Exhibit 10.8
LOAN AND SECURITY AGREEMENT
by and between
PROFILE NATIONAL BUSINESS DIRECTORY, INC.,
a Minnesota corporation
and
COAST BUSINESS CREDIT,
a division of Southern Pacific Bank
Dated as of July 16, 1998
Coast Business Credit
Loan and Security Agreement
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TABLE OF CONTENTS
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1. DEFINITIONS 1
Account Debtor 1
Affiliate 1
Audit 1
BIA 1
Borrower 1
Borrower's Address 1
Business Day 1
Change of Control 1
Closing Date 1
Coast 2
Code 2
Collateral 2
Collections 2
Credit Limit 2
Default 2
Deposit Account 2
Dollars or $ 2
Early Termination Fee 2
EBITDA 2
Equipment 2
Event of Default 2
GAAP 2
General Intangibles 2
Inventory 2
Loan Documents 3
Loans 3
Material Adverse Effect 3
Maturity Date 3
Maximum Dollar Amount 3
Minimum Monthly Interest 3
Obligations 3
Permitted Liens 3
Person 4
Prime Rate 4
Receivables 4
Renewal Date 4
Revolving Loans 4
Solvent 4
Tangible Net Worth 4
Term Loan 4
Year 2000 Problem 4
Other Terms 4
2. CREDIT FACILITIES. 4
2.1 Loans. 4
3. INTEREST AND FEES. 4
3.1 Interest. 4
3.2 Fees. 5
4. SECURITY INTEREST. 5
5. CONDITIONS PRECEDENT. 5
5.1 Status of Accounts at Closing 5
5.2 Minimum Availability 5
5.3 Landlord Waiver 5
5.4 Executed Agreement 5
5.5 Opinion of Borrower's Counsel 5
5.6 Priority of Coast's Liens 5
5.7 Insurance 5
5.8 Borrower's Existence 5
5.9 Organizational Documents 5
5.10 Taxes 6
5.11 Year 2000 Problem Assessment Certificate 6
5.12 Due Diligence 6
5.13 Tri-Party Agreements between Billing
Companies, Borrower, and Coast 6
5.14 Borrower's Officers 6
5.15 BIA's Appraisal of Borrower 6
5.16 Account Verification 6
5.17 Loans to Affiliates 6
5.18 Minimum Tangible Net Worth 6
5.19 Other Documents and Agreements 6
6. REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE BORROWER. 6
6.1 Existence and Authority 6
6.2 Name; Trade Names and Styles 6
6.3 Place of Business; Location of Collateral 7
6.4 Title to Collateral; Permitted Liens 7
6.5 Maintenance of Collateral 7
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6.6 Books and Records 7
6.7 Financial Condition, Statements and Reports 7
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6.8 Tax Returns and Payments; Pension
Contributions 7
6.9 Compliance with Law 8
6.10 Litigation 8
6.11 Use of Proceeds 8
6.12 Year 2000 Compliance 8
7. RECEIVABLES. 8
7.1 Representations Relating to Receivables 8
7.2 Representations Relating to Documents and
Legal Compliance 8
7.3 Schedules and Documents relating to
Receivables 8
7.4 Collection of Receivables 9
7.5 Remittance of Proceeds 9
7.6 Disputes 9
7.7 Returns 9
7.8 Verification 9
7.9 No Liability 9
8. ADDITIONAL DUTIES OF THE BORROWER. 9
8.1 Financial and Other Covenants 9
8.2 Insurance 9
8.3 Reports 10
8.4 Access to Collateral, Books and Records 10
8.5 Negative Covenants 10
8.6 Litigation Cooperation 11
8.7 Further Assurances 11
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9. TERM. 11
9.1 Maturity Date 11
9.2 Early Termination 11
9.3 Payment of Obligations 11
10. EVENTS OF DEFAULT AND REMEDIES. 11
10.1 Events of Default 11
10.2 Remedies 12
10.3 Standards for Determining Commercial
Reasonableness 14
10.4 Power of Attorney 14
10.5 Application of Proceeds 15
10.6 Remedies Cumulative 15
11. GENERAL PROVISIONS. 15
11.1 Interest Computation 15
11.2 Application of Payments 16
11.3 Charges to Accounts 16
11.4 Monthly Accountings 16
11.5 Notices 16
11.6 Severability 16
11.7 Integration 16
11.8 Waivers 16
11.9 No Liability for Ordinary Negligence 16
11.10 Amendment 16
11.11 Time of Essence 17
11.12 Attorneys Fees, Costs and Charges 17
11.13 Benefit of Agreement 17
11.14 Publicity 17
11.15 Paragraph Headings; Construction 17
11.16 Governing Law; Jurisdiction; Venue 17
11.17 Mutual Waiver of Jury Trial 18
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Coast
Loan and Security Agreement
Borrower: Profile National Business Directory, Inc.,
a Minnesota corporation
Address: 0000 Xxxxx Xxxxxx X.
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Date: July 16, 1998
THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between COAST
BUSINESS CREDIT, a division of Southern Pacific Bank ("Coast"), a California
corporation, with offices at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, and the borrower named above (the "Borrower"), whose chief
executive office is located at the above address ("Borrower's Address"). The
Schedule to this Agreement (the "Schedule") shall for all purposes be deemed to
be a part of this Agreement, and the same is an integral part of this Agreement.
(Definitions of certain terms used in this Agreement are set forth in Section 1
below.)
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1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
"Account Debtor" means the obligor on a Receivable or General Intangible.
"Affiliate" means, with respect to any Person, a relative, partner,
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.
"Audit" means to inspect, audit and copy Borrower's books and records and
the Collateral.
"BIA" means BIA Consulting, Inc.
"Borrower" has the meaning set forth in the introduction to this Agreement.
"Borrower's Address" has the meaning set forth in the introduction to this
Agreement.
"Business Day" means a day on which Coast is open for business.
"Change of Control" shall be deemed to have occurred at such time as a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) (other than the current holders of the
ownership interests in any Borrower) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, as a result of any single transaction, of more than twenty percent
(20%) of the total voting power of all classes of stock or other ownership
interests then outstanding of any Borrower normally entitled to vote in the
election of directors or analogous governing body.
"Closing Date" means the date of the initial funding under this Agreement.
"Coast" has the meaning set forth in the introduction to this Agreement.
"Code" means the Uniform Commercial Code as adopted and in effect in the
State of California from time to time.
"Collateral" has the meaning set forth in Section 4 hereof.
"Collections" means those collections of Borrower including, but not
limited to, collections arising from the following: direct xxxxxxxx of Borrower;
web page services; or other services of Borrower.
"Credit Limit" means the maximum amount of Loans that Coast may make to
Borrower pursuant to the amounts and percentages shown on the Schedule.
"Default" means any event which with notice or passage of time or both,
would constitute an Event of Default.
"Deposit Account" has the meaning set forth in Section 9105 of the Code.
"Dollars or $" means United States dollars.
"Early Termination Fee" means the amount set forth on the Schedule that
Borrower must pay Coast if this Agreement is terminated by Borrower or Coast
pursuant to Section 9.2 hereof.
"EBITDA" means, in any fiscal period, Borrower's consolidated net income
(other than extraordinary or non-recurring items of Borrower for such period),
plus (i) the amount of all interest expense, income tax expense, depreciation
expense, and amortization expense of Borrower for such period, on a
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consolidated basis, and plus or minus (as the case may be) (ii) any other
non-cash charges which have been added or subtracted, as the case may be, in
calculating Borrower's consolidated net income for such period.
"Equipment" means all of Borrower's present and hereafter acquired
machinery, molds, machine tools, motors, furniture, equipment, furnishings,
fixtures, trade fixtures, motor vehicles, tools, parts, dies, jigs, goods and
other goods (other than Inventory) of every kind and description used in
Borrower's operations or owned by Borrower and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions or improvements to any of the foregoing, wherever
located.
"Event of Default" means any of the events set forth in Section 10.1 of
this Agreement.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, consistently applied.
