EXHIBIT 10.36
SILICON VALLEY FINANCIAL SERVICES
A Division of Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xx. 00000
(000) 000-0000 - Fax (000) 000-0000
SECOND AMENDED AND RESTATED
LOAN AGREEMENT
Pursuant to that certain Assignment Without Recourse of Loan Documents,
dated _____________, 1999, BankBoston, N.A. ("Assignor") has assigned all of
its rights with respect to that certain Amended and Restated Loan Agreement,
dated as of April 3, 1998, between Assignor and Image Guided Technologies,
Inc. (the "Amended Loan Agreement") and all notes and other documents
executed in connection therewith, to Silicon Valley Bank. Image Guided
Technologies, Inc., Springfield Surgical Instruments, a Massachusetts
corporation (as co-borrower), and Silicon Valley Bank now desire to restate
and amend the provisions of the Amended Loan Agreement, as set forth therein.
NOW THEREFORE, the parties agree that the Amended and Restated Loan
Agreement is hereby amended and restated in its entirety as follows:
This Second Amended and Restated Loan Agreement (this "Agreement") is
made on this ______ day of MARCH, 1999, by and among Silicon Valley Financial
Services (a division of Silicon Valley Bank) ("Buyer"), having a place of
business at the address specified above, and IMAGE GUIDED TECHNOLOGIES, INC.,
a COLORADO corporation ("IGT"), whose principle place of business is 0000-X
Xxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000, and SPRINGFIELD SURGICAL
INSTRUMENTS, a Massachusetts corporation, formerly known as Brimfield
Precision, Inc. ("SSI; " SSI and IGT are collectively called "Seller"), whose
principle place of business is 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxxx; 00000. Each and every obligation and liability of IGT and
SSI under this Agreement are and shall remain joint and several.
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.
1.9. "Documents" shall mean, collectively, this Agreement, any note, or
notes or guaranties executed by Seller or Guarantor, and any other present or
future agreement between Seller and/or for the benefit of Buyer in connection
with this Agreement, all as amended, extended or restated.
1.10. "Event of Default" shall have the meaning set forth in Section 9
hereof.
1.11. "Finance Charges" shall have the meaning set forth in Section 3.2
hereof.
1.12. "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.
1.13. "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.
1.14. "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
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delivered with any Invoice Transmittal delivered by Seller to Buyer
which Buyer elects to purchase and for which Buyer makes an Advance.
1.15. "Refund" shall have the meaning set forth in Section 3.5 hereof.
1.16. "Reserve" shall have the meaning set forth in Section 2.4 hereof.
1.17. "Repurchase Amount" shall have the meaning set forth in Section 4.2
hereof.
1.18. "Reconciliation Date" shall mean the last calendar day of each
Reconciliation Period.
1.19. "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.
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 (the "Advance Rate"). Notwithstanding the foregoing, (i) effective
only for the initial Advance, the Advance Rate shall be 90 (%) percent, and
(ii) effective April 1, 1999 and continuing through June 30, 1999, the
Advance Rate shall be 85 (%) percent. Effective July 1, 1999 and thereafter,
the Advance Rate shall be 80 (%) percent. Such payment shall be the
"Advance" with respect to such receivable. The initial Advance made to
Seller pursuant to this Agreement shall be utilized to satisfy Seller's
outstanding obligations to BankBoston, N.A. 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 ONE MILLION FIVE HUNDRED THOUSAND
AND NO/100**** Dollars ($1,500,000.00).
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 (i) 10(%) percent of the Account Balance with
respect to the initial Advance, (ii) 15(%) percent of the Account Balance
with respect to Advances made between April 1, 1999 and June 30, 1999, and
(iii) 20(%) percent of the Account Balance with respect to Advances made on
July 1, 1999 and thereafter, 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 2.00 (%) percent per month of
the average daily Account Balance outstanding during the applicable
Reconciliation Period (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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3.3. ADMINISTRATIVE FEE. On each Reconciliation Date Seller shall pay
to Buyer an Administrative Fee equal to 1.50 (%) percent of the face amount
of each Purchased Receivable first purchased during that Reconciliation
Period (the "Administrative Fee"). Buyer shall deduct the Administrative Fee
from the Reserve as set forth in Section 3.5 below.
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. 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,
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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.
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;
(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
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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.
(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
quarterly basis to be received by Buyer no later than the fifth calendar day
following each calendar quarter, and; (ii) on a more frequent or other basis
if and as requested by Buyer.
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;
(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.
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) Seller shall become insolvent in that its debts are greater than
the fair value of its assets, or Seller is generally not paying its debts as
they become due or is left with unreasonably small capital;
(D) Any involuntary lien, garnishment, attachment or the like is issued
against or attaches to the Purchased Receivables or any Collateral;
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(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;
(H) A default or event of default shall occur under any agreement
between Seller and any creditor of Seller that has entered into a
subordination agreement with Buyer; or
(I) 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.
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.
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15. NOTICES. Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement
entered into in connection herewith shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by a
recognized overnight delivery service, certified mail, postage prepaid,
return receipt requested, or by telefacsimile to Seller or to Buyer, as the
case may be, at its addresses set forth below:
If to Seller: Image Guided Technologies, Inc.
