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
1
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
3
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
4
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
5
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
--------------------------------------------
================================================================================
7
AMENDED AND RESTATED
GENERAL SECURITY AGREEMENT
THIS AMENDED AND RESTATED GENERAL SECURITY AGREEMENT is executed as of
September 8, 1998 (this "Restated Security Agreement"), by CROSSROUTE SOFTWARE,
INC., a California corporation (hereinafter called "Grantor"), in favor of
IMPERIAL BANK (hereinafter called "Bank") and amends, restates and supersedes in
its entirety that certain General Security Agreement dated as of October 6, 1997
executed by Grantor in favor of Bank ("Prior General Security Agreement").
In consideration of financial accommodations given, to be given or
continued, Grantor hereby grants to Bank a security interest in (a) all property
(i) delivered to Bank by Grantor, (ii) which shall be in Bank's possession or
control in any matter or for any purpose, (iii) described below or (iv) now
owned or hereafter acquired by Grantor of the type or class described below
and/or in any exhibit or supplementary schedule hereto, or in any financing
statement filed by Bank and executed by or on behalf of Grantor; and (b) the
proceeds, increase and products of such property, all accessions thereto, and
all property which Grantor may receive on account of such collateral
(collectively referred to as "Collateral") to secure payment and performance of
all of Grantor's present or future debts or obligations to Bank, whether
absolute or contingent (hereafter referred to as "Debt"). See Exhibit A attached
hereto and incorporated herein by this reference for a description of the
Collateral. The Collateral which is not in Bank's possession will be located at
the locations set forth on Exhibit B attached hereto and incorporated herein by
this reference. Unless otherwise defined herein, initially capitalized terms
used herein shall have the meanings given them (A) in the California Uniform
Commercial Code, (B) as defined in that certain Amended and Restated Loan
Agreement dated as of the date hereof entered into by and among Grantor and Bank
(as the same may be modified, amended, supplemented, restated or superceded from
time to time, the "Restated Loan Agreement") or (C) as defined in Exhibit A
attached hereto.
Grantor hereby represents, warrants and agrees:
1. Grantor will immediately pay (a) any Debt when due, (b) Bank's costs
of collecting the Debt, of protecting, insuring or realizing on Collateral, and
any expenditure of Bank referenced herein, including, without limitation,
attorneys' fees and expenses (incurred in connection with Bank's collection of
the Debt upon the occurrence and continuance of an Event of Default), with
interest at the rate of twenty-four percent (24%) per year, or the rate
applicable to the Debt, whichever is less, from the date of expenditure, and (c)
any deficiency after realization of Collateral.
2. Grantor will use the proceeds of any loan that becomes Debt hereunder
for the purpose indicated on the application therefor, and will promptly
contract to purchase and pay the purchase price of any property which becomes
Collateral hereunder from the proceeds of any loan made for that purpose.
3. As to all Collateral in Grantor's possession or the possession of its
contract manufacturers (unless specifically otherwise agreed to by Bank in
writing), Grantor will:
(a) Have or has possession of the Collateral at the location disclosed
to Bank and will not remove the Collateral from said location, except for sales
in the ordinary course of Borrower's business.
(b) Keep the Collateral separate and identifiable.
(c) Maintain the Collateral in good and saleable condition, repair it
if necessary and otherwise deal with the Collateral in all such ways as are
considered good practice by owners of like property, use it lawfully and only as
permitted by insurance policies, and permit Bank to inspect the Collateral at
any reasonable time in accordance with the terms of the Restated Loan Agreement.
1
(d) Not sell, contract to sell, lease, encumber or transfer the
Collateral (other than the disposition of such inventory Collateral in the
ordinary course of Borrower's business and other assets which are obsolete or
otherwise considered surplus)until the Debt has been paid or performed in full,
even though Bank has a security interest in the proceeds of such Collateral.
4. As to Collateral which is inventory and accounts, Grantor:
(a) May, until notice from Bank after the occurrence and during the
continuance of an Event of Default, sell, lease or otherwise dispose of
inventory Collateral in the ordinary course of business only, and collect the
cash proceeds thereof.
(b) Will, upon notice from Bank after the occurrence and during the
continuance of an Event of Default, deposit all cash proceeds as received in a
demand deposit account with Bank, containing only such proceeds and deliver
statements identifying units of inventory disposed of, accounts which gave rise
to proceeds, and all acquisitions and returns of inventory as required by Bank.
(c) Will receive in trust after the occurrence and during the
continuance of an Event of Default, schedule on forms satisfactory to Bank and,
upon notice from Bank, deliver to Bank all non-cash proceeds other than
inventory received in trade.
(d) So long as there does not exist an Event of Default, may obtain
release of Bank's interest in individual units of inventory upon request
therefore, payment to Bank of the release price of such units shown on any
Collateral schedule supplementary hereto, and compliance herewith as to proceeds
thereof.
5. As to Collateral which are Accounts, Chattel Paper, General
Intangibles and Proceeds described in Section 4(c) above, Grantor warrants,
represents and agrees:
(a) All such Collateral is genuine, enforceable in accordance with its
terms and conditions precedent (except as disclosed to and accepted by Bank in
writing), and is supported by consecutively numbered invoices to, or rights
against, the debtors thereon. Grantor will supply Bank with duplicate invoices
or other evidence of Grantor's rights on Bank's request.
(b) All persons appearing to be obligated on such Collateral have
authority and capacity to contract.
(c) All Chattel Paper is in compliance with applicable law as to form,
content and manner of preparation and execution and has been properly
registered, recorded, and/or filed to protect Grantor's interest thereunder.
