LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT is entered into as of May 29, 2003
between PVI Virtual Media Services, LLC, a Delaware limited liability company
("Lender") and Princeton Video Image, Inc., a Delaware corporation and a debtor
and a debtor in possession, ("Borrower").
RECITALS
WHEREAS, on May , 2003 ("Filing Date"), Borrower filed a petition under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
District of New Jersey and Borrower has retained possession of its assets and is
authorized under Sections 1107 and 1108 of the Bankruptcy Code to continue the
management and operation of its business as a debtor in possession;
WHEREAS, Borrower has requested that Lender provide a debtor in
possession financing facility to Borrower that will provide the additional funds
that Borrower requires to supplement the available cash collateral that Borrower
is permitted to use in accordance with the terms of an Approved Budget and
permitted variances from that Approved Budget;
WHEREAS, Lender has indicated its willingness to agree to extend that
financing to Borrower upon the terms and conditions set forth in this Agreement
and upon the entry of a Financing and Cash Collateral Order acceptable to
Lender;
WHEREAS, Borrower has agreed to provide such other protection,
including collateral security, as described in this Agreement and the Financing
and Cash Collateral Order, subject to the approval of the Bankruptcy Court; and
WHEREAS, the Bankruptcy Court has entered a Financing and Cash
Collateral Order pursuant to which Borrower is permitted to use cash collateral
and Lender may make post-petition loans, advances and other financial
accommodations to Borrower secured by all assets and properties of Borrower as
set forth in, and subject to the exclusions as set forth in, the Financing and
Cash Collateral Order and the Loan Documents.
NOW, THEREFORE, in consideration of these premises and of the mutual
undertakings set forth herein, the parties hereto agree to as follows:
ARTICLE 1
DEFINITIONS, CONSTRUCTION AND RATIFICATION
1.1. TERMS. As used in this Agreement, the following terms shall have
the following meanings:
"Accounts" means, in addition to the definition of accounts in the UCC,
all presently existing and hereafter arising accounts receivable, contract
rights, and all other forms of obligations owing to Borrower arising out of the
sale, lease, license or assignment of goods or other property, or the rendition
of services by Borrower, whether or not earned by performance, all credit
insurance, guaranties, and other security therefor, and Borrower's Books
relating to any of the foregoing.
"Advances" means all loans, advances and other financial accommodations
by Lender to or on account of Borrower under Section 2.1.
"Agreement" means this Loan and Security Agreement.
"Approved Budget" means the most current Budget that has been approved
by Lender, in its absolute discretion. The initial Approved Budget is attached
as Exhibit B.
"Asset Purchase Agreement" means the asset purchase agreement between
Lender and Borrower.
"Authorized Officer" means any officer or other representative of
Borrower authorized in a writing delivered to Lender to transact business with
Lender.
"Avoidance Actions" means recoveries from, or settlements of, actions
commenced by Borrower's bankruptcy estate under Chapter 5 of the Bankruptcy
Code.
"Bankruptcy Code" means Xxxxx 00, Xxxxxx Xxxxxx Code.
"Bankruptcy Court" means the United States Bankruptcy Court for the
District of New Jersey or such other court having jurisdiction over the Case.
"Borrower's Books" means all of Borrower's books and records including
all of the following: ledgers; records indicating, summarizing, or evidencing
Borrower's assets or liabilities, or the Collateral; all information relating to
Borrower's business operations or financial condition; and all computer
programs, disk or tape files, printouts, runs, or other computer prepared
information, and the facilities containing such information, but specifically
excluding Borrower's corporate minute books, stock ledgers and the like.
"Borrowing Request" means a Borrowing Request in the form of Exhibit A.
"Budget" has the meaning ascribed to that term in Section 5.10 and any
revisions provided by Borrower to Lender pursuant to this Agreement.
"Business Day" means any day which is not a Saturday, Sunday, or other
day on which banks in the State of New York are authorized or required to close.
"Carve Out" has the meaning ascribed to that term in Section 4.6.
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"Carve Out Replenishment" has the meaning ascribed to that term in
Section 4.6.
"Case" means Borrower's reorganization case under Chapter 11 of the
Bankruptcy Code, pending in the United States Bankruptcy Court (Chapter 11 Case
No. [to be inserted]).
"Cash Shortfall" means, for any period, the amount, if any, that (x)
cash requirements of Borrower for the categories of expenses and costs included
in the Approved Budget exceed (y) cash collections received by Borrower that are
available for use by Borrower in the ordinary course of business.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of Equity
Interests representing more than 20% of either the aggregate ordinary voting
power or the aggregate equity value represented by the issued and outstanding
Equity Interests in the Company, other than any present holders of Equity
Interests having such voting power or equity value; (b) the occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Company by Persons who were not nominated by the current board of directors of
the Company; or (c) the acquisition of direct or indirect Control of the Company
by any Person or group other than any such Person or group who presently has
direct or indirect Control of the Company.
"Chattel Paper" shall have the same meaning ascribed to such term in
the UCC.
"Collateral" means all assets of Borrower, whether now owned or
existing, or hereafter acquired or arising, and wherever located, and whether
owned before or after the Filing Date including all of the following assets,
properties and interests in property of Borrower: all Accounts; Commercial Tort
Claims, Equipment; General Intangibles; Chattel Paper; Inventory; Negotiable
Collateral; Investment Property; Financial Assets; Letter of Credit Rights;
Supporting Obligations; Deposit Accounts; Documents; money or any assets of
Borrower, including assets which hereafter come into the possession, custody, or
control of Lender; all real property; all proceeds and products, whether
tangible or intangible, of any of the foregoing, including proceeds of insurance
covering any or all of the foregoing, and any and all tangible or intangible
property resulting from the sale, lease, license or other disposition of the
foregoing, or any portion thereof or interest therein, and all proceeds thereof;
and all other property of Borrower's estate in the Case or otherwise, including
all tax refunds and choses in action. However, Collateral shall not include the
proceeds of Avoidance Actions, other than in any Carve Out Replenishment.
"Commercial Tort Claims" means any "commercial tort claim" as defined
in Article 9 of the UCC.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to
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exercise voting power by contract or otherwise. "Controlling" and "Controlled"
have meanings correlative thereto.
"Daily Balance" means the amount of the Obligations owed at the end of
a given day.
"Deposit Account" shall have the meaning ascribed to such term in the
UCC.
"Documents" shall have the meaning ascribed to such term in the UCC.
"Equipment" means in addition to the definition of equipment in the UCC
all of Borrower's present and hereafter acquired equipment, machinery, machine
tools, motors, furniture, furnishings, fixtures, motor vehicles, rolling stock,
processors, tools, goods (other than consumer goods or farm products) 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.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.
"ERISA Affiliate" means each trade or business (whether or not
incorporated and whether or not foreign) which is or may hereafter become a
member of a group of which Borrower is a member and which is treated as a single
employer under ERISA Section 4001(b)(1), or IRC Section 414.
"Event of Default" means any event specified in Article 8.
"Filing Date" shall have the meaning ascribed to such term in the above
Recitals.
"Financial Assets" shall have the meaning ascribed to such term in the
UCC.
"Financing and Cash Collateral Order" means the order authorizing,
inter alia, (a) the use of the Prepetition Secured Lenders' cash collateral
pursuant to Section 363(c) of the Bankruptcy Code and (b) the granting of credit
by Lender to Borrower pursuant to Section 364 of the Bankruptcy Code, entered by
the Bankruptcy Court in the Case, and any subsequent order pursuant to Section
363(c) or 364 of the Bankruptcy Code, in each case, that is consented to by
Lender in its absolute discretion.
"General Intangibles" means, in addition to the definition of general
intangibles in the UCC, all of Borrower's present and future general intangibles
and other personal property (including choses or things in action, goodwill,
Patents, Patent Applications, Intellectual
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Property, trade names; trademarks, service marks, blueprints, drawings, purchase
orders, customer lists, monies due or recoverable from pension funds (other than
"trust funds"), route lists, infringement claims, computer programs, computer
discs, computer tapes, Borrower's Books, literature, reports, catalogs, deposit
accounts, insurance premium rebates, tax refunds, and tax refund claims) other
than goods and Accounts. However, General Intangibles shall not include
Avoidance Actions.
"Ineligible Professional Fees" shall have the meaning ascribed to that
term in Section 4.6.
"Insolvency Proceeding" means any proceeding commenced by or against
any person or entity under any provision of the Bankruptcy Code, as amended, or
under any other state or federal insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, or extensions
generally with its creditors.
"Instruments" shall have the meaning ascribed to such term in the UCC.
