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EXHIBIT 10.17
MASTER PURCHASE ORDER ASSIGNMENT AGREEMENT
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THIS AGREEMENT is made on the 25 day of February, 2000, by and between
TRANSCAP TRADE FINANCE, an Illinois general partnership (the "CONTRACTOR") and
BAY AREA MULTIMEDIA, INC., a California corporation (the "MANUFACTURER"), as
follows:
BACKGROUND OF AGREEMENT:
A. The parties have signed an agreement in principle to enter into a
purchase order assignment program under which the Manufacturer will
assign customer purchase orders to the Contractor and request the
Contractor to purchase the required materials to fulfill such purchase
orders; the Contractor will retain the Manufacturer to manufacture,
process and ship ordered goods; and fees will be paid to the Manufacturer
for its services upon payment to the Contractor for the goods.
B. The parties desire to enter into a formal agreement to set forth the
terms and provisions of the purchase order assignment program.
THEREFORE, in consideration of the services to be performed, the payments
to be made, and the obligations to be assumed as set forth in this Agreement,
the parties agree as follows:
1. DEFINITIONS. In this Agreement, the following frequently used terms
are defined as set forth in this paragraph 1:
(a) The "CERTIFICATE" means the Purchase Order Package Certificate
attached hereto as Exhibit "A" required to be delivered with each request for
assignment of a purchase order. The form of Certificate is attached to this
Agreement as Exhibit "A" and made a part hereof.
(b) With respect to each purchase order submitted for assignment
hereunder, the Certificate will define the "PRODUCT" (the end product to be
delivered to the customer), the "CUSTOMER" (the business entity which issues the
purchase order), the "MATERIALS" (the materials required to produce the
Product), the "PREMISES" (Manufacturer's facility or such other facility
identified in the Certificate where the Materials will be delivered and Products
will be produced), the "P.O. PRICE" (the purchase price to be paid by the
Customer for the Products), the "P.O. DELIVERY DATE" (the date on which Products
are to be delivered to the Customer as set forth in the Certificate), and the
"MATERIALS DELIVERY DATE" (the date on which the Materials are to be delivered
to the Manufacturer as set forth in the Certificate). The Manufacturer is not
engaged in the manufacturing business but is engaged in the development, sale,
and distribution of Products; and Materials and Products shall refer to the same
goods.
(c) A purchase order delivered to the Manufacturer in the ordinary course
of its business is referred to as a "P.O." A P.O. which meets all of the
requirements of paragraph 3 below is deemed to be unconditionally accepted by
Contractor and is referred to as an "ACCEPTED P.O." The date on which the
Contractor delivers notice of acceptance of the assignment of the P.O. is
referred to as the "ACCEPTANCE DATE". When an Accepted P.O. is made null and
void pursuant to this
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Agreement, it is referred to as a "CANCELED P.O." Under certain circumstances,
when a P.O. is not assignable to the Contractor, the Contractor will accept an
assignment of the proceeds of the P.O. In such cases, the terms P.O. and
Accepted P.O. will mean the proceeds of such P.O. or Accepted P.O. as the case
may be.
(d) A financial institution engaged in the practice of lending sums to
the Manufacturer secured at least in part by Manufacturer's accounts receivable
is referred to as the "ACCOUNTS RECEIVABLE LENDER". The Accounts Receivable
Lender involved in this transaction (if any) is identified on Addendum I
attached hereto. A "SENIOR LENDER" is any financial institution (including the
Accounts Receivable Lender) which is engaged in lending sums to the Manufacturer
secured by liens on some or all of the Manufacturer's assets. Each Senior Lender
involved in this transaction (if any) is also identified on Addendum I.
(e) The inventory of Products produced for satisfaction of a P.O. is
referred to as the "P.O. INVENTORY"; the invoice rendered upon delivery of
Products pursuant to a P.O. is referred to as the "P.O. INVOICE"; and payments
received on account of P.O. Invoices (whether paid by the Customer, the Accounts
Receivable Lender, the Manufacturer, or any other xxxxx) are referred to as the
"P.O. PROCEEDS".
(f) The Manufacturer may repurchase an Accepted P.O. pursuant to
paragraph 8(b) below. In the absence of such repurchase, an Accepted P.O.
becomes a "DELINQUENT P.O." if the P.O. Price is not paid to the Contractor by
the earliest of (i) the due date for payment of the P.O. Invoice, (ii) one
hundred and five (105) days following the Funding Date if Contractor issues its
letter of credit or purchase order, (iii) thirty (30) days following the Funding
Date if Contractor advances funds by other than issuing its letter of credit or
purchase order, or (iv) the date on which the Accepted P.O. is canceled.
(g) If a lock box collection procedure is established pursuant to this
Agreement, the term "LOCK BOX" refers to the Contractor's lock box account; and
the term "LOCK BOX BANK" means the bank at which the Contractor establishes the
Lock Box and so notifies Manufacturer in writing. The Lock Box and Lock Box Bank
involved in this transaction (if any) are identified on Addendum II attached
hereto.
(h) The "FUNDING DATE" is the date on which the Contractor makes its
first Materials purchase in connection with an Accepted P.O. or issues its
letter of credit or purchase order or otherwise advances funds to or for the
benefit of or on account of an Accepted P.O., whichever is earlier. The
"CLEARANCE DATE" is the date on which the Contractor (or the Lock Box Bank) has
received full payment of the P.O. Price in connection with an Accepted P.O. in
fully collected funds.
(i) The Manufacturer will perform its obligations in accordance with the
"MANUFACTURER'S SPECIFICATIONS" which are set forth on Exhibit "B" attached
hereto and will be paid a "MANUFACTURER'S FEE" computed in accordance with the
provisions of paragraph 7(c) below. The Manufacturer's obligations are secured
by a "SECURITY AGREEMENT" described in paragraph 10 below.
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(j) The Contractor will be paid "COMMITMENT FEE" (computed and paid
pursuant to Paragraph 6 below), the "CONTRACTOR'S DEAL FEES" (computed and paid
pursuant to Paragraph 7 below), and "CONTRACTOR'S EXPENSES" (computed and paid
pursuant to Paragraph 9 below). For purposes of computing the waiver of portions
of the Commitment Fee, the term "PRODUCT VOLUME" means the aggregate of (a) the
face amounts of all letters of credit issued by Contractor plus (b) the
aggregate amount of funds advanced by Contractor by other than issuing its
letters of credit, in connection with an Accepted P.O. for which a P.O. Invoice
is issued on or before the date on which payment of the Commitment Fee is due;
and "MINIMUM VOLUME" means Product Volume which equals or exceeds $3,000,000.
