Filed
Pursuant to Rule 424(b)(3)
Registration
No. 333-154311
PROSPECTUS
SUPPLEMENT NO. 21
SOUTHPEAK
INTERACTIVE CORPORATION
14,556,333 Shares
of Common Stock
6,151,399 Class Y Warrants
This
prospectus supplement no. 21 supplements our prospectus dated April 3, 2009, as
supplemented by prospectus supplement no. 1 dated May 15, 2009, prospectus
supplement no. 2 dated June 19, 2009, prospectus supplement no. 3 dated July 22,
2009, prospectus supplement no. 4 dated August 6, 2009, prospectus supplement
no. 5 dated August 21, 2009, prospectus supplement no. 6 dated September 11,
2009, prospectus supplement no. 7 dated October 14, 2009, prospectus supplement
no. 8 dated November 13, 2009, prospectus supplement no. 9 dated November 23,
2009, prospectus supplement no. 10 dated February 17, 2010, prospectus
supplement no. 11 dated February 22, 2010, prospectus supplement no. 12 dated
February 22, 2010, prospectus supplement no. 13 dated April 6, 2010, prospectus
supplement no. 14 dated May 7, 2010, prospectus supplement no. 15 dated May 19,
2010, prospectus supplement no. 16 dated May 20, 2010, prospectus supplement no.
17 dated July 20, 2010, prospectus supplement no. 18 dated July 23, 2010,
prospectus supplement no. 19 dated August 23, 2010, and prospectus supplement
no. 20 dated September 7, 2010, that relates to the offer and sale of 14,556,333
shares of common stock and 6,151,399 class Y warrants that may be sold from time
to time by the selling stockholders identified in the prospectus. We will not
receive any proceeds from the sale of common stock or warrants covered by the
prospectus. To the extent that the holders exercise, for cash, the class Y
warrants registered for resale under this prospectus, we would receive the
proceeds from such exercises and intend to use such proceeds for working capital
and other general corporate purposes. The class Y warrants expire on May
31, 2013.
Our
common stock is traded on the Over-the-Counter Bulletin Board under the symbol
SOPK. The closing sales price for our common stock on September 28, 2010 was
$0.24 per share. As of the date of this prospectus supplement, there is no
public market for our class Y
warrants.
This
prospectus supplement is being filed to include the information set forth in our
Current Report on Form 8-K, filed with the Securities and Exchange Commission
(SEC) on September 27, 2010, which is attached below. This prospectus supplement
should be read in conjunction with the prospectus, as supplemented by prospectus
supplement nos. 1 through 20.
Investing
in our securities involves risks. You should consider the risks that we have
described in Risk Factors beginning on page 6 of the prospectus and page 8 of
our Annual Report on Form 10-K for the fiscal year ended June 30, 2009 filed
with the SEC on October 15, 2009 before buying our securities.
Neither
the SEC nor any state securities commission has approved or disapproved of these
securities or determined if the prospectus, prospectus supplement nos. 1 through
20 or this prospectus supplement is truthful or complete. Any representation to
the contrary is a criminal offense.
The date
of this prospectus supplement is September 29, 2010.
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act Of 1934
Date
of Report (Date of earliest event reported): September 27, 2010 (September 21,
2010)
SouthPeak
Interactive Corporation
____________________________________________
(Exact
Name of Registrant as Specified in its Charter)
Delaware
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000-51869
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20-3290391
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(State
or Other
Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification
No.)
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2900
Polo Parkway
Midlothian,
Virginia 23113
___________________________________________
(Address
of principal executive offices) (Zip Code)
Registrant’s
Telephone Number, Including Area Code
: (804) 378-5100
___________________________________________
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (
See
General
Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
¨
Soliciting
material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240.14a-
12)
¨
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01.
Entry into a Material Definitive Agreement
On
September 21, 2010, SouthPeak Interactive, L.L.C. (the “LLC”), a wholly owned
subsidiary of SouthPeak Interactive Corporation (the “Company”), entered into a
Master Purchase Order Assignment Agreement (the “Agreement”) with Wells Fargo
Bank, National Association (“Wells Fargo”). In connection with the
entry into the Agreement, each of the Company, its subsidiaries, Gone Off Deep,
LLC and Vid Sub, LLC, and our chairman, Terry Phillips (the “Guarantors”), have
executed a Guaranty in favor of, and, along with the LLC, have entered into a
Security Agreement and Financing Statement with, Wells Fargo.
Under the
terms of the Agreement, the LLC may request that Wells Fargo accept the
assignment of customer purchase orders and request that Wells Fargo purchase the
required materials to fulfill such purchase orders. If accepted,
Wells Fargo, in turn, will retain the LLC to manufacture, process, and ship the
ordered goods. Wells Fargo
’
s aggregate
outstanding funding under the agreement shall not exceed $2
million.
Upon
receipt of customer payments by Wells Fargo, the LLC will be paid a fee for its
services, with such fee calculated pursuant to the terms of the Agreement. Also
from such customer payments, Wells Fargo shall be entitled to receive the
following:
(1) a
transaction initiation and set-up fee equal to 1.5% of the aggregate amount
outstanding on all amounts (including letters of credit) advanced by Wells
Fargo; (2) a daily maintenance fee equal to 0.05% of all amounts (including
letters of credit) advanced by Wells Fargo which remain outstanding for more
than 30 days; and (3) a product advance fee equal to (a) the prime rate plus 2%,
divided by 360, multiplied by (b) (i) the aggregate amount outstanding on all
amounts (including letters of credit) advanced by Wells Fargo on account of
purchases of products or other advances made in connection with a customer
purchase order, multiplied (ii) by the number of days from the earlier of (A)
the date on which any such letter of credit or purchase order or financial
accommodation is negotiated into cash, or (B) the date funds are advanced by
other than issuing a letter of credit or purchase order.
In addition, Wells Fargo shall be entitled to a commitment
fee
of
$120,000 to be paid on the earlier of (a) September 21, 2011 or (b) the date on
which the Agreement is terminated. Wells Fargo shall also be entitled to
additional commitment fees for each renewal of the Agreement, and such fees
shall be paid on the earlier of (a) the first anniversary of the beginning of
each renewal term or (b) the date on which the Agreement is
terminated.
Subject
to the rights of senior lenders, the Company and the Guarantors have granted
security interests in their assets to Wells Fargo under the Security
Agreement and Financing Statement to secure the LLC’s obligations under the
Agreement and the Guarantors
’ guarantees of such
obligations.
The description of the Agreement,
Security Agreement and Financing Statement, Guaranty, and the terms thereof are
qualified in their entirety by the full text of such agreements, which are
filed as exhibits hereto.
Item
9.01.
Financial Statements and Exhibits.
10.1
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Master
Purchase Order Assignment Agreement by and between Wells Fargo Bank,
National Association and SouthPeak Interactive, L.L.C., dated as of
September 21, 2010.
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10.2
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Security
Agreement and Financing Statement by and between Wells Fargo Bank,
National Association, SouthPeak Interactive, L.L.C., SouthPeak Interactive
Corporation, Gone Off Deep, LLC, and Vid Sub, LLC, dated as of September
21, 2010.
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10.3
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Guaranty
made by Guarantors listed on the signature pages thereto, dated September
21, 2010.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date:
September 27, 2010
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SouthPeak
Interactive Corporation
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By:
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/s/ Reba McDermott
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Reba
McDermott, Chief Financial Officer
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Exhibit
Index
Exhibit
Number
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Description
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10.1
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Master
Purchase Order Assignment Agreement by and between Wells Fargo Bank,
National Association and SouthPeak Interactive, L.L.C., dated as of
September 21, 2010.
