Exhibit 10.24
This LOAN AND SECURITY AGREEMENT is entered into as of September 24,
2001, by and between IPRINT TECHNOLOGIES, INC. ("Creditor") and WOOD ALLIANCE,
INC., d/b/a/ WOOD ASSOCIATES, INC. ("Borrower").
RECITALS
--------
Borrower wishes to obtain from Creditor, and Creditor desires to make a
loan to Borrower, for the purpose of providing working capital for the
production of merchandise in response to certain customer orders. This Agreement
sets forth the terms on which Creditor will advance such funds to Borrower, and
Borrower will repay the amounts owing to Creditor.
AGREEMENT
---------
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
----------------------------
1.1 Definitions. As used in this Agreement, the
-----------
following terms shall have the following definitions:
"Affiliate" means, with respect to any Person, any
Person that owns or controls directly or indirectly such Person, any Person that
controls or is controlled by or is under common control with such Person, and
each of such Person's senior executive officers, directors, and partners.
"Creditor Expenses" means all reasonable costs or
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with the enforcement of the Loan Documents; and Creditor's reasonable
attorneys' fees and expenses incurred in amending, enforcing or defending the
Loan Documents, incurred before, during and after an Insolvency Proceeding,
whether or not suit is brought.
"Business Day" means any day that is not a Saturday,
Sunday, or other day on which banks in the State of California are authorized or
required to close.
"Change in Control" shall mean a transaction in which
any "person" or "group" (within the meaning of Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of a sufficient number of shares of all classes of stock then outstanding of
Borrower ordinarily entitled to vote in the election of directors, empowering
such "person" or "group" to elect a majority of the Board of Directors of
Borrower, who did not have such power before such transaction.
"Closing Date" means the date of this Agreement.
"Code" means the California Uniform Commercial Code.
"Collateral" means the property described on Exhibit
A attached hereto.
"Combined Company" has the meaning ascribed thereto
in Section 7.6.
"Comerica Agreement" means the Amended and Restated
Revolving Loan and Security Agreement entered into as of January 31, 2000 by and
between Borrower and Comerica Bank - California, as amended from time to time.
"Comerica Consent" means a consent executed by an
authorized officer of Comerica Bank - California approving the transactions
under this Agreement and the Loan Documents.
1
"Comerica Subordination Agreement" means the Amended
and Restated Intercreditor Agreement entered into between Comerica
Bank-California and Creditor dated as of September 24, 2001.
"Contingent Obligation" means, as applied to any
Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to (i) any indebtedness, lease, dividend, letter of credit
or other obligation of another, including, without limitation, any such
obligation directly or indirectly guaranteed, endorsed, co-made or discounted or
sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable; (ii) any obligations with respect to
undrawn letters of credit issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designed to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term "Contingent Obligation" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.
"Event of Default" has the meaning assigned in
Article 8.
"GAAP" means generally accepted accounting principles
as in effect from time to time.
"Indebtedness" means (a) all indebtedness for
borrowed money or the deferred purchase price of property or services, including
without limitation reimbursement and other obligations with respect to surety
bonds and letters of credit, (b) all obligations evidenced by notes, bonds,
debentures or similar instruments, (c) all capital lease obligations and (d) all
Contingent Obligations.
"Insolvency Proceeding" means any proceeding
commenced by or against any person or entity under any provision of the United
States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.
"Investment" means any beneficial ownership of
(including stock, partnership interest or other securities) any Person, or any
loan, advance or capital contribution to any Person.
"Lien" means any mortgage, lien, deed of trust,
charge, pledge, security interest or other encumbrance.
"Loan" has the meaning set forth in Section 2(a).
"Loan Documents" means, collectively, this Agreement,
the Promissory Note, any other note or notes executed by Borrower, and any other
agreement entered into between Borrower and Creditor in connection with this
Agreement, all as amended or extended from time to time.
"Material Adverse Effect" means a material adverse
effect on (i) the business operations or condition (financial or otherwise) of
Borrower and its Subsidiaries taken as a whole or (ii) the ability of Borrower
to repay the Obligations or otherwise perform its obligations under the Loan
Documents.
"Maturity Date" means September 23, 2002.
"Merger" means the merger between Creditor and
Borrower as contemplated under the Agreement and Plan of Reorganization dated as
of June 23, 2001.
"Obligations" means all debt, principal, interest,
Creditor Expenses and other amounts owed to Creditor by Borrower pursuant to
this Agreement or any other agreement entered into in connection with
2
this Agreement, whether absolute or contingent, due or to become due, now
existing or hereafter arising, including any interest that accrues after the
commencement of an Insolvency Proceeding.