(d) If an account debtor shall also be indebted to Grantor on another
obligation, any payment made by such account debtor not specifically designated
to be applied on any particular obligation shall be considered to be a payment
on the account in which Bank has a security interest. Should any remittance
include a payment not on an account, it shall be delivered to Bank and, if no
Event of Default has occurred, Bank shall pay Grantor the amount of such
payment.
(e) Grantor agrees that following the occurrence and during the
continuance of an Event of Default, Grantor shall not compromise, settle or
adjust any Account or renew or extend the time of payment thereof without Bank's
prior written consent.
(f) Until Bank exercises its rights to collect the Accounts pursuant
to Section 11 hereof, Grantor will collect with diligence all Grantor's
Accounts. Any collection of Accounts by Grantor, whether in the form of cash,
checks, notes, or other instruments for the payment of money (properly endorsed
or assigned where
2
required to enable Bank to collect same), shall be in trust for Bank. If an
Event of Default has occurred and is continuing, Grantor shall keep all such
collections separate and apart from all other funds and property so as to be
capable of identification as the property of Bank and deliver said collections
daily to Bank in the identical form received. The proceeds of such collections
when received by Bank may be applied by Bank directly to the payment of the
applicable Loan Account or to any other obligation secured hereby. Any credit
given by Bank upon receipt of said proceeds shall be conditional credit subject
to collection. Returned items at Bank's option may be charged to Grantor's
deposit account with Bank. All collections of the Accounts shall be set forth on
an itemized schedule, showing the name of the account debtor, the amount of each
payment and such other information as Bank may request.
(g) Until Bank exercises its rights to collect the Accounts pursuant
to Section 11 hereof, Grantor may continue its present policies with respect to
returned merchandise and adjustments. However, Grantor shall immediately notify
Bank of all cases involving repossessions, and material loss or damage of or to
merchandise represented by the Accounts.
6. Grantor owns all of the Collateral absolutely and no other person has
or claims any interest in any of the Collateral, except for Permitted Liens and
as disclosed to and accepted by Bank in writing. Grantor will defend any
proceeding that may affect title to or Bank's security interest in any of the
Collateral, and will indemnify and hold Bank free and harmless from all costs
and expenses of Bank's defense.
7. Grantor will pay when due all existing or future charges, liens or
encumbrances on and all taxes and assessments (except for taxes not yet due and
payable or which are contested in good faith and for which Grantor has set aside
adequate reserves) now or hereafter imposed on or affecting the Collateral and,
if the Collateral is in Grantor's possession, the realty on which the Collateral
is located.
8. Grantor will insure the Collateral with Bank as loss payee in form and
amounts with companies, and against risks and liability satisfactory to Bank (to
the extent customarily maintained by businesses similar to Borrower's), and
hereby assigns such policies to Bank, agrees to deliver them to Bank at Banks
request, and authorizes Bank to make any claim thereunder, to cancel the
insurance upon Grantor's default, and to receive payment of and endorse any
instrument in payment of any loss or return premium. If Grantor should fail to
deliver the required insurance policy or policies to Bank, Bank may, at
Grantor's cost and expense, without any duty to do so, get and pay for insurance
naming as the insured, at Bank's option, either both Grantor and Bank, or only
Bank, and the cost thereof shall be secured by this Restated Security Agreement,
and shall be repayable as provided in Section 1 above.
9. Grantor will give Bank any information it reasonably requires in
accordance with the terms of the Loan Documents. All information at any time
supplied to Bank by Grantor (including, but not limited to, the value and
condition of Collateral, financial statements, financing statements, and
statements made in documentary Collateral) is correct and complete, and Grantor
will notify Bank of any adverse change in such information. Grantor will
promptly notify Bank of any change of Grantor's residence, chief executive
office or mailing address.
10. At any time and from time to time, upon the written request of Bank,
and at the sole expense of Grantor, Grantor shall promptly and duly execute and
deliver any and all such further instruments and documents and take such further
action as Bank may reasonably deem desirable to obtain the full benefits of this
Restated Security Agreement and of the rights and powers herein granted,
including, without limitation, (a) using its best efforts to secure all consents
and approvals necessary or appropriate for the grant of a security interest to
Bank in any Contract or License held by Grantor or in which Grantor has any
rights not heretofore assigned, (b) filing any financing or continuation
statements under the UCC with respect to the security interests granted hereby,
(c) filing or cooperating with Bank in filing any forms or other documents
required to be filed with the United States Patent and Trademark Office, United
States Copyright Office, or any filings in any foreign jurisdiction or under any
international treaty, required to secure or protect Bank's interest in the
Collateral, (d) transferring Collateral to
3
Bank's possession (if a security interest in such Collateral can be perfected by
possession), (e) placing the interest of Bank as lienholder on the certificate
of title (or other evidence of ownership) of any vehicle owned by Grantor or in
or with respect to which Grantor holds a beneficial interest and (f) using its
best efforts to obtain waivers of liens from landlords and mortgagees. Grantor
also hereby authorizes Bank to file any such financing or continuation statement
without the signature of Grantor. If any amount payable under or in connection
with any of the Collateral is or shall become evidenced by any Instrument, such
Instrument, other than checks and notes received in the ordinary course of
business, shall be duly endorsed in a manner satisfactory to Bank and delivered
to Bank promptly upon Grantor's receipt thereof.
