BUSINESS FINANCING AGREEMENT dated as of September 3, 2008 between BRIDGE BANK, NATIONAL ASSOCIATION and ALPHA INNOTECH CORP., a Delaware corporation ("Borrower")
Exhibit 10.17
dated as
of September 3, 2008
between
BRIDGE
BANK, NATIONAL ASSOCIATION
and
ALPHA
INNOTECH CORP., a Delaware corporation ("Borrower")
Borrower
and Lender agree as follows:
1. Definitions and
Construction.
1.1 Definitions. In
this Agreement:
"Account Balance"
means at any time the aggregate of the Receivable Amounts of all Domestic
Eligible Receivables at such time.
"Account Debtor" has
the meaning in the California Uniform Commercial Code and includes any person
liable on any Receivable, including without limitation, any guaranty of any
Receivable and any issuer of a letter of credit or banker's acceptance assuring
payment thereof.
"Adjustments" means
all discounts, allowances, disputes, 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 Receivable.
"Advance" means an
advance made by Lender to Borrower pursuant to Section 2.2.
"Advance Rate" means
80% or such greater or lesser percentage as Lender may from time to time
establish in its sole discretion upon notice to Borrower.
"Agreement" means this
Business Financing Agreement.
“Borrower Agreement”
is the Export-Import Bank of the United States Working Capital Guarantee Program
Borrower Agreement between Borrower and Lender.
"Borrowing Base" means
at any time the product of the Account Balance and the Advance
Rate.
“Capital Good” shall
mean a capital good (e.g., manufacturing equipment, licensing agreements) that
will establish or expand foreign production capacity of an exportable
good.
"Collateral" means all
of Borrower's rights and interest in any and all personal property, whether now
existing or hereafter acquired or created and wherever located, and all products
and proceeds thereof and accessions thereto, including the following
(collectively, the "Collateral"): accounts, including health care
insurance receivables, chattel paper, inventory, equipment, instruments,
including promissory notes, investment property, documents, deposit accounts,
letter of credit rights, any commercial tort claim of Borrower which is now or
hereafter identified by Borrower or Lender, general intangibles, and supporting
obligations.
"Collections" means
all payments from or on behalf of an Account Debtor with respect to
Receivables.
"Compliance
Certificate" means a certificate in the form attached to this Agreement
by the chief financial officer of Borrower 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.
“Credit Limit” means
$1,250,000, inclusive of the Inventory Sublimit.
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"Default" means any
Event of Default or any event that with notice, lapse of time or otherwise would
constitute an Event of Default.
“Domestic Advances”
means Advances made against Domestic Eligible Receivables.
"Domestic Eligible
Receivable" means a Receivable that satisfies all of the
following:
(a) The
Receivable has been created by Borrower in the ordinary course of Borrower's
business and without any obligation on the part of Borrower to render any
further performance.
(b) There are
no conditions which must be satisfied before Borrower is entitled to receive
payment of the Receivable, and the Receivable does not arise from COD sales,
consignments or guaranteed sales.
(c) The
Account Debtor upon the Receivable does not claim any defense to payment of the
Receivable, whether well founded or otherwise.
(d) The
Receivable is not the obligation of an Account Debtor who has asserted or may
assert any counterclaims or offsets against Borrower (including offsets for any
"contra accounts" owed by Borrower to the Account Debtor for goods purchased by
Borrower or for services performed for Borrower).
(e) The
Receivable represents a genuine obligation of the Account Debtor and to the
extent any credit balances exist in favor of the Account Debtor, such credit
balances shall be deducted in calculating the Receivable Amount.
(f) Borrower
has sent an invoice to the Account Debtor in the amount of the
Receivable.
(g) Borrower
is not prohibited by the laws of the state where the Account Debtor is located
from bringing an action in the courts of that state to enforce the Account
Debtor's obligation to pay the Receivable. Borrower has taken all
appropriate actions to ensure access to the courts of the state where the
Account Debtor is located, including, where necessary, the filing of a Notice of
Business Activities Report or other similar filing with the applicable state
agency or the qualification by Borrower as a foreign corporation authorized to
transact business in such state.
(h) The
Receivable is owned by Borrower free of any title defects or any liens or
interests of others except the security interest in favor of Lender and except
for Permitted Liens, and Lender has a perfected, first priority security
interest in such Receivable.
(i) The
Account Debtor on the Receivable is not any of the following: (i) an
employee, affiliate, parent or subsidiary of Borrower, or an entity which has
common officers or directors with Borrower; (ii) the U.S. government or any
agency or department of the U.S. government unless Lender agrees in writing to
accept the Receivable, Borrower complies with the procedures in the Federal
Assignment of Claims Act of 1940 (41 U.S.C. §15) with respect to the Receivable,
and the underlying contract expressly provides that neither the U.S. government
nor any agency or department thereof shall have the right of set-off against
Borrower; (iii) any person or entity located in a foreign country unless (A) the
Receivable is supported by an irrevocable letter of credit issued by a bank
acceptable to Lender, and (B) if requested by Lender, the original of such
letter of credit and/or any issuance drafts drawn under such letter of credit
and accepted by the issuing or confirming bank have been delivered to Lender;
(iv) an Account Debtor as to which thirty five percent (35%) or more of the
aggregate dollar amount of all outstanding Receivables owing from such Account
Debtor have not been paid within 90 days from invoice date; or (v) an Account
Debtor whose total obligations to Borrower exceed thirty five percent (35%) of
all Accounts, to the extent such obligations exceed the aforementioned
percentage, except as approved in writing by Bank.
(j) The
Receivable is not in default (a Receivable will be considered in default if any
of the following occur: (i) the Receivable is not paid within 90 days from its
invoice date; (ii) the Account Debtor obligated upon the Receivable suspends
business, makes a general assignment for the benefit of creditors,
or
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(k) fails to
pay its debts generally as they come due; or (iii) any petition is filed by or
against the Account Debtor obligated upon the Receivable under any bankruptcy
law or any other law or laws for the relief of debtors);
(l) The
Receivable does not arise from the sale of goods which remain in Borrower's
possession or under Borrower's control.
(m) The
Receivable is not evidenced by a promissory note or chattel paper, nor is the
Account Debtor obligated to Borrower under any other obligation which is
evidenced by a promissory note.
(n) The
Receivable is otherwise acceptable to Lender.
