EXHIBIT 10.25
SECOND FORBEARANCE AND AMENDMENT NUMBER TWO
TO ACCOUNTS RECEIVABLE PURCHASE AGREEMENT
This Second Forbearance and Amendment Number Two to Accounts Receivable
Purchase Agreement (this "Second Forbearance Agreement"), dated as of July 22,
2002, is entered into by and between the following parties:
(a) XETEL CORPORATION, a Delaware corporation (the "Seller");
(b) SILICON VALLEY BANK ("Buyer").
RECITALS
A. The Seller and Buyer have entered into that certain Accounts
Receivable Purchase Agreement, dated as of April 9, 2002 (including any and all
amendments thereto, the "Purchase Agreement"), pursuant to which Buyer agreed to
purchase accounts receivable from Seller, subject to the terms of the Purchase
Agreement.
B. The Seller and Buyer also have entered into that certain Forbearance
and Amendment Number One to Accounts Receivable Purchase Agreement, dated as of
May 29, 2002 (including any and all amendments thereto, the "First Forbearance
Agreement"), pursuant to which Buyer agreed to forbear temporarily from
exercising certain of Buyer's rights and remedies under the Purchase Agreement
and to provide temporary, additional financing to Seller, subject to the terms
of the First Forbearance Agreement.
C. Prior to the date of the First Forbearance Agreement, Events of
Default have occurred, as described in clauses (a) and (b) below, and
subsequently have occurred, as described in clause (c) below, under the Purchase
Agreement by reason of the following acts or omissions:
(a) the Seller's continuing failure to comply with its
covenant in Section 6.2(A) of the Purchase Agreement, resulting in an
Event of Default under Section 9(E) of the Purchase Agreement;
(b) the Seller received monies in payment of Purchased
Receivables and failed to transfer and deliver the same to Buyer;
instead Borrower used such monies for Seller's working capital
purposes, all in breach of Section 6.1(F) of the Purchase Agreement,
which in turn is an Event of Default under Section 9(E) of the Purchase
Agreement; and
(c) the Seller has breached the Additional Warranties,
Representations, and Covenants in Section 6.2(J) of the Purchase
Agreement, which in turn is an Event of Default under Section 9(E) of
the Purchase Agreement, which provides for certain "AP Milestones" that
were required to be met on May 31, 2002 and on June 30, 2002, which
relate to the maximum percentage of the Seller's aggregate accounts
payable that are over 90 days from invoice date.
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The Events of Default referred to above and the specific occurrences of these
Events of Default prior to the date of this Forbearance Agreement are referred
to as the "Specific Events of Default."
D. The Specific Events of Default remain uncured as of this date.
E. Pursuant to Section 10 of the Purchase Agreement, Buyer is
authorized to exercise various rights and remedies including, but not limited
to, declaring all Obligations immediately due and payable.
F. The Seller has requested that Buyer extend its agreements to forbear
temporarily from exercising certain of Buyer's rights and remedies under the
Purchase Agreement and to provide temporary, additional financing to Seller, for
an additional period of thirty (30) days, from July 22, 2002 to August 22, 2002.
G. Buyer has agreed to continue to forbear temporarily, as set forth in
this Second Forbearance Agreement, and to provide temporary additional financing
to Seller.
ACKNOWLEDGMENTS
A. The Seller hereby acknowledges and agrees to the accuracy of all
Recitals included in this Second Forbearance Agreement.
B. To the extent that there is a conflict between the terms of this
Second Forbearance Agreement and the terms of the Purchase Agreement or the
First Forbearance Agreement, the terms of this Second Forbearance Agreement
shall govern.
C. The Seller acknowledges and agrees that, as of July 19, 2002, the
outstanding principal amount of the Obligations is $3,352,636.66, exclusive of
interest, costs, fees, and other expenses payable by the Seller to Buyer under
the Purchase Agreement as of such date.
D. The Seller further acknowledges and agree that, as a result of the
occurrence of the Specific Events of Default and in conjunction with the First
Forbearance Agreement, the Seller declared Obligations under the Purchase
Agreement due and payable in full, that the entire balance thereof continues to
be immediately due and payable in full, and that Buyer has exercised its right
to cease buying receivables from Seller, the Seller having waived, and hereby
waiving, notice of intention to accelerate, notice of acceleration, and all
other notices, presentments, demands, including without limitation, those set
forth in the Purchase Agreement.
