Exhibit 10.12
LOAN AGREEMENT
This Loan Agreement is entered into as of October 6, 1997 (this "Loan
Agreement") between CrossRoute Software, Inc., a California corporation (herein
called "Borrower"), and Imperial Bank (herein called "Bank").
1. The Commitment. Subject to all the terms and conditions of this Loan
Agreement and prior to the termination of its commitment as hereinafter
provided, Bank hereby agrees to make loans (each a "loan" or collectively,
"loans") to Borrower in such amounts as Borrower shall request pursuant to this
Section 1C at any time from the date hereof through October 5, 1998 (the
"Availability End Date"), in an aggregate principal amount not to exceed
$750,000.00 (the "Commitment"). If at any time or for any reason, the
outstanding principal amount of the Loan Account (as hereinafter defined) is
greater than the Commitment, Borrower shall immediately pay to Bank, in cash,
the amount of such excess. Any commitment of Bank, pursuant to the terms of this
Loan Agreement, to make Loans shall expire on the Availability End Date, subject
to Bank's right to renew said commitment in its sole and absolute discretion at
Borrower's request. Any such renewal of said commitment shall not be binding
upon Bank unless it is in writing and signed by an officer of Bank. Loans which
are repaid by Borrower may not be reborrowed. Borrower promises to pay to Bank
the outstanding unpaid principal balance (and all accrued unpaid interest
thereon) of the Loan Account on October 5, 2001 ("Maturity Date").
A. Loans. The amount of each Loan made by Bank-to Borrower hereunder
shall be debited to the loan ledger account of Borrower maintained by Bank for
the Commitment (herein called the "Loan Account") and Bank shall credit the Loan
Account with all loan repayments in respect thereof made by Borrower. When
Borrower desires to obtain a Loan, Borrower shall notify Bank (which notice
shall be signed by an officer of Borrower and shall be irrevocable) in
accordance with Section 2 hereof, to be received no later than 3:00 p.m. Pacific
time one (1) Banking Day before the day on which the Loan is to be made. When
Borrower desires to obtain a Loan to purchase equipment, software or furniture
(herein called an "Equipment Advance"), the notice shall be signed by an officer
of Borrower and include a copy of the invoice for the equipment to be financed.
Loans for equipment will be limited to one hundred percent (100%) of the invoice
amount for such equipment approved from time to time by Bank and purchased by
Borrower subsequent to April 1, 1997, less any taxes, shipping and freight
charges or discounts, warranty charges, installation expenses and similar soft
costs. Loans for software and furniture will be limited to: (a) one hundred
percent of the invoice amount for such software and furniture approved from time
to time by Bank, less any taxes, shipping and freight charges or discounts,
warranty charges, installation expenses and similar soft costs and (b)
$200,000.00.
(1) SVB Advance. Subject to the availability of the Commitment and
in reliance on the representations and warranties of Borrower set forth herein,
in order to repay all existing loans and related indebtedness ("SVB Loans") owed
by Borrower to Silicon Valley Bank ("SVB"), Bank hereby agrees to make loans to
Borrower in an aggregate principal amount not to exceed $250,000.00 (the "SVB
Advance"); provided, however, that the outstanding amounts under the SVB Advance
shall be deemed to constitute Loans for the purpose of calculating the
availability under the Commitment. If at any time or for any reason, the
outstanding amount of the SVB Advance is greater than $250,000.00, Borrower
shall pay immediately to Bank, in cash, the amount of such excess.
(2) Limitations on Advance of any Loan. Notwithstanding any of the
foregoing provisions contained in this Section 1, prior to any advance of a
Loan, except for the initial advance of a Loan to repay the SVB Loans, Bank
shall have received satisfactory evidence of the release of all existing liens
against the Collateral to ensure Bank's first priority lien in the Collateral.
B. Principal Repayment and Interest Payments on SVB Advance. Borrower
further promises to pay to Bank, on or before the tenth day of the month
immediately following the date of the SVB Advance and on or before the tenth
(10th) day of each month thereafter through October 5, 1999, (a) the outstanding
principal balance of the SVB Advance in twenty-four (24) equal monthly
installments plus (b) interest on the average daily unpaid balance of the of the
SVB Advance accruing from and after the date of the SVB Advance, during the
immediately preceding month at a rate of interest and computed in accordance
with Section 1.C. hereof.
1.
C. Interest Payments Prior to Maturity Date. Borrower further
promises to pay to Bank from the date of the initial Equipment Advance through
October 5, 1998, on or before the tenth (10th) day of each month, interest on
the average daily unpaid balance of the Equipment Advance during the immediately
preceding month at a rate of interest equal to one percent (1%) per annum in
excess of the Prime Rate, which shall vary concurrently with any change in the
Prime Rate. Interest shall be computed at the above rate on the basis of the
actual number of days during which the principal balance of the Loan Account is
outstanding divided by 360, which shall for interest computation purposes be
considered one (1) year.
D. Principal Repayment and Interest Payments Following Availability
End Date. Borrower further promises to pay to Bank, on or before October 5, 1998
and on or before the tenth (10th) day of each month thereafter through the
Maturity Date, (a) the outstanding principal balance of the Equipment Advance on
the Availability End Date in thirty-six (36) equal monthly installments plus (b)
interest on the average daily unpaid balance of the Loan Account accruing from
and after October 5, 1998, during the immediately preceding month at the rate of
interest and computed in accordance with Section 1.C. hereof.
2. Loan Requests. Requests for Loans hereunder shall be in writing duly
executed by Borrower in a form satisfactory to Bank and shall contain a
certification setting forth the matters referred to in Section 1, which shall
disclose that Borrower is entitled to the amount and type of Loan being
requested. Bank is hereby authorized to charge Borrower's deposit account with
Bank for all sums due Bank under this Loan Agreement.
3. Delivery of Payments. Payment to Bank of all amounts due hereunder
shall be made at its Santa Xxxxx Valley Regional office, or at such other place
as may be designated in writing by Bank from time to time. If any payment date
fall on a day that is not a day that Bank is open for the transaction of
business ("Banking Day"), the payment due date shall be extended to the next
Banking Day.
4. Late Charge. If any interest payment, principal payment or principal
balance payment required hereunder is not received by Bank on or before ten (10)
days from the date in which such payment becomes due, Borrower shall pay to
Bank, a late charge equal to the lesser of (a) five percent (5.0%) of the amount
of such unpaid payment, in addition to said unpaid payment or (b) the maximum
amount permitted to be charged by applicable law, until remitted to Bank;
provided; however, nothing contained in this Section 4, shall be construed as
any obligation on the part of Bank to accept payment of any past due payment or
less than the total unpaid principal balance of the applicable Loan Account
following the Maturity Date. All payments shall be applied first to any late
charges due hereunder, next to accrued interest then payable and the remainder,
if any, to reduce any unpaid principal due under the applicable Loan Account.
5. Default Interest. From and after the Maturity Date, or such earlier
date as all sums owing under any Loan Account becomes due and payable by
acceleration or otherwise, or upon the occurrence of an Event of Default, at the
option of Bank all sums owing under the applicable Loan Account shall bear
interest until paid in full at a rate equal to the lesser of (a) five percent
(5.0%) per annum in excess of the then applicable interest rate provided for in
Section 1.C. hereof or (b) the maximum amount permitted to be charged by
applicable law, until all obligations hereunder are repaid in full or the Event
of Default is waived or cured to the satisfaction of Bank, as applicable.
6. Definitions. As used in this Loan Agreement and unless otherwise
defined herein, all initially capitalized terms shall have the meanings set
forth on Exhibit A attached hereto and incorporated herein by this reference.
7. Representations and Warranties. Borrower represents and warrants to
Bank: (a) That Borrower is a corporation, duly organized and existing in the
State of its incorporation and the execution, delivery and performance of each
of the Loan Documents are within Borrower's corporate powers, have been duly
authorized and are not in conflict with law or the terms of any charter, by-law
or other incorporation papers, or of any indenture, agreement or undertaking to
which Borrower is a party or by which Borrower is bound or affected; (b)
Borrower is, and at the time the Collateral becomes subject to Bank's security
interest will be, the true and lawful owner of and has, and at the time the
Collateral becomes subject to Bank's security interest will have, good and clear
title to the Collateral, subject only to Bank's rights therein and to Permitted
Liens; (c) Each Account is, and at the time the Account comes into existence
will be, a true and correct statement of a bona fide indebtedness incurred by
the debtor named therein in the amount of the Account for either
2.
merchandise sold or delivered (or being held subject to Borrower's delivery
instructions) to, or services rendered, performed and accepted by, the account
debtor; (d) That there are and will be no defenses, counterclaims, or setoffs
which may be asserted against the Accounts from time to time, except as
permitted in the definition thereof; (e) Any and all financial information,
including information relating to the Collateral, submitted by Borrower to Bank,
whether previously or in the future, is and will be true and correct; (f) There
is no litigation or other proceeding pending or threatened against or affecting
Borrower, and Borrower is not in default with respect to any order, writ,
injunction, decree or demand of any court or other governmental or regulatory
authority; (g) (i) The consolidated balance sheets of Borrower dated as of
August 31, 1997, and the related consolidated profit and loss statements for the
fiscal year then ended, copies of which have heretofore been delivered to Bank
by Borrower, and all other statements and data submitted in writing by Borrower
to Bank in connection with Borrower's request for credit are true and correct,
and said balance sheet and profit and loss statement accurately present the
financial condition of Borrower as of the date thereof and the results of the
operations of Borrower for the period covered thereby, and have been prepared in
accordance with GAAP, (ii) since such date, there have been no material adverse
changes in the financial condition of Borrower, and (iii) Borrower has no
knowledge of any liabilities, contingent or otherwise, which are not reflected
in said balance sheet, and Borrower has not entered into any special commitments
or substantial contracts which are not reflected in said balance sheet, other
than in the ordinary and normal course of its business, which may have a
Material Adverse Effect upon its financial condition, operations or business as
now conducted; (h) Borrower has no liability for any delinquent local, state
or federal taxes, and, if Borrower has contracted with any government agency, it
has no liability for renegotiation of profits; and (i) Borrower, as of the date
hereof, possesses all necessary trademarks, trade names, copyrights, patents,
patent rights, and licenses to conduct its business as now operated, without any
known conflict with valid trademarks, trade names, copyrights, patents, patent
rights and license rights of others.
8. Negative Covenants. Borrower agrees that so long as any loans,
obligations or liabilities remain outstanding or unpaid to Bank or the
commitment of Bank hereunder is in effect, neither Borrower, nor any of its
subsidiaries ("Subsidiaries") will, without the prior written consent, which
will not unreasonably be withheld, of Bank:
A. Make any substantial change in the character of its business as
now conducted;
B. Create, incur, assume or permit to exist any Indebtedness other
than loans from Bank except obligations now existing as shown in the financial
statements referenced in Section 7.(g)(i), excluding those being refinanced by
Bank, Subordinated Debt and Permitted Indebtedness;
C. Create, incur, assume or permit to exist any mortgage, pledge,
encumbrance, lien or charge of any kind (including the charge upon property at
any time purchased or acquired under conditional sale or other title retention
agreement) upon any asset now owned or hereafter acquired by it, other than
Permitted Liens and liens in favor of Bank;
D. Sell, dispose of or grant a security interest in any of the
Collateral other than to Bank (other than the disposing of such Collateral in
the ordinary and normal course of its business as now conducted or other assets
which are obsolete or otherwise considered surplus), or execute any financing
statements covering the Collateral in favor of any secured party or Person other
than Bank;
E. Sell, transfer, assign, mortgage, pledge, license, lease, grant a
security interest in, or otherwise encumber any of its Intellectual Property,
other than licenses or leases conducted in the ordinary and normal course of its
business;
F. Make any loans or advances to any Person or other entity other
than in the ordinary and normal course of its business as now conducted
(provided that such loans or advances are not made to any Person or entity which
is controlled by or under common control with Borrower).
G. Purchase or otherwise acquire for an amount greater than Five
Hundred Thousand Dollars ($500,000), all or substantially all of the assets or
business of any Person or other entity; or liquidate, dissolve, merge or
consolidate, or commence any proceedings therefore; or, except in the ordinary
and normal course of its business as now conducted, sell (including, without
limitation, the selling of any property or other asset accompanied by the
leasing back of
3.
the same) any assets including any fixed assets, any property, or other assets
necessary for the continuance of its business as now conducted; and
H. Declare or pay any dividend or make any other distribution on any
of its capital stock now outstanding or hereafter issued or purchase, redeem or
retire any of such stock other than in dividends or distributions payable in
Borrower's or any such Subsidiary's capital stock, except for the repurchase of
Borrower's capital stock from officers, directors, employees or consultants of
Borrower upon termination of their employment with or rendering of service to
Borrower.
