Exhibit 10.2
This LOAN AND SECURITY AGREEMENT is entered into as of October 22, 2001, by
and between IPRINT TECHNOLOGIES, INC. ("Creditor") and WOOD ALLIANCE, INC.,
d/b/a/ WOOD ASSOCIATES, INC. ("Borrower").
RECITALS
--------
Borrower wishes to obtain from Creditor, and Creditor desires to make, a
loan to Borrower for the purpose of providing working capital. This Agreement
sets forth the terms on which Creditor will advance such funds to Borrower, and
Borrower will repay the amounts owing to Creditor.
AGREEMENT
---------
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
----------------------------
1.1 Definitions. As used in this Agreement, the following
-----------
terms shall have the following definitions:
"Advance" or "Advances" means a cash advance or cash
advances extended by Creditor to Borrower under Section 2.1(a).
"Affiliate" means, with respect to any Person, any
Person that owns or controls directly or indirectly such Person, any Person that
controls or is controlled by or is under common control with such Person, and
each of such Person's senior executive officers, directors, and partners.
"Creditor Expenses" means all reasonable costs or
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with the enforcement of the Loan Documents; and Creditor's reasonable
attorneys' fees and expenses incurred in amending, enforcing or defending the
Loan Documents, incurred before, during and after an Insolvency Proceeding,
whether or not suit is brought.
"Business Day" means any day that is not a Saturday,
Sunday, or other day on which banks in the State of California are authorized or
required to close.
"Change in Control" shall mean a transaction in which any
"person" or "group" (within the meaning of Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of a sufficient number of shares of all classes of stock then outstanding of
Borrower ordinarily entitled to vote in the election of directors, empowering
such "person" or "group" to elect a majority of the Board of Directors of
Borrower, who did not have such power before such transaction.
"Closing Date" means the date of this Agreement.
"Code" means the California Uniform Commercial Code.
"Collateral" means the property described on Exhibit A
---------
attached hereto.
"Combined Company" has the meaning ascribed thereto
in Section 7.6.
"Comerica Agreement" means the Amended and Restated
Revolving Loan and Security Agreement entered into as of January 31, 2000 by and
between Borrower and Comerica Bank -- California, as amended from time to time.
"Comerica Consent" means a consent executed by an
authorized officer of Comerica Bank -- California approving the transactions
under this Agreement and the Loan Documents.
1
"Comerica Subordination Agreement" means the Amended and Restated
Intercreditor Agreement entered into between Comerica Bank-California and
Creditor dated as of October 22, 2001.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to (i) any indebtedness, lease, dividend, letter of credit or other
obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable; (ii) any obligations with respect to undrawn
letters of credit issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designed to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term "Contingent Obligation" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.
"Daily Balance" means the amount of the Obligations owed at the
end of a given day.
"Event of Default" has the meaning assigned in Article 8.
"GAAP" means generally accepted accounting principles as in
effect from time to time.
"Indebtedness" means (a) all indebtedness for borrowed money or
the deferred purchase price of property or services, including without
limitation reimbursement and other obligations with respect to surety bonds and
letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.
"Insolvency Proceeding" means any proceeding commenced by or
against any person or entity under any provision of the United States Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of creditors, formal or informal moratoria,
compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.
"Investment" means any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.
"Lien" means any mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance.
"Loan Documents" means, collectively, this Agreement, the
Promissory Note, any other note or notes executed by Borrower, and any other
agreement entered into between Borrower and Creditor in connection with this
Agreement, all as amended or extended from time to time.
"Material Adverse Effect" means a material adverse effect on (i)
the business operations or condition (financial or otherwise) of Borrower and
its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents.
"Maturity Date" means October 21, 2002.
"Merger" means the merger between Creditor and Borrower as
contemplated under the Agreement and Plan of Reorganization dated as of June 23,
2001.
