Exhibit 10.100
[LOGO]
Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Fax (▇▇▇) ▇▇▇-▇▇▇▇
ACCOUNTS RECEIVABLE PURCHASE AGREEMENT
This Accounts Receivable Purchase Agreement (the "Agreement") is made
on this 26th day of June 2002, by and between Silicon Valley Bank ("Buyer")
having a place of business at the address specified above and P-COM, INC., a
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.
"Administrative Fee" shall have the meaning as set forth in Section
3.3 hereof.
"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.
"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,
Administrative Fees, interest, Repurchase Amounts, fees, expenses, professional
fees and attorneys' fees and any other sums chargeable to Seller hereunder or
otherwise.
"Prime Rate" shall mean the Buyer's most recently announced "prime
rate," even if it is not Buyer's lowest rate.
"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
Page 1 of 7
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, provided Seller deposits
all the payments received from Buyer in its depository and operating accounts
held with Buyer. 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
Four Million Two Hundred Fifty Thousand Dollars ($4,250,000).
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(%) percent of the Account Balance at that time and may be set at a
higher percentage at Buyer's sole discretion. The reserve shall be a book
balance maintained on the records of Buyer and shall not be a segregated fund.
3. Collections, Charges and Remittances.
3.1. Collections. Upon receipt by Buyer of Collections, Buyer shall
promptly credit such Collections to Seller's Account Balance on a daily basis;
provided, that if Seller is in default under this Agreement, Buyer shall apply
all Collections to 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 2.5% percentage points above Prime Rate
per annum of the gross average daily Account Balance outstanding during the
applicable Reconciliation Period (the "Finance Charges"). Notwithstanding the
foregoing, on each Reconciliation Date, Seller shall pay to Buyer a minimum
$500.00 Finance Charge. Buyer shall deduct the accrued Finance Charges from the
Reserve as set forth in Section 3.5 below.
3.3. Administrative Fee. On each Reconciliation Date Seller shall pay to
Buyer an Administrative Fee equal to 1 (%) percent of the face amount of each
Purchased Receivable first purchased during that Reconciliation Period (the
"Administrative Fee"). Buyer shall deduct the Administrative 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 Administrative Fee. The
accounting shall be deemed correct and conclusive unless Seller makes written
objection to Buyer within thirty (30) days after the Buyer mails the accounting
to Seller.
3.5. 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) the Administrative Fee;
(2) Finance Charges;
(3) Adjustments;
Page 2 of 7
(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, subject to Buyer's rights under Section 4.3 and Buyer's rights
of offset and recoupment.
3.6. Facility Fee. A fully earned, non-refundable facility fee of
$42,500.00 shall be due upon the disbursement of the initial Advance.
3.7. Due Diligence Fee. A fully earned, non-refundable due diligence fee of
$15,000.00 was received by Buyer.
3.8. Early Termination Fee. A fully earned, non-refundable early
termination fee of $85,000.00 shall be due upon voluntary or involuntary payment
in full of Seller's Obligations unless the Obligations are paid in full via
initial advance from a loan agreement entered into with Silicon Valley Bank.
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
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,
Administrative Fees, attorney's and professional fees, court costs and expenses
as provided for herein, and any other Obligations. Upon receipt of payment in
full of the Obligations, Buyer shall immediately instruct Account Debtors to pay
Seller directly, and return to Seller any Refund due to Seller. For the purpose
of calculating any Refund due under this Section only, the Reconciliation Date
shall be deemed to be the date Buyer receives payment in good funds of all the
Obligations as provided in this Section 4.4.
5. Power of Attorney. Seller does hereby irrevocably appoint Buyer and its
successors and assigns as Seller's true and lawful attorney in fact, and hereby
authorizes Buyer, regardless of whether there has been an Event of Default, (a)
to sell, assign, transfer, pledge, compromise, or discharge the whole or any
part of the Purchased Receivables; (b) to demand, collect, receive, ▇▇▇, 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
Page 3 of 7
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;
(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) Seller will remit all payments for accounts to Buyer by the close
of business on each Friday along with a detailed cash receipts journal
and shall immediately notify and direct all of the Seller's Account
Debtor's to make all payments for Seller's accounts to a lockbox
account established with Buyer ("Lockbox") or to wire transfer
payments to a cash collateral account that Buyer controls. It will be
considered an immediate Event of Default if the Lockbox is not set-up
and operational within 45 days from the date of this Agreement; and
(K) All receivables forwarded to and accepted by Buyer after the date
hereof, and thereby becoming Purchased Receivables, shall comply with
each and every one of the foregoing representations, warranties,
covenants and agreements referred to above in this Section 6.1.
