EXHIBIT 10.22
Pacific Business Funding
A Member of the Greater Bay Bancorp Family
[GRAPHIC OMITED]
00000 Xxxxxxx Xxxxx Xxxxxxxxx Xxxxx #000 Xxxxxxxxx, Xxxxxxxxxx
00000 Tel. (000) 000-0000 Fax (000) 000-0000
FACTORING AGREEMENT
This Factoring Agreement (the "Agreement"), dated as of March 28, 2001, is
entered into by and between GENUS, INC. a corporation, partnership, sole
proprietorship] ("Seller") having its principal place of business and chief
executive office at the address set forth below Seller's signature, and Pacific
Business Funding, a division of Cupertino National Bank ("Purchaser") having an
office at the address identified above.
Capitalized terms used in this Agreement shall have the meanings assigned to
them in Section 13, Definitions.
1. Purchase of Accounts
1.1 Schedule of Accounts. Seller may, at any time, request that Purchaser
purchase Accounts. Any such request by Seller shall be made by delivering
to Purchaser a Schedule of Accounts (the "Schedule of Accounts") which
describes in detail the Accounts Seller is requesting Purchaser to
purchase, including, (a) the name and address of the Account Debtor of each
such Account, (b) the amount owed by the Account Debtor of each such
Account, and (c) the date and number of the invoice evidencing each such
Account. Each Schedule of Accounts shall have attached to it an invoice for
each Account described on the Schedule of Accounts, and shall be signed by
an authorized representative of Seller.
1.2 Discretionary Approval of Accounts. Purchaser may, in its sole discretion,
purchase any Account included in a Schedule of Accounts, but is under no
obligation to purchase any such Account. Purchaser may exercise its sole
discretion in approving each Account and the credit of each Account Debtor
before purchasing any Account.
1.3 Payment of Advances; Creation of a Book Reserve. Upon approval, in
Purchaser's sole discretion, of any of the Accounts described on a Schedule
of Accounts, Purchaser shall pay to Seller as the purchase price for any
approved Account EIGHTY PERCENT (80%) of the face amount of such approved
Account (the "Advance"). Purchaser may, time to time, in its discretion,
upon notice to Seller, change the percentage of the Advance. Upon payment
of the Advance to Seller, Purchaser shall also create a reserve on
Purchaser's book and records with respect to each Purchased Account in an
amount equal to the face amount of the Purchased Account minus the Advance
for such Purchased Account (the "Reserve"). Notwithstanding the foregoing,
in no event shall the Reserve with respect to all Purchased Accounts
outstanding at any time be less than TWENTY PERCENT (20%) of the Account
Balance. Purchaser, may in its discretion, upon notice to Seller, increase
the percentage of the reserve at any time.
1.4 Transfer of Accounts. At the time Purchaser pays the Advance with respect
to any Account such Account shall constitute a Purchased Account, and
Seller hereby absolutely sells, transfers and assigns to Purchaser, all of
Seller's right, title and interest in and to each Purchased Account. Seller
also hereby sells, transfers and assigns to Purchaser all of the goods
represented by each Purchased Account, all of Seller's rights and remedies
as an unpaid seller under the California Commercial Code and other
applicable law, including the rights of stoppage in transit, replevin,
reclamation, and claim and delivery, and all Seller's rights in and to all
security for each such Purchased Account and guaranties thereof, and all
rights against third parties with respect thereto. Any goods recovered or
received by Seller shall be set aside marked with Purchaser's name, and
held for Purchaser's account as owner.
1.5 Collection of Accounts. Each Purchased Account shall be collected directly
by the Purchaser. At the request of Purchaser, Seller and Purchaser shall
jointly notify each Account Debtor by letter that Purchased Accounts owed
by such Account Debtor have been assigned and are payable to Purchaser.
Such notification shall be in form and substance satisfactory to Purchaser.
Seller shall not take or permit any action to change or revoke any
notification without Purchaser's prior written consent and shall not
request any Account Debtor to pay any Purchased Account to Seller.
