Exhibit 10.22
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Coast
Accounts Collateral Security
Agreement
Borrower: CYBERLINK, INC.,
Address: a California corporation
0000 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Date: September 8, 1995
THIS ACCOUNTS COLLATERAL SECURITY AGREEMENT ("Accounts Agreement"), dated the
above date, is entered into between COASTFED BUSINESS CREDIT CORPORATION
("CoastFed") and the borrower named above ("Borrower"), and is one of the
Collateral Agreements referred to in that certain Loan and Security Agreement
("Loan Agreement") between CoastFed and Borrower dated the above date. This
Accounts Agreement is an integral part of the Loan Agreement, and all of the
terms and provisions of the Loan Agreement are incorporated herein by this
reference.
1. Grant of Security Interest. As collateral and security for the payment and
performance of all Obligations (as defined in the Loan Agreement), Borrower
hereby grants CoastFed an immediately effective, continuing security interest
in, and assigns to CoastFed, all of Borrower's interest in the following types
of property, whether now owned or held or hereafter acquired and wherever
located: all accounts, contract rights, instruments, chattel paper and all other
obligations now or hereafter owing to Borrower (collectively "Accounts"); and
all right, title and interest of Borrower in, and all of Borrower's rights and
remedies with respect to, all goods, the sale or other disposition of which
gives rise to any Account, including, without limitation, all returned,
rejected, rerouted, reclaimed and repossessed goods and all rights of stoppage
in transit, replevin, reclamation, and all rights as an unpaid vendor; and all
collections and proceeds of any of the foregoing; and all guarantees of,
security for, and insurance proceeds attributable to any of the foregoing; and
all books and records relating to any of the foregoing; and all equipment
containing said books and records. The term "Collateral" as used in the Loan
Agreement shall for all purposes be deemed to include, without limitation, the
Accounts and the other property described above. The term "Account Debtor" as
used in this Accounts Agreement shall mean each account debtor, obligor,
guarantor and other person in any way liable or obligated on or in connection
with any Account.
2. Loans.
2.1 Amount of Loans. Provided no Event of Default has occurred, CoastFed
agrees to make Loans to Borrower, repayable on demand, in amounts up to the
lesser of (a) 75% of the Net Amount of each Account, which CoastFed in its sole
and absolute discretion deems eligible for borrowing; provided, however, if,
based on the results of a quarterly audit conducted by CoastFed, Borrower's
Account dilution rate is five (5%) percent or less then, CoastFed will advance,
until the results of the next quarterly audit conducted by CoastFed, Loans to
Borrower hereunder in amounts of up to 80% of the Net Amount of each Account,
which CoastFed in its sole discretion deems eligible for borrowing; or (b) three
(3) times the amount of Borrower's collections on its Accounts during the prior
calendar month. The term "Net Amount" of an Account, as used herein, shall mean
the gross amount of the Account, minus all deductions and expenses customarily
deducted from payments on Accounts pursuant to billing and related services
agreements between Borrower and third parties, applicable sales, use, excise and
other similar taxes and minus all discounts, credits and allowances of any
nature at any time issued, owing, granted, outstanding, available or claimed.
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2.2 Borrower's Accounts Loan Balance. The aggregate amount of Borrower's
outstanding indebtedness to CoastFed on account of Loans made pursuant to
Paragraph 2.1 of this Accounts Agreement shall be referred to herein as
"Borrower's Accounts Loan Balance." If Borrower's Accounts Loan Balance shall at
any time exceed the percentage set forth in Paragraph 2.1, CoastFed, in its sole
and absolute discretion, may require Borrower to repay such excess to CoastFed
upon demand, or require Borrower to immediately deliver such additional security
to CoastFed as may be satisfactory to CoastFed.
2.3 Interest. Until Borrower's Accounts Loan Balance is paid in full,
Borrower shall pay interest thereon monthly at the rate provided in Paragraph
1.2 of the Loan Agreement, provided that, regardless of the amount of Borrower's
Accounts Loan Balance, if any, that may be outstanding from time to time,
Borrower shall pay minimum interest during the term of this Accounts Agreement
of $5,000 per month. The amount of interest payable hereunder shall be computed
as of the close of business on the last day of each calendar month, and shall be
added to Borrower's Accounts Loan Balance, and shall thereafter bear like
interest as the Loans.
2.4 Statement of Account. Each month, CoastFed shall send Borrower an
extract or statement of Borrower's Accounts Loan Balance prepared from
CoastFed's records, which will conclusively be deemed to be correct and accepted
by Borrower unless Borrower delivers to CoastFed a written statement of
exceptions within thirty (30) days after delivery of such extract or statement.
