Exhibit 1(a)
Prestige Capital Agreement
Prestige Capital Corporation
0 XXXXXXXXX XXXXX XXXX XXX, XXX XXXXXX X0000 (000) 000-0000
Purchase and Sale Agreement
1. ASSIGNMENT. PRESTIGE CAPITAL CORPORATION ("Prestige") hereby buys and POWER
SOURCE CORPORATION ("Seller") hereby sells, transfers and assigns all of
Seller's right, title and interest in and to those specific accounts receivable
owing to Seller as set forth on the assignment forms provided by Prestige (the
"Assignments") together with all rights of action accrued or to accrue thereon,
including without limitation, full power to collect, xxx for, compromise, assign
or in any other manner enforce collection thereof in Prestige's name or
otherwise. (All of Seller's accounts receivable and contract rights which are
presently or at any time hereafter assigned by Seller, and accepted by Prestige,
are collectively referred to as the "Accounts".)
2. DISCOUNT. Prestige's purchase of the Accounts from Seller is at a discount
fee of TEN percent ( 10%) from the face value of each Account.
3. RESERVE. Upon Prestige's receipt and acceptance of each Agreement, Prestige
shall pay to Seller SEVENTY percent (70%) of the net value of the Accounts
therein described (the "Down Payment"). Prestige will hold in reserve the
difference between the Purchase Price (hereinafter defined) and the Down Payment
(the "Reserve") and will pay to Seller the Reserve, less any sums due Prestige
hereunder, on the Friday following the week in which all Accounts set forth on
the applicable Assignment have been collected in good funds, charged back and/or
deemed collected by Prestige due to an account debtor's (hereinafter defined)
insolvency. For purposes of this Agreement, the term "Purchase Price" shall mean
the net face value of Accounts, less: Prestige's discount fee described in
paragraph 2 above; returns, credits, allowances and discounts on the shortest
or, at Prestige's option, on alternative terms of sale offered by Seller to
account debtors; and less all other sums charged or chargeable to Seller's
account.
4. REBATES. As an inducement to Seller to facilitate the prompt payment of the
Account s from Seller's customers ("account debtor"), Prestige agrees to return
to Seller, a rebate of SIX percent ( 6 %), if the Accounts are paid to Prestige
within 30 days, a rebate of FIVE percent ( 5%) if the Accounts are paid to
Prestige within 45 days, a rebate of FOUR percent (4%) if the Accounts are paid
to Prestige within 60 days, a rebate of TWO percent (2%) if the Accounts are
paid to Prestige within 90 days.
5. WARRANTIES, REPRESENTATIONS AND COVENANTS. As an inducement for Prestige's
entering into this Agreement and with full knowledge that the truth and accuracy
of the warranties, representations and covenants in this Agreement are being
relied upon by Prestige, instead of the delay of a complete credit
investigation, Seller warrants, represents and covenants that:
(a) Seller is properly licensed and authorized to operate the business of
electric service provider;
(b) Seller is the sole and absolute owner of the Accounts and has the full legal
right to make said sale assignment and transfer:
(c) The correct amount of each Account will be set forth on the Assignments;
(d) Each Account is an accurate and undisputed statement of indebtedness from
and account debtor for a sum certain, without offset or counterclaim and which
is due and payable in ninety days or less;
(e) Each Account is an accurate statement of a bona fide sale, delivery and
acceptance of merchandise or performance of service by Seller to an account
debtor;
(f) Seller does not own, control or exercise dominion in any way whatsoever,
over the business of any account debtor;
(g) All financial records, statements, books or other documents shown to
Prestige by Seller at any time either before or after the signing of this
Agreement are true and accurate;
(h) Seller will not under any circumstances or in any manner whatsoever,
interfere with any of Prestige's rights under this Agreement;
(i) Seller has not and will not, at any time, permit any lien, security interest
or encumbrance to be created upon any of its accounts receivable
(j) Seller will not change or modify the terms of the Accounts with any account
debtor unless Prestige first consents in writing;
(k) Seller will notify Prestige in writing in advance of: any change in Seller's
place of business; Seller having or acquiring more than one place of business;
any change in Seller's chief executive office; and/or any change in the office
or offices where Seller's books and records concerning accounts receivables are
kept;
(l) Seller will immediately notify Prestige of any proposed or actual change of
the Seller's and/or account debtor's identity, legal entity or corporate
structure.
