NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT
Exhibit
10.14
This
NON-RECOURSE
RECEIVABLES PURCHASE AGREEMENT (the
“Agreement”), dated as of September 23, 2005, is between SILICON
VALLEY BANK
(“Buyer”) having a place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx 00000 and
EMCORE CORPORATION (“Seller”),
a New Jersey corporation, with its chief executive office at 000 Xxxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000.
1 Definitions.
When
used
herein, the following terms have the following meanings.
1.1 “Account
Debtor”
has
the
meaning set forth in the Massachusetts 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.
1.2 “Adjustments”
means
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 other than by reason of an Insolvency Event.
1.3 “Administrative
Fee”
means
for any Purchase the percentage of the Total Purchased Receivables Amount set
forth in the Schedule for such Purchase.
1.4 “Business
Day”
means
any day other than a Saturday, Sunday, or other day on which banks in California
or Massachusetts are required or authorized by law to close.
1.5 “Discount
Rate”
means
for any Purchase the “Discount Rate” set forth in the Schedule for such
Purchase.
1.6 “Due
Date”
means
for any Purchase the “Due Date” set forth in the Schedule for such
Purchase.
1.7 “Event
of Default”
has
the
meaning set forth in Section
10
hereof.
1.8 “Insolvency
Event”
means,
with respect to any Account Debtor, (a) the commencement of a case, action
or
proceeding with respect to such Account Debtor before any court or other
governmental authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors, (b)
such Account Debtor is generally not paying its debts when due, (c) the
financial inability to make payment on a Purchased Receivable, or (d) the making
or commencement of any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other similar arrangement
in
respect of the creditors generally or any substantial portion of the creditors
of such Account Debtor.
1.9 “Invoice
Amount”
means
for any Purchase, the “Invoice Amount” set forth in the Schedule for such
Purchase.
1.10 “Late
Payment Settlement Fee”
has
the
meaning set forth in Section 2.2.
1.11 “Open
Amount”
means
the portion of any Purchased Receivable which has been pre-paid to the
Seller.
1.12 “Payment
in Full”
means
the receipt by Buyer of one or more payments in respect of a Purchased
Receivable equal to the Purchased Receivable Amount.
1.13 “Prime
Rate”
means
per annum rate of interest from time to time announced and made effective by
Buyer as its Prime Rate (which rate may or may not be the lowest rate available
from Buyer at any given time).
1.14 “Purchase”
means
the purchase by Buyer from Seller of one or more Purchased Receivables on a
Purchase Date as listed in the Schedule applicable to such
Purchase.
1.15 “Purchase
Date”
means
for any Purchase the date set forth as the “Purchase Date” in the Schedule for
such Purchase.
1.16 “Purchase
Price”
means
for any Purchase the “Purchase Price” set forth on the Schedule for such
Purchase.
1.17 “Purchased
Receivable”
means
for any Purchase a Receivable identified on the Schedule for such
Purchase.
1.18 “Purchased
Receivable Amount”
means
for any Purchased Receivable, the “Invoice Amount” set forth with respect to
such Purchased Receivable on the applicable Schedule minus the Open
Amount.
1.19 “Receivable”
means
an account, receivable, chattel paper, instrument, contract right, documents,
general intangible, letter of credit, draft, bankers acceptances, and other
right to payment, and all proceeds thereof.
1.20 “Related
Property”
has
the
meaning as set forth in Section
9
hereof.
1.21 “Repurchase
Amount”
has
the
meaning set forth in Section
4.2
hereof.
1.22 “Schedule”
means
for each Purchase a schedule executed by the parties in the form of Exhibit
A
hereto
identifying each Purchased Receivable subject to such Purchase and setting
forth
financial and other details relating to such Purchase, all as contemplated
by
Exhibit
A.
1.23 “Settlement
Date”
has
the
meaning set forth in Section
3.2
hereof.
1.24 “Total
Purchased Receivables Amount”
means
for any Purchase the total of the Purchased Receivable Amounts for all Purchased
Receivables subject to such Purchase as set forth on the applicable
Schedule.
2 Purchase
and Sale of Receivables.