“EBITDASC” means
earnings before interest, taxes, depreciation, amortization and non-cash
stock-based charges, all determined in accordance with GAAP.
“Eligible Inventory”
means raw materials and finished goods, net of perishable goods, consigned
inventory, obsolete goods and any other inventory that Lender deems ineligible
in its reasonable judgment due to more than normal inventory financing
risk.
“Eligible Receivables”
means the Domestic Eligible Receivables and the EXIM Eligible Foreign
Accounts.
“EXIM Account Balance”
means at any time the aggregate of the Receivable Amounts of all EXIM Eligible
Foreign Receivables at such time.
“EXIM Advance Rate”
means 90% or such greater or lesser percentage as Lender may from time to time
establish in its sole discretion upon notice to Borrower.
“EXIM Advances” means
Advances made against EXIM Eligible Foreign Accounts.
“EXIM Bank” means
Export-Import Bank of the United States.
“EXIM Bank Expenses”
are all reasonable fees that the Lender pays to the EXIM Bank in consideration
of the issuance of the EXIM Guarantee.
"EXIM Borrowing Base"
means at any time the product of the EXIM Account Balance and the EXIM Advance
Rate.
“EXIM Borrowing Base
Certificate/Funding Request” means the Borrowing Base Certificate/Funding
Request in form of Exhibit A hereto.
“EXIM Credit Limit”
means $1,250,000, inclusive of the EXIM Inventory Sublimit.
“EXIM Application Fee”
means a fee in the amount of $100 per annum.
“EXIM Documents” means
the EXIM Guarantee, the Borrower Agreement, and each other agreement executed in
connection therewith.
“EXIM Eligible Foreign
Accounts” are Receivables payable in United States Dollars that arise in
the ordinary course of Borrower's business and are derived from exports
originating in the United States (i) that the account debtor does not have its
principal place of business in the United States and (ii) that have been
assigned and comply with all of Borrower's representations and warranties in
Section 6; but
Lender may change eligibility standards by giving Borrower
notice. Unless Lender agrees otherwise in writing, EXIM Eligible
Foreign Accounts will not include:
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Receivables
with terms of sales greater than 120 days.
(o) Receivables
of a Buyer for whom fifty percent (50%) or more of the Accounts Receivable of
such Buyer do not satisfy the requirements of subclause (a) above.
(p) Receivables
which are more than sixty (60) calendar days past the original due date, unless
it is insured through EXIM Bank export credit insurance for comprehensive
commercial and political risk, or through EXIM Bank approved private insurers
for a comparable coverage, in which case ninety (90) calendar days shall
apply;
(q) Credit
balances over 60 days from invoice due date;
(r) Receivables
evidenced by a letter of credit until the date of shipment of the items covered
by the subject letter of credit;
(s) Receivables
for which Borrower owes the account debtor, but only up to the amount owed
(sometimes called “contra” accounts, accounts payable, customer deposits or
credit accounts);
(t) Receivables
for demonstration or promotional equipment, or in which goods are consigned,
sales guaranteed, sale or return, sale on approval, xxxx and hold, or other
terms if account debtor’s payment may be conditional;
(u) Receivables
for which the account debtor is Borrower’s affiliate, officer, employee, or
agent;
(v) Receivables
in which the account debtor disputes liability or makes any claim and Lender
believes there may be a basis for dispute (but only up to the disputed or
claimed amount), or if the Account Debtor is subject to a bankruptcy proceeding,
or becomes insolvent, or goes out of business;
(w) Receivables
from sales of items associated with nuclear power, enrichment, reprocessing,
research or heavy water production facilities.
(x) Receivable
from sales of Capital Goods.
(y) Receivables
generated by the sale of products purchased for military purposes or which
constitute defense articles or defense services;
(z) Receivables
that arise from the sales of items not in the ordinary course of Borrower’s
business;
(aa) Receivables
not owned by Borrower or that are subject to any right, claim or interest of
another person other than the lien in favor of Lender;
(bb) Receivables
with respect to which an invoice has not been sent;
(cc) Receivables
billed or payable outside the United Stated unless approved in writing by EXIM
Bank, however, limited to no more than 50% of the borrowing base shall be of
such accounts; and such Receivables are subject to the following:
(i) Each
subsidiary or affiliate is a party to the Agreement;
(ii) All
proceeds are remitted to the United States on a monthly basis (excluding the
retention of proceeds for the purpose of funding local expenses);
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(iii) Receivables
are derived from eligible exports originating from the United
States;
(iv) All
payments due and payable are collected through a cash collateral account under
Lender’s control;
(v) Receivables
are denominated in US Dollars or other hard currencies pre-approved by EXIM
Bank;
(vi) Lender
obtains a valid first priority security interest (or equivalent) in the
jurisdiction where the Receivables are located; and
(vii) Lender
obtains a legal opinion from local counsel with regard to the enforceability of
such security interest.
(dd) Receivables
from account debtors with balance of 50% over 60 days past the invoice due
date;
(ee) Receivables
with open account term with balance more than 35% concentration of total foreign
Receivables, unless pre-approved by Lender;
(ff) Receivables
billed in currencies other than U.S. Dollars, unless approved in writing by EXIM
Bank;
(gg) Receivables
from foreign buyers in countries where EXIM Bank is legally prohibited from
doing business or in which EXIM Bank coverage is not available (as designated in
the Country Limitation Schedule referred to the Borrower
Agreement);
(hh) Foreign
Receivables backed by letters of credit unacceptable to Lender;
(ii) Receivables
for which Lender or EXIM Bank determines collection to be
doubtful;
(jj) Receivables
for which the items giving rise to such Receivable have not been shipped and
delivered to and accepted by the Buyer or the services giving rise to such
Receivables have not been performed by Borrower and accepted by the Buyer or the
Receivable does not represent a final sale;
(kk) Receivables
that are included as an eligible receivable under any other credit facility to
which Borrower is a party;
(ll) Receivables
for which Borrower has made any agreement with the Buyer for any deduction
therefrom, except for discounts or allowances made in the ordinary course of
business for prompt payment, all of which discounts or allowances are reflected
in the calculation of the face value of each respective invoice
related thereto; and
(mm) Receivables
for which any of the items giving rise to such Receivable have been returned,
rejected or repossessed.