(k) If the Manufacturer is required to make a "SECURITY DEPOSIT" (as
defined in Paragraph 3(b)(i), the Security Deposit will be maintained in
accordance with Paragraph 10.1.
2. SUBMISSION OF P.O.'s FOR ASSIGNMENT. Subject to the terms of this
Agreement, the Manufacturer may request that the Contractor accept an assignment
of each P.O. submitted to and accepted by Manufacturer and make Material
purchases to fulfill the P.O. Each such request shall be made pursuant to a
completed and signed Certificate delivered to the Contractor.
3. ACCEPTANCE OF P.O. ASSIGNMENTS.
(a) Subject to the conditions and requirements set forth in this Paragraph
3, Contractor agrees to accept or decline acceptance of the assignment of a P.O.
submitted to Contractor pursuant to the provisions of Paragraph 2 above (in
Contractor's absolute discretion) by delivery of written notice to Manufacturer.
Contractor will use its best efforts to deliver such acceptance by 5:00 p.m. on
or before the fourth full business day after Contractor receives the
Certificate.
(b) Notwithstanding the provisions of Paragraph 3(a) above, Contractor
shall not accept the assignment of any P.O. which does not meet the following
requirements:
(i) Contractor's funding commitment with respect to the P.O. shall not
exceed 60% of the P.O. Price, provided, however, that Contractor may exceed
such limitation upon the deposit by the Manufacturer with the Contractor of
a Security Deposit (the "Security Deposit") in an amount equal to the
excess of the Contractor's funding commitment with respect to the P.O. over
60% of the P.O. Price;
(ii) Manufacturer shall have on deposit with Contractor a Security
Deposit as set forth in Paragraph 10.1 hereof;
(iii) Upon the purchase of Materials required for the P.O., or upon
any other advance of funds in connection with the P.O., the Contractor's
aggregate outstanding funding pursuant to this Agreement shall not exceed
the sum of $1,000,000;
(iv) An original, signed copy of the Certificate shall have been
delivered to the Contractor;
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(v) All information contained on the Certificate shall be verified
by Contractor to ensure (to Contractor's satisfaction) that the Materials
Delivery Date and P.O. Delivery Date are reasonable and that the P.O. is
bona fide (which verification may include, without limitation, direct
confirmation from the Customer and any vendors); and
(vi) The Manufacturer shall have delivered to the Contractor such
additional information and documentation as the Contractor may have from
time to time requested.
(c) Notwithstanding the other provisions of this paragraph 3, the
Contractor's acceptance of the assignment of a P.O. shall be made null and void
and the P.O. shall be deemed a Canceled P.O. upon the occurrence of any one of
the following:
(i) The failure of the Contractor to obtain accepted orders for
Materials at prices and on other terms and conditions acceptable to the
Contractor within five (5) business days following the Acceptance Date,
and Contractor's notice to the Manufacturer thereof. Upon delivery of
such notice to Manufacturer, Contractor's rights and interests in and to
the P.O. will be terminated absolutely and Contractor shall have no
obligation whatsoever, to Manufacturer with respect to such P.O.;
(ii) The failure of a vendor of Materials to deliver Materials
which conform to Contractor's specifications to the Premises on or before
the Material Delivery Date. Upon such failure of delivery, Contractor
shall have the right to require Manufacturer to purchase the Materials
from Contractor and shall assign to Manufacturer the right to receive
those Materials which have not then arrived at the Premises;
(iii) The cancellation of the P.O. prior to delivery of Products
to the Customer. Upon such cancellation, Manufacturer shall pay
Contractor such sums as are required pursuant to paragraph 8 below; and
(iv) The failure of the Manufacturer to obtain (if so requested by
Contractor) a waiver and release of Contractor by the Customer of any and
all liability for breach of any and all express or implied warranties or
product liability claims with respect to the Products or the use and
distribution thereof.
(d) A P.O. shall be deemed an Accepted P.O. only when (i) the P.O. is
submitted for assignment by the Manufacturer pursuant to a Certificate or such
other form of submission to which the Contractor may from time to time consent,
(ii) the Contractor shall deliver notice of acceptance of assignment to the
Manufacturer pursuant to subparagraph (a) or, in the absence of such notice of
acceptance, the Contractor shall purchase Materials with respect to the P.O. or
otherwise advance of funds in connection with the P.O., (iii) the P.O. shall
meet each of the requirements of subparagraph (b) above unless otherwise waived
by the Contractor, and (iv) none of the events described in subparagraph (c)
above shall have occurred prior to delivery of the Products to the
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Customer pursuant to the P.O. Until such time as each of the aforedescribed
requirements and conditions is satisfied in full, Contractor's acceptance of an
assigned P.O. shall be deemed conditional and subject to revocation at any time.
4. APPOINTMENT OF MANUFACTURER.
(a) Subject to the other provisions of this Agreement, with respect to
all Accepted P.O.'s (and only so long as such P.O. remains an Accepted P.O.)
Contractor hereby appoints the Manufacturer as Contractor's exclusive source for
acceptance of Materials at the Premises, performance of all manufacturing,
processing and warehousing requirements with respect to the conversion of
Materials into Products, and the delivery of Products to Customers, and the
Manufacturer hereby accepts such appointment. Manufacturer agrees to perform all
of its obligations pursuant to this paragraph 4 in a good and workmanlike
manner, to utilize quality control procedures consistent with the standards of
Manufacturer and the industry, and to otherwise comply with each of the
Manufacturer's Specifications.
(b) So long as any Materials or Products are located at the Premises or
are scheduled for delivery to the Premises, Manufacturer agrees to warehouse all
Materials and Products and, with respect to such warehousing obligations,
Manufacturer agrees to perform in accordance with all of the Manufacturer's
Specifications.
(c) Manufacturer further agrees that with respect to Materials purchased
by Contractor pursuant to (and in accordance with) a Certificate which are not
(or cannot be) used in connection with the applicable Accepted P.O., upon
Contractor's written notice:
(i) Manufacturer shall purchase such Materials from Contractor
within three (3) days following Contractor's notice for a purchase price
equal to Contractor's costs for the Materials; or
(ii) If Manufacturer fails to make such purchase of Materials,
such Materials shall be sold by Contractor and the proceeds thereof
applied first to Contractor's costs for the Materials, and the balance,
if any, to Manufacturer.