"Obligations" means all debt, principal, interest, Creditor
Expenses and other amounts owed to Creditor by Borrower pursuant to this
Agreement or any other agreement entered into in connection with this Agreement,
whether absolute or contingent, due or to become due, now existing or hereafter
arising, including any interest that accrues after the commencement of an
Insolvency Proceeding.
"Permitted Indebtedness" means:
2
(a) Indebtedness of Borrower in favor of Creditor arising
under this Agreement or any other Loan Document;
(b) Indebtedness existing on the Closing Date and disclosed
in the Schedule; and
(c) Indebtedness secured by a lien described in clause (c)
of the defined term "Permitted Liens," provided (i) such Indebtedness does not
exceed the lesser of the cost or fair market value of the equipment financed
with such Indebtedness and (ii) such Indebtedness does not exceed $100,000 in
the aggregate at any given time; and
(d) Other Indebtedness not to exceed $3,000,000.
"Permitted Investment" means:
(a) Investments existing on the Closing Date disclosed in
the Schedule; and
(b) (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or any
State thereof maturing within one (1) year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having rating of at least A-2 or P-2 from either
Standard & Poor's Corporation or Xxxxx'x Investors Service, (iii) certificates
of deposit maturing no more than one (1) year from the date of investment
therein issued by Creditor and (iv) Creditor's money market accounts.
"Permitted Liens" means the following:
(a) Any Liens existing on the Closing Date and disclosed in
the Schedule or arising under this Agreement or the other Loan Documents, or any
Liens in connection with Permitted Indebtedness;
(b) 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 have no priority over any of
Creditor's security interests;
(c) Liens (i) upon or in any equipment acquired or held by
Borrower or any of its Subsidiaries to secure the purchase price of such
equipment or indebtedness incurred solely for the purpose of financing the
acquisition of such equipment, or (ii) existing on such equipment at the time of
its acquisition, provided that the Lien is confined solely to the property so
acquired and improvements thereon, and the proceeds of such equipment;
(d) Liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by Liens of the type
described in clauses (a) through (c) above, provided that any extension, 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;
(e) Warehouseman's, materialman's, repairman's, mechanics'
and other like liens incurred in the ordinary course of business.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.
"Responsible Officer" means each of the Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer and the Controller of
Borrower.
"Schedule" means the schedule of exceptions attached hereto and
approved by Creditor, if any.
"Strategic Development Agreement" means the technology agreement
entered into between Creditor and Borrower dated as of the date hereof.
"Subsidiary" means any corporation, company or partnership in
which (i) any general partnership interest or (ii) more than 50% of the stock or
other units of ownership which by the terms thereof has the ordinary voting
power to elect the Board of Directors, managers or trustees of the entity, at
the time as of which any determination is being made, is owned by Borrower,
either directly or through an Affiliate.
3
1.2 Accounting Terms. All accounting terms not specifically
----------------
defined herein shall be construed in accordance with GAAP and all calculations
made hereunder shall be made in accordance with GAAP. When used herein, the
terms "financial statements" shall include the notes and schedules thereto.
2. LOAN AND TERMS OF PAYMENT.
-------------------------
(a) Advances. Subject to and upon the terms and
--------
conditions of this Agreement, Creditor agrees to make one or more Advances to
Borrower in an aggregate amount of Six Hundred Thousand Dollars ($600,000). The
Advances shall be payable in one lump sum on the Maturity Date, provided that,
-------------
Borrower shall repay the Advances in full, including all accrued and unpaid
interest, at any time prior to the Maturity Date upon five (5) Business Days'
written notice from Creditor and, provided further, that such repayment of the
----------------
Advances prior to the Maturity Date shall not be a "scheduled" payment of
principal and interest as set forth in Section 3.1 of the Comerica Subordination
Agreement. The Advances, once repaid, may not be reborrowed. Borrower may prepay
the Advances without penalty or premium.
