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EXHIBIT 10.20
ASSIGNMENT OF ACCOUNTS RECEIVABLE
The undersigned, Let's Talk Cellular & Wireless, Inc., a Florida
corporation ("Assignor"), in consideration of the sum of $1,960,571.00 from
H.I.G. Capital LLC ("Assignee"), the receipt and sufficiency of which are
hereby acknowledged, hereby sells, assigns, transfers and conveys absolutely
and not as collateral to Assignee all of its right, title and interest, in and
to the accounts receivable owed to the Assignor by the account debtors listed
on SCHEDULE A (each, a "Debtor"), which are particularly described on the
schedule attached hereto as SCHEDULE "A" (the "Receivables"). Notwithstanding
anything to the contrary set forth in the prior sentence, the Receivable does
not include amounts owing from the Debtor other than as speci ically described
on the Schedule attached hereto as SCHEDULE "A."
Assignor represents that (1) the Receivables have an outstanding
balance of $2,000,582.00 that Assignor is owed by the Debtor, (ii) all
amounts received by Assignor with respect to the Receivables hereby assigned
have been credited and deducted in determining the amount of the Receivables,
and (iii) Assignee shall have all rights Assignor has with respect to the
Receivables including without limitation, the right to enforce, collect,
compromise or settle the Receivables, and the right to put the Debtor on notice
of the assignment of the Receivables.
Assignor hereby unconditionally guarantees payment of the amount of
the Receivables to Assignee in accordance with the terms set forth on Exhibit
"A." Assignor further agrees to indemnify Assignee for any amounts which
Assignee may be required to pay relating to the Receivables, including but not
limited to any amounts which Assignee may be required to disgorge pursuant to
Section 544(a) or 547(a) of the Bankruptcy Code, or otherwise. For the purposes
hereof, any payment required to be made by Assignor to Assignee pursuant to the
two (2) foregoing sentences shall be referred to herein as a "Distribution".
Assignor agrees that Assignee shall have no liability for any counterreceivable
or right of setoff, recoupment the
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like. Assignee agrees that any Distribution required to be paid is and shall be
expressly junior and subordinated in right of payment to all amounts due and
owing upon all Senior Indebtedness (as hereafter defined) outstanding from time
to time. "Senior Indebtedness" shall mean all Obligations of any kind owed by
Assignor or its subsidiaries to The Chase Manhattan Bank, as agent ("Agent"),
and the lenders ("Lenders") who are parties to, the Loan and Security Agreement
dated as of April 2, 1998 between Assignor, its subsidiaries, Agent and the
Lenders (as same has been amended from time to time, the "Credit Agreement")
under or pursuant to the Credit Agreement including, without limitation, all
principal, interest (including all interest accruing after commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of Assignor or its subsidiaries) accruing thereon, charges,
expenses, fees and other sums chargeable to Assignor or its subsidiaries by
Agent or Lenders and reimbursement, indemnity or other obligations due and
payable Agent or Lenders. Senior Indebtedness shall continue to constitute
Senior Indebtedness, notwithstanding the fact that such Senior Indebtedness or
any claim for such Senior Indebtedness is subordinated, avoided or disallowed
under the federal Bankruptcy Code or other applicable law. Specifically, but
not by way of limitation:
(a) PAYMENT. Assignor shall make no Distribution until such
time as the Senior Indebtedness shall have been paid in full in cash and the
Credit Agreement shall have been irrevocably terminated; PROVIDED, HOWEVER, so
long as (i) no Default or Event of Default shall have occurred under the Credit
Agreement and (ii) Borrowers shall have Undrawn Availability of at least
$1,000,000 after giving effect to the payment of such Distribution, Assignor
may pay and Assignee may receive Distributions.
Following the occurrence of a Default or an Event of Default under the
Credit Agreement or, if Undrawn Availability would be less than $1,000,000
after giving effect
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to any Distribution, (i) Assignor shall make no Distribution and (ii) Assignee
shall not be entitled to receive or retain any such Distribution, PROVIDED,
FURTHER, that notwithstanding the foregoing restriction, Assignor may pay and
Assignee shall be entitled to receive and retain any Distribution which shall
have become due and payable on the earliest to occur of (x) the date on which
(i) all such Defaults and/or Events of Default shall have been cured or waived
and (ii) Undrawn Availability shall equal or exceed $1,000,000 after giving
effect to such Distribution or (y) payment in full in cash of all Senior
Indebtedness and the irrevocable termination of the Credit Agreement.
(b) LIMITATION ON ACCELERATION. During any period described
above in which a Distribution is not permitted to be made (any such period, a
"Non-Payment Period"), Assignee shall not be entitled to exercise any remedies
or commence any action or proceeding to recover any amounts due or to become
due with respect to any Distribution, PROVIDED, HOWEVER, the foregoing
limitation on acceleration or exercise of any remedies shall not be applicable
following (x) the occurrence of an Event as defined below or (y) following the
maturity or acceleration of all Senior Indebtedness.
(c) PRIOR PAYMENT OF SENIOR INDEBTEDNESS IN BANKRUPTCY, ETC.