2.1 Sale
and
Purchase. Subject to the terms and conditions of this Agreement, with respect
to
each Purchase, effective on each applicable Purchase Date, Seller agrees to
sell
to Buyer and Buyer agrees to buy from Seller all right, title, and interest
(but
none of the obligations with respect to) of the Seller to the payment of all
sums owing or to be owing from the Account Debtors under each Purchased
Receivable to the extent of the Purchased Receivable Amount for such Purchased
Receivable.
Each
purchase and sale hereunder shall be in the sole discretion of Buyer and Seller.
In any event, Buyer will not (i) purchase any Receivables in excess of an
aggregate outstanding amount of Twenty Million Dollars ($20,000,000.00), or
(ii)
purchase any Receivables under this Agreement after December 31, 2006, unless
the term of this Agreement has been extended by mutual written agreement of
the
parties. The purchase of each Purchased Receivable may be evidenced by an
assignment or xxxx of sale in a form acceptable to Buyer.
2.2 Purchase
Price and Related Matters.
With
respect to each Purchase:
(a) Payment
of Purchase Price. On
the
Purchase Date, the Purchase Price, less the Administrative Fee and legal fees
and expenses of counsel related thereto, shall be paid by Buyer to
Seller.
(b) Late
Payment Settlement Fee.
In the
event that Payment in Full of any Purchased Receivable is not received on or
before the Due Date, Seller agrees to pay to Buyer an additional amount on
any
unpaid amount, calculated at the Discount Rate, through the earlier to occur
of
(i) such date that Buyer receives Payment in Full, and (ii) an additional ninety
(90) days past the Due Date (“Late Payment Settlement Fee”) (subject to Section
4.2 (Seller's Agreement to Repurchase) herein). In the event that such Purchased
Receivable is uncollectible (due to an Account Debtor Insolvency Event), then
the Late Payment Settlement Fee period shall be the lesser of forty-five (45)
days, and the date on which such Purchased Receivable becomes uncollectible
due
to such Insolvency Event.
2.3 Facility
Fee.
A fully
earned, non-refundable facility fee of Seventy Thousand Dollars ($70,000.00)
is
earned by Buyer upon execution of this Agreement and is payable from Seller
as
follows: (i) Forty Thousand Dollars ($40,000.00)on the date hereof, and (ii)
Thirty Thousand Dollars ($30,000.00) on the earlier to occur of (a) the
termination of this Agreement by Seller, or (b) December 30, 2005. In addition,
Seller shall pay to Buyer a facility fee of Seventy Thousand Dollars
($70,000.00) on December 30th
of each
year after December 30, 2005, provided that the term has been extended by mutual
written agreement of the parties.
2.4 Nature
of Transaction.
It is
the intent of the parties hereto that each purchase and sale of Receivables
hereunder is and shall be a true sale of such Receivables for all purposes
(including, without limitation, accounting and tax treatment) and not a loan
arrangement. Each such sale shall be, subject to the terms hereof, absolute
and
irrevocable, providing Buyer with the full risks and benefits of ownership
of
the Purchased Receivables (such that the Purchased Receivables would not be
property of the Seller’s estate in the event of the Seller’s bankruptcy). The
parties agree that appropriate UCC financing statements have been or shall
promptly be filed to reflect that Seller is the seller and Buyer is the
purchaser of Receivables hereunder.
2.5 Good
Faith Deposit.
Seller
has paid to Buyer a good faith deposit of Fifteen Thousand Dollars ($15,000.00)
(the “Good Faith Deposit”) to initiate the Buyer’s due diligence review process,
which Good Faith Deposit shall be applied to the facility fee and/or other
expenses (including attorneys’ fees) of the Buyer and closing
costs;
3 Collections,
Charges and Remittances.
3.1 Application
of Payments.
All
payments in respect of any Purchased Receivable, whether received from an
Account Debtor or any other source and whether received by Seller or Buyer,
shall be the property of Buyer and Seller shall have no ownership interest
therein.
3.2 Collection
by Seller.