9. Affirmative Covenants. Borrower affirmatively covenants that so long
as any loans, obligations or liabilities remain outstanding or unpaid to Bank or
the commitment of Bank hereunder is in effect, it will:
A. Furnish Bank from time to time such financial statements and
information as Bank may reasonably request and inform Bank immediately upon the
occurrence of a material adverse change therein;
B. Permit representatives of Bank to conduct an audit of Borrower's
books and records relating to the Collateral and make extracts therefrom, with
results satisfactory to Bank, provided that Bank shall use its best efforts to
not interfere with the conduct of Borrower's business, and to the extent
possible to arrange for verification of the Accounts directly with the account
debtors obligated thereon or otherwise, all under reasonable procedures
acceptable to Bank and at Borrower's sole expense;
C. Promptly notify Bank of any attachment or other legal process
levied against any of the Collateral and any information received by Borrower
relative to the Collateral, including the Accounts, the account debtors or other
Persons obligated in connection therewith, which may in any way affect the value
of the Collateral or the rights and remedies of Bank in respect thereto;
D. Reimburse Bank upon demand for any and all legal costs, including
reasonable attorneys' fees, and other expense incurred in collecting any sums
payable by Borrower under any Loan Account or any other obligation secured
hereby enforcing any term or provision of this Loan Agreement or otherwise or in
the checking, handling and collection of the Collateral and the preparation and
enforcement of any agreement relating thereto;
E. Notify Bank of each location and of each office of Borrower at
which records of Borrower relating to the Accounts are kept;
F. Provide, maintain and deliver to Bank policies insuring the
Collateral against loss or damage by such risks and in such amounts, forms and
companies as Bank may require (to the extent customarily maintained by
businesses similar to Borrower) and with loss payable to Bank, and, in the event
Bank takes possession of the Collateral, the insurance policy or policies and
any unearned or returned premium thereon shall at the option of Bank become the
sole property of Bank, such policies and the proceeds of any other insurance
coveting or in any way relating to the Collateral, whether now in existence or
hereafter obtained, being hereby assigned to Bank;
G. In the event the unpaid balance of any Loan Account shall exceed
the maximum amount of outstanding loans to which Borrower is entitled under
Section 1 hereof, as applicable, Borrower shall immediately pay to Bank for
credit to such Loan Account the amount of such excess;
H. Maintain and preserve all rights, franchises and other authority
adequate and necessary for the conduct of its business and maintain and preserve
its existence in the State of its incorporation and any other state(s) in which
Borrower conducts its business, except with respect to such other state(s), as
the failure to do so would not have a Material Adverse Effect;
I. Maintain public liability, property damage and workers
compensation insurance and insurance on all its insurable property against fire
and other hazards with responsible insurance carriers to the extent usually
maintained
4.
by similar businesses. Borrower shall provide evidence of property insurance in
amounts and types acceptable to Bank, and certificates naming Bank as a loss
payee;
J. Pay and discharge, before the same becomes delinquent and
penalties accrue thereon, all taxes, assessments and governmental charges upon
or against it or any of its properties, and any of its other liabilities at any
time existing, except to the extent and so long as: (1) the same are being
contested in good faith and by appropriate proceedings in such manner as not to
cause any Material Adverse Effect or the loss of any right of redemption from
any sale thereunder; and (2) it shall have set aside on its books reserves
(segregated to the extent required by GAAP);
K. Maintain a standard and modern system of accounting in accordance
with GAAP on a basis consistently maintained; permit Bank's representatives to
have access to, and to examine its properties, books and records at all
reasonable times; provided that Bank shall use its best efforts to not interfere
with the conduct of Borrower's business;
L. Maintain its properties, equipment and facilities in good order
and repair;
M. Maintain its primary banking accounts with Bank or Imperial
Securities Corporation; and
N. Prior to allowing any of Borrower's raw materials, work in
process, furnished goods inventory and property, plant and equipment to be
transported to or be held at any contract manufacturer, warehouse or other
location (other than with bona fide distributors and retail accounts), Borrower
shall provide notice to Bank and Borrower shall have complied with such filing
and notice requirements as shall, in Bank's opinion, assure Borrower's and
Bank's priority in such property over creditors of such contract manufacturer,
warehouseman or operator of such other location, including, without limitation,
making filings under California Commercial Code (S)2326, providing notice under
California Commercial Code (S)9114 and making filings and publications as
required under California Civil Code (S)3440.1 and (S)3440.5 All such filings,
notices and publications shall be in form and substance satisfactory to Bank.
10. Financial Covenants and Information. All financial covenants and
financial information referenced herein shall be interpreted and prepared in
accordance with GAAP as used in the United States of America applied on a basis
consistent with previous years. Compliance with the financial covenants shall be
calculated and monitored on a monthly basis, except as shall be expressly stated
to the contrary. Borrower affirmatively covenants that so long as any loans,
obligations or liabilities remain outstanding or unpaid to Bank or any
commitment is outstanding hereunder, it will, on a consolidated basis:
A. At all times, maintain a Minimum Tangible Net Worth (meaning all
assets, excluding any value for goodwill, trademarks, patents, copyrights,
organization expense and other similar intangible items, less all liabilities
(excluding deferred revenue), plus Subordinated Debt) of not less than
$1,000,000.00,
B. At all times maintain a Minimum Quick Ratio (meaning all cash plus
Accounts divided by current liabilities (excluding deferred revenue)) of not
less than 1.25:1.00;
C. As soon as it is available, but not later than twenty-five (25)
days after and as of the end of each month, deliver to Bank internally-prepared
financial statement consisting of a balance sheet and profit and loss statement,
in form satisfactory to Bank, and a Compliance Certificate in the form of
Exhibit B attached hereto and incorporated herein by this reference, certified
by an officer of Borrower;
D. As soon as it is available, but not later than one hundred twenty
(120) days after the end of Borrower's fiscal year, deliver to Bank unqualified
copies of Borrower's consolidated financial statements together with changes in
financial position audited by an independent certified public accountant
selected by Borrower but acceptable to Bank;]
E. Upon the reasonable request of Bank, deliver to Bank current
budgets, sales projections, operating plans and other financial exhibits and
information in form and substance satisfactory to Bank; and
5.
F. Upon any officer becoming aware, deliver immediately to Bank
written notice of any pending or threatened litigation claiming, or reasonably
likely to result in, damages against Borrower in an amount in excess of
$50,000.00.
11. Loan Fee. In addition to any other amounts due, or to become due,
concurrent with the execution hereof, in connection with the Equipment Advance,
Borrower shall deliver to Bank a loan fee in the amount of One Thousand Two
Hundred and Fifty Dollars ($1,250.00).
12. Default and Remedies. The occurrence of any one or more of the
following shall constitute an "Event of Default": (a) Default be made in the
payment of any obligation by Borrower under any Loan Document; (b) Except for
any failure to pay as described in clause (a) above, breach be made in any
warranty, statement, promise, term or condition, contained herein or in any
other Loan Document and the same shall not have been cured to the satisfaction
of Bank within fifteen (15) days after Borrower shall have become aware thereof,
whether by written notice from Bank, or otherwise, (except that no cure period
shall exist for breaches in respect of Borrower's obligations under Section 8,
Subsections 9.A., 9.B., 9.C., 9.F., 9.G., 9.H. and 9.I., Subsections 10.A.,
10.B., 10.C., and 10.D. of this Loan Agreement, and Sections 1 and 2 of the
General Security Agreement); (c) Any statement, warranty or representation made
by Borrower at any time proves false; (d) Borrower defaults in the repayment of
any principal of or the payment of any interest on any indebtedness exceeding in
the aggregate principal amount $10,000.00 or breaches or violates any term or
provision of any promissory note, loan agreement, mortgage, indenture or other
evidence of such indebtedness pursuant to which amounts outstanding in the
aggregate exceed $10,000.00 if the effect of such breach is to permit the
acceleration of such indebtedness, whether or not waived by the note holder or
obligee, and such failure shall not have been cured to Bank's satisfaction
within fifteen (15) calendar days after Borrower shall become aware thereof,
whether by written notice from Bank or otherwise, or there has in fact been an
acceleration of such indebtedness; (e) Borrower becomes insolvent or makes an
assignment for the benefit of creditors; (f) Any proceeding be commenced by
Borrower under any bankruptcy, reorganization, arrangement, readjustment of debt
or moratorium law or statute or, any such a proceeding is commenced against
Borrower and is not dismissed or stayed within ten (10) days (provided that no
Loans will be made prior to the dismissal of such proceeding); (g) Any money
judgment, writ of attachment, garnishment, execution or other legal process be
entered against Borrower or issued against any material property of Borrower
which is not fully covered by insurance (subject to reasonable deductibles) and
remains unvacated, unbonded, unstayed or unpaid or undischarged for more than
fifteen (15) days (whether or not consecutive) or in any event later than five
(5) days prior to the date of any proposed sale thereunder, or if any assessment
for taxes against Borrower other than against any of its real property, is made
by the Federal or State government or any department thereof; or (h) Any change
in Borrower's financial condition or operations which has a Material Adverse
Effect. on the occurrence and during the continuance of an Event of Default,
Bank may, at its option and without demand first made and without notice to
Borrower, do any one or more of the following: (i) Terminate its obligation to
make loans to Borrower as provided in Section 1 hereof; (ii) Declare all sums
secured hereby immediately due and payable; (iii) Immediately take possession of
the Collateral wherever it may be found, using all legally permissible means to
do so, or require Borrower to assemble the Collateral and make it available to
Bank at a place designated by Bank which is reasonably convenient to Borrower
and Bank, and Borrower waives all claims for damages due to or arising from or
connected with any such taking; (iv) Proceed in the foreclosure of Bank's
security interest and sale of the Collateral in any manner permitted by law, or
provided for herein; (v) Sell, lease or otherwise dispose of the Collateral at
public or private sale, with or without having the Collateral at the place of
sale, and upon terms and in such manner as Bank may determine, and Bank may
purchase same at any such sale; (vi) Retain the Collateral in full satisfaction
of the obligations secured thereby to the extent permitted under the Uniform
Commercial Code; or (vii) Exercise any remedies of a secured party under the
Uniform Commercial Code. Prior to any such disposition, Bank may, at its option,
cause any of the Collateral to be repaired or reconditioned in such manner and
to such extent as Bank may deem advisable, and any sums expended therefor by
Bank shall be repaid by Borrower and secured hereby. Bank shall have the right
to enforce one or more remedies hereunder successively or concurrently, and any
such action shall not stop or prevent Bank from pursuing any further remedy
which it may have hereunder or by law. If a sufficient sum is not realized from
any such disposition of the Collateral to pay all obligations secured by this
Loan Agreement, Borrower hereby promises and agrees to pay Bank any deficiency.
13. Records Retention. Borrower authorizes Bank to destroy all invoices,
delivery receipts, reports and other types of documents and records submitted to
Bank in connection with the transactions contemplated herein at any time
subsequent to four (4) months from the time such items are delivered to Bank.
6.
14. Attorneys' Fees. Borrower agrees to reimburse Bank up to $2,000.00 for
its reasonable attorneys' fees and expenses incurred in connection with the
negotiation, preparation, execution and delivery of the Loan Documents.
15. Governing Law; Judicial Reference.
A. Governing Law. This Agreement shall be deemed to have been made in
the State of California and the validity, construction, interpretation, and
enforcement hereof, and the rights of the parties hereto, shall be determined
under, governed by, and construed in accordance with the internal laws of the
State of California, without regard to principles of conflicts of law.
B. Judicial Reference.
(1) Other than (a) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (b) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Loan Agreement or the other Loan Documents, which controversy,
dispute or claim-is not settled in writing within thirty (30) days after the
"Claim Date" (defined as the date on which a party subject to this Loan
Agreement gives written notice to all other parties that a controversy, dispute
or claim exists), will be settled by a reference proceeding in California in
accordance with the provisions of Section 638 et seq. of the California Code of
Civil Procedure, or their successor section ("CCP"), which shall constitute the
exclusive remedy for the settlement of any controversy, dispute or claim
concerning this Loan Agreement, including whether such controversy, dispute or
claim is subject to the reference proceeding and except as set forth above, the
parties waive their rights to initiate any legal proceedings against each other
in any court or jurisdiction other than the Superior Court in the County where
the real property, if any, is located or Santa Xxxxx County, if none (the
"Court"). The referee shall be a retired Judge of the Court selected by mutual
agreement of the parties, and if they cannot so agree within forty-five (45)
days after the Claim Date, the referee shall be promptly selected by the
Presiding Judge of the Court (or his/her representative). The referee shall be
appointed to sit as a temporary judge, with all of the powers for a temporary
judge, as authorized by law, and upon selection should take and subscribe to the
oath of office as provided for in Rule 244 of the California Rules of Court (or
any subsequently enacted Rule). Each party shall have one peremptory challenge
pursuant to CCP (S) 170.6. The referee shall (x) be requested to set the matter
for hearing within sixty (60) days after the date of selection of the referee
and (y) try any and all issues of law or fact and report a statement of decision
upon them, if possible, within ninety (90) days of the Claim Date. Any decision
rendered by the referee will be final, binding and conclusive and judgement
shall be entered pursuant to CCP (S) 644 in any court in the State of California
having jurisdiction. Any party may apply for a reference proceeding at any time
after thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Loan Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee. The
referee may extend such period in the event of a party's refusal to provide
requested discovery for any reason whatsoever, including, without limitation,
legal objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days written
notice, and request for production or inspection of documents shall be responded
to Within ten (10) days after service. All disputes relating to discovery which
cannot be resolved by the parties Shall be submitted to the referee whose
decision shall be final and binding upon the parties. Pending appointment of the
referee as provided herein, the Superior Court is empowered to issue temporary
and/or provisional remedies, as appropriate.
(2) Except as expressly set forth in this Loan Agreement, the
referee shall determine the manner in which the reference proceeding is
conducted including the time and place of all hearings, the order of
presentation of evidence, and all other questions that arise with respect to the
course of the reference proceeding. All proceedings and hearings conducted
before the referee, except for trial, shall be conducted without a court
reporter except that when any party so requests, a court reporter will be used
at any hearing conducted before the referee. The party making such a request
shall have the obligation to arrange for and pay for the court reporter. The
costs of the court reporter at the trial shall be borne equally by the parties.
7.
(3) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding which shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.
(4) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act, (S) 1280 through (S) 1294.2 of the CCP as
amended from time to time. The limitations with respect to discovery as set
forth hereinabove shall apply to any such arbitration proceeding.
16. Miscellaneous Provisions.
A. Nothing herein shall in any way limit the effect of the conditions
set forth in any other security or other agreement executed by Borrower; but
each and every condition hereof shall be in addition thereto.
B. No failure or delay on the part of Bank, in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof.
C. All rights and remedies existing under this Loan Agreement or any
other Loan Document are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
D. All headings and captions in this Loan Agreement and any related
documents are for convenience only and shall not have any substantive effect.
E. This Loan Agreement may be executed in any number of counterparts,
each of which when so delivered shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. Each such
agreement shall become effective upon the execution of a counterpart hereof or
thereof by each of the parties hereto and telephonic notification that such
executed counterparts has been received by Borrower and Bank.
BANK: BORROWER:
IMPERIAL BANK CrossRoute Software, Inc.
a California corporation
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxx Xxxx
------------------- ------------
Xxxxxx X. Xxxxx Xxxxxxx Xxxx
Assistant Vice President President and Chief Executive Officer
LIST OF EXHIBITS AND SCHEDULES
------------------------------
Exhibit A: Definitions
SCHEDULE 1 TO EXHIBIT A: List of Specific Permitted Indebtedness
SCHEDULE 2 TO EXHIBIT A: List of Specific Permitted Liens
8.
