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EXHIBIT 10.38
SAND HILL CAPITAL
Innovative Financing Solutions
LOAN AGREEMENT
Dated as of August 14, 1998
by and between
SAND HILL CAPITAL, LLC
as lender
and
UOL PUBLISHING, INC.
a Delaware corporation
as borrower
TOTAL CREDIT AMOUNT: $500,000
Maturity: February 15, 1999
Formula: None
Loan Fee: $10,000
Interest: 12%
Warrants:
Number of shares: 35,000
Class of stock: Series D Preferred
Initial exercise price: See Warrant
The terms and information set forth on this cover page are a part of the
attached Loan Agreement, dated as of the date first written above (this
"Agreement"), entered into by and among Sand Hill Capital, LLC ("Sand Hill") and
UOL Publishing, Inc. ("Borrower") set forth above. The terms and conditions of
the Agreement agreed to between Sand Hill and Borrower are as follows:
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1. Advances. Borrower may request one or more advances (each, an "Advance"
and collectively, the "Advances") from time to time upon one Business Day's
notice in an aggregate outstanding amount not to exceed $500,000, provided
Borrower may not request any Advance until (i) all of the conditions set forth
in Article 3 of the Loan and Security Agreement of even date between Imperial
Bank and Borrower (the "Bank Loan Agreement") have been satisfied to Sand Hill's
satisfaction or waived by Sand Hill, (ii) Sand Hill shall have received
guaranties and security agreements from each of Borrower's subsidiaries in a
form acceptable to Sand Hill, (iii) all filings have been completed that are
necessary or appropriate to perfect the security interest of Sand Hill in the
personal property of Borrower and its Subsidiaries, and (iv) all other matters
relating to the requested Advance have been completed to Sand Hill's reasonable
satisfacton.
Borrower shall pay interest on the outstanding Advances at a fixed rate,
as specifed on the cover page hereof. Interest shall be payable in arrears
within five (5) days after the first day of each month. On the Maturity Date
specified on the cover page, the entire outstanding principal balance of the
Advances and all accrued and unpaid interest thereon shall be immediately due
and payable.
All payments on this Agreement shall be applied first to fees and
expenses, then to interest and then to principal. If any payment is not made
within ten (10) days of the due date, Borrower shall pay a late payment fee
equal to the lesser of 5% of the amount of such late payment or the maximum
amount permitted by law. Any principal or interest payments on this Agreement
outstanding after the occurrence and during the continuance of a default under
this Agreement shall bear interest at a rate equal to 5% above the rate
otherwise applicable under this Agreement. In addition to the foregoing amounts,
on February 15, 1999, Borrower shall pay Sand Hill an Extension Fee of $5,000 if
any amount is outstanding under this Agreement on such date, and on March 15,
1999, Borrower shall pay Sand Hill an additional Extension Fee of $10,000 if any
amount is outstanding under this Agreement on such date. The provision in this
paragraph for late fees, default interest and extension fees shall not be
construed as Sand Hill's consent to Borrower's failure to pay any amounts in
strict accordance with this Agreement, and Sand Hill's acceptance of any such
payments shall not restrict Sand Hill's exercise of any remedies arising out of
any such failure.
2. Secured Agreement. To secure repayment of all obligations evidenced by
this Agreement and performance of all of Borrower's obligations hereunder
(including interest accruing after an Insolvency Event), Borrower grants Sand
Hill a security interest in the property described in Exhibit A attached hereto
(the "Collateral"). Borrower shall take such actions as Sand Hill requests from
time to time to perfect or continue the security interest granted hereunder.
Borrower shall not dispose of or encumber or permit to be encumbered or attached
any part of the Collateral without Sand Hill's prior written consent, except for
the security interest granted to Imperial Bank ("Bank") under that certain Loan
and Security Agreement between Borrower and Bank of even date herewith (the
"Bank Loan Agreement") and dispositions of inventory made in the ordinary course
of Borrower's business.
3. Representations and Warranties. Borrower represents to Sand Hill as
follows: (a) Borrower is not in default under any agreement under which Borrower
owes any money, or any agreement, the violation or termination of which could
have a material adverse effect on Borrower; (b) Borrower has taken all action
necessary to authorize the execution, delivery and performance of this
Agreement; (c) except for purchase money security interests on particular items
of equipment, and the security interest granted under the Bank Loan Agreement,
there are no liens, security interests or other encumbrances on the Collateral;
(d) the execution and performance of this Agreement do not conflict with, or
constitute a default under, any agreement to which Borrower is party or by which
Borrower is bound; (e) the information provided to Sand Hill on or prior to the
date of this Agreement is true and correct in all material respects; (f) all
financial statements and other information provided to Sand Hill fairly present
Borrower's financial condition, and there has not been a material adverse change
in the financial condition of Borrower since the date of the most recent of the
financial statements submitted to Sand Hill; (g) the execution and performance
of this Agreement do not conflict with, or constitute a default under, any
agreement to which Borrower is party or by which Borrower is bound; (h) Borrower
is in compliance with all laws and orders applicable to it; (i) Borrower is not
party to any litigation and is not the subject of any government investigation,
and Borrower has no knowledge of any pending litigation or investigation or the
existence of circumstances that reasonably could be expected to give rise to
such litigation or investigation; (j) the representations and warranties made in
the Bank Loan
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Agreement are true and correct in all material respects; and (k) no
representation or other statement made by Borrower to Sand Hill contains any
untrue statement of a material fact or omits to state a material fact necessary
to make any statements made to Sand Hill not misleading.
4. Covenants.
(a) Borrower will provide Sand Hill (i) within 30 days after the
last day of each month, monthly company-prepared financial statements in form
and substance satisfactory to Sand Hill, prepared in accordance with GAAP, and
(ii) promptly upon Sand Hill's request, such other information relating to
Borrower's operations and condition as Sand Hill may reasonably request from
time to time. Sand Hill shall have a right to review and copy Borrower's books
and records from time to time upon reasonable notice to Borrower. Borrower shall
pay Sand Hill for the costs it may incur from time to time in auditing the
Collateral.
(b) Borrower will maintain insurance on the Collateral that includes
a lender's loss payable endorsement in favor of Sand Hill as an additional loss
payee. Borrower will maintain insurance in a form acceptable to Sand Hill
relating to the Collateral and Borrower's business in amounts and of a type that
are customary to businesses similar to Borrower's. Borrower shall designate Sand
Hill a beneficiary, along with Imperial Bank, under the key person life
insurance policy on Xxxxxxxxxx X. Xxxxxx.
(c) Borrower will maintain its corporate existence and good standing
and will maintain in force all licenses and agreements, the loss of which could
have a material adverse effect on Borrower's business. Borrower will pay all
taxes on or before the date such taxes are due, and will comply with all laws
and orders applicable to it.
(d) Without Sand Hill's prior written consent, which will not be
unreasonably withheld, Borrower will not (i) make any investments in, or loans
or advances to, any person other than in the ordinary course of business as
currently conducted, (ii) acquire any asseets other than in the ordinary course
of business as currently conducted, (iii) make any distributions or pay any
dividends to any person on account of Borrower's shares, (iv) borrow any money
except under the Bank Loan Agreement and under equipment lease agreements, or
(v) dispose of or encumber any portion of its assets, except for dispositions of
inventory in the ordinary course of Borrower's business.
(e) Borrower will register on an expedited basis with the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, those intellectual property rights listed on Exhibits A, B and C to
the Intellectual Property Security Agreement delivered to Sand Hill by Borrower.
Borrower will register such additional intellectual property rights developed or
acquired by Borrower from time to time in connection with any product prior to
the sale or licensing of such product to any third party. Borrower will execute
such documents and take such other actions as Sand Hill may reasonably request
to perfect the security interest granted in such rights.
(f) If Borrower merges or consolidates with any person or entity
such that Borrower is not the surviving entity, Sand Hill shall have the right
to terminate this Agreement and require Borrower to pay all unpaid principal,
interest and other amounts owing hereunder on the effective date of such merger
or consolidation.
(g) Borrower will comply with all of the covenants, terms and
condtions set forth in the Bank Loan Agreement.
5. Fees and Expenses. On the date of this Agreement, Borrower shall pay
Sand Hill the Loan Fee specified on the cover page, plus all legal and
underwriting expenses that Sand Hill incurs in connection with this Agreement.
Borrower shall also deliver a warrant to purchase stock to Sand Hill in a form
acceptable to Sand Hill. Borrower shall pay all costs that Sand Hill incurs in
enforcing this Agreement or exercising any rights with respect to the Collateral
(including all costs incurred after the occurrence of an Insolvency Event),
including without limitation reasonable attorneys fees and expenses.
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6. Events of Default; Remedies. Any one or more of the following shall
constitute an Event of Default under this Agreement:
(a) Borrower's failure (i) to pay all or any part of the principal
or interest hereunder on the date due and payable, or (ii) to comply with any
agreement or covenant set forth in this Agreement, or (iii) to comply with the
terms of any material contract to which Borrower is a party and any agreement
pursuant to which Borrower has incurred indebtedness, or (iv) to comply with any
law to which Borrower is subject; or
(b) Borrower becomes insolvent, or becomes the subject of any case
or proceeding under the United States Bankruptcy Code or any other law relating
to the reorganization or restructuring of debt (an "Insolvency Event"); or
(c) any representation made to Sand Hill in this Agreement, the
Warrant issued of even date herewith, or any information given to Sand Hill by
or on behalf of Borrower shall be incorrect in any material respect; or
(d) the occurrence of a material adverse change in the financial or
other condition of Borrower; or
(e) an Event of Default occurs under the Bank Loan Agreement.
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Sand Hill, be immediately collectible by or on behalf of Sand Hill,
and Sand Hill may exercise all of the rights of a secured party under the
California Uniform Commercial Code. In each case, Sand Hill shall have a right
to dispose of the Collateral in any commercially reasonable manner, and shall
have a royalty-free license to use any name, trademark, advertising matter or
any property of a similar nature to complete production of, advertisement for,
and disposition of any Collateral and Sand Hill shall have a license to enter
into, occupy and use Borrower's premises and the Collateral without charge to
exercise any of Sand Hill's rights or remedies under this Agreement. Borrower
irrevocably appoints Sand Hill (and any of Sand Hill's designated employees or
agents) as Borrower's true and lawful attorney in fact to: endorse Borrower's
name on any checks or other forms of payment; make, settle and adjust all claims
under and decisions with respect to Borrower's policies of insurance; settle and
adjust disputes and claims respecting accounts receivable with account debtors;
execute and deliver all notices, instruments and agreements in connection with
the perfection of the security interest granted in this Agreement; and sell,
lease or otherwise dispose of all or any part of the Collateral. The appointment
of Sand Hill as Borrower's attorney in fact, and each of Sand Hill's rights and
powers, being coupled with an interest, is irrevocable until all amount owing to
Sand Hill have been repaid in full.
7. Waivers; Indemnity. Borrower waives presentment and demand for
payment, notice of dishonor, protest and notice of protest of this Agreement,
and shall pay all costs of collection when incurred, including reasonable
attorneys' fees, costs and expenses incurred before, after or in connection with
of an Insolvency Event. Borrower shall indemnify and hold Sand Hill harmless
from any claim, obligation or liability (including without limitation reasonable
attorneys fees and expenses) arising out of this Agreement or the transactions
contemplated hereby, including any claim, obligation or liability arising
before, after or in connection with an Insolvency Event..
8. Miscellaneous. Sand Hill may assign all or any part of its interest
in this Agreement and the Advances to any person or entity, or grant a
participation of any interest in this Agreement, without notice to, or the
consent of, Borrower. This Agreement can be amended only by an instrument
signed by Sand Hill and Borrower. All prior agreements are superseded by this
Agreement. Borrower may not assign any obligation hereunder without Sand Hill's
consent. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one
instrument. This Agreement shall be governed by the internal laws of the State
of California, without regard to conflicts of laws rules. Borrower and Sand
Hill consent to the exclusive jurisdiction of the United States District Court
of the Northern District of California and the state courts for San Mateo
County, California.
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9. JURY WAIVER. SAND HILL AND BORROWER EACH WAIVES ANY RIGHT TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREIN.
UOL PUBLISHING, INC.
By:
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Title:
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SAND HILL CAPITAL, LLC
By:
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Title:
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EXHIBIT A
The Collateral shall consist of all right, title and interest of Borrower
in and to the following:
(a) All goods and equipment now owned or hereafter acquired,
including, without limitation, all machinery, fixtures, vehicles (including
motor vehicles and trailers), and any interest in any of the foregoing, and all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing, wherever located;
(b) All inventory, now owned or hereafter acquired, including,
without limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and
Borrower's books relating to any of the foregoing;
(c) All contract rights and general intangibles now owned or
hereafter acquired, including, without limitation, goodwill, trademarks,
servicemarks, trade styles, trade names, patents, patent applications, leases,
license agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;
(d) All now existing and hereafter arising accounts, contract
rights, royalties, license rights and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods, the licensing of technology
or the rendering of services by Borrower, whether or not earned by performance,
and any and all credit insurance, guaranties, and other security therefor, as
well as all merchandise returned to or reclaimed by Borrower and Borrower's
books relating to any of the foregoing;
(e) All documents, cash, deposit accounts, securities, financial
assets, securities entitlements, letters of credit, certificates of deposit,
instruments and chattel paper now owned or hereafter acquired and Borrower's
books relating to the foregoing;
(f) All copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished, now owned or hereafter acquired;
all trade secret rights, including all rights to unpatented inventions,
know-how, operating manuals, license rights and agreements and confidential
information, now owned or hereafter acquired; all mask work or similar rights
available for the protection of semiconductor chips, now owned or hereafter
acquired; all claims for damages by way of any past, present and future
infringement of any of the foregoing; and
(g) Any and all claims, rights and interests in any of the above
and all substitutions for, additions and accessions to and proceeds thereof.
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CORPORATE RESOLUTIONS TO BORROW
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Borrower: UOL Publishing, Inc.
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I, the undersigned Secretary or Assistant Secretary of UOL Publishing,
Inc. (the "Corporation"), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of the State of Delaware.
I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true and
complete copies of the Articles of Incorporation and Bylaws of the Corporation,
each of which is in full force and effect on the date hereof.
I FURTHER CERTIFY that by unanimous written consent of the Directors of
the Corporation, (or by other duly authorized corporate action in lieu of a
meeting), the following resolutions were adopted.