"Intellectual Property" means the following property of Borrower: (i)
all inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all rights arising under or in
connection with all Patents, Patent Applications and Patent disclosures related
to the Purchased Assets, (ii) all trademarks, service marks, trade dress, logos,
slogans, trade names and corporate names (including, without limitation,
"L-VIS(R)" and "i-Point(TM)"), together with all translations, adaptations,
derivations and combinations thereof (including all goodwill associated
therewith), and all applications, registrations and renewals related to the
Purchased Assets, (iii) all copyrightable works, all copyrights and all
applications, registrations and renewals related to the Purchased Assets, (iv)
all trade secrets and confidential business information (including, without
limitation, ideas, research, know-how, techniques, methods, data, product
drawings, training manuals, clinical and regulatory strategies, and business and
marketing plans and proposals) related to the Purchased Assets, (v) all computer
software related solely to the Purchased Assets and not other applications, (vi)
all computer generated data and documentation related to the Purchased Assets,
(vii) all Third Party License Rights related to the Purchased Assets, (viii) all
designs, plans and documentation in whatever form related to products under
development or products subject to a change in design or composition, (ix) all
other proprietary rights related to the Purchased Assets, and (x) all copies and
tangible embodiments thereof (in whatever form or medium) related to the
Purchased Assets.
"Inventory" means, in addition to the definition of inventory in the
UCC, all present and future inventory in which Borrower has any interest,
including goods held for sale or lease or to be furnished under a contract of
service, Borrower's present and future raw materials, work in process, finished
goods, tangible property, stock in trade, wares, and materials used in or
consumed in Borrower's business, goods which have been returned to, repossessed
by, or stopped in transit by Borrower, packing and shipping materials, wherever
located, any documents of title representing any of the above, and Borrower's
Books relating to any of the foregoing.
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"Investment Property" means, in addition to the definition of
investment property in the UCC, all Equity Interests.
"IRC" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Lender" means the Lender named in the caption of this Agreement.
"Lender Expenses" means all of the following: costs and expenses
(whether taxes, assessments, insurance premiums or otherwise) required to be
paid by Borrower under any of the Loan Documents which are paid or advanced by
Lender; filing, recording, publication, appraisal and search fees paid or
incurred by Lender in connection with Lender's transactions with Borrower; costs
and expenses incurred by Lender in the disbursement or collection of funds to or
from Borrower; charges resulting from the dishonor of checks; costs and expenses
incurred by Lender to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated; and costs and expenses incurred by Lender in enforcing or defending
the Loan Documents, including costs and expenses incurred in connection with any
proceeding, suit, enforcement of judgment, or appeal.
"Letter of Credit Rights" shall have the meaning ascribed to such term
in the UCC.
"Liens" means all liens (including mechanics', materialmen's and other
consensual and non-consensual liens and statutory liens), security interests,
encumbrances and claims (including, but not limited to, any "claim" as defined
in section 101(5) or "lien" as defined in section 101(37) of the Bankruptcy
Code), reclamation claims, mortgages, deeds of trust, pledges, covenants,
restrictions, hypothecations, charges, indentures, loan agreements, instruments,
contracts, leases, licenses, options, rights of first refusal, contracts,
offsets, recoupment, rights of recovery, judgments, orders and decrees of any
court or foreign or domestic governmental entity, claims for reimbursement,
contribution, indemnity or exoneration, assignment, preferences, debts, charges,
suits, licenses, options, rights of recovery, interests, products liability,
alter-ego, environmental, successor liability, tax and other liabilities, causes
of action and claims, or other encumbrances or restrictions on or conditions to
transfer or assignment of any kind (including without limitation to the
generality of the foregoing restrictions or conditions on or to the transfer,
assignment, or renewal of licenses, permits, registrations, and authorizations
or approvals of or with respect to governmental units and instrumentalities) to
the fullest extent of the law, in each case whether secured or unsecured, xxxxxx
or inchoate, filed or unfiled, scheduled or unscheduled, noticed or unnoticed,
recorded or unrecorded, perfected or unperfected, allowed or disallowed,
contingent or non-contingent, liquidated or unliquidated, matured or unmatured,
material or non-material, disputed or undisputed, or known or unknown, whether
arising prior to, on, or subsequent to the commencement of the Case, whether
imposed by agreement, understanding, law, equity or otherwise.
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"Loan Documents" means, collectively, this Agreement, the Note, any
Financing and Cash Collateral Order, any security agreements, pledge agreements,
mortgages, deeds of trust or other encumbrances or agreements which secure the
Obligations, and any other agreement entered into between Borrower and Lender or
by Borrower or a Guarantor in favor of Lender relating to or in connection with
this Agreement or the Obligations.
"Multiemployer Plan" means a multiemployer plan as defined in ERISA
Sections 3(37) or 4001(a)(3) or IRC Section 414(f).
"Negotiable Collateral" means all of Borrower's present and future
letters of credit, notes, drafts, instruments, documents, leases and Chattel
Paper.
"Note" means the promissory note made by Borrower to the order of
Lender concurrently herewith or at any time hereafter.
"Obligations" means all loans, advances, debts, liabilities,
obligations, covenants, and duties owing by Borrower to Lender of any kind and
description in connection with any Loan Documents, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
including any debt, liability or obligation owing from Borrower to others which
Lender may obtain by assignment or otherwise, all interest thereon and all
Lender Expenses.
"Operating Report" means an operating report to be supplied by Borrower
pursuant to Section 6.1.
"Patent" means United States Letters Patent and design patent,
including any extension, registration, confirmation, continuation, division,
continuation-in-part, reissue, re-examination or renewal thereof, including
L-VIS(R), and also including any foreign equivalents of any of the foregoing.
"Patent Application" means an application, including a provisional
application, for a Patent.
"Permitted Liens" means all Liens listed on the attached Schedule
5.1(a).
"Plan" means any plan described in ERISA Section 3(2) maintained for
employees of Borrower or any ERISA Affiliate, other than a Multiemployer Plan.
"Prepetition Secured Lenders" means the holders of the Prepetition
Secured Obligations."
"Prepetition Secured Loan Documents" means the documents listed on
Schedule 5.1(b).
"Prepetition Secured Obligations" means the prepetition obligations
that are secured under the Prepetition Secured Loan Documents in amounts not to
exceed the amount set forth on Schedule 5.1(b).
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"Projected Cash Shortfall" means, for any period, the amount by which
"Total Cash Requirements" (as indicated in an Approved Budget), exceeds "A/R
Collections" as indicated in an Approved Budget.
"Super-Priority Administrative Expense" means a claim against Borrower
or its estate in the Case that is an administrative expense claim having
priority over (a) any and all allowed administrative expenses and (b) unsecured
claims now existing or hereafter arising, including administrative expenses of
the kind specified in Section 503(b), 506(c) or 507(b) of the Bankruptcy Code.
"Supporting Obligation" shall have the meaning ascribed to such term in
the UCC.
"Term" means the period from the date of the execution and delivery by
Lender of this Agreement through and including the later of (a) the Termination
Date and (b) the indefeasible payment and performance in full of the
Obligations.
"Termination Date" means (a) the earliest of (i) August 29, 2003 and
(ii) the date on which Lender has the right to terminate its obligation to
purchase assets pursuant to the Asset Purchase Agreement (the period through
such date the "Initial Term"), unless such date is extended pursuant to Section
3.1, and if so extended on one or more occasions the last date of the last such
extension and (iii) the closing of the purchase of assets pursuant to the Asset
Purchase Agreement, or (b) if earlier terminated by Lender pursuant to Section
9.1, the date of such termination.
"Third Party License Rights" means all permissions, licenses, covenants
not to xxx, grants, and other express or implied authorization to make, use,
sell, import, create derivative works, publicly display, publicly perform, rent,
or otherwise operate that may be needed by the Business to avoid violating an
Intellectual Property right of a third party, including those relating to
L-VIS(R) and iPoint(TM).
"UCC" means the New York Uniform Commercial Code.
1.2. INTERPRETATION.
a. Whenever the words "include," "includes" or "including" are used in
this Agreement they shall be deemed to be followed by the words "without
limitation."
b. Words denoting any gender shall include all genders. Where a word or
phrase is defined herein, each of its other grammatical forms shall have a
corresponding meaning.
c. A reference to any party to this Agreement or any other agreement or
document shall include such party's successors and permitted assigns.
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d. A reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
e. All references to "$" and dollars shall be deemed to refer to United
States currency.
f. All references to any financial or accounting terms shall be defined
in accordance with GAAP as applicable in the United States.
g. The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Article, Section,
Recitals, Schedule and Exhibit references are to this Agreement unless otherwise
specified.
h. The meanings given to terms defined herein shall be equally
applicable to both singular and plural forms of such terms.
i. Borrower and Lender hereby acknowledge that (i) Borrower and Lender
jointly and equally participated in the drafting of this Agreement and all other
agreements contemplated hereby, (ii) Borrower and Lender have been adequately
represented and advised by legal counsel with respect to this Agreement and the
transactions contemplated hereby, and (iii) no presumption shall be made that
any provision of this Agreement shall be construed against either party by
reason of such role in the drafting of this Agreement and any other agreement
contemplated hereby.
j. The headings of the Articles and Sections herein are inserted for
convenience of reference only and are not intended to be a part of, or to affect
the meaning or interpretation of, this Agreement.
k. References to any document, instrument, mortgage or agreement of any
kind shall refer to any permitted amendments, restatements or other
modifications thereof.
1.3. EXHIBITS. All of the exhibits, addenda or riders attached to this
Agreement shall be deemed incorporated herein by reference.
1.4. UCC. Any terms used in this Agreement that are defined in the UCC
shall be construed and defined as set forth in the UCC, unless otherwise defined
herein.
