EXHIBIT 10.26
Silicon Valley Financial Services
A Division of Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xx. 00000
(000) 000-0000 - Fax (000) 000-0000
ACCOUNTS RECEIVABLE PURCHASE AGREEMENT
This Accounts Receivable Purchase Agreement (the "Agreement") is made
on this Nineth day of October 1998, by and between Silicon Valley Financial
Services (a division of Silicon Valley Bank) ("Buyer") having a place of
business at the address specified above and Integrated Packaging Assembly
Corporation, a California corporation, ("Seller") having its principal place
of business and chief executive office at
Street Address: 0000 Xxx Xxxxxxx Xxxx
Xxxx: Xxx Xxxx
Xxxxxx: Santa Xxxxx
State: California
Zip code: 95131
Phone: 408/000-0000
1. Definitions. When used herein, the following terms shall have the
following meanings.
1.1. "Account Balance" shall mean, on any given day, the gross amount
of all Purchased Receivables unpaid on that day.
1.2. "Account Debtor" shall have the meaning set forth in the
California Uniform Commercial Code and shall include any person liable on
any Purchased Receivable, including without limitation, any guarantor of the
Purchased Receivable and any issuer of a letter of credit or banker's
acceptance.
1.3. "Adjustments" shall mean all discounts, allowances, returns,
disputes, counterclaims, offsets, defenses, rights of recoupment, rights of
return, warranty claims, or short payments, asserted by or on behalf of any
Account Debtor with respect to any Purchased Receivable.
1.4. "Administrative Fee" shall have the meaning as set forth in
Section 3.3 hereof.
1.5. "Advance" shall have the meaning set forth in Section 2.2 hereof.
1.6. "Collateral" shall have the meaning set forth in Section 8
hereof.
1.7. "Collections" shall mean all good funds received by Buyer from
or on behalf of an Account Debtor with respect to
Purchased Receivables.
1.8 "Compliance Certificate" shall mean a certificate, in a form
provided by Buyer to Seller, which contains the certification of the chief
financial officer of Seller that, among other things, the representations
and warranties set forth in this Agreement are true and correct as of the
date such certificate is delivered.
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1.9. "Event of Default" shall have the meaning set forth in Section 9
hereof.
1.10. "Finance Charges" shall have the meaning set forth in Section
3.2 hereof.
1.11. "Invoice Transmittal" shall mean a writing signed by an
authorized representative of Seller which accurately identifies the
receivables which Buyer, at its election, may purchase, and includes for
each such receivable the correct amount owed by the Account Debtor, the name
and address of the Account Debtor, the invoice number, the invoice date and
the account code.
1.12. "Obligations" shall mean all advances, financial accommodations,
liabilities, obligations, covenants and duties owing, arising, due or
payable by Seller to Buyer of any kind or nature, present or future, arising
under or in connection with this Agreement or under any other document,
instrument or agreement, whether or not evidenced by any note, guarantee or
other instrument, whether arising on account or by overdraft, whether direct
or indirect (including those acquired by assignment) absolute or contingent,
primary or secondary, due or to become due, now owing or hereafter arising,
and however acquired; including, without limitation, all Advances, Finance
Charges, Administrative Fees, interest, Repurchase Amounts, fees, expenses,
professional fees and attorneys. fees and any other sums chargeable to
Seller hereunder or otherwise.
1.13. "Purchased Receivables" shall mean all those accounts,
receivables, chattel paper, instruments, contract rights, documents, general
intangibles, letters of credit, drafts, bankers acceptances, and rights to
payment, and all proceeds thereof (all of the foregoing being referred to as
"receivables"), arising out of the invoices and other agreements identified
on or delivered with any Invoice Transmittal delivered by Seller to Buyer
which Buyer elects to purchase and for which Buyer makes an Advance.
1.14. "Refund" shall have the meaning set forth in Section 3.5 hereof.
1.15. "Reserve" shall have the meaning set forth in Section 2.4
hereof.
1.16. "Repurchase Amount" shall have the meaning set forth in Section
4.2 hereof.
1.17. "Reconciliation Date" shall mean the last calendar day of each
Reconciliation Period.
1.18. "Reconciliation Period" shall mean each calendar month of every
year.
2. Purchase and Sale of Receivables.
2.1. Offer to Sell Receivables. During the term hereof, and provided
that there does not then exist any Event of Default or any event that with
notice, lapse of time or otherwise would constitute an Event of Default,
Seller may request that Buyer purchase receivables and Buyer may, in its
sole discretion, elect to purchase receivables. Seller shall deliver to
Buyer an Invoice Transmittal with respect to any receivable for which a
request for purchase is made. An authorized representative of Seller shall
sign each Invoice Transmittal delivered to Buyer. Buyer shall be entitled
to rely on all the information provided by Seller to Buyer on or with the
Invoice Transmittal and to rely on the signature on any Invoice Transmittal
as an authorized signature of Seller.