Exhibit A
DEFINITIONS
"Accounts" means any right to payment for goods sold or leased, or to be
sold or to be leased, or for services rendered or to be rendered no matter how
evidenced, including accounts receivable, contract rights, chattel paper,
instruments, purchase orders, notes, drafts, acceptances, general intangibles
and other forms of obligations and receivables.
"Capital Lease" means, as to any Person, any lease of any Property by such
Person as lessee that is, or should be in accordance with Financing Accounting
Standards Board Statement No. 13, classified and accounted for as a "capital
lease" on the balance sheet of such Person prepared in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.
"Collateral" means any and all personal property of Borrower which is
assigned or hereafter is assigned to Bank as security or in which Bank now has
or hereafter acquires a security interest hereunder (including, without
limitation, the Accounts), or pursuant to the terms of the General Security
Agreement, the Intellectual Property Security Agreement or otherwise.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that Person,
or in respect of which that Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation for which that Person is in
effect liable through any agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, capital stock purchases, capital contributions or
otherwise), or to maintain the solvency of the obligor of such obligation, or to
make payment for any products, materials or supplies or for any transportation,
services or lease regardless of the non-delivery or non-furnishing thereof, in
any such case if the purpose or intent of such agreement is to provide assurance
that such obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof. The amount of
any Contingent Obligation of any Person shall be deemed to be an amount equal to
the maximum amount of such Person's liability with respect to the stated or
determinable amount of the primary obligation for which such Contingent
Obligation is incurred or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder).
"Event of Default" has the meaning set forth in Section 12.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other Person as may be approved by the significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"General Security Agreement" means that certain General Security Agreement
(Tangible and Intangible Personal Property) dated of even date herewith, made by
Borrower in favor of Bank.
"Indebtedness" means, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money, including, without limitation,
all of such indebtedness outstanding under this Loan Agreement and any of the
other Loan Documents, (b) all Capital Lease Obligations of such Person, (c) to
the extent of the outstanding indebtedness thereunder, other than in the
ordinary and normal course of business as it is now conducted, any obligation of
such Person representing an extension of credit to such Person, whether or not
for borrowed money, (d) any obligation of such Person
Exhibit A
Page 1 of 5
for the deferred purchase price of Property or services (other than (i) trade or
other accounts payable in the ordinary course of business in accordance with
customary industry terms and (ii) deferred franchise fees). (e) all Contingent
Obligations, (f) any obligation of such Person of the nature described in
clauses (a), (b), (c), (d) or (e) above, that is secured by a Lien on assets of
such Person and which is non-recourse to the credit of such Person, but Only to
the extent of the fair market value of the assets so subject to the Lien, (g)
obligations of such Person arising under acceptance facilities or under
facilities for the discount of accounts receivable of such Person, (h) any
obligation of such Person to reimburse the issuer of any letter of credit issued
for the account of such Person upon which a draw has been made, and (i) any
lease having the effect of indebtedness, whether or not the same shall be
treated as such on the balance sheet of Borrower under GAAP.
"Lien" means any mortgage, pledge, security interest, lien or other charge
or encumbrance, including the lien or retained security title of a conditional
vendor, upon or with respect to any property or assets.
"Loan Documents" means this Loan Agreement, the General Security Agreement
and that certain Agreement to Provide Insurance (Real or Personal Property)
dated of even date herewith, each as executed by Borrower in favor of Bank,
together with all other documents entered into or delivered pursuant to any of
the foregoing, in each case as originally executed or as the same may from time
to time be modified, amended, supplemented or restated.
"Loans" means individually and collectively, the Equipment Advance and the
SVB Advance advanced pursuant to Section 1.
"Material Adverse Effect" means any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect upon
the validity or enforceability of any material provision of any Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
condition (financial or otherwise) or business operations of Borrower, (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower, to perform its material Obligations, (d) materially impairs
or could reasonably be expected to materially impair the value or priority of
Bank's security interest in any Collateral or (e) materially impairs or could
reasonably be expected to materially impair the ability of Bank to enforce any
of its legal remedies pursuant to the Loan Documents.
"Maturity Date" has the meaning set forth in Section 1.
"Permitted Indebtedness" means the following:
(1) indebtedness of Borrower or Indebtedness and Contingent
Obligations of its Subsidiaries in favor of Bank arising under this Loan
Agreement and the other Loan Documents;
(2) the existing Indebtedness and Contingent Obligations disclosed on
Schedule 1 attached hereto and incorporated herein by this reference;
provided that the principal amount thereof is not increased and the terms
thereof are not modified to impose more burdensome terms upon Borrower or
any of its Subsidiaries;
(3) the Subordinated Debt;
(4) extensions, renewals or refinancings of Indebtedness permitted
under this Loan Agreement, other than clause (3) immediately above;
(5) accrued dividends on the preferred stock of Borrower;
(6) interest rate and currency hedging agreements;
(7) guaranties of any Subsidiary's suppliers in connection with the
purchase of supplies in the ordinary course of business;
(8) guaranties of lease obligations incurred in the ordinary course of
business and to the extent otherwise permitted hereunder;
Exhibit A
Page 2 of 5
(9) Contingent Obligations constituting Permitted Liens; and
(10) the indebtedness referred to in clause (3)(a) of the definition
of Permitted Liens.
"Permitted Liens" means the following:
(1) liens and security interests existing as of this date and
disclosed in Schedule 2 attached hereto and incorporated herein by this
reference;
(2) liens for taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith by appropriate
proceedings;
(3) liens and security interests (a) upon or in any equipment
acquired or held by Borrower to secure the purchase price of such equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such equipment and in an amount not greater than the purchase price thereof or
(b) existing on such equipment at the time of its acquisition, provided that the
lien and security interest is confined solely to the properly so acquired and
improvements thereon, and the proceeds of such equipment;
(4) liens consisting of leases or subleases and licenses and
sublicenses granted to others in the ordinary course of Borrower's business not.
interfering in any material respect with the business of Borrower and any
interest or title of a lessor or licensor under any lease or license, as
applicable;
(5) liens securing claims or demands, of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons or entities imposed
without action of such parties, provided that the payment thereof is not yet
required;
(6) liens incurred or deposits made in the ordinary course of
Borrower's business in connection with worker's compensation, unemployment
insurance, social security and other like laws;
(7) liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
(8) easements, reservations, rights-of-way, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances
affecting real property not interfering in any material respect with the
ordinary conduct of Borrower's business;
(9) liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(10) liens that are not prior to Bank's security interest which
constitute rights of set-off of a customary nature;
(11) any interest or title of a lessor in equipment subject to any
Capitalized Lease otherwise permitted hereunder; and
(12) any liens arising from the filing of any financing statements
relating to true leases otherwise permitted hereunder.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, firm, joint stock
company, estate, entity or governmental agency.
Exhibit A
Page 3 of 5
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.
Exhibit A
Page 4 of 5
Schedule 1 to Exhibit A
SPECIFIC PERMITTED INDEBTEDNESS
Schedule 1 to Exhibit A
Page 1 of 1
Schedule 2 to Exhibit A
SPECIFIC PERMITTED LIENS
Schedule 2 to Exhibit A
Page 1 of 1
Exhibit B
COMPLIANCE CERTIFICATE
The consolidated financial statements dated as of _______________ of CrossRoute
Software, Inc. a California corporation ("Borrower") attached hereto and
submitted to Imperial Bank ("Bank") pursuant to that certain Loan Agreement
dated as of October 6, 1997, entered into between Borrower and Bank (the "Loan
Agreement"), are in compliance with all financial covenants (unless otherwise
noted below) as specified in Section 10 therein, as follows:
Covenant: Actual:
A. Minimum Tangible Net Worth of:
----------------------------- ----------------
$1,000,000.00
B. Minimum Quick Ratio:
------------------- -----------------
1.25:1.00
Exceptions: (if none, so state):
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
The undersigned authorized officer of Borrower hereby certifies that Borrower is
in complete compliance with the terms and conditions of the Loan Agreement for
the period ending _________, ___, and as of the date of this Compliance
Certificate the representations and warranties stated therein are true, accurate
and complete as of the date hereof (except as to those representations and
warranties which specifically reference a particular date and except as noted
above).
The undersigned further certifies that s/he knows of no pending conditions which
may cause an Event of Default (as defined in the Loan Agreement) to exist in the
next thirty (30) days. The required support documents for this certification are
attached and prepared in accordance with GAAP consistently applied.
Date: October 6, 1977 CrossRoute Software, Inc.,
a California corporation
By:
--------------------------------
Xxxxx Xxxxxxxx
Controller
Exhibit B
Page 1 of 2
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT is entered into as of September 8,
1998 (this "Restated Loan Agreement") between CROSSROUTE SOFTWARE, INC., a
California corporation (herein called "Borrower"), and IMPERIAL BANK (herein
called "Bank"). This Restated Loan Agreement amends, restates and supersedes in
its entirety the Original Loan Agreement (as hereinafter defined).
RECITALS
A. Borrower and Bank entered into that certain Loan Agreement dated as of
October 6, 1997 (the "Original Loan Agreement"), pursuant to which Bank agreed
to extend and make loans available to Borrower under the Facility-A Commitment
(as hereinafter defined).
B. Borrower and Bank desire to amend and restate the Loan Agreement in its
entirety to, among other things, modify certain financial covenants and
reporting requirements under the Facility-A Commitment and to extend and make
available to Borrower additional advances of credit, all as more fully set forth
herein.
C. Bank has agreed to make and maintain the credit facilities described in
this Restated Loan Agreement, but only upon the terms and subject to the
conditions hereinafter set forth and in reliance on the representations and
warranties set forth herein.
AGREEMENT
NOW, THEREFORE, in Consideration of the foregoing recitals and the mutual
covenants hereinafter set forth, and intending to be legally bound, Borrower and
Bank hereby agree as follows:
1. Commitments.
A. Facility-A Commitment. Subject to all the terms and conditions of
this Restated Loan Agreement and prior to the termination of its commitment as
hereinafter provided, Bank hereby agrees to make loans (each a "Facility-A
Loan") to Borrower in such amounts as Borrower shall request pursuant to this
Section 1.A. at any time from the date hereof through October 5, 1998 (the
"Facility-A Availability End Date"), in an aggregate principal amount not to
exceed $750,000.00 (the "Facility-A Commitment"). If at any time or for any
reason, the outstanding principal amount of the Facility-A Loan Account (as
hereinafter defined) is greater than the Facility-A Commitment, Borrower shall
immediately pay to Bank, in cash, the amount of such excess. Any commitment of
Bank, pursuant to the terms of this Restated Loan Agreement, to make Facility-A
Loans shall expire on the Facility-A Availability End Date, subject to Bank's
right to renew said commitment in its sole and absolute discretion at Borrower's
request. Any such renewal of said commitment shall not be binding upon Bank
unless it is in writing and signed by an officer of Bank. Facility-A Loans that
are repaid by Borrower may not be reborrowed. Borrower promises to pay to Bank
the outstanding unpaid principal balance (and all accrued unpaid interest
thereon) of the Facility-A Loan Account on or before October 5, 2001 ("Facility-
A Maturity Date").
(1) Facility-A Loans. Facility-A Loans may only be used to
purchase or reimburse the cost of acquiring equipment purchased by Borrower
after April 1, 1997 or (b) purchase or reimburse the cost of acquiring software
or furniture purchased by Borrower. The amount of each Facility-A Loan made by
Bank to Borrower hereunder shall be debited to the loan ledger account of
Borrower maintained by Bank for the Facility-A Commitment (herein called the
"Facility-A Loan Account") and Bank shall credit the Facility-A Loan Account
with all loan repayments in respect thereof made by Borrower. When Borrower
desires to obtain a Facility-A Loan, Borrower shall notify Bank (which notice
shall be signed by an officer of Borrower and shall be
1.
irrevocable) in accordance with Section 2 hereof, to be received no later than
3:00 p.m. Pacific time one (1) Banking Day before the day on which the Loan is
to be made. When Borrower desires to obtain a Facility-A Loan to purchase
equipment, software or furniture, the notice shall be signed by an officer of
Borrower and include a copy of the invoice for the equipment, software or
furniture to be financed. Facility-A Loans for equipment will be limited to one
hundred percent (100%) of the invoice amount for such equipment approved from
time to time by Bank, less any taxes, shipping and freight charges or discounts,
warranty charges, installation expenses and similar soft costs. Facility-A Loans
for software and furniture will be limited to: (a) one hundred percent of the
invoice amount for such software and furniture approved from time to time by
Bank, less any taxes, shipping and freight charges or discounts, warranty
charges, installation expenses and similar soft costs and (b) the maximum
aggregate total amount of $200,000.00.
(a) SVB Advance. Subject to the availability of the
Facility-A Commitment and in reliance on the representations and warranties of
Borrower set forth herein, in order to repay all existing loans and related
indebtedness ("SVB Loans") owed by Borrower to Silicon Valley Bank ("SVB"), Bank
hereby agrees to make one Facility-A Loan to Borrower in an aggregate principal
amount not to exceed $250,000.00 (the "SVB Advance"); provided, however, that
the outstanding amount under the SVB Advance shall be deemed to constitute a
Facility-A Loan for the purpose of calculating the availability under the
Facility-A Commitment.
(b) Limitations on Advance of any Facility-A Loan.
Notwithstanding any of the foregoing provisions contained in this Section 1.A.
prior to any advance of a Facility-A Loan, except for the initial advance of a
Facility-A Loan to repay the SVB Loans, Bank shall have received satisfactory
evidence of the release of all existing liens against the Collateral to ensure
Bank's first priority lien in the Collateral.
(2) Interest Payments Prior to Facility-A Maturity Date.
Borrower further promises to pay to Bank from the date of the initial advance of
a Facility-A Loan (including the SVB Advance) through the Facility-A Maturity
Date, on or before the tenth (10th) day of each month, interest on the average
daily unpaid balance of the Facility-A Loan Account during the immediately
preceding month at a rate of interest equal to one percent (1%) per annum in
excess of the rate of interest which Bank has announced as its prime lending
rate (the "Prime Rate"), which shall vary concurrently with any change in the
Prime Rate. Interest shall be computed at the above rate on the basis of the
actual number of days during which the principal balance of the Facility-A Loan
Account is outstanding divided by 360, which shall for interest computation
purposes be considered one (1) year.
