Exhibit 4.29
AMENDED AND RESTATED PURCHASE & SALE AGREEMENT
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Name of Sellers ("Sellers"): I-CON INDUSTRIES, Inc., a Delaware
corporation, and PERFORMANCE INTERCONNECT
CORP., a Texas corporation.
Dated: March 31, 1998
Sellers and USA Funding, Inc., a Delaware corporation ("Purchaser"),
hereby agree to the terms and conditions set forth in this Purchase & Sale
Agreement ("Agreement"):
1. Purchase & Sale of Accounts Receivable.
(a) Sellers hereby offer to sell, assign, transfer, convey and
deliver to Purchaser, as absolute owner, all of the right, title and
interest of Sellers in and to the following accounts ("Account" or
"Accounts") which arise from the sale of Sellers' services or merchandise
(herein collectively referred to-as the "Merchandise") as indicated by the
box checked below, together with all guarantees and security therefor, and
all of Sellers' right, title and interest in the Merchandise purchased and
represented by such Accounts, including all of Sellers' rights to returned
goods and rights of stoppage in transit, repletion, and reclamation as an
unpaid vendor (with respect to each Account, such guarantees, security and
rights are herein called the "Related Rights"):
X All of Sellers' Eligible Accounts (as defined below) not to exceed
--- $750,000 (the "Commitment") outstanding at any time, which Eligible
Accounts Purchaser agrees to purchase on the terms and conditions set
forth herein, or
Eligible Accounts totaling not less than $______________ outstanding
--- at any time, in which case Purchaser shall be obligated (subject to
the terms and conditions stated below) to purchase Eligible Accounts
totaling not more than "Commitment") outstanding at any time, or
Only those Eligible Accounts which Sellers from time to time may wish
--- to sell but not to exceed $_____________ (the "Commitment") per month,
which Eligible Accounts Purchaser agrees to purchase on the terms and
conditions set forth herein;
provided, however, that in no case shall the purchase price payable
hereunder for all Eligible Accounts purchased at any one time be less tan
$5,000.00.
(b) Subject to the terms of this Agreement, Purchaser hereby agrees
to purchase Eligible Accounts and the Related Rights relating thereto
acceptable to Purchaser in its sole and absolute discretion. Purchaser shall
not be obligated to purchase any Eligible Account if (i) an Event of Default
or an event that, with the giving of notice, the passage of time or both,
would constitute an Event of Default has occurred and is continuing
hereunder, (ii) after such purchase is made, the aggregate face amount of
all outstanding Eligible Accounts which have been purchased by Purchaser
would exceed the Commitment, or (iii) Purchaser has not determined to
purchase such Eligible Account in its sole and absolute discretion.
"Eligible Accounts" means all Accounts except the following: (i) any Account
which has payment terms longer than "net 30 days" or has been outstanding
for more than ninety (90) days from invoice date, (ii) any Account as to
which Purchaser does not have a valid and perfected, first priority security
interest, (iii) any Account that is owed by a customer (an "Account Debtor")
which is an affiliate of a Seller or an officer or employee of a Seller,
(iv) any Account that arises out of a sale made or services performed
outside of the United States of America or tat is owed by an Account Debtor
located outside the United States of America, (v) any Account that is owed
by an Account Debtor which is a creditor or supplier of a Seller or which
has asserted any defense or contested any liability with respect to such
Account, (vi) if twenty-five percent (25%) or more of the aggregate amount
of Accounts owed by an Account Debtor to the Sellers have been outstanding
more than ninety (90) days from invoice date, all Accounts of such Account
Debtor, (vii) any Account that is considered a "progress" billing, (viii)
any retainages, and (ix) any Account which has not been approved by
Purchaser, in its sole and absolute discretion, as an Eligible Account. A
credit investigation by Purchaser shall not be deemed an acceptance of an
Account and Purchaser shall be free to reject any Account submitted by
either Seller if Purchaser deems the Account unacceptable, even tough
Purchaser may have previously approved such Account Debtor.
(c) No single Account Debtor's total purchased and outstanding
Accounts shall ever constitute more than twenty-five percent (25%) of
Sellers' total Accounts purchased and outstanding for all of Sellers'
Account Debtors, except that purchased and outstanding Accounts of one
Account Debtor may constitute up to fifty percent (50%) of the purchased and
outstanding Accounts of all Sellers' Account Debtors. In the event any
single Account Debtor's total purchased and outstanding Accounts exceed the
concentration limits set forth above, Purchaser may in its sale discretion
increase the Sellers' Reserve Accounts to cover such excess on a dollar for
dollar basis. In addition, for purposes of Section 4.A, the amount of any
Eligible Accounts owed by an Account Debtor in excess of the concentration
limit set forth above shall not be Eligible Accounts.
(d) Accounts shall be submitted to Purchaser on a Schedule of
Accounts listing each Account separately. The Schedule of Accounts shall be
in the form attached hereto as Exhibit "A," shall list the Accounts of only
one Seller and shall be signed by a person acting or purporting to act on
behalf of such Seller. There shall be no more than one Schedule of Accounts
submitted by each Seller each week unless Purchaser otherwise agrees in
writing. At the time the Schedule of Accounts is presented, the applicable
Seller shall also deliver to Purchaser one copy of an invoice for each
Account listed an such Schedule of Accounts, evidence of shipment of the
Merchandise covered by such invoice and a copy of the contract between such
Seller and the Account Debtor giving rise to such Account. All invoices
relating to Accounts shall plainly state on their face that amounts payable
thereunder are payable only to Purchaser at the remittance address set forth
below. Payment by Purchaser of the sum specified in paragraph 2(a) below
shall constitute acceptance of an Account by Purchaser at which time such
Account shall become an Eligible Account.
(e) Xxx and all Eligible Accounts shall be purchased with full
recourse against Sellers, including but not limited to, recourse as to the
insolvency or other financial inability of the Account Debtor to pay. Any
Eligible Accounts not paid after ninety (90) days from invoice date shall be
repurchased by Sellers, by means of Sellers paying directly to Purchaser the
face amount of each such Eligible Account, Purchaser deducting such face
amount from the purchase price for the next Eligible Accounts purchased or
from the next Inventory Advance made hereunder or Purchaser charging such
face amount against the Reserve Accounts, as Purchaser may elect in its sole
discretion.
2. Purchase Price and Fees.
(a) Purchaser shall purchase an Eligible Account at a purchase price
equal to the face amount of such Eligible Account less the Reserve
Percentage (as defined in paragraph 4 below) of such face amount which shall
be credited to the applicable Reserve Account. The purchase price for any
Eligible Accounts shall be advanced by Purchaser to the applicable Seller on
the date of purchase as directed by such Seller. Sellers shall pay to
Purchaser a discount (the "Discount") for each Eligible Account purchased
hereunder equal to one-half of one percent (0.5%) of the face amount of the
Eligible Account in question; provided that the Discount for any Eligible
Account bearing terms in excess of the standard net 30-day terms shall be
increased by 1.00% for each additional 30 days or fraction thereof. The
Discount for an Eligible Account shall be due and payable on the earlier of
the ninetieth (90th) day after the related invoice date and the date on
which Purchaser collects such Eligible Account. Sellers hereby authorize
Purchaser to deduct any Discount payable hereunder from the purchase price
of Eligible Accounts or any Inventory Advance hereunder or to charge such
Discount against the Reserve Accounts or collections on the related Eligible
Account, as Purchaser elects at its sole discretion.
(b) Sellers shall pay to Purchaser interest on the daily balance of
all sums (the "Advances") remitted, paid, or otherwise advanced by Purchaser
to Sellers or for Sellers' benefit (including but not limited to the
purchase price of Eligible Accounts purchased by Purchaser hereunder and the
outstanding principal balance of any Inventory Advances), net of all
payments received from Sellers' Account Debtors or otherwise received by
Purchaser on the Sellers' behalf which are credited to the Sellers' account.