3. Schedules. Borrower shall deliver to CoastFed schedules and assignments of
all Accounts on CoastFed's standard form; provided, however, that Borrower's
failure to execute and deliver the same shall not affect or limit CoastFed's
security interest and other rights in all of Borrower's Accounts, nor shall
CoastFed's failure to advance or lend against a specific Account affect or limit
CoastFed's security interest and other rights therein. Together with each such
schedule and assignment, or later if requested by CoastFed, Borrower shall
furnish CoastFed with copies (or, at CoastFed's request, originals) of all
contracts, orders, invoices, and other similar documents, and all original
shipping instructions, delivery receipts, bills of lading, and other evidence of
delivery, for any goods the sale or disposition of which gave rise to such
Accounts, and Borrower warrants the genuineness of all of the foregoing.
Borrower shall also furnish to CoastFed an aged accounts receivable trial
balance in such form and as often as CoastFed requests, and Borrower agrees that
CoastFed may from time to time verify directly with the respective Account
Debtors the validity, amount and any other matters relating to the Accounts by
means of mail, telephone or otherwise, either in the name of Borrower or
CoastFed or such other name as CoastFed may choose. In addition, Borrower shall
deliver to CoastFed the originals of all instruments, chattel paper, security
agreement, guarantees and other documents and property evidencing or securing
any Accounts, immediately upon receipt thereof and in the same form as received,
with all necessary indorsements all of which shall be with recourse.
4. Collection of Accounts. Borrower shall have the privilege of collecting the
Accounts in trust for CoastFed, at Borrower's sole cost and expense, which
privilege may be revoked by CoastFed at any time. All monies, checks, notes,
drafts, money orders, acceptances and other things of value and items of
payment, together with any and all related vouchers, identifications,
communications and other data, documents and instruments, collected or received
by Borrower (or by any receiver, trustee, custodian or successor in interest of
Borrower, or by any person acting on behalf of Borrower) in payment of, or in
reference to, the Accounts shall belong to CoastFed, and, not later than one (1)
day after receipt thereof by Borrower, Borrower shall deliver the same to
CoastFed, at CoastFed's office (or, if so directed by CoastFed, Borrower shall
deposit the same in CoastFed's account in a bank designated by CoastFed) in the
original form in which the same are received, together with any necessary
endorsements, including, without limitation, the indorsement of Borrower, all of
which indorsements shall be with recourse. Borrower shall have no right, and
agrees not to commingle any of the proceeds of any of the collections of the
Accounts with Borrower's own funds and Borrower agrees not to use, divert or
withhold any such proceeds. Borrower hereby divests itself of all dominion over
the Accounts and the proceeds thereof and collections received thereon. Borrower
shall make entries on its books and records in form satisfactory to CoastFed
disclosing the absolute and unconditional assignment of all Accounts to CoastFed
and CoastFed's security interest therein and shall keep a separate account on
its record books of all collections received thereon. Borrower agrees that it
will, upon request after an uncured Event of Default by CoastFed and in such
form and at such times as CoastFed shall request, give notice to the Account
Debtors of the assignment of and the grant of a security interest in the
Accounts to CoastFed and that in the event of an uncured Event of Default
CoastFed may itself give such notice at any time and from time to time in
CoastFed's or Borrower's name, without notice to Borrower, requiring such
Account Debtors to pay the Accounts directly to CoastFed, and in any such event,
Borrower's privilege of collecting the Accounts shall automatically be revoked.
CoastFed may also revoke Borrower's privilege of collecting the Accounts at any
time by giving notice thereof to Borrower (orally or in writing). CoastFed may
charge to Borrower's account all costs and expenses incurred by CoastFed in
collecting Accounts, including, without limitation, postage, telephone and
telegraph charges,
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reasonable and applicable salaries of CoastFed personnel, and attorneys' fees.
5. Intentionally Left Blank.
6. Disputed Accounts. Borrower shall promptly notify CoastFed of all material
disputes and claims with respect to the Accounts. Borrower shall not, except on
Accounts where: (i) the unpaid balance is $2,000 or more, and Borrower desires
to grant the Account Debtor a discount of twenty-five (25%) percent or more of
the face amount of a billed invoice, and (ii) where the aggregate amount of all
adjustments and discounts which Borrower wishes to make may, in the opinion of
CoastFed, materially impair the aggregate value and quality of Borrower's
Accounts without CoastFed's prior written consent, compromise, adjust, or grant
any discount, credit, allowance, or extension of time for payment to any Account
Debtor. CoastFed shall have the right, in its sole and absolute discretion, to
settle, accept reduced amounts and adjust disputes and claims directly with, and
give releases on behalf of Borrower to Account Debtors for cash, credit or
otherwise, upon terms which CoastFed, in its Sole and absolute discretion,
considers advisable, and in such case, CoastFed will credit Borrower's account
with only the net amounts of cash received by CoastFed in payment of the
Accounts, less all costs and expenses (including, without limitation, attorneys'
fees) incurred by CoastFed in connection with the settlement or adjustment of
such disputes and the collection of such Accounts.
