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Exhibit 4.7
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SILICON VALLEY BANK
ACCOUNTS RECEIVABLE FINANCING AGREEMENT
This ACCOUNTS RECEIVABLE FINANCING AGREEMENT (the "Agreement"), dated
as of September 22, 2000 is between Silicon Valley Bank, a California chartered
bank, ("Bank"), and E-SYNC NETWORKS, INC. a Delaware corporation, ("Borrower"),
whose address is 00 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 and with a FAX
number of (000) 000-0000.
1. DEFINITIONS. In this Agreement:
"ACCOUNTS" are all existing and later arising accounts, contract
rights, and other obligations owed Borrower in connection with its sale or lease
of goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.
"ACCOUNT BALANCE" is the aggregate outstanding Advances made hereunder.
"ACCOUNT DEBTOR" is defined in the Code and shall include any person
liable on any Financed Receivable, such as, a guarantor of the Financed
Receivable and any issuer of a letter of credit or banker's acceptance.
"ADJUSTED QUICK RATIO". A ratio of (i) Quick Assets to (ii) Current
Liabilities minus Deferred Revenue of at least 1.25 to 1.00.
"ADJUSTMENTS" are 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 for any Financed Receivable.
"ADVANCE" is defined in Section 2.2.
"ADVANCE RATE" is eighty percent (80%), net of deferred revenue and
offsets related to each specific Account Debtor, provided however, if Borrower
is able to maintain the Adjusted Quick Ratio then the Bank will not net out
deferred revenue, or another percentage as Bank establishes under Section 2.2.
"APPLICABLE RATE" is a per annum rate equal to the "Prime Rate" plus
one and one half (1.50) percentage points.
"BORROWER'S BOOKS" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing such information.
"CODE" is the Uniform Commercial Code (presently M.G.L. Chapter 106) as
adopted by The Commonwealth of Massachusetts, as may be amended and in effect
from time to time.
"COLLATERAL" is attached as Exhibit "A".
"COLLATERAL HANDLING FEE" is defined in Section 3.5.
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"COLLECTIONS" are all funds received by Bank from or on behalf of an
Account Debtor for Financed Receivables.
"COMPLIANCE CERTIFICATE" is attached as Exhibit "B".
"CURRENT LIABILITIES" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year.
"DEFERRED REVENUE" is all amounts received in advance of performance
under contract and not yet recognized as revenue.
"EARLY TERMINATION FEE" is defined in Section 3.6.
"EVENT OF DEFAULT" is defined in Section 9.
"FACILITY" is an extension of credit by Bank to Borrower in order to
finance Receivables with an aggregate Account Balance not exceeding the Facility
Amount.
"FACILITY AMOUNT" is One Million Five Hundred Thousand Dollars
($1,500,000.00).
"FACILITY FEE" is defined in Section 3.4.
"FACILITY PERIOD" is the period beginning on this date and continuing
until SEPTEMBER 22, 2001, unless the period is terminated sooner by Bank with
notice to Borrower or by Borrower under Section 3.6.
"FINANCE CHARGES" is defined in Section 3.2.
"FINANCED RECEIVABLES" are Receivables which Bank finances by making an
Advance in accordance with the terms of this Agreement. A Financed Receivable
stops being a Financed Receivable (but remains Collateral) when the Advance made
for the Financed Receivable has been finally paid.
"FINANCED RECEIVABLE BALANCE" is the total outstanding amount, at any
time, of all Financed Receivables.
"GOOD FAITH DEPOSIT" is described in Section 3.9.
"GUARANTOR" means any guarantor of the Obligations.
"INELIGIBLE RECEIVABLE" is any Receivable:
(A) that is unpaid (90) calendar days after the invoice date; or
(B) that is owed by an Account Debtor that 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 they become due; or
(C) for which there has been any breach of warranty or representation in
Section 6 or any breach of any covenant in this Agreement; or
(D) for which the Account Debtor asserts any discount, allowance, return,
dispute, counterclaim, offset, defense, right of recoupment, right of
return, warranty claim, or short payment.