ARTICLE 2
ADVANCES AND TERMS OF PAYMENT
2.1. ADVANCES; ADVANCE LIMIT. Upon the request of Borrower, made at any
time or from time to time during the Term and so long as no Event of Default has
occurred and is continuing, Lender shall make Advances in an amount up to the
lesser of (a) an amount equal to (i) 110% of the aggregate semi-monthly amounts
of Projected Cash Shortfall on a cumulative basis from the effective date of
this Agreement through such date of determination minus (ii) the
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aggregate amount outstanding of all Advances made to the Borrower hereunder from
the Closing Date through such date of determination and (b) the actual
semi-monthly amounts of Cash Shortfall as indicated in the current Operating
Report as of the time of any request for an Advance. Without the consent of the
Lender, Borrower may make no more than one request for an Advance in any
semi-monthly period.
2.2. OVERADVANCES. All Advances shall be added to and be deemed part of
the Obligations when made. If, at any time and for any reason, the aggregate
amount of the outstanding Advances exceeds the amounts permitted under Section
2.1 (an "Overadvance") then Borrower shall, upon demand by Lender, immediately
pay to Lender, in cash, the amount of that Overadvance.
2.3. AUTHORIZATION TO MAKE ADVANCES. Lender is hereby authorized to
make Advances based upon telephonic or other instructions received from anyone
purporting to be an Authorized Officer, or, at the discretion of Lender, if such
Advances are necessary to satisfy any Obligations. All requests for Advances
shall be made pursuant to a Borrowing Request specifying the date on which such
Advance is to be made (which day shall be a Business Day at least one Business
Day after the request of such Advance) and the amount of such Advance. Requests
received after 12:00 p.m. Eastern Standard Time on any day shall be deemed to
have been made as of the opening of business on the immediately following
Business Day. All Advances made under this Agreement shall be conclusively
presumed to have been made to, at the request of, and for the benefit of
Borrower when deposited to the credit of Borrower or otherwise disbursed in
accordance with the instructions of Borrower or in accordance with the terms and
conditions of this Agreement. Unless otherwise requested by Borrower, all
Advances shall be made by a wire transfer to the deposit account of Borrower
designated by Borrower from time to time in a writing delivered to Lender.
2.4. INTEREST.
a. Except where specified to the contrary in the Loan Documents, the
aggregate outstanding balances of the Obligations shall accrue interest at the
per annum rate of ten percent (10%). The Obligations shall bear interest from
and after written notice by Lender to Borrower of the occurrence of an Event of
Default, and without constituting a waiver of any such Event of Default, at the
per annum rate of twelve percent (12%) (the "Default Rate"). All interest
payable under the Loan Documents shall be computed on the basis of a three
hundred sixty (360) day year for the actual number of days elapsed on the Daily
Balance. Interest as provided for herein shall continue to accrue until the
Obligations are paid in full.
b. All interest payable by Borrower shall be due and payable on the
date that all Advances are due and payable. Lender may, at its option, add such
interest and all Lender Expenses to the Obligations, and such amount shall
thereafter accrue interest at the rate then applicable under this Agreement.
c. In no event shall interest on the Obligations exceed the highest
lawful rate in effect from time to time. It is not the intention of the parties
hereto to make an agreement which violates any applicable state or federal usury
laws. In no event shall Borrower pay or Lender accept or charge any interest
which, together with any other charges upon the principal or
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any portion thereof, exceeds the maximum lawful rate of interest allowable under
any applicable state or federal usury laws. Should any provision of this
Agreement or any existing or future Notes or Loan Documents between the parties
be construed to require the payment of interest or any other fees or charges
which could be construed as interest which, together with any other charges upon
the principal or any portion thereof and any other fees or charges which could
be construed as interest, exceeds the maximum lawful rate of interest, then any
such excess shall be applied to the remaining principal balance of the
Obligations, if any, and the remainder refunded to Borrower.
ARTICLE 3
TERM
3.1. TERM AND RENEWAL DATE. This Agreement shall become effective upon
execution by Lender and upon approval by the Bankruptcy Court, and continue in
full force through the Termination Date. This Agreement may be extended by
mutual written agreement of the parties. In addition, Lender shall have the
right to terminate this Agreement immediately at any time upon the occurrence of
an Event of Default. No such termination shall relieve or discharge Borrower of
its duties, Obligations and covenants hereunder until all Obligations have been
paid and performed in full, and Lender's continuing security interest in the
Collateral shall remain in effect until the Obligations have been fully and
irrevocably paid and satisfied in cash or cash equivalent. On the Termination
Date of this Agreement, the Obligations shall be immediately due and payable in
full.
3.2. FINANCING AND CASH COLLATERAL ORDERS. Prior to making any Advance,
the Bankruptcy Court shall have entered the Financing and Cash Collateral Order
and such Financing and Cash Collateral Order shall be in full force and effect
and shall not have been amended, modified, stayed or reversed, without Lender's
Consent.
ARTICLE 4
CREATION OF CONTINUING SECURITY INTEREST
4.1. GRANT OF CONTINUING SECURITY INTEREST. Borrower (as debtor and as
debtor in possession) hereby grants to Lender a security interest in all
presently existing and hereafter acquired or arising Collateral in order to
secure prompt repayment of the Obligations and in order to secure prompt
performance by Borrower of each of its covenants and Obligations under the Loan
Documents.
4.2. NEGOTIABLE COLLATERAL. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, Borrower shall
notify Lender and upon the request of Lender (but only to the extent not
prohibited under the Prepetition Secured Loan Documents), immediately endorse
and assign such Negotiable Collateral to Lender and deliver physical possession
of such Negotiable Collateral to Lender.
4.3. DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower shall
execute and deliver to Lender concurrently with Borrower's execution and
delivery of this Agreement and at any time thereafter immediately at the request
of Lender, all financing
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statements, continuation financing statements, fixture filings, security
agreements. chattel mortgages, pledges, assignments, endorsements of
certificates of title, applications for title, affidavits, reports, notices,
schedules of accounts, letters of authority, patent assignments, trademark
assignments, and all other documents that Lender may request, in form
satisfactory to Lender, to perfect and maintain perfected Lender's security
interests in the Collateral and in order to fully consummate all of the
transactions contemplated under the Loan Documents and Borrower hereby
authorizes Lender to file and/or record such financing statements and other
documents as Lender deems necessary to perfect and maintain Lender's continuing
security interest in the Collateral, and agrees any such financing statement may
contain an "all asset" or "all property" description of the Collateral, and
Borrower hereby ratifies any such financing statement or other document
heretofore filed by Lender.
4.4. POWER OF ATTORNEY. Borrower hereby irrevocably makes, constitutes
and appoints Lender (and any person designated by Lender) as Borrower's true and
lawful attorney-in-fact with power to sign the name of Borrower on any of the
above described documents or on any other similar documents to be executed,
recorded or filed in order to perfect or continue perfected Lender's continuing
security interest in the Collateral including patent assignments and trademark
assignments. In addition, Borrower hereby appoints Lender (and any person
designated by Lender) as Borrower's attorney-in-fact with power to: (a) sign
Borrower's name on verifications of Accounts, on other Collateral and, upon the
continuance of an Event of Default, on notices to Account debtors; (b) send
requests for verification of Accounts and other Collateral; (c) upon the
continuance of an Event of Default, endorse Borrower's name on any checks,
notes, acceptances, money orders, drafts or other forms of payment or security
that may come into Lender's possession; (d) upon the occurrence of an Event of
Default (except as provided in the Financing and Cash Collateral Order and
subject to the rights of the holders of the Prepetition Secured Obligations),
notify the post office authorities to change the address for delivery of
Borrower's mail to an address designated by Lender, to receive and open all mail
addressed to Borrower, and to retain all mail relating to the Collateral and
forward all other mail to Borrower; (e) upon the occurrence of an Event of
Default (but subject to the rights of the holders of the Prepetition Secured
Obligations) make, settle and adjust all claims under Borrower's policies of
insurance, endorse the name of Borrower on any check, draft, instrument or other
item of payment for the proceeds of such policies of insurance and make all
determinations and decisions with respect to such policies of insurance. The
appointment of Lender as Borrower's attorney-in-fact and each and every one of
Lender's rights and powers, being coupled with an interest, is irrevocable so
long as any Accounts in which Lender has a continuing security interest remain
unpaid and until all of the Obligations have been fully repaid and performed.
4.5. RIGHT TO INSPECT. Lender shall have the right at any time or times
hereafter during Borrower's usual business hours, or during the usual business
hours of any third party having control over Borrower's Books to inspect
Borrower's Books in order to verify the amount or condition of, or any other
matter relating to, the Collateral or Borrower's financial condition. Lender
also shall have the right at any time or times hereafter during Borrower's usual
business hours to inspect and examine the Inventory, the Equipment and the other
Collateral and to check and test the same as to quality, quantity, value and
condition.