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2.2. Acceptance of Receivables. Buyer shall have no obligation to
purchase any receivable listed on an Invoice Transmittal. Buyer may
exercise its sole discretion in approving the credit of each Account Debtor
before buying any receivable. Upon acceptance by Buyer of all or any of the
receivables described on any Invoice Transmittal, Buyer shall pay to Seller
80 (%) percent of the face amount of each receivable Buyer desires to
purchase. Such payment shall be the "Advance" with respect to such
receivable. Buyer may, from time to time, in its sole discretion, change
the percentage of the Advance. Upon Buyer's acceptance of the receivable
and payment to Seller of the Advance, the receivable shall become a
"Purchased Receivable". It shall be a condition to each Advance that (i)
all of the representations and warranties set forth in Section 6 of this
Agreement be true and correct on and as of the date of the related Invoice
Transmittal and on and as of the date of such Advance as though made at
and as of each such date, and (ii) no Event of Default or any event or
condition that with notice, lapse of time or otherwise would constitute an
Event of Default shall have occurred and be continuing, or would result from
such Advance. Notwithstanding the foregoing, in no event shall the
aggregate amount of all Purchased Receivables outstanding at any time exceed
Three Million Five Hundred Thousand and No/100***** Dollars ($3,500,000.00).
2.3. Effectiveness of Sale to Buyer. Effective upon Buyer's payment
of an Advance, and for and in consideration therefor and in consideration of
the covenants of this Agreement, Seller hereby absolutely sells, transfers
and assigns to Buyer, all of Seller's right, title and interest in and to
each Purchased Receivable and all monies due or which may become due on or
with respect to such Purchased Receivable. Buyer shall be the absolute
owner of each Purchased Receivable. Buyer shall have, with respect to any
goods related to the Purchased Receivable, all the rights and remedies of an
unpaid seller under the California Uniform Commercial Code and other
applicable law, including the rights of replevin, claim and delivery,
reclamation and stoppage in transit.
2.4. Establishment of a Reserve. Upon the purchase by Buyer of each
Purchased Receivable, Buyer shall establish a reserve. The reserve shall be
the amount by which the face amount of the Purchased Receivable exceeds the
Advance on that Purchased Receivable (the "Reserve"); provided, the Reserve
with respect to all Purchased Receivables outstanding at any one time shall
be an amount not less than 20 (%) percent of the Account Balance at that
time and may be set at a higher percentage at Buyer's sole discretion. The
reserve shall be a book balance maintained on the records of Buyer and shall
not be a segregated fund.
3. Collections, Charges and Remittances.
3.1. Collections. Upon receipt by Buyer of Collections, Buyer shall
promptly credit such Collections to Seller's Account Balance on a daily
basis; provided, that if Seller is in default under this Agreement, Buyer
shall apply all Collections to Seller's Obligations hereunder in such order
and manner as Buyer may determine. If an item of collection is not honored
or Buyer does not receive good funds for any reason, the amount shall be
included in the Account Balance as if the Collections had not been received
and Finance Charges under Section 3.2 shall accrue thereon.
3.2. Finance Charges. On each Reconciliation Date Seller shall pay to
Buyer a finance charge in an amount equal to (a)
1.50 (%) percent per month of the average daily Account Balance outstanding
during the applicable Reconciliation Period, and (b) an additional .25 (%)
percent per month effective December 1, 1998 (the "Finance Charges"). Buyer
shall deduct the accrued Finance Charges from the Reserve as set forth in
Section 3.5 below.
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3.1 Administrative Fee. On each Reconciliation Date Seller shall pay
to Buyer an Administrative Fee equal to (a) .50 (%) percent of the face
amount of each Purchased Receivable first purchased during that
Reconciliation Period, and (b) an additional .25 (%) percent of the face
amount of each Purchased Receivable effective December 1, 1998 (the
"Administrative Fee"). Buyer shall deduct the Administrative Fee from the
Reserve as set forth in Section 3.5 below.
3.1.1 Success Fee. In the event of a sale of all or
substantially all of the assets or stock of Integrated Packaging Assembly
Corporation, Integrated Packaging Assembly Corporation or its successor or
acquirer shall, on or before the date of closing of such sale, pay to SVFS a
fee equal to the following:
(A) .50 (%) percent of the amount of line if sale occurs on
or before November 16, 1998.
(B) 1.00 (%) percent of the amount of line if sales occurs
on or before December 18, 1998, and 2.00 (%) percent of the amount of line
thereafter.
3.4. Accounting. Buyer shall prepare and send to Seller after the
close of business for each Reconciliation Period, an accounting of the
transactions for that Reconciliation Period, including the amount of all
Purchased Receivables, all Collections, Adjustments, Finance Charges, and
the Administrative Fee. The accounting shall be deemed correct and
conclusive unless Seller makes written objection to Buyer within thirty (30)
days after the Buyer mails the accounting to Seller.
