SILICON VALLEY BANK
LOAN AND SECURITY AGREEMENT
Borrower: Oregon Baking Company
Address: 0000 X.X. Xxxxxxxxxx
Xxxxxxxx, XX 00000
Date: October 28, 1997
THIS LOAN AND SECURITY AGREEMENT is entered into on the above date
between SILICON VALLEY BANK ("Silicon"), whose address is 0000 Xxxxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxxxxxx 00000 and the borrower named above (the "Borrower"),
whose chief executive office is located at the above address ("Borrower's
Address").
1. LOANS.
1.1. LOANS. Silicon will make one or more loans to the Borrower (the
"Loans") up to the amounts (the "Credit Limits") shown on the Schedule to this
Agreement (the "Schedule") as the Credit Limit for such loans. The terms of the
Loans are stated in this Agreement and in the Schedule. The terms of the
Schedule are incorporated into this Agreement. The Borrower is responsible for
monitoring the total amount of Loans and other Obligations outstanding from time
to time, and the Borrower shall not permit the amount of any Loan to exceed at
any time the applicable Credit Limit for such Loan. The Borrower shall not
permit the total amount of Loans and all other obligations to exceed at any time
the aggregate Credit Limit for the Loans. If at any time the total of all
outstanding Loans and all other Obligations exceeds the aggregate Credit Limit,
the Borrower shall immediately pay the amount of the excess to Silicon, without
notice or demand.
1.2. INTEREST; DEBIT TO DEPOSIT ACCOUNTS. All Loans and all other
monetary Obligations shall bear interest at the applicable rates shown on the
Schedule. Interest shall be payable monthly, on the due date shown on the
monthly billing from Silicon to the Borrower. The Borrower shall regularly
deposit all funds received from its business activities in accounts maintained
by the Borrower at Silicon. The Borrower hereby requests and authorizes Silicon
to debit any of the Borrower's accounts with Silicon, including without
limitation account no. _________, for payments of interest and principal due on
the Loans and all other obligations owing by the Borrower to Silicon. Silicon
shall promptly notify the Borrower of all debits which Silicon makes against the
Borrower's accounts. Any such debit against the Borrower's accounts shall in no
way be deemed a setoff by Silicon.
1.3. FEES. The Borrower shall pay to Silicon at closing a commitment
fee and other fees in the amounts shown on the Schedule. These fees are in
addition to all interest and other sums payable to Silicon and are not
refundable.
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1.4 ADDITIONAL COSTS. In case of any law, regulation, treaty or
official directive or the interpretation or application thereof by any court or
any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law) which:
(a) subjects Silicon to any tax with respect to payments of
principal or interest or any other amounts payable hereunder by the Borrower or
otherwise with respect to the transactions contemplated hereby (except for taxes
on the overall net income of Silicon imposed by the United States of America or
any political subdivision thereof);
(b) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by, or
deposits in or for the account of, or loans by, Silicon; or
(c) imposes upon Silicon any other condition with respect to its
performance under this Agreement,
and the result of any of the foregoing is to increase the cost to Silicon,
reduce the income receivable by Silicon or impose any expense upon Silicon with
respect to any loans, Silicon shall notify the Borrower thereof. Borrower agrees
to pay to Silicon the amount of such increase in cost, reduction in income or
additional expense as and when such cost, reduction or expense is incurred or
determined, upon presentation by Silicon of a statement of the amount and
setting forth Silicon's calculation thereof, all in reasonable detail, which
statement shall be deemed true and correct absent manifest error.
2. GRANT OF SECURITY INTEREST.
2.1. OBLIGATIONS. The term "Obligations" as used in this Agreement
means the following: the obligation to pay all Loans and all interest on the
Loans when due, and to pay and perform when due all other present and future
indebtedness, liabilities, obligations, guarantees, covenants, agreements,
warranties and representations of the Borrower to Silicon, whether joint or
several, monetary or non-monetary, and whether created pursuant to this
Agreement or any other present or future agreement (such as future agreements
relating to letters of credit issued by Silicon) or otherwise. Silicon may, in
its discretion, require that the Borrower pay monetary Obligations in cash to
Silicon, or charge them to the Borrower's Loan account, in which event they
shall bear interest at the rates applicable to the Loan to which such amounts
are charged.
2.2. COLLATERAL. As security for all Obligations, the Borrower hereby
grants Silicon a continuing security interest in all of the Borrower's assets,
including but not limited to all of the Borrower's interest in the types of
property described below, whether now owned or hereafter acquired, and wherever
located (collectively, the "Collateral"): (a) all accounts, contract rights,
chattel paper, letters of credit, documents, securities, money, and instruments,
and all other obligations now or in the future owing to the Borrower; (b) all
inventory, goods, merchandise, materials, raw materials, work in process,
finished goods, farm products, advertising, packaging and shipping materials,
supplies, and all other tangible personal property which is held for sale or
lease or furnished under contracts of service or consumed in the Borrower's
business, and all warehouse receipts and other documents; (c) all equipment,
including without limitation all machinery, fixtures, trade fixtures, vehicles,
furnishings, furniture, materials, tools, machine tools, office equipment,
computers and peripheral devices, appliances, apparatus, parts, dies, and jigs;
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(d) all general intangibles including, but not limited to, deposit accounts,
goodwill, names, trade names, trademarks and the goodwill of the business
symbolized thereby, trademark applications, trade secrets, drawings, blueprints,
customer lists, patents, patent applications, copyrights copyright applications,
security deposits, loan commitment fees, federal, state and local tax refunds
and claims, all rights in all litigation presently or hereafter pending for any
cause or claim (whether in contract, tort or otherwise), and all judgments now
or hereafter arising therefrom, all rights to purchase or sell real or personal
property, all rights as a licensor or licensee of any kind, all royalties,
licenses, processes, telephone numbers, proprietary information, purchase
orders, and all insurance policies and claims (including without limitation
credit, liability, property and other insurance), and all other rights,
privileges and franchises of every kind; (e) all books and records, whether
stored on computers or otherwise maintained; (f) all of the Borrower's cash;
books and records, whether stored on computers or otherwise maintained; (g) all
substitutions, additions and accessions to any of the foregoing, and all
products, proceeds and insurance proceeds of the foregoing, and all guaranties
of and security for the foregoing; and all books and records relating to any of
the foregoing. Silicon's security interest in any present or future technology
(including patents, trade secrets, and other technology) shall be subject to any
licenses or rights now or in the future granted by the Borrower to any third
parties in the ordinary course of the Borrower's business; provided that if the
Borrower proposes to sell, license or grant any other rights with respect to any
technology in a transaction that, in substance, conveys a major part of the
economic value of that technology, Silicon shall first be requested to release
its security interest, and Silicon may withhold such release in its discretion.
The Borrower shall not, either directly or through any agent, employee, licensee
or designee, (a) file an application for the registration of any patent,
trademark, or copyright with the U.S. Patent and Trademark Office, the U.S.
Copyright Office, or any similar office or agency in any other country, state,
or any political subdivision (the "Offices"), or (b) file any assignment of any
patent, trademark, or copyright which the Borrower may acquire from a third
party with any one of the Offices unless the Borrower shall, on or prior to the
date of such filing, notify Silicon of such filing, and, upon request of
Silicon, execute and deliver any and all assignments, agreements, instruments,
documents and papers as Silicon may request to evidence Silicon's interest in
such patents, trademarks, or copyrights, as the case may be, including the
goodwill and general intangibles of the Borrower relating thereto or represented
thereby. The Borrower authorizes Silicon to amend any applicable notice of
security interest or assignment executed pursuant to SECTION 4.9 of this
Agreement without first obtaining the Borrower's approval of or signature to
such amendment and to record such assignment with one or more of the Offices.
