Document:

EXHIBIT 10.100

 

	
  

  

20195 STEVENS CREEK BLVD.  · SUITE #220 · CUPERTINO, CA. 95014

TEL: 
(408) 255-8300 FAX (408) 255-9313

 

RECEIVABLES FINANCING AGREEMENT

 

This
Receivables Financing Agreement (the “Agreement”), dated as of JUNE 30, 1999,
is entered into by and between SOUTHWALL TECHNOLOGIES INC. a [ ý
corporation, o partnership, o
sole proprietorship] (“Borrower”) having its principal place of business and
chief executive office at the address set forth below Borrower’s signature, and
Pacific Business Funding, a division of Cupertino National Bank (“Lender”)
having an office at the address identified above.

 

Capitalized
terms used in this Agreement shall have the meanings assigned to them in
Section 13, Definitions.

 

1.             Finance of Accounts.

 

1.1          Schedule
of Accounts. 
Borrower may, at any time, request that Lender finance Accounts.  Any such request by Borrower shall be made
by delivering to Lender a Schedule of Accounts (the “Schedule of Accounts”)
which describes in detail the Accounts Borrower is requesting Lender to
finance, including, (a) the name and address of the Account Debtor of each such
Account, (b) the amount owed by the Account Debtor of each such Account, and
(c) the date and number of the invoice evidencing each such Account.  Each Schedule of Accounts shall have
attached to it an invoice for each Account described on the Schedule of
Accounts, and shall be signed by an authorized representative of Borrower.

1.2          Discretionary
Approval of Accounts. 
Lender may, in its sole discretion, finance any Account included in a
Schedule of Accounts, but is under no obligation to finance any such
Account.  Lender may exercise its sole
discretion in approving each Account and the credit of each Account Debtor
before financing any Account.

1.3          Payment
of Advance; Creation of a Book Reserve.  Upon approval, in Lender’s sole discretion,
of any of the Accounts described on a Schedule of Accounts, Lender shall make
an advance to Borrower for any approved Account in an amount equal to EIGHTY
percent (80)% of the face amount of such approved Account (the “Advance”).  Lender may, from time to time, in its
discretion, upon notice to Borrower, change the percentage of the Advance.  Upon payment of the Advance to Borrower,
Lender shall also create a reserve on Lender’s books and records with respect
to each Financed Account in an amount equal to the face amount of the Financed
Account minus the Advance for such Financed Account (the “Reserve”).  Notwithstanding the foregoing, in no event
shall the Reserve with respect to all Financed Accounts outstanding at any time
be less than TWENTY percent (20)% of the Account Balance.  Lender may, in its discretion upon notice to
Borrower, increase the percentage of the Reserve at any time.

1.4          Collection
of Accounts. 
At the time Lender pays the Advance with respect to any Account, such
Account shall constitute a Financed Account, and Borrower hereby absolutely
assigns to Lender, all of Borrower’s right to collect each Financed
Account.  Each Financed Account shall be
collected directly by Lender.  At the
request of Lender, Borrower and Lender shall jointly notify each Account Debtor
by letter that Financed Accounts owed by such Account Debtor have been assigned
and are payable to Lender.  Such
notification shall be in form and substance satisfactory to Lender.  Borrower shall not take or permit any action
to change or revoke any notification without Lender’s prior written consent and
shall not request any Account Debtor to pay any Financed Account to
Borrower.  Notwithstanding the foregoing,
in the event Borrower receives any payments of any Financed Accounts, Borrower
shall (A) immediately notify Lender of such payment, (B) hold such payment in
trust and safekeeping for Lender, and (C) immediately turn over to Lender the
identical checks, monies or other forms of payment received, with any necessary
endorsement or assignment.  Lender shall
have the right to endorse Borrower’s name on all payments received in
connection with each Financed Account and on any other proceeds of
Collateral.  If Lender receives a check
or item which is payment for both a Financed Account and a non-Financed
Account, the funds shall first be applied to the Financed Account and, so long
as there does not then exist an Event of Default or an event that with notice or
lapse of time would constitute an Event of Default, the excess shall be
remitted to Borrower.  In the event
Lender receives any other payments of non-Financed Accounts, Lender shall remit
to Borrower the collections of such non-Financed Accounts; provided, that if any Event of Default or
event that with notice or lapse of time or otherwise would constitute an Event
of Default then exists, Lender shall have no duty to remit any such
collections, which collections constitute Collateral, and may apply such collections
to reduce the Obligations.

 

2.             Fees and Customer Payments.

 

2.1.         Finance
Fees.  Borrower
shall pay to Lender on each Settlement Date, a finance fee in an amount equal
to                    percent (.088)%
per month of the average daily Account Balance outstanding during the
Settlement Period ending on such Settlement Date (the “Finance Fees”).  Such accrued Finance Fees shall be netted
against the Reserve as described in Section 3.3.