BE IT RESOLVED, that any one (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITIONS ACTUAL SIGNATURES
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acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
BORROW MONEY. To borrow from time to time from Sand Hill Capital, LLC
("Sand Hill"), on such terms as may be agreed upon between the officers,
employees, or agents and Sand Hill, such sum or sums of money as in their
judgment should be borrowed, without limitation, including such sums as are
specified in that certain Loan Agreement dated as of August 14, 1998 (the
"Agreement").
EXECUTE AGREEMENT AND WARRANT. To execute and deliver the Agreement and a
Warrant to Purchase Stock to Sand Hill, and also one or more renewals,
extensions, modifications, refinancings, consolidations, or substitutions for
one or more of the notes, or any portion of the notes.
GRANT SECURITY. To grant a security interest to Sand Hill in the
Collateral described in the Agreement, which security interest shall secure all
of the Corporation's obligations, as described in the Agreement.
FURTHER ACTS. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any and all fees
and costs, and to execute and deliver such other documents and agreements as
they may in their discretion deem reasonably necessary or proper in order to
carry into effect the provisions of these Resolutions.
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BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set forth opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on ____________, 1998 and
attest that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X
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SECURITY AGREEMENT
This Security Agreement is made and entered into as of August 14, 1998 by
and between the undersigned ("Debtor"), and Sand Hill Capital, LLC ("Sand
Hill").
RECITALS
WHEREAS, Sand Hill proposes to enter into a transaction with UOL
Publishing, Inc. ("Borrower"), which is an affiliate of Debtor, pursuant to a
Loan Agreement ('the "Loan Agreement") of even date herewith.
WHEREAS, Debtor has requested Sand Hill to enter into the Loan Agreement,
and expects to derive economic benefit from Sand Hill's doing so and dealing
with Borrower in accordance with the Loan Agreement.
WHEREAS Debtor wishes to guarantee performance and payment of all
obligations under the Loan Agreement, and to secure that guarantee with
substantially all of its assets, subject in all cases to the terms of the
Subordination Agreement between Sand Hill and Imperial Bank.
NOW, THEREFORE, Debtor and Sand Hill agree as follows:
1. Grant of Security Interest. Debtor hereby grants to Sand Hill a
security interest in the Collateral (as defined in Section 2 below) to secure
Debtor's performance of the obligations set forth in Section 3 below.
2. Collateral. The collateral covered by this Security Agreement (the
"Collateral") shall consist of the property described in Exhibit A attached
hereto.
3. Debtor's Obligations Secured Hereby. This Security Agreement secures
all of Debtor's obligations under that certain Unconditional Guaranty of even
date herewith, as such Guaranty is amended from time to time ("Obligations of
Debtor").
4. Debtor's Representations and Warranties. Debtor represents and
warrants as follows:
(a) Authorization. Debtor has authority and has obtained all
approvals and consents necessary to enter into this Security Agreement, and
Debtor's execution, delivery and performance of this Security Agreement will not
violate or conflict with the terms of Debtor's Articles of Incorporation or
Bylaws or any statute, regulation, ordinance, rule of law, agreement, contract,
mortgage, indenture, xxxx, xxxx, Loan Agreement, or other instrument or writing
binding upon Debtor or to which Debtor is subject.
(b) Title. All Collateral currently in Debtor's possession or
under Debtor's control is owned by and is as represented by Debtor and is free
of all liens, encumbrances and other security interests, other than security
interests or lessors' interests that are described on the attached schedule,
including the security interest of Imperial Bank (the "Prior Security
Interests").
(c) Accounts. Each of Debtor's Accounts is genuine, as appearing
on its face, enforceable in accordance with its terms (subject to reserves that
occur in the ordinary course of business and that are accounted for in
accordance with generally accepted accounting principles), free of set-off,
counterclaim and defenses, and represents indebtedness, obligations, interests
or property justly owing to and owned by Debtor in the amount or as therein
provided.
5. Debtor's Covenants. Debtor agrees and covenants as follows:
(a) Further Encumbrances. Except as may be required by the terms
and conditions of the Prior Security Interests, and except for subordinated
financing of Debtor by Sand Hills or other financial institutions or purchase
money secured financing, until the Obligations of Debtor secured under this
Security Agreement shall
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have been repaid in full, Debtor shall not grant a security interest in any of
the Collateral other than to Sand Hill or execute any financing statements
covering any of the Collateral in favor of any person other than Sand Hill.
(b) Use of Collateral. The Collateral will not be used for any
unlawful purpose or in any way that will void any insurance required to be
carried in connection therewith. Debtor will keep the Collateral free and clear
of liens and adverse claims other than the Prior Security Interests and, as
appropriate and applicable, will keep it in good condition and repair, and will
clean, shelter, and otherwise care for the Collateral in all such ways as are
considered good practice by owners of like property.
(c) Insurance of Collateral. The Collateral will be insured at
Debtor's expense against all risks commonly insured by owners of like property.
Debtor agrees to pay when due all premiums for such insurance and all taxes,
license fees and other charges in connection with the Collateral. If Sand Hill
shall take possession of the Collateral, Sand Hill may, subject to the Prior
Security Interests, surrender the policies and receive and retain the unearned
premiums thereon.
(d) Indemnification. Debtor shall indemnify Sand Hill against all
losses, claims, demands and liabilities of any kind caused by the Collateral.
(e) Perfection of Security Interest. Debtor shall execute and
deliver such documents as Sand Hill reasonably deems necessary to create,
perfect and continue the security interest in the Collateral contemplated
hereby.
(f) Collection of Accounts. Until Sand Hill shall elect to do so
in accordance with this Security Agreement, Debtor shall diligently collect all
of its Accounts and proceeds of the Collateral and shall hold such Accounts and
proceeds subject to a security interest of Sand Hill to secure the obligations
secured hereby, provided, however, that Debtor may use such proceeds in the
ordinary course of business.
(g) Records. Debtor shall prepare and keep, in accordance with
generally accepted accounting principles consistently applied, complete and
accurate records regarding all Collateral and, if and when requested by Sand
Hill, shall prepare and deliver a complete and accurate schedule of all the
Collateral in such detail as Sand Hill may reasonably request.
(h) Assignments. If and when requested by Sand Hill, and to the
extent consistent with the Prior Security Interests, Debtor shall upon any Event
of Default (as defined in the Loan Agreement) prepare and deliver to Sand Hill
written assignment of all Accounts, instruments, documents and other evidence
thereof.
(i) Inspection of Debtor's Books. Debtor shall permit Sand Hill or
its designee at reasonable times and from time to time to inspect Debtor's
books, records and properties and to audit and to make copies of extracts from
such books and records.
(j) Fees and Costs. Upon any Event of Default (as defined in
Section 6 below), Debtor shall pay all expenses, including reasonable attorneys'
fees, incurred by Sand Hill in the preservation, realization, enforcement or
exercise of any Sand Hill's rights under this Security Agreement.
(k) Out-of-Pocket Expenses of Sand Hill. Debtor will reimburse
Sand Hill for any out-of-pocket costs and expenses incurred by it in connection
with filings, recordations or registrations made for the purpose of perfecting
the security interest in the Collateral hereunder.
6. Events of Default. The occurrence of any Event of Default under the
Loan Agreement, the failure of Guarantor to perform any obligation under the
Guaranty or this Security Agreement, shall constitute an "Event of Default"
under this Security Agreement.
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7. Remedies on Default. Upon the occurrence of an Event of Default,
Sand Hill shall have all rights, privileges, powers and remedies provided by
law, including, but not limited to, exercise of any or all of the following
remedies.
(a) Payment Under the Guaranty. Sand Hill may declare all amounts
outstanding under the Loan Agreement and the Guaranty to be immediately due and
payable, and thereupon all such amounts shall be and become immediately due and
payable to Sand Hill.
(b) Possession of Collateral. Sand Hill may take possession of all
Collateral covered hereby (which Collateral Debtor will assemble and make
available to Sand Hill).
(c) Use, Operation and Sale of Collateral by Sand Hill. Sand Hill
may use, operate, consume and sell the Collateral in its possession as
appropriate for the purpose of performing Debtor's obligations with respect
thereto to the extent necessary to satisfy the Obligations of Debtor.
8. Payments after an Event of Default. All payments received and
amounts realized by Sand Hill pursuant to Section 7, including all such payments
and amounts received after Sand Hill has declared the entire unpaid principal
and interest amount under the Guaranty to be due and payable pursuant to Section
7(a), as well as all payments or amounts then held or thereafter received by
Sand Hill as part of the Collateral while an Event of Default shall be
continuing, shall be promptly applied and distributed by Sand Hill in the
following order of priority:
(a) first, to the payment of all costs and expenses, including
reasonable legal expenses and attorneys fees, incurred or made hereunder by Sand
Hill, including any such costs and expenses of foreclosure or suit, if any, and
of any sale or the exercise of any other remedy under this Section 8, and of all
taxes, assessments or liens superior to the lien granted under this Security
Agreement;
(b) second, to the payment to Sand Hill of the amount then owing
on the Loan Agreement and in case the payments received and amounts realized by
Sand Hill shall be insufficient to pay in full the whole amount so owing, then
first to the payment of unpaid interest on the Loan Agreement and second to the
payment of unpaid principal thereof; and
(c) third, to the payment of the balance, if any, to the Debtor or
its successors and assigns.
9. Power of Attorney. Debtor hereby appoints Sand Hill, its
attorney-in-fact to prepare, sign and file or record, for Debtor in Debtor's
name, any financing statements, applications for registration and like papers
and to take any other action deemed by Sand Hill necessary or desirable in order
to perfect the security interest of Sand Hill hereunder, and to perform any
obligations of Debtor hereunder, at Debtor's expense, but without obligation to
do so.
10. Remedies Cumulative. The rights, privileges, powers and remedies
afforded to Sand Hill hereunder shall be cumulative, and no single or partial
exercise of any of them shall preclude the further or other exercise of the same
or any of them.
11. Successors and Assigns. This Security Agreement, together with the
covenants and warranties contained herein, shall inure to the benefit of Sand
Hill and its successors and assigns, and shall be binding upon Debtor and it
successors and assigns.
12. Presentment, etc. Debtor hereby waives presentment, protest, notice
of protest, notice of dishonor and notice of nonpayment with respect to any
proceeds to which Sand Hill is entitled hereunder any rights to direct the
application of payments for security for indebtedness of Debtor hereunder, or
indebtedness of customers of Debtor, and hereby waives any right to require
proceedings against others or to require exhaustion of security.
13. Notices. Any notice required or permitted to be given to a party
pursuant to the provisions of this Security Agreement will be in writing and
will be effective and deemed given under this Security Agreement on the earliest
of: (a) the date of personal delivery; (b) the date of delivery by facsimile; or
(c) the business day after deposit
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with a nationally-recognized courier or overnight service, including Federal
Express or Express Mail, for United States deliveries or three (3) business days
after such deposit for deliveries outside of the United States. All notices not
delivered personally or by facsimile will be sent with postage and other charges
prepaid and properly addressed to the party to be notified at the address set
forth in the Loan Agreement, or at such other address as such party may
designate by ten (10) days' advance written notice to the other parties hereto.
All notices or delivery outside the United States will be sent by facsimile, or
by nationally recognized courier or overnight service, including Express Mail.
Any notice given hereunder to more than one person will be deemed to have been
given, for purposes of counting time periods hereunder, on the date given to the
last party required to be given such notice.
14. Governing Law; Consent to Jurisdiction;JURY WAIVER. This Security
Agreement shall be governed and construed under the laws of the State of
California as applied among California residents, made and to be performed
entirely within the State of California, without regard to conflicts of laws
principles. DEBTOR AND SAND HILL EACH WAIVES ANY RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SECURITY AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
15. Enforcement; Counterparts. If any portion of this Security Agreement
is determined to be invalid or unenforceable, the remainder shall be valid and
enforceable to the maximum extent possible with the same effect as if the
invalid or unenforceable portion were omitted from this Security Agreement. This
Security Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and all of which shall constitute one instrument.
16. JUDICIAL REFERENCE.
(a) Other than (i) nonjudicial foreclosure and all matters in connection
therewith regarding security interests in real or personal property; or (ii) the
appointment of a receiver, or the exercise of other provisional remedies (any
and all of which may be initiated pursuant to applicable law), each controversy,
dispute or claim between the parties arising out of or relating to this
Agreement, which controversy, dispute or claim is not settled in writing within
thirty (30) days after the "Claim Date" (defined as the date on which a party
subject to this Agreement gives written notice to all other parties that a
controversy, dispute or claim exists), will be settled by a reference proceeding
in California in accordance with the provisions of Section 638 et seq. of the
California Code of Civil Procedure, or their successor section ("CCP"), which
shall constitute the exclusive remedy for the settlement of any controversy,
dispute or claim concerning this Agreement, including whether such controversy,
dispute or claim is subject to the reference proceeding and except as set forth
above, the parties waive their rights to initiate any legal proceedings against
each other in any court or jurisdiction other than the Superior Court in the
County where the Real Property, if any, is located or Santa Xxxxx County if none
(the "Court"). The referee shall be a retired Judge of the Court selected by
mutual agreement of the parties, and if they cannot so agree within forty-five
(45) days after the Claim Date, the referee shall be promptly selected by the
Presiding Judge of the Court (or his representative). The referee shall be
appointed to sit as a temporary judge, with all of the powers for a temporary
judge, as authorized by law, and upon selection should take and subscribe to the
oath of office as provided for in Rule 244 of the California Rules of the Court
(or any subsequently enacted Rule). Each party shall have one peremptory
challenge pursuant to CCP Section 170.6. The referee shall (a) be requested to
set the matter for hearing within sixty (60) days after the date of selection of
the referee and (b) try any and all issues of law or fact and report a statement
of decision upon them, if possible, within ninety (90) days of the Claim Date.
Any decision rendered by the referee will be final, binding and conclusive and
judgment shall be entered pursuant to CCP Section 644 in any court in the State
of California having jurisdiction. Any party may apply for a reference
proceeding at any time after thirty (30) days following notice to any other
party of the nature of the controversy, dispute or claim, by filing a petition
for a hearing and/or trial. All discovery permitted by this Agreement shall be
completed no later than fifteen (15) days before the first hearing date
established by the referee. The referee may extend such period in the event of a
party's refusal to provide requested discovery or unavailability of a witness
due to absence or illness. No party shall be entitled to "priority" in
conducting discovery. Depositions may be taken by either party upon seven (7)
days written notice, and request for production or inspection of documents which
cannot be resolved by the parties shall be submitted to the referee as provided
herein. The Superior Court is empowered to issue temporary and/or provisional
remedies, as appropriate.