"General Intangibles" means all general intangibles of Borrower, whether
now owned or hereafter created or acquired by Borrower, including, without
limitation, all choses in action, causes of action, corporate or other business
records, Deposit Accounts, investment property, inventions, designs, drawings,
blueprints, patents, patent applications, trademarks and the goodwill of the
business symbolized thereby, names, trade names, trade secrets, goodwill,
copyrights, registrations, licenses, franchises, customer lists, security and
other deposits, 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 claims of Borrower against Coast, rights to
purchase or sell real or personal property, rights as a licensor or licensee of
any kind, royalties, telephone numbers, proprietary information, purchase
orders, and all insurance policies and claims (including without limitation life
insurance, key man insurance, credit insurance, liability insurance, property
insurance and other insurance), tax refunds and claims, computer programs,
discs, tapes and tape files, claims under guaranties, security interests or
other security held by or granted to Borrower, all rights to indemnification and
all other intangible property of every kind and nature (other than Receivables).
"Inventory" means all of Borrower's now owned and hereafter acquired goods,
merchandise or other personal property, wherever located, to be furnished under
any contract of service or held for sale or lease (including without limitation
all raw materials, work in process, finished goods and goods in transit, and
including without limitation all farm products), and all materials and supplies
of every kind, nature and description which are or might be used or consumed in
Borrower's business or used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of such goods, merchandise or other
personal property, and all warehouse receipts, documents of title and other
documents representing any of the foregoing.
"Investment Property" has the meaning set forth in Section 9115 of the Code
as in effect as of the date hereof.
"Loan Documents" means this Agreement, the agreements and documents listed
on Section 5 of the Schedule, and any other
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agreement, instrument or document executed in connection herewith or therewith.
"Loans" has the meaning set forth in Section 2.1 hereof.
"Material Adverse Effect" means a material adverse effect on (i) the
business, assets, condition (financial or otherwise) or results of operations of
Borrower or any subsidiary of Borrower, (ii) the ability of Borrower or any
guarantor of any of the Obligations to perform its obligations under this
Agreement (including, without limitation, repayment of the Obligations as they
come due) or (iii) the validity or enforceability of this Agreement or any other
agreement or document entered into by any party in connection herewith, or the
rights or remedies of Coast hereunder or thereunder.
"Maturity Date" means the date that this Agreement shall cease to be
effective, as set forth on the Schedule, subject to the provisions of Section
9.1 and 9.2 hereof.
"Maximum Dollar Amount" has the meaning set forth in Section 2 of the
Schedule.
"Minimum Monthly Interest" has the meaning set forth in Section 3 of the
Schedule.
"Obligations" means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to Coast, whether evidenced by this Agreement or any note
or other instrument or document, whether arising from an extension of credit,
opening of a letter of credit, banker's acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect (including, without
limitation, those acquired by assignment and any participation by Coast in
Borrower's debts owing to others), absolute or contingent, due or to become due,
including, without limitation, all interest, charges, expenses, fees, attorneys'
fees (including attorneys' fees and expenses incurred in bankruptcy), expert
witness fees, audit fees, letter of credit fees, collateral monitoring fees,
closing fees, facility fees, termination fees, minimum interest charges and any
other sums chargeable to Borrower under this Agreement or under any other
present or future instrument or agreement between Borrower and Coast.
"Permitted Liens" means the following:
(a) purchase money security interests in specific items of Equipment;
(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
Coast, which consent shall not be unreasonably withheld;
(e) security interests being terminated substantially concurrently with
this Agreement;
(f) liens of materialmen, mechanics, warehousemen, carriers, or other
similar liens arising in the ordinary course of business and securing
obligations which are not delinquent;
(g) liens incurred in connection with the extension, renewal or refinancing
of the indebtedness secured by liens of the type described above in clauses
(1) or (2) above, provided that any extension, renewal or replacement lien
is limited to
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the property encumbered by the existing lien and the principal amount of
the indebtedness being extended, renewed or refinanced does not increase;
or
(h) liens in favor of customs and revenue authorities which secure payment
of customs duties in connection with the importation of goods.
Coast will have the right to require, as a condition to its consent under
subparagraph (4) above, that the holder of the additional security interest or
lien sign an intercreditor agreement on Coast's then standard form, acknowledge
that the security interest is subordinate to the security interest in favor of
Coast, and agree not to take any action to enforce its subordinate security
interest so long as any Obligations remain outstanding, and that Borrower agree
that any uncured default in any obligation secured by the subordinate security
interest shall also constitute an Event of Default under this Agreement.
"Person" means any individual, sole proprietorship, general partnership,
limited partnership, limited liability partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.
"Prime Rate" means the actual "Reference Rate" or the substitute therefor
of the Bank of America NT & SA whether or not that rate is the lowest interest
rate charged by said bank. If the Prime Rate, as defined, is unavailable, "Prime
Rate" shall mean the highest of the prime rates published in the Wall Street
Journal on the first business day of the applicable month, as the base rate on
corporate loans at large U.S. money center commercial banks.
"Receivables" means all of Borrower's now owned and hereafter acquired
accounts (whether or not earned by performance), letters of credit, contract
rights, chattel paper, instruments, securities, documents, securities accounts,
security entitlements, commodity contracts, commodity accounts, investment
property and all other forms of obligations at any time owing to Borrower, all
guaranties and other security therefor, all merchandise returned to or
repossessed by Borrower, and all rights of stoppage in transit and all other
rights or remedies of an unpaid vendor, lienor or secured party.
"Renewal Date" shall mean the Maturity Date if this Agreement is renewed
pursuant to Section 9.1 hereof, and each anniversary thereafter that this
Agreement is renewed pursuant to Section 9.1 hereof.
"Revolving Loans" means the Loans described in Section 2.1 of the Schedule.
"Solvent" means, with respect to any Person on a particular date, that on
such date (a) at fair valuations, all of the properties and assets of such
Person are greater than the sum of the debts, including contingent liabilities,
of such Person, (b) the present fair salable value of the properties and assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its properties and assets and
pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts beyond such
Person's ability to pay as such debts mature, and (e) such
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Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's properties and assets
would constitute unreasonably small capital after giving due consideration to
the prevailing practices in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount that, in light of all the facts
and circumstances existing at such time, represents the amount that reasonably
can be expected to become an actual or matured liability.
"Tangible Net Worth" means consolidated shareholder equity, plus
subordinated debt otherwise permitted hereunder.
"Term Loan" means the Loans described in Section 2(c) of the Schedule.
"Year 2000 Problem" means the risk that computer systems, software and
applications used by Borrower may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any dates after
December 31, 1999.
"Other Terms." All accounting terms used in this Agreement, unless
otherwise indicated, shall have the meanings given to such terms in accordance
with GAAP. All other terms contained in this Agreement, unless otherwise
indicated, shall have the meanings provided by the Code, to the extent such
terms are defined therein.
2. CREDIT FACILITIES.
2.1 Loans. Coast agrees, provided no Default or Event of Default has
occurred and is continuing, to make loans to Borrower (the "Loans") not to
exceed the Maximum Dollar Amount shown on the Schedule. In addition, Coast
may create reserves against or reduce its advance rates without declaring a
Default or an Event of Default if it determines that there has occurred a
Material Adverse Effect.
3. INTEREST AND FEES.
3.1 Interest. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set
forth to the contrary in this Agreement. Interest shall be payable monthly,
on the last day of the month. Interest may, in Coast's discretion, be
charged to Borrower's loan account, and the same shall thereafter bear
interest at the same rate as the other Loans. Regardless of the amount of
Obligations that may be outstanding from time to time, Borrower shall pay
Coast Minimum Monthly Interest during the term of this Agreement with
respect to the Receivable Loans in the amount set forth on the Schedule.
3.2 Fees. Borrower shall pay Coast the fee(s) shown on the Schedule, which
are in addition to all interest and other sums payable to Coast and are
deemed fully earned and are nonrefundable.
