Exhibit 10.1
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ACCOUNT PURCHASE AGREEMENT
This Agreement is dated as of May 22, 2006 between Xxxxx Fargo Bank, National
Association, acting through its Xxxxx Fargo Business Credit operating division
("WFBC"), and Simtek Corporation ("Customer"). The Customer and WFBC agree as
follows: ARTICLE I Purpose of Agreement
1.01 Purpose of Agreement. The Customer desires to sell and assign to WFBC
acceptable accounts receivable and WFBC desires to purchase such accounts on the
terms and conditions set forth herein. The purpose of this Agreement is
commercial in nature and not for household, family and/or personal use. This
Agreement sets forth the terms and conditions on which WFBC will consider
purchasing accounts receivable from the Customer.
ARTICLE II
Definitions
2.01 "Account" means any right of payment of the net amount for goods sold, or
leased and delivered or services rendered in the ordinary course of Customer's
business which is not evidenced by an instrument or chattel paper.
2.02 "Acceptable Account" means an Account, in an amount not to be less than
$100, acceptable to WFBC, which conforms to the warranties and terms set forth
herein, net of any credits or allowances of any nature and is not an
Unacceptable Account as defined below.
2.03 "Account Debtor" means Customer's customer or any other person or entity
owing money to the Customer with respect to the Account.
2.04 "Account Debtor Dispute" means a claim by Account Debtor against Customer,
of any kind whatsoever, that reduces or may reduce the amount collectible from
Account Debtor by WFBC which arises at anytime, whether before or after signing
of this Agreement or the purchase of any Account. Any dispute which is a
combination of a Credit Problem and an Account Debtor Dispute shall be deemed to
be an Account Debtor Dispute for purposes of this Agreement.
2.05 "Collateral" means the intangible or tangible property given as security to
WFBC by Customer for any obligations and liabilities of Customer to WFBC under
this Agreement.
2.06 "Collected Reserve Account" means the account established by WFBC for
Customer to which from time to time credits will be made, debits taken and
disbursements made in accordance with this Agreement. Provided there is no Event
of Default hereunder, or any event which with the passage of time or notice
would be an Event of Default, any available balance held in the Collected
Reserve Account shall be released to the Customer on a weekly basis. Any fee,
charge or other obligation of the Customer under this Agreement may be charged
against this account in WFBC's sole discretion.
2.07 "Customer" means the seller and assignor of the Accounts.
2.08 "Credit Problem" means, as established by the Customer, that an Account
Debtor is unable to pay its debts because the Account Debtor is the subject of a
bankruptcy, insolvency, or receivership proceeding within 75 days of the date of
the invoice.
2.09 "Event of Default" shall mean the existence of a default pursuant to
Article VII hereunder, or a default under any documents given to WFBC in
connection with this Agreement.
2.10 "Initial Payment" shall mean with respect to a given Account an amount
equal to the gross face amount of such Account less stated trade discounts
offered by the Customer to the Account Debtor less (20%) twenty percent. This
percentage may be adjusted by WFBC at any time at WFBC's sole discretion.
2.11 "Minimum Fee" shall mean the minimum fee paid per month by the Customer as
stated in Section 6.06 below.
2.12 "Net Purchase Price" for any Account means an amount equal to the gross
face amount of such Account less WFBC's Discount and other charges with respect
to such Account and less any amount of any trade discounts, credits or
allowances, or any other reductions or adjustments to such Account taken by the
Account Debtor.
2.13 "Origination Fee" shall mean the fee payable on closing of this Agreement,
and on each renewal of this Agreement, as set forth in Section 6.06 below.
2.14 "Part Payment" for any Account means any payment made by WFBC to the
Customer with respect to such Account which is less than the full Net Purchase
Price as more fully described in Article III below.
2.15 "Repurchase Price" for any Account means the Net Purchase Price less any
amounts collected from the Account Debtor on the Account plus all fees, costs or
expenses associated with the repurchase or collection of such Account. In any
event where repurchase is required under this Agreement, WFBC, at its
discretion, may charge the Repurchase Price to Customer's Collected Reserve
Account which may create a deficit balance under Section 3.06 below.
2.16 "Unacceptable Account" shall mean Accounts which are not acceptable in
WFBC's sole discretion including but not limited to the following Accounts:
2.16(a) Accounts owed by any unit of government, whether foreign or
domestic (provided, however, that there shall be included in Acceptable
Accounts that portion of Accounts owed by such units of government for
which the Customer has provided evidence satisfactory to WFBC that (i) WFBC
has a first priority perfected security interest and (ii) such Accounts may
be enforced by WFBC directly against such unit of government under all
applicable laws);
2.16(b) Accounts owed by an Account Debtor located outside the United
States which are not (i) backed by a bank letter of credit naming WFBC as
beneficiary or assigned to WFBC, in WFBC's possession and acceptable to
WFBC in all respects, in its sole discretion, (ii) covered by a foreign
receivables insurance policy acceptable to WFBC in its sole discretion;
2.16(c) Accounts owed by an Account Debtor that is insolvent, the subject
of bankruptcy proceedings or have gone out of business;
2.16(d) Accounts owed by a shareholder, subsidiary, affiliate, officer or
employee of the Customer;
2.16(e) Accounts not subject to a duly perfected security interest in
WFBC's favor or which are subject to any lien, security interest or claim
in favor of any Person other than WFBC including without limitation any
payment or performance bond;
2.16(f) Accounts that have been restructured, extended, amended or
modified;
2.16(g) That portion of Accounts that constitutes advertising, finance
charges, service charges or sales or excise taxes;
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2.16(h) Accounts that have been invoiced, paid or partially paid in advance
of the full delivery and acceptance of goods or the performance and
acceptance of services or in advance of the submission of the Account to
WFBC.