Notwithstanding the foregoing, in the event Seller received any payments of
any Purchased Accounts, Seller shall (A) immediately notify Purchaser of
such payment, (B) hold such payment in trust and safekeeping for Purchaser,
and (C) immediately turn over to Purchaser the identical checks, monies or
any other forms of payment received, with any necessary endorsement or
assignment. Purchaser shall have the right to endorse Seller's name on all
payments received in connection with each Purchased Account and on any
other proceeds of Collateral. If Purchaser receives a check or item which
is payment for both a Purchased Account and a non-Purchased Account, the
funds shall first be applied to the Purchased Account and, and so long as
there does not then exist an Event of Default or an event that with notice
or lapse of time would constitute an Event of Default, the excess shall be
remitted to Seller. In the event Purchaser receives any other payments of
non-Purchased Accounts, Purchaser shall remit to Seller the collections of
such non-Purchased Accounts; provided, that if any Event of Default or
event that with notice or lapse of time or otherwise would constitute an
Event of Default then exists, Purchaser shall have no duty to remit any
such collections, which collections constitute Collateral, and may apply
such collections to reduce Obligations.
1.6 Full Recourse. The purchase by Purchaser of Purchased Accounts from Seller
shall be with full recourse against Seller. Seller shall be liable for any
deficiency in the event the Obligations exceed the amount of Purchased
Accounts and the other Collateral.
2. Fees and Customer Payments.
2.1 Finance Fees. Seller shall pay to Purchaser on each Settlement Date, a
finance fee in an amount equal to EIGHT TENTHS OF ONE PERCENT (0.8%) per
month of the average daily Account Balance outstanding during the
Settlement Period ending on such Settlement Date (the "Finance Fees"). Such
accrued Finance Fees shall be netted against the Reserve as described in
Section 3.3,
2.2 Administrative Fees. Seller shall pay to Purchaser on each Settlement Date,
an Administrative Fee equal to ONE FOURTH OF ONE PERCENT (0.25%) of the
face amount of each Account purchased by Purchaser during the Settlement
Period ending on such Settlement Date (the "Administrative Fee"). All
Administrative Fees shall be netted against the Reserve as described in
Section 3.3.
2.3 Maximum Lawful Rate. In no event shall any charges that may constitute
interest hereunder exceed the highest rate permitted under applicable law.
In the event that a court of competent jurisdiction makes a final
determination that Purchaser has received interest hereunder in excess of
the maximum lawful rate, then such excess shall be deemed a payment of
principal and the interest payable hereunder deemed amended to the amount
payable under the maximum lawful rate.
2.4 Crediting Customer Payments. Upon Purchaser's receipt of payment of a
Purchase Account, Purchaser shall promptly credit such customer payment
(the Customer Payments") to the amount outstanding with respect to such
Purchased Account. Notwithstanding the foregoing, if any Customer Payment
is subsequently dishonored or Purchaser does not receive good funds for any
reason, the amount of such uncollected Customer Payment shall be included
in the Account Balance as if such Customer Payment had not been received,
and Finance Fees shall accrue thereon, and the credit to the specific
Purchased Account shall be reversed. Notwithstanding the foregoing, upon
the occurrence of an Event of Default, Purchaser shall apply all Customer
Payments to Seller's Obligations under this Agreement in such order and
manner as Purchaser shall, in its sole discretion, determine.
2.5 Accounting. Purchaser shall deliver to Seller after each Settlement Date, a
statement of Seller's account which shall include and accounting of the
transactions of the Settlement Period, including the amount of all Finance
Fees, Administrative Fees, Adjustments, Chargeback Amounts, Customer
Payments and Purchased Accounts. The accounting shall constitute an account
stated and shall be binding on Seller and deemed correct unless Seller
delivers to Purchaser a written objection within thirty (30) days after
such accounting is mailed to Seller.
3. Adjustments, Chargebacks and Remittances.
3.1 Adjustments. In the event any Account Debtor asserts any offsets, defense,
counterclaim, dispute, discount, allowance, right of return, right of
recoupment, or warranty claim with respect to a Purchased Accounts, or pays
less than the face amount of such Purchased Accounts (each, an
"Adjustment"), Purchaser may, in its sole discretion, either (A) deduct the
amount of the Adjustment in calculating the Remittance, or (B) chargeback
to Seller the Purchased Account with respect to which the Adjustment is
asserted. Seller shall advise Purchaser immediately upon learning of any
Adjustment asserted by any Account Debtor.
