Silicon Valley Financial Services
A Division of Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
(000) 000-0000 Fax (000) 000-0000
This NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT (the
"Agreement"), dated as of May 1, 1998 is between Silicon Valley Financial
Services, a division of Silicon Valley Bank, ("Buyer") and Credence Systems
Corporation, a California corporation, ("Seller'), with its chief executive
office at:
Street Address: 000 Xxxxxxx Xxxxxx
City: Fremont
County: Alameda
State: California
Zip code: 94539
Fax: 510/623-2522
1. Definitions. In this Agreement:
1.1 "Payment" is when Buyer has received payments equal to the Total
Purchased Receivables.
1.2 "Purchased Receivables" is all accounts, receivables, chattel
paper, instruments, contract rights, documents, general intangibles, letters of
credit, drafts, bankers acceptances other rights to payment and all proceeds
arising from the invoices and other agreements on the Schedule.
1.3 "Schedule" is the attached schedule showing the: Purchase Date, Due
Date, Total Purchased Receivables, Discount Rate, Purchase Price, Administrative
Fee and Interest Reserve amount.
2. Purchase and Sale of Receivables.
2.1 Sale and Purchase. On the Purchase Date, Seller sells and Buyer
buys Seller's right, title, and interest (but none of Sellers obligations) to
payment from any person liable on a Purchased Receivable, ("Account Debtors").
Each purchase and sale is at Buyer's and Seller's discretion. Buyer
will not (1) pay Seller an aggregate outstanding amount exceeding Ten Million
and no/1 00*** Dollars ($10,000,000.00) or (ii) buy any Purchased Receivable
after April 30,1999. Each purchase and sale will be on an assignment form
acceptable to Buyer.
2.2 Purchase Price and Related Matters. For each Purchased Receivable:
(a) Payment of Purchase Price. Buyer will pay Seller, on the
Purchase Date, the Purchase Price, less the Administrative Fee and legal fees
(if any).
(b) Late Payment. If one or more payments are made after the
Due Date, Seller shall also pay Buyer, for each such payment, an amount equal to
the Discount Rate divided by 360 days, multiplied by the number of days such
payment is made after the Due Date, not to exceed 90 days, and multiplied by the
amount of such late payment.
1
3. Collections, Payments and Remittances.
3.1 Application of Payments. All payments for any Purchased Receivable,
received by Seller or Buyer, are Buyer's property.
3.2 Collection by Seller.
a. Buyer appoints Seller its attorney-in-fact to receive
payments and enforce its rights and designates Seller it's assignee for
collection. Seller will use diligence and commercially reasonable means to
collect Purchased Receivables. Buyer may revoke these appointments if an Event
of Default occurs and continues.
b. Seller will begin legal proceedings about Purchased
Receivables in its name (as Buyer's assignee for collection or enforcement) or,
with Buyer's prior written consent, in Buyer's name. Seller will not make Buyer
party to any litigation or arbitration without Buyer's written consent.
c. Seller will hold in trust for and give Buyer (i) all
payments made by Account Debtors, and (ii) all instruments, chattel paper and
other proceeds of the Purchased Receivables.
d. Unless an Event of Default occurs and continues Seller will
remit payments to Buyer on the last business day of each week ("Settlement
Date") starting the week after the Purchase Date. On each Settlement Date Seller
will deliver a report acceptable to Buyer of account activity (including dates
and amounts of payments) and changes for each Purchased Receivable.
3.3 Collection by Buyer. If an Event of Default occurs and continues
Buyer is appointed Sellers attorney-in-fact and Buyer may:
(a) demand, xxx for and receive all payments for the Purchased
Receivables;and
(b) enforce payment of each Purchased Receivable in Seller's
name; and
(c) endorse Seller's name on checks or other instruments; and
(d) notify Account Debtors of the purchase and sale and
require all payments be made directly to Buyer.
(e) compromise, prosecute or defend any action or claim
involving a Purchased Receivable including filing or voting a claim in a
bankruptcy case.
(f) require Seller, at its expense, to notify the Account
Debtors to pay Buyer directly; and
(g) require Seller to assist collecting and enforcing claims
and execute any documents that Buyer reasonably requests.
