SILICON VALLEY BANK
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, Xx. 00000
(000) 000-0000 - Fax (000) 000-0000
ACCOUNTS RECEIVABLE PURCHASE AGREEMENT
This Accounts Receivable Purchase Agreement (the "Agreement") Is
made on this TWENTIETH day of MAY 1999, by and between Silicon Valley Bank
("Buyer") having a place of business at the address specified above and
AGRITOPE, INC., a DELAWARE corporation, ("Seller") having its principal place of
business and chief executive office at 00000 XX Xxxxx Xxxxxx Xxxxx Xxxx,
Xxxxxxxx, Xxxxxx 00000.
1. DEFINITIONS. When used herein, the following terms shall have the following
meanings.
1.1. "Account Balance" shall mean, on any given day, the gross
amount of all Purchased Receivables unpaid on that day.
1.2. "Account Debtor" shall have the meaning set forth In the
California Uniform Commercial Code and shall Include any person liable on any
Purchased Receivable, Including without limitation, any guarantor of the
Purchased Receivable and any Issuer of a letter of credit or banker's
acceptance.
1.3. "Adjustments" shall mean all discounts, allowances, returns,
disputes, counterclaims, offsets, defenses, rights of recoupment, rights of
return, warranty claims, or short payments, asserted by or on behalf of any
Account Debtor with respect to any Purchased Receivable.
1.4. "Administrative Fee" shall have the meaning as set forth In
Section 3.3 hereof.
1.5. "Advance" shall have the meaning set forth In Section 2.2
hereof.
1.6. "Collateral" shall have the meaning set forth In Section 8
hereof.
1.7. "Collections" shall mean all good funds received by Buyer from
or on behalf of an Account Debtor with respect to Purchased Receivables.
1.8. "Compliance Certificate" shall mean a certificate, In a form
provided by Buyer to Seller, which contains the certification of the chief
financial officer of Seller that, among other things, the representations and
warranties set forth in this Agreement are true and correct as of the date such
certificate is delivered.
1.9. "Event of Default" shall have the meaning set forth in Section
9 hereof.
1.10. "Finance Charges" shall have the meaning set forth In Section
3.2 hereof.
1.11. "Invoice Transmittal" shall mean a writing signed by an
authorized representative of Seller which accurately identifies the Receivables
which Buyer, at its election, may purchase, and Includes for each such
receivable the correct amount owed by the Account Debtor, the name and address
of the Account Debtor, the invoice number, the invoice date and the account
code.
1.12. "Obligations" shall mean all advances, financial
accommodations, liabilities, obligations, covenants and duties owing, arising,
due or payable by Seller to Buyer of any kind or nature, present or future,
arising under or in connection with this Agreement or under any other document,
Instrument or agreement, whether or not evidenced by any note, guarantee or
other instrument, whether arising on account or by overdraft, whether direct or
indirect (including those acquired by assignment) absolute or contingent,
primary or secondary, due or to become due, now owing or hereafter arising, and
however acquired; including, without limitation, all Advances, Finance Charges,
Administrative Fees, interest, Repurchase Amounts, fees, expenses, professional
fees and attorneys' fees and any other sums chargeable to Seller hereunder or
otherwise.
1.13. "Purchased Receivables" shall mean all those accounts,
receivables, chattel paper, Instruments, contract rights, documents, general
Intangibles, letters of credit, drafts, bankers acceptances, and rights to
payment, and all proceeds thereof (all of the foregoing being referred to as
'receivables'), arising out of the invoices and other agreements identified on
or delivered with any Invoice Transmittal delivered by Seller to Buyer which
Buyer elects to purchase and for which Buyer makes an Advance.
1.14. "Refund" shall have the meaning set forth in Section 3.7
hereof.
1.15. "Reserve" shall have the meaning set forth in Section 2.4
hereof.
1.16. "Repurchase Amount" shall have the meaning set forth in
Section 4.2 hereof.
1.17. "Reconciliation Date" shall mean the last calendar day of each
Reconciliation Period.
1.18. "Reconciliation Period" shall mean each calendar month of
every year.
