EXHIBIT 10 (E)
SILICON VALLEY FINANCIAL SERVICES
A Division of Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xx. 00000
(000)000-0000 - Fax (000)000-0000
FACTORING AGREEMENT
This Factoring Agreement (the "Agreement) is made on the SIXTH day of
SEPTEMBER, 1996, by and between Silicon Valley Financial Services (a division of
Silicon Valley Bank) ("Buyer") having a place of business at the address
specified above and OXIS INTERNATIONAL, INC., A DELAWARE corporation, (the
"Parent"), and its wholly owned subsidiary, OXIS ACQUISITION CORPORATION (the
"Subsidiary"). The Parent and the Subsidiary are jointly referred to herein as
the "Seller" having its principal place of business and chief executive office
at
Street Address: 0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxx: Xxxxxxxx
Xxxxxx: Multnomah
State: Oregon
Zip code: 97271
Fax: 00-0000000
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, defense, 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 the behalf of an Account Debtor with respect to Purchased
Receivables.
1.8. "Compliance Certificate" shall mean a certificate, in a form
provided by Buyer to Seller, which contains the certification of
the chief financial officer of Seller that, among other things,
the representations and warranties set forth in this Agreement are
true and correct as of the date such certificate is delivered.
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1.9. "Event of Default" shall have the meaning set forth in Section 9
hereof.
1.10. "Finance Charges" shall have the meaning set forth in Section 3.2
hereof.
1.11. "Invoice Transmittal" shall mean a writing signed by an authorized
representative of Seller which accurately identifies the
receivables which Buyer, at its election, may purchase, and
includes for each such receivable the correct amount owed by the
Account Debtor, the name and address of the Account Debtor, the
invoice number, the invoice date and the account code.
1.12. "Obligations" shall mean all advances, financial accommodations,
liabilities, obligations, covenants and duties owing, arising, due
or payable by Seller to Buyer of any kind or nature, present or
future, arising under or in connection with this Agreement or
under any other document, instrument or agreement, whether or not
evidenced by any note, guarantee or other instrument, whether
arising on account or by overdraft, whether direct or indirect
(including those acquired by assignment) absolute or contingent,
primary or secondary, due or to become due, now owing or hereafter
arising, and however acquired; including, without limitation, all
Advances, Finance Charges, Administrative Fees, interest,
Repurchase Amounts, fees, expenses, professional fees and
attorneys' fees and other sums chargeable to Seller hereunder or
otherwise.
1.13. "Purchased Receivable" shall mean all those accounts, receivables,
chattel paper, instruments, contract rights, documents, general
intangibles, letters of credit, drafts, bankers acceptances, and
rights to payment, and all proceeds thereof (all of the foregoing
being referred to as "receivables") arising out of the invoices
and other agreements identified on or delivered with any Invoice
Transmittal delivered by Seller to Buyer which Buyer elects to
purchase and for which Buyer makes an Advance.
1.14. "Refund" shall have the meaning set forth in Section 3.5 hereof.
1.15. "Reserve" shall have the meaning set forth in Sections 2.4 hereof.
1.16. "Repurchase Amount" shall have the meaning set forth in Section
4.2 hereof.
1.17. "Reconciliation Date" shall mean the last calendar day of each
Reconciliation Period.
1.18. "Reconciliation Period" shall mean each calendar month of the
year.
2. PURCHASE AND SALE OF RECEIVABLE.
2.1. OFFER TO SELL RECEIVABLES. During the term hereof, and provided
that there does not then exist any Event of Default or any event
that with notice, lapse of time or otherwise would constitute an
Event of Default, Seller may request that Buyer purchase
receivables and Buyer may, in its sole discretion, elect to
purchase receivables. Seller shall deliver to Buyer an Invoice
Transmittal with respect to any receivable for which a request for
purchase is made. An authorized representative of Seller shall
sign each Invoice Transmittal delivered to Buyer. Buyer shall be
entitled to rely on all the information provided by Seller to
Buyer on or with the Invoice Transmittal and to rely on the
signature on any Invoice Transmittal as an authorized signature of
Seller.
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2.2. ACCEPTANCE OF RECEIVABLES. Buyer shall have no obligation to
purchase any receivable listed on an Invoice Transmittal. Buyer
may exercise its sole discretion in approving the credit of each
Account Debtor before buying any receivable. Upon acceptance by
Buyer of all or any of the receivables described on any Invoice
Transmittal, Buyer shall pay to Seller 80 (%) percent of the face
amount of each receivable Buyer desires------to purchase. Such
payment shall be the "Advance" with respect to such receivable.