(3) Principal Repayment and Interest Payments on SVB Advance.
Borrower further promises to pay to Bank, on or before the tenth (10th day of
the month immediately following the date of the SVB Advance and on or before the
tenth (10th) day of each month thereafter through October 5, 1999, (a) the
outstanding principal balance of the SVB Advance in twenty-four (24) equal
monthly installments plus (b) interest on the average daily unpaid balance of
the SVB Advance accruing during the immediately preceding month at a rate of
interest and computed in accordance with Section 1.A.(2) hereof.
(4) Principal Repayment and Interest Payments Following
Availability End Date. Borrower further promises to pay to Bank, on or before
the tenth (10th) day of the month immediately following the Facility-A
Availability End Date and on or before the tenth (10th) day of each month
thereafter through the Facility-A Maturity Date, (a) the outstanding principal
balance of the Facility-A Loan Account (excluding the SVB Advance) on the
Facility-A Availability End Date in thirty-six (36) equal monthly installments
plus (b) interest on the average daily unpaid balance of the Facility-A Loan
Account (excluding the SVB Advance) accruing during the immediately preceding
month at the rate of interest and computed in accordance with Section 1.A.(2)
hereof.
B. Facility-B Commitment. Subject to all the terms and conditions of
this Restated Loan Agreement and prior to the termination of its commitment as
hereinafter provided, Bank hereby agrees to make
2.
loans (each a "Facility-B Loan") to Borrower, from time to time and in such
amounts as Borrower shall request pursuant to this Section 1.B., up to an
aggregate principal amount outstanding under the Facility-B Loan Account (as
hereinafter defined) not to exceed the least off (a) seventy-five percent
(75.0%) of Eligible Accounts (as the same may be adjusted from time to time as
provided for under Section 9.B. hereof, the "Borrowing Base") or (h) $750,000.00
(the "Facility-B Commitment"). If at any time or for any reason, the outstanding
principal amount of the Facility-B Loan Account is greater than the least of:
(x) the Borrowing Base or (y) the Facility-B Commitment, Borrower shall
immediately pay to Bank, in cash, the amount of such excess. Any commitment of
Bank, pursuant to the terms of this Restated Loan Agreement, to make Facility-B
Loans shall expire on the Facility-B Maturity Date (as hereinafter defined),
subject to Bank's right to renew said commitment in its sole and absolute
discretion at Borrower's request. Any such renewal of said commitment shall not
be binding upon Bank unless it is in writing and signed by an officer of Bank.
Provided that no Event of Default (as hereinafter defined) has occurred and is
continuing, all or any portion of the Facility-B Loans advanced by Bank that are
repaid by Borrower shall be available for reborrowing in accordance with the
terms hereof. Borrower promises to pay to Bank the entire outstanding unpaid
principal balance (and all accrued unpaid interest thereon) of the Facility-B
Loan Account on or before September 7, 1999 ("Facility-B Maturity Date").
(1) Facility-B Loans. Facility-B Loans may only be used to
support Borrower's working capital, needs. The amount of each Facility-B Loan
made by Bank to Borrower hereunder shall be debited to the loan ledger account
of Borrower maintained by Bank for the Facility-B Commitment (herein called the
"Facility-B Loan Account") and Bank shall credit the Facility-B Loan Account
with all loan repayments in respect thereof made by Borrower. When Borrower
desires to obtain a Facility-B Loan, Borrower shall notify Bank (which notice
shall be signed by an officer of Borrower and shall be irrevocable) in
accordance with Section 2 hereof, to be received no later than 3:00 p.m. Pacific
time one (1) Banking Day (as hereinafter defined) before the day on which the
Facility-B Loan is to be made.
(a) Letter of Credit Usage and Sublimit. Subject to the
availability of the Facility-B Commitment and in reliance on the representations
and warranties of Borrower set forth herein, at any time and from time to time
from the date hereof through the Banking Day immediately prior to the Facility-B
Maturity Date, Bank shall issue for the account of Borrower such standby and
commercial letters of credit ("Letters of Credit") as Borrower may request,
which request shall be made by delivering to Bank a duly executed letter of
credit application on Bank's standard form; provided, however, that the
outstanding and undrawn amounts under all such Letters of Credit (i) shall not
at any time exceed $200,000.00 and (ii) shall be deemed to constitute Facility-B
Loans for the purpose of calculating availability under the Facility-B
Commitment. Unless Borrower shall have deposited with Bank cash collateral in an
amount sufficient to cover all undrawn amounts under each such Letter of Credit
and Bank shall have agreed in writing, no Letter of Credit shall have an
expiration date that is later than the Facility-B Maturity Date. All Letters of
Credit shall be in form and substance acceptable to Bank in its sole discretion
and shall be subject to the terms and conditions of Bank's form application and
letter of credit agreement. Borrower will pay any standard issuance and other
fees that Bank notifies Borrower will be charged for issuing and processing
Letters of Credit for Borrower.
(2) Interest Payments on Facility-B Loans. Borrower further
promises to pay to Bank from the date of the advance of the initial Facility-B
Loan through the Facility-B Maturity Date, on or before the tenth (10th) day of
each month, interest on the average daily unpaid balance of the Facility-B Loan
Account during the immediately preceding month at a rate of interest equal to
one-half of one percent (0.50%) per annum in excess of Prime Rate, which shall
vary concurrently with any change in the Prime Rate. Interest shall be computed
at the above rate on the basis of the actual number of days during which the
principal balance of the Facility-B Loan Account is outstanding divided by 360,
which shall for interest computation purposes be considered one (1) year.
(3) Limitation on Advance of any Facility-B Loan.
Notwithstanding any of the provisions contained in this Section 1.B. hereof,
prior to any advance of a Facility-B Loan, a representative of
3.
Bank shall have conducted an audit of Borrower's books and records relating to
the Collateral and made extracts therefrom, and arranged for verification of the
Accounts, directly with the account debtors or otherwise, all with results
satisfactory to Bank, the cost of such audit of which shall be at Borrower's
sole expense. Based on Bank's review of such audit, and prior to the advance of
a Facility-B Loan in accordance with the terms of this Section 1.B.(3), Bank may
adjust the Borrowing Base percentage, in its sole and reasonable discretion, as
provided for under Section 9.B. hereof.
C. Facility-C Commitment. Subject to all the terms and conditions of
this Restated Loan Agreement and prior to the termination of its commitment as
hereinafter provided, Bank hereby agrees to make loans (each a "Facility-C
Loan") to Borrower in such amounts as Borrower shall request pursuant to this
Section 1.C. at any time from the date hereof through September 7, 1999 (the
"Facility-C Availability End Date"), in an aggregate principal amount not to
exceed $750,000.00 (the "Facility-C Commitment"). If at any time or for any
reason, the outstanding principal amount of the Facility-C Loan Account (as
hereinafter defined) is greater than the Facility-C Commitment, Borrower shall
immediately pay to Bank, in cash, the amount of such excess. Any commitment of
Bank, pursuant to the terms of this Restated Loan Agreement, to make Facility-C
Loans shall expire on the Facility-C Availability End Date, subject to Bank's
right to renew said commitment in its sole and absolute discretion at Borrower's
request. Any such renewal of said commitment shall not be bidding upon Bank
unless it is in writing and signed by an officer of Bank. Facility-C Loans that
are repaid by Borrower may not be reborrowed. Borrower promises to pay to Bank
the outstanding unpaid principal balance (and all accrued unpaid interest
thereon) of the Facility-C Loan Account on or before September 7, 2002
("Facility-C Maturity Date").
(1) Facility-C Loans. Facility-C Loans may only be used to
purchase or reimburse the cost of acquiring equipment and software purchased by
Borrower after January 1, 1998. The amount of each Facility-C Loan made by Bank
to Borrower hereunder shall be debited to the loan ledger account of Borrower
maintained by Bank for the Facility-C Commitment (herein called the "Facility-C
Loan Account") and Bank shall credit the Facility-C Loan Account with all loan
repayments in respect thereof made by Borrower. When Borrower desires to obtain
a Facility-C Loan, Borrower shall notify Bank (which notice shall be signed by
an officer of Borrower and shall be irrevocable) in accordance with Section 2
hereof, to be received no later than 3:00 p.m. Pacific time one (1) Banking Day
before the day on which the Facility-C Loan is to be made. The notice shall be
signed by an officer of Borrower and include a copy of the invoice for the
equipment or software to be financed. Equipment Loans for equipment will be
limited to one hundred percent 100.00%) of the invoice amount for such
equipment, approved from time to time by Bank, less any taxes, shipping and
freight charges or discounts, warranty charges, installation expenses and other
similar soft costs. Facility-C Loans for software will be limited to: (a) one
hundred percent (100.00%) of the invoice amount for such software, approved from
time to time by Bank, less any taxes, shipping and freight charges or discounts,
warranty charges, installation expenses and other similar soft costs and (b) the
maximum aggregate total amount of $350,000.00.
(2) Interest Payments Prior to Facility-C Maturity Date.
Borrower further promises to pay to Bank from the date of the advance of the
initial Facility-C Loan through the Facility-C Maturity Date, on or before the
tenth (10') day of each month, interest on the average daily unpaid balance of
the Facility-C Loan Account during the immediately preceding month at a rate of
interest equal to three quarters of one percent (0.75%) per annum in excess of
the Prime Rate, which shall vary concurrently with any change in the Prime Rate.
Interest shall be computed at the above rate on the basis of the actual number
of days during which the principal balance of the Facility-C Loan Account is
outstanding divided by 360, which shall for interest computation purposes be
considered one (1) year.
(3) Principal Payments Following Facility-C Availability End
Date. Borrower further promises to pay to Bank, on or before the tenth (10th)
day of the month immediately following the Facility-C Availability End Date and
on or before the tenth (10th) day of each month thereafter through the Facility-
C Maturity Date, (a) the outstanding principal balance of the Facility-C Loan
Account on the Facility-C Availability End Date in thirty-six (36) equal monthly
installments plus (b) interest on the average daily unpaid
4.
balance of the Facility-C Loan Account accruing during the immediately preceding
month at the rate of interest and computed in accordance with Section 1.C.(2)
hereof.
2. Loan Requests. Requests for Loans hereunder shall be in writing duly
executed by Borrower in a form satisfactory to Bank and shall contain a
certification setting forth the matters referred to in Section 1, which shall
disclose that Borrower is entitled to the amount and type of Loan being
requested. Bank is hereby authorized to charge Borrower's deposit account with
Bank for all sums due Bank under this Restated Loan Agreement.
3. Delivery of Payments. Payment to Bank of all amounts due hereunder
shall be made at its Santa Xxxxx Valley Regional office, or at such other place
as may be designated in writing by Bank from time to time. If any payment date
fall on a day that is not a day that Bank is open for the transaction of
business ("Banking Day"), the payment due date shall be extended to the next
Banking Day.
4. Late Charge. If any interest payment, principal payment or principal
balance payment required hereunder is not received by Bank on or before ten (10)
days from the date in which such payment becomes due, Borrower shall pay to
Bank, a late charge equal to the lesser of (a) five percent (5.0%) of the amount
of such unpaid payment, in addition to said unpaid payment or (b) the maximum
amount permitted to be charged by applicable law, until remitted to Bank;
provided; however, nothing contained in this Section 4, shall be construed as
any obligation on the part of Bank to accept payment of any past due payment or
less than the total unpaid principal balance of the applicable Loan Account
following the Facility-A Maturity Date, the Facility-B Maturity Date and/or the
Facility-C Maturity Date, as applicable. All payments shall be applied first to
any late charges due hereunder, next to accrued interest then payable and the
remainder, if any, to reduce any unpaid principal due under the applicable Loan
Account.
5. Default Interest. From and after the Facility-A Maturity Date, the
Facility-B Maturity Date and/or the Facility-C Maturity Date, as applicable, or
such earlier date as all sums owing under any Loan Account becomes due and
payable by acceleration or otherwise, or upon the occurrence of an Event of
Default, at the option of Bank all sums owing under the applicable Loan Account
shall bear interest until paid in full at a rate equal to the lesser of (a) five
percent (5.0%) per annum in excess of the then applicable interest rate provided
for in Sections 1.A.(2), 1.B.(2) and 1.C.(2) hereof or (b) the maximum amount
permitted to be charged by applicable law, until all obligations hereunder are
repaid in full or the Event of Default is waived or cured to the satisfaction of
Bank, as applicable.
6. Definitions. As used in this Restated Loan Agreement and unless
otherwise defined herein, all initially capitalized terms shall have the
meanings set forth on Exhibit A attached hereto and incorporated herein by this
reference.
7. Representations and Warranties. Borrower represents and warrants to
Bank: (a) That Borrower is a corporation, duly organized and existing in the
State of its incorporation and the execution, delivery and performance of each
of the Loan Documents are within Borrower's corporate powers, have been duly
authorized and are not in conflict with law or the terms of any charter, by-law
or other incorporation papers, or of any indenture, agreement or undertaking to
which Borrower is a party or by which Borrower is bound or affected; (b)
Borrower is, and at the time the Collateral becomes subject to Bank's security
interest will be, the true and lawful owner of and has, and at the time the
Collateral becomes subject to Bank's security interest will have, good and clear
title to the Collateral, subject only to Bank's rights therein and to Permitted
Liens; (c) Each Account is, and at the time the Account comes into existence
will be, a true and correct statement of a bona fide indebtedness incurred by
the debtor named therein in the amount of the Account for either merchandise
sold Or delivered (or being held subject to Borrower's delivery instructions)
to, or services rendered, performed and accepted by, the account debtor; (d)
That there are and will be no defenses, counterclaims, or setoffs which may be
asserted against the Accounts from time to time represented by Borrower to be
Eligible Accounts, except as permitted in the
5.
definition thereof; (e) Any and all financial information, including information
relating to the Collateral, submitted by Borrower to Bank, whether previously or
in the future, is and will be true and correct; (f) There is no litigation or
other proceeding pending or threatened against or affecting Borrower, and
Borrower is not in default with respect to any order, writ, injunction, decree
or demand of any court or other governmental or regulatory authority; (g) (i)
The consolidated balance sheets of Borrower dated as of May 31, 1998, and the
related consolidated profit and loss statements for the fiscal year then ended,
copies of which have heretofore been delivered to Bank by Borrower, and all
other statements and data submitted in writing by Borrower to Bank in connection
with Borrower's request for credit are true and correct, and said balance sheet
and profit and loss statement accurately present the financial condition of
Borrower as of the date thereof and the results of the operations of Borrower
for the period covered thereby, and have been prepared in accordance with GAAP,
(ii) since such date, there have been no material adverse changes in the
financial condition of Borrower, and (iii) Borrower has no knowledge of any
liabilities, contingent or otherwise, which are not reflected in said balance
sheet, and Borrower has not entered into any special commitments or substantial
contracts which are not reflected in said balance sheet, other than in the
ordinary and normal course of its business, which may have a Material Adverse
Effect upon its financial condition, operations or business as now conducted;
(h) Borrower has no liability for any delinquent local, state or federal taxes,
and, if Borrower has contracted with any government agency, it has no liability
for renegotiation of profits; and (i) Borrower, as of the date hereof, possesses
all necessary Trademarks, trade names, Copyrights, Patents, patent rights, and
licenses to conduct its business as now operated, without any known conflict
with valid Trademarks, trade names, Copyrights, Patents, patent rights and
license rights of others; and 0) Borrower and its Subsidiaries (as hereinafter
defined) have reviewed the areas within their operations and business which
could be adversely affected by, and have developed or are developing a program
to address on a timely basis, the Year 2000 Problem and have made related
appropriate inquiry of material suppliers and vendors, and based on such review
and program, the Year 2000 Problem will not have a Material Adverse Effect upon
its financial condition, operations or business as now conducted.
