Exhibit 10.1
[Silicon Valley Bank Logo]
Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Fax (▇▇▇) ▇▇▇-▇▇▇▇
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 Adept Technology, Inc., a
California 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 California
Uniform Commercial Code and shall include any person liable on any Purchased
Receivable, including without limitation, any guarantor of the Purchased
Receivable and any issuer of a letter of credit or banker's acceptance.
"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.
"Collateral" shall have the meaning set forth in Section 8 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" is the date Buyer executes this Agreement.
"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.
"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.
"Obligations" shall mean all advances, financial accommodations,
liabilities, obligations, covenants and duties owing, arising, due or payable by
Seller to Buyer of any kind or nature, present or future, arising under or in
connection with this Agreement or under any other document, instrument or
agreement, whether or not evidenced by any note, guarantee or other instrument,
whether arising on account or by overdraft, whether direct or indirect
(including those acquired by assignment) absolute or contingent, primary or
secondary, due or to become due, now owing or hereafter arising, and however
acquired; including, without limitation, all Advances, Finance Charges,
interest, Repurchase Amounts, fees, expenses, professional fees and attorneys'
fees and any other sums chargeable to Seller hereunder or otherwise.
"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.
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 70% percent 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 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).
2.3. Effectiveness of Sale to Buyer. Effective upon Buyer's payment of
an Advance, and for and in consideration therefor and in consideration of the
covenants of this Agreement, Seller hereby absolutely sells, transfers and
assigns to Buyer, all of Seller's right, title and interest in and to each
Purchased Receivable and all monies due or which may become due on or with
respect to such Purchased Receivable. Buyer shall be the absolute owner of each
Purchased Receivable. Buyer shall have, with respect to any goods related to the
Purchased Receivable, all the rights and remedies of an unpaid seller under the
California Uniform Commercial Code and other applicable law, including the
rights of replevin, claim and delivery, reclamation and stoppage in transit.
2.4. Establishment of a Reserve. Upon the purchase by Buyer of each
Purchased Receivable, Buyer shall establish a reserve. The reserve shall be the
amount by which the face amount of the Purchased Receivable exceeds the Advance
on that Purchased Receivable (the "Reserve"); provided, the Reserve with respect
to all Purchased Receivables outstanding at any one time shall be an amount not
less than 30% 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 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 in an amount equal to two percent (2%) per month of the
average daily Account Balance outstanding during the applicable Reconciliation
Period (the "Finance Charges"). Buyer shall deduct the accrued Finance Charges
from the Reserve as set forth in Section 3.5 below.
3.3. Facility Fee; Warrants. In consideration for Seller entering into
this Agreement, Seller shall pay Buyer a facility fee of $25,000 as follows: Any
balance of the $30,000 due diligence and cost deposit previously paid by Seller
to Buyer, after deducting all reasonable costs, fees and expenses incurred by
Buyer (including without
2
limitation reasonable attorneys fees), shall be applied to said $25,000 facility
fee, and, on the date of the first purchase of a receivable hereunder, Seller
shall pay Buyer any unpaid balance of said $25,000 facility fee. In addition,
Seller shall concurrently issue to Buyer five-year warrants to purchase 100,000
shares of Common Stock of Borrower at a purchase price of $1.00 per share, on
the terms set forth in the Warrant to Purchase Stock being executed
concurrently, which shall be fully earned on the date hereof and non-refundable.
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, and Finance Charges. 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:
(A) (1) The Reserve as of the beginning of that Reconciliation Period,
plus
(2) the Reserve created for each Purchased Receivable purchased
during that Reconciliation Period, minus
(B) The total for that Reconciliation Period of:
(1) Finance Charges;
(2) Adjustments;
(3) Repurchase Amounts, to the extent Buyer has agreed to accept
payment thereof by deduction from the Refund;
(4) 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
(5) 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, subject to Buyer's rights under Section 4.3 and Buyer's rights
of offset and recoupment.
