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EXHIBIT 10.16
ADDENDUM TO PRIVATE LABEL VENDOR AGREEMENT BETWEEN
MDA CAPITAL CORP & LIGHTHOUSE CAPITAL INC
THIS ADDENDUM TO PRIVATE LABEL VENDOR AGREEMENT is made as of January 15, 1997
by and between MDA CAPITAL CORP. ("Assignor"), both a corporation, and related
with its principle place of business at 00 Xxxx Xxx., Xxxxxxxxxxx, XX 00000 and
LIGHTHOUSE CAPITAL, INC, ("Assignee") a wholly owned subsidiary of Syracuse
Supply Company, Inc., with its headquarters at 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx,
XX 00000.
WITNESSETH
WHEREAS, Assignor in its ordinary course of business sells Equipment (as
such term is herein defined) to its customers; and
WHEREAS, Assignor proposes to give Assignee a right of first refusal to
provide leasing services to its customers; and
WHEREAS, Assignor desires to establish a Private Label Vendor Agreement
with addendum (as such term is herein defined) lease program, with Assignee
servicing the program; and
WHEREAS, Assignee desires to provide lease financing to qualified
customers of Assignor subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the agreements and covenants
contained herein, the parties hereto agree as follows:
I. DEFINITIONS
As used herein, all capitalized terms shall have the meanings set forth
below:
"Agreement" means the Private Label Vendor Agreement, any Addendums and
all Exhibits annexed hereto and made a part hereof, as may be amended,
supplemented and/or modified from time to time by the parties hereto.
"Approval Letter" means the letter providing the terms and conditions of
Assignee's approval of a customer, or a rejection of such credit application.
"Contract" means the lease, and all related documents in the form shown
as Exhibit A hereto, executed by an authorized representative of the Lessee;
which serves as evidence that the Lessee has entered into a financing obligation
with Assignor. And that the Equipment has been delivered to and accepted by the
Lessee. An Approval Letter shall be part of each lease
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"Distributor" means those sales representatives, independent companies,
and manufacturer representatives selected and authorized by Assignor to sell
products distributed and/or manufactured by Assignor or is affiliates.
"Equipment" means certain equipment, together with all components and
parts incorporated therein, sold or leased to a Lessee by the Distributor and
covered by a Contract.
"Lease Payments" means the monthly rental due from Lessee under the
terms of the Contract. Lease Payments are used interchangeably herein.
"Lessee" means a customer of Assignor, approved in an Approval Letter,
entering into a Contract for Equipment sold by a Distributor.
"Private Label" means an arrangement pursuant to which Assignor's name
and/or logo will appear prominently on the Contracts.
II. TERM AND TERMINATION
2.1 Term. This Agreement shall be deemed effective upon mutual execution. The
term of this Agreement shall continue from such effective date for a period of
one year, and will automatically renew for additional one year periods, unless
terminated by either party pursuant to the terms of subsection 2.2 herein.
2.2 Termination. Either party may terminate this Agreement at any time by
written notice given at least sixty (60) days prior to the effective date of
such termination. Upon termination of this Agreement, the obligations of the
parties with respect to applications not credit approved prior to the effective
date of termination shall cease.
For applications that are credit approved at the effective date of termination,
Assignee shall honor such approvals for the terms and under the conditions
described in subsections 3.4, 3.6, and 4.2 herein. The warranties, obligations,
and covenants of the parties with respect to Contracts prior to the effective
date of termination shall survive such termination and shall remain in effect
until the Contracts expire or are terminated.
III. OFFER AND ACCEPTANCE
3.1 Equipment to be Sold. The parties hereby agree that unless otherwise agreed
in writing, each transaction pursuant to this Agreement shall include the sale
of all Assignor's right, title and interest in the Equipment, but shall not
include assumption of its obligations or responsibilities with respect to
insurance of the Equipment, performance of the Equipment or any other obligation
or liability therein.
3.2 Credit Submission. In each instance in which Assignor shall wish to provide
lease financing for their customer, Assignee will require sufficient information
in order to make a credit determination, which shall at a minimum consist of the
following:
- payment terms requested:
- estimated delivery date;
- a completed credit application as shown in Exhibit B;
- any other information required by Assignee.