3.2 Chargebacks. Purchaser shall have the right to chargeback to Seller any
Purchased Account:
(A) which remains unpaid ninety (90) calendar days after the invoice
dated;
(B) with respect to which there has been a breach of any warranty,
representation, covenant or agreement set forth in this Agreement;
(C) with respect to which the Account Debtor asserts any Adjustment; or
(D) which is owned by an Account Debtor who has filed, or has had filed
against it, any bankruptcy case, insolvency proceeding, assignment of
the benefit of creditors, receivership or insolvency proceeding, or
who has become insolvent (as defined in the United States of
Bankruptcy Code) or who is generally not paying its debts become due.
Upon demand by Purchaser, Seller shall pay to Purchaser the full face amount of
any Purchased Account which has been charged back to Seller pursuant to this
Section 3.2, or the extent partial payment has been made, the amount by which
the face amount of such Purchased Account exceeds such partial payment, together
with any attorneys' fees and cost incurred by Purchaser in connection with
collecting such Purchased Account (collectively, the "Chargeback Amount").
Purchaser shall advise Seller regarding how to Chargeback Amount shall be paid,
which may be by any one or a combination of the following, in Purchaser's sole
discretion: (1) payment in cash immediately upon demand; (2) deduction from or
offset against any Remittance that would otherwise be payable to Seller; (3)
payment from any Advances that may otherwise be made to Seller; (4) adjustment
to the Reserve pursuant to Section 1.3 hereof; or (5) delivery or substitute
Accounts and Schedule of Accounts acceptable to Purchaser, which Accounts shall
constitute Purchased Accounts.
3.3 Remittance. Purchaser shall remit to Seller after the Settlement Date, the
amount, if any, which Purchaser owes to Seller at the end of the Settlement
Period based on the following calculations set forth below (the
"Remittance"); provided, that if there then exists any Event of Default or
any event or condition that with notice or lapse of time would constitute
an Event of Default, Purchaser shall not be obligated to remit any payment
to Seller. If the amount resulting from the following calculation is a
positive number, such amount is the amount of the Remittance for such
Settlement Period. If the resulting amount is a negative number, such
amount is the amount owed by Seller to Purchaser.
The calculations to be used are as follows:
(A) The sum of the following:
(1) The Reserve as of the beginning of the subject Settlement Period,
plus
(2) The Reserve created for each Account purchased during the subject
Settlement Period;
MINUS
(B) The sum of the following:
(1) Finance Fees accrued during the subject Settlement Period;
plus
(2) Administrative Fees accrued during the subject Settlement
Period; plus
(3) Adjustments during the subject Settlement Period; plus
(4) Chargeback Amounts, to the extent Purchaser has agreed to
accept payment of any such Chargeback Amount by deduction
from the Remittances; plus
(5) All professional fees and expenses as set forth in the
Section 10 for which oral or written demand has been made by
Purchaser during the subject Settlement Period; plus
(6) The Reserve for the Account Balance as of the first day of
the following Settlement Period in the minimum percentage
set forth in Section 1.3 hereof. In the foregoing
calculations result in a Remittance payable to Seller,
Purchaser shall make such payment by check, subject to
Purchaser's rights of offset and recoupment, and its right
to deduct any Chargeback Amount as set forth in Section 3.2.
If the foregoing calculations result in an amount due to Purchaser from Seller,
Seller shall make such payment by any one or a combination of the methods set
forth in Section 3.2 hereof for chargebacks, as determined by Purchaser in its
discretion.
