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EXHIBIT 10.15
[LOGO OF GREYROCK BUSINESS CREDIT APPEARS HERE]
LOAN AND SECURITY AGREEMENT
BORROWER(S): INTERPLAY PRODUCTIONS
INTERPLAY OEM, INC.
ADDRESS: 00000 XXX XXXXXX XXX.
XXXXXX, XX 00000
DATE: JUNE 16, 1997
This Loan and Security Agreement is entered into on the above date between
GREYROCK BUSINESS CREDIT, a Division of NationsCredit Commercial Corporation
("GBC"), whose address is 00000 Xxxxxxxx Xxxx, Xxxxx 000, Xxx Xxxxxxx, Xx
00000 and the borrower named above (jointly and severally, "Borrower"), whose
chief executive office is located at the above address ("Borrower's Address").
The Schedule to this Agreement (the "Schedule") being signed concurrently is an
integral part of this Agreement. (Definitions of certain terms used in this
Agreement are set forth in Section 8 below.)
1. LOANS.
1.1 LOANS. GBC will make loans to Borrower (the "Loans"), in amounts
determined by GBC in its *, up to the amounts (the "Credit Limit") shown on the
Schedule, provided no Default or Event of Default has occurred and is
continuing. If at any time or for any reason the total of all outstanding Loans
and all other Obligations exceeds the Credit Limit, Borrower shall immediately
pay the amount of the excess to GBC, **.
*GOOD FAITH BUSINESS JUDGMENT
**WITHIN THREE (3) BUSINESS DAYS THEREAFTER
1.2 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 or in another written agreement signed by GBC and
Borrower. Interest shall be payable monthly, on the last day of the month.
Interest may, in GBC's discretion, be charged to Borrower's loan account, and
the same shall thereafter bear interest at the same rate as the other Loans.
1.3 FEES. Borrower shall pay GBC the fee(s) shown on the Schedule, which
are in addition to all interest and other sums payable to GBC and are not
refundable.
2. SECURITY INTEREST.
2.1 SECURITY INTEREST. To secure the payment and performance of all of the
Obligations when due, Borrower hereby grants to GBC a security interest in all
of Borrower's interest in the following, whether now owned or hereafter
acquired, and wherever located (collectively, the "Collateral"): All Inventory,
Equipment, Receivables, and General Intangibles, including, without limitation,
all of Borrower's Deposit Accounts, all money, all collateral in which GBC is
granted a security interest pursuant to any other present or future agreement,
all property now or at any time in the future in GBC's possession, and all
proceeds (including proceeds of any insurance policies, proceeds of proceeds and
claims against third parties), all products of the foregoing, and all books and
records related to any of the foregoing.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
In order to induce GBC to enter into this Agreement and to make Loans,
Borrower represents and warrants to GBC 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:
3.1 Corporate Existence and Authority. Borrower, if a corporation, is and
will continue to be, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation. 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 on Borrower.
The execution, delivery and performance by Borrower of this Agreement, and all
other documents contemplated hereby (i) have been duly and validly authorized,
(ii) are enforceable against Borrower in accordance with their terms (except
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as enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally), (iii) 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 (iv) 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.
3.2 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 GBC 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.
3.3 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 GBC at least 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.
3.4 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. GBC 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 GBC and the Collateral against all claims of others. So long as any
Loan is outstanding which is a term loan, 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 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 requested by GBC, use its
best * efforts to cause such third party to execute and deliver to GBC, in form
acceptable to GBC, such waivers and subordinations as GBC shall specify, so as
to ensure that GBC'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.
* COMMERCIALLY REASONABLE
3.5 MAINTENANCE OF COLLATERAL. Borrower will maintain the Collateral in
good working condition, ordinary wear and tear excepted, and Borrower will not
use the Collateral for any unlawful purpose. Borrower will immediately advise
GBC in writing of any material loss or damage to the Collateral.
3.6 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 generally accepted accounting principles.
3.7 FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial statements
now or in the future delivered to GBC have been, and will be, prepared in
conformity with generally accepted accounting principles * and now and in the
future will completely and 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 GBC and the date hereof, there has been no
material adverse change in the financial condition or business of Borrower.
Borrower is now and will continue to be solvent.
*(EXCEPT IN THE CASE OF NON-ANNUAL FINANCIAL INFORMATION FOR THE ABSENCE OF
FOOTNOTE DISCLOSURE AND SUBJECT TO CHANGES RESULTING FROM NORMAL, YEAR-END AUDIT
ADJUSTMENTS)
3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has timely
filed, and will timely file, all tax returns and reports required by applicable
law, and Borrower has timely paid, and will timely pay, all applicable 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 GBC 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. 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 any other governmental agency. Borrower shall, at all
times, utilize the services of an
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outside payroll service providing for the automatic deposit of all payroll taxes
payable by Borrower.
3.9 COMPLIANCE WITH LAW. * Borrower has complied, and will comply, in all
material respects, with all provisions of all applicable laws and regulations,
including, but not limited to, those relating to Borrower's ownership of real or
personal property, the conduct and licensing of Borrower's business, and all
environmental matters **.
*TO THE BEST OF ITS KNOWLEDGE,
**IN WHICH THE FAILURE TO SO COMPLY WILL HAVE A MATERIAL ADVERSE IMPACT ON
THE BORROWER OR THE COLLATERAL.
3.10 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 any material adverse change in
the financial condition or business of Borrower, or in any material impairment
in the ability of Borrower to carry on its business in substantially the same
manner as it is now being conducted. Borrower will promptly inform GBC in
writing of any claim, proceeding, litigation or investigation in the future
threatened or instituted by or against Borrower involving any single claim of
$50,000 or more, or involving $100,000 or more in the aggregate.
3.11 USE OF PROCEEDS. All proceeds of all Loans shall be used solely for
lawful business purposes.
4. RECEIVABLES.
4.1 REPRESENTATIONS RELATING TO RECEIVABLES. Borrower represents and
warrants to GBC as follows: Each Receivable with respect to which Loans are
requested by Borrower shall, on the date each Loan is requested and made,
represent an undisputed, bona fide, existing, unconditional obligation of the
Account Debtor created by the sale, delivery, and acceptance of goods or the
rendition of services, in the ordinary course of Borrower's business*.
* (BUT SALES ON TERMS PERMITTING CUSTOMERS TO RETURN DEFECTIVE GOODS OR TO
RETURN GOODS AT THE TIME NEW GOODS ARE PURCHASED IN ACCORDANCE WITH "STOCK
BALANCING" PROGRAMS OF THE BORROWER IN THE ORDINARY COURSE OF BUSINESS SHALL NOT
BE DEEMED TO VIOLATE THIS COVENANT)
4.2 REPRESENTATIONS RELATING TO DOCUMENTS AND LEGAL COMPLIANCE. Borrower
represents and warrants to GBC 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 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, and all
signatories and endorsers have the capacity to contract. All sales and other
transactions underlying or giving rise to each Receivable shall comply with all
applicable laws and governmental rules and regulations. All signatures and
indorsements 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.
4.3 SCHEDULES AND DOCUMENTS RELATING TO RECEIVABLES. Borrower shall
deliver to GBC transaction reports and loan requests, schedules and assignments
of all Receivables, and schedules of collections, all on GBC's standard forms;
provided, however, that Borrower's failure to execute and deliver the same shall
not affect or limit GBC's security interest and other rights in all of
Borrower's Receivables, nor shall GBC's failure to advance or lend against a
specific Receivable affect or limit GBC's security interest and other rights
therein. if requested by GBC, Borrower shall furnish GBC with copies (or, at
GBC'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 GBC an aged
accounts receivable trial balance in such form and at such intervals as GBC
shall request. In addition, ** Borrower shall deliver to GBC the originals of
all instruments, chattel paper, security agreements, guarantees and other
documents and property evidencing or securing any Receivables, immediately upon
receipt thereof and in the same form as received, with all necessary
indorsements.
* (SUBJECT TO THE CONFIDENTIALITY PROVISIONS SET FORTH BELOW)
**ON REQUEST BY GBC (SUBJECT TO THE CONFIDENTIALITY PROVISIONS SET FORTH IN
SECTION 9.16A BELOW)
***THE ABILITY TO INSPECT (AND AFTER AN EVENT OF DEFAULT THE RIGHT TO
POSSESSION OF) ALL
4.4 COLLECTION OF RECEIVABLES. Borrower shall have the right to collect
all Receivables, unless and until a Default or an Event of Default has occurred.
Borrower shall hold all payments on, and proceeds of, Receivables in trust for
GBC, and Borrower shall deliver all such payments and proceeds to GBC, within
one business day after receipt of the same, in their original form, duly
endorsed, to be applied to the Obligations in such order as GBC shall determine.
4.5 DISPUTES. Borrower shall notify GBC promptly of all disputes or claims
relating to Receivables on the regular reports to GBC. Borrower shall not
forgive, 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: (i)
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 GBC on the regular
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reports provided to GBC; (ii) no Default or Event of Default has occurred and is
continuing; and (iii) taking into account all such settlements and forgiveness,
the total outstanding Loans and other Obligations will not exceed the Credit
Limit.
4.6 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 (sending a copy to GBC). In the event any attempted return
occurs after the occurrence of any Event of Default, Borrower shall (i) not
accept any return without GBC's prior written consent, (ii) hold the returned
Inventory in trust for GBC, (iii) segregate all returned Inventory from all of
Borrower's other property, (iv) conspicuously label the returned Inventory as
GBC's property, and (v) immediately notify GBC of the return of any Inventory,
specifying the reason for such return, the location and condition of the
returned Inventory, and on GBC's request deliver such returned Inventory to GBC.
*IF APPROPRIATE,
4.7 VERIFICATION. GBC 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 GBC or such other name as GBC may choose, and GBC or its designee
may, at any time, notify Account Debtors that it has a security interest in the
Receivables.
4.8 NO LIABILITY. GBC 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 GBC 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 GBC from liability for its own gross negligence or willful
misconduct.