”EXIM Eligible
Inventory” shall mean Export-Related Inventory which is acceptable to
Lender and which is deemed to be eligible pursuant to the Loan Documents, but in
no event shall EXIM Eligible Inventory include any Inventory:
(a) that is
not subject to a valid, perfected first priority Lien in favor of
Lender;
(b) that is
located at an address that has not been disclosed to Lender in
writing;
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(c) that has
offsetting claims;
(d) that is
placed by Borrower on consignment or held by Borrower on
consignment from another Person;
(e) that is
in the possession of a processor or bailee, or located on premises leased or
subleased to Borrower, or on premises subject to a mortgage in favor of a Person
other than Lender, unless such processor or bailee or mortgagee or the lessor or
sublessor of such premises, as the case may be, has executed and delivered all
documentation which Lender shall require to evidence the subordination or other
limitation or extinguishment of such Person's rights with respect to such
Inventory and Lender's right to gain access thereto;
(f) that is
produced in violation of the Fair Labor Standards Act or subject to the "hot
goods" provisions contained in 29 U.S.C.§215 or any successor statute or
section;
(g) as to
which any covenant, representation or warranty with respect to such Inventory
contained in the Loan Documents has been breached;
(h) that is
not located in the United States unless expressly permitted by Lender, on terms
acceptable to Lender;
(i) that is
demonstration Inventory or Inventory sold on consignment;
(j) that
consists of proprietary software (i.e. software designed solely for Borrower's
internal use and not intended for resale);
(k) that is
damaged, obsolete, returned, defective, recalled or unfit for further
processing;
(l) that has
been previously exported from the United States;
(m) that
constitutes, or will be incorporated into Items that constitute, defense
articles or defense services;
(n) that is
an Item or will be incorporated into Items that will be used in the
construction, alteration, operation or maintenance of nuclear power, enrichment,
reprocessing, research or heavy water production facilities unless with EXIM
Bank’s prior written consent;
(o) that is
an Item or is to be incorporated into Items destined for shipment to a country
as to which EXIM Bank is prohibited from doing business as designated in the
Country Limitation Schedule;
(p) that is
an Item or is to be incorporated into Items destined for shipment to a Buyer
located in a country in which EXIM Bank coverage is not available for commercial
reasons as designated in the Country Limitation Schedule, unless and only to the
extent that such Items are to be sold to such country on terms of a letter of
credit confirmed by a bank acceptable to EXIM Bank;
(q) that
constitutes, or is to be incorporated into, Items whose sale would result in an
account receivable which would not be an Eligible Receivable;
(r) that is
included as eligible inventory under any other credit facility to which Borrower
is a party; or
(s) that is,
or is to be incorporated into, an Item that is a Capital Good.
“EXIM Facility Fee”
means a fee equal to .50% of the EXIM Credit Limit, due upon execution of this
Agreement and annually thereafter.
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“EXIM Guarantee” means
the Master Guaranty Agreement executed by EXIM Bank in favor of
Lender.
“EXIM Inventory
Sublimit” means a sublimit for EXIM Eligible Inventory not to exceed (x)
the lesser of (a) $200,000 or (b) seventy five percent (75%) of Eligible
Inventory; and (y) sixty percent (60%) of the EXIM Advances
outstanding.
"Export Order" shall
mean a documented purchase order or contract evidencing a buyer’s agreement to
purchase the Items from Borrower for export from the United States, which
documentation shall include written information that is necessary to confirm
such purchase order or contract, including identification of the Items, the name
of the buyer, the country of destination, contact information for the Buyer and
the total amount of the purchase order or contract; in the case of Indirect
Exports, such documentation shall further include a copy of the written purchase
order or contract from a foreign purchaser or other documentation clearly
evidencing a foreign purchaser’s agreement to purchase the Items.
"Export-Related
Inventory" shall mean the Inventory of Borrower located in the United
States that has been purchased, manufactured or otherwise acquired by Borrower
for sale or resale as Items, or to be incorporated into Items to be sold or
resold pursuant to Export Orders.
"Event of Default" has
the meaning set forth in Section 9.1.
"Facility Fee" means a
fee equal to .50% of the Credit Limit, due upon execution of this Agreement and
annually thereafter.
"Finance Charge" means
for each Reconciliation Period an interest amount equal to the Finance Charge
Percentage of the average daily outstanding balance of Advances during such
Reconciliation Period.
"Finance Charge
Percentage" means a rate per year equal to one and one quarter percent
(1.25%) above the Prime Rate, plus an additional five percentage points (5.00%)
during any period that an Event of Default has occurred and is
continuing.
"Funding Request"
means a writing signed by an authorized representative of Borrower requesting an
Advance which accurately identifies the Domestic Eligible Receivables and EXIM
Eligible Foreign Accounts and Receivable Amounts, 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.
“Inventory Sublimit”
means a sublimit for Eligible Inventory not to exceed (x) the lesser of (a)
$200,000 or (b) thirty percent (30%) of Eligible Inventory; and (y) thirty
percent (30%) of the Advances outstanding.
"Lender" means Bridge
Bank, National Association, and its successors and assigns.
“Material Adverse
Change” means a material adverse change in Borrower's (or any
guarantor's) business condition (financial or otherwise), operations, properties
or prospects, or ability to repay the credit.
"Obligations" means
all liabilities and obligations of Borrower to Lender 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, fees, interest, expenses, professional fees and attorneys'
fees.
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"Overadvance" means
that the total amount of the Advances or the EXIM Advances then outstanding
exceeds (x) the Credit Limit or the Borrowing Base, or (y) the EXIM Credit Limit
or the EXIM Borrowing Base, as applicable.
“Permitted
Indebtedness” means: (a) Indebtedness of Borrower in favor of EXIM Bank
arising under this Agreement or any other Loan Document; (b) Indebtedness
existing on the Closing Date and disclosed to Lender and EXIM Bank; (c)
Indebtedness secured by a Permitted Lien not to exceed One Hundred Thousand
Dollars ($100,000) in the aggregate in any fiscal year of Borrower; (d)
Subordinated Debt; (e) Indebtedness to trade creditors and with respect to
surety bonds and similar obligations incurred in the ordinary course of
business; and (f) Extensions, refinancings, modifications, amendments,
restatements and renewals of any items of Permitted Indebtedness, provided that
the principal amount is not increased or the terms modified to impose more
burdensome terms upon Borrower or any Subsidiary, as the case may
be.