2.3. COLLATERAL DEFINITIONS. Notwithstanding SECTION 2.2, for purposes
of this Agreement, the intellectual property comprising the Collateral may be
further defined to include the following:
(a) Any and all copyright rights, copyright applications,
copyright registrations and like protections 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, including without limitation those set forth in EXHIBIT A
attached to the Intellectual Property Security Agreement (collectively, the
"Copyrights");
(b) 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 the patents and patent applications set forth on EXHIBIT B attached
to the Intellectual Property Security Agreement (collectively, the "Patents");
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(c) 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, including without limitation those set forth
on EXHIBIT C attached to the Intellectual Property Security Agreement
(collectively, the "Trademarks"); and
(d) Any series of related images, however fixed or encoded (i)
having or representing the predetermined, three-dimensional pattern of metallic,
insulating or semiconductor material present or removed from the layers of a
semiconductor chip product; and (ii) in which series the relation of the images
to one another is that each image has the pattern of the surface of one form of
the semiconductor chip product, including without limitation those set forth on
EXHIBIT D attached to the Intellectual Property Security Agreement
(collectively, the "Mask Works").
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
The Borrower represents and warrants to Silicon as follows, and the
Borrower covenants that the following representations shall continue to be true,
and that the Borrower shall comply with all of the following covenants:
3.1. CORPORATE EXISTENCE AND AUTHORITY. The Borrower is and shall
continue to be duly authorized, validly existing and in good standing under the
laws of the state of its incorporation, as identified on the copy of the
Borrower's Articles of Incorporation delivered to Silicon. The Borrower is and
shall continue to be qualified and licensed to do business in all jurisdictions
in which any failure to do so would have a material adverse effect on the
Borrower. The execution, delivery and performance by the Borrower of this
Agreement, and all other documents executed by the Borrower in connection with
the Loans have been duly and validly authorized, are enforceable against the
Borrower in accordance with their terms, and do not violate any law or any
provision of, and are not grounds for acceleration under, any agreement or
instrument that is binding upon the Borrower.
3.2. NAME, TRADE NAMES AND STYLES.. The name of the Borrower set forth
in the heading to this Agreement is its correct name. Listed on an Exhibit to
the Schedule are all prior names of the Borrower and all of the Borrower's
present and prior trade names. The Borrower shall give Silicon 15 days' prior
written notice before changing its name or doing business under any other name.
The Borrower has complied, and shall in the future comply, with all laws
relating to the conduct of business under a fictitious business name.
3.3. PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth
in the heading to this Agreement is the chief executive office for the Borrower.
In addition, the Borrower has places of Business only at, and Collateral of the
Borrower is located only at, the locations set forth on the Schedule. The
Borrower shall give Silicon at least 15 days' prior written notice before
changing its chief executive office or moving Collateral (other than inventory
sold in the ordinary course of business) to any location other than a location
listed on the Schedule.
3.4. TITLE TO COLLATERAL; PERMITTED LIENS. The Borrower is now, and
shall at all times in the future be, the sole owner of all the Collateral,
except for items of equipment that are leased by the Borrower and general
intangibles subject to nonexclusive licenses granted by Borrower to its
customers in the ordinary course of business. The Collateral now is and shall
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remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for the following ("Permitted Liens"):
(a) purchase money security interests in specific items of equipment, other than
equipment financed by the Loans; (b) leases of specific items of equipment; (c)
liens for taxes not yet payable; (d) additional security interests and liens
consented to in writing by Silicon in its sole discretion; and (e) security
interests being terminated substantially concurrently with this Agreement.
Silicon shall have the right to require, as a condition to its consent under
subparagraph (d) above, that the holder of the additional security interest or
lien sign an intercreditor agreement on terms satisfactory to Silicon in its
sole discretion, acknowledge that the holder's security interest is subordinate
to Silicon's security interest. Silicon now has, and shall continue to have, a
second priority, perfected and enforceable security interest in all of the
Collateral. The Collateral shall not be subject to any other liens or security
interests of any type except for the Permitted Liens. The Borrower shall at all
times defend Silicon and the Collateral against all claims of others. None of
the Collateral now is or shall be affixed to any real property in such a manner,
or with such intent, as to become a fixture.
3.5. MAINTENANCE OF COLLATERAL. The Borrower shall maintain the
Collateral in good working condition. The Borrower shall not use the Collateral
for any unlawful purpose.
3.6. BOOKS AND RECORDS. The Borrower has maintained and shall maintain
at the Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with generally accepted accounting principles.
3.7. FINANCIAL CONDITION AND STATEMENTS. All financial statements now
or in the future delivered to Silicon have been, and shall be, prepared in
conformity with generally accepted accounting principles and now and in the
future shall completely and accurately reflect the financial condition of the
Borrower, at the times and for the periods therein stated. Since the last date
covered by any such statement, there has been no material adverse change in the
financial condition or business of the Borrower. The Borrower is now and shall
continue to be solvent.
3.8. TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. The Borrower has
timely filed, and shall timely file, all tax returns and reports required by
foreign, federal, state and local law. The Borrower has timely paid, and shall
timely pay, all foreign, federal, state and local taxes, assessments, deposits
and contributions now or in the future owed by the Borrower. The Borrower may,
however, defer payment of any contested taxes, provided that the Borrower (a) in
good faith contests the Borrower's obligation to pay the taxes by appropriate
proceedings promptly and diligently instituted and conducted, (b) notifies
Silicon in writing of the commencement of, and any material development in, the
proceedings, and (c) posts bonds or takes any other steps required to keep the
contested taxes from becoming a lien upon any of the Collateral. The Borrower is
unaware of any claims or adjustments proposed for any of the Borrower's prior
tax years which could result in additional taxes becoming due and payable by the
Borrower. The Borrower has paid, and shall continue to pay all amounts necessary
to fund all present and future pension, profit sharing and deferred compensation
plans in accordance with their terms. The Borrower has not and shall not
withdraw from participation in, permit partial or complete termination of, or
permit the occurrence of any other event with respect to, any such plan which
could result in any liability of the Borrower, including, without limitation,
any liability to the Pension Benefit Guaranty Corporation or its successors or
any other governmental agency.
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3.9. COMPLIANCE WITH LAW. The Borrower has complied, and shall comply,
in all material respects, with all provisions of all foreign, federal, state and
local laws and regulations relating to the Borrower, including, but not limited
to, those relating to ownership of real or personal property, conduct and
licensing of the Borrower's business, and environmental matters.
3.10. LITIGATION. Except as disclosed in the Schedule, there is no
claim, suit, litigation, proceeding or investigation pending or (to best of the
Borrower's knowledge) threatened by or against or affecting the Borrower in any
court or before any governmental agency (or any basis therefor known to the
Borrower) which may result, either separately or in the aggregate, in any
material adverse change in the financial condition or business of the Borrower,
or in any material impairment in the ability of the Borrower to carry on its
business in substantially the same manner as it is now being conducted. The
Borrower shall promptly inform Silicon in writing of any claim, proceeding,
litigation or investigation in the future threatened or instituted by or against
the Borrower involving amounts in excess of $100,000.
3.11. USE OF PROCEEDS. All proceeds of all Loans shall be used solely
for lawful business purposes.