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10.2
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Security
Agreement and Financing Statement by and between Wells Fargo Bank,
National Association, SouthPeak Interactive, L.L.C., SouthPeak Interactive
Corporation, Gone Off Deep, LLC, and Vid Sub, LLC, dated as of September
21, 2010.
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10.3
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Guaranty
made by Guarantors listed on the signature pages thereto, dated September
21, 2010.
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MASTER PURCHASE ORDER
ASSIGNMENT AGREEMENT
THIS
AGREEMENT is made on the 21st day of September, 2010, by and between
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
acting through its Wells Fargo Business Credit, operating
division (the
“CONTRACTOR”
) and
SOUTHPEAK INTERACTIVE, L.L.C.
,
a Virginia limited liability company (the
“DISTRIBUTOR”
), as
follows:
BACKGROUND OF
AGREEMENT
:
A.
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The
parties have signed an agreement in principle to enter into a purchase
order assignment program under which the Distributor 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 Distributor to manufacture, process and ship ordered
goods; and fees will be paid to the Distributor for its services upon
payment to the Contractor for the
goods.
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B.
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The
parties desire to enter into a formal agreement to set forth the terms and
provisions of the purchase order assignment
program.
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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
¶1:
(a) The
“CERTIFICATE”
means the
Purchase Order Package Certificate 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
“WAREHOUSE”
(an independent
warehouse acceptable to the Contractor where the Products will be stored and
shipped), 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 Products are to be delivered to the Distributor or the
Warehouse as set forth in the Certificate).
(c) A
purchase order delivered to the Distributor in the ordinary course of its
business is referred to as a
“P.O.”
A P.O. which
meets all of the requirements of ¶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 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 Distributor
secured at least in part by Distributor'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 Distributor secured by liens on some or all of
the Distributor's assets. Each Senior Lender involved in this
transaction (if any) is also identified on Addendum I.
(e) 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 Distributor, or any other party) are referred to
as the
“P.O.
PROCEEDS”
.
(f) The
Distributor may repurchase an Accepted P.O. pursuant to ¶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) seventy-five (75) days following the Funding
Date if Contractor issues its letter of credit or purchase order, (iii)
seventy-five (75) days following the Funding Date if Contractor advances funds
by other than issuing its letter of credit or purchase order, (iv) the date on
which the Accepted P.O. is canceled, or (v) the date of occurrence of an event
of default pursuant to ¶18 below.
(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 Distributor 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 Product 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 or such other amount as is designated by Contractor on Exhibit “C”
hereto in connection with an Accepted P.O. in fully collected
funds.
(i) The
Distributor will perform its obligations in accordance with the
“DISTRIBUTOR'S SPECIFICATIONS”
which are set forth on Exhibit “B” attached hereto and will be paid a
“DISTRIBUTOR'S FEE”
computed
in accordance with the provisions of ¶7(c) below. The Distributor's
obligations are secured by a
“SECURITY AGREEMENT”
described
in ¶10 below.
(j) The
Contractor will be paid a
“COMMITMENT FEE”
(computed and
paid pursuant to ¶6 below), the
“CONTRACTOR'S DEAL FEES”
(computed and paid pursuant to ¶7 below), and
“CONTRACTOR'S EXPENSES”
(computed and paid pursuant to ¶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
$6,000,000.
(k) If
the Distributor is required to make a
“SECURITY DEPOSIT”
(as defined
in ¶3(b)(i)), the Security Deposit will be maintained in accordance with
¶10.1.
2.
Submission
of P.O.'s for Assignment
.
Subject to the
terms of this Agreement, the Distributor may request that the Contractor accept
an assignment of each P.O. submitted to and accepted by Distributor and make
Product 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 ¶3, Contractor agrees to
accept or decline acceptance of the assignment of a P.O. submitted to Contractor
pursuant to the provisions of ¶2 above (in Contractor's absolute discretion) by
delivery of written notice to Distributor. Contractor may, in its
absolute discretion, elect to treat all P.O.’s that became Accepted P.O’s
concurrently as a single P.O. 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 ¶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 55% of the P.O.
Price, provided, however, that Contractor may exceed such limitation upon the
deposit by the Distributor with the Contractor of a Security Deposit (the
“Security Deposit”) in an amount equal to the aggregate amount of capital
required to purchase and deliver Products to a Customer in connection with the
P.O. minus the lesser of 55% of the P.O. Price or 90% of the advance to be made
by the Accounts Receivable Lender for such P.O. Price;
(ii) If
the Distributor has an Accounts Receivable Lender acceptable to Contractor, the
P.O. shall have been approved for an advance rate of not less than 65% of the
P.O. Price by such Accounts Receivable Lender;
(iii) Distributor
shall have on deposit with Contractor a Security Deposit as set forth in ¶10.1
hereof;
(iv) Upon
the purchase of Product 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
$2,000,000;
(v) An
original, signed copy of the Certificate shall have been delivered to the
Contractor;
(vi) 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
(vii) The
Distributor 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 ¶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 Products 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
Distributor thereof. Upon delivery of such notice to Distributor,
Contractor's rights and interests in and to the P.O. will be terminated
absolutely and Contractor shall have no obligation whatsoever to Distributor
with respect to such P.O.;
(ii) The
failure of a vendor of Products to deliver Products which conform to
Contractor's specifications to the Warehouse on or before the Materials Delivery
Date. Upon such failure of delivery, Contractor shall have the right
to require Distributor to purchase the Products from Contractor and shall assign
to Distributor the right to receive those Products which have not then arrived
at the Warehouse;
(iii) The
cancellation of the P.O. prior to delivery of Products to the
Customer. Upon such cancellation, Distributor shall pay Contractor
such sums as are required pursuant to ¶8 below; and
(iv) The
failure of the Distributor 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 Distributor 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 Distributor
pursuant to subparagraph (a) or, in the absence of such notice of acceptance,
the Contractor shall purchase Products 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 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
Distributor
.
(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 Distributor as Contractor's exclusive source for performing or
causing to be performed in accordance with the Distributor’s Specifications all
processing, warehousing, and shipping requirements with respect to the Products,
and the Distributor hereby accepts such appointment. Distributor
agrees to perform all of its obligations pursuant to this ¶4 in a good and
workmanlike manner, to utilize quality control procedures consistent with the
standards of Distributor and the industry, and to otherwise comply with each of
the Distributor's Specifications.
(b) So
long as any Products are located at the Warehouse or are scheduled for delivery
to the Warehouse, Distributor agrees to perform in accordance with all of the
Distributor's Specifications. If any Products are located at any
facility of the Distributor or at an independent warehouse which is not
acceptable to the Contractor, the Distributor shall furnish the Contractor with
a surety bond issued by a company and having terms acceptable to the
Contractor.
(c) Distributor
further agrees that with respect to Products 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) Distributor
shall purchase such Products from Contractor within three (3) days following
Contractor's notice for a purchase price equal to Contractor's costs for the
Products; or
(ii) If
Distributor fails to make such purchase of Products, such Products shall be sold
by Contractor and the proceeds thereof applied first to Contractor's costs for
the Products, and the balance, if any, to Distributor.
5.
Payment and
Re-Assignment
.
(a) Upon
delivery of Products to the Customer pursuant to an Accepted P.O., Distributor
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). Distributor shall immediately pay to the Contractor any
sums from time to time received by the Distributor 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.