Interest shall be charged on the Advances at a rate (the "Interest Rate"),
equal to the greater of (i) nine and one-half percent (9.5%) per annum and
(ii) the Prime Rate in effect from time to time plus two percent (2%) per
annum but in no event to exceed the maximum rate permitted by applicable
law. If the Prime Rate changes after the date hereof, the Interest Rate
shall be automatically increased or decreased, as the case may be, if
required hereunder, without notice to Sellers from time to time as of the
effective time of each change in the Prime Rate. Interest shall be due and
payable on the last day of each calendar month and may, in Purchaser's sole
discretion, be charged against the Reserve Accounts or other sums that may
be due to Sellers hereunder. As used herein, the term "Prime Rate" means
the rate as published from time to tune by The Wall Street Journal as the
base rate for corporate loans at large commercial banks (if more than one
such rate is published, the Prime Rate will be the higher or highest of the
rates published). If such rate is no longer published by The Wall Street
Journal, then Purchaser shall, in its sole discretion select the base or
prime rate for corporate loans at a large commercial bank as the "Prime
Rate." All interest accruing hereunder shall be calculated on the basis of
actual days elapsed (including the first day but excluding the last) plus
five (5) business days and a year of 360 days.
(c) In the event that the aggregate amount actually paid to Purchaser
pursuant to paragraph 2(a) as Discount (the "Discount Fee") during any
calendar month is less than $1,000 (the "Monthly Minimum Discount"), Sellers
shall pay to Purchaser additional Discount for such calendar month in an
amount equal to the Monthly Minimum Discount minus the aggregate Discount
Fee actually paid to Purchaser during such month. The additional fee payable
hereunder for any calendar month shall be due and payable within five
business days after the end of such calendar month. Sellers hereby
authorize Purchaser to deduct any such additional fee from the purchase
price for Eligible Accounts or any Inventory Advance or to charge any such
additional fee against the Reserve Accounts, as Purchaser elects at its sole
discretion.
(d) Sellers shall pay to Purchaser a liquidation fee ("Liquidation
Fee") in the amount of five percent of the face amount of each Eligible
Account outstanding at any time during a Liquidation Period (as defined
below). For purposes of this section, "Liquidation Period" means a period
beginning on the earliest date of (i) the commencement against or by either
Seller of any voluntary or involuntary case under the federal Bankruptcy
Code, (ii) the general assignment by either Seller for the benefit of its
creditors; (iii) the appointment or taking possession by a receiver,
liquidator, assignee, custodian or similar official of all or a substantial
part of either Seller's assets, or (iv) the cessation of business either of
Seller, and ending on the date on which Purchaser has actually received all
fees, costs, expenses and other amounts owing to it hereunder. The
Liquidation Fee shall be paid either by means of Purchaser charging the
Liquidation Fee against the Reserve Accounts or by Sellers paying the amount
of the Liquidation Fee directly to Purchaser, as Purchaser may elect in its
sole discretion. The Liquidation Fee is in addition to any termination fee
provided for in paragraph 14. The Liquidation Fee shall be payable on the
earlier to occur of(i) the date on which Purchaser collects the applicable
Eligible Account and (ii) the ninetieth (90th) day from invoice date of the
Eligible Account.
(e) The parties hereto intend to contract in strict compliance with
applicable usury law from time to time in effect. In furtherance thereof,
the parties hereto stipulate and agree that none of the terms and provisions
contained in this Agreement shall ever be construed to create a contract to
pay, for the use, forbearance or detention of money, interest in excess of
the maximum amount of interest permitted to be charged by applicable law
from time to time in effect. Neither Sellers nor any present or future
guarantor or any other person hereafter becoming liable for the payment of
the obligations of Sellers hereunder shall ever be liable for unearned
interest thereon or shall ever be required to pay interest thereon in excess
of the maximum amount that may be lawfully charged under applicable law from
time to time in effect, and the provisions of this paragraph shall control
over all other provision of the Agreement which may be in conflict
therewith. If any indebtedness or obligation owed by the Sellers under this
Agreement is prepaid or accelerated and as a result any amounts held to
constitute interest are determined to be in excess of the legal maximum, or
Purchaser shall otherwise collect moneys which are determined to constitute
interest which would otherwise increase the interest on all or any part of
such obligations to an amounts in excess of that permitted to be charged by
applicable law then in effect, then all such sums determined to constitute
interest in excess of such legal limit shall, without penalty, be promptly
applied to reduce the then outstanding principal of the related indebtedness
or obligations or, at Purchaser's option returned to the Sellers or the
other payor thereof upon such determination. In determining whether or not
any amount paid or payable, under any circumstance, exceeds the maximum
amount permitted under applicable law, Sellers and the Purchaser shall to
the greatest extent permitted under applicable law, characterize any non-
principal payment as an expense, fee or premium rather than as interest and
amortize, prorate, allocate and spread the total amount of interest
throughout the entire contemplated term of this Agreement in accordance with
the amounts outstanding from time to time hereunder and the Maximum Rate
from time to time in effect under applicable law in order to lawfully charge
the maximum amount of interest permitted under applicable law. If at any
time the rate at which interest is payable hereunder exceeds the Maximum
Rate, the amount outstanding hereunder shall bear interest at the Maximum,
Rate only, but shall continue to bear interest at the Maximum Rate until
such time as the total amount of interest accrued hereunder equals (but does
not exceed) the total amount of interest which would have accrued hereunder
had there been no Maximum Rate applicable hereto. In the event applicable
law provides for an interest ceiling under Chapter 1D of the Texas Credit
Title, that ceiling shall be the indicated (weekly) rate ceiling and shall
be used when appropriate in determining the maximum rate permitted by
applicable law. As used in this paragraph, (i) the term "applicable law"
means the laws of the State of Texas or the laws of the United States of
America, whichever laws allow the greater interest, as such laws now exist
or may be changed or amended or come into effect in the future, and (ii) the
term "Maximum Rate" means, at the time of determination, the maximum rate of
interest which, under applicable law, may then be charged hereunder. The
parties agree that this Agreement shall not be subject to Chapter 346 of the
Texas Finance Code.
3. Transfer. Upon Purchaser's acceptance of each Eligible Account,
Purchaser shall be the sole owner and holder of such Eligible Account and
the Related Rights relating thereto. Sellers hereby sell, transfer, convey
and assign to Purchaser all their right, title and interest in and to each
Eligible Account together with all Related Rights, effective at the time of
acceptance thereof by Purchaser. Sellers agree to execute and deliver to
Account Debtors obligated under Eligible Accounts such written notices of
sale of the Eligible Accounts as Purchaser may request.
4. Reserve Accounts. Purchaser shall create and maintain a reserve
account for each Schedule of Accounts (each a "Reserve Account" and
collectively the "Reserve Accounts") in the amount of fifteen percent (15%)
(the "Reserve Percentage") of the face amount of the Eligible Accounts
listed on such Schedule of Accounts out of any payments or credits otherwise
to be made to Purchaser with respect to such Eligible Accounts, subject to
adjustment as hereinafter provided. Purchaser may increase the Reserve
Percentage from time to time with notice to Sellers if in Purchaser's sole
discretion the dilution experienced by Sellers with respect to the Accounts
or other factors adversely affecting the value or collectibility of the
Accounts or other Collateral justify such increase. In no event shall the
aggregate amount of the Reserve Accounts for all Schedules of Accounts at
any time equal less than the Reserve Percentage of the Eligible Accounts
remaining unpaid. Purchaser may charge against the Reserve Accounts any
amount for which Sellers may be obligated to Purchaser at any time, whether
under the terms of this Agreement, or otherwise, including but not limited
to any damages suffered by Purchaser as a result of Sellers' breach of any
provision of paragraph 5 hereof (whether intentional or unintentional), any
losses (under only one or more Schedules of Accounts) due to an Account
Debtor's insolvency or other financial inability to pay or any Disputes
pursuant to paragraph 5(e) hereof, any Adjustments or other amounts due
under paragraph 16 hereof and any attorneys' fees and disbursements due
under paragraph 17 hereof. Sellers recognize that the balances in the
Reserve Accounts represent bookkeeping entries and not cash funds. It is
further agreed that with respect to the balances in the Reserve Accounts.
