EXHIBIT 10.15
PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is entered into as of September 12,
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1996 by and between Xxx Acquisition Corp., doing business under the assumed
names of Xxx Technologies and Viisage Technology, having a principal place of
business located at 000 Xxxx Xxxxxx, Xxxxx Xxxxxxxxxxxxx 00000. ("Viisage") and
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Sanwa Business Credit Corporation, having a principal place of business located
at Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxxxxx 00000 ("SBCC").
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WHEREAS, Viisage is engaged in the development of digital imaging software,
and the integration and provision, by sale, lease or otherwise, of digital
imaging systems to Viisage's customers; and
WHEREAS, Viisage may from time to time offer to sell and SBCC in its sole
discretion may from time to time agree to buy certain Systems covered by leases,
installment sale contracts and other chattel paper arising out of such business
and the property covered thereby; and
WHEREAS, SBCC and Viisage desire to set forth the terms and conditions
under which such purchases and sales may be conducted;
NOW THEREFORE, in consideration of the promises contained herein and for
other valuable consideration received, SBCC and Viisage hereby agree as follows:
1. PURCHASE.
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(a) Offering. Viisage may offer SBCC the right to purchase any Systems
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which it places in service under Contracts, together with the Payments under the
Contract and Assigned Rights, and SBCC may elect to purchase or decline to
purchase any Systems, Payments and Assigned Rights so offered. If SBCC for any
reason refuses to buy any System, Payments and Assigned Rights offered to SBCC
within ten (10) days after the offer has been made, then Viisage may offer them
to any other purchaser. The "Purchase Price" of any Systems, Payments and
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Assigned Rights shall be determined as of the date of purchase according to the
System Purchase Price methodology shown on Schedule A (as the same may be
revised from time to time by mutually agreed upon written revisions). On the
date of SBCC's purchase of a System, SBCC may first apply the Purchase Price to
be paid by it against any payments Viisage is then required to make to SBCC and
then SBCC will pay any remainder to Viisage in cash.
(b) Advance Credit Determinations. Viisage may request that SBCC
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determine credit acceptability for prospective Customers under prospective
Contracts and SBCC may, in its sole discretion, evaluate such requests. Credit
approvals will be valid for a period of six (6) months after the date when
rendered unless a different time is specified in connection with the approval.
Any credit approval will be subject to any terms specified by SBCC in connection
with the approval. SBCC's credit approval for any prospective Customer will not
constitute an approval or commitment with respect to any Contract terms, System,
or with respect to the acceptability of
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or purchase price to be paid for any System, Payments and Assigned Rights, and
SBCC's determination to ultimately purchase any System may be exercised or
deferred by SBCC in its sole discretion.
(c) Advance Contract and System Determinations. In connection with its
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request for an advance credit approval of a proposed Customer under a Contract,
Viisage may request that SBCC determine the acceptability of the System proposed
to be offered to such Customer under a Contract and to SBCC for purchase, and
the form of proposed Contract to be entered into with respect to the System.
SBCC may, in its sole discretion, evaluate such requests and may, in addition to
an advance credit determination, approve the form of Contract and System to be
provided under the Contract. Any approval so rendered will be coterminous with
the credit approval for the proposed transaction and will become ineffective
upon termination of the credit approval. Contract and System approvals will be
specific only to the exact form of Contract and the exact configuration of the
System approved, and may be subject to other conditions specified by SBCC in
connection with the approval and/or the payment of mutually agreed fees. SBCC's
approval of any System will not constitute an approval or commitment with
respect to any Contract or the credit of any proposed Customer. SBCC's approval
of any Contract will not constitute an approval or commitment with respect to
any System or the credit of any proposed Customer.
(d) Evaluation Information. In connection with any request for a
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credit, Contract or System approval, Viisage will make a full, accurate and
continuing disclosure to SBCC of all information and documents known to Viisage
or in its possession which relate to the requested approval and/or the
underlying transaction.
(e) Revocation of Approvals. Credit, System and/or Contract approvals
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may be revokedat SBCC's sole and absolute discretion, and of no further effect
if, after the date of approval, (i) a material change (as determined by SBCC in
its sole discretion) is recognized in the Contract, System configuration or in
the structure of the proposed transaction from that understood by SBCC at the
time of approval, (ii) there has occurred an adverse change (as determined by
SBCC in its sole discretion) in the creditworthiness of such Customer from that
shown in the materials presented to SBCC in connection with its credit
evaluation, (iii) any of the materials, information, statements and/or
representations provided to SBCC in connection with its review or approval are
false, misleading or incomplete; (iv) Viisage is in default of any of its
obligations, covenants and agreements under this Agreement, any Assignment, or
any other instrument document or agreement with SBCC, or any event has occurred
which with the passage of time or giving of notice or both would constitute such
an event of default; (v) Viisage or any other provider is in default under, or
System performance or viability issues have been raised under similar System
Contracts or installations with other of Viisage's customers; (vi) any default
under the Contract (or any related support or maintenance agreement) has
occurred, or any event has occurred which with the passage of time or giving of
notice or both would constitute such a default, (vi) SBCC determines that both
(A) the approved Contract or approved System fails to satisfy each of the
eligibility requirements which would be applicable thereto if the System were to
be purchased under this Agreement and (B) such failure is unlikely to be cured
or satisfied prior to expiration of the applicable approval period; (viii) any
System components or technology or
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Software will not, as of the proposed date of purchase, be current generation,
warranted-as-new, latest production or release versions of products offered by
the manufacturers or developers thereof, unless otherwise agreed by SBCC; (ix)
there has occurred an adverse change (as determined by SBCC in its sole
discretion) in the business or financial condition of Viisage; or (x) any
condition specific to the approval is not satisfied.
(f) Conditions. SBCC's purchase of any System subject to one or more
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approvals under this Section shall be subject to all of the following conditions
being satisfied on the date of purchase:
(i) the creditworthiness of the Customer, the acceptability of the
Contract and related documents, and the offered System are as required by
the approval (which must be current and in effect on the purchase date) or
otherwise acceptable to SBCC in its sole discretion; and
(ii) SBCC receives the following documents:
(A) an Assignment of the Contract;
(B) the Contract;
(C) financing statements (or copies of filed financing
statements) and other documents necessary or reasonably desirable to
perfect or evidence SBCC's, the lessor's, or vendor's rights in the
Equipment covered by the Contract;
(D) evidence of the delivery and acceptance of the System or
of the satisfaction of all conditions required of the provider(s), and
of Viisage's payment for components provided by other parties;
(E) complete copies of all contracts pertaining to the
maintenance and service of the System;
(F) evidence of insurance for the System;
(G) evidence of the payment of applicable taxes with respect
to the System and Contract;
(H) evidence of the due authorization and execution of the
Contract by the parties thereto and of the validity and enforceability
thereof;
(I) an executed notice of assignment as provided under Section
2; and
(J) such other instruments, documents and agreements as SBCC
has required in connection with any approval and /or as SBCC may
reasonably require in its sole discretion.
(g) General. Approvals will not be effective unless in writing and signed
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by SBCC. Neither SBCC's rendering of an approval, nor purchase of any System,
nor knowledge of any unsatisfied conditions, representations or warranties with
respect to a Contract will constitute a waiver of any of the representations,
warranties, conditions or rights provided under this agreement or any applicable
Assignment with respect to the Contract.
2. ASSIGNMENT OF SYSTEMS, PAYMENTS AND ASSIGNED RIGHTS.
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(a) Assignment. At the time of SBCC's purchase of a System, Payments and
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Assigned Rights, Viisage will:
(i) transfer, sell and assign to SBCC all of such System and all
accessions, accessories, parts, additions and attachments attached thereto
or used in connection therewith (to the extent that the same are not
removable without affecting the capacity, specifications, performance or
configuration of the System), and all replacements and substitutions
thereof or therefor, provided that for Systems which have not been fully
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developed or installed and for which interim purchase price payments are to
be made under Section 2(d), the foregoing condition need be satisfied only
at the time the final purchase price payment is made, and that at the time
of SBCC's interim payments, Viisage shall transfer such interest in the
System as it then may have; and
(ii) assign to SBCC all of Viisage's right, title and interest in,
to the Payments with respect to the System and under any related Contract
thereunder, and all related Customer Guaranties, and
(iii) assign to SBCC all of Viisage's right, title and interest in,
to and under all Assigned Rights with respect to the System.
all by executing such form of xxxx of sale and assignment (an "Assignment") in
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the Form of Exhibit A hereto or such other form as shall be acceptable to SBCC.
(b) Security Interest. As security for all of its obligations to SBCC
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under this Agreement Viisage hereby grants or assigns to SBCC a Security
interest in all of the following, whether now or in the future owned by Viisage:
(i) all Systems purchased by SBCC and all Payments, Customer
Guaranties and Assigned Rights related to such Systems;
(ii) subject to Section 2(c) of this Agreement, all rights, whether
against the Customer or any licensor, developer or servicer, and whether
construed as accounts, general intangibles, contract rights or otherwise,
to use and re-license the use of the Software to a user of the Systems or
components thereof, together with the rights of enforcement against any
user in the event of a breach or violation of the related Contract; and all
proceeds of any of the foregoing.
(iii) all additions, parts, accessions or attachments (to the extent
that the same are not removable without affecting the capacity,
specifications, performance or configuration of the Systems) and all
replacements, substitutions to or for such property; and
(iv) all proceeds of any of the foregoing.
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(c) Special Limitations on Assignments of Software. Notwithstanding any
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other provision of this Agreement, an Assignment of or security interest granted
in any Software or technology will not be construed as a conveyance of any
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ownership in or proprietary rights in any Software, patents, copyrights, or
intellectual property except (i) the right to receive payments (whether license
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payments or otherwise, and whether due from the original Customer or otherwise)
with respect to the Software and technology components of purchased Systems,
(ii) all rights (whether deemed contract rights, accounts, general intangibles
or otherwise) with respect to such payments, whether arising under the
applicable Contract or otherwise, including the rights of enforcement and
remedies, and (iii) a right to re-license or compel the relicensing of such
Software, and transfer the use of such technology, at no additional cost, to any
user(s) of the Equipment components of the Systems. SBCC's rights in Software
will not extend to any copies of Software which are not used or to be used in
connection with the purchased Systems.