2.16(i) Accounts, or portions thereof, that fail to conform to the
representation and warranties contained herein or are otherwise deemed
unacceptable by WFBC in its sole discretion.
2.17 "WFBC Discount" means the amount to be paid by the Customer according to
the following schedule:
Days Rate
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(for payment
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of Account)
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1 0.055% of the gross face amount of each Account purchased by WFBC.
1+ .055 of 1% daily until the Account is paid in full.
If any Event of Default exists, as defined below, this discount may
increase in an amount to be determined by WFBC at its sole discretion. WFBC
may, upon prior written notice to Customer, change the amount of any fee or
charge at its sole discretion or if WFBC's cost of funds increases for any
reason. Such change shall be effective upon delivery of the notice.
ARTICLE III
Purchase of Accounts
3.00 Purchase Limits: The maximum outstanding face amount of Accounts purchased
by WFBC hereunder is $3,600,000.
3.01 Pursuant to the terms herein, Customer hereby sells, transfers and assigns
to WFBC, its successors and assigns, as absolute owner, and WFBC hereby
purchases and accepts from the Customer all of the Customer's right, title and
interest in and to:
3.01(a) all of the Customer's Accounts together with all rights of action
accrued or to accrue thereon, including, without limitation, full power to
collect, xxx for, compromise, assign, in whole or in part, or in any other
manner enforce collection thereof in Customer's name or otherwise; and
3.01(b) all right, title and interest of the Customer in and to the books
and records evidencing or relating to the Accounts, all deposits, or other
security for the obligation of any person under or relating to the
Accounts, all goods relating to, or which by sale have resulted in, the
Accounts, including goods returned by any Account Debtor, debtor or obligor
in any way obligated on or in connection with the Account including,
without limitation, the Account Debtor, all rights of stoppage in transit,
replevin, repossession and reclamation and all other rights of action of an
unpaid vendor or lienor; and
3.01(c) proceeds of the foregoing in any form.
3.02 Approval: WFBC shall not purchase an Account unless such Account is first
submitted to WFBC by Customer for approval. WFBC is not obligated to buy any
Account from a Customer that WFBC does not deem acceptable in its sole
discretion.
3.03 Purchase: Upon approval and acceptance by WFBC of an Account for the
assignment and sale of an Account to WFBC, WFBC shall purchase and Customer
shall assign and sell to WFBC such Account.
3.04 Purchase Price: As consideration for the assignment and sale of an Account
to WFBC, WFBC shall pay to the Customer the Net Purchase Price for such Account
on the terms and conditions as stated herein.
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3.05 Payment of Purchase Price: If no Default exists hereunder, WFBC shall pay
for each Account purchased hereunder the Net Purchase Price for such Account to
Customer as follows:
3.05(a) Upon assignment or sale of an Account to WFBC, and receipt of all
documents and forms described in Section 3.07 below and upon fulfillment of
all terms precedent to such sale or assignment as more fully described
below, WFBC shall pay to the Customer, or advance to the Collected Reserve
Account as appropriate, the Initial Payment with respect to such Account.
3.05(b) After collection of an Account by WFBC, WFBC shall credit the
Customer's Collected Reserve Account with the amount collected on the
Account less: (i) the Initial Payment, (ii) Part Payment(s), and (iii) any
fees, expenses or charges owed to WFBC as more fully described herein.
3.05(c) Upon an Event of Default hereunder (or an event which with the
passage of time or notice would become an Event of Default), WFBC may hold
any balance in the Collected Reserve Account as Collateral for any
obligations of the Customer to WFBC and WFBC may charge any such
obligations against the Collected Reserve Account in its sole discretion.
3.05(d) In the event WFBC receives payment on an Account which has not been
purchased, such payment will be credited to the Customer's Collected
Reserve Account and released in accordance with this Agreement.
3.06 Reporting and Statement of Account: On a weekly basis, or as otherwise
determined by WFBC at its sole discretion, WFBC shall prepare, and make
available to the Customer, an accounting of the purchases, collections, and
amounts credited to and/or charged against the Collected Reserve Account during
that week or other period. Should such a statement of account indicate a deficit
balance, such balance shall be due and payable and the Customer shall
immediately pay to WFBC the amount of such deficit plus accrued interest on such
deficit balance. Interest shall accrue on any deficit balance at the annual rate
of eighteen percent (18%), calculated on a daily basis, not to exceed the
applicable legal limit, until such deficit is paid in full.
3.07 Required Forms: When Customer offers Accounts to WFBC for sale, WFBC shall
receive (a) an assignment of Accounts, in a form satisfactory to WFBC and signed
by an authorized representative of Customer, (b) an original invoice or such
other document acceptable to WFBC in its sole discretion, (c) a copy of the Xxxx
of Lading, (d) proof of delivery, (e) contract, purchase order, or purchase
order number which corresponds with such invoice(s), as appropriate to the
business of Customer, (f) notification of assignment and waiver of offset signed
by the Account Debtor in a form acceptable to WFBC in its sole discretion and
(g) and any other document which WFBC may require.