6.2. Additional Warranties, Representations and Covenants. In addition to
the foregoing warranties, representations and covenants, to induce Buyer to buy
receivables and to render its services to Seller, Seller hereby represents,
warrants, covenants and agrees that:
(A) Seller will not assign, transfer, sell, or grant , or permit any
lien or security interest in any Purchased Receivables or Collateral
to or in favor of any other party, without Buyer's prior written
consent;
(B) The 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 at least thirty (30) days prior written notice
if such name, organization, chief executive office or other locations
of Collateral or records concerning Purchased Receivables or
Collateral is changed or added and shall execute any documents
necessary to perfect Buyer's interest in the Purchased Receivables and
the Collateral;
(C) Seller shall (i) pay all of its normal gross payroll for
employees, and all federal and state taxes, as and when due, including
without limitation all payroll and withholding taxes and state sales
taxes; (ii) deliver at any time and from time to time at Buyer's
request, evidence satisfactory to Buyer that all such amounts have
been paid to the proper taxing
Page 4 of 7
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 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, (iii) balance sheet and income statement
of Seller within 30 days after the end of each month together with
aged listings of accounts receivable and accounts payable (by invoice
date);
(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 maintain its primary banking relationship with Buyer,
which relationship shall include Seller maintaining account balances
in any accounts at or through Buyer representing 100% of all account
balances of Buyer at any financial institution. Seller agrees to
transfer its funds from another financial institutions to Buyer no
later than August 25, 2002.
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, securities, and general intangibles (including,
without limitation, all claims, causes of action, deposit accounts,
guaranties, rights in and claims under insurance policies (including
rights to premium refunds), rights to tax refunds, copyrights,
patents, trademarks, rights in and under license agreements, and all
other intellectual property);
(B) All inventory, including Seller's rights to any returned or
rejected goods, with respect to which Buyer shall have all the rights
of any unpaid seller, including the rights of replevin, claim and
delivery, reclamation, and stoppage in transit;
(C) All monies, refunds and other amounts due Seller, including,
without limitation, amounts due Seller under this Agreement (including
Seller's right of offset and recoupment);
(D) All equipment, machinery, furniture, furnishings, fixtures, tools,
supplies and motor vehicles;
(E) All farm products, crops, timber, minerals and the like (including
oil and gas);
(F) All accessions to, substitutions for, and replacements of, all of
the foregoing;
(G) All books and records pertaining to all of the foregoing; and
(H) All proceeds of the foregoing, whether due to voluntary or
involuntary disposition, including insurance proceeds.
Seller is not authorized to sell, assign, transfer or otherwise convey
any Collateral without Buyer's prior written consent, except for the sale of
finished inventory in the Seller's usual course of business. Seller agrees to
sign UCC financing statements, in a form acceptable to Buyer, and any other
instruments and documents requested by Buyer to evidence, perfect, or protect
the interests of Buyer in the Collateral. Seller agrees to deliver to Buyer the
originals of all instruments, chattel paper and documents evidencing or related
to Purchased Receivables and Collateral.
9. Default. The occurrence of any one or more of the following shall constitute
an Event of Default hereunder.
(A) Seller 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;
(E) Seller shall breach any covenant, agreement, warranty, or
representation shall constitute an immediate default hereunder;
Page 5 of 7
(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; or
(J) (i) There is a material adverse change in the business,
operations, or condition (financial or otherwise) of the Seller, 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 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 fees of
attorneys and professionals and their costs and expenses) that Buyer incurs or
may from time to time impose in connection with any of the following: (a)
preparing, negotiating, administering, and enforcing this Agreement or any other
agreement executed in connection herewith, including any amendments, waivers or
consents in connection with any of the foregoing, (b) any litigation or dispute
(whether instituted by Buyer, Seller or any other person) in any way relating to
the Purchased Receivables, the Collateral, this Agreement or any other agreement
executed in connection herewith or 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. Lockbox Account Collection Services. Seller shall enter into a three party
agreement (the "Lockbox Agreement") with Buyer and a lockbox provider (the
"Lockbox Provider"). The Lockbox Agreement and Lockbox Provider shall be
acceptable to Buyer. Seller shall use the lockbox address as the payment address
on all invoices issued by Seller and shall direct all its Account Debtors to
remit their payments to the lockbox address. The Lockbox Agreement shall provide
that the Lockbox Provider shall remit all collections received in the lockbox to
Buyer. Upon Buyer's receipt of such collections, 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 promptly 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
Page 6 of 7
collections of Collateral and may apply such collections to the obligations
hereunder and Buyer shall have the rights of a secured party under the
California Uniform Commercial Code.