2. PURCHASE AND SALE OF RECEIVABLES.
2.1. OFFER TO SELL RECEIVABLES. During the term hereof, and provided
that there does not then exist any Event of Default or any event that with
notice, lapse of time or otherwise would constitute an Event of Default, Seller
may request that Buyer purchase receivables and Buyer may, in its sole
discretion, elect to purchase receivables. Seller shall deliver to Buyer an
Invoice Transmittal with respect to any receivable for which a request for
purchase is made. An authorized representative of Seller shall sign each Invoice
Transmittal delivered to Buyer. Buyer shall be entitled to rely on all the
Information provided by Seller to Buyer on or with the Invoice Transmittal and
to rely on the signature on any Invoice Transmittal as an authorized signature
of Seller.
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
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(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 Buyer's payment
of an Advance, and for and in consideration therefor and in consideration of the
covenants of this Agreement, Seller hereby absolutely sells, transfers and
assigns to Buyer, all of Seller's right, title and interest In and to each
Purchased Receivable and all monies due or which may become due on or with
respect to such Purchased Receivable. Buyer shall be the absolute owner of each
Purchased Receivable. Buyer shall have, with respect to any goods related to the
Purchased Receivable, all the rights and remedies of an unpaid seller under the
California Uniform Commercial Code and other applicable law, including the
rights of replevin, claim and delivery, reclamation and stoppage In transit.
2.4. ESTABLISHMENT OF A RESERVE. Upon the purchase by Buyer of each
Purchased Receivable, Buyer shall establish a reserve. The reserve shall be the
amount by which the face amount of the Purchased Receivable exceeds the Advance
on that Purchased Receivable (the "Reserve"); provided, the Reserve with respect
to all Purchased Receivables outstanding at any one time shall be an amount not
less than 20(%) percent of the Account Balance at that time and may be set at a
higher percentage at Buyer's sole discretion. The reserve shall be a book
balance maintained on the records of Buyer and shall not be a segregated fund.
3. COLLECTIONS, CHARGES AND REMITTANCES.
3.1. COLLECTIONS. Upon receipt by Buyer of Collections, Buyer shall
promptly credit such Collections to Seller's Account Balance on a daily basis;
provided, that if Seller is in default under this Agreement, Buyer shall apply
all Collections to Sellers Obligations hereunder in such order and manner as
Buyer may determine. If an item of collection is not honored or Buyer does not
receive good funds for any reason, the amount shall be included in the Account
Balance as if the Collections had not been received and Finance Charges under
Section 3.2 shall accrue thereon.
3.2. FINANCE CHARGES. On each Reconciliation Date Seller shall pay
to Buyer a finance charge in an amount equal to 2.00 (%) percent per month of
the average daily Account Balance outstanding during the applicable
Reconciliation Period (the "Finance Charges"). Buyer shall deduct the accrued
Finance Charges from the Reserve as set forth In Section 3.7 below.
3.3. ADMINISTRATIVE FEE. On each Reconciliation Date Seller shall
pay to Buyer an Administrative Fee equal to .65 (%) percent of the face amount
of each Purchased Receivable first purchased during that Reconciliation Period
(the "Administrative Fee"). Seller shall pay to Buyer an additional .50 (%)
percent Administrative Fee on Purchased Receivables whose Account Debtors are
Government Agencies. Buyer shall deduct the Administrative Fee from the Reserve
as set forth in Section 3.7 below.
3.4. FACILITY FEE. A fully earned, non-refundable facility fee of
$1,000.00 shall be due upon execution of this Agreement
3.5. PREPAYMENT FEE. A fully earned, non-refundable prepayment fee
of $5,000.00 shall be due upon voluntary or involuntary payment in full of
Seller's Obligations if the Obligations are paid in full within one year of the
date of this Agreement.
3.6. ACCOUNTING. Buyer shall prepare and send to Seller after the
close of business for each Reconciliation Period, an accounting of the
transactions for that Reconciliation Period, including the amount of all
Purchased Receivables, all Collections, adjustments, Finance Charges, and the
Administrative Fee. The accounting shall be deemed correct and conclusive unless
Seller makes written objection to Buyer within thirty (30) days after the Buyer
mails the accounting to Seller.