3.13. HAZARDOUS SUBSTANCES. The terms "hazardous wastes," "hazardous
substance," "disposal," "release," and "threatened release," as used in this
Agreement, shall have the same meanings as set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499 ("XXXX"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., or other
applicable state of Federal laws, rules, or regulations adopted pursuant to any
of the foregoing. The Borrower represents and warrants that: (a) the Borrower
has no knowledge of (i) any use, generation, manufacture, storage, treatment,
disposal, release, or threatened release of any hazardous waste or substance by
any prior owners or occupants of any of the real properties owned or operated by
the Borrower, of (ii) any actual or threatened litigation or claims of any kind
by any person relating to such matters; (b) neither the Borrower nor any
subtenant, contractor, agent, or other user authorized by Borrower of any of the
real properties shall use, generate, manufacture, store, treat, dispose of, or
release any hazardous waste or substance on, under, or about any of the real
properties owned or operated by the Borrower except in compliance with all
applicable federal, state, and local laws, regulations, and ordinances,
including without limitation those laws, regulations and ordinances described
above. The Borrower authorizes Silicon and its agents, upon 24 hours' prior
notice (which need not be in writing), to enter upon the real properties to make
such inspections and tests as Silicon may deem appropriate to determine
compliance of the real properties owned or operated by the Borrower with this
Section of the Agreement. Any inspections or tests made by Silicon shall be for
Silicon's purposes only and shall not be construed to create any responsibility
or liability on the part of Silicon to the Borrower or to any other person. The
Borrower hereby (a) releases and waives any future claims against Silicon for
indemnity or contribution in the event the Borrower becomes liable for cleanup
or other costs under any such laws, and (b) agrees to indemnify and hold
harmless Silicon against any and all claims, losses, liabilities, damages,
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penalties, and expenses which Silicon may directly or indirectly sustain or
suffer resulting from a breach of this Section of the Agreement or as a
consequence of any use, generation, manufacture, storage, disposal, release or
threatened release occurring prior to the Borrower's ownership or interest in
the real properties, whether or not the same was or should have been known to
the Borrower. The provisions of this Section of the Agreement, including the
obligation to indemnify, shall survive the payment of the obligations and the
termination or expiration of this Agreement and shall not be affected by
Silicon's acquisition of any interest in any of the real properties, whether by
foreclosure or otherwise.
3.14 NO CONFLICTS. Performance of this Agreement does not conflict with
or result in a breach of any agreement to which Borrower is a party or by which
Borrower is bound, except to the extent that certain intellectual property
agreements prohibit the assignment of the rights thereunder to a third party
without the licensor's or other party's consent and this Agreement constitutes
an assignment.
3.15. NO TRANSFERS OF ENCUMBRANCES. During the term of this Agreement,
Borrower will not transfer or otherwise encumber any interest in the Collateral,
except for non-exclusive licenses granted by Borrower in the ordinary course of
business or as set forth in this Agreement and the Permitted Liens.
3.16. [Intentionally Omitted.]
3.17. [Intentionally Omitted.]
3.18. [Intentionally Omitted.]
3.19. [Intentionally Omitted.]
3.20. [Intentionally Omitted.]
3.21. ACCURATE INFORMATION. All information heretofore, herein or
hereafter supplied to Silicon by or on behalf of Borrower with respect to the
Collateral is accurate and complete in all material respects.
3.22. NO CONFLICTING AGREEMENT. Borrower shall not enter into any
agreement that would materially impair or conflict with Borrower's obligations
hereunder without Silicon's prior written consent, which consent shall not be
unreasonably withheld. Borrower 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 Borrower'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.
3.23. NOTICE OF IMPAIRMENT OF VALUE. Upon any executive officer of
Borrower obtaining actual knowledge thereof, Borrower will promptly notify
Silicon in writing of any event that materially adversely affects the value of
any Collateral, the ability of Borrower to dispose of any Collateral or the
rights and remedies of Silicon in relation thereto, including the levy of any
legal process against any of the Collateral.
4. ADDITIONAL DUTIES OF THE BORROWER.
4.1. FINANCIAL AND OTHER COVENANTS. The Borrower shall at all times
comply with the covenants set forth in the Schedule.
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4.2. OVERADVANCE; PROCEEDS OF ACCOUNTS. If for any reason the total of
all outstanding Loads and all other Obligations exceeds the total Credit Limit,
as stated in the Schedule, without limiting Silicon's other remedies, and
whether or not Silicon declares an Event of Default, the Borrower shall remit to
Silicon all checks and other proceeds of the Borrower's accounts and general
intangibles, in the same form as received by the Borrower, within one day after
the Borrower's receipt of the same, to be applied to the Obligations in such
order as Silicon shall determine in its discretion.
4.3. INSURANCE. The Borrower shall at all times insure all of the
tangible personal property Collateral and carry such other business insurance,
with insurers reasonably acceptable to Silicon, in such form and amounts as
Silicon may reasonably require. All such insurance policies shall name Silicon
as an additional loss payee, and shall contain a lenders loss payee endorsement
in form reasonably acceptable to Silicon. Upon receipt of the proceeds of any
such insurance, subject to the claims of any holders of prior Permitted Liens,
Silicon shall apply such proceeds in reduction of the Obligations as Silicon
shall determine in its sole and absolute discretion, except that, provided no
Event of Default has occurred, Silicon shall release to the Borrower insurance
proceeds with respect to equipment totaling less than $100,000, which shall be
utilized by the Borrower for the replacement of the equipment with respect to
which the insurance proceeds were paid. Silicon may require reasonable assurance
that the insurance proceeds so released shall be so used. If the Borrower fails
to provide or pay for any insurance, Silicon may, but is not obligated to,
obtain the same at the Borrower's expense. The Borrower shall promptly deliver
to Silicon copies of all reports made to insurance companies.
Statutory notice regarding insurance:
WARNING
Unless you provide us with evidence of the insurance coverage as
required by our contract or loan agreement, we may purchase insurance at your
expense to protect our interest. This insurance may, but need not, also protect
your interest. If the collateral becomes damaged, the coverage we purchase may
not pay any claim you make or any claim made against you. You may later cancel
this coverage by providing evidence that you have obtained property coverage
elsewhere.
You are responsible for the cost of any insurance purchased by us. The
cost of this insurance may be added to your contract or loan balance. If the
cost is added to your contract or loan balance, the interest rate on the
underlying contract or loan will apply to this added amount. The effective date
of coverage may be the date your prior coverage lapsed or the date you failed to
provide proof of coverage.
This coverage we purchase may be considerably more expensive than
insurance you can obtain on your own and may not satisfy any need for property
damage coverage or any mandatory liability insurance requirements imposed by
applicable law.
4.4. REPORT. The Borrower shall provide Silicon with such written
reports with respect to the Borrower as Silicon shall from time to time
reasonably specify, including but not limited to the financial reports required
as stated in the Schedule.
4.5. ACCESS TO COLLATERAL, BOOKS AND RECORDS. At all reasonable times,
and upon one business day notice, Silicon, or its agents, shall have the right
to inspect the Collateral, and the right to audit and copy the Borrower's
accounting books, records, ledgers, journals, or registers and the Borrower's
books and records relating to the Collateral, provided that no prior notice is
required upon the occurrence and continuation of an Event of Default. Silicon
shall take reasonable steps to keep confidential all information obtained in
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such inspection or audit, but Silicon shall have the right to disclose any such
information to its auditors, regulatory agencies and attorneys, and pursuant to
any subpoena or other legal process. The Borrower shall reimburse Silicon for
Silicon's actual costs for conducting two such audits per year. Silicon may
debit the Borrower's deposit accounts with Silicon for the cost of such audits,
in which event Silicon shall send notification thereof to the Borrower.