15. Notices. All notices shall be given to Buyer and Seller at the addresses or
faxes set forth on the first page of this Agreement and shall be deemed to have
been delivered and received: (a) if mailed, three (3) calendar days after
deposited in the United States mail, first class, postage pre-paid, (b) one (1)
calendar day after deposit with an overnight mail or messenger service; or (c)
on the same date of confirmed transmission if sent by hand delivery, telecopy,
telefax or telex.
16. Jury Trial. SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT THE FOREGOING WAIVER CONSTITUTES
A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT; AND (c) REPRESENT AND
WARRANT THAT IT HAS REVIEWED THIS WAIVER, HAS DETERMINED FOR ITSELF THE
NECESSITY TO REVIEW THE SAME WITH ITS LEGAL COUNSEL, AND KNOWINGLY AND
VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.
17. Term and Termination. The term of this Agreement shall be for one (1) year
from the date hereof, and from year to year thereafter unless terminated in
writing by Buyer or Seller. Seller and Buyer shall each have the right to
terminate this Agreement at any time. Notwithstanding the foregoing, any
termination of this Agreement shall not affect 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.
20. Conditions to the initial Advance. Seller shall pay in full the initial
Advance no later than July 15, 2002.
Page 7 of 7
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the
day and year above written.
SELLER: P-COM, INC.
By : /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title Chief Financial Officer
--------------------------------
BUYER: SILICON VALLEY BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Title Vice President
--------------------------------
Page 8 of 7
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, 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 /s/ LJS ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
[LOGO]
Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Fax (▇▇▇) ▇▇▇-▇▇▇▇
CERTIFICATION of OFFICERS
The undersigned, being all the officers of P-COM, INC., a corporation (the
"Corporation"), hereby certify to Silicon Valley Bank ("SVB") that:
1. The correct name of the Corporation is P-COM, INC., as set forth in the
Articles of Incorporation.
2. The Corporation was incorporated on , under the laws of the
-----------
State of , and is in good standing under such laws.
3. The Corporation's place of business and chief executive office being the
place at which the Corporation maintains its books and records pertaining to
accounts, accounts receivables, contract rights, chattel paper, general
intangibles, instruments, documents, inventory, and equipment, is located at:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4. The Corporation has other places of business at the following
addressees:
Yes
5. There is no provision in the Certificate of Incorporation, Articles of
Incorporation, or Bylaws of the Corporation, or in the laws of the State of its
incorporation, requiring any vote or consent of shareholders to authorize the
sale of receivables or the grant of a security interest in any assets of the
Corporation. Such power is vested exclusively in the Corporation's Board of
Directors.
6. The officers of the Corporation, and their respective titles and
signatures are as follows:
President:
------------------------------------------------------------------------------
(Signature)
Vice President:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
(Signature)
Secretary:
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------------------------------------------
(Signature)
Treasurer:
------------------------------------------------------------------------------
(Signature)
Other Officer:
Title:
--------------------------------------------------------------------------------
(Signature)
7. Except as indicated in this paragraph 7, each of the officers listed in
paragraph 6 has signatory powers with respect to all the Corporation's
transactions with SVB. Explanation of exceptions:
8. The undersigned shall give SVB prompt written notice of any change or
amendment with respect to any of the foregoing. Until such written notice is
received by SVB, SVB shall be entitled to rely upon the foregoing in all
respects.
IN WITNESS WHEREOF, the undersigned have executed this Certification of
Officers on June 26, 2002.
President:
--------------------------------------------------------------
Vice President:
--------------------------------------------------------------
Secretary:
--------------------------------------------------------------
Treasurer:
--------------------------------------------------------------
Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Fax (▇▇▇) ▇▇▇-▇▇▇▇
SECRETARY'S CERTIFICATE OF RESOLUTION
The undersigned, as Secretary of P-COM, INC., a corporation (the
"Corporation"), hereby certifies to Silicon Valley Bank that at a meeting duly
convened at which a quorum was present the following resolutions were adopted by
the Board of Directors of the Corporation and that such resolutions have not
been modified, amended, or rescinded in any respect and are in full force and
effect as of today's date.