5. ADDITIONAL DUTIES OF THE BORROWER.
5.1 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 GBC, in such form and amounts as *, and
Borrower shall provide evidence of such insurance to GBC, so that GBC is
satisfied that such insurance is, at all times, in full force and effect. All
such insurance policies shall name GBC as an additional loss payee, and shall
contain a lenders loss payee endorsement in form reasonably acceptable to GBC.
Upon receipt of the proceeds of any such insurance, GBC shall apply such
proceeds in reduction of the Obligations as GBC shall determine in its sole
discretion, except that, provided no Default or Event of Default has occurred
and is continuing, GBC shall release to Borrower insurance proceeds with respect
to Equipment totaling less than ** $100,000, which shall be utilized by Borrower
for the replacement of the Equipment with respect to which the insurance
proceeds were paid. GBC may require reasonable assurance that the insurance
proceeds so released will be so used. If Borrower fails to provide or pay for
any insurance, GBC may, but is not obligated to, obtain the same at Borrower's
expense. Borrower shall promptly deliver to GBC copies of all reports made to
insurance companies.
*IS CUSTOMARY AND AVAILABLE FOR BORROWER'S BUSINESS
**$250,000
5.2 REPORTS. Borrower, at its expense, shall provide GBC with the written
reports set forth in the Schedule, and such other written reports with respect
to Borrower (including budgets, sales projections, operating plans and other
financial documentation), as GBC shall from time to time reasonably specify.
5.3 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times, and on
one business day's notice, GBC, or its agents, shall have the right to inspect
the Collateral, and the right to audit and copy Borrower's books and records.
GBC shall take reasonable steps to keep confidential all information obtained in
any such inspection or audit*. The foregoing inspections and audits shall be at
Borrower's expense and the charge therefor shall be $600 per person per day (or
such higher amount as shall represent GBC's then current standard charge for the
same), plus reasonable out-of-pockets expenses. Borrower shall not be charged
more than $3,000 per audit (plus reasonable out-of-pockets expenses), nor shall
audits be done more frequently than four times per calendar year, provided that
the foregoing limits shall not apply after the occurrence of a Default or Event
of Default, nor shall they restrict GBC's right to conduct audits at its own
expense (whether or not a Default or Event of Default has occurred). 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 obtaining GBC's written consent, which may be
conditioned upon such accounting firm, service bureau or other third party
agreeing to give GBC the same rights with respect to access to books and records
and related rights as GBC has under this Agreement.
*IN ACCORDANCE WITH SECTION 9.16A BELOW
5.4 REMITTANCE OF PROCEEDS. All proceeds arising from the sale or other
disposition of any Collateral shall be delivered, in kind, by Borrower to GBC in
the original form in which received by Borrower not later than the following
business day after receipt by Borrower, to be applied to the Obligations in such
order as GBC shall determine; provided that, if no Default or Event of
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Default has occurred and is continuing, and if no term loan is outstanding
hereunder, then Borrower shall not be obligated to remit to GBC the proceeds of
the sale of Equipment which is sold in the ordinary course of business, in a
good-faith arm's length transaction. Except for the proceeds of the sale of
Equipment as set forth above, Borrower shall not commingle proceeds of
Collateral with any of Borrower's other funds or property, and shall hold such
proceeds separate and apart from such other funds and property and in an express
trust for GBC. Nothing in this Section limits the restrictions on disposition of
Collateral set forth elsewhere in this Agreement.
5.5 NEGATIVE COVENANTS. Except as may be permitted in the Schedule,
Borrower shall not, without GBC's prior written consent, do any of the
following: (i) merge or consolidate with another corporation or entity*; (ii)
acquire any assets, except in the ordinary course of business; (iii) enter into
any other transaction outside the ordinary course of business; (iv) sell or
transfer any Collateral, except that, provided no Default or Event of Default
has occurred and is continuing, Borrower may (a) sell finished Inventory in the
ordinary course of Borrower's business, and (b) if no term loan is outstanding
hereunder, sell Equipment in the ordinary course of business, in good-faith
arm's length transactions; (v) store any Inventory or other Collateral with any
warehouseman or other third party; (vi) sell any Inventory on a sale-or-return,
guaranteed sale, consignment, or other contingent basis; (vii) make any loans
of any money or other assets**; (viii) incur any debts, outside the ordinary
course of business, which would have a material, adverse effect on Borrower or
on the prospect of repayment of the Obligations; (ix) guarantee or otherwise
become liable with respect to the obligations of another party or entity***; (x)
pay or declare any dividends on Borrower's stock (except for dividends payable
solely in stock of Borrower); (xi) redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of Borrower's stock****; (xii) make any
change in Borrower's capital structure which would have a material adverse
effect on Borrower or on the prospect of repayment of the Obligations; or (xiii)
dissolve or elect to dissolve; or (xiv) agree to do any of the foregoing.
*EXCEPT PURSUANT TO A REINCORPORATION IN THE STATE OF DELAWARE (PROVIDED
THAT, CONCURRENTLY, BORROWER EXECUTES AND DELIVERS TO GBC SUCH DOCUMENTS AND
INSTRUMENTS AS ARE NECESSARY TO HAVE THE SURVIVING DELAWARE CORPORATION BOUND BY
THIS AGREEMENT AND ALL OTHER DOCUMENTS AND AGREEMENTS RELATING THERETO AND
BORROWER DELIVERS SUCH OTHER DOCUMENTS AS ARE REASONABLY REQUESTED BY GBC IN
CONNECTION WITH SUCH MERGER)
+(OTHER THAN FOR STOCK OF THE BORROWER)
++(BUT SALES ON TERMS PERMITTING CUSTOMERS TO RETURN DEFECTIVE GOODS OR TO
RETURN GOODS AT THE TIME NEW GOODS ARE PURCHASED IN ACCORDANCE WITH "STOCK
BALANCING" PROGRAMS OF THE BORROWER IN THE ORDINARY COURSE OF BUSINESS SHALL NOT
BE DEEMED TO VIOLATE THIS COVENANT)
** (PROVIDED, HOWEVER, BORROWER MAY (A) SELL AND ISSUE TO ITS EMPLOYEES
SHARES OF ITS CAPITAL STOCK FOR WHICH SAID EMPLOYEES PAY THE PURCHASE PRICE
THEREOF IN INSTALLMENTS, AND (B) MAKE OTHER LOANS TO EMPLOYEES OF BORROWER IN
THE ORDINARY COURSE OF BORROWER'S BUSINESS WHICH IN THE AGGREGATE SHALL NOT
EXCEED AT ANY TIME $150,000);
***(EXCEPT FOR (A) GUARANTEES MADE ON BEHALF OF ANY SUBSIDIARY OF BORROWER
IN THE ORDINARY COURSE OF BORROWER'S BUSINESS IN CONNECTION WITH LICENSING
TRANSACTIONS BETWEEN SAID SUBSIDIARY AND THIRD PARTIES, PROVIDED SUCH LICENSING
TRANSACTIONS ARE OF THE TYPE AND ON TERMS AND CONDITIONS SIMILAR TO THE
LICENSING TRANSACTIONS IN WHICH BORROWER ENGAGES DIRECTLY, OR (B) GUARANTEES OF
OBLIGATIONS OF GAMES ON-LINE, INC. DBA ENGAGE GAMES ONLINE ("ENGAGE"), NOT TO
EXCEED $100,000 IN THE AGGREGATE OF LIABILITIES OF ENGAGE AT ANY ONE TIME;
****(EXCEPT THAT BORROWER MAY REPURCHASE STOCK FROM EMPLOYEES, CONSULTANTS
AND OTHER SERVICE PROVIDERS OF BORROWER PURSUANT TO AGREEMENTS UNDER WHICH SUCH
STOCK WAS ACQUIRED BY SUCH PERSON(S) SUBJECT TO VESTING, FORFEITURE OR OTHER
PROVISIONS WHICH ENTITLE BORROWER TO REPURCHASE SUCH STOCK, PROVIDED THAT THE
AGGREGATE PAID FOR SUCH STOCK IN ANY FISCAL YEAR DOES NOT EXCEED $500,000);
5.6 LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against GBC with respect to any Collateral or in any manner
relating to Borrower, Borrower shall, without expense to GBC, make available
Borrower and its officers, employees and agents, and Borrower's books and
records, without charge, to the extent that GBC may deem them reasonably
necessary in order to prosecute or defend any such suit or proceeding.
5.7 NOTIFICATION OF CHANGES. Borrower will promptly notify GBC in writing
of any change in its officers or directors, the opening of any new bank account
or other deposit account, and any material adverse change in the business or
financial affairs of Borrower.
5.8 FURTHER ASSURANCES. Borrower agrees, at its expense, on request by
GBC, to execute all documents and take all actions, as GBC may deem reasonably
necessary or useful in order to perfect and maintain GBC's perfected security
interest in the Collateral, and in order to fully consummate the transactions
contemplated by this Agreement.
5.9 INDEMNITY. Borrower hereby agrees to indemnify GBC and hold GBC
harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, causes of action, penalties, costs and expenses (including
attorneys' fees), of every nature, character and description, which GBC may
sustain or incur based upon or arising out of any of the Obligations, any actual
or alleged failure to collect and pay over any withholding or other tax relating
to Borrower or its employees, any relationship or agreement between GBC and
Borrower, any actual or alleged failure of GBC to comply with any writ of
attachment or other legal process relating to Borrower or
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any of its property, or any other matter, cause or thing whatsoever occurred,
done, omitted or suffered to be done by GBC relating to Borrower or the
Obligations (except any such amounts sustained or incurred as the result of the
gross negligence or willful misconduct of GBC or any of its directors, officers,
employees, agents, attorneys, or any other person affiliated with or
representing GBC). Notwithstanding any provision in this Agreement to the
contrary, the indemnity agreement set forth in this Section shall survive any
termination of this Agreement and shall for all purposes continue in full force
and effect.
6. TERM.
6.1 MATURITY DATE. This Agreement shall continue in effect until the
maturity date set forth on the Schedule (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 days prior to the next Maturity Date, that such party elects to terminate
this Agreement effective on the next Maturity Date.
