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EXHIBIT 10.16
SILICON VALLEY BANK
QUICKSTART LOAN AND SECURITY AGREEMENT
BORROWER: NEOFORMA, INC. ADDRESS: 000 XX XXXXXX XXXX XXXX, XXXXX 000
XXXXXXXX XXXX, XX 00000
DATE: 6/25/98
SILICON'S OFFER TO EXTEND FINANCING ON THE TERMS SET FORTH HEREIN SHALL EXPIRE
IF THIS AGREEMENT IS NOT EXECUTED BY BORROWER AND RETURNED TO SILICON WITHIN 30
DAYS OF THE ABOVE DATE.
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 (jointly and severally, the
"Borrower"), whose chief executive office is located at the above address
("Borrower's Address").
1. LOANS. Silicon will make loans to Borrower (the "Loans") in amounts
determined by Silicon in its reasonable business judgment up to the amount (the
"Credit Limit") shown on the Schedule to this Agreement (the "Schedule"),
provided no Event of Default and no event which, with notice or passage of time
or both, would constitute an Event of Default has occurred. All Loans and other
monetary Obligations will bear interest at the rate shown on the Schedule.
Interest will be payable monthly, on the date shown on the monthly billing from
Silicon. Silicon may, in its discretion, charge interest to Borrower's deposit
accounts maintained with Silicon.
2. SECURITY INTEREST. As security for all present and future indebtedness,
guarantees, liabilities, and other obligations, of Borrower to Silicon
(collectively, the "Obligations"), Borrower hereby grants Silicon a continuing
security interest in all of Borrower's interest in the following types of
property, whether now owned or hereafter acquired, and wherever located
(collectively, the "Collateral"): All "accounts," "general intangibles,"
"contract rights," "chattel paper," "documents" "letters of credit,"
"instruments," "deposit accounts," "inventory," "farm products," investment
property," "fixtures" and "equipment," as such terms are defined in Division 9
of the California Uniform Commercial Code in effect on the date hereof, and all
products, proceeds and insurance proceeds of the foregoing.
3. REPRESENTATIONS AND AGREEMENTS OF BORROWER. Borrower represents to Silicon as
follows, and Borrower agrees that the following representations will continue to
be true, and that Borrower will comply with all of the following agreements
throughout the term of this Agreement:
3.1 CORPORATE EXISTENCE AND AUTHORITY. Borrower, if a corporation, is and
will continue to be, duly authorized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The execution, delivery
and performance by Borrower of this Agreement, and all other documents
contemplated hereby have been duly and validly authorized, and do not violate
any law or any provision of, and are not grounds for acceleration under, any
agreement or instrument which is binding upon Borrower.
3.2 NAME; PLACES OF BUSINESS. The name of Borrower set forth in this
Agreement is its correct name. Borrower shall give Silicon 15 days' prior
written notice before changing its name. The address set forth in the heading to
this Agreement is Borrower's chief executive office. In addition, Borrower has
places of business and Collateral is located only at the locations set forth on
the Schedule. Borrower will give Silicon at least 15 days prior written notice
before changing its chief executive office or locating the Collateral at any
other location.
3.3 COLLATERAL. Silicon has and will at all times continue to have a
first-priority perfected security interest in all of the Collateral other than
specific equipment. Borrower will immediately advise Silicon in writing of any
material loss or damage to the Collateral.
3.4 FINANCIAL CONDITION AND STATEMENTS. All financial statements now or in
the future delivered to Silicon have been, and will be, prepared in conformity
with generally accepted accounting principles. Since the last date covered by
any such statement, there has been no material adverse change in the financial
condition or business of Borrower. Borrower will provide Silicon: (i) within 30
days after the end of each month, a monthly financial statement prepared by
Borrower, and such other information as Silicon shall reasonably request; (ii)
within 120 days following the end of Borrower's fiscal year, complete annual
financial statements, certified by independent certified public accountants
acceptable to Silicon and accompanied by the unqualified report
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thereon by said independent certified public accountants; and (iii) other
financial information reasonably requested by Silicon from time to time.