"INSOLVENCY PROCEEDINGS" are proceedings by or against any person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
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"INVOICE TRANSMITTAL" shows Receivables which are requested by Borrower
for financing hereunder and which the Bank may finance and, for each Receivable,
includes the Account Debtor's, name, address, invoice amount, invoice date and
invoice number and is signed by Borrower's authorized representative.
"LOCKBOX" is described in Section 6.2.
"MINIMUM FINANCE CHARGE" is $4,575.00 per month, pro-rated for any
partial month (e.g., for the calendar months during which the term hereof
commences and terminates).
"OBLIGATIONS" are all advances, liabilities, obligations, covenants
and duties owing, arising, due or payable by Borrower to Bank now or later under
this Agreement or any other document, instrument or agreement, account
(including those acquired by assignment) primary or secondary, including,
without limitation, all Advances, Finance Charges, Collateral Handling Fees,
interest, fees, expenses, professional fees and attorneys' fees, and/or other
amounts now or hereafter owing by Borrower to Bank.
"PRIME RATE" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.
"QUICK ASSETS" is, on any date, the Borrower's consolidated,
unrestricted cash, cash equivalents, net billed Receivables and investments with
maturities of fewer than 12 months determined according to GAAP.
"RECEIVABLES" are 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, including
their proceeds.
"RECONCILIATION DAY" is the last calendar day of each month.
"RECONCILIATION PERIOD" is each calendar month.
"SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's debt to Bank (and identified as subordinated by Borrower and Bank).
"TOTAL LIABILITIES" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.
2. FINANCING OF ACCOUNTS RECEIVABLE.
2.1. REQUEST FOR ADVANCES. During the Facility Period, Borrower may
request that Bank finance Receivables (which are not Ineligible
Receivables), if there is not an Event of Default. Borrower will
deliver an Invoice Transmittal for each Receivable it offers. Bank may
rely on information on or with the Invoice Transmittal.
2.2. ACCEPTANCE OF ACCOUNTS RECEIVABLE. Bank is not obligated to
finance any Receivable. Bank may approve any Account Debtor's credit
before agreeing to finance any Receivable. When Bank agrees to finance
a Receivable, it will pay Borrower the Advance Rate multiplied by the
face amount of the Receivable (the "Advance"). Bank may, in its
discretion, change the percentage of the Advance Rate. When Bank makes
an Advance, the Receivable becomes a "Financed Receivable." All
representations and warranties in Section 6 must be true as of the date
of the Invoice Transmittal and of the Advance and no Event of Default
exists would occur as a result of the Advance. The aggregate amount of
all Financed Receivables outstanding at any time may not exceed the
Facility Amount.
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3. COLLECTIONS, FINANCE CHARGES, REMITTANCES AND FEES. The Obligations shall be
subject to the following fees and Finance Charges. Fees and Finance Charges may,
in Bank's discretion, be charged as an Advance, and shall thereafter accrue fees
and Finance Charges as described below. Bank may, in its discretion, charge fees
and Finance Charges to Borrower's deposit account maintained with Bank.
3.1. COLLECTIONS. Collections will be credited to the Financed
Receivables Balance, but if there is an Event of Default, Bank may
apply Collections to the Obligations in any order it chooses. If Bank
receives a payment for both a Financed Receivable and a non Financed
Receivable, the funds will first be applied to the Financed Receivable
and, if there is not an Event of Default, the excess will be remitted
to the Borrower, subject to Section 3.10.
3.2. FINANCE CHARGES. In computing Finance Charges on the Obligations,
all Collections received by Bank shall be deemed applied by Bank on
account of the Obligations THREE (3) Business Days after receipt of the
Collections. Borrower will pay a finance charge (the "Finance Charge"),
which is equal to the greater of (i) the Applicable Rate multiplied by
the number of days in the Reconciliation Period divided by 360, which
is then multiplied by the outstanding average daily Financed Receivable
Balance for that Reconciliation Period or (ii) the Minimum Finance
Charge. After an Event of Default, Obligations accrue interest at five
percent (5%) above the Applicable Rate effective immediately before the
Event of Default.