0000-X Xxxxxxxx Xxxxxxx
Xxxxxxx, Xx 00000
Attn: CFO
FAX: 303/000-0000
and to: Springfield Surgical Instruments
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attn: CFO
FAX: __________
If to Buyer: Silicon Valley Bank/SVFS
0000 Xxxxxx Xxxxx, XX000
Xxxxx Xxxxx, XX 00000-0000
Attn: Credit Manager
FAX: 408/000-0000
16. SUBROGATION AND SIMILAR RIGHTS. Notwithstanding any other provision of
this Agreement or any other Document, so long as any Obligations remain
outstanding, each Seller irrevocably waives all rights that it may have at
law or in equity (including, without limitation, any law subrogating the
Seller to the rights of Buyer under the Documents) to seek contribution,
indemnification, or any other form of reimbursement from any other Seller, or
any other Person now or hereafter primarily or secondarily liable for any of
the Obligations, for any payment made by the Seller with respect to the
Obligations in connection with the Documents or otherwise and all rights that
it might have to benefit from, or to participate in, any security for the
Obligations as a result of any payment made by the Seller with respect to the
Obligations in connection with the Documents or otherwise. Subject to the
foregoing, any agreement providing for indemnification, reimbursement or any
other arrangement prohibited under this Section shall be null and void. If
any payment is made to a Seller in contravention of this Section, such Seller
shall hold such payment in trust for Buyer and such payment shall be promptly
delivered to Buyer for application to the Obligations, whether matured or
unmatured.
17. WAIVERS OF NOTICE. Each Seller waives notice of acceptance hereof;
notice of the existence, creation or acquisition of any of the Obligations;
notice of an Event of Default; notice of the amount of the Obligations
outstanding at any time; notice of intent to accelerate; notice of
acceleration; notice of any adverse change in the financial condition of any
other Seller or of any other fact that might increase the Seller's risk;
presentment for payment; demand; protest and notice thereof as to any
instrument; default; and all other notices and demands to which the Seller
would otherwise be entitled. Each Seller waives any defense arising from any
defense of any other Seller, or by reason of the cessation from any cause
whatsoever of the liability of any other Seller. Buyer's failure at any time
to require strict performance by any Seller of any provision of the Documents
shall not waive, alter or diminish any right of Buyer thereafter to demand
strict compliance and performance therewith. Nothing contained herein shall
prevent Buyer from foreclosing on the Lien of any deed of trust, mortgage or
other security instrument, or exercising any rights available thereunder, and
the exercise of any such rights shall not constitute a legal or equitable
discharge of any Seller. Each Seller also waives any defense arising from
any act or omission of Buyer that changes the scope of the Seller's risks
hereunder. Each Seller hereby waives any right to assert against Buyer any
defense (legal or equitable), setoff, counterclaim, or claims that such
Seller individually may now or hereafter have against another Seller or any
other Person liable to Seller with respect to the Obligations in any manner
or whatsoever.
18. SUBROGATION DEFENSES. Each Seller hereby waives any defense based on
impairment or destruction of its subrogation or other rights against any
other Seller and waives all benefits which might otherwise be available to it
under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848,
2850, 2899 and 3433 and California Code of Civil Procedure Sections 580a,
580b, 580d and 726, as those statutory provisions are now in effect and
hereafter amended, and under any other similar statutes now and hereafter in
effect.
19. RIGHT TO SETTLE, RELEASE. The liability of Sellers hereunder shall
not be diminished by (i) any agreement, understanding or representation that
any of the Obligations is or was to be guaranteed by another Person or
secured by other property, or (ii) any release or unenforceability, whether
partial or total, or rights, if any, which Seller may now or hereafter have
against any other Person, including another Seller, or property with respect
to any of the Obligations.
Without notice to any Seller and without affecting the liability of any
Seller hereunder, Buyer may (i) compromise, settle, renew, extend the time
for payment, change the manner or terms of payment, discharge the performance
of, decline to enforce, or release all or any of the Obligations with respect
to a Seller, (ii) grant other indulgences to a Seller in respect of the
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Obligations, (iii) modify in any manner any documents, relating to the
Obligations with respect to a Seller, (iv) release, surrender or exchange any
deposits or other property securing the Obligations, whether pledged by a
Seller or any other Person, or (v) compromise, settle renew, or extend the
time for payment, discharge the performance of, decline to enforce, or
release all or any obligations of any guarantor, endorser or other Person who
is now or may hereafter be liable with respect to any of the Obligations.
20. 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.
21. 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.
22. TITLES AND SECTION HEADINGS. The titles and section headings used
herein are for convenience only and shall not be used in interpreting this
Agreement.
23. 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
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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.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the
day and year above written.
SELLER: IMAGE GUIDED TECHNOLOGIES, INC.
By
---------------------------
Title
------------------------
SELLER: SPRINGFIELD SURGICAL INSTRUMENTS, formerly
known as Brimfield Precision, Inc.
By
---------------------------
Title
------------------------
BUYER: SILICON VALLEY FINANCIAL SERVICES
A division of Silicon Valley Bank
By
---------------------------
Title
------------------------
9
