EXHIBIT 10.1
Silicon Valley Bank
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ACCOUNTS RECEIVABLE PURCHASE AGREEMENT
This Accounts Receivable Purchase Agreement (the "Agreement") is made as
of the Effective Date by and between Silicon Valley Bank ("Buyer"), having a
place of business at the address specified above, and NSTOR CORPORATION, INC., a
Delaware corporation ("Seller"), having its principal place of business and
chief executive office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
with a FAX number of (▇▇▇) ▇▇▇-▇▇▇▇.
1. Definitions. When used herein, the following terms shall have the following
meanings.
"Account Balance" shall mean, on any given day, the gross amount of all
Purchased Receivables unpaid on that day.
"Account Debtor" shall have the meaning set forth in the 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.
"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.
"Advance" shall have the meaning set forth in Section 2.2 hereof.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.
Sections 101 et seq.), as amended, and any successor statute.
"Business" means the business of Seller as conducted by Seller as at the
date hereof and as proposed to be conducted by Seller hereafter, including the
ownership, operation and lease of assets and property in connection therewith
and the investment therein and all other activities necessary, useful,
incidental or ancillary to the foregoing.
"Code" means the Uniform Commercial Code as adopted and in effect in the
State of California from time to time.
"Collateral" shall have the meaning set forth in Section 8 hereof.
"Collateral Handling Fee" shall have the meaning as set forth in Section
3.3 hereof.
"Collections" shall mean all good funds received by Buyer from or on
behalf of an Account Debtor with respect to Purchased Receivables.
"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.
"Effective Date" means the date of execution and delivery of this
Agreement by Buyer, as set forth underneath Buyer's executed signature block on
the signature page hereof.
"Event of Default" shall have the meaning set forth in Section 9 hereof.
"Finance Charges" shall have the meaning set forth in Section 3.2
hereof.
"Financing Documents" means, collectively, this Agreement and all other
present and future documents, instruments and agreements between Buyer, on the
one hand, and Seller or any guarantor of any of the Obligations, on the other
hand, including, but not limited to those relating to this Agreement or any
other Financing Document, and all amendments and modifications thereto and
replacements therefor.
"GAAP" means U.S. generally accepted accounting principles consistently
applied.
"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.
"Material Adverse Change" means (i) a material adverse change in the
business, operations, or condition (financial or otherwise) of the Seller, or
(ii) a material impairment of the prospect of repayment of any portion of the
Obligations or (iii) a material impairment of the value or priority of Buyer's
security interests in the Collateral.
"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 Financing Document or 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, Collateral Handling Fees, interest, Repurchase Amounts, fees,
expenses, professional fees and attorneys' fees and any other sums chargeable to
Seller hereunder or otherwise, and including any interest and other amounts
that, but for the provisions of the applicable Bankruptcy Code, would have
accrued.
"Permitted Liens" means the following: (i) purchase money security
interests in specific items of Equipment; (ii) leases of specific items of
Equipment; (iii) liens for taxes not yet payable; (iv) additional security
interests and liens consented to in writing by Buyer, which consent may be
withheld in its good faith business judgment; (v) security interests being
terminated substantially concurrently with this Agreement; (vi) (A) liens of
landlords, warehousemen, and other bailees, if and to the extent such lien is
(1) pursuant to applicable law, expressly junior and subordinate to the security
interests of Buyer, or (2) subject to a landlord agreement or bailee agreement
(in form and substance satisfactory to Buyer in its good faith business
judgment) duly executed and delivered to Buyer by such lienholder and in full
force and effect; and (B) liens of materialmen, mechanics, carriers, or other
similar liens arising in the ordinary course of business and securing
obligations which are not delinquent; (vii) liens incurred in connection with
the extension, renewal or refinancing of the indebtedness secured by liens of
the type described above in clauses (i) or (ii) above, provided that any
extension, renewal or re-placement lien is limited to the property encumbered by
the existing lien and the principal amount of the indebted-ness being extended,
renewed or refinanced does not in-crease; and (viii) Liens in favor of customs
and revenue authorities which secure payment of customs duties in connection
with the importation of goods. Buyer will have the right to require, as a
condition to its consent under sub-paragraph (iv) above, that the holder of the
additional security interest or lien sign an intercreditor agreement on Buyer's
then standard form, acknowledge that the security interest is subordinate to the
security interest in favor of Buyer, and agree not to take any action to enforce
its subordinate security interest so long as any Obligations remain outstanding,
and Seller hereby agrees that any uncured default in any obligation secured by
the subordinate security interest shall also constitute an Event of Default
under this Agreement.