8. Negative Covenants. Borrower agrees that so long as any loans,
obligations or liabilities remain outstanding or unpaid to Bank or the
commitment of Bank hereunder is in effect, neither Borrower, nor any of its
subsidiaries ("Subsidiaries") will, without the prior written consent of Bank,
which consent shall not be unreasonably withheld:
A. Make any substantial change in the character of its business as
now conducted;
B. Create, incur, assume or permit to exist any Indebtedness other
than loans from Bank except obligations now existing as shown in the financial
statements referenced in Section 7.(g)(i), excluding those being refinanced by
Bank, Subordinated Debt and Permitted Indebtedness;
C. Create, incur, assume or permit to exist any mortgage, pledge,
encumbrance, lien or charge of any kind (including the charge upon property at
any time purchased or acquired under conditional sale or other title retention
agreement) upon any asset now owned or hereafter acquired by it, other than
Permitted Liens and liens in favor of Bank;
D. Sell, dispose of or grant a security interest in any of the
Collateral other than to Bank (other than the disposing of such Collateral in
the ordinary and normal course of its business as now conducted or other assets
which are obsolete or otherwise considered surplus), or execute any financing
statements covering the Collateral in favor of any secured party or Person other
than Bank;
E. Sell, transfer, assign, mortgage, pledge, license, lease, grant a
security interest in, or otherwise encumber any of its Intellectual Property,
other than licenses or leases of its intellectually property granted in the
ordinary and normal course of its business;
6.
F. Make any loans or advances to any Person or other entity other
than in the ordinary and normal course of its business as now conducted
(provided that such loans or advances are not made to any Person or entity that
is controlled by or under common control with Borrower). Notwithstanding the
foregoing provision, Borrower shall be permitted to accept full recourse
promissory notes from its employees in payment for its capital stock purchased
by such employees;
G. (1) Purchase or otherwise acquire all or substantially all of the
assets or business of any Person or other entity; or (2) liquidate, dissolve,
merge or consolidate, or commence any proceedings therefore; or (3) except in
the ordinary and normal course of its business as now conducted, sell
(including, without limitation, the selling of any property or other asset
accompanied by the leasing back of the same) any assets including any fixed
assets, any property, or other assets necessary for the continuance of its
business as now conducted. Notwithstanding the foregoing, upon the consent of
Bank, which consent shall not be unreasonably withheld, Borrower may proceed
with any acquisition of up to $500,000.00, (a) so long as no Event of Default
has occurred and is continuing or would exist after giving effect to such
transaction; (b) Borrower is the surviving corporation and (c) prior to
consummating such transaction, Borrower executes and delivers to Bank all such
additional agreements, documents and instruments as Bank may require in order to
affirm, effectuate or further assure its continuing, first priority lien in the
Collateral after giving effect to such transaction; and
H. Declare or pay any dividend or make any other distribution on any
of its capital stock now outstanding or hereafter issued or purchase, redeem or
retire any of such stock other than in dividends or distributions payable in
Borrower's or any such Subsidiary's capital stock, except for the repurchase of
Borrower's capital stock from officers, directors, employees or consultants of
Borrower upon termination of their employment with or rendering of service to
Borrower.
9. Affirmative Covenants. Borrower affirmatively covenants that so long
as any loans, obligations or liabilities remain outstanding or unpaid to Bank or
the commitment of Bank hereunder is in effect, it will:
A. Furnish Bank from time to time such financial statements and
information as Bank may reasonably request and inform Bank immediately upon the
occurrence of a material adverse change therein;
B. Notwithstanding the provisions contained in Section l.A.(3)
hereof, permit representatives of Bank to conduct an audit of Borrower's books
and records relating to the Collateral and make extracts therefrom, with results
satisfactory to Bank, provided that Bank shall use its best efforts to not
interfere with the conduct of Borrower's business, and to the extent possible to
arrange for verification of the Accounts directly with the account debtors
obligated thereon or otherwise, all under reasonable procedures acceptable to
Bank and at Borrower's sole expense; provided further that, prior to an Event of
Default, Borrower shall not be responsible for the expense of more than one (1)
such audit, in any fiscal year the cost of such audit of which shall not exceed
$1,500.00. Borrower hereby acknowledges and agrees that upon completion of any
such audit, including any such audit conducted in accordance with the provisions
of Section 1.A.(3) hereof, Bank shall have the right to adjust the Borrowing
Base percentage, in its sole and reasonable discretion, based on its review of
the results of such Collateral audit;
C. Promptly notify Bank of any attachment or other legal process
levied against any of the Collateral and any information received by Borrower
relative to the Collateral, including the Accounts, the account debtors or other
Persons obligated in connection therewith, which may in any way affect the value
of the Collateral or the rights and remedies of Bank in respect thereto;
D. Notwithstanding the provisions of Section 14 hereof, reimburse
Bank upon demand for any and all legal costs, including reasonable attorneys'
fees, and other expenses incurred in (1) collecting any sums payable by Borrower
under any Loan Account or any other obligation secured hereby, (2) enforcing any
7.
term or provision of this Restated Loan Agreement or otherwise or (3) the
checking, handling and collection of the Collateral and the preparation and
enforcement of any agreement relating thereto in connection with the occurrence
and continuance of an Event of Default;
E. Notify Bank of each location and of each office of Borrower at
which records of Borrower relating to the Accounts are kept;
F. Provide, maintain and deliver to Bank policies insuring the
Collateral against loss or damage by such risks and in such amounts, forms and
companies as Bank may require (to the extent customarily maintained by
businesses similar to Borrower) and with loss payable to Bank, and, in the event
Bank takes possession of the Collateral, the insurance policy or policies and
any unearned or returned premium thereon shall at the option of Bank become the
sole property of Bank, such policies and the proceeds of any other insurance
covering or in any way relating to the Collateral, whether now in existence or
hereafter obtained, being hereby assigned to Bank;
G. In the event the unpaid balance of any Loan Account shall exceed
the maximum amount of outstanding loans to which Borrower is entitled under
Section 1 hereof, as applicable, Borrower shall immediately pay to Bank for
credit to such Loan Account the amount of such excess;
H. Maintain and preserve all rights, franchises and other authority
adequate and necessary for the conduct of its business and maintain and preserve
its existence in the state of its incorporation and any other state(s) in which
Borrower conducts its business, except with respect to such other state(s), as
the failure to do so would not have a Material Adverse Effect;
I. Maintain public liability, property damage and workers
compensation insurance and insurance on all its insurable property against fire
and other hazards with responsible insurance carriers to the extent usually
maintained by similar businesses. Borrower shall provide evidence of property
insurance in amounts and types acceptable to Bank, and certificates naming Bank
as a loss payee;
J. Pay and discharge, before the same becomes delinquent and
penalties accrue thereon, all taxes, assessments and governmental charges upon
or against it or any of its properties, and any of its other liabilities at any
time existing, except to the extent and so long as: (1) the same are being
contested in good faith and by appropriate proceedings in such manner as not to
cause any Material Adverse Effect or the loss of any right of redemption from
any sale thereunder; and (2) it shall have set aside on its books reserves
(segregated to the extent required by GAAP);
K. Maintain a standard and modem system of accounting in accordance
with GAAP on a basis consistently maintained; permit Bank's representatives to
have access to, and to examine its properties, books and records at all
reasonable times; provided that Bank shall use its best efforts to not interfere
with the conduct of Borrower's business;
L. Maintain its properties, equipment and facilities in good order
and repair;
M. Maintain its primary banking and operating accounts with Bank or
Imperial Securities Corporation;
N. Prior to allowing any of Borrower's raw materials, work in
process, finished goods inventory and property, plant and equipment to be
transported to or be held at any contract manufacturer, warehouse or other
location (other than with bona fide distributors and retail accounts), Borrower
shall provide notice to Bank and Borrower shall have complied with such filing
and notice requirements as shall, in Bank's opinion, assure Borrower's and
Bank's priority in such property over creditors of such contract manufacturer,
8.
warehouseman or operator of such other location, including, without limitation,
making filings under California Commercial Code (S)2326, providing notice under
California Commercial Code (S)9114 and making filings and publications as
required under California Civil Code (S)3440.1 and (S)3440.5 All such filings,
notices and publications shall be in form and substance satisfactory to Bank;
and
O. Borrower shall perform all acts reasonably necessary to ensure
that Borrower and any business in which Borrower holds a substantial interest
becomes Year 2000 Compliant in a timely manner. Such acts shall include, without
limitation, performing a comprehensive review and assessment of all of
Borrower's systems and adopting a detailed plan, with an itemized budget, for
the remediation, monitoring and testing of such systems. If requested by Bank,
Borrower shall immediately deliver a statement to Bank summarizing the Year 2000
exposure, program or progress of Borrower and its Subsidiaries or other evidence
of Borrower's compliance with the terms of this Section, certified by an officer
of Borrower.
10. Financial Covenants and Information. All financial covenants and
financial information referenced herein shall be interpreted and prepared in
accordance with GAAP as used in the United States of America applied on a basis
consistent with previous years. Compliance with the financial covenants shall be
calculated and monitored on a monthly basis, except as shall be expressly stated
to the Contrary. Borrower affirmatively covenants that so long as any loans,
obligations or liabilities remain outstanding or unpaid to Bank or any
commitment is outstanding hereunder, it will, on a consolidated basis:
A. At all times, maintain a Minimum Tangible Net Worth of not less
than $3,000,000.00. As used herein, "Tangible Net Worth" shall mean all assets,
excluding any value for goodwill, Trademarks, Patents, Copyrights, organization
expense and other similar intangible items, less all liabilities (excluding
deferred revenue), plus Subordinated Debt;
B. At all times maintain a Minimum Term Liquidity Coverage Ratio of
not less than 1.50:1.00. As used herein "Term Liquidity Coverage Ratio" means
the sum of all unrestricted cash and cash equivalents plus the net availability
under the Facility-B Commitment divided by the total outstanding term
indebtedness owing by Borrower to Bank;
C. At all times maintain a Maximum Net Loss in any single month not
in excess of $1,000,000.00;
D. As soon as it is available, but not later than thirty (30) days
after and as of the end of each month, deliver to Bank an internally-prepared
financial statement consisting of a balance sheet and profit and loss statement,
in form satisfactory to Bank, and a Compliance Certificate in the form of
Exhibit B attached hereto and incorporated herein by this reference, certified
by an officer of Borrower;
E. As soon as it is available, but not later than one hundred twenty
(120) days after the end of Borrower's fiscal year, deliver to Bank unqualified
copies of Borrower's consolidated financial statements together with changes in
financial position audited by an independent certified public accountant
selected by Borrower but acceptable to Bank;
F. So long as any amounts remain outstanding and unpaid under the
Facility-B Loan Account, as soon as it is available, but not later than twenty
(20) days after and as of the end of each month, deliver to Bank, in such form
and detail as Bank may require, statements showing aging of the Accounts and
Borrower's accounts payable, together with a Borrowing Base Certificate in the
form of Exhibit C attached hereto and incorporated herein by this reference,
certified by an officer of Borrower. Notwithstanding the foregoing, as a
condition to any request for a Facility-B Loan, Borrower shall have delivered to
Bank said aging statements as well as a Borrowing Base Certificate covering the
most recent month then ended prior to the date of Borrower's request for an
advance for a Facility-B Loan;
9.
G. Upon the reasonable request of Bank, deliver to Bank current
budgets, sales projections, operating plans and other financial exhibits and
information in form and substance satisfactory to Bank; and
H. Upon any officer becoming aware, deliver immediately to Bank
written notice of any pending or threatened litigation claiming, or reasonably
likely to result in, damages against Borrower in an amount in excess of
$50,000.00.
11. Loan Fee. Borrower has paid, and Bank hereby acknowledges receipt of
(a) in respect of the Facility-B Commitment, a loan fee in the amount of Two
Thousand Five Hundred Dollars ($2,500.00) and (b) in respect of the Facility-C
Commitment,a loan fee in the amount of Two Thousand Five Hundred Dollars
($2,500.00).