4. Recourse and Repurchase Obligations.
4.1. Recourse. Buyer's acquisition of Purchased Receivables from Seller
shall be with full recourse against Seller. In the event the Obligations exceed
the amount of Purchased Receivables and Collateral, Seller shall be liable for
any deficiency.
4.2. Seller's Agreement to Repurchase. Seller agrees to pay to Buyer on
demand, the full face amount, or any unpaid portion, of any Purchased
Receivable:
(A) which remains unpaid ninety (90) calendar days after the
invoice date; or
(B) which is owed by any Account Debtor who has filed, or has
had filed against it, any bankruptcy case, assignment for
the benefit of creditors, receivership, or insolvency
proceeding or who has become insolvent (as defined in the
United States Bankruptcy Code) or who is generally not
paying its debts as such debts become due; or
(C) with respect to which there has been any breach of warranty
or representation set forth in Section 6 hereof or any
breach of any covenant contained in this Agreement; or
(D) with respect to which the Account Debtor asserts any
discount, allowance, return, dispute, counterclaim, offset, defense, right of
recoupment, right of return, warranty claim, or short payment;
together with all reasonable attorneys' and professional fees and expenses and
all court costs incurred by Buyer in collecting such Purchased Receivable and/or
enforcing its rights under, or collecting amounts owed by Seller in connection
with, this Agreement (collectively, the "Repurchase Amount").
4.3. Seller's Payment of the Repurchase Amount or Other Amounts Due
Buyer. When any Repurchase Amount or other amount owing to Buyer becomes due,
Buyer shall inform Seller of the manner of payment which may be any one or more
of the following in Buyer's sole discretion: (a) in cash immediately upon demand
3
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, 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;
(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.
6.1.Receivables' 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;
4
(E) There are no defenses, offsets, or counterclaims against any of the
receivables, and no agreement has been made under which the Account
Debtor may claim any deduction or discount, except as otherwise stated
in the Invoice Transmittal;
(F) Each Purchased Receivable shall be the property of the Buyer and
shall be collected by Buyer, but if for any reason it should be paid to
Seller, Seller shall promptly notify Buyer of such payment, shall hold
any checks, drafts, or monies so received in trust for the benefit of
Buyer, and shall promptly transfer and deliver the same to the Buyer;
(G) Buyer shall have the right of endorsement, and also the right to
require endorsement by Seller, on all payments received in connection
with each Purchased Receivable and any proceeds of Collateral;
(H) Seller, and to Seller's best knowledge, each Account Debtor set
forth in the Invoice Transmittal, are and shall remain solvent as that
term is defined in the United States Bankruptcy Code and the California
Uniform Commercial Code, and no such Account Debtor has filed or had
filed against it a voluntary or involuntary petition for relief under
the United States Bankruptcy Code;
(I) Each Account Debtor named on the Invoice Transmittal will not
object to the payment for, or the quality or the quantity of the
subject matter of, the receivable and is liable for the amount set
forth on the Invoice Transmittal;
(J) Each Account Debtor shall promptly be notified, after acceptance by
Buyer, that the Purchased Receivable has been transferred to and is
payable to Buyer, and Seller shall not take or permit any action to
countermand such notification; and
(K) All receivables forwarded to and accepted by Buyer after the date
hereof, and thereby becoming Purchased Receivables, shall comply with
each and every one of the foregoing representations, warranties,
covenants and agreements referred to above in this Section 6.1.