E. The Seller has submitted to Buyer, and Buyer has received and
approved the operating cash budget through August 31, 2002, dated as of the date
of this Second Forbearance Agreement, and attached hereto as Exhibit "A".
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AGREEMENTS
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, agree to the
above Recitals and Acknowledgments, and further as follows:
1. DEFINITIONS. All capitalized terms used but not otherwise defined in
this Second Forbearance Agreement shall have the meanings ascribed to them in
the Purchase Agreement.
2. FORBEARANCE. Subject to the terms and conditions set forth in this
Second Forbearance Agreement and the Seller's acknowledgments and agreements set
forth above, and expressly conditioned upon the absence of any additional Events
of Default, and satisfaction and fulfillment of each of the conditions precedent
set forth in Section 3 below and the conditions subsequent set forth in Section
4 below, Buyer shall forbear from demanding payment in full of the Obligations
and forbear from exercising its rights and remedies under Section 10 of the
Purchase Agreement (other than the right to cease buying receivables) as a
result of the Specific Events of Default for a period (the "Forbearance Period")
beginning on the date of this Second Forbearance Agreement and expiring on the
earlier to occur of the following:
(1) 5:00 p.m., Pacific time, August 22, 2002; or
(2) any occurrence of any Event of Default other than the
Specific Events of Default or any re-occurrence of a Specific Event of
Default after the date of this Second Forbearance Agreement.
3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF FORBEARANCE PERIOD. The
effectiveness of this Second Forbearance Agreement is subject to the
satisfaction of the following conditions precedent, unless specifically waived
in writing by Buyer:
3.1. Buyer shall have received this Second Forbearance
Agreement, duly executed by the Seller.
3.2. The representations and warranties contained herein and
in the Purchase Agreement shall be true and correct in all material respects on
and as of the date hereof, except as disclosed on Schedule 1 attached hereto and
made a part hereof.
3.3. No Default or Event of Default under the Purchase
Agreement shall have occurred and be continuing, other than the Specific Events
of Default, unless such Default or Event of Default has been specifically waived
in writing by Buyer.
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4. CONDITIONS SUBSEQUENT TO EFFECTIVENESS. The continued effectiveness
of this Second Forbearance Agreement is subject to the satisfaction of the
following conditions subsequent, unless specifically waived in writing by Buyer.
4.1. Access. The Seller shall give Buyer and Buyer's auditors
or its agent complete access to the Seller's books and records during the
Forbearance Period. The Seller agrees to provide complete cooperation with Buyer
and Buyer's auditors or its agent.
4.2. Blocked Accounts. The Seller shall ensure the deposit of
all payments collected by the Seller on its accounts into XX Xxxxxx Xxxxx Bank
account no. 00102630523 or XX Xxxxxx Chase Bank account no. 00102630531 as
required by the Blocked Account Control Agreement. The Seller agrees to provide
complete cooperation with Buyer and Buyer's auditors or its agent, and the
Seller shall provide 100% remittance of all cash collections from all sources
into the blocked accounts described above until further notice.
4.3 Deposits into Blocked Accounts. Any and all cash received
by Seller, whether from accounts receivable or otherwise, will be deposited into
one of the blocked accounts described in Section 4.2 above or will be wired to
the Seller's cash collateral account at Buyer, in accordance with the following
instructions: Federal Reserve Bank, for credit to Silicon Valley Bank, ABA # 121
140 399, further credit to XeTel Corporation, Account # 330 036 3022.
5. AMENDMENTS.
5.1. Credit Limit. Section 1 of the Schedule to the Addendum
to the Purchase Agreement (which was added by the First Forbearance Agreement)
is hereby amended and restated in its entirety to read as follows:
"Loans (the "Receivable Loans") in the amount not to exceed
the lesser of
(1) a total of Four Million Dollars ($4,000,000) at
any one time outstanding (the "Maximum Credit Limit"), or
(2) Loans in an amount not to exceed the amount
which equals the remainder of
(i) 70% of the amount of Borrower's
Eligible Receivables (as defined in Section 8
above), minus
(ii) (A) the aggregate amount of
Advances under the Purchase Agreement, as determined
by Buyer at any time and from time, reduced by (B)
the actual amount of collections received by Buyer
on the Purchased Receivables."