5. PAYMENT AND RE-ASSIGNMENT.
(a) Upon delivery of Products to the Customer pursuant to an
Accepted P.O., Manufacturer shall issue a P.O. Invoice (and deliver any other
related documents required by the applicable P.O. for issuance of an invoice on
account of such P.O.) to the Customer for the full P.O. Price. Upon Contractor's
direction, the P.O. Invoice so issued shall be in the name of the Contractor and
shall direct the Customer to make payment to the Contractor (or the Lock Box, if
applicable). Manufacturer shall immediately pay to the Contractor any sums from
time to time received by the Manufacturer from the Customer or any other party
other than the Contractor on account of a P.O. Invoice. Upon Contractor's
demand, each P.O. Invoice shall be prepared on such invoice form as Contractor
may designate.
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(b) At such time as Contractor has received payment in full on account of
a P.O. Invoice, the Contractor shall pay Manufacturer in accordance with
paragraph 7 below, and shall re-assign the applicable Accepted P.O. and all
rights with respect thereto to the Manufacturer and the Manufacturer shall
accept such re-assignment. The re-assignment shall be evidenced by a
Re-Assignment and Release of Purchase Order in the form of Exhibit "C" attached
hereto.
(c) Sums received by the Contractor on account of a P.O. Invoice shall be
applied by the Contractor for the satisfaction of the expenses, fees and charges
described in this Agreement pursuant to the priorities of payment set forth in
paragraph 7 below. Provided, however, that Manufacturer shall pay all sums due
Contractor upon a Delinquent P.O. in the manner and pursuant to the terms of
paragraph 8 below.
6. COMMITMENT FEE.
(a) Subject to the provisions of this paragraph 6, Manufacturer shall pay
Contractor a Commitment Fee in consideration of Contractor's commitment to
reserve and have available sufficient funds to purchase Materials or to
otherwise advance funds in connection with a P.O. for Product Volume in amounts
equal to or exceeding the Minimum Volume as contemplated by this Agreement. The
Commitment Fee shall be in the sum of $150,000 and shall be paid by Manufacturer
on the earlier of twelve (12) months following the date of this Agreement or the
date of termination of this Agreement. The Commitment Fee for the term of this
Agreement is deemed by the parties to have been earned by the Contractor upon
the signing of this Agreement, as of which date the Contractor has reserved the
requisite funds.
(b) Notwithstanding the provisions of subparagraph (a) above, all or a
portion of the Commitment Fee shall be waived in accordance with the provisions
of this subparagraph (b). If Product Volume as of the due date for payment of
the Commitment Fee equals or exceeds the Minimum Volume, the entire Commitment
Fee shall automatically be deemed waived by the Contractor. If Product Volume as
of the due date for payment of the Commitment Fee does not equal or exceed the
Minimum Volume, Contractor shall waive that portion of the Commitment Fee equal
to the Commitment Fee multiplied by a fraction, the numerator of which is the
Product Volume as of the due date for payment of the Commitment Fee, and the
denominator of which is the Minimum Volume.
7. COMPENSATION OF CONTRACTOR AND MANUFACTURER.
(a) Payments received by the Contractor or into the Lock Box on account
of Accepted P.O.'s will be applied in the following order of priority:
(i) First, to pay Contractor's Expenses to the extent that such
expenses are then due pursuant to the terms of paragraph 9;
(ii) Second, to the payment of the Contractor's Deal Fees in
connection with the Accepted P.O. and all other Accepted P.O.'s that
became Accepted P.O.'s concurrently with such Accepted P.O.;
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(iii) Third, to pay any shortage then existing in the Security
Deposit as set forth in paragraph 10.1;
(iv) Fourth, to reimburse the Contractor for the cost of Materials
and for other advances made in connection with a P.O. (without regard to
term or prompt payment discounts) purchased in connection with the
Accepted P.O. and all other Accepted P.O.'s that became Accepted P.O.'s
concurrently with such Accepted P.O.; and
(v) Fifth, to the payment of the Manufacturer's Fee in connection
with the Accepted P.O.
(b) The Contractor's Deal Fees with respect to each Accepted P.O. shall
be as follows:
(i) A transaction initiation and set-up fee in a sum equal to 5.0%
of the aggregate of (a) the face amounts of all letters of credit issued
by Contractor (or other financial accommodations) plus (b) all funds
advanced by Contractor by other than issuing its letters of credit; plus
(ii) A daily maintenance fee in a sum equal to 0.067% of the
aggregate of the face amounts of all letters of credit issued by
Contractor (or other financial accommodations) and all funds advanced by
Contractor by other than issuing its letters of credit which remain
outstanding for more than seventy-five (75) days; plus
(iii) A Materials advance fee in a sum equal to the Applicable
Daily Rate (as hereinafter defined) multiplied by the aggregate amount
outstanding on all letters of credit (or other financial accommodations)
and all funds advanced by Contractor by other than issuing its letters of
credit on account of purchases of Materials or other advances made in
connection with a P.O. multiplied by the number of days from the earliest
of (A) the date on which any such letter of credit or purchase order or
financial accommodation is negotiated into cash by any person, or (B) the
date funds are advanced by other than issuing a letter of credit or
purchase order, to and including the Clearance Date. The "Applicable
Daily Rate" shall mean the prime rate as in effect from time to time at
the American National Bank, Chicago, Illinois, plus 4%, divided by 360.
(iv) In the event of a Delinquent P.O., a late payment fee in a
sum equal to 0.067% of the outstanding portion of the P.O. Price
multiplied by the number of days from the date an Accepted P.O. becomes a
Delinquent P.O. to and including the Clearance Date.
Notwithstanding the foregoing, if the sum of the transaction initiation and
set-up fee and the daily maintenance fee is not equal to or greater than $2,500
with respect to an Accepted P.O., the minimum aggregate amount payable by
Manufacturer to Contractor for the transaction initiation and set-up fee and the
daily maintenance fee with respect to such accepted P.O. shall be equal to
$2,500.
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(c) The Manufacturer's Fee with respect to each Accepted P.O. shall be
equal to the collected P.O. Proceeds with respect to such Accepted P.O. less all
sums payable pursuant to subparagraphs (a)(i), (ii), (iii) and (iv) above and
less 100% of all term discounts or discounts for prompt payment.
(d) Sums due on account of the expenses and fees described in
subparagraphs (a)(i), (ii), (iii) and (iv) above shall be paid as and when
proceeds are received with respect to the applicable Accepted P.O. The
Manufacturer's Fee will be paid not later than the second business day after the
Clearance Date and after satisfaction of all costs, fees and expenses having a
higher priority then due and owing.