“Permitted Liens”
means (a) Liens for taxes, assessments or other governmental charges or levies
not delinquent, or, being contested in good faith and by appropriate proceedings
and with respect to which proper reserves have been taken by Borrower; provided,
that, the Lien shall have no effect on the priority of the Liens in favor of
Lender or the value of the assets in which Lender has such a Lien and a stay of
enforcement of any such Lien shall be in effect; (b) deposits or pledges
securing obligations under worker's compensation, unemployment insurance, social
security or public liability laws or similar legislation; (c) deposits or
pledges securing bids, tenders, contracts (other than contracts for the payment
of money), leases, statutory obligations, surety and appeal bonds and other
obligations of like nature arising in the ordinary course of Borrower's
business; (d) judgment Liens that have been stayed or bonded; (e) mechanics',
workers', materialmen's or other like Liens arising in the ordinary course of
Borrower's business with respect to obligations which are not due; (f) Liens
placed upon fixed assets hereafter acquired to secure a portion of the purchase
price thereof, provided, that, any such Lien shall not encumber any other
property of Borrower; (g) security interests being terminated concurrently with
the execution of the Loan Documents; and (h) Liens disclosed in Section 6.D. of
the Loan Authorization Agreement, provided that, except as otherwise permitted
by EXIM Bank in writing, such Liens in Section 6.D. shall be subordinate to the
Liens in favor of Lender on Primary Collateral.
"Prime Rate" means for
any day, a variable rate of interest, per annum, most recently published by the
Wall Street Journal, as the "prime rate," provided that if such day is not a
business day, the Prime Rate for such day shall be such rate on such
transactions on the next preceding business day as so published in the Wall
Street Journal on the next succeeding business day. The Prime Rate shall at no
event be less than 4.75%.
"Receivable Amount"
means as to any Receivable, the Receivable Amount due from the Account Debtor
after deducting all discounts, credits, offsets, payments or other deductions of
any nature whatsoever, whether or not claimed by the Account
Debtor.
"Receivables" means
Borrower's rights to payment arising in the ordinary course of Borrower's
business, including accounts, chattel paper, instruments, contract rights,
documents, general intangibles, letters of credit, drafts, and bankers
acceptances.
"Reconciliation Date"
means the last calendar day of each Reconciliation Period.
"Reconciliation
Period" means each calendar month.
“Termination Date”
means the earlier of (a) one year from the date hereof, or (b) the date on which
Lender elects to terminate this Agreement pursuant to the terms
herein.
1.2 Construction:
(a) In this
Agreement: (i) references to the plural include the singular and
to the singular include the plural; (ii) references to any gender include
any other gender; (iii) the terms "include" and "including" are not
limiting; (iv) the term "or" has the inclusive meaning represented by the
phrase "and/or," (v)
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(b) unless
otherwise specified, section and subsection references are to this Agreement,
and (vi) any reference to any statute, law, or regulation shall include all
amendments thereto and revisions thereof.
(c) Neither
this Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved using any presumption against either Borrower or Lender, whether under
any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by each party hereto and their respective
counsel. In case of any ambiguity or uncertainty, this Agreement
shall be construed and interpreted according to the ordinary meaning of the
words used to accomplish fairly the purposes and intentions of all parties
hereto.
(d) Titles
and section headings used in this Agreement are for convenience only and shall
not be used in interpreting this Agreement.
2. Advances.
2.1 Funding
Requests. Borrower may request that Lender make an advance
(each, an "Advance") by delivering to Lender a Funding
Request. Lender shall be entitled to rely on all the information
provided by Borrower to Lender on or with the Funding Request and to rely on the
signature on any Funding Request as an authorized signature of
Borrower.
2.2 Revolving Credit
Line. Subject to the terms and conditions of this Agreement,
from the date on which this Agreement becomes effective until the Termination
Date, Lender will make Advances to Borrower not exceeding the Credit Limit or
the Borrowing Base, whichever is less, minus, in each case, the Inventory
Sublimit; provided that in no event shall Lender be obligated to make any
Advance that results in an Overadvance or while any Overadvance is
outstanding. Amounts borrowed under this Section may be repaid and
reborrowed during the term of this Agreement. It shall be a condition
to each Advance that (a) all of the representations and warranties set
forth in Section 6 are true and correct on the date of such Advance as
though made at and as of each such date (except where such representations and
warranties relate to a specific prior date) and (b) no Default has occurred
and is continuing, or would result from such Advance.
2.3 Inventory
Sublimit. Subject to the terms and conditions of this
Agreement and the availability under the Credit Limit and the Borrowing Base,
Borrower may request Advances to purchase Eligible Inventory in an aggregate
amount not to exceed the Inventory Sublimit.
2.4 EXIM
Advances. Subject to the terms and conditions of this
Agreement, from the date on which this Agreement becomes effective until the
Termination Date, Lender will make EXIM Advances to Borrower not exceeding the
EXIM Credit Limit or the EXIM Borrowing Base, whichever is less, minus, in each
case, the EXIM Inventory Sublimit; provided that in no event shall Lender be
obligated to make any EXIM Advance that results in an Overadvance or while any
Overadvance is outstanding. Amounts borrowed under this Section may
be repaid and reborrowed during the term of this Agreement. It shall
be a condition to each EXIM Advance that (a) all of the representations and
warranties set forth in Section 6 are true and correct on the date of such
EXIM Advance as though made at and as of each such date (except where such
representations and warranties relate to a specific prior date) and (b) no
Default has occurred and is continuing, or would result from such EXIM
Advance.
2.5 EXIM Inventory
Sublimit. Subject to the terms and conditions of this
Agreement and the availability under the EXIM Credit Limit and the EXIM
Borrowing Base, Borrower may request EXIM Advances to purchase Eligible
Inventory in an aggregate amount not to exceed the EXIM Inventory
Sublimit.
2.6 Rights in Respect
of Receivables. Lender shall have the exclusive
right to receive all Collections on the Receivable and no Adjustments will be
made without the Lender's consent. Lender shall have, with respect to
any goods related to the Receivables, 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.
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2.7 Due
Diligence. Lender may at any time and from time to time
contact Account Debtors and other persons obligated or knowledgeable in respect
of Receivables to confirm the Receivable Amount of such Receivables, to
determine whether Receivables constitute Eligible Receivables, and for any other
purpose in connection with this Agreement. Lender may audit
Borrower’s Receivables and any and all records pertaining to the Collateral, at
Lender’s sole discretion and at Borrower's expense; provided that such audits
shall be conducted not more often than twice a year, unless an Event of Default
has occurred.