In
order to facilitate the collection of the Purchased Receivables in the ordinary
course of business, Seller agrees to act as Buyer’s agent for collection of the
Purchased Receivables. Accordingly, Buyer hereby appoints the Seller its
attorney-in-fact to ask for, demand, take, collect, xxx for and receive all
payments made in respect of the Purchased Receivables and to enforce all rights
and remedies thereunder and designates Seller as Buyer’s assignee for
collection; provided
that
such appointment of Seller as such attorney-in-fact or assignee for collection
may be revoked by Buyer at any time following an Event of Default (and any
applicable cure period) or the failure of a Purchased Receivable to be paid
on
the Due Date. Seller, as such attorney-in-fact, shall use due diligence and
commercially reasonable lawful efforts in accordance with its usual policies
and
practices to collect all amounts owed by the Account Debtors on each Purchased
Receivable when the same become due. In the enforcement or the collection of
Purchased Receivables, Seller shall commence any legal proceedings only in
its
own name as an assignee for collection or on behalf of Buyer or, with Buyer’s
prior written consent, in Buyer’s name. Seller shall have no obligation to
commence any such legal proceedings unless Buyer has agreed to assume the legal
fees and other expenses to be incurred in such proceedings. In no event shall
Seller take any action which would make Buyer a party to any litigation or
arbitration proceeding without Buyer’s prior written consent. Until Buyer has
received Payment in Full as to any Purchase, Seller shall (i) hold in trust
for
Buyer and turn over to Buyer forthwith upon receipt all payments made to Seller
by Account Debtors with respect to the Purchased Receivables subject to such
Purchase and (ii) turn over to Buyer forthwith on receipt all instruments,
chattel paper and other proceeds of the Purchased Receivables; provided
that
unless an Event of Default has occurred and is continuing, Seller shall remit
amounts received by Seller and due to Buyer on a weekly basis on Friday of
each
week (each a “Settlement Date”), commencing on the last business day of the
second week after the Purchase Date. On each Settlement Date, Seller shall
deliver to Buyer a report, in form and substance acceptable to Buyer, of the
account activity (including dates and amounts of payments) and changes in
account status for each Purchased Receivable.
3.3 No
Obligation to Take Action.
Buyer
shall have no obligation to perform any of Seller’s obligations under any
Purchased Receivables or to take any action or commence any proceedings to
realize upon any Purchased Receivables (including without limitation any
defaulted Purchased Receivables), or to enforce any of its rights or remedies
with respect thereto.
4 Non-Recourse;
Repurchase Obligations.
4.1 Non-Recourse.
Except
as otherwise set forth in this Agreement, Buyer’s acquisition of Purchased
Receivables from Seller hereunder shall be without recourse against
Seller.
4.2 Seller’s
Agreement to Repurchase.
In the
event that (A) with respect to any Purchased Receivable there has been any
breach of warranty or representation set forth in Section
6.1
hereof
(except for breaches of warranty or representations which are permitted to
be,
and have been, cured pursuant to Section
7
hereof)
or any breach of any covenant contained in this Agreement with respect to such
Purchased Receivable; or (B) with respect to such Purchased Receivable the
Account Debtor asserts any Adjustment (except for such matters as are permitted
to be, and have been, cured pursuant to Section
7
hereof),
Seller shall, at its option, either (X) pay to Buyer on demand, the full face
amount, or any unpaid portion, of such Purchased Receivable; together with,
in
the case of (A) or (B), all reasonable attorneys’ 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”), (Y) shall
substitute another Receivable acceptable to Buyer in its sole and absolute
discretion that is equal in amount to such Purchased Receivable or, with respect
to (B) above only, (Z) shall pay to Buyer the amount of any Adjustment in
accordance with Section
7
hereof;
provided, however, that Seller shall have no obligation to pay the Repurchase
Amount, substitute another Receivable or, with respect to (B) above only, pay
the amount of any Adjustment if there has been an Account Debtor Insolvency
Event with respect to such Purchased Receivable. Upon payment of the Repurchase
Amount or substitution of another Receivable, the Purchased Receivable subject
to the preceding paragraph shall be deemed property of and owned solely by
the
Seller (and shall not be deemed to be a Purchased Receivable
hereunder).