"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.
"Refund" shall have the meaning set forth in Section 3.5 hereof.
"Reserve" shall have the meaning set forth in Section 2.4 hereof.
"Repurchase Amount" shall have the meaning set forth in Section 4.2
hereof.
"Reconciliation Date" shall mean the last calendar day of each
Reconciliation Period.
"Reconciliation Period" shall mean each calendar month of every year.
All accounting terms used in this Agreement, unless otherwise indicated, shall
have the meanings given to such terms in accordance with GAAP, consistently
applied. All other terms contained in this Agreement, unless otherwise
indicated, shall have the meanings provided by the Code, to the extent such
terms are defined therein.
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 eighty percent (80%) of
the face amount of each receivable Buyer desires to purchase, net of deferred
revenue and offsets related to each specific Account Debtor. Such payment shall
be the "Advance" with respect to such receivable. Buyer may, from time to time,
in its sole discretion, change the percentage of the Advance. Upon Buyer's
acceptance of the receivable and payment to Seller of the Advance, the
receivable shall become a "Purchased Receivable." It shall be a condition to
each Advance that (i) all of the representations and warranties set forth in
Section 6 of this Agreement be true and correct in all material respects 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
Two Million Five Hundred Thousand Dollars ($2,500,000) (the "Line Amount"), and
Buyer shall have no obligation to make Advances in excess of Two Million Dollars
($2,000,000) in the aggregate at any one time outstanding.
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
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 twenty percent (20%) 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
three (3) business days after the date received by the Buyer in immediately
available funds; provided, that if Seller is in default under this Agreement,
Buyer shall apply all Collections to Seller's Obligations hereunder in such
order and manner as Buyer may determine. If an item 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 equal to the greater of (a) Five Thousand Dollars ($5,000) for
such Reconciliation Period, and (b) the product of (i) 0.875% per month
multiplied by (ii) the average daily Account Balance outstanding during the
applicable Reconciliation Period (the "Finance Charges"). Buyer shall deduct the
accrued Finance Charges from the Reserve as set forth in Section 3.5 below.
3.3. Collateral Handling Fee. On each Reconciliation Date Seller shall pay
to Buyer a collateral handling fee equal to three-sixteenths of one percent
(0.1875%) per month of the average daily Account Balance outstanding during the
applicable Reconciliation Period (the "Collateral Handling Fee"). Buyer shall
deduct the Collateral Handling Fee from the Reserve as set forth in Section 3.5
below.
3.4. Accounting. Buyer shall prepare and send to Seller after the close of
business for each Reconciliation Period, an accounting of the transactions for
that Reconciliation Period, including the amount of all Purchased Receivables,
all Collections, Adjustments, Finance Charges, and the Collateral Handling 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.
3.5. 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 the result of (A) below less (B) below:
(A) The sum of:
(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 Collateral
Handling Fee;
(2) Finance Charges;
(3) Adjustments;
(4) Repurchase Amounts, to the extent Buyer has agreed to accept
payment thereof by deduction from the Refund;
(5) the Reserve for the Account Balance as of the first day of
the following Reconciliation Period in the minimum percentage set forth in
Section 2.4 hereof; and
(6) all amounts due, including professional fees and expenses, as
set forth 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 3.5 results in an amount due
to Buyer from Seller, Seller shall make such payment in the same manner as set
forth in Section 4.3 hereof for repurchases. If the formula set forth in this
Section 3.5 results in an amount due to Seller from Buyer, Buyer shall make such
payment by check or wire transfer, subject to Buyer's rights under Section 4.3
and Buyer's rights of offset and recoupment.
