Exhibit 4(a)
SILICON VALLEY BANK
QUICKSTART LOAN AND SECURITY AGREEMENT
Borrower: Sandbox Entertainment Corporation Address: 0000 Xxxx Xxxxxxxxx Xxxx
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Suite 324
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Date: September 5, 1996 Xxxxxxx, XX 00000
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THIS LOAN AND SECURITY AGREEMENT is entered into on above date between SILICON
VALLEY BANK ("Silicon"), whose address is 000 Xxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxxxx 00000 and the borrower named above (jointly and severally, the
"Borrower"), whose chief executive office is located at the above address
("Borrower's Address').
1. Loans. Silicon will make loans to Borrower (the "Loans") in amounts
determined by Silicon in its reasonable business judgment up to the amount (the
"Credit Limit") shown on the Schedule to this Agreement (the "Schedule"),
provided to Event of Default and no event which, win notice or passage of time
or both, would constitute an Event of Default has occurred. All Loans and other
monetary Obligations will bear interest at the rate shown on the Schedule.
Interest will be payable monthly, on the date shown on the monthly billing from
Silicon. Silicon may, in its discretion, charge interest to Borrower's deposit
accounts maintained with Silicon.
2. Security Interest. As security for all present and future indebtedness,
guarantees, liabilities, and other obligations, of Borrower to Silicon
(collectively, the "Obligations'), Borrower hereby grants Silicon a continuing
security interest in all of Borrower's interest in the following types of
property, whether now owned or hereafter acquired, and wherever located (collec
-tively, the "Collateral"): All "accounts," "general intangibles," "chattel
paper," "documents," "letters of credit," "instruments," "deposit accounts,"
"inventory," "farm products," "fixtures" and "equipment," as such terms are
defined in Division 9 of the California Uniform Commercial Code in effect on the
date hereof, and all products, proceeds and insurance proceeds of the foregoing.
3. Representations And Agreements of Borrower. Borrower represents to Silicon as
follows, and Borrower agrees that the following representations will continue to
be true, and that Borrower will comply with all of the following agreements
throughout the term of this Agreement.
3.1 Corporate Existence and Authority. Borrower, if a corporation, is and
will continue to be, duly authorized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The execution, delivery
and performance by Borrower of this Agreement and all other documents
contemplated hereby have been duly and validly authorized, and do not violate
any law or any provision of, and are not grounds for acceleration under, any
agreement of instrument which is binding upon Borrower.
3.2 Name; Places of Business. The name of Borrower set forth in this
Agreement is its correct name. Borrower shall give Silicon 15 days' prior
written notice before changing its name. The address set forth in the heading to
this Agreement is Borrower's chief executive office. In addition, Borrower has
places of business and Collateral is located only at the locations set forth on
the Schedule. Borrower will give Silicon at least 15 days prior written notice
before changing its chief executive office or locating the Collateral at any
other location.
3.3 Collateral. Silicon has and will at all times continue to have a
first-priority perfected security interest in all of the Collateral. Borrower
will immediately advise Silicon in writing of any material loss or damage to the
Collateral.
3.4 Financial Condition and Statements. All financial statements now or in
the future delivered to Silicon have been, and will be, prepared in conformity
with generally accepted accounting principles. Since the last date covered by
any such statement, there has been no material adverse change in the financial
condition or business of Borrower. Borrower will provide Silicon: (i) within 30
days after the end of each month, a monthly financial statement prepared by
Borrower, and such other information as Silicon shall reasonably request; (ii)
within 120 days following the end of Borrower's fiscal year, complete annual
financial statements, certified by independent certified public accountants
acceptable to Silicon and accompanied by the unqualified report thereon by said
independent certified public accountants; and (iii) other financial information
reasonably requested by Silicon from time to time.
3.5 Taxes; Compliance with Law. Borrower has filed, and will file, when
due, all tax returns and reports required by applicable law, and Borrower has
paid, and will pay, when due, all taxes,
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assessments, deposits and contributions now or in the future owned by Borrower.
Borrower has complied, and will comply, in all material respects, with all
applicable laws, rules and regulations.
3.6 Insurance. Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance as is
customary in Borrower's industry.
3.7 Access to Collateral and Books and Records. At reasonable times, on
one business day notice, Silicon, or its agents, shall have the right to inspect
the Collateral, and the right to audit and copy Borrower's books and records.