Purchaser is authorized to withhold such payments and credits otherwise due
to Sellers under the terms of this Agreement for reasonably anticipated
claims such as, for example, chargebacks or credits against Sellers for
Account Debtor claims. A Reserve Account shall be calculated and maintained
on each Schedule of Accounts, and the amount remaining in the Reserve
Account for a Schedule of Accounts shall be paid to the applicable Seller on
the first to occur of the 10th or 25th day of any calendar month following
the time when all Accounts listed on such Schedule of Accounts have been
collected or Purchaser has, in its sole discretion, determined that it will
make no further efforts to collect the Accounts listed on such Schedule of
Accounts, provided that (i) there is a positive balance in the Reserve
Account for such Schedule of Accounts, (ii) no Event of Default or an event
that, with the giving of notice, the passage of time or both, would
constitute an Event of Default has occurred and is continuing, (iii) Sellers
have not ceased selling Accounts to Purchaser, and (iv) the balances in the
Reserve Accounts for all Schedules of Accounts on an aggregate basis shall
not be less than the Reserve Percentage of the Eligible Accounts outstanding
after payment of such remaining amount, and (v) the outstanding principal
balance of any Inventory Advances then outstanding does not exceed the
Borrowing Base (as defined in paragraph 4.A). If an Event of Default or an
event that, with the giving of notice, the passage of time or both, would
constitute an Event of Default has occurred and is continuing, or, in the
event Sellers shall cease selling Accounts to Purchaser, Purchaser shall not
disburse any amounts in the Reserve Accounts until all Accounts listed on
each Schedule of Account have been collected or Purchaser has determined, in
its sole-discretion, that it will make no further efforts to collect any
Accounts listed on any Schedules of Accounts and all sums due Purchaser
hereunder have been paid. Purchaser shall make available to Sellers,
through Purchaser's computer link capabilities or otherwise, within 15 days
of the close of the preceding calendar month, a summary or statement of
Sellers' account, prepared from Purchaser's records, which will conclusively
be deemed correct and accepted by Sellers unless Sellers give Purchaser a
written statement of exceptions within 30 days after receipt of such extract
or statement.
4.A Inventory Advances
(a) Subject to the terms of this Agreement, including, without
limitation, Section 4.A(g), Purchaser shall make advances to I-Con
Industries, Inc. ("I-Con") (each an "Inventory Advance" and collectively the
"Inventory Advances") from time to time during the Term; provided, however,
that the aggregate principal amount of Inventory Advances outstanding at any
time shall not exceed the lesser of the (i) Borrowing Base determined by
Purchaser from time to time and (ii) the Inventory Commitment. I-Con shall
not be entitled to request more than one Inventory Advance during any
calendar week, and each Inventory Advance must be greater than or equal to
$5,000 or must equal the unadvanced portion of the Borrowing Base. Sellers
hereby agree to repay to Purchaser all Inventory Advances made to I-Con,
hereunder, together with interest thereon, in the manner provided herein.
The principal owing hereunder in respect of the Inventory Advances at any
given time shall equal the aggregate amount of Inventory Advances made
hereunder minus all principal payments thereon received by Purchaser
hereunder. Subject to the terms and conditions hereof, I-Con may borrow,
repay and reborrow under this Inventory Commitment.
(b) Each request by I-Con to Purchaser for an Inventory Advance
hereunder must be in writing or promptly confirmed in writing. Each such
written request or confirmation shall be accompanied by a "Borrowing Base
Certificate" in the form attached hereto as Exhibit "B," together with a
schedule of Eligible Inventory, setting forth the location of all such
Inventory, including Eligible Inventory not in the possession of I-Con and
the name of the person or entity in possession thereof and such other
information as Purchaser shall request.
(c) Promptly after receiving each Borrowing Base Certificate,
Purchaser shall, based upon such Borrowing Base Certificate and such other
information available to Purchaser, redetermine the Borrowing Base, which
redetermination shall take effect immediately and remain in effect until the
next such redetermination. If all conditions precedent to any Inventory
Advance requested have been met, Purchaser will on the date requested make
such Inventory Advance available to I-Con by wire transfer to the account
designated in writing by I-Con. In the event Purchaser does not receive an
appropriately completed Borrowing Base Certificate, Purchaser shall have no
obligation to redetermine the Borrowing Base or make any additional
Inventory Advances hereunder.
(d) If the aggregate unpaid principal balance of the Inventory
Advances exceeds the Borrowing Base at any time, Sellers shall, upon receipt
of notice thereof from Purchaser immediately repay the principal amount of
the Inventory Advances in an amount at least equal to such excess. At
Purchaser's election, it may require Sellers to pay any such excess directly
to Purchaser, deduct any such excess from the purchase price of the next
Eligible Accounts purchased hereunder or deduct such excess from the Reserve
Accounts or any other amounts due to Sellers hereunder. Any principal
repaid pursuant to this Section 4.A(d) shall be in addition to, and not in
lieu of, all payments otherwise required to be paid under this Agreement.
(e) The aggregate unpaid principal balance of the Inventory
Advances plus all accrued but unpaid interest thereon shall be payable by
Sellers to Purchaser on demand, or if no demand is made, on the last day of
the Term.
(f) As used herein, the term "Borrowing Base" shall mean an
amount, determined by Purchaser from time to time in its sole discretion,
equal to the lesser of (a) the Eligibility Percentage of the face amount of
Eligible Accounts then outstanding or (b) 100% of the value of Eligible
Inventory, valued at the lower of cost or market. As used herein, the term
"Eligible Inventory" shall mean, at the time of determination, all raw
materials that are part of I-Con's Inventory, that (i) are owned by I-Con,
are located in the United States of America and, if located on leased or
mortgaged premises, are subject to the terms of a lien waiver letter
executed by the landlord or mortgagee of such premises if deemed necessary
by Purchaser in its sole discretion, (ii) are ready for sale, and are not,
in the opinion of Purchaser, damaged, obsolete or otherwise not readily
salable at full value, (iii) have been held in Inventory for not more than
365 days, (iv) are not on lease or consignment or furnished under any
contract of service from or to any person or entity, (v) are subject to an
enforceable, first priority, perfected security interest in favor of
Purchaser, (vi) are not the subject of an invoice giving rise to an Eligible
Account, and (vii) have been approved by Purchaser, in its sole and absolute
discretion, for inclusion in the Borrowing Base. As used herein, the term
"Eligibility Percentage" shall mean 10% initially, but such percentage shall
be decreased by the amount of any increase in the Reserve Percentage
pursuant to Section 4. As used herein, the term "Inventory" shall mean all
goods, now owned or hereafter acquired by I-Con, wherever located, that are
held for sale or lease or are to be furnished under any contract of service
(including, but not limited to raw materials, work in process, finished
goods and materials used or consumed in the manufacture or production
thereof, goods in which I-Con has an interest in mass or a joint or other
interest or rights of any kind, and goods which have been returned to or
repossessed or stopped in transit by I-Con). As used herein, the term
"Inventory Commitment" shall mean $75,000.