3. Collections, Charges and
Remittances.
3.1 Collections. Lender
shall credit Collections with respect to Receivables received by Lender to
Borrower's Account Balance within three business days of the date
received. At Lender's discretion, all Collections received by Lender
may either be (a) credited to Borrower's deposit account with Lender, or (b)
applied to repay when due the Advances, the EXIM Advances and other Obligations;
once all Obligations have been paid in full, Lender agrees promptly to remit to
Borrower the remaining amount of Collections it receives. Lender has
no duty to do any act other than to turn over such amounts as required
above. If an item of Collections is not honored or Lender does not
receive good funds for any reason (except as a result of Lender’s gross
negligence), the amount of any application shall be reversed as if the
Collections had not been received and Finance Charges under Section 3.2
shall accrue thereon.
3.2 Finance
Charges. Ten days following the Reconciliation Date Borrower
shall pay to Lender the Finance Charge for the prior Reconciliation
Period. Lender may deduct the accrued Finance Charges from Borrowers
checking account maintained with Lender.
3.3 Fees.
(a) Facility
Fee. On the date of this Agreement and on each anniversary
thereof prior to the Termination Date, Borrower shall pay to Lender the Facility
Fee.
(b) EXIM Facility Fee; EXIM
Application Fee. On the date of this Agreement and each
anniversary thereof, Borrower shall pay to Lender the EXIM Facility Fee and the
EXIM Application Fee.
3.4 Reporting. Within
15 days after the end of each Reconciliation Period, Lender shall send to
Borrower a report covering the transactions for that Reconciliation Period,
including the amount of all Collections, Adjustments made by Lender, Finance
Charges, and other fees and charges. The accounting shall be deemed
correct and conclusive unless Borrower makes written objection to Lender within
30 days after the Lender mails the accounting to Borrower.
3.5 Adjustments. In
the event of a breach of Sections 6 or 7, or in the event any Adjustment or
dispute is asserted by any Account Debtor, Borrower shall promptly advise Lender
and shall, subject to the Lender's approval, resolve such disputes and advise
Lender of any adjustments. Lender shall have the right, at any time,
to take possession of any rejected, returned, or recovered personal
property. If such possession is not taken by Lender, Borrower is to
resell it for Lender's account at Borrower's expense with the proceeds made
payable to Lender. While Borrower retains possession of any returned
goods, Borrower shall segregate said goods and xxxx them as property of
Lender.
3.6 Lockbox Account Collection
Services. Borrower and Lender shall immediately enter into a
remittance processing services agreement acceptable to Lender (the “Lockbox
Agreement”). Borrower shall use the lockbox address as the remit to
and payment address for all of Borrower’s Collections and it will be considered
an immediate Event of Default if this does not occur or is not operational
within 45 days of the date of this Agreement. All Collections
received to the lockbox will be deposited to a non-interest bearing bank-control
account maintained with Lender and Borrower will not have access to that
account. Borrower will (i) immediately notify, transfer and deliver
to Lender all Collections Borrower receives and (ii) deliver to Lender a
detailed cash receipt’s journal on Friday of each week until the lockbox is
operational. Additionally, Lender may request that Account Debtor’s
pay (by wire transfer or otherwise) Collections to Lender directly.
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3.7 Overadvances.
3.8 Overadvances. Upon
any occurrence of an Overadvance, Borrower shall immediately pay down the
Advances or the EXIM Advances, as applicable, so that, after giving effect to
such payments, no Overadvance exists.
3.9 Borrower's
Payment. When any Overadvance or other amount owing to Lender
becomes due, Lender shall inform Borrower of the manner of payment which may be
any one or more of the following in Lender's sole
discretion: (a) in cash immediately upon demand therefor; (b) by
deduction from or offset against the amount that otherwise would be forwarded to
Borrower in respect of any further Advances that may be made by Lender; or
(c) by any combination of the foregoing as Lender may from time to time
choose.
4. Power of
Attorney. Borrower irrevocably appoints Lender and its
successors and assigns as Borrower's true and lawful attorney in fact, and
authorizes Lender, at Borrower's sole expense, whether or not there has been an
Event of Default, to (i) receive and open all mail addressed to Borrower
for the purpose of collecting the Receivables; (ii) endorse Borrower's name
on any checks or other forms of payment on the Receivables; (iii) execute
on behalf of Borrower any and all instruments, documents, financing statements
and the like to perfect Lender's interests in the Receivables and Collateral;
(iv) to notify all Account Debtors with respect to the Receivables to pay Lender
directly; (v) debit Borrower’s checking account maintained with Lender for any
and all Obligations due under this Agreement; (vi) sell, assign, transfer,
pledge, compromise, or discharge the whole or any part of the Collateral;
(vii) demand, collect, receive, xxx, and give releases to any Account
Debtor for the monies due or which may become due upon or with respect to the
Receivables and to compromise, prosecute, or defend any action, claim, case or
proceeding relating to the Collateral, including the filing of a claim or the
voting of such claims in any bankruptcy case, all in Lender's name or Borrower's
name, as Lender may choose; and (viii) prepare, file and sign Borrower'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 the
Collateral; and (ix) do all acts and things necessary or expedient, in
furtherance of any such purposes.
5. Representations and
Warranties. Borrower represents and
warrants:
(a) With
respect to each Eligible Receivable:
(i) It is the
owner with legal right to sell, transfer and assign it;
(ii) The
correct Receivable Amount has been accurately reported to Lender and is not
disputed;
(iii) Lender
has the right to endorse and/ or require Borrower to endorse all payments
received on Receivables and all proceeds of Collateral; and
(iv) No
representation, warranty or other statement of Borrower in any certificate or
written statement given to Lender contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement contained
in the certificates or statement not misleading.
(b) Borrower
is duly existing and in good standing in its state of formation and qualified
and licensed to do business in, and in good standing in, any state in which the
conduct of its business or its ownership of property requires that it be
qualified, except where the failure to do so could not reasonably be expected to
cause a Material Adverse Change.
(c) The
execution, delivery and performance of this Agreement has been duly authorized,
and does not conflict with Borrower's organizational documents, nor constitute
an Event of Default under any material agreement by which Borrower is
bound. Borrower is not in default under any agreement to which or by
which it is bound, except to the extent such default could not reasonably be
expected to cause a Material Adverse Change.
