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EXHIBIT 10.39
MILLENNIUM FUNDING
A Canfield Capital Management LLC Company
Thursday, June 29, 2000
Mr. Ken Schilling
iBIZ Technology Corp.
1919 West Long Cactus
Phoenix, AZ 85027
C/O: Mitchell Cohen
RE: RECEIVABLES FACTORING & PO FUNDING PROPOSAL
Dear Ken:
Thank you for your recent submission to Millennium Funding, a
Canfield Capital Management, LLC company [hereinafter referred to as
"Millennium" with any such reference to be deemed to include any
affiliates of Millennium] of iBIZ Technology Corp. The information
with which this organization has been furnished regarding iBIZ
Technology Corp, has been carefully reviewed and considered.
Based on the information presented to Millennium by iBIZ Technology
Corp., and subject to the requirements, terms, conditions and
contingencies expressed herein, a preliminary determination has been
made to extend to iBIZ Technology Corp. certain requested trade
financing.
I. Specific Nature of Millennium Proposal. The Millennium proposal
contained herein is as follows:
To make available and provide, as requested by iBIZ Technology Corp.
and thereafter approved on a trade transaction by transaction basis
by Millennium based on certain criteria, through the capitalization
of a supply agreement, up to ninety percent (90%) of the required
product acquisition costs and ancillary/attendant transactional costs
(which may include without limitation inspection, forwarding,
freight, insurance's, duties, warehousing and banking charges) to
certain suppliers/intended recipients situated within or without the
United States for the manufacture and distribution, of
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various electronic hardware components, payable directly to such
suppliers/intended recipients by way of either (1) cash up-front
(wire-transfer or check), (2) cash on delivery (wire transfer, check
or certified check), (3) pre-posted commercial escrow payable at
sight upon presentation of documents following delivery anal
inspection of such product, (4) pre-posted commercial letter of
credit payable at sight upon presentation of documents following
delivery and inspection of such product, or (5) any combination of
the above, as required by the particular transactional circumstances,
and as ultimately determined by Millennium in its sole and exclusive
discretion on a trade transaction by transaction basis.
II. Integral Logistical & Financial Terms/Requirements/Conditions.
Without limitation, any and all trade transactions contemplated
hereby shall be subject to the following integral logistical and
financial terms/requirements/conditions:
1. Unless otherwise agreed to by Millennium and iBIZ, trade
transactions shall be initiated in accordance with the following:
A) Cash Basis Transactions. For trade transactions in which the
applicable iBIZ Technology Corp. customer is either (1) a non U.S.
domiciled entity or (2) otherwise being required by iBIZ Technology
Corp., and/or Millennium to pay for the product on a cash basis (i.e.
anything other than an open-credit terms basis), the procedure shall
be as follows:
i) Commercial Escrow. For any trade transactions in which
Millennium approves payment by iBIZ Technology Corp. customer in
the form of a pre-posted commercial escrow:
a) The receipt by iBIZ Technology Corp. and .Millennium of an
irrevocable purchase order issued by the iBIZ Technology Corp.
customer acceptable to Millennium in its sole and exclusive
discretion;
b) The negotiation and manifestation in written form of a
purchase and sale agreement or supply agreement, including all
terms and conditions, with an iBIZ Technology Corp. supplier
nominated by iBIZ Technology Corp., and approved by Millennium in
its sole and exclusive discretion; and
c) Receipt by Millennium of notice by an escrow agent of the
posting of escrow on the account of such iBIZ Technology Corp.
customer in favor of Millennium as beneficiary and payable at
sight upon presentation of appropriate delivery documentation.
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ii) Commercial Letter of Credit. For any transactions in which
Millennium requires payment by the iBIZ Technology Corp. customer
in the form of a commercial letter of credit:
a) The receipt by iBIZ Technology Corp., and Millennium of an
irrevocable purchase order issued by the iBIZ Technology Corp.
customer acceptable to Millennium in its sole and exclusive
discretion;
b) The negotiation and manifestation in written form of a
purchase and sale agreement or supply agreement including all
terms and conditions, with an iBIZ Technology Corp. supplier
nominated by iBIZ Technology Corp., and approved by Millennium in
its sole and exclusive discretion;
c) The receipt by Millennium of a confirmation, as determined in
the sole and exclusive discretion of Millennium from a money
center bank of an irrevocable, commercial letter of credit opened
on the account of such iBIZ Technology Corp. customer in favor of
Millennium as beneficiary and payable at sight upon presentation
of documentation and containing terms and conditions consistent
with those pre-approved by Millennium.
B) Open-Credit Transactions. For transactions in which the iBIZ
Technology Corp. customer has been pre-approved by Millennium for
the extension of open-credit sales terms, the procedure shall be
as follows:
a) The receipt by iBIZ Technology Corp, and Millennium of an
irrevocable purchase order issued by the iBIZ Technology Corp.,
customer acceptable to Millennium to its sole and exclusive
discretion;
b) The negotiation and manifestation in written form of a
purchase and sale agreement or supply agreement, including all
terms and conditions, with an iBIZ Technology Corp. supplier
nominated by iBIZ Technology Corp. and approved by Millennium in
its sole and exclusive discretion;
c) The negotiation of a final written signed purchase and sale
agreement, including all terms and conditions, between iBIZ
Technology Corp., and that iBIZ Technology Corp., customer from
whom the original purchase order had been issued. Agreement to be
approved by Millennium in its sole and exclusive discretion;
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2: Any and all administrative procedural requirements to which
the supply agreement shall be subject shall be dictated by
Millennium in its sole and exclusive discretion, and any all such
requirements shall be adhered to by iBIZ Technology Corp.
throughout the term of any agreement entered into in connection
herewith.