(d) Interim Purchase Price Payments. Viisage and SBCC may mutually
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agree to provide for interim conditional payments of the Purchase Price for
Systems which are to be implemented over a period of time not exceeding twelve
(12) months. In order to effect interim payments, the following conditions must
be satisfied:
(i) Viisage and a Customer shall have irrevocably entered into a
Contract which provides for the development, delivery and installation of a
System by Viisage for the Customer and satisfies all provisions of this
Agreement (save for such development, delivery, installation and/or
acceptance of the System);
(ii) The Contract provides that the Customer will become bound to the
entire Contract for its entire term (subject only [i] to appropriation of
fiscal funds, in the case of any Customer which is a governmental body and
[ii] to termination of the Contract in the event of a material, uncured and
continuing default of performance obligations by Viisage) upon Viisage's
completion of installation and delivery benchmarks on or before a specified
date;
(iii) Viisage has provided SBCC with a schedule of installation or
delivery dates, or other benchmarks for System components and deliverables
to be provided by Viisage and its projected direct System costs and months
in which such costs are to be incurred, and Viisage and SBCC have mutually
agreed upon a schedule of dates and amounts for SBCC's interim payment and
final payment of the Purchase Price;
(iv) The System, Payments, Assigned Rights and Customer Guarantees shall
have been assigned from Viisage to SBCC;
(v) This Agreement is in full force and effect and has not expired, or
been terminated or revoked (or if it has expired or terminated, the
commitment to purchase such System remains in effect);
(vi) All of the requirements of this Agreement which must be true or be
performed as of the date of SBCC's purchase with respect to the Contract,
System, Payments,
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Equipment, Assigned Rights and Customer, including but not limited to the
eligibility requirements set forth in Section 4, shall be satisfied,
excepting only those requirements which relate to Viisage's scheduled
development, delivery and installation of the System and the Customer's
acceptance of the System;
(vii) Viisage is not in default of any of its obligations, duties or
agreements under this Agreement, any Assignment, or any other instrument
document or agreement with SBCC, nor has any event occurred which with the
passage of time or giving of notice or both would constitute such an event
of default, nor is Viisage or any other provider in default under, nor have
System performance or viability issues been raised under, similar System
Contracts or installations with other of Viisage's customers;
(viii) There has been no default, nor event which with the passage of time
or giving of notice or both would constitute a default under the Contract,
by any party to the applicable Contract; and
(ix) Any additional conditions or requirements agreed upon in writing by
SBCC and Viisage have been satisfied.
SBCC will make payment of scheduled interim Purchase Price payments at the times
and in the amounts provided under clause (iii) above (but only to the extent of
Viisage's costs therefor) upon Viisage's request for payment, accompanied by its
certification of invoices, checks and other evidence that Viisage has actually
incurred such costs and its certification that Viisage has performed and
satisfied each of the Contract's benchmarks and conditions to be performed as of
the date of the interim payment request.
(e) Closing Out Interim Purchase Price Arrangements. If, on or before
the date for final payment of the Purchase Price (under Section 2(d)(iii)
above), (i) all of the conditions described under Section 2(d) with respect to
the purchase have been and continue to be satisfied, and (ii) all acceptances
and conditions required to cause the Contract and the Payments provided
thereunder to become unconditional, fully satisfied obligations of the Customer
have been satisfied, then SBCC will remit the balance of the Purchase Price to
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Viisage and the Assignment will become unconditionally effective. If any of the
conditions specified under Section 2(d) are not satisfied on the scheduled date
for an interim Purchase Price advance or cease to be fully satisfied after an
interim Purchase Price advance has been paid, or any of the conditions specified
in the preceding sentence are not satisfied as of the date for final payment of
the Purchase Price, then SBCC's remaining obligation to purchase the System,
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Payments and Assigned Rights shall become void and of no further effect, and
Viisage will immediately make payment to SBCC of the amount of any interim
Purchase Price advances made by SBCC, plus interest thereon from the date of the
advance to the date of payment at a rate equal to the Prime Rate, and, upon
SBCC's receipt of such payment, the remaining provisions of the Assignment will
be canceled and of no further effect.
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(f) No Assumption by SBCC. SBCC shall not be deemed to have assumed any
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of Viisage's, or any lessor's, developer's, licensor's or vendor's, obligations
under any Contract or with respect to any Systems.
(g) Use of Purchased Systems. SBCC acknowledges that the Systems to be
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purchased under this Agreement will be subject to Contracts under which the
Customers will have rights to use and enjoy the Systems. SBCC agrees that,
absent a default under the Contract or related documents by the Customer, and so
long as the Contract remains in effect, SBCC will not interfere with the
Customers' use and enjoyment of the Systems.
3. REPRESENTATIONS AND WARRANTIES.
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Viisage hereby represents and warrants (each representation and warranty
shall be considered as having been made concurrently with each purchase made
pursuant to this Agreement as an inducement to SBCC to make such purchase) that:
(a) Organized and Existing. Viisage is a corporation duly organized,
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validly existing and in good standing under the laws of Massachusetts, and
Viisage is duly qualified and in good standing as a foreign corporation
authorized to do business in each state or jurisdiction where such qualification
is necessary.
(b) Due Authorization; No Conflict. Viisage is duly authorized to execute
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and deliver this Agreement, and is and will (as long as this Agreement is in
effect and thereafter until no further payment or performance obligations are
owed to SBCC under this Agreement or any Assignment) continue to be, duly
authorized to perform all of its obligations under this Agreement and under each
instrument and document delivered in connection with this Agreement. Viisage's
execution, delivery and performance of this Agreement does not and will not
conflict with any law, rule or regulation, Viisage's charter or by-laws, or any
agreement or court or administrative order, judgment or decree.
(c) Financial Information. Viisage has delivered to SBCC copies of
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Viisage's most recent quarterly and annual financial statements, in the form
required by Section 5(a).
(d) Principal Place of Business. Unless and until changed in accordance
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with Section 5(g), Viisage's chief executive office and principal place of
business is located at the address set forth on the first page of this
Agreement.
4. ELIGIBILITY REQUIREMENTS.
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All of the following conditions must be true, correct and satisfied with
respect to each System purchased under this Agreement, the Payments with respect
to the System and the related Contract and Assigned Rights, and if such
conditions thereafter shall cease to be true with respect to such System, then
the provisions of Section 9 shall apply to such System. The satisfaction or
failure of satisfaction of the any of the following conditions will be
determined independently of, and without regard to, whether or not a Credit
Default has occurred.
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(a) Assignable Original; Related Agreements. Viisage has delivered to
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SBCC all assignable originals of the Contract, together with true and accurate
copies of all agreements (including third party Services agreements) entered
into in connection with the Contract.
(b) Accurate Description of System, Services and Payments; Acceptance.
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Except as otherwise contemplated under Section 2(d) or 2(e), the Contract
accurately describes the System covered by, the Payments due under, and the
Services to be rendered in connection with, the purchased System, the System
complies with the requirements of the Contract and has been delivered to and
unqualifiedly accepted by the Customer thereunder, or, if acceptance is not
required by the Contract, all performance conditions necessary to cause the
Contract to become fixed and unconditional against the Customer have been
satisfied; all Services required or to be rendered in connection with a Contract
or any System have been and will be timely and fully provided and unqualifiedly
accepted by the Customer, or, if acceptance is not required by the Contract,
received by the Customer without objection.
(c) No Default. At the time of SBCC's purchase, no default or event which
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with the passage of time or giving of notice or both would become a default
under the terms of the Contract existed, and Viisage had no knowledge of any
fact that might impair the Contract's or Assigned Rights' validity.
(d) No Prepayments. At the time of SBCC's purchase, no amounts have been
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prepaid on the Contract except advance payments required by the Contract.
(e) No Setoffs; Non-cancellable. No setoffs, counterclaims or defenses
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exist to any claims against or obligations of any Customer under the Contract or
any related Customer Guaranty; the Contract has not been canceled or terminated
by any Customer; and, if the Contract is one under which the Customer is a
governmental entity, the Contract will not be canceled, terminated or permitted
to lapse or expire due to non-renewal prior to the original projected term of
the Contract or the term of any renewal or extension in effect, regardless of
whether such cancellation, termination or non-renewal is permitted by the
Contract, any related agreement, or by applicable law or regulation.
(f) Valid, Binding, Enforceable. The Contract and each related Customer
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Guaranty are genuine, valid, binding and enforceable in accordance with their
terms.
(g) Complies with Laws. The Contract and the System and Services covered
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by the Contract comply with all applicable laws and regulations.
(h) Title; Liens; Right to License Software; Perfection. Viisage has
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conveyed to SBCC good title to the System, Payments, Assigned Rights and
Customer Guaranties and all proceeds thereof, free and clear of any lien, claim
or security interest excepting tax liens for which Viisage has fully reserved
payment and which Viisage is contesting in good faith and by appropriate
proceedings; Viisage will not convey to any other party (besides the Customer)
any interest in any related System, Contract, Payments, Assigned Rights or
Customer Guaranties, or
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any proceeds thereof; and at the time of purchase, Viisage has taken, at its
expense, all steps necessary or deemed by SBCC to be desirable to perfect SBCC's
security interest or other interest in the System, Payments, Assigned Rights and
Customer Guaranties. Viisage has an unimpaired fully paid right to perpetually
license the related Software to any user of the Equipment components of the
System, subject only to the interest, if any, of the developer or third-party
licensor of the Software to whom or which all license fees and/or royalties have
been and will be paid by Viisage when due.
(i) No Impairment of Rights or Value. Viisage has not done anything that
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might impair the value of the System, Contract, Payments, Assigned Rights any
related Customer Guaranty, or any of SBCC's rights thereunder.
(j) No Amendments. Neither the Contract nor any related Customer Guaranty
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has been, or will be, altered, modified, changed or amended without SBCC's prior
written consent, which consent will not be unreasonably withheld if the
amendment does not modify the Payments or rights of enforcement under the
Contract, or release any party under or security for the Contract, or provide
for a modification of the System under the Contract. If Viisage requests SBCC's
consent to any proposed amendment, SBCC will be deemed to have consented to the
amendment if SBCC has not denied consent within five (5) business days from its
receipt of Viisage's written request therefor.
(k) Insurance. Viisage will maintain or cause the Customer to maintain
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insurance with respect to the Equipment components of the System and otherwise
to such extent and against such risks, hazards and liabilities as is commonly
maintained by companies similarly situated (provided, however, that in no event
shall the amount of insurance which is required to be maintained against damage
to or loss of any System or component thereof be less than the Termination
Amount thereof).
(l) Taxes. All taxes, assessments, fines, fees and other liabilities
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relating to the Contract, the Payments due under the Contract, the related
System and Services; and any related Customer Guaranty have been paid when due,
and all related filings have been timely made.
(m) Service Agreements. Viisage has provided full and complete copies of,
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and obtained SBCC's concurrence (which may be given or withheld by SBCC in its
sole discretion) with any contract or agreement under which third parties are to
perform or be responsible for any Services to be rendered in connection with the
Contract or System. SBCC will be deemed to have concurred with any such
contract or agreement if it has not noted its disapproval within ten (10) days
after receipt thereof.