"Permitted Indebtedness" means:
(a) Indebtedness of Borrower in favor of
Creditor arising under this Agreement or any other Loan Document;
(b) Indebtedness existing on the Closing Date
and disclosed in the Schedule; and
(c) Indebtedness secured by a lien described in
clause (c) of the defined term "Permitted Liens," provided (i) such Indebtedness
does not exceed the lesser of the cost or fair market value of the equipment
financed with such Indebtedness and (ii) such Indebtedness does not exceed
$100,000 in the aggregate at any given time; and
(d) Other Indebtedness not to exceed $3,000,000.
"Permitted Investment" means:
(a) Investments existing on the Closing Date
disclosed in the Schedule; and
(b) (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or any
State thereof maturing within one (1) year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having rating of at least A-2 or P-2 from either
Standard & Poor's Corporation or Xxxxx'x Investors Service, (iii) certificates
of deposit maturing no more than one (1) year from the date of investment
therein issued by Creditor and (iv) Creditor's money market accounts.
"Permitted Liens" means the following:
(a) Any Liens existing on the Closing Date and
disclosed in the Schedule or arising under this Agreement or the other Loan
Documents, or any Liens in connection with Permitted Indebtedness;
(b) Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings, provided the same have no priority over any of
Creditor's security interests;
(c) Liens (i) upon or in any equipment acquired
or held by Borrower or any of its Subsidiaries to secure the purchase price of
such equipment or indebtedness incurred solely for the purpose of financing the
acquisition of such equipment, or (ii) existing on such equipment at the time of
its acquisition, provided that the Lien is confined solely to the property so
acquired and improvements thereon, and the proceeds of such equipment;
(d) Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of the
type described in clauses (a) through (c) above, provided that any extension,
renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being extended,
renewed or refinanced does not increase;
(e) Warehouseman's, materialman's, repairman's,
mechanics' and other like liens incurred in the ordinary course of business.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or governmental agency.
3
"Responsible Officer" means each of the Chief
Executive Officer, the Chief Operating Officer, the Chief Financial Officer and
the Controller of Borrower.
"Schedule" means the schedule of exceptions attached
hereto and approved by Creditor, if any.
"Strategic Development Agreement" means the
technology agreement entered into between Creditor and Borrower dated as of the
date hereof.
"Subsidiary" means any corporation, company or
partnership in which (i) any general partnership interest or (ii) more than 50%
of the stock or other units of ownership which by the terms thereof has the
ordinary voting power to elect the Board of Directors, managers or trustees of
the entity, at the time as of which any determination is being made, is owned by
Borrower, either directly or through an Affiliate.
1.2 Accounting Terms. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with GAAP and all
calculations made hereunder shall be made in accordance with GAAP. When used
herein, the terms "financial statements" shall include the notes and schedules
thereto.
2. LOAN AND TERMS OF PAYMENT.
-------------------------
(a) Loan. Subject to and upon the terms and
----
conditions of this Agreement, Creditor agrees to make a loan to Borrower (the
"Loan") in an aggregate amount of Two Hundred Thousand Dollars ($200,000). The
Loan shall be payable in one lump sum on the Maturity Date, provided that,
Borrower shall repay the Loan in full, including all accrued and unpaid
interest, at any time prior to the Maturity Date upon five (5) Business Days'
written notice from Creditor and, provided further, that such repayment of the
Loan prior to the Maturity Date shall not be a "scheduled" payment of principal
and interest as set forth in Section 3.1 of the Comerica Subordination
Agreement. The Loan, once repaid, may not be reborrowed. Borrower may prepay the
Loan without penalty or premium.
(b) Interest. Interest shall accrue from the date of
--------
the Loan at the rate of ten percent (10%) per annum and compounded monthly.
Accrued but unpaid interest hereunder shall be due and payable on the Maturity
Date, except where required to be paid prior to the Maturity Date pursuant to
Section 2(a).
(c) Default Rate. All Obligations shall bear
------------
interest, from and after the occurrence and during the continuance of an Event
of Default, at a rate equal to two (2) percentage points above the interest rate
applicable immediately prior to the occurrence of the Event of Default.
(d) Computation. All interest chargeable under the
-----------
Loan Documents shall be computed on the basis of a three hundred sixty (360) day
year for the actual number of days elapsed.