(g) Purchaser shall not be obligated to make any Inventory
Advance hereunder (including the first), unless: (i) all representations and
warranties made by Sellers in this Agreement are true on and as of the date
of such Inventory Advance as if such representations and warranties had been
made as of the date of such Inventory Advance, (ii) Sellers have performed
and complied with all agreements and conditions required in this Agreement
to be performed or complied with by it on or prior to the date of such
Inventory Advance, (iii) no Event of Default or any event or circumstance
that, with the passage of time, the giving of notice or both, would become
an Event of Default shall have occurred, (iv) such Inventory Advance shall
not be prohibited by any law or any regulation or any order of any court or
governmental agency or authority, (v) Sellers shall have not repudiated or
made any anticipatory breach of any of their obligations under this
Agreement, (vi) Xxxxx Investments, Inc. shall have delivered to Purchaser a
landlord waiver subordinating its interest in the Collateral to Purchaser's
security interest therein, (vii) all conditions to the purchase of Eligible
Accounts contained Th paragraph 1(b) shall have been satisfied, (viii)
Sellers shall have implemented a perpetual inventory tracking system
satisfactory to Purchaser in its sole and absolute discretion and otherwise
shall maintain books and records and management procedures relating to its
Inventory satisfactory to Fidelity in its sole and absolute discretion, and
(ix) Purchaser shall have approved such Inventory Advance in its sole
discretion.
5. Sellers' Representations and Covenants. Sellers represent,
warrant and covenant to Purchaser that:
(a) Each Seller is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation and is
qualified and authorized to do business and is m good standing in all states
in which such qualification and good standing are necessary or desirable.
The execution, delivery and performance by each Seller of this Agreement do
not and will not constitute a violation of any applicable law or the
articles of incorporation or bylaws of such Seller or any material breach of
any other document, agreement or instrument to which Seller is a party or by
which such Seller is bound. This Agreement is a legal, valid and binding
obligation of each Seller enforceable against it in accordance with its
terms.
(b) Immediately prior to the execution and delivery of each Schedule
of Accounts, the related Seller will be the sole owner and holder of, and
will have good and marketable title to, each of the Accounts described
thereon and the Related Rights relating thereto, free and clear of all
liens, security interests and other adverse claims. Upon Purchaser's
acceptance of each Eligible Account, it shall become the sole owner and
holder of, and will have good and marketable title to, such Eligible Account
and the Related Rights relating thereto, free and clear of all liens,
security interests and other adverse claims. I-Con is the sole owner of all
Eligible inventory and has good and marketable title thereto free and clear
of all liens, security interests and other adverse claims.
(c) No Eligible Account or other Collateral shall be subject to any
lien, encumbrance, security interest or other claim of any kind or nature.
Sellers will not transfer, pledge or give a security interest in any of
their Accounts to anyone other than Purchaser. Sellers will not factor or
sell any of its Accounts except to Purchaser. There are no financing
statements now on file in any public office governing any property of
Sellers of any kind, real or personal, in which any Seller is named in or
has signed as the debtor, except the financing statement or statements filed
or to be filed in respect of this Agreement or those statements on file as
of the date of this Agreement that have been disclosed in writing by Sellers
to Purchaser. Neither Seller will execute any financing statement in favor
of any other person or entity, other than Purchaser, during the Term.
(d) The amount of each Eligible Account is due and owing to the
applicable Seller and represents an accurate statement of a bona fide sale,
delivery and acceptance of Merchandise or performance of service by such
Seller to or for an Account Debtor. The terms for payment of Eligible
Accounts are 30 days from date of invoice and the payment of such Eligible
Accounts is not contingent upon the fulfillment by the applicable Seller of
any further performance of any nature whatsoever. Each Account Debtors
business is solvent to the best of Sellers' knowledge.
(e) There are and shall be no set-offs, allowances, discounts,
deductions, counterclaims, or Disputes with respect to any Eligible Account,
either at the time it is accepted by Purchaser for purchase or prior to the
date it is to be paid. "Dispute," as used in the last preceding sentence,
shall mean any claim by an Account Debtor against either Seller, of any kind
whatsoever, valid or invalid, that is asserted by the Account Debtor as a
basis for refusing to pay an Eligible Account either in whole or in part.
Sellers agree to inform Purchaser in writing immediately upon learning that
there exists or may exist any Account which is subject to any contra account
charge back, credit consignment, right to return merchandise, or other
matter which diminishes or may diminish the dollar amount or timely
collection of such Account. Sellers shall accept no returns and shall grant
no allowance or credit to any Account Debtor without notice to and the prior
written approval of Purchaser. Sellers shall provide to Purchaser for each
Account Debtor on Eligible Accounts that have been purchased, a weekly
report in form and substance satisfactory to Purchaser itemizing all such
returns and allowances made during the previous week with respect such
Eligible Accounts and a check (or wire transfer) payable to Purchaser for
the amount thereof.
(f) The address set forth below Sellers' signature hereon is, and for
at least the past six months has been, Sellers' mailing address, their chief
executive office and principal place of business. The street and other
business addresses set forth below Sellers' signature hereon are, and for at
least the past six months have been, the offices where all of the books and
records concerning the Eligible Accounts are maintained and the location of
all Collateral. Sellers shall not change their mailing address, chief
executive office, principal place of business or place where such records
are maintained or the Collateral is kept without 30 days prior written
notice to Purchaser. Neither Seller has been a party to a merger or
consolidation with or acquired all or substantially all of the assets of any
person or entity during the past five years.
(g) Sellers shall maintain their books and records in accordance with
generally accepted accounting principles and shall reflect on its books the
absolute sale of the Eligible Accounts and the Related Rights to purchaser.
Sellers shall furnish Purchaser, upon request, such information and
statements as Purchaser shall request from time to time regarding Sellers'
business affairs, financial condition and results of its operations. Without
limiting the generality of the foregoing, Sellers shall provide Purchaser,
on or prior to the 30th day of each month, unaudited consolidated and
consolidating financing statements with respect to the prior month and,
within 90 days after the end of each of Sellers' fiscal years, monthly
annual reviewed consolidated and consolidating financial statements and such
certificates relating to the foregoing as Purchaser may request including,
without limitation, a monthly certificate from the president and chief
financial officer of Sellers stating whether any Events of Default have
occurred and stating in detail the nature of the Events of Default. Sellers
will furnish to Purchaser on or before the last day of each month and at
such other times as Purchaser shall request a current month end listing of
all open and unpaid accounts payable and accounts receivable, and such other
items of information that Purchaser may deem necessary or appropriate from
time to time. Unless otherwise expressly provided herein or unless Purchaser
otherwise consents, all financial statements and reports furnished to
Purchaser hereunder shall be prepared and all financial computations and
determinations pursuant hereto shall be made in accordance with generally
accepted accounting principles, consistently applied. Sellers shall deliver
to Purchaser a Borrowing Base Certificate, with all supporting
documentation, at least once each calendar week and at such other times as
Purchaser shall request.
(h) Purchaser shall have the right, at any time, and from time to
time, to audit Sellers' books, records and operations during normal business
hours. Sellers shall pay all costs associated with such audits which shall
be $700 per day per person plus reasonable out-of-pocket expenses.
(i) Sellers have paid and will pay all taxes and governmental charges
imposed with respect to sales of the Merchandise and furnish to Purchaser
upon request satisfactory proof of payment and compliance with all federal,
state and local tax requirements.
(j) Sellers will promptly notify Purchaser of (i) the filing of any
lawsuit against either Seller involving amounts greater than $10,000 and
(ii) any attachment or any other legal process levied against either Seller.