4. SECURITY INTEREST.
To secure the payment and performance of all of the Obligations when due,
Borrower hereby grants to Coast a security interest in all of Borrower's
interest in the following, whether now owned or hereafter acquired, and wherever
located: All Receivables, Inventory, Equipment, Investment Property, and General
Intangibles, including, without limitation, all of Borrower's Deposit Accounts,
and all money, and all property now or at any time in
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the future in Coast's possession (including claims and credit balances), and all
proceeds of any of the foregoing (including proceeds of any insurance policies,
proceeds of proceeds, and claims against third parties), all products of any of
the foregoing, and all books and records related to any of the foregoing (all of
the foregoing, together with all other property in which Coast may now or in the
future be granted a lien or security interest, is referred to herein,
collectively, as the "Collateral")
5. CONDITIONS PRECEDENT.
The obligation of Coast to make the Loans is subject to the satisfaction,
in the sole discretion of Coast, at or prior to the first advance of funds
hereunder, of each, every and all of the following conditions:
5.1 Status of Accounts at Closing. No accounts payable shall be due and
unpaid sixty (60) days past its due date except for such accounts payable
being contested in good faith in appropriate proceedings and for which
adequate reserves have been provided.
5.2 Minimum Availability. Borrower shall have minimum loan availability
immediately following the initial funding in the amount set forth on the
Schedule.
5.3 Landlord Waiver. Borrower will use its best efforts to obtain landlord
waivers and access agreements in form and substance satisfactory to Coast,
in Coast's sole and absolute discretion, and, when deemed appropriate by
Coast, in form for recording in the appropriate recording office, with
respect to all leased locations where Borrower maintains any inventory or
equipment.
5.4 Executed Agreement. Coast shall have received this Agreement duly
executed and in form and substance satisfactory to Coast in its sole and
absolute discretion.
5.5 Opinion of Borrower's Counsel. Coast shall have received an opinion of
Borrower's counsel, in form and substance satisfactory to Coast in its sole
and absolute discretion.
5.6 Priority of Coast's Liens. Coast shall have received the results of "of
record" searches satisfactory to Coast in its sole and absolute discretion,
reflecting its Uniform Commercial Code filings against Borrower indicating
that Coast has a perfected, first priority lien in and upon all of the
Collateral, subject only to Permitted Liens.
5.7 Insurance. Coast shall have received copies of the insurance binders or
certificates evidencing Borrower's compliance with Section 8.2 hereof,
including lender's loss payee endorsements.
5.8 Borrower's Existence. Coast shall have received copies of Borrower's
articles or certificate of incorporation and all amendments thereto, and a
Certificate of Good Standing, each certified by the Secretary of State of
the state of Borrower's organization, and dated a recent date prior to the
Closing Date, and Coast shall have received Certificates of Foreign
Qualification for Borrower from the Secretary of State of each state
wherein the failure to be so qualified could have a Material Adverse
Effect.
5.9 Organizational Documents. Coast shall have received copies of
Borrower's By-Laws and all amendments thereto, and Coast shall have
received copies of the resolutions of the board of directors of Borrower,
authorizing the execution and delivery of this Agreement
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and the other documents contemplated hereby, and authorizing the
transactions contemplated hereunder and thereunder, and authorizing
specific officers of Borrower to execute the same on behalf of Borrower, in
each case certified by the Secretary or other acceptable officer of
Borrower as of the Closing Date.
5.10 Taxes. Coast shall have received evidence from Borrower that Borrower
has complied with all tax withholding and Internal Revenue Service
regulations, in form and substance satisfactory to Coast in its sole and
absolute discretion.
5.11 Year 2000 Problem Assessment Certificate. Coast shall have received a
certificate from the relevant officer of Borrower to the effect that, as
the result of a comprehensive assessment undertaken by Borrower of
Borrower's computer systems, software and applications, Borrower knows of
no facts that would cause Borrower to reasonably believe that the Year 2000
Problem will cause a Material Adverse Effect.
5.12 Due Diligence. Coast shall have completed its due diligence with
respect to Borrower.
5.13 Tri-Party Agreements between Billing Companies, Borrower, and Coast.
Coast shall have received duly executed tri-party agreements between each
of Borrower's billing companies, Borrower, and Coast in a form acceptable
to Coast.
5.14 Borrower's Officers. Coast shall have reviewed the background check of
Borrower's officers to its satisfaction.
5.15 BIA's Appraisal of Borrower. Coast shall have received the final draft
of BIA's appraisal of Borrower's subscriber base or in lieu thereof, Coast
shall have received BIA's letter of appraisal of Borrower's subscriber
base.
5.16 Account Verification. Coast shall have confirmed that the account
verification system utilized by Borrower is satisfactory to Coast.
5.17 Loans to Affiliates. Coast shall have received concurrent with funding
by direct disbursement, evidence satisfactory to Coast that all advances
and loans from affiliated companies, SM Engineering Company and LD
Management, Inc. are to be fully repaid.
5.18 Minimum Tangible Net Worth. Borrower's Tangible Net Worth shall be no
less than Seven Hundred Fifty Thousand Dollars ($750,000) on the Closing
Date.
5.19 Other Documents and Agreements. Coast shall have received such other
agreements, instruments and documents as Coast may require in connection
with the transactions contemplated hereby, all in form and substance
satisfactory to Coast in Coast's sole and absolute discretion, and in form
for filing in the appropriate filing office, including, but not limited to,
those documents listed in Section 5 of the Schedule.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
In order to induce Coast to enter into this Agreement and to make Loans,
Borrower represents and warrants to Coast as follows, and Borrower covenants
that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants:
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6.1 Existence and Authority. Borrower is and will continue to be, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Borrower is and will 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. The execution,
delivery and performance by Borrower of this Agreement, and all other
documents contemplated hereby (a) have been duly and validly authorized,
(b) are enforceable against Borrower in accordance with their terms (except
as enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to
creditors' rights generally), and (c) do not violate Borrower's articles or
certificate of incorporation, or Borrower's by-laws, or any law or any
material agreement or instrument which is binding upon Borrower or its
property, and (d) do not constitute grounds for acceleration of any
material indebtedness or obligation under any material agreement or
instrument which is binding upon Borrower or its property.
6.2 Name; Trade Names and Styles. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule are
all prior names of Borrower and all of Borrower's present and prior trade
names. Borrower shall give Coast thirty (30) days' prior written notice
before changing its name or doing business under any other name. Borrower
has complied, and will in the future comply, with all laws relating to the
conduct of business under a fictitious business name.
6.3 Place of Business; Location of Collateral. 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 Coast at least
thirty (30) days' prior written notice before opening any additional place
of business, changing its chief executive office, or moving any of the
Collateral to a location other than Borrower's Address or one of the
locations set forth on the Schedule.
6.4 Title to Collateral; Permitted Liens. Borrower is now, and will at all
times in the future be, the sole owner of all the Collateral, except for
items of Equipment which are leased by Borrower. The Collateral now is and
will remain free and clear of any and all liens, charges, security
interests, encumbrances and adverse claims, except for Permitted Liens.
Coast now has, and will continue to have, a first-priority perfected and
enforceable security interest in all of the Collateral, subject only to the
Permitted Liens, and Borrower will at all times defend Coast and the
Collateral against all claims of others. None of the Collateral now is or
will be affixed to any real property in such a manner, or with such intent,
as to become a fixture. Borrower is not and will not become a lessee under
any real property lease pursuant to which the lessor may obtain any rights
in any of the Collateral (other than Permitted Liens and the lessor's
interest in any security deposits required under the lease) and no such
lease now prohibits, restrains, impairs or will prohibit, restrain or
impair Borrower's right to remove any Collateral from the leased premises.
Whenever any Collateral is located upon premises in which any third party
has an interest (whether as owner, mortgagee, beneficiary under a deed of
trust, lien or otherwise), Borrower shall, whenever
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requested by Coast, use its best efforts to cause such third party to
execute and deliver to Coast, in form acceptable to Coast, such waivers and
subordinations as Coast shall specify, so as to ensure that Coast's rights
in the Collateral are, and will continue to be, superior to the rights of
any such third party. Borrower will keep in full force and effect, and will
comply with all the terms of, any lease of real property where any of the
Collateral now or in the future may be located.
6.5 Maintenance of Collateral. Borrower will maintain the Collateral in
good working condition, and Borrower will not use the Collateral for any
unlawful purpose. Borrower will immediately advise Coast in writing of any
material loss or damage to the Collateral.