11. Upon the occurrence and during the continuation of an Event of Default
Bank may, without prior notice to Grantor, collect the Collateral and may give
notice of assignment of Accounts to any and all account debtors and Grantor does
hereby make, constitute and appoint Bank its irrevocable, true and lawful
attorney-in-fact with power to do any act which Grantor is obligated hereby to
do, to exercise such rights as Grantor may exercise, to use such equipment as
Grantor might use, to enter Grantor's premises to give notice of Bank's security
interest, and to collect Collateral and proceeds and to execute and file in
Grantor's name any financing statements and amendments thereto required to
perfect Bank's security interest hereunder, all to protect and preserve the
Collateral and Bank's rights hereunder. Without limiting the generality of the
foregoing, after and during the continuance of an Event of Default, Bank may:
(a) Endorse the name of Grantor, collect and receive delivery or
payment of Instruments and Documents constituting Collateral.
(b) Demand, xxx for, give acquittances for, make extension agreements
with respect to or affecting Collateral, exchange it for other Collateral,
release persons liable thereon or take security for the payment thereof, and
compromise, prosecute or defend any action, claim, proceeding or other disputes
in connection therewith.
(c) Use or operate Collateral for the purpose of preserving Collateral
or its value and for preserving or liquidating Collateral.
12. Discharge of Grantor except for full payment, or any extension,
forbearance, change of rate of interest, or acceptance, release or substitution
of Collateral or any impairment or suspension of Bank's rights against Grantor,
or any transfer of Grantor's interest to another shall not affect the liability
of Grantor hereunder. Until the Debt shall have been paid or performed in full,
Bank's rights shall continue even if the Debt is deemed unenforceable. Grantor
hereby waives: (a) any right to require Bank to proceed against Grantor before
any other, or to pursue any other remedy; (b) presentment, protest and notice of
protest, demand and notice of nonpayment, demand or performance, notice of sale,
and advertisement of sale; (c) any right to the benefit of or to direct the
application of any Collateral until the Debt shall have been paid or performed
in full; and (d) any right of subrogation to Bank until the Debt shall have been
paid or performed in full.
13. After and during the continuance of an Event of Default, at Bank's
option, without demand or notice, all or any part of the Debt shall immediately
become due and payable. Bank shall have all rights given by law, and may sell,
in one or more sales, Collateral in any county where Bank has an office. Bank
may purchase at such sale. Sales for cash or on credit to a wholesaler, retailer
or user of the Collateral, or at public or private auction, are all to be
considered commercially reasonable. Bank may require Grantor to assemble the
Collateral and make it available to Bank at the entrance to the location where
the Collateral is stored, or at a place designated by Bank.
14. Bank's acceptance of partial or delinquent payments or the failure of
Bank to exercise any right or remedy shall not waive any obligation of Grantor
or right of Bank to modify this Restated Security Agreement, or waive any other
similar default.
4
15. Upon the transfer of all or any part of the Debt, Bank may transfer
all or any part of the Collateral. Bank may deliver all or any part of the
Collateral to any Grantor at any time. Any such transfer or delivery shall
discharge Bank from all liability and responsibility with respect to such
Collateral transferred or delivered. This Restated Security Agreement benefits
Bank's successors and assigns and binds Grantor's heirs, legatees, personal
representatives, successors and assigns. Time is of the essence. This Restated
Security Agreement, the other Loan Documents and the exhibit(s) attached hereto
contain the entire security agreement between Bank and Grantor. Grantor will
execute any additional agreements, assignments or documents reasonably required
by Bank to carry this Restated Security Agreement into effect.
16. If one or more Grantors sign this Restated Security Agreement, their
liability hereunder shall be joint and several. Any Grantor who is married
hereby agrees that recourse may be had against his or her separate property for
the Debt.
17. This Restated Security Agreement shall be governed by and construed in
accordance with the laws of the State of California, to the jurisdiction of
whose courts Grantor hereby agrees to submit. Grantor agrees that service of
process may be accomplished by any means authorized by California law. All words
used herein in the singular shall be considered to have been used in the plural
where the context and construction so require.
18. Grantor hereby acknowledges receiving a copy of this Restated Security
Agreement and waives all rights to receive from Bank a copy of any financing
statement or financing change statement filed, or any verification statement
received, at any time in respect of this Restated Security Agreement.
19. This Restated Security 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 Prior General Security Agreement is amended and
restated in full by the terms of this Restated Security Agreement and all
obligations outstanding under the Prior General Security Agreement are governed
by the terms of this Restated Security Agreement.
GRANTOR
CROSSROUTE SOFTWARE, INC.,
a California corporation
By: /s/ Xxxxx Xxxxxxxx
------------------
Xxxxx Xxxxxxxx
Vice President, Finance
5
EXHIBIT A
DESCRIPTION OF COLLATERAL
1. Collateral. The Collateral shall consist of all right, title and
interest of Grantor in, to and under all of the following, wherever located and
whether now owned or hereafter owned or acquired in which Grantor now has or
hereafter acquires any right or interest (collectively, the "Collateral"):
(a) All Accounts of Grantor;
(b) All Chattel Paper of Grantor;
(e) All Contracts of Grantor;
(d) All Deposit Accounts of Grantor;
(e) All Documents of Grantor;
(f) All Equipment of Grantor;
(g) All Fixtures of Grantor;
(h) All General Intangibles of Grantor;
(i) All Instruments of Grantor;
(j) All Inventory of Grantor;
(k) All Investment Property of Grantor;
(1) All Licenses of Grantor;
(m) All property of Grantor held by Bank or any other party for whom
Bank is acting as agent hereunder, including, without limitation, all property
of every description now or hereafter in the possession or custody of or in
transit to Bank or such other party for any purpose, including, without
limitation, safekeeping, collection or pledge, for the account of Grantor, or as
to which Grantor may have any right or power;
(n) All other goods and personal property of Grantor whether tangible
or intangible and whether now or hereafter owned or existing, leased, consigned
by or to, or acquired by, Grantor and wherever located;
(o) To the extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements for, and rents,
profits and products of each of the foregoing; and
(p) All Proceeds of the Intellectual Property of Grantor.