5.2 Interest Rate. The first sentence of Section 2 of the
Schedule to the Addendum to the Purchase Agreement (which was added by the First
Forbearance Agreement) is hereby amended and restated in its entirety to read as
follows:
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NUMBER TWO TO ACCOUNTS RECEIVABLE
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"A rate equal to the "Prime Rate") in effect from
time to time, plus ten percent (10%) per annum."
5.3 Fees. Section 3 of the Schedule to the Addendum to the
Purchase Agreement (which was added by the First Forbearance Agreement) is
hereby amended and restated in its entirety to read as follows:
"Collateral Monitoring Fee: Two Thousand Dollars ($2,000),
per month, payable in arrears
(prorated for any partial month)
at the beginning and at
termination of this Agreement),
beginning for the month ended
July 31, 2002."
5.4. Termination Date. Section 16 of the Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
"16. TERMINATION DATE. This agreement will terminate on August
22, 2002."
6. ADDITIONAL AGREEMENTS.
6.1 Forbearance Fee. In consideration of the agreements of
Buyer set forth in this Second Forbearance Agreement, Seller agrees to pay Buyer
a weekly forbearance fee (the "Weekly Forbearance Fee") amount of Ten Thousand
Dollars ($10,000) per week. The Weekly Forbearance Fee will be payable in
advance on Monday of each week, beginning Monday, July 29, 2002. In the event
that the Obligations are paid in full to Seller, on or before 2:00 p.m., Austin,
Texas time on August 22, 2002, then Buyer agrees to refund to Seller fifty
percent (50%) of the Weekly Forbearance Fee paid by Seller to Buyer up through
the date of payment in full of the Obligations.
6.2. Consent to Relief. In the event of any re-occurrence of a
Specific Event of Default or any breach of the Conditions Precedent, the
Conditions Subsequent or the Additional Agreements set forth in this Second
Forbearance Agreement, then, to the extent that Buyer establishes before a court
of appropriate jurisdiction that any of the foregoing has occurred, the Seller
consents to injunctive relief for the benefit of Buyer in order to enforce the
terms of this Second Forbearance Agreement and the Purchase Agreement.
6.3. Potential Capital Infusions. Seller will advise and
inform Buyer of any and all potential infusions of capital, including, but not
limited to, offers from an investor buyer to purchase the Seller, or
substantially all of the assets of the Seller.
7. RATIFICATIONS, REPRESENTATIONS AND WARRANTIES.
7.1. Controlling Agreement. The terms and provisions set forth
in this Second Forbearance Agreement shall supersede all inconsistent terms and
provisions set forth in the Second Purchase Agreement and, except as expressly
set forth in this Second Forbearance Agreement, the terms and provisions of the
Purchase Agreement are ratified and confirmed and
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shall continue in full force and effect. The parties hereto agree that the
Purchase Agreement shall continue to be legal, valid, binding and enforceable in
accordance with its terms as amended.
7.2. Access. The Seller represents and warrants that the
Seller has given Buyer complete access to the Seller's books and records.