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(b) Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter except that when
any party so requests, a court reporter will be used at any hearing conducted
before the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.
(c) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding which shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this Section 13.
(d) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act, Section 1280 through Section 1294.2 of the
CCP as amended from time to time. The limitations with respect to discovery as
set forth hereinabove shall apply to any such arbitration proceeding.
IN WITNESS WHEREOF, the parties have executed this Security Agreement on
the date set forth above.
COOPERS & ASSOCIATES, INC. SAND HILL CAPITAL, LLC
By: By:
---------------------------- -----------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
------------------------- --------------------------
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EXHIBIT A
COLLATERAL DESCRIPTION ATTACHMENT
TO LOAN AND SECURITY AGREEMENT
All personal property of Borrower (herein referred to as "Borrower" or
"Debtor") whether presently existing or hereafter created, written, produced or
acquired, including, but not limited to:
(a) all accounts receivable, accounts, chattel paper, contract rights
(including, without limitation, royalty agreements, license agreements and
distribution agreements), documents, instruments, money, deposit accounts and
general intangibles, including, without limitation, returns, repossessions,
books and records relating thereto, and equipment containing said books and
records, all investment property, including securities and securities
entitlements;
(b) all software, computer source codes and other computer programs
(collectively, the "Software Products"), and all common law and statutory
copyrights and copyright registrations, applications for registration, now
existing or hereafter arising, United States of America and foreign, obtained or
to be obtained on or in connection with the Software Products, or any parts
thereof or any underlying or component elements of the Software Products
together with the right to copyright and all rights to renew or extend such
copyrights and the right (but not the obligation) of Sand Hill (herein referred
to as "Sand Hill" or "Secured Party") to xxx in its own name and/or the name of
the Debtor for past, present and future infringements of copyright;
(c) all goods, including, without limitation, equipment and inventory
(including, without limitation, all export inventory);
(d) all guarantees and other security therefor;
(e) all trademarks, service marks, trade names and service names and the
goodwill associated therewith;
(f) (a) all patents and patent applications filed in the United States
Patent and Trademark Office or any similar office of any foreign jurisdiction,
and interests under patent license agreements, including, without limitation,
the inventions and improvements described and claimed therein, (b) licenses
pertaining to any patent whether Debtor is licensor or licensee, (c) all income,
royalties, damages, payments, accounts and accounts receivable now or hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (d) the right (but not the obligation) to xxx for past, present and
future infringements thereof, (e) all rights corresponding thereto throughout
the world in all jurisdictions in which such patents have been issued or applied
for, and (f) the reissues, divisions, continuations, renewals, extensions and
continuations-in-part with any of the foregoing (all of the foregoing patents
and applications and interests under patent license agreements, together with
the items described in clauses (a) through (f) in this paragraph are sometimes
herein individually and collectively referred to as the "Patents"); and
(g) all products and proceeds, including, without limitation, insurance
proceeds, of any of the foregoing.
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UNCONDITIONAL GUARANTY
(Ivy Software, Inc.)
For and in consideration of the loan by SAND HILL CAPITAL, LLC ("Sand
Hill") to UOL PUBLISHING, INC., ("Borrower"), which loan is made pursuant to a
Loan Agreement of even date herewith between Borrower and Sand Hill (the
"Agreement"), the undersigned guarantor ("Guarantor") hereby unconditionally and
irrevocably guarantees the prompt and complete payment of all amounts that
Borrower owes to Sand Hill and performance by Borrower of the Agreement and any
other agreements between Borrower and Sand Hill, as amended from time to time
(collectively referred to as the "Agreements"), in strict accordance with their
respective terms.
1. If Borrower does not perform its obligations in strict accordance
with the Agreements, Guarantor shall immediately pay all amounts due thereunder
(including, without limitation, all principal, interest, and fees) and otherwise
to proceed to complete the same and satisfy all of Borrower's obligations under
the Agreements.
2. The obligations hereunder are independent of the obligations of
Borrower, and a separate action or actions may be brought and prosecuted against
Guarantor whether action is brought against Borrower or whether Borrower be
joined in any such action or actions. Guarantor waives the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof, to the extent permitted by law. Guarantor's liability under this
Guaranty is not conditioned or contingent upon the genuineness, validity,
regularity or enforceability of the Agreements.
3. Guarantor authorizes Sand Hill, without notice or demand and without
affecting its liability hereunder, from time to time to (a) renew, extend, or
otherwise change the terms of the Agreements or any part thereof; (b) take and
hold security for the payment of this Guaranty or the Agreements, and exchange,
enforce, waive and release any such security; and (c) apply such security and
direct the order or manner of sale thereof as Sand Hill in its sole discretion
may determine.
4. Guarantor waives any right to require Sand Hill to (a) proceed
against Borrower or any other person; (b) proceed against or exhaust any
security held from Borrower; or (c) pursue any other remedy in Sand Hill's power
whatsoever. Sand Hill may, at its election, exercise or decline or fail to
exercise any right or remedy it may have against Borrower or any security held
by Sand Hill, including without limitation the right to foreclose upon any such
security by judicial or nonjudicial sale, without affecting or impairing in any
way the liability of Guarantor hereunder. Guarantor waives any defense arising
by reason of any disability or other defense of Borrower or by reason of the
cessation from any cause whatsoever of the liability of Borrower. Guarantor
waives any setoff, defense or counterclaim that Borrower may have against Sand
Hill. Guarantor waives any defense arising out of the absence, impairment or
loss of any right of reimbursement or subrogation or any other rights against
Borrower. Until all of the amounts that Borrower owes to Sand Hill have been
paid in full, Guarantor shall have no right of subrogation or reimbursement for
claims arising out of or in connection with this Guaranty, contribution or other
rights against Borrower, and Guarantor waives any right to enforce any remedy
that Sand Hill now has or may hereafter have against Borrower. Guarantor waives
all rights to participate in any security now or hereafter held by Sand Hill.
Guarantor waives all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this Guaranty and of the existence, creation, or incurring of
new or additional indebtedness. Guarantor assumes the responsibility for being
and keeping itself informed of the financial condition of Borrower and of all
other circumstances bearing upon the risk of nonpayment of any indebtedness or
nonperformance of any obligation of Borrower, warrants to Sand Hill that it will
keep so informed, and agrees that absent a request for particular information by
Guarantor, Sand Hill shall have no duty to advise Guarantor of information known
to Sand Hill regarding such condition or any such circumstances. Guarantor
waives the benefits of California Civil Code sections 2809, 2810, 2819, 2845,
2847, 2848, 2849, 2850, 2899 and 3433.
5. Guarantor acknowledges that, to the extent Guarantor has or may have
certain rights of subrogation or reimbursement against Borrower for claims
arising out of this Guaranty, those rights may be impaired or destroyed if Sand
Hill elects to proceed against any real property security of Borrower by
non-judicial foreclosure.
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That impairment or destruction could, under certain judicial cases and based on
equitable principles of estoppel, give rise to a defense by Guarantor against
its obligations under this Guaranty. Guarantor waives that defense and any
others arising from Sand Hill's election to pursue non-judicial foreclosure.
Without limiting the generality of the foregoing, Guarantor waives any and all
benefits and defenses under California Code of Civil Procedure Sections 580a,
580b, 580d and 726, to the extent they are applicable.
6. If Borrower becomes insolvent or is adjudicated bankrupt or files a
petition for reorganization, arrangement, composition or similar relief under
any present or future provision of the United States Bankruptcy Code, or if such
a petition is filed against Borrower, and in any such proceeding some or all of
any indebtedness or obligations under the Agreements are terminated or rejected
or any obligation of Borrower is modified or abrogated, or if Borrower's
obligations are otherwise avoided for any reason, Guarantor agrees that
Guarantor's liability hereunder shall not thereby be affected or modified and
such liability shall continue in full force and effect as if no such action or
proceeding had occurred. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if any payment must be returned by Sand Hill
upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor, any
other guarantor, or otherwise, as though such payment had not been made.
7. Any indebtedness of Borrower now or hereafter held by Guarantor is
hereby subordinated to any indebtedness of Borrower to Sand Hill; and such
indebtedness of Borrower to Guarantor shall be collected, enforced and received
by Guarantor as trustee for Sand Hill and be paid over to Sand Hill on account
of the indebtedness of Borrower to Sand Hill but without reducing or affecting
in any manner the liability of Guarantor under the other provisions of this
Guaranty.
8. Guarantor agrees to pay a reasonable attorneys' fee and all
reasonable and out-of-pocket costs and expenses which may be incurred by Sand
Hill in the enforcement of this Guaranty. No terms or provisions of this
Guaranty may be changed, waived, revoked or amended without Lender's prior
written consent. Should any provision of this Guaranty be determined by a court
of competent jurisdiction to be unenforceable, all of the other provisions shall
remain effective. This Guaranty embodies the entire agreement among the parties
hereto with respect to the matters set forth herein, and supersedes all prior
agreements among the parties with respect to the matters set forth herein. No
course of prior dealing among the parties, no usage of trade, and no parol or
extrinsic evidence of any nature shall be used to supplement, modify or vary any
of the terms hereof. There are no conditions to the full effectiveness of this
Guaranty. Sand Hill may assign this Guaranty without in any way affecting
Guarantor's liability under it. This Guaranty shall inure to the benefit of Sand
Hill and its successors and assigns. This Guaranty is in addition to the
guaranties of any other guarantors and any and all other guaranties of
Borrower's indebtedness or liabilities to Sand Hill.
9. Guarantor represents and warrants to Sand Hill that (i) Guarantor
has taken all necessary and appropriate action to authorize the execution,
delivery and performance of this Guaranty, (ii) execution, delivery and
performance of this Guaranty do not conflict with or result in a breach of or
constitute a default under Guarantor's Articles of Incorporation or Bylaws or
other organizational documents or agreements to which it is party or by which it
is bound, and (iii) this Guaranty constitutes a valid and binding obligation,
enforceable against Guarantor in accordance with its terms.
10. Guarantor covenants and agrees that Guarantor shall do all of the
following:
10.1 Guarantor shall maintain its corporate existence, remain in
good standing in California, and continue to qualify in each jurisdiction in
which the failure to so qualify could have a material adverse effect on the
financial condition, operations or business of Guarantor. Guarantor shall
maintain in force all licenses, approvals and agreements, the loss of which
could have a material adverse effect on its financial condition, operations or
business.
10.2 Guarantor shall comply with all statutes, laws, ordinances,
directives, orders, and government rules and regulations to which it is subject
if non-compliance with such laws could adversely affect the financial condition,
operations or business of Guarantor.
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10.3 At any time and from time to time Guarantor shall execute and
deliver such further instruments and take such further action as may reasonably
be requested by Sand Hill to effect the purposes of this Agreement.
11. JUDICIAL REFERENCE.
(a) Other than (i) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (ii) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Agreement, which controversy, dispute or claim is not settled
in writing within thirty (30) days after the "Claim Date" (defined as the date
on which a party subject to this Agreement gives written notice to all other
parties that a controversy, dispute or claim exists), will be settled by a
reference proceeding in California in accordance with the provisions of Section
638 et seq. of the California Code of Civil Procedure, or their successor
section ("CCP"), which shall constitute the exclusive remedy for the settlement
of any controversy, dispute or claim concerning this Agreement, including
whether such controversy, dispute or claim is subject to the reference
proceeding and except as set forth above, the parties waive their rights to
initiate any legal proceedings against each other in any court or jurisdiction
other than the Superior Court in the County where the Real Property, if any, is
located or Santa Xxxxx County if none (the "Court"). The referee shall be a
retired Judge of the Court selected by mutual agreement of the parties, and if
they cannot so agree within forty-five (45) days after the Claim Date, the
referee shall be promptly selected by the Presiding Judge of the Court (or his
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of the Court (or any subsequently enacted
Rule). Each party shall have one peremptory challenge pursuant to CCP Section
170.6. The referee shall (a) be requested to set the matter for hearing within
sixty (60) days after the date of selection of the referee and (b) try any and
all issues of law or fact and report a statement of decision upon them, if
possible, within ninety (90) days of the Claim Date. Any decision rendered by
the referee will be final, binding and conclusive and judgment shall be entered
pursuant to CCP Section 644 in any court in the State of California having
jurisdiction. Any party may apply for a reference proceeding at any time after
thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee. The
referee may extend such period in the event of a party's refusal to provide
requested discovery or unavailability of a witness due to absence or illness. No
party shall be entitled to "priority" in conducting discovery. Depositions may
be taken by either party upon seven (7) days written notice, and request for
production or inspection of documents which cannot be resolved by the parties
shall be submitted to the referee as provided herein. The Superior Court is
empowered to issue temporary and/or provisional remedies, as appropriate.
(b) Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter except that when
any party so requests, a court reporter will be used at any hearing conducted
before the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.
(c) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding which shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered
3
18
by the referee. The parties hereto expressly reserve the right to findings of
fact, conclusions of laws, a written statement of decision, and the right to
move for a new trial or a different judgment, which new trial, if granted, is
also to be a reference proceeding under this Section 13.
(d) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act, Section 1280 through Section 1294.2 of the
CCP as amended from time to time. The limitations with respect to discovery as
set forth hereinabove shall apply to any such arbitration proceeding.
12. This Guaranty shall be governed by the laws of the State of
California, without regard to conflicts of laws principles. GUARANTOR WAIVES ANY
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. Guarantor submits to the exclusive jurisdiction of the state
and federal courts located in Santa Xxxxx County, California.
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty
as of this 14th day of August, 1998.
Ivy Sofware, Inc.
By:
------------------------------------
Title:
---------------------------------
4
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CORPORATE RESOLUTION TO GUARANTEE
================================================================================
GUARANTOR: IVY SOFTWARE, INC.
================================================================================
I, the undersigned Secretary or Assistant Secretary of Ivy Software, Inc.
(the "Corporation"), HEREBY CERTIFY that the Corporation is organized and
existing under and by virtue of the laws of the State of its incorporation.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation
duly called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions
were adopted.
BE IT RESOLVED, that ANY ONE (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITIONS ACTUAL SIGNATURES
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
--------------------- -------------------- --------------------
acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
GUARANTEE INDEBTEDNESS. To guarantee amounts borrowed from time to time
from Sand Hill Capital, LLC ("Sand Hill"), by UOL Publishing, Inc. ("Borrower")
pursuant to that certain Loan Agreement between Sand Hill and Borrower dated as
of August 14, 1998, as amended from time to time (the "Loan Agreement").
