Modification, Assignment and Assumption Agreement - Brightstreet.com Inc., Pentech Financial Services Inc. and E-centives inc.
MODIFICATION, ASSIGNMENT AND ASSUMPTION AGREEMENT
This Modification, Assignment and Assumption Agreement (the
"Assignment") is made and entered into effective November 1, 2001, by and among
Brightstreet.com, Inc., a Delaware corporation ("Assignor"), PENTECH FINANCIAL
SERVICES, INC., a California corporation ("Lessor") and e-centives, Inc., a
Delaware corporation ("Assignee") with reference to the following:
A. Assignor and Lessor entered into that certain Master Equipment Lease No.
300771 on or about May 1, 2000 and pursuant to the terms thereof entered into
Acceptance Supplement Nos. 1, 2 and 3 (collectively the "Supplements") for the
lease of certain equipment described in the equipment schedules attached to each
of the Supplements (the "Equipment") in the aggregate amount of $973,607.37 (all
of which documentation is collectively referred to herein as the "Lease"), true
copies of which are attached hereto as Exhibits A, B and C and made a part
hereof by this reference;
B. On or prior to November 30, 2001, Assignee intends to acquire certain
assets and liabilities of Assignor pursuant to an Asset Purchase Agreement. In
consideration of execution of this Agreement by Assignor and Assignee, Lessor
consents to Assignor's sale and Assignee's purchase of such assets and
liabilities of Assignor pursuant to the Asset Purchase Agreement.
C. With the consent of Lessor, Assignor desires to assign the Lease to
Assignee, and Assignee desires to acquire all right, title and interest of
Assignor in and to the Lease.
D. Lessor desires to accept the assignment of the Lease to Assignee,
subject to certain modifications to the terms and conditions of the Lease.
THEREFORE, in consideration of the foregoing recitals and of the
mutual agreements hereinafter set forth, the parties hereto agree as follows:
1. ASSIGNMENT. For good and valuable consideration, the receipt and
sufficiency of which Assignor hereby acknowledges, Assignor does hereby sell,
convey, transfer, assign and deliver to Assignee, and Assignee does hereby
accept from Assignor, all of Assignor's right, title and interest in and to the
Lease.
2. MODIFICATION OF TERMS. The terms of the Lease are hereby modified as
follows:
a. The total balance of remaining lease payments due on the Lease,
including Supplements 1, 2 and 3 as of August 1, 2001 is hereby agreed to be
$600,000, ("Lease Balance") exclusive of residual payments, late charges ,taxes
and other fees and charges, if any.
b. The Lease Balance shall be paid in 36 equal monthly payments
totaling $18,768.00 according to the Lease Payment Schedule attached hereto as
Exhibit D, payable monthly in advance on the first of each month, commencing
August 1, 2001, with the last payment due July 1, 2004 ("Lease Term"). This
monthly payment amount is equal to a 3.128%
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monthly rate factor of the Lease Balance, and reflects an annual interest rate
of 8.349%. Lessor acknowledges receipt of the payments due August 1, September 1
and October 1, 2001.
c. So long as no default under the Lease shall have occurred and be
continuing, the Assignee shall have the following residual options at the of the
Lease Term:
(1) Purchase all but not less than all or the Equipment at its
Fair Market Value ("FMV"), which is agreed to by 16% of its original cost, or
$97,360.00; or
(2) Renew the lease for a 12-month period at its Fair Market
Rental Value (FMRV"), which is agreed to be 50% of the original rental amount,
after which Lessor agrees to sell the equipment to the Assignee for $1.00; or
(3) Return all, but not less than all, of the equipment covered
under the Lease subject to a remarketing charge equal to 14% of the original
equipment cost, or $85,190.
3. ASSUMPTION BY ASSIGNEE. In consideration of the transfer from Assignor
to Assignee, Assignee agrees to be bound by and promptly to perform or cause to
be performed the terms, conditions and covenants, under this Agreement and the
Lease assigned by Assignor to Assignee. Assignee hereby agrees to defend,
indemnify, save and hold harmless Assignor from and against any and all claims,
demands, costs, expenses, attorneys' fees and any other damages or injuries
which Assignor may sustain as a result of any failure or delay by Assignee in
performing the obligations assumed by Assignee pursuant hereto, whether or not
suit is filed.