6.2 EARLY TERMINATION. This Agreement may be terminated prior to the
Maturity Date as follows: (i) by Borrower, effective three business days after
written notice of termination is given to GBC; or (ii) by GBC at any time after
the occurrence of an Event of Default, without notice, effective immediately.
If this Agreement is terminated by Borrower or by GBC under this Section 6.2,
Borrower shall pay to GBC a termination fee (the "Termination Fee") in the
amount shown on the Schedule. The Termination Fee shall be due and payable on
the effective date of termination and thereafter shall bear interest at a rate
equal to the highest rate applicable to any of the Obligations.
6.3 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.
Without limiting the generality of the foregoing, if on the Maturity Date, or on
any earlier effective date of termination, there are any outstanding letters of
credit issued based upon an application, guarantee, indemnity or similar
agreement on the part of GBC, then on such date Borrower shall provide to GBC
cash collateral in an amount equal to * of the face amount of all such letters
of credit plus all interest, fees and costs due or (in GBC's estimation) likely
to become due in connection therewith, to secure all of the Obligations relating
to said letters of credit, pursuant to GBC's then standard form cash pledge
agreement. Notwithstanding any termination of this Agreement, all of GBC's
security interests in all of the Collateral and all of the terms and provisions
of this Agreement shall continue in full force and effect until all Obligations
have been paid and performed in full; provided that, without limiting the fact
that Loans are subject to the discretion of GBC, GBC 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 GBC, nor shall any such
termination relieve Borrower of any Obligation to GBC, 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, GBC shall
promptly deliver to Borrower termination statements, requests for reconveyances
and such other documents as may be reasonably required to terminate GBC's
security interests.
*100%
7. EVENTS OF DEFAULT AND REMEDIES.
7.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement, and Borrower shall give
GBC immediate written notice thereof: (a) Any warranty, representation,
statement, report or certificate made or delivered to GBC by Borrower or any of
Borrower's officers, employees or agents, now or in the future, shall be untrue
or misleading in a material respect; 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 perform any non-monetary
Obligation which by its nature cannot be cured; or (e) Borrower shall fail to
perform any other non-monetary Obligation, which failure is not cured within 5
business days after the date performance is due; or (f) 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 *** days after
the occurrence of the same; or (g) 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 (h) Borrower breaches any material contract or obligation, which has or may
reasonably be expected to have a material adverse effect on Borrower's business
or financial condition****; or (i) dissolution, termination of existence,
insolvency or business failure of Borrower or any Guarantor; 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 or any Guarantor 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 (j) the
commencement of any proceeding against Borrower or any Guarantor under any
reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, now or in the
future in effect, which is not cured by the dismissal thereof within 45 days
after the date commenced; or (k) revocation or termination of, or limitation or
denial of liability upon, any guaranty of the Obligations or any attempt to do
any of the foregoing; or (l) revocation or termination of, or limitation or
denial of liability upon, any pledge of any certificate of deposit, securities
or other property or asset
-0-
XXXXXXXX BUSINESS CREDIT LOAN AND SECURITY AGREEMENT
----------------------------------------------------------------------
pledged by any third party to secure any or all of the Obligations, or any
attempt to do any of the foregoing, or commencement of proceedings by or against
any such third party under any bankruptcy or insolvency law; or (m) 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 or terminates its subordination
agreement; or (n) there shall be a change in the record or beneficial ownership
of an aggregate of more than ***** 20% of the outstanding shares of stock of
Borrower, in one or more transactions, compared to the ownership of outstanding
shares of stock of Borrower in effect on the date hereof, without the prior
written consent of GBC; or (o) 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 (p) there shall be a
material adverse change in Borrower's business or financial condition. GBC may
cease making any Loans hereunder during any of the above cure periods, and
thereafter if an Event of Default has occurred.
*AND SUCH DEFAULT SHALL NOT BE CURED WITHIN THREE (3) BUSINESS DAYS;
**AND BORROWER SHALL FAIL TO PAY THE EXCESS TO GBC WITHIN THREE (3)
BUSINESS DAYS THEREAFTER
***FIFTEEN (15)
****IF SUCH BREACH HAS NOT BEEN CURED WITHIN TWENTY (20) DAYS AFTER NOTICE
FROM GBC
*****50%
+which would materially and adversely affect the ability of Borrower to
repay the Obligations.
7.2 REMEDIES. Upon the occurrence and during the continuance of any Event
of Default, and at any time thereafter*, GBC, at its option, and without 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 GBC 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 GBC deems it reasonably
necessary in order to complete the enforcement of its rights under this
Agreement or any other agreement; provided, however, that should GBC 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 GBC
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 GBC at places designated by GBC which are reasonably
convenient to GBC and Borrower, and to remove the Collateral to such locations
as GBC 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, GBC shall have the right to use Borrower's premises,
vehicles, hoists, lifts, cranes, equipment and all other property without
charge; (f) Sell, lease or otherwise dispose of any of the Collateral, in its
condition at the time GBC 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. GBC shall have the right to conduct
such disposition on Borrower's premises without charge, for such time or times
as GBC deems reasonable, or on GBC's premises, or elsewhere and the Collateral
need not be located at the place of disposition. GBC 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 GBC 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 GBC's sole discretion, to grant extensions of time to pay,
compromise claims and settle Receivables, General Intangibles 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 reasonable attorneys' fees,
expenses, costs, liabilities and obligations incurred by GBC with respect to the
foregoing shall be added to and become part of the Obligations, shall be due on
demand, and shall bear interest at a rate equal to the highest interest rate
applicable to any of the Obligations. Without limiting any of GBC's rights and
remedies, from and after the occur-
-7-
GREYROCK BUSINESS CREDIT LOAN AND SECURITY AGREEMENT
----------------------------------------------------------------------
rence of any Event of Default, the interest rate applicable to the Obligations
shall be increased by an additional four percent per annum*.
*SO LONG AS SUCH EVENT OF DEFAULT HAS NOT BEEN EITHER CURED OR WAIVED
7.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. Borrower and GBC
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: (i) Notice of the sale is given to Borrower at least
seven days prior to the sale, and, in the case of a public sale, notice of the
sale is published at least seven days before the sale in a newspaper of general
circulation in the county where the sale is to be conducted; (ii) Notice of the
sale describes the collateral in general, non-specific terms; (iii) The sale is
conducted at a place designated by GBC, with or without the Collateral being
present; (iv) The sale commences at any time between 8:00 a.m. and 6:00 p.m; (v)
Payment of the purchase price in cash or by cashier's check or wire transfer is
required; (vi) With respect to any sale of any of the Collateral, GBC may (but
is not obligated to) direct any prospective purchaser to ascertain directly from
Borrower any and all information concerning the same. GBC shall be free to
employ other methods of noticing and selling the Collateral, in its discretion,
if they are commercially reasonable.
7.4 POWER OF ATTORNEY. Upon the occurrence and during the continuance of
any Event of Default, without limiting GBC's other rights and remedies, Borrower
grants to GBC an irrevocable power of attorney coupled with an interest,
authorizing and permitting GBC (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 GBC agrees to exercise the
following powers in a commercially reasonable manner: (a) Execute on behalf of
Borrower any documents that GBC may, in its sole discretion, deem advisable in
order to perfect and maintain GBC's security interest in the Collateral, or in
order to exercise a right of Borrower or GBC, 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 GBC's Collateral or in which GBC 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 GBC's
possession; (e) Endorse all checks and other forms of remittances received by
GBC; (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 GBC the same rights of access and other rights with respect
thereto as GBC has under this Agreement; and (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 reasonable sums paid and any and all reasonable costs,
expenses, liabilities, obligations and reasonable attorneys' fees incurred by
GBC with respect to the foregoing shall be added to and become part of the
Obligations, shall be payable on demand, and shall bear interest at a rate equal
to the highest interest rate applicable to any of the Obligations. In no event
shall GBC's rights under the foregoing power of attorney or any of GBC's other
rights under this Agreement be deemed to indicate that GBC is in control of the
business, management or properties of Borrower.
7.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any
sale or other disposition of the Collateral shall be applied by GBC first to the
reasonable costs, expenses, liabilities, obligations and attorneys' fees
incurred by GBC 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 GBC shall determine in its sole discretion. Any
surplus shall be paid to Borrower or other persons legally entitled thereto;
Borrower shall remain liable to GBC for any deficiency. If GBC, in its sole
discretion, directly or indirectly enters into a deferred payment or other
credit transaction with any purchaser at any sale of Collateral, GBC 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 GBC of the cash
therefor.
7.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set forth
in this Agreement, GBC shall have all the other rights and remedies accorded a
secured party under the California Uniform Commercial Code and under all other
applicable laws, and under any other instrument or agreement now or in the
future entered into between GBC and Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise by
GBC of one or more of its rights or remedies shall not be deemed an election,
nor bar GBC
-8-
GREYROCK BUSINESS CREDIT LOAN AND SECURITY AGREEMENT
----------------------------------------------------------------------
from subsequent exercise or partial exercise of any other rights or remedies.
The failure or delay of GBC to exercise any rights or remedies shall not operate
as a waiver thereof, but all rights and remedies shall continue in full force
and effect until all of the Obligations have been fully paid and performed.
8. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
"Account Debtor" means the obligor on a Receivable.
--------------
"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.
"Agreement" and "this Agreement" means this Loan and Security Agreement and
---------- --------------
all modifications and amendments thereto, extensions thereof, and replacements
therefor.
"Business Day" means a day on which GBC is open for business.
------------
"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 2.1 above.
----------
"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.
---------------
"Eligible Inventory" means Inventory which GBC, in its *, deems eligible
------------------
for borrowing, based on such ** considerations as GBC may from time to time deem
appropriate. Without limiting the fact that the determination of which Inventory
is eligible for borrowing is a matter of GBC's discretion, Inventory which does
not meet the following requirements will not be deemed to be Eligible Inventory:
Inventory which (i) consists of finished goods, in good, new and salable
condition which is not perishable, not obsolete or unmerchantable, and is not
comprised of raw materials, work in process, packaging materials or supplies;
(ii) meets all applicable governmental standards; (iii) has been manufactured in
compliance with the Fair Labor Standards Act; (iv) conforms in all respects to
the warranties and representations set forth in this Agreement; (v) is at all
times subject to GBC's duly perfected, first priority security interest; and
(vii) is situated at Borrower's Address or at one of Borrower's other locations
set forth on the Schedule.