6.2. Additional Warranties, Representations and Covenants. In addition
to the foregoing warranties, representations and covenants, to induce Buyer to
buy receivables and to render its services to Seller, Seller hereby represents,
warrants, covenants and agrees that:
(A) Seller will not assign, transfer, sell, or grant, or permit any
lien or security interest in any Purchased Receivables or Collateral to
or in favor of any other party, without Buyer's prior written consent,
except for purchase money security interests in equipment in the
ordinary course of business and leases by Seller (as lessee) of
equipment in the ordinary course of business;
(B) The Seller's name, form of organization, chief executive office,
and the place where the records concerning all Purchased Receivables
and Collateral are kept is set forth at the beginning of this
Agreement, Collateral is located only at the location set forth in the
beginning of this Agreement, or, if located at any additional location,
as set forth on a schedule attached to this Agreement, and Seller will
give Buyer written notice of any changes or additions to any such name,
organization, chief executive office or other locations of Collateral
or records concerning Purchased Receivables or Collateral and shall
execute any documents necessary to perfect Buyer's interest in the
Purchased Receivables and the Collateral;
(C) Seller shall (i) pay all of its normal gross payroll for employees,
and all federal and state taxes, as and when due, including without
limitation all payroll and withholding taxes and state sales taxes;
(ii) deliver at any time and from time to time at Buyer's request,
evidence satisfactory to Buyer that all such amounts have been paid to
the proper taxing authorities; and (iii) if requested by Buyer, pay its
payroll and related taxes through 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 United States
Bankruptcy Code or had filed against it an involuntary petition for
relief;
(E) If Seller owns, holds or has any interest in, any registered
copyrights, 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 registered 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
quarterly basis to be received by Buyer no later than the 20 days
following each calendar quarter or on a more frequent or other basis if
and as requested by Buyer in its good faith business judgment, (iii)
monthly financial statements (including balance sheet and income
statement) of Seller within 20 days after the end of each month, and
monthly accounts payable aging and accounts receivable aging (aged by
invoice date) within 20 days after the end of each month; (iv) Annual,
unqualified financial statements of Seller, audited by independent
certified public accountants acceptable to Buyer, within 120 days after
the end of each fiscal year of Seller;
5
(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; and
(I) Seller will at all times maintain its primary operating deposit
accounts with Buyer and not less than 90% of its total cash, deposit
accounts and investments with Buyer, and as to any deposit accounts and
investment accounts maintained with another institution, Borrower shall
cause such institution 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 said deposit
accounts and investment accounts (except that a control agreement shall
not be required with respect to up to $500,000 maintained with Paragon
Bank to secure a loan by Paragon Bank to Seller); and
(J) Seller will not make any transfers, to any of its wholly-owned or
partially-owned subsidiaries, of money, property or any other assets of
any kind, in any transaction of any kind (whether as a loan, payment
for goods or services, royalty, or any other payment of any kind),
except for transfers of funds in a total amount for all subsidiaries in
an aggregate net amount not to exceed a total of $240,000 in any fiscal
quarter of Seller (on a non-cumulative basis and net of any payments
received by Seller from any such subsidiaries); and
(K) Seller shall promptly set up a lock-box agreement with ▇▇▇▇▇ Fargo
Bank and Buyer on terms acceptable to Buyer in its good faith business
judgment, and Seller shall keep the same in full force and effect
throughout the term of this Agreement, and until all Obligations have
been paid and performed in full.
(L) Concurrently, Seller shall cause all of its subsidiaries to execute
and deliver to Buyer a Continuing Guaranty with respect to all of the
Obligations, on Silicon's standard form, and certified resolutions or
other evidence of authority with respect to the execution and delivery
of such Guaranty. Throughout the term of this Agreement Borrower shall
cause such Guaranty to continue in full force and effect, to the extent
permitted by applicable law.
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, and 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, 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;
(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;
6
provided that, anything herein to the contrary notwithstanding, Buyer
shall have a security interest in the Seller's copyrights, patents, and
trademarks only to the extent that a judicial authority (including
without limitation a U.S. Bankruptcy Court) holds that a perfected
security interest in such copyrights, patents, or trademarks is
necessary to have a perfected security interest in the proceeds thereof
(including without limitation proceeds consisting of accounts, accounts
receivable, royalties, payment intangibles, and other rights to payment
arising from, in connection with or relating to such collateral 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 finished inventory in the Seller's usual course of business,
and (ii) dispositions of damaged, excess, unutilized or obsolete
inventory, equipment, machinery, furniture, furnishings, fixtures,
tools, supplies and motor vehicles in the ordinary course of business.