8. REPURCHASE; REASSIGNMENT.
(a) Contractor shall have the right to require the Manufacturer to
immediately purchase any Delinquent P.O. (and inventory of Materials and
Products in the case of a Canceled P.O.) for an amount equal to the full amount
outstanding under the P.O. Invoice (or the P.O. Price in the case of a canceled
P.O.). Any such payment by the Manufacturer shall be deemed to be P.O. Proceeds
and shall be applied in accordance with the priorities and terms set forth in
paragraph 7 above.
(b) In the event that Manufacturer makes all payments due on a Delinquent
P.O. or Canceled P.O. pursuant to the provisions of subparagraph (a) above,
Contractor shall thereupon immediately assign to Manufacturer all of
Contractor's rights and interests in and to the P.O. Invoice and the P.O.
Proceeds and any Materials or Products in the possession of Contractor or
Manufacturer with respect to such Delinquent P.O.
9. CONTRACTOR'S EXPENSES. Immediately upon Contractor's demand,
Manufacturer shall pay or reimburse Contractor for all Contractor's Expenses.
Contractor's Expenses include all reasonable expenses, fees, and costs incurred
by Contractor in connection with the creation of and performance of this
Agreement and the transactions contemplated hereby, including without
limitation, the expenses of Contractor's representative at the Premises,
insurance and credit insurance premiums, audit costs, attorney's fees,
Contractor's travel expenses, Lock Box Bank charges, and filing fees.
Contractor's demand for payment of Contractor's Expenses will be made in writing
and will include reasonable documentation of the expenses for which
reimbursement is demanded. Contractor acknowledges receipt of the sum of $5,000
deposited by Manufacturer to be applied towards the payment of Contractor's
Expenses.
10. SECURITY INTERESTS. As security for the performance by Manufacturer
of each of its obligations under this Agreement, Manufacturer hereby grants the
following security interests to the Contractor:
(a) A security interest in all of Manufacturer's assets in accordance
with the provisions of the Security Agreement in form satisfactory to
Contractor. Provided, however, that such grant of security interest shall be
subordinate to the lien of the Senior Lender (if any) in any common collateral.
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(b) The right to set-off against any and all amounts due to the
Manufacturer hereunder any sums which are due to the Contractor hereunder which
have become past due and delinquent under this Agreement.
(c) All of the Manufacturer's rights and interests in, and right of
payment from, the Accounts Receivable Lender of all sums paid or payable by the
Accounts Receivable Lender from time to time to the Manufacturer. Manufacturer
agrees to direct the Accounts Receivable Lender to make such payments to
Contractor pursuant to such written direction as Contractor may request from
time to time.
(d) All checks, notes, deposits, drafts, and other instruments of payment
on account of or related to an Accepted P.O. Manufacturer hereby irrevocably
designates and appoints the Contractor (and all persons designated by the
Contractor) as the Manufacturer's true and lawful attorney-in-fact and
agent-in-fact and Contractor (or Contractor's agent) may, without notice to
Manufacturer:
(i) At any time endorse by writing or stamping Manufacturer's name
on any checks, notes, deposits, drafts or other instruments of payment on
account of, relating to, or representing the proceeds of an Accepted P.O.
or any other collateral described herein or in the Security Agreement
(collectively the "Collateral") which come into the possession of the
Contractor or are under Contractor's control and deposit the same to the
account of the Contractor for application to all sums due from the
Manufacturer to the Contractor hereunder; and
(ii) At any time after the occurrence of a default by the
Manufacturer hereunder or pursuant to the Security Agreement, in
Manufacturer's or Contractor's name, demand payment of, enforce payment
of, exercise all of Manufacturer's rights and remedies with respect to,
settle, adjust, compromise, initiate and prosecute legal proceeding with
respect to, and otherwise take all actions with respect to the Collateral
which are, in the Contractor's sole discretion, necessary or desirable in
order to fulfill Manufacturer's obligations under this Agreement and
otherwise realize the full economic value of the Collateral.
10.1 SECURITY DEPOSIT. (a) The Security Deposit shall be held and applied
by the Contractor as follows:
(i) Contractor shall hold the Security Deposit in such
depositaries as it determines and may commingle the same with other funds
from time to time in Contractor's possession. No interest or other
earnings shall be payable on account of sums held as a Security Deposit.
(ii) Upon the occurrence of a default as set forth in paragraph
18(c) below, Contractor may, in its discretion and without prior notice,
apply all or any portion of the Security Deposit to pay or otherwise
satisfy Manufacturer's obligations hereunder. Contractor
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shall, as soon as practicable following any such application, notify
Manufacturer thereof and provide a full accounting of such application.
(b) When funds are applied in the manner set forth in paragraph
10.1(a)(ii) above, a "shortage" is created in an amount equal to all sums so
applied. Manufacturer shall, within five (5) business days following
notification of any shortage, pay to the Contractor, as and for a portion of the
Security Deposit, the sum of such shortage.
(c) Upon termination of this Agreement and the payment of all sums then
due the Contractor by the Manufacturer hereunder. Contractor shall promptly pay
the Security Deposit to Manufacturer.
11. GUARANTY. It is a condition to the signing of this Agreement and the
performance by the Contractor of any of its obligations hereunder that the
persons and entities listed on Addendum III attached hereto execute and deliver
to the Contractor a Guaranty in form and substance satisfactory to Contractor
under which said guarantor(s) guaranty the Manufacturer's obligations to
Contractor hereunder.
12. COVENANTS OF CONTRACTOR. Provided that Manufacturer performs each of
its obligations in the manner set forth in this Agreement, the Contractor
covenants and agrees as follows:
(a) To use reasonable efforts to place orders for Materials identified on
Certificates for Accepted P.O.s for purchase by Contractor and delivery to the
Premises on terms consistent with the terms set forth in the Certificate.
(b) Following timely delivery and acceptance of Materials at the
Premises, to promptly pay for all such Materials in accordance with the terms of
purchase.
(c) To release Materials located at the Premises in such quantity and at
such times as are necessary to permit Manufacturer to meet the terms of Accepted
P.O.'s.
(d) Upon termination of this Agreement and performance by Manufacturer of
all of its obligations hereunder, to promptly execute, deliver and file (if
Manufacturer so requests) any instruments and documents reasonably necessary to
terminate and release any and all security interests granted to Contractor by
Manufacturer pursuant to this Agreement.