3.3 Confidentiality of Submissions. All information and materials furnished to
Assignee in the credit application, shall be held strictly confidential and
shall be used by Assignee solely for the purpose of
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making a determination. Assignee shall retain such credit information, and shall
return to Assignor such information when requested via fax or mail.
3.4 Credit Decision. The decision to accept or reject any proposed transaction
shall be at the sole discretion of Assignee. Within twenty-four (24) hours of
receipt of all required information, Assignee shall notify Assignor by fax on
the Approval Letter of its decision to approve or reject a proposed transaction
at its primary place of business.
3.5 Credit Rejection.
Assignee is not a credit reporting agency and consequently Assignor agrees that
any details provided to substantiate Assignee's reason(s) for rejection of a
specific proposed transaction represent strictly Assignee's opinion of the
credit and financial risk(s) involved in the proposed transaction, and not
statements of fact. Assignor agrees to keep all such details and statements of
opinion strictly confidential, to the extent permitted by applicable law.
Assignee agrees to provide to any such proposed Lessee any notice required by
the Federal Equal Credit Opportunity Act.
3.6 Credit Approval. The Approval Letter shall give complete details regarding
the terms and conditions of the approval and shall be valid for a period of
sixty (60) days from the date of the Approval Letter, subject to interest rate
movements set forth below. Assignee may adjust the rates in accordance with
corresponding movements in like term US Treasury as listed in the Wall Street
Journal. Assignee's credit approval may be revoked prior to the funding of a
transaction should the Lessee thereunder experience a material adverse change in
its financial condition or ability to pay in Assignee's sole discretion.
IV. DOCUMENTATION and ADMINISTRATION
4.1 No Recourse to Assignor. Assignee hereby assumes all risk of the lessee's
insolvency or financial inability to make payments.
4.2 Documents Required.
a) Contract shown in Exhibit A or as amended from time to time by Assignee
will be used along with the standard terms and conditions. Personal
Guaranties shall be required unless waived by Assignee. Assignee
reserves the right to require additional documentation if the individual
circumstances warrant. Documentation may be prepared by Assignee or
Assignor and sent directly to the Lessee. All Lease Payment checks are
to be made payable to Assignee.
b) Assignor will provide Assignee with an invoice or xxxx of sale which
details the Equipment being sold (including serial numbers), the ship to
address of the customer and the xxxx to address of Assignee.
c) Upon receipt of the above, Assignee will immediately examine the
Contract and promptly notify Assignor of any deficiencies, if any.
d) All Contracts shall require a proof of insurance as listed therein from
the Lessee, adding Assignee as additional insured and loss payee, and
"Certificate of Complete" from PSEF and/or ASPRS.
e) All Contracts shall required UCC-1 filings and the cost of such shall be
borne by either the Lessee or Assignor. An administrative fee of $200.00
shall be charged on each contract to cover this cost.
4.3 Funding.
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a) Payment will be made within twenty-four (24) hours once all properly
executed Contracts have been received by Assignee, and delivery and
acceptance of Lease and the Equipment subject thereto, of Lessee is
confirmed by Assignee.
b) Items to be funded will include Equipment, (shipping and installation
"soft costs" not to exceed 20% of Equipment cost) and acceptable soft
costs.
V. COMMUNICATION and MARKETING
5.1 Support. Assignee will support the marketing efforts of Assignor and the
marketing of this lease finance program to authorized Distributors of Assignor
products by having office hours from 8:00 am to 8:00 pm Monday through Friday,
(with certain exceptions), and ongoing sales and marketing programs and lease
training to Assignor personnel at lease once per year. Assignor will support the
efforts of Assignee by expressly noting in its literature and marketing material
that this Agreement is the sole leasing program to be offered by Assignor and
it's Distributor and actively promoting leasing in the selling process, provided
that Assignor's customers may choose to finance Equipment elsewhere.
5.2 Communication/Notices.
a) The following toll free numbers are established:
Central Processing Center: (000) 000-0000
Fax Transmissions: (000) 000-0000
Marketing Support: (000) 000-0000
b) Notices under this Agreement shall be deemed to have been given if
delivered by mail, or by courier service to the other party at the
address stated below or such other address as such party may provide by
written notice.