(b) At
such time as Contractor has received payment in full on account of a P.O.
Invoice or such other amount as is designated by Contractor on Exhibit “C”
hereto, the Contractor shall re-assign the applicable Accepted P.O. and all
rights with respect thereto to the Distributor and the Distributor 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 ¶7
below. Provided, however, that Distributor shall pay all sums due
Contractor upon a Delinquent P.O. in the manner and pursuant to the terms of ¶8
below.
6.
Commitment
Fee
.
(a) Subject
to the provisions of this ¶6, Distributor shall pay Contractor a Commitment Fee
in consideration of Contractor's commitment to reserve and have available
sufficient funds to purchase Products 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 $120,000 and shall be paid by Distributor on the earlier
of twelve months following the date of this Agreement or the date of termination
of this Agreement. In the event the term of this Agreement is renewed
for one or more twelve month renewal terms, for each such renewal, Distributor
shall pay Contractor a Commitment Fee in the sum of $120,000, which fee shall be
paid by Distributor on the earlier of twelve months following the date of the
renewal of this Agreement or the date of termination of this
Agreement. The Commitment Fee for the initial 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. The Commitment Fee for each renewal term of this Agreement is
deemed by the parties to have been earned by the Contractor upon each renewal
date 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 for the initial term or any renewal thereof as
of the due date for payment of the Commitment Fee equals or exceeds the Minimum
Volume, the entire Commitment Fee shall be waived by the
Contractor. If Product Volume for the initial term or any renewal
thereof 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 Distributor
.
(a) Payments
received by the Contractor 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 ¶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.;
(iii) Third,
to pay any shortage then existing in the Security Deposit as set forth in
¶10.1;
(iv) Fourth,
to reimburse the Contractor for the cost of Products 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 Distributor'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 1.5% 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 0.05% 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 thirty (30) days;
plus
(iii) A
Product 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 Products 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 Wells Fargo
Bank, National Association, plus 2%, 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 Distributor 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.
(c) The
Distributor'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 Distributor'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 Distributor to immediately purchase any
Delinquent P.O. (and inventory of 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
Distributor shall be deemed to be P.O. Proceeds and shall be applied in
accordance with the priorities and terms set forth in ¶7 above.
(b) In
the event that Distributor 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 Distributor all of Contractor's rights and
interests in and to the P.O. Invoice and the P.O. Proceeds and any Products in
the possession of Contractor or Distributor with respect to such Delinquent
P.O.
9.
Contractor's
Expenses
.
Immediately upon
Contractor's demand, Distributor 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
Warehouse, insurance and credit insurance premiums, audit costs, attorney's
fees, Contractor's travel expenses, Lock Box Bank charges, bank letter of credit
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 $7,500
deposited by Distributor to be applied towards the payment of Contractor's
Expenses.
10.
Security
Interests
.
As security for
the performance by Distributor of each of its obligations under this Agreement,
Distributor hereby grants the following security interests to the
Contractor:
(a) A
security interest in all of Distributor'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.
(b) The
right to set-off against any and all amounts due to the Distributor hereunder
any sums which are due to the Contractor hereunder which have become past due
and delinquent under this Agreement.
(c) All
of the Distributor'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 Distributor. Distributor
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., and all bills of lading and other documents of
title related to an Accepted P.O. Distributor hereby irrevocably
designates and appoints the Contractor (and all persons designated by the
Contractor) as the Distributor's true and lawful attorney-in-fact and
agent-in-fact and Contractor (or Contractor's agent) may, without notice to
Distributor:
(i) At
any time endorse by writing or stamping Distributor'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 Distributor to the Contractor hereunder;
(ii) At
any time endorse by writing or stamping Distributor's name on any bill of lading
or other document of title relating to an Accepted P.O.; and
(iii) At
any time after the occurrence of a default by the Distributor hereunder or
pursuant to the Security Agreement, in Distributor's or Contractor's name,
demand payment of, enforce payment of, exercise all of Distributor'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 Distributor'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 depositories 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 ¶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 Distributor's obligations hereunder.
Contractor shall, as soon as practicable following any such application, notify
Distributor thereof and provide a full accounting of such
application.
(b) When
funds are applied in the manner set forth in ¶10.1(a)(ii) above, a “shortage” is
created in an amount equal to all sums so applied. Distributor 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) Contractor
shall pay the Security Deposit to Distributor promptly following such time as
all sums then due and owing to the Contractor by the Distributor hereunder have
been paid in full, provided that Distributor is not then in default of any of
its other obligations under this Agreement.
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
Distributor's obligations to Contractor hereunder.
12.
Covenants
of Contractor
.
Provided that
Distributor 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 Products identified on Certificates
for Accepted P.O.'s for purchase by Contractor and delivery to the Warehouse on
terms consistent with the terms set forth in the Certificate.
(b) Following
timely delivery and acceptance of Products at the Warehouse, to promptly pay for
all such Products in accordance with the terms of purchase.
(c) To
release Products located at the Warehouse in such quantity and at such times as
are necessary to permit Distributor to meet the terms of Accepted
P.O.'s.
(d) Upon
termination of this Agreement and performance by Distributor of all of its
obligations hereunder, to promptly execute and deliver (if Distributor so
requests) any instruments and documents reasonably necessary to terminate and
release any and all security interests granted to Contractor by Distributor
pursuant to this Agreement.
13.
Warranties
and Representations of Distributor
.
Distributor
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) Distributor
is a limited liability company duly organized, validly existing, and in good
standing under the laws of the state of its formation, and is qualified or
licensed as a foreign limited liability company to do business in every location
in which the laws require Distributor to be so qualified or
licensed;
(b) Distributor
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 Distributor 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 Distributor is a party or is otherwise bound or
subject;
(d) Distributor
is not in default under any loan agreement, mortgage, lease, trust deed or
similar agreement relating to the borrowing of money to which Distributor is a
party or is otherwise bound;
(e) Each
P.O. submitted for assignment by the Distributor 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
Distributor shall at all times maintain such types and amounts of insurance
coverage (including without limitation credit insurance) with respect to
Distributor's business operations, the Products located in the Warehouse 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 Distributor 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 Distributor's knowledge) threatened against
Distributor or any of the guarantors;
(i) All
of the financial information (including projections) provided by the Distributor
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 Distributor's financial condition, and do not omit to state any facts which,
if disclosed, would reflect adversely on the financial condition of the
Distributor or any of its Customers; and
(j) Distributor
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 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. Distributor has
no material liability for any taxes of any nature whatsoever.
14.
Product
Warranties
.
Distributor
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
.
Distributor shall
deliver to Contractor copies of all information and documents submitted from
time to time by the Distributor 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 Distributor'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 Distributor at any time during
regular business hours upon not less than 24 hours' prior written
notice. Distributor 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) Distributor
acknowledges that it has no ownership interest in any P.O. 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 Distributor or in any of Distributor's
assets.
17.
Indemnification
.
Distributor
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 Distributor, any breach of a
warranty made by Distributor hereunder, or the failure of any representation
made by Distributor 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 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 Distributor'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 an initial term of twelve
months following the date hereof and shall continue thereafter for successive
twelve month renewal terms unless either party terminates the Agreement by
written notice to the other not later than thirty days prior to the end of the
initial term or any renewal term. Provided, however, that Contractor
may also terminate this Agreement immediately upon Distributor's default or at
any time following the initial term upon fifteen days' prior written notice to
Distributor.