3.7. REFUND TO SELLER. Provided that there does not then exist an
Event of Default or any event or condition that with notice, lapse of time or
otherwise would constitute an Event of Default, Buyer shall refund to Seller by
check after the Reconciliation Date, the amount, if any, which Buyer owes to
Seller at the end of the Reconciliation Period according to the accounting
prepared by Buyer for that Reconciliation Period (the "Refund"). The Refund
shall be an amount equal to:
(A) (1) The Reserve as of the beginning of that
Reconciliation Period, PLUS
(2) the Reserve created for each Purchased Receivable
purchased during that Reconciliation Period, MINUS
(B) The total for that Reconciliation Period of:
(1) the Administrative Fee;
(2) Finance Charges;
(3) Adjustments;
(4) Repurchase Amounts, to the extent Buyer has agreed
to accept payment thereof by deduction from the Refund;
(5) the Reserve for the Account Balance as of the first
day of the following Reconciliation Period in the
minimum percentage set forth in Section 2.4 hereof; and
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(6) all amounts due, including professional fees and
expenses, as set forth In Section 12 for which oral or
written demand has been made by Buyer to Seller during that Reconciliation
Period to the extent Buyer has agreed to accept payment thereof by deduction
from the Refund. In the event the formula set forth in this Section 3.7 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 3.7 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 vent the Obligations
exceed the amount of Purchased Receivables and Collateral, Seller shall be
liable for any deficiency.
4.2. SELLER'S AGREEMENT TO REPURCHASE. Seller agrees to pay to Buyer
on demand, the full face amount, or any unpaid portion, of any Purchased
Receivable:
(A) which remains unpaid ninety (90) calendar days after the
Invoice date; or
(B) which is owed by any Account Debtor who has filed, or
has had filed against it, any bankruptcy case, assignment
for the benefit of creditors, receivership, or insolvency
proceeding or who has become insolvent (as defined in the
United States Bankruptcy Code) or who Is generally not
paying its debts as such debts become due; or
(C) with respect to which there has been any breach of
warranty or representation set forth in Section 6 hereof or
any breach of any covenant contained in this Agreement; or
(D) with respect to which the Account Debtor asserts any
discount, allowance, return, dispute, counterclaim, offset,
defense, right of recoupment, right of return, warranty
claim, or short payment;
together with all reasonable attorneys' and professional fees and expenses and
all court costs incurred by Buyer in collecting such Purchased Receivable and/or
enforcing its rights under, or collecting amounts owed by Seller in connection
with, this Agreement (collectively, the "Repurchase Amount").
4.3. SELLER'S PAYMENT OF THE REPURCHASE AMOUNT OR Other AMOUNTS Due
BUYER. When any Repurchase Amount or other amount owing to Buyer becomes due,
Buyer shall Inform Seller of the manner of payment which may be any one or more
of THE following IN Buyer's sole DISCRETION: (a) IN CASH LIYIIIIEDLATELY upon
DEMAND therefor; (b) by dellvety 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 3.7 hereof;
(d) by deduction from or offset against the Refund that would otherwise be due
and payable to Seller-, (e) by deduction from or offset against the amount that
otherwise would be forwarded to Seller In respect of any further Advances that
may be made by Buyer; or (o by any combination of the foregoing as Buyer may
from time to time choose.
4.4. SELLER'S AGREEMENT TO REPURCHASE ALL PURCHASED RECEIVABLES.
Upon and after the occurrence of an Event of Default, Seller shall, upon Buyers
demand (or, in the case of an Event of Default under Section 9(B), immediately
without notice or demand from Buyer) repurchase all the Purchased Receivables
then outstanding, or such portion thereof as Buyer may demand. Such demand may,
at Buyer's option, Include and Seller shall pay to Buyer Immediately upon
demand, cash In an amount equal to the Advance with respect to each Purchased
Receivable then outstanding together with all accrued Finance Charges,
Adjustments, Administrative Fees, attorney's and professional fees, court costs
and expenses as provided for herein, and any other Obligations. Upon receipt of
payment In full of the Obligations, Buyer shall Immediately Instruct Account
Debtors to pay Seller directly, and return to Seller any Refund due to Seller.
For the purpose of calculating any Refund due under this Section only, the
Reconciliation Date shall be deemed to be the date Buyer receives payment In
good funds of all the Obligations as provided in this Section 4.4.