Seller agrees to sign UCC financing statements, in a form acceptable to
Buyer, and any other instruments and documents requested by Buyer to
evidence, perfect, or protect the interests of Buyer in the Collateral.
Seller agrees to deliver to Buyer the originals of all instruments,
chattel paper and documents evidencing or related to Purchased
Receivables and Collateral.
9. Default. The occurrence of any one or more of the following shall constitute
an Event of Default hereunder.
(A) Seller 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, 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,
unless the same is discharged or fully bonded against within 10 days
after the same arises;
(E) Seller shall breach any covenant or agreement herein or relating
hereto, which is not cured within 3 business days after such breach
occurs;
(F) Any representation by Seller herein or in connection herewith is
untrue in any material respect when made or deemed made;
(G) 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;
(H) 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;
(I) 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 relating to such agreement, which
default or event of default shall not have been cured within any
applicable cure period or waived in writing;
(J) 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; or
(K) (i) There is a material adverse change in the business, operations,
or condition (financial or otherwise) of the Seller (but the de-listing
of Seller's stock by the NASDAQ will not, by itself, be considered to
be such a material adverse change), or (ii) there is a material
impairment of the prospect of repayment of any portion of the
Obligations or (iii) there is a material impairment of the value or
priority of Buyer's security interests in the Collateral.
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 and under
applicable law, including the rights and remedies of a secured party under the
California Uniform Commercial Code, all the power of attorney rights described
in Section 5 with respect to all Collateral, and the right to collect, dispose
of, sell, lease, use, and realize upon all Purchased Receivables and all
Collateral in any commercial reasonable manner. Seller and Buyer agree that any
notice of sale required to be given to Seller shall be deemed
7
to be reasonable if given ten 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 reasonable 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. 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 remitted to the same address and/or party,
or Seller and Buyer may agree that all receivables with respect to certain
Account Debtors be paid to one party. In such event Buyer and Seller may agree
that Buyer shall collect all receivables whether owned by Seller or Buyer and
(provided that there does not then exist an Event of Default or event that with
notice, lapse or time or otherwise would constitute an Event of Default, and
subject to Buyer's rights in the Collateral) Buyer agrees to remit to Seller the
amount of the receivables collections it receives with respect to receivables
other than Purchased Receivables. It is understood and agreed by Seller that
this Section does not impose any affirmative duty on Buyer to do any act other
than to turn over such amounts. All such receivables and collections are
Collateral and in the event of Seller's default hereunder, Buyer shall have no
duty to remit collections of Collateral and may apply such collections to the
obligations hereunder and Buyer shall have the rights of a secured party under
the California Uniform Commercial Code.
15. Notices. All notices shall be given to Buyer and Seller at the addresses or
faxes set forth on the first page of this Agreement and shall be deemed to have
been delivered and received: (a) if mailed, three (3) calendar days after
deposited in the United States mail, first class, postage pre-paid, (b) one (1)
calendar day after deposit with an overnight mail or messenger service; or (c)
on the same date of confirmed transmission if sent by hand delivery, telecopy,
telefax or telex.
16. Jury Trial. SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT THE FOREGOING WAIVER CONSTITUTES
A MATERIAL
8
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 through the first
anniversary of the Effective Date, and the term of this Agreement shall
automatically be extended for additional terms of one year each unless either
party gives written notice of termination to the other at least 30 days prior to
the next date this Agreement terminates. 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.
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on
the day and year above written.
SELLER: Adept Technology, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title Vice President, Finance and CFO
----------------------------------------------
BUYER: SILICON VALLEY BANK
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
Title Vice President
-----------------------------------------------
Effective Date: March 21, 2003
--------------------------------------
9