7.3. Representations and Warranties. The Seller hereby
represents and warrants to Buyer as follows:
(a) the execution, delivery and performance of this Second
Forbearance Agreement and any and all other agreements executed and/or
delivered in connection herewith or therewith have been authorized by
all requisite corporate action on the part of the Seller and will not
violate the Certificate of Incorporation or Bylaws of the Seller;
(b) the representations and warranties contained in this
Second Forbearance Agreement and the Purchase Agreement are true and
correct on and as of the date hereof as though made on and as of such
date, except to the extent that breaches thereof are specifically
waived by this Second Forbearance Agreement;
(c) no Default or Event of Default under the Purchase
Agreement has occurred and is continuing, other than the Specific
Events of Default, unless such Default or Event of Default has been
specifically waived in writing by Buyer;
(d) the Seller is in full compliance with all covenants and
agreements contained in the Purchase Agreement, other than those
covenants and agreements specifically identified in this Second
Forbearance Agreement;
(e) the consummation of the transactions contemplated hereby
will not (i) violate any provision of the organizational documents or
governing instruments of the Seller, (ii) violate any judgment, order,
ruling, injunction, decree or award of any court, administrative agency
or governmental body against, or binding upon, the Seller, or (iii)
constitute a violation by the Seller of any law or regulation of any
jurisdiction applicable to the Seller;
(f) this Second Forbearance Agreement was reviewed by the
Seller, who acknowledges and agrees that the Seller (i) understands
fully the terms of this Second Forbearance Agreement and the
consequences of the issuance hereof, (ii) has been afforded an
opportunity to have this Second Forbearance Agreement reviewed by, and
to discuss this Second Forbearance Agreement with, such attorneys and
other persons as the Seller may wish, and (iii) has entered into this
Second Forbearance Agreement of its own free will and accord and
without threat or duress; and
(g) this Second Forbearance Agreement and all information
furnished to Buyer is made and furnished in good faith, for value and
valuable consideration; and this Second
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Forbearance Agreement has not been made or induced by any fraud, duress
or undue influence exercised by Buyer or any other person.
8. MISCELLANEOUS.
8.1. Misrepresentation. The Seller shall indemnify and hold
Buyer harmless from and against any losses, damages, costs and expenses
(including attorneys' fees) incurred by Buyer as a direct or indirect result of
(i) breach of any representation or warranty contained in this Second
Forbearance Agreement, or (ii) any breach or default under any of the covenants
or agreements contained in this Second Forbearance Agreement.
8.2. Covenants and Agreements. The Seller hereby agrees and
acknowledges that it is well and truly indebted to Buyer pursuant to the terms
of the Purchase Agreement and other documents executed in connection therewith
and hereby agrees to observe, comply with and perform all of the obligations,
terms and conditions under or in the Purchase Agreement and other documents
executed in connection therewith, except as may be amended or waived by this
Second Forbearance Agreement.
8.3. Ratification of Liens and Security Interests. The Seller
hereby acknowledges and agrees that the liens and security interests of Buyer,
as more fully described in the Purchase Agreement and documents executed in
connection therewith, are valid and subsisting liens and security interests and
are superior to all liens and security interests other than those exceptions
approved by Buyer in writing and as otherwise permitted under the Purchase
Agreement.
8.4. No Waiver. The Seller agrees that nothing contained in
this Second Forbearance Agreement shall affect or impair the validity or
priority of the liens and security interests under any of the documents executed
in connection with the Purchase Agreement. Buyer further reserves all its rights
under the these documents except as expressly modified herein.
8.5. Survival of Representations and Warranties. Except as
provided otherwise in this Second Forbearance Agreement, all representations and
warranties made in the Purchase Agreement or any document executed in connection
therewith, including, without limitation, any document furnished in connection
with this Second Forbearance Agreement, shall survive the execution and delivery
of this Second Forbearance Agreement, and no investigation by Buyer or any
closing shall affect the representations and warranties or the right of Buyer to
rely upon them.
8.6. Expenses of Buyer. The Seller agrees to pay on demand all
reasonable costs and expenses incurred by Buyer in connection with the
preparation, negotiation and execution of this Second Forbearance Agreement and
any other agreements executed pursuant hereto, including, without limitation,
the reasonable costs and fees of Buyer's legal counsel. The Seller acknowledges
that Buyer may debit the Seller's account to pay such costs and expenses.
Further, the Seller acknowledges that, at the execution and delivery of this
Second Forbearance Agreement, Buyer may debit the Seller's account to pay costs
and expenses, including Buyer's attorneys' fees, incurred at such time.
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8.7. Severability. Any provision of this Second Forbearance
Agreement held by a court of competent jurisdiction to be invalid or
unenforceable shall not impair or invalidate the remainder of this Second
Forbearance Agreement, and the effect thereof shall be confined to the provision
so held to be invalid or unenforceable.