3.8 Additional Agreements. Borrower shall not, without Silicon's prior
written consent, do any of the following: (i) enter into any transactions
outside the ordinary course of business; (ii) sell or transfer any Collateral,
except for the sale of finished inventory in the ordinary course of Borrower's
business, and the sale of obsolete or unneeded equipment in the primary course
of business, (iii) grant a security interest in intellectual property to any
third party (excluding Borrower's venture investors); (iv) pay or declare any
dividends on Borrower's stock (except for dividends payable solely in stock of
Borrower); or (v) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Borrower's stock.
4. Term. This Agreement shall continue in effect until the maturity date set
forth on the Schedule (the "Maturity Date"). This Agreement may be terminated,
without penalty, prior to the Maturity Date as follows: (i) by Borrower,
effective three business days after written notice of termination is given to
Silicon; or (ii) by Silicon at any time after the occurrence of an Event of
Default, without notice, effective immediately. On the Maturity Date or on any
earlier effective date of termination. Borrower shall pay all Obligations in
full, whether or not such Obligations are otherwise then due and payable. No
termination shall in any way affect or impair any security interest or other
right or remedy of Silicon, nor shall any such termination relieve Borrower of
any Obligation to Silicon, until all of the Obligations have been paid and
performed in full.
5. Events of Default and Remedies. The occurrence of any of the following events
shall constitute an "Event of Default" under this Agreement (a) Any
representation, statement, report or certificate given to Silicon by Borrower or
any of its officers, employees or agents, now or in the future, in untrue or
misleading in a material respect; or (b) Borrower fails to pay when due any Loan
or any interest thereon or any other monetary Obligation; or (c) the total
Obligations outstanding at any time exceed the Credit Limit; or (d) Borrower
fails to perform any other non-monetary Obligation, which failure is not cured
within 5 business days after the date due; or (e) Dissolution, termination of
existence, insolvency or business failure of Borrower; or appointment of a
receiver, trustee or custodian, for all or any part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceeding by or against Borrower under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or in the future in effect; or (f) a material
change in the ownership of Borrower "resulting in change of control", without
the prior written consent of Silicon; or (g) a material adverse change in the
business, operations, or financial or other condition of Borrower. If an Event
of Default occurs, Silicon, shall have the right to accelerate and declare all
of the Obligations to be immediately due and payable, increase the interest rate
by an additional four percent per annum, and exercise all rights and remedies
accorded it by applicable law.
6. General. If any provision of this Agreement is held to be unenforceable, the
remainder of this Agreement shall still continue in full force and effect. This
Agreement and any other written agreements, documents and instruments executed
in connection herewith are the complete agreement between Borrower and Silicon
and supersede all prior and contemporaneous negotiations and oral
representations and agreements, all of which are merged and integrated in this
Agreement. There are no oral understandings, representations or agreements
between the parties which are not in this Agreement or in other written
agreements signed by the parties in connection this Agreement. The failure of
Silicon at any time to require Borrower to comply strictly with any of the
provisions of this Agreement shall not waive Silicon's right later to demand and
receive strict compliance. Any waiver of a default shall not waive any other
default. None of the provisions of this Agreement may be waived except by a
specific written waiver signed by an officer of Silicon and delivered to
Borrower. The provisions of this Agreement may not be amended, except in a
writing signed by Borrower and Silicon. Borrower shall reimburse Silicon for all
reasonable attorneys' fees and all other reasonable costs incurred by Silicon,
in connection with this Agreement (whether or not a lawsuit is filed). If
Silicon or Borrower files any lawsuit against the other predicated on a breach
of this Agreement, the prevailing party shall be entitled to recover its
reasonable costs and attorneys' fees from the non-prevailing party. Borrower may
not assign any rights under this Agreement without Silicon's prior written
consent. This Agree ment shall be governed by the laws of the State of
California.
7. Manual Waiver of Jury Trial. BORROWER AND SILICON EACH HEREBY WAIVE THE RIGHT
TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN
ANY WAY RELATING TO, THIS AGREEMENT OR ANY CONDUCT, ACT OR OMISSION OF SILICON
OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR
AFFILIATES.
Borrower:
Sandbox Entertainment Corp.