(m) All invoices will state plainly on their face that the Accounts represented
thereby have been sold and assigned to Prestige and are payable only and
directly to Prestige; and
(n) No Account shall be on a xxxx-and-hold, guaranteed sale, sale-and-return,
sale on approval, consignment or any other repurchase or return basis;
The warranties, representations, and covenants contained in this paragraph 5
shall be continuous and be deemed to be renewed each xxxx Xxxxxx assigns
Accounts to Prestige. Notwithstanding the provisions contained in paragraph 6 of
this Agreement, Prestige shall have recourse against the Seller in the event
that any of the warranties, representations and covenants set forth in this
paragraph 5 are breached.
6. NO RECOURSE. Prestige shall have recourse against Seller in all instances
except if payments are not received due to the "Insolvency" of an account debtor
within 120 days of an invoice date. For purposes of the foregoing, Insolvency
shall be deemed to have occurred only when: (a) a voluntary or involuntary
bankruptcy proceeding for the relief of an account debtor under either Chapter 7
or Chapter 11 shall have been instituted in a United States Bankruptcy Court;
(b) a receiver is appointed for the whole or any part of the property of an
account debtor; (c) an account debtor's assets shall have been sold under a writ
of execution or attachments, or a writ of execution shall have been returned
unsatisfied; (d) an account debtor shall have absconded; or e) an account
debtor's assets shall have been sold under levy by any taxing authority or by a
landlord.
7. CHARGE-BACK. In the event that ay Account is not paid within 90 days of
invoice date for any reason whatsoever (other than as a result of an account
debtor's Insolvency ), including , without limitation, any alleged defense,
counterclaim, offset, dispute or other claim (real or merely asserted) whether
arising from or relating to the sale of goods or rendition of services or
arising from or relating to any other transactions or occurrence, then in any
such event Prestige shall have the right to chargeback such Account to Seller.
No chargeback shall be deemed a reassignment to Seller of the Account involved.
Seller acknowledges that all amounts chargeable to Seller's account under this
Agreement shall be payable by Seller on demand.
8. NOTICE OF DISPUTE. Seller must immediately notify Prestige of any dispute
between any account debtor and Seller.
9. SETTLEMENT OF DISPUTE. Prestige may, at its option, settle any dispute with
any account debtor. Such settlement does not relieve Seller of any of its
obligations under this Agreement.
10. SOLE PROPERTY. Once Prestige has purchased the Accounts, the payment from
account debtors relative to the Accounts is the sole property of Prestige. Any
interference by Seller with this payment will result in civil and/or criminal
liability.
11. SECURITY INTEREST. As a further inducement for Prestige to enter into this
Agreement, and as security for the prompt performance, observance and payment of
all obligations owing by Seller to Prestige herein, Seller hereby grants to
Prestige a continuing security interest in and lien upon the following (herein
collectively referred to as the "Collateral": all accounts, instruments,
documents, chattel paper and general intangibles (as such terms are defined in
the Uniform Commercial Code), whether now owned or hereafter created or acquired
by Seller, wherever located, and all replacements and substitutions therefore,
accessions thereto, and products and proceeds thereof, and all property of
Seller at any time in Prestige's possessions.
12. FINANCING STATEMENTS. Seller will, at its expense perform all acts and
execute all documents requested by Prestige at any time to evidence, perfect,
maintain and enforce Prestige's security interest and other rights in the
Collateral and the priority thereof. Upon request, at any time and from time to
time, Seller will execute and deliver to Prestige one or more UCC financing
statements (in form and substance satisfactory to Prestige and its counsel).
13. HOLD IN TRUST. Seller will hold in trust and safekeeping, as the property of
Prestige and immediately turn over to Prestige, the identical check or other
form of payment received by Seller if payment on the Accounts comes into
Seller's possession. Should Seller come into possession of a check comprising
payments owing to both Seller and Prestige, Seller shall turn over said check to
Prestige. Thereafter, Prestige will refund Seller's portion, if any, to Seller.
14. FINANCIAL RECORDS. Seller will furnish to Prestige financial statements and
such other information as is, from time to time, requested by Prestige.
15. BOOK ENTRY. Seller will immediately, upon the sale of the Accounts, make the
proper entry on its books and records disclosing the absolute sale of the
Accounts to Prestige.
16. POWER OF ATTORNEY. In order to implement this Agreement, Seller irrevocably
appoints Prestige its special attorney in fact or agent with power to:
(a) Strike out Seller's address on any correspondence to any account debtor and
put on Prestige's address;
(b) Receive and open all mail addressed to Seller via Prestige's address;
(c) Endorse the name of Seller or Seller's trade name on any checks or other
evidences of payment that may come into the possession of Prestige in connection
with the Accounts;
(d) In Seller's name, or otherwise demand, xxx for, collect any and all monies
due in connection with the Accounts; and
(e) Compromise, prosecute or defend any action, claim or proceeding relative to
the Accounts; The authority granted to Prestige shall remain in full force and
effect until the Accounts are paid in full and the entire indebtedness of Seller
to Prestige is discharged.