5. DUTIES.
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Until the termination of this Agreement and for as long as any Payments or
Assigned Rights purchased under this Agreement have not been fully paid or
satisfied, or any System or component thereof is owned by SBCC and has not been
abandoned, Viisage will:
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(a) Financial Information. Furnish to SBCC:
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(i) as soon as available, but not later than sixty (60) days after
the end of each quarter (except the last) of each fiscal year, quarterly
unaudited financial statements concerning Viisage's business, prepared in
accordance with generally accepted accounting principles and applicable
Securities and Exchange Commission rules and regulations, applied on a
basis consistent with that of the preceding fiscal quarter, presenting
fairly its financial condition as at the end of that quarter and containing
such data as may be requested by SBCC, and certified as true and correct by
its Chief Financial Officer;
(ii) as soon as available, but not later than one hundred-five (105)
days after the end of each fiscal year, a copy of Viisage's annual audit
report for that year, prepared in conformity with generally accepted
accounting principles and applicable Securities and Exchange Commission
rules and regulations, applied on a basis consistent with that of the
preceding fiscal year and presenting fairly its financial condition as at
the end of that fiscal year and the results of its operations for the
twelve (l2) month period then ended and signed by independent certified
public accountants of recognized standing or otherwise satisfactory to
SBCC; and
(iii) any other information as SBCC may reasonably request from time
to time.
(b) Notice of Adverse Events. Notify SBCC promptly upon Viisage's
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learning of:
(i) any change in the name of any Customer;
(ii) the default or violation by any Customer under any Contract or
other related document;
(iii) any adverse credit information, which Viisage may acquire or
have knowledge of, with respect to any Customer under any Contract;
(iv) the occurrence of any Termination Event or event which, with
the passage of time or with notice or both would become a Termination
Event.
(c) Books and Records. Permit SBCC reasonable access, upon reasonable
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notice and during normal business hours, to Viisage's books and records as they
relate to Systems, Payments, Assigned Rights or Customer Guaranties purchased by
SBCC, or any related Contracts.
(d) Continuity of Business. Subject to Section 13(f), not (i) cease to
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engage in substantially the same line of business in which Viisage is engaged on
the date of this Agreement, (ii) cease to engage in the provision of Systems and
related Services, or (iii) sell, transfer or convey a substantial part of
Viisage's assets, or effect or be a party to any merger or consolidation if the
effect thereof, determined by SBCC in its sole discretion, would adversely
affect any of SBCC's rights under this Agreement, any Assignment or in any
property or rights covered by an
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Assignment, or adversely affect Viisage's ability to perform or satisfy any of
its duties and obligations under this Agreement, any Assignment, or any
Contract.
(e) Defaults Under Loan Agreements. Not default under that certain Fourth
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Amended and Restated Loan and Conditional Security Agreement between Xxx
Acquisition Corporation and the First National Bank of Boston, N.A., or any
related document or agreement, or under any other primary working capital credit
agreement or arrangement hereafter substituted by Viisage therefor, with the
result that any indebtedness with respect to such agreement shall have been
declared due and payable prior to the date on which it would otherwise become
due and payable, and such default is not cured or waived before SBCC has acted
upon such a default as a Termination Event or condition for repurchase of a
System under Section 9 of this Agreement.
(f) Performance of Obligations Under Contracts. Perform or cause any
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supplier, vendor or developer of System components or Services to perform all of
Viisage's or any such supplier's, vendor's or developer's obligations arising by
contract or imposed by applicable law, rule or regulation with respect to the
Contracts and the related Systems.
(g) Changed Locations. Notify SBCC at least ten (10) days prior to:
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(i) Viisage's changing the location of its principal place of
business or chief executive office; or
(ii) Viisage's opening or closing any places of business in any
jurisdictions where such openings or closings might affect the place where
a UCC financing statement or similar document would need to be filed in
order to perfect or protect SBCC's security interest or other interest in
any Systems, Payments or Assigned Rights.
(h) Further Assurances. From time to time execute and deliver such
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further documents and take such actions as SBCC may reasonably request in order
to fully effect the purposes of this Agreement and to protect SBCC's interest in
the Systems, Payments and Assigned Rights.
(i) Qualification to Do Business. Subject to Section 13(f), maintain in
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full effect its corporate existence and qualification, in each state or
jurisdiction where the failure to do so would have an adverse effect upon
Viisage's rights under this Agreement, any Assignment, any Contract, or with
respect to any Systems, Payments or Assigned Rights, to conduct business under
Viisage's name, the names Xxx Technologies and Viisage Technologies, and any
other name under which Viisage conducts business.
6. AGREEMENT TO INDEMNIFY.
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(a) Scope of Indemnity. Viisage agrees to indemnify and save SBCC
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harmless of, from and against any losses, damages, penalties, forfeitures,
claims, costs, expenses (including court costs and reasonable attorneys' fees)
or liabilities, excepting those arising solely out of SBCC's gross negligence or
willful misconduct, which may at any time be brought, incurred,
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assessed or adjudged against SBCC, related to or arising from the purchased
Systems, the related Contracts and Services, or any breach by Viisage of any of
its representations, warranties, duties or other obligations or agreements
contained in this Agreement, any Assignment or any other agreement with SBCC.
(b) Indemnity Notification. SBCC and Viisage will each give the other
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notice of any event or condition that requires indemnification by Viisage, or
any allegation that such event or condition exists, promptly upon obtaining
knowledge thereof.
(c) Control of Proceedings. If Viisage is otherwise in compliance with
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the terms of this Agreement, Viisage shall be subrogated to SBCC's rights with
respect to such event or condition and shall have the right to control, and
determine the settlement of claims upon related litigation, so long as Viisage
does not impose any liability upon SBCC without SBCC's consent (acting in SBCC's
sole discretion).
(d) Survival of Indemnity Obligations. All of the indemnities and
---------------------------------
agreements contained in this Section shall survive and continue in full force
and effect notwithstanding termination of this Agreement or of any Contract.
7. ADMINISTRATION AND COLLECTIONS.
------------------------------
(a) Generally. Viisage agrees to collect Payments and to administer the
---------
Contracts generally. Viisage will undertake such collections and administration
as an independent contractor and not as SBCC's agent, and in connection
therewith will, at Viisage's sole cost and expense, diligently monitor and
verify the amount of usage under Per-Use Contracts, and perform all billing and
collecting for amounts due and to become due with respect to such Contracts.
Viisage will xxxx Customers and perform such administration in accordance with
its standard procedures.
(b) Xxxxxxxx; Remittances. Subject to Section 2(d), Viisage shall render
---------------------
xxxxxxxx to Customers such that rental, license or usage Payments for any month
during the term of a Contract for a System purchased hereunder will be due not
later than thirty (30) days after the end of such month. Within ten (10) days
after its receipt of any Payment under a Contract or otherwise with respect to a
System purchased hereunder, Visage will remit to SBCC (but only to the extent of
such Payment) the total of unpaid Remittance Amounts for such System for the
month in which paid and for any prior month(s). If Viisage has not received and
remitted the full Remittance Amount to SBCC for each of the first three (3)
respective months in any Contract's term, Viisage shall, within thirty (30) days
after the end of each such month and regardless of whether corresponding
Payments have been received from the Customer, make payment to SBCC of the
unpaid Remittance Amount for such System for such month. Viisage shall be
entitled to receive back the amount of any such forced payments made to SBCC
upon a Credit Default under the Contract, together with interest thereon at the
Prime Rate. All payments made to SBCC shall, unless otherwise specified by SBCC
in writing, be made to SBCC by wire transfer to SBCC's account at Xxxxxx Trust
and Savings Bank, ABA Number 000000000, Account Number 0000000.
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(c) Viisage's Recovery of Remittance Amounts. Viisage may, unless SBCC has
----------------------------------------
terminated Viisage's authority to collect for Payments under Section 7(f), or
unless a breach has occurred under this Agreement or any Assignment, retain the
excess by which Payments (excepting prepayments) received by Viisage exceed the
Remittance Amounts attributed to the purchased Systems through such period. If
SBCC has terminated Viisage's authority to xxxx and collect for Payments under
Section 7(f) or if a breach under this Agreement or any Assignment has occurred,
then SBCC shall receive and may retain all Payments with respect to all Systems
which are subject to the Termination Event. To the extent that any such
Payments retained by SBCC exceed the Remittance Amounts then due with respect to
the Systems to which they relate, SBCC shall apply any such excess Payments
first against the Termination Amount with respect to the System in the inverse
order of maturity until the Termination Amount is zero, and second, against the
Termination Amount(s) (in inverse order of maturity) of any other System(s) then
subject to a Termination Event, with any remaining excess to Viisage. If a
Termination Event is remedied after SBCC has terminated Viisage's authority to
xxxx and collect for Payments, and SBCC has elected to continue billing and
collecting for Payments, SBCC may, in its sole discretion, remit back to Viisage
the amount of excess Payments collected.
(d) Collection Reports. So long as Viisage shall administer Payments
------------------
purchased by SBCC, Viisage shall maintain books and records pertaining to all
related Contracts and provide SBCC with summaries of monthly xxxxxxxx to the
Customer involved and summaries of the Payments due under and Payments received
under such Contracts, of the usage (compared to the number of usage units
projected for such period under the Contract) and payment amounts under each
Per-Use Contract, and, as requested by SBCC, other source information from which
the aforementioned summaries are prepared. Such reports shall be provided to
SBCC on or before the twentieth (20th) calendar day of each month.
(e) Taxes. Viisage will make or cause the Customer to make all filings in
-----
respect of, and file or cause the Customer to file for and remit payments
received on account of, any and all personal property taxes, license, permit and
registration fees, sales, use, excise, or similar taxes, together with any
penalties or interest in connection therewith, now or hereafter imposed by any
state, Federal or other government or agency on any Contract, System, Assigned
Rights, Services or Payment covered under this Agreement, whether the same shall
be payable by or billed or assessed to the Customer, Viisage or SBCC.
(f) Termination of Billing and Collections. SBCC may terminate Viisage's
--------------------------------------
authority to xxxx, collect and administer under this Section 7 as to any or all
System Contracts upon the occurrence of a Termination Event, provided that if
the Termination Event results solely out of a default by a Customer under a
Contract, then SBCC may terminate such authority only with respect to the
affected System. If Viisage's authority is terminated by SBCC, SBCC may deliver
to the applicable Customers the notices delivered to SBCC or prepared by SBCC
pursuant to this Agreement and xxxx for and collect all amounts payable under
the applicable Contracts or with respect to any related Systems. If, despite a
termination of Viisage's authority under this Section 7(f), Viisage subsequently
receives any Payment, Viisage agrees to immediately forward the Payment to SBCC
in kind, and until such Payment is forwarded to SBCC, to hold the Payment in
trust for SBCC. If SBCC has terminated Viisage's billing and collection
authority under this
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Section, Viisage shall not interfere or attempt to interfere with the issuance
of notices with respect to, or the billing and collection of sums due under the
applicable Contracts or with respect to any related Systems. Furthermore,
following termination of Viisage's authority to xxxx and collect, Viisage agrees
to cooperate and assist SBCC in efforts with respect to billing and collection.