*GOOD FAITH BUSINESS JUDGMENT
**RELEVANT
"Eligible Receivables" means unconditional Receivables arising in the
--------------------
ordinary course of Borrower's business from the completed sale of goods or
rendition of services, which GBC, in its *,shall deem eligible for borrowing,
based on such ** considerations as GBC may from time to time deem appropriate.
***
*GOOD FAITH BUSINESS JUDGMENT
**RELEVANT
***Without limiting the fact that the determination of which Receivables
are eligible for borrowing is a matter of GBC's discretion, the following (the
"Minimum Eligibility Requirements") are the minimum requirements for a
--------------------------------
Receivable to be an Eligible Receivable: (i) the Receivable must not be
outstanding for more than 120 days from its invoice date, (ii) the Receivable
must not represent progress xxxxxxxx, or be due under a fulfillment or
requirements contract with the Account Debtor (provided that installment
payments shall be permitted, if disclosed to GBC), (iii) the Receivable must not
be subject to any contingencies (including Receivables arising from sales on
consignment, guaranteed sale or other terms pursuant to which payment by the
Account Debtor may be conditional, but sales on terms permitting customers to
return defective goods or to return goods at the time new goods are purchased in
accordance with "stock balancing" programs of the Borrower in the ordinary
course of business shall not be deemed to violate this provision), (iv) the
Receivable must not be owing from an Account Debtor with whom the Borrower has
any dispute (whether or not relating to the particular Receivable) (and if it
is, the Receivable will be considered ineligible to the extent of the amount of
the dispute), (v) the Receivable must not be owing from an Affiliate of
Borrower, (vi) the Receivable must not be owing from an Account Debtor which is
subject to any insolvency or bankruptcy proceeding, or whose financial condition
is not acceptable to GBC in its good faith business judgment, or which, fails or
goes out of a material portion of its business, (vii) the Receivable must not be
owing from an Account Debtor to whom Borrower is or may be liable for goods
purchased from such Account Debtor or otherwise (to the extent of the amount of
such liability of the Borrower). If more than 50% of the Receivables owing from
an Account Debtor are outstanding more than 120 days from their invoice date
(without regard to unapplied credits) or are otherwise not eligible Receivables,
then all Receivables owing from that Account Debtor will be deemed ineligible
for borrowing. GBC may, from time to time, in its discretion, revise the Minimum
Eligibility Requirements, upon written notice to the Borrower, provided that in
no event shall the 120-day period in clause (i) or the 50% cross-aging clause in
the immediately preceding sentence be modfied without the written consent of the
Borrower. Notwithstanding the foregoing, if GBC withdraws approval of a
particular Account Debtor, so that Receivables owing from such Account Debtor
cease to be Eligible, the Receivables
-9-
GREYROCK BUSINESS CREDIT LOAN AND SECURITY AGREEMENT
----------------------------------------------------------------------
outstanding at the date of the withdrawal shall nevertheless continue to be
Eligible Receivables, so long as they comply with the other Minimum Eligibility
Requirements.
"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, dyes, jigs, goods and
other tangible personal property (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 7.1 of this
----------------
Agreement.
"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, 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 GBC, 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 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).
"Guarantor" means any Person who has guaranteed any of the Obligations.
---------
"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 all raw materials,
work in process, finished goods and goods in transit), 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.
"LIBOR Rate" means (i) the one-month London Interbank Offered Rate for
----------
deposits in U.S. dollars, as shown each day in The Wall Street Journal (Eastern
Edition) under the caption "Money Rates - London Interbank Offered Rates
(LIBOR)"; or (ii) if the Wall Street Journal does not publish such rate, the
offered one-month rate for deposits in U.S. dollars which appears on the Reuters
Screen LIBO Page as of 10:00 a.m., New York time, each day, provided that if at
--------
least two rates appear on the Reuters Screen LIBO Page on any day, the "LIBOR
Rate" for such day shall be the arithmetic mean of such rates; or (iii) if the
Wall Street Journal does not publish such rate on a particular day and no such
rate appears on the Reuters Screen LIBO Page on such day, the rate per annum at
which deposits in U.S. dollars are offered to the principal London office of The
Chase Manhattan Bank, in the London interbank market at approximately 11:00
A.M., London time, on such day in an amount approximately equal to the
outstanding principal amount of the Loans, for a period of one month, in each of
the foregoing cases as determined in good faith by GBC, which determination
shall be conclusive absent manifest error.
"Obligations" means all present and future Loans, advances, debts,
-----------
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to GBC, 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 GBC in
Borrower's debts owing to others), absolute or contingent, due or to become due,
including, without limitation, all interest, charges, expenses, fees, attorney's
fees, expert witness fees, audit fees, letter of credit fees, loan 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 GBC.
"Permitted Liens" means the following: (i) purchase money security
---------------
interests in specific items of Equipment; (ii) leases of specific items of
Equipment; (iii) liens for taxes not yet payable; (iv) additional security
interests and liens which are subordinate to the security interest in favor of
GBC and are consented to in writing by GBC (which consent shall not be
unreasonably withheld); (v) security interests being terminated substantially
concurrently with this Agreement; (vi) liens of materialmen, mechanics,
warehousemen, carriers, or other similar liens arising in the ordinary course of
business and securing obligations which are not delinquent; (vii) liens incurred
in connection with the extension, renewal or refinancing of the indebtedness
secured by liens of the type described above in clauses (i) or (ii) above,
provided that any extension, renewal or replacement lien is limited to the
property encumbered by the existing lien and the principal amount of the
indebtedness being extended,
-00-
XXXXXXXX XXXXXXXX CREDIT LOAN AND SECURITY AGREEMENT
----------------------------------------------------------------------
renewed or refinanced does not increase; (viii) Liens in favor of customs and
revenue authorities which secure payment of customs duties in connection with
the importation of goods*. GBC will have the right to require, as a condition
to its consent under subparagraph (iv) above, that the holder of the additional
security interest or lien sign an intercreditor agreement on GBC's then standard
form, acknowledge that the security interest is subordinate to the security
interest in favor of GBC, 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.
* (IX) PRESENT SECURITY INTERESTS SECURING THE PRESENTLY OUTSTANDING
SUBORDINATED SECURED NOTES OF BORROWER.
"Person" means any individual, sole proprietorship, partnership, joint
------
venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.
"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 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.
*AND THE UK SUBSIDIARY'S (AS DEFINED IN THE SCHEDULE)
Other Terms. All accounting terms used in this Agreement, unless otherwise
-----------
indicated, shall have the meanings given to such terms in accordance with
generally accepted accounting principles, consistently applied. 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.
9. GENERAL PROVISIONS.
9.1 INTEREST COMPUTATION. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by GBC (including
proceeds of Receivables and payment of the Obligations in full) shall be deemed
applied by GBC on account of the Obligations three Business Days after receipt
by GBC of immediately available funds. GBC shall not, however, be required to
credit Borrower's account for the amount of any item of payment which is
unsatisfactory to GBC in its discretion, and GBC may charge Borrower's Loan
account for the amount of any item of payment which is returned to GBC unpaid.
9.2 APPLICATION OF PAYMENTS. All payments with respect to the Obligations
may be applied, and in GBC's sole discretion reversed and re-applied, to the
Obligations, in such order and manner as GBC shall determine in its sole
discretion.
9.3 CHARGES TO ACCOUNT. GBC may, in its discretion, require that Borrower
pay monetary Obligations in cash to GBC, or charge them to Borrower's Loan
account, in which event they will bear interest at the same rate applicable to
the Loans.
9.4 MONTHLY ACCOUNTINGS. GBC 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 GBC), unless Borrower
notifies GBC in writing to the contrary within * sixty days after each account
is rendered, describing the nature of any alleged errors or admissions.
* 180
9.5 NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable private delivery
service or by regular first-class mail, or certified mail return receipt
requested, addressed to GBC 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. All notices shall be deemed to have been given upon delivery in
the case of notices personally delivered, or at the expiration of one business
day following delivery to the private delivery service, or two business days
following the deposit thereof in the United States mail, with postage prepaid.
9.6 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.
9.7 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 GBC 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.
-----------------------
9.8 WAIVERS. The failure of GBC 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 GBC shall not waive or diminish
any right of GBC 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
-00-
XXXXXXXX XXXXXXXX CREDIT LOAN AND SECURITY AGREEMENT
----------------------------------------------------------------------
or in the future executed by Borrower and delivered to GBC shall be deemed to
have been waived by any act or knowledge of GBC or its agents or employees, but
only by a specific written waiver signed by an authorized officer of GBC 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 GBC on which Borrower is or may in any way be liable, and notice of any
action taken by GBC, unless expressly required by this Agreement.
9.9 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 GBC.
9.10 TIME OF ESSENCE. Time is of the essence in the performance by Borrower
of each and every obligation under this Agreement.
9.11 ATTORNEYS FEES AND COSTS. Borrower shall reimburse GBC for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by GBC, pursuant to, or in
connection with, or relating to this Agreement (whether or not a lawsuit is
filed), including, but not limited to, any reasonable attorneys' fees and costs
GBC 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 GBC's
security interest in, the Collateral; and otherwise represent GBC in any
litigation relating to Borrower. If either GBC 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 reasonable costs and attorneys'
fees, including (but not limited to) reasonable attorneys' fees and costs
incurred in the enforcement of, execution upon or defense of any order, decree,
award or judgment. All attorneys' fees and costs to which GBC may be entitled
pursuant to this Paragraph shall immediately become part of Borrower's
Obligations, shall be due on demand, and shall bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations.