2. Defined Terms. Unless otherwise defined herein, the following terms
shall have the following meanings (such meanings being equally applicable to
both the singular and plural forms of the terms defined):
Exhibit A
Page 1 of 5
"Accounts" means any "account," as such term is defined in Section 9106 of
the UCC, now owned or hereafter acquired by Grantor or in which Grantor now
holds or hereafter acquires any interest and, in any event, shall include,
without limitation, all accounts receivable, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper,
Documents or Instruments) now owned or hereafter received or acquired by or
belonging or owing to Grantor (including, without limitation, under any trade
name, style or division thereof) whether arising out of goods sold or services
rendered by Grantor or from any other transaction, whether or not the same
involves the sale of goods or services by Grantor (including, without
limitation, any such obligation which may be characterized as an account or
contract right under the UCC) and all of Grantor's rights in, to and under all
purchase orders or receipts now owned or hereafter acquired by it for goods or
services, and all of Grantor's rights to any goods represented by any of the
foregoing (including, without limitation, unpaid seller's rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned, reclaimed
or repossessed goods), and all monies due or to become due to Grantor under all
purchase orders and contracts for the sale of goods or the performance of
services or both by Grantor (whether or not yet earned by performance on the
part of Grantor or in connection with any other transaction), now in existence
or hereafter occurring, including, without limitation, the right to receive the
proceeds of said purchase orders and contracts, and all collateral security and
guarantees of any kind given by any Person with respect to any of the foregoing.
"Chattel Paper" means any "chattel paper," as such term is defined in
Section 9105(1)(b) of the UCC, now owned or hereafter acquired by Grantor or in
which Grantor now holds or hereafter acquires an interest.
"Contracts" means all contracts, undertakings, franchise agreements or
other agreements (other than rights evidenced b3, Chattel Paper, Documents or
Instruments) in or under which Grantor may now or hereafter have any right,
title or interest, including, without limitation, any and all right, title and
interest of Grantor under any customer agreements, supply agreements,
distribution agreements, rebate agreements, processing agreements, warehousing
agreements or royalty agreements and shall include, without limitation, with
respect to an Account, any agreement relating to the terms of payment or the
terms of performance thereof.
"Copyright License" means all of the following now owned or hereafter
acquired by Grantor: any agreement granting any right in and to any Copyright or
Copyright registration (whether Grantor is the licensee or the licensor
thereunder), now owned or hereafter acquired by Grantor, including, without
limitation, licenses pursuant to which Grantor has obtained the exclusive right
to use a copyright owned by a third party.
"Copyrights" means all of the following now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires any interest: (a)
all copyrights, whether registered or unregistered, held pursuant to the laws of
the United States, any state thereof or of any other country or political
subdivision thereof; (b) registrations, applications and recordings in the
United States Copyright Office or in any similar office or agency of the United
States, any state thereof or any other country or political subdivision thereof;
(c) any continuations, renewals or extensions thereof; (d) any registrations to
be issued in any pending applications; (e) prior versions of works covered by a
copyright and all works based upon, derived from, or incorporating such works;
(f) income, royalties, damages, claims, and payments now and hereafter due and
payable with respect to copyrights including, without limitation, damages and
payments for past, present, or future infringement; (g) rights to xxx for past,
present and future infringements of copyright; and (h) any other rights
corresponding to any of the foregoing rights throughout the world.
"Deposit Account" means any "deposit account" as such term is defined in
Section 9105(e) of the UCC, and shall include, without limitation, any demand,
time, savings passbook or like account, now or hereafter maintained by or for
the benefit of Grantor, or in which Grantor now holds or hereafter acquires any
interest, with a bank, savings and loan association, credit union or like
organization (including Bank) and all funds and amounts therein, whether or not
restricted or designated for a particular purpose.
Exhibit A
Page 2 of 5
"Documents" means any "documents," as such term is defined in Section
9105(1)(f) of the UCC, now owned or hereafter acquired by Grantor or in which
Grantor now holds or hereafter acquires an interest.
"Equipment" means any "equipment," as such term is defined in Section
9109(2) of the UCC, now or hereafter owned or acquired by Grantor or in which
Grantor now holds or hereafter acquires an interest, and, in any event, shall
include, without limitation, all machinery, equipment, furnishings, vehicles,
computers and other electronic data-processing and any other office equipment of
any nature whatsoever, any and all additions, substitutions and replacements of
any of the foregoing, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto.
"Fixtures" means "fixtures," as such term is defined in Section 9313(1)(a)
of the UCC, now or hereafter owned or acquired by Grantor or in which Grantor
now holds or hereafter acquires any interest and, in any event, shall include,
without limitation, regardless of where located, all of the fixtures, systems,
machinery, apparatus, equipment and fittings of every kind and nature whatsoever
and all appurtenances and additions thereto and substitutions or replacements
thereof, now or hereafter attached or affixed to or constituting a part of, or
located in or upon, real property wherever located, including, without
limitation, all heating, electrical, mechanical, lighting, lifting, plumbing,
ventilating, air-conditioning and air cooling, refrigerating, food preparation,
incinerating and power, loading and unloading, communication, sprinkler and
other fire prevention and extinguishing, fixtures, systems, machinery, apparatus
and equipment, any signs, escalators, elevators, boilers or switchboards, and
all engines, motors, dynamos, machinery, pipes, pumps, tanks, conduits and ducts
constituting a part of any of the foregoing, together with all right, title, and
interest of Grantor in and to all extensions, improvements, betterments,
renewals, substitutes, and replacements of, and all additions and appurtenances
to any of the foregoing property, and all conversions of the security
constituted thereby, immediately upon any acquisition or release thereof or any
such conversion, as the case may be.