3.08 Notification: Prior to purchasing any Accounts, WFBC will notify all
Account Debtors of the assignment of Accounts and instruct the Account Debtor to
make payments directly to WFBC. 3.09 Notation of Assignment: Customer shall make
a notation on each original invoice (or the electronic equivalent of an invoice)
or other such documentation accepted by WFBC for each Account which indicates
that the Account has been assigned and/or sold to WFBC with the following
language:
This invoice has been assigned to
and is payable to:
Xxxxx Fargo Business Credit
Dept. 1494
Xxxxxx, Xxxxxxxx 00000-0000
For information call 303/000-0000
In the event any invoice (or the electronic equivalent of an invoice) is sent or
transmitted to any Account Debtor without the required notation, a fee equal to
2.5% of the face amount of such invoice shall be assessed.
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3.10 Sole Property: Once WFBC has purchased an Account, any and all payments
from the Account Debtor as to that Account are the sole property of WFBC. 3.11
Credit Risk: The purchase of any Accounts from the first submission of Accounts
under Section 3.02 shall be with full recourse to Customer. Thereafter, provided
there is no event of default hereunder, and Customer has complied with all
requirements of this Agreement, WFBC assumes the risk of non-payment due to a
Credit Problem with respect to Purchased Accounts. 3.12 Book Entry: Customer
shall, immediately upon sale of Accounts to WFBC, make proper entries on its
books and records disclosing the absolute sale of said Accounts to WFBC,
including the proper inclusion of the language stated in Section 3.09 above, on
said books and records and other documents as so directed by WFBC.
ARTICLE IV
Customer's Representations, Warranties and Covenants
4.01 Representations and Warranties. Customer hereby represents and warrants and
as follows:
4.01 (a) Customer is properly licensed, qualified and authorized to operate
the business of Simtek Corporation under the trade name(s) of N/A and
Customer's trade name(s) have been properly filed and published as required
by applicable law. Customer, and the persons executing this document, are
duly authorized to execute and deliver this Agreement and all other
documents required to be executed and delivered hereunder.
4.01 (b) Customer is solvent, is not a Debtor under the United States
Bankruptcy Code or under the direction of a receiver, and Customer has made
and shall continue to make timely payment on deposit of any tax required to
be deducted and withheld by Customer from the wages of any of its
employees.
4.01 (c) Customer is, at the time of purchase of each Account by WFBC, the
lawful owner of and has good and undisputed title to such Account. Each
Account, at the time of purchase is free from any liens, mortgages,
restrictions or encumbrances. Each Account offered for sale to WFBC is an
Acceptable Account as defined in Section 2.02 above.
4.01 (d) Each Account Debtor's business is solvent to the best of
Customer's information and knowledge at the time of this Agreement and at
the time each Account is presented to WFBC for purchase.
4.01 (e) Each Account offered for sale to WFBC is an accurate and
undisputed statement of indebtedness owed by Account Debtor to Customer for
a certain sum which is due and payable in 30 days or less, or within such
time as is agreed to in writing by WFBC and Customer, is for a bona fide
sale, delivery and acceptance of merchandise or performance of services
which have been received and finally accepted by the Account Debtor.
Customer has all rights to transfer or sell such Accounts to WFBC and such
Accounts are payable by Account Debtor without offset, deduction or
counterclaim.
4.01 (f) Customer does not own, control or exercise dominion over, in any
way whatsoever, the Account Debtor or the business of any Account Debtor
for whom Accounts are to be sold by Customer to WFBC.
4.01 (g) All financial records, statements, books or other documents shown
to WFBC by Customer at anytime, either before or after the signing of this
Agreement are true and accurate.
4.01 (h) Customer has not transferred, pledged or granted a security
interest in Customer's Accounts or other personal property to any other
party which Customer has not fully disclosed in writing to WFBC.
4.01 (i) There is no action, suit or proceeding at law or in equity or by
or before any governmental instrumentality or other agency now pending, or
to the knowledge of Customer, threatened against or affecting Customer,
which if adversely determined, would have a material adverse effect on the
business, operations, property, assets or condition, financial or
otherwise, of Customer.
4.01 (j) The execution and performance by Customer of the terms and
provisions of this Agreement and the execution and delivery of any other
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documents required to be executed and delivered hereunder have been duly
authorized by all requisite company action, and neither the execution nor
the performance of this Agreement or any other documents required to be
delivered hereunder, will violate any provision of law, any order of any
court or other agency of government, the governing documents of Customer,
or any agreement or other instrument to which Customer is a party, or by
which Customer is bound, or be in conflict with, result in breach of, or
constitute (with due notice or lapse of time or both) a default under, or
result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the property or assets of Customer,
pursuant to any such agreement or instrument, except as provided hereunder.
Customer agrees that it will execute and perform all terms hereunder.
4.02 Negative Covenants. Customer agrees as follows:
4.02 (a) Customer will not under any circumstances or in any manner
whatsoever, interfere with any of WFBC's rights under this Agreement.
4.02 (b) For the duration of this Agreement and for any period thereafter
for as long as any obligation to repurchase or indebtedness whatsoever
remains owing by Customer to WFBC, Customer will not sell or assign
Accounts except to WFBC.