2.2 Term. This Agreement shall become effective on the
----
Closing Date and, subject to Section 12.6, shall continue in full force and
effect for so long as any Obligations remain outstanding. Creditor's Lien on the
Collateral shall remain in effect for so long as any Obligations are
outstanding.
3. CONDITIONS OF LOAN.
------------------
The obligation of Creditor to make the Loan is subject to the
condition precedent that Creditor shall have received, in form and substance
satisfactory to Creditor, the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower
with respect to incumbency and resolutions authorizing the execution and
delivery of this Agreement;
(c) financing statements (Form UCC-1: CA);
4
(d) Comerica Subordination Agreement;
(e) the Comerica Consent;
(f) the Strategic Development Agreement; and
(g) such other documents, and completion of such
other matters, as Creditor may reasonably deem necessary or appropriate.
4. CREATION OF SECURITY INTEREST.
-----------------------------
4.1 Grant of Security Interest. Borrower grants and
--------------------------
pledges to Creditor a continuing security interest in all presently existing and
hereafter acquired or arising Collateral in order to secure prompt repayment of
any and all Obligations and in order to secure prompt performance by Borrower of
each of its covenants and duties under the Loan Documents. Except for Permitted
Liens, such security interest constitutes a valid, first priority security
interest in the presently existing Collateral, and will constitute a valid,
first priority security interest in Collateral acquired after the date hereof.
4.2 Delivery of Additional Documentation Required.
---------------------------------------------
Borrower shall from time to time execute and deliver to Creditor, at the request
of Creditor, all financing statements and other documents that Creditor may
reasonably request, in form satisfactory to Creditor, to perfect and continue
the perfection of Creditor's security interests in the Collateral and in order
to fully consummate all of the transactions contemplated under the Loan
Documents.
5. REPRESENTATIONS AND WARRANTIES.
------------------------------
Borrower represents and warrants as follows:
5.1 Due Organization and Qualification. Borrower is a
----------------------------------
corporation duly existing under the laws of its state of incorporation and
qualified and licensed to do business in any state in which the conduct of its
business or its ownership of property requires that it be so qualified.
5.2 Due Authorization; No Conflict. The execution,
------------------------------
delivery, and performance of the Loan Documents are within Borrower's powers,
have been duly authorized, and are not in conflict with nor constitute a breach
of any provision contained in Borrower's Articles of Incorporation or Bylaws,
nor will they constitute an event of default under any material agreement to
which Borrower is a party or by which Borrower is bound. Borrower is not in
default under any agreement to which it is a party or by which it is bound,
which default could have a Material Adverse Effect.
5.3 No Prior Encumbrances. Borrower has good and
---------------------
marketable title to the Collateral, free and clear of Liens, except for
Permitted Liens.
5.4 Name; Location of Chief Executive Office. Except as
----------------------------------------
disclosed in the Schedule, Borrower has not done business under any name other
than that specified on the signature page hereof. The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.
5.5 No Material Adverse Change in Financial Statements.
--------------------------------------------------
All consolidated financial statements related to Borrower and any Subsidiary
that are delivered by Borrower to Creditor fairly present in all material
respects Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended. There
has not been a material adverse change in the consolidated financial condition
of Borrower since the date of the most recent of such financial statements
submitted to Creditor.
5.6 Solvency, Payment of Debts. Borrower is solvent and
--------------------------
able to pay its debts (including trade debts) as they mature.
5
5.7 Taxes. Borrower and each Subsidiary have filed or
-----
caused to be filed all tax returns required to be filed, and have paid, or have
made adequate provision for the payment of, all taxes reflected therein.
5.8 Subsidiaries. Borrower does not own any stock,
------------
partnership interest or other equity securities of any Person, except for
Permitted Investments.
5.9 Location of Assets and Collateral. Except as
---------------------------------
disclosed in the Schedule, the Borrower has no Collateral or any other assets
located in any other state or country.
5.10 Full Disclosure. No representation, warranty or other
---------------
statement made by Borrower in any certificate or written statement furnished to
Creditor contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
certificates or statements not misleading.
6. AFFIRMATIVE COVENANTS.
---------------------
Borrower covenants and agrees that, until payment in full of
all outstanding Obligations, Borrower shall do all of the following:
6.1 Good Standing. Borrower shall maintain its and each
-------------
of its Subsidiaries' corporate existence in its jurisdiction of incorporation
and maintain qualification in each jurisdiction in which the failure to so
qualify could have a Material Adverse Effect. Borrower shall maintain, and shall
cause each of its Subsidiaries to maintain, in force all licenses, approvals and
agreements, the loss of which could have a Material Adverse Effect.