12. Default and Remedies. The occurrence of any one or more of the
following shall constitute an "Event of Default": (a) Default be made in the
payment of any obligation by Borrower under any Loan Document; (b) Except for
any failure to pay as described in clause (a) above, breach be made in any
warranty, statement, promise, term or condition, contained herein or in any
other Loan Document and the same shall not have been cured to the satisfaction
of Bank within fifteen (15) days after Borrower shall have become aware thereof,
whether by written notice from Bank, or otherwise, (except that no cure period
shall exist for breaches in respect of Borrower's obligations under Section 8,
Subsections 9.A., 9.B., 9.C., 9.F., 9.G., 9.H., 9:I and 9.0., Subsections 10.A.,
10.B., 10.C., 10.D., 10.E. and 10.F. of this Restated Loan Agreement, and
Sections 1 and 2 of the Restated Security Agreement); (c) Any statement,
warranty or representation made by Borrower at any time proves false; (d)
Borrower defaults in the repayment of any principal of or the payment of any
interest on any indebtedness exceeding in the aggregate principal amount
$10,000.00 or breaches or violates any term or provision of any promissory note,
loan agreement, mortgage, indenture or other evidence of such indebtedness
pursuant to which amounts outstanding in the aggregate exceed $10,000.00 if the
effect of such breach is to permit the acceleration of such indebtedness,
whether or not waived by the note holder or obligee, and such failure shall not
have been cured to Bank's satisfaction within fifteen (15) calendar days after
Borrower shall become aware thereof, whether by written notice from Bank or
otherwise, or there has in fact been an acceleration of such indebtedness; (e)
Borrower becomes insolvent or makes an assignment for the benefit of creditors;
(0 Any proceeding be commenced by Borrower under any bankruptcy, reorganization,
arrangement, readjustment of debt or moratorium law or statute or, any such a
proceeding is commenced against Borrower and is not dismissed or stayed within
ten (10) days (provided that no Loans will be made prior to the dismissal of
such proceeding); (g) Any money judgment, writ of attachment, garnishment,
execution or other legal process be entered against Borrower or issued against
any material property of Borrower which is not fully covered by insurance
(subject to reasonable deductibles) and remains unvacated, unbonded, unstayed or
unpaid or undischarged for more than fifteen (15) days (whether or not
consecutive) or in any event later than five (5) days prior to the date of any
proposed sale thereunder, or if any assessment for taxes against Borrower other
than against any of its real property, is made by the Federal or State
government or any department thereof; or (h) Any change in Borrower's financial
condition or operations which has a Material Adverse Effect. Upon the occurrence
and during the continuance of an Event of Default, Bank may, at its option and
without demand first made and without notice to Borrower, do any one or more of
the following: (i) Terminate its obligation to make loans to Borrower as
provided in Section 1 hereof; (ii) Declare all sums secured hereby immediately
due and payable; (iii) Immediately take possession of the Collateral wherever it
may be found, using all legally permissible means to do so, or require Borrower
to assemble the Collateral and make it available to Bank at a place designated
by Bank which is reasonably convenient to Borrower and Bank, and Borrower waives
all claims for damages due to or arising from or connected with any such taking;
(iv) Proceed in the foreclosure of Bank's security interest and sale of the
Collateral in any manner permitted by law, or provided for herein; (v) Sell,
lease or otherwise dispose of the Collateral at public or private sale, with or
without having the Collateral at the place of sale, and upon terms and in such
manner as Bank may determine, and Bank may purchase same at any such sale; (vi)
Retain the Collateral in full satisfaction of the obligations secured thereby to
the extent permitted under the Uniform Commercial Code; or (vii) Exercise any
remedies of a secured party under the Uniform Commercial Code. Prior to any such
10.
disposition, Bank may, at its option, cause any of the Collateral to be repaired
or reconditioned in such manner and to such extent as Bank may deem advisable,
and any sums expended therefor by Bank shall be repaid by Borrower and secured
hereby. Bank shall have the right to enforce one or more remedies hereunder
successively or concurrently, and any such action shall not estop or prevent
Bank from pursuing any further remedy that it may have hereunder or by law. If a
sufficient sum is not realized from any such disposition of the Collateral to
pay all obligations secured by this Restated Loan Agreement, Borrower hereby
promises and agrees to pay Bank any deficiency.
13. Records Retention. Borrower authorizes Bank to destroy all invoices,
delivery receipts, reports and other types of documents and records submitted to
Bank in connection with the transactions contemplated herein at any time
subsequent to four (4) months from the time such items are delivered to Bank.
14. Attorneys' Fees. Borrower agrees to reimburse Bank up to $3,500.00 for
its reasonable attorneys' fees and expenses incurred in connection with the
negotiation, preparation, execution and delivery of the Loan Documents.
15. Governing Law; Judicial Reference.
A. Governing Law. This Agreement shall be deemed to have been made
in the State of California and the validity, construction, interpretation, and
enforcement hereof, and the rights of the parties hereto, shall be determined
under, governed by, and construed in accordance with the internal laws of the
State of California, without regard to principles of conflicts of law.
B. Judicial Reference.
(1) Other than (a) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (b) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Restated Loan Agreement or the other Loan Documents, which
controversy, dispute or claim is not settled in writing within thirty (30) days
after the "Claim Date" (defined as the date on which a party subject to this
Restated Loan Agreement gives written notice to all other parties that a
controversy, dispute or claim exists), will be settled by a reference proceeding
in California in accordance with the provisions of Section 638 et seq. of the
California Code of Civil Procedure, or their successor section ("CCP"), which
shall constitute the exclusive remedy for the settlement of any controversy,
dispute or claim concerning this Restated Loan Agreement, including whether such
controversy, dispute or claim is subject to the reference proceeding and except
as set forth above, the parties waive their rights to initiate any legal
proceedings against each other in any court or jurisdiction other than the
Superior Court in the County where the real property, if any, is located or
Santa Xxxxx County, if none (the "Court"). The referee shall be a retired Judge
of the Court selected by mutual agreement of the parties, and if they cannot so
agree within forty-five (45) days after the Claim Date, the referee shall be
promptly selected by the Presiding Judge of the Court (or his/her
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of Court (or any subsequently enacted Rule).
Each party shall have one peremptory challenge pursuant to CCP (S) 170.6. The
referee shall (x) be requested to set the matter for hearing within sixty (60)
days after the date of selection of the referee and (y) try any and all issues
of law or fact and report a statement of decision upon them, if possible, within
ninety (90) days of the Claim Date. Any decision rendered by the referee will be
final, binding and conclusive and judgement shall be entered pursuant to CCP (S)
644 in any court in the State of California having jurisdiction. Any party may
apply for a reference proceeding at any time after thirty (30) days following
notice to any other party of the nature of the controversy, dispute or claim, by
filing a petition for a hearing and/or trial. All discovery permitted by this
Restated Loan Agreement shall be completed no later than fifteen (15) days
before the first hearing date established by the referee. The
11.
referee may extend such period in the event of a party's refusal to provide
requested discovery for any reason whatsoever, including, without limitation,
legal objections raised to such discovery or unavailability of a witness due to
absence or illness. No party shall be entitled to "priority" in conducting
discovery. Depositions may be taken by either party upon seven (7) days written
notice, and request for production or inspection of documents shall be responded
to within ten (10) days after service. All disputes relating to discovery which
cannot be resolved by the parties shall be submitted to the referee whose
decision shall be final and binding upon the parties. Pending appointment of the
referee as provided herein, the Superior Court is empowered to issue temporary
and/or provisional remedies, as appropriate.
(2) Except as expressly set forth in this Restated Loan
Agreement, the referee shall determine the manner in which the reference
proceeding is conducted including the time and place of all hearings, the order
of presentation of evidence, and all other questions that arise with respect to
the course of the reference proceeding. All proceedings and hearings conducted
before the referee, except for trial, shall be conducted without a court
reporter except that when any party So requests, a court reporter will be used
at any hearing conducted before the referee. The party making such a request
shall have the obligation to arrange for and pay for the court reporter. The
costs of the court reporter at the trial shall be borne equally by the parties.
(3) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding that shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.
(4) In the event that the enabling legislation which provides
for appointment of a referee is repealed (and no successor statute is enacted),
any dispute between the parties that would otherwise be determined by the
reference procedure herein described will be resolved and determined by
arbitration. The arbitration will be conducted by a retired judge of the Court,
in accordance with the California Arbitration Act, (S) 1280 through (S) 1294.2
of the CCP as amended from time to time. The limitations with respect to
discovery as set forth hereinabove shall apply to any such arbitration
proceeding.
16. Miscellaneous Provisions.
A. Nothing herein shall in any way limit the effect of the
conditions set forth in any other security or other agreement executed by
Borrower, but each and every condition hereof shall be in addition thereto.
B. No failure or delay on the part of Bank, in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof.
C. All rights and remedies existing under this Restated Loan
Agreement or any other Loan Document are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
D. All headings and captions in this Restated Loan Agreement and any
related documents are for convenience only and shall not have any substantive
effect.
12.
E. This Restated Loan Agreement is not intended to be, and shall not
be construed to create, a novation or accord and satisfaction, and, except as
otherwise provided herein, the Original Loan Agreement is amended and restated
in full by the terms of this Restated Loan Agreement and all obligations
outstanding under the Original Loan Agreement are governed by the terms of this
Restated Loan Agreement.
F. This Restated Loan Agreement may be executed in any number of
counterparts, each of which when so delivered shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. Each
such agreement shall become effective upon the execution of a counterpart hereof
or thereof by each of the parties hereto and telephonic notification that such
executed counterparts has been received by Borrower and Bank.
Bank: Borrower:
Imperial Bank CrossRoute Software, Inc.,
a California corporation
By:___________________________ By: /s/ Xxxxx Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxx Xxxxx Xxxxxxxx
Assistant Vice President Vice President, Finance
LIST OF EXHIBITS AND SCHEDULES
------------------------------
EXHIBIT A: Definitions
SCHEDULE 1 TO EXHIBIT A: List of Specific Permitted Indebtedness
SCHEDULE 2 TO EXHIBIT A: List of Specific Permitted Liens
EXHIBIT B: Compliance Certificate
EXHIBIT C: Borrowing Base Certificate
13.
Exhibit A
DEFINITIONS
"Accounts" means any right to payment for goods sold or leased, or to be
sold or to be leased, or for services rendered or to be rendered no matter how
evidenced, including accounts receivable, contract rights, chattel paper,
instruments, purchase orders, notes, drafts, acceptances, general intangibles
and other forms of obligations and receivables.
"Approved Account" means the Account of any account debtor which is a
"Fortune 500" company and approved by Bank in its sole and reasonable
discretion.
"Capital Lease" means, as to any Person, any lease of any Property by such
Person as lessee that is, or should be in accordance with Financing Accounting
Standards Board Statement No. 13, classified and accounted for as a "capital
lease" on the balance sheet of such Person prepared in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.
"Collateral" means any and all personal property of Borrower which is
assigned or hereafter is assigned to Bank as security or in which Bank now has
or hereafter acquires a security interest hereunder (including, without
limitation, the Accounts), Or pursuant to the terms of the Restated Security
Agreement, the IP Security Agreement or otherwise.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that Person,
or in respect of which that Person is otherwise directly or indirectly liable,
including, without limitation, any such obligation for which that Person is in
effect liable through any agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, capital stock purchases, capital contributions or
otherwise), or to maintain the solvency of the obligor of such obligation, or to
make payment for any products, materials or supplies or for any transportation,
services or lease regardless of the non-delivery or non-furnishing thereof, in
any such case if the purpose or intent of such agreement is to provide assurance
that such obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof. The amount of
any Contingent Obligation of any Person shall be deemed to be an amount equal to
the maximum amount of such Person's liability with respect to the stated or
determinable amount of the primary obligation for which such Contingent
Obligation is incurred or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder).
"Eligible Accounts" means such of Borrower's Accounts as Bank in its sole
reasonable discretion shall determine are eligible from time to time; provided,
however, that in no event shall Eligible Accounts include the following:
(1) all Accounts under which payment is not received within ninety
(90) days from the applicable invoice date;
Exhibit A
Page 1 of 6
(2) all Accounts against which the account debtor or any other Person
obligated to make payment thereon asserts any defense, offset, counterclaim
or other right to avoid or reduce the liability represented by the
Accounts;
(3) any Accounts if the account debtor or any other Person liable in
connection therewith is insolvent, subject to bankruptcy or receivership
proceedings or has made an assignment for the benefit of creditors or whose
credit standing is unacceptable to Bank and Bank has so notified Borrower;
(4) Accounts with respect to which the account debtor is an officer,
director, shareholder, employee or Subsidiary;
(5) Accounts due from an account debtor if more than fifty percent
(50%) of the aggregate amount of Accounts of such account debtor have at
that time remained unpaid for more than ninety (90) days from the
applicable invoice date;
(6) Accounts with respect to international transactions unless either
(a) such Accounts are insured or covered by a letter of credit in a manner
and form acceptable to the Bank or (b) Bank shall have otherwise permitted
in writing in its sole and absolute direction;
(7) salesperson's accounts for promotional purposes;
(8) the amount by which the aggregate of all Accounts of an account
debtor exceeds twenty-five percent (25.0%) of the total accounts receivable
balance ("Concentration Limit"); provided, however, the Concentration Limit
for an Approved Account shall be thirty percent (30.0%);
(9) Accounts where the account debtor is a seller to borrower, to the
extent that a potential offset exists; and
(10) Accounts where the account debtor is a federal governmental
entity, federal agency or instrumentality thereof.
"Event of Default" has the meaning set forth in Section 12.
"Facility-A Maturity Date" has the meaning set forth in Section 1.A.
"Facility-B Maturity Date" has the meaning set forth in Section 1.B.
"Facility-C Maturity Date" has the meaning set forth in Section 1.C.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other Person as may be approved by the significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Indebtedness" means, as to any Person, without duplication, (a)all
indebtedness of such Person for borrowed money, including, without limitation,
all of such indebtedness outstanding under this Restated Loan Agreement and any
of the other Loan Documents, (b) all Capital Lease Obligations of such Person,
(c) to the extent of the outstanding indebtedness thereunder, other than in the
ordinary and normal course of business as it is now conducted, any obligation of
such Person representing an extension of credit to such Person, whether or not
Exhibit A
Page 2 of 6
for borrowed money, (d) any obligation of such Person for the deferred purchase
price of Property or services (other than (i) trade or other accounts payable in
the ordinary course of business in accordance with customary industry terms and
(ii) deferred franchise fees), (e) all Contingent Obligations, (f) any
obligation of such Person of the nature described in clauses (a), (b), (c), (d)
or (e) above, that is secured by a Lien on assets of such Person and which is
non-recourse to the credit of such Person, but only to the extent of the fair
market value of the assets so subject to the Lien, (g) obligations of such
Person arising under acceptance facilities or under facilities for the discount
of accounts receivable of such Person, (h) any obligation of such Person to
reimburse the issuer of any letter of credit issued for the account of such
Person upon which a draw has been made, and (i) any lease having the effect of
indebtedness, whether or not the same shall be treated as such on the balance
sheet of Borrower under GAAP.
