{"id":42556,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/master-purchase-order-assignment-agreement-transcap-trade.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"master-purchase-order-assignment-agreement-transcap-trade","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/master-purchase-order-assignment-agreement-transcap-trade.html","title":{"rendered":"Master Purchase Order Assignment Agreement &#8211; Transcap Trade Finance and Bay Area Multimedia Inc."},"content":{"rendered":"<pre>                   MASTER PURCHASE ORDER ASSIGNMENT AGREEMENT\n                   ------------------------------------------\n\n       THIS AGREEMENT is made on the 25 day of February, 2000, by and between\nTRANSCAP TRADE FINANCE, an Illinois general partnership (the \"CONTRACTOR\") and\nBAY AREA MULTIMEDIA, INC., a California corporation (the \"MANUFACTURER\"), as\nfollows:\n\nBACKGROUND OF AGREEMENT:\n\nA.     The parties have signed an agreement in principle to enter into a\n       purchase order assignment program under which the Manufacturer will\n       assign customer purchase orders to the Contractor and request the\n       Contractor to purchase the required materials to fulfill such purchase\n       orders; the Contractor will retain the Manufacturer to manufacture,\n       process and ship ordered goods; and fees will be paid to the Manufacturer\n       for its services upon payment to the Contractor for the goods.\n\nB.     The parties desire to enter into a formal agreement to set forth the\n       terms and provisions of the purchase order assignment program.\n\n       THEREFORE, in consideration of the services to be performed, the payments\nto be made, and the obligations to be assumed as set forth in this Agreement,\nthe parties agree as follows:\n\n       1. DEFINITIONS. In this Agreement, the following frequently used terms\nare defined as set forth in this paragraph 1:\n\n       (a) The \"CERTIFICATE\" means the Purchase Order Package Certificate\nattached hereto as Exhibit \"A\" required to be delivered with each request for\nassignment of a purchase order. The form of Certificate is attached to this\nAgreement as Exhibit \"A\" and made a part hereof.\n\n       (b) With respect to each purchase order submitted for assignment\nhereunder, the Certificate will define the \"PRODUCT\" (the end product to be\ndelivered to the customer), the \"CUSTOMER\" (the business entity which issues the\npurchase order), the \"MATERIALS\" (the materials required to produce the\nProduct), the \"PREMISES\" (Manufacturer's facility or such other facility\nidentified in the Certificate where the Materials will be delivered and Products\nwill be produced), the \"P.O. PRICE\" (the purchase price to be paid by the\nCustomer for the Products), the \"P.O. DELIVERY DATE\" (the date on which Products\nare to be delivered to the Customer as set forth in the Certificate), and the\n\"MATERIALS DELIVERY DATE\" (the date on which the Materials are to be delivered\nto the Manufacturer as set forth in the Certificate). The Manufacturer is not\nengaged in the manufacturing business but is engaged in the development, sale,\nand distribution of Products; and Materials and Products shall refer to the same\ngoods.\n\n       (c) A purchase order delivered to the Manufacturer in the ordinary course\nof its business is referred to as a \"P.O.\" A P.O. which meets all of the\nrequirements of paragraph 3 below is deemed to be unconditionally accepted by\nContractor and is referred to as an \"ACCEPTED P.O.\" The date on which the\nContractor delivers notice of acceptance of the assignment of the P.O. is\nreferred to as the \"ACCEPTANCE DATE\". When an Accepted P.O. is made null and\nvoid pursuant to this\n   2\n\nAgreement, it is referred to as a \"CANCELED P.O.\" Under certain circumstances,\nwhen a P.O. is not assignable to the Contractor, the Contractor will accept an\nassignment of the proceeds of the P.O. In such cases, the terms P.O. and\nAccepted P.O. will mean the proceeds of such P.O. or Accepted P.O. as the case\nmay be.\n\n       (d) A financial institution engaged in the practice of lending sums to\nthe Manufacturer secured at least in part by Manufacturer's accounts receivable\nis referred to as the \"ACCOUNTS RECEIVABLE LENDER\". The Accounts Receivable\nLender involved in this transaction (if any) is identified on Addendum I\nattached hereto. A \"SENIOR LENDER\" is any financial institution (including the\nAccounts Receivable Lender) which is engaged in lending sums to the Manufacturer\nsecured by liens on some or all of the Manufacturer's assets. Each Senior Lender\ninvolved in this transaction (if any) is also identified on Addendum I.\n\n       (e) The inventory of Products produced for satisfaction of a P.O. is\nreferred to as the \"P.O. INVENTORY\"; the invoice rendered upon delivery of\nProducts pursuant to a P.O. is referred to as the \"P.O. INVOICE\"; and payments\nreceived on account of P.O. Invoices (whether paid by the Customer, the Accounts\nReceivable Lender, the Manufacturer, or any other patty) are referred to as the\n\"P.O. PROCEEDS\".\n\n       (f) The Manufacturer may repurchase an Accepted P.O. pursuant to\nparagraph 8(b) below. In the absence of such repurchase, an Accepted P.O.\nbecomes a \"DELINQUENT P.O.\" if the P.O. Price is not paid to the Contractor by\nthe earliest of (i) the due date for payment of the P.O. Invoice, (ii) one\nhundred and five (105) days following the Funding Date if Contractor issues its\nletter of credit or purchase order, (iii) thirty (30) days following the Funding\nDate if Contractor advances funds by other than issuing its letter of credit or\npurchase order, or (iv) the date on which the Accepted P.O. is canceled.\n\n       (g) If a lock box collection procedure is established pursuant to this\nAgreement, the term \"LOCK BOX\" refers to the Contractor's lock box account; and\nthe term \"LOCK BOX BANK\" means the bank at which the Contractor establishes the\nLock Box and so notifies Manufacturer in writing. The Lock Box and Lock Box Bank\ninvolved in this transaction (if any) are identified on Addendum II attached\nhereto.\n\n       (h) The \"FUNDING DATE\" is the date on which the Contractor makes its\nfirst Materials purchase in connection with an Accepted P.O. or issues its\nletter of credit or purchase order or otherwise advances funds to or for the\nbenefit of or on account of an Accepted P.O., whichever is earlier. The\n\"CLEARANCE DATE\" is the date on which the Contractor (or the Lock Box Bank) has\nreceived full payment of the P.O. Price in connection with an Accepted P.O. in\nfully collected funds.\n\n       (i) The Manufacturer will perform its obligations in accordance with the\n\"MANUFACTURER'S SPECIFICATIONS\" which are set forth on Exhibit \"B\" attached\nhereto and will be paid a \"MANUFACTURER'S FEE\" computed in accordance with the\nprovisions of paragraph 7(c) below. The Manufacturer's obligations are secured\nby a \"SECURITY AGREEMENT\" described in paragraph 10 below.\n\n\n                                       2\n   3\n     (j) The Contractor will be paid  \"COMMITMENT FEE\" (computed and paid\npursuant to Paragraph 6 below), the \"CONTRACTOR'S DEAL FEES\" (computed and paid\npursuant to Paragraph 7 below), and \"CONTRACTOR'S EXPENSES\" (computed and paid\npursuant to Paragraph 9 below). For purposes of computing the waiver of portions\nof the Commitment Fee, the term \"PRODUCT VOLUME\" means the aggregate of (a) the\nface amounts of all letters of credit issued by Contractor plus (b) the\naggregate amount of funds advanced by Contractor by other than issuing its\nletters of credit, in connection with an Accepted P.O. for which a P.O. Invoice\nis issued on or before the date on which payment of the Commitment Fee is due;\nand \"MINIMUM VOLUME\" means Product Volume which equals or exceeds $3,000,000.\n\n     (k) If the Manufacturer is required to make a \"SECURITY DEPOSIT\" (as\ndefined in Paragraph 3(b)(i), the Security Deposit will be maintained in\naccordance with Paragraph 10.1.\n\n    2.  SUBMISSION OF P.O.'s FOR ASSIGNMENT. Subject to the terms of this\nAgreement, the Manufacturer may request that the Contractor accept an assignment\nof each P.O. submitted to and accepted by Manufacturer and make Material\npurchases to fulfill the P.O. Each such request shall be made pursuant to a\ncompleted and signed Certificate delivered to the Contractor.