(b) Interest. Except as set forth in Section 2.3(b), the
--------
Advances shall bear interest, on the outstanding Daily Balance thereof, at the
rate of ten percent (10%) per annum and compounded monthly. Accrued but unpaid
interest hereunder shall be due and payable on the Maturity Date, except where
required to be paid prior to the Maturity Date pursuant to Section 2(a).
(c) Default Rate. All Obligations shall bear interest,
------------
from and after the occurrence and during the continuance of an Event of Default,
at a rate equal to two (2) percentage points above the interest rate applicable
immediately prior to the occurrence of the Event of Default.
(d) Computation. All interest chargeable under the Loan
-----------
Documents shall be computed on the basis of a three hundred sixty (360) day
year for the actual number of days elapsed.
2.2 Term. This Agreement shall become effective on the Closing
----
Date and, subject to Section 12.6, shall continue in full force and effect for
so long as any Obligations remain outstanding. Creditor's Lien on the Collateral
shall remain in effect for so long as any Obligations are outstanding.
3. CONDITIONS OF ADVANCES.
----------------------
The obligation of Creditor to make Advances hereunder is
subject to the condition precedent that Creditor shall have received, in form
and substance satisfactory to Creditor, the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower with
respect to incumbency and resolutions authorizing the execution and
delivery of this Agreement;
(c) financing statements (Form UCC-1: CA);
(d) the Comerica Consent;
(e) the Comerica Subordination Agreement;
(f) the Strategic Development Agreement; and
(g) such other documents, and completion of such other
matters, as Creditor may reasonably deem necessary or appropriate.
4. CREATION OF SECURITY INTEREST.
-----------------------------
4.1 Grant of Security Interest. Borrower grants and pledges to
--------------------------
Creditor a continuing security interest in all presently existing and hereafter
acquired or arising Collateral in order to secure prompt repayment of any and
all Obligations and in order to secure prompt performance by Borrower of each of
its covenants and duties under the Loan Documents. Except for Permitted Liens,
such security interest constitutes a valid, first priority security interest in
the presently existing Collateral, and will constitute a valid, first priority
security interest in Collateral acquired after the date hereof.
4
4.2 Delivery of Additional Documentation Required. Borrower
---------------------------------------------
shall from time to time execute and deliver to Creditor, at the request of
Creditor, all financing statements and other documents that Creditor may
reasonably request, in form satisfactory to Creditor, to perfect and continue
the perfection of Creditor's security interests in the Collateral and in order
to fully consummate all of the transactions contemplated under the Loan
Documents.
5. REPRESENTATIONS AND WARRANTIES.
------------------------------
Borrower represents and warrants as follows:
5.1 Due Organization and Qualification. Borrower is a
----------------------------------
corporation duly existing under the laws of its state of incorporation and
qualified and licensed to do business in any state in which the conduct of its
business or its ownership of property requires that it be so qualified.
5.2 Due Authorization; No Conflict. The execution, delivery,
------------------------------
and performance of the Loan Documents are within Borrower's powers, have been
duly authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Articles of Incorporation or Bylaws, nor will
they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound. Borrower is not in default
under any agreement to which it is a party or by which it is bound, which
default could have a Material Adverse Effect.
5.3 No Prior Encumbrances. Borrower has good and marketable
---------------------
title to the Collateral, free and clear of Liens, except for Permitted Liens.
5.4 Name; Location of Chief Executive Office. Except as
----------------------------------------
disclosed in the Schedule, Borrower has not done business under any name other
than that specified on the signature page hereof. The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.
5.5 No Material Adverse Change in Financial Statements. All
--------------------------------------------------
consolidated financial statements related to Borrower and any Subsidiary that
are delivered by Borrower to Creditor fairly present in all material respects
Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended. There
has not been a material adverse change in the consolidated financial condition
of Borrower since the date of the most recent of such financial statements
submitted to Creditor.
5.6 Solvency, Payment of Debts. Borrower is solvent and able
--------------------------
to pay its debts (including trade debts) as they mature.