2.2.         Administrative
Fee.  Borrower
shall pay to Lender on each Settlement Date, an Administrative Fee equal to
ZERO percent (-0-)% of the face amount of each Account financed by Lender
during the Settlement Period ending on such Settlement Date (the
“Administrative Fee”).  All
Administrative Fees shall be netted against the Reserve as described in Section
3.3.

2.3.         Maximum
Lawful Rate. 
In no event shall any charges that may constitute interest hereunder
exceed the highest rate permitted under applicable law.  In the event that a court of competent
jurisdiction makes a final determination that Lender has received interest
hereunder in excess of the maximum lawful rate, then such excess shall be
deemed a payment of principal and the interest payable hereunder deemed amended
to the amount payable under the maximum lawful rate.

2.4.         Crediting
Customer Payments. 
Upon Lender’s receipt of payment of a Financed Account, Lender shall
promptly credit such customer payment (the “Customer Payments”) to the amount
outstanding with respect to such Financed Account.  Notwithstanding the foregoing, if any Customer Payment is
subsequently dishonored or Lender does not receive good funds for any reason,
the amount of such uncollected Customer Payment shall [ILLEGIBLE] included in
the Account Balance as if such Customer Payment had not been received, and
Finance Fees shall accrue thereon, and the credit to [ILLEGIBLE] specific
Financed Account shall be reversed. 
Notwithstanding the foregoing, upon the occurrence of an Event of
Default, Lender shall apply all Customer Payments to Borrower’s Obligations
under this Agreement in such order and manner as Lender shall, in its sole
discretion, determine.

2.5.         Accounting.  Lender shall
deliver to Borrower after each Settlement Date, a statement of Borrower’s
account which shall include an accounting of the transactions for that
Settlement Period, including the amount of all Finance Fees, Administrative
Fees, Adjustments, Chargeback Amounts, Customer Payments and Financed
Accounts.  The accounting shall constitute
an account stated and shall be binding on Borrower and deemed correct unless
Borrower delivers to Lender a written objection within thirty (30) days after
such accounting is mailed to Borrower.

 

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3.             Adjustments, Chargebacks and
Remittances.

 

3.1.         Adjustments.  In the event any Account Debtor asserts any
offset, defense, counterclaim, dispute, discount, allowance, right of return,
right of recoupment, or warranty claim with respect to a Financed Account, or
pays less than the face amount of such Financed Account (each, an
“Adjustment”), Lender may, in its sole discretion, either (A) deduct the amount
of the Adjustment in calculating the Remittance, or (B) chargeback to Borrower
the Financed Account with respect to which the Adjustment is asserted.  Borrower shall advise Lender immediately
upon learning of any Adjustment asserted by any Account Debtor.

3.2.         Chargebacks.  Lender shall have
the right to chargeback to Borrower any Financed Account:

(A)                              which
remains unpaid ninety (90) calendar days after the invoice date;

(B)                                with
respect to which there has been a breach of any warranty, representation,
covenant or agreement set forth in this Agreement;

(C)                                with
respect to which the Account Debtor asserts any Adjustment; or

(D)                               which
is owed by an Account Debtor who has filed, or has had filed against it, any
bankruptcy case, insolvency proceeding, assignment for the benefit of
creditors, receivership or insolvency proceeding, or who has become insolvent
(as defined in the United States Bankruptcy Code) or who is generally not
paying its debts as such debts become due.

 

Upon demand by Lender, Borrower
shall pay to Lender the full face amount of any Financed Account which has been
charged back to Borrower pursuant to this Section 3.2, or to the extent partial
payment has been made, the amount by which the face amount of such Financed
Account exceeds such partial payment, together with any attorneys’ fees and
costs incurred by Lender in connection with collecting such Financed Account
(collectively, the “Chargeback Amount”). 
Lender shall advise Borrower regarding how the Chargeback Amount shall
be paid, which may be by any one or a combination of the following, in Lender’s
sole discretion:  (1) payment in cash
immediately upon demand; (2) deduction from or offset against any Remittance
that would otherwise be payable to Borrower; (3) payment from any Advances that
may otherwise be made to Borrower; (4) adjustment to the Reserve pursuant to
Section 1.3 hereof; or (5) delivery of substitute Accounts and a Schedule of
Accounts acceptable to Lender, which Accounts shall constitute Financed
Accounts.

3.3.         Remittance.  Lender shall remit
to Borrower after the Settlement Date, the amount, if any, which Lender owes to
Borrower at the end of the Settlement Period based on the following
calculations set forth below (the “Remittance”); provided, that if there then exists any Event of Default or
any event or condition that with notice or lapse of time would constitute an
Event of Default, Lender shall not be obligated to remit any payments to
Borrower.  If the amount resulting from
the following calculation is a positive number, such amount is the amount of
the Remittance for such Settlement Period. 
If the resulting amount is a negative number, such amount is the amount
owed by Borrower to Lender.