RESOLVED, that this corporation be and hereby is authorized to sell this
corporation's accounts receivable to Silicon Valley Bank, and to grant Silicon
Valley Bank a security interest in this corporation's assets, including, without
limitation, accounts, accounts receivable, contract rights, chattel paper,
general intangibles, instruments, documents, letters of credit, drafts,
inventory and equipment, presently owned or hereafter acquired and proceeds and
products of the foregoing (the " Collateral," as defined in the Accounts
Receivable Purchase Agreement).
RESOLVED, that this corporation be and hereby is authorized and directed to
execute and deliver certain agreements in connection with the sale of
receivables, and granting of security interests in the Collateral to Silicon
Valley Bank including, without limitations, a Accounts Receivable Purchase
Agreement and UCC-1 financing statement.
RESOLVED, that the following named officers of this corporation
("Authorized Officers") be, and any of them hereby are, authorized, empowered,
and directed to execute and deliver to Silicon Valley Bank on behalf of this
corporation all such further agreements and instruments as may be deemed
necessary or advisable in order to fully effectuate the purposes and intent of
the foregoing resolutions.
Print Names of Authorized Officers: Title:
------------------------------------- -------------------------------------
------------------------------------- -------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Chief Executive Officer
------------------------------------- -------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Chief Financial Officer
------------------------------------- -------------------------------------
------------------------------------- -------------------------------------
------------------------------------- -------------------------------------
RESOLVED, that the Secretary or Assistant Secretary of this
corporation be, and hereby is authorized, empowered and directed to certify to
the passage of the foregoing resolutions under the seal of this corporation.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this 26th
day of June 2002.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------------------
Signature
Secretary of P-COM, INC. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
Consent and Release
Silicon Valley Bank sincerely appreciates your business and would like to
publicize your Company recently joining our "family". In order to do so, kindly
complete the following and return to us.
P-COM, INC. ("Client") consents to and releases Silicon Valley Bank ("Bank")
from any liability in its use of (check all that apply):
Company Name X
-------
Individual Name
-------
Quotation
-------
Photograph
-------
Client Reference
-------
Type of Credit Facility
-------
Amount of Credit Facility
-------
in Bank's written and oral presentations, advertising and promotional materials
and Internet Web site.
Client Name:
P-COM, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
Signature
Chief Financial Officer
--------------------------
Name and Title
6-28-02
--------------------------
Date
[LOGO]
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: P-COM, INC.
LOAN OFFICER: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
DATE: June 26, 2002
UCC Search Fee 300.00
UCC Filing Fee 60.00
IP Filing Fee 550.00
TOTAL FEE DUE $910.00
{} Debit DDA for the total amount.
---------------------
{} A check for the total amount is attached.
P-COM, INC.
----------------------------------
Authorized Signer (Date)
-----------------------------------
Silicon Valley Bank (Date)
Account Officer's Signature
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is made
as of the 26th day of June, 2002 by and between P-COM, INC. ("Grantor"), and
Silicon Valley Bank, a California banking corporation ("Bank").
RECITALS
A. Bank will make advances to Grantor ("Advances") as described in the
Accounts Receivable Purchase Agreement (the "Purchase Agreement"), but only if
Grantor grants Bank a security interest in its Copyrights, Trademarks, Patents,
and Mask Works. Defined terms used but not defined herein shall have the same
meanings as in the Purchase Agreement.