9.12 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 GBC; provided, however,
that Borrower may not assign or transfer any of its rights under this Agreement
without the prior written consent of GBC, and any prohibited assignment shall be
void. No consent by GBC to any assignment shall release Borrower from its
liability for the Obligations.
9.13 JOINT AND SEVERAL LIABILITY. If Borrower consists of more than one
Person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.
9.14 LIMITATION OF ACTIONS. Any claim or cause of action by Borrower
against GBC, its directors, officers, employees, agents, accountants or
attorneys, based upon, arising from, or relating to this Loan Agreement, or any
other present or future document or agreement, or any other transaction
contemplated hereby or thereby or relating hereto or thereto, or any other
matter, cause or thing whatsoever, occurred, done, omitted or suffered to be
done by GBC, its directors, officers, employees, agents, accountants or
attorneys, shall be barred unless asserted by Borrower by the commencement of an
action or proceeding in a court of competent jurisdiction by the filing of a
complaint within *, and the service of a summons and complaint on an officer of
GBC, or on any other person authorized to accept service on behalf of GBC,
within ** days thereafter. Borrower agrees that such *** is a reasonable and
sufficient time for Borrower to investigate and act upon any such claim or cause
of action. The *** one-year period provided herein shall not be waived, tolled,
or extended except by the written consent of GBC in its sole discretion. This
provision shall survive any termination of this Loan Agreement or any other
present or future agreement.
*TWO YEARS AFTER SUCH CLAIM OR CAUSE OF ACTION ACCRUES
**SIXTY (60)
***TWO-YEAR
9.15 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used in
this Agreement for convenience. Borrower and GBC 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 GBC or Borrower under any rule of construction or
otherwise.
9.16 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of GBC and Borrower shall
be governed by the laws of the State of California. As a material part of the
consideration to GBC to enter into this Agreement, Borrower (i) agrees that all
actions and pro-
-00-
XXXXXXXX XXXXXXXX CREDIT LOAN AND SECURITY AGREEMENT
----------------------------------------------------------------------
ceedings relating directly or indirectly to this Agreement shall, at GBC's
option, be litigated in courts located within California, and that the exclusive
venue therefor shall be Los Angeles County; (ii) 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 (iii) 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. *
* 9.16A CONFIDENTIALITY. GBC agrees to exercise reasonable care to
---------------
maintain the confidentiality of all proprietary, confidential or trade secret
information disclosed pursuant to Sections 4.3, 5.2 or 5.3 hereof, and any such
other information which is identified as "confidential" by Borrower and provided
to GBC by Borrower in connection with this Agreement, and GBC shall not use any
such information for any purpose or in any matter other than pursuant to the
terms contemplated by this Agreement, except to the extent such information (i)
was or becomes generally available to the public other than as a result of a
disclosure by GBC, or (ii) was or became available on a non-confidential basis
from a source other than Borrower, provided that such source is not bound by a
confidentiality agreement with Borrower known to GBC; provided, however, that
GBC may disclose such information (A) at the request or pursuant to any
requirement of any governmental agency to which GBC is subject or in connection
with an examination of GBC by any such agency; (B) pursuant to subpoena or other
court process; (C) when required to do so in accordance with the provisions of
any applicable law; (D) to the extent reasonably required in connection with the
exercise of any remedy hereunder; and (E) to GBC's independent auditors,
attorneys and other professional advisors, provided such auditors, attorneys and
professional advisors agree to keep such information confidential to the same
extent required of GBC hereunder.
9.17 MUTUAL WAIVER OF JURY TRIAL. BORROWER AND GBC 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 GBC AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF GBC OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH GBC OR BORROWER, IN ALL
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
BORROWER:
INTERPLAY PRODUCTIONS
BY [SIGNATURE ILLEGIBLE]
------------------------------
PRESIDENT OR VICE PRESIDENT
BY [SIGNATURE ILLEGIBLE]
------------------------------
SECRETARY OR ASS'T SECRETARY
INTERPLAY OEM, INC.
BY [SIGNATURE ILLEGIBLE]
-------------------------------
PRESIDENT OR VICE PRESIDENT
BY [SIGNATURE ILLEGIBLE]
-------------------------------
ASS'T SECRETARY
GBC:
GREYROCK BUSINESS CREDIT,
A DIVISION OF NATIONSCREDIT COMMERCIAL
CORPORATION
BY [SIGNATURE ILLEGIBLE]
--------------------------------
TITLE Vice President
-----------------------------
46,335-6
-13-
--------------------------------------------------------------------------------
[LOGO OF GREYROCK BUSINESS APPEARS HERE]
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER(S): INTERPLAY PRODUCTIONS
INTERPLAY OEM, INC.
DATE: JUNE 16, 1997
This Schedule is an integral part of the Loan and Security Agreement between
GREYROCK BUSINESS CREDIT, A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION
("GBC") and the above-borrower ("Borrower") of even date.
================================================================================
1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of (1) or (2) below:
(1) $20,000,000 at any one time outstanding; or
(2) an amount equal to
(i) 65% of the amount of Borrower's Eligible
Receivables (as defined in Section 8 above), plus
65% of the amount of the Eligible Receivables (as
defined in Section 8 above) of Interplay
Productions Limited (U.K.) (the AUK Subsidiary@),
which Borrower represents is a wholly-owned
subsidiary of Interplay Productions (the
"Parent"), plus
(ii) the lesser of (A) 100% of the Value of
Borrower's Eligible Inventory (as defined in
Section 8 above), consisting of "Interplay Titles"
(i.e. software titles as to which Borrower is the
publisher and does marketing and manufacturing)
and 20% of the Value of Borrower's Eligible
Inventory (as defined in Section 8 above),
consisting of "Affiliate Titles" (i.e. software
titles as to which Borrower is not the publisher
and does not do marketing and manufacturing) or
(B) $5,000,000. "Value", as used herein, means the
lower of cost or wholesale market value.
The UK Subsidiary shall provide a cross-corporate
guarantee and first-priority security interests in its
Receivables and other assets prior to the making of any
Loans with respect to the same. In order to be Eligible
Receivables, the UK Subsidiary's Receivables (the AUK
Receivables@) shall be billed from and payable to
offices in the UK (even though bills may be sent to,
and payments may be remitted from, other countries).
Currencies in which Receivables are denominated shall
be acceptable to GBC in its sole discretion.
-1-
GREYROCK BUSINESS CREDIT SCHEDULE LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
Loans will be made separately to each Borrower based on
the Receivables and Inventory of each Borrower. Loans
based on the UK Receivables will be made to the Parent.
================================================================================
2. INTEREST.
INTEREST RATE (Section 1.2):
The interest rate in effect throughout each calendar
month during the term of this Agreement shall be the
highest "LIBOR Rate" in effect during such month, plus
4.87% per annum, provided that the interest rate in
effect in each month shall not be less than 8% per
annum, and provided that the interest charged for each
month shall be a minimum of $20,000, regardless of the
amount of the Obligations outstanding. Interest shall
be calculated on the basis of a 360-day year for the
actual number of days elapsed. "LIBOR Rate" has the
meaning set forth in Section 8 above.
================================================================================
3. FEES (Section 1.3/Section 6.2):
Loan Fee: $200,000, payable concurrently herewith.
Termination Fee: $2,000 per month for each month (or portion thereof)
from the effective date of termination to the Maturity
Date
NSF Check Charge: $15.00 per item.
Wire Transfers: $15.00 per transfer.
================================================================================
4. MATURITY DATE
(Section 6.1): MAY 31, 1998, subject to automatic renewal as provided
in Section 6.1 above, and early termination as provided
in Section 6.2 above.
================================================================================
5. REPORTING.
(Section 5.2):
Borrower shall provide GBC with the following:
1. Annual financial statements, as soon as available, and
in any event within 120 days following the end of
Borrower's fiscal year, certified by independent
certified public accountants acceptable to GBC.
2. Quarterly unaudited financial statements, as soon as
available, and in any event within 45 days after the
end of each fiscal quarter of Borrower.
3. Monthly unaudited financial statements, as soon as
available, and in any event within 30 days after the
end of each month.
-2-
GREYROCK BUSINESS CREDIT SCHEDULE LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
4. Monthly Receivable agings, aged by invoice date, within
10 days after the end of each month.
5. Monthly accounts payable agings, aged by invoice date,
and outstanding or held check registers within 10 days
after the end of each month.
6. Monthly perpetual inventory reports for the Inventory
valued on a first-in, first-out basis at the lower of
cost or market (in accordance with generally accepted
accounting principles) or such other inventory reports
as are reasonably requested by GBC, all within 30 days
after the end of each month.
================================================================================
6. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(Section 3.2): See Exhibits hereto
PRIOR TRADE
NAMES OF BORROWER
(Section 3.2): See Exhibits hereto
EXISTING TRADE
NAMES OF BORROWER
(Section 3.2): See Exhibits hereto
OTHER LOCATIONS AND
ADDRESSES (Section 3.3): See Exhibits hereto
MATERIAL ADVERSE
LITIGATION (Section 3.10): See Exhibits hereto
================================================================================
7. ADDITIONAL PROVISIONS:
7.1 CORPORATE STRUCTURE. BORROWERS represent and warrant that their
corporate structure is as follows: Interplay Productions (the "Parent")
owns 100% of the outstanding stock of the UK Subsidiary and Interplay OEM,
Inc., 91% of the outstanding stock of Shiny Entertainment, Inc. ("Shiny")
and 100% of the outstanding stock of Interplay Co., Ltd. (a Japanese
company) (the "Japanese Subsidiary"). The Japanese Subsidiary does not and
will not do business in the United States and does not and will not own any
assets in the United States. The UK Subsidiary, Interplay OEM, Inc., Shiny
and Interplay Co., Ltd. have no subsidiaries. The Parent has no other
subsidiaries, other than as set forth above.
7.2 AFFILIATE GUARANTIES. Concurrently, Borrowers shall cause the UK
Subsidiary to execute and deliver to GBC a Continuing Guarantee with
respect to all of the Obligations and security agreements, UCC-1 Financing
Statements and all such other documents as shall be necessary, in GBC's
judgment, to grant GBC a first priority security interest in all of its
assets, all of which shall be on such form as GBC shall specify.