4.6. NEGATIVE COVENANTS. Except as may be expressly permitted in the
Schedule, the Borrower shall not, without Silicon's prior written consent, do
any of the following: (a) merge or consolidate with another corporation, except
that the Borrower may merge or consolidate with another corporation if the
Borrower is the surviving corporation in the merger and the aggregate value of
the assets acquired in the merger does not exceed 25% of the Borrower's tangible
net worth (determined in accordance with generally accepted accounting
principles) as of the end of the month prior to the effective date of the
merger, and the assets of the corporation acquired in the merger as not subject
to any liens or encumbrances, except Permitted Liens; (b) acquire any assets,
including stock of any other entity, outside the ordinary course of the business
for an aggregate purchase price (whether paid in cash, in stock of the Borrower
or other consideration) exceeding 25% of the Borrower's tangible net worth
(determined in accordance with generally accepted accounting principles) as of
the end of the month prior to the effective date of the acquisition; (c) enter
into any other transaction outside the ordinary course of business (except as
permitted by the other provisions of this Section); (d) sell or transfer any
Collateral, except for the sale of finished inventory in the ordinary course of
the Borrower's business; (e) make any loans of any money or any other assets to
shareholders, employees or any other person except in the ordinary course of
business; (f) incur any debts that are outside the ordinary course of business
or that would have a material, adverse effect on the Borrower or on the prospect
of repayment of the Obligations; (g) guarantee or otherwise become liable with
respect to the obligations of another party or entity; (h) pay or declare any
dividends on the stock of the Borrower (except for dividends payable solely in
stock of the Borrower); (i) redeem, retire, purchase or otherwise acquire,
directly or indirectly, any of the stock of the Borrower, except when exercising
any standard repurchase right Borrower may have in any existing or hereafter
adopted Company Stock Option/Stock Issuance Plan or related documents; (j) make
any change in the Borrower's capital structure which has a material adverse
effect on that Borrower or on the prospect of repayment of the Obligations; or
(k) dissolve or elect to dissolve. Transactions permitted by the foregoing
provisions of this Section are only permitted if no Event of Default and no
event which (with notice or passage of time or both) would constitute an Event
of Default would occur as a result of such transaction.
4.7. LITIGATION COOPERATION. Should any third-party suit or proceeding
be instituted by or against Silicon with respect to any Collateral or in any
manner relating to the Borrower, the Borrower shall, without expense to Silicon,
make available the Borrower and its officers, employees and agents and the
Borrower's books and records to the extent that Silicon may deem them reasonably
necessary in order to prosecute or defend any such suit or proceeding.
4.8 [Intentionally Omitted.]
4.9 EXECUTE ADDITIONAL DOCUMENTATION. The Borrower agrees, at its
expense, on request by Silicon, to execute from time to time all documents in
form satisfactory to Silicon, as Silicon may deem reasonably necessary or useful
in order to perfect and maintain Silicon's perfected security interest in the
Collateral, and in order to fully consummate all of the transactions
contemplated by this Agreement.
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4.10 [Intentionally Omitted.]
5. TERM.
5.1 MATURITY DATE. This Agreement shall continue in effect until the
payment in full of the Obligations, provided, however, that the Borrower shall
repay in full each Loan described on the Schedule, with all accrued but unpaid
interest on that Loan, on or before the Maturity Date stated on the Schedule for
such Loan.
5.2 EARLY TERMINATION. Subject to SECTION 5.3, this Agreement may be
terminated, without penalty, prior to the Maturity Date as follows: (a) by the
Borrower, effective three business days after written notice of termination is
given to Silicon; or (b) by Silicon at any time after the occurrence of an Event
of Default, without notice, effective immediately.
5.3 PAYMENT OF OBLIGATIONS. On the due dates stated in the Schedule, or
on any earlier effective date of termination, the Borrower shall pay and perform
in full all Obligations, whether evidenced by installment notes or otherwise,
and whether or not all or any part of such Obligations are otherwise then due
and payable. Notwithstanding any termination of this Agreement, all of Silicon's
security interests in all of the Collateral and all of the terms and provisions
of this Agreement shall continue in full force and effect until all Obligations
have been paid and performed in full; provided that, without limiting the fact
that Loans are discretionary on the part of Silicon, Silicon may, in its sole
discretion, refuse to make any further Loans after termination. No termination
shall in any way affect or impair any right or remedy of Silicon, nor shall any
such termination relieve the Borrower of any Obligation to Silicon, until all of
the Obligations have been paid and performed in full. Upon payment and
performance in full of all the Obligations, Silicon shall promptly deliver to
the Borrower termination statements, requests for reconveyances and such other
documents as may be required to fully terminate any of Silicon's security
interests.
6. EVENTS OF DEFAULT AND REMEDIES.
6.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an "Event of Default" under this Agreement, and the Borrower
shall give Silicon immediate written notice thereof: (a) any warranty,
representation, statement, report or certificate made or delivered to Silicon by
the Borrower or any of the Borrower's officers or employees, now or in the
future, shall be untrue or misleading in any material respect; (b) the Borrower
shall fail to pay when due any Loan or any interest thereon or any other
monetary Obligation; or (c) the total outstanding balance of any Loan exceeds
the applicable Credit Limit, or the total Loans and other Obligations
outstanding at any time exceed the aggregate Credit Limit for all Loans, or the
total Loans and other Obligations outstanding at any time exceed the aggregate
Credit Limit for all Loans; or (d) the Borrower shall fail to comply with any of
the covenants set forth in the Schedule or shall fail to perform any other
non-monetary Obligation which by its nature cannot be cured; or (e) the Borrower
shall fail to pay or perform any other non-monetary Obligation, under this
Agreement or any other agreement or document relating to the Loans; or (f) any
levy, assessment, attachment, seizure, lien or encumbrances is made on all or
any part of the Collateral; or (g) dissolution, termination of existence,
insolvency or business failure of the 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 the Borrower
under any reorganization, bankruptcy, insolvency, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, now or in
Page 10 - LOAN AND SECURITY AGREEMENT
the future in effect; or (h) the commencement of any proceeding against the
Borrower or any guarantor of any of the Obligations 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,
which is not cured by the dismissal thereof within 45 days after the date
commenced; or (i) revocation or termination of, or limitation of liability upon,
any guaranty of the Obligations; or (j) commencement of proceedings by any
guarantor of any of the Obligations under any bankruptcy or insolvency law; or
(k) the Borrower makes any payment on account of any indebtedness or obligation
which has been subordinated to the Obligations, unless such payment is permitted
in the applicable subordination agreement, or if any person who has subordinated
such indebtedness terminates or in any way limits his subordinate agreement; or
(l) the Borrower shall generally not pay its debts as they become due; or the
Borrower shall conceal, remove or transfer any part of its property, with intent
to hinder, delay or defraud its creditors, or make or suffer any transfer of any
of its property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or (m) either the Borrower or any other party thereto
shall breach any subordination agreement executed in connection with the Loans;
or (n) the current shareholders of he Borrower shall crease to own more than 50%
of the outstanding common stock of the Borrower. If any of the foregoing
defaults, other than a failure to pay money and breach of an financial covenants
set forth in the Schedule, is curable, it may be cured (and no Event of Default
shall have occurred) if the Borrower cures the default within 15 days (or within
45 days in the case of clause (h) of this SECTION 6.1). Silicon may cease making
any Loans hereunder during the above cure periods, and thereafter if an Event of
Default has occurred.