\n\n\n    3.  ACCEPTANCE OF P.O. ASSIGNMENTS.\n\n     (a) Subject to the conditions and requirements set forth in this Paragraph\n3, Contractor agrees to accept or decline acceptance of the assignment of a P.O.\nsubmitted to Contractor pursuant to the provisions of Paragraph 2 above (in\nContractor's absolute discretion) by delivery of written notice to Manufacturer.\nContractor will use its best efforts to deliver such acceptance by 5:00 p.m. on\nor before the fourth full business day after Contractor receives the\nCertificate.\n\n     (b) Notwithstanding the provisions of Paragraph 3(a) above, Contractor\nshall not accept the assignment of any P.O. which does not meet the following\nrequirements:\n\n          (i) Contractor's funding commitment with respect to the P.O. shall not\n     exceed 60% of the P.O. Price, provided, however, that Contractor may exceed\n     such limitation upon the deposit by the Manufacturer with the Contractor of\n     a Security Deposit (the \"Security Deposit\") in an amount equal to the\n     excess of the Contractor's funding commitment with respect to the P.O. over\n     60% of the P.O. Price;\n\n          (ii) Manufacturer shall have on deposit with Contractor a Security\n     Deposit as set forth in Paragraph 10.1 hereof;\n\n          (iii) Upon the purchase of Materials required for the P.O., or upon\n     any other advance of funds in connection with the P.O., the Contractor's\n     aggregate outstanding funding pursuant to this Agreement shall not exceed\n     the sum of $1,000,000;\n\n          (iv) An original, signed copy of the Certificate shall have been\n     delivered to the Contractor;\n\n\n                                       3\n\n   4\n\n              (v) All information contained on the Certificate shall be verified\n       by Contractor to ensure (to Contractor's satisfaction) that the Materials\n       Delivery Date and P.O. Delivery Date are reasonable and that the P.O. is\n       bona fide (which verification may include, without limitation, direct\n       confirmation from the Customer and any vendors); and\n\n              (vi) The Manufacturer shall have delivered to the Contractor such\n       additional information and documentation as the Contractor may have from\n       time to time requested.\n\n       (c) Notwithstanding the other provisions of this paragraph 3, the\nContractor's acceptance of the assignment of a P.O. shall be made null and void\nand the P.O. shall be deemed a Canceled P.O. upon the occurrence of any one of\nthe following:\n\n              (i) The failure of the Contractor to obtain accepted orders for\n       Materials at prices and on other terms and conditions acceptable to the\n       Contractor within five (5) business days following the Acceptance Date,\n       and Contractor's notice to the Manufacturer thereof. Upon delivery of\n       such notice to Manufacturer, Contractor's rights and interests in and to\n       the P.O. will be terminated absolutely and Contractor shall have no\n       obligation whatsoever, to Manufacturer with respect to such P.O.;\n\n              (ii) The failure of a vendor of Materials to deliver Materials\n       which conform to Contractor's specifications to the Premises on or before\n       the Material Delivery Date. Upon such failure of delivery, Contractor\n       shall have the right to require Manufacturer to purchase the Materials\n       from Contractor and shall assign to Manufacturer the right to receive\n       those Materials which have not then arrived at the Premises;\n\n              (iii) The cancellation of the P.O. prior to delivery of Products\n       to the Customer. Upon such cancellation, Manufacturer shall pay\n       Contractor such sums as are required pursuant to paragraph 8 below; and\n\n              (iv) The failure of the Manufacturer to obtain (if so requested by\n       Contractor) a waiver and release of Contractor by the Customer of any and\n       all liability for breach of any and all express or implied warranties or\n       product liability claims with respect to the Products or the use and\n       distribution thereof.\n\n       (d) A P.O. shall be deemed an Accepted P.O. only when (i) the P.O. is\nsubmitted for assignment by the Manufacturer pursuant to a Certificate or such\nother form of submission to which the Contractor may from time to time consent,\n(ii) the Contractor shall deliver notice of acceptance of assignment to the\nManufacturer pursuant to subparagraph (a) or, in the absence of such notice of\nacceptance, the Contractor shall purchase Materials with respect to the P.O. or\notherwise advance of funds in connection with the P.O., (iii) the P.O. shall\nmeet each of the requirements of subparagraph (b) above unless otherwise waived\nby the Contractor, and (iv) none of the events described in subparagraph (c)\nabove shall have occurred prior to delivery of the Products to the\n\n\n                                       4\n   5\nCustomer pursuant to the P.O. Until such time as each of the aforedescribed\nrequirements and conditions is satisfied in full, Contractor's acceptance of an\nassigned P.O. shall be deemed conditional and subject to revocation at any time.\n\n       4. APPOINTMENT OF MANUFACTURER.\n\n       (a) Subject to the other provisions of this Agreement, with respect to\nall Accepted P.O.'s (and only so long as such P.O. remains an Accepted P.O.)\nContractor hereby appoints the Manufacturer as Contractor's exclusive source for\nacceptance of Materials at the Premises, performance of all manufacturing,\nprocessing and warehousing requirements with respect to the conversion of\nMaterials into Products, and the delivery of Products to Customers, and the\nManufacturer hereby accepts such appointment. Manufacturer agrees to perform all\nof its obligations pursuant to this paragraph 4 in a good and workmanlike\nmanner, to utilize quality control procedures consistent with the standards of\nManufacturer and the industry, and to otherwise comply with each of the\nManufacturer's Specifications.\n\n       (b) So long as any Materials or Products are located at the Premises or\nare scheduled for delivery to the Premises, Manufacturer agrees to warehouse all\nMaterials and Products and, with respect to such warehousing obligations,\nManufacturer agrees to perform in accordance with all of the Manufacturer's\nSpecifications.\n\n       (c) Manufacturer further agrees that with respect to Materials purchased\nby Contractor pursuant to (and in accordance with) a Certificate which are not\n(or cannot be) used in connection with the applicable Accepted P.O., upon\nContractor's written notice:\n\n              (i) Manufacturer shall purchase such Materials from Contractor\n       within three (3) days following Contractor's notice for a purchase price\n       equal to Contractor's costs for the Materials; or\n\n              (ii) If Manufacturer fails to make such purchase of Materials,\n       such Materials shall be sold by Contractor and the proceeds thereof\n       applied first to Contractor's costs for the Materials, and the balance,\n       if any, to Manufacturer.\n\n       5. PAYMENT AND RE-ASSIGNMENT.\n\n              (a) Upon delivery of Products to the Customer pursuant to an\nAccepted P.O., Manufacturer shall issue a P.O. Invoice (and deliver any other\nrelated documents required by the applicable P.O. for issuance of an invoice on\naccount of such P.O.) to the Customer for the full P.O. Price. Upon Contractor's\ndirection, the P.O. Invoice so issued shall be in the name of the Contractor and\nshall direct the Customer to make payment to the Contractor (or the Lock Box, if\napplicable). Manufacturer shall immediately pay to the Contractor any sums from\ntime to time received by the Manufacturer from the Customer or any other party\nother than the Contractor on account of a P.O. Invoice. Upon Contractor's\ndemand, each P.O. Invoice shall be prepared on such invoice form as Contractor\nmay designate.\n\n\n                                       5\n   6\n\n       (b) At such time as Contractor has received payment in full on account of\na P.O. Invoice, the Contractor shall pay Manufacturer in accordance with\nparagraph 7 below, and shall re-assign the applicable Accepted P.O. and all\nrights with respect thereto to the Manufacturer and the Manufacturer shall\naccept such re-assignment. The re-assignment shall be evidenced by a\nRe-Assignment and Release of Purchase Order in the form of Exhibit \"C\" attached\nhereto.