5.7 Taxes. Borrower and each Subsidiary have filed or caused to
-----
be filed all tax returns required to be filed, and have paid, or have made
adequate provision for the payment of, all taxes reflected therein.
5.8 Subsidiaries. Borrower does not own any stock, partnership
------------
interest or other equity securities of any Person, except for Permitted
Investments.
5.9 Location of Assets and Collateral. Except as disclosed in
---------------------------------
the Schedule, the Borrower has no Collateral or any other assets located in any
other state or country.
5.10 Full Disclosure. No representation, warranty or other
---------------
statement made by Borrower in any certificate or written statement furnished to
Creditor contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
certificates or statements not misleading.
6. AFFIRMATIVE COVENANTS.
---------------------
Borrower covenants and agrees that, until payment in full of
all outstanding Obligations, Borrower shall do all of the following:
6.1 Good Standing. Borrower shall maintain its and each of its
-------------
Subsidiaries' corporate existence in its jurisdiction of incorporation and
maintain qualification in each jurisdiction in which the failure to so qualify
could have a Material Adverse Effect. Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, in force all licenses, approvals and
agreements, the loss of which could have a Material Adverse Effect.
5
6.2 Financial Statements, Reports, Certificates. Borrower shall
-------------------------------------------
deliver the following to Creditor:
(a) as soon as available, but in any event within one
hundred twenty (120) days after the end of Borrower's fiscal year, audited
consolidated financial statements of Borrower prepared in accordance with GAAP,
consistently applied, together with an unqualified opinion on such financial
statements of an independent certified public accounting firm; and
(b) promptly upon receipt of notice thereof, a report of any
legal actions pending or threatened against Borrower or any Subsidiary that
could result in damages or costs to Borrower or any Subsidiary of Fifty Thousand
Dollars ($50,000) or more.
6.3 Tangible Assets. Borrower shall provide Creditor written
---------------
notice within a reasonable period of time prior to obtaining, acquiring or
otherwise placing any Collateral or any other assets in a state other than those
set forth in the Schedule.
6.4 Further Assurances. At any time and from time to time
------------------
Borrower shall execute and deliver such further instruments and take such
further action as may reasonably be requested by Creditor to effect the purposes
of this Agreement.
7. NEGATIVE COVENANTS.
------------------
Borrower covenants and agrees that until payment in full of
the outstanding Obligations, Borrower shall not do any of the following:
7.1 Change in Control or Executive Office. Borrower will not
-------------------------------------
suffer or permit a Change in Control or, without thirty (30) days prior written
notification to Creditor, relocate its chief executive office.
7.2 Mergers or Acquisitions. Merge or consolidate, or permit any
-----------------------
of its Subsidiaries to merge or consolidate, with or into any other business
organization (other than Creditor), or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person.
7.3 Indebtedness. Create, incur, assume or be or remain liable
------------
with respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.
7.4 Encumbrances. Create, incur, assume or suffer to exist any
------------
Lien with respect to any of its property, or assign or otherwise convey any
right to receive income, or permit any of its Subsidiaries so to do, except for
Permitted Liens. Agree with any Person other than Creditor not to grant a
security interest in, or otherwise encumber any of its property, or permit any
Subsidiary to do so, except for Permitted Liens.
7.5 Distributions. Pay any dividends or make any other
-------------
distribution or payment on account of or in redemption, retirement or purchase
of any capital stock, or permit any of its Subsidiaries to do so, except that
Borrower may repurchase the stock of former employees pursuant to stock
repurchase agreements as long as an Event of Default does not exist prior to
such repurchase or would not exist after giving effect to such repurchase.