8.8. Successors and Assigns. This Second Forbearance Agreement
will inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
8.9. Headings. The headings of the sections and subsections of
this Second Forbearance Agreement are inserted for convenience only and do not
constitute a part of this Second Forbearance Agreement.
8.10. Counterparts. This Second Forbearance Agreement may be
executed in counterparts, and when so executed each counterpart shall be deemed
to be an original, and said counterparts together shall constitute one and the
same instrument. However, no party shall be required to exhibit or prove all
counterparts of the original agreement to make proof of same, rather each
counterpart shall constitute an enforceable agreement against the party who has
executed the same.
8.11. Facsimile Execution. This Second Forbearance Agreement
may be executed and delivered by facsimile, and the production of a facsimile
counterpart shall have the same force and effect as production of an originally
executed counterpart for all purposes.
8.12. No Commitment. The Seller agrees that Buyer has made no
commitment or other agreement regarding the Purchase Agreement, or any document
executed in connection therewith, except as expressly set forth in this Second
Forbearance Agreement. The Seller warrants and represents that the Seller will
not rely on any commitment, further agreement to forbear or other agreement on
the part of Buyer unless such commitment or agreement is in writing and signed
by Buyer.
8.13. Survival. All representations, warranties, covenants and
agreements of the parties made in this Second Forbearance Agreement shall
survive the execution and delivery hereof, until such time as all of the
obligations of the parties hereto shall have lapsed in accordance with their
respective terms or shall have been discharged in full.
8.14. Time of Essence. The parties to this Second Forbearance
Agreement have agreed specifically with regard to the times for performance set
forth in this Second Forbearance Agreement. Further, the parties to this Second
Forbearance Agreement acknowledge that the agreements with regard to the times
for performance are material to this Second Forbearance Agreement. Therefore,
the parties agree and acknowledge that time is of the essence to this Second
Forbearance Agreement.
SECOND FORBEARANCE AND AMENDMENT
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PURCHASE AGREEMENT - Page 8
8.15. LAW GOVERNING. THIS SECOND FORBEARANCE AGREEMENT SHALL
BE DEEMED TO HAVE BEEN SUBSTANTIALLY NEGOTIATED AND MADE IN THE STATE OF
CALIFORNIA AND SHALL BE INTERPRETED AND THE RIGHTS OF THE PARTIES DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE UNITED STATES APPLICABLE THERETO AND THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO AN AGREEMENT EXECUTED,
DELIVERED AND PERFORMED THEREIN, WITHOUT GIVING EFFECT TO THE CHOICE-OF-LAW
RULES THEREOF OR ANY OTHER PRINCIPLE THAT COULD REQUIRE THE APPLICATION OF THE
SUBSTANTIVE LAW OF ANY OTHER JURISDICTION.
8.16. WAIVER; MODIFICATION. NO PROVISION OF THIS SECOND
FORBEARANCE AGREEMENT MAY BE WAIVED, CHANGED OR MODIFIED, OR THE DISCHARGE
THEREOF ACKNOWLEDGED, ORALLY, BUT ONLY BY AN AGREEMENT IN WRITING SIGNED BY THE
PARTY AGAINST WHOM THE ENFORCEMENT OF ANY WAIVER, CHANGE, MODIFICATION OR
DISCHARGE IS SOUGHT. NO DELAY ON THE PART OF BUYER IN EXERCISING ANY RIGHT,
POWER OR PRIVILEGE HEREUNDER, SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY
WAIVER OF ANY RIGHT, POWER OR PRIVILEGE HEREUNDER OPERATE AS A WAIVER OF ANY
OTHER RIGHT, POWER OR PRIVILEGE HEREUNDER, NOR SHALL ANY SINGLE OR PARTIAL
EXERCISE OF ANY RIGHT, POWER OR PRIVILEGE HEREUNDER PRECLUDE ANY OTHER OR
FURTHER EXERCISE THEREOF, OR THE EXERCISE OF ANY OTHER RIGHT, POWER OR PRIVILEGE
HEREUNDER. ALL RIGHTS AND REMEDIES HEREIN PROVIDED ARE CUMULATIVE AND ARE NOT
EXCLUSIVE OF ANY RIGHTS OR REMEDIES THAT THE PARTIES HERETO MAY OTHERWISE HAVE
AT LAW OR IN EQUITY.