4. Power of Attorney. Seller hereby appoints Purchaser and its designees as
Seller's true and lawful attorney in fact, to exercise in Purchaser's
discretion, and regardless of whether an Event of Default is then existing,
all of the following powers, such powers being coupled with an interest:
(A) to notify all Account Debtors with respect to the Purchased Accounts to
make payment directly to Purchaser; (B) to receive, deposit, and endorse
Seller's name on all checks, drafts, money orders and other forms of
payment relating to the Purchased Accounts; (C) to demand, collect,
receive, xxx and give releases to any Account Debtor for the monies due or
which may become due on or in connection with the Purchased Accounts; (D)
to compromise, prosecute, or defend any action, claim, case, or proceeding
relating to the Purchased Accounts, including the filing of a claim or the
voting of such claims in any bankruptcy case, all in Purchaser's name or
Seller's name, as Purchaser may elect; (E) to sell, assign, transfer,
pledge, compromise, or discharge any Purchased Accounts;(F) to receive,
open, redirect and dispose of all mail addressed to Seller for the purpose
of collecting the Purchased Accounts and to take all the actions permitted
in subsection (B) above with respect to any payment in any such mail; (G)
to execute in the name of Seller and files against Seller in favor of
Purchaser such financing statements and other agreements as Purchaser deems
necessary to evidence or perfect is security interest in the Purchased
Accounts and the other Collateral; and (H) to do all acts and things
necessary or expedient, in furtherance of any such purposes. Upon the
occurrence of an Event of Default, all of the power of attorney rights
granted by Seller to Purchaser hereunder shall be applicable with respect
to all Collateral.
5. Continuing Representation, Warranties and Covenants. To induce Purchaser to
enter into this Agreement and purchase Accounts, and with full knowledge
that Purchaser is relying on the truth accuracy of the following in
determining whether to purchase any Account, Seller represents, warrants,
covenants and agrees as follows, which representations, warranties,
covenants and agreements shall be deemed made each time Purchaser purchases
Accounts hereunder and shall survive the execution and delivery of this
Agreement:
(A) The information contained in each Schedule of Accounts is true and
correct;
(B) Each Schedule of Accounts is signed by an authorized representative of
Seller, and Purchaser shall have the right to rely on such signature
as an authorized signature of Seller;
(C) Seller is the sole and absolute owner of each Account described in
each Schedule of Accounts and has the legal rights to sell, transfer,
and assign such Account to Purchaser;
(D) Seller has performed all obligations required by the Account Debtor in
connection with each Account described in each Schedule of Accounts
and payment of each such Account is not contingent upon the
fulfillment of any obligation or contract, past or future;
(E) Each Account described on each Schedule of Accounts is correctly
stated therein, is not in dispute, is presently and unconditionally
owing at the time stated in the invoice evidencing such Account as
attached to the Schedule of Accounts, is not past due or in default,
represent a bona fide indebtedness arising from the actual sale of
goods or performance of service to an Account Debtor in the ordinary
course of Seller's business which has been received and finally
accepted by the Account Debtor;
(F) Each Account set forth on each Schedule of Accounts is not subject to
any offset, defense or counterclaim of any kind, whether bona fide or
otherwise, and no agreement has been made under which the Account
Debtor may claim any deduction or discount except as otherwise stated
in the Schedule of Accounts;
(G) Each Account Debtor identified on each Schedule of Accounts is liable
for the amount set forth on such Schedule of Accounts and will not be
object to payment for, or the quality or the quantity of the goods or
services to which any Account described on such Schedule of Accounts
relates;
(H) Seller, and the Seller's best knowledge, each Account Debtor set forth
in each Schedule of Accounts, is and shall remain in that the present
saleable value of such entity's assets exceeds the total of such
entity's liabilities;
(I) Seller has not, as of the xxxx Xxxxxx accepts an Advance from
Purchaser, filed or had filed against it a petition for relief under
the United States Bankruptcy Code;
(J) Except for Permitted Liens, each Account and all other Collateral are
free and clear of any and all liens, security interest and
encumbrances of any kind, other than those in favor of Purchaser and
Seller will not assign, transfer, or grant any lien or security
interest in any Accounts or other Collateral to any other party,
without Purchaser's prior written consent;
(K) Seller has not sold, assigned, transferred, pledged or otherwise
conveyed any Purchased Accounts to any party other than Purchaser, and
Seller shall not sell, assign, transfer, pledge or otherwise convey
any Collateral without Purchaser's prior consent, except for the of
Accounts to Purchaser and the sale of finished inventory in Seller's
normal course of business;
(L) Seller's name and form of organization are as set forth at the
beginning of this Agreement, and Seller's chief executive office,
place of business and place where Collateral and records concerning
Accounts and other Collateral are kept are as set forth below Seller's
signature, and Seller will give Purchaser at least thirty (30) days
prior written notice if such name, organization, place of business,
location of Collateral or records concerning Collateral is to be
changed or added and shall execute any documents necessary to perfect
Purchaser's interest in the Purchased Accounts and the other
Collateral; and
(M) Seller shall pay all of its normal gross payroll for employees, and
all federal and state taxes, as and when due, including all payroll
and withholding taxes and state sales taxes.