3.4 No Obligation to Take Action. Buyer has no obligation to perform
Sellers obligations or to take action on any Purchased Receivable (including on
defaulted Purchased Receivables).
2
4. Non-Recourse; Repurchase Obligations.
4.1 Non-Recourse and Seller's Agreement to Repurchase. Buyer acquires
Purchased Receivables without recourse, except Seller will pay Buyer on demand
any unpaid portion of any Purchased Receivable if.
(a) For which there has been any breach of warranty,
representation or covenant in this Agreement; or
(b) For which the Account Debtor asserts any discount,
allowance, return, dispute, defense, right of recoupment, right of return,
warranty claim, or short payment;
together with Buyers reasonable attorneys' and professional fees and expenses
and all court costs for collecting Purchased Receivables and/or enforcing its
rights under this Agreement.
4.2 Payment to Buyer. Seller will pay Buyer in immediately available
funds.
5. Representations, Warranties and Covenants.
5.1 Purchased Receivables- Warranties, Representations and Covenants.
Seller represents, warrants and covenants for each Purchased Receivable:
(a) It is the owner with legal right to sell, transfer
and assign it;
(b) The correct amount is on the Schedule and is not
disputed;
(c) No payment is contingent on any obligation or
contract, and it has fulfilled all its obligations
as of the Purchase Date;
(d) It is based on actual sale and delivery of goods
and/or services rendered, due no later than its Due
Date and owing to Seller, it is not past due or in
default, has not been previously sold, assigned,
transferred, or pledged, and is free of any liens,
security interests and encumbrances;
(e) There are no defenses, offsets, counterclaims or
agreements in which the Account Debtor may claim any
deduction or discount.
(f) It reasonably believes no Account Debtor is insolvent
as defined in the United States Bankruptcy Code ("US
Code") or the California Uniform Commercial Code
("UCC") and no Account Debtor has filed or had filed
against it a voluntary or involuntary petition for
relief under the US CODE.; and
(g) No Account Debtor has objected to payment for or the
quality or quantity of the subject of the Purchased
Receivable,
(h) It will not assign, transfer, sell, or grant, or
permit any lien or security interest without Buyer's
prior written consent
5.2 Additional Warranties, Representations and Covenants. Seller
represents, warrants and covenants:
(a) Its name, form of organization, chief executive
office, and the place where the records about all
Purchased Receivables are kept is shown at the
beginning of this Agreement and it will give Buyer at
least 10 days prior written notice of changes to its
name, organization, chief executive office or
location of records.
(b) It will pay all its taxes including gross payroll,
withholding and sales taxes when due and will deliver
satisfactory evidence of payment if requested.
3
(c) It has not filed a voluntary petition or had filed
against it an involuntary petition under the US CODE
and does not anticipate any filing;
(d) If Payment of any Purchased Receivable does not occur
by its Due Date then Seller will provide a written
report, within 30 days, of the reasons for the delay.
(e) While any Purchased Receivable is outstanding, Seller
will give Buyer copies of all Forms 1 0-K, 1 0-Q and
8-K (or equivalents) within 5 days of its filing with
the Securities and Exchange Commission.
6. Adjustments. If any Account Debtor asserts a discount, allowance,
return, offset, defense, warranty claim, or the like (an "Adjustment") Seller
will promptly advise Buyer and, with Buyer's approval, resolve the dispute.
Seller will resell any rejected, returned, or recovered personal property for
Buyer, at Sellers expense, with the proceeds payable to Buyer. While Seller has
returned goods that are Buyers property, Seller will segregate and xxxx them
"property of Silicon Valley Financial Services." Buyer owns the Purchased
Receivables and until Payment has the right to take possession of any rejected,
returned, or recovered personal property.
7. Indemnification.
(a) If any Account Debtor is released from any payment
obligation for any Purchased Receivable because of: (i) Seller's act or
omission; or (ii) any of the documentation about the Purchased Receivables which
results in termination of any part of the Account Debtors obligation for the
Purchased Receivables, then Seller will pay Buyer the lesser of the amount of
the Purchased Receivable not payable or the unpaid portion of the Purchased
Receivable.