 

The
calculations to be used are as follows:

 

(A)          The sum of the following:

(1)  The Reserve as of the
beginning of the subject Settlement Period, plus

(2)  the Reserve created for
each Account financed during the subject Settlement Period;

MINUS

(B)           The sum of the following:

(1)  Finance Fees accrued during
the subject Settlement Period; plus

(2)  Administrative Fees accrued
during the subject Settlement Period; plus

(3)  Adjustments during the
subject Settlement Period; plus

(4) 
Chargeback Amounts, to the extent Lender has agreed to accept payment of
any such Chargeback Amount by deduction from the Remittance; plus

(5) 
All professional fees and expenses as set forth in Section 10 for which
oral or written demand has been made by Lender during the subject Settlement
Period; plus

(6) 
The Reserve for the Account Balance as of the first day of the following
Settlement Period in the minimum percentage set forth in Section 1.3 hereof.

 

If the foregoing calculations
result in a Remittance payable to Borrower, Lender shall make such payment by
check, subject to Lender’s rights of offset and recoupment, and its right to
deduct any Chargeback Amount as set forth in Section 3.2.  If the foregoing calculations result in an
amount due to Lender from Borrower, Borrower shall make such payment by any one
or a combination of the methods set forth in Section 3.2. hereof for
chargebacks, as determined by Lender in its discretion.

 

4.             Power of Attorney.  Borrower hereby
appoints Lender and its designees as Borrower’s true and lawful attorney in
fact, to exercise in Lender’s discretion, and regardless of whether an Event of
Default is then existing, all of the following powers, such powers being
coupled with an interest:  (A) to notify
all Account Debtors with respect to the Financed Accounts to make payment
directly to Lender; (B) to receive, deposit, and endorse Borrower’s name on all
checks, drafts, money orders and other forms of payment relating to the
Financed Accounts; (C) to demand, collect, receive, sue, and give releases to
any Account Debtor for the monies due or which may become due on or in
connection with the Financed Accounts; (D) to compromise, prosecute, or defend
any action, claim, case, or proceeding relating to the Financed Accounts,
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 elect; (E) to
sell, assign, transfer, pledge, compromise, or discharge any Financed Accounts;
(F) to receive, open, redirect and dispose of all mail addressed to Borrower
for the purpose of collecting the Financed Accounts and to take all the actions
permitted in subsection (B) above with respect to any payments in any such
mail; (G) to execute in the name of Borrower and file against Borrower in favor
of Lender such financing statements and other agreements as Lender deems
necessary to evidence or perfect its security interest in the Financed Accounts
and the other Collateral; and (H) to do all acts and things necessary or
expedient, in furtherance of any such purposes.  Upon the occurrence of an Event of Default, all of the power of
attorney rights granted by Borrower to Lender hereunder shall be applicable
with respect to all Collateral.

 

5.             Continuing Representations,
Warranties and Covenants.  To
induce Lender to enter into this Agreement and finance Accounts, and with full
knowledge that Lender is relying on the truth and accuracy of the following in
determining whether to finance any Account, Borrower represents, warrants,
covenants and agrees as follows, which representations, warranties, covenants
and agreements shall survive the execution and delivery of this Agreement:

(A)                              The
information contained in each Schedule of Accounts is true and correct;

(B)                                Each
Schedule of Accounts is signed by an authorized representative of Borrower, and
Lender shall have the right to rely on such signature as an authorized
signature of Borrower;

 

2

 

(C)                                Borrower
is the sole and absolute owner of each Account described in each Schedule of
Accounts and has the legal right to transfer and assign such Account to Lender;

(D)                               Borrower
has performed all obligations required by the Account Debtor in connection with
each Account described in each Schedule of Accounts and payment of each such
Account is not contingent upon the fulfillment of any obligation or contract,
past or future;

(E)                                 Each
Account described on each Schedule of Accounts is correctly stated therein, is
not in dispute, is presently and unconditionally owing at the time stated in
the invoice evidencing such Account as attached to the Schedule of Accounts, is
not past due or in default, represents a bona fide indebtedness arising from
the actual sale of goods or performance of services to an Account Debtor in the
ordinary course of Borrower’s business which has been received and finally
accepted by the Account Debtor;

(F)                                 Each
Account set forth on each Schedule of Accounts is not subject to any offset,
defense or counterclaim of any kind, whether bona fide or otherwise, and no
agreement has been made under which the Account Debtor may claim any deduction
or discount, except as otherwise stated in the Schedule of Accounts;

(G)                                Each
Account Debtor identified on each Schedule of Accounts is liable for the amount
set forth on such Schedule of Accounts and will not object to the payment for,
or the quality or the quantity of the goods or services to which any Account
described on such Schedule of Accounts relates;

(H)                               Borrower,
and to Borrower’s best knowledge, each Account Debtor set forth in each
Schedule of Accounts, is and shall remain solvent in that the present saleable
value of such entity’s assets exceeds the total of such entity’s liabilities;

(I)                                    Borrower
has not, as of the time Borrower accepts an Advance from Lender, filed or had
filed against it a petition for relief under the United States Bankruptcy Code;

(J)                                   Each
Account and all other Collateral are free and clear of any and all liens,
security interests and encumbrances of any kind, other than those in favor of
Lender, and Borrower will not assign, transfer, or grant any lien or security
interest in any Accounts or other Collateral to any other party, without
Lender’s prior written consent;

