EXHIBIT
10.9
NON-RECOURSE RECEIVABLES PURCHASE
AGREEMENT
This NON-RECOURSE RECEIVABLES
PURCHASE AGREEMENT (the “Agreement”), dated as of
November 28, 2005, is between SILICON VALLEY BANK
(“Buyer”) having a place of business at 3003 Tasman
Drive, Santa Clara, California 95054 and ARBINET-THEXCHANGE,
INC. (“Seller”), a Delaware corporation, with its
chief executive office at 120 Albany Street, Suite 450, New
Brunswick, New Jersey 08901.
1
DEFINITIONS.
When used herein, the following
terms have the following meanings.
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 ***
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, or (c) 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 “ Late Payment Settlement Period
” has the meaning set forth in Section 2.2.
1.12 “ Open Amount ” means the
portion of any Purchased Receivable which has been pre-paid to the
Seller.
1.13 “ Payment in Full ” means for
any Purchase that Buyer has received payments on account of the
Purchased Receivables under such Purchase equal to the Total
Purchased Receivables Amount for such Purchase.
*** Portions for which confidential treatment
requested.
-1-
1.14 “ 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), provided,
however, that at no time shall be Prime Rate be either
(i) less than ***, or (ii) greater than ***.
1.15 “ 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.
1.16 “ Purchase Date ” means for
any Purchase the date set forth as the “Purchase Date”
in the Schedule for such Purchase.
1.17 “ Purchase Price ” means for
any Purchase the “Purchase Price” set forth on the
Schedule for such Purchase.
1.18 “ Purchased Receivables ”
means for any Purchase all those Receivables arising out of the
invoices and other agreements identified on the Schedule for such
Purchase.
1.19 “ 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.
1.20 “ Receivables ” means
accounts, receivables, chattel paper, instruments, contract rights,
documents, general intangibles, letters of credit, drafts, bankers
acceptances, and other rights to payment, and all proceeds
thereof.
1.21 “ Related Property ” has the
meaning as set forth in Section 9 hereof.
1.22 “ Repurchase Amount ” has the
meaning set forth in Section 4.2 hereof.
1.23 “ Schedule ” means for each
Purchase a schedule executed by the parties in the form of
Exhibit A hereto identifying the Purchased Receivables
subject to such Purchase and setting forth financial and other
details relating to such Purchase, all as contemplated by
Exhibit A .
1.24 “ Settlement Date ” has the
meaning set forth in Section 3.2 hereof.
1.25 “ 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.
Each purchase and sale hereunder
shall be in the sole discretion of Buyer and Seller. In any event,
Buyer will not (i) purchase any Receivables in excess of an
aggregate outstanding amount exceeding Ten Million Dollars
($10,000,000.00), or (ii) purchase any Receivables under this
Agreement after November 30, 2007. The purchase of each
Purchased Receivable may be evidenced by an assignment or bill of
sale in a form acceptable to Buyer.
*** Portions for which confidential treatment
requested.
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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, if any, shall be paid by Buyer
to Seller.
(b) Late Payment Settlement
Fee . If, for any reason, Payment in Full does not occur on or
before the Due Date, then, upon the first to occur of Payment in
Full, *** after the Due Date or the *** by or against the
applicable Account Debtor that failed to pay in full by the Due
Date, and in addition to any other obligations of Seller hereunder,
Seller shall pay to Buyer an amount which is equal to (i) the
*** and the *** during the period from the Due Date until the first
to occur of Payment in Full, *** the Due Date or the *** by or
against the applicable Account Debtor that failed to pay in full by
the Due Date (the “Late Payment Settlement Period”)
multiplied by (ii) a fraction the numerator of which is the
*** in the Late Payment Settlement Period and the denominator of
which is *** (“Late Payment Settlement
Fee”).
2.3 Facility Fee
. A fully earned, non-refundable
facility fee of Twenty Thousand Dollars ($20,000.00) is due to
Buyer from Seller upon execution of this Agreement. In addition,
Seller shall pay to Buyer a facility fee of Twenty Thousand Dollars
($20,000.00) on each annual anniversary of this
Agreement.
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 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.
2.5 Good Faith Deposit
. Seller has paid to Buyer a good
faith deposit of Fifteen Thousand Dollars ($15,000.00) (the
“Good Faith Deposit”) to initiate the Buyer’s due
diligence review process, which Good Faith Deposit shall be applied
to the facility fee and/or other expenses of the Buyer and closing
costs.
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 with notice by Buyer to Seller. 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 share the legal fees and other expenses
to be incurred in such proceedings on a basis which is acceptable
to Seller. In no event shall Seller intentionally 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 second week (each a
“Settlement Date”), commencing
*** Portions for which confidential treatment
requested.
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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 . Seller
agrees to pay to Buyer within *** Business Days, the full face
amount, or any unpaid portion, of any Purchased Receivable:
(A) with respect to such Purchase 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 unpaid portion of the
Purchased Receivable the Account Debtor asserts in good faith any
discount, allowance, return, *** counterclaim, offset, defense,
right of recoupment, right of return, warranty claim, or short
payment (except for such matters as are permitted to be, and have
been, cured pursuant to Section 7 hereof); together
with, in the