(k) Each Seller has served or caused to be served any and all
preliminary notices required by law to perfect or enforce any mechanic's
liens or stop notice or bonded stop notice for the Eligible Accounts and the
information contained in those notices is true and correct to the best of
Sellers' knowledge. Waivers and releases for all labor, services, equipment
or material of Sellers and others will be submitted on Purchaser's form
concurrently with each Schedule of Accounts.
(l) The application ("Application") made by Sellers in connection
with this Agreement, and the statements made therein are true and correct at
the time that this Agreement is executed. There is no fact which either
Seller has not disclosed to Purchaser in writing which could materially
adversely affect the properties, business or financial condition of Sellers,
or any of the Eligible Accounts or Collateral, or which it is necessary to
disclose in order to keep the foregoing representations and warranties from
being misleading.
(m) Sellers are engaged primarily in commercial, manufacturing or
industrial pursuits In no event shall the finds paid to Sellers hereunder
be: used or indirectly for consumer personal, family, household or
agricultural purposes, but shall be used solely for business or investment
activities.
(n) Sellers do not do business, and for the past five years have not
done business, under any trade or assumed name except as indicated below:
NONE.
(o) Sellers shall not merge or consolidate with or transfer or assign
all or substantially all of its assets and properties to any person or
entity without Purchasers prior written consent.
(p) Sellers shall not repay the principal amount of any debt owed by
Seller to Touchstone Enterprises, Inc., Winterstone Management, Inc., or
Associates Funding Group, Inc., without the prior written consent of
Purchaser.
6. Notice of Purchase. Sellers shall execute and deliver to
Purchaser and/or file at such times and places as Purchaser may designate
such financing statements, continuations thereof and amendments thereto as
are necessary or desirable to give notice of Purchaser's purchase of the
Eligible Accounts under the Uniform Commercial Code in effect in any
applicable jurisdiction.
7. Collateral. In order to secure the payment of all indebtedness
and obligations of Sellers to Purchaser, whether presently existing or
hereafter arising, each Seller hereby grants to Purchaser a security
interest in and lien upon all of such Seller's right, title and interest in
and to (a) the Reserve Accounts and all payments (if any) due or to become
due to such Seller from the Reserve Accounts; (b) all accounts, contract
rights, general intangibles, receivables and claims whether now existing or
hereafter arising, all guaranties and security therefor and all of such
Seller's right title and interest in the goods purchased and represented
thereby, if any, including all of such Seller's rights in and to returned
goods and rights of stoppage in transit, replevin and reclamation as unpaid
vendor; (c) all Inventory, wherever located and whether now or hereafter
existing, and all accessions thereto and products thereof and documents
therefor; (d) all machinery and equipment, wherever located and whether now
or hereafter existing, and all parts thereof, accessions thereto, and
replacements therefor and all documents and general intangibles covering or
relating thereto; (e) all books and records pertaining to the foregoing,
including but not limited to computer programs, data and lists; and (f) all
proceeds of the foregoing (collectively, the "collateral"). Sellers agree to
comply with all appropriate laws in order to perfect Purchaser's security
interest in and to the Collateral, to execute any financing statements,
continuations thereof, amendments thereto or additional documents as
Purchaser may require, to deliver to Purchaser a list of all locations of
its inventory and equipment and to obtain any landlord or mortgagee lien
waivers that Purchaser may require. Each Seller shall provide written
notice to Purchaser of any change in the locations at which the keeps its
inventory and equipment at least 30 days prior to any such change. To
induce Purchaser to make a loan of $1,150,000 to BC&Q Corp. pursuant to the
BC&Q Loan Agreement (as hereinafter defined), I-Con guaranteed, such loan
pursuant to the General Continuing Guarantee (as amended, supplemented or
modified from time to time, the "Guarantee"), dated October 22, 1997, from
I-Con in favor of Purchaser and granted to Purchaser a lien on and security
interest in the Collateral to secure the Guarantee pursuant to the Security
Agreement (as amended, supplemented or modified from time to time, the
"Security Agreement"), dated as of October 22, 1997, from I-Con in favor of
Purchaser. It is expressly agreed that the security interest granted to
Purchaser under the this Agreement shall secure I-Con's obligations to
Purchaser under the Guarantee and the Security Agreement. Purchaser hereby
is authorized to pay to itself any amount required to be paid by Purchaser
to Sellers hereunder, whether as the Purchase Price of Eligible Accounts, an
Inventory Advance, a Reserve Account disbursement or otherwise, to be
applied to the payment of any amounts then due by I-Con to Purchaser under
the Guarantee or the Security Agreement. From time to time, upon the written
request of either Seller and so long as no Event of Default or event or
circumstance that would, with the giving of notice, the passage of time or
both, constitute an Event of Default, has occurred, the Purchaser shall
release from the lien and security interest created hereby any specific item
of machinery or equipment constituting a part of the Collateral and used by
such Seller as security for obtaining a loan or other financial
accommodations from and the lender.
8. Collection.
(a) Sellers shall notify all Account Debtors and take other necessary
or appropriate means to insure that all of Sellers' Accounts, whether or not
purchased by Purchaser, shall be paid directly to Purchaser at the
remittance address set forth below. After collection by Purchaser, all
payments on Collateral shall be promptly remitted to Sellers, subject to and
following the exercise of Purchaser's rights therein as a secured party and
its rights to offset any sums then owing by Sellers hereunder
(b) Purchaser, as the sole and absolute owner of the Eligible
Accounts purchased hereunder, shall have the sole and exclusive power and
authority to collect each such Eligible Account, through legal action or
otherwise, and Purchaser may, in its sole discretion, settle, compromise, or
assign (in whole or in part) any of such Eligible Accounts, or otherwise
exercise any other right now existing or hereafter arising with respect to
any of such Eligible Accounts. If either Seller receives payment of all or
any portion of any Eligible Accounts or other Account, such Seller shall
notify Purchaser immediately and shall hold all checks and other instruments
so received in trust for Purchaser and immediately shall deliver to
Purchaser such checks and other instruments in the form received with any
necessary endorsements.
(c) Purchaser shall have the right at any time, either before or
after the occurrence of an Event of Default and without notice to Sellers,
to notify any or all Account Debtors on the Eligible Accounts and the other
Collateral of the assignment thereof to Purchaser and to direct such Account
Debtors to make payment of all amounts due or to become due to Sellers
directly to Purchaser, and to the extent permitted by law, to enforce
collection thereof and to adjust, settle or compromise the amount or payment
thereof Payments received by Purchaser may, at the sole discretion of
Purchaser, be applied by Purchaser to the payment of the indebtedness and
obligations of Sellers to Purchaser or held as cash collateral for such
indebtedness and obligations. All amounts and proceeds (including
investments and writings) received by Sellers in respect of the Collateral
shall be received in trust for the benefit of Purchaser hereunder, shall be
segregated from other funds of Sellers and immediately shall be paid over to
Purchaser in the same form as so received (with any necessary endorsement)
to be applied in the same manner as payments received directly by Purchaser.
