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