4.02 (c) Customer shall not pledge, transfer or grant a security interest
in any personal property or Accounts of Customer nor shall Customer consent
to the transfer, pledge or grant a security interest in or the placement of
any lien or encumbrance, by any other party on any personal property or
Accounts belonging to the Customer for the term of this Agreement and for
as long as Customer may be required to repurchase any Account or is
indebted to WFBC hereunder without the written consent of WFBC. Customer
shall provide written notice to WFBC within five business days of Customer
obtaining any knowledge, from any source, of the assertion, filing,
recording or perfection by any means, of any non-consensual lien, claim or
encumbrance against the property of Customer.
4.02 (d) Customer will not change or modify the terms of the original
invoice or agreement with the Account Debtor or the order of payment on
Accounts sold to WFBC unless WFBC first consents to such change or
modification in writing.
4.02 (e) Customer shall not be involved in a material dispute of any kind
with an Account Debtor, regardless of validity, during the term of this
Agreement.
4.02 (f) Customer shall not breach any warranties or promises in this
Agreement with regard to any unpaid Account or Account Debtor from whom
payment on any such Account is due.
4.02 (g) Customer shall not intentionally contribute to, or aggravate any
Credit Problem of any Account Debtor.
4.03 Affirmative Covenants. Customer agrees as follows:
4.03 (a) With respect to misdirected payments, whenever any payment on any
Account comes into Customer's possession, Customer shall hold such payment
in trust and safekeeping, as the property of WFBC, and immediately turn
over to WFBC such payment in the same form as it was received by Customer
to WFBC. Customer shall pay a misdirected payment fee in the amount of
fifteen percent (15%) of the amount of any payment on account of a
Purchased Account which has been received by Customer and not delivered in
kind to WFBC on the next business day following the date of receipt by
Customer. Further, Customer shall segregate and hold in trust and
safekeeping, as the property of WFBC, and immediately turn over to WFBC,
any goods or inventory returned to, reclaimed or repossessed by the
Customer which are covered by an Account purchased by WFBC.
4.03 (b) Customer will maintain such insurance covering Customer's business
and/or the property of the Account Debtors as is customary and adequate for
businesses similar to the business of Customer in an amount as is
sufficient to compensate for reasonably foreseeable loss, and promptly pay
all premiums with respect to the policies covering such insurance. Further,
the Customer shall have WFBC named as loss payee for such insurance.
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4.03 (c) Customer will immediately notify WFBC of any material disputes
greater than $1,000.00 between Account Debtor and Customer or the return of
any product by Account Debtor to Customer.
4.03 (d) Customer will notify WFBC in writing prior to any change in the
location of any of its places of business, including the location of the
Customer's inventory or, if Customer has or intends to acquire any
additional place of business. Customer will not change its chief executive
office or the office or offices where Customer's books and records
concerning Accounts are kept without prior notice to WFBC.
4.03 (e) Customer will immediately notify WFBC in writing of any proposed
change of Customer's name, identity, legal entity, corporate structure,
business dissolution, use of any additional trade name, or any proposed
change in any of the officers, principals, partners, shareholders and/or
owners of Customer and will not effect any such change without WFBC's
written consent.
4.03 (f) Customer will immediately notify WFBC in writing of the
commencement of any legal proceeding or service of any legal document
affecting the Customer including, but not limited to, any judgments, liens,
attachments, garnishments, complaints, or the filing of a voluntary
petition under the United States Bankruptcy Code, if any involuntary
bankruptcy petition is filed against Customer or if a receiver is appointed
to manage the property of Customer.
4.03 (g) At least once per quarter, or once per month if Customer is in
default, Customer will furnish to WFBC financial statements, including but
not limited to a statement of profit and loss and a balance sheet,
satisfactory proof of payment and compliance with all federal, state and
local tax requirements and any other information requested by WFBC.
4.03 (h) Customer will immediately notify WFBC of the return of any product
greater than $1,000.00 by Account Debtor to Customer.
4.03 (i) Customer shall immediately notify WFBC of any claim or loss or
offset of any kind greater than $1,000.00 against Customer or WFBC asserted
by Account Debtor during any time period covered by this Agreement.
4.03 (j) Upon the occurrence of an Account Debtor Dispute, Customer shall
immediately pay to WFBC the Repurchase Price for any and all Accounts so
disputed.
ARTICLE V
Security Interest
5.01 Security Interest/Collateral: As further inducement for WFBC to enter into
this Agreement, Customer grants to WFBC, as collateral for the repayment of any
and all obligations and liabilities whatsoever of Customer to WFBC, a security
interest, under the Uniform Commercial Code, in the following described
property, as defined under the Uniform Commercial Code, hereinafter collectively
called "Collateral": All presently existing or hereafter arising, now owned or
hereafter acquired property including, but not limited to, accounts, general
intangibles, contract rights, investment property, deposit accounts, the
Collected Reserve Account established hereunder, inventory, instruments, chattel
paper, documents, insurance proceeds, and all books and records pertaining to
accounts and all proceeds and products of the foregoing property. Together with
the deposit account set up as collateral by Customer for the benefit of the
WFBC.
5.02 Security Documents: Customer shall execute all and deliver to WFBC any and
all documents and instruments as WFBC may request from time to time, including,
without limitation, UCC financing statements or amendments. Customer authorizes
WFBC to file a financing statement with any appropriate authority reflecting its
security interest and further authorizes WFBC to file other filings including
amendments (other than amendments adding collateral) or terminations, as WFBC
deems appropriate.