3.5 TAXES; COMPLIANCE WITH LAW. Borrower has filed, and will file, when due,
all tax returns and reports required by applicable law, and Borrower has paid,
and will pay, when due, all taxes, assessments, deposits and contributions now
or in the future owed by Borrower. Borrower has complied, and will comply, in
all material respects, with all applicable laws, rules and regulations.
3.6 INSURANCE. Borrower shall at all times insure all of the tangible
personal property Collateral and carry such other business insurance as is
customary in Borrower's industry.
3.7 ACCESS TO COLLATERAL AND BOOKS AND RECORDS. At reasonable times, on one
business day notice, Silicon, or its agents, shall have the right to inspect the
Collateral, and the right to audit and copy Borrower's books and records.
3.8 OPERATING ACCOUNTS. Borrower shall maintain its primary operating
accounts with Bank.
3.9 ADDITIONAL AGREEMENTS. Borrower shall not, without Silicon's prior
written consent, do any of the following: (i) enter into any transaction outside
the ordinary course of business except for the sale of capital stock to venture
investors, provided that Borrower promptly delivers written notification to
Silicon of any such sale; (ii) sell or transfer any Collateral, except in the
ordinary course of business; (iii) pay or declare any dividends on Borrower's
stock (except for dividends payable solely in stock of Borrower); or (iv)
redeem, retire, purchase or otherwise acquire, directly or indirectly, any of
Borrower's stock other than the repurchase of up to five percent (5%) of
Borrower's then issued stock in any fiscal year from Borrower's employees or
directors pursuant to written agreement with Borrower.
4. TERM. This Agreement shall continue in effect until the maturity date set
forth on the Schedule (the "Maturity Date"). This Agreement may be terminated,
without penalty, prior to the Maturity Date as follows: (i) by Borrower,
effective three business days after written notice of termination is given to
Silicon; or (ii) by Silicon at any time after the occurrence of an Event of
Default, without notice, effective immediately. On the Maturity Date or on any
earlier effective date of termination, Borrower shall pay all Obligations in
full, whether or not such Obligations are otherwise then due and payable. No
termination shall in any way affect or impair any security interest or other
right or remedy of Silicon, nor shall any such termination relieve Borrower of
any Obligation to Silicon, until all of the Obligations have been paid and
performed in full.
5. EVENTS OF DEFAULT AND REMEDIES. The occurrence of any of the following events
shall constitute an "Event of Default" under this Agreement: (a) Any
representation, statement, report or certificate given to Silicon by Borrower or
any of its officers, employees or agents, now or in the future, is untrue or
misleading in a material respect; or (b) Borrower fails to pay when due any Loan
or any interest thereon or any other monetary Obligation; or (c) the total
Obligations outstanding at any time exceed the Credit Limit; or (d) Borrower
fails to perform any other non-monetary Obligation, which failure is not cured
within 5 business days after the date due; or (e) Dissolution, termination of
existence, insolvency or business failure of Borrower; or appointment of a
receiver, trustee or custodian, for all or any part of the property of,
assignment for the benefit of creditors by, or the commencement of any
proceeding by or against Borrower under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or in the future in effect; or (f) a material
adverse change in the business, operations, or financial or other condition of
Borrower. If an Event of Default occurs, Silicon, shall have the right to
accelerate and declare all of the Obligations to be immediately due and payable,
increase the interest rate by an additional four percent per annum, and exercise
all rights and remedies accorded it by applicable law.