B. Pursuant to the terms of the Purchase Agreement, Grantor has granted to
Bank a security interest in all of Grantor's right title and interest, whether
presently existing or hereafter acquired in, to and under all of the Collateral.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness under the
Purchase Agreement, Grantor hereby represents, warrants, covenants and agrees as
follows:
1. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance of all of Grantor's present or future
Indebtedness, obligations and liabilities to Bank, Grantor hereby grants a
security interest in all of Grantor's right, title and interest in, to and under
its Intellectual Property Collateral (all of which shall collectively be called
the "Intellectual Property Collateral"), including, without limitation, the
following:
(a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative
work thereof, whether published or unpublished and whether or not the same also
constitutes a trade secret, now or hereafter existing, created, acquired or
held, including without limitation those set forth on Exhibit A attached hereto
(collectively, the "Copyrights");
(b) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products now or hereafter
existing, created, acquired or held;
(c) Any and all design rights which may be available to Grantor now or
hereafter existing, created, acquired or held;
(d) All patents, patent applications and like protections including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including without limitation
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the "Patents");
(e) Any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Grantor connected with and symbolized by
such trademarks, including without limitation those set forth on Exhibit C
attached hereto (collectively, the "Trademarks")
(f) All mask works or similar rights available for the protection of
semiconductor chips, now owned or hereafter acquired, including, without
limitation those set forth on Exhibit D attached hereto (collectively, the "Mask
Works");
(g) Any and all claims for damages by way of past, present and future
infringements of any of the rights included above, with the right, but not the
obligation, to ▇▇▇ for and collect such damages for said use or infringement of
the intellectual property rights identified above;
(h) All licenses or other rights to use any of the Copyrights,
Patents, Trademarks, or Mask Works and all license fees and royalties arising
from such use to the extent permitted by such license or rights; and
(i) All amendments, extensions, renewals and extensions of any of the
Copyrights, Trademarks, Patents, or Mask Works; and
(j) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.
2. Authorization and Request. Grantor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Agreement.
3. Covenants and Warranties. Grantor represents, warrants, covenants and
agrees as follows:
(a) Grantor is now the sole owner of the Intellectual Property
Collateral, except for non-exclusive licenses granted by Grantor to its
customers in the ordinary course of business.
(b) Performance of this IP Agreement does not conflict with or result
in a breach of any IP Agreement to which Grantor is bound, except to the extent
that certain intellectual property agreements prohibit the assignment of the
rights thereunder to a third party without the licensor's or other party's
consent and this IP Agreement constitutes a security interest.
(c) During the term of this IP Agreement, Grantor will not transfer or
otherwise encumber any interest in the Intellectual Property Collateral, except
for non-exclusive licenses granted by Grantor in the ordinary course of business
or as set forth in this IP Agreement;
(d) To its knowledge, each of the Patents is valid and enforceable,
and no part of the Intellectual Property Collateral has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part of
the Intellectual Property Collateral violates the rights of any third party;
(e) Grantor shall promptly advise Bank of any material adverse change
in the composition of the Collateral, including but not limited to any
subsequent ownership right of the Grantor in or to any Trademark, Patent,
Copyright, or Mask Work specified in this IP Agreement;
(f) Grantor shall (i) protect, defend and maintain the validity and
enforceability of the Trademarks, Patents, Copyrights, and Mask Works, (ii) use
its best efforts to detect infringements of the Trademarks, Patents, Copyrights,
and Mask Works and promptly advise Bank in writing of material infringements
detected and (iii) not allow any Trademarks, Patents, Copyrights, or Mask Works
to be abandoned, forfeited or dedicated to the public without the written
consent of Bank, which shall not be unreasonably withheld, unless Grantor
determines that reasonable business practices suggest that abandonment is
appropriate.
(g) Grantor shall promptly register the most recent version of any of
Grantor's Copyrights, if not so already registered, and shall, from time to
time, execute and file such other instruments, and take such further actions as
Bank may reasonably request from time to time to perfect or continue the
perfection of Bank's interest in the Intellectual Property Collateral;
(h) This IP Agreement creates, and in the case of after acquired
Intellectual Property Collateral, this IP Agreement will create at the time
Grantor first has rights in such after acquired Intellectual Property
Collateral, in favor of Bank a valid and perfected first priority security
interest in the Intellectual Property Collateral in the United States securing
the payment and performance of the obligations evidenced by the Purchase
Agreement upon making the filings referred to in clause (i) below;
(i) To its knowledge, except for, and upon, the filing with the United
States Patent and Trademark office with respect to the Patents and Trademarks
and the Register of Copyrights with respect to the Copyrights and Mask Works
necessary to perfect the security interests created hereunder and except as has
been already made or obtained, no authorization, approval or other action by,
and no notice to or filing with, any U.S. governmental authority of U.S.
regulatory body is required either (i) for the grant by Grantor of the security
interest granted hereby or for the execution, delivery or performance of this IP
Agreement by Grantor in the U.S. or (ii) for the perfection in the United States
or the exercise by Bank of its rights and remedies thereunder;
(j) All information heretofore, herein or hereafter supplied to Bank
by or on behalf of Grantor with respect to the Intellectual Property Collateral
is accurate and complete in all material respects.