8.17. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, SELLER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS SECOND
FORBEARANCE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF
BUYER IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.
8.18. FINAL AGREEMENT. THIS SECOND FORBEARANCE AGREEMENT AND
THE OTHER DOCUMENTS EXECUTED IN CONNECTION THEREWITH REPRESENT THE ENTIRE
EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE
THIS SECOND FORBEARANCE AGREEMENT IS EXECUTED. NEITHER THIS SECOND FORBEARANCE
AGREEMENT NOR THE LOAN DOCUMENTS MAY BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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PURCHASE AGREEMENT - Page 9
8.19. RELEASE. SELLER HEREBY ACKNOWLEDGES THAT AS OF THE DATE
HEREOF IT HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND
OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL
OR ANY PART OF ITS LIABILITY TO REPAY THE OBLIGATIONS OR TO SEEK AFFIRMATIVE
RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM BUYER OR ITS AFFILIATES,
PARTICIPANTS OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS, EMPLOYEES
OR ATTORNEYS. SELLER HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER
DISCHARGES BUYER, AND ITS AFFILIATES AND PARTICIPANTS, AND ITS PREDECESSORS,
AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL
POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES,
AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS SECOND
FORBEARANCE AGREEMENT IS EXECUTED, WHICH SELLER MAY NOW OR HEREAFTER HAVE
AGAINST BUYER, ITS PREDECESSORS, AGENTS, OFFICERS, DIRECTORS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND
ARISING FROM THE OBLIGATIONS, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE
PURCHASE AGREEMENT OR OTHER DOCUMENTS EXECUTED IN CONNECTION THEREWITH, AND
NEGOTIATION FOR AND EXECUTION OF THIS FORBEARANCE AGREEMENT. SELLER HEREBY
COVENANTS AND AGREES NEVER TO INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY,
NOR INSTITUTE, PROSECUTE, OR IN ANY WAY AID IN THE INSTITUTION OR PROSECUTION OF
ANY CLAIM, ACTION OR CAUSE OF ACTION, RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY
NATURE AGAINST BUYER, ITS AFFILIATES, AND PARTICIPANTS, AND THEIR RESPECTIVE
SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS, EMPLOYEES, AND PERSONAL AND
LEGAL REPRESENTATIVES ARISING OUT OF OR RELATED TO LENDER'S ACTIONS, OMISSIONS,
STATEMENTS, REQUESTS OR DEMANDS IN ADMINISTERING, ENFORCING, MONITORING,
COLLECTION OR ATTEMPTING TO COLLECT THE INDEBTEDNESS OF SELLER TO BUYER, WHICH
INDEBTEDNESS WAS EVIDENCED BY THE PURCHASE AGREEMENT AND THE LOAN DOCUMENTS.
8.20. Agreement Binding on the Seller. The Seller agrees that
this Second Forbearance Agreement will be binding on the Seller.
[Signature page follows.]
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IN WITNESS WHEREOF, the Seller and Buyer have caused this Second
Forbearance Agreement to be executed and delivered as of the date first written.
SELLER:
XETEL CORPORATION,
a Delaware corporation
By:
----------------------------------
Name:
--------------------------------
Title:
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BUYER:
SILICON VALLEY BANK
By:
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Name:
--------------------------------
Title:
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SECOND FORBEARANCE AND AMENDMENT
NUMBER TWO TO ACCOUNTS RECEIVABLE
PURCHASE AGREEMENT - Page 11
EXHIBIT "A"
OPERATING CASH BUDGET
[See attached.]
EXHIBIT "A"
SCHEDULE 1
Exceptions to Representations and Warranties
1. Borrower has received notice of a payroll tax penalty in the amount(s)
as set forth in the attached Schedule 2. Borrower is disputing a
portion of the penalty in the amount as set forth in the attached
Schedule 2. Borrower will pay or cause the Internal Revenue Service to
offset the undisputed portion of the penalty on or before July 31,
2002.
SCHEDULE 1