(b)
Obligations Upon
Termination
. Except for termination in the event of
Distributor's default, upon termination of this Agreement, each party shall
remain liable to perform all 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, all obligations hereunder shall terminate except
the continuing obligations of the parties under ¶¶12(d), 13, 14, 15 and 17
hereof.
(c)
Default
.
(i) Distributor
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 Distributor, and in addition to Contractor's right of set-off
set forth in ¶10 above, upon the occurrence of any event of default, Distributor
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 ¶18(c) shall carry interest at the
rate of 2% per month from the effective date of default or, in the case of
Contractor's costs of collection, from the date such costs are
incurred.
(iii)
In the event of default by Distributor, 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 Distributor or as a court of competent jurisdiction may
direct. In the case of a deficiency, Distributor 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 DISTRIBUTOR (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 DISTRIBUTOR 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 COOK COUNTY, AND EACH PARTY IRREVOCABLY SUBMITS AND
CONSENTS TO THE JURISDICTION OF THOSE COURTS AND 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
DISTRIBUTOR MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS FOR NOTICE AS PROVIDED IN THIS
AGREEMENT. DISTRIBUTOR 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
. DISTRIBUTOR 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 Distributor cause to be
delivered to the Contractor an opinion of Distributor'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.
(g)
Assignment
. Distributor
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.
(j)
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).
(k)
Counterparts: Facsimile
Delivery
. This Agreement may be executed in two 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.
* * * * *
* * * * *
This
Agreement has been signed at Deerfield, Illinois on the day and year first above
written.
CONTRACTOR:
|
|
DISTRIBUTOR:
|
|
|
|
WELLS
FARGO BANK,
|
|
SOUTHPEAK
INTERACTIVE, L.L.C.
|
NATIONAL
ASSOCIATION
|
|
|
|
|
|
By:
|
|
|
By:
|
/s/ Reba McDermott
|
Title:
|
|
|
Title:
|
Chief Financial
Officer
|
Address:
|
520 Lake Cook Road #315
|
|
Address:
|
2900 Polo Parkway
|
|
Deerfield, IL 60015
|
|
|
Midlothian, VA 23113
|
Facsimile:
|
847-282-6630
|
|
Facsimile:
|
|
EXHIBIT
A
PURCHASE ORDER PACKAGE
CERTIFICATE
This
Certificate is executed by ____________________________, who is the
____________________ of SOUTHPEAK INTERACTIVE, L.L.C., a Virginia limited
liability company (“Distributor”), in connection with the Master Purchase Order
Assignment Agreement dated ______________, 2010, (the “Agreement”) with WELLS
FARGO BANK, NATIONAL ASSOCIATION (“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 Product in accordance with the
Agreement:
1.
Customer
Information
|
(a)
|
Attached
is a purchase order number ______ dated _______________, 20____ in the
total amount of $_________ (the “Purchase Order”) from the following
customer (“Customer”), or Distributor 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 Distributor 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
|
|
_____
|
Distributor
has received indication of interest
only.
|
2.
|
Customer Product
Information
|
An
original (or a true, accurate and complete copy) of Customer’s Purchase Order
identifying the Product, the quantity ordered, and the quality specifications
therefor is attached.
3.
|
Product Price and
Delivery Information
|
Attached
is an exhibit detailing: (a) the cost, quantity and quality specifications for
all Products needed to complete the Purchase Order (“Products”); (b) the name,
address, contact person and phone number of each person from whom the Products
may be purchased; and (c) confirmed current pricing and delivery date(s)
(“Material Delivery Date(s)”) for all of the Products and a copy of the
Distributor’s applicable Purchase Orders.
The
warehouse facility at which the Product(s) will be warehoused/distributed (the
“Warehouse”):
_______________________________________
_______________________________________
_______________________________________
5.
|
Customs Broker
Information
|
The
customs broker for the Product(s) will be:
_______________________________________
_______________________________________
_______________________________________
Attached
is the computation of Projected Net Gross Margin before depreciation, including,
without limitation, projections of the cost of Products and Distributor's Direct
Costs:
7.
|
Assignment of Purchase
Order
|
Attached
is an Assignment of the Purchase Order, duly executed by authorized officers of
Distributor.
Distributor
hereby irrevocably designates and appoints Contractor (and all persons
designated by Contractor) as Distributor’s true and lawful attorney-in-fact and
agent-in-fact, and Contractor (or Contractor’s agent) may, at any time and
without notice to Distributor, endorse any bill of lading or other document of
title related to a Purchase Order accepted by Contractor by writing or stamping
Distributor’s name thereon.
9.
|
Lender Consent
(check one):
|
|
_____
|
None
of the Products is subject to a security interest;
or
|
|
_____
|
If
any of the Products 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:
______________, 20____
SOUTHPEAK
INTERACTIVE, L.L.C.
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By:
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Title:
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EXHIBIT
A
(continued)
ACCEPTANCE
OF PURCHASE ORDER CERTIFICATE
The
foregoing Purchase Order Certificate, as prepared and delivered by Distributor,
is hereby accepted and approved.
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WELLS
FARGO BANK, NATIONAL ASSOCIATION
|
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By:
|
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Dated:
EXHIBIT
A
(continued)
ASSIGNMENT OF PURCHASE
ORDER
FOR VALUE
RECEIVED, SOUTHPEAK INTERACTIVE, L.L.C., a Virginia limited liability company
(“Assignor”) hereby assigns, transfers and delivers to WELLS FARGO BANK,
NATIONAL ASSOCIATION (“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 Assignment Agreement, dated ________, 2010, between Assignor and
Assignee:
Assignor's
P.O. No.: ___________________________
Customer
Name: __________________________________
P.O.
Date: ___________________________________________
SOUTHPEAK
INTERACTIVE, L.L.C.
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By:
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Title:
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EXHIBIT
B
DISTRIBUTOR'S
SPECIFICATIONS
The
following are performance specifications, obligations, and covenants
(collectively the “Distributor's Specifications”) required of Distributor in
connection with its obligations under the Master Purchase Order Assignment
Agreement to which this Exhibit is attached:
1. To
deliver to each Customer a Purchase Order Acknowledgment 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
Products.
3. To
notify Contractor immediately upon the receipt of Products at the
Warehouse. Upon such delivery, to inspect the quality and quantity of
Products and to notify Contractor of any deficiencies.
4. To
take or cause to be taken all actions necessary for the shipment of Products to
Customers in accordance with Accepted P.O.'s, including without limitation,
packaging, shipping, and insuring 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.
5. To
maintain all inventories of Products in such segregated locations at the
Warehouse as the Contractor may approve; to properly identify such Products as
being the property of the Contractor and further identify the same by the P.O.
and the Customer for which such Products relate; and to implement such
commercially reasonable security procedures and devices as Contractor may
require for the preservation and segregation of Products, including without
limitation, the construction and maintenance of secured cages and storage rooms
for such Products. To not ship or otherwise release any Products
except with the prior written consent of the Contractor.
6. To
ship all Products by such date, by such means, and under such terms as required
pursuant to the applicable P.O. and to deliver the Products to the Customer on
or before the P.O. Delivery Date. Distributor shall further provide
Contractor with written notice of each shipment of Products to a Customer
immediately following shipment thereof.
7. To
prepare and deliver to the Contractor each P.O. Invoice immediately following
shipment of the Products to the Customer.
8. To
fully insure in the name of the Distributor and the Contractor all Products
during shipment to Customers in amounts, with carriers and on terms and
conditions acceptable to Contractor.