6.2 Financial Statements, Reports, Certificates.
-------------------------------------------
Borrower shall deliver the following to Creditor:
(a) as soon as available, but in any event
within one hundred twenty (120) days after the end of Borrower's fiscal year,
audited consolidated financial statements of Borrower prepared in accordance
with GAAP, consistently applied, together with an unqualified opinion on such
financial statements of an independent certified public accounting firm; and
(b) promptly upon receipt of notice thereof, a
report of any legal actions pending or threatened against Borrower or any
Subsidiary that could result in damages or costs to Borrower or any Subsidiary
of Fifty Thousand Dollars ($50,000) or more.
6.3 Tangible Assets. Borrower shall provide Creditor
---------------
written notice within a reasonable period of time prior to obtaining, acquiring
or otherwise placing any Collateral or any other assets in a state other than
those set forth in the Schedule.
6.4 Further Assurances. At any time and from time to time
------------------
Borrower shall execute and deliver such further instruments and take such
further action as may reasonably be requested by Creditor to effect the purposes
of this Agreement.
7. NEGATIVE COVENANTS.
------------------
Borrower covenants and agrees that until payment in full of
the outstanding Obligations, Borrower shall not do any of the following:
7.1 Change in Control or Executive Office. Borrower will
-------------------------------------
not suffer or permit a Change in Control or, without thirty (30) days prior
written notification to Creditor, relocate its chief executive office.
7.2 Mergers or Acquisitions. Merge or consolidate, or
-----------------------
permit any of its Subsidiaries to merge or consolidate, with or into any other
business organization (other than Creditor), or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person.
6
7.3 Indebtedness. Create, incur, assume or be or remain
------------
liable with respect to any Indebtedness, or permit any Subsidiary so to do,
other than Permitted Indebtedness.
7.4 Encumbrances. Create, incur, assume or suffer to
------------
exist any Lien with respect to any of its property, or assign or otherwise
convey any right to receive income, or permit any of its Subsidiaries so to do,
except for Permitted Liens. Agree with any Person other than Creditor not to
grant a security interest in, or otherwise encumber any of its property, or
permit any Subsidiary to do so, except for Permitted Liens.
7.5 Distributions. Pay any dividends or make any other
-------------
distribution or payment on account of or in redemption, retirement or purchase
of any capital stock, or permit any of its Subsidiaries to do so, except that
Borrower may repurchase the stock of former employees pursuant to stock
repurchase agreements as long as an Event of Default does not exist prior to
such repurchase or would not exist after giving effect to such repurchase.
7.6 Approval of Use of Funds. (a) With respect only to
------------------------
the first One Million Dollars ($1,000,000) of expenditures by Borrower following
receipt of the Loan proceeds, make payments or other expenditures, in each case,
over Fifteen Thousand Dollars ($15,000) without the written consent of Xxxxx
Xxxx, Xxxxx Xxxxxxx (CFO) (or her designee) and Royal X. Xxxxxx (or his
designee), provided that (i) such consent shall not be unreasonably withheld and
(ii) such spending restriction shall not be applicable to, nor affect, the
permitted expenditures of Borrower set forth in Section 5.1 of the Agreement and
Plan of Reorganization entered into among Creditor, Metal Combination Corp.,
Borrower and, with respect to Articles VIII and IX, Xxxxx Xxxxxxxx, dated as of
June 23, 2001. Borrower shall use its best efforts to submit to Creditor
requests for expenditures hereunder at least three (3) Business Days in advance
or, in extraordinary circumstances, two business hours prior to the relevant
expenditures and Creditor shall cause Xxxxx Xxxxxxx and Royal X. Xxxxxx (or
their designees) to use their best efforts to approve such expenditure requests
within the applicable time periods.
(b) Following the closing of the Merger, any expenditure, in each
case, over Fifteen Thousand Dollars ($15,000) by the combined company as a
result of the Merger (the "Combined Company") must be approved by Xxxxx Xxxx (or
his designee), Royal X. Xxxxxx (or his designee) and Xxxxx Xxxxxxx (CFO) (or her
designee), provided that such approval requirement shall be subject to review by
the Board of Directors of the Combined Company on a semi-annual basis beginning
on the first anniversary of the closing of the Merger, and provided further,
that any change to such approval requirement shall require a unanimous vote of
the Board of Directors of the Combined Company, which vote shall not include the
participation of Royal X. Xxxxxx and Xxxxx Xxxx.