ARTICLE VI
Operational Provisions
6.01 Credit Problems: If Customer asserts that nonpayment of an Account is due
to a Credit Problem, then Customer shall provide documentation satisfactory to
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WFBC, in its reasonable discretion, establishing that such nonpayment is due
solely to a Credit Problem. If WFBC is not satisfied, in its reasonable
discretion, that nonpayment is solely due to a Credit Problem, then customer
shall be obligated to pay the Repurchase Price for such Account to WFBC. The
documentation required under this section may be provided at any time prior to
the Account being charged back to Customer's Collected Reserve Account at which
time nonpayment is deemed to be due to a Customer Dispute hereunder.
6.02 Power of Attorney: In order to carry out this Agreement and avoid
unnecessary notification of Account Debtors,
Customer irrevocably appoints WFBC, or any person designated by WFBC, as its
special attorney in fact, or agent, with power to:
6.02(a) strike out Customer's address on all invoices delivered to Account
Debtors and note WFBC's address on all invoices.
6.02(b) receive, open and dispose of all mail addressed to Customer
(including any trade name of Customer) sent to WFBC's address.
6.02(c) endorse the name of Customer or Customer's trade name on any checks
or other evidences of payment that may come into the possession of WFBC on
Accounts , and on any other documents relating to any of the Accounts or to
Collateral.
6.02(d) in Customer's name, or otherwise, demand, xxx for, collect, and
give releases for any and all monies due to or become due on Accounts.
6.02(e) compromise, prosecute, or defend any action, claim or proceeding as
to said Accounts.
6.02(f) In the Event of Default, offer a trade discount to Customer's
Account Debtor exclusive of Customer's normal business custom with said
Account Debtor.
6.02(g) initiate electronic debit or credit entries through the ACH system
to Customer's account or any other deposit account maintained by Customer
wherever located.
6.02(h) sign Customer's name on any notice of assignment, financing
statement, amendment to any financing statement and on any notices to
Account Debtors.
6.02(i) do any and all things necessary and proper to carry out the
purposes intended by this Agreement.
The authority granted to WFBC under this provision shall remain in full
force and effect until all assigned Accounts are paid in full and any
indebtedness of Customer to WFBC is discharged.
6.03 Double Payments: Should WFBC receive a double payment on an Account or
other payment which is not identified, WFBC shall carry these sums as open items
in its accounting and shall return any double payment to the payor or apply such
unidentified payment pursuant to the terms hereof upon proper identification and
documentation.
6.04 Hold Harmless: Customer shall hold WFBC harmless against any Account Debtor
ill will arising from WFBC's collecting or attempting to collect on any
Accounts, provided that WFBC acts in a commercially reasonable manner.
6.05 Taxes: Should any excise, sale, use or other tax be imposed by any federal,
state or local authority requiring a deduction or withholding from the proceeds
of sale of Accounts, or if the Account Debtor is authorized to withhold and
deduct such tax or levy, then the Customer shall immediately pay WFBC the amount
of the tax or levy so withheld, and the Customer shall indemnify and hold WFBC
harmless from any loss or expense on account of such tax.
6.06 Minimum and Origination Fee: Customer shall pay a Minimum Fee per month in
the amount of $7,500 (seven thousand five hundred) during the term of this
Agreement (and any extension hereof) and Customer shall pay any deficiency
between the Minimum Fee and the fees calculated under Section 2.17 hereof on the
15th day of the next calendar month. Customer shall pay an origination fee in
the amount of $7,500 (seven thousand five hundred)upon closing of this
Agreement, and at the yearly anniversary date, in the amount of $7,500 (seven
thousand five hunred). WFBC agrees, however, that if, after the expiration of
the first 12 months hereof, Customer obtains financing from any Xxxxx Fargo &
Co. entity, that is utilized for paying off all obligations to WFBC, and ceases
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selling Accounts hereunder, Minimum Fees for the remainder of the then current
term shall be waived from the date of the full pay off to WFBC or the date
selling of Accounts ceases, whichever is later.
6.07 Account Debtor Disputes: Any Account which is unpaid for 60 days or more
after the due date or 90 days after the invoice date, whichever occurs earlier,
shall be deemed to be unpaid due to an Account Debtor Dispute unless prior to
such time the information required by Section 6.01 is provided to, and accepted
by, WFBC.
6.08 Reports: Except as provided by Section 3.06, and in the event Customer
requests information from WFBC regarding Customer's account hereunder, such
requests shall be subject to the schedule of fees provided by WFBC which
schedule may be adjusted by WFBC from time to time in its discretion.
6.09 WFBC Settlement of Accounts: WFBC may settle any Account Debtor Dispute
with any Account Debtor. Such settlement does not relieve Customer of any
obligation (including any repurchase obligation) under this Agreement with
respect to any Accounts.
6.10 Customer Settlement of Accounts: If Customer does not fully and promptly
settle any Account Debtor Dispute, the Customer shall repurchase each Account
that is subject to such Account Debtor Dispute from WFBC for its Repurchase
Price.
6.11 Documents: If documents submitted by Customer to WFBC for the purchase of
any Account are materially mistaken, fraudulent, materially incorrect or
erroneous, or if the Customer fails to submit any document required by WFBC
under this Agreement for the purchase of any Account, then such Account shall be
deemed to be an Account Debtor Dispute and the Customer shall repurchase such
Account and pay the Repurchase Price as stated herein.
6.12 Information: In the event WFBC provides financial information to Customer
regarding third parties, whether by setting credit limits, at the request of
Customer or otherwise, Customer understands that WFBC is not making any
representations or warranties or expressing an opinion as to the
creditworthiness of any such third party.