4.3 Seller’s
Payment of the Amounts Due Buyer.
All
amounts due from Seller to Buyer shall be paid by Seller to Buyer in immediately
available funds by fedwire to the account listed in the attached
Schedule.
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: (a) to sell,
assign, transfer, pledge, compromise, or discharge the whole or any part of
the
Purchased Receivables; (b) to demand, collect, receive, xxx, and give releases
to any Account Debtor for the monies due or which may become due upon or with
respect to the Purchased Receivables and to compromise, prosecute, or defend
any
action, claim, case or proceeding relating to the Purchased Receivables,
including the filing of a claim or the voting of such claims in any bankruptcy
case, all in Buyer’s name or Seller’s name, as Buyer may choose; (c) to prepare,
file and sign Seller’s name on any notice, claim, assignment, demand, draft, or
notice of or satisfaction of lien or mechanics’ lien or similar document with
respect to Purchased Receivables; (d) to notify all Account Debtors with respect
to the Purchased Receivables to pay Buyer directly; (e) to receive, open, and
dispose of all mail addressed to Seller for the purpose of collecting the
Purchased Receivables; (f) to endorse Seller’s name on any checks or other forms
of payment on the Purchased Receivables; (g) to execute on behalf of Seller
any
and all instruments, documents, financing statements and the like to perfect
Buyer’s interests in the Purchased Receivables; and (h) to do all acts and
things necessary or expedient, in furtherance of any such purposes.
6 Representations,
Warranties and Covenants.
6.1 Receivables’
Warranties, Representations and Covenants.
To
induce Buyer to purchase the Purchased 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 Purchased Receivable, that, as of the date of the applicable
Purchase pertaining to such Purchased Receivable:
(a) Seller
is
the absolute owner of each of the Purchased Receivables and has full legal
right
to sell, transfer and assign such receivables;
(b) The
correct amount of each Purchased Receivable is as set forth on the applicable
Schedule and is not in dispute;
(c) The
payment of each Purchased Receivable is not contingent upon the fulfillment
of
any obligation or contract, and any and all obligations required of the Seller
have been fulfilled as of the applicable Purchase Date;
(d) Such
Purchased Receivable is based on an actual sale and delivery of goods and/or
services actually rendered, is due no later than the applicable Due Date and
is
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 such Purchased Receivable, and
no
agreement has been made under which the Account Debtor may claim any deduction
or discount, except as otherwise stated on the applicable Schedule;
(f) Seller
is
not insolvent as that term is defined in the United States Bankruptcy Code,
and
Seller has not filed or had filed against it a voluntary or involuntary petition
for relief under the United States Bankruptcy Code; and
(g) No
Account Debtor set forth on the applicable Schedule with respect to such
Purchased Receivable has objected to the payment for, or the quality or the
quantity of the subject matter of, the Purchased Receivable, each such Account
Debtor is liable for the amount set forth on such Schedule.
6.2 Additional
Warranties, Representations and Covenants.
In
addition to the foregoing warranties, representations and covenants, to induce
Buyer to buy the Purchased Receivables, 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 interest the Seller may have in any Purchased Receivables to
or
in favor of any other party, without Buyer’s prior written consent.
(b) The
Seller’s name, form of organization, chief executive office, and the place where
the records concerning all Purchased Receivables are kept is set forth at 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 five (5) Business Days prior written notice if such name, organization,
chief executive office or records concerning Purchased Receivables is changed
or
added and shall execute any documents necessary to perfect Buyer’s interest in
the Purchased Receivables.
(c) If
Payment in Full of any Purchased Receivable has not occurred by the applicable
Due Date, then Seller shall within twenty (20) days of such date provide a
written report to Buyer setting forth the reasons for such delay in
payment.
(d) So
long
as any Purchased Receivable is outstanding, to the extent not available online
from the SEC XXXXX website, Seller shall deliver to Buyer:
(i) within
five (5) days of filing, copies or electronic notice of links to of all
statements, reports and notices made available to Seller’s security holders and
all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission; and
(ii) any
other
financial information reasonably requested by Buyer.