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(d) Borrower
has good title to the Collateral, except for Permitted Liens, and all inventory
is in all material respects of good and marketable quality, free from material
defects, except for inventory for which adequate reserves have been made
(provided no such inventory is included in any Borrowing Base
Certificate).
(e) Borrower's
name, form of organization, chief executive office, and the place where the
records concerning all Receivables and Collateral are kept is set forth at the
beginning of this Agreement, Borrower is located at its address for notices set
forth in this Agreement.
(f) If
Borrower 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 specifically disclosed and identified to Lender in
writing.
6. Miscellaneous
Provisions. Borrower will:
(a) Maintain
its corporate existence and good standing in its jurisdictions of incorporation
and maintain its qualification in each jurisdiction necessary to Borrower’s
business or operations, except where the failure to do so could not reasonably
be expected to cause a Material Adverse Change.
(b) Give
Lender at least 30 days prior written notice of changes to its name,
organization, chief executive office or location of records.
(c) Pay or
make provisions for paying all its taxes including gross payroll, withholding
and sales taxes when due and will deliver satisfactory evidence of payment to
Lender if requested. Borrower may, however, defer payment of any contested
taxes; provided, that Borrower (a) in good faith contests Borrower's obligation
to pay such taxes by appropriate proceedings promptly and diligently instituted
and conducted; (b) notifies Lender in writing of the commencement of, and any
material development in, the proceedings; (c) posts bonds or takes any other
steps required to keep the contested taxes from becoming a Lien upon any of the
Collateral; and (d) maintains adequate reserves therefore in conformity with
GAAP.
(d) Provide
to Lender a written report within 10 days, if payment of any Receivable does not
occur by its due date and include the reasons for the delay.
(e) Give
Lender copies of all of Borrower's quarterly balance sheets and income
statements, Forms 10-K, 10-Q and 8-K (or equivalents) within 5 days of filing
any of the foregoing with the Securities and Exchange Commission, while any
Advance is outstanding; provided that such Forms shall be deemed to have been
delivered on the date on which Borrower posts the same or provides a link
thereto on Borrower’s or another website on the Internet.
(f) Execute
any further instruments and take further action as Lender reasonably requests to
perfect or continue Lender’s security interest in the Collateral or to effect
the purposes of this Agreement.
(g) Immediately
notify, transfer and deliver to Lender all Collections Borrower
receives.
(h) Not
create, incur, assume, or be liable for any indebtedness, except for Permitted
Indebtedness.
(i) Immediately
notify Lender if Borrower hereafter obtains any interest in any copyrights,
patents, trademarks or licenses that are significant in value or are material to
the conduct of its business or the value of any Receivable.
(j) Provide
to Lender within 30 days after the end of each month the following for such
month and the period then ending: balance sheet, income statement; statement of
cashflows, deferred revenue report, and Compliance Certificate.
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(k) Provide
to Lender, no later than 5 days following the 1st and
15th
day of each month, the following for the period then ending: accounts receivable
aging report, together with a borrowing base certificate in form and substance
acceptable to Lender setting forth the Eligible Receivables and Receivable
Amounts thereof, and an accounts payable aging report.
(l) Provide
to Lender, no later than 30 days after to the end of Borrower’s fiscal year,
Borrower’s Board of Director’s-approved operating budget for the succeeding
year;
(m) Provide
to Lender, as soon as available, but in any event within 120 days after the end
of Borrower’s fiscal year, audited consolidated financial statements of Borrower
prepared in accordance with GAAP, consistently applied, together with an
unqualified opinion on such financial statements of an independent certified
public accounting firm reasonably acceptable to Lender.
(n) At
reasonable request and during normal business hours, Lender shall have a right
from time to time hereafter to audit Borrower's Inventory and Receivables at
Borrower's expense. Such audits shall be conducted every
six months or, if an Event of Default has occurred, more
frequently.
(o) Maintain
its primary depository and operating accounts with Lender and, in the case of any deposit accounts not maintained
with Lender, grant to Lender a first priority perfected security interest in and
“control” (within the meaning of Section 9104 of the California Uniform
Commercial Code) of such deposit account pursuant to documentation acceptable
to Lender.
(p) At all
times insure all of the tangible Collateral and carry such other business
insurance, with insurers reasonably acceptable to Lender, in such form and
amounts as Lender may reasonably require and that are customary and in
accordance with standard practices for Borrower’s industry and locations, and
Borrower shall provide evidence of such insurance to Lender. All such
insurance policies shall name Lender as an additional loss payee, and shall
contain a lenders loss payee endorsement in form reasonably acceptable to
Lender. Upon receipt of the proceeds of any such insurance, Lender
shall apply such proceeds in reduction of the Obligations as Lender shall
determine in its good faith business judgment, provided that no Default or Event
of Default has occurred and is continuing. If Borrower fails to
provide or pay for any insurance, Lender may, but is not obligated to, obtain
the same at Borrower's expense. Borrower shall promptly deliver to
Lender copies of all material reports made to insurance companies.
(q) Not merge
or consolidate with or into any other business organization, or acquire all or
substantially all of the capital stock or property of a third party, unless (i)
any such acquired entity becomes a “borrower” under this Agreement and (ii)
Lender has previously consented to the applicable transaction in
writing.
(r) Maintain
on a rolling 3-month basis an EBITDASC of no less than One Dollar
($1.00).
(s) Provide
to Lender promptly upon the execution hereof, a subordination agreement by
Agility Capital and Montage Capital in favor of Lender, in each case, in form
satisfactory to Lender.
7. Security
Interest. To secure the prompt payment and performance to
Lender of all of the Obligations, Borrower hereby grants to Lender a continuing
security interest in the Collateral. Borrower is not authorized to
sell, assign, transfer or otherwise convey any Collateral without Lender's prior
written consent, except for the sale of finished inventory in the Borrower's
usual course of business. Borrower agrees to sign any instruments and
documents requested by Lender to evidence, perfect, or protect the interests of
Lender in the Collateral. Borrower agrees to deliver to Lender the
originals of all instruments, chattel paper and documents evidencing or related
to Receivables and other Collateral. Borrower shall not grant or
permit any lien or security interest in the Collateral or any interest therein,
except for Permitted Liens.
8. Default and
Remedies.
8.1 Events of
Default. The occurrence of any one or more of the following
shall constitute an Event of Default hereunder.