(K)                               Borrower
has not sold, assigned, transferred, pledged or otherwise conveyed any Financed
Accounts to any party other than Lender, and Borrower shall not sell, assign,
transfer, pledge or otherwise convey any Collateral without Lender’s prior
consent, except for the financing of Accounts to Lender and the sale of
finished inventory in Borrower’s normal course of business;

(L)                                 Borrower’s
name and form of organization are as set forth at the beginning of this
Agreement, and Borrower’s chief executive office, place of business and place
where Collateral and records concerning Accounts and other Collateral are kept
are as set forth below Borrower’s signature, and Borrower will give Lender at
least thirty (30) days prior written notice if such name, organization, place
of business, location of Collateral or records concerning Collateral is to be
changed or added and shall execute any documents

necessary to perfect Lender’s interest in the Financed Accounts and the
other Collateral; and

(M)                            Borrower
shall pay all of its normal gross payroll for employees, and all federal and
state taxes, as and when due, including all payroll and withholding taxes and
state sales taxes.

 

6.             Grant of Security Interest.  To secure the
prompt payment and performance of all of Borrower’s Obligations to Lender,
Borrower hereby grants to Lender a continuing lien upon and security interest
in, and right of set off with respect to, all of Borrower’s right, title and
interest in, to and under the following, whether now owned by or owing to, or
hereafter acquired by or arising in favor of, Borrower, and regardless of where
located (collectively the “Collateral”):

(A)                              All
accounts, accounts receivable, goods represented by accounts or accounts
receivable (including unpaid sellers’ rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed
goods), chattel paper, contract rights, documents, instruments, letters of
credit, banker’s acceptances, drafts, securities and general intangibles,
including all claims, causes of action, deposit accounts, rights to receive tax
refunds, rights in and claims under insurance policies (including rights to
unearned premiums), customer lists, copyrights, patents, trademarks, license
agreements, goodwill associated with trademarks and trademark licenses, and
other intellectual property of every kind and other rights to payment;

(B)                                All
inventory;

(C)                                All
monies, remittances, and other amounts due under this Agreement and any other
agreement between Lender and Borrower;

(D)                               All
equipment, machinery, motor vehicles, furniture, fixtures, tools and supplies;

(E)                                 All
investment securities;

(F)                                 All
farm products, crops, timber, minerals and the like (including oil and gas);

(G)                                All
books and records relating to the foregoing, including all computer programs,
printed output and computer readable data;

(H)                               All
accessions to, and substitutions and replacements for, each of the foregoing;
and

(I)                                    All
proceeds and products of the foregoing, whether due to voluntary or involuntary
disposition, including insurance proceeds. 
Borrower shall sign and deliver to Lender UCC financing statements, in
form acceptable to Lender.  Borrower
agrees to deliver to Lender the originals of all instruments, chattel paper and
documents evidencing or related to Financed Accounts and other Collateral.

 

7.             Default.  The occurrence of any one or more of the
following shall constitute an event of default under this Agreement (each, an
“Event of Default”):

(A)                              Borrower
fails to pay any amount owed to Lender as and when due under this Agreement or
fails to pay any other Obligations as and when due;

(B)                                Any
warranty or representation by Borrower to Lender under this Agreement is
incorrect or untrue when made or thereafter becomes untrue or incorrect;

(C)                                Borrower
fails to perform or breaches any covenant or agreement set forth in this
Agreement or any other agreement between Lender and Borrower;

(D)                               There
shall be commenced by or against Borrower any voluntary or involuntary case
under the United States Bankruptcy Code, or any assignment for the benefit of
creditors, or appointment of a receiver or custodian for any of Borrower’s
assets;

(E)                                 Borrower
shall become insolvent in that its debts are greater than the fair value of its
assets, or Borrower is generally not paying its debts as they become due or is
left with unreasonably small capital;

(F)                                 Any
involuntary lien, garnishment, attachment or the like is issued against or
attaches to the Financed Accounts or the other Collateral;

(G)                                An
event of default shall occur under any guaranty executed by any guarantor of
the Obligations, or any material provision of any such guaranty shall for any
reason cease to be valid or enforceable or any such guaranty shall be
repudiated or terminated, including by operation of law; or

(H)                               A
default or event of default shall occur under any agreement between Borrower
and any creditor of Borrower who has entered into a subordination agreement
with Lender.

 

8.             Remedies Upon Default.  Upon the occurrence
of an Event of Default, Lender may, without notice, (A) without implying any
obligation to finance accounts, cease financing Accounts; (B) accelerate the
payment of all Obligations, which Obligations shall be due and payable in full
without demand; (C) 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. 
Without limiting the generality of the foregoing, Lender may (1)
exercise all of the power of attorney rights described in Section 4 with
respect to all Collateral, and (2) collect, dispose of, sell, lease, use, and
realize upon all Financed Accounts and other Collateral in any commercially
reasonable manner.  Borrower and Lender
agree that any notice of sale required to be given to Borrower shall be deemed
to be reasonable if given five (5) days prior to the date on or after which any
sale may be held.  All remedies set
forth herein shall be cumulative and none exclusive.

