EXHIBIT 10.8
================================================================================
LOAN AGREEMENT
Dated as of June 26, 1996
between
RELEASE SOFTWARE CORPORATION
as Borrower,
and
VENTURE LENDING & LEASING, INC.,
as Lender
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1 - DEFINITIONS ..................................................................... 1
ARTICLE 2 - THE COMMITMENT AND LOANS ........................................................ 4
2.1 The Commitment ............................................................ 4
2.2 Limitation on Loans ....................................................... 4
2.3 Notes Evidencing Loans; Repayment ......................................... 6
2.4 Procedures for Borrowing .................................................. 5
2.5 Interest................................................................... 5
2.6 Interest Rate Calculation ................................................. 5
2.7 Default Interest .......................................................... 5
2.8 Lender's Records .......................................................... 6
2.9 Security .................................................................. 6
2.10 Issuance of Warrant to Lender ............................................. 6
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES .................................................. 6
3.1 Due Organization .......................................................... 6
3.2 Authorization, Validity and Enforceability ................................ 6
3.3 Compliance with Applicable Laws ........................................... 7
3.4 Copyrights, Patents, Trademarks and Licenses .............................. 7
3.5 No Conflict ............................................................... 7
3.6 No Litigation, Claims or Proceedings ...................................... 7
3.7 Correctness of Financial Statements ....................................... 7
3.8 No Subsidiaries ........................................................... 7
3.9 Environmental Matters ..................................................... 7
3.10 No Event of Default ....................................................... 7
3.11 Full Disclosure ........................................................... 8
ARTICLE 4 - CONDITIONS PRECEDENT ............................................................ 8
4.1 Conditions to First Loan .................................................. 8
4.2 Conditions to All Loans ................................................... 9
ARTICLE 5 - AFFIRMATIVE COVENANTS ........................................................... 9
5.1 Notice to Lender .......................................................... 9
5.2 Financial Statements ...................................................... 10
5.3 Managerial Assistance from Lender ......................................... 10
5.4 Existence ................................................................. 11
5.5 Accounting Records ........................................................ 11
5.6 Compliance With Laws ...................................................... 11
5.7 Taxes and Other Liabilities ............................................... 11
5.8 Financial Covenants ....................................................... 11
5.9 Use of Proceeds ........................................................... 11
ARTICLE 6 - NEGATIVE COVENANTS .............................................................. 11
6.1 Dividends ................................................................. 12
6.2 Changes/Mergers ........................................................... 12
6.3 Sales of Assets ........................................................... 12
ARTICLE 7 - EVENTS OF DEFAULT ............................................................... 12
7.1 Events of Default ......................................................... 12
ARTICLE 8 - GENERAL PROVISIONS .............................................................. 13
8.1 Notices ................................................................... 13
8.2 Binding Effect ............................................................ 13
8.3 No Waiver ................................................................. 14
8.4 Rights Cumulative ......................................................... 14
8.5 Unenforceable Provisions .................................................. 14
8.6 Accounting Terms .......................................................... 14
8.7 Indemnification; Exculpation .............................................. 14
8.8 Reimbursement ............................................................. 14
8.9 Execution in Counterparts ................................................. 15
8.10 Entire Agreement .......................................................... 15
8.11 Governing Law and Jurisdiction ............................................ 15
i
TABLE OF CONTENTS
-----------------
(continued)
Page
----
8.12 Waiver of Jury Trial ...................................... 15
LIST OF EXHIBITS
----------------
Exhibit "A" Form of Note
Exhibit "B" Form of Borrowing Request
Exhibit "C" Security Agreement (Equipment)
Exhibit "D" Form of Warrant
ii
LOAN AGREEMENT
This LOAN AGREEMENT is entered into as of June 26, 1996, between
RELEASE SOFTWARE CORPORATION, a Delaware corporation ("Borrower"), and VENTURE
LENDING & LEASING, INC., a Maryland corporation ("VLLI" or "Lender").
WHEREAS, Lender has agreed to make available to Borrower a loan
facility upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE 1 - DEFINITIONS
The definitions appearing in this Agreement or any supplement or
addendum to this Agreement, shall be applicable to both the singular and plural
forms of the defined terms:
"Additional Interest" means, with respect to each Loan, an amount of
interest payable thereon, in addition to Basic Interest, payable on the Maturity
Date of such Loan in an amount equal to twelve percent (12%) of the original
principal amount of such Loan.
"Affiliate" means any Person which directly or indirectly controls, is
controlled by, or is under common control with, Borrower. "Control," "controlled
by" and "under common control with" means direct or indirect possession of the
power to direct or cause the direction of management or policies (whether
through ownership of voting securities, by contract or otherwise); provided that
control shall be conclusively presumed when any Person or affiliated group
directly or indirectly owns five percent or more of the securities having
ordinary voting power for the election of directors of a corporation.
"Agreement" means this Loan Agreement as it may be amended or
supplemented from time to time.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. (S)101, et seq.), as amended.
-- ---
"Basic Interest" means the fixed rate of interest payable on the
outstanding balance of each Loan at the applicable Designated Rate.
"Borrowing Date" means the Business Day on which the proceeds of a
Loan are disbursed by Lender.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or San Francisco are authorized
or required by law to close.
"Closing Date" means the date of this Agreement.
"Collateral" has the meaning ascribed thereto in the Security
Agreement.
3
"Commitment" means the obligation of Lender to make Loans to Borrower
in an aggregate, original principal amount not exceeding One Million Dollars
($1,000,000,00} as stated in Commitment Letter dated May 29, 1996
"Default" means an event which with the giving of notice, passage of
time, or both would constitute an Event of Default.
"Default Rate" is defined in Section 2.7.
------------
"Designated Rate" means a fixed rate of interest of eight percent
(8.00%).
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authorities, in each case
relating to environmental, health, or safety matters.
"Equipment" means all of Debtor's specific equipment identified and
described on Schedule 1 attached to the Security Agreement and incorporated
----------
herein by reference (as such Schedule may be amended or supplemented from time
to time) all replacements, parts, accessions and additions thereto, and all
proceeds thereof arising from the sale, lease, rental or other use or
disposition thereof, including all rights to payment with respect to insurance
or condemnation, returned premiums, or any cause or action relating to any of
the foregoing. Financed equipment to be new and used software, R&D, test
equipment, computer and general purpose office equipment. Advances on used
equipment will be at 100% of purchase price and 50% of this facility may be used
for software or tenant improvements as stated in Commitment Letter dated May 29,
1996.
"Event of Default" means any event described in Article 7.
"GAAP" means generally accepted accounting principles and practices
consistent with those principles and practices promulgated or adopted by the
Financial Accounting Standards Board and the Board of the American Institute of
Certified Public Accountants, their respective predecessors and successors. Each
accounting term used but not otherwise expressly defined herein shall have the
meaning given it by GAAP.
"Indebtedness" of any Person means at any date, without duplication
and without regard to whether matured or unmatured, absolute or contingent: (i)
all obligations of such Person for borrowed money; (ii) all obligations of such
Person evidenced by bonds, debentures, notes, or other similar instruments;
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business; (iv) all obligations of such Person as lessee under capital
leases; (v) all obligations of such Person to reimburse or prepay any bank or
other Person in respect of amounts paid under a letter of credit, banker's
acceptance, or similar instrument, whether drawn or undrawn; (vi) all
obligations of such Person to purchase securities which arise out of or in
connection with the sale of the same or substantially similar securities; (vii)
all obligations of such Person in connection with
4
any agreement to purchase, redeem, exchange, convert or otherwise acquire for
value any capital stock of such Person or any warrants, rights or options to
acquire such capital stock, now or hereafter outstanding, except to the extent
that such obligations remain performable solely at the option of such Person;
(viii) all obligations to repurchase assets previously sold (including any
obligation to repurchase any accounts or chattel paper under any factoring,
receivables purchase, or similar arrangement); {ix) obligations of such Person
under interest rate swap, cap, collar or similar hedging arrangements; and (x)
all obligations of others of any type described in clause (i) through clause
---------- ------
(ix) above guaranteed by such Person.
----
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other governmental authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"Lien" means any voluntary or involuntary security interest, mortgage,
pledge, claim, charge, encumbrance, title retention agreement, or third party
interest, covering all or any part of the property of Borrower or any other
Person.
"Loan" means an extension of credit by Lender under Section 2 of this
--------
Agreement.
"Loan Documents" means, individually and collectively, this Agreement,
each Note, the Security Agreement and any other security or pledge agreement
(s), and all other contracts, instruments, addenda and documents executed in
connection with this Agreement or the extensions of credit which are the subject
of this Agreement.
"Material Adverse Effect" or "Material Adverse Change" means (a) a
material adverse change in, or a material adverse effect upon, the operations,
business, properties, or condition (financial or otherwise) of Borrower; (b) a
material impairment of the ability of Borrower to perform under any Loan
Document and to avoid any Event of Default; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against Borrower
of any Loan Document.
"Maturity Date" means, with regard to each Note, the date on which
payment of all outstanding principal and accrued interest, including Additional
Interest, is due, whether at stated maturity or by acceleration.
"Note" means a promissory note substantially in the form of Exhibit
-------
"A" hereto, executed by Borrower evidencing each Loan.
---
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document, owing by Borrower to
Lender, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising.
5
"Person" means any individual or entity.
"Qualified Public Offering" means the closing of a firmly underwritten
public offering of Borrower's common stock with aggregate proceeds of not less
than $6,000,000 (prior to underwriting expenses and commissions).
"Related Person" means any Affiliate of Borrower, or any officer,
employee, director or shareholder of Borrower or any Affiliate.
"Security Agreement" means the Security Agreement substantially in the
form of Exhibit "C" hereto, executed by Borrower.
-----------
"Termination Date" means the earlier of: (a) the date Lender may
terminate making loans or extending the credit pursuant to the rights of Lender
under Article 7, or (b) June 30, 1997.