\n\n       (c) Sums received by the Contractor on account of a P.O. Invoice shall be\napplied by the Contractor for the satisfaction of the expenses, fees and charges\ndescribed in this Agreement pursuant to the priorities of payment set forth in\nparagraph 7 below. Provided, however, that Manufacturer shall pay all sums due\nContractor upon a Delinquent P.O. in the manner and pursuant to the terms of\nparagraph 8 below.\n\n       6. COMMITMENT FEE.\n\n       (a) Subject to the provisions of this paragraph 6, Manufacturer shall pay\nContractor a Commitment Fee in consideration of Contractor's commitment to\nreserve and have available sufficient funds to purchase Materials or to\notherwise advance funds in connection with a P.O. for Product Volume in amounts\nequal to or exceeding the Minimum Volume as contemplated by this Agreement. The\nCommitment Fee shall be in the sum of $150,000 and shall be paid by Manufacturer\non the earlier of twelve (12) months following the date of this Agreement or the\ndate of termination of this Agreement. The Commitment Fee for the term of this\nAgreement is deemed by the parties to have been earned by the Contractor upon\nthe signing of this Agreement, as of which date the Contractor has reserved the\nrequisite funds.\n\n       (b) Notwithstanding the provisions of subparagraph (a) above, all or a\nportion of the Commitment Fee shall be waived in accordance with the provisions\nof this subparagraph (b). If Product Volume as of the due date for payment of\nthe Commitment Fee equals or exceeds the Minimum Volume, the entire Commitment\nFee shall automatically be deemed waived by the Contractor. If Product Volume as\nof the due date for payment of the Commitment Fee does not equal or exceed the\nMinimum Volume, Contractor shall waive that portion of the Commitment Fee equal\nto the Commitment Fee multiplied by a fraction, the numerator of which is the\nProduct Volume as of the due date for payment of the Commitment Fee, and the\ndenominator of which is the Minimum Volume.\n\n       7. COMPENSATION OF CONTRACTOR AND MANUFACTURER.\n\n       (a) Payments received by the Contractor or into the Lock Box on account\nof Accepted P.O.'s will be applied in the following order of priority:\n\n              (i) First, to pay Contractor's Expenses to the extent that such\n       expenses are then due pursuant to the terms of paragraph 9;\n\n              (ii) Second, to the payment of the Contractor's Deal Fees in\n       connection with the Accepted P.O. and all other Accepted P.O.'s that\n       became Accepted P.O.'s concurrently with such Accepted P.O.;\n\n\n                                       6\n   7\n\n              (iii) Third, to pay any shortage then existing in the Security\n       Deposit as set forth in paragraph 10.1;\n\n              (iv) Fourth, to reimburse the Contractor for the cost of Materials\n       and for other advances made in connection with a P.O. (without regard to\n       term or prompt payment discounts) purchased in connection with the\n       Accepted P.O. and all other Accepted P.O.'s that became Accepted P.O.'s\n       concurrently with such Accepted P.O.; and\n\n              (v) Fifth, to the payment of the Manufacturer's Fee in connection\n       with the Accepted P.O.\n\n       (b) The Contractor's Deal Fees with respect to each Accepted P.O. shall\nbe as follows:\n\n              (i) A transaction initiation and set-up fee in a sum equal to 5.0%\n       of the aggregate of (a) the face amounts of all letters of credit issued\n       by Contractor (or other financial accommodations) plus (b) all funds\n       advanced by Contractor by other than issuing its letters of credit; plus\n\n              (ii) A daily maintenance fee in a sum equal to 0.067% of the\n       aggregate of the face amounts of all letters of credit issued by\n       Contractor (or other financial accommodations) and all funds advanced by\n       Contractor by other than issuing its letters of credit which remain\n       outstanding for more than seventy-five (75) days; plus\n\n              (iii) A Materials advance fee in a sum equal to the Applicable\n       Daily Rate (as hereinafter defined) multiplied by the aggregate amount\n       outstanding on all letters of credit (or other financial accommodations)\n       and all funds advanced by Contractor by other than issuing its letters of\n       credit on account of purchases of Materials or other advances made in\n       connection with a P.O. multiplied by the number of days from the earliest\n       of (A) the date on which any such letter of credit or purchase order or\n       financial accommodation is negotiated into cash by any person, or (B) the\n       date funds are advanced by other than issuing a letter of credit or\n       purchase order, to and including the Clearance Date. The \"Applicable\n       Daily Rate\" shall mean the prime rate as in effect from time to time at\n       the American National Bank, Chicago, Illinois, plus 4%, divided by 360.\n\n              (iv) In the event of a Delinquent P.O., a late payment fee in a\n       sum equal to 0.067% of the outstanding portion of the P.O. Price\n       multiplied by the number of days from the date an Accepted P.O. becomes a\n       Delinquent P.O. to and including the Clearance Date.\n\nNotwithstanding the foregoing, if the sum of the transaction initiation and\nset-up fee and the daily maintenance fee is not equal to or greater than $2,500\nwith respect to an Accepted P.O., the minimum aggregate amount payable by\nManufacturer to Contractor for the transaction initiation and set-up fee and the\ndaily maintenance fee with respect to such accepted P.O. shall be equal to\n$2,500.\n\n\n                                       7\n   8\n\n       (c) The Manufacturer's Fee with respect to each Accepted P.O. shall be\nequal to the collected P.O. Proceeds with respect to such Accepted P.O. less all\nsums payable pursuant to subparagraphs (a)(i), (ii), (iii) and (iv) above and\nless 100% of all term discounts or discounts for prompt payment.\n\n       (d) Sums due on account of the expenses and fees described in\nsubparagraphs (a)(i), (ii), (iii) and (iv) above shall be paid as and when\nproceeds are received with respect to the applicable Accepted P.O. The\nManufacturer's Fee will be paid not later than the second business day after the\nClearance Date and after satisfaction of all costs, fees and expenses having a\nhigher priority then due and owing.\n\n       8. REPURCHASE; REASSIGNMENT.\n\n       (a) Contractor shall have the right to require the Manufacturer to\nimmediately purchase any Delinquent P.O. (and inventory of Materials and\nProducts in the case of a Canceled P.O.) for an amount equal to the full amount\noutstanding under the P.O. Invoice (or the P.O. Price in the case of a canceled\nP.O.). Any such payment by the Manufacturer shall be deemed to be P.O. Proceeds\nand shall be applied in accordance with the priorities and terms set forth in\nparagraph 7 above.\n\n       (b) In the event that Manufacturer makes all payments due on a Delinquent\nP.O. or Canceled P.O. pursuant to the provisions of subparagraph (a) above,\nContractor shall thereupon immediately assign to Manufacturer all of\nContractor's rights and interests in and to the P.O. Invoice and the P.O.\nProceeds and any Materials or Products in the possession of Contractor or\nManufacturer with respect to such Delinquent P.O.\n\n       9. CONTRACTOR'S EXPENSES. Immediately upon Contractor's demand,\nManufacturer shall pay or reimburse Contractor for all Contractor's Expenses.\nContractor's Expenses include all reasonable expenses, fees, and costs incurred\nby Contractor in connection with the creation of and performance of this\nAgreement and the transactions contemplated hereby, including without\nlimitation, the expenses of Contractor's representative at the Premises,\ninsurance and credit insurance premiums, audit costs, attorney's fees,\nContractor's travel expenses, Lock Box Bank charges, and filing fees.\nContractor's demand for payment of Contractor's Expenses will be made in writing\nand will include reasonable documentation of the expenses for which\nreimbursement is demanded. Contractor acknowledges receipt of the sum of $5,000\ndeposited by Manufacturer to be applied towards the payment of Contractor's\nExpenses.