"IP Security Agreement" means that certain Collateral Assignment, Patent
Mortgage and Security Agreement dated of even date herewith, made by Borrower
in favor of Bank.
"Intellectual Property" means
(1) Any and all copyright, rights, copyright applications, copyright
registrations and like protection in each work or authorship and derivative
work thereof, whether published or unpublished and whether or not the same
also constitutes a trade secret, now or hereafter existing, created,
acquired or held (collectively, the "Copyrights");
(2) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products now Or hereafter
existing, created, acquired or held;
(3) Any and all design rights which may be available to Borrower now
or hereafter existing, created, acquired or held;
(4) Any patents, patent applications and like protections, including,
without limitation, improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same, including,
without limitation, the patents and patent applications (collectively, the
"Patents");
(5) Any trademark and servicemark rights, whether registered or not,
applications, to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected
with and symbolized by such trademarks (collectively, the "Trademarks");
(6) Any and all claims for damages by way of past, present and future
infringements of any of the rights included above, with the right, but not
the obligation, to xxx for and collect such damages for said use or
infringement of the intellectual property rights identified above;
(7) Any licenses or other rights to use any of the Copyrights,
Patents or Trademarks and all license fees and royalties arising from such
use to the extent permitted by such license or rights;
(8) Any amendments, extensions, renewals and extensions of any of the
Copyrights, Patents or Trademarks; and
(9) Any proceeds and products of the foregoing, including, without
limitation, all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
"Lien" means any mortgage, pledge, security interest, lien or other charge
or encumbrance, including the lien or retained security title of a conditional
vendor, upon or with respect to any property or assets.
Exhibit A
Page 3 of 6
"Loan Account or Loan Accounts" means individually and collectively, the
Facility-A Loan Account, the Facility-B Loan Account and the Facility-C Loan
Account.
"Loan Documents" means this Restated Loan Agreement, the Restated Security
Agreement, the IP Security Agreement and that certain Agreement to Provide
Insurance (`Real or Personal Property) dated of even date herewith, each as
executed by Borrower in favor of Bank, together with all other documents entered
into or delivered pursuant to any of the foregoing, in each case as originally
executed or as the same may from time to time be modified, amended, supplemented
or restated.
"Loans" means individually and collectively, the Facility-A Loans, the
Facility-B Loans and the Facility-C Loans advanced pursuant to Section 1.
"Material Adverse Effect" means any set of circumstances or events which
(a) has or could reasonably be expected to have any material adverse effect upon
the validity Or enforceability of any material provision of any Loan Document,
(b) is or could reasonably be expected to be material and adverse to the
condition (financial or otherwise) or business operations of Borrower, (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower, to perform its material Obligations, (d) materially impairs
or could reasonably be expected to materially impair the value or priority of
Bank's security interest in any Collateral or (e) materially impairs or could
reasonably be expected to materially impair the ability of Bank to enforce any
of; its legal remedies pursuant to the Loan Documents.
"Permitted Indebtedness" means the following:
(1) indebtedness of Borrower or Indebtedness and Contingent
Obligations of its Subsidiaries in favor of Bank arising under this
Restated Loan Agreement and the other Loan Documents;
(2) the existing Indebtedness and Contingent Obligations disclosed on
Schedule 1 attached hereto and incorporated herein by this reference;
provided that the principal amount thereof is not increased and the terms
thereof are not modified to impose more burdensome terms upon Borrower or
any of its Subsidiaries;
(3) the Subordinated Debt;
(4) extensions, renewals or refinancings of Indebtedness permitted
under this Restated Loan Agreement, other than clause (3) immediately
above;
(5) accrued dividends on the preferred stock of Borrower;
(6) interest rate and currency hedging agreements;
(7) guaranties of any Subsidiary's suppliers in connection with the
purchase of supplies in the ordinary course of business;
(8) guaranties of lease obligations incurred in the ordinary course
of business and to the extent otherwise permitted hereunder;
(9) Contingent Obligations constituting Permitted Liens; and
(10) the indebtedness referred to in clause (3)(a) of the definition
of Permitted Liens.
Exhibit A
Page 4 of 6
"Permitted Liens" means the following:
(1) liens and security interests existing as of this date and
disclosed in Schedule 2 attached hereto and incorporated herein by this
reference;
(2) liens for taxes, fees, assessments or other governmental charges
or levies, either not delinquent or being contested in good faith by
appropriate proceedings;
(3) liens and security interests (a) upon or in any equipment
acquired or held by Borrower to secure the purchase price of such equipment
or indebtedness incurred solely for the purpose of financing the
acquisition of such equipment and in an amount not greater than the
purchase price thereof or (b) existing on such equipment at the time of its
acquisition, provided that the lien and security interest is confined
solely to the property so acquired and improvements thereon, and the
proceeds of such equipment;
(4) liens consisting of leases or Subleases and licenses and
sublicenses granted to others in the ordinary course of Borrower's business
not interfering in any material respect with the business of Borrower and
any interest or title of a lessor or licensor under any lease or license,
as applicable;
(5) liens securing claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons or entities
imposed without action of such parties, provided that the payment thereof
is not yet required;
(6) liens incurred or deposits made in the ordinary course of
Borrower's business in connection with worker's compensation, unemployment
insurance, social security and other like laws;
(7) liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
(8) easements, reservations, rights-of-way, restrictions, minor
defects or irregularities in title and other similar charges or
encumbrances affecting real property not interfering in any material
respect with the ordinary conduct of Borrower's business;
(9) liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(10) liens that are not prior to Bank's security interest which
constitute rights of set-off of a customary nature;
(11) any interest or title of a lessor in equipment subject to any
Capitalized Lease otherwise permitted hereunder, and
(12) any liens arising from the filing of any financing statements
relating to true leases otherwise permitted hereunder.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, firm, joint stock
company, estate, entity or governmental agency.
Exhibit A
Page 5 of 6
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.
"Restated Security Agreement" means that certain Amended and Restated
General Security Agreement dated of even date herewith, made by Borrower in
favor of Bank.
"Subordinated Debt" means indebtedness of Borrower, the repayment of
principal of which is fully subordinated in time and right of payment to the
Loans, and has been approved in Bank's sole and absolute discretion and in
writing.
"Year 2000 Compliant" means, in regard to Borrower or any Person, that all
software, hardware, firmware, equipment, goods or systems utilized by or
material to the business operations or financial condition of Borrower or such
Person, will properly perform date sensitive functions before, during and after
the year 2000.
"Year 2000 Problem" means the risk that any computer applications used by
Borrower and its Subsidiaries may be unable to recognize and properly perform
date-sensitive functions involving certain dates prior to and any date on or
after December 31, 1999.
Exhibit A
Page 6 of 6
Schedule 1 to Exhibit A
SPECIFIC PERMITTED INDEBTEDNESS
List or indicate "None".
Schedule 1 to Exhibit A
Page 1 of 1
Schedule 2 to Exhibit A
SPECIFIC PERMITTED LIENS
List or indicate "None"
Schedule 2 to Exhibit A
Page 1 of 1
Exhibit B
COMPLIANCE CERTIFICATE
The consolidated financial statements dated as of __________________ of
CROSSROUTE SOFTWARE, INC., a California corporation ("Borrower") attached hereto
and submitted to IMPERIAL BANK ("Bank") pursuant to that certain Amended and
Restated Loan Agreement dated as of September 8, 1998, entered into between
Borrower and Bank (the "Restated Loan Agreement"), are in compliance with all
financial covenants (unless otherwise noted below) as specified in Section 10
therein, as follows:
--------------------------------------------------------------------------------
COVENANT: ACTUAL:
--------------------------------------------------------------------------------
A. Minimum Tangible Net Worth of:
-----------------------------
$3,000,000.00
--------------------------------------------------------------------------------
B. Minimum Term Liquidity Coverage Ratio:
-------------------------------------
1.50:1.00
--------------------------------------------------------------------------------
C. Maximum Net Loss:
----------------
$1,000,000.00
--------------------------------------------------------------------------------
Exceptions: (if none, so state):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
The undersigned authorized officer of Borrower hereby certifies that Borrower is
in complete compliance with the terms and conditions of the Restated Loan
Agreement for the period ending ________________, ______, and as of the date of
this Compliance Certificate the representations and warranties stated therein
are true, accurate and complete as of the date hereof (except as to those
representations and warranties which specifically reference a particular date
and except as noted above).
The undersigned further certifies that s/he knows of no pending conditions which
may cause an Event of Default (as defined in the Restated Loan Agreement) to
exist in the next thirty (30) days. The required support documents for this
certification are attached and prepared in accordance with GAAP consistently
applied.
Date:________________ CROSSROUTE SOFTWARE, INC.,
a California corporation
By:_____________________________________
Name:___________________________________
Title:__________________________________
Exhibit B
Page 1 of 1
Exhibit C
BORROWING BASE CERTIFICATE
(To be provided and attached by Bank)
Exhibit C
[LETTERHEAD OF IMPERIAL BANK APPEARS HERE]
November 18, 1998
Extricity Software, Inc.
000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Xxx Xxxx
Re: Imperial Bank Loan No. 00720000111
Gentlemen:
With reference to the Loan Agreement dated October 6, 1997 and the Amended
and Restated Loan Agreement dated September 8, 1998 between Imperial Bank
("Bank") and Extricity Software, Inc. ("Borrower") in connection with the
above-referenced loan ("Loan"), and as amended from time to time, the Bank
and Borrower hereby modify the following numbered terms and conditions of
the Amended and Restated Loan Agreement (hereinafter referred to as the
"Loan Agreement"):
1. Section C of Paragraph 10 of the Loan Agreement is deleted in its
entirety and is replaced with the following:
C. Borrower to maintain a Maximum Net Loss in any single month not
in excess of $1,500,000 beginning with the month ending October
31, 1998 through the month ending June 30, 1999, thereafter
maintain a Maximum Net Loss in any month not in excess of
$1,000,000.
Except for the above-described modifications, the Agreement shall remain
unaltered and in full force and effect.
Please acknowledge your approval by signing and returning the original of
this letter to me.
Sincerely,
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Assistant Vice President
Emerging Growth Industries
Extricity Software, Inc.
November 18, 1998
Page 2 of 2
--------------------------------------------------------------------------------
Accepted and agreed to:
EXTRICITY SOFTWARE, INC.
By: /s/ [ILLEGIBLE]^^
-----------------------------
Title: Vice President, Finance
-----------------------------
Date: 12/4/98
-----------------------------
[LETTERHEAD OF IMPERIAL BANK]
April 6, 1999
Extricity Software. Inc.
000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx
Xxxx Xxxxx
Re: Imperial Bank Loan No. 00720000111
Gentlemen:
With reference to the Amended and Restated Loan Agreement dated September 8,
1998 between Imperial Bank ("Bank") and Extricity Software, Inc., formerly
Crossroute Software, Inc, ("Borrower") in connection with the above-referenced
loan ("Loan"). and as amended from time to time, the Bank and Borrower hereby
modify the following numbered terms and conditions of the Amended and Restated
Loan Agreement (hereinafter referred to as the "Loan Agreement"):
1. Section A of Paragraph 10 of the Loan Agreement is deleted in its entirety
and is replaced with the following:
A. At all times maintain a Minimum Tangible Net Worth of not less than
$3,000,000, except for the period beginning with the month ending
February 28, 1999 through the earlier of 1) the month ending June 30,
1999 or 2) upon maintaining a Minimum Tangible Net Worth of not less
than $3,000,000 during which time no further advances under Facility
A, Facility B or Facility C will be made by Bank to Borrower. As used
herein, "Tangible Net Forth" shall mean all assets, excluding any
value for goodwill, Trademarks, Patents, Copyrights, organization
expense and other similar intangible items, less all liabilities
(excluding deferred revenue), plus Subordinated Debt;
Except for the above-described modifications, the Agreement shall remain
unaltered and in full force and effect.
Extricity Software, Inc.
April 6, 1999
Page 2 of 2
--------------------------------------------------------------------------------
Please acknowledge your approval by signing and returning the original of this
letter to me.
Sincerely,
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Assistant Vice President
Emerging Growth Industries
Accepted and agreed to:
EXTRICITY SOFTWARE, INC.
By: /s/ Xxxxx Xxxxxxxxxx
--------------------
Title: VP Finance and Administration and CFO
-------------------------------------
Date: April 7, 1999
-------------
April 6, 1999
Extricity Software, Inc.
000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx
Xxxx Xxxxx
Re: Imperial Bank Loan No. 00720000111
Gentlemen:
With reference to the Amended and Restated Loan Agreement dated September 8,
1998 between Imperial Bank ("Bank") and Extricity Software, Inc., formerly
Crossroute Software, Inc, ("Borrower") in connection with the above-referenced
loan ("Loan"), and as amended from time to time, the Bank and Borrower hereby
modify the following numbered terms and conditions of the Amended and Restated
Loan Agreement (hereinafter referred to as the "Loan Agreement"):
1. Section C of Paragraph 10 of the Loan Agreement is deleted in its entirety
and is replaced with the following:
C. Borrower to maintain a Maximum Net Loss in any single month not in
excess of $1,500,000, except for the month ending June 30, 1999, in
which Borrower is to maintain a Maximum Net Loss not in excess of
$1,650,000;
Except for the above-described modifications, the Agreement shall remain
unaltered and in full force and effect.
Please acknowledge your approval by signing and returning the original of this
letter to me.
Sincerely,
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Assistant Vice President
Emerging Growth Division
Extricity Software, Inc.
August 5, 1999
Page 2 of 2
--------------------------------------------------------------------------------
Accepted and agreed to:
EXTRICITY SOFTWARE, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------
Title: VP Finance and CFO
------------------
Date: 9-7-99
------
[LETTERHEAD OF IMPERIAL BANK]
September 7, 1999
Xxxxxxx Xxxxxxxxxx
Extricity Software
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Re: Loan # 00720000111/ 05 Note Number/ $750,000 Note Amount
Dear Xxxxx:
Imperial Bank has approved an extension of your credit facility shown above as
evidenced by the Loan Agreement dated September 8, 1998, from its current
maturity of September 7, 1999 to December 7, 1999.