3.3. INTENTIONALLY OMITTED.
3.4. FACILITY FEE. A fully earned, non-refundable facility fee of
$15,000.00 is due upon execution of this Agreement (the "Facility
Fee").
3.5. COLLATERAL HANDLING FEE. On each Reconciliation Day, Borrower will
pay to Bank a collateral handling fee, equal to one half percent (.50%)
per month of the average daily Financed Receivable Balance outstanding
during the applicable Reconciliation Period (the "Collateral Handling
Fee"). After an Event of Default, the Collateral Handling Fee will
increase an additional .50% effective immediately before the Event of
Default.
3.6. EARLY TERMINATION FEE. A fully earned, non-refundable early
termination fee of $15,000.00 is due upon voluntary or involuntary full
payment of the Obligations and termination of this Facility prior to
SEPTEMBER __, 2001 unless the Obligations are paid in full from an
initial advance from a loan agreement with Silicon Valley Bank (the
"Early Termination Fee").
3.7. ACCOUNTING. After each Reconciliation Period, Bank will provide an
accounting of the transactions for that Reconciliation Period,
including the amount of all Financed Receivables, all Collections,
Adjustments, Finance Charges, and the Collateral Handling Fee. If
Borrower does not object to the accounting in writing within thirty
(30) days it is considered correct. All Finance Charges and other
interest and fees are calculated on the basis of a 360 day year and
actual days elapsed.
3.8. DEDUCTIONS. Bank may deduct fees, Finance Charges and other
amounts due from any Advances made or Collections received by Bank.
3.9. GOOD FAITH DEPOSIT. Borrower has paid to Bank a Good Faith Deposit
of $5,000.00 to initiate Bank's due diligence review process. Any
portion of the deposit not utilized to pay expenses up to and including
the date hereof will be applied to the Facility Fee.
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3.10. ACCOUNT COLLECTION SERVICES. All Borrowers' Receivables are to be
paid to the same address and/or party and Borrower and Bank must agree
on such address. If Bank collects all Receivables and there is not an
Event of Default or an event that with notice or lapse of time will be
an Event of Default, within FIVE (5) days of receipt of those
collections, Bank will give Borrower, the Receivables collections it
receives for Receivables other than Financed Receivables and/or amount
in excess of the amount for which Bank has made an Advance to Borrower,
less any amount due to Bank, such as the Finance Charge, the Collateral
Handling Fee, other fees and expenses, or otherwise. This Section does
not impose any affirmative duty on Bank to do any act other than to
turn over amounts. All Receivables and collections are Collateral and
if an Event of Default occurs, Bank need not remit collections of
Collateral and may apply them to the Obligations.
4. REPAYMENT OF OBLIGATIONS.
4.1. REPAYMENT ON MATURITY. Borrower will repay each Advance on the
earliest of: (a) payment of the Financed Receivable in respect of which
the Advance was made, (b) the Financed Receivable becomes an Ineligible
Receivable, (c) when any Adjustment is made to the Financed Receivable
(but only to the extent of the Adjustment if the Financed Receivable is
not otherwise an Ineligible Receivable, or (d) the last day of the
Facility Period (including any early termination). Each payment will
also include all accrued Finance Charges on the Advance and all other
amounts due hereunder.
4.2. REPAYMENT ON EVENT OF DEFAULT. When there is an Event of Default,
Borrower will, if Bank demands (or, in an Event of Default under
Section 9(B), immediately without notice or demand from Bank) repay all
of the Advances. The demand may, at Bank's option, include the Advance
for each Financed Receivable then outstanding and all accrued Finance
Charges, Collateral Handling Fees, attorneys and professional fees,
court costs and expenses, and any other Obligations.