5. POWER OF ATTORNEY. Seller does hereby irrevocably appoint Buyer
and its successors and assigns as Seller's true and lawful attorney in fact, and
hereby authorizes Buyer, regardless of whether there has been an Event of
Default, (a) to sell, assign, transfer, pledge, compromise, or discharge the
whole or any part of the Purchased Receivables; (b) to demand, collect, receive,
xxx, and give releases to any Account Debtor for the monies due or which may
become due upon or with respect to the Purchased Receivables and to compromise,
prosecute, or defend any action, claim, case or proceeding relating to the
Purchased Receivables, including the filing of a claim or the voting of such
claims In any bankruptcy case, all in Buyer's name or Sellers name, as Buyer may
choose; (c) to prepare, file and sign Seller's name on any notice, claim,
assignment, demand, draft, or notice of or satisfaction of lien or mechanics'
lien or similar document with respect to Purchased Receivables; (d) to notify
all Account Debtors with respect to the Purchased Receivables to pay Buyer
directly; (e) to receive, open, and dispose of all mail addressed to Seller for
the purpose of collecting the Purchased Receivables; (f) to endorse Seller's
name on any checks or other forms of payment on the Purchased Receivables; (g)
to execute on behalf of Seller any and all instruments, documents, financing
statements and the like to perfect Buyer's interests In the Purchased
Receivables and Collateral; and (h) to do all acts and things necessary or
expedient, in furtherance of any such purposes. If Buyer receives a check or
item which is payment for both a Purchased Receivable and another receivable,
the funds shall first be applied to the Purchased Receivable and, so long as
there does not exist an Event of Default or an event that with notice, lapse of
time or otherwise would constitute an Event of Default, the excess shall be
remitted to Seller. Upon the occurrence and continuation of an
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Event of Default, all of the power of attorney rights granted by Seller to Buyer
hereunder shall be applicable with respect to all Purchased Receivables and all
Collateral.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
6.1. RECEIVABLES' WARRANTIES, REPRESENTATIONS AND COVENANTS. To
induce Buyer to buy receivables and to render its services to Seller, and with
full knowledge that the truth and accuracy of the following are being relied
upon by the Buyer in determining whether to accept receivables as Purchased
Receivables, Seller represents, warrants, covenants and agrees, with respect to
each Invoice Transmittal delivered to Buyer and each receivable described
therein, that:
(A) Seller is the absolute owner of each receivable set
forth in the Invoice Transmittal and has full legal right to
sell, transfer and assign such receivables;
(B) The correct amount of each receivable Is as set forth In
the Invoice Transmittal and is not In dispute;
(C) The payment of each receivable is not contingent upon
the fulfillment of any obligation or contract, past or
future and any and all obligations required of the Seller
have been fulfilled as of the date of the Invoice
Transmittal;
(D) Each receivable set forth on the Invoice Transmittal is
based on an actual sale and delivery of goods and/or
services actually rendered, is presently due and owing to
Seller, Is not past due or In default, has not been
previously sold, assigned, transferred, or pledged, and Is
free of any and all liens, security interests and
encumbrances other than liens, security Interests or
encumbrances In favor of Buyer or any other division or
affiliate of Silicon Valley Bank;
(E) There are no defenses, offsets, or counterclaims against
any of the receivables, and no agreement has been made under
which the Account Debtor may claim any deduction or
discount, except as otherwise stated in the Invoice
Transmittal;
(F) Each Purchased Receivable shall be the property of the
Buyer and shall be collected by Buyer, but if for any reason
it should be paid to Seller, Seller shall promptly notify
Buyer of such payment, shall hold any checks, drafts, or
monies so received in trust for the benefit of Buyer, and
shall promptly transfer and deliver the same to the Buyer;
(G) Buyer shall have the right of endorsement, and also the
right to require endorsement by Seller, on all payments
received in connection with each Purchased Receivable and
any proceeds of Collateral;
(H) Seller, and to Seller's best knowledge, each Account
Debtor set forth in the Invoice Transmittal, are and shall
remain solvent as that term is defined In the United States
Bankruptcy Code and the California Uniform Commercial Code,
and no such Account Debtor has filed or had filed against it
a voluntary or involuntary petition for relief under the
United States Bankruptcy Code;
(I) Each Account Debtor named on the Invoice Transmittal
will not object to the payment for, or the quality or the
quantity of the subject matter of, the receivable and is
liable for the amount set forth on the Invoice Transmittal;
(J) Each Account Debtor shall promptly be notified, after
acceptance by Buyer, that the Purchased Receivable has been
transferred to and is payable to Buyer, and Seller shall not
take or permit any action to countermand such notification;
and
(K) All receivables forwarded to and accepted by Buyer after
the date hereof, and thereby becoming Purchased Receivables,
shall comply with each and every one of the foregoing
representations, warranties, covenants and agreements
referred to above in this Section 6.1.