3.6. Facility Fee. In consideration for Buyer entering into this Agreement,
Seller shall pay to Buyer a facility fee of $10,000.00, which shall be due and
payable concurrently with the execution and delivery of this Agreement and shall
be fully earned on the Effective Date and non-refundable when paid. Seller and
Buyer hereby acknowledge and agree that, solely in the event that Seller
requests in writing an increase in the Line Amount and Buyer agrees (in its sole
and absolute discretion) in writing to such increase in the Line Amount (and no
Default or Event of Default exists at the time of such request and agreement),
an additional facility fee, in an amount equal to 1.00% of the incremental
increase in the then extant Line Amount so requested and agreed, shall be due
and payable and fully earned concurrently with the effectiveness of such
incremental increase and non-refundable when paid.
4. Recourse and Repurchase Obligations.
4.1. Recourse. Buyer's acquisition of Purchased Receivables from Seller
shall be with full recourse against Seller. In the event the Obligations exceed
the amount of Purchased Receivables and Collateral, Seller shall be liable for
any deficiency.
4.2. Seller's Agreement to Repurchase. Seller agrees to pay to Buyer on
demand, the full face amount, or any unpaid portion, of any Purchased
Receivable:
(A) which remains unpaid ninety (90) calendar days after the invoice
date; or
(B) which is owed by any Account Debtor who has filed, or has had filed
against it, any bankruptcy case, assignment for the benefit of
creditors, receivership, or insolvency proceeding or who has become
insolvent (as defined in the 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 immediately upon demand
therefor; (b) by delivery of substitute invoices and an Invoice Transmittal
acceptable to Buyer which shall thereupon become Purchased Receivables; (c) by
adjustment to the Reserve pursuant to Section 3.5 hereof; (d) by deduction from
or offset against the 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 (f) 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 Buyer's demand
(or, in the case of an Event of Default under Section 9(B), immediately without
notice or demand from Buyer) repurchase all the Purchased Receivables then
outstanding, or such portion thereof as Buyer may demand. Such demand may, at
Buyer's option, include and Seller shall 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,
Collateral Handling 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, ▇▇▇, 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
(and, without limiting the generality of the foregoing, to do so pursuant to
written payment instructions printed on letterhead of Seller or Parent but sent
by Buyer); (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 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; Additional Provisions; Conditions.
6.1. Receivables-related Warranties, Representations and Covenants. To induce
Buyer to buy receivables and to renders 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 Bankruptcy Code and the Code, and no such Account
Debtor has filed or had filed against it a voluntary or involuntary
petition for relief under the 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 in all
material respects 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 or
except as otherwise expressly permitted under this Agreement.
(B) The Seller's name, form of organization, chief executive office and
jurisdiction of organization, 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 foreign, federal, state, and local taxes (collectively,
"Taxes"), as and when due, including without limitation all payroll and
withholding Taxes and state sales, use, and other ad valorem taxes; (ii)
deliver at any time and from time to time at Buyer's request, evidence
satisfactory to Buyer that all such amounts have been paid to the proper
Tax authorities; and (iii) if requested by Buyer, pay its payroll and
related Taxes through a bank or an independent payroll service
acceptable to Buyer.
(D) Seller has not, as of the ▇▇▇▇ ▇▇▇▇▇▇ delivers to Buyer an Invoice
Transmittal, or as of the ▇▇▇▇ ▇▇▇▇▇▇ accepts any Advance from Buyer,
filed a voluntary petition for relief under the 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.
