
INCORPORATED HEREIN BY THIS REFERENCE.
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15. Security Agreement: Sale of Collateral. If necessary for Assignee
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to acquire or perfect a security interest in the Collateral, this Agreement
shall be deemed a security agreement under the Uniform Commercial Code, and
Assignor hereby grants to Assignee a security interest in the Contract. In such
an event, Assignee shall be entitled to sell the Collateral at public or private
sale and/or to the exercise of all other rights and remedies under the Uniform
Commercial Code if an Event of Default exists, in addition to all the other
rights and remedies available to it pursuant to Paragraph 6.2. Any notice of
sale or other disposition of the Collateral given not less than ten (10)
Business Days prior to such proposed action in connection with the exercise of
Assignee's rights and remedies shall constitute reasonable and fair notice of
such action. Assignee may postpone or adjourn any such sale from time to time by
announcement at the time and place of sale stated on the notice of sale or by
announcement of any adjourned sale, without being required to give a further
notice of sale. Any such sale may be for cash or, unless prohibited by
applicable law, upon such credit or installment as Assignee may determine. The
net proceeds of such sale shall be credited to the Obligations only when such
proceeds are actually received by Assignee in good current funds. All proceeds
realized by Assignee from the Collateral after termination of the License and
through and including a sale of the Collateral, net of the costs of any such
sale, shall be applied by Assignee to the Obligations in such order and manner
as may be provided in the Term Loan Agreement or, if not so provided, in such
order and manner as Assignee may determine. Assignor shall be liable for any
deficiency remaining after application of such proceeds to the Obligations.
16. Attorneys' Fees. Without limiting the generality of any other
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provision in this Assignment, in the event of any arbitration or litigation
(including any appeal) concerning the interpretation or enforcement of this
Assignment, the prevailing party in such litigation shall be entitled to
reimbursement and/or award of its attorneys' fees, costs and any other expenses
incurred in connection therewith.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
instrument as of the day and year first hereinabove written.
ASSIGNOR: CPS ACQUISITION CORP.,
a Georgia corporation
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx, President
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ASSIGNEE: GREYHOUND FINANCIAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx, Vice President
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