5. POWER OF ATTORNEY. Borrower irrevocably appoints Bank and its successors and
assigns it attorney-in-fact and authorizes Bank, regardless of whether there has
been an Event of Default, to:
(A) sell, assign, transfer, pledge, compromise, or discharge all or any
part of the Financed Receivables:
(B) demand, collect, xxx, and give releases to any Account Debtor for
monies due and compromise, prosecute, or defend any action, claim,
case or proceeding about the Financed Receivables, including filing
a claim or voting a claim in any bankruptcy case in Bank's or
Borrower's name, as Bank chooses:
(C) prepare, file and sign Borrower's name on any notice, claim,
assignment, demand, draft, or notice of or satisfaction of lien or
mechanics' lien or similar document;
(D) notify all Account Debtors to pay Bank directly;
(E) receive, open, and dispose of mail addressed to Borrower;
(F) endorse Borrower's name on check or other instruments;
(G) execute on Borrower's behalf any instruments, documents, financing
statements to perfect Bank's interests in the Financed Receivables
and Collateral; and
(H) do all acts and things necessary or expedient in connection with
the Bank's rights under this Agreement.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
6.1. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants for
each Financed Receivable:
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(A) Borrower is the owner with legal right to sell, transfer and assign
it;
(B) The correct amount is on the Invoice Transmittal and is not
disputed;
(C) Payment is not contingent on any obligation or contract and it has
fulfilled all its obligations as of the Invoice Transmittal date;
(D) It is based on an actual sale and delivery of goods and/or services
rendered, is due to Borrower, it is not past due or in default, has
not been previously sold, assigned, transferred, or pledged and is
free of any liens, security interests and encumbrances;
(E) There are no defenses, offsets, counterclaims or agreements for
which the Account Debtor may claim any deduction or discount;
(F) Borrower reasonably believes no Account Debtor is insolvent or
subject to any Insolvency Proceedings;
(G) Borrower has not filed or had filed against it Insolvency
Proceedings and does not anticipate any filing;
(H) Bank has the right to endorse and/or require Borrower to endorse
all payments received on Financed Receivables and all proceeds of
Collateral; and
(I) No representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statement contained in the certificates or
statement not misleading.
6.1.1 ADDITIONAL REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants as follows:
(A) Borrower is duly existing and in good standing in its state of
formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its
ownership of property requires that it be qualified. The execution,
delivery and performance of this Agreement has been duly
authorized, and does not conflict with Borrower's organizational
documents, or constitute an Event of Default under any material
agreement by which Borrower is bound. Borrower is not in default
under any agreement to which or by which it is bound.
(B) Borrower has good title to the Collateral. All inventory is in all
material respects of good and marketable quality, free from
material defects.
(C) Borrower is not an "investment company" or a company "controlled"
by an "investment company" under the Investment Company Act.
Borrower is not engaged as one of its important activities in
extending credit for margin stock (under Regulations G, T and U of
the Federal Reserve Board of Governors). Borrower has complied with
the Federal Fair Labor Standards Act. Borrower has not violated any
laws, ordinances or rules. None of Borrower's properties or assets
has been used by Borrower, to the best of Borrower's knowledge, by
previous persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than legally. Borrower
has timely filed all required tax returns and paid, or made
adequate provision to pay, all taxes. Borrower has obtained all
consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all government authorities
that are necessary to continue its business as currently conducted.
6.2. AFFIRMATIVE COVENANTS. Borrower will do all of the following:
(A) Maintain its corporate existence and good standing in its
jurisdictions of incorporation and maintain its qualification in
each jurisdiction necessary to Borrower's business or operations.
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(B) Give Bank at least ten (10) days' prior written notice of changes
to its name, state of organization, chief executive office or
location of records.
(C) Pay all its taxes including gross payroll, withholding and sales
taxes when due and will deliver satisfactory evidence of payment if
requested.
(D) Provide a written report within 10 days, if payment of any Financed
Receivable does not occur within sixty (60) days of the invoice
date respecting any Financed Receivable (or as and when otherwise
directed by the Bank) and include the reasons for the delay.