SBCC's right to send notices and xxxx and collect for Payments and other amounts
shall be specifically enforceable by SBCC.
(g) Notice Letters and Billing Information; Contacts with Customers.
---------------------------------------------------------------
Viisage agrees to provide to each applicable Customer, at the time of SBCC's
purchase of a System, an original notice in the form of Exhibit B hereto. Upon
the occurrence of a Termination Event, Viisage irrevocably authorizes SBCC, in
connection with any notification of Customers as provided in this Section 7, to
deliver the same as an original to each Customer to whom notice under this
Section may be given.
(h) Power of Attorney. For as long as any amounts are owing to SBCC under
-----------------
this or any related agreements, Viisage hereby irrevocably constitutes and
appoints SBCC as Viisage's true and lawful attorney with respect to any System
for which a Termination Event has occurred, with full power of substitution, for
Viisage and in Viisage's name, place and stead, to ask, demand, collect,
receive, receipt for, xxx for, compound and give acquittance for any and all
Payments and other sums due with respect to such Systems under Section 7(f), and
to endorse, in writing or by stamp, Viisage's name or otherwise on all checks,
collections, receipts or instruments given in payment or part payment thereof.
(i) SBCC's Discretion. Upon the occurrence of a Termination Event and
-----------------
SBCC's subsequent undertaking to xxxx and collect for Payments, SBCC may, in
accordance with its ordinary practices and procedures, take or forego whatever
action with respect to the collection of such Payments and receipt of such funds
as SBCC, in its sole discretion, shall deem proper. In addition thereto, SBCC
or its designees may take such actions as SBCC deems appropriate to provide
ongoing verification of usage under Per-Use Contracts and to satisfy any
conditions and/or perform any obligations which may be required in order to
recognize Payments under and/or give effect to such Contract. Regardless of any
such action SBCC may take or forego, the provisions of this Agreement which
govern repurchase will remain in force and shall be unaffected by any such
action or failure to act on SBCC's part.
(j) Reimbursement of Collection Expenses. If SBCC has terminated
------------------------------------
Viisage's authority to xxxx, collect and administer for Payments under Section
7(f), SBCC will be entitled to receive and retain out of collected amounts any
out-of-pocket expenses and costs which have been reasonably incurred in
connection with SBCC's billing and collection of, performance of administrative
functions with respect to, and verification of usage under any related
Contracts. Viisage will not have any direct liability for such costs and
expenses incurred by SBCC.
(k) Post Termination Repurchases. Viisage will have the right, within
----------------------------
sixty (60) days after SBCC's termination of authority to collect and administer
any Contract, to repurchase the related System and Payments for cash for a price
equal to the then applicable Termination Amount of the System. Such repurchases
may be made pursuant to Section 9A with respect to
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terminations based upon the occurence of a Credit Default. After SBCC receives
the Termination Amount for any repurchased System, SBCC will reassign to Viisage
all of its right, title and interest in the repurchased System and any Payments
due thereunder without representations or warranties by SBCC of any kind
whatsoever, except that SBCC shall represent and warrant that it has not granted
or conveyed any interest therein to any third party (other than interests that
have been fully and finally released). The existence of such a right on
Viisage's part will not (until the right is exercised) impair, limit or effect
SBCC's authority to conduct collections and administration as provided above.
8. PREPAYMENTS.
-----------
Viisage has no right to repurchase any System or prepay any Contract,
whether in whole or in part. If a Contract covering a System purchased by SBCC
is prepaid in full for any reason, SBCC shall be entitled to receive, in
connection with the prepayment, an amount equal to the Termination Amount with
respect to the System.
9. REPURCHASE.
----------
(a) Ineligible Systems, Payments or Contracts. If any of the conditions
-----------------------------------------
specified in Section 4 shall not be or shall cease to be true, correct or
satisfied, SBCC may request or demand that Viisage repurchase the related or
affected System and Payments. If any such condition remains untrue, incorrect
or unsatisfied for sixty (60) days after SBCC's written request or demand, then
Viisage will immediately after expiration of the sixty (60) day period,
repurchase the System and Payments for cash for a price equal to the then
applicable Termination Amount of the related System.
(b) Repurchase of All Systems and Payments. Upon any breach of Viisage's
--------------------------------------
duties or agreements in this Agreement (other than any duty set forth in Section
5(d) or 5(e)) and the continuation of such breach for sixty (60) days after
written notice from SBCC, or upon a breach of any duty set forth in Section 5(d)
or 5(e), Viisage will immediately repurchase all Systems and Payments for cash
for a price equal to the total of then applicable Termination Amounts of all
such Systems.
(c) Per-Use Payment Shortfall. If the Payments actually due under any
-------------------------
Per-Use Contract over any three (3) consecutive-month period are less in the
aggregate than the total of Remittance Amounts for the such period and no Credit
Default exists (other than a Credit Default existing solely because the Customer
has failed or refused to make payments, and not in connection with any other
Credit Default), and upon SBCC's written request to do so, Viisage will
repurchase the related System and Payments for cash for a price equal to the
then applicable Termination Amount.
(d) Reassignment by SBCC. After SBCC receives the Termination Amount for
--------------------
any repurchased System, SBCC will reassign to Viisage all of its right, title
and interest in the repurchased System and any Payments due thereunder without
representations or warranties by SBCC of any kind whatsoever, except that SBCC
shall represent and warrant that it has not
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granted or conveyed any interest therein to any third party (other than
interests that have been fully and finally released).
9A. Term Repurchases'
----------------
(a) Request for Term Repurchase. Upon written request to SBCC within the
---------------------------
time provided for the repurchase of a System and Payments under Section 9(a)
or 9(c), as applicable, Viisage may elect to discharge its repurchase payment
obligations under Section 9(a) or 9(c) over a period of time by making periodic
payments not greater than the related Remittance Amounts to SBCC over a term not
less than the projected term of the related Contract. Unless a different amount
or term are agreed to in writing by SBCC and Viisage, the periodic payment
amount and term for repayment will be equal to the unpaid Remittance Amounts and
remaining term of the Contract. Any difference between the unpaid Termination
Amount due for the repurchase and the present value of the periodic payments
(determined using the Discount Rate used to originally determine the Purchase
Price for the System) must be paid at the time the first deferred payment is
due.
(b) Retained Security Interest. SBCC will retain a security interest in the
--------------------------
Systems, Payments, Assigned Rights, and Customer Guaranties which are
repurchased by payments under this Section 9A and in all proceeds thereof. Said
security interest will be automatically released and of no further effect upon
final payment of all deferred payments with respect to the repurchased System,
Assigned Rights and Customer Guaranties.
(c) Conditions for Deferred Repurchase; Deferral Effective Only While
-----------------------------------------------------------------
Conditions are Satisfied. Viisage's right to defer its repurchase payments
------------------------
under this Section 9A will be effective and may be exercised only if each of the
following conditions is and remains fully satisfied. In the event that any of
the following conditions is not satisfied or at any time ceases to be satisfied,
Viisage will not be able to exercise any right to defer payment of its
repurchase obligations under Section 9 and the full unpaid amount of all
---
repurchase obligations deferred under this Section 9A will immediately become
due and be payable to SBCC without further notice or demand. These conditions
are as follows:
(i) Viisage's Debt to Worth Ratio shall equal or be less than 3 to 1;
(ii) Viisage's Debt Service Coverage Ratio shall equal or exceed 1.5 to 1;
(iii) Viisage's EBITDA to Interest Ratio shall equal or exceed 2.5 to 1;
(iv) Viisage's EBITDA to Funded Debt Ratio shall equal or exceed 0.20 to
1;
(v) Viisage's Interest Coverage Ratio shall equal or exceed 1.5 to 1;
(vi) Viisage is not in default of any of its obligations, covenants and
agreements under this Agreement, any Assignment, or any other instrument
document or agreement with
16 of 30
SBCC, nor has any event occurred which with the passage of time or giving
of notice or both would constitute such an event of default.
(d) Prepayments. All prepayment amounts and other amounts received on
-----------
account of any System, Assigned Rights or Customer Guaranty repurchased by
payments under this Section 9A, or under any related Contract must be paid to
SBCC by Viisage upon Viisage's receipt thereof. Such amounts will be applied in
inverse order against the periodic payments for such System.
10. UPGRADES; FIRST OPPORTUNITY; DISPLACEMENTS.
------------------------------------------
(a) First Opportunity. Whenever a Customer wishes to upgrade any
-----------------
components of a System to a different capacity or model number (an "Upgrade"),
-------
or wishes to add any separately identifiable additional Equipment or Software to
a System (an "Add-On") which will result in additional Payments to become due
------
under the Contract, Viisage will provide SBCC with the first opportunity to, and
SBCC may, in its sole discretion, purchase the Upgrade or Add-On and any
Payments and/or Assigned Rights arising from the lease or financing thereof
(which may, with SBCC's consent, be in the form of an amendment to or
replacement of the original Contract). If SBCC declines to make such purchase,
Viisage may, at its election, either (i) repurchase the existing System and
Payments by paying SBCC the Termination Amount, without any prepayment fee, or
(ii) fund the applicable Upgrade or Add-On itself or from funding sources other
than SBCC (provided that in so doing, none of the eligibility conditions with
respect to the System owned by SBCC are violated and Viisage does not breach any
duty or agreement hereunder or under any Assignment). Upon receipt of such
payment from Viisage, SBCC will reassign all of its right, title and interest in
the System, any unpaid Payments due thereunder, and any related Assigned Rights,
without recourse to and without representations or warranties by SBCC of any
kind whatsoever, except that SBCC shall represent and warrant that it has not
granted or conveyed any interest therein to any third party (other than
interests that have been fully and finally released).
(b) No Displacements. Viisage agrees that it will not, without SBCC's
----------------
written consent, solicit, counsel, offer or encourage any Customer to replace,
reconfigure or consolidate System components in such a manner that existing
System components are replaced or rendered surplus to the ordinary operation of
the existing System.