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4.6. CARVE OUT. Notwithstanding anything to the contrary in this
Agreement, Lender's security interest in the Collateral shall be subject to a
carve out (the "Carve Out") for the sum of allowed administrative expenses in
the Case payable pursuant to 28 U.S.C. ss. 1930(a)(6) and Priority Professional
Expenses (as defined below) in the Case. "Priority Professional Expenses" means
allowed fees, costs and reasonable expenses allowed or permitted pursuant to
Sections 330 and 331 of the Bankruptcy Code, exclusive of prepetition retainers,
of: (a) Fox Rothschild, LLP, general counsel for the Borrower, up to the amount
of $150,000.00; (b) Smith, Stratton, Wise, Xxxxx & Xxxxxxx, LLP, special counsel
to the Borrower, up to the amount of $75,000.00; (c) PricewaterhouseCoopers,
Borrower's accountant, up to the amount of $50,000.00; (d) Broadband Capital
Management, Borrower's financial advisor, in an amount up to $100,000.00 and (e)
any professionals retained by any official creditors committee in the Case that
may be appointed in this Case up the amount of $25,000.00, provided, however,
Priority Professional Expenses shall not include any fees or expenses
(collectively the "Ineligible Professional Fees") incurred by any such
professional in preventing, hindering or delaying the Lender or the Prepetition
Secured Lenders from enforcing or realizing upon any of their collateral once an
Event of Default has occurred, using or seeking to use cash collateral or
selling any collateral subject to the liens of the Prepetition Secured Lenders
or the Lender without the prior written consent of the Prepetition Secured
Lender or the Lender objecting to or contesting in any manner, or raising any
defenses to, the validity, extent, amount, perfection, priority or
enforceability of the Prepetition Secured Obligations the Liens securing, or
purporting to secure, the Prepetition Secured Obligations, any Prepetition
Secured Loan Documents, any Obligations, and Liens securing, or purporting to
secure, any Obligations or any Loan Documents or any other rights or interest of
the Prepetition Secured Lenders and the Lender, or in asserting any claims or
causes of action, including any actions under Chapter 5 or Section 724(a) of the
Bankruptcy Code, or for equitable subordination, against the Lender or the
Prepetition Secured Lenders. The exclusion of the Ineligible Professional Fees
from Priority Professional Expenses shall not include fees and expenses related
to the investigation of the extent, validity and priority of the Prepetition
Secured Obligations and Liens, the investigation of claims or causes of action
against the Prepetition Secured Lenders, or litigation respecting whether an
Event of Default has occurred. However, if after payment of any of the
above-amounts from the Collateral or unencumbered assets are received by the
Borrower, including its bankruptcy estate, such funds shall be used to replenish
the amount of the proceeds of such Collateral used for such payments included in
the Carve Out to the extent such payments result in a diminution in value of the
Lender in the Collateral or leaves the Lender undersecured or, if applicable,
further undersecured. Any such payment will be referred to in this Agreement as
a "Carve Out Replenishment". Nothing herein shall be construed as consent to the
allowance of any Priority Professional Expenses or shall effect the rights of
the Lender or the Prepetition Secured Lenders to object to the allowance in
payment of such expenses. Any payments made to any of the professionals pursuant
to the Approved Budget and permitted to be paid under Sections 330 and 331 of
the Bankruptcy Code or otherwise pursuant to an order of the Bankruptcy Court
shall reduce the respective Priority Professional Expenses allocated to each
such professional. Notwithstanding the expiration of the Term or the termination
of the Lender's obligation to make Advances to the Debtor pursuant to the Loan
Agreement, Lender shall nevertheless continue to make Advances under the Loan
Agreement for the purposes of (i) funding the Carve Out (or any unpaid portion
of the Carve Out) but only to the extent amounts covered by the Carve Out have
been incurred, and not paid, whether or not applied for or allowed prior to the
termination of the
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Lender's obligation to make advances under the Loan Agreement and (ii) funding
any expenses set forth in the Approved Budget which have been incurred but not
paid prior to the termination of the Lender's obligation to make Advances under
the Loan Agreement. Upon the expiration of the Term or the termination of the
Lender's obligation (the "Termination Date") to make advances to the Debtor
pursuant to the Loan Agreement, the Lender shall have no obligation to fund any
Professional Fee Expenses incurred after the Termination Date except to the
extent (i) of an aggregate of $25,000 for all professionals covered by the Carve
Out and (ii) such Professional Fee Expenses are within the individual Carve Out
limits set forth in this Section 4.6
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender the following and
acknowledges:
5.1. PRIOR ENCUMBRANCES; SECURITY INTERESTS. Borrower has good and
marketable title to the Collateral, free and clear of liens, except for the
continuing security interests granted to Lender by Borrower and Permitted Liens.
Other than Permitted Liens, Borrower will not create or permit to be created any
Lien on any Collateral or any of its other assets. The Permitted Liens secure
only the Prepetition Secured Obligations and obligations specified on the
Financing and Cash Collateral Order.
5.2. LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment
is not now, and shall not at any time or times hereafter be stored, with a
bailee, warehouseman, processor, or similar party. Borrower shall keep the
Inventory and Equipment only at the addresses set forth on Schedule 5.2, unless
Inventory or Equipment are required to be moved to a different location to
enable Debtor to provide services to a customer in which case Borrower shall
promptly notify Lender of the new location of such Inventory and Equipment
5.3. RELOCATION OF CHIEF EXECUTIVE OFFICE. The chief executive office
of Borrower is at the address indicated on the first page of this Agreement and
Borrower will not, without ten days' prior written notice to Lender, relocate
such office.
5.4. DUE INCORPORATION AND QUALIFICATION. Borrower is and shall at all
times hereafter be a corporation duly organized and existing under the laws of
the state of its incorporation as set forth on the first page hereof and is
qualified and licensed to do business and is in good standing in any state in
which the conduct of its business or its ownership of assets requires that it be
so qualified.
5.5. FICTITIOUS NAME. Borrower is conducting its business under the
trade or fictitious name(s) listed on Schedule 5.5 and no others. Borrower has
complied with the fictitious name laws of all jurisdictions in which compliance
is required in connection with its use of such name(s).
5.6. PERMITS AND LICENSES. Borrower holds all licenses, permits,
franchises, approvals and consents required for the conduct of its business and
the ownership and operation of its assets.
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5.7. DUE AUTHORIZATION. Borrower has the right and power and is duly
authorized by all appropriate corporate action to enter into each of the Loan
Documents to which it is a party.
5.8. COMPLIANCE WITH ARTICLES; BYLAWS. The execution by Borrower of the
Loan Documents to which it is a party does not constitute a breach of any
provision contained in Borrower's Certificate or Articles of Incorporation or
its Bylaws, nor does it constitute an event of default under any material
agreement to which Borrower is now or may hereafter become a party.
5.9. LITIGATION. Except as disclosed on Schedule 5.9 hereto there are
no actions, proceedings or claims pending by or against Borrower whether or not
before any court or administrative agency and Borrower has no knowledge or
notice of any pending, threatened or imminent litigation, governmental
investigations, or claims, complaints, actions, or prosecutions involving
Borrower, except for ongoing collection matters in which Borrower is the
plaintiff. If any such actions, proceedings or claims presently exist or arise
during the Term, Borrower shall promptly notify Lender in writing and shall,
from time to time, notify Lender of all material events relating thereto.
5.10. ACCURACY OF INFORMATION AND NO MATERIAL ADVERSE CHANGE IN
FINANCIAL STATEMENTS. All information furnished by Borrower to Lender and all
statements made by Borrower to Lender including information set forth in any
loan application, is true, accurate and complete in all respects and does not
contain any misstatement of fact or omit to state any facts necessary to make
the statements or information contained therein not misleading in any material
respect. All financial statements relating to Borrower which have been or may
hereafter be delivered to Lender (a) have been prepared in accordance with GAAP;
(b) fairly present Borrower's financial condition as of the date thereof and
Borrower's results of operations for the period then ended; and (c) disclose all
contingent obligations of Borrower. The Borrower has delivered to the Lender a
three-month cash revenue and expense budget (the "Budget"). The Budget has been
prepared in good faith based upon reasonable assumptions. The Budget is attached
hereto as Exhibit B. To the knowledge of the Borrower, no facts exist that
(individually or in the aggregate) would result in any material change in any of
the assumptions in the Budget. The Budget is based upon reasonable estimates and
assumptions, has been prepared on the basis of the assumptions stated therein
and reflect the reasonable estimates of the Borrower of the results of
operations and other information projected therein.
5.11. ERISA. Neither Borrower or any ERISA Affiliate, nor any Plan is
or has been in violation of any of the provisions of ERISA, any of the
qualification requirements of IRC Section 401(a), or any of the published
interpretations thereof. No lien upon the assets of Borrower has arisen with
respect to any Plan. No "prohibited transaction" within the meaning of ERISA
Section 406 or IRC Section 4975(c) has occurred with respect to any Plan.
Neither Borrower nor any ERISA Affiliate has incurred any withdrawal liability
with respect to any Multiemployer Plan. Borrower and each ERISA Affiliate have
made all contributions required to be made by them to any Plan or Multiemployer
Plan when due. There is no accumulated funding deficiency in any Plan, whether
or not waived.