9. 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 Customer to make any
payment with respect to any P.O. Invoice to anyone other than the Contractor or
the Lock Box.
10. 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.
11. 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 Distributor, its agents,
representatives or any other party acting on behalf of Distributor, and promptly
to deliver or cause delivery of such sums to the Contractor.
12. To
maintain in the name of Distributor 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.
13. 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 Distributor.
14. 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.
15. To
provide Contractor with written notice immediately upon (i) the filing or threat
of filing of a bankruptcy petition by or against Distributor, (ii) the
initiation of foreclosure proceedings or other similar action against
Distributor or any of its assets, (iii) a request or demand made upon
Distributor to make, or for any reason Distributor makes, an assignment for the
benefit of its creditors, or (iv) Distributor becomes unable to pay its bills in
the ordinary course of business as they become due.
16. To
immediately notify Contractor of any pending or threatened litigation,
administrative proceeding, arbitration, or governmental investigation concerning
or relating to Distributor 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.
EXHIBIT
C
RE-ASSIGNMENT AND RELEASE OF
PURCHASE ORDER
UPON AND
SUBJECT TO PAYMENT OF the sum of $__________ on or before ___________, ________
(“Payment Date”), WELLS FARGO BANK, NATIONAL ASSOCIATION (“Assignor”)
hereby assigns, transfers and delivers to SOUTHPEAK INTERACTIVE, L.L.C.
(“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.
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WELLS FARGO BANK, NATIONAL
ASSOCIATION
|
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By:
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ACCEPTANCE
SOUTHPEAK
INTERACTIVE, L.L.C., a Virginia limited liability company (“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 Accounts Receivable Lender to transfer the amount set forth above to
Assignor per Assignor's instructions.]
SOUTHPEAK
INTERACTIVE, L.L.C.
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By:
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Title:
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EXHIBIT
D
EXCEPTIONS TO CONTRACTOR'S
SENIOR LIEN
SunTrust
Bank
Rosenthal
& Rosenthal
CNH
Diversified Opportunities Master Account, L.P.
Paradox
Interactive, AB
EXHIBIT
E
PENDING
LITIGATION, ETC.
None
ADDENDUM
I
The
Accounts Receivable Lender is:
None
The
Senior Lenders other than the Accounts Receivable Lender are:
SunTrust
Bank
Rosenthal
& Rosenthal
CNH
Diversified Opportunities Master Account, L.P.
ADDENDUM
II
In this
Agreement:
|
(a)
|
The
“Lock Box Bank” is:
|
Wells
Fargo Bank, National Association
NW 5985PO
Box 1450
Minneapolis,
MN 55485-5985
|
(b)
|
The
“Lock Box” is maintained in
Lock Box
Account
|
No. 77-6132
at the Lock Box
Bank.
ADDENDUM
III
The
Guarantors pursuant to this Agreement are:
Terry
Phillips
Gone
Off Deep, LLC
Southpeak
Interactive Ltd.
Vid Sub,
LLC
SECURITY AGREEMENT
AND
FINANCING
STATEMENT
THIS
SECURITY AGREEMENT AND FINANCING STATEMENT is made this 21
st
day of
September, 2010, between
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
acting through its Wells Fargo Business
Credit, operating division (the "SECURED PARTY"), and
SOUTHPEAK INTERACTIVE
,
L.L.C.
, a Virginia limited
liability company,
GONE
OFF DEEP, LLC
, a Delaware limited liability company,
SOUTHPEAK INTERACTIVE CORP.
, a
Delaware corporation, and
VID
SUB, LLC
, a
Delaware limited
liability company (collectively, the "DEBTOR"), as follows:
BACKGROUND
:
A.
|
On
this date, the Secured Party and Debtor entered into a Master Purchase
Order Assignment Agreement (the "Assignment
Agreement").
|
B.
|
It
is a condition to Secured Party's performance of its obligations under the
Assignment Agreement that the Debtor execute and deliver this Agreement to
secure performance and payment of the "Liabilities" (as hereinafter
defined).
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THEREFORE,
in consideration of
the agreements described in this Agreement and the Assignment Agreement, the
parties agree as follows:
1.
Definitions
.
In this
Agreement, the following frequently used terms are defined as set forth in this
¶1:
(a) Each
term used in this Agreement which is defined in the Assignment Agreement will
have the same meaning herein as that ascribed to it in the Assignment
Agreement.
(b) The
"LIABILITIES"
are all
payments and other obligations from time to time due or owing to the Secured
Party by the Debtor under the Assignment Agreement, this Agreement and any
agreement referred to in the Assignment Agreement or this
Agreement.
(c) The
"PRIMARY COLLATERAL"
means those assets of the Debtor set forth on Exhibit "A" attached to and made
part of this Agreement, whether now or hereafter existing or acquired, together
with all the proceeds thereof and Debtor's interests therein.
(d) The
"COMMON COLLATERAL"
are
those assets of Debtor set forth on Exhibit "B" attached to and made part of
this Agreement, whether now or hereafter existing or acquired, together with all
the proceeds thereof and Debtor's interests therein which from time to time are
also pledged to a Senior Lender and as to which the Secured Party shall maintain
a subordinated security interest. If no Senior Lender is involved in
the subject transaction, Exhibit "A" shall be excluded from this Agreement and
the Primary Collateral and Common Collateral shall refer to the same
assets.
(e) The
"COLLATERAL"
means the
Primary Collateral and the Common Collateral and the Secured Party's security
interest in the Collateral is referred to as the
"LIEN"
.
(f) The
"SENIOR LIEN"
is the
security interest in the Common Collateral maintained by a Senior Lender (if
any).
(g) The
"LOCATIONS"
are Debtor's
facilities set forth at the end of this Agreement at which all or a portion of
the Collateral will be located.
2.
Grant of
Security Interest
.
As security for
the performance and payment of the Liabilities, the Debtor hereby assigns,
grants, conveys, mortgages, hypothecates, pledges, and sets over to the Secured
Party a continuing first priority security interest for the use and benefit of
the Secured Party in the Primary Collateral; and a security interest for the use
and benefit of the Secured Party in the Common Collateral which is subordinate
only to the Senior Lien, if any.
3.
Representations
and Warranties
.
The Debtor
represents, warrants, and agrees that: (i) except with respect to the Senior
Lien, no financing statement or other lien notice covering any portion of the
Collateral is on file in any public office; (ii) the Debtor is and at all times
will be the lawful owner of all Collateral, free of all liens and claims
whatsoever except the Senior Lien and the Lien; (iii) the Debtor has full power
and authority to execute this Agreement and to perform the Debtor's obligations
hereunder, and to subject the Collateral to the Lien; (iv) all information with
respect to Collateral set forth in any schedule, certificate or other writing at
any time heretofore, and all other written information heretofore or hereafter
furnished by the Debtor to the Secured Party is and will be true and correct in
all respects as of the date furnished; (v) the Locations include the address at
which any portion of the Collateral is located and Debtor will immediately
notify Secured Party of any other location at which any portion of the
Collateral is hereafter located; and (vi) there is no litigation or regulatory
complaint against the Debtor or affecting or relating to the Collateral or any
portion thereof which is pending or threatened as of this date other than as set
forth on Exhibit "E" of the Assignment Agreement.
4.
Certificates,
Schedules and Reports
.
The Debtor will
from time to time, as the Secured Party may request, deliver to the Secured
Party such schedules and such certificates and reports respecting the Collateral
to such extent as the Secured Party may reasonably request. Any such
schedule, certificate or report shall be executed by an authorized officer of
the Debtor and shall be in such form and detail as the Secured Party may
specify. The Debtor shall immediately notify the Secured Party of the
occurrence of any event causing a material loss or depreciation in the value of
any item of Collateral, and the amount of such loss or
depreciation.