9. Power of Attorney. Each Seller grants to Purchaser an irrevocable
power of attorney authorizing and permitting Purchaser, at its option with
or without notice to such Seller to do any or all of the following:
(a) Endorse the name of such Seller on any checks or other evidences
of payment whatsoever that may come into the possession of Purchaser
regarding Eligible Accounts or Collateral, including checks received by
Purchaser pursuant to paragraph S hereof;
(b) Receive, open and dispose of any mail addressed to such Seller
and put Purchaser's address on any statements mailed to Account Debtors,
(c) Pay, settle, compromise, prosecute or defend any action, claim,
conditional waiver and release, or proceeding relating to Eligible Accounts
or Collateral;
(d) Upon the occurrence of an Event of Default, notify in the name of
such Seller, the U.S. Post Office to change the address for delivery of mail
addressed to such Seller to such address as Purchaser may designate
(provided that Purchaser shall turn over to such Seller all such mail not
relating to Eligible Accounts or Collateral);
(e) Verify, sign, acknowledge, record, file for recording, serve as
required by law, any claim of mechanic's lien, stop notice or bonded stop
notice in the sole and absolute discretion of Purchaser relating to any
Eligible Account or Collateral;
(f) Insert all recording or service information in any mechanic's
lien or assignment of rights under stop notice/bonded stop notice which such
Seller has signed in connection with this Agreement, recorded or served to
enforce payment of the Eligible Accounts or Collateral;
(g) Execute and file on behalf of such Seller any financing statement
deemed necessary or appropriate by Purchaser to protect Purchaser's interest
in and to the Eligible Accounts or Collateral, or under any provision of
this Agreement; and
(h) To do all other things necessary and proper in order to carry out
this Agreement. The authority granted to Purchaser herein is irrevocable
until this Agreement is terminated and all amounts owed to Purchaser
hereunder are fully satisfied.
10. Default and Remedies. An event of default ("Event of Default")
shall be deemed to have occurred hereunder and Purchaser shall have no
further obligation to purchase Accounts and may immediately exercise its
fights and remedies with respect to the Eligible Accounts and the Collateral
under this Agreement, the Uniform Commercial Code, and applicable law, upon
the happening of one or more of the following:
(a) Either Seller shall fail to pay when due any amount owed to
Purchaser, whether arising hereunder or otherwise;
(b) There shall be commenced by or against either Seller any
voluntary or involuntary case under the federal Bankruptcy Code, or any
assignment shall be made by either Seller for the benefit of its creditors,
or there shall be appointment of a receiver or custodian for a substantial
portion of either Seller's assets;
(c) Either Seller shall become insolvent in that its debts are
greater than the fair value of its assets, or either Seller is generally not
paying its debts as they become due;
(d) Any involuntary lien, garnishment, attachment or the like shall
be issued against or shall attach to the Eligible Accounts, the Eligible
Inventory, the Collateral, any other assets of either Seller or any portion
thereof;
(e) Either Seller shall suffer the entry against it of a final
judgment for the payment of money in excess of $25,000, unless the same is
discharged within 30 days after the date of entry thereof or an appeal or
appropriate proceeding for review thereof is taken within such period and a
stay of execution pending such appeal is obtained;
(f) Either Seller shall breach any covenant or agreement made by it
herein;
(g) Any warranty or representation set forth herein shall be untrue
when made or any report, certificate, schedule, financial statement, profit
and loss statement or other statement furnished by either Seller, or by any
other person on behalf of either Seller, to Purchaser is not true and
correct furnished;
(h) Either Seller shall have a federal or state tax lien filed
against any of its properties, or either Seller shall fail to pay any
federal or state tax when due, or either Seller shall fail to file any
federal or state tax form when due;
(i) In Purchaser's sole judgment, a material adverse change shall
have occurred in either Seller's financial condition, business or operations
or the value of the Collateral; or
(j) In Purchaser's sole judgment, the prospect for payment of any
amounts due to it hereunder shall have become impaired.
(k) Either Seller shall have ceased the operation of its business.
(l) A default or an event of default shall have occurred under any
instrument or agreement relating to, securing, creating or evidencing debt
owed by I-Con to Winterstone Management, Inc., Touchstone Enterprises, Inc.
or Associates Funding Group, Inc., any such debt shall have been accelerated
or called due prior to maturity.
(m) An "event of default" shall have occurred under the Security
Agreement or the Loan and Security Agreement (as amended, supplemented or
modified from time to time, the "BC&Q Loan Agreement"), dated as of October
22, 1997, between BC&Q Corp. and Purchaser, or the indebtedness evidenced by
the Guarantee or the BC&Q Loan Agreement shall have been accelerated.
Upon the occurrence of an Event of Default described in clauses (5) or (c)
of this Section 10, Sellers immediately shall repurchase from Purchaser all
outstanding Eligible Accounts purchased by Purchaser from Sellers hereunder
at a price equal to the aggregate face amount thereof and shall pay to
Purchaser all other amounts owing by Sellers to Purchaser hereunder, whether
or not then due, including, without limitation, the outstanding principal
balance of all Inventory Advances and accrued but unpaid interest thereon,
all without demand, presentment, notice of demand or of dishonor and
nonpayment, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Sellers. During the continuation of any other
Event of Default, Purchaser, at any time, may require Sellers to (and
Sellers shall) repurchase from Purchaser all outstanding Eligible Accounts
purchased by Purchaser from Sellers hereunder at a price equal to the
aggregate face amount thereof and pay to Purchaser all other amounts owing
by Sellers to Purchaser hereunder, whether or not then due, including,
without limitation, the outstanding principal balance of all Inventory
Advances and accrued but unpaid interest therein, all without notice,
demand, presentment, notice of demand or of dishonor and nonpayment, or any
notice or declaration of any kind, all of which are hereby expressly waived
by Sellers. In addition to, and without limitation of, the foregoing
provisions of this Agreement, if an Event of Default shall have occurred and
be continuing, Purchaser may from time to time in its discretion, without
limitation and without notice except as expressly herein: (a) exercise in
respect of the Collateral, in addition to other rights and remedies provided
for herein, or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code (the "UCC")
(whether or not the IJCC applies to the affected Collateral); (5) require
Sellers to, and Sellers hereby agree that they will at their expense,
assemble all or part of the Collateral as directed by Purchaser and make it
available to Purchaser at a place to be designated by Purchaser; (c) reduce
its claim to judgment or foreclose. or otherwise enforce, in whole or in
part, the security interest created hereby by any available judicial
procedure; (d) dispose of, at its office, on the premises of Sellers or
elsewhere, all or any part of the Collateral, as a unit or in parcels, by
public or private proceedings; (e) buy the Collateral, or any part thereof,
at any public sale, or at any private sale if the Collateral is of a type
customarily sold in a recognized market or is of a type that is the subject
to widely distributed standard price quotations; (f) apply by appropriate
judicial proceedings for appointment of a receiver for the Collateral, or
any part thereof, and Sellers hereby consent to any such appointment; and
(g) at its discretion, retain the Collateral in satisfaction of the
obligations due Purchaser hereunder whenever the circumstances are such that
Purchaser is entitled to do so under the UCC or otherwise. Sellers agree
that, to the extent notice of sale shall be required by law, at least five
days' notice to Sellers of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. Purchaser shall not be obligated to make any sale of
Collateral regardless of whether any notice of sale has been given.
Purchaser may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. If any Event of Default shall have occurred and be continuing,
Purchaser may in its discretion apply any cash proceeds received by
Purchaser in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral, to any or all of the following in
such order as Purchaser may elect: (a) the repayment of all or any portion
of the obligations owed to Purchaser by Sellers, whether hereunder or
otherwise; (5) the repayment of reasonable costs and expenses, including
reasonable attorneys' fees and legal expenses, incurred by Purchaser
(whether or not litigation has been commenced or a judgment has been issued,
and if litigation has been commenced, whether at trial or any appellate
level) in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, of the sale of, collection from,
or other realization upon, any Collateral, (iii) the exercise or enforcement
of any of the rights of Purchaser hereunder, or (iv) the failure of Sellers
to perform or observe any of the provisions hereof; (c) the payment or other
satisfaction of any liens and other encumbrances upon any of the Collateral;
(d) the reimbursement of Purchaser for the amount of any obligations of
Sellers paid or discharged by Purchaser, and of any expenses of Purchaser
payable by Sellers hereunder; (e) by holding the same as Collateral; (f) the
payment of any other amounts required by applicable law (including, without
limitation, Part 5 of Article 9 of the UCC or any successor or similar
applicable statutory provision); and (g) by delivery to Sellers or to
whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct.