5.12. ENVIRONMENTAL LAWS AND HAZARDOUS MATERIALS.
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a. Borrower has complied, and at all times through the Term will
comply, with all Environmental Laws. Borrower has not and will not cause or
permit any Hazardous Materials to be located, incorporated, generated, stored,
manufactured, transported to or from, released, disposed of, or used at, upon,
under, or within any premises at which Borrower conducts its business, or in
connection with Borrower's business, except in compliance with applicable law.
To the best of Borrower's knowledge, no prior owner or operator of any premises
at which Borrower conducts its business has caused or permitted any of the above
to occur at, upon, under, or within any of the premises. Borrower will not
permit any lien to be filed against the Collateral or any part thereof under any
Environmental Law, and will promptly notify Lender of any proceeding, inquiry or
claim relating to any alleged violation of any Environmental Law, or any alleged
loss, damage or injury resulting from any Hazardous Material. Lender shall have
the right to join and participate in, as a party if it so elects, any legal or
administrative proceeding initiated with respect to any Hazardous Material or in
connection with any Environmental Law. "Hazardous Material" includes without
limitation any substance, material, emission, or waste which is or hereafter
becomes regulated or classified as a hazardous substance, hazardous material,
toxic substance or solid waste under any Environmental Law, asbestos, petroleum
products, urea formaldehyde, polychlorinated biphenyls (PCBs), radon, and any
other hazardous or toxic substance, material, emission or waste. "Environmental
Law" means the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, the
Hazardous Materials Transportation Act, the Toxic Substances Control Act, the
regulations pertaining to such statutes, and any other safety, health or
environmental statutes, laws, regulations or ordinances of the United States or
of any state, county or municipality in which Borrower conducts its business or
the Collateral is located.
b. All present business operations of Borrower's businesses including
those involving Hazardous Materials are in material compliance with all
applicable Environmental Laws.
5.13. TAX COMPLIANCE. Borrower has filed all tax returns required to be
filed by it and has paid all taxes due and payable on said returns and on any
assessment made against it or its assets, except for returns which have not been
filed but are the subject of appropriate extensions.
5.14. INTELLECTUAL PROPERTY. Schedule 5.14 attached to this Agreement
contains a true, complete and current listing of all copyrights, copyright
applications, trademarks, trademark rights, trade names, patents, patent rights
or licenses, patent applications and other Intellectual Property of the Borrower
that are registered with any governmental authority as of the Closing Date.
Borrower owns or possesses rights to use all franchises, licenses, copyrights,
copyright applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, copyrights and
rights with respect to the foregoing which are required to conduct its business.
No event has occurred which permits, or after notice or lapse of time or both
would permit, the revocation or termination of any such rights, and no Borrower
is liable to any Person for infringement under applicable law with respect to
any such rights as a result of its business operations.
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5.15. EQUITY INTERESTS. All Equity Interests owned by Borrower are set
forth on Schedule 5.15.
5.16. USE OF PROCEEDS. All proceeds provided by Lender to Borrower
pursuant to any Financing and Cash Collateral Order, this Agreement or
otherwise, shall be used by Borrower in accordance with the Approved Budget. No
portion of any administrative expense claim or other claim relating to the Case
shall be used for Ineligible Professional Expenses.
5.17. EVENTS OF DEFAULT. No event of default has occurred or is
existing under any of the Loan Documents.
5.18. FINANCING AND CASH COLLATERAL ORDER. Each applicable Financing
and Cash Collateral Order has been duly entered, is valid, subsisting and
continuing and has not been vacated, modified, reversed on appeal, or vacated or
modified by any order of the Bankruptcy Court (other than as consented to by
Lender) and is not subject to any pending appeal or stay.
5.19. SUPER-PRIORITY ADMINISTRATIVE EXPENSES. Upon the entry of the
Financing and Cash Collateral Order, the Obligations: (a) shall at all times
constitute a Super-Priority Administrative Expense having priority, pursuant to
Sections 364(c)(1) of the Bankruptcy Code, over any other claims of any entity,
including any claims under Sections 503, 507, 1113, and 1114 of the Bankruptcy
Code, other than claims of the lenders under the Prepetition Secured
Obligations, and (b) pursuant to Sections 364(c)(2) and (3) and 364(d) of the
Bankruptcy Code, shall at all times be secured by a perfected lien in all of the
assets (other than Avoidance Actions), whether now owned or hereafter acquired
of Borrower and its estates, pursuant to the terms of the Loan Documents prior
to all Liens, other than the Liens of the lenders under the Prepetition Secured
Obligations.
5.20. RELIANCE BY LENDER; CUMULATIVE. Each warranty, representation and
agreement contained in this Agreement shall be automatically deemed repeated by
Borrower with each request for an Advance and shall be conclusively presumed to
have been relied on by Lender regardless of any investigation made or
information possessed by Lender. The warranties, representations and agreements
set forth herein shall be cumulative and in addition to any and all other
warranties, representations and agreements which Borrower shall now or hereafter
give, or cause to be given, to Lender.
ARTICLE 6
AFFIRMATIVE COVENANTS
Borrower covenants and acknowledges that during the Term Borrower shall
comply with all of the following:
6.1. COLLATERAL AND OTHER REPORTS. Borrower shall provide to Lender the
following: (a) as soon as available and in any event no later than three
Business Days after each semi-monthly period, an operating report ("Operating
Report") (in form and substance satisfactory to Lender as of the last day of the
preceding semi-monthly period, setting forth the following information for the
Borrower for the preceding semi-monthly period on both a semi-
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monthly and cumulative basis from the Filing Date to such date, together with a
reconciliation report comparing such results with the Borrower's Budget for such
period, on a cash basis: (i) total disbursements and (ii) total cash receipts;
(b) within one Business Day of Borrower's filing with the Bankruptcy Court, all
Monthly Operating Reports required by the Office of the United States Trustee
and all schedules and statements required by Section 521 of the Bankruptcy Code
and Federal Rule of Bankruptcy Procedure 1007; and (c) within one Business Day
of filing or distribution, as the case may be, copies of all pleading, motions,
applications, judicial information, financial information and other documents
filed by or on behalf of Borrower with the Bankruptcy Court in the Case, or
distributed by or on behalf of Borrower to any official committee appointed in
the Case or to any unofficial committee.
6.2. FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Borrower shall
deliver to Lender as soon as available, but in any event within ninety (90) days
after the end of each of Borrower's fiscal years, financial statements of
Borrower for each such fiscal year. Such financial statements shall include a
balance sheet and profit and loss statement, and the accountants' management
letter, if any, and shall be prepared in accordance with GAAP. Together with the
above, Borrower shall also deliver Borrower's Form 10-Qs, 10-Ks or 8-Ks, if any,
as soon as the same become available, and any other report reasonably requested
by Lender relating to the Collateral and the financial condition of Borrower and
a certificate signed by its chief financial officer to the effect that all
reports, statements or computer prepared information of any kind or nature
delivered or caused to be delivered to Lender under this Section 6.2 to fairly
present its financial condition and that there exists on the date of delivery of
such certificate to Lender no condition or event which constitutes an Event of
Default.
6.3. TAX RETURNS, RECEIPTS. Borrower shall deliver to Lender copies of
each of its future federal income tax returns, and any amendments thereto,
within thirty (30) days of the filing thereof. Borrower further shall promptly
deliver to Lender, upon request, satisfactory evidence of Borrower's payment of
all withholding and other taxes required to be paid by it.
6.4. TITLE TO EQUIPMENT. Upon Lender's request, Borrower shall promptly
deliver to Lender, properly endorsed, any and all evidences of ownership of,
certificates of title, or applications for title to any items of Equipment.
6.5. MAINTENANCE OF EQUIPMENT. Borrower shall keep and maintain the
Inventory and Equipment in good operating condition and repair, and shall make
all necessary replacements thereto so that its value and operating efficiency
shall at all times be maintained and preserved. Borrower shall not permit any
item of Collateral to become a fixture to real estate or an accession to other
property, and the Collateral is now and shall at all times remain Borrower's
personal property.
6.6. TAXES. All Federal, state and local assessments and taxes, whether
real, personal or otherwise, due or payable by, or imposed, levied or assessed
against Borrower or any of its assets or in connection with Borrower's business
shall hereafter be paid in full, before they become delinquent or before the
expiration of any extension period except for those taxes, assessments and the
like being contested by Borrower in good faith and by appropriate proceedings
and as to which Borrower has established appropriate reserves, provided, that no
Lien is placed on any assets of Borrower during any such contest as a
consequence of the failure
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to pay such tax, assessment or the like. Borrower shall make due and timely
payment or deposit of all federal, state and local taxes, assessments or
contributions required of it by law, and will execute and deliver to Lender, on
demand, appropriate certificates attesting to the payment or deposit thereof.
6.7. INSURANCE. Borrower, at its expense, shall keep and maintain the
Collateral insured against all risk of loss or damage from fire, theft,
vandalism, malicious mischief, explosion, sprinklers, and all other hazards and
risks of physical damage included within the meaning of the term "extended
coverage" in such amounts as are ordinarily insured against by similar
businesses. Borrower shall also keep and maintain comprehensive general public
liability insurance and property damage insurance, and insurance against loss
from business interruption, insuring against all risks relating to or arising
from Borrower's ownership and use of the Collateral and its other assets and the
operation of its business. All such policies shall be in such form, with such
companies and in such amounts as may be reasonably satisfactory to Lender.