ARTICLE VII
Default
7.01 Any one or more of the following shall be an Event of Default hereunder:
7.01 (a) Customer shall fail to pay any indebtedness to WFBC when due or
repurchase any Account when required hereunder.
7.01 (b) Customer shall breach any term, provision, promise, warranty,
representation or covenant under this Agreement, or under any other
agreements, contracts, between Customer and WFBC or obligation to WFBC.
7.01 (c) The appointment of any receiver or trustee of all or a substantial
portion of the assets of Customer.
7.01 (d) Customer shall become insolvent or unable to pay debts as they
mature, shall make a general assignment for the benefit of creditors or
shall voluntarily file a petition under the United States Bankruptcy Code
or any similar law.
7.01 (e) Any involuntary petition in bankruptcy shall be filed against
Customer and is not dismissed within 60 days or an order for relief is
entered against Customer under the United States Bankruptcy Code.
7.01 (f) Any levies, attachment, executions, liens or similar process shall
be issued against the Collateral.
7.01 (g) Any financial statements, profit and loss statements, or
schedules, other statements or documents furnished by Customer to WFBC are
false or incorrect in any material respect.
7.01 (h) Any documents submitted by Customer to WFBC for the purchase of an
Account are mistaken, fraudulent, incorrect and/or erroneous, or if the
Customer fails to submit any document required by WFBC under this Agreement
for the purchase of that Account.
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7.01 (i) Any Account Debtor shall assert a claim or offset of any kind
greater than $1,000.00 against Customer or WFBC during any time period
covered by this Agreement.
7.01 (j) Any guarantor of Customer's obligations hereunder is in default
under the guaranty or if any guarantor withdraws or revokes the guaranty as
to future sales of Accounts or otherwise.
ARTICLE VIII
Remedies
8.01 In the event of an occurrence of an Event of Default, WFBC may do any one
or more of the following:
8.01 (a) Declare immediately due and payable, and to charge back, all
indebtedness of Customer to WFBC, including without limitation (i)
outstanding purchased Accounts, (ii) any unpaid Minimum Fees and (iii) all
other fees, costs and expenses as required hereunder.
8.01 (b) Cease purchasing Accounts under this Agreement.
8.01 (c) Notify any Account Debtor and take possession of Collateral and
collect any Accounts without judicial process.
8.01 (d) Require Customer to assemble the Collateral and the records
pertaining to Accounts and make them available to WFBC at a place
designated by WFBC.
8.01 (e) Enter the premises of Customer and take possession of the
Collateral and of the records pertaining to the Accounts and any other
Collateral.
8.01 (f) Grant extensions, compromise claims and settle Accounts for less
than face value, all without prior notice to Customer.
8.01 (g) Use, in connection with any assembly or disposition of the
Collateral, any trademark, trade name, trade style, copyright, patent right
or technical process used or utilized by Customer.
8.01 (h) Initiate electronic credit or debit entries through the ACH system
to and from Customer's deposit account maintained by Customer wherever
located.
8.01 (i) Hold Customer liable for any deficiency for any amounts due and
owing to WFBC.
8.01 (j) Require the Customer to repurchase any and all Accounts, whether
disputed or undisputed, and pay the Repurchase Price for those Accounts as
provided herein, and, in the event the Repurchase Price is not promptly
paid, WFBC may continue to collect such Accounts and charge a reasonable
fee in connection with such collection activities in addition to any other
fees or charges provided for herein.
8.01 (k) Cease making reports or accountings to the Customer as otherwise
required by this Agreement.
ARTICLE IX
Term and Termination
9.01 This Agreement shall continue in full force and effect until the earliest
of (a) two years from the date of this
Agreement; (b) any date agreed to in writing by the parties hereto, (c) upon at
least 60 days written notice by Customer; or (d) any date set by WFBC upon the
occurrence of an Event of Default. This Agreement shall automatically continue
for the following twelve-month period unless at least sixty days prior to the
termination date, the Customer notifies WFBC in writing that the Customer wishes
to terminate this Agreement. On the date of termination, all obligations owing
by the Customer to WFBC, including any unpaid Minimum Fees for the year term,
shall be accelerated and become immediately due and payable in full without
further notice or demand.
9.02 Upon termination, Customer shall repurchase any and all Accounts, whether
disputed or undisputed, as may be requested by WFBC, and shall pay the
Repurchase Price for those Accounts as provided herein as well as any other
indebtedness or obligations owed to WFBC by Customer including any unpaid
Minimum Fee for the two year term, or the renewed twelve month term of this
Agreement. WFBC continues and shall continue to have a security interest in the
Collateral of Customer until all amounts owed to WFBC by Customer are paid in
full or are satisfied.
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9.03 In the event WFBC is required to repay any Account Debtor for a payment
received by WFBC on an Account, and non-payment of that Account would have
required repurchase by Customer under this Agreement, the amount of the
repayment by WFBC shall be an obligation of Customer to WFBC notwithstanding the
termination of this Agreement. In the event the Customer receives a payment from
WFBC to which the Customer has no rights, repayment of the funds to WFBC is an
obligation of the Customer to WFBC whether or not the Agreement has been
terminated. In either event, if the obligation is not paid upon five (5) days
notice of the obligation to pay from WFBC to Customer, WFBC may file a financing
statement in connection with the security interest granted herein (if necessary)
and exercise any and all rights it has under this Agreement to collect the
amounts due.