\n\n       10. SECURITY INTERESTS. As security for the performance by Manufacturer\nof each of its obligations under this Agreement, Manufacturer hereby grants the\nfollowing security interests to the Contractor:\n\n       (a) A security interest in all of Manufacturer's assets in accordance\nwith the provisions of the Security Agreement in form satisfactory to\nContractor. Provided, however, that such grant of security interest shall be\nsubordinate to the lien of the Senior Lender (if any) in any common collateral.\n\n\n                                       8\n   9\n\n       (b) The right to set-off against any and all amounts due to the\nManufacturer hereunder any sums which are due to the Contractor hereunder which\nhave become past due and delinquent under this Agreement.\n\n       (c) All of the Manufacturer's rights and interests in, and right of\npayment from, the Accounts Receivable Lender of all sums paid or payable by the\nAccounts Receivable Lender from time to time to the Manufacturer. Manufacturer\nagrees to direct the Accounts Receivable Lender to make such payments to\nContractor pursuant to such written direction as Contractor may request from\ntime to time.\n\n       (d) All checks, notes, deposits, drafts, and other instruments of payment\non account of or related to an Accepted P.O. Manufacturer hereby irrevocably\ndesignates and appoints the Contractor (and all persons designated by the\nContractor) as the Manufacturer's true and lawful attorney-in-fact and\nagent-in-fact and Contractor (or Contractor's agent) may, without notice to\nManufacturer:\n\n              (i) At any time endorse by writing or stamping Manufacturer's name\n       on any checks, notes, deposits, drafts or other instruments of payment on\n       account of, relating to, or representing the proceeds of an Accepted P.O.\n       or any other collateral described herein or in the Security Agreement\n       (collectively the \"Collateral\") which come into the possession of the\n       Contractor or are under Contractor's control and deposit the same to the\n       account of the Contractor for application to all sums due from the\n       Manufacturer to the Contractor hereunder; and\n\n              (ii) At any time after the occurrence of a default by the\n       Manufacturer hereunder or pursuant to the Security Agreement, in\n       Manufacturer's or Contractor's name, demand payment of, enforce payment\n       of, exercise all of Manufacturer's rights and remedies with respect to,\n       settle, adjust, compromise, initiate and prosecute legal proceeding with\n       respect to, and otherwise take all actions with respect to the Collateral\n       which are, in the Contractor's sole discretion, necessary or desirable in\n       order to fulfill Manufacturer's obligations under this Agreement and\n       otherwise realize the full economic value of the Collateral.\n\n       10.1 SECURITY DEPOSIT. (a) The Security Deposit shall be held and applied\nby the Contractor as follows:\n\n              (i) Contractor shall hold the Security Deposit in such\n       depositaries as it determines and may commingle the same with other funds\n       from time to time in Contractor's possession. No interest or other\n       earnings shall be payable on account of sums held as a Security Deposit.\n\n              (ii) Upon the occurrence of a default as set forth in paragraph\n       18(c) below, Contractor may, in its discretion and without prior notice,\n       apply all or any portion of the Security Deposit to pay or otherwise\n       satisfy Manufacturer's obligations hereunder. Contractor\n\n\n                                       9\n   10\n\n       shall, as soon as practicable following any such application, notify\n       Manufacturer thereof and provide a full accounting of such application.\n\n       (b) When funds are applied in the manner set forth in paragraph\n10.1(a)(ii) above, a \"shortage\" is created in an amount equal to all sums so\napplied. Manufacturer shall, within five (5) business days following\nnotification of any shortage, pay to the Contractor, as and for a portion of the\nSecurity Deposit, the sum of such shortage.\n\n       (c) Upon termination of this Agreement and the payment of all sums then\ndue the Contractor by the Manufacturer hereunder. Contractor shall promptly pay\nthe Security Deposit to Manufacturer.\n\n       11. GUARANTY. It is a condition to the signing of this Agreement and the\nperformance by the Contractor of any of its obligations hereunder that the\npersons and entities listed on Addendum III attached hereto execute and deliver\nto the Contractor a Guaranty in form and substance satisfactory to Contractor\nunder which said guarantor(s) guaranty the Manufacturer's obligations to\nContractor hereunder.\n\n       12. COVENANTS OF CONTRACTOR. Provided that Manufacturer performs each of\nits obligations in the manner set forth in this Agreement, the Contractor\ncovenants and agrees as follows:\n\n       (a) To use reasonable efforts to place orders for Materials identified on\nCertificates for Accepted P.O.s for purchase by Contractor and delivery to the\nPremises on terms consistent with the terms set forth in the Certificate.\n\n       (b) Following timely delivery and acceptance of Materials at the\nPremises, to promptly pay for all such Materials in accordance with the terms of\npurchase.\n\n       (c) To release Materials located at the Premises in such quantity and at\nsuch times as are necessary to permit Manufacturer to meet the terms of Accepted\nP.O.'s.\n\n       (d) Upon termination of this Agreement and performance by Manufacturer of\nall of its obligations hereunder, to promptly execute, deliver and file (if\nManufacturer so requests) any instruments and documents reasonably necessary to\nterminate and release any and all security interests granted to Contractor by\nManufacturer pursuant to this Agreement.\n\n       13. WARRANTIES AND REPRESENTATIONS OF MANUFACTURER. Manufacturer hereby\nmakes the following warranties and representations to Contractor, each of which\nis deemed a material inducement to the Contractor to enter into and perform in\naccordance with the provisions of this Agreement and each of which shall be\ndeemed renewed and restated as of the Acceptance Date of each Accepted P.O.:\n\n       (a) Manufacturer is a corporation duly organized, validly existing, and\nin good standing under the laws of the state of its incorporation, and is\nqualified or licensed as a foreign corporation\n\n\n                                       10\n   11\n\nto do business in every location in which the laws require Manufacturer to be so\nqualified or licensed;\n\n       (b) Manufacturer has the right and power and is duly authorized and\nempowered to enter into, execute, deliver, and perform this Agreement and all\nagreements and documents described herein;\n\n       (c) The execution, delivery, and performance by Manufacturer of this\nAgreement and all agreements and documents described herein does not constitute\na violation of any law, regulation, judgment, order, contract, charter, by-laws,\nor other instrument to which Manufacturer is a party or is otherwise bound or\nsubject;\n\n       (d) Manufacturer is not in default under any loan agreement, mortgage,\nlease, trust deed or similar agreement relating to the borrowing of money to\nwhich Manufacturer is a party or is otherwise bound;\n\n       (e) Each P.O. submitted for assignment by the Manufacturer is a bona fide\npurchase order and conforms in all respects to the representations contained in\nthe Certificate, which Certificate is true and correct in all respects;\n\n       (f) The Manufacturer shall at all times maintain such types and amounts\nof insurance coverage (including without limitation credit insurance) with\nrespect to Manufacturer's business operations, the Premises, the Materials and\nthe Products located upon the Premises and any Accepted P.O. as Contractor may\nfrom time to time reasonably require, such insurance to name the Contractor as\nan insured in the manner and to the extent required by Contractor from time to\ntime and, upon the failure to maintain such coverage, Contractor may purchase\nthe same and the cost thereof shall be deemed a Contractor's Expense;\n\n       (g) Except