7.7 Transactions with Affiliates. Directly or indirectly
----------------------------
enter into or permit to exist any material transaction with any Affiliate of
Borrower except for transactions that are in the ordinary course of Borrower's
business, upon fair and reasonable terms that are no less favorable to Borrower
than would be obtained in an arm's length transaction with a non-affiliated
Person.
8. EVENTS OF DEFAULT.
-----------------
Any one or more of the following events shall constitute an
Event of Default by Borrower under this Agreement:
8.1 Payment Default. If Borrower fails to pay, within
---------------
thirty (30) days when due, any of the Obligations;
8.2 Covenant Default. If Borrower fails to materially
----------------
perform any obligation under Article 6 or materially violates any of the
covenants contained in Article 7 of this Agreement, or fails or neglects to
perform, keep, or observe any other material term, provision, condition,
covenant, or agreement contained in this Agreement, in any of the Loan
Documents, or in any other present or future agreement between Borrower and
Creditor entered into in connection with this Agreement, and as to any default
under such other term, provision, condition, covenant or agreement that can be
cured, has failed to cure such default within thirty (30) days after Borrower
receives notice thereof or any officer of Borrower becomes aware thereof;
7
8.3 Material Adverse Change. If there occurs a material
-----------------------
adverse change in Borrower's business or financial condition, or if there is a
material impairment of the prospect of repayment of any portion of the
Obligations or a material impairment of the value or priority of Creditor's
security interests in the Collateral;
8.4 Attachment. If any material portion of Borrower's
----------
assets is attached, seized, subjected to a writ or distress warrant, or is
levied upon, or comes into the possession of any trustee, receiver or person
acting in a similar capacity and such attachment, seizure, writ or distress
warrant or levy has not been removed, discharged or rescinded within twenty (20)
days, or if Borrower is enjoined, restrained, or in any way prevented by court
order from continuing to conduct all or any material part of its business
affairs, or if a judgment or other claim becomes a lien or encumbrance upon any
material portion of Borrower's assets, or if a notice of lien, levy, or
assessment is filed of record with respect to any of Borrower's assets by the
United States Government, or any department, agency, or instrumentality thereof,
or by any state, county, municipal, or governmental agency, and the same is not
paid within twenty (20) days after Borrower receives notice thereof, provided
that none of the foregoing shall constitute an Event of Default where such
action or event is stayed or an adequate bond has been posted pending a good
faith contest by Borrower;
8.5 Insolvency. If Borrower becomes insolvent, or if an
----------
Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding
is commenced against Borrower and is not dismissed or stayed within thirty (30)
days;
8.6 Other Agreements. If there is a default or event of
----------------
default (howsoever defined) under (i) the Comerica Agreement, (ii) any agreement
in connection with Indebtedness set forth in paragraph (d) of the definition
"Permitted Indebtedness" to which Borrower is a party with a third party or
parties (iii) the Strategic Development Agreement (provided that the cure
periods provided in this Section shall not apply in the event the relevant cure
periods under the Strategic Development have lapsed) or (iv) the Loan and
Security Agreement dated as of June 29, 2001 or the Loan and Security Agreement
dated August 30, 2001, each entered into between Creditor and Borrower,
resulting in a right by Comerica, Creditor or a third party or parties (as the
case may be), whether or not exercised, to accelerate the maturity of any
Indebtedness thereunder or that could have a Material Adverse Effect;
8.7 Judgments. If a judgment or judgments for the payment
---------
of money in an amount, individually or in the aggregate, of at least Fifty
Thousand Dollars ($50,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of twenty (20) days; or
8.8 Misrepresentations. If any material misrepresentation
------------------
or material misstatement exists now or hereafter in any warranty or
representation set forth herein or in any certificate delivered to Creditor by
any Responsible Officer pursuant to this Agreement or to induce Creditor to
enter into this Agreement or any other Loan Document.
9. CREDITOR'S RIGHTS AND REMEDIES.
------------------------------
9.1 Rights and Remedies. Upon the occurrence and during
-------------------
the continuance of an Event of Default, Creditor may, at its election, without
notice of its election and without demand, do any one or more of the following,
all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.5, all Obligations shall become immediately due and payable without
any action by Creditor);
(b) Make such payments and do such acts as
Creditor considers necessary or reasonable to protect its security interest in
the Collateral;
(c) Set off and apply to the Obligations any and
all (i) balances and deposits of Borrower held by Creditor, or (ii) indebtedness
at any time owing to or for the credit or the account of Borrower held by
Creditor;
8
(d) Dispose of the Collateral by way of one or
more contracts or transactions, for cash or on terms, in such manner and at such
places (including Borrower's premises) as Creditor determines is commercially
reasonable, and apply any proceeds to the Obligations in whatever manner or
order Creditor deems appropriate;
(e) Creditor may credit bid and purchase at any
public sale; and
(f) Any deficiency that exists after disposition
of the Collateral as provided above will be paid immediately by Borrower,
subject to applicable law.