(F) Seller shall provide Buyer with: (i) a Compliance Certificate on a
monthly basis to be received by Buyer no later than the 30th calendar
day following each calendar month or on a more frequent or other basis
if and as requested by Buyer, (ii) monthly financial statements of
Seller (including balance sheet and income statement of Seller) within
30 days after the end of each month; (iii) annual financial statements
of Seller, audited by independent certified public accountants
acceptable to Buyer, within 90 days after the end of each fiscal year of
Seller; (iv) monthly accounts receivable agings (separately identifying
Purchased Receivables and non-Purchased Receivables), aged by invoice
date, within 30 days after the end of each month; (v) monthly accounts
payable agings, aged by invoice date, and outstanding or held check
registers, within 30 days after the end of each month; (vi) monthly
reconciliations of accounts receivable agings (aged by invoice date),
transaction reports, and general ledger, within 30 days after the end of
each month.
(G) Seller shall provide Buyer with a deferred revenue listing upon
request.
(H) On request by Buyer, Seller will promptly furnish any information
Buyer may reasonably request to determine financial condition of Seller,
including, but not limited to all of Seller's Obligations, and the
condition of any of Seller's receivables which may include but are not
limited to Purchased Receivables.
(I) At all times from and after a date as soon as practicable after the
Effective Date (and in any event not later than 90 days following the
Effective Date), Seller will maintain its primary operating deposit
accounts and investment securities accounts with Buyer or Buyer's
institutional affiliates. As to any deposit accounts and investment
property (including securities accounts) maintained with another
institution, Seller shall cause such institution, within 30 days after
the Effective Date, to enter into a control agreement in form acceptable
to Buyer in its good faith business judgment in order to perfect Buyer's
first-priority security interest in such deposit accounts and grant
Buyer "control" (within the meaning of Articles 8 and 9 of the Code)
over such investment property (including securities accounts).
Thereafter, Seller shall not maintain any deposit accounts or investment
property (including securities accounts) with any bank, securities
intermediary, or other institution unless Buyer has received such a
control agreement duly executed by such party in favor of Buyer covering
such deposit account or investment property (including securities
accounts), as the case may be.
(J) All Collections and all other proceeds of Collateral shall be
directly paid by third parties, or promptly deposited by Seller, into a
lockbox account or such other "blocked account" as Buyer may specify,
pursuant to a blocked account or other cash dominion agreement in such
form as Buyer may specify in its good faith business judgment, and funds
from such lockbox account or other blocked account, as the case may be,
shall be forwarded directly to a cash collateral account maintained with
and controlled by Buyer in accordance with the terms and conditions of
such agreement(s). Seller shall keep such agreements and such
arrangements in full force and effect throughout the term of this
Agreement, and until all Obligations have been paid and performed in
full.
(K) 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.
(L) Seller shall allow Buyer to audit the Collateral at Seller's
expense. The charge for such audits shall be at Buyer's then current
standard charge for the same, plus Buyer's reasonable out-of-pocket
expenses in connection therewith.
(M) Seller will comply with all other covenants and agreements set forth
in the Intellectual Property Security Agreement or any other Financing
Document.
(N) Seller shall not enter into any merger, amalgamation, or
consolidation with or into any other entity, party or person, or acquire
all or substantially all of the capital stock or assets of another
person.
(O) All financial statements now or in the future delivered to Buyer
have been, and will be, prepared in conformity with GAAP and now and in
the future will fairly present the results of operations and financial
condition of Seller, in accordance with GAAP, at the times and for the
periods therein stated. Between the last date covered by any such
statement provided to Buyer and the date hereof, there has been no
Material Adverse Change.