6. Grant of Security Interest. To secure the prompt payment and performance of
all of Seller's Obligations to Purchaser, Seller hereby grants to Purchaser
a continuing lien upon and security interest in, and right of set off with
respect to, all of Seller's right, title and interest in, to and under the
following, whether now owned by or owing to, or hereafter acquired by or
arising in favor of, Seller, and regardless of where located (collectively
the "Collateral"):
(A) All accounts, accounts receivable, chattel paper, contract rights,
documents, instruments, letter of credit, banker's acceptances,
drafts, securities and general intangibles, including all claims,
causes of action, deposit accounts, rights to receive tax refunds,
rights in and claims under insurance policies (including rights to
unearned premiums), customer lists, copyrights, patents, trademarks,
license agreements, goodwill associated with trademarks and trademark
licenses, and other intellectual property of every kind and other
rights to payment;
(B) All inventory;
(C) All monies, remittances, and other amounts due under this Agreement
and any other agreement between Purchaser and Seller;
(D) All equipment, machinery, motor vehicles, furniture, fixtures, tools
and supplies;
(E) All investment securities;
(F) All farm products, crops, timber, minerals and like (including oil and
gas);
(G) All books and records relating to the foregoing, including all
computer programs, printed output and computer readable data;
(H) All accessions to, and substitutions and replacements for, all of the
foregoing; and
(I) All proceeds and products of the foregoing, whether due to voluntary
or involuntary disposition, including insurance proceeds. Seller shall
sign and deliver to Purchaser UCC financing statements, in form
acceptable to Purchaser. Seller agrees to deliver to Purchaser the
originals of all instruments. chattel paper and documents evidencing
or related to Purchased Accounts and other Collateral.
Notwithstanding the foregoing, the security interest granted herein
shall not extend to and the term "Collateral" shall not include any
property, rights or licenses to the extent the granting of a security
interest therein would be contrary to applicable law or is prohibited
by or would constitute a default under any agreement or document
governing such property, rights or licenses (but only to the extent
such prohibition is enforceable under applicable law); provided that
the preceding sentence shall in no case exclude from the definition of
"Collateral" any Accounts, proceeds of the disposition of any
property, or any general intangible consisting of rights to payment,
all of which shall at all times constitute "Collateral"; and provided
further that upon the termination or lapsing of any such prohibition
or restriction, such otherwise excluded property shall automatically
be part of the Collateral.
7. Default. The occurrence of any one or more of the following shall
constitute an event of default under this Agreement (each, an "Event of
Default"):
(A) Seller fails to pay any amount owed to Purchaser an and when due under
this Agreement or fails to pay any other Obligations as and when due;
(B) Any warranty or representation by Seller to Purchaser under this
Agreement is incorrect or untrue when made;
(C) Seller fails to perform or breaches any covenant or agreement set
forth in this Agreement or any other agreement between Purchaser and
Seller and such failure shall continue uncured for five business days
after written notice thereof to Seller by Purchaser;
(D) 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 Seller's assets;
(E) 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;
(F) Except for Permitted Liens, any involuntary lien, garnishment,
attachment or the like is issued against or attaches to the Purchased
Accounts or the other Collateral;
(G) [Reserved]; or
(H) A default or event of default shall occur under any agreement between
Seller and any creditor or Seller who has entered into a subordination
agreement with Purchaser and such default or event of default shall
continue uncured for the cure period, if any, permitted under such
agreement after written notice thereof to Seller.