6.2 REMEDIES. Upon the occurrence of any Event of Default and the
expiration of any applicable cure period under SECTION 6.1, and at any time
thereafter, Silicon, at its option, and without notice or demand of any kind
(all of which are hereby expressly waived by the Borrower), may do any one or
more of the following, to the extent that such actions are consistent with the
priority of Silicon's interest in the Collateral: (a) cease making Loans or
otherwise extending credit to the Borrower under this Agreement or any other
document or agreement; (b) accelerate and declare all or any part of the
Obligations to be immediately due, payable, and performable, notwithstanding any
deferred or installment payments allowed by any instrument evidencing or
relating to any Obligation; (c) take possession of any or all of the Collateral
wherever it may be found, and for that purpose the Borrower hereby authorizes
Silicon without judicial process to enter onto any of the Borrower's premises
without interference to search for, take possession of, keep, store, or remove
any of the Collateral, and remain on the premises or cause a custodian to remain
on the premises in exclusive control thereof without charge for so long as
Silicon deems it reasonably necessary in order to complete the enforcement of
its rights under this Agreement or any other agreement; provided, however, that
should Silicon seek to take possession of any or all of the Collateral by Court
process, the Borrower hereby irrevocably waives: (i) any bond and any surety or
security relating thereto required by any statute, court rule or otherwise as an
incident to such possession; (ii) any demand for possession prior to the
commencement of any suit or action to recover possession thereof; and (iii) any
requirement that Silicon retain possession of and not dispose of any such
Collateral until after trial or final judgment; (d) require the Borrower to
assemble any or all of the Collateral and make it available to Silicon at places
designated by Silicon which are reasonably convenient to Silicon and the
Borrower, and to remove the Collateral to such locations as Silicon may deem
advisable; (e) require the Borrower to deliver to Silicon, in kind, all checks
and other payments received with respect to all accounts and general
intangibles, together with any necessary endorsements, within one day after the
date received by the Borrower; (f) complete the proceeding, manufacturing or
repair of any Collateral prior to a disposition thereof and, for such purpose
Page 11 - LOAN AND SECURITY AGREEMENT
and for the purpose of removal, Silicon shall have the right to use the
Borrower's premises, vehicles, hoists, lifts, cranes, equipment and all other
property without charge; (g) sell, lease or otherwise dispose of any of the
Collateral in its condition at the time Silicon obtains possession of it or
after further manufacturing, processing or repair, at any one or more public
and/or private sales, in lots or in bulk, for cash, exchange or other property,
or on credit, and to adjourn any such sale from time to time without notice
other than oral announcement at the time scheduled for sale; Silicon shall have
the right to conduct such disposition on the Borrower's premises without charge,
for such time or times as Silicon deems reasonable, or on Silicon's premises, or
elsewhere and the Collateral need not be located at the place of disposition;
Silicon may directly or through any affiliated company purchase or lease any
Collateral at any such public disposition, and if permissible under applicable
law, at any private disposition; any sale or other disposition of Collateral
shall not relieve the Borrower of any liability the Borrower may have if any
Collateral is defective as to title or physical condition or otherwise at the
time of sale; (h) demand payment of, and collect nay accounts and general
intangibles comprising Collateral an, in connection therewith, the Borrower
irrevocably authorizes Silicon to endorse or sign the Borrower's name on all
collections, receipts, instruments and other documents, to take possession of
and open mail addressed to the Borrower and remove therefrom payments made with
respect to any item of the Collateral or proceeds thereof, and, in Silicon's
sole discretion, to grant extensions of time to pay, compromise claims and
settle accounts and the like for less than face value; (i) offset against any
sums in any general, special or other deposit accounts maintained by the
Borrower with Silicon; and (j) demand and receive possession of any of the
Borrower's federal and state income tax returns and the books and records
utilized in the preparation thereof or referring thereto. All reasonable fees of
professionals (including attorneys' fees), expenses, costs, liabilities and
obligations incurred by Silicon with respect to the foregoing shall be added to
and become part of the Obligations, shall be due on demand, and shall bear
interest at a rate equal to the highest interest rate applicable to any of the
Obligations. Without limiting any of Silicon's rights and remedies, from and
after the occurrence of any Event of Default, the interest rat applicable to the
Obligations shall be increased by an additional two percent per annum above the
rate otherwise applicable.
6.3. STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. The Borrower
and Silicon agree that a sale or other disposition (collectively, "Sale") of any
Collateral which complies with the following standards shall conclusively be
deemed to be commercially reasonable: (a) notice of the Sale is given to the
Borrower at least seven days prior to the Sale, and, in the case of a public
Sale, notice of the Sale is published at least seven days before the Sale in a
newspaper of general circulation in the county where the Sale is to be
conducted; (b) notice of the Sale describes the Collateral in general,
non-specific terms; (c) the Sale is conducted at a place designed by Silicon,
with or without the Collateral being present; (d) the Sale commences at any time
between 8:00 a.m. and 6:00 p.m.; (e) payment of the purchase price in cash or by
cashier's check or wire transfer is required; (f) with respect to any Sale of
any of the Collateral, Silicon may (but is not obligated to) direct any
prospective purchaser to ascertain directly from the Borrower any and all
information concerning the same. Silicon may employ other methods of noticing
and selling the Collateral, in its discretion, if they are commercially
reasonable.
6.4. POWER OF ATTORNEY. Effective only upon the occurrence and during
the continuance of an Event of Default, the Borrower hereby irrevocably appoints
Silicon (and any of Silicon's designated officers, or employees) as the
Borrower's true and lawful attorney to: (a) send requests for verification of
accounts or notify account debtors of Silicon's security interest in the
accounts; (b) endorse the Borrower's name on any checks or other forms of
payment or security that may come into Silicon's possession; (c) sign the
Borrower's name on any invoice or xxxx of lading relating to any account, drafts
against account debtors, schedules and assignments of accounts, verifications of
accounts, and notices to account debtors; (d) make, settle, and adjust all
Page 12 - LOAN AND SECURITY AGREEMENT
claims under and decisions with respect to the Borrower's policies of insurance;
and (e) settle and adjust disputes and claims respecting the accounts directly
with account debtors, for amounts and upon terms which Silicon determines to be
reasonable; provided Silicon may exercise such power of attorney to sign the
name of the Borrower on any of the documents described in SECTION 4.9 regardless
of whether an Event of Default has occurred. The appointment of Silicon as the
Borrower's attorney in fact, and each and every one of Silicon's rights and
powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully repaid and performed and Silicon's obligation to
provide advances hereunder is terminated.
6.5. APPLICATION OF PROCEEDS. All proceeds realized as the result of
any Sale of the Collateral shall be applied by Silicon first to the costs,
expenses, liabilities, obligations and attorneys' fees incurred by Silicon in
the exercise of its rights under this Agreement, second to the interest due upon
any of the Obligations, and third to the principal of the Obligations, in such
order as Silicon shall determine in its sole discretion. Any surplus shall be
paid to the Borrower or other persons legally entitled thereto; the Borrower
shall remain liable to Silicon for any deficiency. If Silicon, in its sole
discretion, directly or indirectly enters into a deferred payment or other
credit transaction with any purchaser at any Sale or other disposition of
Collateral, Silicon shall have the option, exercisable at any time, in its sole
discretion, of either reducing the Obligations by the principal amount of
purchase price or deferring the reduction of the Obligations until the actual
receipt by Silicon of the cash therefor.
6.6. REMEDIES CUMULATIVE. In addition to the rights and remedies set
forth in this Agreement, Silicon shall have all the other rights and remedies
accorded a secured party under the Uniform Commercial Code of Oregon and each
state in which any Collateral is located, and under all other applicable laws,
and under any other instrument or agreement now or in the future entered into
between Silicon and the Borrower, and all of such rights and remedies are
cumulative and none is exclusive. Exercise or partial exercise by Silicon of one
or more of its rights or remedies shall not be deemed an election, nor bar
Silicon from subsequent exercise or partial exercise of any other rights or
remedies. The failure or delay of Silicon to exercise any rights or remedies
shall not operate as a waiver thereof, but all rights and remedies shall
continue in full force and effect until all of the Obligations have been fully
paid and performed.