(P) Seller does not own any maskworks, computer software, or other
copyrights that are registered (or are the subject of any application
for registration) with the United States Copyright Office. Seller will
NOT register with the United States Copyright Office (or apply for such
registration of) any of Seller's maskworks, computer software, or other
copyrights, unless Seller has provided Buyer not less than 30 days prior
written notice of the commencement of such registration/application and
Seller has executed and delivered to Buyer such security agreement(s)
and other documentation (in form and substance reasonably satisfactory
to Buyer) which Buyer in its good faith business judgment deems
necessary for the grant, attachment, and perfection of Buyer's security
interests in such maskworks, computer software, or other copyrights (and
all proceeds and products (including without limitation licensing
revenue) thereof) and for filing with respect to such registration or
application.
(Q) With respect to any leased premises of Seller, Seller shall,
promptly upon Buyer's request therefor, deliver to Buyer a landlord
agreement (in form and substance satisfactory to Buyer) duly executed by
the lessor of such leased premises.
(R) Seller hereby represents and warrants that, as of the date of
execution and deliver of this Agreement, no goods of Seller are in the
possession of any warehouseman or other bailee, and hereby covenants
that Seller promptly shall deliver written notice to Buyer of any goods
of Seller being in the possession of any warehouseman or other bailee.
With respect to any goods of Seller in the possession of any
warehouseman or other bailee, Seller shall, promptly upon Buyer's
request therefor, deliver to Buyer a bailee agreement (in form and
substance satisfactory to Buyer) duly executed by such warehouseman or
other bailee.
(S) Seller shall pay any and all brokerage commissions or finders fees
incurred in connection with or as a result of Seller's obtaining
financing from Buyer under this Agreement. Seller agrees and
acknowledges that payment of all such brokerage commissions or finders
fees shall be the sole responsibility of Seller, and Seller agrees to
indemnify, defend, and hold Buyer harmless from and against any claim of
any broker or finder arising out of Seller's obtaining financing from
Buyer under this Agreement (and any reasonable attorneys fees and costs
incurred by Buyer in connection therewith).
(T) All present and future indebtedness of Seller to its officers,
directors, shareholders, and subsidiaries ("Inside Debt") shall, at all
times, be subordinated to the Obligations pursuant to a subordination
agreement on Buyer's standard form. Seller represents and warrants that
there is no Inside Debt presently outstanding, other than the Designated
Subordinated Debt (as defined in Section 6.4(D) below). Prior to
incurring any Inside Debt in the future, Seller shall cause the person
to whom such Inside Debt will be owed to execute and deliver to Buyer a
subordination agreement on Buyer's standard form.
(U) Seller shall not pay or declare any dividends on Seller's stock
(except for dividends payable solely in stock of Seller). Seller shall
not redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Seller's stock.
6.3. Payments without Setoffs or Counterclaims, etc. All payments hereunder and
under the other Financing Documents made by or on behalf of Seller shall be
made: (a) without setoff or counterclaim; and (b) free and clear of, and without
deduction or withholding for or on account of, any foreign, federal, state, or
local Taxes.
6.4. Conditions Precedent. In addition to any other conditions precedent set
forth in this Agreement, the making of the initial Advance or other credit
extension or the purchase of the initial receivable hereunder is subject to the
following additional conditions:
(A) Buyer shall have received lien searches listing all effective
financing statements that name Seller (or any predecessor corporation or
any tradename thereof or any seller of assets acquired by any Seller
outside of the ordinary course of business) as debtor that are filed in
the applicable filing offices with respect to such Seller, none of which
financing statements shall cover any of the Collateral of Seller, except
(1) financing statements perfecting Permitted Liens, (2) financing
statements as to which Buyer has received duly executed authorization by
the applicable secured party to file executed termination statements,
partial release statements, or authorizations to discharge, each in form
and substance satisfactory to Buyer, or (3) as otherwise agreed in
writing by Buyer.
(B) nStor Technologies, Inc. ("Parent") shall execute and deliver to
Buyer a continuing guaranty with respect to all of the Obligations of
Seller, in form and substance satisfactory to Buyer (the "Guaranty").