EXECUTE GUARANTY. To execute and deliver to Sand Hill the guaranty of the
Corporation (the "Guaranty"), on Sand Hill's forms, and also to execute and
deliver to Sand Hill one or more renewals, extensions, modifications,
consolidations, or substitutions therefor.
GRANT SECURITY. To grant a security interest to Sand Hill in the
Collateral, described in the Security Agreement, which security interest shall
secure all of the Corporation's obligations under the Guaranty.
FURTHER ACTS. To do and perform such other acts and things, to pay any and
all fees and costs, and to execute and deliver such other documents and
agreements as they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Sand Hill
1
20
may rely on these Resolutions until written notice of their revocation shall
have been delivered to and received by Sand Hill. Any such notice shall not
affect any of the Corporation's agreements or commitments in effect at the time
notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on August __, 1998 and
attest that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X
-------------------------------
================================================================================
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UNCONDITIONAL GUARANTY
(Coopers & Associates, Inc.)
For and in consideration of the loan by SAND HILL CAPITAL, LLC ("Sand
Hill") to UOL PUBLISHING, INC., ("Borrower"), which loan is made pursuant to a
Loan Agreement of even date herewith between Borrower and Sand Hill (the
"Agreement"), the undersigned guarantor ("Guarantor") hereby unconditionally and
irrevocably guarantees the prompt and complete payment of all amounts that
Borrower owes to Sand Hill and performance by Borrower of the Agreement and any
other agreements between Borrower and Sand Hill, as amended from time to time
(collectively referred to as the "Agreements"), in strict accordance with their
respective terms.
1. If Borrower does not perform its obligations in strict accordance
with the Agreements, Guarantor shall immediately pay all amounts due thereunder
(including, without limitation, all principal, interest, and fees) and otherwise
to proceed to complete the same and satisfy all of Borrower's obligations under
the Agreements.
2. The obligations hereunder are independent of the obligations of
Borrower, and a separate action or actions may be brought and prosecuted against
Guarantor whether action is brought against Borrower or whether Borrower be
joined in any such action or actions. Guarantor waives the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof, to the extent permitted by law. Guarantor's liability under this
Guaranty is not conditioned or contingent upon the genuineness, validity,
regularity or enforceability of the Agreements.
3. Guarantor authorizes Sand Hill, without notice or demand and without
affecting its liability hereunder, from time to time to (a) renew, extend, or
otherwise change the terms of the Agreements or any part thereof; (b) take and
hold security for the payment of this Guaranty or the Agreements, and exchange,
enforce, waive and release any such security; and (c) apply such security and
direct the order or manner of sale thereof as Sand Hill in its sole discretion
may determine.
4. Guarantor waives any right to require Sand Hill to (a) proceed
against Borrower or any other person; (b) proceed against or exhaust any
security held from Borrower; or (c) pursue any other remedy in Sand Hill's power
whatsoever. Sand Hill may, at its election, exercise or decline or fail to
exercise any right or remedy it may have against Borrower or any security held
by Sand Hill, including without limitation the right to foreclose upon any such
security by judicial or nonjudicial sale, without affecting or impairing in any
way the liability of Guarantor hereunder. Guarantor waives any defense arising
by reason of any disability or other defense of Borrower or by reason of the
cessation from any cause whatsoever of the liability of Borrower. Guarantor
waives any setoff, defense or counterclaim that Borrower may have against Sand
Hill. Guarantor waives any defense arising out of the absence, impairment or
loss of any right of reimbursement or subrogation or any other rights against
Borrower. Until all of the amounts that Borrower owes to Sand Hill have been
paid in full, Guarantor shall have no right of subrogation or reimbursement for
claims arising out of or in connection with this Guaranty, contribution or other
rights against Borrower, and Guarantor waives any right to enforce any remedy
that Sand Hill now has or may hereafter have against Borrower. Guarantor waives
all rights to participate in any security now or hereafter held by Sand Hill.
Guarantor waives all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this Guaranty and of the existence, creation, or incurring of
new or additional indebtedness. Guarantor assumes the responsibility for being
and keeping itself informed of the financial condition of Borrower and of all
other circumstances bearing upon the risk of nonpayment of any indebtedness or
nonperformance of any obligation of Borrower, warrants to Sand Hill that it will
keep so informed, and agrees that absent a request for particular information by
Guarantor, Sand Hill shall have no duty to advise Guarantor of information known
to Sand Hill regarding such condition or any such circumstances. Guarantor
waives the benefits of California Civil Code sections 2809, 2810, 2819, 2845,
2847, 2848, 2849, 2850, 2899 and 3433.
5. Guarantor acknowledges that, to the extent Guarantor has or may have
certain rights of subrogation or reimbursement against Borrower for claims
arising out of this Guaranty, those rights may be impaired or destroyed if Sand
Hill elects to proceed against any real property security of Borrower by
non-judicial foreclosure.
1
22
That impairment or destruction could, under certain judicial cases and based on
equitable principles of estoppel, give rise to a defense by Guarantor against
its obligations under this Guaranty. Guarantor waives that defense and any
others arising from Sand Hill's election to pursue non-judicial foreclosure.
Without limiting the generality of the foregoing, Guarantor waives any and all
benefits and defenses under California Code of Civil Procedure Sections 580a,
580b, 580d and 726, to the extent they are applicable.
6. If Borrower becomes insolvent or is adjudicated bankrupt or files a
petition for reorganization, arrangement, composition or similar relief under
any present or future provision of the United States Bankruptcy Code, or if such
a petition is filed against Borrower, and in any such proceeding some or all of
any indebtedness or obligations under the Agreements are terminated or rejected
or any obligation of Borrower is modified or abrogated, or if Borrower's
obligations are otherwise avoided for any reason, Guarantor agrees that
Guarantor's liability hereunder shall not thereby be affected or modified and
such liability shall continue in full force and effect as if no such action or
proceeding had occurred. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if any payment must be returned by Sand Hill
upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor, any
other guarantor, or otherwise, as though such payment had not been made.
7. Any indebtedness of Borrower now or hereafter held by Guarantor is
hereby subordinated to any indebtedness of Borrower to Sand Hill; and such
indebtedness of Borrower to Guarantor shall be collected, enforced and received
by Guarantor as trustee for Sand Hill and be paid over to Sand Hill on account
of the indebtedness of Borrower to Sand Hill but without reducing or affecting
in any manner the liability of Guarantor under the other provisions of this
Guaranty.
8. Guarantor agrees to pay a reasonable attorneys' fee and all
reasonable and out-of-pocket costs and expenses which may be incurred by Sand
Hill in the enforcement of this Guaranty. No terms or provisions of this
Guaranty may be changed, waived, revoked or amended without Lender's prior
written consent. Should any provision of this Guaranty be determined by a court
of competent jurisdiction to be unenforceable, all of the other provisions shall
remain effective. This Guaranty embodies the entire agreement among the parties
hereto with respect to the matters set forth herein, and supersedes all prior
agreements among the parties with respect to the matters set forth herein. No
course of prior dealing among the parties, no usage of trade, and no parol or
extrinsic evidence of any nature shall be used to supplement, modify or vary any
of the terms hereof. There are no conditions to the full effectiveness of this
Guaranty. Sand Hill may assign this Guaranty without in any way affecting
Guarantor's liability under it. This Guaranty shall inure to the benefit of Sand
Hill and its successors and assigns. This Guaranty is in addition to the
guaranties of any other guarantors and any and all other guaranties of
Borrower's indebtedness or liabilities to Sand Hill.
9. Guarantor represents and warrants to Sand Hill that (i) Guarantor
has taken all necessary and appropriate action to authorize the execution,
delivery and performance of this Guaranty, (ii) execution, delivery and
performance of this Guaranty do not conflict with or result in a breach of or
constitute a default under Guarantor's Articles of Incorporation or Bylaws or
other organizational documents or agreements to which it is party or by which it
is bound, and (iii) this Guaranty constitutes a valid and binding obligation,
enforceable against Guarantor in accordance with its terms.
10. Guarantor covenants and agrees that Guarantor shall do all of the
following:
10.1 Guarantor shall maintain its corporate existence, remain in
good standing in California, and continue to qualify in each jurisdiction in
which the failure to so qualify could have a material adverse effect on the
financial condition, operations or business of Guarantor. Guarantor shall
maintain in force all licenses, approvals and agreements, the loss of which
could have a material adverse effect on its financial condition, operations or
business.
10.2 Guarantor shall comply with all statutes, laws, ordinances,
directives, orders, and government rules and regulations to which it is subject
if non-compliance with such laws could adversely affect the financial condition,
operations or business of Guarantor.
2
23
10.3 At any time and from time to time Guarantor shall execute and
deliver such further instruments and take such further action as may reasonably
be requested by Sand Hill to effect the purposes of this Agreement.
11. JUDICIAL REFERENCE.
(a) Other than (i) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (ii) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Agreement, which controversy, dispute or claim is not settled
in writing within thirty (30) days after the "Claim Date" (defined as the date
on which a party subject to this Agreement gives written notice to all other
parties that a controversy, dispute or claim exists), will be settled by a
reference proceeding in California in accordance with the provisions of Section
638 et seq. of the California Code of Civil Procedure, or their successor
section ("CCP"), which shall constitute the exclusive remedy for the settlement
of any controversy, dispute or claim concerning this Agreement, including
whether such controversy, dispute or claim is subject to the reference
proceeding and except as set forth above, the parties waive their rights to
initiate any legal proceedings against each other in any court or jurisdiction
other than the Superior Court in the County where the Real Property, if any, is
located or Santa Xxxxx County if none (the "Court"). The referee shall be a
retired Judge of the Court selected by mutual agreement of the parties, and if
they cannot so agree within forty-five (45) days after the Claim Date, the
referee shall be promptly selected by the Presiding Judge of the Court (or his
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of the Court (or any subsequently enacted
Rule). Each party shall have one peremptory challenge pursuant to CCP Section
170.6. The referee shall (a) be requested to set the matter for hearing within
sixty (60) days after the date of selection of the referee and (b) try any and
all issues of law or fact and report a statement of decision upon them, if
possible, within ninety (90) days of the Claim Date. Any decision rendered by
the referee will be final, binding and conclusive and judgment shall be entered
pursuant to CCP Section 644 in any court in the State of California having
jurisdiction. Any party may apply for a reference proceeding at any time after
thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee. The
referee may extend such period in the event of a party's refusal to provide
requested discovery or unavailability of a witness due to absence or illness. No
party shall be entitled to "priority" in conducting discovery. Depositions may
be taken by either party upon seven (7) days written notice, and request for
production or inspection of documents which cannot be resolved by the parties
shall be submitted to the referee as provided herein. The Superior Court is
empowered to issue temporary and/or provisional remedies, as appropriate.
(b) Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter except that when
any party so requests, a court reporter will be used at any hearing conducted
before the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.
(c) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding which shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered
3
24
by the referee. The parties hereto expressly reserve the right to findings of
fact, conclusions of laws, a written statement of decision, and the right to
move for a new trial or a different judgment, which new trial, if granted, is
also to be a reference proceeding under this Section 13.
(d) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act, Section 1280 through Section 1294.2 of the
CCP as amended from time to time. The limitations with respect to discovery as
set forth hereinabove shall apply to any such arbitration proceeding.
12. This Guaranty shall be governed by the laws of the State of
California, without regard to conflicts of laws principles. GUARANTOR WAIVES ANY
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. Guarantor submits to the exclusive jurisdiction of the state
and federal courts located in Santa Xxxxx County, California.
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty
as of this 14th day of August, 1998.
Coopers & Associates, Inc.
By:
--------------------------------------
Title:
-----------------------------------
4
25
CORPORATE RESOLUTION TO GUARANTEE
================================================================================
GUARANTOR: COOPERS & ASSOCIATES, INC.
================================================================================
I, the undersigned Secretary or Assistant Secretary of Coopers &
Associates, Inc. (the "Corporation"), HEREBY CERTIFY that the Corporation is
organized and existing under and by virtue of the laws of the State of its
incorporation.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation
duly called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions
were adopted.
BE IT RESOLVED, that ANY ONE (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITIONS ACTUAL SIGNATURES
----- --------- -----------------
---------------------- ------------------- --------------------
---------------------- ------------------- --------------------
---------------------- ------------------- --------------------
---------------------- ------------------- --------------------
---------------------- ------------------- --------------------
acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
GUARANTEE INDEBTEDNESS. To guarantee amounts borrowed from time to time
from Sand Hill Capital, LLC ("Sand Hill"), by UOL Publishing, Inc. ("Borrower")
pursuant to that certain Loan Agreement between Sand Hill and Borrower dated as
of August 14, 1998, as amended from time to time (the "Loan Agreement").
EXECUTE GUARANTY. To execute and deliver to Sand Hill the guaranty of the
Corporation (the "Guaranty"), on Sand Hill's forms, and also to execute and
deliver to Sand Hill one or more renewals, extensions, modifications,
consolidations, or substitutions therefor.
GRANT SECURITY. To grant a security interest to Sand Hill in the
Collateral, described in the Security Agreement, which security interest shall
secure all of the Corporation's obligations under the Guaranty.
FURTHER ACTS. To do and perform such other acts and things, to pay any and
all fees and costs, and to execute and deliver such other documents and
agreements as they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Sand Hill
1
26
may rely on these Resolutions until written notice of their revocation shall
have been delivered to and received by Sand Hill. Any such notice shall not
affect any of the Corporation's agreements or commitments in effect at the time
notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on August __, 1998 and
attest that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X
-----------------------------
================================================================================
2
27
UNCONDITIONAL GUARANTY
(Corporate)
For and in consideration of the loan by SAND HILL CAPITAL, LLC ("Sand
Hill") to UOL PUBLISHING, INC., ("Borrower"), which loan is made pursuant to a
Loan Agreement of even date herewith between Borrower and Sand Hill (the
"Agreement"), the undersigned guarantor ("Guarantor") hereby unconditionally and
irrevocably guarantees the prompt and complete payment of all amounts that
Borrower owes to Sand Hill and performance by Borrower of the Agreement and any
other agreements between Borrower and Sand Hill, as amended from time to time
(collectively referred to as the "Agreements"), in strict accordance with their
respective terms.
1. If Borrower does not perform its obligations in strict accordance
with the Agreements, Guarantor shall immediately pay all amounts due thereunder
(including, without limitation, all principal, interest, and fees) and otherwise
to proceed to complete the same and satisfy all of Borrower's obligations under
the Agreements.