11. Equitable Relief. In the event that either Seller commits any act
or omission which prevents or unreasonably interferes with: (a) Purchasers
exercise of the rights and privileges arising under the power of attorney
granted in paragraph 9 of this Agreement; or (5) Purchaser's perfection of
or levy upon the security interest granted in the Collateral, including any
seizure of any Collateral, such conduct will cause immediate, severe,
incalculable and irreparable harm and injury, and shall constitute
sufficient grounds to entitle Purchaser to an injunction, writ of
possession, or other applicable relief in equity, and to make such
application for such relief in any court of competent jurisdiction, without
any prior notice to either Seller.
12. Cumulative Rights; Waivers. All rights, remedies and powers
granted to Purchaser in this Agreement, or in any other instrument or
agreement given by Sellers to Purchaser or otherwise available to Purchaser
in equity or at law, are cumulative and may be exercised singularly or
concurrently with such other rights as Purchaser may have. These rights may
be exercised from time to time as to all or any part of the Eligible
Accounts purchased hereunder or the Collateral as Purchaser in its
discretion may determine. In the event that the transaction between Sellers
and Purchaser is construed to be a loan from Purchaser to Sellers, such loan
shall be secured by the Eligible Accounts and the Collateral and Purchaser
shall have all rights and remedies available to a lender in addition to its
rights and remedies hereunder. Purchaser may not waive its rights and
remedies unless the waiver is in writing and signed by Purchaser. A waiver
by Purchaser of a right or remedy under this Agreement on one occasion is
not a waiver of the right or remedy on any subsequent occasion.
13. Notices. Any notice or communication with respect to this
Agreement shall be given in writing, sent by (i) personal delivery, or (ii)
expedited delivery service with proof of delivery, or (iii) United States
mail, postage prepaid, registered or certified mail, or (iv) prepaid
telegram, telex or telecopy, addressed to each party hereto at its address
set forth below or to such other address or to the attention of such other
person as hereafter shall be designated in writing by the applicable party
sent in accordance herewith. Any such notice or communication shall be
deemed to have been given either at the time of personal delivery or, in the
case of delivery service or mail, as of the date of first attempted deliver
at the address and in the manner provided herein, or m the case of telegram,
telex or telecopy, upon receipt. Sellers hereby agree that Purchaser may
publicize the financing transaction contemplated by this Agreement in
newspapers, trade and similar publications including, without limitation,
the publication of a "tombstone".
14. Term. The term of this Agreement shall expire on August 27, 2000
(the "Original Term"); provided that the term of this Agreement shall be
extended automatically for an additional year and for each succeeding year
unless written notice determination is given by one party hereto to the
other party hereto at least sixty (60) days, but no more than ninety (90)
days, prior to the end of the Term or any extension thereof (the Original
Term and any extensions thereof are herein referred to as the "Term"). In
the event that during the Term this Agreement is terminated for any reason,
Sellers shall pay to Purchaser an early termination fee in an amount equal
to (a) six percent (6%) of the sum of the Commitment and the Inventory
Commitment, if this Agreement is terminated during the first year of the
Term, (b) four percent (4%) of the sum of the Commitment and the Inventory
Commitment if this Agreement is terminated during the second year of the
Term, and (c) two percent (2%) of the sum of the Commitment and the
Inventory Commitment, if this Agreement is terminated thereafter during the
Term (but in no event shall any such early termination fee exceed the
maximum amount permitted by applicable law). Any termination of this
Agreement shall not affect Purchaser's security interest in the Collateral
and Purchasers ownership of the Eligible Accounts and the Related Rights,
and this Agreement shall continue to be effective, until all transactions
entered into and obligations incurred hereunder have been completed and
satisfied in full.
15. Right of First Offer. Sellers hereby agree that in the event
either Seller receives an offer during the Term from a third party to
provide financing or factoring to such Seller, which offer such Seller
intends to accept, Sellers shall require the offeror to reduce such offer to
a written commitment (the "new commitment"). In addition, Sellers will (i)
notify Purchaser in writing of the identity of the offeror of the
commitment and the complete terms of the new commitment and (ii) if, within
30 days after its receipt of such notice, (which shall be accompanied by a
copy of the new commitment), Purchaser elects, in its sole discretion, to
offer to terminate this Agreement and match the new commitment, accept
Purchaser's offer.
16. Charges; Indemnification. Sellers shall pay to Purchaser its
normal and customary charges for the following items in connection with the
transactions contemplated hereby: long-distance telephone charges,
reasonable travel expenses, copying, legal fees incurred in collecting the
Accounts or enforcing this Agreement, postage, credit reports, lock box
charges, wire transfers, overnight mail delivery, UCC and tax lien searches
and filing fees ("Adjustments"). Sellers hereby indemnify and agree to hold
harmless and defend Purchaser and Purchaser's officers, directors,
shareholders, affiliates, agents, employees and attorneys (collectively, the
"Indemnified Persons") from and against any and all claims, demands,
actions, causes of action, judgments, liabilities, damages and consequential
damages, penalties, fines, costs, fees, expenses and disbursements
(including, without limitation, fees and expenses of attorneys and other
professional consultants and experts in connection with any investigation or
defense) of every kind, known or unknown, existing or hereafter arising,
foreseeable or unforeseeable, which may be imposed upon, threatened or
asserted against or incurred or paid by any Indemnified Person at any time
and from time to time, because of, resulting from, in connection with or
arising out of any transaction, act, omission, event or circumstance in any
way connected with the Collateral or this Agreement (including but not
limited to enforcement of Purchaser's rights thereunder or the defense of
Purchaser's actions thereunder) (each, as "Indemnified Claims"), excluding
with respect to any Indemnified Persons, any of the foregoing resulting from
such Indemnified Person's gross negligence or willful misconduct. THE
FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH INDEMNIFIED CLAIMS
ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANX
NEGLIGENT ACT OR OMISSION OF ANY INDEMNIFIED PERSON. Upon notification and
demand, Sellers agree to provide defense of any Indemnified Claim and to pay
all costs and expenses of counsel selected by any Indemnified Person in
respect thereof. Any Indemnified Person against whom any Indemnified Claim
may be asserted reserves the right to settle or compromise any such
Indemnified Claim as such Indemnified Person may determine in its sole
discretion, and the obligations of such Indemnified Person, if any, pursuant
to any such settlement or compromise shall be deemed included within the
Indemnified Claims. Except as specifically provided in this section, Sellers
waive all notices from any Indemnified Person. The provisions of this
paragraph 16 shall survive the termination of this Agreement. Purchaser may,
in its sole and absolute discretion, deduct any Adjustments or other amounts
owed under this paragraph from the Reserve Accounts.
17. Attorney's Fees. Sellers agree to reimburse Purchaser upon demand
for all costs and expenses incurred by Purchaser in connection with its due
diligence review of Sellers and the negotiation, documentation, closing and
consummation of the transactions contemplated hereby, including attorney's
fees and expenses and all reasonable attorney's fees, court costs and other
expenses incurred by Purchaser in the enforcement of this Agreement and
protecting or enforcing its interest in the Eligible Accounts or the
Collateral, in collecting the Eligible Accounts or the Collateral, or in the
representation of Purchaser in connection v4th any bankruptcy case or
insolvency proceeding involving either Seller, the Collateral, any Account
Debtor, or any Eligible Account. Sellers hereby authorize Purchaser, at its
sole discretion, to deduct such fees, costs and expenses from the purchase
price for Eligible Accounts or charge any such fees, costs and expenses
against the Reserve Accounts, as Purchaser elects at its sole discretion.