13. WARRANTIES AND REPRESENTATIONS OF MANUFACTURER. Manufacturer hereby
makes the following warranties and representations to Contractor, each of which
is deemed a material inducement to the Contractor to enter into and perform in
accordance with the provisions of this Agreement and each of which shall be
deemed renewed and restated as of the Acceptance Date of each Accepted P.O.:
(a) Manufacturer is a corporation duly organized, validly existing, and
in good standing under the laws of the state of its incorporation, and is
qualified or licensed as a foreign corporation
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to do business in every location in which the laws require Manufacturer to be so
qualified or licensed;
(b) Manufacturer has the right and power and is duly authorized and
empowered to enter into, execute, deliver, and perform this Agreement and all
agreements and documents described herein;
(c) The execution, delivery, and performance by Manufacturer of this
Agreement and all agreements and documents described herein does not constitute
a violation of any law, regulation, judgment, order, contract, charter, by-laws,
or other instrument to which Manufacturer is a party or is otherwise bound or
subject;
(d) Manufacturer is not in default under any loan agreement, mortgage,
lease, trust deed or similar agreement relating to the borrowing of money to
which Manufacturer is a party or is otherwise bound;
(e) Each P.O. submitted for assignment by the Manufacturer is a bona fide
purchase order and conforms in all respects to the representations contained in
the Certificate, which Certificate is true and correct in all respects;
(f) The Manufacturer shall at all times maintain such types and amounts
of insurance coverage (including without limitation credit insurance) with
respect to Manufacturer's business operations, the Premises, the Materials and
the Products located upon the Premises and any Accepted P.O. as Contractor may
from time to time reasonably require, such insurance to name the Contractor as
an insured in the manner and to the extent required by Contractor from time to
time and, upon the failure to maintain such coverage, Contractor may purchase
the same and the cost thereof shall be deemed a Contractor's Expense;
(g) Except with respect to the lien of the Accounts Receivable Lender or
as otherwise set forth on Exhibit "D" attached hereto, there are no liens,
judgments or claims affecting or relating to the Manufacturer or any of its
assets;
(h) Except as set forth on Exhibit "E", there are no suits,
administrative proceedings, arbitration proceedings or other adversarial
proceedings or investigations pending or (to the best of Manufacturer's
knowledge) threatened against Manufacturer or any of the guarantors;
(i) All of the financial information (including projections) provided by
the Manufacturer to the Contractor in connection with the Contractor's
consideration of the transaction contemplated by this Agreement are true and
accurate, contain no material misstatement of any facts, contain all material
information concerning the Manufacturer's financial condition, and do not omit
to state any facts which, if disclosed, would reflect adversely on the financial
condition of the Manufacturer or any of its Customers; and
(j) Manufacturer has duly filed all federal, state, county, local, and
foreign income, excise, sales, customs, property, withholding, social security
and other tax and information returns and
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reports required to be filed by it to the date hereof, or in the alternative,
has obtained extensions for filing pursuant to established procedures, and has
paid or made provision for payment of all taxes (including interest and
penalties) due and payable. Manufacturer has no material liability for any taxes
of any nature whatsoever.
14. PRODUCT WARRANTIES. Manufacturer expressly assumes and agrees to make
all product and service warranties (expressed or implied) to Customers with
respect to Products and further agrees to defend, indemnify and hold the
Contractor harmless from and against any claims, suits, obligations, costs, or
expenses (including reasonable attorney's fees and legal expenses) with respect
to all express or implied warranties in connection with the Products.
15. AUDIT RIGHTS. Manufacturer shall deliver to Contractor copies of all
information and documents submitted from time to time by the Manufacturer to any
Senior Lender simultaneously with the submission of such documents to such
Senior Lender; and shall deliver to Contractor monthly financial statements,
aged accounts receivable, aged accounts payable, and Manufacturer's and
Contractor's inventory schedules within fifteen (15) days following the end of
each month during the term hereof. In addition, Contractor shall have the right
to inspect, audit and copy any financial books, computer programs, and other
data containing financial information in connection with the Manufacturer at any
time during regular business hours upon not less than 24 hours' prior written
notice. Manufacturer agrees to prepare and maintain complete and accurate
business records with respect to the transactions contemplated by this
Agreement.
16. RELATIONSHIP OF THE PARTIES. The parties are independent contractors
and are not (and shall not be deemed to be) the partners, joint venturers,
agents or representatives of the other. Each party is exclusively responsible
for the conduct of its own business and is not authorized to bind the other
party in any manner whatsoever. Further in this regard:
(a) Manufacturer acknowledges that it has no ownership interest in any
P.O., Materials, work-in-process, or Products in connection with an Accepted
P.O. except as otherwise provided in this Agreement; and
(b) Contractor acknowledges that it has no ownership interest (other than
the security interests granted hereunder) in Manufacturer or in any of
Manufacturer's assets.
17. INDEMNIFICATION. Manufacturer agrees to indemnify, hold harmless and
defend Contractor from and against any loss, costs, (including reasonable
attorney's fees and costs), claims, suits or causes of action brought,
threatened or incurred by or against Contractor by reason of any of the
following:
(a) As a consequence of any breach of this Agreement by Manufacturer, any
breach of a warranty made by Manufacturer hereunder, or the failure of any
representation made by Manufacturer hereunder to be true;
(b) Any suit or threat of suit by any Customer, including, without
limitation, all claims under or with respect to Product warranties, except with
respect to any suit or claim arising or
12
13
threatened solely by reason of Contractor's acts or omissions to act which
constitute a breach of Contractor's obligations hereunder;
(c) Any suit or threat of suit by any of Manufacturer's employees, former
employees, securities holders or lenders. except with respect to any suit or
claim arising or threatened solely by reason of Contractor's acts or omissions
to act which constitute a breach of Contractor's obligations hereunder;
(d) Any product liability claims of any kind, including, without
limitation, all claims under or with respect to Product warranties; and
(e) Environmental liability, if any, as a result of this Agreement or any
transaction contemplated by or engaged in pursuant to or on account of this
Agreement.
18. TERM AND TERMINATION; DEFAULT.
(a) Term of Agreement. This Agreement is for a term of twelve (12) months
following the date hereof; provided, however, that Contractor may terminate this
Agreement immediately upon Manufacturer's default.
(b) Obligations Upon Termination. Except for termination in the event of
Manufacturer's default, upon termination of this Agreement, each party shall
remain liable to perform all matured obligations under this Agreement which
remain unperformed as of the termination date as if this Agreement remained in
full force and effect. Upon termination for any reason and upon completion of
the foregoing obligations in the case of a termination upon Manufacturer's
default, all obligations hereunder shall terminate except the continuing
obligations of the parties under paragraphs 13, 14, 15 and 17 hereof.
(c) Default.