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8.2 Failure to
Pay. Borrower fails to make a payment under this
Agreement.
(a) Lien
Priority. Lender fails to have an enforceable first lien
(except for any prior liens or Permitted Liens to which Lender has consented in
writing) on or security interest in the Collateral.
(b) False
Information. Borrower (or any guarantor) has given Lender
false or misleading information or representations.
(c) Intentionally
Omitted.
(d) Bankruptcy. Borrower
(or any guarantor) files a bankruptcy petition, a bankruptcy petition is filed
against Borrower (or any guarantor) or Borrower (or any guarantor) makes a
general assignment for the benefit of creditors; provided such proceeding is not
stayed or dismissed within 45 days of initiation thereof.
(e) Receivers. A
receiver or similar official is appointed for a substantial portion of
Borrower's (or any guarantor's) business, or the business is
terminated.
(f) Judgments. Any
judgments or arbitration awards in excess of $250,000 (individually or in the
aggregate) are entered against Borrower (or any guarantor), or Borrower (or any
guarantor) enters into any settlement agreements with respect to any litigation
or arbitration which could reasonably be expected to result in damages
(individually or in the aggregate) in excess of $250,000.
(g) Material Adverse
Change. A Material Adverse Change occurs, or is reasonably
likely to occur; or Lender determines that it is insecure for any other
reason.
(h) Cross-default. Any
default occurs under any agreement in connection with any credit Borrower (or
any guarantor) or any of Borrower's related entities or affiliates has obtained
from anyone else or which Borrower (or any guarantor) or any of Borrower's
related entities or affiliates has guaranteed.
(i) Default under Related
Documents. Any default occurs under any guaranty,
subordination agreement, security agreement, deed of trust, mortgage, or other
document required by or delivered in connection with this Agreement or (while
any of the Loan Agreements remain in effect) any such document is no longer in
effect.
(j) Other
Agreements. Borrower (or any guarantor) or any of Borrower's
related entities or affiliates fails to meet the conditions of, or fails to
perform any obligation under any other agreement Borrower (or any guarantor) or
any of Borrower's related entities or affiliates has with Lender or any
affiliate of Lender.
(k) Change of
Control. Absent the prior
written consent of Lender, the holders of the capital ownership of the Borrower
as of the date hereof cease to own and control, directly and indirectly, at
least 90% of the capital ownership of the Borrower.
(l) Other Breach Under
Agreement. Borrower fails to meet the conditions of, or fails
to perform any obligation under, any material term of this Agreement not
specifically referred to above.
8.3 Remedies. Upon
the occurrence of an Event of Default, (1) without implying any obligation
to do so, Lender may cease making Advances and/or EXIM Advances, or extending
any other financial accommodations to Borrower; (2) all or a portion of the
Obligations shall be, at the option of and upon demand by Lender, or with
respect to an Event of Default described in Section 9.1(e), automatically
and without notice or demand, due and payable in full; (3) Lender may notify
Account Debtors that the underlying Receivables have been assigned to Lender and
that payment thereof is to be made to the order of Lender and sent directly to
Lender, and (4) Lender 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
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8.4 right to
collect, dispose of, sell, lease, use, and realize upon all Receivables and all
Collateral in any commercial reasonable manner.
9. Accrual of
Interest. If any amount owed by Borrower hereunder is not paid
when due, including, without limitation, amounts due under Section 3.3,
Overadvances, amounts due under Section 11, 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. All interest and Finance Charges
hereunder calculated at an annual rate shall be based on a year of 360 days,
which results in a higher effective rate of interest than if a year of 365 or
366 days were used.
10. Fees, Costs and Expenses;
Indemnification. The Borrower will pay to Lender upon demand
all fees, costs and expenses (including fees of attorneys and professionals and
their costs and expenses) that Lender 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 Lender, Borrower or any other person) in any way relating to the
Receivables, the Collateral, this Agreement or any other agreement executed in
connection herewith or therewith, (c) enforcing any rights against Borrower
or any guarantor, or any Account Debtor, (d) protecting or enforcing its
interest in the Receivables or the Collateral, (e) collecting the
Receivables and the Obligations, or (f) the representation of Lender in
connection with any bankruptcy case or insolvency proceeding involving Borrower,
any Receivable, the Collateral, any Account Debtor, or any
guarantor. Borrower shall indemnify and hold Lender 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, except
with respect to any losses caused by Lender’s gross negligence or willful
misconduct.
11. Integration, Severability,
Waiver, and Choice of Law. This Agreement and any related
security or other agreements required by this Agreement, collectively: (a)
represent the sum of the understandings and agreements between Lender and
Borrower concerning this credit; (b) replace any prior oral or written
agreements between Lender and Borrower concerning this credit; and (c) are
intended by Lender and Borrower as the final, complete and exclusive statement
of the terms agreed to by them. In the event of any conflict between
this Agreement and any other agreements required by this Agreement, this
Agreement will prevail. If 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. Lender retains all of its rights, even if it makes an Advance
after a default. If Lender waives a default, it may enforce a later
default. Any consent or waiver under, or amendment of, this Agreement
must be in writing, and no such consent, waiver, or amendment shall imply any
obligation by Lender to make any subsequent consent, waiver, or
amendment. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.
12. Notices. All
notices shall be given to Lender and Borrower at the addresses or faxes set
forth on the signature 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.
13. Jury
Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING IN CONNECTION WITH THE OBLIGATIONS OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY OBLIGATION, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH
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14. ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY. EACH PARTY REPRESENTS AND WARRANTS 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.
15. REFERENCE
PROVISION.
(a) The
parties prefer that any dispute between them be resolved in litigation subject
to a Jury Trial Waiver as set forth in the Loan Documents (defined below), but
the California Supreme Court has held that pre-dispute Jury Trial Waivers not
authorized by statute are unenforceable. This Reference Provision will be
applicable until: (i) the California Supreme Court holds that a pre-dispute Jury
Trial Waiver provision similar to that contained in the Loan Documents is valid
or enforceable; or (ii) the California Legislature enacts a statute which
becomes law, authorizing pre-dispute Jury Trial Waivers of the type in the Loan
Documents and, as a result, such waivers become enforceable. In
addition, this Reference Provision, if not already applicable as otherwise
provided herein, will become applicable, if a Court, contrary to a choice of law
provision contained in the Loan Documents, holds that the laws of the State of
California apply to the Loan Documents.