In the event of any insolvency or bankruptcy proceedings relative to Assignor,
its subsidiaries or their property, or any receivership, liquidation,
reorganization or other similar proceedings in connection therewith, or, in the
event of any proceedings for voluntary liquidation, dissolution or other
winding up of Assignor or its subsidiaries or distribution or marshalling of
their assets or any composition with creditors of Assignor or its subsidiaries,
whether or not involving insolvency or bankruptcy, or if Assignor or its
subsidiaries shall cease their operations, call a meeting of their creditors or
no longer do business as a going concern (each individually or collectively, an
"Event") then all Senior Indebtedness shall be paid in full and satisfied in
cash and the Credit
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Agreement irrevocably terminated before any Distribution shall be made. Any
such Distribution which would, but for the provisions hereof, be payable or
deliverable, shall be paid or delivered directly to the Agent or its
representatives, in the proportions in which they hold the same, until amounts
owing upon Senior Indebtedness shall have been paid in full in cash and the
Credit Agreement has been irrevocably terminated.
(d) ACCELERATION. In the event of any Senior Indebtedness
becoming due and payable, whether by acceleration, maturity or otherwise, no
Distribution shall thereafter be made until all Senior Indebtedness shall be
paid in full in cash and the Credit Agreement irrevocably terminated.
(e) PAYMENTS HELD IN TRUST. Should any Distribution be
collected or received by Assignee or any Affiliate (as such term is defined in
rule 405 of Regulation C adopted by the Securities and Exchange Commission
pursuant to the Securities Act of 1933) of Assignee at a time when the
Assignee is not permitted to receive any such Distribution or proceeds thereof
including if same is collected or received when there is or would be after
giving effect to such payment a Default or an Event of Default under the Credit
Agreement, then the Assignee will forthwith deliver, or cause to be delivered,
the same to the Agent in precisely the form held by the Assignee (except for
any necessary endorsement) and until so delivered, the same shall be held in
trust by the Assignee, or any such Affiliate, as the property of the Agent and
shall not be commingled with other property of the Assignee or any such
Affiliate.
Notwithstanding the foregoing, in the event that Assignee shall not
receive payment of all or any part of the Receivables within ninety (90) days
of the date of this Agreement or the Assignee shall have reasonably determined
that the Receivable will not be paid by the account debtor due to the financial
inability of the account debtor to pay such Receivable (any such sum, the
"Unpaid Amount"), Assignee shall have the right to acquire additional
Receivables from
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Assignor with the same representations and warranties contained in paragraph 2
hereof in an amount equal to such Unpaid Amount up to an aggregate sum of
$300,000; provided, the additional Receivables transferred to Assignee (x) are
due and unpaid more than ninety (90) days past the original invoice date
therefor and (y) do not have an aggregate outstanding balance in excess of the
lesser of (x) $300,000 or (y) the Unpaid Amount.
Assignor shall provide assistance as follows in connection with the
assignment of the Receivables:
A. Reasonable documentation to support the Receivables;
B. Knowledgeable witnesses to offer testimony on the validity of the
Receivables, including without limitation, testimony as to the basis for the
Receivables, if necessary.
C. Such other information and help as Assignee reasonably requests.
D. Provision of written notice to Debtor of assignment of the
Receivables to Assignee.
This Assignment shall be governed by the laws of the State of
New York.
June __, 1999
Assignor
LET'S TALK CELLULAR & WIRELESS, INC.
By: /s/ Daniel Cammarata
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Name: Daniel Cammarata
Title: Chief Financial Officer
Assignee
H.I.G. CAPITAL LLC
By: /s/ Douglas Berman
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Name: Douglas Berman
Title: Managing Director
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SCHEDULE A
Lets Talk Cellular & Wireless
Detail of Receivables
As of 4/30/99
Detail of
Receivables for
System Vendor Code Carrier ll/l/98 - 01/30/99
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Prism AIRTROUCH Airtouch 104,584.05
Prism ATTCO AT&T Colorado 56,645.02
Prism ATT-LA AT&T Calif. 50,395.01
Prism ATTPCS AT&T DC 87,360.01
Prism ATTPCSNATL AT&T PCS National (11,585.09)
Prism BAPHILLY Bell Atlantic - Philly 80,720.03
Prism BS Bell South - So Fla. 68,798.08
Prism BS03 Bell South - Orlando 10,365.66
Prism CELLONENY Cellular One - New York 27,073.78
Prism COMCAST Comcast Cellular Communication 12,504.00
Prism GTESANFRAN GTE San Francisco 392,782.31
Prism LACELLULAR AT&T (AKA L.A. Cellular) 83,209.96
Prism LVATT AT&T Las Vegas 69,805.01
Prism OMNIPOINT Omnipoint Communications 39,989.00
Prism SNET SNET of Connecticut 129,974.96
Prism SPRINT Sprint Spectrum LP 2,939.51
Prism TAMPAGTE GTE Mobilenet - Tampa 9,128.98
GERS 1 AIRDETROIT Airtouch Cellular DT 30,060.00
GERS 2 T-ATTl AT&T Wireless Activations 343,295.00
GERS 2 T-CEL1 Cellular One Kansas Activations 36,700.00
GERS 2 V-ATTAUSTI AT&T Wireless Austin 15,765.00
GERS 1 V-ATTPCNAT AT&T PCS National 19,650.00
GERS 1 V-CELL1 BUF Cellular One Buffalo 39,062.75
GERS I V-CELL1 CH Cellular One Chicago 273,950.00
GERS 1 V-CELL1 ROC Cellular One Rochester (111,742.04)
GERS 1 V-CELL1 SYR Cellular One Syracuse 72,058.00
GERS 1 V-GTEINDIA GTE Indianapolis 67,094.00
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Grand Totals 2,000,582.99
LET'S TALK CELLULAR CONFIDENTIAL Page 1