11. REMARKETING.
-----------
(a) Appointment, Priority. SBCC hereby appoints Viisage as its sole
---------------------
agent, to Remarket Systems purchased by SBCC for a term commencing with the
date of this Agreement and continuing until all of the Systems subject to
Remarketing are sold to the then Customer or other end user, and the provisions
of this Section will apply with respect to the Remarketing of Systems during
such term. The terms "Remarket" or "Remarketing" as used herein will mean the
-------- -----------
re-lease, rental, lease and sale of Systems as provided in this Section, on
prices, terms and conditions acceptable to SBCC and consistent with Viisage's
business practice. Viisage shall use its best commercially reasonable efforts
to Remarket Systems. No priority is required to be given
17 of 30
by Viisage to Remarket Systems owned by SBCC, but Viisage shall not discriminate
against SBCC in favor of any comparable Systems or components, or upgrades
owned, managed or remarketed by Viisage. Viisage will not replace any System
component owned by SBCC with components owned by Viisage or any other third
party that performs substantially the same functions as SBCC's related System
components (e.g. no "like for like" replacements). Viisage's Remarketing duties
shall, unless terminated earlier by SBCC in accordance with Section 11(k), be
effective with respect to each System and its components until the Termination
Amount with respect to such System has been reduced to zero or, if earlier, the
System has been finally disposed of.
(b) Reporting. For any period beginning after December 31, 1996, Viisage
---------
will provide periodic market reports to SBCC, which will be prepared to the best
of Viisage's knowledge and will show summaries of market information for goods
comparable to any Systems which were offered, represented, sold or brokered by
Viisage during the previous period. Such reports will be considered
confidential and covered by that certain confidentiality agreement dated as of
October 11, 1995, between SBCC and Viisage. Viisage also will provide to SBCC,
within 30 days after the end of any month in which Remarketing has been
conducted, a monthly Remarketing report, which will cover in detail a listing of
Systems which became Off-Lease and Systems or items which were Remarketed during
the prior month.
(c) Remarketing to Existing Customers. If provided for under the
---------------------------------
Assignment related to a System, Viisage may agree to extensions and/or renewals
of the term of the Contract with the Customer thereunder. Any such extension or
renewal must be entered into and become effective prior to the time that the
System becomes Off-Lease and the periodic payments required to be paid by the
Customer on account of the extension or renewal must equal or exceed the amount
specified in the Assignment as the Renewal Rental Amount. If any such renewal
or extension is entered into, all rent and other proceeds of Remarketing, net of
sales, use, property, excise, ad valorem, or similar taxes shall be SBCC's
property, and shall be remitted to SBCC, provided however, that Viisage may
----------------
retain any Payments which are in excess of the Renewal Rental Amounts required
to be paid to SBCC.
(d) Off-Lease Systems, Duties. At such time as a System ceases to be
-------------------------
subject to a Contract or any renewal or extension of a Contract, whether due to
the expiration or termination of the Contract or after a default by the
Customer, the System covered by such Contract or agreement will be deemed "Off-
---
Lease" and Viisage will diligently perform the following Remarketing services
-----
with respect to each such item of the System:
(i) Take possession of Off-Lease Equipment and/or Software as it
becomes Off-Lease and exercise such of the lessor's or vendor's remedies
under the appropriate Contract as SBCC may request.
(ii) Transport, store, refurbish, insure, perform such service and
repairs as necessary to place the System in proper working order and
otherwise perform such duties as set forth in Section 11(d);
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(iii) Certify the System components to the Remarketing lessee or
purchaser for inclusion under the manufacturer's standard maintenance
policy for equipment of like kind if available to the commercial market;
(iv) Seek new rental customers or purchasers for the System and/or
the components thereof (including, but not limited to, arranging for the
transportation, storage, maintenance and installation of the System, re-
licensing the Software components of the System, and making available to
any lessee, purchaser or user such operating and other Software, service,
and maintenance, spare parts, and training as necessary).
(e) Removal, Refurbishing. Viisage's refurbishment duties for Off-Lease
---------------------
Systems shall include, but are not limited to, a duty to return the Equipment to
an attractive appearance suitable for Remarketing, and a duty to cause the Off-
Lease Systems to perform in accordance with applicable product and certification
specifications for a System of the same model, version or release. Viisage
shall refurbish Off-Lease Systems on a schedule sufficient to make items of
refurbished Systems available to satisfy orders for Equipment or Systems of the
same type as the same are received by SBCC or Viisage. Upon the re-lease or
sale of any System or component of a System (whether Off-Lease or subject to
extensions or renewals of an existing Contract), Viisage shall, at no additional
charge, re-license any Software used in connection with the transferred
Equipment to the purchaser, lessee or user of such Equipment for the full term
of use of such Equipment and shall install or cause to be installed, such System
at the lessee or purchaser's place of business. Viisage shall also, subject to
SBCC's prior approval, (i) update Systems (in accordance with Viisage's standard
service procedures for said Equipment) to incorporate changes or new version
releases of Software and/or microcode which affects the System's value,
compatibility, performance, ability to be upgraded, or ability to accept
interchangeable parts in the same manner Viisage does for other comparable
equipment, and (ii) provide all engineering changes made to substantially all
other Equipment of the same model. SBCC shall not pay greater charges for
products and services covered under Sections 11 (d) and 11(e) than Viisage's
reasonable and customary charges for any such services and products for Systems
similar to such System..
(f) Terms of Remarketing. Subject to the provisions of Section 11(c), any
--------------------
proposed Remarketing of a System will be with parties and upon terms (including
but not limited to price or rental term) and conditions satisfactory to SBCC in
its discretion. Viisage will transmit to SBCC for approval:
(i) The identity of those prospective lessees, users or purchasers
who are considered reasonable prospects to lease or purchase Systems,
setting forth the name (and address if reasonably available) of each such
party;
(ii) A copy of each proposed lease, renewal, extension or contract
for the sale of the System, as the case may be, together with a copy of any
other agreement that may exist or be under consideration between Viisage
and each proposed lessee, user or purchaser, as the case may be, relating
to the System or the leasing or sale thereof; and
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(iii) Sufficient credit information (as may be reasonably requested
by SBCC and which can be reasonably provided by Viisage) with respect to
each proposed lessee, user or installment purchaser to enable SBCC to make
an informed judgment as to the prospective lessee's, user's or purchaser's
creditworthiness, it being understood that any such information will be
provided without any warranty as to the accuracy of such information.
SBCC will notify Viisage in writing of its approval of any Remarketing
transaction proposed by Viisage. If such approval is not given prior to the
seventh (7) business day after SBCC receives the information, SBCC will be
deemed to have not approved the proposed transaction.
(g) Documentation. Upon the Remarketing of any System or portion of a
-------------
System, Viisage will promptly deliver to SBCC, in the case of a cash sale, the
executed contract for the sale of the Equipment and all other documents
effecting or evidencing such sale, and the collected sale proceeds, and, in the
case of a re-lease, installment sale or other arrangement, Viisage will promptly
deliver:
(i) Each assignable original executed lease or document of
extension or renewal with respect to the System;
(ii) All other documents, including executed financing statements in
appropriate form for filing and releases of any liens, necessary or
appropriate to evidence and record SBCC's title and interest in the System,
all moneys due with respect to the System, and rights under all contracts
and agreements concerning the System, and all proceeds of all of the
foregoing;
(iii) An executed assignment to SBCC of each lease or extension,
renewal agreement or Remarketing document;
(iv) If the re-lease is not to an existing Customer, an installation
certificate to the effect that such System has been installed and is ready
for use by the lessee or user; and a letter to each lessee from Viisage and
signed by an authorized representative of Viisage notifying such lessee of
the assignment to SBCC of Viisage's rights under the lease or agreement.
(h) Rates. In establishing rental or sales rates for Remarketing (except
-----
as provided in Section 11(c), Viisage shall apply rates that, in its best
commercial judgment, are the reasonable commercially available rates obtainable
for Systems of the same type. Viisage shall not offer any credits or discounts
to lessees or purchasers of Off-Lease stems not normally granted to like
customers.
(i) Remarketing Proceeds. All proceeds of any Remarketing, net of sales,
--------------------
use, property, excise, ad valorem, or similar taxes ("Remarketing Proceeds")
--------------------
shall be SBCC's property and shall, except as provided under Section 11(c), if
received by Viisage, be immediately remitted
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to SBCC by Viisage, in the form in which they were received. Except for Systems
Remarketed pursuant to Section 11(c), Viisage will be entitled to retain out of
Remarketing Proceeds for any System the amount of Viisage's direct costs of
Remarketing for such System (including sales commissions) up to five percent
(5%) of the original purchase price paid by SBCC for such System, plus (ii) such
of Viisage's documented direct costs as have been approved by SBCC and incurred
in connection with the services covered under Section 11(d) and Section11(e).
Viisage will not be entitled to any additional Remarketing Proceeds except as
provided under Section 11(m) or as otherwise agreed by SBCC in writing.
(j) Communications With Customers. SBCC may communicate directly with
-----------------------------
existing or prospective Customers, lessees or users of Systems if Viisage fails
to perform any of its Remarketing duties with respect to the System.
(k) Brokers; Termination of Remarketing. With respect to any Off-Lease
-----------------------------------
System and with prior notice to Viisage, SBCC may arrange sales to brokers or
dealers. If SBCC arranges a sale of any such System and notifies Viisage before
Viisage Remarkets such System to an end-user, SBCC will be free to conclude such
sale. Further, if any item of a System subject to Remarketing due to the
occurrence of a Customer default is Off-Lease for a period of ninety (90) days
or more, or if any item of a System subject to Remarketing due to any other
reason is Off-Lease for a period of ninety (90) days or more, SBCC may, upon ten
(10) days prior written notice, notify Viisage of SBCC's intention to Remarket
such System. If Viisage fails to Remarket the item within such ten (10) days,
SBCC or its designee may remarket such System on its own behalf. In the event
SBCC arranges a sale of a System or portion thereof to a broker or dealer or
undertakes to remarket any System, Viisage shall only be entitled to receive
payment of its permitted costs and expenses as provided under Section 11(i).
Viisage will not be entitled to any other compensation or residual sharing in
connection with the Remarketing of such System and all Remarketing Proceeds will
be for SBCC's account. Notwithstanding any sale to a broker or dealer or any
undertaking to remarket by SBCC, Viisage agrees that it will make available to
SBCC and to any lessee, purchaser or user of a remarketed System or component,
at prevailing commercial rates, all services, parts, attachments, maintenance
and upgrades as it generally makes available to owners or users of similar
Systems or components. Any Software to be remarketed as part of a System by SBCC
or by a broker or dealer shall be licensed, at no additional cost, to the end
user(s) of the Equipment components of the System. SBCC agrees that it will not
Remarket any Systems to any person or entity that is directly engaged in
competition with Viisage's digital identification system business
(l) Overseas Transactions. If conversion of any System component to a
---------------------
different model or modification of the System to allow its use in any country
other than the United States is required in connection with any remarketing,
Viisage will undertake such conversion, with SBCC's prior written approval, but
the cost thereof will be paid by SBCC. SBCC may require that some or all of
such Off-Lease System be transported by Viisage to destinations outside the
United States. In the event SBCC requests that items be transported outside the
United States, then SBCC will be responsible for the costs of such
transportation export permits, customs fee and duties.