(b) Other
than (i) nonjudicial foreclosure of security interests in real or personal
property, (ii) the appointment of a receiver or (iii) the exercise of
other provisional remedies (any of which may be initiated pursuant to applicable
law), any controversy, dispute or claim (each, a “Claim”) between the parties
arising out of or relating to this Agreement or any other document, instrument
or agreement between Lender and the undersigned (collectively in this Section,
the “Loan Documents”), will be resolved by a reference proceeding in California
in accordance with the provisions of Section 638 et seq. of the California Code
of Civil Procedure (“CCP”), or their successor sections, which shall constitute
the exclusive remedy for the resolution of any Claim, including whether the
Claim is subject to the reference proceeding. Except as otherwise
provided in the Loan Documents, venue for the reference proceeding will be in
the Superior Court or Federal District Court in the County or District where the
real property, if any, is located or in a County or District where venue is
otherwise appropriate under applicable law (the “Court”).
(c) The
referee shall be a retired Judge or Justice selected by mutual written agreement
of the parties. If the parties do not agree, the referee shall be
selected by the Presiding Judge of the Court (or his or her
representative). A request for appointment of a referee may be heard
on an ex parte or expedited basis, and the parties agree that irreparable harm
would result if ex parte relief is not granted. The referee shall be
appointed to sit with all the powers provided by law. Pending
appointment of the referee, the Court has power to issue temporary or
provisional remedies.
(d) The
parties agree that time is of the essence in conducting the reference
proceedings. Accordingly, the referee shall be requested, subject to
change in the time periods specified herein for good cause shown, to (a) set the
matter for a status and trial-setting conference within fifteen (15) days after
the date of selection of the referee, (b) if practicable, try all issues of law
or fact within ninety (90) days after the date of the conference and (c) report
a statement of decision within twenty (20) days after the matter has been
submitted for decision.
(e) The
referee will have power to expand or limit the amount and duration of
discovery. The referee may set or extend discovery deadlines or
cutoffs for good cause, including a party’s failure to provide requested
discovery for any reason whatsoever. Unless otherwise ordered based
upon good cause shown, no party shall be entitled to “priority” in conducting
discovery, depositions may be taken by either party upon seven (7) days written
notice, and all other discovery shall be responded to within fifteen (15) days
after service. All disputes relating to discovery which cannot be
resolved by the parties shall be submitted to the referee whose decision shall
be final and binding.
(f) Except as
expressly set forth in this Agreement, the referee shall determine the manner in
which the reference proceeding is conducted including the time and place of
hearings, the order of presentation of evidence, and all other questions that
arise with respect to the course of the reference
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(g) proceeding. All
proceedings and hearings conducted before the referee, except for trial, shall
be conducted without a court reporter, except that when any party so requests, a
court reporter will be used at any hearing conducted before the referee, and the
referee will be provided a courtesy copy of the transcript. The party
making such a request shall have the obligation to arrange for and pay the court
reporter. Subject to the referee’s power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the
court reporter at trial.
(h) The
referee shall be required to determine all issues in accordance with existing
case law and the statutory laws of the State of California. The rules
of evidence applicable to proceedings at law in the State of California will be
applicable to the reference proceeding. The referee shall be
empowered to enter equitable as well as legal relief, provide all temporary or
provisional remedies, enter equitable orders that will be binding on the parties
and rule on any motion which would be authorized in a trial, including without
limitation motions for summary judgment or summary adjudication. The
referee shall issue a decision and pursuant to CCP §644 the referee’s decision
shall be entered by the Court as a judgment or an order in the same manner as if
the action had been tried by the Court. The final judgment or order
or from any appealable decision or order entered by the referee shall be fully
appealable as provided by law. The parties reserve the right to
findings of fact, conclusions of laws, a written statement of decision, and the
right to move for a new trial or a different judgment, which new trial, if
granted, is also to be a reference proceeding under this provision.
(i) If the
enabling legislation which provides for appointment of a referee is repealed
(and no successor statute is enacted), any dispute between the parties that
would otherwise be determined by reference procedure will be resolved and
determined by arbitration. The arbitration will be conducted by a
retired judge or Justice, in accordance with the California Arbitration Act
§1280 through §1294.2 of the CCP as amended from time to time. The
limitations with respect to discovery set forth above shall apply to any such
arbitration proceeding.
(j) THE
PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE
PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN
CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES
THAT THIS REFERENCE PROVISION WILL APPLY TO ANY DISPUTE BETWEEN THEM WHICH
ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE LOAN
DOCUMENTS.
16. Term and
Termination. This Agreement shall become effective upon the
execution and delivery hereof by Borrower and Lender and shall continue in full
force and effect until the Termination Date. Upon the Termination Date, the
unpaid balance of the Obligations shall be due and payable without demand or
notice. Notwithstanding any of the foregoing, the obligations of Borrower to
indemnify Lender with respect to the expenses, damages, losses, costs and
liabilities described in Section 11 shall survive until all applicable statute
of limitations periods with respect to actions that may be brought against
Lender have run.
17. Other
Agreements. (i) Any security agreements, liens and/or security
interests securing payment of any obligations of Borrower owing to Lender or its
affiliates also secure the Obligations, and are valid and subsisting and are not
adversely affected by execution of this Agreement. An Event of
Default under this Agreement constitutes a default under other outstanding
agreements between Borrower and Lender or its affiliates; (ii) Lender reserves
the right to issue press releases, advertisements, and other promotional
materials describing any successful outcome of services provided on Borrower’s
behalf. Borrower agrees that Lender shall have the right to identify
Borrower by name in those materials.
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Blank]
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355157-000030
IN
WITNESS WHEREOF, Borrower and Lender have executed this Agreement on the day and
year above written.
|
BORROWER:
|
LENDER:
|
|
ALPHA
INNOTECH CORP., a Delaware corporation
By
Name:
Title:
|
BRIDGE
BANK, NATIONAL ASSOCIATION
By
Name:
Title:
|
|
Address for Notices:
Attn: Chief
Financial Officer
0000
Xxxxxx Xxxxxx
Xxx
Xxxxxxx, XX 00000
Fax:
(000) 000-0000
|
Address for Notices:
Attn: Xxx
Xxxxxxx
00
Xxxxxxx Xxxx
Xxx
Xxxx, XX 00000
Fax:
(000) 000-0000
|
[Signature Page to Business Financing
Agreement]
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