7. GENERAL PROVISIONS.
7.1. NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by certified mail return receipt
requested, addressed to Silicon or the Borrower at the addresses shown in the
heading to this Agreement, or at any other address designed in writing by one
party to the other party. In addition, Borrower shall send a copy of any notice
to Silicon to the following address: 00000 X.X. Xxxxxxx, Xxxxx 000, Xxxxxxxxx,
XX 00000-0000, Attn: Art Xxxxxxxx. All notices shall be deemed to have been
given upon delivery in the case of notices personally delivered to the Borrower
or to Silicon, or at the expiration of two business days following the deposit
thereof in the United States mail, with postage prepaid.
7.2. SEVERABILITY. Should any provision of this Agreement be held by
any court of competent jurisdiction to be void or unenforceable, such defect
shall not affect the remainder of this Agreement, which shall continue in full
force and effect.
Page 13 - LOAN AND SECURITY AGREEMENT
7.3. INTEGRATION. This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between the 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. ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. UNDER
OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY SILICON AFTER
OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY SILICON TO
BE ENFORCEABLE.
7.4. WAIVERS. The failure of Silicon at any time or times to require
the Borrower to strictly comply with any of the provisions of this Agreement or
any other present or future agreement between the Borrower and Silicon shall not
waive or diminish any right of Silicon later to demand And receive strict
compliance therewith. Any waiver of any default shall not waive or affect any
other default, whether prior or subsequent thereto. None of the provisions of
this Agreement or any other agreement now or in the future executed by the
Borrower and delivered to Silicon shall be deemed to have been waived by any act
or knowledge of Silicon or its agents or employees, but only by a specific
written waiver signed by an officer of Silicon and delivered to the Borrower.
The Borrower waives demand, protest, notice of protest, and notice of default or
dishonor, notice of payment and nonpayment, release, compromise, settlement,
extension or renewal of any commercial paper, instrument, account, general
intangible, document or guaranty at any time held by Silicon on which the
Borrower is or may in any way be liable, and notice of any action taken by
Silicon, unless expressly required by this Agreement.
7.5. [Intentionally Omitted.]
7.6. AMENDMENT. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by the Borrower and a duly
authorized officer of Silicon.
7.7. TIME OF ESSENCE. Time is of the essence in the performance by the
Borrower of each and every obligation under this Agreement.
7.8 ATTORNEYS' FEES AND COSTS. The Borrower shall reimburse Silicon for
all reasonable attorneys' fees and fees of other professionals, and all filing,
recording, search, title insurance, appraisal, audit, and other reasonable costs
incurred by Silicon, pursuant to, or in connection with, or relating to this
Agreement (whether or not a lawsuit is filed), including, but not limited to,
any reasonable attorneys' fees and costs Silicon incurs in order to do the
following: prepare and negotiate this Agreement and the documents relating to
this Agreement; obtain legal advice in connection with this Agreement; enforce,
or seek to enforce, any of its rights; prosecute actions against, or defend
actions by, account debtors; commence, intervene in, or defend any action or
proceeding (including any appeal or review); initiate any complaint to be
relieved of the automatic stay in bankruptcy; file or prosecute any probate
claim, bankruptcy claim, third-party claim, or other claim; examine, audit,
copy, and inspect any of the Collateral or any of the borrower's books and
records; or protect, obtain possession of, lease, dispose of, or otherwise
enforce Silicon's security interest in, the Collateral and otherwise represent
silicon in any litigation relating to the Borrower. If either Silicon or the
Page 14 - LOAN AND SECURITY AGREEMENT
Borrower files any lawsuit against the other predicated on a breach of this
Agreement, the prevailing party in such action shall be entitled to recover its
reasonable costs and professionals' fees, including (but not limited to)
reasonable attorneys' fees and costs incurred in the enforcement of, execution
upon or defense of any order, decree, award or judgment, and in any appeal or
review by an appellate court. All fees and costs to which Silicon may be
entitled pursuant to this Section shall immediately become part of the
Borrower's Obligations, shall be due on demand, and shall bear interest at a
rate equal to the highest interest rate applicable to any of the Obligations.
7.9. BENEFIT OF AGREEMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of the parties hereto; provided,
however, that the Borrower may not assign or transfer any of its rights under
this Agreement without the prior written consent of Silicon, and any prohibited
assignment shall be void. No consent by Silicon to any assignment shall release
the Borrower from its liability for the Obligations. The borrower agrees and
consents to Silicon's sale or transfer, whether now or later, of one or more
participation interests in the Loans to one or more purchasers, whether related
or unrelated to Silicon. Silicon may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or
knowledge Silicon may have about the Borrower or about any other matter relating
to the Loans and the Borrower hereby waives any rights to privacy it may have
with respect to such matters. The Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices of any
repurchase of such participation interests. The Borrower also agrees that the
purchasers of any such participation interests shall be considered as the
absolute owners of such interests in the Loans and shall have all the rights
granted under the participation agreement or agreements governing the sale of
such participation interests.
7.10. SECTION HEADINGS; CONSTRUCTION. Section headings are only used in
this Agreement for convenience. The Borrower acknowledges that the headings may
not describe completely the subject matter of the applicable section, and the
headings shall not be used in any manner to construe, limit, define or interpret
any term or provision of this Agreement. This Agreement has been fully reviewed
and negotiated between the parties and no uncertainty or ambiguity in any term
or provision of this Agreement shall be construed strictly against Silicon or
the Borrower under any rule of construction or otherwise.
7.11. MUTUAL WAIVER OF JURY TRIAL. The 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 other present or future
instrument or agreement between Silicon and the Borrower, or any conduct, acts
or missions of Silicon or the Borrower or any of their directors, officers,
employees, agents, attorneys or any other persons affiliated with Silicon or the
borrower, in all of the foregoing cases, whether sounding in contract or tort or
otherwise.
7.12. GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts
and transactions hereunder and all rights and obligations of Silicon and the
Borrower shall be governed by, and construed in accordance with, the laws of the
State of Oregon. Any undefined term used in this Agreement that is defined in
the Oregon Uniform Commercial Code shall have the meaning assigned to that term
in the Oregon Uniform Commercial Code. As a material part of the consideration
to Silicon to enter into this Agreement, the Borrower (i) agrees that all
actions and proceedings relating directly or indirectly hereto shall at
Silicon's option, be litigated in courts located within Oregon, and that the
exclusive venue therefor shall be, at Silicon's option, Washington County or
Multnomah County, Oregon; (ii) consents to the jurisdiction and venue of any
such court and consents to service of process in any such action or proceeding
Page 15 - LOAN AND SECURITY AGREEMENT
by personal delivery or any other method permitted by law; and (iii) waives any
and all rights the Borrower may have to object to the jurisdiction of any such
court, or to transfer or change the venue of any such action or proceeding.
BORROWER:
OREGON BAKING COMPANY
By: /s/ Xxxxx Xxxx
--------------------------------
Title: CFO
-----------------------------
SILICON:
SILICON VALLEY BANK
By: /s/ Illegible
--------------------------------
Title: V.P.
-----------------------------
Page 16 - LOAN AND SECURITY AGREEMENT
SCHEDULE TO LOAN AND SECURITY AGREEMENT
BORROWER: Oregon Baking Company
SECURED OPERATING LINE OF CREDIT
CREDIT LIMIT: An amount not to exceed $250,000 at any one time outstanding.
The amount of this Loan may be borrowed, repaid and
reborrowed from time to time, subject to the terms of this
Agreement and Schedule.
INTEREST RATE: The interest rate applicable to this Loan shall be a rate
equal to the "Prime Rate" in effect from time to time, plus
1.00% per annum. Interest calculations shall be made on the
basis of a 360-day year and 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.
COMMITMENT FEE: $2,000, which is fully earned and payable at closing. (Any
Commitment Fee previously paid by the Borrower in connection
with this loan shall be credited against this Fee.)
MATURITY DATE: October 23, 1998, at which time all unpaid principal and
accrued but unpaid interest shall be due and payable.