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(m) Revenue Sharing. Provided that Viisage continues to Remarket any
---------------
System which is subject to this Agreement; after the Termination Amount with
respect to such System has been reduced to zero, all Remarketing Proceeds and
other proceeds received by SBCC from or on account of such System shall be paid
one half to SBCC and one-half to Viisage.
12. TERMINATION.
-----------
This Agreement shall continue in effect until terminated and may be
terminated by either party at any time upon thirty (30) days' written notice to
the other, provided, however, that all indemnities and all of the rights and
obligations of the parties which apply to the Systems, Payments and Assigned
Rights assigned and/or approvals and commitments given prior to such termination
shall survive such termination.
13. MISCELLANEOUS.
-------------
(a) Costs and Expenses. Viisage agrees to pay all reasonable costs and
------------------
expenses, including reasonable attorneys' and paralegals' fees, expenses and
court costs incurred by SBCC in enforcing any of the provisions of this
Agreement or in enforcing any of Viisage's obligations under any Assignment
(b) Waiver of Notice of Customer Default. Viisage waives further notice of
------------------------------------
any Customer Default under any Contract for a System purchased hereunder for
which SBCC has undertaken to effect collections under Section 7(f). Viisage
further consents and agrees that with regard to any Contract for which Viisage's
collection rights have terminated under Section 7(f) hereof, and that, without
affecting any of its liabilities or obligations under this Agreement or under
any Assignment, SBCC may agree with any Customer as to any modification,
alteration, release, compromise, extension, waiver, consent, or other similar or
dissimilar indulgence of, or with respect to any Contract.
(c) Notices. Any notice under this Agreement shall be in writing and shall
-------
be delivered in person, by overnight air courier or by United States first class
mail, postage prepaid, and addressed:
(i) if to Viisage, at Viisage's address set forth on the first page of
this Agreement, with a copy to Xxxxxxx X. Xxxxxxx, Esq., Finnegan, Hickey,
Xxxxxxxx & Xxxxxxx, P.C., 00 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000;
(ii) if to SBCC, at Xxx Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attn:
Senior Credit Officer; and
(iii) to either party at any other address as such party may, by notice as
herein provided, received by the other, designate as its address for all
notices under this Agreement.
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(d) Jury; Venue; Jurisdiction. This Agreement has been delivered for
-------------------------
acceptance by SBCC in Chicago, Illinois and shall be governed by and construed
in accordance with the internal laws of the State of Illinois. VIISAGE AND SBCC
EACH:
(I) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING FROM
---
OR RELATED TO THIS AGREEMENT;
(II) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED IN XXXX COUNTY, ILLINOIS, OVER ANY ACTION OR PROCEEDING
ARISING FROM OR RELATED TO THIS AGREEMENT;
(III) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT VIISAGE MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF ANY SUCH ACTION OR PROCEEDING;
(IV) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTIONS BY SUIT
ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND
(V) AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST
SBCC'S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY, CONCERNING ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT OTHER THAN
ONE LOCATED IN XXXX COUNTY, ILLINOIS.
Nothing in this Section shall affect or impair either party's right to serve
legal process in any manner permitted by law or to bring any action or
proceeding against the other in the courts of any other jurisdiction.
(e) Successors and Assigns; SBCC's Assignment. This Agreement shall be
-----------------------------------------
binding on, and inure to the benefit of, SBCC and Viisage and their respective
successors and assigns and contains their entire understanding and agreement
with respect to the subject matter of this Agreement. It is understood and
agreed that from time to time SBCC may, without notice to Viisage:
(i) decide that any or all of the purchases pursuant to this
Agreement shall be made by one or more of SBCC's affiliates, subsidiaries,
or subsidiaries of SBCC's affiliates;
(ii) assign or transfer all or a part of SBCC's right, title and
interest in any Systems, Payments or Assigned Rights and any related rights
under this Agreement, to any person; and
(iii) assign this Agreement in whole or in part and/or assign all or
part of SBCC's rights and benefits under this Agreement to one or more of
SBCC's affiliates, subsidiaries or subsidiaries of SBCC's affiliates.
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If one or more of SBCC's affiliates, subsidiaries or subsidiaries of SBCC's
affiliates purchase any Systems, Payments or Assigned Rights, the purchase or
purchases shall be made under the terms and conditions of this Agreement.
Despite the foregoing, SBCC agrees that it shall not to make any assignment
hereunder to any person or entity that is directly engaged in competition with
Viisage's digital identification system business.
(f) Viisage's Assignment. This Agreement is not assignable by Viisage;
--------------------
provided, however, that Viisage may assign and delegate all of its rights and
obligations hereunder to Viisage Technology, Inc., a Delaware corporation
("Viisage Delaware"), in connection with the transfer of the Viisage Technology
------------------
Division (being Viisage's digital imaging division) by Xxx Acquisition Corp. to
Viisage Delaware, such transfer to be made in consideration of shares of Viisage
Delaware's common stock in a transaction that is intended to qualify under
Section 351 of the Internal Revenue Code of 1986, as amended, provided that (i)
-------------
Viisage Delaware shall, immediately following completion of the transaction,
have assets and liabilities substantially similar to those shown in pro forma
financial statements previously disclosed to SBCC, and (ii) the transfer shall
be consented to by SBCC. From and after the date of such assignment, Viisage
Delaware shall become, and Xxx Acquisition Corp. shall cease to be, bound
hereunder and under any Assignment or other instrument, document or agreement
made or entered into by Viisage in connection herewith, and references herein to
Viisage shall be deemed to mean Viisage Delaware. Upon such assignment, Viisage
Delaware shall enter such agreements of assumption of this Agreement and shall
execute and deliver to SBCC such Uniform Commercial Code financing statements
consistent herewith for Systems purchased by SBCC hereunder as SBCC reasonably
may request to confirm Viisage Delaware's obligations hereunder.
(g) Reliance. All of the covenants, agreements, representations and
--------
warranties made by Viisage in this Agreement shall, notwithstanding any
investigation by SBCC, be deemed material and to have been relied upon by SBCC
with respect to each purchase made pursuant to this Agreement.
(h) Waivers. SBCC's knowledge of any breach of or non-compliance with any
-------
of Viisage's duties, agreements, representations or warranties shall not
constitute a waiver by SBCC. None of SBCC's rights under this Agreement will be
waived except in a writing signed by SBCC and any such waiver will be effective
only as to the matters expressly set forth in such writing.
(i) Illegality. SBCC's obligation to perform under this Agreement is
----------
limited by and subject to any and all applicable laws, rules and regulations.
Wherever possible, each provision of this Agreement shall be interpreted as
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Agreement.
SBCC and Viisage intend to comply with the laws of the State of Illinois, and
notwithstanding any provision to the contrary, Viisage shall not be required to
pay and SBCC shall not be permitted to collect interest in excess of the maximum
amount of interest permitted by law. If any excess interest is determined to
have been provided for by a court of competent jurisdiction, then: (i) Viisage
shall not be obligated to pay any excess
24 of 30
interest; (ii) any excess interest that SBCC may have received shall be applied
against any of Viisage's outstanding obligations or refunded to Viisage; (iii)
the interest rate(s) shall be automatically reduced to the maximum lawful rate
allowed under applicable law, and this Agreement and any related agreements
shall be deemed to have been, and shall be, reformed and modified to reflect
such reduction; and (iv) Viisage shall not have any action against SBCC for any
damages arising out of the payment or collection of any excess interest.
14. DEFINITIONS.
-----------
The following terms, wherever used in this Agreement, shall have the
meanings given to them in this Section. To the extent applicable, all of the
terms shall be determined in accordance with, and each of the components used
therein shall be afforded the meaning given under, generally accepted accounting
principles consistently applied with respect to prior periods:
"Add-On" has the meaning given in Section 10(a).
------
"Assigned Rights" with respect to a System means all rights with respect to
---------------
the ownership of the System, except as otherwise provided under Section 2(c),
including the rights under any Contract related to the System, all rights with
respect to any Payments related to the System, rights of enforcement and
remedies with respect to any Contract and/or Payments, and all related rights
under or with respect to any of the foregoing (whether deemed contract rights,
accounts, general intangibles or otherwise).
"Assignment" has the meaning given in Section 2(a).
----------
"Assumed Residual" means the projected value of a System purchased by SBCC,
----------------
as of the end of the projected term or renewal term of the Contract. The
Assumed Residual will be determined at the date of purchase and will be shown on
the Assignment relating to the System.
"Contract" means:
--------
(i) a non-cancelable lease agreement arising out of a lease of a
System or
(ii) an installment sale contract, other installment payment
agreement;
(iii) a Per Use Contract;
(iv) other chattel paper arising out of the sale, provision or
financing of a System
"Credit Default" with respect to any particular Contract or the Customer
--------------
thereunder means any payment default by such Customer which continues for a
period of 90 days, default by the Customer under the terms of the Contract (but
not including any default arising solely from the Customer's failure to make
Payments), the filing of a voluntary or involuntary bankruptcy petition naming
such Customer as debtor thereunder, the commencement of any other insolvency
25 of 30
proceedings by or against such Customer, the failure by such Customer to
continue its business or legal existence, the meeting by such Customer with a
committee of its creditors, the making of any assignment or the appointment of
any receiver for any such Creditor or its property, or any other similar event
evidencing an insolvency of or imposing upon or seeking any insolvency relief
for such Customer.
"Customer" means any party obligated with respect to a System other than
--------
the lessor, provider or vendor of the System covered thereby.
"Customer Guaranty" means any guaranty given to Viisage (or under which
-----------------
Viisage has rights) by any person or entity guaranteeing the payment and/or
performance of a Contract.
"Current Maturities of Long Term Debt" for an accounting period means the
------------------------------------
sum of the current portions of long term debt, capitalized leases and operating
leases due and to become due in such period.
"Debt to Worth Ratio" shall mean the ratio calculated as Liabilities
-------------------
divided by Tangible Net Worth.
----------
"Debt Service Coverage Ratio" shall be determined as of the end of fiscal
---------------------------
quarters, and, as of the end of a fiscal quarter, means the ratio calculated as
Operating Income for the four quarters ending as of the relevant fiscal quarter
divided by the Current Maturities of Long Term Debt for such 12-month period.
----------
"Discount Rate" for any System means the rate, as of the date of SBCC's
-------------
purchase, specified as the Discount Rate in Schedule A to this Agreement.
Changes to the Discount Rate may be announced by SBCC from time to time and will
apply prospectively to purchases made after the announced effective date.