(E) Give Bank copies of all Forms 10-K, 10-Q and 8-K (or equivalents)
within five (5) days of filing with the Securities and Exchange
Commission, while any Financed Receivable is outstanding.
(F) Execute any further instruments and take further action as Bank
requests to perfect or continue Bank's security interest in the
Collateral or to effect the purposes of this Agreement.
(G) Provide Bank with a Compliance Certificate no later than five (5)
days following each quarter end/or as requested by Bank.
(H) Provide Bank with, as soon as available, but no later than thirty
(30) days following each Reconciliation Period, a company prepared
balance sheet and income statement, prepared under GAAP,
consistently applied, covering Borrower's operations during the
period together with an aged listing of Receivables and accounts
payable along with a deferred revenue listing.
(I) Immediately notify, transfer and deliver to Bank all collections
Borrower receives for Financed Receivables.
(J) Direct each Account Debtor to make payments to a Lockbox account
with Bank or to wire transfer payments to Bank. Without limiting
the applicability of the foregoing, until the Bank establishes a
Lockbox account, all collections Borrower receives for all
Receivables shall be remitted to the Bank at least weekly by Friday
of each week.
(K) Borrower will allow Bank to audit Borrower's Collateral, including
but not limited to Borrower's Accounts, at Borrowers expense, no
later than ninety (90) days of the execution of this Agreement and
annually thereafter (provided that Bank may, at its option, conduct
more frequent audits at any time and from time to time at Bank's
expense); Provided however, if an Event of Default has occurred,
Bank may audit Borrower's Collateral at any time and from time to
time, including but not limited to Borrower's Accounts at Bank's
sole discretion and without notification and authorization from
Borrower.
(L) Demonstrate to the Bank that Borrower has received the proceeds of
Subordinated Debt or has obtained an equity infusion in an
aggregate amount of at least $1,000,000.00 subsequent to June 30,
2000 and before the date of the initial Advance.
(M) Obtain additional equity infusion or the proceeds of Subordinated
Debt (exclusive of the $1,000,000.00 described in Section 6.2(L))
in an aggregate amount of $9,000,000.00 as follows: (i) in an
aggregate amount of at least $3,000,000.00 on or before October 31,
2000; and (ii) in an additional aggregate amount of at least
$6,000,000.00 on or before December 31, 2000.
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6.3. NEGATIVE COVENANTS. Borrower will not do any of the following without
Bank's prior written consent:
(A) Assign, transfer, sell or grant, or permit any lien or security
interest in the Collateral.
(B) Convey, sell, lease, transfer or otherwise dispose of the
Collateral, except for bona fide sales (upon commercially
reasonable terms and conditions) of inventory and dispositions or
trade-ins of obsolete equipment.
(C) Create, incur, assume, or be liable for any indebtedness, except
for indebtedness (in an aggregate amount not exceeding $500,000.00)
fully subordinated to the Obligations and capital lease
obligations.
(D) Become an "investment company" or a company controlled by an
"investment company," under the Investment Company Act of 1940 or
undertake as one of its important activities extending credit to
purchase or carry margin stock, or use the proceeds of any Advance
for that purpose; fail to meet the minimum funding requirements of
ERISA, permit a Reportable Event or Prohibited Transaction, as
defined in ERISA, to occur; fail to comply with the Federal Fair
Labor Standards Act or violate any other law or regulation, or
permit any of its subsidiaries to do so.
(E) Without in any way limiting Section 6.3(A) above, pledge, or grant
a security interest in, any of Borrower's intellectual property.
7. ADJUSTMENTS. If any Account Debtor asserts a discount, allowance, return,
offset, defense, warranty claim, or the like (an "Adjustment") or if Borrower
breaches any of the representations, warranties or covenants set forth in
Section 6., Borrower will promptly advise Bank. Borrower will resell any
rejected, returned, or recovered personal property for Bank, at Borrower's
expense, and pay proceeds to Bank. While Borrower has returned goods that are
Borrower property, Borrower will segregate and xxxx them "property of Silicon
Valley Bank." Bank owns the Financed Receivables and until receipt of payment,
has the right to take possession of any rejected, returned, or recovered
personal property.