(i) Manufacturer shall be considered to be in default hereunder if
it either (A) fails to make any payment due Contractor hereunder within
three (3) business days of the due date thereof, or (B) fails in any
respect to perform any of its other obligations hereunder and such
failure continues unremedied for a period of three (3) business days
following Contractor's notice thereof, or (C) has made a representation
which proves to be false or breaches a warranty made hereunder, or (D)
files (or has filed against it) a petition (or otherwise initiates
proceedings) for bankruptcy, reorganization, receivership or other
proceedings for the protection of debtors, or (E) fails to make any
payment due to any third party on or before the due date therefor if the
failure to make such payment gives rise to or creates (or if unremedied
would give rise to or create) an encumbrance upon the Products or any of
them or otherwise restricts Contractor's sale or disposition of the
Products or any of them.
(ii) Without waiving or limiting any of Contractor's other rights
and remedies in the event of a default by Manufacturer, and in addition
to Contractor's
13
14
right of set-off set forth in paragraph 10 above, upon the occurrence of
any event of default, Manufacturer shall be liable for immediate payment
to Contractor of all amounts due or to become due to Contractor
hereunder, including, without limitation, Contractor's Expenses,
Contractor's Deal Fees and the Commitment Fee. Contractor shall further
be entitled to reimbursement for all of its costs of collection, whether
or not suit has been filed or judgment entered, including, without
limitation, reasonable attorneys' fees and legal expenses. All amounts
owed to Contractor pursuant to this paragraph 18(c) shall carry interest
at the rate of 2% per month from the effective date of termination, or,
in the case of Contractor's costs of collection, from the date such costs
are incurred.
(iii) In the event of default by Manufacturer, and subject to any
agreements between Contractor and any Senior Lender, Contractor shall
further be entitled to exercise all the rights and remedies of a secured
party under the Uniform Commercial Code or as otherwise provided under
the Security Agreement. The proceeds of any amount recovered by
Contractor shall be applied, first, to the payment of Contractor's
reasonable costs and expenses in connection with the enforcement of
Contractor's rights and remedies hereunder; second, toward the payment or
satisfaction of all amounts owing Contractor hereunder, including
interest thereon; and third, any surplus to be paid to Manufacturer or as
a court of competent jurisdiction may direct. In the case of a
deficiency, Manufacturer shall remain liable for such deficiency after
such sale, with interest at the rate herein provided.
19. MISCELLANEOUS PROVISIONS.
(a) CHOICE OF LAW, VENUE, JURISDICTION AND SERVICE. THIS AGREEMENT AND
ALL AGREEMENTS REFERRED TO HEREIN BETWEEN THE CONTRACTOR AND THE MANUFACTURER
(COLLECTIVELY THE "TRANSACTION DOCUMENTS") HAVE BEEN SUBMITTED TO THE CONTRACTOR
AT THE CONTRACTOR'S PRINCIPAL PLACE OF BUSINESS IN THE STATE OF ILLINOIS, WILL
BE PERFORMED BY THE PARTIES IN THE STATE OF ILLINOIS, AND SHALL BE DEEMED TO
HAVE BEEN MADE IN THE STATE OF ILLINOIS. THE VALIDITY OF EACH OF THE TRANSACTION
DOCUMENTS AND THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT THEREOF, AND THE
RIGHTS OF THE PARTIES THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT
REGARD TO THE CONFLICTS OF LAW RULES OF THE STATE IN WHICH SUIT IS INITIATED
PERTAINING TO THIS AGREEMENT. FURTHER, THE CONTRACTOR AND THE MANUFACTURER AGREE
THAT ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THE
TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY, SHALL BE
INSTITUTED IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS, EASTERN DIVISION, OR ANY COURT OF THE STATE OF ILLINOIS LOCATED IN
XXXX COUNTY, AND EACH PARTY IRREVOCABLY SUBMITS AND CONSENTS TO THE JURISDICTION
OF THOSE COURTS AND
14
15
WAIVES ANY AND ALL OBJECTIONS TO JURISDICTION OR VENUE THAT ANY SUCH PARTY MAY
HAVE UNDER THE LAWS OF THE STATE OF ILLINOIS OR OTHERWISE IN THOSE COURTS IN ANY
SUCH SUIT, ACTION, OR PROCEEDING. FURTHER, TO THE EXTENT PERMITTED BY LAW,
SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST
THE MANUFACTURER MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS FOR NOTICE AS PROVIDED IN THIS AGREEMENT. MANUFACTURER
AGREES THAT ANY FINAL JUDGMENT RENDERED AGAINST IT IN ANY ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AS TO THE SUBJECT OF SUCH FINAL JUDGMENT AND MAY BE ENFORCED
IN OTHER JURISDICTIONS IN ANY MANNER PROVIDED BY LAW.
(b) WAIVER OF RIGHT TO JURY TRIAL. MANUFACTURER AND CONTRACTOR
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT,
ANY OTHER AGREEMENT RELATED HERETO OR WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES,
AND THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDING ARISING OUT OF ANY
SUCH CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
SITTING WITHOUT A JURY.
(c) Notices. All notices required or permitted pursuant to this Agreement
shall be in writing and either personally delivered, sent by facsimile
transmission (provided evidence of transmission is maintained and the original
of the transmittal notice is sent by U.S. mail), or Federal Express or similar
overnight delivery service, addressed to the respective addresses or facsimile
number of the parties set forth on the last page of this Agreement, or at such
telephone numbers or other addresses as have from time to time been designated
by like notice. Notices given in the manner prescribed herein shall be deemed
given on the date sent or transmitted (as the case may be).
(d) Severability. The paragraphs of this Agreement are severable, and in
the event that any paragraph or portion of this Agreement is declared illegal or
unenforceable, the remainder of this Agreement will be effective and binding
upon the parties.
(e) Opinion of Counsel. It is an express condition to the closing of the
transactions contemplated by this Agreement that the Manufacturer cause to be
delivered to the Contractor an opinion of Manufacturer's counsel which is
satisfactory to Contractor.
(f) Waiver; Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof, and
supersedes all prior oral or written agreements, understandings, or
arrangements. No waiver of or modifications to the provisions of this Agreement
will be valid unless in writing and signed by all parties. This Agreement shall
be binding upon and inure to the benefit of the parties hereto, their
successors, assigns and legal representatives.
15
16
(g) Assignment. Manufacturer may not transfer or assign its rights or
obligations hereunder without the prior written consent of the Contractor, and
any attempted transfer or assignment shall be null and void.
(h) Performance. Time is of the essence under this Agreement.
(i) Further Assurances. From and after the date hereof, each party will
execute all documents and take such further actions as the other may from time
to time reasonably request in order to carry out the transactions provided for
herein and accomplish the purposes contemplated hereby.