"EBITDA" shall be determined as of the end of fiscal quarters, and, as of
------
the end of a fiscal quarter, means the net income for the four quarters ending
as of the relevant fiscal quarter plus the amounts by which gross income was, in
determining net income, reduced on account of depreciation, interest,
amortization and federal, state and local income tax expenses and/or tax
reserves.
"EBITDA to Interest Ratio" shall be determined as of the end of fiscal
------------------------
quarters, and, as of the end of a fiscal quarter, means the ratio calculated as
EBITDA for the four quarters ending as of the relevant fiscal quarter divided by
----------
interest expense for such 12-month period.
"EBITDA to Funded Debt Ratio" shall be determined as of the end of fiscal
---------------------------
quarters, and, as of the end of a fiscal quarter, means the ratio calculated as
EBITDA for the four quarters ending as of the relevant fiscal quarter, divided
-------
by the sum of current and deferred portions of long term debt, capital leases
--
and operating leases for the such 12-month period.
26 of 30
"Equipment" means digital imaging equipment and/or other goods which are
---------
sold or leased by Viisage under a Contract together with all additions,
replacements, substitutions, parts, repairs, accessories, accessions or
attachments to such property.
"Interest Coverage Ratio" shall be determined as of the end of fiscal
-----------------------
quarters, and, as of the end of a fiscal quarter, means the ratio calculated as
Operating Income for the four quarters ending as of the relevant fiscal quarter,
divided by interest expense for such 12-month period.
----------
"Liabilities" means all consolidated liabilities, obligations and
-----------
indebtedness to any person or entity of any and every kind and nature, whether
primary, secondary, direct, indirect, absolute, contingent, fixed, or otherwise,
heretofore, now or hereafter owing, due, or payable, however evidenced, created,
incurred, acquired or owing and however arising, whether under written or oral
agreement, by operation of law, or otherwise. Liabilities specifically includes
(i) all obligations or liabilities of any person or entity that are secured by
any lien, claim, encumbrance, or security interest upon property owned by
Viisage, even though Viisage has not assumed or become liable for the payment
thereof, (ii) all obligations or liabilities created or arising under any lease
of real or personal property, or conditional sale or other title retention
agreement with respect to property used or acquired, even though the rights and
remedies of the lessor, seller or lender thereunder are limited to repossession
of such property, (iii) all unfunded pension fund obligations and liabilities
and (iv) deferred taxes.
"Off-Lease System" has the meaning given in Section 11.
----------------
"Operating Income" shall be determined as of the end of fiscal quarters,
----------------
and, as of the end of a fiscal quarter, means net income for the four quarters
ending as of the relevant fiscal quarter, plus the amounts by which gross income
was, in determining net income, reduced on account of depreciation and
amortization
"Payment" means any payment, whether or not earned by performance,
-------
receivable by the vendor, lessor or provider on account of any related System
purchased by SBCC, including but not limited to all payments receivable under
any Contract covering or related to the System.
"Per-Use Contract" means a Contract under which the Payments to become due
----------------
(or some portion of the Payments) will be calculated by multiplying (i) the
amount or extent of System usage or production, measured numerically, by (ii) a
per-use, per-cycle, per-unit, etc., rate.
"Prime Rate" means the highest "Prime Rate" of interest quoted, from time
----------
to time, by The Wall Street Journal. If The Wall Street Journal ceases quoting
----------------------- -----------------------
a "Prime Rate", "Prime Rate" shall be determined by SBCC in good faith using
Statistical Release H.15 (519) published by the Board of Governors of the
Federal Reserve System or a comparable index chosen by SBCC. The "Prime Rate"
shall change effective on the date of the publication of any change in the
applicable index by which such "Prime Rate" is determined.
"Purchase Price" of a System covered by a Contract shall be computed as of
--------------
the date of purchase (or, if interim payments of the Purchase Price are made, on
the date of the first payment
27 of 30
of any interim payments of the Purchase Price) and shall be an amount equal to
the sum of (i) the present value of the Remittance Amounts for the System,
calculated using the Discount Rate, plus (ii) the present value of the Assumed
Residual of the System calculated using the Residual Discount Rate.
"Remarket" has the meaning given in Section 11.
--------
"Remarketing Proceeds" has the meaning given in Section 11.
--------------------
"Remittance Amount" means, with respect to any System for any period of
-----------------
time, the amount specified in the Assignment applicable to the System as the
"Remittance Amount" for such period, plus any prepayments or other amounts
received on account of the System, plus any additional amounts then due to SBCC
under the Contract or otherwise with respect to the System, plus, for any
Remittance Amount which is projected to be paid, but is not paid within ten (10)
days after the end of the month in which payment is projected, a monthly late
payment amount equal to one percent of the unpaid Remittance Amount as of the
end of the preceding month. If the Assignment does not specify a Remittance
Amount, the Remittance Amount for a System for a specified period will be an
amount determined in good faith to provide to SBCC an internal rate of return on
the System's Purchase Price, based on the originally anticipated Contract term,
equal to the Discount Rate.
"Renewal Rental Amount" means, with respect to any particular System
---------------------
purchased by SBCC hereunder, the periodic dollar amount to be paid by Viisage to
SBCC during Contract renewals and extensions, if any, for such System under
Section 11(c) hereof, which dollar amount shall be specified in the Assignment
for such System.
"Residual Discount Rate" for any System means the rate, as of the date of
----------------------
SBCC's purchase, specified as the Residual Discount Rate in Schedule A to this
Agreement. Changes to the Residual Discount Rate may be announced by SBCC from
time to time and will apply prospectively to purchases made by SBCC after the
announced effective date.
"Services" means design, installation, analysis, testing, monitoring,
--------
maintenance, development, training, support engineering, consulting or other
services taken or to be taken by Viisage, its designees and/or parties other
than the Customer under or in connection with a System or Contract.
"Software" means operating and applications Software products or code used
--------
in connection with the Equipment comprising a part of a System, together with
all upgrades, enhancements or supplements thereto.
"System" means a digital identification system that is designed, developed
------
or implemented by Viisage and that is sold, leased or otherwise made available
to a Customer, and includes Equipment, rights to use solutions and Software in
connection therewith, and other property which is sold, provided or leased by
Viisage, together with all additions, replacements, substitutions, parts,
repairs, accessories, accessions or attachments thereto.
28 of 30
"Tangible Net Worth" shall mean, as of any particular date, the
-------------------
difference between (a) total assets excluding all values attributable to
goodwill, patents, copyrights, trademarks, licenses, prepaid expense, other
general intangibles and accounts due from affiliated entities and (b) total
liabilities and deferred charges, including as liabilities all guarantees of the
indebtedness of affiliated entities.
"Termination Amount" with respect to any System will be an amount equal to
------------------
the sum of (i) the present value of any Remittance Amounts with respect to the
System which have not been received by SBCC, calculated using the Discount Rate
in effect on the date that the Purchase Price of the System was determined, plus
(ii) the present value of any unpaid Assumed Residual of the System, calculated
using the Residual Discount Rate in effect on the date that the Purchase Price
for the System was determined plus (iii) the amount of any costs, expenses or
sums payable to or recoverable by SBCC with respect to the System and any
related Contract.
"Termination Event" means: (i) Viisage's failure to timely pay any amount
-----------------
due under this Agreement or any Assignment, which failure is not remedied within
ten (10) business days; (ii) the breach or violation of any duties set forth in
Section 5(d) or 5(e) of this Agreement; (iii) the breach or violation of any
other of Viisage's duties set forth in this Agreement or any Assignment, and the
continuation thereof for sixty (60) days after written notice from SBCC; (iv)
Viisage's insolvency, inability to pay debts as they mature, making of an
assignment for the benefit of creditors, or the institution of any proceeding by
Viisage alleging that Viisage is insolvent or unable to pay Viisage's debts as
they mature, (v) the institution of any proceeding against Viisage alleging
that Viisage is insolvent or unable to pay its debts as they mature, which is
consented to by Viisage or under which Viisage is adjudicated to be a debtor in
a Bankruptcy case, or which is not withdrawn or dismissed within one hundred
eighty (180) days after its institution; or (vi) with respect to the affected
Contract only, the default, breach or violation of the Contract by any Customer.
"Upgrade" has the meaning given in Section 10(a).
-------
IN WITNESS WHEREOF, SBCC and Viisage have executed this Purchase Agreement
effective as of September 12, 1996.
SANWA BUSINESS CREDIT CORPORATION ("SBCC")
By: /s/ Xxx XxXxxxxx
___________________________________________
Title: Vice President, Vendor Finance Division
________________________________________
XXX ACQUISITION CORP. ("VIISAGE")
By: /s/ Xxxxxxx X. Xxxxxxxx
___________________________________________
Title: CFO, Viisage
________________________________________
29 of 30
Attachments:
Schedule A
Exhibit A (form of Assignment)
Exhibit B(form of notification letter)
30 of 30
Exhibits to
Exhibit 10.15
-------------
EXHIBIT A TO PURCHASE AGREEMENT
XXXX OF SALE AND ASSIGNMENT
FOR VALUE RECEIVED and pursuant to a Purchase Agreement dated (the "Agreement"),
Xxx Acquisition Corp., doing business under the assumed names of Xxx
Technologies and Viisage Technology, ("Viisage") hereby sells, assigns and
transfers to Sanwa Business Credit Corporation ("SBCC") all right, title and
interest of Viisage in and to
(i) the digital identification system identified on Schedule hereto,
including equipment, rights to use solutions and software products or code
in connection therewith, and other property which is sold, provided or
leased by Viisage to ("Customer") under the Contract (as defined below),
together with all accessions, accessories, parts, additions and attachments
attached thereto or used in connection therewith (to the extent that the
same are not removable without affecting the capacity, specifications,
performance or configuration of the System), and all replacements and
substitutions thereof or therefor, (all collectively the "System");
(ii) all payments, whether or not earned by performance, receivable by
Viisage or any vendor, lessor or provider on account of the System,
including but not limited to all payments receivable under the Contract
covering or related to the System ("Payments");
(iii) all rights with respect to the ownership of the System, except as
otherwise provided under Section 2(c) of that certain Purchase Agreement
between Viisage and SBCC which more specifically limits the scope of SBCC's
interest in proprietary rights, patents, copyrights and intellectual
property, including the rights under that certain between Viisage and the
Customer ("Contract") related to the System, all rights with respect to any
Payments related to the System, rights of enforcement and remedies with
respect to the Contract and/or Payments, and all related rights under or
with respect to any of the foregoing (whether deemed contract rights,
accounts, general intangibles or otherwise) collectively,
(iv) all guaranties given to Viisage (or under which Viisage has rights)
by any person or entity guaranteeing the payment and/or performance of the
Contract.
Notwithstanding anything herein or in the Agreement to the contrary,
Viisage has not assigned or delegated, and SBCC has not assumed or promised to
perform, any of Viisage's duties or
obligations under the Contract or with respect to any property referred to in or
covered by the Contract.