7.3 PLEDGE OF SHINY STOCK. Concurrently, the Parent shall execute and
deliver to GBC a Stock Pledge Agreement pledging not less than 91% of the
outstanding stock of
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GREYROCK BUSINESS CREDIT SCHEDULE LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
Shiny, in such form as GBC shall specify, and shall deliver to GBC
certificates evidencing such shares together with duly executed stock
powers with respect thereto. Throughout the term of this Agreement, said
pledged stock shall continue to represent not less than 91% of the
outstanding stock of Shiny, except for reductions in such percentage as a
result of the exercise of employee stock options.
7.4 COPYRIGHT FILINGS. Concurrently, Borrowers are executing and
delivering to GBC a Security Agreement in Copyrighted Works (the "Copyright
Agreement"). Borrower represents and covenants as follows:
(a) Future Owned Software. Borrower shall register with the United
----------------------
States Copyright Office (the "Copyright Office") all future software,
computer programs and other material works of authorship subject to United
States copyright protection ("Copyrights") which are hereafter owned,
developed or acquired by the Borrower, within 30 days after the date the
same are first owned, developed or acquired, and Borrower shall, within
said 30-day period cause the Copyright Agreement to be amended to include
such Copyrights, and cause such amendment to be filed in the Copyright
Office.
(b) Future Licensed Software. Borrower shall cause all Copyrights
-------------------------
hereafter licensed by the Borrower as a licensee, which give rise to
Receivables and as to which Borrower has exclusive publishing rights in the
United States, to be registered by the owner thereof with the Copyright
Office, within 30 days after the date the same is licensed by the Borrower,
and Borrower shall, within said 30-day period cause its license or a
memorandum thereof to be filed in the Copyright Office and cause the
Copyright Agreement to be amended to include such license, and cause such
amendment to be filed in the Copyright Office.
(c) All Owned and Licensed Software. From the date hereof to and
--------------------------------
including November 29, 1997, not less than 50% of all Eligible Receivables
arising from the sale or licensing of Copyrights ("Copyright Receivables")
shall arise from the sale or licensing of Copyrights which have been
registered with the United States Copyright Office, and which are expressly
included in the Copyright Agreement filed with the Copyright Office; (iii)
on and after November 30, 1997 not less than 70% of all Copyright
Receivables shall arise from the sale or licensing of Copyrights which have
been registered with the United States Copyright Office, and which are
expressly included in the Copyright Agreement filed with the Copyright
Office.
(d) Shiny. Parent has filed in the Copyright Office its license
------
rights to Shiny's products pursuant to Product Agreement between Parent and
Shiny dated July 24, 1995 (the "Shiny Exclusive Output Agreement"), and
Parent's license rights thereunder shall be included in the Copyright
Agreement filed with the Copyright Office. In addition, concurrently,
Borrower shall provide GBC with an agreement by Shiny, in form and
substance satisfactory to GBC, pursuant to which Shiny agrees not to modify
the Shiny Exclusive Output Agreement in such manner as to materially
increase the amount of advances, minimum guarantees, royalties or other
payments to be made by Parent to Shiny or to reduce materially of otherwise
adversely and materially affect any rights or obligations of Parent under
the Shine Exclusive Output Agreement, without GBC's prior written consent.
7.5 BAILEE AGREEMENTS. Concurrently, Borrowers shall cause Ditan, IPC,
Omni Resources, Advance Paper Box, Xxxxx and Future Media to execute and
deliver Bailee Agreements in such form as GBC shall specify.
7.6 SUBORDINATED DEBT HOLDER AGREEMENTS. Within 30 days after the date
hereof, Borrower shall obtain and deliver to GBC (i) copies of signed
Subordination Agreements
-4-
GREYROCK BUSINESS CREDIT SCHEDULE LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
in favor of Imperial Bank in the form previously provided by the Borrower
to GBC, and (ii) signed Subordinated Debt Holder Agreements, in the form
provided to the Borrower by GBC, in each case, executed by the holders of
not less than 90% of the Parent's presently outstanding Subordinated
Secured Notes.
7.7 UK RECEIVABLES-STREAMLINE PROVISIONS.
(a) Borrowing Base Certificate. Daily reporting of transactions and
--------------------------
daily schedules and assignments of Receivables and schedules of
collections, called for by Section 4.3 of this Loan Agreement, will not be
required with respect to the UK Receivables. Instead, the Borrower shall
provide GBC with a monthly Borrowing Base Certificate, in such form as GBC
shall from time to time specify, within 10 days after the end of each
month, with respect to the UK Receivables.
(b) Proceeds of Receivables. Delivery of the proceeds of Receivables
-----------------------
within one business day after receipt, as called for by Sections 4.4 and
5.4 of this Loan Agreement will not be required with respect to the UK
Receivables.
(c) Termination of Streamline Provisions on Default. The provisions
------------------------------------------------
of Sections 7.6 (a) and 7.6 (b) above shall immediately terminate if any
Event of Default occurs and is continuing. Upon termination of said
provisions, the Borrower shall, then and thereafter, provide GBC with the
daily reporting of transactions and daily schedules and assignments of the
UK Receivables and schedules of collections, as called for by Section 4.3
of the Loan Agreement, and the Borrower shall cause the UK Subsidiary to
deliver all proceeds of UK Receivables and other Collateral to GBC, within
one business day after receipt, as called for by Sections 4.4 and 5.4 of
this Loan Agreement.
7.8 FOREIGN LAW PROVISIONS.
(a) No Reduction of Payments. The Borrower shall pay all amounts of
------------------------
principal, interest, fees and other amounts due under this Agreement free
and clear of, and without reduction for or on account of, any present and
future taxes, levies, imposts, duties, fees, assessments, charges,
deductions or withholdings and all liabilities with respect thereto
(excluding, in the case of GBC, income and franchise taxes imposed on it by
the jurisdiction under the laws of which GBC is organized or in which its
principal executive offices may be located or any political subdivision or
taxing authority thereof or therein) (all such nonexcluded taxes, levies,
imposts, duties, fees, assessments, charges, deductions, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes shall
be required by law to be deducted or withheld from any payment, the
Borrower shall increase the amount paid so that GBC receives when due (and
is entitled to retain), after deduction or withholding for or on account of
such Taxes (including deductions or withholdings applicable to additional
sums payable under this Section), the full amount of the payment provided
for in this Agreement.
(b) Deduction or Withholding; Tax Receipts. If the Borrower makes
--------------------------------------
any payment hereunder in respect of which it is required by law to make any
deduction or withholding, it shall pay the full amount to be deducted or
withheld to the relevant taxation or other authority within the time
allowed for such payment under applicable law and promptly thereafter shall
furnish to GBC an original or certified copy of a receipt evidencing
payment thereof, together with such other information and documents as GBC
may reasonably request. If no Taxes are payable in respect of any payment
hereunder or in connection herewith, the Borrower shall, upon request of
GBC, furnish to GBC a certificate from each appropriate taxing authority,
or an opinion of counsel acceptable to GBC, in either case stating that
such payment is exempt from or not subject to Taxes.
-5-
GREYROCK BUSINESS CREDIT SCHEDULE LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
(c) Indemnity. Without limiting any other provisions of this
---------
Agreement, if GBC is required by law to make any payment on account of
Taxes, or any liability in respect of any Tax is imposed, levied or
assessed against GBC, the Borrower shall indemnify GBC for and against such
payment or liability, together with any incremental taxes, interest or
penalties, and all costs and expenses, payable or incurred in connection
therewith, including Taxes imposed on amounts payable under this Section
7.8, whether or not such payment or liability was correctly or legally
asserted. A certificate of GBC as to the amount of any such payment shall,
in the absence of manifest error, be conclusive and binding for all
purposes.
(d) Other Charges. Without limiting any other provisions of this
-------------
Agreement, the Borrower agrees to indemnify GBC against and hold it
harmless from any and all present and future stamp, transfer, documentary
and other such taxes, levies, fees, assessments and other charges made by
any jurisdiction by reason of the execution, delivery, performance and
enforcement of the Loan Documents.
(e) Obligation to Make Payments in Dollars. Payment in United States
--------------------------------------
Dollars ("Dollars") of all amounts due under this Loan Agreement and all
other present and future documents, instruments and agreements relating
hereto (with this Loan Agreement, the "Loan Documents") is of the essence,
and Dollars shall be the currency of account in all events. The payment
obligations of the Borrower under the Loan Documents shall not be
discharged by an amount paid in another currency or in another place,
whether pursuant to a judgment or otherwise, to the extent that the amount
so paid on conversion to Dollars and transfer to GBC under normal banking
procedures (after premium and costs of exchange) does not yield the amount
of Dollars due under the Loan Documents. If, for the purposes of obtaining
judgment in any court, it is necessary to convert a sum due hereunder or
any other Loan Document in Dollars into another currency (the "Other
Currency"), the rate of exchange used shall be that at which in accordance
with normal banking procedures GBC could purchase Dollars with the Other
Currency on the Business Day preceding that on which final judgment is
given. The obligation of the Borrower in respect of any such sum due from
it to GBC under the Loan Documents shall, notwithstanding any judgment in
such Other Currency, be discharged only to the extent that on the Business
Day following receipt by GBC of any sum adjudged to be so due in the Other
Currency, GBC may in accordance with normal banking procedures purchase
Dollars with the Other Currency; if the Dollars so purchased are less than
the sum originally due GBC in Dollars, the Borrower agrees, as a separate
and independent obligation and notwithstanding any such judgment, to
indemnify GBC against such loss,
-6-
GREYROCK BUSINESS CREDIT SCHEDULE LOAN AND SECURITY AGREEMENT
--------------------------------------------------------------------------------
and if the Dollars so purchased exceed the sum originally due to GBC in
Dollars, GBC agrees to remit to the Borrower such excess."