8. Remedies Upon Default. Upon the Occurrence of an Event of Default,
Purchaser may, without notice, (A) without implying any obligation to by
Accounts, cease buying Accounts; (B) accelerate the payment of all
Obligations by requiring Seller to purchase all or any portion of the
Purchased Accounts then outstanding for cash in an amount equal to the
Advance made for each Purchased Account and all accrued Finance Fees,
Administrative Fees, attorneys' fees and other Obligations then
outstanding, which Obligations shall be due and payable in full without
demand; (C) 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 Commercial Code. Without limiting the generality of
the foregoing, Purchaser may (1) exercise all of the power of attorney
rights described in Section 4 with respect to all Collateral, and (2)
collect, dispose of, sell, lease, use, and realize upon all Purchased
Accounts and other Collateral in any commercially reasonable manner. Seller
and Purchaser 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 any sale may be held. All remedies set forth herein shall
be cumulative and none exclusive.
9. Accrual of Interest. If any amount owed by Seller hereunder is not paid
when is due, including any amounts due under Section 3.3, Chargeback
Amounts, professional fees and expenses under Section 10 and any other
Obligations, such amounts shall bear interest at a per annum rate equal to
the rate used to calculate the Finance Fees, annualized, until Payment in
good funds in the full of all such obligations.
10. Attorneys' Fees. Seller shall pay to Purchaser immediately upon demand, all
costs and expenses, including reasonable fees and expenses of attorneys and
other professionals, that Purchaser incurs in connection with any and all
of the following: (A) preparing, amending, supplementing, negotiating and
enforcing this Agreement, or any other agreement executed in connection
herewith; (B) perfecting, protecting or enforcing Purchaser's interest in
the Purchased Accounts and the other Collateral; (C) Collecting the
Purchased Accounts and the Obligations; (D) defending or in any way
addressing claims made or litigation initiated by or against Purchaser as a
result of Purchaser's relationship with Seller or any guarantor; and (E)
representing Purchaser in connection with any bankruptcy case or insolvency
proceeding involving Seller, any Purchased Account, any other Collateral or
Account Debtor. Any Attorneys' fees and expense may, at Purchaser's option.
be netted against the reserve as set forth in Section 3.3.
11. Term and Termination. The term of this Agreement shall be for one (1) year
from the dated hereof, and from year to year thereafter unless terminated
in writing by Purchaser or Seller. Seller and Purchaser shall each have the
right to terminated this Agreement at any time. Notwithstanding the
foregoing, any termination of this Agreement shall not affect Purchaser's
security interest in the Collateral and Purchaser's ownership of the
Purchased Accounts, and this Agreement shall continue to be effective, and
Purchaser'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.
12. Miscellaneous.
12.1 Severability. In the event that any provision of this Agreement is held to
be invalid or unenforceable, this Agreement will be construed as no
containing such provision and the remainder of the Agreement shall remain
in force and effect.
12.2 Choice of Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California, without giving effect
to principles of conflicts of law.
12.3 Notices. All notices shall be given to Purchaser and Seller at the
addresses set forth in 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 prepaid; (B) one
(1) calendar day after deposit with an overnight mail or messenger service;
or (C) on the same date of transmission if sent by delivery, telecopy,
telefax, or telex.
12.4 Titles and Section Headings. The titles and section headings used herein
are for convenience only and shall not be used in interpreting this
Agreement.
13. Definitions. All terms used herein which are defined in the California
Uniform Commercial Code shall have the meaning given therein unless
otherwise defined in this Agreement. The term "including" is not limiting
or exclusive. When used herein, the following terms shall have the
following meanings.
13.1 "Account" shall mean all accounts, accounts receivable, chattel paper,
contract rights, documents, general intangibles, instruments, letters of
credit, banker's acceptances, and other rights to payment, and proceeds
thereof.
13.2 "Account Balance" shall mean, on any given day, the gross face amount of
all Purchased Accounts unpaid on that day.
13.3 "Account Debtor" shall have the meaning set forth in the California
Commercial Code and shall include any person liable on any Purchased
Account, including any guarantor of the Purchased Account and any issuer of
a letter of credit or banker's acceptance.
13.4 "Adjustment(s)" shall have the meaning set in Section 3.1.