(k) Grantor shall not enter into any agreement that would materially
impair or conflict with Grantor's obligations hereunder without Bank's prior
written consent, which consent shall not be unreasonably withheld. Grantor shall
not permit the inclusion in any material contract to which it becomes a party of
any provisions that could or might in any way prevent the creation of a security
interest in Grantor's rights and interest in any property included within the
definition of the Intellectual property Collateral acquired under such
contracts, except that certain contracts may contain anti-assignment provisions
that could in effect prohibit the creation of a security interest in such
contracts.
(l) Upon any executive officer of Grantor obtaining actual knowledge
thereof, Grantor will promptly notify Bank in writing of any event that
materially adversely affects the value of any material Intellectual Property
Collateral, the ability of Grantor to dispose of any material Intellectual
Property Collateral of the rights and remedies of Bank in relation thereto,
including the levy of any legal process against any of the Intellectual Property
Collateral.
4. Bank's Rights. Bank shall have the right, but not the obligation, to
take, at Grantor's sole expense, any actions that Grantor is required under this
IP Agreement to take but which Grantor fails to take, after fifteen (15) days'
notice to Grantor. Grantor shall reimburse and indemnify Bank for all reasonable
costs and reasonable expenses incurred in the reasonable exercise of its rights
under this section 4.
5. Inspection Rights. Grantor hereby grants to Bank and its employees,
representatives and agents the right to visit, during reasonable hours upon
prior reasonable written notice to Grantor, and any of Grantor's plants and
facilities that manufacture, install or store products (or that have done so
during the prior six-month period) that are sold utilizing any of the
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more than one (1) in every six
(6) months; provided, however, nothing herein shall entitle Bank access to
Grantor's trade secrets and other proprietary information.
6. Further Assurances; Attorney in Fact.
(a) On a continuing basis, Grantor will, subject to any prior
licenses, encumbrances and restrictions and prospective licenses, make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States, all such instruments, including appropriate
financing and continuation statements and collateral agreements and filings with
the United States Patent and Trademarks Office and the Register of Copyrights,
and take all such action as may reasonably be deemed necessary or advisable, or
as requested by Bank, to perfect Bank's security interest in all Copyrights,
Patents, Trademarks, and Mask Works and otherwise to carry out the intent and
purposes of this IP Agreement, or for assuring and confirming to Bank the grant
or perfection of a security interest in all Intellectual Property Collateral.
(b) Grantor hereby irrevocably appoints Bank as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Bank or otherwise, from time to time in Bank's discretion,
upon Grantor's failure or inability to do so, to take any action and to execute
any instrument which Bank may deem necessary or advisable to accomplish the
purposes of this IP Agreement, including:
(i) To modify, in its sole discretion, this IP Agreement without
first obtaining Grantor's approval of or signature to such modification by
amending Exhibit A, Exhibit B, Exhibit C, and Exhibit D hereof, as appropriate,
to include reference to any right, title or interest in any Copyrights, Patents,
Trademarks or Mask Works acquired by Grantor after the execution hereof or to
delete any reference to any right, title or interest in any Copyrights, Patents,
Trademarks, or Mask Works in which Grantor no longer has or claims any right,
title or interest; and
(ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Intellectual Property Collateral without the signature of Grantor where
permitted by law.
7. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under this IP Agreement:
(a) An Event of Default occurs under the Purchase Agreement; or
(b) Grantor breaches any warranty or agreement made by Grantor in this
IP Agreement.
8. Remedies. Upon the occurrence and continuance of an Event of Default,
Bank shall have the right to exercise all the remedies of a secured party under
the California Uniform Commercial Code, including without limitation the right
to require Grantor to assemble the Intellectual Property Collateral and any
tangible property in which Bank has a security interest and to make it available
to Bank at a place designated by Bank. Bank shall have a nonexclusive, royalty
free license to use the Copyrights, Patents, Trademarks, and Mask Works to the
extent reasonably necessary to permit Bank to exercise its rights and remedies
upon the occurrence of an Event of Default. Grantor will pay any expenses
(including reasonable attorney's fees) incurred by Bank in connection with the
exercise of any of Bank's rights hereunder, including without limitation any
expense incurred in disposing of the Intellectual Property Collateral. All of
Bank's rights and remedies with respect to the Intellectual Property Collateral
shall be cumulative.