7.6 Approval of Use of Funds. (a) With respect only to the first
------------------------
Six Hundred Thousand Dollars ($600,000) of expenditures by Borrower following
receipt of the Advances, make payments or other expenditures, in each case, over
Fifteen Thousand Dollars ($15,000) without the written consent of Xxxxx Xxxx,
Xxxxx Xxxxxxx (CFO) (or her designee) and Royal X. Xxxxxx (or his designee),
provided that (i) such consent shall not be unreasonably withheld and (ii) such
-------------
spending restriction shall not be applicable to, nor affect, the permitted
expenditures of Borrower set forth in Section 5.1 of the Agreement and Plan of
Reorganization entered into among Creditor, Metal Combination Corp., Borrower
and, with respect to Articles VIII and IX, Xxxxx Xxxxxxxx, dated as of June 23,
2001. Borrower shall use its best efforts to submit to Creditor requests for
expenditures hereunder at least three (3) Business Days in advance or, in
extraordinary circumstances, two business hours prior to the relevant
expenditures and Creditor shall cause Xxxxx Xxxxxxx and Royal X. Xxxxxx (or
their designees) to use their best efforts to approve such expenditure requests
within the applicable time periods.
(b) Following the closing of the Merger, any expenditure, in each
case, over Fifteen Thousand Dollars ($15,000) by the combined company as a
result of the Merger (the "Combined Company") must be approved by Xxxxx Xxxx (or
his designee), Royal X. Xxxxxx (or his designee) and Xxxxx Xxxxxxx (CFO) (or her
designee), provided that such approval requirement shall be subject to review by
-------------
the Board of Directors of the Combined Company on a semi-annual basis beginning
on the first anniversary of the closing of the Merger, and provided further,
----------------
that any change to such approval requirement shall require a unanimous vote of
the Board of Directors of the Combined Company, which vote shall not include the
participation of Royal X. Xxxxxx and Xxxxx Xxxx.
6
7.7 Transactions with Affiliates. Directly or indirectly enter into or
----------------------------
permit to exist any material transaction with any Affiliate of Borrower except
for transactions that are in the ordinary course of Borrower's business, upon
fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm's length transaction with a non-affiliated Person.
8. EVENTS OF DEFAULT.
-----------------
Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:
8.1 Payment Default. If Borrower fails to pay, within thirty (30) days
---------------
when due, any of the Obligations;
8.2 Covenant Default. If Borrower fails to materially perform any
----------------
obligation under Article 6 or materially violates any of the covenants contained
in Article 7 of this Agreement, or fails or neglects to perform, keep, or
observe any other material term, provision, condition, covenant, or agreement
contained in this Agreement, in any of the Loan Documents, or in any other
present or future agreement between Borrower and Creditor entered into in
connection with this Agreement, and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within thirty (30) days after Borrower receives notice thereof
or any officer of Borrower becomes aware thereof;
8.3 Material Adverse Change. If there occurs a material adverse change
-----------------------
in Borrower's business or financial condition, or if there is a material
impairment of the prospect of repayment of any portion of the Obligations or a
material impairment of the value or priority of Creditor's security interests in
the Collateral;
8.4 Attachment. If any material portion of Borrower's assets is
----------
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within twenty (20) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within twenty (20)
days after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower;
8.5 Insolvency. If Borrower becomes insolvent, or if an Insolvency
----------
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within thirty (30) days;
8.6 Other Agreements. If there is a default or event of default
----------------
(howsoever defined) under (i) the Comerica Agreement, (ii) any agreement in
connection with Indebtedness set forth in paragraph (d) of the definition
"Permitted Indebtedness" to which Borrower is a party with a third party or
parties (iii) the Strategic Development Agreement (provided that the cure
periods provided in this Section shall not apply in the event the relevant cure
periods under the Strategic Development have lapsed), or (iv) the Loan and
Security Agreement dated as of June 29, 2001, the Loan and Security Agreement
dated as of August 30, 2001, the Loan and Security Agreement dated as of
September 24, 2001 or the Loan and Security Agreement dated as of October 11,
2001, each entered into between Creditor and Borrower, resulting in a right by
Comerica, Creditor or a third party or parties (as the case may be), whether or
not exercised, to accelerate the maturity of any Indebtedness thereunder or that
could have a Material Adverse Effect;
8.7 Judgments. If a judgment or judgments for the payment of money in
---------
an amount, individually or in the aggregate, of at least Fifty Thousand Dollars
($50,000) shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of twenty (20) days; or
8.8 Misrepresentations. If any material misrepresentation or material
------------------
misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Creditor by any Responsible Officer
pursuant to this Agreement or to induce Creditor to enter into this Agreement or
any other Loan Document.
9. CREDITOR'S RIGHTS AND REMEDIES.
------------------------------
9.1 Rights and Remedies. Upon the occurrence and during the continuance
-------------------
of an Event of Default, Creditor may, at its election, without notice of its
election and without demand, do any one or more of the following, all of which
are authorized by Borrower:
7
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, immediately due and payable
(provided that upon the occurrence of an Event of Default described in Section
8.5, all Obligations shall become immediately due and payable without any action
by Creditor);
(b) Make such payments and do such acts as Creditor
considers necessary or reasonable to protect its security interest in the
Collateral;
(c) Set off and apply to the Obligations any and all (i)
balances and deposits of Borrower held by Creditor, or (ii) indebtedness at any
time owing to or for the credit or the account of Borrower held by Creditor;
(d) Dispose of the Collateral by way of one or more
contracts or transactions, for cash or on terms, in such manner and at such
places (including Borrower's premises) as Creditor determines is commercially
reasonable, and apply any proceeds to the Obligations in whatever manner or
order Creditor deems appropriate;
(e) Creditor may credit bid and purchase at any public sale;
and
(f) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower, subject to
applicable law.
9.2 Power of Attorney. Borrower hereby irrevocably appoints
-----------------
Creditor (and any of Creditor's designated officers, or employees) as Borrower's
true and lawful attorney to file, in its sole discretion, one or more financing
or continuation statements and amendments thereto, relative to any of the
Collateral without the signature of Borrower where permitted by law; and
Creditor may exercise such power of attorney to sign the name of Borrower on any
of the documents described in Section 4.2. The appointment of Creditor as
Borrower's attorney in fact hereunder, and each and every one of Creditor's
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully repaid and performed.
10. NOTICES.
-------
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized
overnight delivery service, certified mail, postage prepaid, return receipt
requested, or by telefacsimile to Borrower or to Creditor, as the case may be,
at its addresses set forth below:
If to Borrower: WOOD ALLIANCE, INC., D/B/A/ WOOD ASSOCIATES, INC.
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxx
FAX: (000) 000-0000
With a copy, which shall not
constitute notice, to:
Pillsbury Winthrop LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxx Xxxxxxx
FAX: (000) 000-0000
If to Creditor: IPRINT TECHNOLOGIES, INC.
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
FAX: (000) 000-0000
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
8
11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
------------------------------------------
This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without regard to
principles of conflicts of law. Each of Borrower and Creditor hereby submits to
the exclusive jurisdiction of the state and Federal courts located in the County
of Santa Xxxxx, State of California. BORROWER AND CREDITOR EACH HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND
AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO
ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
12. GENERAL PROVISIONS.
------------------
12.1 Successors and Assigns. This Agreement shall bind and inure
----------------------
to the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower or Creditor without the other's prior written
consent.
12.2 Indemnification. Borrower shall defend, indemnify and hold
---------------
harmless Creditor and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Agreement; and
(b) all losses or Creditor Expenses in any way suffered, incurred, or paid by
Creditor as a result of or in any way arising out of, following, or
consequential to transactions between Creditor and Borrower whether under this
Agreement, or otherwise (including without limitation reasonable attorneys' fees
and expenses), except for losses caused by Creditor's gross negligence or
willful misconduct.
12.3 Severability of Provisions. Each provision of this
--------------------------
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
12.4 Amendments in Writing, Integration. Neither this Agreement
----------------------------------
nor the Loan Documents can be amended or terminated orally. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement
and the Loan Documents, if any, are merged into this Agreement and the Loan
Documents.