(i) Publication. Contractor shall have the right to publicize (by
"tombstone" or comparable publication) the Purchase Order Assignment Program
evidenced hereby (including the date and size of the facility but not the
specific terms hereof).
(j) Counterparts; Facsimile Delivery. This Agreement may be executed in
one or more counterparts, each of which taken together shall constitute one and
the same instrument, admissible into evidence. Delivery of an executed
counterpart of this Agreement by facsimile shall be equally as effective as
delivery of a manually executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by facsimile shall also
deliver a manually executed counterpart of this Agreement, but the failure to
deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
* * * * * * * * * * *
16
17
This Agreement has been signed at Northbrook, Illinois on the day and
year first above written.
CONTRACTOR: MANUFACTURER:
TRANSCAP TRADE BAY AREA MULTIMEDIA, INC.
FINANCE
By: /s/ XXXXXXX XXXX By: /s/ XXX XXXXX
------------------------------ -----------------------------
Xxxxxxx Xxxx, Executive Vice President Xxx Xxxxx, President
Transcap Associates, Inc. general partner
Address: 000 Xxxxxx Xxxx. #000 Address: 000 X. Xxxxx Xxxxx Xx.
----------------------- ----------------------
Xxxxxxxxxx, XX. 00000 Suite 930
----------------------- ----------------------
Facsimile: 000-000-0000 Xxx Xxxx, XX. 00000
----------------------- ----------------------
Facsimile: 408-298-9600
----------------------
17
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EXHIBIT A
PURCHASE ORDER PACKAGE CERTIFICATE
This Certificate is executed by ___________________________, who is the
______________________ of BAY AREA MULTIMEDIA, INC., a California corporation
("Manufacturer"), in connection with the Master Purchase Order Agreement dated
___________, 2000, (the "Agreement") with TRANSCAP TRADE FINANCE ("Contractor").
The undersigned certifies to Contractor that all of the information
contained in this Certificate is true, complete and accurate and is furnished to
Contractor to induce Contractor to purchase Materials in accordance with the
Agreement:
1. Customer Information
(a) Attached is a purchase order number _______ dated _______________,
2000 in the total amount of $________ (the "Purchase Order") from
the following customer ("Customer"), or Manufacturer has received
a bona fide indication of interest from the following Customer.
Name:
Address:
Person in charge:
Phone Number:
(b) Attached is a true and complete credit history, payment history
and credit report on the Customer; or, in lieu thereof,
_____________approval or accepted letter of credit.
(c) The Purchase Order is (check one):
______ Assignable to Contractor by Manufacturer without Customer's
consent; or
______ Not assignable without Customer's consent, but attached is
the consent of the Customer to assignment to Contractor;
______ Not assignable, but the proceeds of the Purchase Order are
assignable; or
______ Manufacturer has received indication of interest only.
A-1
19
2. Product Information
(a) Original (or a true, accurate and complete copy of) Purchase Order
- attached.
(b) Identification of "Product(s)":
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
(c) Quantity of Product Ordered:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
(d) Specifications of Product:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
3. Price and Delivery Information
(a) Aggregate Purchase Order Price:
---------------------------
(b) Price per Unit of Product:
--------------------------------
(c) Delivery Date ("P.O. Delivery Date")
----------------------
(d) Terms as to liability for shipping cost, insurance, "process and
hold", risk of loss, etc.:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
4. Materials Information
Attached is an exhibit detailing: (a) the quantity and quality
specifications for all Materials needed to complete the Purchase
Order ("Materials"); (b) the name, address, contact person and
phone number of each person from whom the Materials may be
purchased; and (c) confirmed current pricing and delivery date(s)
("Material Delivery Date(s)") for all of the Material and a copy
of the applicable Purchase Orders.
A-2
20
5. Production Information
(a) The manufacturing/distributing facility at which the Product will
be manufactured/distributed (the "Premises"):
---------------------------------------------
---------------------------------------------
---------------------------------------------
(b) Brief description of production processes and requirements:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
(c) Cost of Production:
--------------------------------------
(d) Units of Product per day:
--------------------------------
(e) Duration of production run to manufacture Product for the Purchase
Order:
-----------------------------------
6. Gross Margin
Here is the computation of Projected Net Gross Margin before
depreciation, including, without limitation, projections of the
cost of Materials and Manufacturer's Direct Costs:
7. Assignment of Purchase Order
Attached is an Assignment of the Purchase Order, duly executed by
authorized officers of Manufacturer.
A-3
21
8. Lender Consent (check one):
______ None of the Materials, work-in-process or inventory is subject to
a security interest; or
______ If any of the Materials, work-in-process or inventory of
Manufacturer are subject to a security interest, attached is the
written consent and release of each holder of a security interest,
in form previously approved by Contractor.
Dated: ___________________, 2000
BAY AREA MULTIMEDIA, INC.
By: /s/ XXX XXXXX
-----------------------------
Title: PRESIDENT
-----------------------------
A-4
22
EXHIBIT A (continued)
ACCEPTANCE OF PURCHASE ORDER CERTIFICATE
The foregoing Purchase Order Certificate, as prepared and
delivered by Manufacturer, is hereby accepted and approved.
TRANSCAP TRADE FINANCE
By:
------------------------
Dated:
-----------------------
A-5
23
EXHIBIT A (continued)
ASSIGNMENT OF PURCHASE ORDER
FOR VALUE RECEIVED, BAY AREA MULTIMEDIA, INC., a California corporation
("Assignor") hereby assigns, transfers and delivers to TRANSCAP TRADE FINANCE
("Assignee") all of Assignor's right, title and interest in, to and under that
certain Purchase Order, identified as follows, for the purposes, and pursuant to
the terms and conditions of that certain Master Purchase Order Purchase
Agreement, dated _________, 2000, between Assignor and Assignee:
Assignor's P.O. No.:_______________
Customer Name:_____________________
P.O. Date:_________________________
BAY AREA MULTIMEDIA, INC.
By: /s/ XXX XXXXX
--------------------------
Title: PRESIDENT
--------------------------
A-6
24
EXHIBIT B
MANUFACTURER'S SPECIFICATIONS
The following are performance specifications, obligations, and covenants
(collectively the "Manufacturer's Specifications") required of Manufacturer in
connection with its obligations under the Purchase Order Assignment Agreement to
which this Exhibit is attached:
1. To deliver to each Customer a Purchase Order Acknowledgement on such
form as Contractor may accept directing that payment of each P.O. Invoice be
made to Contractor or the Lock Box Bank (if any).
2. To cooperate with Contractor concerning Contractor's placement of
orders for Materials.