2. The obligations hereunder are independent of the obligations of
Borrower, and a separate action or actions may be brought and prosecuted against
Guarantor whether action is brought against Borrower or whether Borrower be
joined in any such action or actions. Guarantor waives the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof, to the extent permitted by law. Guarantor's liability under this
Guaranty is not conditioned or contingent upon the genuineness, validity,
regularity or enforceability of the Agreements.
3. Guarantor authorizes Sand Hill, without notice or demand and without
affecting its liability hereunder, from time to time to (a) renew, extend, or
otherwise change the terms of the Agreements or any part thereof; (b) take and
hold security for the payment of this Guaranty or the Agreements, and exchange,
enforce, waive and release any such security; and (c) apply such security and
direct the order or manner of sale thereof as Sand Hill in its sole discretion
may determine.
4. Guarantor waives any right to require Sand Hill to (a) proceed
against Borrower or any other person; (b) proceed against or exhaust any
security held from Borrower; or (c) pursue any other remedy in Sand Hill's power
whatsoever. Sand Hill may, at its election, exercise or decline or fail to
exercise any right or remedy it may have against Borrower or any security held
by Sand Hill, including without limitation the right to foreclose upon any such
security by judicial or nonjudicial sale, without affecting or impairing in any
way the liability of Guarantor hereunder. Guarantor waives any defense arising
by reason of any disability or other defense of Borrower or by reason of the
cessation from any cause whatsoever of the liability of Borrower. Guarantor
waives any setoff, defense or counterclaim that Borrower may have against Sand
Hill. Guarantor waives any defense arising out of the absence, impairment or
loss of any right of reimbursement or subrogation or any other rights against
Borrower. Until all of the amounts that Borrower owes to Sand Hill have been
paid in full, Guarantor shall have no right of subrogation or reimbursement for
claims arising out of or in connection with this Guaranty, contribution or other
rights against Borrower, and Guarantor waives any right to enforce any remedy
that Sand Hill now has or may hereafter have against Borrower. Guarantor waives
all rights to participate in any security now or hereafter held by Sand Hill.
Guarantor waives all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this Guaranty and of the existence, creation, or incurring of
new or additional indebtedness. Guarantor assumes the responsibility for being
and keeping itself informed of the financial condition of Borrower and of all
other circumstances bearing upon the risk of nonpayment of any indebtedness or
nonperformance of any obligation of Borrower, warrants to Sand Hill that it will
keep so informed, and agrees that absent a request for particular information by
Guarantor, Sand Hill shall have no duty to advise Guarantor of information known
to Sand Hill regarding such condition or any such circumstances. Guarantor
waives the benefits of California Civil Code sections 2809, 2810, 2819, 2845,
2847, 2848, 2849, 2850, 2899 and 3433.
5. Guarantor acknowledges that, to the extent Guarantor has or may have
certain rights of subrogation or reimbursement against Borrower for claims
arising out of this Guaranty, those rights may be impaired or destroyed if Sand
Hill elects to proceed against any real property security of Borrower by
non-judicial foreclosure.
1
28
That impairment or destruction could, under certain judicial cases and based on
equitable principles of estoppel, give rise to a defense by Guarantor against
its obligations under this Guaranty. Guarantor waives that defense and any
others arising from Sand Hill's election to pursue non-judicial foreclosure.
Without limiting the generality of the foregoing, Guarantor waives any and all
benefits and defenses under California Code of Civil Procedure Sections 580a,
580b, 580d and 726, to the extent they are applicable.
6. If Borrower becomes insolvent or is adjudicated bankrupt or files a
petition for reorganization, arrangement, composition or similar relief under
any present or future provision of the United States Bankruptcy Code, or if such
a petition is filed against Borrower, and in any such proceeding some or all of
any indebtedness or obligations under the Agreements are terminated or rejected
or any obligation of Borrower is modified or abrogated, or if Borrower's
obligations are otherwise avoided for any reason, Guarantor agrees that
Guarantor's liability hereunder shall not thereby be affected or modified and
such liability shall continue in full force and effect as if no such action or
proceeding had occurred. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if any payment must be returned by Sand Hill
upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor, any
other guarantor, or otherwise, as though such payment had not been made.
7. Any indebtedness of Borrower now or hereafter held by Guarantor is
hereby subordinated to any indebtedness of Borrower to Sand Hill; and such
indebtedness of Borrower to Guarantor shall be collected, enforced and received
by Guarantor as trustee for Sand Hill and be paid over to Sand Hill on account
of the indebtedness of Borrower to Sand Hill but without reducing or affecting
in any manner the liability of Guarantor under the other provisions of this
Guaranty.
8. Guarantor agrees to pay a reasonable attorneys' fee and all
reasonable and out-of-pocket costs and expenses which may be incurred by Sand
Hill in the enforcement of this Guaranty. No terms or provisions of this
Guaranty may be changed, waived, revoked or amended without Lender's prior
written consent. Should any provision of this Guaranty be determined by a court
of competent jurisdiction to be unenforceable, all of the other provisions shall
remain effective. This Guaranty embodies the entire agreement among the parties
hereto with respect to the matters set forth herein, and supersedes all prior
agreements among the parties with respect to the matters set forth herein. No
course of prior dealing among the parties, no usage of trade, and no parol or
extrinsic evidence of any nature shall be used to supplement, modify or vary any
of the terms hereof. There are no conditions to the full effectiveness of this
Guaranty. Sand Hill may assign this Guaranty without in any way affecting
Guarantor's liability under it. This Guaranty shall inure to the benefit of Sand
Hill and its successors and assigns. This Guaranty is in addition to the
guaranties of any other guarantors and any and all other guaranties of
Borrower's indebtedness or liabilities to Sand Hill.
9. Guarantor represents and warrants to Sand Hill that (i) Guarantor
has taken all necessary and appropriate action to authorize the execution,
delivery and performance of this Guaranty, (ii) execution, delivery and
performance of this Guaranty do not conflict with or result in a breach of or
constitute a default under Guarantor's Articles of Incorporation or Bylaws or
other organizational documents or agreements to which it is party or by which it
is bound, and (iii) this Guaranty constitutes a valid and binding obligation,
enforceable against Guarantor in accordance with its terms.
10. Guarantor covenants and agrees that Guarantor shall do all of the
following:
10.1 Guarantor shall maintain its corporate existence, remain in
good standing in California, and continue to qualify in each jurisdiction in
which the failure to so qualify could have a material adverse effect on the
financial condition, operations or business of Guarantor. Guarantor shall
maintain in force all licenses, approvals and agreements, the loss of which
could have a material adverse effect on its financial condition, operations or
business.
10.2 Guarantor shall comply with all statutes, laws, ordinances,
directives, orders, and government rules and regulations to which it is subject
if non-compliance with such laws could adversely affect the financial condition,
operations or business of Guarantor.
2
29
10.3 At any time and from time to time Guarantor shall execute and
deliver such further instruments and take such further action as may reasonably
be requested by Sand Hill to effect the purposes of this Agreement.
11. JUDICIAL REFERENCE.
(a) Other than (i) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (ii) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Agreement, which controversy, dispute or claim is not settled
in writing within thirty (30) days after the "Claim Date" (defined as the date
on which a party subject to this Agreement gives written notice to all other
parties that a controversy, dispute or claim exists), will be settled by a
reference proceeding in California in accordance with the provisions of Section
638 et seq. of the California Code of Civil Procedure, or their successor
section ("CCP"), which shall constitute the exclusive remedy for the settlement
of any controversy, dispute or claim concerning this Agreement, including
whether such controversy, dispute or claim is subject to the reference
proceeding and except as set forth above, the parties waive their rights to
initiate any legal proceedings against each other in any court or jurisdiction
other than the Superior Court in the County where the Real Property, if any, is
located or Santa Xxxxx County if none (the "Court"). The referee shall be a
retired Judge of the Court selected by mutual agreement of the parties, and if
they cannot so agree within forty-five (45) days after the Claim Date, the
referee shall be promptly selected by the Presiding Judge of the Court (or his
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of the Court (or any subsequently enacted
Rule). Each party shall have one peremptory challenge pursuant to CCP Section
170.6. The referee shall (a) be requested to set the matter for hearing within
sixty (60) days after the date of selection of the referee and (b) try any and
all issues of law or fact and report a statement of decision upon them, if
possible, within ninety (90) days of the Claim Date. Any decision rendered by
the referee will be final, binding and conclusive and judgment shall be entered
pursuant to CCP Section 644 in any court in the State of California having
jurisdiction. Any party may apply for a reference proceeding at any time after
thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee. The
referee may extend such period in the event of a party's refusal to provide
requested discovery or unavailability of a witness due to absence or illness. No
party shall be entitled to "priority" in conducting discovery. Depositions may
be taken by either party upon seven (7) days written notice, and request for
production or inspection of documents which cannot be resolved by the parties
shall be submitted to the referee as provided herein. The Superior Court is
empowered to issue temporary and/or provisional remedies, as appropriate.
(b) Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter except that when
any party so requests, a court reporter will be used at any hearing conducted
before the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.
(c) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding which shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered
3
30
by the referee. The parties hereto expressly reserve the right to findings of
fact, conclusions of laws, a written statement of decision, and the right to
move for a new trial or a different judgment, which new trial, if granted, is
also to be a reference proceeding under this Section 13.
(d) In the event that the enabling legislation which provides for
appointment of a referee is repealed (and no successor statute is enacted), any
dispute between the parties that would otherwise be determined by the reference
procedure herein described will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge of the Court, in accordance
with the California Arbitration Act, Section 1280 through Section 1294.2 of the
CCP as amended from time to time. The limitations with respect to discovery as
set forth hereinabove shall apply to any such arbitration proceeding.
12. This Guaranty shall be governed by the laws of the State of
California, without regard to conflicts of laws principles. GUARANTOR WAIVES ANY
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. Guarantor submits to the exclusive jurisdiction of the state
and federal courts located in Santa Xxxxx County, California.
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty
as of this 14th day of August, 1998.
HTR, Inc.
By:
------------------------------------
Title:
----------------------------------
4
31
CORPORATE RESOLUTION TO GUARANTEE
================================================================================
GUARANTOR: HTR, INC.
================================================================================
I, the undersigned Secretary or Assistant Secretary of HTR, Inc. (the
"Corporation"), HEREBY CERTIFY that the Corporation is organized and existing
under and by virtue of the laws of the State of its incorporation.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation
duly called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions
were adopted.
BE IT RESOLVED, that ANY ONE (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:
NAMES POSITIONS ACTUAL SIGNATURES
----- --------- -----------------
---------------------- ---------------------- -------------------
---------------------- ---------------------- -------------------
---------------------- ---------------------- -------------------
---------------------- ---------------------- -------------------
---------------------- ---------------------- -------------------
acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:
GUARANTEE INDEBTEDNESS. To guarantee amounts borrowed from time to time
from Sand Hill Capital, LLC ("Sand Hill"), by UOL Publishing, Inc. ("Borrower")
pursuant to that certain Loan Agreement between Sand Hill and Borrower dated as
of August 14, 1998, as amended from time to time (the "Loan Agreement").
EXECUTE GUARANTY. To execute and deliver to Sand Hill the guaranty of the
Corporation (the "Guaranty"), on Sand Hill's forms, and also to execute and
deliver to Sand Hill one or more renewals, extensions, modifications,
consolidations, or substitutions therefor.
GRANT SECURITY. To grant a security interest to Sand Hill in the
Collateral, described in the Security Agreement, which security interest shall
secure all of the Corporation's obligations under the Guaranty.
FURTHER ACTS. To do and perform such other acts and things, to pay any and
all fees and costs, and to execute and deliver such other documents and
agreements as they may in their discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Sand Hill
1
32
may rely on these Resolutions until written notice of their revocation shall
have been delivered to and received by Sand Hill. Any such notice shall not
affect any of the Corporation's agreements or commitments in effect at the time
notice is given.
I FURTHER CERTIFY that the officers, employees, and agents named above are
duly elected, appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set opposite their respective names; that the
foregoing Resolutions now stand of record on the books of the Corporation; and
that the Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand on August __, 1998 and
attest that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X
---------------------------------
================================================================================
2
33
INTELLECTUAL PROPERTY SECURITY AGREEMENT
(Coopers & Associates, Inc.)
This Intellectual Property Security Agreement is entered into as of
August 14, 1998 by and between SAND HILL CAPITAL, LLC ("Sand Hill") and
Coopers & Associates, Inc. ("Grantor").
RECITALS
Sand Hill and UOL Publishing, Inc. are parties to that certain loan
agreement of even date (as amended from time to time, the "Loan Agreement").
Capitalized terms used herein have the meaning assigned in the Grantor
Documents. Pursuant to the terms of that certain Unconditional Guaranty and that
certain Security Agreement, each of even date herewith (the "Grantor
Documents"), Grantor has granted to Sand Hill a security interest in all of
Grantor's right, title and interest, whether presently existing or hereafter
acquired, in, to and under the Collateral.
NOW, THEREFORE, Grantor agrees as follows:
AGREEMENT
To secure performance of its obligations under the Grantor Documents,
Grantor grants to Sand Hill a security interest in all of Grantor's right, title
and interest in Grantor's intellectual property (including without limitation
those Copyrights, Patents and Trademarks listed on Schedules A, B and C hereto),
including without limitation all proceeds thereof (such as, by way of example
but not by way of limitation, license royalties and proceeds of infringement
suits). The security interest granted hereby shall terminate immediately and
automatically upon satisfaction of the Obligations, as defined in the Loan
Agreement.
Grantor shall register or cause to be registered on an expedited basis (to
the extent not already registered) with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, those intellectual
property rights listed on Schedules A, B and C hereto within thirty (30) days of
the date of this Agreement. Grantor shall register or cause to be registered on
an expedited basis with the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, those additional intellectual
property rights developed or acquired by Grantor from time to time in connection
with any product prior to the sale or licensing of such product to any third
party (including without limitation revisions or additions to the intellectual
property rights listed on such Schedules A, B and C). Grantor shall from time to
time, execute and file such other instruments, and take such further actions as
Sand Hill may reasonably request from time to time to perfect or continue the
perfection of Sand Hill's interest in the intellectual property.
This security interest is granted in conjunction with the security
interest granted to Sand Hill under the Grantor Documents. Each right, power and
remedy of Sand Hill provided for herein shall not preclude the simultaneous or
later exercise by Sand Hill of any or all other rights, powers or remedies.