(b) Seller indemnifies and holds Buyer harmless from any
taxes from this transaction (except Buyer's income taxes) and costs, expenses
and reasonable attorney fees if Buyer promptly notifies it of any taxes of which
Buyer has notice.
8. Additional Rights. Seller grants Buyer a continuing lien on and
security interest in all of Seller's rights existing now or later and interest
in:
(a) Returned or rejected goods connected with the Purchased
Receivables
(b) Books and records about the Purchased Receivables or
returned or rejected goods;
(c) Proceeds from voluntary or involuntary dispositions,
including insurance proceeds.
(all the "Related Property")
Seller may not sell or convey any interest in Related Property without Buyer's
prior written consent. Seller will sign UCC financing statements and any other
instruments or documents to evidence, perfect or protect Buyers interests in the
Purchased Receivables and Related Property. Seller will deliver to Buyer all
original instruments, chattel paper and documents about Purchased Receivables
and Related Property.
9. Default. Any of the following is an Event of Default:
(a) Seller fails to pay Buyer any amount when due under
Section 2.2(b), 3.2(c) & (d), 4.1, 7 or 12;
(b) There is a voluntary or involuntary case against
Seller under the US CODE, or an assignment for the
benefit of creditors, or appointment of a receiver or
custodian for its assets;
(c) Seller's debts are greater than the fair value of its
assets or Seller is not paying its debts as they
become due or has unreasonably small capital;
(d) An involuntary lien, garnishment, attachment or the
like is issued against or attaches to the Purchased
Receivables or Related Property;
4
(e) Seller breaches a covenant, agreement, warranty, or
representation in this Agreement and the breach is
not cured to Buyer's satisfaction within 10 days
after Buyer gives Seller oral or written notice. A
breach that cannot be cured is an immediate default.
(f) Seller defaults under any debt or liability to Buyer.
10. Remedies on Default. When an Event of Default occurs Buyer has all
rights and remedies under this Agreement and the law, including those of a
secured party under the UCC, and the right to collect, dispose of, sell, lease
or use all Purchased Receivables and Related Property.
11. Default Rate. Amounts not paid by Seller when due under Section
2.2(b), 3.2(c) & (d), 4.1, 7 or 12; will accrue interest until paid at the
Discount Rate plus 5%.
12. Fees, Costs and Expenses. Immediately on demand Seller will pay all
reasonable fees, costs and expenses (including attorney and professional fees)
that Buyer incurs from (a) preparing, negotiating, administering and enforcing
this Agreement or any other agreement, including amendments, waivers or
consents, (b) litigation or disputes relating to the Purchased Receivables, the
Related Property, this Agreement or any other agreement, (c) enforcing rights
against Seller, (d) protecting or enforcing its title to the Purchased
Receivables or its security interest in the Related Property, (e) collecting any
amounts due from Seller or for a Purchased Receivable under a breach of Sellers
representation, warranty or covenant and (f) any bankruptcy case or insolvency
proceeding involving Seller. Reimbursement for fees, costs, and expenses through
the initial Purchase Date will be limited to $2,500.00.
13. Choice of Law, Venue and Jury Trial Waiver. California law governs
this Agreement. Seller and Buyer each submit to the exclusive jurisdiction of
the State and Federal courts in Santa Xxxxx County, California.
SELLER AND BUYER EACH WAIVE ITS RIGHT TO A JURY TRIAL FROM ANY CAUSE OF ACTION
RELATED TO AGREEMENT, INCLUDING CONTRACT, TORT, 13REACH OF DUTY OR OTHER CLAIM.
THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
14. Notices. Notices or demands by either party about this Agreement must be in
writing and personally delivered or sent by an overnight delivery service, by
certified mail postage prepaid return receipt requested, or by FAX to the
addresses below:
Seller: Credence Systems Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxx
FAX: (000) 000-0000
Buyer Silicon Valley Financial Services, A Division of
Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
FAX: (000) 000-0000
A party may change notice address by written notice to the other party.
5
15. General Provisions.
15.1 Successors and Assigns. This Agreement binds and is for the
benefit of successors and permitted assigns of each party. Seller may not assign
this Agreement or any rights under it without Buyers prior written consent which
may be granted or withheld in Buyers discretion. Buyer may, without the consent
of or notice to Seller, sell, transfer, or grant participation in any part of
Buyers obligations, rights or benefits under this Agreement.