If to Lighthouse Capital, Inc. If to MDA Capital Corp:
Attn: VP Administration Attn:
Lighthouse Capital, Inc. MDA Capital Corp
XX Xxx 0000 0000 Xxxxxx Xxxxxx Xxxxxxx
0000 Xxxxx Xxxxxx Xx. Xxxxx 0000
Xxxxxxxx, XX 00000 Xxx Xxxxx, XX 00000
5.3 Rental Factors. Assignee will provide competitive rental factors which it
may change at its sole discretion. The current rates in effect are shown in
Exhibit D. Special lease structures or deviations from those set forth in the
Exhibit D will be handled on a case by case basis. Assignee will support special
marketing programs, in it's sole discretion, desired by Assignor. Rates on
Exhibit D(i) are provided with 6 points built in for the sole benefit of
Assignor. Commissions shall be paid directly to Assignor monthly.
5.4 Marketing Assignee Services. Assignor will inform its Distributors of the
benefits to using the services under this agreement. Assignor will provide
access to its sales personnel and facilitate the attendance of Assignee's and
Assignor's personnel at scheduled sales meetings.
5.6 Distributor List. A current authorized Distributor listing will be provided
to Assignee along with any supporting information relative to the nature of the
Distributor's business and/or finances. Additions to or deletions from the
Distributor list will be provided in a timely manner. All information received
by Assignee will be treated as proprietary and confidential.
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VI. LESSEE CANCELLATION
6.1 Lessee Cancellation. Any Lessee that defaults or cancels a Contract due to
failure of MDA/LySonix to perform any maintenance, services, failure of, related
governmental approvals or otherwise shall be considered an event of default
under Section 10.1 and be subject to the remedies of section 10.2(a). Any such
default shall have a cure period of thirty (30) days from the date of written
notification by Assignee to Assignor at the address listed in Section 5.2(b).
VII. REMARKETING
7.1 Agreement to Remarket. In order to allow Assignor to control the after
market for its Equipment and in an attempt to obtain reasonable proceeds from
Equipment under a defaulted contract, Assignor shall have the obligation to
remarket and/or repurchase such Equipment of Assignee as provided below.
7.2 Repossession. When Assignee has requested Assignor to remarket Equipment,
Assignee shall transfer legal right to such Equipment to Assignor and Assignor
agrees to retake the Equipment on behalf of Assignor upon such transfer by
Assignor. The risk of loss to any Equipment so transferred shall pass to
Assignor at the time and place of transfer.
7.3 Appraisal. Assignor shall appraise the Equipment and advise Assignee in
writing of its best estimate of the Equipment's market value in an "as is/where
is" condition. Additionally, Assignor shall makes its best estimate of all
recommended repairs and/or reconditioning costs and shall advise Assignee in
writing of its best estimate of the market value such Equipment would have after
recommended repairs and reconditioning are completed.
7.4 Repairs. Assignor agrees to perform such repairs and reconditioning as
Assignee may direct, and shall not cause any repairs or reconditioning to be
performed without the prior written consent of Assignee. Assignor shall keep
accurate records of all costs and expenses incurred in the performance of such
repair and reconditioning.
7.5 Manner of Remarketing. Assignor shall remarket the Equipment on a
non-discriminatory, priority basis within the 120 day Remarketing Period for
cash or on such extended payment terms as Assignee shall approve. Assignor in
the ordinary course of its business will be engaged in the marketing of other
equipment and such activity shall not be a breach of this Agreement
7.6 Distribution of Remarketing Proceeds. If a buyer or new lessee is obtained
by Assignor, the remarketing proceeds shall be distributed as follows:
a) first to the recovery by Assignor for the costs and expenses of
repossession, remarketing and reconditioning the Equipment as agreed to
in writing by Assignee;
b) then to Assignee for recovery of its Net Book Value of the Contract, and
the recovery of Assignee's other reasonable out-of-pocket expenses
incurred with respect to such lease and legal fees, if any; and last,
the remainder, if any, to be paid 50% to Assignor and 50% to Assignee,
as allowed by law.