9. Indemnity. Grantor agrees to defend, indemnify and hold harmless Bank
and its officers, employees, and agents against: (a) all obligations, demands,
claims, and liabilities claimed or asserted by any other party in connection
with the transactions contemplated by this IP Agreement, and (b) all losses or
expenses in any way suffered, incurred, or paid by Bank as a result of or in any
way arising out of, following or consequential to transactions between Bank and
Grantor, whether under this IP Agreement or otherwise (including without
limitation, reasonable attorneys fees and reasonable expenses), except for
losses arising from or out of Bank's gross negligence or willful misconduct.
10. Reassignment. At such time as Grantor shall completely satisfy all of
the obligations secured hereunder, Bank shall execute and deliver to Grantor all
deed, assignments, and other instruments as may be necessary or proper to
reinvest in Grantor full title to the property assigned hereunder, subject to
any disposition thereof which may have been made by Bank pursuant hereto.
11. Course of Dealing. No course of dealing, nor any failure to exercise,
nor any delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
12. Attorneys' Fees. If any action relating to this IP Agreement is brought
by either party hereto against the other party, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements.
13. Amendments. This IP Agreement may be amended only by a written
instrument signed by both parties hereto.
14. Counterparts. This IP Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
15. Law and Jurisdiction. This IP Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
for choice of law provisions. Grantor and Bank consent to the nonexclusive
jurisdiction of any state or federal court located in Santa ▇▇▇▇▇ County,
California.
16. Confidentiality. In handling any confidential information, Bank shall
exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this IP
Agreement except that the disclosure of this information may be made (i) to the
affiliates of the Bank, (ii) to prospective transferee or purchasers of an
interest in the obligations secured hereby, provided that they have entered into
comparable confidentiality agreement in favor of Grantor and have deliver a copy
to Grantor, (iii) as required by law, regulation, rule or order, subpoena
judicial order or similar order and (iv) as may be required in connection with
the examination, audit or similar investigation of Bank.
IN WITNESS WHEREOF, the parties hereto have executed this IP Agreement on
the day and year first above written.
Address of Grantor: GRANTOR:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ P-COM, INC.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit "A" attached to that certain Intellectual Property Security Agreement
dated June 26, 2002.
EXHIBIT "A"
COPYRIGHTS
SCHEDULE A - ISSUED COPYRIGHTS
COPYRIGHT REGISTRATION DATE OF
DESCRIPTION NUMBER ISSUANCE
----------- ------------ --------
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
FIRST DATE
COPYRIGHT APPLICATION DATE OF DATE OF OF PUBLIC
DESCRIPTION NUMBER FILING CREATION DISTRIBUTION
----------- ----------- ------- -------- ------------
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
--------------------------------------------------------------------------------
DATE AND
RECORDATION
NUMBER OF
IP AGREEMENT TO
OWNER OF
ORIGINAL GRANTOR (IF
AUTHOR OR ORIGINAL AUTHOR
OWNER OF OR OWNER OF
FIRST DATE COPYRIGHT COPYRIGHT IS
COPYRIGHT DATE OF OF (IF DIFFERENT DIFFERENT FROM
DESCRIPTION CREATION DISTRIBUTION FROM GRANTOR) GRANTOR)
----------- -------- ------------ ------------- ---------------
Exhibit "B" attached to that certain Intellectual Property Security Agreement
dated June 26, 2002.
EXHIBIT "B"
PATENTS
PATENT
DESCRIPTION DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
----------- ---------- ------- ---------- ----------- ------
Exhibit "C" attached to that certain Intellectual Property Security Agreement
dated June 26, 2002.
EXHIBIT "C"
TRADEMARKS
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------
Exhibit "D" attached to that certain Intellectual Property Security Agreement
dated June 26, 2002.
EXHIBIT "D"
MASK WORKS
MASK WORK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------
DEPOSIT ACCOUNT CONTROL AGREEMENT
TO: (Financial Institution)
-------------------------------
-------------------------------
-------------------------------
-------------------------------
Attention:
---------------------
June 26, 2002
Dear :
-----------
P-COM, INC. ("Borrower") and Silicon Valley Bank ("SVB") have entered into
a Loan and Security Agreement dated as of June 26, 2002 (the "Loan Agreement")
pursuant to which a security interest, in all present and future deposit
accounts of the Borrower whether by assignment, assumption or otherwise,
including account number and any replacements, additions and
-----------------
proceeds, maintained with you in the name of Borrower (the "Deposit Account(s)",
were granted by the Borrower to the SVB (the "Pledge"). In connection with the
Pledge, the Borrower and the SVB hereby instruct you and you acknowledge and
agree that:
1. The assets contained from time to time in the Deposit Account(s) are
pledged according to the terms of the Loan Agreement. As long as the
assets are pledged to SVB, Financial Institution will not set-off the
assets to cover any other obligations of Borrower to Financial
Institution, except for payment of its customary fees in connection
with the maintenance and use of the Deposit Account(s) and pursuant to
the agreement with Borrower governing the Deposit Account(s), and
except for reimbursement of any provisional credits granted by
Financial Institution in connection with the Deposit Account to the
extent, in each case, that Borrower has not separately paid or
reimbursed Financial Institution therefor. Financial Institution
acknowledges that neither it, its subsidiaries nor its affiliates has
a present lien on the pledged assets and has not received notice of
any other security interest in such assets. In the event any such
notice is received, Financial Institution will promptly notify SVB.