Except as modified and extended hereby, the existing documentation as amended
concerning your obligations remains in full force and effect.
Sincerely,
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Vice President
Emerging Growth Industries Group
Acknowledged and accepted on September, 9, 1999.
By:
EXTRICITY SOFTWARE, INC.
/s/ Xxxxx Xxxxxxxxxx
--------------------
Title: VP Finance and CFO
------------------
[LETTERHEAD OF IMPERIAL BANK]
April 27, 2000
Extricity Software, Inc.
000 Xxxx Xxxxxxx Xxxxx, Xxx. 000
Xxxxxxx Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx
Xxxx Xxxxx
Re: Imperial Bank Loan No. 00720000111
Gentlemen:
With reference to the Amended and Restated Loan Agreement dated September 8,
1998 between Imperial Bank ("Bank") and Extricity Software, Inc., formerly
Crossroute Software, Inc. ("Borrower") in connection with the above referenced
loan ("Loan"), and as amended from time to time, the Bank and Borrower hereby
agree to waive for the periods ended January 31, 2000, February 28, 2000 and
March 31, 2000, the requirement under Section C of Paragraph 10 of the Loan
agreement, requiring a Maximum Net Loss in any single month not in excess of
$1,500,000, except for the month ending June 30, 1999, in which Borrower is to
maintain a Maximum Net Loss not in excess of $1,650,000.
This waiver should not be construed as a permanent waiver of any terms and
conditions. Except for the above waiver, the Agreement shall remain unaltered
and in full force and effect.
Please acknowledge your approval by signing and returning this original letter
to my attention.
Sincerely,
/s/ Xxx Xxxxxxx
Xxx Xxxxxxx
Vice President
Emerging Growth Division
Extricity Software, Inc.
April 27, 2000
Page 2 of 2
Accepted and Agreed to:
EXTRICITY SOFTWARE, INC.
By: /s/ Xxxxx Albertulle
-----------------------
Title: CFO and VP of Finance
-----------------------
and Administration
-----------------------
Date: April 27, 2000
-----------------------
[LETTERHEAD OF IMPERIAL BANK]
April 27, 2000
Xxxxxxx Xxxxxxxxxx
Extricity Software
000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Re: Loan # 00720000111/ 05 Note Number/ $750,000 Note Amount
Dear Xxxxx:
Imperial Bank has approved an extension of your credit facility shown above as
evidenced by the Loan Agreement dated September 8, 1998, from its current
maturity of April 7, 2000 to May 7, 2000.
Except as modified and extended hereby, the existing documentation as amended
concerning your obligations remains in full force and effect.
Sincerely,
/s/ Xxx Xxxxxxx
Xxx Xxxxxxx
Vice President
Emerging Growth Industries Group
Acknowledged and accepted on April 27, 2000.
EXTRICITY SOFTWARE, INC.
By: /s/ Xxxxx Xxxxxxxxxx
---------------------
Title: CFO and VP of Finance and Administration
-----------------------------------------
FIRST AMENDMENT
TO
AMENDED AND RESTATED
LOAN AGREEMENT
--------------
This First Amendment to Amended and Restated Loan Agreement is entered into
as of May 1, 2000 (the "Amendment"), by and between IMPERIAL BANK ("Bank") and
EXTRICITY, INC., formerly known as CROSSROUTE SOFTWARE, INC. ("Borrower").
RECITALS
--------
Borrower has changed its name from "CrossRoute Software, Inc." to
"Extricity, Inc." Borrower and Bank are parties to that certain Amended and
Restated Loan Agreement dated as of September 8, 1998 as amended thereafter (the
"Agreement"), that certain Amended and Restated General Security Agreement dated
as of September 8, 1998 (the "Security Agreement"), and that certain Collateral
Assignment, Patent Mortgage and Security Agreement dated as of September 8, 1998
(the "Collateral Assignment"). Since execution of the Loan Documents, Borrower
has since changed its name from CROSSROUTE SOFTWARE, INC. to EXTRICITY, INC.
The parties desire to amend the Agreement in accordance with the terms of this
Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Wherever the name "CrossRoute Software, Inc." appears in the Loan
Agreement and any related documents (the "Loan Documents") it shall mean
"Extricity, Inc." Any reference in the Loan Documents to Borrower, the
undersigned or other terms that refer to "CrossRoute Software, Inc." shall mean
and refer to "Extricity, Inc."
2. The reference in Section 1.B. to "$750,000.00 (the "Facility -B
Commitment")" is hereby revised to read "$1,500,000.00 (the "Facility -B
Commitment")".
3. The last sentence in Section 1.B. is hereby replaced with the
following:
"Borrower promises to pay to Bank the entire outstanding
unpaid principal balance (and all accrued unpaid interest thereon) of the
Facility-B Loan Account on or before May 1, 2001. ("Facility-B Maturity Date").
4. In Section 10.D., after the words "an internally-prepared financial
statement", add the following: "prepared in accordance with GAAP,".
5. Section 10.E. of the Agreement is hereby replaced in its entirety with
the following:
"Beginning with the fiscal year ended March 31, 2000, as soon
as it is available, but not later than one hundred twenty (120) days after the
end of Borrower's fiscal year, deliver to Bank unqualified copies of Borrower's
consolidated financial statements together with changes in financial position
audited by an independent certified public accountant selected by Borrower but
acceptable to Bank;"
6. The following new Section 10.I. is hereby added to the Agreement:
"I. At all times, maintain, a ratio of Quick Assets to
Current Liabilities minus Deferred Maintenance Revenue of at least 1.50 to
1.0.; and
Section 10.C. of the Agreement is hereby replaced in its entirety with
the following:
Beginning with the fiscal quarter and the month ending June
30, 2000, Borrower shall not suffer a loss (excluding expenses related to
amortization of deferred compensation) in excess of
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30, 2000; $9,000,000 for the fiscal quarter ended December 31, 2000; $6,500,000
for the fiscal quarter ended March 31, 2001.
7. The following new definitions are hereby added to Exhibit A of the
---------
Agreement:
"Bank Expenses" means all: reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents;
reasonable Collateral audit fees; and Bank's reasonable attorneys' fees and
expenses incurred in amending, enforcing or defending the Loan Documents
(including fees and expenses of appeal), incurred before, during and after an
Insolvency Proceeding, whether or not suit is brought.
"Current Liabilities" means, as of any applicable date, all amounts
that should, in accordance with GAAP, be included as current liabilities on the
consolidated balance sheet of Borrower and its Subsidiaries, as at such date,
plus, to the extent not already included therein, all outstanding Credit
Extensions made under this Agreement, including all Indebtedness that is payable
upon demand or within one year from the date of determination thereof unless
such Indebtedness is renewable or extendible at the option of Borrower or any
Subsidiary to a date more than one year from the date of determination.
"Deferred Maintenance Revenue" is all amounts received in advance of
performance under maintenance contracts and not yet recognized as revenue.
"GAAP" means generally accepted accounting principles as in effect
from time to time.
"Insolvency Proceeding" means any proceeding commenced by or against
any person or entity under any provision of the United States Bankruptcy Code,
as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.
"Quick Assets" means, at any date as of which the amount thereof
shall be determined, the unrestricted cash and cash-equivalents, accounts
receivable and investments with maturities not to exceed 90 days, of Borrower
determined in accordance with GAAP.
8. The definition of "IP Security Agreement" is hereby deleted in Exhibit A
---------
of the Agreement.
9. The Exhibit B, Compliance Certificate and Exhibit C, Borrowing Base
--------- ---------
Certificate of the Agreement are hereby replaced in their entirety with the
Exhibit B, Compliance Certificate and Exhibit C, Borrowing Base Certificate
--------- ---------
attached hereto and incorporated into the Agreement by this reference.
10. Bank will not be requiring specific filings on the Borrower's
Intellectual Property at the United States Patent and Trademark Office or the
Copyright Office.
11. Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof. Borrower ratifies and reaffirms the continuing effectiveness of all
promissory notes, guaranties, security agreements, mortgages, deeds of trust,
environmental agreements, and all other instruments, documents and agreements
entered into in connection with the Agreement.
12. Borrower represents and warrants that the Representations and
Warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
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13. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.
14. As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:
(a) this Amendment, duly executed by Borrower;
(b) any Bank Expenses incurred through the date of this Amendment;
(c) Corporate Resolutions to Borrow;
(d) UCC-2 Amendment evidencing Borrower's name change; and
(e) such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
first date above written.
EXTRICITY, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------------
Title: VP Finance, CFO and Secretary
IMPERIAL BANK
By: /s/ Xxx Xxxxxxx
----------------------------------
Title: Vice President
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EXHIBIT B
COMPLIANCE CERTIFICATE
TO: IMPERIAL BANK
FROM: EXTRICITY, INC.
The undersigned authorized officer of Extricity, Inc. hereby certifies that
in accordance with the terms and conditions of the Amended and Restated Loan
Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is in
complete compliance for the period ending _______________ with all required
covenants except as noted below and (ii) all representations and warranties of
Borrower stated in the Agreement are true and correct in all material respects
as of the date hereof. Attached herewith are the required documents supporting
the above certification. The Officer further certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES" COLUMN.
Reporting Covenant Required Complies
------------------ -------- ------------
Monthly financial statements Monthly within 30 days Yes No
Annual (CPA Audited) FYE within 120 days (beg. 3/31/00) Yes No
10K and 10Q (as applicable) Yes No
A/R & A/P Agings, Borrowing Base Cert. Monthly within 20 days Yes No
A/R Audit Initial and Annual Yes No
IP Report Quarterly within 30 days Yes No
Financial Covenant Required Actual Complies
------------------ -------- ----------- ------------
Maintain on a Monthly Basis:
Minimum Adjusted Quick Ratio 1.50:1.00(1) _____:1.00 Yes No
Maximum Term Liquidity Coverage Ratio 1.50:1.00 _____:1.00 Yes No
Minimum Tangible Net Worth $ 3,000,000 $________ Yes No
Maximum Loss $ ________(2) $________ Yes No
(1) At all times, maintain, a ratio of Quick Assets to Current Liabilities
minus Deferred Maintenance Revenue of at least 1.50 to 1.0.
(2) Maintain, beginning with the fiscal quarter and the month ending March 31,
2000, Borrower shall not suffer a loss, in excess of $6,000,000 for each fiscal
quarter.
COMMENTS REGARDING EXCEPTIONS: See Attached. BANK USE ONLY
Received by:_______________________________________
Sincerely, AUTHORIZED SIGNER
Date:______________________________________________
___________________________________________________ Verified:__________________________________________
SIGNATURE AUTHORIZED SIGNER
___________________________________________________ Date: _____________________________________________
TITLE
Compliance Status Yes No
___________________________________________________
DATE
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EXHIBIT C
---------
BORROWING BASE CERTIFICATE
-----------------------------------------------------------------------------------------------------------
Borrower: Extricity, Inc. Lender: Imperial Bank
Commitment Amount: $1,500,000.00
-----------------------------------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE
1. Accounts Receivable Book Value as of ___ $___________
2. Additions (please explain on reverse) $___________
3. TOTAL ACCOUNTS RECEIVABLE $___________
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4. Amounts over 90 days due $___________
5. Balance of 50% over 90 day accounts $___________
6. Concentration Limits
7. Foreign Accounts $___________
8. Governmental Accounts $___________
9. Contra Accounts $___________
10. Demo Accounts $___________
11. Intercompany/Employee Accounts $___________
12. Other (please explain on reverse) $___________
13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $___________
14. Eligible Accounts (#3 minus #13) $___________
15. LOAN VALUE OF ACCOUNTS (75% of #14) $___________
BALANCES
16. Maximum Loan Amount $___________
17. Total Funds Available [Lesser of #16 or #15] $___________
18. Present balance owing on Line of Credit $___________
19. Outstanding under Sublimits (Letters of Credit) $___________
20. RESERVE POSITION (#17 minus #18 and #19) $___________
The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Imperial Bank.
EXTRICITY, INC.
By: _______________________________________
Authorized Signer
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CORPORATE RESOLUTIONS TO BORROW
Borrower: EXTRICTY, INC.
--------------------------------------------------------------------------------
I, the undersigned Secretary or Assistant Secretary of EXTRICITY, INC. (the
"Corporation"), HEREBY CERTIFY that the Corporation is organized and existing
under and by virtue of the laws of the state of its incorporation.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation
duly called and held, at which a quorum was present and voting, (or by other
duly authorized corporate action in lieu of a meeting), the following
resolutions were adopted.
BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITIONS ACTUAL SIGNATURES
----------------------------------- -------------------------------------- --------------------------------------
Xxxxx X. Xxxxx Chairman and CEO /s/ Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxxx VP Finance, CFO and Secretary /s/ Xxxxxxx Xxxxxxxxxx
Xxxxx X. Xxxxxxx General Counsel and Assistant /s/ Xxxxx Xxxxxxx
Secretary
acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
BORROW MONEY. To borrow from time to time from Imperial Bank ("Bank"), on
such terms as may be agreed upon between the officers, employees, or agents and
Bank, such sum or sums of money as in their judgment should be borrowed, without
limitation, including such terms and sums as are specified in that certain First
Amendment to Amended and Restated Loan Agreement dated as of May 1, 2000 (the
"Amendment").
EXECUTE AMENDMENT. To execute and deliver to Bank the Amendment and related
documents, and also to execute and deliver to Bank one or more renewals,
extensions, modifications, consolidations, or substitutions therefor.
GRANT SECURITY. To grant a security interest to Bank in the Collateral
described in the Amendment, which security interest shall secure all of the
Corporation's Obligations, as described in the Amendment.
NEGOTIATE ITEMS. To draw, endorse, and discount with Bank all drafts, trade
acceptances, promissory notes, or other evidences of indebtedness payable to or
belonging to the Corporation or in which the Corporation may have an interest,
and either to receive cash for the same or to cause such proceeds to be credited
to the account of the Corporation with Bank, or to cause such other disposition
of the proceeds derived therefrom as they may deem advisable.
FURTHER ACTS. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any
6
and all fees and costs, and to execute and deliver such other documents and
agreements as they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set forth opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.
I FURTHER CERTIFY that attached hereto are true and correct copies of the
Certificate of Incorporation and Bylaws of the Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand on May 1, 2000 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X
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