6. GENERAL. If any provision of this Agreement is held to be unenforceable, the
remainder of this Agreement shall still continue in full force and effect. This
Agreement and any other written agreements, documents and instruments executed
in connection herewith are the complete agreement between Borrower and Silicon
and supersede all prior and contemporaneous negotiations and oral
representations and agreements, all of which are merged and integrated in this
Agreement. There are no oral understandings, representations or agreements
between the parties which are not in this Agreement or in other written
agreements signed by the parties in connection this Agreement. The failure of
Silicon at any time to require Borrower to comply strictly with any of the
provisions of this Agreement shall not waive Silicon's right later to demand and
receive strict compliance. Any waiver of a default shall not waive any other
default. None of the provisions of this Agreement may be waived except by a
specific written waiver signed by an officer of Silicon and delivered to
Borrower. The provisions of this Agreement may not be amended, except in a
writing signed by Borrower and Silicon. Borrower shall reimburse Silicon for all
reasonable attorneys' fees and all other reasonable costs incurred by Silicon,
in connection with this Agreement (whether or not a lawsuit is filed). If
Silicon or Borrower files any lawsuit against the other predicated on ' a breach
of this Agreement, the prevailing party shall be entitled to recover its
reasonable costs and attorneys' fees from the non-prevailing party. Borrower may
not assign any rights under this Agreement without Silicon's prior written
consent. This Agreement shall be governed by the laws of the State of
California.
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7. MUTUAL WAIVER OF JURY TRIAL. BORROWER AND SILICON EACH HEREBY WAIVE THE RIGHT
TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN
ANY WAY RELATING TO, THIS AGREEMENT OR ANY CONDUCT, ACT OR OMISSION OF SILICON
OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR
AFFILIATES.
BORROWER: NEOFORMA, INC.
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By: /s/ XXXX XXXXX
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PRESIDENT OR VICE PRESIDENT
CEO
SILICON:
----------------------------------
By:
----------------------------------
Title:
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SILICON VALLEY BANK
SCHEDULE TO
QUICKSTART LOAN AND SECURITY AGREEMENT (EQUIPMENT ADVANCES)
BORROWER: Neoforma, Inc.
DATE: 6/25/98
This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
CREDIT LIMIT (EQUIPMENT) $ 750,000.00 (such amount to be funded under
(Section 1): the aggregate Credit Limit).Equipment
Advances will be made only on or prior to
12/25/98 (the "Last Advance Date")
and only for the purpose of purchasing
equipment reasonably acceptable to Silicon.
Borrower must provide invoices for the
equipment to Silicon on or before the Last
Advance Date.
INTEREST RATE (Section 1): A rate equal to the "Prime Rate" in effect
from time to time, plus 0% per annum.
Interest shall be calculated on the basis of
a 360-day year for the actual number of days
elapsed. "Prime Rate" means the rate
announced from time to time by Silicon as its
"prime rate;" it is a base rate upon which
other rates charged by Silicon are based, and
it is not necessarily the best rate available
at Silicon. The interest rate applicable to
the Obligations shall change on each date
there is a change in the Prime Rate.
MATURITY DATE (Section 4): After the Last Advance Date, the unpaid
principal balance of the Equipment Advances
shall be repaid in 36 equal monthly
installments of principal, plus interest,
commencing on 1/25/99 and continuing on the
same day of each month thereafter until the
entire unpaid principal balance of the
Equipment Advances and all accrued unpaid
interest have been paid (subject to Silicon's
right to accelerate the Equipment Advances on
an Event of Default).
BORROWER: SILICON:
Neoforma, Inc. SILICON VALLEY BANK
------------------------------------
By
---------------------------------- By
PRESIDENT OR VICE PRESIDENT ---------------------------
CEO Title
-------------------------
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SILICON VALLEY BANK
SCHEDULE TO
QUICKSTART LOAN AND SECURITY AGREEMENT (MASTER)
BORROWER: Neoforma, Inc.
DATE: 6/25/98
This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
CREDIT LIMIT (AGGREGATE) $ 750,000.00 includes, without limitation,
(Section 1): Equipment Advances and the Merchant
Services and Business Visa Reserve, if any)
INTEREST RATE (SECTION 1): A rate equal to the "Prime Rate" in effect
from time to time, plus 0% per annum.