3.5. Refund to Seller. Provided that there does not then exist an
Event of Default or any event or condition that with notice, lapse of time
or otherwise would constitute an Event of Default, Buyer shall refund to
Seller by check after the Reconciliation Date, the amount, if any, which
Buyer owes to Seller at the end of the Reconciliation Period according to
the accounting prepared by Buyer for that Reconciliation Period (the
"Refund"). The Refund shall be an amount equal to:
(A) (1) the Reserve as of the beginning of that Reconciliation
Period, plus
(2) the Reserve created for each Purchased Receivable
purchased during that Reconciliation Period, minus
(B) The total for that Reconciliation Period of
(1) the Administrative Fee;
(2) Finance Charges;
(3) Adjustments;
(4) Repurchase Amounts, to the extent Buyer has agreed to
accept payment thereof by deduction from
the Refund;
(5) the Reserve for the Account Balance as of the first day
of the following Reconciliation Period in the minimum percentage set forth
in Section 2.4 hereof; and
(6) all amounts due, including professional fees and
expenses, as set forth in Section 12 for which oral or written demand has
been made by Buyer to Seller during that Reconciliation Period to the extent
Buyer has agreed to accept payment thereof by deduction from the Refund.
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In the event the formula set forth in this Section 3.5 results in an amount
due to Buyer from Seller, Seller shall make such payment in the same manner
as set forth in Section 4.3 hereof for repurchases. If the formula set
forth in this Section 3.5 results in an amount due to Seller from Buyer,
Buyer shall make such payment by check, subject to Buyer's rights under
Section 4.3 and Buyer's rights of offset and recoupment.
4. Recourse and Repurchase Obligations.
4.1. Recourse. Buyer's acquisition of Purchased Receivables from
Seller shall be with full recourse against Seller. In the event the
Obligations exceed the amount of Purchased Receivables and Collateral,
Seller shall be liable for any deficiency.
4.2 Seller's Agreement to Repurchase. Seller agrees to pay to Buyer
on demand, the full face amount, or any unpaid portion, of any Purchased
Receivable:
(A) which remains unpaid ninety (90) calendar days after the
invoice date; or
(B) which is owed by any Account Debtor who has filed, or has had
filed against it, any bankruptcy case, assignment for the benefit of
creditors, receivership, or insolvency proceeding or who has become
insolvent (as defined in the United States Bankruptcy Code) or who is
generally not paying its debts as such debts become due; or
(C) with respect to which there has been any breach of warranty
or representation set forth in Section 6 hereof or any breach of any
covenant contained in this Agreement; or
(D) with respect to which the Account Debtor asserts any
discount, allowance, return, dispute, counterclaim, offset, defense, right
of recoupment, right of return, warranty claim, or short payment; together
with all reasonable attorneys. and professional fees and expenses and all
court costs incurred by Buyer in collecting such Purchased Receivable and/or
enforcing its rights under, or collecting amounts owed by Seller in
connection with, this Agreement (collectively, the "Repurchase Amount").
4.3. Seller's Payment of the Repurchase Amount or Other Amounts Due
Buyer. When any Repurchase Amount or other amount owing to Buyer becomes
due, Buyer shall inform Seller of the manner of payment which may be any one
or more of the following in Buyer's sole discretion: (a) in cash
immediately upon demand therefor; (b) by delivery of substitute invoices
and an Invoice Transmittal acceptable to Buyer which shall thereupon become
Purchased Receivables; (c) by adjustment to the Reserve pursuant to Section
3.5 hereof; (d) by deduction from or offset against the Refund that would
otherwise be due and payable to Seller; (e) by deduction from or offset
against the amount that otherwise would be forwarded to Seller in respect
of any further Advances that may be made by Buyer; or (f) by any
combination of the foregoing as Buyer may from time to time choose.
4.4. Seller's Agreement to Repurchase All Purchased Receivables. Upon
and after the occurrence of an Event of Default, Seller shall, upon Buyer's
demand (or, in the case of an Event of Default under Section 9(B),
immediately without notice or demand from Buyer) repurchase all the
Purchased Receivables then outstanding, or such portion thereof as Buyer
may demand. Such demand may, at Buyer's option, include and Seller shall
pay to Buyer immediately upon demand, cash in an amount equal to the Advance
with respect to each Purchased Receivable then outstanding together with all
accrued Finance Charges, Adjustments, Administrative Fees, attorney's and
professional fees, court costs and expenses as provided for herein, and any
other Obligations. Upon receipt of payment in full of the Obligations,
Buyer shall immediately instruct Account Debtors to pay Seller directly, and
return to Seller any Refund due to Seller. For the purpose of calculating
any Refund due under this Section only, the Reconciliation Date shall be
deemed to be the date Buyer receives payment in good funds of all the
Obligations as provided in this Section 4.4.