6.6 Books and Records. Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with GAAP.
6.7 Financial Condition, Statements and Reports. All financial statements
now or in the future delivered to Coast have been, and will be, prepared in
conformity with GAAP (except, in the case of unaudited financial
statements, for the absence of footnotes and subject to normal year-end
adjustments) and now and in the future will fairly reflect the financial
condition of Borrower, at the times and for the periods therein stated.
Between the last date covered by any such statement provided to Coast and
the date hereof, there has been no Material Adverse Effect. Borrower is now
and will continue to be Solvent.
6.8 Tax Returns and Payments; Pension Contributions. Borrower has timely
filed, and will timely file, all tax returns and reports required by
foreign, federal, state and local law, and Borrower has timely paid, and
will timely pay, all foreign, federal, state and local taxes, assessments,
deposits and contributions now or in the future owed by Borrower. Borrower
may, however, defer payment of any contested taxes, provided that Borrower
(i) in good faith contests Borrower's obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted,
(ii) notifies Coast in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other
steps required to keep the contested taxes from becoming a lien upon any of
the Collateral. As of the date hereof, Borrower is unaware of any claims or
adjustments proposed for any of Borrower's prior tax years which could
result in additional taxes becoming due and payable by Borrower. 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, and Borrower has not and will 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 Borrower, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other
governmental agency. Borrower shall, at all times, utilize the services of
an outside payroll service providing for the automatic deposit of all
payroll taxes payable by Borrower.
6.9 Compliance with Law. Borrower has complied, and will comply, in all
material respects, with all provisions of all material
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foreign, federal, state and local laws and regulations relating to
Borrower, including, but not limited to, the Fair Labor Standards Act, and
those relating to Borrower's ownership of real or personal property, the
conduct and licensing of Borrower's business, and environmental matters.
6.10 Litigation. Except as disclosed in the Schedule, there is no claim,
suit, litigation, proceeding or investigation pending or (to best of
Borrower's knowledge) threatened by or against or affecting Borrower in any
court or before any governmental agency (or any basis therefor known to
Borrower) which may result, either separately or in the aggregate, in a
Material Adverse Effect. Borrower will promptly inform Coast in writing of
any claim, proceeding, litigation or investigation in the future threatened
(to the best of Borrower's knowledge) or instituted by or against Borrower
involving an amount set forth on the Schedule.
6.11 Use of Proceeds. All proceeds of all Loans shall be used solely for
lawful business purposes. Borrower is not purchasing or carrying any
"margin stock" (as defined in Regulation G of the Board of Governors of the
Federal Reserve System) and no part of the proceeds of any Loan will be
used to purchase or carry any "margin stock" or to extend credit to others
for the purpose of purchasing or carrying any "margin stock."
6.12 Year 2000 Compliance. As the result of a comprehensive review and
assessment undertaken by Borrower of Borrower's computer systems, software
and applications, Borrower represents and warrants that the Year 2000
problem will not result in a Material Adverse Effect.
7. RECEIVABLES.
7.1 Representations Relating to Receivables. Borrower represents and
warrants to Coast as follows: all Collections with respect to which Loans
are requested by Borrower shall, on the date each Loan is requested and
made, represent bona fide existing unconditional Collections from Account
Debtors on Receivables created by the sale, delivery and acceptance of
goods or the rendition of services in the ordinary course of Borrower's
business.
7.2 Representations Relating to Documents and Legal Compliance. Borrower
represents and warrants to Coast as follows: All statements made and all
unpaid balances appearing in all invoices, instruments and other documents
evidencing the Receivables are and shall be true and correct in all
material respects and all such invoices, instruments and other documents
and all of Borrower's books and records are and shall be genuine and in all
respects what they purport to be. All sales and other transactions
underlying or giving rise to each Receivable shall fully comply in all
material respects with all applicable laws and governmental rules and
regulations. All signatures of and indorsements by Borrower on all
documents, instruments, and agreements relating to all Receivables are and
shall be genuine, and all such documents, instruments and agreements are
and shall be legally enforceable in accordance with their terms.
7.3 Schedules and Documents relating to Receivables. Borrower shall deliver
to Coast via facsimile, unless otherwise directed by Coast, at such
locations and at such intervals as Coast may reasonably request,
transaction reports and loan requests, schedules of Receivables, and
schedules of collections, all on Coast's standard forms; provided,
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however, that Borrower's failure to execute and deliver the same shall not
affect or limit Coast's security interest and other rights in all of
Borrower's Receivables, nor shall Coast's failure to advance or lend
against a specific Receivable affect or limit Coast's security interest and
other rights therein. Loan requests received after 10:30 A.M. Los Angeles,
California time, will not be considered by Coast until the next Business
Day. Together with each such schedule, or later if requested by Coast,
Borrower shall furnish Coast with copies (or, at Coast's request,
originals) of all contracts, orders, invoices, and other similar documents,
and all original shipping instructions, delivery receipts, bills of lading,
and other evidence of delivery, for any goods the sale or disposition of
which gave rise to such Receivables, and Borrower warrants the genuineness
of all of the foregoing. Borrower shall also furnish to Coast an aged
accounts receivable trial balance in such form and at such intervals as
Coast shall request. In addition, Borrower shall deliver to Coast the
originals of all instruments, chattel paper, security agreements,
guarantees and other documents and property evidencing or securing any
Receivables, upon receipt thereof and in the same form as received, with
all necessary indorsements, all of which shall be with recourse. Borrower
shall also provide Coast with copies of all credit memos as and when
requested by Coast.
7.4 Collection of Receivables. Borrower shall cause its Account Debtors to
direct all payments on Receivables to be deposited into a lockbox account,
or such other "blocked account" as Coast may specify, pursuant to a
lockbox/blocked account agreement in such form as Coast may specify. Coast
or its designee may, at any time, notify Account Debtors that Coast has
been granted a security interest in the Receivables.
7.5 Remittance of Proceeds. All proceeds arising from the disposition of
any Collateral shall be delivered to Coast within one (1) Business Day
after receipt by Borrower, in their original form, duly endorsed to Coast,
to be applied to the Obligations in such order as Coast shall determine.
Borrower agrees that it will not commingle proceeds of Collateral with any
of Borrower's other funds or property, but will hold such proceeds separate
and apart from such other funds and property and in an express trust for
Coast. Nothing in this Section limits the restrictions on disposition of
Collateral set forth elsewhere in this Agreement.
7.6 Disputes. Borrower shall notify Coast promptly of all disputes or
claims relating to Receivables. Borrower shall not forgive (completely or
partially), compromise or settle any Receivable for less than payment in
full, or agree to do any of the foregoing, except that Borrower may do so,
provided that: (a) Borrower does so in good faith, in a commercially
reasonable manner, in the ordinary course of business, and in arm's length
transactions, which are reported to Coast on the regular reports provided
to Coast; (b) no Default or Event of Default has occurred and is
continuing; and (c) taking into account all such discounts settlements and
forgiveness, the total outstanding Loans will not exceed the Credit Limit.
Coast may, at any time after the occurrence of an Event of Default, settle
or adjust disputes or claims directly with Account Debtors for amounts and
upon terms which Coast considers advisable in its reasonable credit
judgment
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and, in all cases, Coast shall credit Borrower's Loan account with only the
net amounts received by Coast in payment of any Receivables.
7.7 Returns. Provided no Event of Default has occurred and is continuing,
if any Account Debtor returns any Inventory to Borrower in the ordinary
course of its business, Borrower shall promptly determine the reason for
such return and promptly issue a credit memorandum to the Account Debtor in
the appropriate amount. In the event any attempted return occurs after the
occurrence of any Event of Default, Borrower shall (a) hold the returned
Inventory in trust for Coast, (b) segregate all returned Inventory from all
of Borrower's other property, (c) conspicuously label the returned
Inventory as subject to Coast's security interest, and (d) immediately
notify Coast of the return of any Inventory, specifying the reason for such
return, the location and condition of the returned Inventory, and on
Coast's request deliver such returned Inventory to Coast.
7.8 Verification. Coast may, from time to time, verify directly with the
respective Account Debtors the validity, amount and other matters relating
to the Receivables, by means of mail, telephone or otherwise, either in the
name of Borrower or Coast or such other name as Coast may choose.