6.2. ADDITIONAL WARRANTIES, REPRESENTATIONS AND COVENANTS. In addition to the
foregoing warranties, representations and covenants, to induce Buyer to buy
receivables and to render its services to Seller, Seller hereby represents,
warrants, covenants and agrees that:
(A) Seller will not assign, transfer, sell, or grant, or
permit any lien or security interest in any Purchased
Receivables or Collateral to or in favor of any other party,
without Buyer's prior written consent;
(B) The Sellers name, form of organization, chief executive
office, and the place where the records concerning all
Purchased Receivables and Collateral are kept is set forth
at the beginning of this Agreement, Collateral is located
only at the location set forth in the beginning of this
Agreement, or, if located at any additional location, as set
forth on a schedule attached to this Agreement, and Seller
will give Buyer at least thirty (30) days prior written
notice if such name, organization, chief executive office or
other locations of Collateral or records concerning
Purchased Receivables or Collateral is changed or added and
shall execute any documents necessary to perfect Buyer's
interest in the Purchased Receivables and the Collateral;
(C) Seller shall (i) pay all of Its normal gross payroll for
employees, and all federal and state taxes, as and when due,
including without limitation all payroll and withholding
taxes and state sales taxes; (ii) deliver at any time and
from time to time at Buyers request, evidence satisfactory
to Buyer that all such amounts have been paid to the proper
taxing authorities; and (iii) If requested by Buyer, pay its
payroll and related taxes through a bank or an Independent
payroll s6rvice acceptable to Buyer.
(D) Seller has not, as of the xxxx Xxxxxx delivers to Buyer
an Invoice Transmittal, or as of the xxxx Xxxxxx accepts any
Advance from Buyer, filed a voluntary petition for relief
under the United States Bankruptcy Code or had filed against
it an involuntary petition for relief;
(E) If Seller owns, holds or has any interest in, any
copyrights (whether registered, or unregistered), patents or
trademarks, and licenses of any of the foregoing, such
interest has been disclosed to Buyer and is specifically
listed and identified on a schedule to this Agreement, and
Seller shall immediately notify Buyer if Seller hereafter
obtains any Interest In any additional copyrights, patents,
trademarks or licenses that are significant in value or are
material to the conduct of its business; and
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(F) Seller shall provide Buyer with a Compliance Certificate
(i) on a quarterly basis to be received by Buyer no later
than the fifth calendar day following each calendar quarter,
and; (ii) on a more frequent or other basis if and as
requested by Buyer.
7. ADJUSTMENTS. In the event of a breach of any of the
representations, warranties, or covenants set forth in Section 6.1, or In the
event any Adjustment or dispute is asserted by any Account Debtor, Seller shall
promptly advise Buyer and shall, subject to the Buyer's approval, resolve such
disputes and advise Buyer of any adjustments. Unless the disputed Purchased
Receivable is repurchased by Seller and the full Repurchase Amount is paid,
Buyer shall remain the absolute owner of any Purchased Receivable which is
subject to Adjustment or repurchase under Section 4.2 hereof, and any rejected,
returned, or recovered personal property, with the right to take possession
thereof at any time. If such possession is not taken by Buyer, Seller is to
resell it for Buyer's account at Seller's expense with the proceeds made payable
to Buyer. While Seller retains possession of said returned goods, Seller shall
segregate said goods and xxxx them "property of Silicon Valley Bank."
8. SECURITY INTEREST. To secure the prompt payment and performance
to Buyer of all of the Obligations, Seller hereby grants to Buyer a continuing
lien upon and security interest in all of Settees now existing or hereafter
arising rights and interest in the following, whether now owned or existing or
hereafter created, acquired, or arising, and wherever located (collectively, the
"Collateral"):
(A) All accounts, receivables, contract rights, chattel
paper, instruments, documents, letters of credit, bankers
acceptances, drafts, checks, cash, securities, and general
Intangibles (including, without limitation, all claims,
causes of action, deposit accounts, guaranties, rights in
and claims under insurance policies (including rights to
premium refunds), rights to tax refunds, copyrights,
patents, trademarks, rights in and under license agreements,
and all other intellectual property);
(B) All inventory, Including Seller's rights to any returned
or rejected goods, with respect to which Buyer shall have
all the rights of any unpaid seller, including the rights of
replevin, claim and delivery, reclamation, and stoppage in
transit;
(C) All monies, refunds and other amounts due Seller,
including, without limitation, amounts due Seller under this
Agreement (including Seller's right of offset and
recoupment);
(D) All equipment, machinery, furniture, furnishings,
fixtures, tools, supplies and motor vehicles;
(E) All farm products, crops, timber, minerals and the like
(including oil and gas);
(F) All accessions to, substitutions for, and replacements
of, all of the foregoing;
(G) All books and records pertaining to all of the
foregoing; and
(H) All proceeds of the foregoing, whether due to voluntary
or involuntary disposition, including insurance proceeds.