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5. Power of Attorney. Seller does hereby irrevocably appoint Buyer and
its successors and assigns as Seller's true and lawful attorney in fact, and
hereby authorizes Buyer, regardless of whether there has been an Event of
Default, (a) to sell, assign, transfer, pledge, compromise, or discharge
the whole or any part of the Purchased Receivables; (b) to demand, collect,
receive, xxx, and give releases to any Account Debtor for the monies due or
which may become due upon or with respect to the Purchased Receivables and
to compromise, prosecute, or defend any action, claim, case or proceeding
relating to the Purchased Receivables, including the filing of a claim or
the voting of such claims in any bankruptcy case, all in Buyer's name or
Seller's name, as Buyer may choose; (c) to prepare, file and sign Seller's
name on any notice, claim, assignment, demand, draft, or notice of or
satisfaction of lien or mechanics. lien or similar document with respect to
Purchased Receivables; (d) to notify all Account Debtors with respect to
the Purchased Receivables to pay Buyer directly; (e) to receive, open, and
dispose of all mail addressed to Seller for the purpose of collecting the
Purchased Receivables; (f) to endorse Seller's name on any checks or other
forms of payment on the Purchased Receivables; (g) to execute on behalf of
Seller any and all instruments, documents, financing statements and the like
to perfect Buyer's interests in the Purchased Receivables and Collateral;
and (h) to do all acts and things necessary or expedient, in furtherance of
any such purposes. If Buyer receives a check or item which is payment for
both a Purchased Receivable and another receivable, the funds shall first be
applied to the Purchased Receivable and, so long as there does not exist an
Event of Default or an event that with notice, lapse of time or otherwise
would constitute an Event of Default, the excess shall be remitted to
Seller. Upon the occurrence and continuation of an Event of Default, all of
the power of attorney rights granted by Seller to Buyer hereunder shall be
applicable with respect to all Purchased Receivables and all Collateral.
6. Representations, Warranties and Covenants.
6.1. Receivables. Warranties, Representations and Covenants. To
induce Buyer to buy receivables and to render its services to Seller, and
with full knowledge that the truth and accuracy of the following are being
relied upon by the Buyer in determining whether to accept receivables as
Purchased Receivables, Seller represents, warrants, covenants and agrees,
with respect to each Invoice Transmittal delivered to Buyer and each
receivable described therein, that:
(A) Seller is the absolute owner of each receivable set forth in
the Invoice Transmittal and has full legal right to sell, transfer and
assign such receivables;
(B) The correct amount of each receivable is as set forth in the
Invoice Transmittal and is not in dispute;
(C) The payment of each receivable is not contingent upon the
fulfillment of any obligation or contract, past or future and any and
all obligations required of the Seller have been fulfilled as of the date of
the Invoice Transmittal;
(D) Each receivable set forth on the Invoice Transmittal is
based on an actual sale and delivery of goods and/or services actually
rendered, is presently due and owing to Seller, is not past due or in
default, has not been previously sold, assigned, transferred, or pledged,
and is free of any and all liens, security interests and encumbrances other
than liens, security interests or encumbrances in favor of Buyer or any
other division or affiliate of Silicon Valley Bank;
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(E) There are no defenses, offsets, or counterclaims against any
of the receivables, and no agreement has been made under which the Account
Debtor may claim any deduction or discount, except as otherwise stated in
the Invoice Transmittal;
(F) Each Purchased Receivable shall be the property of the Buyer
and shall be collected by Buyer, but if for any reason it should be paid to
Seller, Seller shall promptly notify Buyer of such payment, shall hold any
checks, drafts, or monies so received in trust for the benefit of Buyer, and
shall promptly transfer and deliver the same to the Buyer;
(G) Buyer shall have the right of endorsement, and also the
right to require endorsement by Seller, on all payments received in
connection with each Purchased Receivable and any proceeds of Collateral;
(H) Seller, and to Seller's best knowledge, each Account Debtor
set forth in the Invoice Transmittal, are and shall remain solvent as that
term is defined in the United States Bankruptcy Code and the California
Uniform Commercial Code, and no such Account Debtor has filed or had filed
against it a voluntary or involuntary petition for relief under the United
States Bankruptcy Code;
(I) Each Account Debtor named on the Invoice Transmittal will
not object to the payment for, or the quality or the quantity of the subject
matter of, the receivable and is liable for the amount set forth on the
Invoice Transmittal;
(J) Each Account Debtor shall promptly be notified, after
acceptance by Buyer, that the Purchased Receivable has been transferred to
and is payable to Buyer, and Seller shall not take or permit any action to
countermand such notification; and
(K) All receivables forwarded to and accepted by Buyer after the
date hereof, and thereby becoming Purchased Receivables, shall comply with
each and every one of the foregoing representations, warranties, covenants
and agreements referred to above in this Section 6.1.
6.2. Additional Warranties, Representations and Covenants. In
addition to the foregoing warranties, representations and covenants, to
induce Buyer to buy receivables and to render its services to Seller, Seller
hereby represents, warrants, covenants and agrees that:
(A) Seller will not assign, transfer, sell, or grant, or permit
any lien or security interest in any Purchased Receivables or Collateral to
or in favor of any other party, without Buyer's prior written consent;
(B) The Seller's name, form of organization, chief executive
office, and the place where the records concerning all Purchased Receivables
and Collateral are kept is set forth at the beginning of this Agreement,
Collateral is located only at the location set forth in the beginning of
this Agreement, or, if located at any additional location, as set forth on a
schedule attached to this Agreement, and Seller will give Buyer at least
thirty (30) days prior written notice if such name, organization, chief
executive office or other locations of Collateral or records concerning
Purchased Receivables or Collateral is changed or added and shall execute
any documents necessary to perfect Buyer's interest in the Purchased
Receivables and the Collateral;
(C) Seller shall (i) pay all of its normal gross payroll for
employees, and all federal and state taxes, as and when due, including
without limitation all payroll and withholding taxes and state sales taxes;
(ii) deliver at any time and from time to time at Buyer's request, evidence
satisfactory to Buyer that all such amounts have been paid to the proper
taxing authorities; and (iii) if requested by Buyer, pay its payroll and
related taxes through a bank or an independent payroll service acceptable to
Buyer.