Buyer may, from time to time, in its sole discretion, change the
percentage of the Advance. Upon Buyer's acceptance of the
receivable and payment to Seller of the Advance, the receivable
shall become a "Purchased Receivable." It shall be a condition to
each advance that (i) all of the representations and warranties
set forth in Section 6 of this Agreement be true and correct on
and as of the date of the related Invoice Transmittal and on and
as of the date of such Advance as though made at and as of each
such date, and (ii) no Event of Default or any event or condition
that with notice, lapse of time or otherwise would constitute an
Event of Default shall have occurred and be continuing, or would
result from such Advance. Notwithstanding the foregoing, in no
event shall the aggregate amount of all Purchased Receivables
outstanding at any time exceed FIVE HUNDRED THOUSAND AND
NO/100**** Dollars ($500,000.00).
2.3. EFFECTIVENESS OF SALE TO BUYER. Effective upon Buyers' payment of
an Advance, and for and in consideration thereof and in
consideration of the covenants of this Agreement, Seller hereby
absolutely sells, transfers and assigns to Buyer, all of Seller's
right, title and interest in and to each Purchased Receivable and
all monies due or which may become due on or with respect to such
Purchased Receivable. Buyer shall be the absolute owner of each
Purchased Receivable. Buyer shall have, with respect to any goods
related to the Purchased Receivable, all the rights and remedies
of an unpaid seller under the California Uniform Commercial Code
and other applicable law, including the rights of replevin, claim
and delivery, reclamation and stoppage in transit.
2.4. ESTABLISHMENT OF A RESERVE. Upon the purchase by Buyer of each
Purchased Receivable, Buyer shall establish a reserve. The reserve
shall be the amount by which the face amount of the Purchased
Receivable exceeds the advance on that Purchased Receivable (the
"Reserve"); provided, the Reserve with respect to all Purchased
Receivables outstanding at any one time shall be an amount not
less than 20(%) percent of the Account Balance at that time and
may be set at a higher percentage at Buyer's sole discretion. The
reserve shall be a book balance maintained on the records of Buyer
and shall not be a segregated fund.
3. COLLECTIONS, CHARGES AND REMITTANCES.
3.1. COLLECTIONS. Upon receipt by Buyer of Collections, Buyer shall
promptly credit such Collections to Seller's Account Balance on a
daily basis; provided, that if Seller is in default under this
Agreement, Buyer shall apply all Collections to Seller's
Obligations hereunder in such order and manner as Buyer may
determine. If an item
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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 2.0(%) 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.
3.3. ADMINISTRATIVE FEE. On each Reconciliation Date Seller shall pay
to Buyer an Administrative Fee equal to 1.0 (%) 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, and Adjustments,
Finance Charges, and the Administrative Fee. The accounting shall
be deemed correct and conclusive unless Seller makes written
objection to Buyer within xxxxxx (30) days after the Buyer mails
the accounting to Seller.
3.5. REFUND TO SELLER. Provided that there does not exist an Event of
Default or any 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 the
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 Reconciliations 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 Section 12 for which oral or written demand has
been made by Buyer to Seller during that Reconciliation Period
to the extent Buyer has agreed to accept payment thereof by
deduction from the Refund.
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In the event the formula set forth in this Section 3.5 results in an amount
due to Buyer from Seller, Seller shall make such payment in the same manner
as set forth in Section 4.3 hereof for repurchases. If the formula set
forth in this Section 3.5 results in an amount due to Seller from Buyer,
Buyer shall make such payment by check, subject to Buyer's rights under
Section 4.3 and Buyer's rights of offset and recoupment.
4. RECOURSE AND REPURCHASE OBLIGATIONS.
4.1 RECOURSE. Buyer's acquisition of Purchased Receivables from Seller
shall be with full recourse against Seller. In the event the
Obligations exceed the amount of Purchased Receivables and
collateral, Seller shall be liable for any deficiency.