17. NOTIFICATIONS, VERIFICATION OF ACCOUNTS
(a) Without in any way limiting the terms and provisions of paragraph 5 (m)
hereinabove, Prestige may at any time and from time to time, in its sole
discretion, notify any account debtor to make payment on any of Seller's open
invoices to Prestige;
(b) Prestige, may at any time verify the Accounts utililizing an audit control
company, any agent of Prestige or any other means deemed appropriate by
Prestige.
18. NO ASSUMPTION. Nothing contained in this Agreement shall be deemed to impose
any duty or obligation upon Prestige in favor of any account debtor and/or any
other party in connection with the Accounts.
19. FUTURE ASSIGNMENTS. Seller may from time to time, at Seller's option, sell,
transfer and assign different Accounts to Prestige. The future sale of any
Accounts shall be subject to and governed by this Agreement and such Accounts
shall be identified by separate and subsequent Assignments.
20. DISCRETION. Nothing contained in this Agreement shall be construed to impose
any obligation upon Prestige to purchase Accounts from Seller. Prestige shall at
its sole discretion determine which Accounts it shall purchase. Further,
Prestige shall have the absolute right at any time to cease accepting any
further assignments from Seller.
21. LEGAL FEES; EXPENSES. Seller will pay on demand any and all collection
expenses and reasonable attorney's fees that Prestige incurs in the event it
should become necessary for Prestige to enforce its rights under this Agreement.
In addition, Seller will pay on demand all costs and expenses incurred by
Prestige in connection with the preparation, execution and delivery of this
Agreement and any supplement or modification thereof, and in any way relating to
the transactions contemplated by this Agreement, including, without limitation,
all reasonable attorneys' fees, Federal Express costs (or similar expenses),
wire transfer costs, certified mail costs, facsimile transmission costs and lien
search costs.
22. BINDING ON FUTURE PARTIES. This Agreemetn shall inure to the benefit of and
is binding upon the heirs, executors, administrators, successors and assigns of
the parties hereto, except that Seller may not assign or transfer any or all of
its rights and obligations under this Agreement to any party without the prior
written consent of Prestige.
23. WAIVER; ENTIRE AGREEMENT. No failure or delay on Prestige's part in
exercising any right, power or remedy granted to Prestige herein, will
constitute or operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right set forth herein. This
Agreement contains the entire agreement and understanding of the parties hereto
and no amendment, modification or waiver of, or consent with respect to, any
provision of this Agreement, will in any event be effective unless the same is
in writing and signed and delivered by Prestige.
24. NEW JERSEY LAW. This agreement shall be deemed executed in the State of New
Jersey and, in all respects, shall be governed and construed in accordance with
the laws of the State of New Jersey.
25. INDEMNITY. Seller shall hold Prestige harmless from and against any action
or other proceeding brought by any account debtor against Prestige arising from
Prestig's collecting or attempting to collect any of the Accounts.
26. TERMS. This Agreement will remain in effect until October 15, 2000 (the
"Term"). Thereafter, the Term will be automatically extended for successive
periods of one (1) year unless either party provides the other with a written
notice of cancellation at least sixty (60) days prior to the expiration of the
initial Term or any renewal Term; provided, however , Prestige may cancel this
Agreement at any time upon sixty (60) days notice to Seller.
In the event of abreach by Seller of any term or provision of this Agreement or
upon Seller's Insolvency or the Insolvency of any guarantor of Seller's
obligations herein, Prestige shall have the right to cancel this Agreement
without notice to Seller, and all of Seller's obligations to Prestige herein
shall be immediately due and payable. In the event of cancellation, the
provisions of this Agreement shall remain in full force and effect until all of
the Accounts have been paid in full.
27. JURY WAIVER. The parties hereto hereby mutually waive trial by jury in the
event of any litigation with respect to any matter connected with this
agreement.
Executed this 6th day of October, 1999 .
POWER SOURCE CORPORATION
By:/s/ E.Xxxxxxx Xxxxxxxx
E. XXXXXXX XXXXXXXX, President
Accepted this 12th day of October , 1999
PRESTIGE CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
Each of the undersigned hereby personally guarantees and shall be jointly and
severally liable for any damages suffered by Prestige Capital Corporation by
virtue of the breach of any warranty, representation or covenant made by Seller
in paragraph 5 above. Each of the undersigned also personally waives presentment
for payment, demand, protest, notice of dishonor and notice of every nature
whatsoever.
By: /s/ E. Xxxxxxx Xxxxxxxx
E. XXXXXXX XXXXXXXX Individually
By: /s/ Xxxxx Xxxxxx
XXXXX XXXXXX Individually
