Triggering Events That Accelerate or Increase a Direct Financial Obligation or Item Triggering Events that Accelerate or Increase a Direct Financial Obligation 2.04 or an Obligation under an Off-Balance Sheet Arrangement
On January 7, 2011, we received a letter from FCC, LLC dba First Growth Capital ("Purchaser") declaring us in default of the solvency, reporting, receivable quality and net worth covenants in our November 3, 2008 Purchasing Agreement with Purchaser. Purchaser has declared that an Event of Default exists under the Purchasing Agreement. We do not believe we are in payment default under the Purchasing Agreement, nor do we concur that we are in default of a number of the covenants described in the letter.
The Purchasing Agreement is secured by all of our assets, including but not limited our commercial accounts receivable (the "Collateral").
Purchaser has reserved the right to (i) declare all obligations under the Purchasing Agreement (the "Obligations") to be immediately due, payable and performable, and to enforce collection of the Obligations by repossessing the Collateral, and (ii) pursue and enforce any and all other remedies against us as permitted under the Purchasing Agreement and applicable law. The Purchasing Agreement is fully recourse to us.
David C. Owen, our Chairman and CEO, and Laura E. Owen, our President and COO, signed a Validity Guaranty of the Purchasing Agreement. Purchaser has reserved its right to exercise its remedies against Mr. and Ms. Owen under the Validity Guaranty.
As of January 7, 2011, First Growth Capital was owed less than $150,000 under the Purchasing Agreement (equals $202,863.17 when contract cancellation penalties are included) and held a total of $478,530.16 in ICOP Digital, Inc.'s receivables available for collection."