5.
Agreements
of the Debtor
.
The Debtor (i)
hereby authorizes the Secured Party (at the Debtor’s expense) to file such
financing statements and other documents necessary to perfect its Lien on the
Collateral, and do such other acts and things as Secured Party may from time to
time deem necessary to establish and maintain valid perfected security interests
in the Collateral; (ii) will keep all items of Collateral at the Locations;
(iii) will keep its records concerning all items of Collateral at the Locations,
which records will be of such character as will enable Secured Party to
determine at any time the status thereof; (iv) will furnish the Secured Party
such information concerning the Debtor and the Collateral as the Secured Party
may from time to time reasonably request; (v) will permit the Secured Party or
its designees, at all times, to inspect the Collateral, and to inspect, audit
and make copies of and extracts from all records and all other papers in the
possession of the Debtor, and will, upon request of the Secured Party, deliver
to the Secured Party all of such records and papers that pertain to the
Collateral; (vi) will, upon request of the Secured Party, stamp on its records
concerning the Collateral (and/or enter in its computer records concerning the
Collateral) a notation, in form reasonably satisfactory to the Secured Party, of
the security interests of the Secured Party hereunder; (vii) except as consented
to in writing by the Secured Party, will not sell, lease, assign or create or
permit to exist any lien on or security interest in any item of Collateral to or
in favor of anyone other than the Secured Party and the Senior Lender(s); (viii)
will at all times keep all items of Collateral insured against loss, damage,
theft and other risks, in such amounts, by such companies, under such policies
and in such form as may be required pursuant to the Assignment Agreement, which
policies shall contain a so-called lender's loss payable (or comparable) clause,
whereby a denial of payment based on policy conditions will not prevent recovery
by Secured Party, and such policies or certificates thereof shall be deposited
with the Secured Party; (ix) furnish to the Secured Party no less than thirty
(30) days prior to the occurrence of any change in the Locations or in Debtor's
name, notice in writing of such change; and (x) will reimburse the Secured Party
for all expenses, including reasonable attorneys' fees and legal expenses
incurred by the Secured Party in seeking to collect or enforce any rights under
this Agreement or the Assignment Agreement.
6.
Remedies
.
Whenever Debtor
shall fail to perform any obligation in the manner and at the time required by
the Assignment Agreement or this Agreement, or whenever the Debtor or any of
them shall breach or default on a covenant made by any Debtor pursuant to the
Assignment Agreement or this Agreement (collectively an "event of default"), the
Secured Party may exercise any rights and remedies available to it under the
Assignment Agreement and applicable law. The Debtor and each of them
agrees, upon the occurrence of an event of default and during the continuance
thereof, if requested by the Secured Party, to assemble, at the Debtor's
expense, all or any part of the Collateral at a place designated by the Secured
Party. Without limiting the foregoing, upon an event of default the
Secured Party may, to the fullest extent permitted by applicable law, without
notice, advertisement, hearing or process of law of any kind, (i) enter upon any
premises where any of the Collateral may be located and take possession of and
remove such Collateral, (ii) sell any or all of the Collateral, free of all
rights and claims of the Debtor therein and thereto, at any public or private
sale, and (iii) bid for and purchase any or all of the Collateral at any such
sale. The Debtor and each of them hereby expressly waives, to the
fullest extent permitted by applicable law, any and all notices, advertisements,
hearings or process of law in connection with the exercise by the Secured Party
of any of its rights and remedies upon an event of default. Any
notification of the intended disposition of any of the Collateral required by
law shall be deemed reasonably and properly given if given at least ten (10)
days before such disposition. Any proceeds of any disposition by the
Secured Party of any of the Collateral will be applied by the Secured
Party.
First
, to the payment
of the Secured Party's reasonable out-of-pocket expenses in connection with the
Collateral or this Agreement and enforcement of the Secured Party's rights with
respect thereto or hereunder, including reasonable attorney's fees and legal
expenses;
Second
, toward the
payment or satisfaction of the Liabilities in full; and
Third
, any surplus to
be paid to the Debtor, its successors and assigns, or as a court of competent
jurisdiction may direct.
7.
Relationship
with Senior Lender
. If a Senior Lender is involved in the
instant transaction, the Secured Party and each Senior Lender have entered into
a Subordination Agreement of even date herewith which defines and sets forth the
respective rights and interests of the Secured Party and each Senior Lender in
connection with the Collateral.
8.
Miscellaneous
.
(a) The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of any of the Collateral in its possession if it takes such
action for that purpose as the Debtor requests in writing, but failure of the
Secured Party to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care, and no failure of the Secured Party to
preserve or protect any rights with respect to such Collateral against prior
parties, or to do any act with respect to the preservation of such Collateral
not so requested by the Debtor, shall be deemed a failure to exercise reasonable
care in the custody or preservation of such Collateral.
(b) 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, to the
Secured Party at its address set forth at the end of this Agreement and to the
Debtor at any one of the Locations. Notices given in the manner
prescribed herein shall be deemed given on the date sent or transmitted (as the
case may be). Either party may change its notice address by notice to
the other party in the manner prescribed herein.
(c) No
delay on the part of the Secured Party in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Secured Party of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy.
(d) No
amendment to, modification or waiver of, or consent with respect to, any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed and delivered by the Secured Party, and then any
such amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
(e) All
obligations of the Debtor and all rights, powers and remedies of the Secured
Party expressed herein are in addition to all other rights, powers and remedies
possessed by Secured Party, including, without limitation, those provided by
applicable law or in any other written instrument or agreement relating to any
of the Liabilities or security therefor.
(f) The
Agreement shall in all respects be a continuing agreement and shall remain in
full force and effect until final payment in full of all the
Liabilities.
(g) THIS
AGREEMENT HAS BEEN DELIVERED AT DEERFIELD, ILLINOIS, AND SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, SUBJECT,
HOWEVER, TO THE UNIFORM COMMERCIAL CODE OF ANY APPLICABLE
JURISDICTION. WHENEVER POSSIBLE, EACH PROVISION OF THIS AGREEMENT
SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT SHALL BE HELD INVALID,
ILLEGAL OR UNENFORCEABLE UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE
INEFFECTIVE TO THE EXTENT OF SUCH INVALIDITY, ILLEGALITY OR UNENFORCEABILITY,
WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS
OF THIS AGREEMENT.
(h) THE
DEBTOR IRREVOCABLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, OR ANY
COURT OF THE STATE OF ILLINOIS LOCATED IN COOK COUNTY, AND 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 DEBTOR
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS
ADDRESS FOR NOTICE AS PROVIDED IN THIS AGREEMENT.
(i)
DEBTOR AND SECURED PARTY 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.
(j) This
Agreement shall be binding upon, and shall inure to the benefit of, the Secured
Party and the Debtor and their respective successors and
assigns.
(k) At
the option of the Secured Party, this Agreement, or a carbon, photographic or
other reproduction of this Agreement or of any Uniform Commercial Code financing
statement covering the Collateral or any portion thereof, shall be sufficient as
a Uniform Commercial Code financing statement and may be filed as
such.
(l) This
Agreement is the Security Agreement referred to in the Assignment
Agreement.
(m) In
the case of any irreconcilable conflict between the provisions of this Agreement
and the Assignment Agreement, the provisions of the Assignment Agreement shall
control.