7.9 No Liability. Coast shall not under any circumstances be responsible or
liable for any shortage or discrepancy in, damage to, or loss or
destruction of, any goods, the sale or other disposition of which gives
rise to a Receivable, or for any error, act, omission or delay of any kind
occurring in the settlement, failure to settle, collection or failure to
collect any Receivable, or for settling any Receivable in good faith for
less than the full amount thereof, nor shall Coast be deemed to be
responsible for any of Borrower's obligations under any contract or
agreement giving rise to a Receivable. Nothing herein shall, however,
relieve Coast from liability for its own gross negligence or willful
misconduct.
8. ADDITIONAL DUTIES OF THE BORROWER.
8.1 Financial and Other Covenants. Borrower shall at all times comply with
the financial and other covenants set forth in the Schedule.
8.2 Insurance. Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Coast, in such form and amounts as Coast
may reasonably require, and Borrower shall provide evidence of such
insurance to Coast, so that Coast is satisfied that such insurance is, at
all times, in full force and effect. All liability insurance policies of
Borrower shall name Coast as an additional insured, and all property
casualty and related insurance policies of Borrower shall name Coast as a
loss payee thereon and Borrower shall cause a lender's loss payee
endorsement to be issued in form reasonably acceptable to Coast. Upon
receipt of the proceeds of any such insurance, Coast shall apply such
proceeds in reduction of the Obligations as Coast shall determine in its
sole discretion, except that, provided no Default or Event of Default has
occurred and is continuing, Coast shall release to Borrower insurance
proceeds with respect to Equipment totaling less than the amount set forth
in Section 8 of the Schedule, which shall be utilized by Borrower for the
replacement of the Equipment with respect to
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which the insurance proceeds were paid. Coast may require reasonable
assurance that the insurance proceeds so released will be so used. If
Borrower fails to provide or pay for any insurance, Coast may, but is not
obligated to, obtain the same at Borrower's expense. Borrower shall
promptly deliver to Coast copies of all reports made to insurance
companies.
8.3 Reports. Borrower, at its expense, shall provide Coast with the written
reports set forth in Section 8 of the Schedule, and such other written
reports with respect to Borrower (including budgets, sales projections,
operating plans and other financial documentation), as Coast shall from
time to time reasonably specify.
8.4 Access to Collateral, Books and Records. At reasonable times but not
less frequently than quarterly and on one (1) Business Day's notice, Coast,
or its agents, shall have the right to perform Audits. Coast shall take
reasonable steps to keep confidential all confidential information obtained
in any Audit, but Coast 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 Audits shall be at
Borrower's expense and the charge for the Audits shall be Seven Hundred
Fifty Dollars ($750) per person per day (or such higher amount as shall
represent Coast's then current standard charge for the same), plus
reasonable out-of-pocket expenses. Borrower will not enter into any
agreement with any accounting firm, service bureau or third party to store
Borrower's books or records at any location other than Borrower's Address,
without first notifying Coast of the same and obtaining the written
agreement from such accounting firm, service bureau or other third party to
give Coast the same rights with respect to access to books and records and
related rights as Coast has under this Loan Agreement. Borrower shall also
take all necessary steps to assure that this material accounting and
software, systems and applications, and those of its accounting firm,
service bureau or any other third party vendor or supplier, will, on a
timely basis, adequately and completely address the Year 2000 Problem in
all material respects.
8.5 Negative Covenants. Borrower shall not, without Coast's prior written
consent, do any of the following:
(a) merge or consolidate with another entity, except in a transaction in
which (i) the owners of the Borrower hold at least fifty percent
(50%) of the ownership interest in the surviving entity immediately
after such merger or consolidation, and (ii) the Borrower is the
surviving entity;
(b) acquire any assets, except (i) in the ordinary course of business, or
(ii) in a transaction or a series of transactions not involving the
payment of an aggregate amount in excess of the amount set forth in
Section 8 of the Schedule;
(c) enter into any other transaction outside the ordinary course of
business;
(d) sell or transfer any Collateral, except for the sale of finished
Inventory in the ordinary course of Borrower's business, and except
for the sale of obsolete or unneeded Equipment in the ordinary course
of business;
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(e) store any Inventory or other Collateral with any warehouseman or
other third party;
(f) sell any Inventory on a sale-or-return, guaranteed sale, consignment,
or other contingent basis;
(g) make any loans of any money or other assets, except (i) advances to
customers or suppliers in the ordinary course of business, (ii)
travel advances, employee relocation loans and other employee loans
and advances in the ordinary course of business, and (iii) loans to
employees, officers and directors for the purpose of purchasing
equity securities of the Borrower;
(h) make or receive loans or advances to or from affiliated companies,
including affiliated companies SM Engineering, LD Management and
Software Moguls India Pvt., Limited. Notwithstanding the foregoing,
this limitation shall not apply to accounts payable arising in the
ordinary course of business owing to or from affiliate company
Software Moguls India Pvt., Limited.
(i) incur any debts, outside the ordinary course of business, which would
have a Material Adverse Effect;
(j) guarantee or otherwise become liable with respect to the obligations
of another party or entity;
(k) pay or declare any dividends on Borrower's stock (except for
dividends payable solely in stock of Borrower and dividends in an
amount not to exceed the shareholders' S corporation tax liability
arising out of their ownership of Borrower);
(l) make any change in Borrower's capital structure which would have a
Material Adverse Effect; or
(m) dissolve or elect to dissolve.
Transactions permitted by the foregoing provisions of this Section are only
permitted if no Default or Event of Default is continuing or would occur as a
result of such transaction.
8.6 Litigation Cooperation. Should any third-party suit or proceeding be
instituted by or against Coast with respect to any Collateral or relating
to Borrower, Borrower shall, without expense to Coast, make available
Borrower and its officers, employees and agents and Borrower's books and
records, to the extent that Coast may deem them reasonably necessary in
order to prosecute or defend any such suit or proceeding.
8.7 Further Assurances. Borrower agrees, at its expense, on request by
Coast, to execute all documents and take all actions, as Coast, may deem
reasonably necessary or useful in order to perfect and maintain Coast's
perfected security interest in the Collateral, and in order to fully
consummate the transactions contemplated by this Agreement.
9. TERM.
9.1 Maturity Date. This Agreement shall continue in effect until the
Maturity Date; provided that the Maturity Date shall automatically be
extended, and this Agreement shall automatically and continuously renew,
for successive additional terms of one year each, unless one party gives
written notice to the other, not less than sixty (60) days prior to the
Maturity Date or the next Renewal Date, that such
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party elects to terminate this Agreement effective on the Maturity Date or
such next Renewal Date.
9.2 Early Termination. This Agreement may be terminated prior to the
Maturity Date as follows: (a) by Borrower, effective three (3) Business
Days after written notice of termination is given to Coast; or (b) by Coast
at any time after the occurrence and during the continuance of an Event of
Default, without notice, effective immediately. If this Agreement is
terminated by Borrower or by Coast under this Section 9.2, Borrower shall
pay to Coast an Early Termination Fee in the amount shown in Section 3 of
the Schedule. The Early Termination Fee shall be due and payable on the
effective date of termination and thereafter shall bear interest at a rate
equal to the rate applicable to the Receivable Loans.
9.3 Payment of Obligations. On the Maturity Date or on any earlier
effective date of termination, 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
Coast'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,
Coast 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 Coast, nor shall any such termination relieve Borrower of any
Obligation to Coast, until all of the Obligations have been paid and
performed in full. Upon payment and performance in full of all the
Obligations and termination of this Agreement, Coast shall promptly deliver
to Borrower termination statements, requests for reconveyances and such
other documents as may be required to fully terminate Coast's security
interests.