Borrower shall deliver to Lender certified copies of such policies and evidence
of the payments of all premiums therefor upon request. All such policies (except
those of public liability and liability property damage) shall contain a
Lender's Loss Payable endorsement in a form satisfactory to Lender, naming
Lender as sole loss payee thereof, and containing a waiver of warranties. All
proceeds payable under such policies shall be payable to Lender. In the event of
partial or total destruction of the collateral by fire or other casualty, the
insurance proceeds shall, if an Event of Default exists, at the option of
Lender, be paid to Lender to reduce the Obligations, or, alternatively, be held
in a trust fund with Lender to be disbursed solely for repairs and
reconstruction of such collateral or if no Event of Default exists such
insurance proceeds shall at the option of Borrower, be applied to reduce the
balance owing on the Obligations or be held in a trust fund with Lender to be
disbursed solely for repairs and reconstruction of the collateral. Any such
trust fund shall be additional security for the Obligations. Borrower shall
notify Lender of its exercise of its option as to the use of such insurance
proceeds within thirty (30) days of the subject casualty occurrence.
6.8. LENDER EXPENSES. All reasonable Lender Expenses shall be paid at
the same time as all of the Obligations are paid.
6.9. COMPLIANCE WITH LAW. Borrower shall comply, in all material
respects, with the requirements of all applicable laws, rules, regulations and
orders of governmental authorities relating to Borrower and the conduct of its
business.
6.10. ACCOUNTING SYSTEM. Borrower at all times hereafter shall maintain
a standard and modern system of accounting in accordance with GAAP with ledger
and account cards or computer tapes, disks, printouts and records pertaining to
the Collateral containing such information as may from time to time be requested
by Lender.
6.11. COMPLIANCE WITH BANKRUPTCY COURT. Borrower shall comply in full
with the notice and other requirements of the Bankruptcy Code and all other
applicable rules with respect to any relevant Financing and Cash Collateral
Order in a manner acceptable to Lender and its counsel.
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ARTICLE 7
NEGATIVE COVENANTS
Borrower covenants and acknowledges that during the Term Borrower shall
not undertake any of the following without the prior written consent of Lender:
7.1. EXTRAORDINARY TRANSACTIONS AND DISPOSAL OF ASSETS. Enter into any
transaction not in the ordinary and usual course of its business as conducted on
the date hereof, including but not limited to the sale, lease, disposal,
movement, relocation or transfer, whether by sale or otherwise, of any its
assets other than the licensing of its Equipment and technology in the ordinary
and usual course of its business as presently conducted; incur any indebtedness
for borrowed money or any other indebtedness outside the ordinary and usual
course of its business as conducted on the date hereof except for renewals or
extensions of existing debts permitted by Lender and transactions contemplated
by the Bidding Procedures Order (as defined in the Asset Purchase Agreement);
make any advance or loan to any third party; or xxxxx x xxxx on any of its
assets except (a) in favor of Lender or (b) the Permitted Liens.
7.2. CHANGE NAME. Change its name, business structure or identity or
add any new fictitious name.
7.3. MERGE, ACQUIRE. Merge, acquire, or consolidate with or into any
other business organization.
7.4. GUARANTY. Guaranty or otherwise become in any way liable with
respect to the obligations of any third party, except by endorsement of
instruments or items of payment for deposit to the account of Borrower for
negotiation and delivery to Lender.
7.5. RESTRUCTURE. Make any material change in its financial structure
or business operations.
7.6. PREPAYMENTS. Prepay any existing indebtedness owing to any third
party other than expenses in the Budget that are due no later than 15 days
thereafter.
7.7. LOANS AND ADVANCES. Make any loans, advances or extensions of
credit to any officer, director, executive employee or shareholder of Borrower
(or any relative of any of the foregoing), or to any entity which is a
subsidiary of, related to, affiliated with or has common shareholders, officers
or directors with Borrower. Notwithstanding the foregoing, Borrower shall be
permitted to make reasonable travel expense advances and similarly related
expense advances as made in the Borrower's ordinary course of business in
accordance with the Approved Budget.
7.8. CAPITAL EXPENDITURES. Make any capital expenditure, or any
commitment therefor, or purchase or lease any real or personal assets or
replacement Equipment in excess of sums, if any, set forth for this purpose in
the Approved Budget.
7.9. CONSIGNMENTS OF INVENTORY. Consign any Inventory or Equipment
except to persons or entities as to which Borrower has furnished to Lender prior
written notice
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and provided Borrower has filed such UCC-1 financing statements or taken such
other action as required by applicable law to perfect Borrower's interest in
such consigned Inventory.
7.10. DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or in stock) on, or purchase, acquire, redeem or retire any
of its capital stock, of any class, whether now or hereafter outstanding.
7.11. ACCOUNTING METHODS. Modify or change its method of accounting or
enter into, modify or terminate any agreement presently existing or at any time
hereafter entered into with any third party for the preparation or storage of
Borrower's records of Accounts and financial condition without said party
agreeing to provide Lender with information regarding the Collateral or
Borrower's financial condition. Borrower waives the right to assert a
confidential relationship, if any, it may have with any such third party in
connection with any information requested by Lender hereunder, and agrees that
Lender may contact any such party directly in order to obtain such information.
7.12. BUSINESS SUSPENSION. Suspend or go out of business.
7.13. BANKRUPTCY CASE. Seek, consent or suffer to exist: (a) any
modification, stay, vacation or amendment to any Financing and Cash Collateral
Order, unless Lender has consented to such modification, stay, vacation or
amendment in writing, (b) a priority claim for any administrative expense or
unsecured claim against Borrower (now existing or hereafter arising of any kind
or nature whatsoever, including any administrative expense of the kind specified
in Section 503(b), 506(c) or 507(b) of the Bankruptcy Code) equal or superior to
the priority claim of Lender in respect of the Obligations except as expressly
permitted in favor of the Prepetition Secured Lenders as provided in the
Financing and Cash Collateral Order, or (c) any Lien on any Collateral, having a
priority equal or superior to the liens in favor of Lender in respect of the
Obligations except Permitted Liens securing the Secured Prepetition Obligations.
ARTICLE 8
EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall
constitute an Event of Default by Borrower hereunder:
8.1. FAILURE TO PAY. Borrower's failure to pay when due and payable, or
when declared due and payable, any portion of the Obligations (whether
prepetition or post-petition, and whether principal, interest, taxes, Lender
Expenses, or otherwise);
8.2. FAILURE TO PERFORM. Borrower's failure to perform, keep or observe
any term, provision, condition, representation, warranty, covenant or agreement
contained in this Agreement, in any of the Loan Documents, in any Financing and
Cash Collateral Order, or in any other present or future agreement between
Borrower and Lender. Notwithstanding the foregoing, with respect to a failure of
Borrower to timely deliver any Operating Report due on a monthly basis to Lender
pursuant to Section 6.1 or to meet any timely delivery obligations under Section
6.3, Lender shall provide Borrower with written notice of any such default
hereunder and
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provide Borrower with five (5) days from receipt of such notice to cure such
default. If Borrower fails to cure any such default within this cure period,
Lender may exercise any and all of its rights and remedies as set forth in this
Agreement;
8.3. MISREPRESENTATION. Any material misstatement or material
misrepresentation now or hereafter exists in any warranty, representation,
statement, aging or report made to Lender by, Borrower or any officer, employee,
agent or director thereof, or if any such warranty, representation, statement,
aging or report is withdrawn by such person;
8.4. MATERIAL ADVERSE CHANGE. Borrower is enjoined from conducting any
part of its business as a debtor in possession, or there is a material adverse
change in Borrower's business or financial condition, provided, that the
commencement of the Case shall not constitute a material adverse change;
8.5. LEVY OR ATTACHMENT. Any material portion of Borrower's assets is
attached, seized, subjected to a writ or distress warrant or is levied upon, or
comes into the possession of any judicial officer or assignee;
8.6. INJUNCTION AGAINST BORROWER. Borrower is enjoined, restrained or
in any way prevented by court order from continuing to conduct all or any
material part of its business;
8.7. GOVERNMENT LIEN. A notice of lien, levy or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, or any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a lien, whether xxxxxx or
otherwise, securing an amount of $10,000 or more upon any of Borrower's assets
and the same is not paid on the payment date thereof;
8.8. DEFAULT TO THIRD PARTY. There is a default in any material
post-Filing Date agreement to which Borrower is a party which binds Borrower or
any of its assets and which permits the counterparty to exercise its rights and
remedies and such counterparty does exercise its rights and remedies;
8.9. ERISA VIOLATION. A prohibited transaction within the meaning of
ERISA Section 406 or IRC Section 1975(c) shall occur with respect to a Plan
which could have a material adverse effect on the financial condition of
Borrower; any lien upon the assets of Borrower in connection with any Plan shall
arise; Borrower or any ERISA Affiliate shall completely or partially withdraw
from a Multiemployer Plan and such withdrawal could, in the good faith opinion
of Lender, have a material adverse effect on the financial condition of
Borrower. Borrower or any of its ERISA Affiliates shall fail to make full
payment when due of all amounts which Borrower or any of its ERISA Affiliates
may be required to pay to any Plan or any Multiemployer Plan as one or more
contributions thereto; Borrower or any of its ERISA Affiliates creates or