7. Representations, Warranties and Covenants of Borrower. Borrower represents,
warrants and covenants that subject to the Schedule of Exceptions, now and
throughout the term of this Accounts Agreement:
7.1 Status of Accounts. Each and every Account with respect to which Loans
are made shall, on the date each Loan is made and thereafter, comply with all of
the following representations, warranties and covenants: each Account represents
an undisputed bona fide existing unconditional obligation of the Account Debtor
created by the sale, delivery, and acceptance of goods or the rendition of
services in the ordinary course of Borrower's business; the Account Debtor on
each Account has not and will not offset, counterclaim, or cancellation, or
other right or claim; each Account will be paid in full at maturity; no petition
in bankruptcy or other application for relief under the Bankruptcy Code or any
other insolvency law has been or will be filed by or against the Account Debtor
on any Account, and no Account Debtor has made or will make an assignment for
the benefit of creditors, become insolvent, fail or go out of business, nor does
Borrower have notice that any of the foregoing is threatened, or is or may be
about to occur; no Account is or will be impaired or reduced in value; no
Account Debtor on any Account is a shareholder, director, partner or agent of
Borrower, or is a person or entity controlling, controlled by or under common
control with Borrower; no Account is owed by an Account Debtor to whom Borrower
is or may become liable in connection with goods sold or services rendered by
the Account Debtor to Borrower or any other transaction or dealing between the
Account Debtor and Borrower. Immediately upon discovery by Borrower that any of
the foregoing representations, warranties, or covenants are or have become
untrue with respect to any Account, Borrower shall immediately give written
notice thereof to CoastFed.
7.2 Documents Genuine; Legal Compliance. All statements made and all
unpaid balances appearing in all invoices, instruments and other documents
evidencing the Accounts are and shall be true and correct and all such invoices,
instruments and other documents and all of Borrower's books and records are and
shall be genuine and in all material respects what they purport to be and all
signatories and indorsers have full capacity to contract. All sales and other
transactions underlying or giving rise to each Account shall fully comply with
all applicable laws and governmental rules and regulations. All signatures and
indorsements on all documents, instruments, and agreements relating to all
Accounts are and shall be genuine, and all such documents, instruments and
agreements are and shall be legally enforceable in accordance with their terms.
7.3 Disposition of Accounts. Borrower has not, and shall not hereafter
sell, assign, pledge, encumber, forgive (completely or partially), settle for
less than payment in full, or transfer or dispose of any Account, or agree to do
any of the foregoing.
8. No Liability. CoastFed shall not under any circumstances be responsible or
liable for any shortage or discrepancy in, damage to, or material loss or
destruction of, any goods, the sale or other disposition of which gives rise to
an Account, or for any error, act, omission, or delay of any kind occurring in
the settlement, failure to settle, collection or failure to collect any Account
(including, without limitation, any of the same which result in the material
loss of rights against others), or for settling any Account for less than the
full amount thereof, nor shall CoastFed be deemed by any provision herein or any
act, omission, or event to be responsible for or to have assumed any of
Borrower's obligations under any contract or agreement giving rise to an
Account.
9. Relationship to Loan Agreement. CoastFed's remedies under this Accounts
Agreement and the Loan Agreement are cumulative. If any provision of this
Accounts Agreement modifies or conflicts with any provision of the Loan
Agreement, that provision in either agreement that gives greater rights and
remedies to CoastFed shall control. All capitalized terms used herein,
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which are not defined herein, shall have the meanings ascribed to them in the
Loan Agreement.
10. Effective Date. This Accounts Agreement, when executed by Borrower and
accepted by a duly authorized officer of CoastFed, shall be effective on the
date first above written.
Borrower:
CYBERLINK, INC.,
a California corporation
By /s/ Xxxxxxx Xxxxxx Lydiate
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Xxxxxxx Xxxxxx Lydiate,
President
By _________________________________
Xxx XxXxxxx,
Chief Financial Officer
CoastFed:
Accepted at Los Angles, California:
COASTFED BUSINESS CREDIT
CORPORATION
By__________________________________
Title_______________________________
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which are not defined herein, shall have the meanings ascribed to them in the
Loan Agreement.
10. Effective Date. This Accounts Agreement, when executed by Borrower and
accepted by a duly authorized officer of CoastFed, shall be effective on the
date first above written.
Borrower:
CYBERLINK, INC.,
a California corporation
By ________________________________________
Xxxxxxx Xxxxxx Lydiate,
President
By /s/ Xxx XxXxxxx
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Xxx XxXxxxx,
Chief Financial Officer
CoastFed:
Accepted at Los Angles, California:
COASTFED BUSINESS CREDIT
CORPORATION
By /s/ CoastFed Business Credit Corporation
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Title Vice President
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