10. EVENTS OF DEFAULT AND REMEDIES.
10.1 Events of Default. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement, and Borrower shall
give Coast immediate written notice thereof:
(a) Any material warranty, representation, statement, report or
certificate made or delivered to Coast by Borrower or any of
Borrower's officers, employees or agents, now or in the future, shall
be untrue or misleading and result in a Material Adverse Effect; or
(b) Borrower shall fail to pay when due any Loan or any interest thereon
or any other monetary Obligation; or
(c) the total Loans and other Obligations outstanding at any time shall
exceed the Credit Limit; or
(d) Borrower shall fail to deliver the proceeds of Collateral to Coast as
provided in Section 7.5 above, or shall fail to give Coast access to
its books and records or Collateral as provided in Section 8.4 above,
or shall breach any negative covenant set forth in Section 8.5 above;
or
(e) Borrower shall fail to comply with the financial covenants (if any)
set forth in the
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Schedule or shall fail to perform any material non-monetary
Obligation which by its nature cannot be cured; or
(f) Borrower shall fail to perform any material non-monetary Obligation,
which failure is not cured within ten (10) Business Days after the
date due; or
(g) Any levy, assessment, attachment, seizure, lien or encumbrance (other
than a Permitted Lien) is made on all or any part of the Collateral
which is not cured within ten (10) Business Days after the occurrence
of the same; or
(h) any default or event of default occurs under any obligation secured
by a Permitted Lien, which is not cured within any applicable cure
period or waived in writing by the holder of the Permitted Lien; or
(i) Borrower breaches any material contract or obligation, which has or
may reasonably be expected to have a Material Adverse Effect; or
(j) 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 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
(k) the commencement of any proceeding 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, which is (i) not timely controverted,
or (ii) not cured by the dismissal thereof within thirty (30) days
after the date commenced; or
(l) Borrower makes any payment on account of any indebtedness or
obligation which has been subordinated to the Obligations, other than
as permitted in the applicable subordination agreement, or if any
Person who has subordinated such indebtedness or obligations
terminates or in any way limits his subordination agreement; or
(m) Except as permitted under Section 8.5(a), Borrower shall suffer or
experience any Change of Control without Coast's prior written
consent, which consent shall be in the discretion of Coast in the
exercise of its reasonable business judgment; or
(n) Borrower shall generally not pay its debts as they become due, or
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
(o) there shall be any Material Adverse Effect.
Coast may cease making any Loans or extending any credit hereunder during
any of the above cure periods.
10.2 Remedies. Upon the occurrence, and during the continuance, of any
Event of Default, Coast, at its option, and without
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notice or demand of any kind (all of which are hereby expressly waived by
Borrower), may do any one or more of the following:
(a) Cease making Loans or otherwise extending credit to 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 Borrower hereby authorizes Coast without
judicial process to enter onto any of 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 Coast deems it reasonably necessary in
order to complete the enforcement of its rights under this Agreement
or any other agreement; provided, however, that should Coast seek to
take possession of any of the Collateral by Court process, 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 Coast retain possession of, and not
dispose of, any such Collateral until after trial or final
judgment;
(d) Require Borrower to assemble any or all of the Collateral and make it
available to Coast at places designated by Coast which are reasonably
convenient to Coast and Borrower, and to remove the Collateral to
such locations as Coast may deem advisable;
(e) Complete the processing, manufacturing or repair of any Collateral
prior to a disposition thereof and, for such purpose and for the
purpose of removal, Coast shall have the right to use Borrower's
premises, vehicles, hoists, lifts, cranes, equipment and all other
property without charge. Coast is hereby granted a license or other
right to use, without charge, Borrower's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production
of, advertising for sale, and selling any Collateral and Borrower's
rights under all licenses and all franchise agreements shall inure to
Coast's benefit;
(f) Sell, lease or otherwise dispose of any of the Collateral, in its
condition at the time Coast obtains possession of it or after further
manufacturing, processing or repair, at 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. Coast shall have the right to conduct
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such disposition on Borrower's premises without charge, for such time
or times as Coast deems reasonable, or on Coast's premises, or
elsewhere and the Collateral need not be located at the place of
disposition. Coast 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 Borrower of
any liability Borrower may have if any Collateral is defective as to
title or physical condition or otherwise at the time of sale;
(g) Demand payment of, and collect any Receivables and General
Intangibles comprising Collateral and, in connection therewith,
Borrower irrevocably authorizes Coast to endorse or sign Borrower's
name on all collections, receipts, instruments and other documents,
to take possession of and open mail addressed to Borrower and remove
therefrom payments made with respect to any item of the Collateral or
proceeds thereof, and, in Coast's sole discretion, to grant
extensions of time to pay, compromise claims and settle Receivables
and the like for less than face value; and
(h) Demand and receive possession of any of Borrower's federal and state
income tax returns and the books and records utilized in the
preparation thereof or referring thereto.
All attorneys' fees, expenses, costs, liabilities and obligations incurred
by Coast (including attorneys' fees and expenses incurred in connection with
bankruptcy) with respect to the foregoing shall be due from the Borrower to
Coast on demand. Coast may charge the same to Borrower's loan account, and the
same shall thereafter bear interest at the same rate as is applicable to the
Receivable Loans. Without limiting any of Coast's rights and remedies, from and
after the occurrence of any Event of Default, the interest rate applicable to
the Obligations shall be increased by an additional three percent per annum.
10.3 Standards for Determining Commercial Reasonableness. Borrower and
Coast agree that a sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable:
(a) Notice of the sale is given to Borrower at least seven (7) days prior
to the sale, and, in the case of a public sale, notice of the sale is
published at least seven (7) 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 designated by Coast, with or without
the Collateral being present;
(d) The sale commences at any time between 8:00 a.m. and 6:00 p.m. Los
Angeles, California time;
(e) Payment of the purchase price in cash or by cashier's check or wire
transfer is required; and
(f) With respect to any sale of any of the Collateral, Coast may (but is
not obligated to) direct any prospective purchaser to
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ascertain directly from Borrower any and all information concerning
the same.
Coast shall be free to employ other methods of noticing and selling the
Collateral, in its discretion, if they are commercially reasonable.
10.4 Power of Attorney. Borrower grants to Coast an irrevocable power of
attorney coupled with an interest, authorizing and permitting Coast (acting
through any of its employees, attorneys or agents) at any time, at its
option, but without obligation, with or without notice to Borrower, and at
Borrower's expense, to do any or all of the following, in Borrower's name
or otherwise, but Coast agrees to exercise the following powers in a
commercially reasonable manner:
(a) Execute on behalf of Borrower any documents that Coast may, in its
sole discretion, deem advisable in order to perfect and maintain
Coast's security interest in the Collateral, or in order to exercise
a right of Borrower or Coast, or in order to fully consummate all the
transactions contemplated under this Agreement, and all other present
and future agreements;
(b) Execute on behalf of Borrower any document exercising, transferring
or assigning any option to purchase, sell or otherwise dispose of or
to lease (as lessor or lessee) any real or personal property which is
part of Coast's Collateral or in which Coast has an interest;
(c) Execute on behalf of Borrower, any invoices relating to any
Receivable, any draft against any Account Debtor and any notice to
any Account Debtor, any proof of claim in bankruptcy, any Notice of
Lien, claim of mechanic's, materialman's or other lien, or assignment
or satisfaction of mechanic's, materialman's or other lien;
(d) Take control in any manner of any cash or non-cash items of payment
or proceeds of Collateral; endorse the name of Borrower upon any
instruments, or documents, evidence of payment or Collateral that may
come into Coast's possession;
(e) Endorse all checks and other forms of remittances received by Coast;
(f) Pay, contest or settle any lien, charge, encumbrance, security
interest and adverse claim in or to any of the Collateral, or any
judgment based thereon, or otherwise take any action to terminate or
discharge the same;
(g) Grant extensions of time to pay, compromise claims and settle
Receivables and General Intangibles for less than face value and
execute all releases and other documents in connection therewith;
(h) Pay any sums required on account of Borrower's taxes or to secure the
release of any liens therefor, or both;
(i) Settle and adjust, and give releases of, any insurance claim that
relates to any of the Collateral and obtain payment therefor;
(j) Instruct any third party having custody or control of any books or
records belonging to, or relating to, Borrower to give Coast the same
rights of access and other rights with respect thereto as Coast has
under this Agreement; and
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(k) Take any action or pay any sum required of Borrower pursuant to this
Agreement and any other present or future agreements.
Any and all sums paid and any and all costs, expenses, liabilities,
obligations and attorneys' fees incurred by Coast (including attorneys' fees and
expenses incurred pursuant to bankruptcy) with respect to the foregoing shall be
added to and become part of the Obligations, and shall be payable on demand.