13.5 "Administrative Fee" shall have the meaning as set forth in Section 2.2.
13.6 "Advance" shall have the meaning set forth in Section 1.3.
13.7 "Chargeback Amount" shall have the meaning set forth in Section 3.2.
13.8 "Collateral" shall have the meaning set forth in Section 6.
13.9 "Customer Payments" shall have the meaning set forth in Section 2.4.
13.10 "Event of Default" shall have the meaning set forth in Section 7.
13.11 "Finance Fees" shall have the meaning set forth in Section 2.1.
13.12 "Schedule of Accounts" shall have the meaning set forth in Section 1.1.
13.13 "Obligations" shall mean all advances, obligations, indebtedness and
duties owing by Seller to Purchaser of any kind or nature, present or
future arising under or in connection with this Agreement entered into
between Purchaser and Seller, weather direct or indirect, including all
Advances, Finance Fees, Administrative Fees, Chargeback Amounts, attorneys'
fees and expenses.
13.14 "Permitted Liens" shall mean: (1) liens for taxes, fees, assessments or
other government charges or levies, either not delinquent or being
contested in good faith and for which Seller maintains adequate reserves on
its books, if they have no priority over any of Purchaser's security
interests; (2) materialmen's, mechanics', artisan's, workmen's,
repairmen's, employees', or other like liens arising in the ordinary course
of business, which either are not delinquent or are being contested in good
faith by Seller; (3) liens that are not prior to the Purchaser's lien which
constitute rights of set-off of a customary nature or banker's liens with
respect to amount on deposit, whether arising by operation of law or by
contract, in connection with arrangements entered in to with banks in the
ordinary course of business; (4) deposits under worker's compensation,
unemployment insurance, social security and other similar laws, or to
secure the performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure indemnity, performance or other
similar bonds for the performance of bids, tenders or contracts (other than
for the repayment of borrowed money) or to secure statutory obligations
(other than liens arising under ERISA or environmental liens) or surety or
appeal bonds, or to secure indemnity, performance or other similar bonds in
the ordinary course of business; (5) purchase money liens (a) on Collateral
acquired or held by Seller incurred for financing the acquisition of the
Collateral or (b) existing on Collateral when acquired; (6) liens on
insurance proceeds in favor of insurance companies granted solely as
security for refinanced premiums; (7) liens in favor of Purchaser; (8)
liens arising from judgments or attachments that are not prior to the lien
of Purchaser and that are removed within thirty (30) days after such
judgment or attachment and (9) liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by liens of
the type described in clauses 1 through 8 above, provided that any
extension, renewal or replacement lien shall be limited to the property
encumbered by the existing lien and the principal amount of the
indebtedness being extended, renewed or refinanced (as may have been
reduced by any payment thereon) does not increase.
13.15 "Purchased Accounts" shall mean all Accounts identified on any Schedule of
Accounts delivered by Seller to Purchaser with Purchaser elects to purchase
and for which Purchaser makes an Advance, and all monies due or to become
due thereunder.
13.16 "Remittance" shall have the meaning set forth in Section 3.3.
13.17 "Reserve" shall have the meaning set forth in Section 1.3.
13.18 "Settlement Date" shall mean the last calendar day of each Settlement
Period.
13.19 "Settlement Period" shall mean each calendar month of each year.
IN WITNESS WHEREOF, Seller and Purchaser have executed this Agreement on the day
and year written above.
"PURCHASER" "SELLER"
GENUS, INC.
PACIFIC BUSINESS FUNDING, By /s/ Xxxxxxx X. X. Xxxxx
a division of Cupertino National ------------------------
Bank
By: /s/ Xxxxxxx Xxxxxxxx Title Chief Executive Officer
-------------------- -----------------------
Title: President Address of Seller, Chief Executive
--------- Office and Location of Collateral
Street: 0000 Xxxxxxxx Xxxxx
-------------------
Other Locations of Collateral, City: Sunnyvale
if any, in Addition to Above: State: California
__________________________________ Zip Code: 94089
__________________________________ Telephone No.: (000)000-0000
__________________________________ Facsimile No.: (000)000-0000