"General Intangibles" means any "general intangibles," as such term is
defined in Section 9106 of the UCC, now owned or hereafter acquired by Grantor
or in which Grantor now holds or hereafter acquires an interest, and, in any
event, shall include, without limitation, all right, title and interest which
Grantor may now or hereafter have in or under any Contract, interests in
partnerships, joint ventures and other business associations, licenses, permits,
goodwill, claims in or under insurance policies, including unearned premiums,
uncertificated securities, deposit accounts (including as defined in Section
9105(e) of the UCC), rights to receive tax refunds and other payments and rights
of indemnification; provided, however, that General Intangibles shall not
include the Intellectual Property.
"Instruments" means any "instrument," as such term is defined in Section
9105(1)(i) of the UCC now owned or hereafter acquired by Grantor or in which
Grantor now holds or hereafter acquires any interest, including, without
limitation, all notes, certificated securities, and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"Intellectual Property" means all intellectual property of any kind or
nature, including, without limitation, all Copyrights, Copyright Licenses,
Trademarks, Trademark Licenses, Patents, Patent Licenses, trade secrets,
customer lists, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, recipes,
experience, processes, models, drawings, materials and records.
"Inventory" means any "inventory," as such term is defined in Section
9109(4) of the UCC, wherever located, now or hereafter owned or acquired by
Grantor or in which Grantor now holds or hereafter acquires any interest and, in
any event, shall include, without limitation, all inventory, merchandise, goods
and other personal property which are held by or on behalf of Grantor for sale
or lease or are furnished or are to be furnished under a contract of service or
which constitute raw materials, work in process or materials used or consumed or
to be used
Exhibit A
Page 3 of 5
or consumed in Grantor's business, or the processing, packaging, promotion,
delivery or shipping of the same, and all finished goods, whether or not such
inventory is listed on any schedules, assignments or reports furnished to Bank
from time to time and whether or not the same is in transit or in the
constructive, actual or exclusive occupancy or possession of Grantor or is held
by Grantor or by others for Grantor's account, including, without limitation,
all goods covered by purchase orders and contracts with suppliers and all goods
billed and held by suppliers and all inventory which may be located on premises
of Grantor or of any carriers, forwarding agents, truckers, warehousemen,
vendors, selling agents or other Persons.
"Investment Property" means any "investment property" as such term is
defined in Section 9115(1)(t) of the UCC, now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires an interest,
including, without limitation, a security, whether certificated or
uncertificated, a security entitlement, a securities account, a commodity
contract or a commodity account.
"License" means any license of rights or interests now held or hereafter
acquired by Grantor or in which Grantor now holds or hereafter acquires an
interest, and any renewals or extensions thereof.
"Loan Account" shall have the meaning ascribed to it in the Restated Loan
Agreement.
"Loan Documents" shall have the meaning ascribed to it in the Restated Loan
Agreement.
"Patent License" means any written agreement granting any right with
respect to any invention on which a Patent is in existence, now owned or
hereafter acquired by Grantor or in which Grantor now holds or hereafter
acquires an interest.
"Patents" means all of the following now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires any interest: (a)
all letters patent of the United States or any other country, all registrations
and recordings thereof, and all applications for letters patent of the United
States or any other country or political subdivision thereof, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or political subdivision thereof;
(b) all reissues, continuations, continuations-in-part or extensions thereof;
(c) all xxxxx patents, divisionals, and patents of addition; and (d) all patents
to issue in any such applications.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, firm, joint stock company, estate,
entity or governmental agency.
"Proceeds" means "proceeds," as such term is defined in Section 9306(1) of
the UCC, and, in any event, shall include, without limitation, (a) any and all
Accounts, Chattel Paper, Instruments, cash or other forms of money or currency,
income, royalties or other proceeds, payable to Grantor from time to time in
respect of the Collateral or Grantor's Intellectual Property; (b) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to Grantor
from time to time with respect to any of the Collateral or Grantor's
Intellectual Property; (c) any and all payments (in any form whatsoever) made or
due and payable to Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral or Grantor's Intellectual Property by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority); (d) any claim of Grantor against third parties (i) for past, present
or future infringement of any Patent or Patent License, (ii) for past, present
or future infringement of any Copyright or Copyright License, or (iii) for past,
present or future infringement, dilution or misappropriation of any Trademark or
Trademark License or for injury to the goodwill associated with any Trademark,
Trademark registration or Trademark licensed under any Trademark License; (e)
all certificates, dividends, cash, Instruments and other property received or
distributed in respect of or in exchange for any Investment Property; and (f)
any
Exhibit A
Page 4 of 5
and all other amounts from time to time paid or payable under or in connection
with any of the Collateral, Grantor's Intellectual Property or any Contract.
"Trademark License" means any written agreement granting any right in and
to any Trademark or Trademark registration (whether Grantor is the licensee or
the licensor thereunder) now owned or hereafter acquired by Grantor or in which
Grantor now holds or hereafter acquires an interest.
"Trademarks" means any of the following now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires an interest: (a) any
and all trademarks, trade names, corporate names, company names, business names,
trade styles, service marks, logos, other source or business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and any applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or any other
country or any political subdivision thereof (the "Marks"); (b) any reissues,
extensions or renewals thereof; (c) the goodwill of the business symbolized by
or associated with Marks; (d) income, royalties, damages and payments now and
hereafter due and/or payable with respect to Marks, including, without
limitation, damages, claims and recoveries for past, present or future
infringement, misappropriation, or dilution; and (e) rights to xxx for past,
present and future infringements of Marks.