Coast may charge the foregoing to Borrower's loan account and the foregoing
shall thereafter bear interest at the same rate applicable to the Receivable
Loans. In no event shall Coast's rights under the foregoing power of attorney or
any of Coast's other rights under this Agreement be deemed to indicate that
Coast is in control of the business, management or properties of Borrower.
Borrower shall pay, indemnify, defend, and hold Coast and each of its officers,
directors, employees, counsel, agents, and attorneys-in-fact (each, an
"Indemnified Person") harmless (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all attorneys fees and disbursements and other
costs and expenses actually incurred in connection therewith (as and when they
are incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them in connection with or as a
result of or related to the execution, delivery, enforcement, performance, and
administration of this Agreement and any other Loan Documents or the
transactions contemplated herein, and with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event
or circumstance in any manner related thereto (all the foregoing, collectively,
the "Indemnified Liabilities"). Borrower shall have no obligation to any
Indemnified Person hereunder with respect to any Indemnified Liability that a
court of competent jurisdiction finally determines to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations.
10.5 Application of Proceeds. All proceeds realized as the result of any
sale of the Collateral shall be applied by Coast first to the costs,
expenses, liabilities, obligations and attorneys' fees incurred by Coast 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 Coast shall determine in its sole discretion. Any surplus
shall be paid to Borrower or other persons legally entitled thereto;
Borrower shall remain liable to Coast for any deficiency. If, Coast, in its
sole discretion, directly or indirectly enters into a deferred payment or
other credit transaction with any purchaser at any sale of Collateral,
Coast 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 Coast of the cash therefor.
10.6 Remedies Cumulative. In addition to the rights and remedies set forth
in this Agreement, Coast shall have all the other rights and remedies
accorded a secured party in equity, under the Code, and under all other
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applicable laws, and under any other instrument or agreement now or in the
future entered into between Coast and Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise
by Coast of one or more of its rights or remedies shall not be deemed an
election, nor bar Coast from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of Coast 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 indefeasibly paid and performed.
11. GENERAL PROVISIONS.
11.1 Interest Computation. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by Coast
(including proceeds of Receivables and payment of the Obligations in full)
shall be deemed applied by Coast on account of the Obligations three (3)
Business Days after receipt by Coast of immediately available funds, and,
for purposes of the foregoing, any such funds received after 10:30 AM Los
Angeles, California time, on any day shall be deemed received on the next
Business Day. Coast shall be entitled to charge Borrower's account for such
three (3) Business Days of "clearance" or "float" at the rate(s) set forth
in Section 3 of the Schedule on all checks, wire transfers and other items
received by Coast, regardless of whether such three (3) Business Days of
"clearance" or "float" actually occur, and shall be deemed to be the
equivalent of charging three (3) Business Days of interest on such
collections. This across-the-board three (3) Business Day clearance or
float charge on all collections is acknowledged by the parties to
constitute an integral aspect of the pricing of Coast's financing of
Borrower. Coast shall not, however, be required to credit Borrower's
account for the amount of any item of payment which is unsatisfactory to
Coast in its sole discretion, and Coast may charge Borrower's loan account
for the amount of any item of payment which is returned to Coast unpaid.
11.2 Application of Payments. Subject to Section 7.5 hereof, all payments
with respect to the Obligations may be applied, and in Coast's sole
discretion reversed and re-applied, to the Obligations, in such order and
manner as Coast shall determine in its sole discretion.
11.3 Charges to Accounts. Coast may, in its discretion, require that
Borrower pay monetary Obligations in cash to Coast, or charge them to
Borrower's Loan account, in which event they will bear interest from the
date due to the date paid at the same rate applicable to the Loans.
11.4 Monthly Accountings. Coast shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Coast), unless
manifestly erroneous or unless Borrower notifies Coast in writing to the
contrary within thirty (30) days after each account is rendered, describing
the nature of any alleged errors or omissions.
11.5 Notices. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable
24
private delivery service or by regular first-class mail, facsimile or
certified mail return receipt requested, addressed to Coast or Borrower at
the addresses shown in the heading to this Agreement, or at any other
address designated in writing by one party to the other party. Notices to
Coast shall be directed to the Commercial Finance Division, to the
attention of the Division Manager or the Division Credit Manager. All
notices shall be deemed to have been given upon delivery in the case of
notices personally delivered, faxed (at time of confirmation of
transmission), or at the expiration of one (1) Business Day following
delivery to the private delivery service, or two (2) Business Days
following the deposit thereof in the United States mail, with postage
prepaid.
11.6 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.
11.7 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 Borrower and Coast 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 set forth in this Agreement or
in other written agreements signed by the parties in connection herewith.
11.8 Waivers. The failure of Coast at any time or times to require Borrower
to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and Coast shall not
waive or diminish any right of Coast 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, and whether or not similar.
None of the provisions of this Agreement or any other agreement now or in
the future executed by Borrower and delivered to Coast shall be deemed to
have been waived by any act or knowledge of Coast or its agents or
employees, but only by a specific written waiver signed by an authorized
officer of Coast and delivered to Borrower. 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 Coast on which Borrower is or may
in any way be liable, and notice of any action taken by Coast, unless
expressly required by this Agreement.
11.9 No Liability for Ordinary Negligence. Neither Coast, nor any of its
directors, officers, employees, agents, attorneys or any other Person
affiliated with or representing Coast shall be liable for any claims,
demands, losses or damages, of any kind whatsoever, made, claimed, incurred
or suffered by Borrower or any other party through the ordinary negligence
of Coast, or any of its directors, officers, employees, agents, attorneys
or any other Person affiliated with or representing Coast, but nothing
herein shall relieve Coast from liability for its own gross negligence or
willful misconduct.
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11.10 Amendment. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and a duly
authorized officer of Coast.
11.11 Time of Essence. Time is of the essence in the performance by
Borrower of each and every obligation under this Agreement.
11.12 Attorneys Fees, Costs and Charges. Borrower shall reimburse Coast for
all attorneys' fees (including attorneys' fees and expenses incurred
pursuant to bankruptcy) and all filing, recording, search, title insurance,
appraisal, audit, and other costs incurred by Coast, pursuant to, or in
connection with, or relating to this Agreement (whether or not a lawsuit is
filed), including, but not limited to, any attorneys' fees and costs
(including attorneys' fees and expenses incurred pursuant to bankruptcy)
Coast 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 or Borrower; 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;
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 Borrower's books and records; protect, obtain possession of, lease,
dispose of, or otherwise enforce Coast's security interest in, the
Collateral; and otherwise represent Coast in any litigation relating to
Borrower. If either Coast or 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 costs and attorneys' fees
(including attorneys' fees and expenses incurred pursuant to bankruptcy),
including (but not limited to) attorneys' fees and costs incurred in the
enforcement of, execution upon or defense of any order, decree, award or
judgment. Borrower shall also pay Coast's standard charges for returned
checks and for wire transfers, in effect from time to time. All attorneys'
fees, costs and charges (including attorneys' fees and expenses incurred
pursuant to bankruptcy) and other fees, costs and charges to which Coast
may be entitled pursuant to this Agreement may be charged by Coast to
Borrower's loan account and shall thereafter bear interest at the same rate
as the Receivable Loans.
11.13 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 Borrower and Coast;
provided, however, that Borrower may not assign or transfer any of its
rights under this Agreement without the prior written consent of Coast, and
any prohibited assignment shall be void. No consent by Coast to any
assignment shall release Borrower from its liability for the Obligations.
Coast may assign its rights and delegate its duties hereunder without the
consent of Borrower. Coast reserves the right to syndicate all or a portion
of the transaction created herein or sell, assign, transfer, negotiate, or
grant participations in all or any part of, or any interest in Coast's
rights and benefits hereunder. In connection with any such syndication,
assignment or participation, Coast may disclose all documents and
information which Coast now
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or hereafter may have relating to Borrower or Borrower's business. To the
extent that Coast assigns its rights and obligations hereunder to a third
Person, Coast thereafter shall be released from such assigned obligations
to Borrower.
11.14 Publicity. Coast is hereby authorized, at its expense, to issue
appropriate press releases and to cause a tombstone to be published
announcing the consummation of this transaction and the aggregate amount
thereof.