Seller is not authorized to sell, assign, transfer or
otherwise convey any Collateral without Buyer's prior written consent, except
for the sale of finished Inventory In the Sellers usual course of business.
Seller agrees to sign UCC financing statements, in a form acceptable to Buyer,
and any other Instruments and documents requested by Buyer to evidence, perfect,
or protect the Interests of Buyer In the Collateral. Seller agrees to deliver to
Buyer the originals of all instruments, chattel paper and documents evidencing
or related to Purchased Receivables and Collateral.
9. DEFAULT. The occurrence of any one or more of the following shall constitute
an Event of Default hereunder.
(A) Seller falls to pay any amount owed to Buyer as and when
due;
(B) There shall be commenced by or against Seller any
voluntary or Involuntary case under the United States
Bankruptcy Code, or any assignment for the benefit of
creditors, or appointment of a receiver or custodian for any
of its assets;
(C) Seller shall become insolvent in that its debts are
greater than the fair value of its assets, or Seller is
generally not paying its debts as they become due or is left
with unreasonably small capital;
(D) Any involuntary lien, garnishment, attachment or the
like is issued against or attaches to the Purchased
Receivables or any Collateral;
(E) Seller shall breach any covenant, agreement, warranty,
or representation set forth herein, and the same is not
cured to Buyers satisfaction within ten (10) days after
Buyer has given Seller oral or written notice thereof;
provided, that if such breach is incapable of being cured it
shall constitute an immediate default hereunder;
(F) Seller is not in compliance with, or otherwise is in
default under, any term of any document, instrument or
agreement evidencing a debt, obligation or liability of any
kind or character of Seller, now or hereafter existing, in
favor of Buyer or any division or affiliate of Silicon
Valley Bank, regardless of whether such debt, obligation or
liability is direct or Indirect, primary or secondary,
joint, several or joint and several, or fixed or contingent,
together with any and all renewals and extensions of such
debts, obligations and liabilities, or any part thereof;
(G) An event of default shall occur under any guaranty
executed by any guarantor of the Obligations of Seller to
Buyer under this Agreement, or any material provision of any
such guaranty shall for any reason cease to be valid or
enforceable or any such guaranty shall be repudiated or
terminated, Including by operation of law;
(H) A default or event of default shall occur under any
agreement between Seller and any creditor of Seller that has
entered into a subordination agreement with Buyer; or
(I) Any creditor that has entered into a subordination
agreement with Buyer shall breach any of the terms of or not
comply with such subordination agreement.
10. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default, (1)
without implying any obligation to buy receivables, Buyer may cease buying
receivables or extending any financial accommodations to Seller; (2) all or a
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portion of the Obligations shall be, at the option of and upon demand by Buyer,
or with respect to an Event of Default described in Section 9(B), automatically
and without notice or demand, due and payable in full; and (3) Buyer shall have
and may exercise all the rights and remedies under this Agreement and under
applicable law, including the rights and remedies of a secured party under the
California Uniform Commercial Code, all the power of attorney rights described
in Section 5 with respect to all Collateral, and the right to collect, dispose
of, sell, lease, use, and realize upon all Purchased Receivables and all
Collateral in any commercial reasonable manner. Seller and Buyer agree that any
notice of sale required to be given to Seller shall be deemed to be reasonable
if given five (5) days prior to the date on or after which the sale may be held.
In the event that the Obligations are accelerated hereunder, Seller shall
repurchase all of the Purchased Receivables as set forth in Section 4.4.