3: Any and all product acquired from suppliers by Millennium for
further sale to or through iBIZ Technology Corp. pursuant to any
of the trade transactions contemplated hereby shall conform in any
and all ways to any and all applicable standards and/or
regulations for any states, provinces or countries to which it
will be subject including without limitation any such regulations
promulgated by the United States Department of Commerce
(U.S.D.C.), and the United States Consumer Product Safety
Commission (U.S.C.P.S.O), and may be inspected from time to time
for purposes of quality control and insuring such conformity, and
approved in writing by authorities acceptable to Millennium in its
sole and exclusive discretion.
4: Any and all providers of products and services and the
agreements concurrent to a relationship with same required for the
consummation of the transaction, including without limitation any
suppliers, packers, freight carriers, insurance providers and
banks) shall be subject to the approval of Millennium in its sole
and exclusive discretion.
5: For that period until the time at which title to the subject
product passes from the respective supplier up until that point in
time at which title to such product is passed along to the
appropriate iBIZ Technology Corp. customer, such shall be covered
by proper insurance for full value against loss, theft, damage and
destruction as determined in the sole and exclusive discretion of
Millennium. Any and all insurance policies procured in connection
with the trade transactions contemplated hereby shall name
Millennium as the exclusive loss payee/beneficiary.
III. Cost of Millennium Transactional Financing. In consideration
for providing the trade financing and/or supply agreement, Millennium
shall be entitled to a discount in accordance with the following:
For each transaction contemplated, that amount calculated in
direct relation to the number of days between that date upon which
such monies are debited from a Millennium account in the
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U.S. and that date upon which Millennium's account in the U.S. is
duly credited (following receipt of payment by customer or receipt
of funds in connection with any escrow or applicable letters of
credit) on a first-out/first-in basis, in accordance with the
following:
PRODUCT ACQUISITION AND CORRESPONDING
DELIVERY PERIOD DISCOUNT*
--------------- ---------
01 to 30 Days 4.00%
Each 10 Days Thereafter 1.34%
*NOTE: Discount is based on value
of dollars funded.
FACTORING PERIOD Corresponding
Discount**
UP TO $150,000 EMPLOYED
01 TO 30 DAYS 2.90%
EACH ADDITIONAL 10 DAYS 1.00%
THEREAFTER
$150,001 TO $300,000 EMPLOYED 2.75%
01 TO 30 DAYS 0.91%
OVER $300,000 EMPLOYED
01 TO 30 DAYS 2.50%
EACH ADDITIONAL 10 DAYS 0.834%
THEREAFTER
**NOTE: Factoring Period assumes a 70% advance and discount
against the value of the receivable(s).
IV. Term. There will be no contractual term enforced through any
Agreement entered into it connection herewith.
V. Exclusivity. Any agreements entered into in connection herewith
shall not require that iBIZ Technology Corp., exclusively submit
funding requests solely to Millennium.
VI. Subject to Due Diligence. The proposal contained herein is
subject in full to the review and verification, to the full
subjective satisfaction of Millennium, of all previously or
hereinafter requested and existing documentation and/or other
information relating to iBIZ Technology Corp., and the subject
trade/purchase order transactions, however conducted, including
without limitation
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all documentation/information relating to suppliers, customers,
product, actual or proposed letters of credit or other financial
instruments, shipping documentation, freight considerations, business
organizational documentation, business principals and management, and
transactional logistical considerations.
VII. Subject to Legal Documentation. The proposal contained herein
is subject in full to the execution, by an authorized officer of iBIZ
Technology Corp., and by Millennium.
VIII. Subject to Acceptance/Payment of Expenses. The proposal
contained herein is subject in full to the receipt by Millennium, by
the close of business (5:00 pm EDT) on July 7, 2000, of a signed
original of this Contingent Letter of Proposal. The proposal
contained herein is subject further to iBIZ Technology Corp. agreeing
to pay in advance as required by Millennium, a fee of $500 to offset
legal and due diligence costs incurred by Millennium.
Your signature below shall serve as your acceptance of the terms
hereof. Any offers contained herein shall be valid through the close
of business (5:00 pm EDT) on July 7, 2000, and shall be deemed
revoked thereafter unless otherwise expressly provided in writing by
Millennium.
Thank you for your attention in this matter.
Very truly yours,
MILLENNIUM FUNDING
/s/ NEAL R. POLSHUK
Neal R. Polshuk
Managing Partner
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ACKNOWLEDGEMENT & ACCEPTANCE
I have read the foregoing contingent letter of proposal and hereby
acknowledge and accept the terms contained therein.
iBIZ TECHNOLOGY CORP.
/s/ TERRY S. RATLIFF
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Signature
Vice President
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Print Name and Title
07/07/00
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Date
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