Borrower herein represents that the pledged assets are free and clear
of any other lien or encumbrances, and agrees that no further or
additional liens or encumbrances will be placed on the pledged assets
without the express written consent of SVB and Financial Institution.
2. So long as Financial Institution has not received notice of an "Event
of Default" under the Loan Agreement from SVB, Borrower may withdraw
and deposit funds from the Deposit Account(s).
Upon written notice by SVB that an "Event of Default" exists as of the date
thereof under the Loan Agreement (a "Notice of Default"), Financial Institution
shall accept instructions regarding the Deposit Account(s) only from SVB and
shall dispose of or transfer the assets in the Deposit Account(s) as directed by
SVB. Such instructions may include the giving of stop payment orders for any
items being presented to the Deposit Account for payment. Borrower agrees and
confirms that Financial Institution should follow such instructions from SVB
even if the result of following such instructions from SVB is that Financial
Institution dishonors items presented for payment from the Deposit Account, and
Financial Institution shall have no liability to Borrower for wrongful dishonor
of such items in following such instructions from SVB. Financial Institution
shall have no duty or obligation whatsoever of any kind or character to have
knowledge of the terms of the Loan Agreement or to determine whether or not an
"Event of Default" exists. Borrower hereby agrees to indemnify and hold harmless
Financial Institution, its affiliates, officers
and employees from and against any and all claims, causes of action,
liabilities, lawsuits, demands and/or damages including, without limitation, any
and all court costs and reasonable attorneys' fees, that may result by reason of
Financial Institution complying with such instructions.
Notwithstanding anything to the contrary contained herein or in the Loan
Agreement, this Agreement shall not impose or create any obligations or duties
upon Financial Institution greater than or in addition to the customary and
usual obligations and duties of Financial Institution to Borrower except and to
the extent that Financial Institution shall accept instructions in connection
with the Deposit Account(s) as provided in this Agreement.
The parties acknowledge that the Deposit Account(s) constitute(s) a
"Deposit Account" within the meaning of Section 9102 of the Uniform Commercial
Code of the State of California ("UCC"), and Financial Institution is a "Bank"
within the meaning of Section 9102 of the UCC. The provisions of this agreement
constitute "Control" over the Deposit Account(s) within the meaning of Section
9104 of the UCC.
This Agreement shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the respective parties hereto and shall be construed
in accordance with the laws of the State of California without regard to its
conflict of law principles and the rights and remedies of the parties shall be
determined in accordance with such laws. Financial Institution and Borrower
agree that the account agreement relating to the establishment and general
operation of the Deposit Account provides that the laws of the State of
California govern secured transactions relating to the Deposit Account and the
governing law provision shall not be amended.
If any term or provision of this Agreement is determined to be invalid or
unenforceable, the remainder of this Agreement shall be construed in all
respects as if the invalid or unenforceable term or provision were omitted. This
Agreement may not be altered or amended in any manner without the express
written consent of Borrower, SVB and Financial Institution. This Agreement may
be executed in any number of counterparts, all of which shall constitute one
original agreement.
Borrower and SVB have caused this Agreement to be executed by their duly
authorized officers all as of the date first above written.
BORROWER
P-COM, INC.
By:
---------------------------------------------------------
Name:
---------------------------------------------------------
Title:
---------------------------------------------------------
SVB
SILICON VALLEY BANK
By:
----------------------------------------------------------
Name:
----------------------------------------------------------
Title:
----------------------------------------------------------
ACKNOWLEDGED AND AGREED:
Financial Institution
---------------------
By: Date:
------------------------------------------------ ----------------
(Title )
-------------------------