Interest shall be calculated on the basis
of a 360-day year for the actual number
of days elapsed. "Prime Rate" means the
rate announced from time to time by
Silicon as its "prime rate;" it is a base
rate upon which other rates charged by
Silicon are based, and it is not
necessarily the best rate available at
Silicon. The interest rate applicable to
the Obligations shall change on each date
there is a change in the Prime Rate.
MATURITY DATE (Section 4): 12/25/99
OTHER LOCATIONS AND ADDRESSES
(Section 3.2): _____________________
OTHER AGREEMENTS: Borrower also agrees as follows:
1. LOAN FEE. Borrower shall concurrently
pay Silicon a non-refundable Loan Fee
in the amount of $ 2,000.00
2. BANKING RELATIONSHIP. Borrower shall at
all times maintain its primary banking
relationship with Silicon.
BORROWER: SILICON:
__________________________________
Neoforma, Inc. SILICON VALLEY BANK
By ______________________________ By __________________________
PRESIDENT OR VICE PRESIDENT
CEO Title _______________________
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LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of July 20, 1999,
by and between Neoforma, Inc. ("Borrower") and Silicon Valley Bank ("Silicon").
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 QuickStart Loan and Security Agreement (and Schedule
thereto), dated June 25, 1998, 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 Seven Hundred Fifty Thousand Dollars
($750,000). Defined terms used but not otherwise defined herein shall have the
same meanings as in the Loan Agreement. As of this date, the balance of
outstanding Equipment Advances is Four Hundred Thirty-Three Thousand Five
Dollars and 39/100 ($433,005.39).
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 and that certain
Intellectual Property Security Agreement.
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 (and Schedule thereto)
1. The paragraph entitled "Maturity Date" (Section 4) is
hereby amended, in its entirety, to read as follows:
Borrower will pay in one payment all outstanding
Equipment Advances plus all accrued unpaid interest
on July 20, 2000. In addition, Borrower will pay
regular monthly payments of all accrued unpaid
interest due as of each payment date beginning July
20, 1999, and all subsequent interest payments are
due on the same day of each month thereafter (subject
to Silicon's right to accelerate the Equipment
Advances on an Event of Default).
2. Section 3.10 entitled "Financial Covenants" is hereby
incorporated in to the Loan Agreement to read as
follows:
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Borrower shall comply with the following covenant, as
of the end of each month, except as otherwise
provided:
Liquidity: Borrower shall maintain a minimum
Liquidity ratio of 1.50 to 1.00. Liquidity shall be
defined as unrestricted cash and cash equivalents
plus accounts receivable divided by all Obligations
owing to Silicon. This covenant shall be monitored in
accordance with cash held by Silicon.
B. Modification(s) to Subordination Agreement.
1. The reference to the August 7, 1998 date of the
QuickStart Loan and Security Agreement between
Borrower and Bank is hereby deleted and replaced with
June 25, 1998.
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 Lender a fee in the amount of Two
Thousand Dollars ($2,000) (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
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. CONDITION. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee and execution of the QuickStart Warrant
to Purchase Stock agreement.
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This Loan Modification Agreement is executed as of the date first
written above.
BORROWER: SILICON:
NEOFORMA, INC. SILICON VALLEY BANK
By: /s/ XXXXXXXXX XXXXXXXXXX By: /s/ PELE X. XXXXX
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Name: Xxxxxxxxx Xxxxxxxxxx Name: Pele X. Xxxxx
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Title: CFO Title: AVP
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The undersigned hereby consent to (i) the modification to the Subordination
Agreement pursuant to this Loan Modification Agreement, and (ii) hereby ratifies
all the provisions of the Subordination Agreement and confirms that all
provisions of that document are in full force and effect.
CREDITOR:
COMDISCO, INC.
By: ------------------------- Date: -------------------------
Name: -------------------------
Title: -------------------------
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