18. Severability; Joint and Severally Liability. Each and every
provision, condition, covenant and representation contained in this
Agreement is, and shall be construed, to be a separate and independent
covenant and agreement. If any term or provision of this Agreement shall to
any extent be invalid or unenforceable, the remainder of the Agreement shall
not be affected thereby. The obligations of Sellers hereunder shall be joint
and several.
19. Parties in Interest. All grants, covenants and agreements
contained in this Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns; provided,
however, that Sellers may not delegate or assign any of their duties or
obligations under this Agreement without the prior written consent of
Purchaser. PURCHASER RESERVES THE RIGHT TO ASSIGN ITS RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT IN WHOLE OR IN PART TO ANY PERSON OR ENTITY.
20. GOVERNING LAW: SUBMISSION TO PROCESS. THIS AGREEMENT SHALL BE
DEEMED A CONTRACT MADE UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL BE
CONSTRUED AN]) ENFORCED IN ACCORDANCE WITH AND GOVERNED BY TILE INTERNAL
LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO THE RULES THEREOF RELATING
TO CONFLICTS OF LAW. EACH SELLER HEREBY IRREVOCABLY SUBMITS ITSELF TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN TEXAS, AND
AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL
PROCEEDING RELATING TO THIS AGREEMENT, THE PURCHASE OF ELIGIBLE AQCOUNTS OR
ANY OTHER RELATIONSHIP BETWEEN PURCHASER AND SELLER BY ANY MEANS ALLOWED
UNDER STATE OR FEDERAL LAW. ANY LEGAL PROCEEDING ARISING OUT OF OR IN ANY
WAY RELATED TO THIS AGREEMENT, THE PURCHASE OF ELIGIBLE ACCOUNTS OR ANY
OTHER RELATIONSHIP BETWEEN PURCHASER AND SELLER SHALL BE BROUGHT AND
LITIGATED EXCLUSIVELY IN ANY ONE OF THE STATE OR FEDERAL COURTS LOCATED IN
THE STATE OF TEXAS HAVING JURISDICTION. THE PARTIES HERETO HEREBY WAIVE AND
AGREE NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, THAT ANY
SUCH PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE
THEREOF IS IMPROPER.
21. WAIVER OF JURY TRIAL. PUNITIVE AND CONSEOUENTIAL DAMAGES, ETC.
EACH OF EACH SELLER AND PURCHASER HEREBY (A) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY AT ANY TIME ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH; (B) IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; (C) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT
OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
PARAGRAPH.
22. THIS AGREEMENT RESTATES AND AMENDS THE PURCHASE & SALE AGREEMENT
DATED AUGUST 28, 0000 XXXXXXX X-XXX AN]) PURCHASER (AS THE SAME MAY HAVE
HERETOFORE BEEN AMENDED OR MODIFIED, THE "ORIGINAL AGREEMENT,") IN ITS
ENTIRETY EFFECTIVE AS OF THE DATE HEREOF, AND ALL OF THE TERMS AND
PROVISIONS HEREOF SHALL SUPERSEDE THE TERMS AND PROVISIONS THEREOF; PROVIDED
THAT ALL INDEBTEDNESS AND OBLIGATIONS OF I-CON TO PURCHASER UNDER THE
ORIGINAL AGREEMENT ARE RENEWED AND EXTENDED HEREBY AND ALL LIENS, SECURITY
INTERESTS, ASSIGNMENTS, SUPERIOR TITLES, RIGHTS, REMEDIES, POWERS, EQUITIES
AND PRIORITIES (THE "LIENS") CREATED BY TILE ORIGINAL AGREEMENT ARE RENEWED
AND EXTENDED HEREBY AND SHALL CONTINUE IN FULL FORCE AND, EFFECT TO SECURE
THE OBLIGATIONS BY THIS AGREEMENT, THE LIENS ARE HEREBY RATIFIED AND
CONFIRMED AS VALID, SUBSISTING AND CONTINUING TO SECURE THE OBLIGATIONS.
23. COMPLETE AGREEMENT. THIS AGREEMENT, THE WRITTEN DOCUMENTS
EXECUTED PURSUANT TO THIS AGREEMENT, IF ANY, AND THE ACKNOWLEDGMENT
DELIVERED 111 CONNECTION HEREWITH SET FORTH THE ENTIRE UNDERSTANDING AND
AGREEMENT OF THE PARTIES HERETO WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN AN]) MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. NO
MODIFICATION OR AMENDMENT OF OR SUPPLEMENT TO THIS PURCHASE & SALE AGREEMENT
OR TO SUCH ACKNOWLEDGMENT SHALL BE VALID OR EFFECTIVE UNLESS THE SAME IS IN
WRITING AND SIGNED BY THE PARTY AGAINST WHOM IT IS SOUGHT TO BE ENFORCED.
The undersigned have entered into this Agreement on the date first
above written.
USA FUNDING, INC., I-CON Industries, Inc.,
a Delaware corporation a Delaware corporation
BY: /s/ By: /s/
--------------------------- -----------------------
Name: Name:
--------------------------- -----------------------
Title: Title:
--------------------------- -----------------------
Remittance Address: Mailing Address of I-Con:
P. O. Box 971194 0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000-0000 Xxxxxx, XX 00000
Mailing Address: Street Address of I-Con:
00000 Xxxxx Xxxxx, Xxxxx Xxxxx 0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Performance Interconnect Corp.
By: /s/
------------------------
Name:
------------------------
Title:
------------------------
Mailing Address of Performance:
00000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
SCHEDULE OF ACCOUNTS
DATE:_____________ SCHEDULE NO.___________________________
SELLER: [I-CON INDUSTRIES, INC.]
[PERFORMANCE INTERCONNECT CORP.]
Total Number of Accounts Sold:_________
Total Amount Sold:_____________________
Reserve:_______________________________
ACCOUNT INVOICE INVOICE INVOICE
DEBTOR NUMBER AMOUNT DATE
------ ------ ------ ----
The undersigned does hereby certify that he or she has made a thorough
inquiry into all matters certified herein and, based upon such inquiry and
experience does hereby certify that:
1. He or she is the duly elected, qualified, and acting _____________
of [I-CON INDUSTRIES, INC.] [PERFORMANCE INTERCONNECT CORP.].
2. This Schedule of Accounts is being submitted to USA Funding, Inc.
("Purchaser") pursuant to that certain Amended and Restated Purchase & Sale
Agreement dated as of March 31, 1998, between Performance Interconnect
Corp., I-Con Industries, Inc. and Purchaser (as from time to time
supplemented or amended, the "Agreement").
3. All representations and warranties made by Sellers (as defined in
the Agreement) in the Agreement or any other instrument, document,
certificate or other agreement executed in connection therewith
(collectively, the "Transaction Documents") delivered on or before the date
hereof are true on and as of the date hereof as if such representations and
warranties had been made as of the date hereof
4. No Event of Default (as defined in the Agreement) or any event
that, with the giving of notice, the passage of time or both, would
constitute an Event of Default exists on the date hereof.
5. Sellers have performed and complied with all agreements and
conditions required in the Transaction Documents to be performed or complied
with by it on or prior to the date hereof.
6. All information contained in this Schedule of Accounts is true,
correct and complete.
IN WITNESS WHEREOF, this instrument is executed by the undersigned
as of ________, 1997.
[I-CON INDUSTRIES, INC.]
[PERFORMANCE INTERCONNECT CORP.]
By:_________________________________
Name:_______________________________
Title:______________________________
[ CONSENT AND AGREEMENT APPEARS HERE ]