11.15 Paragraph Headings; Construction. Paragraph headings are only used in
this Agreement for convenience. Borrower and Coast acknowledge that the
headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe,
limit, define or interpret any term or provision of this Agreement. The
term "including", whenever used in this Agreement, shall mean "including
(but not limited to)". 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 Coast or
Borrower under any rule of construction or otherwise.
11.16 Governing Law; Jurisdiction; Venue. This Agreement and all acts and
transactions hereunder and all rights and obligations of Coast and Borrower
shall be governed by the internal laws of the State of California, without
regard to its conflicts of law principles. As a material part of the
consideration to Coast to enter into this Agreement, Borrower (a) agrees
that all actions and proceedings relating directly or indirectly to this
Agreement shall, at Coast's option, be litigated in courts located within
California, and that the exclusive venue therefor shall be Los Angeles
County; (b) consents to the jurisdiction and venue of any such court and
consents to service of process in any such action or proceeding by personal
delivery or any other method permitted by law; and (c) waives any and all
rights 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.
11.17 Mutual Waiver of Jury Trial. BORROWER AND COAST 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 COAST AND BORROWER, OR ANY CONDUCT,
ACTS OR OMISSIONS OF COAST OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH COAST OR
BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE.
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BORROWER:
PROFILE NATIONAL BUSINESS
DIRECTORY, INC., a Minnesota
corporation
By /s/ Xxxxx X. Xxxx
-----------------------------
President
COAST:
COAST BUSINESS CREDIT,
a division of Southern Pacific Bank
By /s/
-----------------------------
Title:
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Coast
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
Borrower: Profile National Business Directory, Inc.,
a Minnesota corporation
Address: 0000 Xxxxx Xxxxxx X.
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Date: July 16, 1998
This Schedule forms an integral part of the Loan and Security Agreement between
Coast Business Credit, a division of Southern Pacific Bank, and the
above-borrower of even date.
SECTION 2 - CREDIT FACILITIES
Section 2.1 - Credit Limit: Revolving Loans in a total amount at
any time outstanding totaling Three
Million Dollars ($3,000,000, being the
"Maximum Dollar Amount"), which is
based on:
a) Advances in an amount not to exceed
at any time four (4) times recurring
monthly Collections (as defined in
Section 1, above), based on a
trailing three (3) month moving
average however, these Advances shall
not exceed the lesser of:
1) Eighty percent (80%) of the
orderly liquidation value of the
subscriber base as determined by
BIA or other appraiser acceptable
to Coast in its sole and absolute
discretion, or
2) Four (4) times annualized EBITDA
(as defined in Section 1, above),
based on a trailing 12 month
moving average;
provided, however, Coast shall
have the right, at its sole
discretion to reduce the multiple
in section (a) in the
1
event that either (1) one month's
Collections decline by 30% or
more from the previous months
Collections, or (2) the three
month's moving average of
recurring monthly Collections
declines by 30% or more from the
prior three months moving
average.
SECTION 3 - INTEREST AND FEES
Section 3.1 - Interest Rate: A rate equal to the Prime Rate plus 3%
per annum, calculated on the basis of a
360-day year for the actual number of
days elapsed. The interest rate
applicable to all Loans shall be
adjusted monthly as of the first day of
each month, and the interest to be
charged for each month shall be based
on the highest Prime Rate in effect
during the prior month, but in no event
shall the rate of interest charged on
any Loans in any month be less than 9%
per annum.
Section 3.1 - Minimum Monthly
Interest: An amount equal to the interest that
would have accrued had the daily
aggregate outstanding balance of the
Loans been equal twenty percent (20%)
of the Maximum Dollar Amount during the
first three months following the
Closing Date, twenty-five percent (25%)
of the Maximum Dollar Amount during
months four through six following the
Closing Date, and thirty-three (33%) of
the Maximum Dollar Amount thereafter.
Section 3.2 - Loan Fee: 1% of the Maximum Dollar Amount, to be
fully earned and payable on the Closing
Date.
Section 3.2 - Facility Fee: $500, per quarter, payable on the
Closing Date (prorated for any partial
quarter at the beginning of the term of
this Agreement), and thereafter, on the
first Business Day of the first month
of each subsequent calendar quarter.
Section 9.2 - Early Termination
Fee: An amount equal to the greater of (i) an
amount equal to all interest due and
payable during the six (6) months
immediately preceding the effective date
of termination, or (ii) an amount equal
to the Minimum Monthly Interest
multiplied by the number of full or
partial months from the effective date
of termination to the Maturity Date, or
(iii) an amount equal to the average
monthly interest due and payable based
on the greater of the six month monthly
interest immediately preceding the
effective date of termination or, if the
effective date of termination is less
than six months from initial funding, an
amount equal to the average monthly
interest multiplied by the number of
full or partial months
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from the effective date of termination
to the Maturity Date will be due and
payable.
SECTION 5 - CONDITIONS PRECEDENT
Section 5.2 - Minimum
Availability: $300,000
Section 5.13 - Other Documents
and Agreements: 1. Security Agreements (including those
covering copyrights, patents and
trademarks);
2. UCC-1 financing statements, fixture
filings and termination statements;
and
3. Tri-Party Agreements (with billing
companies).
SECTION 6 - REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.2 - Prior Names of
Borrower: National Business Directory; nbd.
Section 6.2 - Prior Trade Names
of Borrower: National Business Directory; nbd.
Section 6.2 - Existing Trade Names
of Borrower: xxxxxx.xxx
Section 6.3 - Other Locations and
Addresses: 0000 Xxxxx Xxxxxx X., #000, Xxxxxxx,
Xxxxxxxxx 00000
Section 6.10 - Material Adverse
Litigation: Complaint for Breach of Contract, Fraud
and Unfair Discrimination practices
filed by Plaintiff Xxxxxxx X. Xxxxxx
against Borrower and Xxxxx X. Xxxx
seeking damages of $100,000. All causes
of action in the Complaint arise from
plaintiff's objection that Borrower
agreed to employ plaintiff for a three
year period after plaintiff's company,
World Web Wonders, Inc., acquired by
Borrower. Complaint alleges that
plaintiff was employed by Borrower for
approximately four months. Complaint
appears to have been filed during June,
1998.
Section 6.10 - Future Claims and
Litigation: Borrower will promptly inform Coast in
writing of any claim, proceeding,
litigation or investigation in the
future threatened or instituted by or
against Borrower involving any single
claim of Fifty Thousand Dollars
($50,000) or more, or involving One
Hundred Thousand Dollars ($100,000) or
more in the aggregate.
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SECTION 8 - ADDITIONAL DUTIES OF BORROWER
Section 8.1 - Other Provisions:1. Borrower's Tangible Net Worth
shall be no less than Seven
Hundred Fifty Thousand Dollars
($750,000) at all times.
Section 8.2 - Insurance: Subject to the limitations set forth in
Section 8.2 of the Agreement, Coast
shall release to Borrower insurance
proceeds with respect to Equipment
totaling less than Fifty Thousand
Dollars ($50,000).
Section 8.3 - Reporting: Borrower shall provide Coast with the
following:
(a) Monthly Receivable agings, aged by
invoice date, within ten (10) days
after the end of each month.
(b) Monthly accounts payable agings,
aged by invoice date, and
outstanding or held check registers
within ten (10) days after the end
of each month.
(c) Monthly internally prepared
financial statements, as soon as
available, and in any event within
thirty (30) days after the end of
each month.
(d) Quarterly internally prepared
financial statements, as soon as
available, and in any event within
forty-five (45) days after the end
of each fiscal quarter of Borrower.
(e) Quarterly customer lists, including
customer name, address, and phone
number.
(f) Annual audited financial
statements, as soon as available,
and in any event within ninety (90)
days following the end of
Borrower's fiscal year, containing
the unqualified opinion of, and
certified by, an independent
certified public accountant
acceptable to Coast.
Section 8.5: $150,000.00.
SECTION 9 - TERM
Section 9.1 - Maturity Date: The last Business Day of the month
three (3) years from the Closing Date,
subject to automatic renewal as
provided in Section 9.1 of the
Agreement, and early termination as
provided in Section 9.2 of the
Agreement.
4