11. ACCRUAL OF INTEREST. IF any amount owed by Seller hereunder Is not paid when
due, Including, without limitation, amounts due under Section 3.7, 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 'Herewith, (d) enforcing any rights against
Seller or any guarantor, or any Account Debtor, (e) protecting or enforcing Its
Interest in the Purchased Receivables or the Collateral, (f) collecting the
Purchased Receivables and the Obligations, and (g) the representation of Buyer
in connection with any bankruptcy case or Insolvency proceeding Involving
Seller, any Purchased Receivable, the Collateral, any Account Debtor, or any
guarantor. Seller shall Indemnify and hold Buyer harmless from and against any
and all claims, actions, damages, costs, expenses, and liabilities of any nature
whatsoever arising in connection with any of the foregoing.
13. SEVERABILITY, WAIVER, AND CHOICE OF LAW. In the event that any provision of
this Agreement is deemed Invalid by reason of law, this Agreement will be
construed as not containing such provision and the remainder of the Agreement
shall remain in full force and effect. Buyer retains all of its rights, even if
it makes an Advance after an Event of Default. If Buyer waives an Event of
Default, it may enforce a later Event of 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 Buyers office in the State
of California and has been executed and accepted by Buyer in the State of
California. This Agreement shall be governed by and interpreted in accordance
with the internal laws of the State of California.
14. ACCOUNT COLLECTION SERVICES. Certain Account Debtors may require or prefer
that all of Seller's receivables be paid to the same address and/or party, or
Seller and Buyer may agree that all receivables with respect to certain Account
Debtors be paid to one party. In such event Buyer and Seller may agree that
Buyer shall collect all receivables whether owned by Seller or Buyer and
(provided that there does not then exist an Event of Default or event that with
notice, lapse or time or otherwise would constitute an Event of Default, and
subject to Buyer's rights In the Collateral) Buyer agrees to remit to Seller the
amount of the receivables collections it receives with respect to receivables
other than Purchased Receivables. It is understood and agreed by Seller that
this Section does not Impose any affirmative duty on Buyer to do any act other
than to turn over such amounts. All such receivables and collections are
Collateral and In the event of Seller's default hereunder, Buyer shall have no
duty to remit collections of Collateral and may apply such collections to the
obligations hereunder and Buyer shall have the rights of a secured party under
the California Uniform Commercial Code.
15. NOTICES. All notices shall be given to Buyer and Seller at the addresses or
faxes set forth on the first page of this Agreement and shall be deemed to have
been delivered and received: (a) if mailed, three (3) calendar days after
deposited in the United States mail, first class, postage pre-paid, (b) one (1)
calendar day after deposit with an overnight mail or messenger service; or (c)
on the same date of confirmed transmission if sent by hand delivery, telecopy,
telefax or telex.
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 Buyers 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,
6
until all transactions entered Into and Obligations Incurred hereunder or in
connection herewith have been completed and satisfied in full,
18. TITLES AND SECTION HEADINGS. The titles and section headings used herein are
for convenience only and shall not be used in interpreting this Agreement.
19. OTHER AGREEMENTS. The terms and provisions of this Agreement shall not
adversely affect the rights of Buyer or any other division or affiliate of
Silicon Valley Bank under any other document, instrument or agreement. The
terms of such other documents, instruments and agreements shall remain in
full force and effect notwithstanding the execution of this Agreement. In
the event of a conflict between any provision of this Agreement and any
provision of any other document, Instrument or agreement between Seller on
the one hand, and Buyer or any other division or affiliate of Silicon Valley
Bank on the other hand, Buyer shall determine In Its sole discretion which
provision shall apply. Seller acknowledges specifically that any security
agreements, liens and/or security interests currently securing payment of
any obligations of Seller owing to Buyer or any other division or affiliate
of Silicon Valley Bank also secure Seller's obligations under this
Agreement, and are valid and subsisting and are not adversely affected by
execution of this Agreement. Seller further acknowledges that (a) any
collateral under other outstanding security agreements or other documents
between Seller and Buyer or any other division or affiliate of Silicon
Valley Bank secures the obligations of Seller under this Agreement and (b) a
default by Seller under this Agreement constitutes a default under other
outstanding agreements between Seller and Buyer or any other division or
affiliate of Silicon Valley Bank.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the
day and year above written.
SELLER: AGRITOPE, INC.
By /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Title Executive Vice President
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BUYER: SILICON VALLEY BANK
By /s/ Xxx Xxxxxxxx
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Xxx Xxxxxxxx
Title Vice President
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