Throughout the term of this Agreement, Seller shall not cause, suffer,
or permit the Guaranty to cease to be in full force and effect.
(C) Seller shall execute and deliver to Buyer an intellectual property
security agreement, in form and substance satisfactory to Buyer (the
"Intellectual Property Security Agreement"). Throughout the term of this
Agreement, Seller shall not cause, suffer, or permit the Intellectual
Property Security Agreement to cease to be in full force and effect.
(D) (i) Buyer shall have received copies of all material agreements,
instruments, and other documents consisting of, evidencing, securing, or
otherwise relating to, the series of Seller's 10% Convertible
Subordinated Promissory Notes still outstanding as of the Effective Date
(including, without limitation, that certain 10% Convertible
Subordinated Promissory Note dated June 14, 2002, made by Seller to the
order of H. ▇▇▇▇▇ ▇▇▇▇ in the original principal amount of $650,000, as
amended by that certain letter agreement, dated June 30, 2003, between
Seller and H. ▇▇▇▇▇ ▇▇▇▇, pursuant to which the principal amount of such
note was increased from $650,000 to $818,370 due to the conversion of
accrued but unpaid interest into additional principal), in each case, as
amended, restated, supplemented, or otherwise modified from time to time
(collectively, the "Designated Subordinated Debt Documents"), which
copies shall be certified by the Secretary of Seller as true, correct,
and complete and are in full force and effect; and (ii) (unless the
Designated Subordinated Debt has been repaid in full or converted into
equity securities of Seller on or before the Effective Date) all holders
of any indebtedness evidenced by any one or more of the Designated
Subordinated Debt Documents (the "Designated Subordinated Debt") shall
execute and deliver to Buyer a subordination agreement, in form and
substance satisfactory to Buyer (the "Designated Subordinated Debt
Subordination Agreement"), pursuant to which the obligations of Seller
under the Designated Subordinated Debt Documents (including the
Designated Subordinated Debt) shall be subordinated in favor of Buyer in
accordance with the terms and conditions of the Designated Subordinated
Subordination Agreement. Seller represents and warrants that Seller has
reviewed the Designated Subordinated Debt Subordination Agreement and
that all holders of record with respect to the Designated Subordinated
Debt (and all holders of security interests (if any) securing same) are
signatories to the Designated Subordinated Debt Subordination Agreement.
Seller hereby covenants and agrees that, throughout the term of this
Agreement, Seller shall not cause, suffer, or permit the Designated
Subordinated Debt Subordination Agreement to cease to be in full force
and effect (unless, the Designated Subordination Debt has been repaid in
full (but only if and to the extent expressly permitted under the
Designated Subordinated Debt Subordination Agreement) or converted into
equity securities of Borrower). Seller hereby represents and warrants
that no obligation of Seller under or in respect of the Designated
Subordinated Debt Documents is secured. Seller hereby covenants and
agrees that, at all times, no obligation of Seller under or in respect
of the Designated Subordinated Debt Documents shall be secured. Seller
hereby represents and warrants that, as of the date of the Effective
Date, the aggregate outstanding principal amount of the Designated
Subordinated Debt is $818,370.
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 ▇▇▇▇ 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 Seller's now existing or hereafter arising rights
and interest in the following, whether now owned or existing or hereafter
created, acquired, or arising, and wherever located (collectively, the
"Collateral"):
(A) All accounts, receivables, contract rights, chattel paper,
instruments, documents, letters of credit, bankers acceptances, drafts,
checks, cash, investment property, 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: (i) the sale
of inventory of Seller in the Seller's usual course of business; (ii) the
non-exclusive licensing of intellectual property of Seller, in the Seller's
usual course of business; and (iii) up to $5,000 in the aggregate of immaterial,
worn-out, or obsolete Equipment. Seller hereby authorizes and authenticates UCC
financing statements, in a form acceptable to Buyer, and agrees to execute and
deliver 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 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 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) The breach, in any material respect, of any covenant,
agreement, warranty, or representation in this Agreement or any other
Financing Document shall constitute an immediate Event of 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; (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; (J) There
is a Material Adverse Change; or (K) Parent ceases to own 100% of the
issued and outstanding capital stock of Seller.