"UCC" means the Uniform Commercial Code as the same may, from time to time,
be in effect in the State of California; provided, however, in the event that,
by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Bank's security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of California, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes of definitions
related to such provisions.
Exhibit A
Page 5 of 5
EXHIBIT B
LOCATION OF COLLATERAL NOT IN BANK'S POSSESSION
1. 000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000.
2. Please add other address locations, if any. If none, please indicate "None"
below:
Exhibit B
COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND SECURITY AGREEMENT
THIS COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND SECURITY AGREEMENT is made
as of September 8, 1998 ("Security Agreement"), by and between CROSSROUTE
SOFTWARE, INC., a California corporation ("Debtor"), and IMPERIAL BANK ("Bank").
RECITALS
A. Bank has agreed to lend to Debtor certain funds (the "Loans"), and
Debtor desires to borrow such funds from Bank pursuant to the terms of an
Amended and Restated Loan Agreement dated of even date herewith (as the same may
be modified, amended, supplemented, restated or superceded from time to time,
collectively, the "Restated Loan Agreement"). Terms not defined herein shall
have the meanings ascribed to them in the Restated General Security Agreement.
B. In order to induce Bank to make the Loans, Debtor has agreed to assign
the Proceeds of certain intangible property to Bank for purposes of securing the
obligations of Debtor to Bank:
NOW, THEREFORE, the parties hereto agree as follows:
1. COLLATERAL ASSIGNMENT, PATENT MORTGAGE AND GRANT OF SECURITY INTEREST.
As collateral security for the prompt and complete payment and performance of
all of Debtor's present or future indebtedness, obligations and liabilities to
Bank, including, without limitation, such indebtedness, obligations and
liabilities under the Restated Loan Agreement and the other documents executed
in connection therewith (as the same may be modified, amended, supplemented,
restated or superceded from time to time, collectively, the "Loan Documents"),
Debtor hereby assigns, transfers, conveys and grants a security interest and
mortgage to Bank, as security, in and to all Proceeds (the "Collateral") of
Debtor's entire right, title and interest in, to and under the following, now or
hereafter existing, created, acquired or held by Debtor (the "Contingent
Collateral"):
(a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished and whether or not the same also
constitutes a trade secret, including, without limitation, those set forth on
Exhibit A attached hereto and incorporated herein by this reference
(collectively, the "Copyrights");
(b) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products;
(c) Any and all design rights which may be available to Debtor;
(d) All 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,
those set forth on Exhibit B attached hereto and incorporated herein by this
reference (collectively, the "Patents");
(e) 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 Debtor connected with and symbolized by
such trademarks, including, without limitation, those set forth on Exhibit C
attached hereto and incorporated herein by this reference (collectively, the
"Trademarks");
1
(f) Any and all claims for damages by way of past, present and future
infringement 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;
(g) All 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;
(h) All amendments, renewals and extensions of any of the Copyrights,
Patents or Trademarks;
(i) All 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; and
(j) If any state or federal court (including a bankruptcy court) holds
that a security interest in the Contingent Collateral is necessary for the Bank
to have a security interest in the above-described Proceeds (a "Holding"), the
Collateral shall also include the Contingent Collateral. Until such a Holding is
made, the parties agree that unless otherwise specified, all references
hereinafter made to the Collateral shall exclude the Contingent Collateral.
As used herein, "Proceeds" shall mean "proceeds," as such term is defined
in Section 9-306(1) of the UCC and, in any event, shall include, without
limitation, (a) any and all accounts, chattel paper, and instruments (as such
terms are defined in the UCC), cash, income, royalties, or other proceeds
payable to Debtor :from time to time in respect of the Collateral or Debtor's
Intellectual Property, (b) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Debtor from time to time with respect to any of
the Collateral or Debtor's Intellectual Property, (c) any and all payments (in
any form whatsoever) made or due and payable to Debtor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral or Debtor's Intellectual
Property by any governmental body, authority, bureau or agency (or any person
acting under color of governmental authority), (d) any damages or settlements
received by Debtor based on any claim of Debtor against third parties (i) for
past, present or future infringement of any Patent or Patent license, (ii) for
past, present or future infringement of any Copyright or Copyright license,
(iii) for past, present or future infringement, dilution or misappropriation of
any Trademark or Trademark license or for injury to the goodwill associated with
any Trademark, Trademark registration or Trademark licensed under any Trademark
license, (e) all certificates, dividends, cash, instruments (as such term is
defined in the UCC) and other property received or distributed in respect of or
in exchange for any investment property (as such term is defined in the UCC) and
(f) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral, Debtor's Intellectual Property or any
Contract.
THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE
CONSTRUED AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE ALL
OF DEBTOR'S PRESENT OR FUTURE INDEBTEDNESS, OBLIGATIONS AND LIABILITIES TO BANK,
INCLUDING, WITHOUT LIMITATION, SUCH INDEBTEDNESS, OBLIGATIONS AND LIABILITIES
UNDER THE RESTATED LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS.