PRIOR NAMES OF
BORROWER: See attached Exhibit A.
TRADE NAMES OF
BORROWER: See attached Exhibit A.
TRADEMARKS OF
BORROWER: See attached Exhibit A.
OTHER LOCATIONS
AND ADDRESSES: See attached Exhibit A.
MATERIAL ADVERSE
LITIGATION: See attached Exhibit A.
Page 17 - LOAN AND SECURITY AGREEMENT
OTHER COVENANTS: Borrower shall at all times comply with all of the following
additional covenants:
BANKING RELATIONSHIP. Borrower and its subsidiaries
shall at all times maintain their primary banking
relationship with Silicon. Neither Borrower nor its
subsidiaries shall establish any deposit accounts of any type
with any bank or other financial institution other than
Silicon without Silicon's prior written consent.
FINANCIAL STATEMENTS AND REPORTS. The Borrower shall provide
Silicon: (a) within 30 days after the end of each month, a
monthly financial statement (consisting of a income statement
and a balance sheet) prepared by the Borrower in accordance
with generally accepted accounting principals; and (b) within
90 days following the end of the Borrower's fiscal year,
complete annual CPA-audited financial statements, such audit
being conducted by independent certificate public accountants
reasonably acceptable to Silicon, together with an
unqualified opinion of such accountants.
CONDITIONS
TO CLOSING: Without in any way limiting the discretionary nature of
advances under this Agreement, before requesting any such
advance, the Borrower shall satisfy each of the following
conditions:
1. LOAN DOCUMENTS:
Silicon shall have received this Agreement and the Schedule
executed by the Borrower, a Continuing guaranty in form and
substance satisfactory to Silicon, executed by Xxx Xxxxxx and
Xxxx Xxxxxxxxx, and such other loan documents as Silicon
shall require, each duly executed and delivered by the
parties thereto.
2. DOCUMENTS RELATING TO
AUTHORITY, ETC.:
Silicon shall have received each of the following in form and
substance satisfactory to it:
(a) Certificate Copies of the Articles of Incorporation and
Bylaws of the Borrower:
(b) A Certificate of Good Standing issued by the Secretary
of State of the borrower's state of incorporation and such
other states as Silicon may reasonably request with respect
to the Borrower;
(c) A certified copy of a Resolution adopted by the Board
of Directors of the Borrower authorizing the execution,
delivery and performance of this Agreement, and any other
documents or certificates to be executed by the Borrower in
connection with this transaction; and
Page 18 - LOAN AND SECURITY AGREEMENT
(d) Incumbency Certificates describing the office and
identifying the specimen signatures of the individuals
signing all such loan documents behalf of the Borrower.
3. PERFECTION AND
PRIORITY OF SECURITY:
Silicon shall have received evidence satisfactory to it that
its security interest in the Collateral has been duly
perfected and that such security interest is prior to all
other liens, charges, security interests, encumbrances
and adverse claims in or to the Collateral other than
Permitted Liens, which evidence shall include, without
limitation, a certificate from the appropriate state agencies
showing the due filing and second priority of the UCC
Financing Statements to be signed by the Borrower covering
the Collateral.
4. INSURANCE: Silicon shall have received evidence satisfactory to it that
all insurance required by this Agreement is in full force and
effect, with loss payee designations and additional insured
designations as required by this Agreement.
5. OTHER INFORMATION:
Silicon shall have received such other statements, opinions,
certificates, documents and information with respect to
matter contemplated by this Agreement as it may reasonably
request, all of which must be acceptable to Silicon.
Silicon shall have conducted an examination of the Borrower's
books, records ledgers, journals, and registers, as Silicon
may deem necessary, and shall be satisfied with the results
of such examination in its sole discretion.
Silicon and the Borrower agree that the terms of this Schedule
supplement the Loan and Security Agreement between Silicon and the Borrower and
agree to be bound by the terms of this Schedule.
BORROWER:
OREGON BAKING COMPANY
By: /s/ Xxxxx Xxxx
--------------------------------
Title: CFO
-----------------------------
SILICON:
SILICON VALLEY BANK
By: /s/ Illegible
--------------------------------
Title: V.P.
-----------------------------
Page 19 - LOAN AND SECURITY AGREEMENT
EXHIBIT A
TRADENAMES
----------
PRIOR NAMES
-----------
TRADEMARKS
----------
OTHER LOCATIONS AND ADDRESSES
-----------------------------
MATERIAL ADVERSE LITIGATION
---------------------------
[OTHER DISCLOSURES]
Page 20 - LOAN AND SECURITY AGREEMENT
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of May 4, 1998, by
and between Oregon Baking Company ("Borrower") whose address is 0000 XX
Xxxxxxxxxx, Xxxxxxxx, XX 00000 and Silicon Valley Bank ("Silicon") whose address
is 0000 Xxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with a loan production office
located at 00000 XX Xxxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which may be
owing by Borrower to Silicon, Borrower is indebted to Silicon pursuant to, among
other documents, a Loan and Security Agreement, dated October 28,1 997, together
with any and all Schedules attached thereto, as may be amended from time to time
(the "Loan Agreement"). The Loan Agreement provided for, among other things, a
Credit Limit in the original principal amount of Two Hundred Fifty Thousand
Dollars ($250,000) (the "Secured Operating Line of Credit"). Defined terms used
by not otherwise defined herein shall have the same meanings as in the Loan
Agreement.
Hereinafter, all indebtedness owing by Borrower to Silicon shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement. Additionally,
repayment of the Indebtedness is guaranteed by Xxx Xxxxxx and Xxxx Xxxxxxxxx
(each, the "Guarantor"), pursuant to two (2) Continuing Guaranty agreements
(each, the "Guaranty"). Furthermore, repayment of the Letter of Credit (as
defined below) under the Indebtedness is guaranteed by each Guarantor pursuant
to two (2) Commercial Guaranty agreement (each, the "Commercial Guaranty"),
executed concurrently herewith.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. MODIFICATION(S) TO LOAN AGREEMENT
1. The following Section is hereby incorporated into the Loan Agreement.
LETTER OF CREDIT. Subject to the terms and conditions of this Loan
Agreement, Silicon agrees to issue or cause to be issued a Letter of
Credit ("Letter of Credit") for the account of Borrower to assist
Borrower in the acquisition of Bernie's Bagels, in a face amount not to
exceed Three Hundred Twenty Five Thousand Dollars ($325,000). Such
letter of Credit shall have an expire date no later than one year after
its issuance, and an annual option to renew at each renewal. Borrower's
Letter of Credit reimbursement obligation shall be secured by a
Certificate of Deposit number 8800023826, including any and all
renewals and proceeds, held at Silicon, in an amount not less than one
third (0.33) of the face amount of the Letter of Credit. The Letter of
Credit shall be, in form and substance, acceptable to Silicon in its
sole discretion and shall be subject to the terms and conditions of
Silicon's form of application and Letter of Credit agreement.
Borrower shall indemnify, defend and hold Silicon harmless from any
loss, cost, expense or liability, including, without limitation,
reasonable attorneys' fees, arising out of or in connection with the
Letter of Credit.
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B. MODIFICATION(S) TO GUARANTY.
1. The following paragraphs are hereby incorporated into the Guaranty:
FINANCIAL INFORMATION. Guarantor shall promptly deliver to Silicon
complete and current financial statements and tax returns within thirty
(30) days of filing, and such other information about Guarantor as
Silicon may reasonably request.
COMMERCIAL GUARANTY. Guarantor's obligation to Borrower's indebtedness
under the Letter of Credit is limited to the terms and conditions as
stated in that certain Commercial Guaranty, dated May 4, 1998, by and
between Guarantor and Silicon.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrower shall pay to Silicon a fee in the amount of One
Thousand Six Hundred Twenty Five Dollars ($1,626) (the "Loan Fee") plus all
out-of-pocket expenses.