7 Adjustments.
In
the
event any Adjustment is asserted by any Account Debtor, Seller shall promptly
advise Buyer and Seller shall, subject to the Buyer’s approval, resolve such
disputes and advise Buyer of any Adjustments and promptly remit to Buyer the
difference between the Invoice Amount on the Purchase Date and the Invoice
Amount after such Adjustment. Subject to Section 9 and Section 4.2, Buyer shall
remain the absolute owner of any Purchased Receivable which is subject to
Adjustment, and, until the amount of such Adjustment (as set forth above) is
paid by Seller to Buyer, any rejected, returned, or recovered personal property,
with the right to take possession thereof at any time, and if such possession
is
not taken by Buyer, Seller agrees 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 and such goods are the property of Buyer, Seller shall
segregate said goods and xxxx them “property of Silicon Valley
Bank.”
8 Indemnification.
(a) Seller
hereby agrees that in the event any Account Debtor is released from all or
any
part of its payment obligations with respect to any Purchased Receivable by
reason of: (1) any act or omission of Seller not permitted by this Agreement
or
consented to in writing by Buyer; or (2) the operation of any of the provisions
of the documentation pertaining to such Purchased Receivables, which result
in
the termination of the Account Debtor’s obligation to pay all or any part of the
Purchased Receivables, then, upon the happening of any such event, Seller shall
thereafter pay to Buyer on the date when the Account Debtor would otherwise
have
paid the Purchased Receivable to Buyer an amount equal to the lesser of (a)
the
amount of the Purchased Receivable not payable by the Account Debtor as a result
of such event and (b) the unpaid portion of the Purchased Receivable Amount
for
such Purchased Receivable.
(b) Seller
hereby agrees to pay, and to indemnify and hold harmless Buyer from and against,
any taxes which may at any time be asserted in respect of this transaction
or
the subject matter thereof (including, without limitation, any sales,
occupational, excise, or gross receipts taxes, but not including taxes imposed
upon the Buyer with respect to its income arising out of this transaction)
and
reasonable counsel fees in defending against the same, whether arising by reason
of the acts to be performed by Seller hereunder or imposed against Buyer,
Seller, the property involved or otherwise; provided
that
with respect to any of the foregoing for which Seller shall be liable, Seller
shall receive prompt notice from Buyer of this assertion of any such taxes
on
Buyer of which Buyer has notice.
9 Additional
Rights.
To
secure
the obligations of Seller hereunder, 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 (the “Related
Property”): (A) Seller’s rights to any returned or rejected goods in respect of
the Purchased Receivables, with respect to which Buyer has all the rights of
any
unpaid seller, including the rights of replevin, claim and delivery,
reclamation, and stoppage in transit; (B) All books and records pertaining
to
the Purchased Receivables or the foregoing goods; and (C) All proceeds of the
foregoing, whether due to voluntary or involuntary disposition, including
insurance proceeds. Notwithstanding the security interest in favor of Buyer,
unless there is an Event of Default (after expiration of any cure periods),
Seller is authorized to sell, assign, transfer, dispose of, reuse components
of,
rework, or otherwise convey any interest in any Related Property without Buyer’s
prior written consent. 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 Purchased
Receivables and the Related Property. Seller agrees to deliver to Buyer the
originals of all instruments, chattel paper and documents evidencing or related
to Purchased Receivables and Related Property. Buyer agrees that it shall only
exercise its rights as a secured party upon an Event of Default (after
expiration of any cure periods) and shall not attempt to exercise such rights
if
Seller has, prior to such Event of Default, sold, assigned, transferred,
disposed of, reused components of, reworked or otherwise conveyed an interest
in
the Related Property. In addition, to the extent practicable, before taking
any
actions permitted by law as a secured party, including the rights of replevin,
claim and delivery, reclamation, and stoppage in transit, Buyer shall give
Seller five (5) Business Days notice during which period Seller may pay Buyer
the full face amount, or any unpaid portion, of any Purchased Receivable plus
any accrued and unpaid interest thereon. In the event that Seller makes Payment
in Full with respect to the subject Purchased Receivable, Buyer shall not take
any of the aforementioned actions with respect to the subject Purchased
Receivable.