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By /s/ Xxxx X. Xxxxxx
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SILICON VALLEY BANK
By: /s/ Xxxxx X. Xxxxxx
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Title Assistant Vice President
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SILICON VALLEY BANK
Schedule to
QuickStart Loan and Security Agreement (Master)
BORROWER: Sandbox Entertainment Corporation
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DATE: September 5, 1996
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This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
Credit Limit (Aggregate)
(Section 1): $4,000,000 (includes Equipment Advances, if any)
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Interest Rate (Section 1) A rate equal to the "Prime Rate" in effect from
time to time, plus 1.5% per annum. Interest
shall be calculated on the basis of a 360-day
year for the actual number of days elapsed.
'Prime Rate" means the rate announced from time
to time by Silicon as its "prime rate;" it is a
base rate upon which other rates charged by
Silicon are based, and it is not necessarily the
best rate available at Silicon. The interest
rate applicable to the Obligations shall change
on each date there is a change in the Prime
Rate.
Maturity Dates (Section 4): March 5, 1998
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Other Locations and Addresses
(Section 3.2): --------------------
Other Agreements: Borrower also agrees as follows:
1. Loan Fee. Borrower shall concurrently pay
silicon a non-refundable Loan Fee in the amount
of $3,000
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2. Banking Relationship. Borrower shall at all
times maintain its primary banking relationship
with Silicon.
Borrower: Silicon:
Sandbox Entertainment Corp. SILICON VALLEY BANK
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By /s/ Xxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxxx
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President or Vice President Title Assistant Vice President
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SILICON VALLEY BANK
Schedule to
QuickStart Loan and Security Agreement (Equipment Advances)
BORROWER: Sandbox Entertainment Corporation
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DATE: September 5, 1996
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This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
Credit Limit (Equipment)
(Section 1): $4,000,000. Equipment Advances will be made only
on or prior to March 5, 1997 (the "Last Advance
Date") and only for the purpose of purchasing
equipment reasonably acceptable to Silicon.
Borrower must provide invoices for the equipment
to Silicon on or before the Last Advance Date.
Interest Rate (Section 1) A rate equal to the "Prime Rate" in effect from
time to time, plus 1.5% per annum. Interest
shall be calculated on the basis of a 360-day
year for the actual number of days elapsed.
'Prime Rate" means the rate announced from time
to time by Silicon as its "prime rate;" it is a
base rate upon which other rates charged by
Silicon are based, and it is not necessarily the
best rate available at Silicon. The interest
rate applicable to the Obligations shall change
on each date there is a change in the Prime
Rate.
Maturity Dates (Section 4): After the Last Advance Date, the unpaid
principal balance of the equipment Advances
shall be repaid in 24 equal monthly installments
of principal commencing on April 5, 1997 and
continuing on the same day of each month
thereafter until the entire unpaid principal
balance of the Equipment Advances has been paid
(subject to Silicon's right to accelerate the
Equipment Advances on an Event of Default).
Borrower: Silicon:
Sandbox Entertainment Corp. SILICON VALLEY BANK
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By /s/ Xxxx X. Xxxxxx By /s/ Xxxxx X. Xxxxxx
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President or Vice President Title Assistant Vice President
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Approved by The Secretary of State of Arizona REV 10/90 FORM UCC-1
Space below used by filing office.
replaced California
UCC's
Return copy of recorded original to:
SILICON VALLEY BANK
0000 XXXXXX XXXXX/XX000
XXXXX XXXXX, XX 00000
ARIZONA UNIFORM COMMERCIAL CODE
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FINANCING STATEMENT - FORM UCC-1
This FINANCING STATEMENT is presented for filing
(recording) pursuant to the Arizona Uniform
Commercial Code.
1. Debtor(s) (last name first and address):
SANDBOX ENTERTAINMENT CORPORATION
0000 Xxxx Xxxxxxxxx Xxxx, Xxx. 000
Xxxxxxx, XX 00000
2. Secured Party(ies) and address:
SILICON VALLEY BANK
0000 XXXXXX XXXXX/XX000
XXXXX XXXXX, XX 00000
3. Name and Address of Assignee of Secured
Party(ies):
4. XX If checked, products of collateral are
also covered.
5. This Financing Statement covers the following
types (or items) of property:
SEE EXHIBIT "A" ATTACHED HERETO AND MADE
A PART HEREOF.