 

3

 

9.             Accrual of Interest.  If any amount owed by Borrower hereunder is
not paid when due, including any amounts due under Section 3.3, Chargeback
Amounts, professional fees and expenses under Section 10 and any other
Obligations, such amounts shall bear interest at a per annum rate equal to the
rate used to calculate the Finance Fees, annualized, until Lender receives
payment in good funds in the full amount of such Obligations.

 

10.          Attorneys’ Fees.  Borrower shall pay
to Lender immediately upon demand, all costs and expenses, including reasonable
fees and expenses of attorneys and other professionals, that Lender incurs in
connection with any and all of the following: (A) preparing, amending,
supplementing, negotiating and enforcing this Agreement, or any other agreement
executed in connection herewith; (B) perfecting, protecting or enforcing
Lender’s security interest in the Financed Accounts and the other Collateral;
(C) collecting the Financed Accounts and the Obligations; (D) defending or in
any way addressing claims made or litigation initiated by or against Lender as
a result of Lender’s relationship with Borrower or any guarantor; and (E)
representing Lender in connection with any bankruptcy case or insolvency
proceeding involving Borrower, any Financed Account, any other Collateral or
any Account Debtor.  Any attorneys’ fees
and expenses may, at Lender’s option, be netted against the reserve as set
forth in Section 3.3.

 

11.          Term and Termination.  The term of this
Agreement shall be for one (1) year from the date hereof, and from year to year
thereafter unless terminated in writing by Lender or Borrower.  Borrower and Lender shall each have the
right to terminate this Agreement at any time. 
Notwithstanding the foregoing, any termination of this Agreement shall
not affect Lender’s security interest in the Collateral, and this Agreement
shall continue to be effective, and Lender’s rights and remedies hereunder
shall survive such termination, until all transactions entered into and
Obligations incurred hereunder or in connection herewith have been completed
and satisfied in full.

 

12.          Miscellaneous.

12.1. 
Severability.  In
the event that any provision of this Agreement is held to be invalid or
unenforceable, this Agreement will be construed as not containing such
provision and the remainder of the Agreement shall remain in full force and
effect.

12.2. 
Choice of Law.  This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California, without giving effect to principles
of conflicts of law.

12.3. 
Notices. 
All notices shall be given to Lender and Borrower at the addresses set
forth in 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 prepaid; (B) one (1) calendar day after
deposit with an overnight mail or messenger service; or (C) on the same date of
transmission if sent by hand delivery, telecopy, telefax or telex.

12.4. 
Titles and Section Headings.  The
titles and section headings used herein are for convenience only and shall not
be used in interpreting this Agreement.

 

13.          Definitions.  All terms used herein which are defined
in the California Uniform Commercial Code shall have the meaning given therein
unless otherwise defined in this Agreement. 
The term “including” is not limiting or exclusive.  When used herein, the following terms shall
have the following meanings.

13.1.  
“Account” shall mean all accounts, accounts
receivable, chattel paper, contract rights, documents, general intangibles,
instruments, letters of credit, banker’s acceptances, and other rights to
payment, and proceeds thereof.

13.2.  
“Account Balance” shall mean, on any given day,
the gross face amount of all Financed Accounts unpaid on that day.

13.3.  
“Account Debtor” shall have the meaning set
forth in the California Uniform Commercial Code and shall include any person
liable on any Financed Account, including any guarantor of the Financed Account
and any issuer of a letter of credit or banker’s acceptance.

13.4.  
“Adjustment(s)” shall have the meaning set in
Section 3.1.

13.5.  
“Administrative Fee” shall have the meaning as
set forth in Section 2.2.

13.6.  
“Advance” shall have the meaning set forth in
Section 1.3.

13.7.  
“Chargeback Amount” shall have the meaning set
forth in Section 3.2.

13.8.  
“Collateral” shall have the meaning set forth
in Section 6.

13.9.  
“Customer Payments” shall have the meaning set
forth in Section 2.4.

13.10. 
“Event of Default” shall have the meaning set
forth in Section 7.

13.11. 
“Finance Fees” shall have the meaning set forth
in Section 2.1.

13.12. 
“Financed Accounts” shall mean all Accounts
identified on any Schedule of Accounts delivered by Borrower to Lender which
Lender elects to finance and against which Lender makes an Advance, and all
monies due or to become due thereunder.

13.13. 
“Schedule of Accounts” shall have the meaning
set forth in Section 1.1.

13.14. 
“Obligations” shall  mean all advances, obligations, indebtedness and duties owing
by Borrower to Lender of any kind or nature, present or future, arising under
or in connection with this Agreement or any other agreement entered into
between Lender and Borrower, whether direct or indirect, including all
Advances, Finance Fees, Administrative Fees, Chargeback Amounts, attorneys’
fees and expenses.

13.15. 
“Remittance” shall have the meaning set forth
in Section 3.3.