4. CONTINUATION OF REGULAR MONTHLY PAYMENTS. Assignee agrees to continue
regular monthly payments to Lessor as provided in the Lease with the December 1,
2001 payments, and to continue with regular monthly payments thereafter, and in
all other respects to comply with the terms of the Lease.
5. RELEASE. Lessor, on behalf of itself and its successors and assigns,
hereby releases and forever discharges Assignor and its employees, directors and
officers from any claims, actions, complaints, liabilities, obligations,
damages, demands or suits that Lessor may have against Assignor arising from or
any way related to the Lease or this agreement. As of the Effective Date, Lessor
will look solely to Assignee for payment under the Lease, as modified hereby.
6. FURTHER ASSURANCES. Assignor, Assignee and Lessor shall, at any time and
from time to time after the date hereof, upon the request of the other, execute,
acknowledge and deliver all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances, and take all such further
actions, as shall be necessary or desirable to give effect to the transactions
hereby consummated,
7. NOTICES. All notices and other communications provided for hereunder
shall be in writing (including telex or facsimile) and sent by registered mail
or courier or telexed or telecopied or delivered as follows:
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To Assignor: Brightstreet.com, Inc. To: Assignee: e-centives, Inc.
1601 S. DeAnza Blvd., 6901 Rockledge Drive, 7th Floor
Suite 100 Bethesda, MD 20817
Cupertino, CA 95014 Tel: 240-333-6254
Fax: (408) 777-7201 Attention: General Counsel
Attention: Michael Lu
With a
copy to: Carr & Ferrell LLP To Lessor: Pentech Financial Services, Inc.
2225 East Bayshore Road 310 West Hamilton Avenue,
Suite 200 Campbell, CA 95008
Palo Alto, CA 94303 Facsimile: (408) 378-6978
Fax: (650) 812-3444 Attention: General Counsel
Attention: Barry Carr
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All such notices and communications shall be effective (i) when sent
by registered mail two (2) business days after being duly deposited in
registered mail, (ii) when sent by overnight courier, one (1) business day after
being delivered to the overnight courier or (iii) when sent by telecopier, the
business day when sent (or the following business day if sent on a day that is
not a business day).
8. SEVERABILITY. In the event any provision of this Assignment shall become
or be adjudicated at any time by a court or other applicable authority, invalid
or null and void, such invalidity or nullity shall not affect the validity of
the other provisions hereof, which shall, by express agreement, be considered as
severable.
9. AMENDMENT OR WAIVER. This Assignment may not be modified, amended,
altered or supplemented, discharged or terminated, except by an agreement in
writing executed by each of the parties hereto.
10. COSTS AND EXPENSES. Each party shall be liable for its own costs and
expenses incurred in negotiation and preparation of this Assignment. Should
legal action be brought to enforce any term or agreement herein contained, the
prevailing party in such action shall be entitled to recover reasonable
attorneys' fees, regardless of whether the matter is concluded by Court action
or otherwise, which attorneys fees shall include a reasonable amount for the
services of in house counsel, plus actual costs incurred.
11. COUNTERPARTS.. This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12. CHOICE OF LAW. This Assignment shall be governed and construed in
accordance with the laws of the State of California.
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13. TERMS OF LEASE. Except as expressly provided herein, the provisions of
the Lease shall continue unchanged and in full force and effect.
14. EFFECTIVE DATE. This Assignment shall be effective on November 1, 2000,
regardless of the date on which the last counterpart hereof is signed.
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ASSIGNOR: ASSIGNEE:
BRIGHTSTREET.COM, INC. e-centives, Inc.
a Delaware corporation a Delaware corporation
By /s/ SCOTT WILLS By
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Name: Scott Wills Name: David Samuels
Title: Chief Executive Officer Title: Chief Financial Officer
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LESSOR:
PENTECH FINANCIAL SERVICES, INC.
a California corporation
By /s/ NORMAN H. NELSON
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Norman H. Nelson
Its President and Chief Operating Officer
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