permits the creation of any accumulated funding deficiency, whether or not
waived; the voluntary or involuntary termination of any Plan which termination
could, in the good faith opinion of Lender, have a material adverse effect on
the financial condition of Borrower or Borrower shall fail to notify Lender
promptly and in any event within ten (l0) days
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of the occurrence of an event which constitutes an Event of Default under this
clause or would constitute an Event of Default upon the exercise of Lender's
judgment;
8.10. BANKRUPTCY COURT. The Bankruptcy Court enters any order that has
not been consented to by Lender: (a) amending, supplementing, altering, staying,
vacating, rescinding or otherwise modifying any Financing and Cash Collateral
Order or any other order with respect to any of the Case affecting in any
material respect this Agreement, (b) appointing a Chapter 11 trustee or an
examiner with enlarged powers relating to the operation of the business (powers
beyond those set forth in Section 1106(a)(3) and (4) of the Bankruptcy Code)
under Section 1106(b) of the Bankruptcy Code in any of the Case, (c) dismissing
the Case or converting the Case to a Chapter 7 case, (d) permitting a sale of
any of Borrower's assets where the proceeds are not used to pay the Prepetition
Secured Obligations and the Obligations in cash at the closing of that
transaction, or (e) permitting a sale of a material portion of Borrower's assets
where all Obligations are not indefeasibly paid in full in cash at the closing
of that transaction;
8.11. JUDGMENTS OR EXECUTION ACTION. There remains undischarged for
more than ten (10) days any final post-petition judgment or execution action
against Borrower, or relief from the automatic stay of Section 362(a) of the
Bankruptcy Code shall be granted to any creditor or creditors of Borrower with
respect to assets having an aggregate value in excess of $50,000 or where the
deprivation of Borrower of such assets would reasonably be expected to have a
material adverse effect on Borrower, considered as a whole;
8.12. MOTIONS. Borrower files a motion in the Case without Lender's
consent (a) except as provided in any Financing and Cash Collateral Order, to
use cash collateral under Section 363(c) of the Bankruptcy Code, (b) to recover
from any portions of the Collateral any costs or expenses of preserving or
disposing of such Collateral under Section 506(c) of the Bankruptcy Code, (c) to
take any other action or actions adverse to Lender or its rights and remedies
hereunder or under any of the other Loan Documents or any of the documents
evidencing or creating Lender's interest in any of the Collateral, or (d) to
take any other action that would be an Event of Default;
8.13. ACTIONS. A suit or action against Lender is commenced by
Borrower, any federal, state environmental protection or health and safety
agency, any shareholder or any official committee in any Case, any suit or
action which asserts any claim or legal or equitable remedy contemplating
subordination of any claim or lien of Lender or its affiliates, and shall remain
undismissed or unstayed for thirty (30) days after its commencement without any
preliminary relief of the nature sought having been granted;
8.14. REORGANIZATION PLAN. Borrower files a plan of reorganization in
the Case or a motion for the sale of a material portion of the assets pursuant
to Section 363 of the Bankruptcy Code which does not provide for indefeasible
payment in full of the Obligations in cash on the effective date thereof or to
which Lender does not otherwise consent;
8.15. BUDGET VARIANCES. If as, of any date, either (a) cumulative
expenses and costs exceed the amounts set forth in the Budget by more than five
percent, (b) any line item expenses and costs exceed the amounts set forth in
the Budget by more than twenty-five percent
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(25%), or (c) cumulative collections (that are available for use by the Borrower
in the ordinary course of business) are less than the amounts set forth in the
Budget by more than ten percent; or
8.16. CHANGE IN CONTROL. Any Change of Control.
ARTICLE 9
LENDER'S RIGHTS AND REMEDIES
9.1. RIGHTS AND REMEDIES. Upon the occurrence of an Event of Default,
Lender may, at its election, and the expiration of any applicable cure period
without notice of such election and without demand except as provided in
paragraph 13 of the Financing and Cash Collateral Order, do any one or more of
the following:
a. Declare all Obligations, whether evidenced by the Loan Documents or
otherwise, immediately due and payable in full:
b. Cease advancing money or extending credit to or for the benefit of
Borrower under the Loan Documents or under any other agreement between Borrower
and Lender;
c. Terminate this Agreement as to any future liability or obligation of
Lender, but without affecting Lender's rights and security interest in the
Collateral and without affecting the Obligations;
d. Subject to the rights of the holders of the Prepetition Secured
Obligations, settle or adjust disputes and claims directly with Account debtors
for amounts and upon terms which Lender considers advisable and, in such cases,
Lender will credit the Obligations with the net amounts received by Lender in
payment of such disputed Accounts, after deducting all Lender Expenses;
e. Subject to the rights of the holders of the Prepetition Secured
Obligations, cause Borrower to hold all returned Inventory in trust for Lender,
segregate all returned Inventory from all other property of Borrower or in
Borrower's possession and conspicuously label said returned Inventory as the
property of Lender;
f. Without notice to or demand upon Borrower, make such payments and do
such acts as Lender considers necessary or reasonable to protect its security
interest in the Collateral. Borrower shall assemble the Collateral if Lender so
requires and deliver or make the Collateral available to Lender at a place
designated by Lender. Borrower authorizes Lender to enter any premises where the
Collateral is located, to take and maintain possession of the Collateral, or any
part of it, and to pay, purchase, contest or compromise any encumbrance, charge
or lien which in Lender's determination appears to be prior or superior to its
security interest and to pay all expenses incurred in connection therewith;
g. Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, lease, license or other disposition, advertise for sale, lease, license or
other disposition, and sell,
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lease, license or otherwise dispose of (in the manner provided for herein or in
the UCC) the Collateral. Lender is hereby granted a license or other right to
use, without charge, Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks, service marks, and advertising
matter, or any asset of a similar nature, pertaining to the Collateral, in
completing the production of, advertising for sale, lease, license or other
disposition, and sale, lease license or other disposition of the Collateral.
Borrower's rights under all licenses and all franchise agreements shall inure to
Lender's benefit;
h. Subject to the rights of the holders of the Prepetition Secured
Obligations, sell, lease, license or otherwise dispose of the Collateral at
either a public or private proceeding, or both, by way of one or more contracts
or transactions, for cash or on terms, in such manner and at such places
(including Borrower's premises) as is commercially reasonable. It is not
necessary that the Collateral be present at any such sale;
i. Lender shall give notice of the disposition of the Collateral as
follows:
(i) To Borrower and each holder of a security interest in the
Collateral who has filed with Lender a written request for notice, a notice in
writing of the time and place of public sale or other disposition or, if the
sale or other disposition is a private sale or some other disposition other than
a public sale is to be made, then the time on or after which the private sale or
other disposition is to be made;
(ii) The notice hereunder shall be personally delivered or mailed,
postage prepaid, to Borrower as provided in Section 12, at least ten (10)
calendar days before the date fixed for the sale or other disposition, or at
least five (5) calendar days before the date on or after which the private sale
or other disposition is to be made, unless the Collateral is perishable or
threatens to decline speedily in value. Notice to persons other than Borrower
claiming an interest in the Collateral shall be sent to such addresses as they
have furnished to Lender;
j. Lender may credit bid and purchase at any public sale;
k. Any deficiency that exists after disposition of the Collateral as
provided herein shall be immediately paid by Borrower. Any excess will be
remitted without interest by Lender to the party or parties legally entitled to
such excess; and
l. In addition to the foregoing, Lender shall have all rights and
remedies provided by law (including those set forth in the UCC) and any rights
and remedies contained in any Loan Documents and all such rights and remedies
shall be cumulative.
9.2. NO WAIVER. No delay on the part of Lender in exercising any right,
power or privilege under any Loan Document shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege under such Loan
Documents or otherwise, preclude other or further exercise of any such right,
power or privilege.
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ARTICLE 10
TAXES AND EXPENSES REGARDING THE COLLATERAL
If Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums or otherwise) due to third persons or entities, or fails to
make any deposits or furnish any required proof of payment or deposit, or fails
to perform any of Borrower's other covenants under any of the Loan Documents,
then in its discretion and upon prior notice to Borrower, Lender may do any or
all of the following: (a) make any payment which Borrower has failed to pay or
any part thereof; (b) set up such reserves in Borrower's loan account as Lender,
in its reasonable discretion, deems necessary to protect Lender from the
exposure created by such failure; (c) obtain and maintain insurance policies of
the type described in Section 6.10 and take any action with respect to such
policies as Lender deems prudent; or (d) take any other action, in its
reasonable discretion, deemed necessary to preserve and protect its interests
and rights under the Loan Documents. Any payments made by Lender shall not
constitute: (a) an agreement by Lender to make similar payments in the future or
(b) a waiver by Lender of any Event of Default. Lender need not inquire as to,
or contest the validity of, any such expense, tax, security interest,
encumbrance or lien and the receipt of notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.