with respect to the lien of the Accounts Receivable Lender or\nas otherwise set forth on Exhibit \"D\" attached hereto, there are no liens,\njudgments or claims affecting or relating to the Manufacturer or any of its\nassets;\n\n       (h) Except as set forth on Exhibit \"E\", there are no suits,\nadministrative proceedings, arbitration proceedings or other adversarial\nproceedings or investigations pending or (to the best of Manufacturer's\nknowledge) threatened against Manufacturer or any of the guarantors;\n\n       (i) All of the financial information (including projections) provided by\nthe Manufacturer to the Contractor in connection with the Contractor's\nconsideration of the transaction contemplated by this Agreement are true and\naccurate, contain no material misstatement of any facts, contain all material\ninformation concerning the Manufacturer's financial condition, and do not omit\nto state any facts which, if disclosed, would reflect adversely on the financial\ncondition of the Manufacturer or any of its Customers; and\n\n       (j) Manufacturer has duly filed all federal, state, county, local, and\nforeign income, excise, sales, customs, property, withholding, social security\nand other tax and information returns and\n\n\n                                       11\n   12\n\nreports required to be filed by it to the date hereof, or in the alternative,\nhas obtained extensions for filing pursuant to established procedures, and has\npaid or made provision for payment of all taxes (including interest and\npenalties) due and payable. Manufacturer has no material liability for any taxes\nof any nature whatsoever.\n\n       14. PRODUCT WARRANTIES. Manufacturer expressly assumes and agrees to make\nall product and service warranties (expressed or implied) to Customers with\nrespect to Products and further agrees to defend, indemnify and hold the\nContractor harmless from and against any claims, suits, obligations, costs, or\nexpenses (including reasonable attorney's fees and legal expenses) with respect\nto all express or implied warranties in connection with the Products.\n\n       15. AUDIT RIGHTS. Manufacturer shall deliver to Contractor copies of all\ninformation and documents submitted from time to time by the Manufacturer to any\nSenior Lender simultaneously with the submission of such documents to such\nSenior Lender; and shall deliver to Contractor monthly financial statements,\naged accounts receivable, aged accounts payable, and Manufacturer's and\nContractor's inventory schedules within fifteen (15) days following the end of\neach month during the term hereof. In addition, Contractor shall have the right\nto inspect, audit and copy any financial books, computer programs, and other\ndata containing financial information in connection with the Manufacturer at any\ntime during regular business hours upon not less than 24 hours' prior written\nnotice. Manufacturer agrees to prepare and maintain complete and accurate\nbusiness records with respect to the transactions contemplated by this\nAgreement.\n\n       16. RELATIONSHIP OF THE PARTIES. The parties are independent contractors\nand are not (and shall not be deemed to be) the partners, joint venturers,\nagents or representatives of the other. Each party is exclusively responsible\nfor the conduct of its own business and is not authorized to bind the other\nparty in any manner whatsoever. Further in this regard:\n\n       (a) Manufacturer acknowledges that it has no ownership interest in any\nP.O., Materials, work-in-process, or Products in connection with an Accepted\nP.O. except as otherwise provided in this Agreement; and\n\n       (b) Contractor acknowledges that it has no ownership interest (other than\nthe security interests granted hereunder) in Manufacturer or in any of\nManufacturer's assets.\n\n       17. INDEMNIFICATION. Manufacturer agrees to indemnify, hold harmless and\ndefend Contractor from and against any loss, costs, (including reasonable\nattorney's fees and costs), claims, suits or causes of action brought,\nthreatened or incurred by or against Contractor by reason of any of the\nfollowing:\n\n       (a) As a consequence of any breach of this Agreement by Manufacturer, any\nbreach of a warranty made by Manufacturer hereunder, or the failure of any\nrepresentation made by Manufacturer hereunder to be true;\n\n       (b) Any suit or threat of suit by any Customer, including, without\nlimitation, all claims under or with respect to Product warranties, except with\nrespect to any suit or claim arising or\n\n\n                                       12\n   13\n\nthreatened solely by reason of Contractor's acts or omissions to act which\nconstitute a breach of Contractor's obligations hereunder;\n\n       (c) Any suit or threat of suit by any of Manufacturer's employees, former\nemployees, securities holders or lenders. except with respect to any suit or\nclaim arising or threatened solely by reason of Contractor's acts or omissions\nto act which constitute a breach of Contractor's obligations hereunder;\n\n       (d) Any product liability claims of any kind, including, without\nlimitation, all claims under or with respect to Product warranties; and\n\n       (e) Environmental liability, if any, as a result of this Agreement or any\ntransaction contemplated by or engaged in pursuant to or on account of this\nAgreement.\n\n       18. TERM AND TERMINATION; DEFAULT.\n\n       (a) Term of Agreement. This Agreement is for a term of twelve (12) months\nfollowing the date hereof; provided, however, that Contractor may terminate this\nAgreement immediately upon Manufacturer's default.\n\n       (b) Obligations Upon Termination. Except for termination in the event of\nManufacturer's default, upon termination of this Agreement, each party shall\nremain liable to perform all matured obligations under this Agreement which\nremain unperformed as of the termination date as if this Agreement remained in\nfull force and effect. Upon termination for any reason and upon completion of\nthe foregoing obligations in the case of a termination upon Manufacturer's\ndefault, all obligations hereunder shall terminate except the continuing\nobligations of the parties under paragraphs 13, 14, 15 and 17 hereof.\n\n       (c) Default.\n\n              (i) Manufacturer shall be considered to be in default hereunder if\n       it either (A) fails to make any payment due Contractor hereunder within\n       three (3) business days of the due date thereof, or (B) fails in any\n       respect to perform any of its other obligations hereunder and such\n       failure continues unremedied for a period of three (3) business days\n       following Contractor's notice thereof, or (C) has made a representation\n       which proves to be false or breaches a warranty made hereunder, or (D)\n       files (or has filed against it) a petition (or otherwise initiates\n       proceedings) for bankruptcy, reorganization, receivership or other\n       proceedings for the protection of debtors, or (E) fails to make any\n       payment due to any third party on or before the due date therefor if the\n       failure to make such payment gives rise to or creates (or if unremedied\n       would give rise to or create) an encumbrance upon the Products or any of\n       them or otherwise restricts Contractor's sale or disposition of the\n       Products or any of them.\n\n              (ii) Without waiving or limiting any of Contractor's other rights\n       and remedies in the event of a default by Manufacturer, and in addition\n       to Contractor's\n\n\n                                       13\n   14\n\n       right of set-off set forth in paragraph 10 above, upon the occurrence of\n       any event of default, Manufacturer shall be liable for immediate payment\n       to Contractor of all amounts due or to become due to Contractor\n       hereunder, including, without limitation, Contractor's Expenses,\n       Contractor's Deal Fees and the Commitment Fee. Contractor shall further\n       be entitled to reimbursement for all of its costs of collection, whether\n       or not suit has been filed or judgment entered, including, without\n       limitation, reasonable attorneys' fees and legal expenses. All amounts\n       owed to Contractor pursuant to this paragraph 18(c) shall carry interest\n       at the rate of 2% per month from the effective date of termination, or,\n       in the case of Contractor's costs of collection, from the date such costs\n       are incurred.