4.2 SELLER'S AGREEMENT TO REPURCHASE. Seller agrees to pay to Buyer
on demand, the full face amount, or any unpaid portion, of any
Purchased
Receivable:
(A) which remains unpaid ninety (90) calendar days after the
invoice date; or
(B) which is owed by any Account Debtor who has filed, or has had
filed against it, any bankruptcy case, assignment for the
benefit of creditors, receivership, or insolvency proceeding
or who is generally not paying its debts as such debts become
due; or
(C) with respect to which there has been any breach of warranty of
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 owned 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 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 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
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pay to Buyer Immediately upon demand, cash in an amount equal to
the Advance with respect to each Purchased Receivable then
outstanding together will all accrued Finance Charges,
Adjustments, Administrative Fees, attorney's and professional
fees, court costs and expenses as provided for herein, and any
other Obligations. Upon receipt of payment in full of the
Obligations, Buyers 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 as 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 in 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 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 check 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 interest 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
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:
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(A) Seller is the absolute owner of each receivable set forth in
the Invoice Transmittal and legal rights to sell, transfer and
assign such receivables;
(B) The correct amount of each receivables 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 the Seller, Seller shall promptly notify
Buyer of such payment, shall hold 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 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, representation and covenants, to
induce Buyer to buy
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receivables and to render its services to Seller, hereby Seller
represents, warrants, covenants and agrees that:
(A) Seller will not assign, transfer, sell, or grant, or permit
any lien or security interest any Purchased Receivables or
Collateral to or 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 records concerning all Purchased
Receivables and Collateral are kept is set forth at the
beginning of this Agreement, Collateral is located only at the
location set forth in the beginning of this Agreement, or, if
located at any additional location, as set forth on a schedule
attached to this Agreement, and Seller will give Buyer at
least thirty (30) days prior written notice if such name,
organization, chief executive office or other locations of
Collateral or records concerning Purchased Receivables or
Collateral is changed or added and shall execute any documents
necessary to perfect Buyer's interest in the Purchased
Receivables and the Collateral;
(C) Seller shall(i) pay all of its normal gross payroll for
employees, and all federal and state taxes, as and when due,
including without limitation all payroll and withholding taxes
and state sales taxes; (ii) deliver at any time and from time
to time at Buyer's request, evidence satisfactory to Buyer
that all such amounts have been paid to the proper taxing
authorities: and; (iii) if requested by Buyer, pay its payroll
and related taxes through the bank or any independent payroll
service acceptable 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), and licenses of any of
the foregoing, such interest has been disclosed to Buyer and
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,
or licenses that are significant in value or are material it
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
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repurchased 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 the 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 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, rights in and
under license agreements and all other intellectual property
excluding patents and trademarks);
(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 repelvin,
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, furnishing, 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 here under.
(A) Seller fails to pay any amount owed to Buyer as and when due;
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(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;
(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 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 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.
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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 proceedings
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 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.
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14. ACCOUNT COLLECTION SERVICES. Certain Account Debtors may require or prefer
that all of Seller's receivables be paid to the same address and/or party,
or Seller and Buyer may agree that all receivables with respect to certain
Account Debtors be paid to one party. In such event Buyer and Seller may
agree that Buyer shall collect all receivables whether owned by Seller or
Buyer and (provided that there does not then exist an Event of Default or
event that with notice, lapse or time or otherwise would constitute an
Event of Default, and subject to Buyer's rights in the Collateral) Buyer
agrees to remit to Seller the amount of the receivables collections it
receives with respect to receivables other than Purchased Receivables. It
is understood and agreed by Seller that this Section does not impose any
affirmative duty on Buyer to do any act other than to turn over such
amounts. All such receivables and collections are Collateral and in the
event of Seller's default hereunder, Buyer shall have no duty to remit
collections of Collateral and may apply such collections to the obligations
hereunder and Buyer shall have the rights of a secured party under the
California Uniform Commercial Code.
15. NOTICES. All notices shall be given to Buyer and Seller at the addresses or
faxes set forth on the first page of this Agreement and shall be deemed to
have been delivered and received: (a) if mailed, three(3) calendar days
after deposited in the United Stated mail, first class, postage pre-paid,
(b) one (1) calendar day after deposit with an overnight mail or messenger
service; or (c) on the same date of confirmed transmission if sent by hand
delivery, telecopy, telefax or telex.
16. JURY TRIAL. SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT THE FOREGOING
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT; AND (c) REPRESENT AND WARRANT THAT IT HAS REVIEWED THIS WAIVER,
HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS LEGAL
COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.
17. TERM AND TERMINATION. The term of this Agreement shall be for one (1) year
from the date hereof, and from year to year thereafter unless terminated in
writing by Buyer or Seller. Seller and Buyer shall each have the right to
terminate this Agreement at any time. Notwithstanding the foregoing, any
termination of this Agreement shall not affect Buyer's security interest in
the Collateral and Buyer's ownership of the Purchased Receivables and this
Agreement shall continue to be effective and Buyer's rights and remedies
hereunder shall survive such termination, until all transactions entered
into and Obligations incurred hereunder or in connection herewith have been
completed and satisfied in full.
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18. TITLES AND SECTION HEADINGS. The titles and section headings used herein
are for convenience only and shall not be used in interpreting this
Agreement.
19. OTHER AGREEMENTS. The terms and provision 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 Valey
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 Agreement,
and are valid and subsisting and are not adversely affected by execution of
this Agreement. Seller further acknowledges that (a) any collateral under
other outstanding security agreements or other documents between Seller and
Buyer or any other division or affiliate of Silicon Valley Bank secures the
obligations of Seller under this Agreement and (b) a default by Seller
under this Agreement constitutes a default under other outstanding
agreements between Seller and Buyer or any other division or affiliate of
Silicon Valley Bank.
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IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the day and
year above written.
SELLER: OXIS INTERNATIONAL, INC. SELLER: OXIS ACQUISITION CORPORATION
By s/Xxx X. Xxxxxxx By s/Xxx X. Xxxxxxx
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Title C.F.O. and Secretary Title C.F.O.
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BUYER: SILICON VALLEY FINANCIAL SERVICES
A division of Silicon Valley Bank
By
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Title
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