"UCC" means the Uniform Commercial Code as enacted in the applicable
jurisdiction, in effect on the Closing Date and as amended from time to time.
ARTICLE 2 - THE COMMITMENT AND LOANS
2.1 The Commitment. Subject to the terms and conditions of this Agreement,
Lender agrees to make term loans to Borrower from time to time from the Closing
Date and to, but not including, the Termination Date in an aggregate principal
amount not exceeding the Commitment for purposes of financing Borrower's
acquisition of Equipment. The Commitment is not a revolving credit commitment,
and Borrower shall not have the right to repay and reborrow hereunder.
2.2 Limitation on Loans. Each Loan shall be in an amount not to exceed one
hundred percent (100%) of the amount paid or payable by Borrower to a non-
affiliated manufacturer, vendor or dealer for an item of Equipment as shown on
an invoice therefor (excluding any commissions and any portion of the payment
which relates to the servicing of the equipment and sales taxes payable by
Borrower upon acquisition, and delivery charges). Lender shall not be obligated
to make any Loan under its Commitment if at the time of or after giving effect
to the proposed Loan Lender would no longer qualify as: (A) a "venture capital
operating company" under U.S. Department of Labor Regulations Section 2510.3-
101(d), Title 29 of the Code of Federal Regulations, as amended; and (B) a
"business development company" under the provisions of Federal Investment
Company Act of 1940, as amended; and (C) a "regulated investment company" under
the provisions of the Internal Revenue Code of 1986, as amended. Each Loan
requested by Borrower to be made on a single Business Day shall be for a
principal amount of Fifty Thousand Dollars ($50,000.00) or greater, except to
the extent the remaining Commitment is a lesser amount.
2.3 Notes Evidencing Loans; Repayment. Each Loan shall be evidenced by a
separate Note payable to the order of Lender substantially in the form of
Exhibit "A" to this Agreement, in the total principal amount of the Loan. Each
-----------
Note shall be payable as follows: Principal and Basic Interest shall be
6
paid in thirty-six(36) equal and successive monthly payments, in advance,
beginning on the Borrowing Date and continuing on the first Business Day of each
month thereafter; provided, that if the Borrowing Date of a Loan is not the
--------
first day of a month, then (i) the 36-month amortization period shall commence
on the first day of the next month following the Borrowing Date, and (ii)
Borrower shall pay to Lender, in advance on the Borrowing Date a payment of
Basic Interest that will accrue on such Loan from the Borrowing Date through the
last day of such month. Borrower shall also prepay on the Borrowing Date the
first amortization installment payment. The Additional Interest on each Loan
shall be paid on the first Business Day of the thirty-seventh (37th) full month
after the Borrowing Date of such Loan. The payment of amortization installments
of principal of and interest on a Loan in advance results in a higher effective
rate of interest than the stated Designated Rate applicable to such Loan.
2.4 Procedures for Borrowing.
(a) Borrower shall give Lender at least five (5) Business Days' prior
to a proposed Borrowing Date written notice of any request for borrowing
hereunder (a "Borrowing Request"). Each Borrowing Request shall be in
substantially the form of Exhibit "B" hereto, shall be executed by the chief
-----------
financial officer of Borrower, and shall state how much is requested, and shall
be accompanied by copies of invoices for the Equipment to be financed and such
additional information and documentation as Lender may deem reasonably necessary
to determine whether the proposed borrowing will comply with the limitations in
Section 2.2. To the Borrower's best knowledge after due inquiry of its senior
-----------
officers, the Borrowing Request shall also certify that all Equipment to be
financed thereby is owned by Borrower free and clear of all Liens except in
favor of Lender.
(b) No later than 1:00 p.m. Pacific Standard Time on the Borrowing
Date, if Borrower has satisfied the conditions precedent in Article 4, Lender
shall make the Loan available to Borrower in immediately available funds.
2.5 Interest. Basic Interest on the outstanding principal balance of the
each Loan shall accrue daily from the Borrowing Date until the Maturity Date at
the Designated Rate. On the Maturity Date of a Loan, Borrower shall pay the
Additional Interest thereon.
2.6 Interest Rate Calculation. Basic Interest, along with charges and fees
under this Agreement and any Loan Document, shall be calculated for actual days
elapsed on the basis of a 360-day year, which results in higher interest, charge
or fee payments than if a 365-day year were used. In no event shall Borrower be
obligated to pay Lender interest, charges or fees at a rate in excess of the
highest rate permitted by applicable law from time to time in effect.
2.7 Default Interest. Any unpaid payments of principal or interest with
respect to any Loan shall bear interest from their respective maturities,
whether scheduled or accelerated, at the Designated Rate for such Loan plus five
----
percent (5.00%) per annum, until paid in full, whether before or after judgment
(the "Default Rate"). Borrower shall pay such interest on demand.
7
2.8 Lender's Records. Principal, Basic Interest, Additional Interest and
all other sums owed under any Loan Document shall be evidenced by entries in
records maintained by Lender for such purpose. Each payment on and any other
credits with respect to principal, Basic Interest, Additional Interest and all
other sums outstanding under any Loan Document shall be evidenced by entries in
such records. Absent manifest error, Lender's records shall be conclusive
evidence thereof.
2.9 Security. As security for all Obligations to Lender, Borrower shall
grant concurrently to Lender, or ensure that Lender is concurrently granted,
perfected security interests of first priority in all of the Equipment and other
Collateral pursuant to the Security Agreement, subject only to Liens disclosed
to and approved by Lender prior to the Closing Date to this Agreement.
2.10 Issuance of Warrant to Lender. As additional consideration for the
making of the Loans under this Agreement, Lender shall be entitled to receive a
Warrant to purchase a number of shares of preferred stock of Borrower with a
value equal to seven percent (7%) of the Commitment. Thirty percent (30%) of the
Warrant Shares will be exercisable at a price per share of $0.50 and seventy
percent (70%) of the Warrant shares will be exercisable at a price per share
equal to the price paid by investors in Borrower's next round of venture capital
equity financing to be closed within one year from the date of this Agreement.
The Warrant issued pursuant to this Agreement shall be in substantially the form
attached hereto as Exhibit D; shall be transferable by Lender, subject to
compliance with applicable securities laws; shall expire March 26, 2003; and
shall include piggy-back registration rights, a "net exercise" provision and
anti dilution protection that is identical to the antidilution protection
received by the other holders of Borrower's preferred stock.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that as of the Closing Date and each
Borrowing Date:
3.1 Due Organization. Borrower is a corporation duly organized and validly
existing in good standing under the laws of California, and is duly qualified to
conduct business and is in good standing in each other jurisdiction in which its
business is conducted or its properties are located.
3.2 Authorization, Validity and Enforceability. The execution, delivery
and performance of all Loan Documents executed by Borrower are within Borrower's
powers, have been duly authorized, and are not in conflict with Borrower's
articles [certificate] of incorporation or by-laws, or the terms of any charter
or other organizational document of Borrower, as amended from time to time; and
all such Loan Documents constitute valid and binding obligations of Borrower,
enforceable in accordance with their terms (except as may be limited by
bankruptcy, insolvency and similar laws affecting the enforcement of creditors'
rights in general, and subject to general principles of equity).
3.3 Compliance with Applicable Laws. Borrower has complied with all
licensing, permit and fictitious name requirements necessary to lawfully conduct
the business in which it is engaged, and to any sales, leases or the
8
furnishing of services by Borrower, including without limitation those requiring
consumer or other disclosures, the noncompliance with which would have a
Material Adverse Effect.
3.4 Copyrights, Patents, Trademarks and Licenses.
(a) Borrower owns or is licensed or otherwise has the right to use
all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of its business, without conflict with the rights of
any other Person.
(b) No slogan or other advertising device, product, process, method,
substance, park or other material now employed, or now contemplated to be
employed, by Borrower infringes upon any rights held by any other Person.
(c) No claim or litigation regarding any of the foregoing is pending
or threatened, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
3.5 No Conflict. The execution, delivery, and performance by Borrower of
all Loan Documents are not in conflict, with any law, rule, regulation, order or
directive, or any indenture, agreement, or undertaking to which Borrower is a
party or by which Borrower may be bound or affected.
3.6 No Litigation, Claims or Proceedings. There is no litigation, tax
claim, proceeding or dispute pending, or, to the knowledge of Borrower,
threatened against or affecting Borrower or its property.
3.7 Correctness of Financial Statements. Borrower's financial statements
which have been delivered to Lender fairly and accurately reflect Borrower's
financial condition as of April 30, 1996; and, since that date there has been no
Material Adverse Change.
3.8 No Subsidiaries. Borrower is not a majority owner of or in a control
relationship with any other business entity.
3.9 Environmental Matters. Borrower has reviewed, or caused to be reviewed
on its behalf, all Environmental Laws applicable to its business operations and
materials handled therein, and as a result thereof has reasonably concluded that
Borrower is in compliance with such Environmental Laws, except to the extent a
failure to be in such compliance could not reasonably be expected to have a
Material Adverse Effect on Borrower's operations, properties or financial
condition.
3.10 No Event of Default. No Default or Event of Default has occurred and
is continuing.
3.11 Full Disclosure. None of the representations or warranties made by
Borrower in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of Borrower
in connection with the Loan Documents (including disclosure materials delivered
by or on behalf of Borrower to Lender prior to the Closing Date),
9
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of
the time when made or delivered.
ARTICLE 4 - CONDITIONS PRECEDENT
4.1 Conditions to First Loan. The obligation of Lender to make its first
Loan hereunder is, in addition to the conditions precedent specified in Section
-------
4.2, subject to the fulfillment of the following conditions and to the receipt
by Lender of the documents described below, duly executed and in form and
substance satisfactory to Lender and its counsel:
(a) Resolutions. A certified copy of the resolutions of the Board of
Directors of Borrower authorizing the execution, delivery and performance by
Borrower of the Loan Documents.
(b) Incumbency and Signatures. A certificate of the secretary of
Borrower certifying the names of the officer or officers of Borrower authorized
to sign the Loan Documents, together with a sample of the true signature of each
such officer.
(c) Opinion of Counsel. The opinion of Venture Law Group, counsel for
Borrower, together with any opinions, certificates and other matters on which
such opinion relies.
(d) Articles and By-Laws. Certified copies of the Articles of
Incorporation and By-Laws of Borrower, as amended through the Closing Date.
(e) The Agreement. A counterpart of this Agreement with all schedules
completed and attached thereto, and disclosing such information as is acceptable
to Lender.
(f) Security Agreement. A Security Agreement executed by Borrower,
substantially in the form of Exhibit "C", together with filing copies (or other
---
evidenced of filing satisfactory to Lender and its counsel) of such Uniform
Commercial Code financing statements, collateral assignments and termination
statements, with respect to the Collateral (as defined in such Security
Agreement) as Lender shall request.
(g) Lien Searches. Uniform Commercial Code lien, judgment, bankruptcy
and tax lien searches of Borrower from the California Secretary of State, as of
a date reasonably satisfactory to Lender and its counsel.
(h) Good Standing Certificate. A Certificate of Good Standing as of a
date acceptable to Lender with respect to Borrower from the California Secretary
of State.
(i) Warrant. A warrant issued by Borrower to Lender exercisable for
the Warrant Shares, as described in Section 2.11 hereof.
------------
10
4.2 Conditions to All Loans. The obligation of Lender to make its initial
Loan and each subsequent Loan is subject to the following further conditions
precedent that:
(a) No Default. No Default or Event of Default has occurred and is
continuing or will result from the making of any such Loan, and the
representations and warranties of Borrower contained in Article 3 of this
Agreement are true and correct as of the Borrowing Date of such Loan.
(b) No Adverse Material Change. No Material Adverse Change shall have
occurred since the date of the most recent financial statements submitted to
Lender.
(c) Note. Borrower shall have delivered an executed Note evidencing
such Loan, in form and substance satisfactory to Lender.
(d) Borrowing Request. Borrower shall have delivered to Lender a
Borrowing request for such Loan.
(e) VCOC Limitation. The making of the Loan will not result in a
violation of the condition applicable to Lender described in Section 2.2.
ARTICLE 5 - AFFIRMATIVE COVENANTS
During the term of this Agreement and until its performance of ail
obligations to Lender, Borrower will:
5.1 Notice to Lender. Promptly give written notice to each Lender of:
(a) Any litigation or administrative or regulatory proceeding
affecting Borrower where the amount claimed against Borrower is Fifty Thousand
Dollars ($50,000) or more, or where the granting of the relief requested would
have a Material Adverse Effect.
(b) Any substantial dispute which may exist between Borrower or any
governmental or regulatory authority.
(c) The occurrence of any Event of Default or any event which with
the giving of notice, the passage of time, or both, would constitute an Event of
Default.
(d) Any change in the location Of any of Borrower's places of
business at least thirty (30) days in advance of such change, or of the
establishment of any new, or the discontinuance of any existing, place of
business.
(e) Any other matter which has resulted or might result in a Material
Adverse Change.
5.2 Financial Statements. Deliver to each Lender or cause to be delivered
to Lender, in form and detail satisfactory to Lender the following financial
information, which Borrower warrants shall be accurate and complete in all
material respects:
11
(a) Monthly Financial Statements. As soon as available but no later
than thirty (30) days after the end of each month, Borrower's balance sheet as
of the end of such period, and Borrower's income statement for such period and
for that portion of Borrower's financial reporting year ending with such period,
prepared and attested by a responsible financial officer of Borrower as being
complete and correct and fairly presenting Borrower's financial condition and
the results of Borrower's operations. After a Qualified Public Offering, the
foregoing interim financial statements shall be delivered no later than 45 days
after each fiscal quarter and for the quarter-annual fiscal period then ended.
(b) Year-End Financial Statements. As soon as available but no later
than ninety (90) days after and as of the end of each financial reporting year,
a complete copy of Borrower's audit report, which shall include balance sheet,
income statement, statement of changes in equity and statement of cash flows for
such year, prepared and certified by an independent certified public accountant
selected by Borrower and reasonably satisfactory to Lender (the "Accountant").
The Accountant's certification shall not be qualified or limited due to a
restricted or limited examination by the Accountant of any material portion of
Borrower's records or otherwise.
(c) Compliance Certificates. Simultaneously with the delivery of each
set of financial statements referred to in paragraphs (a) and (b) above, a
certificate of the chief financial officer of Borrower stating whether any
Default or Event of Default exists on the date of such certificate, and if so,
setting forth the details thereof and the action which Borrower is taking or
proposes to take with respect thereto.
(d) Government Required Reports; Press Releases. Promptly after
sending, issuing, making available, or filing, copies of all statements released
to any news media for publication, all reports, proxy statements, and financial
statements that Borrower sends or makes available to its stockholders, and, not
later than five (5) days after actual filing or the date such filing was first
due, all registration statements and reports that Borrower files or is required
to file with the Securities and Exchange Commission.
(e) Other Information. Such other statements, lists of property and
accounts, budgets, forecasts, reports, or other information as any Lender may
reasonably from time to time request.
5.3 Managerial Assistance from Lender. Permit Lender, as a "venture
capital operating company" to participate in, and influence the conduct of
management of Borrower through the exercise of "management rights," as such
terms are defined in 29 C.F.R. (S) 2510.3-101(d), and:
(a) Permit Lender to make available to Borrower, at no cost to
Borrower, "significant managerial assistance", as defined in Section 2(a)(47) of
the Investment Company Act of 1940, as amended, either in the form of: (i)
consulting arrangements with Lender or any of its officers, directors, employees
or affiliates, (ii) Borrower's allowing Lender to provide recommendations of
prospective candidates for election to Borrower's Board of Directors, or (iii)
Lender, at Borrower's request, seeking the services of
12
third-party consultants to aid Borrower with respect to its management and
operations;
(b) Permit Lender to make available consulting and advisory services
to officers of Borrower regarding Borrower's equipment acquisition and financing
plans, and such other matters affecting the business, financial condition and
prospects of Borrower as Lender shall reasonably deem relevant; and
(c) If Lender reasonably believes that financial or other
developments affecting Borrower have impaired or are likely to impair Borrower's
ability to perform its obligations under this Agreement, permit Lender
reasonable access to Borrower's management and/or Board of Directors and
opportunity to present Lender's views with respect to such developments.
5.4 Existence. Maintain and preserve Borrower's existence, present form of
business, and all rights and privileges necessary or desirable in the normal
course of its business.
5.5 Accounting Records. Maintain adequate books, accounts and records, and
prepare all financial statements in accordance with GAAP, and in compliance with
the regulations of any governmental or regulatory authority having jurisdiction
over Borrower or Borrower's business; and permit employees or agents of Lender
at such reasonable times as Lender may request, at Borrower's expense not to
exceed $1,000; provided that Borrower shall not be required to pay this expense
more than one time, to inspect Borrower's properties, and to examine, and make
copies and memoranda of Borrower's books, accounts and records.
5.6 Compliance With Laws. Comply with all laws (including Environmental
Laws), rules, regulations applicable to, and all orders and directives of any
governmental or regulatory authority having jurisdiction over, Borrower or
Borrower's business, and with all material agreements to which Borrower is a
party.
5.7 Taxes and Other Liabilities. Pay all Borrower's obligations when due;
pay all taxes and other governmental or regulatory assessments before
delinquency or before any penalty attaches thereto, except as may be contested
in good faith by the appropriate procedures and for which Borrower shall
maintain appropriate reserves; and timely file all required tax returns.
5.8 Financial Covenants. Comply with the terms of all financial covenants
contained in any addendum to this Agreement.
5.9 Use of Proceeds. Use the proceeds of Loans only as set forth in
Article 2 of this Agreement; and not directly or indirectly to purchase or carry
any margin stock, as defined from time to time by the Board of Governors of the
Federal Reserve System in Federal Regulation U.
ARTICLE 6 - NEGATIVE COVENANTS
During the term of this Agreement and until the performance of all
obligations to Lender, Borrower will not:
13
6.1 Dividends. Except after a Qualified Public Offering, pay any dividends
or purchase, redeem or otherwise acquire or make any other distribution with
respect to any of Borrower's capital stock, except dividends or other
distributions solely of capital stock of Borrower.
6.2 Changes/Mergers. Liquidate or dissolve, or enter into any
consolidation, merger, partnership, joint venture or other combination except
------
for joint ventures, strategic alliances, licensing and similar arrangements
customary in Borrower's industry for businesses in the development stage of
Borrower and which do not require Borrower to assume or otherwise become liable
for the obligations of any third party not directly related to or arising out of
such arrangement or, without the prior written consent of Lender, require
Borrower to transfer ownership of assets to such joint venture or other entity;
prepay any subordinated debt, debt for borrowed money, or debt secured by any
permitted Lien, or enter into or modify any agreement as a result of which the
terms of payment of any such debt are waived or modified.
6.3 Sales of Assets. Sell, transfer, lease or otherwise dispose of any of
Borrower's assets except for fair consideration and in the ordinary course of
its business; or enter into any sale or leaseback agreement covering any of
Borrower's fixed or capital assets.
ARTICLE 7 - EVENTS OF DEFAULT
7.1 Events of Default. Upon the occurrence and during the continuation of
any Default, the obligation of Lender to make any additional Loan shall be
suspended. The occurrence of any of the following shall terminate any obligation
of Lender to make any additional Loan; and shall, at the option of Lender (1)
make all sums of Basic Interest, principal, Additional Interest and any other
amounts owing under any Loan Documents immediately due and payable without
notice of default, presentment or demand for payment, protest or notice of
nonpayment or dishonor or any other notices or demands, and (2) give Lender the
right to exercise any other right or remedy provided by contract or applicable
law:
(a) Borrower shall fail to make any payment of principal or interest
under this Agreement, or to pay any fees or other charges when due under any
Loan Document, and such failure continues for three (10) Business Days or more
after the same first becomes due; or an Event of Default as defined in any other
Loan Document shall have occurred.
(b) Any representation or warranty made, or financial statement,
certificate or other document provided, by Borrower shall prove to have been
false or misleading in any material respect when made or deemed made herein.
(c) Borrower shall fail to pay its debts generally as they become due
or shall commence any Insolvency Proceeding with respect to itself; an
involuntary Insolvency Proceeding shall be filed against Borrower, or a
custodian, receiver, trustee, assignee for the benefit of creditors, or other
similar official, shall be appointed to take possession, custody or control of
the properties of Borrower, and such involuntary Insolvency Proceeding, petition
or appointment is acquiesced to by Borrower or is not dismissed within sixty
(60) days; or the dissolution or termination of the business of Borrower.
14
(d) Borrower shall be in default beyond any applicable period of
grace or cure under any other agreement involving the borrowing of money, the
purchase of property, the advance of credit or any other monetary liability of
any kind to Lender or to any Person which results in the acceleration of payment
of such obligation in an amount in excess of One Hundred Thousand Dollars
($100,000).
(e) Any governmental or regulatory authority shall take any judicial
or administrative action, or any defined benefit pension plan maintained by
Borrower shall have any unfunded liabilities, any of which, in the reasonable
judgment of Lender, might have a Material Adverse Effect.
(f) Any sale, transfer or other disposition of all or a substantial
or material part of the assets of Borrower, including without limitation to any
trust or similar entity, shall occur.
(g) Any judgment(s) singly or in the aggregate in excess of One
Hundred Thousand Dollars ($100,000) shall be entered against Borrower which
remain unsatisfied, unvacated or unstayed pending appeal for ten (10) or more
days after entry thereof.
(h) Any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission) of twenty-five percent (25%) or more of the
outstanding shares of voting stock of Borrower.
(i) Borrower shall fail to perform any of its duties or obligations
under any Loan Document not specifically referenced in this Article 7.
ARTICLE 8 - GENERAL PROVISIONS
8.1 Notices. Any notice given by any party under any Loan Document shall
be in writing and personally delivered, sent by overnight courier, or United
States mail, postage prepaid, or sent by facsimile, to be promptly confirmed in
writing, or other authenticated message, charges prepaid, to the other party's
or parties' addresses shown on the signature pages hereto. Each party may change
the address or facsimile number to which notices, requests and other
communications are to be sent by giving written notice of such change to each
other party. Notice given hand delivery shall be deemed received on the date
delivered; if sent by overnight courier, on the next business day after delivery
to the courier service; if by first class mail, on the third business day after
deposit in the U.S. Mail; and if by telecopy, on the date of transmission.
8.2 Binding Effect. The Loan Documents shall be binding upon and inure to
the benefit of Borrower and Lender and their respective successors and assigns;
provided, however, that Borrower may not assign or transfer Borrower's rights or
obligations under any Loan Document without each Lender's prior written consent.
Lender reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Lender's rights and
obligations under the Loan Documents. In connection with any of the foregoing,
Lender may disclose all documents and information which
15
Lender now or hereafter may have relating to the Loans, Borrower, or its
business.
8.3 No Waiver. Any waiver, consent or approval by Lender of any Event of
Default or breach of any provision, condition, or covenant of any Loan Document
must be in writing and shall be effective only to the extent set forth in
writing. No waiver of any breach or default shall be deemed a waiver of any
later breach or default of the same or any other provision of any Loan Document.
No failure or delay on the part of Lender in exercising any power, right, or
privilege under any Loan Document shall operate as a waiver thereof, and no
single or partial exercise of any such power, right, or privilege shall preclude
any further exercise thereof or the exercise of any other power, right or
privilege. Lender has the right at its sole option to continue to accept
interest and/or principal payments due under the Loan Documents after default,
and such acceptance shall not constitute a waiver of said default or an
extension of the Maturity Date unless Lender agrees otherwise in writing.
8.4 Rights Cumulative. All rights and remedies existing under the Loan
Documents are cumulative to, and not exclusive of, any other rights or remedies
available under contract or applicable law.
8.5 Unenforceable Provisions. Any provision of any Loan Document executed
by Borrower which is prohibited or unenforceable in any jurisdiction, shall be
so only as to such jurisdiction and only to the extent of such prohibition or
unenforceability, but all the remaining provisions of any such Loan Document
shall remain valid and enforceable.
8.6 Accounting Terms. Except as otherwise provided in this Agreement,
accounting terms and financial covenants and information shall be determined and
prepared in accordance with GAAP.
8.7 Indemnification; Exculpation. Borrower shall pay and protect, defend
and indemnify Lender and Lender's employees, officers, directors, shareholders,
affiliates, correspondents, agents and representatives (other than Lender,
collectively "Agents") against, and hold Lender and each such Agent harmless
from, all claims, actions, proceedings, liabilities, damages, losses, expenses
(including, without limitation, attorneys' fees and costs) and other amounts
incurred by Lender and each such Agent, arising from (i) the matters
contemplated by this Agreement or any other Loan Documents or (ii) any
contention that Borrower has failed to comply with any law, rule, regulation,
order or directive applicable to Borrower's business; provided, however, that
this indemnification shall not apply to any of the foregoing incurred solely as
the result of Lender's or any Agent's gross negligence or willful misconduct.
This indemnification shall survive the payment and satisfaction of all of
Borrower's Obligations to Lender.
8.8 Reimbursement. Borrower shall reimburse Lender for all costs and
expenses, including without limitation reasonable attorneys' fees and
disbursements expended or incurred by Lender in any arbitration, mediation,
judicial reference, legal action or otherwise in connection with (a) the
preparation, negotiation, amendment, interpretation and enforcement of the Loan
Documents, including without limitation during any workout, attempted workout,
and/or in connection with the rendering of legal advice as to Lender's rights,
remedies and obligations under the Loan Documents, (b) collecting any sum which
becomes due Lender under any Loan Document,
16
(c) any proceeding for declaratory relief, any counterclaim to any, proceeding,
or any appeal, or (d) the protection, preservation or enforcement of any rights
of Lender. For the purposes of this section, attorneys' fees shall include,
without limitation, fees incurred in connection with the following: (1) contempt
proceedings; (2) discovery; (3) any motion, proceeding or other activity of any
kind in connection with an Insolvency Proceeding;
(4) garnishment, levy, and debtor and third party examinations; and
(5) postjudqment motions and proceedings of any kind, including without
limitation any activity taken to collect or enforce any judgment. All of the
foregoing costs and expenses shall be payable upon demand by Lender and if not
paid within forty-five (45) days of presentation of invoices shall bear interest
at the highest applicable Default Rate.
8.9 Execution in Counterparts. This Agreement may be executed in any
number of counterparts which, when taken together, shall constitute but one
agreement.
8.10 Entire Agreement. The Loan Documents are intended by the parties as
the final expression of their agreement and therefore contain the entire
agreement between the parties and supersede all prior understandings or
agreements concerning the subject matter hereof. This Agreement may be amended
only in a writing signed by Borrower and Lender.
8.11 Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN, CENTRAL OR SOUTHERN
DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF BORROWER AND LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF
BORROWER AND LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR
ANY DOCUMENT RELATED HERETO. BORROWER AND LENDER EACH WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY
ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
8.12 Waiver of Jury Trial. BORROWER AND LENDER EACH WAIVES ITS RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. BORROWER AND LENDER EACH AGREES THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEMS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE
17
OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
as of the date set forth in the preamble.
Addresses, for Notice: RELEASE SOFTWARE CORPORATION
---------------------
000 Xxxxxxxxxxx xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000 By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Attn: Xxxxxxx Xxxxx Name: Xxxxxxx Xxxxx
------------------------------------
Its: President
-------------------------------------
Venture Lending & Leasing, Inc. VENTURE LENDING & LEASING, INC.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxxx
--------------------------------------
President Name: Xxxxxxxx X. Xxxxxxxxx
------------------------------------
Fax No.: 000-000-0000 Its: President
-------------------------------------
18
EXHIBIT A
[Note No. X-XXX]
FORM OF PROMISSORY NOTE
$_________________________ _______________, 000___
Xxx Xxxx, Xxxxxxxxxx
The undersigned ("Borrower") promises to pay to the order of VENTURE
LENDING & LEASING, INC., a Maryland corporation ("Lender") at its office at 0000
Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxxxxxxxxx 00000, or at such other
place as Lender may designate in writing, in lawful money of the United States
of America, the principal sum of _____________________ Dollars ($______), with
Basic Interest thereon from the date hereof until maturity, whether scheduled or
accelerated, at a fixed rate per annum of eight percent (8.00%), and with
Additional Interest in the sum of _______________ [12% of face amount] Dollars
--------------------
($______) payable on the Maturity Date.
This Note is one of the Notes referred to in, and is entitled to all the
benefits of, a Loan Agreement dated _____________________, 199___, between
Borrower and Lender. Each capitalized term not otherwise defined herein shall
have the meaning set forth in the Loan Agreement. The Loan Agreement contains
provisions for the acceleration of the maturity of this Note upon the happening
of certain stated events.
Principal of and interest on this Note shall be payable as follows:
On the Borrowing Date, Borrower shall pay (i) Basic Interest, in advance,
on the outstanding principal balance of this Note at the Designated Rate for the
period from the Borrowing Date through [the last day of the same month] ; and
--------------------------------
(ii) a first (1st) amortization installment of principal and Basic Interest in
the amount of ______________, in advance for the month of [ first full month
------------------
after Borrowing Date ].
--------------------
Commencing on the first day of the second full month after the Borrowing
Date, and continuing on the first day of each consecutive month thereafter,
principal and Basic Interest shall be payable, in advance, in __________________
(__) equal consecutive installments of ______________________ Dollars ($_______)
each, with a (____) installment equal to the entire unpaid principal balance and
accrued Basic Interest on _________, 199___. The Additional Interest amount
shall be payable on [one month later], 199__ .
-----------------
Any unpaid payments of principal or interest on this Note shall bear
interest from their respective maturities, whether scheduled or accelerated, at
a rate per annum equal to the Default Rate. Borrower shall pay such interest on
demand.
Interest, charges and fees shall be calculated for actual days elapsed on
the basis of a 360-day year, which results in higher interest, charge or fee
payments than if a 365-day year were used. In no event shall Borrower be
obligated to pay interest, charges or fees at a rate in excess of the highest
rate permitted by applicable law from time to time in effect.
This Note shall be governed by, and construed in accordance with, the laws
of the State of California.
RELEASE SOFTWARE CORPORATION
By:____________________________
Name: _________________________
Its:___________________________
EXHIBIT B
BORROWER REQUEST
____________________, 1996
Venture Lending & Leasing, Inc.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Re: RELEASE SOFTWARE CORPORATION
Gentlemen:
Reference is made to the Loan Agreement dated as of June 26, 1996 as it has
been and may be amended from time to time, the "Loan Agreement", the capitalized
terms used herein as defined therein), between Venture Lending & Leasing, inc.
and RELEASE Software Corporation (the "Company").
The undersigned is the Chief Financial Officer of the Company, and hereby
requests a Loan under the Loan Agreement, and in that connection certifies as
follows:
1. The amount of the proposed Loan is $______________. The Business Day
of the proposed Loan is ________________________ 1996.
2. As of this date, no Default or Event of Default has occurred and is
continuing, or will result from the making of the proposed Loan, and the
representations and warranties of the Company contained in Article 3 of the Loan
Agreement are true and correct.
3. No Material Adverse Change has occurred since the date of the most
recent financial statements submitted to you by the Company.
The Company agrees to notify you promptly before the funding of the Loan
if any of the matters to which I have certified above shall not be true and
correct on the Borrowing Date.
Very Truly Yours,
________________________________
Chief Financial Officer
EXHIBIT C
SECURITY AGREEMENT
(EQUIPMENT)
This Agreement is made as of June 26, 1996, by RELEASE SOFTWARE
CORPORATION, a Delaware corporation ("Debtor") in favor of VENTURE LENDING &
LEASING, INC., a Maryland corporation ("Secured Party").
ARTICLE 1 - DEFINITIONS
The following definitions shall be applicable to both the singular and
plural forms of the defined terms:
"Agreement" means this Security Agreement, as it may be amended from time
to time.
"Collateral" means all Debtor's Equipment and Fixtures now owned or
hereafter acquired, wherever located, and whether held by Debtor or any third
party, and all proceeds and products (excluding all intellectual property of
Debtor) thereof, including all insurance and condemnation proceeds ("Proceeds"),
and all Records relating or useful to, or used in connection with any of the
foregoing.
"Equipment," means all of Debtor's specific equipment identified and
described on Schedule 1 attached to this Agreement and incorporated herein by
----------
reference (as such Schedule may be amended or supplemented from time to time),
together with all improvements, replacements, accessions and additions thereto,
wherever located, and all Proceeds thereof arising from the sale, lease, rental
or other use or disposition of any such property, including all rights to
payment with respect to insurance or condemnation, returned premiums, or any
cause of action relating to any of the foregoing. Financed equipment to be new
and used software, R&D, test equipment, computer and general purpose office
equipment. Advances on used equipment will be at 100% of purchase price and 50%
of this facility may be used for software or tenant improvements as stated in
the Commitment Letter dated May 29, 1996.
"Event of Default,, means an event described in Article 6.
"Fixtures" means all items of Equipment that are so related to the real
property upon which they are located that an interest in them arises under real
property law, and all proceeds thereof arising from the sale, lease, rental or
other use or disposition thereof.
1
"Indebtedness" means all debts, obligations and liabilities of Debtor to
Secured Party currently existing or now or hereafter made, incurred or created,
whether pursuant to the Loan Documents, whether voluntary or involuntary and
however arising or evidenced, whether direct or acquired by Secured Party by
assignment or succession, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, and whether Debtor may
be liable individually or jointly, or whether recovery upon such debt may be or
become barred by any statute of limitations or otherwise unenforceable and all
renewals, extensions and modifications thereof, and all attorneys' fees and
costs incurred by Secured Party in connection with the collection and
enforcement thereof.
"Lien" means any voluntary or involuntary security interest, mortgage,
pledge, claim, charge, encumbrance, title retention agreement, or third party
interest covering all or any part of the property of Debtor or any other Person.
"Loan Agreement" means that certain Loan Agreement between Debtor and
Secured Party of even date herewith, as amended from time to time.
"Person" means any individual or entity, including without limitation
Secured Party where the context so permits and in Secured Party's sole
discretion.
"Records" means all Debtor's computer programs, software, hardware, source
codes and data processing information, all written documents, books, invoices,
ledger sheets, financial information and statements, and all other writings
concerning Debtor's business.
"Uniform Commercial Code" means the California Uniform Commercial Code, as
amended from time to time.
Terms not specifically defined in this Agreement have the meanings
prescribed in the Loan Agreement, and if not defined therein then the meanings
prescribed in the Uniform Commercial Code.
ARTICLE 2 - GRANT OF SECURITY INTEREST
To secure the timely payment of the Indebtedness and performance of all
obligations of Debtor to Secured Party, Debtor grants to Secured Party a
security interest in the Collateral.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
2
Debtor represents and warrants that, at all times during the term of this
Agreement:
3.1 Governmental Actions. Debtor has obtained all consents and actions of,
and has performed all filings with, any governmental or regulatory authority
required to authorize the execution, delivery or performance of this Agreement.
Debtor has, at the time Lender makes a Loan with respect to an item of equipment
in accordance with Section 2.2 of the Loan Agreement, and at all times
thereafter while such Loan is outstanding, obtained all consents and actions of,
and has performed all filings with, any governmental or regulatory authority
required to grant and perfect Secured Party's security interest in such item of
equipment which is part of the Collateral.
3.2 Title. Except for the security interests created by this Agreement,
Debtor is and will be the unconditional legal and beneficial owner of the
Collateral. The Collateral is subject to no Liens, rights or defenses of others,
except Liens permitted under the Loan Agreement.
3.3 No Misrepresentation. No representation, warranty or statement by
Debtor contained in this Agreement, in any Loan Document or certificate or other
writing furnished by Debtor to Secured Party in connection with any Loan
Document contains any untrue statement of material fact, or omits to state a
material fact necessary to make the statements made therein not misleading in
any material respect.
3.4 Collateral Not Inventory. Debtor is not in the business of selling
goods of the kind included within the Collateral subject to this Agreement.
3.5 Chief Executive Office. Debtor's chief executive office is located at:
000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
3.6 Records Location. Other than as set forth in Section 3.5, Records are
maintained at:
000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
3.7 Equipment or Fixtures Location. Other than as set forth in Section
3.5, Equipment or Fixtures are located at:
000 Xxxxxxxxxxx Xxxx, Xxxxx 000
0
Xxxxx Xxxx, Xxxxxxxxxx 00000
3.8 Other Places of Business. In addition to the locations set forth in
Sections 3.5 through 3.7, Debtor maintains the following place(s) of business:
3.9 Business Names. Debtor has conducted business in the following names
other than as stated in the preamble to this Agreement:
3.10 Financing Statements. Copies of all financing statements and all other
documents publicly recorded or filed naming Debtor as debtor or obligor have
been delivered to Secured Party, prior to the date of this Agreement.
ARTICLE 4 - AFFIRMATIVE COVENANTS
During the term of this Agreement and until payment of all the Indebtedness
and performance of all obligations to Secured Party, Debtor will, unless Secured
Party otherwise consents in writing:
4.1 Use of Proceeds. Use the proceeds of any credit extended by Secured
Party to Debtor only in accordance with the terms of the Loan Documents.
4.2 Delivery of Certain Items. Deliver to Secured Party promptly (a) after
an Event of Default, all Proceeds; (b) such specific acknowledgments,
assignments or other agreements as Secured Party may reasonably request relating
to the Collateral; and (c) copies of such Records and other reports in such form
and detail and at such times as Secured Party may reasonably require relating to
the Collateral.
4.3 Maintenance of Collateral; Inspection. Do all things necessary to
maintain, preserve, protect and keep all Collateral in good working order and
saleable condition, dealing with the Collateral in all ways as are considered
good practice by owners of like property, and use the Collateral lawfully and
only as permitted by Debtor's insurance policies. Debtor hereby authorizes
Secured Party's officers, employees, representatives and agents, upon reasonable
notice, at reasonable times and with reasonable frequency, to inspect the
Collateral and to discuss
4
the Collateral and the Records relating thereto with Debtor's officers
4.4 Maintenance of Records; Inspection. Maintain, or cause to be
maintained, complete and accurate Records relating to the Collateral. Secured
Party, its officers, employees, agents and representatives, upon reasonable
notice, shall have the right, from time to time, to examine the Records relating
to the Collateral and to make copies or extracts therefrom.
4.5 Debtor's Duty to Give Notice. Give prompt notice to Secured Party of:
(a) any decrease in the value of any Collateral and the amount of such decrease
(other than depreciation calculated in the ordinary course of business under
applicable tax laws and regulations and in accordance with generally accepted
accounting principles); (b) any threatened or asserted dispute or claim with
respect to the Collateral; (c) any litigation or administrative or regulatory
proceeding which is reasonably likely to have a material adverse effect on
Debtor or its business; (d) any change in ownership of any property on which any
Collateral is located; and (e) the occurrence of any Event of Default or of any
other development, financial or otherwise, which is reasonably likely to
materially adversely affect the Collateral or Debtor's ability to pay the
indebtedness or perform its obligations to Secured Party.
4.6 Financing Statements and Other Actions. Execute and deliver to Secured
Party, and file or record at Debtor's expense all financing statements, notices
and other documents from time to time requested by Secured Party to maintain a
first perfected security interest in the Collateral in favor of Secured Party,
all in form and substance satisfactory to Secured Party, perform such other acts
and execute and deliver to Secured Party such additional conveyances,
assignments, agreements and instruments, as Secured Party may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or Secured Party's rights, powers and remedies hereunder.
4.7 Decals, Markings. At the request of Secured Party, firmly affix a
decal, stencil or other marking to designated items of Collateral, indicating
thereon the security interest of Secured Party.
4.8 Agreement With Real Property Owner/Landlord. Obtain and maintain such
acknowledgments, consents, waivers and agreements from the owner, lienholder,
mortgagee and landlord with respect to any real property on which Collateral is
located as Secured Party may require, all in form and substance satisfactory to
Secured Party.
5
ARTICLE 5 - NEGATIVE COVENANTS
During the tern of this Agreement and until payment of all the Indebtedness
and performance of all obligations to Secured Party, Debtor will not, without
Secured Party's prior written consent:
5.1 Liens. Create, incur, assume or permit to exist any Lien on any
Collateral, except Liens permitted under the Loan Agreement.
5.2 Documents of Title. Sign or authorize the signing of any financing
statement or other document naming Debtor as debtor or obligor, except those
which do not relate to the Collateral or which, with respect to the Collateral
are permitted under the Loan Agreement, or acquiesce or cooperate in the
issuance of any warehouse receipt or other document of title with respect to any
Collateral, except those negotiated to Secured Party or those naming Secured
Party as secured party.
5.3 Disposition of Collateral. Sell, transfer, lease or otherwise dispose
of any Collateral.
5.4 Change in Location, Name, Legal Structure. If and to the extent the
same would in any manner impair the creation, perfection or priority of Secured
Party's security interest in the Collateral, (a) maintain Records, its chief
executive office or residence, or a place of business at a location other than
as specified in Article 3; or (b) change its name, mailing address, the nature
of its business, or its legal structure.
ARTICLE 6 - EVENTS OF DEFAULT
6.1 Events of Default. The occurrence of any of the following shall
constitute an Event of Default:
(a) Any "Event of Default" as defined in the Loan Agreement.
(b) Secured Party shall not have a first perfected security interest
in any Collateral for ten (10) or more days after notice to Debtor;
(c) Secured Party reasonably determines, in good faith, that its
security interest in the Collateral is materially impaired for ten (10) or more
days after notice to Debtor;
(d) Secured Party reasonably determines, in good faith, that any or
all of the Collateral, including any proceeds, is in danger of dissipation,
loss, theft, damage or destruction,
6
or otherwise in jeopardy such as would materially impair the value of the
Collateral (with due consideration to applicable insurance coverage);
(e) Debtor shall fail to perform any of its duties or obligations
under this Agreement not specifically referenced in this Article 6 and such
failure remains uncured for ten (10) or more days after notice to Debtor;
6.2 Acceleration and Remedies. Upon the occurrence of any Event of Default
Secured Party shall be entitled to, at Secured Party's option, without notice or
demand of any kind, (a) declare all or any part of the Indebtedness immediately
due and payable; (b) exercise any or all of the rights and remedies available to
a secured party under the Uniform Commercial Code or any other applicable law;
and (c) exercise any or all of Secured Party's rights and remedies provided for
in this Agreement and in any other Loan Document. The obligations of Debtor
under this Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any Indebtedness is rescinded or must
otherwise be returned by Secured Party upon, on account of, or in connection
with, the insolvency, bankruptcy or reorganization of Debtor, or otherwise, all
as though such payment had not been made.
6.3 Sale of Collateral. After the occurrence of an Event of Default
Secured Party may sell all or any part of the Collateral, at public or private
sales, to itself, a wholesaler, retailer or investor, for cash, upon credit or
for future delivery, and at such price or prices as Secured Party may deem
commercially reasonable. To the extent permitted by law, Debtor hereby
specifically waives all rights of redemption and any rights of stay or appraisal
which it has or may have under any applicable law in effect from time to time.
Any such public or private sales shall be held at such times and at such
place(s) as Secured Party may determine. In case of the sale of all or any part
of the Collateral on credit or for future delivery, the collateral so sold may
be retained by Secured Party until the selling price is paid by the purchaser,
but Secured Party shall not incur any liability in case of the failure of such
purchaser to pay for the Collateral and, in case of any such failure, such
Collateral may be resold. Secured Party may, instead of exercising its power of
sale, proceed to enforce its security interest in the Collateral by seeking a
judgment or decree of a court of competent jurisdiction.
6.4 Debtor's Obligation Upon Default. Upon the request of Secured Party
after the occurrence of an Event of Default Debtor will:
7
(a) Assemble and make available to Secured Party the Collateral at
such place(s) as Secured Party shall designate, segregating all Collateral so
that each item is capable of identification; and
(b) Permit Secured Party, by Secured Party's officers, employees,
agents and representatives, to enter any premises where any Collateral is
located, to take possession of the Collateral and to remove the Collateral or to
conduct any public or private sale of the Collateral, all without any liability
of Secured Party for rent or other compensation for the use of Debtor's
premises.
ARTICLE 7 - SPECIAL COLLATERAL PROVISIONS
7.1 Performance of Debtor's Obligations. Without having any obligation to
do so, Secured Party may perform or pay any obligation which Debtor has agreed
to perform or pay under this Agreement, including, without limitation, the
payment or discharge of taxes or Liens levied or placed on or threatened against
the Collateral. In so performing or paying, Secured Party shall determine the
action to be taken and the amount necessary to discharge such obligations.
Debtor shall reimburse Secured Party on demand for any amounts paid by Secured
Party pursuant to this Section, which amounts shall constitute Indebtedness
secured by the Collateral and shall bear interest from the date of demand at the
rate applicable to overdue payments under the Loan Agreement.
7.2 Power of Attorney. For the purpose of protecting, preserving and
enforcing the Collateral and Secured Party's rights under this Agreement, Debtor
hereby irrevocably appoints Secured Party, with full power of substitution, as
its attorney-in-fact with full power and authority to do any act which Debtor
is obligated to do, or Secured Party has the right to do, hereunder; to exercise
such rights with respect to the Collateral as Debtor might exercise; to use such
Equipment, Fixtures or other property as Debtor might use; to enter Debtor's
premises; to give notice of Secured Party's security interest in and to collect
the Collateral and the Proceeds; and to execute and file in Debtor's name any
financing statements, amendments and continuation statements necessary or
desirable to perfect or continue the perfection of Secured Party's security
interests in the Collateral. Debtor hereby ratifies all that Secured Party shall
lawfully do or cause to be done by virtue of this appointment.
7.3 Authorization for Secured Party to Take Certain Action. The power of
attorney created in Section 7.3 is a power coupled with an interest and shall be
irrevocable. The powers conferred
8
on Secured Party hereunder are solely to protect its interests in the Collateral
and shall not impose any duty upon Secured Party to exercise such powers.
Secured Party shall be accountable only for amounts that it actually receives as
a result of the exercise of such powers and in no event shall Secured Party or
any of its directors, officers, employees, agents or representatives be
responsible to Debtor for any act or failure to act, except for gross negligence
or willful misconduct. Secured Party may exercise this power of attorney without
notice to or assent of Debtor, in the name of Debtor, or in Secured Party's own
name, from time to time in Secured Party's sole discretion and at Debtor's
expense. To further carry out the terms of this Agreement, Secured Party may
upon the occurrence of an Event of Default:
(a) Execute any statements or documents to take possession of, and
endorse and collect and receive delivery or payment of, any checks, drafts,
notes, acceptances or other instruments and documents constituting the payment
of amounts due and to become due or any performance to be rendered with respect
to the Collateral;
(b) Sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts; drafts, certificates and statements under
any commercial or standby letter of credit, assignments, leases, bills of sale,
or any other documents relating to the Collateral, including without limitation
the Records;
(c) Use or operate Collateral or any other property of Debtor for the
purpose of preserving or liquidating Collateral;
(d) File any claim or take any other action or proceeding in any
court of law or equity or as otherwise deemed appropriate by Secured Party for
the purpose of collecting any and all monies due or securing any performance to
be rendered with respect to the Collateral;
(e) Commence, prosecute or defend any suits, actions or proceedings
or as otherwise deemed appropriate by Secured Party for the purpose of
protecting or collecting the Collateral. In furtherance of this right, upon the
occurrence of an Event of Default Secured Party may apply for the appointment of
a receiver or similar official to operate Debtor's business, and, to the fullest
extent permitted by law, Debtor hereby waives any right to oppose such
appointment;
(f) Prepare, adjust, execute, deliver and receive payment under
insurance claims, and collect and receive payment of and endorse any instrument
in payment of loss or returned
9
premiums or any other insurance refund or return, and apply soon amounts, at
Secured Party's sole discretion, toward repayment of the Indebtedness or
replacement of the Collateral.
7.4 Application of Proceeds. Any Proceeds and other monies or property
received by Secured Party pursuant to the terms of this Agreement or any Loan
Document may be applied by Secured Party first to the payment of expenses of
collection, including without limitation to reasonable attorneys' fees, and then
to the payment of the Indebtedness in such order of application as Secured Party
may elect. Notwithstanding the rights given to Debtor pursuant to California
Civil Code sections 1479 and 2822 or equivalent provisions in the laws of the
state specified in the governing law clause of this document (and any amendments
or successors thereto), to designate how payments will be applied, Debtor hereby
waives such rights and Secured Party shall have the right in its sole discretion
to determine the order and method of the application of payments received from
Debtor or from the sale or disposition of the Collateral and to revise such
application prospectively or retroactively at its discretion.
7.5 Deficiency. If the proceeds of any sale of the Collateral are
insufficient to cover all costs and expenses of such sale and the payment in
full of all Indebtedness, plus all other sums required to be expended or
distributed by Secured Party, then Debtor shall be liable for any such
deficiency.
7.6 Secured Party Transfer. Upon the transfer of all or any part of the
Indebtedness, Secured Party may transfer all or any part of its interest in the
Collateral and shall be fully discharged thereafter from all liability and
responsibility with respect to such interest in the Collateral so transferred,
and the transferee shall be vested with all the rights and powers of Secured
Party hereunder with respect to such interest in the Collateral so transferred.
ARTICLE 8 - GENERAL PROVISIONS
8.1 Notices. Any notice given by any party under this Agreement shall be
given in the manner prescribed in the Loan Agreement.
8.2 Binding Effect. This Agreement shall be binding upon Debtor, its
permitted successors, representatives and assigns, and shall inure to the
benefit of Secured Party and its successors, representatives and assigns;
provided however that Debtor may not assign or transfer Debtor's obligations
under this Agreement without Secured Party's prior written consent. Secured
Party reserves the right to sell, assign, or transfer its rights and powers
under this Agreement in whole or in part without
10
notice to Debtor. In that connection, Secured Party may disclose all documents
and information which Secured Party now or hereafter may have relating to this
Agreement, Debtor or Debtor's business.
8.3 No Waiver. Any waiver, consent or approval by Secured Party of any
Event of Default or breach of any provision, condition or covenant of this
Agreement or any Loan Document must be in writing and shall be effective only to
the extent set forth in writing. No waiver or any breach of default shall be
deemed a waiver of any later breach or default of the same or any other
provision of this Agreement or any of the Loan Documents. No failure or delay on
the part of Secured Party in exercising any power, right or privilege under this
Agreement or any Loan Document shall operate as a waiver thereof, and no single
or partial exercise of any such power, right or privilege shall preclude any
further exercise thereof, or the exercise of any further power, right or
privilege.
8.4 Rights Cumulative. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any other rights or remedies
available under contract or applicable law.
8.5 Unenforceable Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be so only as to such
jurisdiction and only to the extent of such prohibition or unenforceability, but
all the remaining provisions of this Agreement shall remain valid and
enforceable.
8.6 Governing Law, Waiver of Notice. Except as may be otherwise provided
by the Uniform Commercial Code or in any addendum hereto, this Agreement shall
be governed by and construed in accordance with the laws of the State of
California.
To the fullest extent permitted by law, Debtor hereby waives presentment,
demand, protest, notice of dishonor and all other notices and demands as well as
any applicable statute of limitations.
8.7 Entire Agreement. This Agreement, together with the other Loan
Documents, is intended by Debtor and Secured Party as the final expression of
Debtor's obligations to Secured Party in connection with the Collateral and
supersedes all prior understandings or agreements concerning the subject matter
hereof. This Agreement may be amended only by a writing signed by Debtor and
accepted by Secured Party in writing.
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth in the preamble.
RELEASE SOFTWARE CORPORATION VENTURE LENDING & LEASING, INC.
By:_________________________ By: /s/ Xxxxxxxx X. Xxxxxxxxx
-----------------------------
XXXXXXXX X. XXXXXXXXX
Chief Financial Officer
12
Schedule 1 to Security Agreement
Description of Equipment
Quantity Article Make Y. Mfg. Model Serial or Motor No.
-------- ------- ---- ------- ----- -------------------
See attached continuation to Schedule 1
together with all improvements, replacements, accessions and additions thereto,
wherever located, and all Proceeds thereof arising from the sale, lease, rental
or other use or disposition of any such property, including all rights to
payment With respect to insurance or condemnation, returned premiums, or any
cause of action relating to any of the foregoing.
RELEASE SOFTWARE CORPORATION
By:_________________________
VENTURE LENDING & LEASING, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
----------------------------
XXXXXXXX X. XXXXXXXXX
President
EXHIBIT A TO FINANCING STATEMENT
BETWEEN
RELEASE SOFTWARE CORPORATION.
AS DEBTOR,
AND
VENTURE LENDING & LEASING, INC.,
AS SECURED PARTY
--------------------------------
Item 6 continued:
-----------------
All of Debtor's right, title and interest in and to the Collateral, as such
term is defined below.
"Collateral" means all Debtor's Equipment and Fixtures now owned or
hereafter acquired, wherever located, and whether held by Debtor or any third
party, and all proceeds and products thereof, including all insurance and
condemnation proceeds ("Proceeds"), and all Records relating or useful to, or
used in connection with any of the foregoing.
"Equipment" means all of Debtor's specific equipment identified and
described on Schedule 1 attached to this Agreement and incorporated herein by
----------
reference (as such Schedule may be amended or supplemented from time to time),
all replacements, parts, accessions and additions thereto, and all proceeds
thereof arising from the sale, lease, rental or other use or disposition
thereof, including all rights to payment with respect to insurance or
condemnation, returned premiums, or any cause of action relating to any of the
foregoing. Financed equipment to be new and used software, R&D, test equipment,
computer and general purpose office equipment. Advances on used equipment will
be 100% of purchase price and 50% of this facility may be used for software or
tenant improvements as stated in Commitment Letter dated May 29, 1996.
"Fixtures" means all items of Equipment that are so related to the real
property upon which they are located that an interest in them arises under real
property law, and all proceeds thereof arising from the sale, lease, rental or
other use or disposition thereof.
"Records" means all Debtor's computer programs, software, hardware, source
codes and data processing information, all written documents, books, invoices,
ledger sheets, financial information and statements, and all other writings
concerning Debtor's business.
RELEASE SOFTWARE CORPORATION
EQUIPMENT LIST FOR LOAN SCHEDULE NO. 53-001
MANUFACTURER QTY DESCRIPTION SERIAL INVOICE INVOICE EQUIPMENT
OF NUMBER NUMBER DATE COST
VENDOR
----------------------------------------------------------------------------------------------------------------------------------
NCA 6 XXXXX 4X32/60 MEMORY S1651686 2/24/96 298.31
HI-TECH USA 1 INTEL ATLANTIS 256K PIPELINED M/B COMPUTER 10522 A05735 2/26/96 4,264.35
1 INTEL PENTIUM-133 CPU
1 INTEL ATLANTIS W/OK EXT. CACHE M/B COMPUTER 47419
1 INTEL XXXXXXX-000 XXX
0 XXXXXXX-000 XXXXXXX FAN
2 16MB EDO DRAM
2 4*32 6ONS SIMM
2 FULL TOWER CASE & POWER SUPPLY
2 KEYTRONICS 104 KEYBOARDS FOR WINDOWS 95
2 3 BUTTON SERIAL MOUSE
2 1.44 MB 0 0/0 XXXXXX XXXXX
1 ADAPTEC AHA-294OK PCI SCSI
1 1/0GB SCSI HARD DRIVE
1 1/6GB IDE HARD DRIVE
2 MITSUMI FX400 CD ROM 4-SPEED
1 14" SVGA NIN INTERLACED
546849 2/27/96 320.46
FRY'S ELECTRONICS 2 3COM PCI 10BASE ETHERLINK CARDS
7 TWISTED PAIR PATCH CORDS
1 R J45 COUPLER COUBLE NETWORK
FRY'S ELECTRONICS 1 NECS MULTISYNE 17" MONITOR 551099 3/1/96 850.15
NCA 1 ALEXIX QPA-120 MULTIMEDIA SYSTEM INCLUDING 727465 3/15/96 3,273.22
3COM ETHERLINK II
2 2X32/60 8MB MEMORY
FRY'S ELECTRONICS 1 APPLE POWERMAC 85/120 16/2G/CD 16MB 2GHD 4XCD-ROM XB5500AP3FT 589829 3/21/96 6,230.08
1 APPLE MULTIPLE SCAN
1 16MB UPGRADE FOR POWERMAC
1 MICROSPEED KEYBOARD
1 CONNECTIX QUICKCAM WIN 95
NCA COMPONENTS FOR 2 PENTIUM 100 PS'S TO INCLUDE THE S345119 3/27/96 5,332.14
FOLLOWING
2 SANYO QUAD IDE 3551312781
Page 1
RELEASE SOFTWARE CORPORATION
EQUIPMENT LIST FOR LOAN SCHEDULE NO. 53-001
MANUFACTURER QTY DESCRIPTION SERIAL INVOICE INVOICE EQUIPMENT
OF NUMBER NUMBER DATE COST
VENDOR
----------------------------------------------------------------------------------------------------------------------------------
4 XXXXX 4 32/60 EDO MEMORY 3551498592
2 INTEL ATLANTIS W/ATI VIDEO AND SOUND
2 KEYTRONICS 104 KEYBOARDS
2 MICROSOFT MOUSE
2 TEAC 1.44MB FLOPPY DRIVE
2 3COM ETHERLINK
2 NCA CASE 9 BAY
1 NEC 17" PLUS MONITOR S6207186RA
1 INTEL PENTIUM 12
1 INTEL PENTIUM 13
NCA 2 WESTERN DIGITAL 31600A 190MS ENHANCED IDE 2891411529 S345123 3/27/96 624.84
2891332557
NCA 4 4X32/70 16MB MEMORY
2 INTEL PENTIUM 100 MHZ CPU L6060871-0598 S169766 3/29/96 5,343.74
L6060871-0662
2 SANYO 254P 4X IDE CD ROM 3551497326
3551497322
2 MICROSOFT SERIAL MOUSE
2 3-COM ETHERLINK III PERALLEL
2 CPU COOLING FANS PENTIUM 90-133
2 MITSUMI 1.44MB FLOPPY DRIVE
2 QUANTUM HARD DRIVES 1226447115889
122644721444
2 ATLANTIS W/SOUND & VIDEO
1 NEC XV17" PLUS MONITOR 6203566RA
1 NEC XV 15" PLUS MONITOR 6206188EP
2 NCA CASE 9 BAY TOWER 250 POWER SUPPLY
PROGRAMMER'S PARADISE INC. 1 MS VIS SOURCESAFE V4.0 446531 4/3/96 504.80
FRY'S ELECTRONICS 1 QUICKBOOKS PRO V4.0 630767 4/9/96 204.67
NCA 1 ALEXUISIII 166-6X 3PA PRE-BUILT SYSTEM 120 4/11/96 3,110.47
1 PRINCETON ULTRA 1 T PLUS BY MAG
1 SONY QIC-WIDE QW
NCA 2 MOTION 331 2MB PCI DRAM NBX1-331-2P 224 4/13/96 290.07
Page 2
RELEASE SOFTWARE CORPORATION
EQUIPMENT LIST FOR LOAN SCHEDULE NO. 53-001
MANUFACTURER
OF SERIAL INVOICE INVOICE EQUIPMENT
VENDOR QTY DESCRIPTION NUMBER NUMBER DATE COST
-----------------------------------------------------------------------------------------------------------------------------------
NB9FX2-771-2P
MACSYSTEM WAREHOUSE 1 APPLEVISION 1710 BCGM2935 4/27/96 999.^
MACSYSTEM WAREHOUSE 1 POWERWAVE 604/150-8/1 MINI TOWER 4/27/96 4,122.^
1 8MB 70NS MEMORY
THE COMPUTER GUYS 1 HP NETSERVER LS2 P5 133MHZ DUAL PENTIUM 133HMZ, 64MB SG60500899 4476 5/10/96 37,606.^
RAM 1.44MMD FLOPPY DRIVE CD-ROM DRIVE AND KEYBOARD
1 HP 4GB HOT PLUGGABLE FAST SCSI2
1 2/1 GB HOT SWAY DRIVE FAST SCSI-2 HOT SWAP DRIVE
1 HP SURESTORE TAPE 6000I INTERNAL 8GB TAPE DRIVE
1 MICROSOFT WINDOWS
3 HP VECTRA XX0 XXXXXXX 166MH 16MB RAM, 1.2GB HARDDRIVE US60953394
1.44 FLOPPY DRIVE, MINI TOWER, KEYBORD, WINDOWS 95 US60953363
MOUSE US60953396
3 16MB RAM MODULES 72 PINS
3 QUAD SPEED IDE CD-ROM DRIVE
3 3COM COMBO PCI ETHERNIET CARD
3 MAG SVGA COLOR MONITOR21" MA2134018257
MA2134018420
MA2134021760
1 APC SMART UPS 1000XL WITH EXTENDED BATTERY
1 APC POWER CHUTE PLUS WINDOWS
2 ACCTON ETHERHUB 16 POSTS EXTERNAL
2 3COM FAST ETHERLINK 10/100
3 1MB DRAM VIDEO UPGRADE
THE COMPUTER GUYS 1 APPLE POWER MAC 8500 120MHZ, 16MB RAM, 2GB HD, 4X B5500XP3FT 4505 5/15/96 5,648.3
CD-ROM, PCI BUS.
1 APPLE MAC 17" MULTISCAN CY5503025X5
1 APPLE EXTENDED KEYBOARD II
THE COMPUTER GUYS 1 DIGIBOARD PC/16EM ISA INTELIGHENT I/O WITH RISC CHIP, 4503 5/15/96 1,093.4
16 PORTSS, NOS AND SOFTWARE DRIVERS
FRY'S ELECTRONICS 1 APPLE PERFORMA 63-CD 100MHZ, 16MB/1.2GB HD/4X CD-ROM M442511A 715368 5/24/96 2,693.6
28.8MDM/15" COLOR DISPLAY
1 QUICKCAM
Page 3
RELEASE SOFTWARE CORPORATION
EQUIPMENT LIST FOR LOAN SCHEDULE NO. 53-001
MANUFACTURER
OF QTY DESCRIPTION SERIAL INVOICE INVOICE EQUIPMENT
VENDOR NUMBER NUMBER DATE COST
-----------------------------------------------------------------------------------------------------------------------------------
NCA 1 16MB XXXXX (8) INTEL ATLANTIS MB W/ATI VIDEO S181322 5/20/96 678.6?
NCA 1 IBM 1700 1.7 GB IT S181386 5/21/96 235.9?
NCA 1 PENTIUM 100 CPU C6787447-0113 S181434 5/22/96 183.1?
THE COMPUTER GUYS 3 HITACHI P5-100MHZ NOTEBOKS INCLUDING 8MB RAM. AG4740039 4552 6/3/96 13,031.75
700MB HARDDRIVE, 1.44MB FLOPPY DRIVE, 4X-CD-ROM, AG4740045
TFT SVGA LCD DISPLAY, SOUND SYSTEM
THE COMPUTER GUYS 3 INTEL ENDAVOR P5 SYSTEM SUPPORT P5/90/100/120/133 AND 20133 4551 6/30/96 15,438.62
166MHZ, 256PIP CACHE, 2S AND 1P SOUND BLASTER BUILT-IN 20134
AND XXXX 20135
3 INTEL PENTIUM 588-166MHZ
3 CPU XXXXXXX UNIT PENTIUM
6 16MB RAM EDO 72 PINS
3 TEAC 1.44MB FLOPPY DRIVE
3 WESTERN DIGILAL 1.6GB IDE
3 DIAMOND STEALTH 64 PCI 2MB VRAM
3 KEYTORNICS KEYBOARD 1-4 KEY
3 MEDIUM TOWER CASE WITH 250W POWER SUPPLY
3 MICROSOFT SERIAL MOUSE
3 MOUSE PAD
3 NEC 4X IDE CD-ROM DRIVE INTERNAL
3 3 COM 3c590 COMBO PCI ETHERNET CARD
2 MAG MX21F SVGA COLOR MONITORS 21" MA2134021716
MA2134018418
1 MAG DX-17F 17" COLOR MONITOR MH43440854
1 INTEL PENTIUM SYSTEM 75/90/100/133/150/166MHZ WITH 20145
256K PIPELINE CACHE
1 INTEL PENTIUM 133MHZ
1 CPU COOLING UNIT PENTIUM
2 8MB EDO MEMORY
1 TEAC 1.44MB FLOPPY DRIVE
1 WESTERN DIGITAL 1.6GB IDE
1 KEYTRONIC KEYBOARD
1 MEDIUM TOWER CASE WITH 250W POWER SUPPLY
1 MICROSOFT SERIAL MOUSE
1 MOUSE PAD
Page 4
RELEASE SOFTWARE CORPORATION
EQUIPMENT LIST FOR LOAN SCHEDULE NO. 53-001
MANUFACTURER QTY DESCRIPTION SERIAL INVOICE INVOICE EQUIPMENT
OF NUMBER NUMBER DATE COST
VENDOR
---------------------------------------------------------------------------------------------------------------------------------
1 TOSHIBA 4X SPEED CD-ROM INTERNAL IDE INTERFACE
1 3COM COMBO POI ETHERNET CARD
1 INTEL PENTIUM SYSTEM 75/90/100/133/150/166MHZ WITH 20136
256K PIPELINE CACHE
1 INTEL PENTIUM 586-166MHZ
1 CPU COOLING UNIT PENTIUM
2 16MB EDO MEMORY
1 TEAC 1.44MB FLOPPY DRIVE
1 1.2GB IDE HARDDRIVE
1 KEYTRONIC KEYBOARD
1 MEDIUM TOWER CASE WITH 250W POWER SUPPLY
1 MICROSOFT SERIAL MOUSE
1 MOUSE PAD
1 3COM COMBO POI ETHERNET CARD
1 TRIDENT SVGA CARD PCI 32-BIT BUS. 1MB RAM
THE COMPUTER GUYS 1 HP LASER JET 5M 600 DPI, 12PPM, PRINTER USHB039653 4565 6/7/96 6,200.92
1 SCSI 2.0 GB HARD DRIVE
3 MICROSOFT BUS. MOUSE
1 MAC MX21F SVGA COLOR 21" MONITOR MA2134021715
THE COMPUTER GUYS 1 APPLE POAERMAC 8500-120MHZ POWER PC 604/120MHZ, 16MB XB60705M3FT 4566 6/10/96 4,815.58
RAM, 1GB HARD DRIVE, QUAD SPEED CD-ROM
1 APPLE EXTENDED KEYGBOARDII
1 APPLE 15" COLOR DISPLAY SG6101PQ35J
FRY'S ELECTRONICS 3 MHZ ETHER/MOCEM PCMCIA 10BASE-T ETHERN X-XXXX MODEM 558070 3/4/96 1,891.94
CONNECTOR
1 CARDINAL 28.8 V.34EXTERNALFAX MODEM
1 XXXXXX 4GB INTERNAL HARD DRIVE
1 3COM PCI 10BASE-T TWISTED PAIR
FRY'S ELECTRONICS 1 TOSHIBA 5522 6X IDE CD 128KB BUFFER, 900KB TRANS RATE 548342 2/28/96 290.86
LOW POWER CONSUMPTION
1 3 COM ETHERLINK IIITP FOR TWISTED PAIR
FRY'S ELECTRONICS 1 ADAPTEC PCI SCSI MOSTER SOFTWARE, DOS WIN, OS/2 562893 3/7/96 1,009.55
NETWARE & SUNIX SUPPLY
1 PIONEER 4 SPEED SCSI
Page 5
RELEASE SOFTWARE CORPORATION
EQUIPMENT LIST FOR LOAN SCHEDULE NO. 53-001
MANUFACTURER QTY DESCRIPTION SERIAL INVOICE INVOICE EQUIPMENT
OF NUMBER NUMBER DATE COST
VENDOR
---------------------------------------------------------------------------------------------------------------------------------
1 FUJITSU 2.1 GB FAST WIDE SCSI-28.9MS READ, 512K BUFFER
NCA 1 QUANTUM HARD DRIVE S168466 3/15/96 545.03
-------
127.128.70
Page 6