(n) If
more than one person or entity is included as a Debtor hereunder, each of
Debtor's obligations, covenants, warranties, and representations hereunder is
joint, several and mutually binding on each such party.
(o) 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.
* * * * *
* * * * *
IN WITNESS WHEREOF,
this
Agreement has been duly signed at Deerfield, Illinois on the day and year first
above written.
|
SECURED
PARTY:
|
|
|
|
WELLS
FARGO BANK, NATIONAL ASSOCIATION
|
|
|
|
By:
|
|
|
Title:
|
|
|
Address:
|
520 Lake Cook Road, Suite
315
|
|
|
Deerfield, IL 60015
|
|
|
|
|
DEBTOR:
|
|
|
|
SOUTHPEAK
INTERACTIVE, L.L.C.
|
|
|
|
By:
|
/s/ Reba McDermott
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
GONE
OFF DEEP, LLC
|
|
|
|
|
By:
|
/s/ Reba McDermott
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
SOUTHPEAK
INTERACTIVE CORP.
|
|
|
|
|
By:
|
/s/ Reba McDermott
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
VID
SUB, LLC
|
|
|
|
|
By:
|
/s/ Reba McDermott
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
LOCATIONS:
|
|
|
|
|
2900 Polo Parkway, Midlothian, VA
23113
|
EXHIBIT
"A"
PRIMARY
COLLATERAL
The
"Collateral" with respect to which Secured Party's first priority security
interest applies shall be (i) all merchandise, inventory and goods and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping "Products" pursuant to "Accepted Purchase Orders", as such terms are
defined in a certain Master Purchase Order Purchase Agreement dated September
21, 2010 between Secured Party and Debtor, and all products and proceeds of
whatever sort now or hereafter owned by Debtor and related thereto; (ii) all
accounts receivable, credit card receivables, payment intangibles, contract
rights and other customer obligations for the payment of money arising out of
the Debtor's sale, lease, or license of any tangible or intangible property or
the rendering of services pursuant to "Accepted Purchase Orders" now or
hereafter existing; and (iii) all proceeds and products of the
foregoing.
Debtor's
facility at which the Collateral is located is:
2900 Polo Parkway,
Midlothian, VA 23113
EXHIBIT
"B"
COMMON
COLLATERAL
The
"Collateral" with respect to which Secured Party's subordinated lien applies
shall be (i) all merchandise, inventory and goods and all additions,
substitutions and replacements thereof, wherever located, together with all
goods, supplies, incidentals, packaging materials, labels, materials and any
other items used or usable in manufacturing, processing, packaging or shipping
same, in all stages of production, and all products and proceeds of whatever
sort, including specifically all "inventory" as such term is defined in the
Code, now or hereafter owned by Debtor; (ii) all machinery and equipment, now or
hereafter owned by Debtor, including, but not limited to, all machinery,
equipment, furnishings, movable trade fixtures and vehicles now or hereafter
owned by Debtor and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, spare
and replacement parts, related computer software, maintenance and repair
supplies and manuals, instructional manuals, warranties, and equipment and
accessories installed thereon or affixed thereto; (iii) all accounts
receivable, credit card receivables, payment intangibles, contract rights and
other customer obligations for the payment of money arising out of the Debtor's
sale, lease, or license of any tangible or intangible property or the rendering
of services, now existing or hereafter arising; (iv) all trademarks, copyrights,
patents, contract rights, investment property, rights to payment evidenced by
tangible or electronic chattel paper, instruments, and all general intangible
assets of Debtor now or hereafter existing; and (v) all proceeds and products of
the foregoing, except such assets of the Debtor as are described on
Exhibit "A".
Debtor's
facility at which the Collateral is located is:
2900 Polo Parkway,
Midlothian, VA 23113
GUARANTY
This
Guaranty (the "Guaranty") is made on the 21st day of September, 2010, among the
persons whose names are set forth at the end of this Guaranty (collectively the
"Guarantors"), and
WELLS FARGO
BANK, NATIONAL ASSOCIATION,
acting through its Wells Fargo Business
Credit, operating division (the "Contractor"), as follows:
BACKGROUND OF
AGREEMENT
:
A.
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The
Contractor and
SOUTHPEAK
INTERACTIVE, L.L.C.
, a Virginia limited liability company (the
"Distributor"), have on this day entered into a Master Purchase Order
Assignment Agreement (the "Assignment Agreement") under the terms of which
the Distributor 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 Distributor to
manufacture, process and ship ordered goods; and fees will be paid to the
Contractor and the Distributor for their services
thereunder.
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B.
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Each
of the Guarantors has a substantial financial stake in the Distributor and
will substantially benefit from the performance by Contractor of its
obligations under the Assignment
Agreement.
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C.
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The
execution of this Guaranty is an express condition to the consummation of
the transactions contemplated by the Assignment Agreement and the
Contractor is unwilling to enter into or perform in accordance with the
Assignment Agreement in the absence of the execution of this
Guaranty.
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THEREFORE,
in consideration of the services to be performed, the payments to be made, and
the obligations to be assumed by the Contractor pursuant to the Assignment
Agreement, and further as an inducement to the Contractor to enter into and
perform in accordance with the Assignment Agreement, the Guarantors hereby agree
as follows:
1.
DEFINITIONS
.
In
this Guaranty, the following frequently used terms are defined as set forth in
this ¶1:
(a) Any
terms used in this Guaranty which are defined in the Assignment Agreement will
have the same meaning herein as is ascribed to such term in the Assignment
Agreement.
(b) The
"Contract Documents" are, collectively, the Assignment Agreement, the Security
Agreement and Financing Statement between the Contractor and the Distributor
dated this day, the Subordination Agreement between the Contractor, the
Distributor, and the Senior Lender dated this day, and this
Guaranty.
(c) The
"Obligations" mean all of the obligations of the Distributor and each of the
Guarantors pursuant to the Contract Documents.
(d) The
term "Guarantors" means all of the undersigned, jointly and severally; and the
term "Guarantor" means each of the undersigned, individually and
collectively.
(e) A
"Default" means the occurrence of an event of default by the Distributor
pursuant to or in accordance with the provisions of any of the Contract
Documents or the failure of the Guarantors (or any of them) to perform any
covenant or agreement contained in this Guaranty or if any representation or
warranty contained in this Guaranty is found to have been untrue, incomplete or
misleading in any material respect when furnished.
2.
GUARANTY
.
The Guarantors,
jointly and severally, unconditionally and irrevocably, guaranty to Contractor
the full and prompt payment and performance when due, whether at maturity or
earlier (by reason of acceleration) and at all times thereafter, of all of the
Obligations, and the undersigned further agree to pay all costs and expenses
including, without limitation, all court costs and reasonable attorneys' fees
and expenses paid or incurred by the Contractor in endeavoring to collect all or
any part of the Obligations from, or in prosecuting any action against,
Distributor or any of the Guarantors. The obligations of the
Guarantors hereunder are secured by that certain Security Agreement and
Financing Statement of even date herewith among the Contractor, Southpeak
Interactive, L.L.C., and the Guarantors.
3.
TERMS AND
CONDITIONS
.
(a) Subject
to the provisions of the Contract Documents, Contractor shall have the exclusive
right to determine the application of payments and credits, if any, received by
Contractor from the undersigned, the Distributor, the Senior Lender, and any
Customer.