\n\n              (iii) In the event of default by Manufacturer, and subject to any\n       agreements between Contractor and any Senior Lender, Contractor shall\n       further be entitled to exercise all the rights and remedies of a secured\n       party under the Uniform Commercial Code or as otherwise provided under\n       the Security Agreement. The proceeds of any amount recovered by\n       Contractor shall be applied, first, to the payment of Contractor's\n       reasonable costs and expenses in connection with the enforcement of\n       Contractor's rights and remedies hereunder; second, toward the payment or\n       satisfaction of all amounts owing Contractor hereunder, including\n       interest thereon; and third, any surplus to be paid to Manufacturer or as\n       a court of competent jurisdiction may direct. In the case of a\n       deficiency, Manufacturer shall remain liable for such deficiency after\n       such sale, with interest at the rate herein provided.\n\n       19. MISCELLANEOUS PROVISIONS.\n\n       (a) CHOICE OF LAW, VENUE, JURISDICTION AND SERVICE. THIS AGREEMENT AND\nALL AGREEMENTS REFERRED TO HEREIN BETWEEN THE CONTRACTOR AND THE MANUFACTURER\n(COLLECTIVELY THE \"TRANSACTION DOCUMENTS\") HAVE BEEN SUBMITTED TO THE CONTRACTOR\nAT THE CONTRACTOR'S PRINCIPAL PLACE OF BUSINESS IN THE STATE OF ILLINOIS, WILL\nBE PERFORMED BY THE PARTIES IN THE STATE OF ILLINOIS, AND SHALL BE DEEMED TO\nHAVE BEEN MADE IN THE STATE OF ILLINOIS. THE VALIDITY OF EACH OF THE TRANSACTION\nDOCUMENTS AND THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT THEREOF, AND THE\nRIGHTS OF THE PARTIES THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND\nCONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT\nREGARD TO THE CONFLICTS OF LAW RULES OF THE STATE IN WHICH SUIT IS INITIATED\nPERTAINING TO THIS AGREEMENT. FURTHER, THE CONTRACTOR AND THE MANUFACTURER AGREE\nTHAT ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THE\nTRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY, SHALL BE\nINSTITUTED IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF\nILLINOIS, EASTERN DIVISION, OR ANY COURT OF THE STATE OF ILLINOIS LOCATED IN\nCOOK COUNTY, AND EACH PARTY IRREVOCABLY SUBMITS AND CONSENTS TO THE JURISDICTION\nOF THOSE COURTS AND\n\n\n                                       14\n   15\n\nWAIVES ANY AND ALL OBJECTIONS TO JURISDICTION OR VENUE THAT ANY SUCH PARTY MAY\nHAVE UNDER THE LAWS OF THE STATE OF ILLINOIS OR OTHERWISE IN THOSE COURTS IN ANY\nSUCH SUIT, ACTION, OR PROCEEDING. FURTHER, TO THE EXTENT PERMITTED BY LAW,\nSERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST\nTHE MANUFACTURER MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT\nREQUESTED, TO ITS ADDRESS FOR NOTICE AS PROVIDED IN THIS AGREEMENT. MANUFACTURER\nAGREES THAT ANY FINAL JUDGMENT RENDERED AGAINST IT IN ANY ACTION OR PROCEEDING\nSHALL BE CONCLUSIVE AS TO THE SUBJECT OF SUCH FINAL JUDGMENT AND MAY BE ENFORCED\nIN OTHER JURISDICTIONS IN ANY MANNER PROVIDED BY LAW.\n\n       (b) WAIVER OF RIGHT TO JURY TRIAL. MANUFACTURER AND CONTRACTOR\nACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT,\nANY OTHER AGREEMENT RELATED HERETO OR WITH RESPECT TO THE TRANSACTIONS\nCONTEMPLATED HEREBY OR THEREBY WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES,\nAND THEREFORE, THE PARTIES AGREE THAT ANY COURT PROCEEDING ARISING OUT OF ANY\nSUCH CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE\nSITTING WITHOUT A JURY.\n\n       (c) Notices. All notices required or permitted pursuant to this Agreement\nshall be in writing and either personally delivered, sent by facsimile\ntransmission (provided evidence of transmission is maintained and the original\nof the transmittal notice is sent by U.S. mail), or Federal Express or similar\novernight delivery service, addressed to the respective addresses or facsimile\nnumber of the parties set forth on the last page of this Agreement, or at such\ntelephone numbers or other addresses as have from time to time been designated\nby like notice. Notices given in the manner prescribed herein shall be deemed\ngiven on the date sent or transmitted (as the case may be).\n\n       (d) Severability. The paragraphs of this Agreement are severable, and in\nthe event that any paragraph or portion of this Agreement is declared illegal or\nunenforceable, the remainder of this Agreement will be effective and binding\nupon the parties.\n\n       (e) Opinion of Counsel. It is an express condition to the closing of the\ntransactions contemplated by this Agreement that the Manufacturer cause to be\ndelivered to the Contractor an opinion of Manufacturer's counsel which is\nsatisfactory to Contractor.\n\n       (f) Waiver; Entire Agreement. This Agreement contains the entire\nunderstanding of the parties with respect to the subject matter hereof, and\nsupersedes all prior oral or written agreements, understandings, or\narrangements. No waiver of or modifications to the provisions of this Agreement\nwill be valid unless in writing and signed by all parties. This Agreement shall\nbe binding upon and inure to the benefit of the parties hereto, their\nsuccessors, assigns and legal representatives.\n\n\n                                       15\n   16\n\n       (g) Assignment. Manufacturer may not transfer or assign its rights or\nobligations hereunder without the prior written consent of the Contractor, and\nany attempted transfer or assignment shall be null and void.\n\n       (h) Performance. Time is of the essence under this Agreement.\n\n       (i) Further Assurances. From and after the date hereof, each party will\nexecute all documents and take such further actions as the other may from time\nto time reasonably request in order to carry out the transactions provided for\nherein and accomplish the purposes contemplated hereby.\n\n       (i) Publication. Contractor shall have the right to publicize (by\n\"tombstone\" or comparable publication) the Purchase Order Assignment Program\nevidenced hereby (including the date and size of the facility but not the\nspecific terms hereof).\n\n       (j) Counterparts; Facsimile Delivery. This Agreement may be executed in\none or more counterparts, each of which taken together shall constitute one and\nthe same instrument, admissible into evidence. Delivery of an executed\ncounterpart of this Agreement by facsimile shall be equally as effective as\ndelivery of a manually executed counterpart of this Agreement. Any party\ndelivering an executed counterpart of this Agreement by facsimile shall also\ndeliver a manually executed counterpart of this Agreement, but the failure to\ndeliver a manually executed counterpart shall not affect the validity,\nenforceability, and binding effect of this Agreement.\n\n\n                              * * * * * * * * * * *\n\n\n                                       16\n   17\n\n       This Agreement has been signed at Northbrook, Illinois on the day and\nyear first above written.\n\nCONTRACTOR:                                   MANUFACTURER:\n\nTRANSCAP TRADE                                BAY AREA MULTIMEDIA, INC.\nFINANCE\n\n\nBy: \/s\/ MICHAEL SEAR                          By:  \/s\/ RAY MUSCI\n    ------------------------------                 -----------------------------\n    Michael Sear, Executive Vice President         Ray Musci, President\n    Transcap Associates, Inc. general partner\n\nAddress:    900 Skokie Blvd. #210             Address:    333 W. Santa Clara St.\n            -----------------------                       ----------------------\n            Northbrook, IL. 60062                         Suite 930\n            -----------------------                       ----------------------\nFacsimile:  847-753-9090                                  San Jose, CA. 95115\n            -----------------------                       ----------------------\n                                              Facsimile:  408-298-9600\n                                                          ----------------------\n\n\n                                       17\n   18\n\n                                   EXHIBIT A\n\n                       PURCHASE ORDER PACKAGE CERTIFICATE\n\n       This Certificate is executed by ___________________________, who is the\n______________________ of BAY AREA MULTIMEDIA, INC., a California corporation\n(\"Manufacturer\"), in connection with the Master Purchase Order Agreement dated\n___________, 2000, (the \"Agreement\") with TRANSCAP TRADE FINANCE (\"Contractor\").