3. To notify Contractor immediately upon the receipt of Materials at the
Premises. Upon such delivery, to inspect the quality and quantity of Materials
and to notify Contractor of any deficiencies.
4. To permit Contractor's representative access to the Premises at all
times for the purpose of inspecting, safeguarding, and otherwise observing and
overseeing the storage of Materials and Products and the processing of Materials
into Products.
5. To take all actions necessary for the conversion of Materials into
Products and the shipment thereof to Customers in accordance with Accepted
P.O.'s, including without limitation, manufacturing, processing, packaging,
shipping, warehousing, fabricating and insuring Materials and Products in
accordance with the specifications set forth in the applicable Accepted P.O.,
and to deliver the same to the Customer on or before the P.O. Delivery Date.
6. To maintain and supply sufficient quantity and quality of equipment,
materials, labor and facilities (other than Materials) in order to perform each
of its obligations described in this Exhibit "B".
7. To maintain all inventories of Materials and Products in such
segregated locations upon the Premises as the Contractor may approve; to
properly identify such Materials and Products as being the property of the
Contractor and further identify the same by the P.O. and the Customer for which
such Materials or Products relate; and to implement such commercially reasonable
security procedures and devices as Contractor may require for the preservation
and segregation of Materials and Products, including without limitation, the
construction and maintenance of secured cages and storage rooms for such
Materials and Products. To not ship or otherwise release any Materials or
Products except with the prior written consent of the Contractor.
8. To ship all P.O. Inventory by such date, by such means, and under such
terms as required pursuant to the applicable P.O. and to deliver the P.O.
Inventory on or before the X.X.
X-0
00
Delivery Date. Manufacturer shall further provide Contractor with written notice
of each shipment of P.O. Inventory immediately following shipment thereof.
9. To prepare and deliver to the Contractor each P.O. Invoice immediately
following shipment of the P.O. Inventory.
10. To fully insure in the name of the Manufacturer and the Contractor
all P.O. Inventory during shipment to Customers in amounts, with carriers and on
terms and conditions acceptable to Contractor.
11. To direct all Customers to make payment with respect to a P.O.
Invoice to the Contractor or the Lock Box (if any) and to take no actions and
make no statements which direct (or have the effect of causing) any P.O.
Customer to make any payment with respect to any P.O. Invoice to anyone other
than the Contractor or the Lock Box.
12. To not accept any payment (including rebates, set-offs, and other
Customer adjustments) with respect to any P.O. Invoice other than through the
Contractor or the Lock Box.
13. To receive and hold in trust for the sole and exclusive benefit of
Contractor all sums and instruments representing payment of any P.O. Invoice and
all proceeds which for any reason come into the possession of Manufacturer, its
agents, representatives or any other party acting on behalf of Manufacturer, and
promptly to deliver or cause delivery of such sums to the Contractor.
14. To maintain in the name of Manufacturer and Contractor general
comprehensive liability insurance, with extended coverage and coverage against
theft and product liability and such other insurance and coverages as may be
commercially reasonable with exclusions, with carriers, and on terms and
conditions that may be acceptable to Contractor in its sole discretion.
15. To deliver to Contractor a list of unpaid accounts receivable
relating to P.O. Invoices as of last day of the preceding calendar month, such
list to be delivered by the 10th day of the next succeeding month and certified
as complete and accurate by a duly authorized officer of Manufacturer.
16. To not pledge any of its assets or cause or permit any lien or
security interest to be taken in any of its assets, except such liens as are
described on Exhibit "D" of this Agreement or are otherwise approved by
Contractor.
17. To provide Contractor with written notice immediately upon (i) the
filing or threat of filing of a bankruptcy petition by or against Manufacturer,
(ii) the initiation of foreclosure proceedings or other similar action against
Manufacturer or any of its assets, (iii) a request or demand made upon
Manufacturer to make, or for any reason Manufacturer makes, an assignment for
the benefit of its creditors, or (iv) Manufacturer becomes unable to pay its
bills in the ordinary course of business as they become due.
X-0
00
00. To immediately notify Contractor of any pending or threatened
litigation, administrative proceeding, arbitration, or governmental
investigation concerning or relating to Manufacturer or any goods, services or
assets that are the subject of an Accepted P.O. or are pledged as collateral
pursuant to the Security Agreement.
B-3
27
EXHIBIT C
RE-ASSIGNMENT AND RELEASE OF PURCHASE ORDER
UPON AND SUBJECT TO PAYMENT OF the sum of $_____ on or before _________,
19__("Payment Date"), TRANSCAP TRADE FINANCE ("Assignor") hereby assigns,
transfers and delivers to BAY AREA MULTIMEDIA, INC. ("Assignee") all of
Assignor's right, title and interest in, to and under that certain Purchase
Order identified below, and hereby releases any claims in or with respect to
such Purchase Order. If payment is made after the Payment Date, such assignment
and release shall require payment of $________ for each day after the Payment
Date during which payment is not received. The applicable Purchase Order is:
P.O. Invoice No.: ___________
Customer Name: ___________
P.O. Invoice Date: ___________
This Assignment shall become effective immediately upon receipt of good
funds in the amount described above.
TRANSCAP TRADE FINANCE
By:
---------------------------
Dated:
------------------
ACCEPTANCE
BAY AREA MULTIMEDIA, INC., a California corporation ("Assignee"), hereby
accepts the foregoing assignment of Purchase Order, and covenants and agrees to
fully perform all obligations with respect thereto and hereby releases Assignor
from responsibility for the performance of any such obligations whether required
before, on or after the date of this Acceptance. Assignee hereby authorizes
[Account Receivable Lender] to transfer the amount set forth above to Assignor
per Assignor's instructions.
Dated:________
BAY AREA MULTIMEDIA, INC.
By: /s/ XXX XXXXX
-------------------------
Title: PRESIDENT
-------------------------
X-0
00
XXXXXXX X
EXCEPTIONS TO XXXXXXXXXX'X XXXXXX XXXX
Xxxx
X-0
29
EXHIBIT E
PENDING LITIGATION, ETC.
X-0
00
XXXXXXXX X
The Accounts Receivable Lender is:
None
The Senior Lenders other than the Accounts Receivable Lender are:
None
31
ADDENDUM II
In this Agreement:
(a) The "Lock Box Bank" is:
AMERICAN NATIONAL BANK
DEPT. 77-6132
XXXXXXX, XX 00000-0000
(b) The "Lock Box" is maintained in LOCK BOX ACCOUNT NO. 77-6132 at
the Lock Box Bank.
32
ADDENDUM III
The Guarantors pursuant to this Agreement are:
Xxx Xxxxx