ARTICLE X
Miscellaneous Provisions
10.01 Binding on Future Parties: This Agreement inures to the benefit of and is
binding upon the heirs, executors, administrators, successors and assigns of the
parties hereto except that the Customer shall not have the right to assign its
rights hereunder or any interest herein without WFBC's prior written consent.
10.02 Cumulative Rights: No failure or delay by WFBC in exercising any right,
power or remedy under the Agreement or documents given in connection with the
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy under the
Agreement. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
10.03 Waiver: WFBC may not waive its rights and remedies unless the waiver is in
writing and signed by WFBC. A waiver by WFBC of a right or remedy under this
Agreement on one occasion is not a waiver of the right or remedy on any
subsequent occasion.
10.04 Choice of Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
10.05 Invalid Provisions: Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof.
10.06 Entire Agreement: This instrument contains the entire Agreement between
the parties. This Agreement, together with the documents given in connection
herewith, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof.
10.07 Amendment: Except as otherwise provided herein, any addendum or
modification hereto must be signed by both parties.
10.08 Effective: This Agreement becomes effective when it is accepted and
executed by an authorized officer of WFBC.
10.09 Information: Without limiting WFBC's right to share information regarding
the Customer and its affiliates with WFBC's agents, accountants, lawyers and
other advisors, Xxxxx Fargo & Co., and all direct and indirect subsidiaries of
Xxxxx Fargo & Co. and other persons WFBC deems appropriate may exchange, discuss
or otherwise utilize any and all information they may have in their possession
regarding the Customer and its Affiliates, and the Customer waives any right of
confidentiality it may have with respect to such exchange of such information.
10.10 Indemnification: Customer agrees to indemnify and hold WFBC harmless from
any and all liability, claims and damages, including attorneys' fees, costs of
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suit and interest which WFBC may incur as a result of the failure of Customer to
pay withholding taxes due and payable to any taxing authority.
10.11 Notices hereunder: All notices and communications hereunder shall be given
or made to the parties at their respective addresses set forth below, or at such
other address as the addressee may hereafter specify for the purpose of written
notice to the other party hereto. Such notices and communications shall be
effectively given by WFBC when and if given in writing and delivered to the
address set forth herein, delivered by facsimile or duly deposited in the mails
with first-class postage prepaid.
10.12 Costs and Expenses: Except as is prohibited by law, the Customer agrees to
pay on demand all costs and expenses, including (without limitation) attorneys'
fees, incurred by WFBC in connection with this Agreement and any other related
document or agreement, and the transactions contemplated hereby, including
without limitation all such costs, expenses and fees incurred in connection with
the negotiation, due diligence, preparation, execution, amendment,
administration, performance, collection and enforcement of the obligations and
all such documents and agreements and the creation, perfection, protection,
satisfaction, foreclosure or enforcement of any security interest granted
hereunder, the collection of any Account or any obligation owed by Customer to
WFBC.
10.13 Audit: The Customer hereby agrees to pay WFBC, on demand, audit fees in
connection with any audits or inspections conducted by WFBC of any Collateral or
the Customer's operations or business at the rates established from time to time
by WFBC as its audit fees, together with all actual out-of-pocket costs and
expenses incurred in conducting any such audit or inspection.
10.14 Jurisdiction: The parties hereby (a) consent to the personal jurisdiction
of the state and federal courts located in the State of Colorado in connection
with any controversy related to this Agreement; (b) waive any argument that
venue in any such forum is not convenient, (c) agree that any litigation
initiated by WFBC or the Customer in connection with this Agreement shall be
venued in either the State Courts of the City and County of Denver, Colorado or
the United States District Court, District of Colorado, and (d) agree that a
final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
10.15 Waiver of Jury Trial: THE CUSTOMER HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, BASED ON
OR PERTAINING TO THIS AGREEMENT.
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Executed and accepted this 22 day of May at Colorado Springs, CO.
-- ---------- ---------------------
Month/Year City/State
Simtek Corporation XXXXX FARGO BANK, NATIONAL ASSOCIATION
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000 1740 Broadway MAC X0000-000
Xxxxxxxx Xxxxxxx, XX 00000 Xxxxxx, XX 00000
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxxxx
------------------------------ ----------------------------
Signature Signature
By: Xxxxx X. Xxxxxxx By: Xxxx Xxxxxxxx
------------------------------ ----------------------------
Name Name
Its: VP & CFO Its: VP
----------------------------- ---------------------------
Title Title
Sworn and subscribed before me this 22 day Witnessed by:
of May, 2006.
/s/ Xxxx Xxxxxx
--------------------------------
Signature
/s/ Xxxxxxx X. Xxxxx Xxxx Xxxxxx, V.P.
---------------------------------- --------------------------------
NOTARY PUBLIC NAME AND TITLE
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Foreign Receivables Addendum
This Foreign Receivables Addendum ("Addendum") dated this 22 day of May, 2006
shall modify that certain Account Purchase Agreement dated May 22, as amended
(the "Agreement"), by and between Xxxxx Fargo Bank, National Association, acting
through its Xxxxx Fargo Business Credit operating division ("WFBC"), and Simtek
Corporation ("Customer"). Terms not otherwise defined herein, shall have the
meaning ascribed to them in the Agreement.
RECITALS
A. WFBC and Customer are parties to that certain Account Purchase Agreement,
dated May 22, 2006 (the "Agreement"); and
B. The Customer wishes to sell certain foreign accounts receivable, as defined
herein, to WFBC, and WFBC wishes to purchase certain foreign accounts receivable
from Customer.