\n\n       The undersigned certifies to Contractor that all of the information\ncontained in this Certificate is true, complete and accurate and is furnished to\nContractor to induce Contractor to purchase Materials in accordance with the\nAgreement:\n\n1.     Customer Information\n\n       (a)    Attached is a purchase order number _______ dated _______________,\n              2000 in the total amount of $________ (the \"Purchase Order\") from\n              the following customer (\"Customer\"), or Manufacturer has received\n              a bona fide indication of interest from the following Customer.\n\n                    Name:\n                    Address:\n\n\n                    Person in charge:\n                    Phone Number:\n\n       (b)    Attached is a true and complete credit history, payment history\n              and credit report on the Customer; or, in lieu thereof,\n              _____________approval or accepted letter of credit.\n\n       (c)    The Purchase Order is (check one):\n\n              ______ Assignable to Contractor by Manufacturer without Customer's\n                     consent; or\n\n              ______ Not assignable without Customer's consent, but attached is\n                     the consent of the Customer to assignment to Contractor;\n\n              ______ Not assignable, but the proceeds of the Purchase Order are\n                     assignable; or\n\n              ______ Manufacturer has received indication of interest only.\n\n\n                                      A-1\n   19\n\n2.     Product Information\n\n       (a)    Original (or a true, accurate and complete copy of) Purchase Order\n              - attached.\n\n       (b)    Identification of \"Product(s)\":\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n       (c)    Quantity of Product Ordered:\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n       (d)    Specifications of Product:\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n3.     Price and Delivery Information\n\n       (a)    Aggregate Purchase Order Price:\n                                             ---------------------------\n\n       (b)    Price per Unit of Product:\n                                        --------------------------------\n\n       (c)    Delivery Date (\"P.O. Delivery Date\")\n                                                  ----------------------\n\n       (d)    Terms as to liability for shipping cost, insurance, \"process and\n              hold\", risk of loss, etc.:\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n4.     Materials Information\n\n              Attached is an exhibit detailing: (a) the quantity and quality\n              specifications for all Materials needed to complete the Purchase\n              Order (\"Materials\"); (b) the name, address, contact person and\n              phone number of each person from whom the Materials may be\n              purchased; and (c) confirmed current pricing and delivery date(s)\n              (\"Material Delivery Date(s)\") for all of the Material and a copy\n              of the applicable Purchase Orders.\n\n\n                                      A-2\n   20\n\n5.     Production Information\n\n       (a)    The manufacturing\/distributing facility at which the Product will\n              be manufactured\/distributed (the \"Premises\"):\n\n                      ---------------------------------------------\n\n                      ---------------------------------------------\n\n                      ---------------------------------------------\n\n       (b)    Brief description of production processes and requirements:\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n                      ----------------------------------------------------------\n\n       (c)    Cost of Production:\n                                 --------------------------------------\n\n       (d)    Units of Product per day:\n                                       --------------------------------\n\n       (e)    Duration of production run to manufacture Product for the Purchase\n              Order:\n                    -----------------------------------\n\n6.     Gross Margin\n\n              Here is the computation of Projected Net Gross Margin before\n              depreciation, including, without limitation, projections of the\n              cost of Materials and Manufacturer's Direct Costs:\n\n7.     Assignment of Purchase Order\n\n              Attached is an Assignment of the Purchase Order, duly executed by\n              authorized officers of Manufacturer.\n\n\n                                      A-3\n   21\n\n8.     Lender Consent (check one):\n\n       ______ None of the Materials, work-in-process or inventory is subject to\n              a security interest; or\n\n       ______ If any of the Materials, work-in-process or inventory of\n              Manufacturer are subject to a security interest, attached is the\n              written consent and release of each holder of a security interest,\n              in form previously approved by Contractor.\n\nDated: ___________________, 2000\n\n\nBAY AREA MULTIMEDIA, INC.\n\n\nBy:      \/s\/ RAY MUSCI\n         -----------------------------\n\nTitle:   PRESIDENT\n         -----------------------------\n\n\n                                      A-4\n   22\n\n                              EXHIBIT A (continued)\n\n                    ACCEPTANCE OF PURCHASE ORDER CERTIFICATE\n\n              The foregoing Purchase Order Certificate, as prepared and\ndelivered by Manufacturer, is hereby accepted and approved.\n\n                              TRANSCAP TRADE FINANCE\n\n                              By:\n                                 ------------------------\n\nDated:\n      -----------------------\n\n\n                                      A-5\n   23\n\n                             EXHIBIT A (continued)\n\n                          ASSIGNMENT OF PURCHASE ORDER\n\n       FOR VALUE RECEIVED, BAY AREA MULTIMEDIA, INC., a California corporation\n(\"Assignor\") hereby assigns, transfers and delivers to TRANSCAP TRADE FINANCE\n(\"Assignee\") all of Assignor's right, title and interest in, to and under that\ncertain Purchase Order, identified as follows, for the purposes, and pursuant to\nthe terms and conditions of that certain Master Purchase Order Purchase\nAgreement, dated _________, 2000, between Assignor and Assignee:\n\n       Assignor's P.O. No.:_______________\n\n       Customer Name:_____________________\n\n       P.O. Date:_________________________\n\n\nBAY AREA MULTIMEDIA, INC.\n\n\nBy:     \/s\/ RAY MUSCI\n        --------------------------\n\nTitle:  PRESIDENT  \n        --------------------------\n\n\n                                      A-6\n   24\n\n                                    EXHIBIT B\n\n                          MANUFACTURER'S SPECIFICATIONS\n\n       The following are performance specifications, obligations, and covenants\n(collectively the \"Manufacturer's Specifications\") required of Manufacturer in\nconnection with its obligations under the Purchase Order Assignment Agreement to\nwhich this Exhibit is attached:\n\n       1. To deliver to each Customer a Purchase Order Acknowledgement on such\nform as Contractor may accept directing that payment of each P.O. Invoice be\nmade to Contractor or the Lock Box Bank (if any).\n\n       2. To cooperate with Contractor concerning Contractor's placement of\norders for Materials.\n\n       3. To notify Contractor immediately upon the receipt of Materials at the\nPremises. Upon such delivery, to inspect the quality and quantity of Materials\nand to notify Contractor of any deficiencies.\n\n       4. To permit Contractor's representative access to the Premises at all\ntimes for the purpose of inspecting, safeguarding, and otherwise observing and\noverseeing the storage of Materials and Products and the processing of Materials\ninto Products.\n\n       5. To take all actions necessary for the conversion of Materials into\nProducts and the shipment thereof to Customers in accordance with Accepted\nP.O.'s, including without limitation, manufacturing, processing, packaging,\nshipping, warehousing, fabricating and insuring Materials and Products in\naccordance with the specifications set forth in the applicable Accepted P.O.,\nand to deliver the same to the Customer on or before the P.O. Delivery Date.