7.7 Repurchase of Equipment. Assignor shall have the option to repurchase any
defaulted Contract for the Net Book Value plus any other outstanding amounts due
on such Contract. Such option shall become an obligation of the Assignor after
one hundred-twenty (120) days from default notice.
VIII. REPRESENTATIONS, WARRANTIES AND COVENANTS
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8.1 Each Party Represents And Warrants To One Another That:
a) each is a corporation duly organized, validly existing and in good
standing under the laws of its representative state of incorporation.
That each is in good standing in every jurisdiction where the nature of
its business requires it to be qualified;
b) each has full power, authority and legal right to execute, deliver and
perform this Agreement and the execution, delivery and performance
hereof has been duly authorized by all necessary corporate action;
c) this Agreement has been duly executed and constitutes a legal, valid and
binding obligation enforceable in accordance with its terms; and
d) the execution, delivery and performance of this Agreement (1) is not in
contravention of any agreement or indenture by which the parties are
bound or by which properties may be affected, (2) does not require any
stockholder approval, or any approval or consent of, or filing or
registration with, any governmental body or regulatory authority or
agency, or any approval or consent of any trustees or holders of any
indebtedness or obligations of such party, or such approval or consent
has been obtained and (3) does not contravene any law, regulation,
judgment or decree applicable, or certificate of incorporation or
by-laws.
8.2 Assignor Representations and Warranties.
a) The Equipment shall perform in accordance with any Equipment performance
standards provided for in the Contract or otherwise.
b) There shall not have been and will not be any act, failure to act,
omission or misrepresentation of Assignor which (i) nullifies, modifies,
limits or in any way affects the genuineness, validity or enforceability
of any obligation of a Lessee, or (ii) modifies or amends the Contract
in any respect, or (iii) modifies the uses, maintenance or warranties of
the related Equipment.
c) Each Contract and Equipment related thereto shall not be subject to any
offset, deduction, defense, counter claim or lien as the result of any
act, failure to act, omission, or any alleged act, failure to act or
omission of Assignor.
d) Assignor will promptly fulfill and perform all obligations, covenants,
liabilities, warranties and duties, if any, on its part to be fulfilled
and performed in connection with the Contract and Equipment related
thereto and any other agreements or instruments executed by Assignor
with respect to the installation, maintenance or servicing by Assignor
of the Equipment covered by the Contract. Assignee or any subsequent
assignee shall have no obligation or liability under the Contract and
shall not be obligated to perform any of Assignor's obligations
thereunder; Assignor's obligations under the Contract may be performed
by Assignee or any subsequent assignee, however, without releasing
Assignor therefrom.
e) Assignor shall provide to Assignee within 90 days of each year end,
audited financial statements and any other information reasonably
requested by Assignee. Notice of any action or event that could cause a
material change in Assignor shall be provided to Assignee immediately.
Additionally, Assignor is not the subject of any litigation, charge,
lien, or other such encumbrance and shall notify PMEL immediately upon
becoming the subject of such an act.
f) Assignor has fully informed Lessee of the training courses,
certification requirement and malpractice insurance coverage exemption
for non-compliance. All Lessee have a certified employee at the time of
Contract acceptance. Such certification shall be done by PSEF or ASPRS.
IX. INDEMNITIES
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9.1 Indemnity by Assignor. Assignor shall without limiting any other rights
which Assignee has hereunder, defend, indemnify, protect and save Assignee
harmless against and from any third party claims, damages, losses, liabilities,
obligations, demands, defenses, judgments, costs including reasonable attorney's
fees, disbursements or expense of any kind or of any nature whatsoever which may
be imposed upon, incurred by or asserted or awarded against Assignee and
arising from any breach by Assignor of the representations, warranties or
covenants made by Assignor in this Agreement, or any alleged infringement or
violation of a patent, copyright, trade secret or other proprietary right of any
third party based upon the sale, lease, use, operation or other disposition of
the Equipment (including the Equipment as modified or upgraded in any way)
unless such claim, loss or damage shall be based upon the negligence or
misconduct of Assignee.