8. SECURITY INTEREST. Borrower grants to Bank a continuing security interest in
all presently and later acquired Collateral. Any security interest will be a
first priority security interest in the Collateral.
9. EVENTS OF DEFAULT. Any one or more of the following is an Event of Default.
(A) Borrower fails to pay any amount owed to Bank when due;
(B) Borrower files or has filed against it any Insolvency Proceedings
or any assignment for the benefit of creditors, or appointment of a
receiver or custodian for any of its assets;
(C) Borrower becomes insolvent or is generally not paying its debts as
they become due or is left with unreasonably small capital;
(D) Any involuntary lien, garnishment, attachment attaches to the
Financed Receivables or any Collateral;
(E) Borrower breaches any covenant, agreement, warranty, or
representation and does not cure it to Bank's satisfaction within
10 days; but a breach that cannot be cured it is an immediate Event
of Default;
(F) Borrower is in default under any document, instrument or agreement
evidencing any debt, obligation or liability in favor of Bank its
affiliates or vendors regardless of whether the debt, obligation or
liability is direct or indirect, primary or secondary, or fixed or
contingent;
(G) An event of default occurs under any Guaranty of the Obligations or
any material provision of any Guaranty is not valid or enforceable
or a Guaranty is repudiated or terminated;
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(H) A material default or event of default occurs under any agreement
between Borrower and any creditor of Borrower that signed a
subordination agreement with Bank;
(I) Any creditor that has signed a subordination agreement with Bank
breaches any terms of the subordination agreement; or
(J) (i) A material impairment in the perfection or priority of the
Bank's security interest in the Collateral; (ii) a material adverse
change in the business, operations, or conditions (financial or
otherwise) of the Borrower occurs; or (iii) a material impairment
of the prospect of repayment of any portion of the Advances occurs.
10. REMEDIES.
10.1. REMEDIES UPON DEFAULT. When an Event of Default occurs, (1) Bank
may stop financing Receivables or extending credit to Borrower; (2) at
Bank's option and on demand, all or a portion of the Obligations or,
for an Event of Default described in Section 9(B), automatically and
without demand, are due and payable in full; (3) Bank may apply to the
Obligations any (i) balances and deposits of Borrower it holds, or (ii)
any amount held by Bank owing to or for the credit of the account of
Borrower; and (4) Bank may exercise all rights and remedies under this
Agreement and the law, including those of a secured party under the
Code, power of attorney rights in Section 5 for the Collateral, and the
right to collect, dispose of, sell, lease, use, and realize upon all
Financed Receivables and Collateral in any commercial manner. Borrower
agrees that any notice of sale required to be given to Borrower is
deemed given if at least five (5) days before the sale may be held.
10.2. DEMAND WAIVER. Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or
renewal of accounts, documents, instruments, chattel paper, and
guaranties held by Bank on which Borrower is liable.
10.3. DEFAULT RATE. As further provided in Section 3.2, while any Event
of Default exists, all Advances hereunder bears interest at the
Applicable Rate plus five percent (5%) per annum until the earlier of
(a) payment of all Obligations in good funds or (b) entry of a final
judgment when the principal amount of any money judgment will accrue
interest at the highest rate allowed by law.
11. FEES, COSTS AND EXPENSES. The Borrower will pay on demand all fees, costs
and expenses (including attorneys' and professionals fees with costs and
expenses) that Bank incurs from: (a) preparing, negotiating, administering, and
enforcing this Agreement or any related agreement, including any amendments,
waivers or consents, (b) any litigation or dispute relating to the Financed
Receivables, the Collateral, this Agreement or any other agreement, (c)
enforcing any rights against Borrower or any Guarantor, or any Account Debtor,
(d) protecting or enforcing its interest in the Financed Receivables or other
Collateral, (e) collecting the Financed Receivables and the Obligations, and (f)
any bankruptcy case or insolvency proceeding involving Borrower, any Financed
Receivable, the Collateral, any Account Debtor, or any Guarantor.
12. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER. This Agreement shall be
construed, governed, and enforced pursuant to the laws of The Commonwealth of
Massachusetts (without regard to conflict of law principals) and shall take
effect as a sealed instrument. Borrower and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in Suffolk County, Massachusetts.
BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
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13. NOTICES. Notices or demands by either party about this Agreement must be in
writing and personally delivered or sent by an overnight delivery service, by
certified mail postage prepaid return receipt requested, or by FAX to the
addresses listed at the beginning of this Agreement. A party may change notice
address by written notice to the other party.
14. GENERAL PROVISIONS.
14.1. SUCCESSORS AND ASSIGNS. This Agreement binds and is for the
benefit of successors and permitted assigns of each party. Borrower may
not assign this Agreement or any rights under it without Bank's prior
written consent which may be granted or withheld in Bank's discretion.
Bank may, without the consent of or notice to Borrower, sell, transfer,
or grant participation in any part of Bank's obligations, rights or
benefits under this Agreement.
14.2. INDEMNIFICATION. Borrower will indemnify, defend and hold
harmless Bank and its officers, employees, and agents against: (a)
obligations, demands, claims, and liabilities asserted by any other
party in connection with the transactions contemplated by this
Agreement; and (b) losses or expenses incurred, or paid by Bank from or
consequential to transactions between Bank and Borrower (including
reasonable attorneys fees and expenses), except, with respect to each
of the foregoing, for losses caused by Bank's gross negligence or
willful misconduct.
14.3. TIME OF ESSENCE. Time is of the essence for performance of all
obligations in this Agreement.
14.4. SEVERABILITY OF PROVISION. Each provision of this Agreement is
severable from every other provision in determining the enforceability
of any provision.
14.5. AMENDMENTS IN WRITING, INTEGRATION. All amendments to this
Agreement must be in writing. This Agreement is the entire agreement
about this subject matter and supersedes prior negotiations or
agreements.
14.6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts and when
executed and delivered are one Agreement.
14.7. SURVIVAL. All covenants, representations and warranties made in
this Agreement continue in force while any Financed Receivable amount
remains outstanding. Borrower's indemnification obligations survive
until all statutes of limitations for actions that may be brought
against Bank have run.
14.8. CONFIDENTIALITY. Bank will use the same degree of care handling
Borrower's confidential information that it uses for its own
confidential information, but may disclose information; (i) to its
subsidiaries or affiliates in connection with their business with
Borrower, (ii) to prospective transferees or purchasers of any interest
in the Agreement, (iii) as required by law, regulation, subpoena, or
other order, (iv) as required in connection with an examination or
audit and (v) as it considers appropriate exercising the remedies under
this Agreement. Confidential information does not include information
that is either: (a) in the public domain or in Bank's possession when
disclosed, or becomes part of the public domain after disclosure to
Bank; or (b) disclosed to Bank by a third party, if Bank does not know
that the third party is prohibited from disclosing the information.
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14.9. OTHER AGREEMENTS. This Agreement may not adversely affect Banks
rights under any other document or agreement. If there is a conflict
between this Agreement and any agreement between Borrower and Bank,
Bank may determine in its sole discretion which provision applies.
Borrower acknowledges that any security agreements, liens and/or
security interests securing payment of Borrower's Obligations also
secure Borrower's Obligations under this Agreement and are not
adversely affected by this Agreement. Additionally, (a) any Collateral
under other agreements or documents between Borrower and Bank secures
Borrowers Obligations under this Agreement and (b) a default by
Borrower under this Agreement is a default under agreements between
Borrower and Bank.
BORROWER: E-SYNC NETWORKS, INC.
By ______________________________________
Title ___________________________________
BANK: SILICON VALLEY BANK
By ______________________________________
Title ___________________________________
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