This Xxxx of Sale and Assignment is intended by the parties as an agreement
for the sale of the System and the assignment of the Contract referred to above.
However, in the event it is determined that this Xxxx Of Sale And Assignment is
an agreement for the making of a loan or loans, then as collateral security for
the payment of all amounts due and to become due to SBCC in connection with this
Xxxx Of Sale And Assignment and/or the Agreement, Viisage hereby grants to SBCC
a security interest in and to
(i) the System, Payments, Customer Guaranties and Assigned Rights
related to such System;
(ii) subject to Section 2(c) of the Purchase Agreement (which more
specifically limits the scope of SBCC's interest in proprietary rights,
patents, copyrights and intellectual property), all rights to receive
payments with respect to the Software and technology components of the
System and all rights, whether against the Customer or any licensor,
developer or servicer, and whether construed as accounts, general
intangibles, contract rights or otherwise, to use and re-license the use of
the Software to a user of the System or components thereof, together with
the rights of enforcement against any user in the event of a breach or
violation of the Contract; and all proceeds of any of the foregoing;
(iii) all additions, parts, accessions or attachments (to the extent that
the same are not removable without affecting the capacity, specifications,
performance or configuration of the System) and all replacements,
substitutions to or for such property; and
(iv) all proceeds of any of the foregoing.
The terms and conditions of this Xxxx Of Sale And Assignment, including,
but not limited to, Viisage's warranties with respect to the Contract and
System, Viisage's obligations to SBCC with respect to such Contract and System,
are as provided for in the Agreement, to which reference is hereby made for a
statement thereof All capitalized terms used in this Xxxx Of Sale And Assignment
shall have the same meaning herein as in the Agreement, unless a different
definition is specifically provided in this Xxxx of Sale and Assignment.
The "Remittance Amounts" for the Contract are specified by date and amount
on Schedule hereto, which is incorporated in full by this reference.
The projected initial term of the Contract is expected to run through the
month of
----------------------- begin optional terms ----------------
[optional] The "Assumed Residual" of the System covered by this Xxxx of
Sale and Assignment is S which is assumed to be paid on
[optional] The Contract is a "Per-Use Contract". Schedule hereto, (which
is incorporated in full by this reference) sets forth the value and number of
usage units projected under the Contract.
[optional] As provided for under Section 11(c) of the Agreement, Viisage
may agree to extensions and/or renewals of the term of the Contract with the
Customer. Any such extension or renewal must be entered into and become
effective prior to the time that the System becomes Off-Lease and the periodic
"Renewal Rental Amount" payments required on account of the extension or renewal
must equal or exceed the amount specified in Schedule as the renewal rental
amount.
[optional] Interim payments of the Purchase Price will be made as provided
in the Agreement. The total Purchase Price for the System is
$________________________. Interim payments in the amounts specified on
Schedule ____ hereto (which is incorporated in full by this reference) will be
made on the dates specified therefor on Schedule ___. Final payment of the
Purchase Price will be made on _______________________________. Schedule ___
hereto (which is incorporated in full by this reference) provides a schedule of
installation or delivery dates or other benchmarks for System components and
deliverables to be provided by Viisage, together with a schedule of Viisage's
projected direct System costs and months in which such costs are to be incurred.
If any of the conditions specified under Section 2(d) of the Agreement are not
satisfied on the scheduled date for any interim or final Purchase Price payment
or cease to be fully satisfied after an interim Purchase Price payment has been
paid, then SBCC's remaining obligation to purchase the System, Payments and
Assigned Rights shall become void and of no further effect, and Viisage will
immediately make payment to SBCC as provided in Section 2(e) of the Agreement.
---------------------------- end of optional terms -----------------------------
This Xxxx Of Sale And Assignment shall be governed by and construed in
accordance with the internal laws (as opposed to the conflicts of law
provisions) of the State of Illinois.
This Xxxx Of Sale And Assignment shall be binding upon and inure to the
benefit of Viisage and SBCC and their respective successors and assigns.
Dated: Xxx Acquisition Corp. (Viisage)
---------------
By:
--------------------------------------------------
Title:
-----------------------------------------------
ATTACHMENT: SCHEDULE A [optional] Show renewal rental amount if applicable;
[optional] show usage projections if applicable
[optional] SCHEDULE(S) _____ [schedules of interim and final
purchase price payments and conditions/benchmarks and costs]
SCHEDULE A
ATTACHED TO AND MADE A PART OF THAT CERTAIN PURCHASE
AGREEMENT
(THE "AGREEMENT") DATED SEPTEMBER 12,1996
BETWEEN XXX ACQUISITION CORPORATION
AND SANWA BUSINESS CREDIT CORPORATION ("SBCC")
1. Discount Rate. Contracts purchased pursuant to the Agreement will be
-------------
discounted to yield to SBCC a simple per annum interest rate equal to the sum of
the "Index Rate" plus 3 10 basis points.
2. Residual Discount Rate. Means a simple per annum interest rate equal
----------------------
to the sum of the "Index Rate" plus 500 basis points.
The "Index Rate" will be the "yield rate" as quoted in the most recent
----------
(prior to the purchase date or, if interim payments of the Purchase Price are
made, on the date of the first payment of any interim payments) edition of
Statistical Release H. 15 (519), as published by the Board of Governors of the
Federal Reserve System, for "This week" for "Treasury Constant Maturities"
having a maturity of five (5) years. In the event that the Board of Governors
ceases publishing H. 15 (519), the Index Rate will be determined using a
comparable index chosen by SBCC in good faith.
Agreed to this day of 1996.
---------------
XXX ACQUISITION CORP. SANWA BUSINESS CREDIT CORPORATION
By: By:
------------------------ --------------------------------
Title: Title:
--------------------- -----------------------------
EXHIBIT B TO PURCHASE AGREEMENT
NOTICE AND CONSENT TO ASSIGNMENT
--------------------------------
, 19
------------ ---
-------------------------
-------------------------
-------------------------
Re: _______________________ dated __________, 19__ (the "Agreement")
---------
between Xxx Acquisition Corporation ("Xxx") and __________________ ("User")
--- ----
Xxx gives notice to User that pursuant to the terms of an Assignment (the
"Assignment") it has assigned and transferred to Sanwa Business Credit
----------
Corporation ("SBCC") all of Xxx'x right, title and interest in and to the
----
equipment and other goods provided to User under the Contract and the right to
license related software to the user of such equipment and goods, together with
certain accessions, accessories, parts, additions and attachments attached
thereto or used in connection therewith (the "System"). Xxx has also assigned
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to SBCC all of Xxx'x right to receive payments with respect to the System and
all rights with respect to the ownership of the System, (excepting intellectual
property rights in the software and technology), including rights of enforcement
and remedies with respect to the Agreement and/or payments.
The Assignment does not relieve Xxx from the performance of any of its
obligations under the Agreement, nor shall the Assignment make or cause SBCC to
be liable for such obligations. User should settle all claims against Xxx,
whether arising under or related to the Agreement or otherwise, directly with
Xxx.
Xxx hereby irrevocably directs User, upon notice from Xxx or SBCC, to make
any and all payments required or permitted to be made pursuant to the Agreement
directly to SBCC at the following address: Sanwa Business Credit Corporation,
Xxx Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, or to such other
address as SBCC may specify. Xxx agrees that payment to SBCC in accordance with
the foregoing instructions will relieve User of its obligation to make such
payment to Xxx pursuant to the Agreement. UNTIL YOU RECEIVE NOTICE FROM XXX OR
SBCC THAT PAYMENTS ARE TO BE MADE TO SBCC, YOU SHOULD CONTINUE TO FORWARD
PAYMENT TO XXX AS CONTEMPLATED IN THE AGREEMENT.
User should not, without SBCC's prior written consent: (i) modify or amend
the Agreement, (ii) assign, encumber or sublet its rights under the Agreement or
in the System, or (iii) exercise any of its rights under the Agreement which are
exercisable only with the consent of Xxx.
A copy of each notice which User is required to give Xxx under the terms of
the Agreement should be sent by User to SBCC at its address set forth above by
certified mail, postage prepaid, or at such other address as SBCC may hereafter
notify User.
("Xxx")
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By:
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Name and Title:
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EXHIBIT A
ATTACHED TO AND MADE A PART OF THE FINANCING STATEMENT
EXECUTED BY XXX ACQUISITION CORP. (also doing business as Xxx
Technologies and Viisage Technology) AS DEBTOR AND SHOWING
SANWA BUSINESS CREDIT CORPORATION AS SECURED PARTY
This Financing Statement covers all of Debtor's right, title and interest
whatsoever in and to all of the following, whether now or hereafter existing or
acquired and wherever located:
(i) the digital identification system identified on Schedule A hereto,
including equipment, rights to use solutions and software products or code in
connection therewith, and other property which is sold, provided or leased by
Debtor to ______________________ ("Customer") under the Contract (as defined
below), together with all accessions, accessories, parts, additions and
attachments attached thereto or used in connection therewith (to the extent that
the same are not removable without affecting the capacity, specifications,
performance or configuration of the System), and all replacements and
substitutions thereof or therefor, (all collectively the "System");
(ii) all payments, whether or not earned by performance, receivable by
the Debtor or any vendor, lessor or provider on account of the System, including
but not limited to all payments receivable under the Contract covering or
related to the System ("Payments");
(iii) all rights with respect to the ownership of the System, except as
otherwise provided under Section 2(c) of the Purchase Agreement between Debtor
and Secured Party dated September 12,1996 which more specifically limits the
scope of SBCC's interest in proprietary rights, patents, copyrights and
intellectual property), including the rights under that certain between Debtor
and the Customer ("Contract") related to the System, all rights with respect to
any Payments related to the System, rights of enforcement and remedies with
respect to any Contract and/or Payments, and all related rights under or with
respect to any of the foregoing (whether deemed contract lights, accounts,
general intangibles or otherwise) (collectively, 00 11);
(iv) all rights to receive payments with respect to the software and
technology components of the System and all rights, whether against the Customer
or any licensor, developer or servicer, and whether construed as accounts,
general intangibles, contract rights or otherwise, to use and re-license the use
of the software to a user of the System or components thereof, together with the
rights of enforcement against any user in the event of a breach or violation of
the Contract,
DEBTOR'S INITIALS:
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(v) all guaranties given to Debtor (or under which Debtor has rights)
by any person or entity guaranteeing the payment and/or performance of the
Contract.
(vi) all additions, parts, accessions or attachments (to the extent that
the same are not removable without affecting the capacity, specifications,
performance or configuration of the System) and all replacements, substitutions
to or for such property; and
(vii) all proceeds of any of the foregoing.
DEBTOR'S INITIALS:
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