34
IN WITNESS WHEREOF, the parties have caused this Intellectual Property
Security Agreement to be duly executed as of the first date written above.
Address of Grantor: Coopers & Associates, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000 By:
XxXxxx, XX 00000 -----------------------------------
Title:
--------------------------------
Attn: Xxxxxx X'Xxxxxx Xxxxxxx
Address of Sand Hill: SAND HILL CAPITAL, LLC
0000 Xxxx Xxxx Xxxx By:
Xxxxxxxx 0, Xxxxx 000 -----------------------------------
Menlo Xxxx, XX 00000
Attn: Xxxxxx Xxxxx Title:
--------------------------------
35
EXHIBIT A
Copyrights
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- -------------
36
EXHIBIT B
Patents
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- -------------
37
EXHIBIT C
Trademarks
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- -------------
38
INTELLECTUAL PROPERTY SECURITY AGREEMENT
(HTR, Inc.)
This Intellectual Property Security Agreement is entered into as of
August 14, 1998 by and between SAND HILL CAPITAL, LLC ("Sand Hill") and
HTR, Inc. ("Grantor").
RECITALS
Sand Hill and UOL Publishing, Inc. are parties to that certain loan
agreement of even date (as amended from time to time, the "Loan Agreement").
Capitalized terms used herein have the meaning assigned in the Grantor
Documents. Pursuant to the terms of that certain Unconditional Guaranty and that
certain Security Agreement, each of even date herewith (the "Grantor
Documents"), Grantor has granted to Sand Hill a security interest in all of
Grantor's right, title and interest, whether presently existing or hereafter
acquired, in, to and under the Collateral.
NOW, THEREFORE, Grantor agrees as follows:
AGREEMENT
To secure performance of its obligations under the Grantor Documents,
Grantor grants to Sand Hill a security interest in all of Grantor's right, title
and interest in Grantor's intellectual property (including without limitation
those Copyrights, Patents and Trademarks listed on Schedules A, B and C hereto),
including without limitation all proceeds thereof (such as, by way of example
but not by way of limitation, license royalties and proceeds of infringement
suits). The security interest granted hereby shall terminate immediately and
automatically upon satisfaction of the Obligations, as defined in the Loan
Agreement.
Grantor shall register or cause to be registered on an expedited basis (to
the extent not already registered) with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, those intellectual
property rights listed on Schedules A, B and C hereto within thirty (30) days of
the date of this Agreement. Grantor shall register or cause to be registered on
an expedited basis with the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, those additional intellectual
property rights developed or acquired by Grantor from time to time in connection
with any product prior to the sale or licensing of such product to any third
party (including without limitation revisions or additions to the intellectual
property rights listed on such Schedules A, B and C). Grantor shall from time to
time, execute and file such other instruments, and take such further actions as
Sand Hill may reasonably request from time to time to perfect or continue the
perfection of Sand Hill's interest in the intellectual property.
This security interest is granted in conjunction with the security
interest granted to Sand Hill under the Grantor Documents. Each right, power and
remedy of Sand Hill provided for herein shall not preclude the simultaneous or
later exercise by Sand Hill of any or all other rights, powers or remedies.
39
IN WITNESS WHEREOF, the parties have caused this Intellectual Property
Security Agreement to be duly executed as of the first date written above.
Address of Grantor: HTR, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000 By:
XxXxxx, XX 00000 ------------------------------------
Title:
--------------------------------
Attn: Xxxxxx X'Xxxxxx Xxxxxxx
Address of Sand Hill: SAND HILL CAPITAL, LLC
0000 Xxxx Xxxx Xxxx By:
Xxxxxxxx 0, Xxxxx 000 -----------------------------------
Menlo Xxxx, XX 00000
Attn: Xxxxxx Xxxxx Title:
--------------------------------
40
EXHIBIT A
Copyrights
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- ---------------
41
EXHIBIT B
Patents
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- ---------------
42
EXHIBIT C
Trademarks
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- ---------------
43
INTELLECTUAL PROPERTY SECURITY AGREEMENT
(Ivy Software, Inc.)
This Intellectual Property Security Agreement is entered into as of
August 14, 1998 by and between Sand Hill Capital, LLC ("Sand Hill") and Ivy
Software, Inc. ("Grantor").
RECITALS
Sand Hill and UOL Publishing, Inc. are parties to that certain loan
agreement of even date (as amended from time to time, the "Loan Agreement").
Capitalized terms used herein have the meaning assigned in the Grantor
Documents. Pursuant to the terms of that certain Unconditional Guaranty and that
certain Security Agreement, each of even date herewith (the "Grantor
Documents"), Grantor has granted to Sand Hill a security interest in all of
Grantor's right, title and interest, whether presently existing or hereafter
acquired, in, to and under the Collateral.
NOW, THEREFORE, Grantor agrees as follows:
AGREEMENT
To secure performance of its obligations under the Grantor Documents,
Grantor grants to Sand Hill a security interest in all of Grantor's right, title
and interest in Grantor's intellectual property (including without limitation
those Copyrights, Patents and Trademarks listed on Schedules A, B and C hereto),
including without limitation all proceeds thereof (such as, by way of example
but not by way of limitation, license royalties and proceeds of infringement
suits). The security interest granted hereby shall terminate immediately and
automatically upon satisfaction of the Obligations, as defined in the Loan
Agreement.
Grantor shall register or cause to be registered on an expedited basis (to
the extent not already registered) with the United States Patent and Trademark
Office or the United States Copyright Office, as applicable, those intellectual
property rights listed on Schedules A, B and C hereto within thirty (30) days of
the date of this Agreement. Grantor shall register or cause to be registered on
an expedited basis with the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, those additional intellectual
property rights developed or acquired by Grantor from time to time in connection
with any product prior to the sale or licensing of such product to any third
party (including without limitation revisions or additions to the intellectual
property rights listed on such Schedules A, B and C). Grantor shall from time to
time, execute and file such other instruments, and take such further actions as
Sand Hill may reasonably request from time to time to perfect or continue the
perfection of Sand Hill's interest in the intellectual property.
This security interest is granted in conjunction with the security
interest granted to Sand Hill under the Grantor Documents. Each right, power and
remedy of Sand Hill provided for herein shall not preclude the simultaneous or
later exercise by Sand Hill of any or all other rights, powers or remedies.
44
IN WITNESS WHEREOF, the parties have caused this Intellectual Property
Security Agreement to be duly executed as of the first date written above.
Address of Grantor: Ivy Software, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000 By:
XxXxxx, XX 00000 ---------------------------------
Title:
------------------------------
Attn: Xxxxxx X'Xxxxxx Xxxxxxx
Address of Sand Hill: SAND HILL CAPITAL, LLC
0000 Xxxx Xxxx Xxxx By:
Xxxxxxxx 0, Xxxxx 000 ---------------------------------
Menlo Xxxx, XX 00000
Attn: Xxxxxx Xxxxx Title:
------------------------------
45
EXHIBIT A
Copyrights
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- ---------------
46
EXHIBIT B
Patents
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- ---------------
47
EXHIBIT C
Trademarks
Registration/ Registration/
Application Application
Description Number Date
----------- -------------- ---------------
48
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement is entered into as of
August 14, 1998 by and between SAND HILL CAPITAL, LLC ("Sand Hill") and UOL
PUBLISHING, INC.. ("Borrower").
RECITALS
Sand Hill and Borrower are parties to that certain loan agreement of even
date (as amended from time to time, the "Loan Agreement"). Capitalized terms
used herein have the meaning assigned in the Loan Agreement. Pursuant to the
terms of the Loan Agreement, Borrower has granted to Sand Hill a security
interest in all of Borrower's right, title and interest, whether presently
existing or hereafter acquired, in, to and under the Collateral.
NOW, THEREFORE, Borrower agrees as follows:
AGREEMENT
To secure performance of its obligations under the Loan Agreement,
Borrower grants to Sand Hill a security interest in all of Borrower's right,
title and interest in Borrower's intellectual property (including without
limitation those Copyrights, Patents and Trademarks listed on Schedules A, B and
C hereto), including without limitation all proceeds thereof (such as, by way of
example but not by way of limitation, license royalties and proceeds of
infringement suits).
Grantor shall register or cause to be registered (to the extent not
already registered) with the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, those intellectual property
rights listed on Schedules A, B and C hereto within thirty (30) days of the date
of this Agreement. Grantor shall register or cause to be registered with the
United States Patent and Trademark Office or the United States Copyright Office,
as applicable, those additional intellectual property rights developed or
acquired by Grantor from time to time in connection with any product prior to
the sale or licensing of such product to any third party (including without
limitation revisions or additions to the intellectual property rights listed on
such Schedules A, B and C). Grantor shall from time to time, execute and file
such other instruments, and take such further actions as Sand Hill may
reasonably request from time to time to perfect or continue the perfection of
Sand Hill's interest in the intellectual property.
This security interest is granted in conjunction with the security
interest granted to Sand Hill under the Loan Agreement. Each right, power and
remedy of Sand Hill provided for herein shall not preclude the simultaneous or
later exercise by Sand Hill of any or all other rights, powers or remedies.
49
IN WITNESS WHEREOF, the parties have caused this Intellectual Property
Security Agreement to be duly executed as of the first date written above.
Address of Borrower: UOL PUBLISHING, INC.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000 By:
XxXxxx, XX 00000 -----------------------------------
Title:
--------------------------------
Attn: Xxxxxx X'Xxxxxx Xxxxxxx
Address of Sand Hill: SAND HILL CAPITAL, LLC
0000 Xxxx Xxxx Xxxx By:
Xxxxxxxx 0, Xxxxx 000 -----------------------------------
Menlo Xxxx, XX 00000
Attn: Xxxxxx Xxxxx Title:
--------------------------------
50
EXHIBIT A
Copyrights
Registration/ Registration/
Application Application
Description Number Date
----------- --------------- ----------------
51
EXHIBIT B
Patents
Registration/ Registration/
Application Application
Description Number Date
----------- --------------- ----------------
52
x
EXHIBIT C
Trademarks
Registration/ Registration/
Application Application
Description Number Date
----------- --------------- ----------------
53
SECURITY AGREEMENT
(HTR, Inc.)
This Security Agreement is made and entered into as of August 14,
1998 by and between the undersigned ("Debtor"), and Sand Hill Capital, LLC
("Sand Hill").
RECITALS
WHEREAS, Sand Hill proposes to enter into a transaction with UOL
Publishing, Inc. ("Borrower"), which is an affiliate of Debtor, pursuant to a
Loan Agreement ('the "Loan Agreement") of even date herewith.
WHEREAS, Debtor has requested Sand Hill to enter into the Loan
Agreement, and expects to derive economic benefit from Sand Hill's doing so and
dealing with Borrower in accordance with the Loan Agreement.
WHEREAS Debtor wishes to guarantee performance and payment of all
obligations under the Loan Agreement, and to secure that guarantee with
substantially all of its assets, subject in all cases to the terms of the
Subordination Agreement between Sand Hill and Imperial Bank.
NOW, THEREFORE, Debtor and Sand Hill agree as follows:
1. Grant of Security Interest. Debtor hereby grants to Sand Hill a
security interest in the Collateral (as defined in Section 2 below) to secure
Debtor's performance of the obligations set forth in Section 3 below.
2. Collateral. The collateral covered by this Security Agreement
(the "Collateral") shall consist of the property described in Exhibit A attached
hereto.
3. Debtor's Obligations Secured Hereby. This Security Agreement
secures all of Debtor's obligations under that certain Unconditional Guaranty of
even date herewith, as such Guaranty is amended from time to time ("Obligations
of Debtor").
4. Debtor's Representations and Warranties. Debtor represents and
warrants as follows:
(a) Authorization. Debtor has authority and has obtained all
approvals and consents necessary to enter into this Security Agreement, and
Debtor's execution, delivery and performance of this Security Agreement will not
violate or conflict with the terms of Debtor's Articles of Incorporation or
Bylaws or any statute, regulation, ordinance, rule of law, agreement, contract,
mortgage, indenture, xxxx, xxxx, Loan Agreement, or other instrument or writing
binding upon Debtor or to which Debtor is subject.
(b) Title. All Collateral currently in Debtor's possession or
under Debtor's control is owned by and is as represented by Debtor and is free
of all liens, encumbrances and other security interests, other than security
interests or lessors' interests that are described on the attached schedule,
including the security interest of Imperial Bank (the "Prior Security
Interests").
(c) Accounts. Each of Debtor's Accounts is genuine, as appearing
on its face, enforceable in accordance with its terms (subject to reserves that
occur in the ordinary course of business and that are accounted for in
accordance with generally accepted accounting principles), free of set-off,
counterclaim and defenses, and represents indebtedness, obligations, interests
or property justly owing to and owned by Debtor in the amount or as therein
provided.
5. Debtor's Covenants. Debtor agrees and covenants as follows:
(a) Further Encumbrances. Except as may be required by the terms
and conditions of the Prior Security Interests, and except for subordinated
financing of Debtor by Sand Hills or other financial institutions or purchase
money secured financing, until the Obligations of Debtor secured under this
Security Agreement shall
1
54
have been repaid in full, Debtor shall not grant a security interest in any of
the Collateral other than to Sand Hill or execute any financing statements
covering any of the Collateral in favor of any person other than Sand Hill.
(b) Use of Collateral. The Collateral will not be used for any
unlawful purpose or in any way that will void any insurance required to be
carried in connection therewith. Debtor will keep the Collateral free and clear
of liens and adverse claims other than the Prior Security Interests and, as
appropriate and applicable, will keep it in good condition and repair, and will
clean, shelter, and otherwise care for the Collateral in all such ways as are
considered good practice by owners of like property.
(c) Insurance of Collateral. The Collateral will be insured at
Debtor's expense against all risks commonly insured by owners of like property.
Debtor agrees to pay when due all premiums for such insurance and all taxes,
license fees and other charges in connection with the Collateral. If Sand Hill
shall take possession of the Collateral, Sand Hill may, subject to the Prior
Security Interests, surrender the policies and receive and retain the unearned
premiums thereon.
(d) Indemnification. Debtor shall indemnify Sand Hill against all
losses, claims, demands and liabilities of any kind caused by the Collateral.
(e) Perfection of Security Interest. Debtor shall execute and
deliver such documents as Sand Hill reasonably deems necessary to create,
perfect and continue the security interest in the Collateral contemplated
hereby.
(f) Collection of Accounts. Until Sand Hill shall elect to do so
in accordance with this Security Agreement, Debtor shall diligently collect all
of its Accounts and proceeds of the Collateral and shall hold such Accounts and
proceeds subject to a security interest of Sand Hill to secure the obligations
secured hereby, provided, however, that Debtor may use such proceeds in the
ordinary course of business.