9.2 Notice. If any claim or action is brought or threatened against Assignee
based on a claim, loss or damage for which Assignor is required to provide
indemnity hereunder, Assignee shall promptly notify Assignor in writing of such
claim.
9.3 Defense of Claim. Following the receipt of notice by Assignor then
unless otherwise directed by Assignee, Assignor shall defend such actions or
claims at its expense and pay all costs, damages and attorneys' fees which may
be awarded in any such action against Assignee. Assignee shall reasonably
cooperate (at the expense of Assignor) as may be reasonably requested by
Assignor to assist Assignor in the settlement and defense of such claims.
X. DEFAULTS and REMEDIES
10.1 Events of Default. The following shall be events of default hereunder:
a) The occurrence of a material breach by Assignor of any warranty,
representation or obligation contained in this Agreement;
b) Any Contract delivered to Assignee by Assignor is found to be executed
by someone other than the Lessee;
c) Assignor or its Distributor suspends or ceases to do business as a going
concern, becomes bankrupt, insolvent, unable to pay its debts as they
become due, or makes an assignment for the benefit of creditors.
10.2 Remedies. In the event of default hereunder, the following remedies shall
be available to Assignee:
a) In the event of a default described in Paragraphs 10.l(a), (b), or (c)
above, Assignor agrees, upon receipt of written request from Assignee, to
repurchase the affected Contract within five (5) days after Assignee's demand at
the present value, plus; any outstanding amounts due, applicable taxes, any
residual position, and any fees or other costs that Assignee may incur, for
example reasonable legal fees or costs to refile appropriate UCC's.
10.3 Cancellation. In the event of any breach or default by either Assignee or
Assignor of any terms and conditions contained herein, the aggrieved party shall
provide the other party with written notice thereof setting forth in reasonable
detail the basis of such breach or default, whereupon the defaulting party shall
have thirty (30) days to cure, and absent such cure, the aggrieved party may, in
addition to exercising any and all other remedies available herein, at law or in
equity, by written notice to the other party cancel this Agreement, effective
upon notice of cancellation.
XI. MISCELLANEOUS
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11.1 Power of Attorney. Assignor hereby appoints Assignee as Assignor's
attorney-in-fact to do, at Assignee's option, all lawful acts and things which
Assignee may deem necessary in accordance with this Agreement on behalf of
Assignor.
11.2 Assignments. PMEL may assign any or all of its right or obligations in the
Contracts as provided for therein.
11.3 Survival. All covenants, agreements, representation, warranties, and
indemnities (including any obligation to repurchase associated therewith)
contained in this Agreement (and any and each other agreement or instrument
delivered pursuant hereto) shall survive (i) the execution and delivery of this
Agreement, (ii) the consummation of the transactions contemplated hereby, (iii)
repurchase of any Contract by Assignor and (iv) termination of this Agreement
(but only with respect to assignments or credit approvals executed or
outstanding prior to the date of any such termination.
11.4 Governing Law. This Agreement shall be subject to and governed by the laws
of the State of New York.
11.5 Independent Contractors. Assignee and Assignor acknowledge that they are
separate entities, each of which has entered into this Agreement for independent
business reasons, and that neither Assignee nor Assignor has acted, acts, or
shall be deemed to have acted or act as an agent for the other.
11.6 Headings. The headings of the sections of this Agreement are for
convenience only and shall not be used to interpret or construe this Agreement.
11.7 Entirety; Amendments. This Agreement together with the Exhibits referred to
herein, constitute the entire agreement between Assignee and Assignor as to the
subject matter contemplated herein, and supersedes all prior agreements and
understandings relating thereto. No other agreements will be effective to
change, modify or terminate this Agreement in whole or in part unless such
agreement is in writing and duly executed by the party to be charged except as
expressly set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[SIG] 1/15/97 [SIG] 1/21/97
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Authorized Signature Date Authorized Signature Date
MDA Capital Corp
3800 Xxxxxx Xxxxxx Parkway Lighthouse Capital, Inc
Xxxxx 0000 0000 Xxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000 XX Xxx 0000
Xxxxxxxx, XX 00000
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