EXHIBIT 10.10
Coast
Loan and Security Agreement
Borrower: NEURON DATA, INC.
a California corporation
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Date: March 11, 1994
THIS LOAN AND SECURITY AGREEMENT ("Loan Agreement"), dated the above date, is
entered into at Los Angeles, California, between COASTFED BUSINESS CREDIT
CORPORATION ("CoastFed"), a California corporation, with offices at 00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, and the borrower
named above ("Borrower"), whose chief executive office is located at the above
address ("Borrower's Address").
1. LOANS.
1.1 Loans, Collateral Agreements. Borrower has requested and may hereafter
request that CoastFed advance funds or otherwise extend credit to or for the
benefit of Borrower ("Loan(s)") in accordance with the terms and provisions of
this Loan Agreement and other written agreements ("Collateral Agreement(s)"),
including, but not limited to, any one or more of the following described
security agreements now or hereafter entered into between Borrower and CoastFed:
(a) Accounts Collateral Security Agreement; (b) Inventory Collateral Security
Agreement; (c) Equipment Collateral Security Agreement; and (d) any promissory
notes or guarantees. The amount and terms of payment of my Loans by CoastFed to
Borrower shall be determined in accordance with the terms and provisions of this
Loan Agreement and of any executed Collateral Agreements. Notwithstanding
anything herein or in any Collateral Agreement to the contrary, in no event
shall the Borrower permit the total balance of all Loans and all other
Obligations outstanding at any one time to exceed $2,000,000.00; and, if for any
reason they do, Borrower shall immediately pay the amount of such excess to
CoastFed in immediately available funds.
1.2 Interest. Unless specifically provided to the contrary in any Collateral
Agreement, all Loans shall bear interest at a rate equal to the "Prime Rate" (as
hereinafter defined), plus 3% per annum, calculated on the basis of a 360-day
year for the actual number of days elapsed. The interest rate applicable to all
Loans shall be adjusted monthly as of the first day of each month, and the
interest to be charged for that month shall be based on the highest "Prime Rate"
in effect during said month, but in no event shall the rate of interest charged
on any Loans in any month be less than 8 % per annum. "Prime Rate" is defined as
the actual "Reference Rate" or the substitute therefor of the Bank of America NT
& SA ("B of A") whether or not that rate is the lowest interest rate charged by
B of A. If the Prime Rate, as defined, is unavailable, "Prime Rate" shall mean
the highest of the prime rates published in the Wall Street Journal on the first
business day of the month, as the base rate on corporate loans at large U.S.
money center commercial banks.
1.2 Fees. Borrower shall pay to CoastFed a loan origination fee in the amount
of $20,000.00 at the time of the initial funding hereunder, and an annual loan
fee of $-0- on each anniversary of the date hereof during the term of this Loan
Agreement. Said fees are in addition to all other sums payable to CoastFed, are
not refundable for any reason, and shall bear interest from the date due to the
date paid at the highest interest rate applicable to any of the Obligations.
2. DEFINITIONS OF OBLIGATIONS AND COLLATERAL; GRANT OF SECURITY INTEREST
2.1 Obligations. The term "Obligations" as used in this Loan Agreement, and
any and all Collateral Agreements, shall mean and include each and all of the
following: the obligation to pay all Loans and all interest thereon when due and
to pay and perform when clue all other indebtedness, liabilities, obligations,
guarantees, covenants, agreements, warranties and representations of Borrower to
CoastFed, whether heretofore, now or hereafter existing, owing or arising;
whether primary,
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secondary, direct, acquired from a third party, absolute, contingent, fixed,
secured or unsecured; joint or several. written or oral, monetary, or non-
monetary; and whether created pursuant to, or caused by Borrower's breach of
this Lease Agreement, a Collateral Agreement or any other present or future
agreement or instrument, or created by operation of law or otherwise.
2.2 Collateral. As security and collateral for all Obligations, Borrower
hereby grants to CoastFed a continuing security interest in, and assigns to
CoastFed, all of Borrower's interest in the types of property described below,
whether now owned or hereafter acquired and wherever located, together with all
proceeds (including insurance proceeds), substitutions, accessions and products
thereof (collectively referred to as "Collateral"):
(a) Accounts. All accounts, contract rights (to the extent assignable without
breach thereof), chattel paper, and instruments, and all other obligations now
or hereafter owing to Borrower (hereinafter sometimes collectively referred to
as "Accounts"), including, but not limited to, those described in any Accounts
Collateral Security Agreement executed by Borrower in, and all right, title and
interest of Borrower in, and all of Borrower's rights and remedies with respect
to, all goods, the sale or other disposition of which gives rise to any Account,
including, without limitation, all returned, reclaimed and repossessed goods and
all rights of stoppage in transit, replevin, reclamation, and all rights as an
unpaid vendor; and
2.2(b) Inventory. All inventory, goods, merchandise, materials, raw
materials, work in process, finished goods, advertising, packaging and shipping
materials, supplies, and all other tangible personal property which is held for
sale or lease or furnished under contracts of service or consumed in Borrower's
business, including, without limitation, any and all of the foregoing which are
returned, repossessed, reclaimed or stopped in transit, and including, but not
limited to, those described in any Inventory Collateral Security Agreement
executed by Borrower, and all warehouse receipts and other documents or
instruments now or hereafter issued with respect to any of the foregoing; and
2.2(c) Equipment. All equipment, goods (other than inventory), machinery,
fixtures, trade fixtures, vehicles, furnishings, furniture, supplies, materials,
tools, machine tools, office equipment, appliances, apparatus, parts, dies,
jigs, and chattels, including, but not limited to, those described in any
Equipment Collateral Security Agreement executed by Borrower; and
2.2(d) Intangibles. All deposit accounts and general intangibles (including,
but not limited to, tax refunds, goodwill, name, drawings, trademarks,
blueprints, trade names, trade secrets, customer lists, patents, patent
applications, copyrights, security deposits, loan commitment fees, royalties,
licenses, processes, and all other rights, privileges and franchises); and
All personal property of Borrower which comes into CoastFed's possession,
custody or control; and all tangible and intangible personal property in which
CoastFed now has or hereafter acquires a security interest to secure any or
all of the Obligations; and all substitutions, additions and accessions to any
or all of the foregoing items of Collateral; and all guaranties of and
security for any and all of the foregoing; and all books and records relating
to any and all of the foregoing and the equipment containing said books and
records. Payment and performance of the Obligations are collateralized by the
Collateral and by any security interest created in any other agreement now or
hereafter existing between CoastFed and Borrower unless such other agreement
is a deed of trust or other security instrument having real property, or rents
from real property as its subject matter and expressly provides to the
contrary.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR
To induce CoastFed to enter into this Loan Agreement and now and hereafter to
enter into any Collateral Agreement, Borrower represents and warrants that each
of the following representations and warranties now is and hereafter will
continue to be true and correct in all respects and Borrower has and will timely
perform each of the following covenants:
3.1 Corporate Existence and Power. Borrower, if a corporation, is and will
continue to be, duly authorized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. Borrower is and will continue to
be qualified and licensed to do business in all jurisdictions in which the
nature of the business transacted by it, or the ownership or leasing of its
property, makes such Qualification or licensing necessary, and Borrower has and
will continue to have all requisite power and authority to carry on its business
as it is flow, or may hereafter be, conducted.
3.2 Authority. Borrower is, and will continue to be, authorized to enter
into, to grant security interests in its property pursuant to, and to perform
its obligations under, this Loan Agreement, any Collateral Agreement and all
other instruments and transactions contemplated herein. The execution, delivery
and performance by Borrower of this Loan Agreement, any Collateral Agreement and
all other instruments and transactions contemplated herein have been validly
authorized, are enforceable against the Borrower in accordance with their terms,
and do not violate any law or any provision of, and are not grounds for
acceleration under, any agreement, indenture, note or instrument which is
binding upon Borrower, or any of its property,
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including/, /without limitation, Borrower's Articles of Incorporation, By-Laws
and any Shareholder Agreements.
3.3 Name; Trade Names and Styles. Borrower has set forth above its correct
name. Listed on the Schedule hereto are all prior names of Borrower and each
fictitious name, trade name and trade style by which Borrower has been, or is
now, known. Borrower shall provide CoastFed with fifteen (15) days' advance
written notice prior to doing business under any other name, fictitious name,
trade name or trade style. Borrower has complied, and will hereafter comply,
with all laws relating to the conduct of business under, the ownership of
property in, and the renewal or continuation of the right to use, a corporate,
fictitious or trade name or trade style.
3.4 Place of Business; Location of Collateral. Borrower's sole place of
business; or, if Borrower has more than one place of business, Borrower's chief
executive office; or, if Borrower is an individual and does not have a separate
place of business, Borrower's residence is, and will continue to be, located at
Borrower's Address and all of Borrower's books and records including, but not
limited to, the books and records relating to Borrower's Accounts, are and will
be maintained at Borrower's Address unless and until CoastFed shall otherwise
consent in writing. In addition to Borrower's Address, Borrower has places of
business and Collateral is located only at the locations shown on the Schedule
hereto. Borrower will provide CoastFed with at least five (5) days advance
written notice if Borrower moves any of the Collateral (other than (i) in
connection with sales or other dispositions of inventory and other products,
transactions with subsidiaries, and the license, sublicense and grant of
distribution and similar rights, in the ordinary course of business, (ii)
disposal in the ordinary course of business of items of Collateral which have
become worn out or obsolete or which are promptly being replaced, (iii) disposal
of Collateral outside the ordinary course of business not exceeding in the
aggregate $50,000.00 in any fiscal year, and (iv) movement of Collateral of the
type described in Section 2.2(c) above ("Equipment") within any of the states
specified in the Schedule or within any other jurisdiction notified to CoastFed
hereunder in which CoastFed has taken all necessary action in order to protect
and perfect its security interest therein, and (v) any and all mobile goods
which are of a type normally used in more than one jurisdiction), or obtains any
additional sites for the conduct of Borrower's business or the location of any
Collateral.