12.5 Counterparts. This Agreement may be executed in any number
------------
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Agreement.
12.6 Survival. All covenants, representations and warranties
--------
made in this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding.
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
WOOD ALLIANCE, INC., D/B/A/ WOOD ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
----------------------------------------
Title: CEO
-------------------------------------
IPRINT TECHNOLOGIES, INC.
By: /s/ Royal X. Xxxxxx
----------------------------------------
Title: CEO
-------------------------------------
10
"THIS NOTE AND THE PAYMENT HEREOF IS SUBJECT TO AND GOVERNED BY
THE TERMS OF THAT CERTAIN AMENDED AND RESTATED INTERCREDITOR AND
SUBORDINATION AGREEMENT DATED AS OF OCTOBER 22, 2001 BY AND AMONG
BORROWER, CREDITOR AND COMERICA BANK-CALIFORNIA, UNDER WHICH THIS
NOTE AND BORROWER'S OBLIGATIONS HEREUNDER ARE SUBORDINATED IN THE
MANNER SET FORTH THEREIN TO THE PRIOR PAYMENT OF CERTAIN
OBLIGATIONS OF BORROWER TO THE HOLDERS OF THE SENIOR DEBT AS
DEFINED THEREIN."
PROMISSORY NOTE
$600,000 October 22, 2001
FOR VALUE RECEIVED, the undersigned, WOOD ALLIANCE, INC.,
D/B/A/ WOOD ASSOCIATES, INC. (the "Borrower"), promises to pay to the
order of IPRINT TECHNOLOGIES, INC. ("Creditor"), at such place as the
holder hereof may designate, in lawful money of the United States of
America, the sum of Six Hundred Thousand Dollars ($600,000) plus
interest at a rate specified in the Loan and Security Agreement of even
date herewith between Borrower and Creditor (the "Loan Agreement").
Borrower shall pay Creditor the amounts on the dates specified in the
Loan Agreement. On the Maturity Date, as defined in the Loan Agreement,
the entire remaining principal balance plus all accrued but unpaid
interest shall be due and payable, provided that the entire remaining
-------------
principal balance plus all accrued and unpaid interest shall be due and
payable at any time prior to the Maturity Date upon five (5) Business
Day's written notice from Creditor. In no event shall the amount of
interest paid hereunder exceed the maximum amount allowed by applicable
law.
Borrower irrevocably waives the right to direct the
application of any and all payments at any time hereafter received by
Creditor from or on behalf of Borrower, and Borrower irrevocably agrees
that Creditor shall have the continuing exclusive right to apply any
and all such payments against the then due and owing obligations of
Borrower as Creditor may deem advisable. In the absence of a specific
determination by Creditor with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and
expenses; (b) then due and payable interest payments; and (c) then due
and payable principal payments and optional prepayments.
All or part of the amounts due and owing hereunder may be
prepaid by Borrower in accordance with the terms and subject to the
conditions contained in the Loan Agreement.
Borrower promises to pay Creditor all costs and expenses of
collection of this Note and to pay all reasonable attorneys' fees
incurred in such collection or in any suit or action to collect this
Note. Borrower hereby consents to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waives
presentment, demand, protest, notice of protest, notice of default or
dishonor, notice of payment and nonpayment, and any and all other
notices and demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note, as well as any
applicable statute of limitations. No delay by Creditor in exercising
any power or right hereunder shall operate as a waiver of any power or
right. Time is of the essence as to all obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which
shall govern the rights and obligations of Borrower with respect to all
obligations hereunder. This Note is secured pursuant to the Loan
Agreement.
[remainder of page intentionally left blank]
This Note shall be deemed to be made under, and shall be
construed in accordance with and governed by, the laws of the State of
California, excluding conflicts of laws principles.
WOOD ALLIANCE, INC., D/B/A/ WOOD
ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
---------------------------------
Print Name: Xxxxx Xxxx
-------------------------
Title: CEO
------------------------------