\n\n       6. To maintain and supply sufficient quantity and quality of equipment,\nmaterials, labor and facilities (other than Materials) in order to perform each\nof its obligations described in this Exhibit \"B\".\n\n       7. To maintain all inventories of Materials and Products in such\nsegregated locations upon the Premises as the Contractor may approve; to\nproperly identify such Materials and Products as being the property of the\nContractor and further identify the same by the P.O. and the Customer for which\nsuch Materials or Products relate; and to implement such commercially reasonable\nsecurity procedures and devices as Contractor may require for the preservation\nand segregation of Materials and Products, including without limitation, the\nconstruction and maintenance of secured cages and storage rooms for such\nMaterials and Products. To not ship or otherwise release any Materials or\nProducts except with the prior written consent of the Contractor.\n\n       8. To ship all P.O. Inventory by such date, by such means, and under such\nterms as required pursuant to the applicable P.O. and to deliver the P.O.\nInventory on or before the P.O.\n\n\n                                      B-1\n   25\n\nDelivery Date. Manufacturer shall further provide Contractor with written notice\nof each shipment of P.O. Inventory immediately following shipment thereof.\n\n       9. To prepare and deliver to the Contractor each P.O. Invoice immediately\nfollowing shipment of the P.O. Inventory.\n\n       10. To fully insure in the name of the Manufacturer and the Contractor\nall P.O. Inventory during shipment to Customers in amounts, with carriers and on\nterms and conditions acceptable to Contractor.\n\n       11. To direct all Customers to make payment with respect to a P.O.\nInvoice to the Contractor or the Lock Box (if any) and to take no actions and\nmake no statements which direct (or have the effect of causing) any P.O.\nCustomer to make any payment with respect to any P.O. Invoice to anyone other\nthan the Contractor or the Lock Box.\n\n       12. To not accept any payment (including rebates, set-offs, and other\nCustomer adjustments) with respect to any P.O. Invoice other than through the\nContractor or the Lock Box.\n\n       13. To receive and hold in trust for the sole and exclusive benefit of\nContractor all sums and instruments representing payment of any P.O. Invoice and\nall proceeds which for any reason come into the possession of Manufacturer, its\nagents, representatives or any other party acting on behalf of Manufacturer, and\npromptly to deliver or cause delivery of such sums to the Contractor.\n\n       14. To maintain in the name of Manufacturer and Contractor general\ncomprehensive liability insurance, with extended coverage and coverage against\ntheft and product liability and such other insurance and coverages as may be\ncommercially reasonable with exclusions, with carriers, and on terms and\nconditions that may be acceptable to Contractor in its sole discretion.\n\n       15. To deliver to Contractor a list of unpaid accounts receivable\nrelating to P.O. Invoices as of last day of the preceding calendar month, such\nlist to be delivered by the 10th day of the next succeeding month and certified\nas complete and accurate by a duly authorized officer of Manufacturer.\n\n       16. To not pledge any of its assets or cause or permit any lien or\nsecurity interest to be taken in any of its assets, except such liens as are\ndescribed on Exhibit \"D\" of this Agreement or are otherwise approved by\nContractor.\n\n       17. To provide Contractor with written notice immediately upon (i) the\nfiling or threat of filing of a bankruptcy petition by or against Manufacturer,\n(ii) the initiation of foreclosure proceedings or other similar action against\nManufacturer or any of its assets, (iii) a request or demand made upon\nManufacturer to make, or for any reason Manufacturer makes, an assignment for\nthe benefit of its creditors, or (iv) Manufacturer becomes unable to pay its\nbills in the ordinary course of business as they become due.\n\n\n                                      B-2\n   26\n\n       18. To immediately notify Contractor of any pending or threatened\nlitigation, administrative proceeding, arbitration, or governmental\ninvestigation concerning or relating to Manufacturer or any goods, services or\nassets that are the subject of an Accepted P.O. or are pledged as collateral\npursuant to the Security Agreement.\n\n\n                                      B-3\n   27\n\n                                   EXHIBIT C\n\n                   RE-ASSIGNMENT AND RELEASE OF PURCHASE ORDER\n\n       UPON AND SUBJECT TO PAYMENT OF the sum of $_____ on or before _________,\n19__(\"Payment Date\"), TRANSCAP TRADE FINANCE (\"Assignor\") hereby assigns,\ntransfers and delivers to BAY AREA MULTIMEDIA, INC. (\"Assignee\") all of\nAssignor's right, title and interest in, to and under that certain Purchase\nOrder identified below, and hereby releases any claims in or with respect to\nsuch Purchase Order. If payment is made after the Payment Date, such assignment\nand release shall require payment of $________ for each day after the Payment\nDate during which payment is not received. The applicable Purchase Order is:\n\n       P.O. Invoice No.:      ___________\n       Customer Name:         ___________\n       P.O. Invoice Date:     ___________\n\n       This Assignment shall become effective immediately upon receipt of good\nfunds in the amount described above.\n\n\n                            TRANSCAP TRADE FINANCE\n\n\n                            By:\n                               ---------------------------\n\nDated:\n      ------------------\n\n                                   ACCEPTANCE\n\n       BAY AREA MULTIMEDIA, INC., a California corporation (\"Assignee\"), hereby\naccepts the foregoing assignment of Purchase Order, and covenants and agrees to\nfully perform all obligations with respect thereto and hereby releases Assignor\nfrom responsibility for the performance of any such obligations whether required\nbefore, on or after the date of this Acceptance. Assignee hereby authorizes\n[Account Receivable Lender] to transfer the amount set forth above to Assignor\nper Assignor's instructions.\n\n\nDated:________\n\n\nBAY AREA MULTIMEDIA, INC.\n\nBy:       \/s\/ RAY MUSCI\n          -------------------------\nTitle:    PRESIDENT\n          -------------------------\n\n\n                                      D-1\n   28\n\n                                    EXHIBIT D\n\n                     EXCEPTIONS TO CONTRACTOR'S SENIOR LIEN\n\nNone\n\n\n                                      D-1\n   29\n\n                                    EXHIBIT E\n\n                            PENDING LITIGATION, ETC.\n\n\n                                      E-1\n   30\n\n                                   ADDENDUM I\n\nThe Accounts Receivable Lender is:\n\nNone\n\n\n\n\n\nThe Senior Lenders other than the Accounts Receivable Lender are:\n\nNone\n\n\n   31\n\n                                   ADDENDUM II\n\nIn this Agreement:\n\n       (a)    The \"Lock Box Bank\" is:\n\n                              AMERICAN NATIONAL BANK\n                              DEPT. 77-6132\n                              CHICAGO, IL 60678-6132\n\n       (b)    The \"Lock Box\" is maintained in LOCK BOX ACCOUNT NO. 77-6132 at\n              the Lock Box Bank.\n\n\n   32\n\n                                        ADDENDUM III\n\nThe Guarantors pursuant to this Agreement are:\n\nRay Musci\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6843],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9613,9619],"class_list":["post-42556","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-bam-entertainment-inc","corporate_contracts_industries-technology__software","corporate_contracts_types-operations","corporate_contracts_types-operations__sales"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42556","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42556"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42556"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42556"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}