10 Default.
The
occurrence of any one or more of the following shall constitute an Event of
Default hereunder:
(a) Seller
fails to pay any amount owed to Buyer as and when due;
(b) There
shall be commenced by or against Seller any voluntary or involuntary case under
the United States Bankruptcy Code and the petition is not controverted within
twenty (20) days, or is not dismissed within sixty (60) days after commencement
of the case; or Seller makes any assignment for the benefit of creditors, or
suffers appointment of a receiver or custodian for any of its
assets;
(c) Seller
shall become insolvent in that its assets do not have a fair value in excess
of
the amount required to pay its probable liabilities on its existing debts as
they become absolute and mature (taking into account the timing of and amounts
of cash to be received by it and the timing of and amounts of cash to be payable
on or in respect of such liabilities), or Seller is generally not paying its
debts as they become due;
(d) Any
involuntary lien, garnishment, attachment or the like is issued against or
attaches to the Purchased Receivables or any Related Property (provided that
Seller shall have ten (10) Business Days to have removed any involuntary lien,
garnishment, attachment or the like against any of the Related
Property);
(e) Seller
shall breach any covenant, agreement, warranty, or representation set forth
herein, and the same is not cured (whether pursuant to the provisions of
Section
6
hereof,
if applicable, or otherwise) to Buyer’s reasonable satisfaction within 10
Business Days after Buyer has given Seller written notice thereof; provided,
that if such breach is incapable of being cured it shall constitute an immediate
default hereunder; or
(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.
11 Remedies
Upon Default.
Upon
the
occurrence of an Event of Default, Buyer has 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 Massachusetts Uniform Commercial Code,
all
the power of attorney rights described in Section 5 with respect to all
Purchased Receivables and, subject to the restrictions in Section 9, Related
Property, and the right to collect, dispose of, sell, lease, use, and realize
upon all Purchased Receivables and, subject to the restrictions in Section
9,
all Related Property; PROVIDED THAT Buyer shall use due diligent and
commercially lawful efforts in accordance with its usual policies and practices
to collect all amounts owed by the Account Debtors on each Purchased Receivable
when the same become due.
An Event
of Default shall not, by itself, give rise to an obligation of Seller to
repurchase or substitute Receivables or
make
any Adjustment.
12 TERM
AND TERMINATION.
The
term
of this Agreement shall be through December 31, 2006 unless terminated in
writing by Buyer or Seller. Seller and Buyer may extend the term of this
Agreement beyond December 31, 2006 by mutual written agreement in each of the
parties’ sole and absolute discretion. Notwithstanding the foregoing, any
termination of this Agreement shall not affect 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
Payment in Full has been received on all Purchased Receivables other than those
Purchased Receivables in respect of which the Account Debtor has experienced
an
Insolvency Event.
13 Accrual
of Interest.
If
any
amount owed by Seller to Buyer hereunder is not paid when due, such amount
shall
bear interest from such due date until paid at a per annum rate equal to the
Discount Rate plus 2.0%.
14 Fees,
Costs and Expenses.
The
Seller will pay to Buyer immediately upon demand all reasonable fees, costs
and
expenses (including reasonable fees of attorneys and their costs and expenses)
that Buyer incurs with any of the following: (a) preparing and negotiating
this
Agreement, provided that without the prior written consent of Seller such fees
shall not exceed Ten Thousand Dollars ($10,000.00), (b) enforcing this Agreement
or any other agreement executed by Buyer and Seller in connection herewith,
including any amendments, waivers or consents in connection with any of the
foregoing, (c) enforcing Buyer’s rights under, or collecting amounts owed by
Seller to Buyer in connection with this Agreement other than relating solely
to
an Account Debtor Insolvency Event, including, without limitation, to enforce
(i) Seller’s agreement to repurchase as set forth in Section 4.2, (ii) Seller’s
payment of any amounts owing by Seller pursuant to Section 7 hereof, or (iii)
Seller’s payment of any amounts owing by Seller pursuant to Section 8 hereof,
(d) enforcing any other rights against Seller hereunder, (e) protecting or
enforcing its title to the Purchased Receivables or its security interest in
the
Related Property, and (f) the representation of Buyer in connection with any
bankruptcy case or insolvency proceeding involving Seller 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, except to the extent
arising as a result of Buyer’s own gross negligence or willful
misconduct.