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(D) Seller has not, as of the xxxx Xxxxxx delivers to Buyer an
Invoice Transmittal, or as of the xxxx Xxxxxx accepts any Advance from
Buyer, filed a voluntary petition for relief under the United States
Bankruptcy Code or had filed against it an involuntary petition for relief;
(E) If Seller owns, holds or has any interest in, any
copyrights (whether registered, or unregistered), patents or trademarks,
and licenses of any of the foregoing, such interest has been disclosed to
Buyer and is specifically listed and identified on a schedule to this
Agreement, and Seller shall immediately notify Buyer if Seller hereafter
obtains any interest in any additional copyrights, patents, trademarks or
licenses that are significant in value or are material to the conduct of its
business; and
(F) Seller shall provide Buyer with a Compliance Certificate
(i) on a monthly basis to be received by Buyer no later than the fifth
business day following each calendar month, and; (ii) on a more frequent
or other basis if and as requested by Buyer; and
(G) Seller shall provide Buyer with Monthly Financial
Statements(Balance Sheet, Income Statement and Statement of Cash Flow) to be
received by Buyer no later than the twentieth business day following each
month end; and
(H) Seller shall provide Buyer with a weekly cash flow update on
the first business day of every week.
7. Adjustments. In the event of a breach of any of the representations,
warranties, or covenants set forth in Section 6.1, or in the event any
Adjustment or dispute is asserted by any Account Debtor, Seller shall
promptly advise Buyer and shall, subject to the Buyer's approval, resolve
such disputes and advise Buyer of any adjustments. Unless the disputed
Purchased Receivable is repurchased by Seller and the full Repurchase Amount
is paid, Buyer shall remain the absolute owner of any Purchased Receivable
which is subject to Adjustment or repurchase under Section 4.2 hereof, and
any rejected, returned, or recovered personal property, with the right to
take possession thereof at any time. If such possession is not taken by
Buyer, Seller is to resell it for Buyer's account at Seller's expense with
the proceeds made payable to Buyer. While Seller retains possession of said
returned goods, Seller shall segregate said goods and xxxx them "property of
Silicon Valley Financial Services".
8. Security Interest. To secure the prompt payment and performance to
Buyer of all of the Obligations, Seller hereby grants to Buyer a continuing
lien upon and security interest in all of Seller's now existing or
hereafter arising rights and interest in the following , whether now owned
or existing or hereafter created, acquired, or arising, and wherever located
(collectively, the "Collateral"):
(A) All accounts, receivables, contract rights, chattel paper,
instruments, documents, letters of credit, bankers acceptances, drafts,
checks, cash, securities, and general intangibles (including, without
limitation, all claims, causes of action, deposit accounts, guaranties,
rights in and claims under insurance policies (including rights to premium
refunds), rights to tax refunds, copyrights, patents, trademarks, rights in
and under license agreements, and all other intellectual property);
(B) All inventory, including Seller's rights to any returned or
rejected goods, with respect to which Buyer shall have all the rights of
any unpaid seller, including the rights of replevin, claim and delivery,
reclamation, and stoppage in transit;
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(C) All monies, refunds and other amounts due Seller, including,
without limitation, amounts due Seller under this Agreement (including
Seller's right of offset and recoupment);
(D) All equipment, machinery, furniture, furnishings, fixtures, tools,
supplies and motor vehicles;
(E) All farm products, crops, timber, minerals and the like (including
oil and gas);
(F) All accessions to, substitutions for, and replacements of, all of
the foregoing;
(G) All books and records pertaining to all of the foregoing; and
(H) All proceeds of the foregoing, whether due to voluntary or
involuntary disposition, including insurance proceeds.
Seller is not authorized to sell, assign, transfer or otherwise convey
any Collateral without Buyer's prior written consent, except for the sale of
finished inventory in the Seller's usual course of business. Seller agrees
to sign UCC financing statements, in a form acceptable to Buyer, and any
other instruments and documents requested by Buyer to evidence, perfect, or
protect the interests of Buyer in the Collateral. Seller agrees to deliver
to Buyer the originals of all instruments, chattel paper and documents
evidencing or related to Purchased Receivables and Collateral.
Buyer acknowledges that its security interest in certain of the
Seller's assets will be junior to the existing liens of Comerica Bank,
Phoenix Leasing Incorporated, Copelco Capital, Comdisco, Inc., MMC/GATX
Partnership No. 1, Xxxxxx Financial, Transamerica Business Credit
Corporation, The CIT Group, Nissho Iwai American Corporation, APIC Yamada
Corporation, Mitsui High-tec Inc., and ICOS Vision Systems, Inc.
9. Default. The occurrence of any one or more of the following shall
constitute an Event of Default hereunder.
(A) Seller fails to pay any amount owed to Buyer as and when due;
(B) There shall be commenced by or against Seller any voluntary or
involuntary case under the United States Bankruptcy Code, or any assignment
for the benefit of creditors, or appointment of a receiver or custodian for
any of its assets;
(C) If there occurs a material impairment in the perfection or
priority of the Buyer's security interest in the Collateral or in the value
of such Collateral which is not covered by adequate insurance or (ii) if the
Bank determines, in its reasonable opinion, based upon information available
to it that Borrower's financial condition has materially deteriorated.
(D) Any involuntary lien, garnishment, attachment or the like is
issued against or attaches to the Purchased Receivables or any Collateral;
(E) Seller shall breach any covenant, agreement, warranty, or
representation set forth herein, and the same is not cured to Buyer's
satisfaction within ten (10) days after Buyer has given Seller oral or
written notice thereof; provided, that if such breach is incapable of being
cured it shall constitute an immediate default hereunder;
(F) Seller is not in compliance with, or otherwise is in default
under, any term of any document, instrument or agreement evidencing a debt,
obligation or liability of any kind or character of Seller, now or hereafter
existing, in favor of Buyer or any division or affiliate of Silicon Valley
Bank, regardless of whether such debt, obligation or liability is direct or
indirect, primary or secondary, joint, several or joint and several, or
fixed or contingent, together with any and all renewals and extensions of
such debts, obligations and liabilities, or any part thereof;
(G) An event of default shall occur under any guaranty executed by
any guarantor of the Obligations of Seller to Buyer under this Agreement,
or any material provision of any such guaranty shall for any reason cease to
be valid or enforceable or any such guaranty shall be repudiated or
terminated, including by operation of law;
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(H) Any creditor that has entered into a subordination agreement with
Buyer shall breach any of the terms of or not comply with such subordination
agreement.
10. Remedies Upon Default. Upon the occurrence of an Event of Default,
(1) without implying any obligation to buy receivables, Buyer may cease
buying receivables or extending any financial accommodations to Seller; (2)
all or a portion of the Obligations shall be, at the option of and upon
demand by Buyer, or with respect to an Event of Default described in Section
9(B), automatically and without notice or demand, due and payable in full;
and (3) Buyer shall have and may exercise all the rights and remedies under
this Agreement and under applicable law, including the rights and remedies
of a secured party under the California Uniform Commercial Code, all the
power of attorney rights described in Section 5 with respect to all
Collateral, and the right to collect, dispose of, sell, lease, use, and
realize upon all Purchased Receivables and all Collateral in any commercial
reasonable manner. Seller and Buyer agree that any notice of sale required
to be given to Seller shall be deemed to be reasonable if given five (5)
days prior to the date on or after which the sale may be held. In the event
that the Obligations are accelerated hereunder, Seller shall repurchase all
of the Purchased Receivables as set forth in Section 4.4.
11. Accrual of Interest. If any amount owed by Seller hereunder is not
paid when due, including, without limitation, amounts due under Section 3.5,
Repurchase Amounts, amounts due under Section 12, and any other Obligations,
such amounts shall bear interest at a per annum rate equal to the per annum
rate of the Finance Charges until the earlier of (i) payment in good funds
or (ii) entry of a final judgment thereof, at which time the principal
amount of any money judgment remaining unsatisfied shall accrue interest at
the highest rate allowed by applicable law.
12. Fees, Costs and Expenses; Indemnification. The Seller will pay to
Buyer immediately upon demand all fees, costs and expenses (including
fees of attorneys and professionals and their costs and expenses) that
Buyer incurs or may from time to time impose in connection with any of
the following: (a) preparing, negotiating, administering, and enforcing this
Agreement or any other agreement executed in connection herewith,
including any amendments, waivers or consents in connection with any of the
foregoing, (b) any litigation or dispute (whether instituted by Buyer,
Seller or any other person) in any way relating to the Purchased
Receivables, the Collateral, this Agreement or any other agreement executed
in connection herewith or therewith, (d) enforcing any rights against Seller
or any guarantor, or any Account Debtor, (e) protecting or enforcing its
interest in the Purchased Receivables or the Collateral, (f) collecting the
Purchased Receivables and the Obligations, and (g) the representation of
Buyer in connection with any bankruptcy case or insolvency proceeding
involving Seller, any Purchased Receivable, the Collateral, any Account
Debtor, or any guarantor. Seller shall indemnify and hold Buyer harmless
from and against any and all claims, actions, damages, costs, expenses, and
liabilities of any nature whatsoever arising in connection with any of the
foregoing.
Page 10
13. Severability, Waiver, and Choice of Law. In the event that any
provision of this Agreement is deemed invalid by reason of law, this
Agreement will be construed as not containing such provision and the
remainder of the Agreement shall remain in full force and effect. Buyer
retains all of its rights, even if it makes an Advance after a default. If
Buyer waives a default, it may enforce a later default. Any consent or
waiver under, or amendment of, this Agreement must be in writing. Nothing
contained herein, or any action taken or not taken by Buyer at any time,
shall be construed at any time to be indicative of any obligation or
willingness on the part of Buyer to amend this Agreement or to grant to
Seller any waivers or consents. This Agreement has been transmitted by
Seller to Buyer at Buyer's office in the State of California and has been
executed and accepted by Buyer in the State of California. This Agreement
shall be governed by and interpreted in accordance with the internal laws of
the State of California.
14. Account Collection Services. Certain Account Debtors may require or
prefer that all of Seller's receivables be paid to the same address and/or
party, or Seller and Buyer may agree that all receivables with respect to
certain Account Debtors be paid to one party. In such event Buyer and
Seller may agree that Buyer shall collect all receivables whether owned by
Seller or Buyer and (provided that there does not then exist an Event of
Default or event that with notice, lapse or time or otherwise would
constitute an Event of Default, and subject to Buyer's rights in the
Collateral) Buyer agrees to remit to Seller the amount of the receivables
collections it receives with respect to receivables other than Purchased
Receivables. It is understood and agreed by Seller that this Section does
not impose any affirmative duty on Buyer to do any act other than to turn
over such amounts. All such receivables and collections are Collateral and
in the event of Seller's default hereunder, Buyer shall have no duty to
remit collections of Collateral and may apply such collections to the
obligations hereunder and Buyer shall have the rights of a secured party
under the California Uniform Commercial Code.
15. Notices. All notices shall be given to Buyer and Seller at the
addresses or faxes set forth on the first page of this Agreement and shall
be deemed to have been delivered and received: (a) if mailed, three (3)
calendar days after deposited in the United States mail, first class,
postage pre-paid, (b) one (1) calendar day after deposit with an overnight
mail or messenger service; or (c) on the same date of confirmed
transmission if sent by hand delivery, telecopy, telefax or telex.
In addition, all notices to Seller shall be made to the following
address:
Xxxxx X. Xxxxx
Xxxxxx & Xxxxxx, A Professional Corporation
0000 Xxxxxx Xxx, Xxxxx 000
Xxxx Xxxx, XX 00000-0000
Facsimile: 650/000-0000
Telephone: 650/000-0000
16. Jury Trial. SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT
THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO
THIS AGREEMENT; AND (c) REPRESENT AND WARRANT THAT IT HAS REVIEWED THIS
WAIVER, HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS
LEGAL COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY
TRIAL.
Page 11
17. Term and Termination. The term of this Agreement shall be for one (1)
year from the date hereof, and from year to year thereafter unless
terminated in writing by Buyer or Seller. Seller and Buyer shall each have
the right to terminate this Agreement at any time. Notwithstanding the
foregoing, any termination of this Agreement shall not affect Buyer's
security interest in the Collateral and Buyer's ownership of the Purchased
Receivables, and this Agreement shall continue to be effective, and Buyer's
rights and remedies hereunder shall survive such termination, until all
transactions entered into and Obligations incurred hereunder or in
connection herewith have been completed and satisfied in full.
18. Titles and Section Headings. The titles and section headings used
herein are for convenience only and shall not be used in interpreting this
Agreement.
19. Other Agreements. The terms and provisions of this Agreement shall
not adversely affect the rights of Buyer or any other division or affiliate
of Silicon Valley Bank under any other document, instrument or agreement.
The terms of such other documents, instruments and agreements shall remain
in full force and effect notwithstanding the execution of this Agreement.
In the event of a conflict between any provision of this Agreement and any
provision of any other document, instrument or agreement between Seller on
the one hand, and Buyer or any other division or affiliate of Silicon Valley
Bank on the other hand, Buyer shall determine in its sole discretion which
provision shall apply. Seller acknowledges specifically that any security
agreements, liens and/or security interests currently securing payment of
any obligations of Seller owing to Buyer or any other division or affiliate
of Silicon Valley Bank also secure Seller's obligations under this
Agreement, and are valid and subsisting and are not adversely affected by
execution of this Agreement. Seller further acknowledges that (a) any
collateral under other outstanding security agreements or other documents
between Seller and Buyer or any other division or affiliate of Silicon
Valley Bank secures the obligations of Seller under this Agreement and (b)
a default by Seller under this Agreement constitutes a default under other
outstanding agreements between Seller and Buyer or any other division or
affiliate of Silicon Valley Bank.
Page 12
A Division of Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
(000) 000-0000 - Fax (000) 000-0000
CERTIFICATION of OFFICERS
The undersigned, being all the officers of Integrated Packaging
Assembly Corporation, a California corporation (the "Corporation"), hereby
certify to Silicon Valley Financial Services, a division of Silicon Valley
Bank ("SVFS") that:
1. The correct name of the Corporation is Integrated Packaging
Assembly Corporation , as set forth in the Articles of Incorporation.
2. The Corporation was incorporated on April 28, 1992, under the laws
of the State of
California , and is in good standing under such laws.
3. The Corporation's place of business and chief executive office
being the place at which the Corporation maintains its books and records
pertaining to accounts, accounts receivables, contract rights, chattel
paper, general intangibles, instruments, documents, inventory, and
equipment, is located at:
0000 Xxx Xxxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
4. The Corporation has other places of business at the following
addressees:
5. There is no provision in the Certificate of Incorporation,
Articles of Incorporation, or Bylaws of the Corporation, or in the laws of
the State of its incorporation, requiring any vote or consent of
shareholders to authorize the sale of receivables or the grant of a security
interest in any assets of the Corporation. Such power is vested exclusively
in the Corporation's Board of Directors.
6. The officers of the Corporation, and their respective titles and
signatures are as follows:
7. Except as indicated in this paragraph 7, each of the officers
listed in paragraph 6 has signatory powers with respect to all the
Corporation's transactions with SVFS. Explanation of exceptions:
8. The undersigned shall give SVFS prompt written notice of any
change or amendment with respect to any of the foregoing. Until such
written notice is received by SVFS, SVFS shall be entitled to rely upon the
foregoing in all respects.
IN WITNESS WHEREOF, the undersigned have executed this Certification
of Officers on 10/09/98.
SELLER: Integrated Packaging Assembly Corporation
By
------------------------------------------------
Title
---------------------------------------------
BUYER: Silicon Valley Financial Services
By
------------------------------------------------
Title
---------------------------------------------
Page 13
Silicon Valley Financial Services
A Division of Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
(000) 000-0000 - Fax (000) 000-0000
CERTIFICATION OF OFFICERS
The undersigned, being all the officers of Integrated Packaging
Assembly Corporation, a California corporation (the "Corporation"), hereby
certify to Silicon Valley Financial Services, a division of Silicon Valley
Bank ("SVFC") that:
1. The correct name of the Corporation is Integrated Packaging
Assembly Corporation, as set forth in the Articles of Incorporation.
2. The Corporation was incorporated on April 28, 1992, under the laws
of the State of California, and is in good standing under such laws.
3. The Corporation's place of business and chief executive office
being the place at which the Corporation maintains its books and records
pertaining to accounts, accounts receivables, contract rights, chattel
paper, general intangibles, instruments, documents, inventory, and
equipment, is located at:
0000 Xxx Xxxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
4. The Corporation has other places of business at the following
addresses:
None
5. There is no provision in the Certificate of Incorporation, Articles
of Incorporation, or Bylaws of the Corporation, or in the laws of the State
of its incorporation, requiring any vote or consent of shareholders to
authorize the sale of receivables or the grant of a security interest in any
assets of the Corporation. Such power is vested exclusively in the
Corporation's Board of Directors.
6. The officers of the Corporation, and their respective titles and
signatures are as follows:
President:
----------------------------------------
(Signature)
Vice President:
----------------------------------------
(Signature)
Secretary:
----------------------------------------
(Signature)
Treasurer:
----------------------------------------
(Signature)
Other Officer:
Title:
----------------------------------------
(Signature)
Page 14
7. Except as indicated in this paragraph 7, each of the officers
listed in paragraph 6 has signatory powers with respect to all the
Corporation's transactions with SVFS. Explanation of exceptions:
8. The undersigned shall give SVFS prompt written notice of any change
or amendment with respect to any of the foregoing. Until such written
notice is received by SVFS, SVFS shall be entitled to rely upon the
foregoing in all respects.
IN WITNESS WHEREOF, the undersigned have executed this Certification of
Officers on 10/09/98.
President:
----------------------------------------
Vice President:
----------------------------------------
Secretary:
----------------------------------------
Treasurer:
----------------------------------------
Page 15
Silicon Valley Financial Services
A Division of Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
(000) 000-0000 - Fax (000) 000-0000
SECRETARY'S CERTIFICATE OF RESOLUTION
The undersigned, as Secretary of Integrated Packaging Assembly
Corporation, a California corporation (the "Corporation"), hereby
certifies to Silicon Valley Financial Services that at a meeting duly
convened at which a quorum was present the following resolutions were
adopted by the Board of Directors of the Corporation and that such
resolutions have not been modified, amended, or rescinded in any respect and
are in full force and effect as of today's date.
RESOLVED, that this corporation be and hereby is authorized to sell
this corporation's accounts receivable to Silicon Valley Financial Services,
a division of Silicon Valley Bank, and to grant Silicon Valley Financial
Services a security interest in this corporation's assets, including,
without limitation, accounts, accounts receivable, contract rights, chattel
paper, general intangibles, instruments, documents, letters of credit,
drafts, inventory and equipment, presently owned or hereafter acquired
and proceeds and products of the foregoing (the "Collateral," as defined in
the Factoring Agreement).
RESOLVED, that this corporation be and hereby is authorized and
directed to execute and deliver certain agreements in connection with the
sale of receivables, and granting of security interests in the Collateral to
Silicon Valley Financial Services including, without limitations, a
Factoring Agreement and UCC-1 financing statement.
RESOLVED, that the following named officers of this corporation
("Authorized Officers") be, and any of them hereby are, authorized,
empowered, and directed to execute and deliver to Silicon Valley Financial
Services on behalf of this corporation all such further agreements and
instruments as may be deemed necessary or advisable in order to fully
effectuate the purposes and intent of the foregoing resolutions.
Print Names of Authorized Officers: Title:
----------------------------------------- -------------------------
----------------------------------------- -------------------------
----------------------------------------- -------------------------
----------------------------------------- -------------------------
----------------------------------------- -------------------------
----------------------------------------- -------------------------
RESOLVED, that the Secretary or Assistant Secretary of this corporation
be, and hereby is authorized, empowered and directed to certify to the
passage of the foregoing resolutions under the seal of this corporation.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this
Nineth day of October 1998.
----------------------------------------------
Signature
Secretary of Integrated Packaging Assembly Corporation
Page 16