ARTICLE 11
WAIVERS
11.1. DEMAND, PROTEST. Except as provided in paragraph 13 of the
Financing and Cash Collateral Order, Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, and notice of nonpayment at maturity and acknowledges that
Lender may compromise, settle or release, without notice to Borrower, any
Collateral and/or guaranties at any time held by Lender. Borrower hereby
consents to any extensions of time of payment or partial payment at, before or
after the Termination Date.
11.2. NO MARSHALING. Borrower, on its own behalf and on behalf of
hereby expressly waives all rights, if any, to require a marshaling of assets by
Lender or to require that Lender first resort to some portion(s) of the
Collateral before foreclosing upon, selling or otherwise realizing on any other
portion thereof.
11.3. LENDER'S NON-LIABILITY FOR INVENTORY OR EQUIPMENT OR FOR
PROTECTION OF RIGHTS. So long as Lender complies with its obligations, if any,
under Section 9-207 of the UCC, Lender shall not in any way or manner be liable
or responsible for: (a) the safekeeping of the Inventory or Equipment; (b) any
loss or damage thereto occurring or arising in any manner or fashion from any
cause; (c) any diminution in the value thereof; or (d) any act or default of any
carrier, warehouseman, bailee, forwarding agency or other person whomsoever. All
risk of loss, damage or destruction of the Inventory or Equipment shall be borne
by Borrower. Lender shall have no obligation to protect any rights of Borrower
against any person obligated on any Collateral.
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ARTICLE 12
NOTICES
Unless otherwise provided herein, all consents, waivers, notices or
demands by any party relating to the Loan Documents shall be in writing and
(except for financial statements and other informational documents which may be
sent by first-class mail, postage prepaid) shall be telecopied (followed up by a
mailing), personally delivered or sent by registered or certified mail, postage
prepaid, return receipt requested, or by receipted overnight delivery service to
Borrower or to Lender, as the case may be, at their addresses set forth below
IF TO BORROWER: Princeton Video Image, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: President
Fax # (000) 000-0000
WITH A COPY TO: Fox Rothschild LLP
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-000
Attn: Xxx X. Baume, Esq.
Fax # (000) 000-0000
WITH A COPY TO: Smith, Stratton, Wise, Xxxxx & Xxxxxxx, LLP
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000-
Attn: Xxxxxxx X. Xxxxx
Fax # (000) 000-0000
WITH A COPY TO: Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxx and Xxxxx Xxxxxx
Fax # (000) 000-0000
IF TO LENDER: Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Xxxx Xxxxx, Esq.
Fax # (000) 000-0000
Fax # (000) 000-0000
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WITH A COPY TO: Xxxxxxxx & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Xxx X. Xx, Esq.
Fax # (000) 000-0000
Any party may change the address at it is to receive notices hereunder
by notice in writing in the foregoing manner given to the other. All notices or
demands sent in accordance with this Article 12 shall be deemed received on the
earlier of the date of actual receipt or five (5) calendar days after the
deposit thereof in the mail or on the date telecommunicated if telecopied. The
failure to provide a copy of any notice, consent, waiver, demand or other
document or communication to Borrower's or Lender's counsel as indicated above
shall not affect its validity.
ARTICLE 13
GENERAL PROVISIONS
13.1. EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower and executed and delivered by Lender.
13.2. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the respective successors and assigns of each of the parties;
provided, however, that Borrower may not assign this Agreement or any rights
hereunder and any prohibited assignment shall be absolutely void. No consent to
an assignment by Lender shall release Borrower from its Obligations. Without
notice to or the consent of Borrower, Lender may assign this Agreement and its
rights and duties hereunder and Lender reserves the right to sell, assign,
transfer, negotiate or grant participations in all or any part of, or any
interest in Lender's rights and benefits hereunder. In connection therewith,
Lender may disclose all documents and information which Lender now or hereafter
may have relating to Borrower or Borrower's business. Borrower and Lender do not
intend any of the benefits of the Loan Documents to inure to any third party,
and no third party shall be a third party beneficiary hereof or thereof.
13.3. SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only.
13.4. INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Lender or Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by each party and shall be construed and interpreted
according to the ordinary meaning of the words used so as to fairly accomplish
the purposes and intentions of the parties hereto.
13.5. SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of such provision.
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13.6. AMENDMENTS IN WRITING. This Agreement cannot be changed or
terminated orally. This Agreement is the entire agreement between the parties
with respect to the matters contained herein. This Agreement supersedes all
prior agreements, understandings and negotiations, if any, all of which are
merged into this Agreement.
13.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which, when executed and delivered, shall be deemed to be
an original and all of which, when taken together, shall constitute but one and
the same Agreement.
13.8. INDEMNIFICATION. Borrower hereby indemnifies, protects, defends
and saves harmless Lender and any member, officer, director, official, agent,
employee and attorney of Lender, and their respective heirs, successors and
assigns (collectively, the "Indemnified Parties"), from and against any and all
losses, damages, expenses or liabilities of any kind or nature and from any
suits, claims or demands, including reasonable counsel fees incurred in
investigating or defending such claim, suffered by any of them and caused by,
relating to, arising out of, resulting from, or in any way connected with the
Loan Documents and the transactions contemplated therein or the Collateral
(unless caused by the gross negligence or willful misconduct of the Indemnified
Parties) including, without limitation: (a) losses, damages, expenses or
liabilities sustained by Lender in connection with any environmental cleanup or
other remedy required or mandated by any Environmental Law; (b) breach of any
material representation or warranty contained in any Loan Documents; (c) the
failure of Borrower to perform any obligations required to be performed by
Borrower under the Loan Documents; and (d) the ownership, construction,
occupancy, operations, use and maintenance of any of Borrower's assets. The
provisions of this Section 13.8 shall survive termination of this Agreement and
the other Loan Documents.
ARTICLE 14
CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
THE VALIDITY OF THE LOAN DOCUMENTS, THEIR CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES AGREE
THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THE LOAN DOCUMENTS
SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS LOCATED IN THE STATE OF
NEW YORK, THE BANKRUPTCY COURT, AND/OR THE FEDERAL COURTS WHOSE VENUE INCLUDES
THE STATE OF NEW YORK, OR AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN
WHICH Lender SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT
MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. BORROWER AND LENDER EACH
WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE RIGHT TO A TRIAL BY
JURY IN ANY PROCEEDING UNDER THE LOAN DOCUMENTS OR RELATING TO THE DEALINGS OF
BORROWER AND LENDER AND ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF "FORUM
NON
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CONVENIENS" OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS ARTICLE 14.
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Borrower and Lender have executed this Agreement as of the date first
above written.
PRINCETON VIDEO IMAGE, INC.
a Delaware corporation, Debtor in Possession
By:
---------------------------------
Name:
Title:
PVI VIRTUAL MEDIA SERVICES, LLC
a Delaware limited liability company, Lender
By:
---------------------------------
Name:
Title:
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UPDATE/SEARCH
EXHIBIT
-------
Exhibit A Form of Borrowing Request
Exhibit B Initial Budget
SCHEDULES
---------
Schedule 5.1(a) Permitted Liens
Schedule 5.1(b) Prepetition Secured Loan Documents and Prepetition Secured
Obligations
Schedule 5.2 Locations of Inventory and Equipment
Schedule 5.5 Other Names
Schedule 5.9 Litigation
Schedule 5.14 Intellectual Property
Schedule 5.15 Equity Interests
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EXHIBIT A
FORM OF BORROWING REQUEST
[DATE]
PVI Virtual Media Services, LLC
[---------]
[---------]
Attention: [_________]
Reference is made to the Loan and Security Agreement, dated as of May __, 2003,
among PVI Virtual Media Services, LLC ("Lender") and Princeton Video Image, Inc.
("Borrower") (as the same may be amended, supplemented or otherwise modified
from time to time, the "Loan Agreement"). Capitalized terms used herein that are
defined in the Loan Agreement shall have the meanings therein defined.
Pursuant to Section 2.3 of the Loan Agreement, the Borrower hereby gives notice
of its request for an Advance in the principal amount of $_______ on ______ __,
200_.
The Borrower hereby certifies that:
(i) this request for an Advance is made in accordance with the
provisions set forth in Section 2.1 of the Loan Agreement;
(ii) the funds will be used in accordance with the Approved Budget;
(iii) after giving effect to the requested Advance, the aggregate
Advances made to date will total $__________________; and
(iv) the aggregate "Cash Shortfall" for the period beginning on the
Filing Date and ending as of the end of the most-recently ended
semi-monthly period reflected in the Approved Budget is
$___________.
The Borrower hereby further certifies that on the date hereof and on the date of
the proposed new Advance, and after giving effect to the Advance requested
hereby, there exists and shall exist no Event of Default, each of the
representations and warranties contained in each Loan Document is and shall be
true and correct in all material respects, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties were true and correct in all material
respects at such earlier date.
IN WITNESS WHEREOF, the Borrower has caused this Borrowing Request to be
executed by its authorized representative as of the date and year first written
above.
PRINCETON VIDEO IMAGE, INC.
By:
------------------------------------
Name:
Title:
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