Borrower: GBC:
INTERPLAY PRODUCTIONS Greyrock Business Credit,
a Division of NationsCredit Commercial
Corporation
By /s/ Xxxxxxxxxxx X. Xxxxxxxxxx
-------------------------------
President or Vice President By /s/ Xxxx Xxxxxx
--------------------------------------
Title V.P.
-----------------------------------
By /s/ Xxxxxx Camps
-------------------------------
Ass't Secretary
Borrower:
INTERPLAY OEM, INC.
By /s/ Xxxx X. Goldworn
-------------------------------
President or Vice President
By /s/ Xxxx X. Xxxxxx
-------------------------------
Ass't Secretary
-7-
Exhibit A-1
To
Schedule to Loan Security Agreement
Greyrock Business Credit
Interplay Productions and Interplay OEMS, Inc.
6. BORROWER INFORMATION
PRIOR NAMES OF BORROWER
(SECTION 3.2)
Interplay Productions
---------------------
Xxxxx Xxxxx Corp.
Interplay OEM, Inc.
-------------------
None
Exhibit A-2
To
Schedule to Loan Security Agreement
Greyrock Business Credit
Interplay Productions and Interplay OEMS, Inc.
PRIOR TRADE NAMES OF BORROWER
(SECTION 3.2)
Interplay Productions
---------------------
None
Interplay OEM, Inc.
-------------------
None
Exhibit A-3
To
Schedule to Loan Security Agreement
Greyrock Business Credit
Interplay Productions and Interplay OEMS, Inc.
EXISTING TRADE NAMES OF BORROWER
(SECTION 3.2)
Interplay Productions
---------------------
Brainstorm
VR Sports
I.O.L.
MacPlay
Digital Voodoo
Interplay Pictures
Interplay OEM, Inc.
-------------------
Interplay Licensing & Merchandising
Exhibit A-4
To
Schedule to Loan Security Agreement
Greyrock Business Credit
Interplay Productions and Interplay OEMS, Inc.
OTHER LOCATIONS AND ADDRESSES
(SECTION 3.3)
Interplay Productions
---------------------
Interplay Productions
16795, 16815 and 00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
IPC
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Ditan
0000 Xxxxx Xxxx
Xxxxxxx, XX 00000
Advance Paper Box
0000 X. Xxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Omni Resources
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx Global Turnkey
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Future Media
00000 Xxxx Xxxxx
Xxxxxxxx, XX 00000
Interplay OEM, Inc.
------------------
Same as above
Exhibit A-5
To
Schedule to Loan Security Agreement
Greyrock Business Credit
Interplay Productions and Interplay OEMS, Inc.
MATERIAL ADVERSE LITIGATION
(SECTION 3.10)
Interplay Productions
---------------------
1. Xxxxx Xxxxxxxxx dba The Chessworks Studio. Interplay received a
-----------------------------------------
letter dated November 4, 1996. The Chessworks Studio alleges that
Interplay's use of the xxxx "Chess Mates" may infringe its rights to
the xxxx "The Chess Mate." The Chessworks Studio and Interplay are
currently in discussions to resolve the matter. The Company does not
believe that this dispute will have a material adverse impact on the
Company or its financial condition or business
Interplay OEM, Inc.
------------------
None
[LOGO OF INTERPLAY APPEARS HERE]
June 19, 1997
Greyrock Business Credit
a Division of NationsCredit Commercial Corporation
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Re: Interplay Productions
---------------------
Gentlemen:
In order to facilitate the closing of the Loan and Security Agreement
transaction between Interplay Productions, a California corporation ("Parent"),
Interplay OEM, Inc., a California corporation ("OEM"), and Greyrock Business
Credit, a division of NationsCredit Commercial Corporation ("Greyrock"), the
parties have executed the transaction documents with certain points still
outstanding. The parties agree under this side letter to the final
modifications to the definitive transaction documents as follows:
SCHEDULE TO LOAN AND SECURITY AGREEMENT
---------------------------------------
Section 7.6. Section 7.6 of the Schedule to Loan and Security Agreement is
-----------
hereby amended and restated in its entirety to read as follows:
(a) Borrower represents and warrants to GBC that the principal
amount of the presently outstanding Subordinated Secured Promissory Notes
of the Parent (the "Notes") is $14,803,000 and that the holders of
approximately $9,100,000 of the Notes previously signed subordination and
standstill agreements in favor of Imperial Bank. Within 30 days of the date
hereof, Borrower shall obtain and deliver to GBC Subordinated Debt Holder
Agreements ("SDH Agreements"), in the form provided to the Borrower by GBC,
executed by the holder of not less than 20% in principal amount of the
Notes; and within 60 days hereof, Borrower shall obtain and deliver to GBC
SDH Agreements executed by the holders of an additional 20% in principal
amount of the Notes; and within 90 days after the date hereof, Borrower
shall obtain and deliver to GBC SDH Agreements, executed by the holders of
an additional 20% in principal amount of the Notes, so that within 90 days
after the date hereof GBC will have signed SDH Agreements from the holders
of a total of at least 60% in principal amount of the Notes.
Greyrock Business Credit
A Division of NationsCredit Commercial Corporation
June 19, 1997
Page 2
(b) In addition, Borrower shall use its diligent efforts to obtain
subordination and standstill agreements in favor of GBC from the holders of
Notes who did not previously sign Subordination Agreements in favor of
Imperial Bank (the "Non-signing Holders"), in substantially the Imperial
Bank form, within 90 days after the date hereof. In the event any of the
Non-signing Holders, who have not signed such subordination and standstill
agreements in favor of GBC, take any actions which would be prohibited by
such subordination and standstill agreements if they had signed them, the
same shall constitute an Event of Default hereunder.
PLEDGE AGREEMENT
----------------
Section 3. Add the following words at the end of Section 3 to the Pledge
---------
Agreement:
"other than as set forth in the Shareholders Agreement dated July 24, 1995
between Pledgor, and Shiny Entertainment, Inc. and Xxxxx Xxxxx as modified
by that certain letter agreement dated June [16], 1997."
Section 4. Add to Section 4 at the top of Page 2, commencing in the first line
---------
on that page replace the words commencing with "due" and ending with "event of
default," to read as follows:
"due, or within any applicable cure period, part or all of any of the
Obligations, or any event of default"
Section 5. Add to Section 5 at the top of page 2, in the fourth line on that
---------
page between the words "thereafter" and "GBC shall," the words:
"so long as such Event of Default has not been either cured or waived,"
Exhibit A. The blank on Exhibit A should be completed so that the Exhibit
---------
reads:
"8,500,000 shares of Common Stock of Shiny Entertainment, Inc."
CROSS-CORPORATE CONTINUING GUARANTY
-----------------------------------
Section 3. On page 2, in Section 3, at the twelfth through eighteenth lines,
---------
delete the words:
"or any failure of GBC to comply with any provision of applicable law in
enforcing any security interest in or lien upon any property securing any
or all of the Indebtedness including, but not limited to, any failure by
GBC to dispose of
Greyrock Business Credit
A Division of NationsCredit Commercial Corporation
June 19, 1997
Page 3
any property securing any or all of the Indebtedness in a commercially
reasonable manner;"
Section 7. On page 3, in Section 7, at the seventh through eighth lines, delete
---------
the words "default or".
Section 9. On page 3, in Section 9, at the seventh line, between the words
---------
"indebtedness." and "No payment", insert the words:
"Except as permitted by the Loan Agreement,"
Section 16. On page 5, in Section 16, commencing with the sixteenth line,
----------
replace the section which begins with "one year after" and ends with "such one
year period" to read as follows:
"within two years after such claim or cause of action accrues, and service
of a summons and complaint on an officer of GBC or any other person
authorized to accept service of process on behalf of GBC, within 60 days
thereafter, Guarantor agrees that such two-year period"
TRADEMARK SECURITY AGREEMENT FOR PARENT
---------------------------------------
Section 3.3. On page 3, immediately before the first sentence of that section,
-----------
insert the words:
"Except as provided in the Loan Documents,"
SECURITY AGREEMENT IN COPYRIGHTED WORKS
---------------------------------------
Section 2(b). On page 2 in Section 2(b), delete from the first line the words
------------
"non-exclusive".
Section 2(d). On page 2 in Section 2(d), add the following words after the word
------------
"Grantor" at the end of that section:
"; provided such Schedules also include copyrights licensed by Grantor."
Section 3(d). On page 3, in Section 3(d), in the second line between the words
------------
"contractors," and "to assign", insert the words:
"who develop products on a "work for hire" basis"
Greyrock Business Credit
A Division of NationsCredit Commercial Corporation
June 19, 1997
Page 4
Please countersign this side letter confirming the agreement of Greyrock to
the modifications to the Loan Documents expressly provided by Parent and OEM on
this side letter.
Sincerely yours,
INTERPLAY PRODUCTIONS, a California
corporation
By: /s/ Xxxxxx Camps
----------------------------------------
Xxxxxx "Xxxxx" Camps,
Chief Financial Officer, Chief Operating
Officer and Assistant Secretary
INTERPLAY OEM, INC., a California
corporation
By: /s/ Xxxxxx Camps
----------------------------
Xxxxxx "Xxxxx" Camps,
Chief Financial Officer
AGREED & ACCEPTED:
GREYROCK BUSINESS CREDIT, a division
of NationsCredit Commercial Corporation
By: /s/ Xxxx Xxxxxx
---------------------
Its: Vice President
--------------------
________________________________________________________________________________
[LOGO OF GREYROCK BUSINESS CREDIT APPEARS HERE]
AMENDMENT TO LOAN DOCUMENTS
BORROWER(S): INTERPLAY PRODUCTIONS
INTERPLAY OEM, INC.
ADDRESS: 00000 XXX XXXXXX XXX.
XXXXXX, XX 00000
DATE: SEPTEMBER 10, 1997
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between GREYROCK BUSINESS
CREDIT, a Division of NationsCredit Commercial Corporation ("GBC"), whose
address is 00000 Xxxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx, XX 00000 and the
borrowers named above (jointly and severally, the "Borrower").