13.16. 
“Reserve” shall have the meaning set forth in
Section 1.3.

13.17. 
“Settlement Date” shall mean the last calendar
day of each Settlement Period.

13.18. 
“Settlement Period” shall mean each calendar
month of each year.

 

IN WITNESS
WHEREOF, Borrower and Lender have executed this Agreement on the day and year
written above.

 

	
  “Lender”

  	
   

  	
  Address of Borrower, Chief Executive
  Officer and Location of Collateral:

  
	
   

  	
   

  	
   

  
	
  PACIFIC
  BUSINESS FUNDING, a division of

  Cupertino National Bank

  	
   

  	
  Street:

  	
                                                                                                   
  

  
	
   

  	
   

  	
  City:

  	
                                                                                                    

  
	
   

  	
   

  	
   

  
	
  By  

  	
  /s/ W.
  CHRONERT

  	
   

  	
   

  	
  State:

  	
                                     

  	
  Zip Code:

  	
                                 

  
	
   

  	
   

  	
   

  
	
  Title 

  	
  PRESIDENT

  	
   

  	
   

  	
  Telephone
  No.:

  	
  (                 )                                   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile
  No.:

  	
  (                 )                                   

  
	
   

  	
   

  	
   

  
	
  “Borrower”

  	
   

  	
  Other Locations of Collateral, if any, in
  Addition to Above:

  
	
   

  	
   

  	
   

  
	
  Southwall
  Technologies Inc.

  	
   

  	
   

  	
                                                                                                               

  
	
   

  	
   

  	
                                                                                                              
  

  
	
  By 

  	
  /s/ Billy R.
  Finley`

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title 

  	
  Vice
  President and CFO

  	
   

  	
   

  	
   

  
													

 

4EXHIBIT
10.101

 

	
  [SOUTHWALL TECHNOLOGIES LOGO] 

  	
   

  	
  CONFIDENTIAL

  

 

SUPPLY AGREEMENT

 

BETWEEN

 

SOUTHWALL TECHNOLOGIES
INC.

1029 Corporation Way

Palo Alto, California
94303

USA

 

SAINT GOBAIN SEKURIT
FRANCE

Bureau Central

B.P.15, Rue Joffre

F-60150 THOUROTTE, France

 

	
  1. Agreement.

  	
   

  	
  It is agreed that Saint Gobain Sekurit (“SGSF”)
  commits to place a firm, two (2) year, irrevocable purchase order for Heat
  Mirror ® XIR® 70 and 75 film (“Film”) as detailed in Section 6, below.  Additionally, it is agreed that Southwall
  Technologies Inc. (“Southwall”) commits to supply the volume of Film,
  including the Optional amounts, as detailed in Section 6 below.  The purchase of Film under this Agreement
  is for the needs of SGSF and Saint Gobain Sekurit (“SGS”) worldwide.  This Agreement to sell Film is for
  vehicular application (not architectural applications) only, and SGSF agrees
  that such films will be used for no other purpose.  Film purchased under this Agreement will be incorporated by
  SGSF (or an SGSF subsidiary), into vehicular glass and will otherwise not be
  resold to third parties who are not subsidiaries of SGSF.  This agreement supercedes the previous
  Agreement signed May 27, 1999 by and between Southwall and SGSF.

  
	
   

  	
   

  	
   

  
	
  2. Term of the Supply
  Agreement.

  	
   

  	
  The term of the Supply Agreement shall be for a
  period of two (2) years, from January 1, 2002 to December 31, 2003, and may
  be renewed, if at all, only on such terms and conditions as the parties may
  then agree for each subsequent year.

  
	
   

  	
   

  	
   

  
	
  3. Best Customer/Supplier.

  	
   

  	
  Based on committed purchase volumes from SGSF,
  Southwall confirms SGSF has received best 
  pricing terms for XIR® Film and enjoys “best customer” status during
  the term of this Agreement.  SGSF
  agrees to give Southwall “best supplier” status by approaching Southwall
  first for the quotation and supply of additional Film (beyond the volumes
  described in this Agreement).

  
	
   

  	
   

  	
   

  
	
  4. Volume of Film Purchases.

  	
   

  	
  By means of an irrevocable two (2) year purchase
  order, SGSF commits to three million five hundred thousand (3,500,000) square
  meters (37.66 million square feet) of Film intended for delivery in the
  period January 1, 2002 to December 31, 2003 (with a plus/minus tolerance of
  five percent [5%] in any one year). 
  Such commitment is contingent upon full web (1.83 meters or 2.00
  meters) purchase.

  

 

1

 

	
  5. Film Price/Terms/Warranties
  and Liabilities.

  	
   

  	
  Refer to the attached Price Schedule and Terms,
  Warranties, and Liabilities attached in Appendix A.