10. Remedies Upon Default. Upon the occurrence of an Event of Default, (1)
without implying any obligation to buy receivables, Buyer may cease buying
receivables or extending any financial accommodations to Seller; (2) all or a
portion of the Obligations shall be, at the option 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 or any other
Financing Document, and under applicable law, including the rights and remedies
of a secured party under the 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 3.5, Repurchase
Amounts, amounts due under Section 12, and any other Obligations, such amounts
shall bear interest at a per annum rate equal to the per annum rate of the
Finance Charges until the earlier of (i) payment in good funds or (ii) entry of
a final judgment thereof, at which time the principal amount of any money
judgment remaining unsatisfied shall accrue interest at the highest rate allowed
by applicable law.
12. Fees, Costs and Expenses; Indemnification. The Seller will pay to Buyer
immediately upon demand all fees, costs and expenses (including reasonable fees
of attorneys and professionals and their reasonable costs and expenses) that
Buyer incurs or may from time to time impose in connection with any of the
following: (a) preparing, negotiating, administering, and enforcing this
Agreement or any other agreement executed in connection herewith, including any
amendments, waivers or consents in connection with any of the foregoing, (b) any
litigation or dispute (whether instituted by Buyer, Seller or any other person)
in any way relating to the Purchased Receivables, the Collateral, this Agreement
or any other agreement executed in connection herewith or therewith, (c)
enforcing any rights against Seller or any guarantor, or any Account Debtor, (d)
protecting or enforcing its interest in the Purchased Receivables or the
Collateral, (e) collecting the Purchased Receivables and the Obligations, and
(f) 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 signed by Seller and an
authorized officer of Buyer. Nothing contained herein, or any action taken or
not taken by Buyer at any time, shall be construed at any time to be indicative
of any obligation or willingness on the part of Buyer to amend this Agreement or
to grant to Seller any waivers or consents. This Agreement has been transmitted
by Seller to Buyer at Buyer's office in the State of California and has been
executed and accepted by Buyer in the State of California. This Agreement shall
be governed by and interpreted in accordance with the internal laws of the State
of California.
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 Code.
15. Notices. All notices shall be given to Seller and Buyer at the respective
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 Effective Date. Seller and Buyer shall each have the right to terminate
this Agreement at any time. Notwithstanding the foregoing, any termination of
this Agreement shall not affect Buyer's security interest in the Collateral and
Buyer's ownership of the Purchased Receivables, and this Agreement shall
continue to be effective, and Buyer's rights and remedies hereunder shall
survive such termination, until all transactions entered into and Obligations
incurred hereunder or in connection herewith have been completed and satisfied
in full.
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.
[remainder of page intentionally left blank; signature page immediately follows]
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement and
delivered same as of the Effective Date.
SELLER:
NSTOR CORPORATION, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Acting President, Chief Operating
and Financial Officer
BUYER:
SILICON VALLEY BANK
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title Vice President Commerical Finance Division
[To be completed by Buyer:]
Effective Date:_______________________________
Exhibit A
SVB/nStor/AR Purchase Agr-2
EXHIBIT "A"
TO FINANCING STATEMENT AND SECURITY AGREEMENT
This FINANCING STATEMENT and SECURITY AGREEMENT covers the following types or
items of property (in addition to, and without limiting the types of property
set forth on page 1 hereof):
A) All accounts, receivables, contract rights, chattel paper, instruments,
documents, letters of credit, bankers acceptances, drafts, checks, cash,
securities, investment property, deposit accounts, and general
intangibles (including, without limitation, all claims, causes of
action, 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.
Initials TG