The Parties agree to amend the Loan and Security Agreement between them,
dated JUNE 16, 1997 (as amended, the "Loan Agreement") as follows, effective on
the date hereof. (This Amendment, the Loan Agreement, any prior written
amendments to said agreements signed by GBC and the Borrower, and all other
written documents and agreements between GBC and the Borrower are referred to
herein collectively as the "Loan Documents". Capitalized terms used but not
defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.)
1. INCREASE IN CREDIT LIMIT. Section 1(1) of the Schedule to the Loan
Agreement, which presently reads "(1) $20,000,000 at any one time outstanding;
or" is amended to read as follows:
"(1) An amount equal to the "Dollar Limit" (as defined below); or"
and the following is added at the end of Section 1 of the Schedule:
"As used herein 'Dollar Limit' means the following amounts during the
following periods:
From September 10, 1997 to and including October 30, 1997 $30,000,000
From October 30, 1997 to and including January 31, 1998 $25,000,000
From January 31, 1998 to and including February 28, 1998 $22,500,000
-1-
GREYROCK BUSINESS CREDIT AMENDMENT TO LOAN DOCUMENTS
------------------------------------------------------------------------
From February 28, 1998 and thereafter $20,000,000"
2. LETTER OF CREDIT FACILITY. Borrower and GBC are concurrently entering
into a Letter of Credit Agreement, providing for a temporary letter of credit
facility for the Borrower.
3. FEE. In consideration for GBC entering into this Amendment and the
Letter of Credit Agreement, the Borrower shall concurrently pay GBC a fee in the
amount of $75,000, which shall be non-refundable and in addition to all interest
and other fees payable to GBC under the Loan Documents. GBC is authorized to
charge said fee to Borrower's loan account.
4. REPRESENTATIONS TRUE. Borrower represents and warrants to GBC that
all representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct.
5. GENERAL PROVISIONS. This Amendment, the Loan Agreement, and the other
Loan Documents set forth in full all of the representations and agreements of
the parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement and the other Loan Documents
shall continue in full force and effect and the same are hereby ratified and
confirmed.
Borrower: GBC:
INTERPLAY PRODUCTIONS GREYROCK BUSINESS CREDIT,
a Division of NationsCredit
Commercial Corporation
By /s/ Xxxxxx Camps
---------------------------
President or Vice President
By /s/ Xxxx Xxxxxx
-----------------------------
Title VP
---------------------------
Borrower:
INTERPLAY OEM, INC.
By /s/ Xxxxxx Camps
--------------------------
Secretary/CFO
-2-
AMENDMENT TO LOAN DOCUMENTS
BORROWER(S): INTERPLAY PRODUCTIONS
INTERPLAY OEM, INC.
DATE: FEBRUARY 26, 1998
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between GREYROCK BUSINESS
CREDIT, a Division of NationsCredit Commercial Corporation ("GBC"), whose
address is 00000 Xxxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx, XX 00000 and the
borrower named above ("Borrower").
The Parties agree to amend the Loan and Security Agreement between them,
dated June 16, 1997 (the "Loan Agreement"), as modified by that certain Letter
Agreement dated June 19, 1997 (the "Letter Agreement"), as follows. (This
Amendment, the Loan Agreement, the Letter Agreement, any prior written
amendments to said agreements signed by GBC and the Borrower, and all other
written documents and agreements between GBC and the Borrower are referred to
herein collectively as the "Loan Documents". Capitalized terms used but not
defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.)
1. INCREASE IN CREDIT LIMIT. The portion of Section 1 of the Schedule,
which presently reads as follows:
"1. CREDIT LIMIT (Section 1.1): An amount not to exceed the lesser of (1)
or (2) below:
"(1) An amount equal to the "Dollar Limit" (as defined below); or
"(2) an amount equal to
"(i) 65% of the amount of Borrower's Eligible
Receivables (as defined in Section 8 above), plus 65% of the
amount of the Eligible Receivables (as defined in Section 8
above) of Interplay Productions Limited (U.K.) (the 'UK
Subsidiary'), which Borrower represents is a wholly-owned
subsidiary of Interplay Productions (the 'Parent'), plus
"(ii) the lesser of (A) 100% of the Value of Borrower's
Eligible Inventory (as defined in Section 8 above),
consisting of 'Interplay Titles' (i.e. software titles as to
which Borrower is the publisher and does marketing and
manufacturing) and 20% of the Value of Borrower's Eligible
Inventory (as defined in Section 8 above), consisting of
'Affiliate Titles' (i.e. software titles as to which
Borrower is not the publisher and
-1-
GREYROCK BUINESS CREDIT AMENDMENT TO LOAN DOCUMENTS
-------------------------------------------------------------------------------
does not do marketing and manufacturing) or (B) $5,000,000. 'Value',
as used herein, means the lower of cost or wholesale market value."
"As used herein 'Dollar Limit' means the following amounts during the
following periods:
"From September 10, 1997 to and including October 30, $30,000,000
1997
"From October 30, 1997 to and including January 31, $25,000,000
1998
"From January 31, 1998 to and including February 28, $22,500,000
1998
"From February 28, 1998 and thereafter $20,000,000"
is amended to read as follows:
"1. CREDIT LIMIT (Section 1.1): An amount not to exceed the lesser of (1)
or (2) below:
"(A) an amount equal to the 'Dollar Limit' (as defined below) at any
one time outstanding; or
"(B) an amount equal to
"(1) 65% of the amount of Borrower's Eligible Receivables (as
defined in Section 8 above), plus 65% of the amount of the Eligible
Receivables (as defined in Section 8 above) of Interplay Productions
Limited (U.K.) (the 'UK Subsidiary'), which Borrower represents is a
wholly-owned subsidiary of Interplay Productions (the 'Parent'),
"Plus
"(2) the lesser of (A) 100% of the Value of Borrower's Eligible
Inventory (as defined in Section 8 above), consisting of 'Interplay
Titles' (i.e. software titles as to which Borrower is the publisher
and does marketing and manufacturing) and 20% of the Value of
Borrower's Eligible Inventory (as defined in Section 8 above),
consisting of 'Affiliate Titles' (i.e. software titles as to which
Borrower is not the publisher and does not do marketing and
manufacturing) or (B) $5,000,000. 'Value', as used herein, means the
lower of cost or wholesale market value."
"Plus
"(3) The 'Permitted Overadvance Amount' (as defined below).
"As used above, 'Dollar Limit' shall mean the following amounts
during the following periods:
"Present to August 30, 1998 $35,000,000
"August 31, 1998 to December 30, 1998 $30,000,000
-2-
GREYROCK BUSINESS CREDIT AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------
"December 31, 1998 to May 31, 1999 and
thereafter $25,000,000
"As used above, 'Permitted Overadvance Amount' shall mean the
following amounts during the following periods:
"Present to June 29, 1998 $10,000,000
"June 30, 1998 -0-
"July 1, 1998 to August 30, 1998 $10,000,000
"August 31, 1998 to December 30, 1998 $ 5,000,000
"December 31, 1998 to May 31, 1999 and
thereafter -0-
"It is a material part of the agreement between GBC and Borrower that
the Permitted Overadvance Amount be reduced to zero on June 30, 1998
and on the other dates shown above, and that the Dollar Limit and
Permitted Overadvance Amounts be reduced as set forth above on the
dates set forth above, and any failure to do so shall constitute an
Event of Default."
2. EXTENSION. The date "May 31, 1998" in Section 4 of the Schedule is
hereby amended to read "May 31, 1999".
3. FEE.
(a) In consideration for GBC entering into this Amendment, the
Borrower shall pay GBC a fee in the amount of $225,000 (the "Line Increase and
Extension Fee"), which is fully earned on the date hereof, non-refundable and in
addition to all interest and other fees payable to GBC under the Loan Documents.
(b) The Line Increase and Extension Fee shall be payable, without
interest, in 12 equal monthly installments of $18,750 each, commencing on March
1, 1998 and continuing on the first day of each month thereafter until paid in
full, provided that the entire unpaid balance of the Line Increase and Extension
Fee shall be payable in full on any termination of the Loan Agreement. GBC is
authorized to charge the monthly payments of the Line Increase and Extension Fee
to Borrower's loan account, as they come due.
(c) The Line Increase and Extension Fee shall be included in the
"Obligations" for all purposes of the Loan Agreement, except that it shall not
be considered outstanding for purposes of determining compliance with the Credit
Limit under Section 1 of the Schedule.
4. REPRESENTATIONS TRUE. Borrower represents and warrants to GBC that
all representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct.
5. GENERAL PROVISIONS. This Amendment, the Loan Agreement, and the other
Loan Documents set forth in full all of the representations and agreements of
the parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. Except as herein expressly
-3-
GREYROCK BUSINESS CREDIT AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------
amended, all of the terms and provisions of the Loan Agreement and the other
Loan Documents shall continue in full force and effect and the same are hereby
ratified and confirmed.
Borrower: GBC:
INTERPLAY PRODUCTIONS GREYROCK BUSINESS CREDIT,
a Division of NationsCredit
Commercial
Corporation
By /s/ Xxxxxxxxxxx X. Xxxxxxxxxx
------------------------------
President or Vice President
By /s/ Xxxx Xxxxxx
By /s/ Xxxx Xxx Xxxxxx --------------------------------
----------------------------- Title V.P.
Secretary ----------------------------
Borrower:
INTERPLAY OEM, INC.
By /s/ Xxxx X. Goldworn
-------------------------------
President
By /s/ Xxxx Xxxxxxxxx
-------------------------------
Secretary
CONSENT
The undersigned, guarantor, acknowledges that its consent to the foregoing
Agreement is not required, but the undersigned nevertheless does hereby consent
to the foregoing Agreement and to the documents and agreements referred to
therein and to all future modifications and amendments thereto, and any
termination thereof, and to any and all other present and future documents and
agreements between or among the foregoing parties. Nothing herein shall in any
way limit any of the terms or provisions of the Continuing Guaranty of the
undersigned, all of which are hereby ratified and affirmed.
Interplay Productions Limited (U.K.)
By /s/ Xxxxx X. Xxxxxxx
-------------------------------
Title President
--------------------------
-4-