  
	
   

  	
   

  	
   

  
	
  6. Orders/Forecasts.

  	
   

  	
   

   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  * A plus/minus
  tolerance of five percent (5%) is acceptable only on the Minimum Quantities,
  in any one (1) year.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In the first week of the month next following the
  date of this Agreement, SGSF will supply Southwall with an expected take-down
  schedule of Film type and volumes for each film type by month for the full
  year 2002, (to be attached as Exhibit 1)
  which shall not, without written agreement of the parties, be less than the
  amounts shown above.  By November 1,
  2002 SGSF will supply a similar takedown schedule for 2003 and will exercise
  or cancel its option for an additional fixed 500,000 m2 for 2003.  Southwall shall then be committed to
  supply and sell such volume and type of Film when so ordered by SGSF as part
  of its two (2) year purchase order. 
  SGSF acknowledges the commercial necessity to advise Southwall of the
  initial takedown schedule and significant forecast demand increases or
  decreases, and/or significant changes in the product mix at the earliest
  opportunity and in no event less than three (3) months prior to the required
  delivery date, and confirms that it will spread out take-down volumes as
  evenly as possible over each year to avoid capacity problems for
  Southwall.  In turn, Southwall needs
  to confirm any changes of the initial takedown schedule and acknowledges the
  commercial necessity for SGSF to receive even volumes and confirms it will
  ship takedown volumes over each month to avoid production problems for SGSF.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Southwall agrees to establish a “2-week demand”
  safety stock of Film, as defined and agreed-upon between the Parties, to
  reduce the risk of supply interruption to SGSF.  Southwall will maintain this safety stock with current material
  of acceptable quality at this minimum level throughout the term of this
  Agreement.  This material will be held
  at Southwall's plants in Grossrohrsdorf, Germany and Palo Alto, California
  and Tempe, Arizona in the form of sputtered polyester Film (i.e.
  non-encapsulated).  The amount of Film
  in each of these sites will be determined based on the quarterly scheduled
  demand from SGSF and will be apportioned based on the type of Film and the
  scheduled location of manufacture by Southwall operations.  Additionally, Southwall agrees to pay for
  any extraordinary shipping costs that may be incurred by having to supply
  Film to SGSF from this stock due to late delivery.  This safety stock will be maintained with Film that is no

  
	
   

  	
   

  	
   

  

 

2

 

	
   

  	
   

  	
  older than 3 months by ensuring that there is a quarterly
  turnover of this material.  The
  initial 2-week safety stock will be established no later than March 31, 2002.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  When at the end of one month during the term of this
  Agreement, with the exception of the first quarter of 2002 (January 1, 2002
  through March 1, 2002), more than one week of delay occurs with any type or
  width of Film, SGSF will apply penalties to Southwall for late delivery.  These penalties are structured as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       End
  of a month with undelivered quantities per SGSF Purchase Order as received
  and accepted by Southwall —
  no penalties.

  2.            Southwall has 1 week
  to have undelivered quantities resolved per Payment Terms (Appendix A) for
  shipments from the U.S. and/or from SEG.

  3.            At end of week two
  any remaining undelivered quantities from the prior month have a 3% penalty
  applied to SGSF's account in the form of a customer credit.

  4.            At end of week three
  any remaining undelivered quantities from the prior month have a 4% penalty
  applied to SGSF's account in the form of a customer credit.

  5.            At end of week four
  any remaining undelivered quantities from the prior month have a 5% penalty
  applied to SGSF's account in the form of a customer credit .

  6.          The cumulative total
  late penalty for late shipments from the prior month will be 15%.

  
	
   

  	
   

  	
   

  
	
  7. Product Specifications.

  	
   

  	
  The Film to be supplied under this Agreement shall
  correspond to the last valid Specifications agreed and signed by both
  parties, or as may be amended from time to time by agreement of the Parties
  in writing so as thereafter to be in effect.

  
	
   

  	
   

  	
   

  
	
  8. Assignablilty.

  	
   

  	
  This Agreement or any part hereof may not be
  assigned by either Party    without
  the prior consent of the other party; provided, however, that either party
  may assign this Agreement to any entity which acquires substantially all of
  its assets or business, provided that the assignor remains obligated
  hereunder.

  
	
   

  	
   

  	
   

  
	
  9. Term and Termination.

  	
   

  	
  The term of this Agreement shall be for two (2)
  years, renewable thereafter  upon
  mutual consent.  Either Party may
  terminate this Agreement for a material breach by the other party which fails
  to be cured within ninety (90) days (thirty (30) days for failure to pay) of
  notice thereof.  The rights of
  termination hereunder are absolute. 
  Neither party shall incur any liability or compensation obligation
  whatsoever for any damage (including, without limitation, damage or loss of
  goodwill or investment) loss or expenses of any kind, suffered or incurred by
  the other (or any compensation to the other) arising from, or incident to,
  any termination of this Agreement by such party that complies with the terms
  of the Agreement, whether such party is aware of any such damage, loss or
  expense.