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has not defenses against the
obligations to pay any amounts under the Indebtedness.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below)
understands and agrees that in modifying the existing Indebtedness, Silicon is
relying upon Borrower's representations, warranties, and agreements, as set
froth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Silicon's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Silicon to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Indebtedness. It is the intention of Silicon and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Silicon in writing. No maker,
endorser, or guarantor will be released by virtue of this Loan Modification
Agreement. The terms of this paragraph apply not only to this Loan Modification
Agreement, but also to all subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon Borrower's payment of the Loan Fee and Silicon's receipt of
Commercial Guaranty.
This Loan Modification Agreement is executed as of the date first
written above.
BORROWER: SILICON:
OREGON BAKING COMPANY SILICON VALLEY BANK
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxx
------------------------ -------------------------
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxxx
---------------------- -----------------------
Title: President/CEO Title: V.P.
--------------------- ----------------------
2
The undersigned hereby consent to the modifications to the Indebtedness pursuant
to this Loan Modification Agreement hereby ratify all the provisions of the
Guaranty and confirm that all provisions of that document are in full force and
effect.
GUARANTOR:
/s/ Xxx Xxxxxx
------------------------
Xxx Xxxxxx
/s/ Xxxx Xxxxxxxxx
------------------------
Xxxx Xxxxxxxxx
3
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of October 23, 1998,
by and between Oregon Baking Company ("Borrower") and Silicon Valley Bank
("Silicon") a California chartered bank with a loan production office located in
Beaverton, OR.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Silicon, Borrower is indebted to Silicon pursuant to, among
other documents, a Loan and Security Agreement, dated October 28, 1997, together
with any and all Schedules attached thereto, as may be amended form time to time
(the "Loan Agreement"). The Loan Agreement provided for, among other things, a
Credit Limit in the original principal amount of Two Hundred Fifty Thousand
Dollars ($250,000) (the "Secured Operating Line of Credit"). Defined terms used
but not otherwise defined herein shall have the same meanings as in the Loan
Agreement.
Hereinafter, all indebtedness owing by Borrower to Silicon shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement. Additionally,
repayment of the Indebtedness is guaranteed by Xxx Xxxxxx and Xxxx Xxxxxxxxx
(each, the "Guarantor"), pursuant to two (2) Continuing Guaranty agreements
(each, the "Guaranty"). Furthermore, repayment of the Letter of Credit (as
defined below) under the Indebtedness is guaranteed by each Guarantor pursuant
to two (2) Commercial Guaranty agreements (each, the "Commercial Guaranty").
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. MODIFICATION(S) TO SCHEDULE LOAN AGREEMENT.
1. The term "Maturity Date" is hereby amended to mean February 23, 1999,
at which time all unpaid principal and all accrued but unpaid interest shall be
due and payable.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrower shall pay to Silicon a fee in the amount of
Five Hundred Dollars ($500) (the "Loan Fee") plus all out-of-pocket expenses.
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below)
understands and agrees that in modifying the existing Indebtedness, Silicon is
relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Silicon's agreement to
1
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Silicon to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Indebtedness. It is the intention of Silicon and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Silicon in writing. No maker,
endorser, or guarantor will be released by virtue of this Loan Modification
Agreement. The terms of this paragraph apply not only to this Loan Modification
Agreement, but also to all subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon Borrower's payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first
written above.
BORROWER: SILICON:
OREGON BAKING COMPANY SILICON VALLEY BANK
By: /s/ Xxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxx
------------------------ -------------------------
Name: Xxxxxx Xxxxxxxxxx Name: Xxxxx Xxxxxxx
---------------------- -----------------------
Title: Exec. V.P. Title: Vice President
--------------------- ----------------------
2
The undersigned hereby consent to the modifications to the Indebtedness pursuant
to this Loan Modification Agreement hereby ratify all the provisions of the
Guaranty and confirm that all provisions of that document are in full force and
effect.
GUARANTOR:
/s/ Xxx Xxxxxx
------------------------
Xxx Xxxxxx
/s/ Xxxx Xxxxxxxxx
------------------------
Xxxx Xxxxxxxxx
3
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of February 23, 1999 by
and between Oregon Baking Company ("Borrower") and Silicon Valley Bank
("Silicon") a California chartered bank with a loan production office located in
Beaverton, OR.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Silicon, Borrower is indebted to Silicon pursuant to, among
other documents, a Loan and Security Agreement, dated October 26, 1997, together
with any and all schedules attached thereto, as may be amended from time to
time, (the "Loan Agreement"). the Loan Agreement provided for, among other
things, a Credit Limit in the original principal amount of Two Hundred Fifty
Thousand Dollars ($250,000)(the "Secured Operating Line of Credit"). Defined
terms used but not otherwise defined herein shall have the same meanings as in
the Loan Agreement.
Hereinafter, all Indebtedness owing by Borrower to Silicon shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement. Additionally,
repayment of the Indebtedness is guaranteed by Xxx Xxxxxx and Xxxx Xxxxxxxxx
(each, the "Guarantor"), pursuant to two (2) Continuing Guaranty agreements
(each, the "Guaranty"). Furthermore, repayment of the Letter of Credit (as
referenced below) is guaranteed by each Guarantor pursuant to two (2) Commercial
Guaranty Agreements (each, the "Commercial Guaranty").
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the indebtedness shall be
referred to as the "Security Documents." Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. MODIFICATION(S) TO SCHEDULE LOAN AGREEMENT
1. The term "Maturity Date" is hereby amended to mean February 23, 2000,
at which time all unpaid principal and all accrued but unpaid interest
shall be due and payable.
2. The paragraph entitled "Letter of Credit" is hereby amended to provide
that the Letter of Credit may have an expiry date of no later than
March 1, 2000, subject to the annual renewal option as provided herein.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
6. PAYMENT OF LOAN FEE. Borrower shall pay to Silicon a fee in the amount of Two
Thousand Five Hundred Dollars ($2,500)(the "Loan Fee"), plus all out of pocket
expenses.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below)
understands and agrees that in modifying the existing Indebtedness, Silicon is
1
relying upon Borrower's representations, warranties, and agreements, as set
forth in the Existing Loan Documents. Except as expressly modified pursuant to
this Loan Modification Agreement, the terms of the Existing Loan Documents
remain unchanged and in full force and effect. Silicon's agreement to
modifications to the existing indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate silicon to make any future modifications to
the indebtedness. Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Indebtedness. It is the intention of Silicon and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Silicon in writing. No maker,
endorser, or guarantor will be released by virtue of this Loan Modification
Agreement. the terms of this paragraph apply not only to this loan modification
agreement, but also to all subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon Borrower's payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first
written above.
BORROWER: SILICON:
OREGON BAKING COMPANY SILICON VALLEY BANK
By: /s/ Xxxxxx Xxxxxxxxxx By: /s/ Xxxxx Xxxxxxx
------------------------ -------------------------
Name: Xxxxxx Xxxxxxxxxx Name: Xxxxx Xxxxxxx
---------------------- -----------------------
Title: Exec VP Title: Vice President
--------------------- ----------------------
The undersigned hereby consent to the modifications to the indebtedness pursuant
to this Loan Modification Agreement, hereby ratify all the provisions of the
Guaranty and confirm that all provisions of that document are in full force and
effect.
GUARANTOR:
/s/ Xxx Xxxxxx
--------------------------
Xxx Xxxxxx
/s/ Xxxx Xxxxxxxxx
--------------------------
Xxxx Xxxxxxxxx
2
