NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT

Exhibit 10.14

NON-RECOURSE RECEIVABLES PURCHASE AGREEMENT

1   Definitions.

1.1   “ Account Debtor ” has the meaning set forth in the Massachusetts Uniform Commercial Code and shall include any person liable on any Purchased Receivable, including without limitation, any guarantor of the Purchased Receivable and any issuer of a letter of credit or banker’s acceptance.

1.2   “ Adjustments ” means all discounts, allowances, returns, disputes, counterclaims, offsets, defenses, rights of recoupment, rights of return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor with respect to any Purchased Receivable other than by reason of an Insolvency Event.

1.3   “ Administrative Fee ” means for any Purchase the percentage of the Total Purchased Receivables Amount set forth in the Schedule for such Purchase.

1.4   “ Business Day ” means any day other than a Saturday, Sunday, or other day on which banks in California or Massachusetts are required or authorized by law to close.

1.5   “ Discount Rate ” means for any Purchase the “Discount Rate” set forth in the Schedule for such Purchase.

1.6   “ Due Date ” means for any Purchase the “Due Date” set forth in the Schedule for such Purchase.

1.7   “ Event of Default ” has the meaning set forth in Section 10 hereof.

1.8   “ Insolvency Event ” means, with respect to any Account Debtor, (a) the commencement of a case, action or proceeding with respect to such Account Debtor before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, (b) such Account Debtor is generally not paying its debts when due, (c) the financial inability to make payment on a Purchased Receivable, or (d) the making or commencement of any general assignment for the benefit of creditors, composition, marshaling of assets for creditors, or other similar arrangement in respect of the creditors generally or any substantial portion of the creditors of such Account Debtor.

1.9   “Invoice Amount” means for any Purchase, the “Invoice Amount” set forth in the Schedule for such Purchase.

1.10   “ Late Payment Settlement Fee ” has the meaning set forth in Section 2.2.

1.11   “ Open Amount ” means the portion of any Purchased Receivable which has been pre-paid to the Seller.

1.12   “ Payment in Full ” means the receipt by Buyer of one or more payments in respect of a Purchased Receivable equal to the Purchased Receivable Amount.

1.13   “ Prime Rate ” means per annum rate of interest from time to time announced and made effective by Buyer as its Prime Rate (which rate may or may not be the lowest rate available from Buyer at any given time).

1.14   “ Purchase ” means the purchase by Buyer from Seller of one or more Purchased Receivables on a Purchase Date as listed in the Schedule applicable to such Purchase.

1.15   “ Purchase Date ” means for any Purchase the date set forth as the “Purchase Date” in the Schedule for such Purchase.

1.16   “ Purchase Price ” means for any Purchase the “Purchase Price” set forth on the Schedule for such Purchase.

1.17   “ Purchased Receivable ” means for any Purchase a Receivable identified on the Schedule for such Purchase.

1.18   “ Purchased Receivable Amount ” means for any Purchased Receivable, the “Invoice Amount” set forth with respect to such Purchased Receivable on the applicable Schedule minus the Open Amount.

1.19   “ Receivable ” means an account, receivable, chattel paper, instrument, contract right, documents, general intangible, letter of credit, draft, bankers acceptances, and other right to payment, and all proceeds thereof.

1.20   “ Related Property ” has the meaning as set forth in Section 9 hereof.

1.21   “ Repurchase Amount ” has the meaning set forth in Section 4.2 hereof.

1.22   “ Schedule ” means for each Purchase a schedule executed by the parties in the form of Exhibit A hereto identifying each Purchased Receivable subject to such Purchase and setting forth financial and other details relating to such Purchase, all as contemplated by Exhibit A .

1.23   “ Settlement Date ” has the meaning set forth in Section 3.2 hereof.

1.24   “ Total Purchased Receivables Amount ” means for any Purchase the total of the Purchased Receivable Amounts for all Purchased Receivables subject to such Purchase as set forth on the applicable Schedule.

2   Purchase and Sale of Receivables .

2.1   Sale and Purchase. Subject to the terms and conditions of this Agreement, with respect to each Purchase, effective on each applicable Purchase Date, Seller agrees to sell to Buyer and Buyer agrees to buy from Seller all right, title, and interest (but none of the obligations with respect to) of the Seller to the payment of all sums owing or to be owing from the Account Debtors under each Purchased Receivable to the extent of the Purchased Receivable Amount for such Purchased Receivable.

2.2   Purchase Price and Related Matters . With respect to each Purchase:

(a)   Payment of Purchase Price. On the Purchase Date, the Purchase Price, less the Administrative Fee and legal fees and expenses of counsel related thereto, shall be paid by Buyer to Seller.

(b)   Late Payment Settlement Fee . In the event that Payment in Full of any Purchased Receivable is not received on or before the Due Date, Seller agrees to pay to Buyer an additional amount on any unpaid amount, calculated at the Discount Rate, through the earlier to occur of (i) such date that Buyer receives Payment in Full, and (ii) an additional ninety (90) days past the Due Date (“Late Payment Settlement Fee”) (subject to Section 4.2 (Seller's Agreement to Repurchase) herein). In the event that such Purchased Receivable is uncollectible (due to an Account Debtor Insolvency Event), then the Late Payment Settlement Fee period shall be the lesser of forty-five (45) days, and the date on which such Purchased Receivable becomes uncollectible due to such Insolvency Event.