6. If the collateral is crops, the crops are
growing or to be grown on the following
described real estate:
7. If the collateral is (a) goods which are or are to become fixtures: (b)
timber to be cut; or (c) minerals or the like (including oil and gas),
or accounts resulting from the sale thereof at the wellhead or minehead
to which the security interest attaches upon extraction, the legal
description of the real estate concerned is:
And, this Financing Statement is to be recorded in the office where a
mortgage on such real estate would be recorded. If the Debtor does not
have an interest of record, the name of a record owner is:
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8. This Financing Statement is signed by the Secured Party instead of the
debtor to perfect or continue perfection of a security interest in:
|_| collateral already subject to a security interest in
jurisdiction when it was brought in to this state.
|_| proceeds of collateral because of a change in type
or use.
|_| collateral as to which the filing has lapsed or will lapse.
|_| collateral acquired after a change of name, identity,
or corporate structure of the Debtor.
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SANDBOX ENTERTAINMENT CORPORATION
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/s/ Xxxx X. Xxxxxx
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SIGNATURE(S) OF DEBTOR(S) OR ASSIGNOR
(Use
whichever
is
applicable)
Dated:
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SILICON VALLEY BANK
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SIGNATURE OF SECURED PARTY OF ASSIGNEE
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This FINANCING STATEMENT is presented for filing and will remain effective, with
certain exceptions for five years from the date of filing, pursuant to Section
9403 of the California Uniform Commercial Code.
1. DEBTOR (Last Name First - If An Individual
Sandbox Entertainment Corporation 1A. Soc Sec No. or Id No.
1B. MAILING ADDRESS
0000 Xxxx Xxxxxxxxx Xxxx - Suite 324 1C. CITY, STATE 1D. ZIP CODE
2. ADDITIONAL DEBTOR (IF ANY)
Last Name First - If An Individual) 2A. Soc. Sec No. or Id No.
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
3. DEBTOR'S TRADE, NAMES OR STYLES (IF ANY) 2C. CITY, STATE 2D. ZIP CODE
4. SECURED PARTY
Name: SILICON VALLEY BANK
Mailing Address: 0000 Xxxxxx Xxxxx
Mail Sort NC661
Xxxxx Xxxxx, Xxxxxxxxxx 00000 4A. Soc Sec No. or Id No.
5. ASSIGNEE OF SECURED PARTY 5A. Soc Sec No. or Id No.
Name:
Mailing Address:
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record when
required by instruction 4).
Debtor hereby grants Secured Party a security interest in all of the following,
whether now owned or hereafter acquired, and wherever located, as collateral for
the payment and performance of all present and future indebtedness, liabilities,
guarantees and obligations of Debtor to Secured Party: All "accounts," "general
intangibles," "chattel paper," "documents," "letters of credit," "instruments,"
"deposit accounts," "inventory," "farm products," "fixtures" and "equipment," as
such terms are defined in Division 9 of the California Uniform Commercial Code
in effect on the date hereof, and all products, proceeds and insurance proceeds
of any or all of the foregoing.
7. CHECK IF APPLICABLE: X-PRODUCTS OF COLLATERAL ARE ALSO COVERED.
SIGNATURE(S) OF DEBTOR: DATE: C THIS SPACE FOR USE OF FILING OFFICER
O (DATE, TIME, FILE NUMBER AND FILING
By /s/ C. M. Little D OFFICER)
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Title President
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SIGNATURE(S) OF SECURED PARTY: 1
2
SILICON VALLEY BANK 3
4
By /s/ Xxxxx X. Xxxxxx 5
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Title Assistant Vice President 7
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9
RETURN COPY TO: 0
SILICON VALLEY BANK
0000 XXXXXX XXXXX
MAIL SORT NC 661
XXXXX XXXXX, XXXXXXXXXX 00000
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Debtor: SANDBOX ENTERTAINMENT CORPORATION
Security Party: SILICON VALLEY BANK
EXHIBIT "A"
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Debtor hereby grants Secured Party a security interest in all of the following,
whether now owned or hereafter acquired, and wherever located, as collateral for
the payment and performance of all present and future indebtedness, liabilities,
guarantees and obligations of Debtor to Secured Party: All "accounts," "general
intangibles," "chattel paper," "documents," "letters of credit," "instruments,"
"deposit accounts," "inventory," "farm products," "fixtures," and "equipment,'
as such terms are defined in the Uniform Commercial Code in effect on the date
hereof, and all products, proceeds and insurance process of any or all of the
foregoing.