15 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. 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
Commonwealth of Massachusetts and has been executed and accepted by Buyer in
the
Commonwealth of Massachusetts. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the Commonwealth of
Massachusetts.
16 Notices.
All
notices under this Agreement shall be deemed to have been delivered and
received: (a) if mailed, three (3) Business Days after deposited in the United
States mail, first class, postage pre-paid, (b) one (1) Business Day after
deposit with an overnight mail or messenger service; or (c) on the same Business
Day of confirmed transmission if sent by hand delivery or confirmed facsimile
transmission, in each case addressed as follows:
If
to
Seller, to:
Emcore
Corporation
000
Xxxxxxx Xxxxx
Xxxxxxxx,
Xxx Xxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attn:
Xxxxxx X. Xxxxxx, Esq.
If
to
Buyer, to:
Silicon
Valley Bank
Xxx
Xxxxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attn:
Xxxxx Xxxxx
17 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.
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.
IN
WITNESS WHEREOF, Seller and Buyer have executed this Agreement under seal as
of
the date first written above.
SELLER:
EMCORE
CORPORATION
By /s/
Xxxxxx Xxxxxx
Title
Executive Vice President
BUYER:
SILICON
VALLEY BANK
By /s/ Xxxxx
Xxxxx
Title SVP
EXHIBIT
A
SCHEDULE
SCHEDULE
DATED __________________
TO
DATED
AS OF _________________________, 2005
Seller: EMCORE
Corporation
Buyer: Silicon
Valley Bank
Purchase
Date:
Due
Date: _____
days from Purchase Date (not less than 30 days or more than 180
days)
Total
Purchased Receivables: $_____________
(List of Receivables total)
Discount
Rate: _________%
(calculated as follows: (i) the Prime Rate plus 1.0% per annum for Receivables
with Due Dates less than 90 days, or (ii) such other Discount Rate for invoices
with Due Dates over 90 days or for which the Account Debtor is located outside
of the United States, as determined by Buyer in its sole
discretion).
Purchase
Price: $________________
(is _________% of the Total Purchased Receivables Amount which is the straight
discount of the Total Purchased Receivables Amount discounted from the Due
Date
to the Purchase Date at the Discount Rate).
Administrative
Fee: ___%
multiplied by the Total Purchased Receivables Amount (calculated based upon
the
following: (i) with respect to Receivables owing from an Account Debtor located
in the United States, 0.375% of the Total Purchased Receivables Amount set
forth
in the Schedule for such Purchase and (ii) with respect to Receivables owing
from an Account Debtor located outside of the United States, 0.50% of the Total
Purchased Receivables Amount set forth in the Schedule for such
Purchase).
Late
Payment Settlement Fee.
In the
event that Payment in Full of any Purchased Receivable is not received on or
before the Due Date, Seller agrees to pay to Buyer an additional amount on
any
unpaid amount, calculated at the Discount Rate, through the earlier to occur
of
(i) such date that Buyer receives Payment in Full, and (ii) an additional ninety
(90) days past the Due Date (“Late Payment Settlement Fee”) (subject to Section
4.2 (Seller's Agreement to Repurchase) herein). In the event that such Purchased
Receivable is uncollectible (due to an Account Debtor Insolvency Event), then
the Late Payment Settlement Fee period shall be the lesser of forty-five (45)
days, and the date on which such Purchased Receivable becomes uncollectible
due
to such Insolvency Event.
Buyer
Wire Instructions:
Seller
Wire Instructions:
Seller
warrants and represents that (a) with respect to the Purchased Receivables
that
are the subject of this Schedule, its warranties and representations in the
Agreement are true and correct as of the date of this Schedule and (b) no Event
of Default has occurred under the Agreement.
SELLER:
EMCORE CORPORATION
By:
Name:
Title:
BUYER:
SILICON VALLEY BANK
By:
Name:
Title:
