CONTRACT PAYMENT RIGHTS
TRANSFER AGREEMENT
THIS CONTRACT PAYMENT RIGHTS TRANSFER AGREEMENT ("Agreement") has been made and
entered into as of this 28th day of February, 2003, by and among Pinnacle
Security, Inc. ("PSI"), Impact Strategy Group, Inc. ("ISG") and Pinnacle Fund I,
Inc. ("Pinnacle Fund").
R E C I T A L S:
A. PSI is in the business of selling alarm systems and entering into alarm
monitoring and purchase agreements (the "Contracts") with its customers.
B. Pursuant to a Contract, a PSI customer will make monthly payments to PSI
during the term of the Contract.
C. PSI desires to sell and Pinnacle Fund desires to purchase the rights to
the payment stream from certain Contracts (the "Contract Payment Rights") as
determined from time to time by PSI.
D. The parties hereto desire that ISG be engaged to perform certain services
with respect to the Contracts and the Contract Payment Rights.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I.
TRANSFER OF CONTRACT PAYMENT RIGHTS
1.1 Transfer of Rights. PSI will from time to time transfer Contract
Payment Rights for certain Contracts to Pinnacle Fund. It is anticipated that
the Contract Payments Rights transferred to Pinnacle Fund will normally be equal
to 35 monthly payments due under a Contract.
1.2 Consideration. Pinnacle Fund will make payment to PSI for the Contract
Payment Rights in an amount to be determined by PSI and Pinnacle Fund from time
to time based upon the number of payments in the Contract Payment Rights being
transferred, the amount of the payments and other items as determined by the
parties.
1.3 Engagement of ISG. ISG will receive a management fee of $14.00 for the
Contract Payment Rights of each Contract transferred to Pinnacle Fund. ISG will
also be engaged to manage electronic funds transfer of payments by PSI customers
for Contract Payment Rights assigned to Pinnacle Fund and for the payments to
the note holders of Pinnacle Fund. ISG will also provide collection services
for payments from PSI customers to be paid to Pinnacle Fund.
ARTICLE II.
FURTHER DUTIES OF PSI
2.1 Duties of PSI. In order to protect the ability of Pinnacle Fund to pay
all principal and interest as it comes due under the notes it issues to third
party investors, PSI agrees to do as necessary one or more of the following:
- If any payment pursuant Contract Payment Rights transferred to Pinnacle
Fund is delinquent 35 days or more, PSI will make any such payment in cash
in behalf of the applicable Contract obligor.
- In the discretion of PSI, any Contract whose term is extended beyond the
initial three year term may have its corresponding Contract Payment Rights
remain with Pinnacle Fund beyond the original payment term.
- If any payment pursuant to Contract Payment Rights transferred to Pinnacle
Fund is delinquent 35 days or more, Pinnacle Fund or PSI may unilaterally
determine that PSI shall replace the corresponding Contract with Contract
Payment Rights of another Contract that is not in default. The term of any
replacement Contract Payment Rights shall be at least equal in length to
the remaining term of the Contract Payment Rights being replaced.
In the event that all Contract Payment Rights held by Pinnacle Fund at a
particular time are more than sufficient to make all payments of principal and
interest on outstanding notes, PSI may shorten the term of certain Contract
Payment Rights as necessary so that the payments generated by the Contract
Payment Rights held by Pinnacle Fund are approximately equal to but not more
than the principal and interest payments that are required to be made on the
notes currently outstanding.
ARTICLE III.
MISCELLANEOUS
3.1 Assignability and Parties in Interest. This Agreement shall not be
assignable by any of the parties hereto without the consent of all other parties
hereto. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors. Nothing in this Agreement is
intended to confer, expressly or by implication, upon any other person any
rights or remedies under or by reason of this Agreement.
3.2 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Utah.
3.3 Counterparts. This Agreement may be executed as of the same effective
date in one or more counterparts, each of which shall be deemed an original.
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3.4 Headings. The headings and subheadings contained in this Agreement
are included solely for ease of reference, and are not intended to give a full
description of the contents of any particular Section and shall not be given any
weight whatever in interpreting any provision of this Agreement.
3.5 Complete Agreement. This Agreement and the documents referred to herein
contain the entire agreement between the parties and, except as provided herein,
supersede all previous negotiations, commitments and writings.
3.6 Modifications, Amendments and Waivers. This Agreement shall not be
modified or amended except by a writing signed by each of the parties hereto.
3.7 Severability. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect. Upon any such determination that any term or
other provision is invalid, illegal, or incapable of being enforced, the parties
hereto will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
PINNACLE SECURITY, INC.
By: /s/
________________________________
Name:
______________________________
Title:
_____________________________
IMPACT STRATEGY GROUP, INC.
By: /s/ Xxxxxx Xxxxx
_______________________________
Name: Xxxxxx Xxxxx
______________________________
Title: Chief Financial Officer
_____________________________
PINNACLE FUND I, INC.
By: /s/ Xxxxxx Xxxxx
________________________________
Name: Xxxxxx Xxxxx
______________________________
Title: Secretary, Treasurer
_____________________________
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