(g) Records. Debtor shall prepare and keep, in accordance with
generally accepted accounting principles consistently applied, complete and
accurate records regarding all Collateral and, if and when requested by Sand
Hill, shall prepare and deliver a complete and accurate schedule of all the
Collateral in such detail as Sand Hill may reasonably request.
(h) Assignments. If and when requested by Sand Hill, and to the
extent consistent with the Prior Security Interests, Debtor shall upon any Event
of Default (as defined in the Loan Agreement) prepare and deliver to Sand Hill
written assignment of all Accounts, instruments, documents and other evidence
thereof.
(i) Inspection of Debtor's Books. Debtor shall permit Sand Hill
or its designee at reasonable times and from time to time to inspect Debtor's
books, records and properties and to audit and to make copies of extracts from
such books and records.
(j) Fees and Costs. Upon any Event of Default (as defined in
Section 6 below), Debtor shall pay all expenses, including reasonable attorneys'
fees, incurred by Sand Hill in the preservation, realization, enforcement or
exercise of any Sand Hill's rights under this Security Agreement.
(k) Out-of-Pocket Expenses of Sand Hill. Debtor will reimburse
Sand Hill for any out-of-pocket costs and expenses incurred by it in connection
with filings, recordations or registrations made for the purpose of perfecting
the security interest in the Collateral hereunder.
6. Events of Default. The occurrence of any Event of Default under
the Loan Agreement , the failure of Guarantor to perform any obligation under
the Guaranty or this Security Agreement, shall constitute an "Event of Default"
under this Security Agreement.
2
55
7. Remedies on Default. Upon the occurrence of an Event of Default,
Sand Hill shall have all rights, privileges, powers and remedies provided by
law, including, but not limited to, exercise of any or all of the following
remedies.
(a) Payment Under the Guaranty. Sand Hill may declare all amounts
outstanding under the Loan Agreement and the Guaranty to be immediately due and
payable, and thereupon all such amounts shall be and become immediately due and
payable to Sand Hill.
(b) Possession of Collateral. Sand Hill may take possession of
all Collateral covered hereby (which Collateral Debtor will assemble and make
available to Sand Hill).
(c) Use, Operation and Sale of Collateral by Sand Hill. Sand Hill
may use, operate, consume and sell the Collateral in its possession as
appropriate for the purpose of performing Debtor's obligations with respect
thereto to the extent necessary to satisfy the Obligations of Debtor.
8. Payments after an Event of Default. All payments received and
amounts realized by Sand Hill pursuant to Section 7, including all such payments
and amounts received after Sand Hill has declared the entire unpaid principal
and interest amount under the Guaranty to be due and payable pursuant to Section
7(a), as well as all payments or amounts then held or thereafter received by
Sand Hill as part of the Collateral while an Event of Default shall be
continuing, shall be promptly applied and distributed by Sand Hill in the
following order of priority:
(a) first, to the payment of all costs and expenses, including
reasonable legal expenses and attorneys fees, incurred or made hereunder by Sand
Hill, including any such costs and expenses of foreclosure or suit, if any, and
of any sale or the exercise of any other remedy under this Section 8, and of all
taxes, assessments or liens superior to the lien granted under this Security
Agreement;
(b) second, to the payment to Sand Hill of the amount then owing
on the Loan Agreement and in case the payments received and amounts realized by
Sand Hill shall be insufficient to pay in full the whole amount so owing, then
first to the payment of unpaid interest on the Loan Agreement and second to the
payment of unpaid principal thereof; and
(c) third, to the payment of the balance, if any, to the Debtor
or its successors and assigns.
9. Power of Attorney. Debtor hereby appoints Sand Hill, its
attorney-in-fact to prepare, sign and file or record, for Debtor in Debtor's
name, any financing statements, applications for registration and like papers
and to take any other action deemed by Sand Hill necessary or desirable in order
to perfect the security interest of Sand Hill hereunder, and to perform any
obligations of Debtor hereunder, at Debtor's expense, but without obligation to
do so.
10. Remedies Cumulative. The rights, privileges, powers and remedies
afforded to Sand Hill hereunder shall be cumulative, and no single or partial
exercise of any of them shall preclude the further or other exercise of the same
or any of them.
11. Successors and Assigns. This Security Agreement, together with
the covenants and warranties contained herein, shall inure to the benefit of
Sand Hill and its successors and assigns, and shall be binding upon Debtor and
it successors and assigns.
12. Presentment, etc. Debtor hereby waives presentment, protest,
notice of protest, notice of dishonor and notice of nonpayment with respect to
any proceeds to which Sand Hill is entitled hereunder any rights to direct the
application of payments for security for indebtedness of Debtor hereunder, or
indebtedness of customers of Debtor, and hereby waives any right to require
proceedings against others or to require exhaustion of security.
13. Notices. Any notice required or permitted to be given to a party
pursuant to the provisions of this Security Agreement will be in writing and
will be effective and deemed given under this Security Agreement on the earliest
of: (a) the date of personal delivery; (b) the date of delivery by facsimile; or
(c) the business day after deposit
3
56
with a nationally-recognized courier or overnight service, including Federal
Express or Express Mail, for United States deliveries or three (3) business days
after such deposit for deliveries outside of the United States. All notices not
delivered personally or by facsimile will be sent with postage and other charges
prepaid and properly addressed to the party to be notified at the address set
forth in the Loan Agreement, or at such other address as such party may
designate by ten (10) days' advance written notice to the other parties hereto.
All notices or delivery outside the United States will be sent by facsimile, or
by nationally recognized courier or overnight service, including Express Mail.
Any notice given hereunder to more than one person will be deemed to have been
given, for purposes of counting time periods hereunder, on the date given to the
last party required to be given such notice.
14. Governing Law; Consent to Jurisdiction;JURY WAIVER. This
Security Agreement shall be governed and construed under the laws of the State
of California as applied among California residents, made and to be performed
entirely within the State of California, without regard to conflicts of laws
principles. DEBTOR AND SAND HILL EACH WAIVES ANY RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SECURITY AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
15. Enforcement; Counterparts. If any portion of this Security
Agreement is determined to be invalid or unenforceable, the remainder shall be
valid and enforceable to the maximum extent possible with the same effect as if
the invalid or unenforceable portion were omitted from this Security Agreement.
This Security Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one
instrument.
16. JUDICIAL REFERENCE.
(a) Other than (i) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (ii) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Agreement, which controversy, dispute or claim is not settled
in writing within thirty (30) days after the "Claim Date" (defined as the date
on which a party subject to this Agreement gives written notice to all other
parties that a controversy, dispute or claim exists), will be settled by a
reference proceeding in California in accordance with the provisions of Section
638 et seq. of the California Code of Civil Procedure, or their successor
section ("CCP"), which shall constitute the exclusive remedy for the settlement
of any controversy, dispute or claim concerning this Agreement, including
whether such controversy, dispute or claim is subject to the reference
proceeding and except as set forth above, the parties waive their rights to
initiate any legal proceedings against each other in any court or jurisdiction
other than the Superior Court in the County where the Real Property, if any, is
located or Santa Xxxxx County if none (the "Court"). The referee shall be a
retired Judge of the Court selected by mutual agreement of the parties, and if
they cannot so agree within forty-five (45) days after the Claim Date, the
referee shall be promptly selected by the Presiding Judge of the Court (or his
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of the Court (or any subsequently enacted
Rule). Each party shall have one peremptory challenge pursuant to CCP Section
170.6. The referee shall (a) be requested to set the matter for hearing within
sixty (60) days after the date of selection of the referee and (b) try any and
all issues of law or fact and report a statement of decision upon them, if
possible, within ninety (90) days of the Claim Date. Any decision rendered by
the referee will be final, binding and conclusive and judgment shall be entered
pursuant to CCP Section 644 in any court in the State of California having
jurisdiction. Any party may apply for a reference proceeding at any time after
thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee. The
referee may extend such period in the event of a party's refusal to provide
requested discovery or unavailability of a witness due to absence or illness. No
party shall be entitled to "priority" in conducting discovery. Depositions may
be taken by either party upon seven (7) days written notice, and request for
production or inspection of documents which cannot be resolved by the parties
shall be submitted to the referee as provided herein. The Superior Court is
empowered to issue temporary and/or provisional remedies, as appropriate.
4
57
(b) Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter except that when
any party so requests, a court reporter will be used at any hearing conducted
before the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.
(c) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding which shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this Section 13.
(d) In the event that the enabling legislation which provides
for appointment of a referee is repealed (and no successor statute is enacted),
any dispute between the parties that would otherwise be determined by the
reference procedure herein described will be resolved and determined by
arbitration. The arbitration will be conducted by a retired judge of the Court,
in accordance with the California Arbitration Act, Section 1280 through Section
1294.2 of the CCP as amended from time to time. The limitations with respect to
discovery as set forth hereinabove shall apply to any such arbitration
proceeding.
IN WITNESS WHEREOF, the parties have executed this Security
Agreement on the date set forth above.
HTR, INC. SAND HILL CAPITAL, LLC
By: By:
------------------------------------ ------------------------------------
Name: Name:
---------------------------------- ----------------------------------
Title: Title:
--------------------------------- ---------------------------------
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EXHIBIT A
COLLATERAL DESCRIPTION ATTACHMENT
TO SECURITY AGREEMENT
All personal property of Debtor whether presently existing or
hereafter created, written, produced or acquired, including, but not limited to:
(a) all accounts receivable, accounts, chattel paper, contract
rights (including, without limitation, royalty agreements, license agreements
and distribution agreements), documents, instruments, money, deposit accounts
and general intangibles, including, without limitation, returns, repossessions,
books and records relating thereto, and equipment containing said books and
records, all investment property, including securities and securities
entitlements;
(b) all software, computer source codes and other computer programs
(collectively, the "Software Products"), and all common law and statutory
copyrights and copyright registrations, applications for registration, now
existing or hereafter arising, United States of America and foreign, obtained or
to be obtained on or in connection with the Software Products, or any parts
thereof or any underlying or component elements of the Software Products
together with the right to copyright and all rights to renew or extend such
copyrights and the right (but not the obligation) of Sand Hill (herein referred
to as "Sand Hill" or "Secured Party") to xxx in its own name and/or the name of
the Debtor for past, present and future infringements of copyright;
(c) all goods, including, without limitation, equipment and
inventory (including, without limitation, all export inventory);
(d) all guarantees and other security therefor;
(e) all trademarks, service marks, trade names and service names and
the goodwill associated therewith;
(f) (a) all patents and patent applications filed in the United
States Patent and Trademark Office or any similar office of any foreign
jurisdiction, and interests under patent license agreements, including, without
limitation, the inventions and improvements described and claimed therein, (b)
licenses pertaining to any patent whether Debtor is licensor or licensee, (c)
all income, royalties, damages, payments, accounts and accounts receivable now
or hereafter due and/or payable under and with respect thereto, including,
without limitation, damages and payments for past, present or future
infringements thereof, (d) the right (but not the obligation) to xxx for past,
present and future infringements thereof, (e) all rights corresponding thereto
throughout the world in all jurisdictions in which such patents have been issued
or applied for, and (f) the reissues, divisions, continuations, renewals,
extensions and continuations-in-part with any of the foregoing (all of the
foregoing patents and applications and interests under patent license
agreements, together with the items described in clauses (a) through (f) in this
paragraph are sometimes herein individually and collectively referred to as the
"Patents"); and
(g) all products and proceeds, including, without limitation,
insurance proceeds, of any of the foregoing.
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SECURITY AGREEMENT
(Ivy Software, Inc.)
This Security Agreement is made and entered into as of August 14,
1998 by and between the undersigned ("Debtor"), and Sand Hill Capital, LLC
("Sand Hill").
RECITALS
WHEREAS, Sand Hill proposes to enter into a transaction with UOL
Publishing, Inc. ("Borrower"), which is an affiliate of Debtor, pursuant to a
Loan Agreement ('the "Loan Agreement") of even date herewith.
WHEREAS, Debtor has requested Sand Hill to enter into the Loan
Agreement, and expects to derive economic benefit from Sand Hill's doing so and
dealing with Borrower in accordance with the Loan Agreement.
WHEREAS Debtor wishes to guarantee performance and payment of all
obligations under the Loan Agreement, and to secure that guarantee with
substantially all of its assets, subject in all cases to the terms of the
Subordination Agreement between Sand Hill and Imperial Bank.
NOW, THEREFORE, Debtor and Sand Hill agree as follows:
1. Grant of Security Interest. Debtor hereby grants to Sand Hill a
security interest in the Collateral (as defined in Section 2 below) to secure
Debtor's performance of the obligations set forth in Section 3 below.
2. Collateral. The collateral covered by this Security Agreement
(the "Collateral") shall consist of the property described in Exhibit A attached
hereto.
3. Debtor's Obligations Secured Hereby. This Security Agreement
secures all of Debtor's obligations under that certain Unconditional Guaranty of
even date herewith, as such Guaranty is amended from time to time ("Obligations
of Debtor").
4. Debtor's Representations and Warranties. Debtor represents and
warrants as follows:
(a) Authorization. Debtor has authority and has obtained all
approvals and consents necessary to enter into this Security Agreement, and
Debtor's execution, delivery and performance of this Security Agreement will not
violate or conflict with the terms of Debtor's Articles of Incorporation or
Bylaws or any statute, regulation, ordinance, rule of law, agreement, contract,
mortgage, indenture, xxxx, xxxx, Loan Agreement, or other instrument or writing
binding upon Debtor or to which Debtor is subject.
(b) Title. All Collateral currently in Debtor's possession or
under Debtor's control is owned by and is as represented by Debtor and is free
of all liens, encumbrances and other security interests, other than security
interests or lessors' interests that are described on the attached schedule,
including the security interest of Imperial Bank (the "Prior Security
Interests").
(c) Accounts. Each of Debtor's Accounts is genuine, as appearing
on its face, enforceable in accordance with its terms (subject to reserves that
occur in the ordinary course of business and that are accounted for in
accordance with generally accepted accounting principles), free of set-off,
counterclaim and defenses, and represents indebtedness, obligations, interests
or property justly owing to and owned by Debtor in the amount or as therein
provided.