3.5 Title to Collateral; Liens. Borrower is now, and will at all times
hereafter be, the lawful and sole owner of all the Collateral. With the
exception of the security interest granted CoastFed, the Collateral now is and
will remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims ("Liens"), other than Permitted Liens. As used
herein, "Permitted Liens" means (i) any Liens existing as of the date hereof and
disclosed in the Schedule; (ii) Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings, provided the same does not have priority over
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any of CoastFed's security interests and do not interfere With Borrower's rights
in the Collateral and its use and possession thereof; (iii) Liens of
materialmen, mechanics, warehousemen, carriers, or employees or other like Liens
arising in the ordinary course of business and securing obligations either not
delinquent or being contested in good faith by appropriate proceedings; (iv) any
judgment, attachment or similar lien, unless the judgment it secures is not
fully covered by insurance and has not been discharged or execution thereof
effectively stayed and bonded against pending appeal within thirty (30) days of
the entry thereof; (v) easements, rights of way, servitudes or zoning or
building restrictions and other minor encumbrances on real property and
irregularities in the title to such property which do not in the aggregate
materially impair the use or value of such property or risk the loss or
forfeiture of title thereto; (vi) Liens (A) upon or in any property acquired or
held by the Borrower or any of its subsidiaries to secure the purchase price of
such property or indebtedness incurred solely for the purpose of financing the
acquisition of such property, or (B) existing on such property at the time of
its acquisition, provided that the Liens referred to in (A) and (B) above are
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confined solely to the property so acquired and improvements thereon; (vii)
Liens on assets of corporations which become subsidiaries of the Borrower after
the date hereof, provided that such Liens existed at the time the respective
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corporations became subsidiaries of the Borrower and were not created in
anticipation thereof; (viii) Liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by Liens of the type
described in clauses (i), (vi) and (vii) above, provided that any extension,
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renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being extended,
renewed or refinanced does not increase. Without limiting any of CoastFed's
other rights and remedies, if Borrower grants any third party a lien or
encumbrance on or security interest in any of the Collateral (other than a
Permitted Lien), CoastFed, in its sole discretion, shall have the right to treat
such action as a notice of termination by Borrower to CoastFed under Paragraph
8(d) hereof, as of any date subsequent to such grant selected by CoastFed, in
its sole discretion, and to charge Borrower the termination fee therein
provided. CoastFed now has, and will have, a perfected and enforceable first
priority security interest in all of the Collateral subject only to Permitted
Liens, and Borrower will at all times defend CoastFed and the Collateral against
all claims of others. None of the Collateral now is or will be affixed to any
real property, in such a manner, or with such intent, as to constitute a
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fixture thereto, unless such Collateral is covered by a fixture filing duly
executed and delivered by the Borrower in favor of CoastFed. 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 except to the extent
provided under leases existing as of the date hereof and disclosed in the
Schedule hereto. Whenever any Collateral is located upon premises in which any
third party has an interest, including, but not limited to, the leased premises
disclosed in the Schedule referred to in the preceding sentence, (whether as
owner, mortgagee, beneficiary under a deed of trust, lien or otherwise),
Borrower shall, whenever requested by CoastFed, use its best efforts to cause
such third party to execute and deliver to CoastFed, in form acceptable to
CoastFed, whatever waivers and subordinations that CoastFed specifies, so as to
ensure that CoastFed'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.
3.6 Maintenance of Collateral. Borrower has maintained and will maintain the
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Collateral and all of its assets in good working condition, at Borrower's
expense. Borrower will not use the Collateral or any of its other properties for
any unlawful purpose and will not secrete or abandon the Collateral. Borrower
will immediately advise CoastFed in writing of any material loss or significant
decline in value of the Collateral.
3.7 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.
Borrower has not and will not in the future enter into any agreement with any
accounting firm, service bureau or third party to prepare or store Borrower's
books and records at any location other than Borrower's Address, without first
obtaining CoastFed's written consent, which may be conditioned upon such
accounting firm, service bureau or other third party agreeing to give CoastFed
the same rights with respect to access to books and records and related rights
as CoastFed has under Paragraph 4.3 of this Loan Agreement.
3.8 Financial Condition and Statements. All financial statements now or
hereafter delivered to CoastFed have been, and will be, prepared in conformity
with generally accepted accounting principles and now and hereafter will
completely and accurately reflect the financial condition of Borrower, at the
times and for the periods therein stated. Since the last date covered by any
such statement, there has been no material adverse change in the financial
condition, operations or any other status of the Borrower. Borrower will deliver
to CoastFed a copy of all financial statements prepared with respect to Borrower
no later than five (5) days after the preparation or receipt thereof by
Borrower. Borrower will cause to be prepared, and will provide CoastFed (i)
within forty-five (45) days following the end of each fiscal quarter, quarterly
financial statements accompanied by a statement of the chief financial officer
or other senior finance officer of the Borrower stating that such financial
statements fairly present the financial condition of the Borrower and its
subsidiaries as at such date and the results of operations of the Borrower and
its subsidiaries for the period ended on such date and have been prepared in
accordance with generally accepted accounting principles consistently applied,
except for the absence of footnote disclosure and subject to changes resulting
from normal, year-end audit adjustments; and (ii) within one hundred twenty
(120) days following the end of Borrower's fiscal year, complete annual
financial statements, certified by independent certified public accountants
acceptable to CoastFed.
3.9 Tax Returns and Payments; Pension Contributions. Borrower has timely
filed, and will timely file, all tax returns and reports required by foreign,
federal, state or local law. Borrower has timely paid, and will timely pay, all
foreign, federal, state and local taxes, assessments, deposits and contributions
now or hereafter owed by Borrower. Borrower may defer payment of any contested
taxes provided that Borrower (i) in good faith contests Borrower's obligation to
pay such taxes by appropriate proceedings promptly and diligently instituted and
conducted, (ii) notifies CoastFed in writing of the commencement of and any
material development in such proceedings, and (iii) posts bonds or takes any
other steps required to keep such contested taxes from becoming a lien against
or charge upon any of the Collateral or other properties of Borrower. Borrower
shall at all times utilize the services of an outside payroll service providing
for the automatic deposit of all payroll taxes payable by Borrower. 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 material liability of Borrower, including, without limitation, any
liability to the Pension Benefit Guaranty Corporation or its successors or any
other governmental agency. When requested, Borrower will furnish CoastFed with
proof satisfactory to CoastFed of Borrower's making the payment or deposit of
all such taxes and contributions, such proof to be delivered within
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five (5) days after the due date established by law for each such payment or
deposit. If Borrower fails or is unable to pay or deposit such taxes or
contributions, CoastFed may, but is not obligated to, pay the same and treat all
such advances as additional Obligations of Borrower. Such advances shall bear
interest at the highest interest rate applicable to any of the Obligations.
3.10 Compliance with Law. Borrower has complied, and will comply, in all
material respects with all provisions of all foreign, federal, state and local
laws and regulations relating to Borrower, including, but not limited to, those
relating to Borrower's ownership of real or persona property, conduct and
licensing of Borrower's business and employment of Borrower's personnel.
3.11 Litigation. Except as set forth in the Schedule hereto there is no
claim, suit, litigation, proceeding or investigation pending or threatened by or
against or affecting Borrower in any court or before any regulatory commission,
board or other governmental agency (or any basis therefor known to Borrower)
which is reasonably likely to result, either separately or in the aggregate, in
any material adverse change in the business or condition of Borrower, or in any
impairment in the ability of Borrower to carry on its business in substantially
the same manner as it is now being conducted. Borrower will immediately inform
CoastFed in writing of any claim, proceeding, litigation or investigation
hereafter threatened or instituted by or against Borrower involving in excess of
$50,000.00.
3.12 Use of Proceeds. Borrower is not purchasing or carrying any "margin
stock" (as defined in Regulation G of the Board of Governors of the Federal
Reserve System) and no part of the proceeds of any Loan will be used to
purchased or carry any "margin stock" or to extend credit to others for the
purpose of purchasing or carrying any "margin stock." All proceeds of all Loans
shall be used solely for lawful business purposes.
3.13 Continuing Effect. All representations, warranties and covenants of
Borrower contained in this Loan Agreement and any Collateral Agreement and any
other agreement with CoastFed shall be true and correct at the time of the
effective date of each such agreement and shall be deemed continuing and shall
remain true, correct and in full force and effect until payment and satisfaction
in full of all of the Obligations, and Borrower acknowledges that CoastFed is
and will be expressly relying on such representations, warranties and covenants
in making Loans to Borrower.
4 ADDITIONAL DUTIES OF DEBTOR
4.1 Insurance. Borrower shall, at all times, at Borrower's expense, insure
all of the Collateral other than Accounts and carry such other business
insurance with insurers acceptable to CoastFed, covering such property and risks
as is customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the Borrower operates, and in such
form and amounts as CoastFed may reasonably require. All such insurance policies
shall name CoastFed an additional loss payee, shall provide that proceeds
payable thereunder be payable directly to CoastFed unless written authority to
the contrary is obtained, and shall also provide that no act or default of
Borrower or any other person shall affect the right of CoastFed to recover
thereunder and shall contain a lenders loss payee endorsement in form acceptable
to CoastFed. Upon receipt of the proceeds of any such insurance, CoastFed shall
apply such proceeds in reduction of the Obligations as CoastFed shall determine
in its sole and absolute discretion. If Borrower fails to provide or pay for any
such insurance, CoastFed may, but is not obligated to, procure the same at
Borrower's expense. Borrower agrees to deliver to CoastFed, promptly as
rendered, copies of all reports made to all insurance companies involving a
claim in excess of $50,000.00.
4.2 Reports. At its expense, Borrower shall report, in form satisfactory to
CoastFed, such information as CoastFed may from time to time reasonably specify
regarding Borrower or the Collateral; such reports shall be rendered with such
frequency as CoastFed may reasonably specify. All reports furnished CoastFed
shall be complete and accurate in all material respects.
4.3 Access to Collateral, Books and Records. At any time CoastFed, or its
agents, shall have immediate access to the Collateral and any other property of
Borrower, wherever located. CoastFed shall have the right to audit and copy
Borrower's books and records and accounts including accountants' reports
wherever located but excluding communications to or by Borrower's attorneys
(hereinafter collectively the "Records"). Borrower hereby irrevocably authorizes
and directs any of the officers, agents, accountants and attorneys having
possession or control of any. of the Records (including computer records) to
physically deliver or make same available to CoastFed upon CoastFed's request.
Borrower waives the benefit of any accountant-client privilege or other
evidentiary privilege precluding or limiting the disclosure, divulgence or
delivery of any of the Records. Upon the occurrence and continuation of an Event
of Default CoastFed shall have the right to possession of, or to move to the
premises of CoastFed or any agent of CoastFed, for so long as CoastFed may
desire, all or any part of the Records.
4.4 Prohibited Transactions. Borrower shall not without CoastFed's prior
written consent which shall be a matter of CoastFed's good faith business
judgment: merge, consolidate, dissolve, acquire any other corporation (provided
that Borrower may merge into another
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corporation for purposes of effecting a reincorporation into another state after
CoastFed has indicated to Borrower that all steps necessary to protect the
validity and perfection of CoastFed's first-priority security interest in the
Collateral, subject to Permitted Liens have been taken); guarantee or otherwise
become in any way liable with respect to the obligations of another party or
entity (except by endorsements of instruments or items of payment for deposit to
the general account of Borrower or which are transmitted or turned over to
CoastFed on account of the Obligations, obligations pursuant to the Borrower's
bylaws or in indemnification agreements, to indemnify officers, directors and
employees of the Borrower, and guarantees of the obligations of the Borrower's
subsidiaries; pay or declare any dividends (other than stock dividends) upon
Borrower's stock; redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Borrower's stock (other than repurchases pursuant to employee
benefit plans not to exceed $150,000 per year); make any change in Borrower's
name, identity, corporate or capital structure without notifying CoastFed in
writing at least fifteen (15) days prior thereto; sell or transfer any
Collateral, except for the sale of inventory and other products, transactions
with subsidiaries, and the license, sublicense and grant of distribution and
similar rights, in the ordinary course of Borrower's business, sales or other
dispositions of assets in the ordinary course of business which have become worn
out or obsolete or which are promptly being replaced, and sales or dispositions
of assets outside the ordinary course of business not exceeding in the aggregate
$50,000.00 in any fiscal year; lend or distribute any of Borrower's property or
assets, or incur any indebtedness for borrowed money in excess of $50,000.00 in
any fiscal year (other than the indebtedness specified in Schedule 1), outside
of the ordinary course of Borrower's business, except for transactions in the
ordinary course of its business with subsidiaries.
4.5 Notification of Changes. Borrower will promptly notify CoastFed in
writing of any change of its executive officers, directors, any purchase of
assets or property with an aggregate value exceeding $50,000.00 in any fiscal
year out of the regular course of Borrower's business and any material adverse
change in the business or financial affairs of Borrower.
4.6 Charges. Borrower shall pay all charges assessed by CoastFed, in
accordance with CoastFed's schedule of charges in effect from time to time, and
such charges shall be part of the Obligations and shall be payable on demand.
4.7 Litigation Cooperation. Should any suit or proceeding be instituted by or
against CoastFed with respect to any Collateral or for the collection or
enforcement of any Account, or in any manner relating to Borrower, Borrower
shall, without expense to CoastFed, and wherever and whenever designated by
CoastFed, make available Borrower and its officers, employees and agents, and
Borrower's Records to the extent that CoastFed may deem reasonably necessary in
order to prosecute or defend any such suit or proceeding.
4.8 Remittance of Proceeds. All proceeds arising from the disposition of the
Collateral shall be delivered, in kind, by Borrower to CoastFed in the original
form in which received by Borrower not later than the following business day
after receipt by Borrower. Borrower agrees that it will not commingle proceeds
of Collateral with any of Borrower's other funds or property, but will hold such
proceeds separate and apart from such other funds and property and in an express
trust for CoastFed. CoastFed may from time to time verify directly with the
respective account debtors the validity, amount and any other matters relating
to the Accounts by means of mail, telephone or otherwise, either in the name of
Borrower or CoastFed or such other name as CoastFed may choose.
4.9 Execute Additional Documentation. Borrower agrees, at its expense, on
demand by CoastFed, to execute all documents in form satisfactory to CoastFed,
as CoastFed, in its sole discretion, may deem reasonably necessary or useful in
order to perfect and maintain CoastFed's perfected first-priority or any other
security interest in the Collateral, and in order to fully consummate all of the
transactions contemplated under this Loan Agreement and under any Collateral
Agreement.
5. APPLICATION OF PAYMENTS.
All forms of payments delivered to CoastFed on account of the Obligations
constitute conditional payment only until such items are actually paid in cash
to CoastFed; solely for the purpose of computing interest earned by CoastFed,
credit therefor and for bank wire transfers shall be given as of the third
business day after receipt by CoastFed in order to allow for clearance,
bookkeeping and computer entries. All payments made by Borrower may be applied,
and in CoastFed's sole discretion reversed and re-applied, in whole or in part
to any of the Obligations, in such order and manner as CoastFed shall determine
in its sole discretion.
6. EVENTS OF DEFAULT AND REMEDIES
6.1 Events of Default. If any of the following events shall occur, such an
occurrence shall constitute an "Event of Default" and Borrower shall provide
CoastFed with immediate written notice thereof: (a) Any warranty,
representation, statement, report or certificate made or delivered to CoastFed
by Borrower or any of Borrower's officers, employees or agents now or hereafter
shall be incorrect, false, untrue or misleading in any material respect; or (b)
Borrower shall fail to repay when due part
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or all of any Loan or to pay any interest thereon when due; or (c) Borrower
shall fail to perform when due any term or condition contained in this Loan
Agreement or in any Collateral Agreement, or any other agreement between
CoastFed and Borrower and such failure shall continue for 30 days; or (d)
Borrower shall fail to pay or perform any other Obligation when due and such
failure shall continue for 30 days; or (e) Any loss, theft, or substantial
damage to, or destruction of, any material portion of or all of the Collateral
(unless within five (5) days after the occurrence of any such event, Borrower
furnishes CoastFed with evidence satisfactory to CoastFed that the amount of any
such loss, theft, damage to or destruction of the Collateral is fully insured
under policies designating CoastFed as an additional named insured); or (f) A
material impairment of the value of the Collateral or any material impairment in
the priority of CoastFed's security interest; or (g) Any event shall arise which
permits the acceleration of or actually results in the acceleration of the
maturity of the indebtedness of Borrower to others under any loan or other
agreement or undertaking for borrowed money; or (h) Any levy assessment
attachment, seizure, lien or encumbrance for any cause or reason whatsoever,
upon all or any part of the Collateral or any other asset of Borrower other than
a Permitted Lien (unless discharged by payment, release or fully bonded against
not more than thirty (30) days after such event has occurred); or (i)
Dissolution, termination of existence, insolvency or business failure of
Borrower; or appointment of a receiver, trustee or custodian, for all or any
part of the property of, assignment for the benefit of creditors by, or the
commencement of any proceeding by or against, Borrower under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or hereafter in effect,
provided that the filing of an involuntary bankruptcy petition against the
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Borrower shall not be deemed to be an Event of Default hereunder if it is cured
by being dismissed within 30 days after the date instituted (although CoastFed
shall have no obligation to make Loans during such 30-day cure period); or entry
of a court or governmental order which enjoins, restrains or in any way prevents
Borrower from conducting all or any part of its business; or failure to pay any
foreign, federal, state or local tax or other debt of Borrower unless, with
respect to any such tax, Borrower complies with the provisions of Paragraphs 3.9
(i), (ii), and (iii); or (j) A notice of lien, levy or assessment is filed of
record with respect to any of Borrower's assets by the United States or any
department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, or if any taxes or debts now or
hereafter owing to any one or more of them becomes a lien upon all or any of the
Collateral or any other assets of Borrower (other than a lien for real property
taxes which are not yet due and payable) or any other Permitted Lien; or (k)
Death, insolvency or incompetency of any guarantor of the Obligations;
appointment of a conservator or guardian or the person of any such guarantor;
appointment of a conservator, guardian, trustee, custodian or receiver of all or
any part of the assets, property or estate of, any such guarantor; revocation or
termination of, or limitation of liability upon, any guaranty of the
Obligations; or commencement of proceedings by or against any guarantor or
surety for Borrower under any bankruptcy or insolvency law; or (1) Borrower
makes any payment on account of any indebtedness or obligation which has been
subordinated to the Obligations other than in compliance with the subordination
agreement with respect hereto or if any person who has subordinated such
indebtedness or obligations terminates or in any way limits his subordination
agreement; or (m) Borrower shall generally not pay its debts as they become due
or shall enter into any agreement (whether written or oral), or offer to enter
into any such agreement, with all or a significant number of its creditors
regarding any moratorium or other indulgence with respect to its debts or the
participation of such creditors or their representatives in the supervision,
management or control of the business of Borrower; 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 shall make any transfer of its property to or for the benefit of any
creditor at a time when other creditors similarly situated have not been paid.
6.2 Remedies. Upon the occurrence of any Event of Default, and at any time
thereafter, CoastFed, at its option, upon notice to Borrower, may do any one or
more of the following (a) Cease advancing money or extending credit to or for
the benefit of Borrower under this Loan Agreement, any Collateral Agreement, and
may 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 authorizing
CoastFed without judicial process to enter onto any of the Borrower's premises
without hindrance to search for, take possession of, keep, store, or remove any
of the Collateral and remain on such premises or cause a custodian to remain
thereon in exclusive control thereof without charge for so long as CoastFed
deems necessary in order to complete the enforcement of its rights under this
Loan Agreement or any Collateral Agreement, or any other agreement; provided,
however, that should CoastFed seek to take possession of any or all 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
7
requirement that CoastFed retain possession of and not dispose of any such
Collateral until after trial or final judgement (d) Require Borrower to assemble
any or all of the Collateral and make it available to CoastFed at a place or
places to be designated by CoastFed which are reasonably convenient to CoastFed
and Borrower, and to remove the Collateral to such locations as CoastFed may
deem advisable; (e) Complete processing, manufacturing or repair of all or any
portion of the Collateral prior to a disposition thereof and, for such purpose
and for the purpose of removal, CoastFed shall have the right to use Borrower's
premises, vehicles, hoists, lifts, cranes, equipment and all other property
without charge. Without limiting any security interest granted CoastFed in other
provisions of this Loan Agreement or in any Collateral Agreement or other
agreement, for the purpose of completing manufacturing, processing or repair of
Collateral and the disposition thereof, CoastFed is hereby granted a security
interest in, and CoastFed and any purchaser from CoastFed may use without
charge, all of the Borrower's plant, machinery, equipment, labels, licenses,
processes, patents, patent applications, copyrights, names, trade names,
trademarks, trade secrets, logos, advertising material and all other assets, and
may also utilize all of Borrower's rights under any license or franchise
agreement; (f) Sell, ship, reclaim, lease or otherwise dispose of all or any
portion of the Collateral in its condition at the time CoastFed obtains
possession or after further manufacturing, processing or repair, at any one or
more public and/or private sales (including execution 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. CoastFed shall have the right to conduct such disposition on
Borrower's premises without charge for such time or times as CoastFed deems fit,
or on CoastFed's premises, or elsewhere and the Collateral need not be located
at the place of disposition. CoastFed 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 Accounts
and general intangibles comprising part or all of the Collateral and, in
connection therewith, Borrower irrevocably authorizes CoastFed 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 CoastFed's sole discretion, to grant extensions of time to pay,
compromise claims and settle Accounts and the like for less than face value; (h)
Demand and receive possession of any of Borrower's federal and state income tax
returns and the Records utilized in the preparation thereof or referring
thereto. All attorneys' fees, expenses, costs, liabilities and obligations
incurred by CoastFed 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.
6.3 Standards for Determining Commercial Reasonableness. Borrower and
CoastFed agree that the following conduct by CoastFed with respect to any
disposition of Collateral shall conclusively be deemed commercially reasonable
(but other conduct by CoastFed, including, but not limited to, CoastFed's use in
its sole discretion of other or different times, places and manners of noticing
and conducting any disposition of Collateral shall not be deemed unreasonable):
Any public or private disposition as to which on no later than the fifth
calendar day prior thereto written notice thereof is mailed or personally
delivered to Borrower and, with respect to any public disposition, on no later
than the first calendar day prior thereto notice thereof describing in general
non-specific terms, the Collateral to be disposed of is published once in a
newspaper of general circulation in the county where the sale is to be
conducted, at any place designated by CoastFed, with or without the Collateral
being present, and which commences at any time between 8:00 a.m. and 5:00 p.m.
Without limiting the generality of the foregoing, Borrower expressly agrees
that, with respect to any disposition of Accounts, instruments and general
intangibles (collectively "Receivables"), it shall be commercially reasonable
for CoastFed to direct any prospective acquirer thereof to ascertain directly
from Borrower any and all information (and CoastFed shall not be required to
maintain records of, or answer any inquiries) concerning the Receivables offered
for disposition, including, but not limited to, the terms of payment, aging and
delinquency, if any, of the Receivables, the financial condition of any
obligation or account debtor thereon or guarantor thereof, any collateral
therefor and the condition and location of the goods, if any, that are the
subject of any of the Receivables.
6.4 Application of Proceeds. All proceeds realized as the result of any
disposition of the Collateral shall be applied by CoastFed first to the costs,
expenses, liabilities, obligations and attorneys' fees incurred by CoastFed in
the exercise of its rights under this Loan Agreement and any Collateral
Agreement, second to the interest due upon any of the Obligations and third to
the principal of the Obligations in any order determined by CoastFed in its sole
discretion. The surplus, if any, shall be paid to Borrower; if any deficiency
shall arise, Borrower shall remain liable to CoastFed therefor. If, as a result
of the disposition of any of the Collateral, CoastFed directly or indirectly
enters into a credit transaction with any third party, CoastFed shall have the
option, exercisable at any
8
time, in its sole discretion, of either reducing the Obligations by the
principal amount of such credit transaction or deferring the reduction thereof
until the actual receipt by CoastFed of cash therefor from such third party.
6.5 Remedies Cumulative. In addition to the rights and remedies set forth in
this Loan Agreement and any Collateral Agreement, CoastFed shall have all the
other rights and remedies accorded a secured party under the California Uniform
Commercial Code and under any and all other applicable laws and in any other
instrument or hereafter entered into between CoastFed and Borrower and all such
rights and remedies are cumulative and none is exclusive. Exercise or partial
exercise by CoastFed of one or more of its rights or remedies shall not be
deemed an election, nor bar CoastFed from subsequent exercise or partial
exercise of any other rights or remedies. The failure or delay of CoastFed to
exercise any rights or remedies shall not operate as a waiver thereof, but all
rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed.
7. POWER OF ATTORNEY
Borrower grants to CoastFed an irrevocable power of attorney coupled with an
interest, authorizing and permitting CoastFed (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,
after the occurrence of an Event of Default, do any or all of the following, in
Borrower's name or otherwise: (a) Execute on behalf of Borrower any documents
that CoastFed may, in its sole and absolute discretion, deem advisable in order
to perfect, maintain or improve CoastFed's security interest in the Collateral
or other real or personal property intended to constitute Collateral, or in
order to exercise a right of Borrower or CoastFed, or in order to fully
consummate all the transactions contemplated under this Loan Agreement, any
Collateral Agreement and all other present and future agreements; (b) At any
time after the occurrence of an Event of Default, to 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 CoastFed's Collateral or in which
CoastFed has an interest; (c) Execute on behalf of Borrower, any invoices
relating to any Account, 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 CoastFed's possession; (e) Upon the occurrence of any Event
of Default, to receive and open all mail addressed to Borrower; and to notify
the Post Office authorities to change the address for the delivery of mail
addressed to Borrower to such other address as CoastFed may designate,
including, but not limited to, CoastFed's own address; CoastFed shall turn over
to Borrower all of such mail not relating to the Collateral; (f) Endorse all
checks and other forms of remittances received by CoastFed "Pay to the Order of
CoastFed Business Credit Corporation," or in such other manner as CoastFed may
designate; (g) 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; (h)
Grant extensions of time to pay, compromise claims and settle Accounts and the
like for less than face value and execute all releases and other documents in
connection therewith; (i) Pay any sums required on account of Borrower's taxes
or to secure the release of any liens therefor, or both; (j) Settle and adjust,
and give releases of, any insurance claim that relates to any of the Collateral
and obtain payment therefor; (k) Instruct any third party having custody or
control of any books or records belonging to, or relating to, Borrower to give
CoastFed the same rights of access and other rights with respect thereto as
CoastFed has under Paragraph 4.3 of this Loan Agreement; and (l) Take any action
or pay any sum required of Borrower pursuant to this Loan Agreement, any
Collateral Agreement and any other present or future agreements. Any and all
sums paid and any and all costs, expenses, liabilities, obligations and
attorneys' fees incurred by CoastFed 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 CoastFed's rights under the foregoing
power of attorney or any of CoastFed's other rights under this Loan Agreement or
any Collateral Agreement be deemed to indicate that CoastFed is in control of
the business, management or properties of Borrower.
8 TERMINATION.
This Loan Agreement and all Collateral Agreement(s) shall continue in effect
until March 1, 1995 (the "initial renewal date") and shall thereafter
automatically and continuously renew for successive additional terms of one
year(s) each unless terminated as to future transactions as hereinafter
provided. (The initial renewal date and each subsequent date on which the terms
of this Loan Agreement and the Collateral Agreement(s) automatically renew are
hereinafter referred to as "renewal dates.") This Loan Agreement and any
Collateral Agreement may be terminated, as to future transactions only, as
follows: (a) By written notice from either CoastFed or Borrower to the other,
not less than sixty (60) days prior to the next
9
renewal date, in which event termination shall be effective on the next renewal
date; or (b) By CoastFed at any time after the occurrence of an Event of
Default, without notice, in which event termination shall be effective
immediately; or (c) By sixty (60) days' prior written notice from Borrower to
CoastFed, in which event, termination shall be effective on the sixtieth day
after such notice is given; or (d) By the grant by Borrower to any third party
of a lien or encumbrance on, or security interest in, any of the Collateral
other than a Permitted Lien, as provided in Paragraph 3.5, in which event
termination shall be effective on the date selected by CoastFed pursuant to
Paragraph 3.5. On the 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. If Borrower attempts to terminate this Loan Agreement
under subparagraph (a) or (c) above, but does not pay and perform all
Obligations in full on the effective date of termination, then this Loan
Agreement and all Collateral Agreement(s) shall not be terminated and shall
continue in full force and effect until the next renewal date and shall
automatically renew thereafter as provided above. If termination occurs under
subparagraph (b), (c) or (d) above, Borrower shall pay to CoastFed a termination
fee in an amount equal to $4,000.00 for each month (or portion thereof) from
the effective date of termination to the date which would have been the next
renewal date had this Loan Agreement not been terminated. Said termination fee
shall be included in the Obligations, shall be payable on the effective date of
termination, and shall bear interest at a rate equal to the highest interest
rate applicable to any of the Obligations. Notwithstanding any termination of
this Loan Agreement or any Collateral Agreement, all of CoastFed's security
interest in all of the Collateral and all of the terms and provisions of this
Loan Agreement and all Collateral Agreement(s) shall continue in full force and
effect until all Obligations have been paid and performed in full, and no
termination shall in any way affect or impair any right or remedy of CoastFed,
nor shall any such termination relieve Borrower of any Obligation to CoastFed
until all of the Obligations have been paid and performed in full. Without
limiting the fact that all Loans are discretionary on the part of CoastFed,
CoastFed may, in its sole discretion, refuse to make any further Loans after
termination. Upon payment and performance in full of all the Obligations,
CoastFed shall promptly deliver to Borrower termination statements, request for
reconveyance and such other documents as may be required to fully terminate any
of CoastFed's security interests.
9. NOTICES.
All notices to be given hereunder shall be in writing and shall be served
either personally or by depositing the same in the United States mail, postage
prepaid, by regular first class mail, or by certified mail, return receipt
requested, addressed to CoastFed or Borrower at the addresses shown above, or at
any other address as shall be designated by one party, in a written notice to
the other party. Any such notice shall be deemed to have been given upon
delivery in the case of notices personally delivered to Borrower or to an
officer of CoastFed, or at the expiration of two (2) business days following the
deposit thereof in the United States mail, with postage prepaid (except that any
notice of disposition referred to in Paragraph 6.3 hereof that is mailed shall
be deemed given at the time of deposit thereof in the United States mail, with
postage prepaid). If there is more than one Borrower, notice to any Borrower
shall constitute notice to all; if Borrower is a corporation, the service upon
any member of the Board of Directors, officer, employee or agent shall
constitute service upon the corporation.
10. GENERAL WAIVER
The failure of CoastFed at any time or times hereafter to require Borrower to
strictly comply with any of the provisions of this Loan Agreement or any
Collateral Agreement or any other present or future agreement between Borrower
and CoastFed shall not waive or diminish any right of CoastFed thereafter to
demand and receive strict compliance therewith. Any waiver of any default shall
not waive or affect any other default, whether prior or subsequent thereto. None
of the provisions of this Loan Agreement or any Collateral Agreement or other
agreement now or hereafter executed by Borrower and delivered to CoastFed shall
be deemed to have been waived by any act or knowledge of CoastFed or its agents
or employees, but only by a specific written waiver signed by an officer of
CoastFed and delivered to Borrower. Borrower waives the benefit of all
statute(s) of limitations in any action or proceeding based upon or arising out
of this Loan Agreement or any Collateral Agreement or any other present or
future instrument or agreement between CoastFed and Borrower. Borrower waives
any and all notices or demands which Borrower might be entitled to receive with
respect to this Loan Agreement, any Collateral Agreement, or any other agreement
by virtue of any applicable law. Borrower hereby 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 CoastFed on which Borrower is or may in any way be liable, and notice of any
action taken by CoastFed unless expressly required by this Loan Agreement or any
Collateral Agreement. Borrower hereby ratifies and confirms whatever CoastFed
may do pursuant to this Loan Agreement and any Collateral Agreement and agrees
that CoastFed shall not be liable for (a) the safekeeping of the Collateral or
any loss or damage thereto, or diminution in value thereof, from any cause
whatsoever (except that CoastFed shall exercise reasonable care to
10
assure the safe custody of Collateral in its possession), or (b) any act or
omission of any carrier, warehouseman, bailee, forwarding agent or other person,
or (c) any act of commission or any omission by CoastFed or its officers,
employees, agents or attorneys, or any of its or their errors of judgment or
mistakes of fact or law.
11. ATTACHMENT WAIVERS.
To the extent that CoastFed, in its sole and absolute discretion, determines,
prior to the disposition of all of the Collateral, that the amount to be
realized by CoastFed from the disposition of all of the Collateral may be less
than the amount of the Obligations, and to the full extent of any such
anticipated deficiency, Borrower waives the benefit of Section 483.010 (b) of
the California Code of Civil Procedure and of any and all other statutes
requiring CoastFed to first resort to and exhaust all of the Collateral before
seeking or obtaining any attachment remedy against Borrower, and Borrower
expressly agrees that, to the extent of such anticipated deficiency, CoastFed
shall have all of the rights of an unsecured creditor, including, but not
limited to, the right of CoastFed, prior to the disposition of all of the
Collateral, to obtain a temporary protective order and writ of attachment or
other available remedy. CoastFed shall have no liability to Borrower if the
actual deficiency realized by CoastFed is less than the anticipated deficiency
on the basis of which CoastFed obtained a temporary protective order or writ of
attachment. In the event CoastFed should seek a temporary protective order, or
writ of attachment, or both, Borrower hereby irrevocably waives any bond and any
surety or security relating thereto required by any statute, court rule or
otherwise as an incident or condition precedent to the issuance of any temporary
protective order or writ of attachment.
12. ATTORNEYS' FEES AND COSTS
Borrower shall forthwith pay to CoastFed the amount of all attorneys' fees and
all filing, recording, publication, search and other costs incurred by CoastFed
pursuant to this Loan Agreement, any Collateral Agreement or any other present
or future agreement or in connection with any transaction contemplated hereby,
or with respect to the Collateral or the defense or enforcement of its interests
(whether or not CoastFed files a lawsuit against Borrower). Without limiting the
generality of the foregoing, Borrower shall, with respect to each and all of the
foregoing, pay all attorneys' fees and costs CoastFed incurs in order to: obtain
legal advice; enforce, or seek to enforce, any of its rights; prosecute
actions against, or defend actions by, Account debtors; commence, intervene
in, respond to, or defend any action or proceeding; initiate any complaint to
be relieved of the effect of the automatic stay in bankruptcy in order to
commence or continue any foreclosure or other disposition of the Collateral or
to commence, defend or continue any action or other proceeding in or out of
bankruptcy against Borrower or relating to the Collateral; file or prosecute a
claim or right in any action or proceeding, including, but not limited to, any
probate claim, bankruptcy claim, third-party claim, secured creditor claim or
reclamation complaint; examine, audit count, test, copy, or otherwise inspect
any of the Collateral or any of Borrower's books and records; or protect,
obtain possession of, lease, dispose of, or otherwise enforce any security
interest in or lien on, the Collateral or represent CoastFed in any litigation
with respect to Borrower's affairs. Without limiting the generality of the
foregoing, Borrower shall reimburse CoastFed for its out of pocket costs in
connection with CoastFed's regular quarterly audits of Borrower and Borrower
shall pay CoastFed an audit fee of $1,250.00 for each such quarterly audit. If
either CoastFed or Borrower files any lawsuit against the other predicated on
a breach of this Loan Agreement or any Collateral Agreement, the prevailing
party in such action shall be entitled to recover its costs and attorneys'
fees, including, but not limited to, attorneys' fees and costs incurred in the
enforcement of, execution upon or defense of any order, decree, award or
judgment. All attorneys' fees and costs to which CoastFed 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.
13. DESTRUCTION OF DEBTOR'S DOCUMENTS; LIMITATION OF ACTIONS.
Any documents, schedules, invoices or other papers delivered to CoastFed may
be destroyed or otherwise disposed of by CoastFed six (6) months after they are
delivered to CoastFed unless Borrower makes written request therefor and pays
all expenses attendant to their return, in which event, CoastFed shall return
same when CoastFed's actual or anticipated need therefore has terminated.
Borrower agrees that any claim or cause of action by Borrower against CoastFed,
its directors, officers, employees, agents, accountants or attorneys, based
upon, arising from, or relating to this Loan Agreement, or any Collateral
Agreement, or any other present or furore 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 CoastFed, its directors, officers, employees, agents, accountants or
attorneys, relating in any way to Borrower, 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 six (6) months after Borrower
learns of, or in the exercise of reasonable diligence should have learned of,
the first act, occurrence or omission upon which such claim or cause of action,
or any part thereof is based, and the service of a summons and complaint on an
officer of CoastFed, or on any other person authorized to accept
11
service on behalf of CoastFed, within thirty (30) days thereafter. Borrower
agrees that such six-month period of dyne is a reasonable and sufficient time
for Borrower to investigate and act upon any such claim or cause of action. The
six month period provided herein shall not be waived, tolled, or extended except
by the written consent of CoastFed in its sole and absolute discretion. This
provision shall survive any termination, however arising, of this Loan
Agreement, any Collateral Agreement, and any other present or future agreement.
14. GENERAL PROVISIONS
14.1 Severability. Should any provision, clause or condition of this Loan
Agreement or any Collateral Agreement be held by any court of competent
jurisdiction to be void or unenforceable, such defect shall not affect the
remainder of this Loan Agreement or any Collateral Agreement.
14.2 Integration. This Loan Agreement and any Collateral Agreements and
such other agreements, documents and instruments as may be executed in
connection herewith shall be construed as the entire and complete agreement
between Borrower and CoastFed and shall supersede all prior negotiations, all of
which are merged and integrated herein.
14.3 Amendment. The terms and provisions of this Loan Agreement and any
Collateral Agreement may not be waived or amended except in a writing executed
by Borrower and a duly authorized officer of CoastFed.
14.4 Time of Essence. Time is of the essence in the performance by Borrower
of each and every obligation under this Loan Agreement and any Collateral
Agreement.
14.5 Mutual Waiver of Jury Trial. Borrower and CoastFed 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 Loan Agreement or any Collateral Agreement
or any other present or future instrument or agreement between CoastFed and
Borrower, or any conduct, acts or omissions of CoastFed or Borrower any of their
directors, officers, employees, agents, attorneys or any other persons
affiliated with CoastFed or Borrower.
14.6 Benefit of Agreement. The provisions of this Loan Agreement and any
Collateral Agreement shall be binding upon and inure to the benefit of the
respective successors, assigns, heirs, beneficiaries and representatives of the
parties hereto; provided, however, that Borrower may not assign or transfer any
of its rights under this Loan Agreement or any Collateral Agreement without the
prior written consent of CoastFed, and any prohibited assignment shall be void.
No consent by CoastFed to any assignment shall relieve Borrower or any guarantor
from its liability for the Obligations
14.7 Joint and Several Liability. The liability of each Borrower 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.
14.8 Paragraph Headings; Construction. Paragraph headings are used herein
for convenience only. Borrower acknowledges that the same may not describe
completely the subject matter of the applicable paragraph, and the same shall
not be used in any manner to construe, limit, define or interpret any term or
provision hereof. This Loan Agreement and the Collateral Agreements have been
fully reviewed and negotiated between the parties and no uncertainty or
ambiguity in any term or provision of this Loan Agreement or any Collateral
Agreement shall be construed strictly against CoastFed or Borrower under any
rule of construction or otherwise.
14.9 Governing Law; Jurisdiction; Venue. This Loan Agreement and any
Collateral Agreement and all acts and transactions hereunder and all rights and
obligations of CoastFed and Borrower shall be governed by and in accordance with
the laws of the State of California. Any undefined term used in this Loan
Agreement or in any Collateral Agreement that is defined in the California
Uniform Commercial Code shall have the meaning therein assigned to that term. As
a material part of the consideration to CoastFed to enter into this Agreement,
Borrower (i) agrees that all actions and proceedings relating directly or
indirectly hereto shall, at CoastFed'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 arid 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.
14.10 Execution by CoastFed. This Loan Agreement and any Collateral Agreement
which has been executed and delivered by Borrower to CoastFed shall not become
effective unless and until executed by a duly authorized officer of CoastFed.
14.11 Confidentiality. CoastFed covenants and agrees, on a continuing basis,
to use reasonable efforts to maintain the confidentiality of and not to disclose
to any person other than its officers, directors, attorneys and accountants and
affiliates, and such other persons to whom CoastFed shall at any time be
required to make such disclosure in accordance with applicable law (including,
but not limited to, laws relating to the perfection of CoastFed's
12
security, interests in the Collateral), any and all proprietary, trade secret or
confidential information provided to or received by CoastFed from or on account
of Borrower or any affiliate of Borrower, including business plans and
forecasts, non-public financial information, confidential or secret processes,
formulae, devices or contractual information, customer lists, employee relation
matters, and any other information the disclosure of which could reasonably be
expected to have a material adverse impact on the business, finances or
operations of Borrower or its affiliates, provided, however, the foregoing
-------- -------
provisions shall not be effective regarding the disposition of Collateral after
an Event of Default.
Borrower:
NEURON DATA, INC.
a California corporation
By /s/ Signature illegible
-----------------------
Title Chief Financial Officer
-----------------------
By /s/
-----------------------
Title
---------------------
CoastFed:
COASTFED BUSINESS CREDIT
CORPORATION
By /s/ Signature illegible
-----------------------
Title Sr. V. Pres.
------------
13
SCHEDULE 1 TO LOAN AND SECURITY AGREEMENT
-----------------------------------------
NEURON DATA, INC.
----------------
Section 3.4. Collateral is located at the locations listed in Exhibit
----------- -------
A hereto.
-
Section 3.5
-----------
(1) Attached as Exhibit B hereto is a listing of UCC filings with the
---------
California Secretary of state as of January 27, 1994.
(2) The Borrower leases premises at the locations specified in
Exhibit C hereto.
---------
14
EXHIBIT A
[ND LOGO]
NEURON DATA
SALES OFFICES
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
XXXXXXXXXXXX XX D.C. (VIRGINIA)
------------ ------------------
000 Xxxxxxxxxx Xxxxxx 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000 XxXxxx, XX 00000
Ph: 415/321-4488 Ph: 703/000-0000
Fax: 415/000-0000 Fax: 703/000-0000
Xxx X'Xxxxxx, Consultant, Acting N.A. Sales Xxxx Xxxx, District Manager
h: 415/885-4108 h/o: 404/998-5477
h: 404/993-5186
Xxxxx Xxxxx, VP, Bus. Devel.
h: 510/527-0731 ND NEW YORK
-----------
ND ATLANTA 000 Xxxxx Xxx. 0xx Xxxxx
---------- Xxx Xxxx, XX 00000
Five Concourse Parkway, Suite 3100 Ph: 212/832-8900 (Xxxx Xxxxx)
Xxxxxxx, XX 00000 Fax: 212/000-0000
Ph: 404/000-0000
Fax: 404/000-0000 Xxxxxx Xxxxx, Sr. Technical Rep.
h: 212/355-1264
Xxxx Xxxx, District Manager
h/o: 404/998-5477 ND LOS ANGELES
h: 404/993-5186 --------------
000 Xxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx Xxxxxxxx, XX 00000
[???] Systems Floor Ph: 818/545-4725
h: 404/303-7069 Fax: 818/000-0000 or 818/247-1414
m: 404/210-6221
Xxx XxXxxxxxx, District Manager
ND CHICAGO h: 818/952-1821
---------- m: 818/384-0075
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000 Xxxx Xxx, Xx. Tech Support Rep.
Ph: 708/955-3688 2537 Tequestra
Fax: 708/000-0000 Xxxxxx, XX 00000
h: 714/573-8362
Xxx Xxxxxxx, Central Regional Mgr. Fax: 714/000-0000
h: 708/961-1475 (working out of his home)
m: 708/204-0428
Xxxx Jonusaitus, Sr. Technical Rep.
h: 708/469-1648
ND PENNSYLVANIA
---------------
0 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Ph: 215/000-0000
Fax: 215/000-0000
Xxxxx Xxxxxxxx, Northeast Regional Mgr.
h: 215/293-1573
Telesales
Xxxxx Bastertier x-509 h: 415/965-9669 Xxxx Xxxxxxx x-532 h: 510/658-7714
Xxxxx Xxxxxx x-513 h: 415/371-7608 Xxxxx Xxxx x-520 h: 408/244-7407
Xxxx Xxxxx x-515 h: 415/389-6528 Xxxxxx Xxxx x-510 h: 415/497-0742
Xxxxx [???] x-514 h: 415/387-7788
================================================================================
Tech Hotline: 415/321-8152
Toll Free Sales: 800/876-4900
15
ND NEW YORK ND JAPAN
----------- --------
000 Xxxxx Xxx. 0xx Xxxxx 0X Xxxxxxx Xxxx.
Xxx Xxxx, XX 00000 2-3-8 MINAMI-AOYAMA
Ph: 000/000-0000 Xxxxxx-Xx, Xxxxx 107
Fax: 000/000-0000 Xxxxx
Xxxx Xxxxx Ph: (000)0000-0000 *Dial 011 first
Fax: (000)0000-0000
ND PARIS
-------- Xxxxxxxxx Xxxxx
00 Xxx Xxxxxx Xxxxxx Honda - Admin. Asst.
00000, Xxxxx Xxxxxx Xx. Xxx - Sales
Ph: 33/0-0000-0000 *Dial 011 first Mr. Kudo
Fax: 33/0-0000-0000 (sales/mkt/admin) Xxxxxxx Xxxxx - tech support
Fax: 33/0-0000-00-00 (tech)
ND LOS ANGELES
Xxxx-Xxxxx Chauvet --------------
Xxxxx Xxx (sales manager) 0000 XxxXxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxx Suite 3000
Xxxx Xxxx Xxxxxxx Xxxxxxx Xxxxx, XX 00000
Bruno Johier
Xxxxxxxx Xxxxxxxx (telesales, office mgt) Ph: 000-000-0000
Xxxxxxx Xxxxxxxx Fax: 000-000-0000
Xxxxxxxx Xxxxxxxx
Xxxxxxx Latournerie Xxxx Xxx (Snr. Tech Support Rep.)
Xxxxxx Xxxxxxx
000 X. Xxxxx Xxxxxxxxx, Xxxxx 000
XX XXXXXX Xxxxxxxx, XX 00000
---------
34 X. Xxxxxx Ph: (818) 545-4725
Xxxxxx X0X0XX, Xxxxxxx Direct Fax: (000) 000-0000
Ph: 44/00-000-0000 *Dial 011 first General Off Fax: (000) 000-0000
Fax: 44/00-000-0000
Direct Line (to be used after 6:00pm local time): Xxx XxXxxxxxx
44/00-000-0000
ND CHICAGO
Pany Christofereu (U.K. Country Mgr.) ----------
Xxxxxxx Greek - Marketing Asst. 0000 Xxxxxxxxxxx Xx.
Xxxx Xxxxxxx - Pre/Post Sales Support Suite 600
Xxxxxx Xxxxxxx - Pre/Post Sales Support Xxxxx, XX 00000
Xxx Xxxxx - Post Sales Support/Training
Xxxxx Xxxxx - New Business Sales Executive Ph: (000) 000-0000
Fax: (000) 000-0000
ND HOUSTON car phone (000) 000-0000
---------- home phone (000) 000-0000
0000 Xxxxx Xx., Xxx. 0000
Xxxxxxx, XX 00000 Xxx Xxxxxxx
Ph: 713/000-0000
Fax: 713/000-0000 ND PENNSYLVANIA
---------------
Xxxxxx Xxxxx 0 Xxxxx Xxxxxx
Xxxxx 000
ND D.C. (VIRGINIA) Xxxx Xxxxxxxxxx, XX 00000
------------------ Ph: (215) 941-2981
0000 Xxxxxx Xxxx Xxxx, Xxxxx 000 Fax: (000) 000-0000
XxXxxx, XX 00000
Xxxxx Xxxxxxxx
Ph: 703/000-0000
Fax: 703/000-0000 ND ATLANTA
----------
Xxxx Xxxx
16
EXHIBIT B
THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE OBTAINED
THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE. PHO HAS NOT RECEIVED
ALL UCC FILINGS FOR 11/30/93, 12/1/93, AND 12/2/93 FROM THE CALIFORNIA SECRETARY
OF STATE. WE ARE WORKING WITH THE STATE TO RESOLVE THIS PROBLEM.
Summary of Uniform Commercial Code (Name) Data for California
For: NEURON DATA Thru Date: 01/27/9
1 16 NEURON DATA
End of list
Enter request:
17
THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE OBTAINED
THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE. PHO HAS NOT RECEIVED
ALL UCC FILINGS FOR 11/30/93, 12/1/93, AND 12/2/93 FROM THE CALIFORNIA SECRETARY
OF STATE. WE ARE WORKING WITH THE STATE TO RESOLVE THIS PROBLEM.
Detail Display of Uniform Commercial Code (Name) Data for California
For: NEURON DATA Thru Date: 01/27/94
1 ORIG CA 88016443 01/25/88
D: NEURON DATA, 00-0000000, 000 XXXX XX, XXXX XXXX, XX
S: ATTIS, 000 XXXXXXX XXXX XXX 000, XXX XXXX, XX
2 ORIG CA 88113772 05/12/88
D: NEURON DATA, 00-0000000, 000 XXXX XX, XXXX XXXX, XX
S: LEASAMETRIC INC, 0000 XXXXXX XX, XXXXXX XXXX, XX
3 ORIG CA 89320282 12/18/89
D: XXXXXX XXXX, 000 XXXX XX, XXXX XXXX, XX
X: IBM CREDIT CORP, 000 XXXXXX XX, XXXXXXXX, XX
4 ORIG CA 90024107 01/30/90
D: XXXXXX XXXX, 000 XXXX XX, XXXX XXXX, XX
X: IBM CREDIT CORP, 000 XXXXXX XX, XXXXXXXX, XX
PAGE 1 - press ENTER for next page, Q to quit:
18
THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE OBTAINED
THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE. PHO HAS NOT RECEIVED
ALL UCC FILINGS FOR 11/30/93, 12/1/93, AND 12/2/93 FROM THE CALIFORNIA
SECRETARY OF STATE. WE ARE WORKING WITH THE STATE TO RESOLVE THIS PROBLEM.
Detail Display of Uniform Commercial Code (Name) Data for California
For: NEURON DATA Thru Date: 1/27/9
5 ORIG CA 90220917 09/04/90
D: NEURON DATA INC, 000 XXXX XX, XXXX XXXX, XX
S: AMERICAN LEASING, X X XXX 000, XXXXX XXXXX, XX
6 ASGN CA 90220917 09/04/90 90220917 09/04/90
XA: DENRICH LEASING, 0000 X/X 00XX XX, XXXXX, XX
7 ORIG CA 90224036 09/07/90
D: NEURON DATA, 000 XXXX XX, XXXX XXXX, XX
S: AT & T CREDIT CORP, 00 XXXXXXXX XX, XXXXXXXXXX, XX
8 ORIG CA 90300952 12/11/90
D: NEURON DATA INC, 000 XXXX XX XXX 000, XXXX XXXX, XX
S: LEASEPARTNERS CORP, 000 XXXX XXXX XXX 000, XXXXXXXXXX, XX
9 ASGN CA 90300952 12/11/90 90300952 12/11/90
XA: XXXXXX FINANCIAL INC, 000 X XX XXXXX XX, XXXXXXX, XX
PAGE 2 - press ENTER for next page, P for prior, Q to quit:
19
THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE OBTAINED
THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE. PHO HAS NOT RECEIVED
ALL UCC FILINGS FOR 11/30/93, 12/1/93, AND 12/2/93 FROM THE CALIFORNIA
SECRETARY OF STATE. WE ARE WORKING WITH THE STATE TO RESOLVE THIS PROBLEM.
Detail Display of Uniform Commercial Code (Name) Data for California
For: NEURON DATA Thru Date: 01/27/9
10 ASGN CA 90300952 12/11/90 90300952 09/21/92
XA: LB CREDIT CORP, 000 XXXXXXXXXX XX XXX 0000, XXX XXXXXXXXX, XX
11 ORIG CA 90300958 12/11/90
D: NEURON DATA INC, 000 XXXX XX XXX 000, XXXX XXXX, XX
S: LEASEPARTNERS CORP, 000 XXXX XXXX XXX 000, XXXXXXXXXX, XX
12 ASGN CA 90300958 12/11/90 90300958 12/11/90
XA: XXXXXX FINANCIAL INC, 000 X XX XXXXX XX, XXXXXXX, XX
13 ORIG CA 90305004 12/17/90
D: NEURON DATA INC, 000 XXXX XX XXX 000, XXXX XXXX, XX
S: LEASEPARTNERS CORP, 000 XXXX XXXX XXX 000, XXXXXXXXXX, XX
14 ASGN CA 90305004 12/17/90 90305004 12/17/90
XA: PHILADELPHIA NATL BK, BROAD & CHESTNUTS STS, PHILADELPHIA, PA
PAGE 3 - press ENTER for next page, P for prior, Q to quit:
20
THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE OBTAINED
THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE. PHO HAS NOT RECEIVED
ALL UCC FILINGS FOR 11/30/93, 12/1/93, AND 12/2/93 FROM THE CALIFORNIA
SECRETARY OF STATE. WE ARE WORKING WITH THE STATE TO RESOLVE THIS PROBLEM.
Detail Display of Uniform Commercial Code (Name) Data for California
For: NEURON DATA Thru Date: 01/27/94
15 ORIG CA 90305005 12/17/90
D: NEURON DATA INC, 000 XXXX XX XXX 000, XXXX XXXX, XX
S: LEASEPARTNERS CORP, 000 XXXX XXXX XXX 000, XXXXXXXXXX, XX
16 ASGN CA 90305005 12/17/90 90305005 12/17/90
XA: PHILADELPHIA NATL BK, BROAD & CHESTNUTS STS, PHILADELPHIA, PA
17 ORIG CA 91068990 04/01/91
D: NEURON DATA INC, 000 XXXXXXXXXX XXX, XXXX XXXX, XX
S: XXXXX FINANCIAL CORP, 0000 X XXXXXX XX, XXXXXXXXXX, XX
18 ORIG CA 91080947 04/12/91
D: NEURON DATA INC, 000 XXXX XX, XXXX XXXX, XX
S: LEASEPARTNERS CORP, 000 XXXX XXXX XXX 000, XXXXXXXXXX, XX
19 ASGN CA 91080947 04/12/91 91080947 04/12/91
XA: SANWA BUSINESS CREDIT CORP, ONE S XXXXXX DR, CHICAGO, IL
PAGE 4 - press ENTER for next page, P for prior, Q to quit:
21
THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE OBTAINED
THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE. PHO HAS NOT RECEIVED
ALL UCC FILINGS FOR 11/30/93, 12/1/93, AND 12/2/93 FROM THE CALIFORNIA
SECRETARY OF STATE. WE ARE WORKING WITH THE STATE TO RESOLVE THIS PROBLEM.
Detail Display of Uniform Commercial Code (Name) Data for California
For: NEURON DATA Thru Date: 01/27/9
20 ASGN CA 91080947 04/12/91 91080947 02/13/92
XA: LB CREDIT CORP, 000 XXXXXXXXXX XX XXX 0000, XXX XXXXXXXXX, XX
21 ASGN CA 91080947 04/12/91 91080947 11/23/92
XA: LEASE PARTNERS CORP, 000 XXXX XXXX #000, XXXXXXXXXX, XX
22 ORIG CA 91080949 04/12/91
D: NEURON DATA INC, 000 XXXX XX, XXXX XXXX, XX
S: LEASEPARTNERS CORP, 000 XXXX XXXX XXX 000, XXXXXXXXXX, XX
23 ASGN CA 91080949 04/12/91 91080949 04/12/91
XA: SANWA BUSINESS CREDIT CORP, ONE S XXXXXX DR, CHICAGO, IL
24 ASGN CA 91080949 04/12/91 91080949 02/13/92
XA: LB CREDIT CORP, 000 XXXXXXXXXX XX XXX 0000, XXX XXXXXXXXX, XX
25 ORIG CA 91095160 04/30/91
D: NEURON DATA, 000 XXXXXXXXXX XXX, XXXX XXXX, XX
S: XXXXX FINANCIAL CORP, 0000 X XXXXXX XX, XXXXXXXXXX, XX
PAGE 5 - press ENTER for next page, P for prior, Q to quit:
22
THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE OBTAINED
THROUGH THE OFFICE OF THE CALIFORNIA SECRETARY OF STATE. PHO HAS NOT RECEIVED
ALL UCC FILINGS FOR 11/30/93, 12/1/93, AND 12/2/93 FROM THE CALIFORNIA
SECRETARY OF STATE. WE ARE WORKING WITH THE STATE TO RESOLVE THIS PROBLEM.
Detail Display of Uniform Commercial Code (Name) Data for California
For: NEURON DATA Thru Date: 01/27/94
26 ORIG CA 92200798 09/16/92
D: XXXXXX XXXX, 000 XXXX XX, XXXX XXXX, XX
X: LEASE PARTNERS CORP, 000 XXXX XXXX XXX 000, XXXXXXXXXX, XX
27 ASGN CA 92200798 09/16/92 92200798 09/16/92
XA: NATL WESTMINSTER BK X X X, 000 XXXXX XX, XXX XXXX, XX
28 ORIG CA 93025842 02/05/93
D: NEURON DATA, 000 XXXXXXXXXX XXX, XXXX XXXX, XX
S: LEASE PARTNERS CORP, 000 XXXX XXXX XXX 000, XXXXXXXXXX, XX
PAGE 6 - LAST PAGE.. enter P for prior page, or press ENTER to end detail:
23
EXHIBIT C
FACIL LEASES
FACILITY LEASES
LESSOR ADDRESS
101 UNIVERSITY 000 XXXX XX. XXXX XXXX, XX Palo Alto warehouse & production facil.
XXXXXX BROS., INC. 156 UNIVERSITY, PALO ALTO, CA Palo AIto Headquarters
SAGE REALTY CORP 000 XXXXX XXX, X.X., XX XX Xxx Xxxx (Sales & Support) xxxxxx
XXXXX XXXXXX XXXXXX XXX XXXXX XXXXXX, X. XXXXXXXXXXXX, XX ND Pennsylvania" "
HQ-CHICAGO, INC. 0000 XXXXXXXXXXX XX., XXXXX, XX ND Chicago " "
SOURCE OFC SUITES OF TYSON 0000 XXXXXX XXXX XX., XXXXXX, XX ND D.C." "
CES OFFICE CENTERS 5 CONCOURSE PKWY, ATLANTA, GA ND Atlanta" "
EXEC. MGT. SERVICES 000 X. XXXXX XXXX, XXXXXXXX, XX ND Los Angeles" "
LAHAINA, INC. 0000 XXXXX, XXXXXXX, XX ND Houston" "
XXXXXXX XXXXXX XXXXXX 0000 XXXXXXXXX XXXX, XXXXXXX XXXXX, XX ND Los Angeles" "
24
[LETTERHEAD OF COAST BUSINESS CREDIT]
June 12, 1997
Mr. Xxxx Xxxxxxx
Chief Financial Officer
Neuron Data, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Dear Xxxx:
Enclosed please find three sets of the Third Amendment to Loan and Security
dated March 24, 1997. These were originally titled Second Amendment in error.
Please initial both copies of the Amendment and sign below in the space provided
on the cover letter and return one Amendment and the cover letter to my
attention at your earliest convenience.
Sincerely,
COAST BUSINESS CREDIT
/s/ Xxxx X. Xxxxxxx
-------------------
Xxxx X. Xxxxxxx
Assistant Vice President
Enclosure ACCEPTED & AGREED TO:
NEURON DATA, INC.
/s/ Xxxx Xxxxxxx
----------------
Xxxx Xxxxxxx, CFO
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT, dated as of March 24,
1997 (this "Amendment"), amends that certain Loan and Security Agreement, dated
as of March 11, 1994; as amended by that certain First Amendment to Loan and
Security Agreement, dated as of March 31, 1995 (as amended from time to time,
the "Loan Agreement"), by and between NEURON DATA, INC., a California
corporation ("Borrower"), on the one hand, and COAST BUSINESS CREDIT, a division
of Southern Pacific Thrift & Loan Association, a California corporation,
formerly known as CoastFed Business Credit Corporation ("Coast"), on the other
hand. All initially capitalized terms used in this Amendment shall have the
meanings ascribed thereto in the Loan Agreement unless specifically defined
herein.
RECITALS
WHEREAS, Borrower and Coast wish to amend the Loan Agreement pursuant to
the terms and provisions set forth in this Amendment; and
NOW, THEREFORE, the parties hereto agree as follows:
AMENDMENT
Section 1.3 Amendment to Section 1.1 of the Loan Agreement. Section 1.1 of
the Loan Agreement is hereby amended by deleting the last sentence of such
Section in its entirety and replacing it with the following:
"Notwithstanding anything herein or in. any Collateral Agreement to
the contrary, in no event shall the Borrower permit the total balance
of all Loans and all other Obligations outstanding at any one time to
exceed Five Million Dollars ($5,000,000); and, if for any reason they
do, Borrower shall immediately pay the amount of such excess to
CoastFed in immediately available funds."
Section 2. Extended Tern. The parties acknowledge and confirm to each other
that pursuant to the terms of Section 8 of the Loan Agreement, as amended, the
Loan Agreement and all Collateral Agreement(s) have automatically renewed and
shall continue in effect until March 1, 1999, subject to all terms and
provisions of such Section 8, the Loan Agreement, and the Collateral
Document(s).
Section 3. Conditions Precedent. The effectiveness of this Amendment is
expressly conditioned upon:
3.1 Receipt by Coast of an executed copy of this Amendment; and
1
3.2 Receipt by Coast of and executed Amendment Number One to
Security Agreement in Copyrighted Works, and the recording thereof with the
United States Copyright Office, in form and substance satisfactory to Coast in
its sole and absolute discretion.
Section 4. Further Assurances. Borrower agrees, at its expense, on request
by Coast, to execute all other documents and take all other actions, as Coast
and Coast's counsel located in the United Kingdom, may deem reasonably necessary
or useful in order to perfect and maintain Coast's perfected security interest
in the Collateral, including, but not limited to, book debt of Borrower's
subsidiary Neuron Data Limited, and in order to fully consummate the
transactions contemplated by the Loan Agreement and this Amendment.
Section 5. Entire Agreement. The Loan Agreement, as amended hereby,
embodies the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof. Borrower represents, warrants and agrees that in entering into
the Loan Agreement and consenting to this Amendment, it has not relied on any
representation, promise, understanding or agreement, oral or written, of, by or
with, Coast or any of its agents, employees, or counsel, except the
representations, promises, understandings and agreements specifically contained
in or referred to in the Loan Agreement, as amended hereby.
Section 6. Conflicting Terms. In the event of a conflict between the terms
and provisions of this Amendment and the terms and provisions of the Loan
Agreement, the terms of this Amendment shall govern. In all other respects, the
Loan Agreement, as amended and supplemented hereby, shall remain in full force
and effect.
Section 7. Miscellaneous. This Amendment shall be governed by and construed
in accordance with the laws of the State of California. This Amendment may be
executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any party hereto may execute this Amendment by
signing such counterpart.
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized as of the
date first above written.
BORROWER:
NEURON DATA, INC.,
a California corporation
By /s/ Signature illegible
-----------------------
President or Vice President
By
-----------------------
Secretary or Ass't Secretary
COAST:
COAST BUSINESS CREDIT,
a division of Southern Pacific Thrift & Loan
Association
By /s/ Signature illegible
-----------------------
Title Senior V.P.
-----------
3
REAFFIRMATION OF GUARANTEE AND INDEMNITY
The undersigned has executed that certain Guarantee and Indemnity (the
"Guarantee"), dated as of March 31, 1995, in favor of Coast Business Credit, a
division of Southern Pacific Thrift & Loan Association, a California
corporation, formerly known as CoastFed Business Credit Corporation ("Coast")
respecting the obligations of Neuron Data, Inc., a California corporation
("Borrower") owing to Coast. The undersigned acknowledges the terms of that
certain Second Amendment to Loan and Security Agreement, dated as of even date
herewith, and reaffirms and agrees that (a) the Guarantee shall remain in full
force and effect, (b) nothing in such Guarantee obligates Coast to notify the
undersigned of any changes in the financial accommodations made available to
Borrower or to seek reaffirmations of the Guarantee, and (c) no requirement to
so notify the undersigned or to seek reaffirmations in the future shall be
implied by the execution of the reaffirmation.
NEURON DATA LIMITED,
A company incorporated
under the laws of England
By /s/ Signature illegible
-----------------------
President or Vice President
By -----------------------
Secretary or Ass't Secretary
4
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT, dated as of February
, 1996 (this "Amendment"), amends that certain Loan and Security Agreement,
dated as of March 11, 1994, between NEURON DATA, INC., a California corporation
("Borrower") and COAST BUSINESS CREDIT, a Division of Southern Pacific Thrift &
Loan Association ("Coast"), a California corporation, the successor in interest
to COASTFED BUSINESS CREDIT CORPORATION, as amended from time to time (the "Loan
Agreement"). All initially capitalized terms used in this Amendment shall have
the meanings ascribed thereto in the Loan Agreement unless specifically defined
herein.
WHEREAS, pursuant to the Loan Agreement, Coast and Borrower have
agreed to extend the renewal date from March 1, 1996 to March 1, 1997;
WHEREAS, to facilitate the extension of the renewal date, the parties
hereto wish to make certain amendments to the Loan Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendments.
----------
1.1 All references to COASTFED BUSINESS CREDIT CORPORATION
("CoastFed") in the Loan Agreement shall be deleted and replaced with the
following: COAST BUSINESS CREDIT, a Division of Southern Pacific Thrift & Loan
Association ("Coast"), a California corporation, the successor in interest to
COASTFED BUSINESS CREDIT CORPORATION.
1.2 Section 8 of the Loan Agreement is amended by deleting the first
sentence of such section in its entirety and replacing it with the following:
"This Loan Agreement and all Collateral Agreement(s) shall continue in
effect until March 1, 1997 (the "initial renewal date") and shall
thereafter automatically and continuously renew for successive
additional terms of one year(s) each unless terminated as to future
transactions as hereinafter provided."
Section 2. Entire Agreement. The Loan Agreement, as amended hereby,
----------------
embodies the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof. Borrower represents, warrants and agrees that in entering into
the Loan Agreement and consenting to this Amendment, it has not relied on any
representation, promise, understanding or agreement, oral or written, of, by or
with, Coast or any of its agents, employees, or counsel, except the
representations, promises, understandings and agreements specifically contained
in or referred to in the Loan Agreement, as amended hereby.
Section 3. Conflicting Terms. In the event of a conflict between the
-----------------
terms and provisions of this Amendment and the terms and provisions of the Loan
Agreement, the terms of this Amendment shall govern. In all other respects, the
Loan Agreement, as amended and supplemented hereby, shall remain in full force
and effect.
Section 4. Miscellaneous. This Amendment shall be governed by and
-------------
construed in accordance With the laws of the State of California. This Amendment
may be executed in any number of
1
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Amendment by signing such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers thereunto duly authorized as of
the date first above written.
Borrower:
NEURON DATA, INC.
a California corporation
By /s/ Signature illegible
-----------------------
Title Chief Financial Officer V.P. Finance
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Coast:
COAST BUSINESS CREDIT
a Division of Southern Pacific Thrift & Loan
Association
By /s/ Signature illegible
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Title Vice President
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FIRST AMENDMENT TO LOAN SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT, dated as of March
31, 1995 (this "Amendment"), amends that certain Loan and Security Agreement,
dated as of March 11, 1994 (the "Loan Agreement"), between NEURON DATA, INC.,
California corporation ("Borrower") and COASTFED BUSINESS CREDIT CORPORATION
("CoastFed"). All initially capitalized terms used in this Amendment shall have
the meanings ascribed thereto in the Loan Agreement unless specifically defined
herein.
WHEREAS, pursuant to the Loan Agreement, CoastFed has agreed to
advance funds or otherwise extend credit to Borrower in a maximum principal
amount of up to $2,000,000;
WHEREAS, Borrower has requested and CoastFed has agreed to increase
the maximum principal amount CoastFed can advance from up to $2,000,000 to up to
$3,000,000 pursuant to the Loan Agreement;
WHEREAS, to facilitate the increase in line limit, the parties hereto
wish to make certain amendments to the Loan Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
Section I. Amendments.
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1.1 Section 1.1 of the Loan Agreement is amended by deleting such
Section in its entirety and replacing it with the following:
"1.l Loans, Collateral Agreements. Borrower has requested and may
hereafter request that CoastFed advance funds or otherwise extend
credit to or for the benefit of Borrower ("Loan(s)") in accordance
with the terms and provisions of this Loan Agreement and other written
agreements ("Collateral Agreement(s)"), including, but not limited to,
any one or more of the following described security agreements now or
hereafter entered into between Borrower and CoastFed: (a) Accounts
Collateral Security Agreement; (b) Inventory Collateral Security
Agreement; (c) Equipment Collateral Security Agreement; and (d) any
promissory notes or guaranties. The amount and terms of payment of any
Loans by CoastFed to Borrower shall be determined in accordance with
the terms and provisions of this Loan Agreement and of any executed
Collateral Agreements. Notwithstanding anything herein or in any
Collateral Agreement to the contrary, in no event shall the Borrower
permit the total balance of all Loans and all other Obligations
outstanding at any one time to exceed $3,000,000.00; and, if for any
reason they do, Borrower shall immediately pay the amount of such
excess to CoastFed in immediately available funds.
1.2 Section 1.2 of the Loan Agreement is amended by deleting the
first sentence of such Section in its entirety and replacing it with the
following:
"1.2 Fees. Borrower shall pay to CoastFed a loan origination fee in
the amount of $20,000.00 at the time of the initial funding hereunder,
a line increase fee in the amount of $10,000.00 concurrent with the
execution
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of this First Amendment to the Loan Agreement, and an annual loan fee
of $-0- on each anniversary of the date hereof during the term of this
Loan Agreement.
Section 2. Extended Term. The parties acknowledge and confirm to each
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other that pursuant to the terms of Section 8 of the Loan Agreement and all
Collateral Agreement(s), as amended have automatically renewed and shall
continue in effect until March 1, 1996 subject to all the terms and provisions
of such section and the Loan Agreement.
Section 3. Entire Agreement. The Loan Agreement, as amended hereby,
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embodies the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof. Borrower represents, warrants and agrees that in entering into
the Loan Agreement and consenting to this Amendment, it has not relied on any
representation, promise, understanding or agreement, oral or written, of, by or
with, CoastFed or any of its agents, employees, or counsel, except the
representations, promises, understandings and agreements specifically contained
in or referred to in the Loan Agreement, as amended hereby.
Section 4. Conflicting Terms. In the event of a conflict between the
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terms and provisions of this Amendment and the terms and provisions of the Loan
Agreement, the terms of this Amendment shall govern. In all other respects, the
Loan Agreement, as amended and supplemented hereby, shall remain in full force
and effect.
Section 5. Miscellaneous. This Amendment shall be governed by and
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construed in accordance with the laws of the State of California. This Amendment
may be executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any party hereto may execute this Amendment by
signing such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers thereunto duly authorized as of
the date first above written.
Borrower:
NEURON DATA, INC.
a California corporation
By /s/ Signature illegible
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Title Chief Financial Officer
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CoastFed:
COASTFED BUSINESS CREDIT CORPORATION
By /s/ Signature illegible
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Title V.P.
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