(b) Contractor
is authorized, without notice or demand, and without affecting the liability of
any of the Guarantors, from time to time to (i) renew, extend, accelerate or
otherwise change the time for payment or performance of, or other terms relating
to, the Obligations or any of them, or otherwise modify, amend or change the
terms of the Contract Documents or any of them, or any other agreement, document
or instrument now or hereafter executed by the Distributor and delivered to
Contractor; (ii) accept partial payments on or performance of the Obligations;
and (iii) settle, release, compromise, collect or otherwise liquidate the
Obligations in any manner, without affecting or impairing the Obligations of the
undersigned.
(c) At
any time after a Default, Contractor may, at its discretion, upon notice to the
Guarantors and regardless of the acceptance of any security or collateral for
the payment, appropriate and apply toward the payment and satisfaction of the
Obligations (i) any indebtedness due or to become due from Contractor to one or
more of the Guarantors; and (ii) any monies, credits or other property belonging
to one or more of the Guarantors, at any time held by Contractor on deposit or
otherwise.
(d) Contractor
shall not be required to take any steps to preserve any rights against prior
parties (if any) to or in any of the Obligations.
(e) The
Guarantors agree that to the extent that the Distributor makes a payment(s) to
Contractor, which payment(s) are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy act, state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
the obligation intended to be satisfied shall be renewed and continued in full
force and effect as if said payment had not been made, and the Guarantors shall,
upon demand by Contractor, immediately satisfy such obligation in full in
accordance with the terms of this Guaranty. The Guarantors further
agree that any and all claims of the Guarantors against the Distributor or
against its properties, arising by reason of any loan, advance, investment or
other payment by the undersigned to Contractor shall be subordinate and subject
in right of payment to the prior payment, in full, of all sums due pursuant to
the Obligations.
(f) Each
Guarantor assumes responsibility for keeping himself, herself or itself informed
of the financial condition of the Distributor and of all other circumstances
bearing upon the risk of Default. Contractor shall have no duty to
advise the Guarantors of information known to Contractor regarding such
condition or circumstances.
(g) No
delay on the part of Contractor in the exercise of any right or remedy shall
operate as a waiver or constitute a discharge of any of the Guarantors'
obligations under this Guaranty, and no single or partial exercise by Contractor
of any right or remedy shall preclude the further exercise to any extent; nor
shall any modification or waiver of any of the provisions of this Guaranty be
binding upon Contractor except as expressly set forth in a writing duly signed
and delivered by an authorized officer of Contractor. Contractor's
failure at any time to require strict performance by the Distributor or any
other party of any of the provisions, warranties, terms and conditions contained
in the Contract Documents shall not discharge any of the Guarantors' obligations
under this Guaranty, nor shall it waive, affect or diminish any right of the
Contractor at any time to demand strict performance and such right shall not be
deemed to have been waived by any act or knowledge of Contractor unless such
waiver is contained in an instrument in writing, signed by an officer of
Contractor specifying such waiver. No waiver by Contractor of any
default shall operate as a waiver of either any other default or the same
default on a future occasion, and no action or inaction by Contractor shall in
any way affect or impair Contractor's rights or the obligations of the
Guarantors under this Guaranty. The Guarantors agree that their
obligations under this Guaranty will not be discharged except by complete
performance of all of the Obligations. Any determination by a court
of competent jurisdiction of the sums owing by the Distributor to Contractor
shall be conclusive and binding on the Guarantors irrespective of whether any of
the Guarantors was a party to the suit or action in which such determination was
made.
4.
WARRANTIES
AND REPRESENTATIONS
.
Each of the
Guarantors, jointly and severally, hereby represent and warrant to the
Contractor that:
(a) The
execution, delivery, and performance by each Guarantor of this Guaranty will not
violate any provision of law, any order of any court or other agency of
government, or any agreement or other instrument to which any of the Guarantors
is a party or by which any of the Guarantors is bound or be in conflict with,
result in a breach of or constitute (with due notice or lapse of time, or both)
a default under any such agreement or other instrument, or result in the
creation or imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of the property or assets of any Guarantor, except as
contemplated by the provisions of this Guaranty; and
(b)
This Guaranty constitutes the legal, valid and binding obligation of each of the
Guarantors and is enforceable against each of the Guarantors in accordance with
the terms hereof.
5.
DEFAULT
.
(a)
Upon and during the continuance of any Default, Contractor may, at its sole
election, proceed directly and at once, without notice, against one or more of
the Guarantors to collect and recover the full amount or any portion of the
Obligations, without first proceeding against the Distributor or any other
Guarantor, or any other party or any other person, firm or
corporation. All of the above rights and powers may be exercised by
Contractor without liability, except the obligation to account for property
actually received.
(b) Any
right to set-off exercised by Contractor shall be deemed to have been exercised
immediately on the occurrence of a Default, even though such set-off is made or
entered on the books of Contractor at any subsequent time.
6.
INDEMNIFICATION
.
The Guarantors
will at all times, now and hereafter, jointly and severally, indemnify and hold
Contractor harmless from and against all loss or damage arising in connection
with this Guaranty and against all claims, liability, demands, actions or suits,
and all liabilities, payments, costs, charges and expenses including, without
limitation, attorneys' fees and costs incurred by Contractor on account of or in
connection with this Guaranty or the transactions or assertions of rights
contemplated or permitted hereunder.
7.
MISCELLANEOUS
.
(a) This
Guaranty shall be binding upon the undersigned and upon the heirs, executors,
successors and assigns of the undersigned and shall inure to the benefit of
Contractor's successors and assigns; all references to the Distributor and to
the undersigned shall be deemed to include their respective successors, assigns,
participants, receivers or trustees (as the case may be).
(b) This
Guaranty embodies the entire understanding of the parties pertaining to the
subject matter hereof, and shall constitute a continuing agreement applicable to
future as well as existing transactions between the Contractor and the
Distributor.
(c) THIS
GUARANTY HAS BEEN DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
DEERFIELD, ILLINOIS, AND SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF
THE PARTIES DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS,
AND AS PART OF THE CONSIDERATION FOR CONTRACTOR'S PERFORMANCE PURSUANT TO THE
CONTRACT DOCUMENTS, THE UNDERSIGNED CONSENT TO THE JURISDICTION OF ANY LOCAL,
STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF ILLINOIS, AND FURTHER CONSENT
THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL
DIRECTED TO THE UNDERSIGNED AT THE ADDRESS STATED HEREIN AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED TWO (2) DAYS AFTER THE SAME SHALL HAVE BEEN
POSTED. THE UNDERSIGNED FURTHER CONSENT TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
(d) The
headings used in this Guaranty are for the convenience of the reader only; such
headings constitute no part whatsoever of the agreement between the
parties.
(e)
No invalidity, irregularity or unenforceability of the Obligations (or any of
them) hereby secured shall affect, impair or be a defense to any provision
contained in this Guaranty. If any term, condition or provision of
this Guaranty is determined to be invalid or unenforceable, such determination
shall not affect the validity or enforceability of any other term, condition or
provision of this Guaranty.
(f)
If this Guaranty shall differ or conflict in terms with any of the Contract
Documents, the agreement which gives Contractor the greater right, as determined
by Contractor, shall prevail.
GUARANTORS:
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Terry
Phillips
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Address:
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Gone
Off Deep, LLC
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By:
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Name:
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Address:
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Southpeak
Interactive Corp.
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By:
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Name:
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Address:
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Vid
Sub, LLC
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By:
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Name:
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Address:
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SouthPeak Interactive (GM) (USOTC:SOPK)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
SouthPeak Interactive (GM) (USOTC:SOPK)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024