2. AUTHORIZATION AND REQUEST. Debtor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this conditional assignment.
2
3. COVENANTS AND WARRANTIES. Debtor represents, warrants, covenants and
agrees as follows:
(a) Debtor is now the sole owner of the Collateral. With respect to
the Contingent Collateral, Debtor does not own the intellectual property rights
in any portion of the Debtor's software product that now or hereafter is
licensed from a third party ("Third Party Code"). Debtor has adequate license
rights to make the uses it makes of such Third Party Code, but does not have the
right to grant Bank ownership, use or distribution rights to such Third Party
Code;
(b) Performance of this Security Agreement does not conflict with or
result in a breach of any agreement to which Debtor is a party or by which
Debtor is bound;
(e) During the term of this Security Agreement, Debtor will not sell,
transfer, assign or otherwise encumber any interest in the Collateral. With
respect to the Contingent Collateral, unless otherwise provided in the Loan
Documents, Debtor retains the right to sell, transfer, license and assign rights
in its Intellectual Property, in the ordinary course of Debtor's business or as
approved by Debtor's Board of Directors;
(d) To its knowledge as of the date of this Security Agreement each of
the Patents is valid and enforceable, and there are no Patents, Trademarks or
Copyrights ("Intellectual Property") which have been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part of
the Intellectual Property violates the rights of any third party;
(e) Debtor shall promptly advise Bank of any new products or major new
releases of its software products that it makes generally available to its
customers (collectively, the "Releases") and of any patents that issue in the
name of Debtor or that are assigned to Debtor;
(f) Debtor shall use such efforts as its Board of Directors determines
appropriate to protect, defend and maintain the validity and enforceability of
the Intellectual Property and to detect infringements;
(g) Debtor shall promptly register the copyright to each new Release
with the U.S. Copyright Office;
(h) This Security Agreement creates, and in the case of after acquired
Collateral, this Security Agreement will create at the time Debtor first has
rights in such after acquired Collateral, in favor of Bank a valid and perfected
first priority security interest in the Collateral in the United States securing
the payment and performance of all present or future indebtedness, obligations
and liabilities of Debtor to Bank, including, without limitation, such
indebtedness, obligations and liabilities under the Restated Loan Agreement and
the other Loan Documents, upon making the filings referred to in Section 30)
below, subject only to Permitted Liens;
(i) To its knowledge as of the date of this Security Agreement, except
for, and upon, the filings with, as applicable, (1) the United States Patent and
Trademark office with respect to the Patents and Trademarks, (2) the Register of
Copyrights with respect to the Copyrights and (3) the UCC Division of the
California Secretary of State, necessary to perfect the security interests and
assignment created hereunder, and except as has been already made or obtained,
no authorization, approval or other action by, and no notice to or filing with,
any United States governmental authority or United States regulatory body is
required either (a) for the grant by Debtor of the security interest granted
hereby or for
3
the execution, delivery or performance of this Security Agreement by Debtor in
the United States or (b) for the perfection in the United States or the exercise
by Bank of its rights and remedies hereunder;
(j) All information heretofore, herein or hereafter supplied to Bank
by or on behalf of Debtor with respect to the Collateral is accurate and
complete in all material respects;
(k) Debtor shall not enter into any agreement that would materially
impair or conflict with Debtor's obligations hereunder without Bank's prior
written consent, which consent shall not be unreasonably withheld. Debtor shall
not permit the inclusion in any material contract to which it becomes a party of
any provisions that could or might in any way prevent the creation of a security
interest in Debtor's rights and interests in any property included within the
definition of the Collateral acquired under such contracts, except that certain
contracts may contain anti-assignment provisions that could in effect prohibit
the creation of a security interest in such contracts. The parties acknowledge
and agree that prior to a Holding, the security interest granted hereby only
grants Bank rights as to the Proceeds derived from the Contingent Collateral;
and
(l) Upon any executive officer of Debtor obtaining actual knowledge
thereof, Debtor will promptly notify Bank in writing of any event that
materially adversely affects the value of any Collateral, the ability of Debtor
to dispose of any Collateral or the rights and remedies of Bank in relation
thereto, including the levy of any legal process against any of the Collateral.
Debtor shall have no obligation to notify Bank of market changes that could
materially adversely affect the value of the Intellectual Property, including
but not limited to the introduction of competitive products.
4. BANK'S RIGHTS. Bank shall have the right, but not the obligation, to
take, at Debtor's sole expense, any actions that Debtor is required under this
Security Agreement to take but which Debtor fails to take, after fifteen (15)
days' notice to Debtor. Debtor shall reimburse and indemnify Bank for all
reasonable costs and reasonable expenses incurred in the reasonable exercise of
its rights under this Section 4.
5. INSPECTION RIGHTS. Debtor hereby grants to Bank and its employees,
representatives and agents the right to visit, during reasonable hours upon
prior reasonable written notice to Debtor, any of Debtor's plants and facilities
that manufacture, install or store products (or that have done so during the
prior six-month period) that are sold utilizing any of the Intellectual
Property, and to inspect the products and quality control records relating
thereto upon reasonable written notice to Debtor and as often as may be
reasonably requested.
6. FURTHER ASSURANCES; ATTORNEY IN FACT.
(a) On a continuing basis, Debtor will make, execute, acknowledge and
deliver, and file and record in the proper filing and recording places in the
United States, all such instruments, including appropriate financing and
continuation statements and collateral agreements and filings with the United
States Patent and Trademark Office and the Register of Copyrights, and take all
such action as may reasonably be necessary or advisable, or as reasonably
requested by Bank, to perfect Bank's security interest in the Collateral, and
otherwise to carry out the intent and purposes of this Security Agreement, or
for assuring and confirming to Bank the grant or perfection of a security
interest in all Collateral.
(b) Debtor hereby irrevocably appoints Bank as Debtor's attorney-in-
fact, with full authority in the place and stead of Debtor and in the name of
Debtor, from time to time in Bank's discretion, to take any action and to
execute any instrument which Bank may reasonably deem necessary or advisable to
accomplish the purposes of this Security Agreement, including (i) to modify, in
its reasonable discretion, this Security Agreement without first obtaining
Debtor's approval of or signature to such modification by amending Exhibit A,
Exhibit B or Exhibit C hereof, as appropriate, to include
4
reference to any material right, title or interest in any Intellectual Property
acquired by Debtor after the execution hereof or to delete any reference to any
right, title or interest in any Intellectual Property in which Debtor no longer
has or claims any right, title or interest, (ii) to file, in its reasonable
discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of Debtor where
permitted by law and (iii) after the occurrence and during the continuance of an
Event of Default, to transfer the Collateral into the name of Bank or a third
party to the extent permitted under the California Uniform Commercial Code. Bank
will not have the right to transfer the Intellectual Property into the name of
Bank or a third party except after a Holding.
7. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Security Agreement:
(a) An Event of Default occurs under the Restated Loan Agreement or
any of the other Loan Documents; or
(b) Debtor breaches any warranty or agreement in any material respect
made by Debtor in this Security Agreement and, as to any breach that is capable
of cure, Debtor fails to cure such breach within fifteen (15) days of the
occurrence of such breach if notice thereof has been given to Debtor.
8. REMEDIES. Upon the occurrence and during the continuance of an Event
of Default, Bank shall have the right to exercise all the remedies of a secured
party under the California Uniform Commercial Code, including, without
limitation, the right to require Debtor to assemble the collateral and any
tangible property in which Bank has a security interest and to make it available
to Bank at a place designated by Bank. Upon the occurrence and during the
continuance of an Event of Default, Bank shall have a nonexclusive, royalty free
license to use the Copyrights, Patents and Trademarks, to the extent reasonably
necessary to permit Bank to exercise its rights and remedies with respect to the
Collateral and, after a Holding, the Contingent Collateral. The rights of Bank
hereunder are limited to those necessary to permit Bank to exercise its rights
and remedies with respect to the Collateral and Bank will only have the right to
use or transfer the Intellectual Property or the Releases after a Holding.
Debtor will pay any expenses (including reasonable attorneys' fees) incurred by
Bank in connection with the exercise of any of Bank's rights hereunder,
including, without limitation, any expense incurred in disposing of the
Collateral. All of Bank's rights and remedies with respect to the Collateral
shall be cumulative.
9. INDEMNITY. Debtor agrees to defend, indemnify and hold harmless Bank
and its officers, employees, and agents against: (a) all obligations, demands,
claims, and liabilities claimed or asserted by any other party in connection
with the transactions contemplated by this Security Agreement and (b) all losses
or expenses in any way suffered, incurred, or paid by Bank as a result of or in
any way arising out of or following any transactions between Bank and Debtor,
whether under this Security Agreement or otherwise (including, without
limitation, reasonable attorneys' fees and reasonable expenses), except for
losses arising from or out of Bank's negligence or willful misconduct.
10. REASSIGNMENT. At such time as Debtor shall completely satisfy all of
the obligations secured hereunder, Bank shall execute and deliver to Debtor all
deeds, assignments and other instruments as may be necessary or proper to revest
in Debtor full title to the property assigned hereunder, subject to any
disposition thereof which may have been made by Bank pursuant hereto.
11. NO FAILURE OR DELAY. 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.
5
12. ATTORNEYS' FEES. If any action relating to this Security Agreement is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys' fees, costs and
disbursements.
13. AMENDMENTS. This Security Agreement may be amended only by a written
instrument signed by both parties hereto.
14. COUNTERPARTS. This Security 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 Security 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 Debtor and
Bank.
15. JUDICIAL REFERENCE. The terms and provisions of Section 15.B. of the
Restated Loan Agreement is incorporated herein by this reference and made a part
hereof.
16. GOVERNING LAW; JURISDICTION; JURY WAIVER. This Security Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of California, without regard to principles of conflicts of law. Debtor
and Bank consent to the exclusive jurisdiction of any state or federal court
located in Santa Xxxxx County, California. DEBTOR AND BANK EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS SECURITY AGREEMENT AND ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
17. CONFLICT. In the event of a conflict between any term and/or provision
contained in this Security Agreement with any term and/or provision contained in
the Restated Security Agreement, the term and/or provision of this Security
Agreement shall govern.
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement on the day and year first above written.
BANK DEBTOR
IMPERIAL BANK CROSSROUTE SOFTWARE, INC.
a California corporation
By: By:/s/ Xxxxx Xxxxxxxx
---------------------------- ------------------------------
Xxxxxx X. Xxxxx Xxxxx Xxxxxxxx
Assistant Vice President Vice President, Finance
Address of Bank Address of Debtor
--------------- -----------------
000 Xxxxxxx Xxxxxxx 000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000 Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention:
-----------------------
with a copy to:
---------------
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
6
EXHIBIT A
COPYRIGHTS
1. REGISTERED: List titles below or indicate "None"
CrossRoute Alliance/(TM)/
2. UNREGISTERED: List titles below or indicate "None"
None
3. APPLICATIONS IN PROCESS: List titles, applicable dates, application
numbers, etc. below or indicate "None"
None
Exhibit A
EXHIBIT B
U.S. PATENTS AND PATENT APPLICATIONS
(List titles below or indicate "None")
PATENT PENDING TITLE ISSUE FILING
NO. APPLICATION DATE DATE
NO.
-----------------------------------------------------------------------------------
PCT/US98/01403 System and Method For 1/23/98
-----------------------------------------------------------------------------------
Creating, Executing &
-----------------------------------------------------------------------------------
Maintaining Cross-Enterprise
Processes
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Exhibit B
EXHIBIT C
U.S. TRADEMARKS AND TRADEMARK APPLICATIONS
(List marks below or indicate "None")
PATENT PENDING XXXX REGISTRATION FILING
NO. APPLICATION DATE DATE
NO.
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75/125625 CrossRoute Software 7/16/98
-----------------------------------------------------------------------------
75/265882 CrossRoute Alliance 12/19/97
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UNREGISTERED TRADEMARKS: List marks below or indicate "None."
-----------------------
Exhibit C