15.2 Indemnification. Seller will indemnify, defend and hold harmless
Buyer and its officers, employees, and agents against: (a) obligations, demands,
claims, and liabilities asserted by any other party in connection with the
transactions contemplated by this Agreement; and (b) losses or expenses
incurred, or paid by Borrower from or consequential to transactions between
Buyer and Seller (including reasonable attorneys fees and expenses), except for
losses caused by Buyer's gross negligence or willful misconduct.
15.3 Time of Essence. Time is of the essence for performance of all
obligations in this Agreement.
15.4 Severability of Provision. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
15.5 Amendments in Writing, Integration. All amendments to this
Agreement must be in writing. This Agreement is the entire agreement about this
subject matter and supersedes prior negotiations or agreements.
15.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts and when executed
and delivered are one Agreement.
15.7 Survival. All covenants, representations and warranties made in
this Agreement continue in full force while any Purchased Receivable amount
remains outstanding. Sellers indemnification obligations survive until all
statutes of limitations for actions that may be brought against Buyer have run.
15.8 Buyer will use the same degree of care in handling Seller's
confidential information that it uses for its own proprietary information, but
may disclose information; (I) to its subsidiaries or affiliates in connection
with their business with Seller, (ii) to prospective transferees or purchasers
of any interest in the Agreement, (iii) as required by law, regulation,
subpoena, or other order, (iv) as required in connection with an examination or
audit and (v) as it considers appropriate exercising the remedies under this
Agreement. Confidential information does not include information that is either
(a) in the public domain or in Buyer's possession when disclosed, or becomes
part of the public domain after disclosure to Buyer, or (b) disclosed to Buyer
by a third party, if Buyer does not know that the third party is prohibited from
disclosing the information.
SELLER: Credence Systems Corporation,
a California corporation
/s/ XXXXXX X. XXXX
-------------------------------------------------------
By: Xxxxxx X. Xxxx
Title Chief Financial Officer
BUYER: SILICON VALLEY FINANCIAL SERVICES
A division of Silicon Valley Bank
-------------------------------------------------------
By
Title Senior Vice President
6
CORPORATE RESOLUTION TO SELL
I, the Secretary or Assistant Secretary of Credence Systems Corporation (the
"Seller"), certify that:
The Seller is a California corporation, and
Attachments 1 and 2 are copies of Seller's Articles of Incorporation and
Bylaws which are currently effective, and
At a duly held meeting of Seller's directors at which a quorum was present
(or by other authorized corporate action) the following resolutions were
adopted:
"Resolved that any ( ) of the following officers of Seller, whose
signatures are below:
Name Title Signature
Xxxxx Xxxxx VP, Controller /s/ XXXXX XXXXX
-------------------- ---------------- --------------------
Xxxxxx Xxxx Treasurer /s/ XXXXXX XXXX
-------------------- ---------------- --------------------
-------------------- ---------------- --------------------
-------------------- ---------------- --------------------
acting for Seller are authorized to:
Execute Purchase Agreement. To enter a Purchase Agreement with Silicon
Valley Bank ("Buyer") on terms agreed by them and Buyer for the sale of
certain of Seller's accounts receivable and to execute renewals,
extensions, modifications, refinancings, consolidations or
substitutions of any accounts receivable and to do other acts and
things and execute and deliver other documents that they consider
necessary to carry out the effect of these Resolutions.
Further Acts. To designate other individuals as authorized to request
that Buyer purchase additional accounts receivable under the Purchase
Agreement.
Further Resolved that:
any acts authorized by these Resolutions but performed before their
passage are ratified, and
these Resolutions remain effective and Buyer may rely on them until it
receives written notice of their revocation, but that notice will not
affect any of Seller's agreements or commitments then effective."
I also certify that the officers or agents above are duly elected or appointed
by Seller and hold the positions opposite their names and that the their
signatures are true and that the Resolutions are effective and have not been
modified or revoked.
/s/ XXXXXX X. XXXX 5/29/98
-------------------------------------------- -------------------
(signature) Assistant Secretary or Secretary Date