5. Debtor's Covenants. Debtor agrees and covenants as follows:
(a) Further Encumbrances. Except as may be required by the terms
and conditions of the Prior Security Interests, and except for subordinated
financing of Debtor by Sand Hills or other financial institutions or purchase
money secured financing, until the Obligations of Debtor secured under this
Security Agreement shall
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have been repaid in full, Debtor shall not grant a security interest in any of
the Collateral other than to Sand Hill or execute any financing statements
covering any of the Collateral in favor of any person other than Sand Hill.
(b) Use of Collateral. The Collateral will not be used for any
unlawful purpose or in any way that will void any insurance required to be
carried in connection therewith. Debtor will keep the Collateral free and clear
of liens and adverse claims other than the Prior Security Interests and, as
appropriate and applicable, will keep it in good condition and repair, and will
clean, shelter, and otherwise care for the Collateral in all such ways as are
considered good practice by owners of like property.
(c) Insurance of Collateral. The Collateral will be insured at
Debtor's expense against all risks commonly insured by owners of like property.
Debtor agrees to pay when due all premiums for such insurance and all taxes,
license fees and other charges in connection with the Collateral. If Sand Hill
shall take possession of the Collateral, Sand Hill may, subject to the Prior
Security Interests, surrender the policies and receive and retain the unearned
premiums thereon.
(d) Indemnification. Debtor shall indemnify Sand Hill against all
losses, claims, demands and liabilities of any kind caused by the Collateral.
(e) Perfection of Security Interest. Debtor shall execute and
deliver such documents as Sand Hill reasonably deems necessary to create,
perfect and continue the security interest in the Collateral contemplated
hereby.
(f) Collection of Accounts. Until Sand Hill shall elect to do so
in accordance with this Security Agreement, Debtor shall diligently collect all
of its Accounts and proceeds of the Collateral and shall hold such Accounts and
proceeds subject to a security interest of Sand Hill to secure the obligations
secured hereby, provided, however, that Debtor may use such proceeds in the
ordinary course of business.
(g) Records. Debtor shall prepare and keep, in accordance with
generally accepted accounting principles consistently applied, complete and
accurate records regarding all Collateral and, if and when requested by Sand
Hill, shall prepare and deliver a complete and accurate schedule of all the
Collateral in such detail as Sand Hill may reasonably request.
(h) Assignments. If and when requested by Sand Hill, and to the
extent consistent with the Prior Security Interests, Debtor shall upon any Event
of Default (as defined in the Loan Agreement) prepare and deliver to Sand Hill
written assignment of all Accounts, instruments, documents and other evidence
thereof.
(i) Inspection of Debtor's Books. Debtor shall permit Sand Hill
or its designee at reasonable times and from time to time to inspect Debtor's
books, records and properties and to audit and to make copies of extracts from
such books and records.
(j) Fees and Costs. Upon any Event of Default (as defined in
Section 6 below), Debtor shall pay all expenses, including reasonable attorneys'
fees, incurred by Sand Hill in the preservation, realization, enforcement or
exercise of any Sand Hill's rights under this Security Agreement.
(k) Out-of-Pocket Expenses of Sand Hill. Debtor will reimburse
Sand Hill for any out-of-pocket costs and expenses incurred by it in connection
with filings, recordations or registrations made for the purpose of perfecting
the security interest in the Collateral hereunder.
6. Events of Default. The occurrence of any Event of Default under
the Loan Agreement , the failure of Guarantor to perform any obligation under
the Guaranty or this Security Agreement, shall constitute an "Event of Default"
under this Security Agreement.
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7. Remedies on Default. Upon the occurrence of an Event of Default,
Sand Hill shall have all rights, privileges, powers and remedies provided by
law, including, but not limited to, exercise of any or all of the following
remedies.
(a) Payment Under the Guaranty. Sand Hill may declare all amounts
outstanding under the Loan Agreement and the Guaranty to be immediately due and
payable, and thereupon all such amounts shall be and become immediately due and
payable to Sand Hill.
(b) Possession of Collateral. Sand Hill may take possession of
all Collateral covered hereby (which Collateral Debtor will assemble and make
available to Sand Hill).
(c) Use, Operation and Sale of Collateral by Sand Hill. Sand Hill
may use, operate, consume and sell the Collateral in its possession as
appropriate for the purpose of performing Debtor's obligations with respect
thereto to the extent necessary to satisfy the Obligations of Debtor.
8. Payments after an Event of Default. All payments received and
amounts realized by Sand Hill pursuant to Section 7, including all such payments
and amounts received after Sand Hill has declared the entire unpaid principal
and interest amount under the Guaranty to be due and payable pursuant to Section
7(a), as well as all payments or amounts then held or thereafter received by
Sand Hill as part of the Collateral while an Event of Default shall be
continuing, shall be promptly applied and distributed by Sand Hill in the
following order of priority:
(a) first, to the payment of all costs and expenses, including
reasonable legal expenses and attorneys fees, incurred or made hereunder by Sand
Hill, including any such costs and expenses of foreclosure or suit, if any, and
of any sale or the exercise of any other remedy under this Section 8, and of all
taxes, assessments or liens superior to the lien granted under this Security
Agreement;
(b) second, to the payment to Sand Hill of the amount then owing
on the Loan Agreement and in case the payments received and amounts realized by
Sand Hill shall be insufficient to pay in full the whole amount so owing, then
first to the payment of unpaid interest on the Loan Agreement and second to the
payment of unpaid principal thereof; and
(c) third, to the payment of the balance, if any, to the Debtor
or its successors and assigns.
9. Power of Attorney. Debtor hereby appoints Sand Hill, its
attorney-in-fact to prepare, sign and file or record, for Debtor in Debtor's
name, any financing statements, applications for registration and like papers
and to take any other action deemed by Sand Hill necessary or desirable in order
to perfect the security interest of Sand Hill hereunder, and to perform any
obligations of Debtor hereunder, at Debtor's expense, but without obligation to
do so.
10. Remedies Cumulative. The rights, privileges, powers and remedies
afforded to Sand Hill hereunder shall be cumulative, and no single or partial
exercise of any of them shall preclude the further or other exercise of the same
or any of them.
11. Successors and Assigns. This Security Agreement, together with
the covenants and warranties contained herein, shall inure to the benefit of
Sand Hill and its successors and assigns, and shall be binding upon Debtor and
it successors and assigns.
12. Presentment, etc. Debtor hereby waives presentment, protest,
notice of protest, notice of dishonor and notice of nonpayment with respect to
any proceeds to which Sand Hill is entitled hereunder any rights to direct the
application of payments for security for indebtedness of Debtor hereunder, or
indebtedness of customers of Debtor, and hereby waives any right to require
proceedings against others or to require exhaustion of security.
13. Notices. Any notice required or permitted to be given to a party
pursuant to the provisions of this Security Agreement will be in writing and
will be effective and deemed given under this Security Agreement on the earliest
of: (a) the date of personal delivery; (b) the date of delivery by facsimile; or
(c) the business day after deposit
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with a nationally-recognized courier or overnight service, including Federal
Express or Express Mail, for United States deliveries or three (3) business days
after such deposit for deliveries outside of the United States. All notices not
delivered personally or by facsimile will be sent with postage and other charges
prepaid and properly addressed to the party to be notified at the address set
forth in the Loan Agreement, or at such other address as such party may
designate by ten (10) days' advance written notice to the other parties hereto.
All notices or delivery outside the United States will be sent by facsimile, or
by nationally recognized courier or overnight service, including Express Mail.
Any notice given hereunder to more than one person will be deemed to have been
given, for purposes of counting time periods hereunder, on the date given to the
last party required to be given such notice.
14. Governing Law; Consent to Jurisdiction;JURY WAIVER. This
Security Agreement shall be governed and construed under the laws of the State
of California as applied among California residents, made and to be performed
entirely within the State of California, without regard to conflicts of laws
principles. DEBTOR AND SAND HILL EACH WAIVES ANY RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS SECURITY AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
15. Enforcement; Counterparts. If any portion of this Security
Agreement is determined to be invalid or unenforceable, the remainder shall be
valid and enforceable to the maximum extent possible with the same effect as if
the invalid or unenforceable portion were omitted from this Security Agreement.
This Security Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which shall constitute one
instrument.
16. JUDICIAL REFERENCE.
(a) Other than (i) nonjudicial foreclosure and all matters in
connection therewith regarding security interests in real or personal property;
or (ii) the appointment of a receiver, or the exercise of other provisional
remedies (any and all of which may be initiated pursuant to applicable law),
each controversy, dispute or claim between the parties arising out of or
relating to this Agreement, which controversy, dispute or claim is not settled
in writing within thirty (30) days after the "Claim Date" (defined as the date
on which a party subject to this Agreement gives written notice to all other
parties that a controversy, dispute or claim exists), will be settled by a
reference proceeding in California in accordance with the provisions of Section
638 et seq. of the California Code of Civil Procedure, or their successor
section ("CCP"), which shall constitute the exclusive remedy for the settlement
of any controversy, dispute or claim concerning this Agreement, including
whether such controversy, dispute or claim is subject to the reference
proceeding and except as set forth above, the parties waive their rights to
initiate any legal proceedings against each other in any court or jurisdiction
other than the Superior Court in the County where the Real Property, if any, is
located or Santa Xxxxx County if none (the "Court"). The referee shall be a
retired Judge of the Court selected by mutual agreement of the parties, and if
they cannot so agree within forty-five (45) days after the Claim Date, the
referee shall be promptly selected by the Presiding Judge of the Court (or his
representative). The referee shall be appointed to sit as a temporary judge,
with all of the powers for a temporary judge, as authorized by law, and upon
selection should take and subscribe to the oath of office as provided for in
Rule 244 of the California Rules of the Court (or any subsequently enacted
Rule). Each party shall have one peremptory challenge pursuant to CCP Section
170.6. The referee shall (a) be requested to set the matter for hearing within
sixty (60) days after the date of selection of the referee and (b) try any and
all issues of law or fact and report a statement of decision upon them, if
possible, within ninety (90) days of the Claim Date. Any decision rendered by
the referee will be final, binding and conclusive and judgment shall be entered
pursuant to CCP Section 644 in any court in the State of California having
jurisdiction. Any party may apply for a reference proceeding at any time after
thirty (30) days following notice to any other party of the nature of the
controversy, dispute or claim, by filing a petition for a hearing and/or trial.
All discovery permitted by this Agreement shall be completed no later than
fifteen (15) days before the first hearing date established by the referee. The
referee may extend such period in the event of a party's refusal to provide
requested discovery or unavailability of a witness due to absence or illness. No
party shall be entitled to "priority" in conducting discovery. Depositions may
be taken by either party upon seven (7) days written notice, and request for
production or inspection of documents which cannot be resolved by the parties
shall be submitted to the referee as provided herein. The Superior Court is
empowered to issue temporary and/or provisional remedies, as appropriate.
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(b) Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of all hearings, the order of presentation of
evidence, and all other questions that arise with respect to the course of the
reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter except that when
any party so requests, a court reporter will be used at any hearing conducted
before the referee. The party making such a request shall have the obligation to
arrange for and pay for the court reporter. The costs of the court reporter at
the trial shall be borne equally by the parties.
(c) The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, to provide all
temporary and/or provisional remedies and to enter equitable orders that will be
binding upon the parties. The referee shall issue a single judgment at the close
of the reference proceeding which shall dispose of all of the claims of the
parties that are the subject of the reference. The parties hereto expressly
reserve the right to contest or appeal from the final judgment or any appealable
order or appealable judgment entered by the referee. The parties hereto
expressly reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this Section 13.
(d) In the event that the enabling legislation which provides
for appointment of a referee is repealed (and no successor statute is enacted),
any dispute between the parties that would otherwise be determined by the
reference procedure herein described will be resolved and determined by
arbitration. The arbitration will be conducted by a retired judge of the Court,
in accordance with the California Arbitration Act, Section 1280 through Section
1294.2 of the CCP as amended from time to time. The limitations with respect to
discovery as set forth hereinabove shall apply to any such arbitration
proceeding.
IN WITNESS WHEREOF, the parties have executed this Security
Agreement on the date set forth above.
IVY SOFTWARE, INC. SAND HILL CAPITAL, LLC
By: By:
------------------------------------ ------------------------------------
Name: Name:
---------------------------------- ----------------------------------
Title: Title:
--------------------------------- ---------------------------------
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EXHIBIT A
COLLATERAL DESCRIPTION ATTACHMENT
TO SECURITY AGREEMENT
All personal property of Debtor whether presently existing or
hereafter created, written, produced or acquired, including, but not limited to:
(a) all accounts receivable, accounts, chattel paper, contract
rights (including, without limitation, royalty agreements, license agreements
and distribution agreements), documents, instruments, money, deposit accounts
and general intangibles, including, without limitation, returns, repossessions,
books and records relating thereto, and equipment containing said books and
records, all investment property, including securities and securities
entitlements;
(b) all software, computer source codes and other computer programs
(collectively, the "Software Products"), and all common law and statutory
copyrights and copyright registrations, applications for registration, now
existing or hereafter arising, United States of America and foreign, obtained or
to be obtained on or in connection with the Software Products, or any parts
thereof or any underlying or component elements of the Software Products
together with the right to copyright and all rights to renew or extend such
copyrights and the right (but not the obligation) of Sand Hill (herein referred
to as "Sand Hill" or "Secured Party") to xxx in its own name and/or the name of
the Debtor for past, present and future infringements of copyright;
(c) all goods, including, without limitation, equipment and
inventory (including, without limitation, all export inventory);
(d) all guarantees and other security therefor;
(e) all trademarks, service marks, trade names and service names and
the goodwill associated therewith;
(f) (a) all patents and patent applications filed in the United
States Patent and Trademark Office or any similar office of any foreign
jurisdiction, and interests under patent license agreements, including, without
limitation, the inventions and improvements described and claimed therein, (b)
licenses pertaining to any patent whether Debtor is licensor or licensee, (c)
all income, royalties, damages, payments, accounts and accounts receivable now
or hereafter due and/or payable under and with respect thereto, including,
without limitation, damages and payments for past, present or future
infringements thereof, (d) the right (but not the obligation) to xxx for past,
present and future infringements thereof, (e) all rights corresponding thereto
throughout the world in all jurisdictions in which such patents have been issued
or applied for, and (f) the reissues, divisions, continuations, renewals,
extensions and continuations-in-part with any of the foregoing (all of the
foregoing patents and applications and interests under patent license
agreements, together with the items described in clauses (a) through (f) in this
paragraph are sometimes herein individually and collectively referred to as the
"Patents"); and
(g) all products and proceeds, including, without limitation,
insurance proceeds, of any of the foregoing.
6