2.3   Facility Fee . A fully earned, non-refundable facility fee of Seventy Thousand Dollars ($70,000.00) is earned by Buyer upon execution of this Agreement and is payable from Seller as follows: (i) Forty Thousand Dollars ($40,000.00)on the date hereof, and (ii) Thirty Thousand Dollars ($30,000.00) on the earlier to occur of (a) the termination of this Agreement by Seller, or (b) December 30, 2005. In addition, Seller shall pay to Buyer a facility fee of Seventy Thousand Dollars ($70,000.00) on December 30 ^th of each year after December 30, 2005, provided that the term has been extended by mutual written agreement of the parties.

2.4   Nature of Transaction . It is the intent of the parties hereto that each purchase and sale of Receivables hereunder is and shall be a true sale of such Receivables for all purposes (including, without limitation, accounting and tax treatment) and not a loan arrangement. Each such sale shall be, subject to the terms hereof, absolute and irrevocable, providing Buyer with the full risks and benefits of ownership of the Purchased Receivables (such that the Purchased Receivables would not be property of the Seller’s estate in the event of the Seller’s bankruptcy). The parties agree that appropriate UCC financing statements have been or shall promptly be filed to reflect that Seller is the seller and Buyer is the purchaser of Receivables hereunder.

3   Collections, Charges and Remittances .

3.1   Application of Payments . All payments in respect of any Purchased Receivable, whether received from an Account Debtor or any other source and whether received by Seller or Buyer, shall be the property of Buyer and Seller shall have no ownership interest therein.

3.2   Collection by Seller . In order to facilitate the collection of the Purchased Receivables in the ordinary course of business, Seller agrees to act as Buyer’s agent for collection of the Purchased Receivables. Accordingly, Buyer hereby appoints the Seller its attorney-in-fact to ask for, demand, take, collect, sue for and receive all payments made in respect of the Purchased Receivables and to enforce all rights and remedies thereunder and designates Seller as Buyer’s assignee for collection; provided that such appointment of Seller as such attorney-in-fact or assignee for collection may be revoked by Buyer at any time following an Event of Default (and any applicable cure period) or the failure of a Purchased Receivable to be paid on the Due Date. Seller, as such attorney-in-fact, shall use due diligence and commercially reasonable lawful efforts in accordance with its usual policies and practices to collect all amounts owed by the Account Debtors on each Purchased Receivable when the same become due. In the enforcement or the collection of Purchased Receivables, Seller shall commence any legal proceedings only in its own name as an assignee for collection or on behalf of Buyer or, with Buyer’s prior written consent, in Buyer’s name. Seller shall have no obligation to commence any such legal proceedings unless Buyer has agreed to assume the legal fees and other expenses to be incurred in such proceedings. In no event shall Seller take any action which would make Buyer a party to any litigation or arbitration proceeding without Buyer’s prior written consent. Until Buyer has received Payment in Full as to any Purchase, Seller shall (i) hold in trust for Buyer and turn over to Buyer forthwith upon receipt all payments made to Seller by Account Debtors with respect to the Purchased Receivables subject to such Purchase and (ii) turn over to Buyer forthwith on receipt all instruments, chattel paper and other proceeds of the Purchased Receivables; provided that unless an Event of Default has occurred and is continuing, Seller shall remit amounts received by Seller and due to Buyer on a weekly basis on Friday of each week (each a “Settlement Date”), commencing on the last business day of the second week after the Purchase Date. On each Settlement Date, Seller shall deliver to Buyer a report, in form and substance acceptable to Buyer, of the account activity (including dates and amounts of payments) and changes in account status for each Purchased Receivable.

3.3   No Obligation to Take Action . Buyer shall have no obligation to perform any of Seller’s obligations under any Purchased Receivables or to take any action or commence any proceedings to realize upon any Purchased Receivables (including without limitation any defaulted Purchased Receivables), or to enforce any of its rights or remedies with respect thereto.

4   Non-Recourse; Repurchase Obligations .

4.1   Non-Recourse . Except as otherwise set forth in this Agreement, Buyer’s acquisition of Purchased Receivables from Seller hereunder shall be without recourse against Seller.

4.2   Seller’s Agreement to Repurchase . In the event that (A) with respect to any Purchased Receivable there has been any breach of warranty or representation set forth in Section 6.1 hereof (except for breaches of warranty or representations which are permitted to be, and have been, cured pursuant to Section 7 hereof) or any breach of any covenant contained in this Agreement with respect to such Purchased Receivable; or (B) with respect to such Purchased Receivable the Account Debtor asserts any Adjustment (except for such matters as are permitted to be, and have been, cured pursuant to Section 7 hereof), Seller shall, at its option, either (X) pay to Buyer on demand, the full face amount, or any unpaid portion, of such Purchased Receivable; together with, in the case of (A) or (B), all reasonable attorneys’ fees and expenses and all court costs incurred by Buyer in collecting such Purchased Receivable and/or enforcing its rights under, or collecting amounts owed by Seller in connection with this Agreement (collectively, the “Repurchase Amount”), (Y) shall substitute another Receivable acceptable to Buyer in its sole and absolute discretion that is equal in amount to such Purchased Receivable or, with respect to (B) above only, (Z) shall pay to Buyer the amount of any Adjustment in accordance with Section 7 hereof; provided, however, that Seller shall have no obligation to pay the Repurchase Amount, substitute another Receivable or, with respect to (B) above only, pay the amount of any Adjustment if there has been an Account Debtor Insolvency Event with respect to such Purchased Receivable. Upon payment of the Repurchase Amount or substitution of another Receivable, the Purchased Receivable subject to the preceding paragraph shall be deemed property of and owned solely by the Seller (and shall not be deemed to be a Purchased Receivable hereunder).

4.3   Seller’s Payment of the Amounts Due Buyer . All amounts due from Seller to Buyer shall be paid by Seller to Buyer in immediately available funds by fedwire to the account listed in the attached Schedule.

5   Power of Attorney.