  

 

3

 

	
  10. Force Majeure.

  	
   

  	
  Not withstanding anything else to the contrary, if
  the performance of this Agreement is prevented, restricted or interfered with
  by reason of any cause or circumstance whatsoever beyond the reasonable
  control of the parties hereto, the party so affected, upon giving notice to
  the other, shall be excused hereunder to the extent of such prevention,
  restriction or interference, provided that the party so affected shall
  continue performance hereunder insofar as applicable whenever such causes or
  circumstances are removed.  Matters
  beyond reasonable control of the parties shall include:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.  Fire, explosion, strike, lock-out, labor
  dispute, casualty or accident, lack or failure in all transportation
  facilities, epidemic, cyclone, flood, drought, lack or failure in all sources
  supply of labor, raw materials, power or supplies; or,

   

  2.  War, revolution, civil commotions, acts of
  public enemies, blockade or embargo; or, 

   

  3.  Any law, order, proclamation, regulation,
  ordinance, demand or requirement of any government or any sub-division,
  authority or representative of any such government; or,

   

  4.  Any other acts whatsoever, whether similar
  or dissimilar to those enumerated, beyond the reasonable control of the
  parties hereto, but does not include lack of demand (except when lack of
  demand is due to a Force Majeure event, as described herein).

  
	
   

  	
   

  	
   

  
	
  11. Product Development.

  	
   

  	
  Southwall and SGSF commit to cooperate on mutual
  product and process development efforts, including: better solar properties,
  heatability, antenna, greater degrees of cross–curvature, and new
  products.  SGSF agrees to consider all
  of SGS's worldwide, new product needs in these joint activities.

  
	
   

  	
   

  	
   

  
	
  12. Confidentiality.

  	
   

  	
  Each party (the “Receiving Party”) agrees that all
  inventions, know–how and ideas it obtains from the other party (the
  “Disclosing Party”) and all other business, technical and financial
  information it obtains from such party are the confidential property of the
  Disclosing Party (“Proprietary Information”). Except as unambiguously allowed
  in other parts of this Agreement, the Receiving Party will hold in confidence
  and not use or disclose any Proprietary Information and will similarly bind
  its employees in writing.  The
  Receiving Party's nondisclosure obligation will not apply to information it
  can document: (i) was already known to the Receiving Party without
  restriction prior to execution of the Agreement: (ii) is publicly available
  through no fault of the Receiving Party; or (iii) is required to be disclosed
  pursuant to a regulation or court order (but only to a minimum extent
  required to comply with such regulation of order).  The Receiving Party understands that any breach of this Section
  12 will result in irreparable injury to the Disclosing Party and that the
  Disclosing Party shall be entitled to equitable relief, including injunction
  and specific performance, as a remedy for any such breach by the Receiving
  Party.  Such remedies shall not be
  deemed to be the exclusive remedy for such breach, but shall be in addition,
  to all other available remedies at law or equity.

  

 

4

 

	
  13. General Terms.

  	
   

  	
  Any waivers or amendments shall be effective only if
  made in writing and signed by a representative or agent of the respective
  parties authorized to bind the parties. 
  However, this Agreement shall be controlling over additional or
  different terms of any purchase order, confirmation, invoice or similar
  document, even if accepted in writing by both parties, and waivers and
  amendments will be effective only if made by non–preprinted agreements
  clearly understood by both parties to be an amendment or waiver.  Any notice, report, approval or consent
  required or permitted hereunder shall be in writing, and will be deemed to
  have been duly given if delivered personally or mailed by first-class,
  registered or certified U.S. mail, postage prepaid to a party at its address
  as set forth herein.  Any
  communication between the parties shall be in English.  Any dispute arising out of or relating to
  this Agreement shall be resolved in accordance with the International Rules
  of Arbitration of the American Arbitration Association. The site of the
  Arbitration shall be in the United Kingdom. 
  In addition to any award of damages, the prevailing party in any such
  arbitration shall be entitled to an award of its attorneys' fees and expenses
  incurred in connection with the dispute. 
  In any action or proceeding to enforce rights under this Agreement,
  the prevailing party will be entitled to recover costs and attorney's
  fees.  If any provisions of this
  Agreement is held to be illegal or unenforceable, that provision shall be
  limited or eliminated to the minimum extent necessary so that this Agreement
  will otherwise remain in full force and effect and enforceable.  The parties agree that this Agreement is
  the complete and exclusive statement of the mutual understanding of the
  parties, and supersedes and cancels all previous written and oral agreements
  and communications, with respect to the subject matter of this Agreement.  Each party warrants and represents that
  this Agreement has been duly authorized by all necessary corporate action and
  that this Agreement has been duly executed by and constitutes a valid and
  binding Agreement of that party.

  

 

Accepted and Agreed to:

 

	
  /s/  Thomas
  G. Hood

  	
   

  	
  /s/  Javier
  Fernandez

  
	
  Thomas G. Hood

  	
   

  	
  Javier Fernandez

  
	
  President & CEO

  	
   

  	
  Purchasing Director

  
	
  Southwall Technologies Inc.

  	
   

  	
  Saint Gobain Sekurit International

  
	
  Palo Alto, CA

  	
   

  	
  Paris, France

  
	
  U.S.A.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: 

  	
  December 18, 2001

  	
   

  	
  Date:

  	
  December 19, 2001

  
					

 

5

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