C. WFBC and Customer desire to enter into this Addendum to supplement terms of
the Agreement regarding such foreign accounts receivable.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, WFBC and customer agree as follows:
1. The definition of "Unacceptable Accounts " in Section 2.16 of the
Purchase Agreement is hereby amended to insert the phrase "Unless the
parties have entered into an Foreign Receivables Addendum to Account
Purchase Agreement," at the beginning of the subsection (b) so that
the section reads as follows:
"(b) Unless the parties have entered into an Foreign Receivables
Addendum to Account Purchase Agreement, Accounts owed by an
Account Debtor located outside the United States or Canada.
2. WFBC may purchase certain Accounts, which are owed by an Account
Debtor located outside the United States at its sole discretion
("Foreign Accounts").
3. Notwithstanding Section 2.10 of the Purchase Agreement, the Initial
Payment on any Foreign Accounts purchased by WFBC shall be an amount
equal to 80% times the stated invoice or the face amount of such
Account. Such 80% advance rate may be adjusted by WFBC at any time at
WFBC's sole discretion.
4. The Foreign Accounts purchased by WFBC shall be on a full recourse
basis to the Customer and the Customer promises to pay any and all
amounts due and owing to WFBC for such Foreign Accounts which shall be
payable on demand by WFBC.
5. Unless modified herein, all terms and conditions of the Purchase
Agreement shall remain the same.
6. The Agreement, as amended hereby, shall be binding upon and inure to
the benefit of the Customer and WFBC and their respective successors
and assigns, except that the Customer shall not have the right to
assign its rights thereunder or any interest therein without the prior
written consent of WFBC. This Agreement and all other documents
related hereto may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be
executed as of the date first above written.
XXXXX FARGO BANK, NATIONAL ASSOCIATION SIMTEK CORPORATION
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------ ----------------------------------
By: Xxxx Xxxxxxxx By: Xxxxx X. Xxxxxxx
------------------------------ ----------------------------------
(Sign) (Sign)
Title: VP Title: VP & CFO
--------------------------- -------------------------------
SUPPORT AGREEMENT
This Agreement, dated as of May 22, 2006 is made by Xxxxx X. Xxxxxxx (the
"Officer") and SiMtek Corporation, a Colorado Corporation (the "Customer") for
the benefit of Xxxxx Fargo Bank, National Association, acting through its Xxxxx
Fargo Business Credit operating division ("WFBC").
Recitals
WFBC and Customer have entered into an Agreement (together with all amendments,
supplements and restatements, the "Agreement") dated as of May 22, 2006,
pursuant to which WFBC has agreed to make account purchases and extend other
financial accommodations to or for the benefit of the Customer.
The Officer is the duly elected, qualified and acting Chief Financial
Officer of the Customer and is fully familiar with all of the Customer's
business and financial affairs.
To induce WFBC to make advances and extend other financial accommodations
to or for the account of the Customer under the Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Officer, the Customer and WFBC agree as follows:
1. Definitions. Capitalized terms used in this Agreement which are not
defined in this Agreement have the meanings given to them in the Account
Purchase Agreement.
2. Officer to Dispose of Collateral. The Officer and the Customer agree
that if (i) WFBC comes into possession of any or all of the tangible Collateral
or is collecting the Customer's Accounts or otherwise disposing of Collateral
Because an Event of Default has occurred; and (ii) WFBC has given notice of an
acceleration of all of the Obligations;
a) if the Officer is still employed by the Customer, the Customer
will, upon WFBC's request, cause the Officer so long as he is employed by
the Customer, to exert his best efforts and devote all of his regular
working hours to obtain sales of the Collateral at the best commercially
obtainable prices and terms and to collect the Accounts at their full face
value to the extent commercially reasonable; and
b) if the Officer ceases to be employed by the Customer or has ceased
to be employed by the Customer, at WFBC's option and upon WFBC's request,
the Officer shall assist WFBC as WFBC's independent contractor, for a
period not to exceed four months, for the sole purpose of disposing of the
Collateral and collecting the Accounts, or assisting WFBC in disposing of
the Collateral and collecting the Accounts. During the aforementioned
period the Officer shall exert his best efforts and devote regular working
hours to obtain sales of the Collateral at the best commercially obtainable
prices and terms and to collect the Accounts at their full face value.
3. Termination of Officer's Obligations. This Agreement shall remain in
full force and effect until:
a) the Agreement is no longer outstanding and all Obligations have
been paid in full; or
b) the Officer shall have ceased to be employed by the Customer for
more than thirty (30) days before the occurrence of the events described in
Paragraph 3 hereof, and shall have given notice of such cessation of
employment to WFBC at least thirty (30) business days before the occurrence
of such events.
4. Miscellaneous. The provisions of this Agreement are declared to be
severable. If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Agreement. The Officer and the Client
waive notice of WFBC's acceptance hereof.
5. Governing Law; Waiver of Jury Trial. This Agreement shall be governed by
and construed in accordance with the substantive laws (other than conflict laws)
of the State of Colorado. THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, BASED
ON OR PERTAINING TO THIS AGREEMENT.
IN WITNESS WHEREOF, the Officer and Customer have duly executed this
Agreement as of the date first written above.
Signature: /s/ Xxxxx X. Xxxxxxx
---------------------------
Xxxxx X. Xxxxxxx
Its: VP & CFO
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