9.2 Power of Attorney. Borrower hereby irrevocably
-----------------
appoints Creditor (and any of Creditor's designated officers, or employees) as
Borrower's true and lawful attorney to file, in its sole discretion, one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of Borrower where permitted by law; and
Creditor may exercise such power of attorney to sign the name of Borrower on any
of the documents described in Section 4.2. The appointment of Creditor as
Borrower's attorney in fact hereunder, and each and every one of Creditor's
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully repaid and performed.
10. NOTICES.
-------
Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized
overnight delivery service, certified mail, postage prepaid, return receipt
requested, or by telefacsimile to Borrower or to Creditor, as the case may be,
at its addresses set forth below:
If to Borrower: WOOD ALLIANCE, INC., D/B/A/ WOOD ASSOCIATES, INC.
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxx
FAX: (000) 000-0000
With a copy, which shall not
constitute notice, to:
Pillsbury Winthrop LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxx Xxxxxxx
FAX: (000) 000-0000
If to Creditor: IPRINT TECHNOLOGIES, INC.
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
FAX: (000) 000-0000
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
------------------------------------------
This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without regard to
principles of conflicts of law. Each of Borrower and Creditor hereby submits to
the exclusive jurisdiction of the state and Federal courts located in the County
of Santa Xxxxx, State of California. BORROWER AND CREDITOR EACH HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN
9
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
12. GENERAL PROVISIONS.
------------------
12.1 Successors and Assigns. This Agreement shall bind and
----------------------
inure to the benefit of the respective successors and permitted assigns of each
of the parties; provided, however, that neither this Agreement nor any rights
hereunder may be assigned by Borrower or Creditor without the other's prior
written consent.
12.2 Indemnification. Borrower shall defend, indemnify and
---------------
hold harmless Creditor and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Agreement; and
(b) all losses or Creditor Expenses in any way suffered, incurred, or paid by
Creditor as a result of or in any way arising out of, following, or
consequential to transactions between Creditor and Borrower whether under this
Agreement, or otherwise (including without limitation reasonable attorneys' fees
and expenses), except for losses caused by Creditor's gross negligence or
willful misconduct.
12.3 Severability of Provisions. Each provision of this
--------------------------
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
12.4 Amendments in Writing, Integration. Neither this
----------------------------------
Agreement nor the Loan Documents can be amended or terminated orally. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement
and the Loan Documents, if any, are merged into this Agreement and the Loan
Documents.
12.5 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.
12.6 Survival. All covenants, representations and
--------
warranties made in this Agreement shall continue in full force and effect so
long as any Obligations remain outstanding.
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
WOOD ALLIANCE, INC., D/B/A/ WOOD
ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
_____________________________________
Title: CEO
__________________________________
IPRINT TECHNOLOGIES, INC.
By: /s/ Royal X. Xxxxxx
_____________________________________
Title: CEO
__________________________________
11
DEBTOR WOOD ALLIANCE, INC., D/B/A/ WOOD ASSOCIATES, INC.
SECURED PARTY: IPRINT TECHNOLOGIES, INC.
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:
(i) 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 financial assets, all investment property, including
securities and securities entitlements;
(ii) 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 Creditor
(herein referred to as "Creditor" or "Secured Party") to xxx in its own name
and/or the name of the Debtor for past, present and future infringements of
copyright;
(iii) all goods, including, without limitation, equipment
and inventory (including, without limitation, all export inventory);
(iv) all guarantees and other security therefor;
(v) all trademarks, service marks, trade names and
service names and the goodwill associated therewith;
(vi) (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
(vii) all products and proceeds, including, without
limitation, insurance proceeds, of any of the foregoing.
Notwithstanding the foregoing, the Collateral shall not
include any software products, licenses or other contract rights to the extent
that the granting of a security interest in such items is contrary to applicable
law, or prohibited by the terms of such software products, licenses or other
contract rights.
12
SCHEDULE OF EXCEPTIONS
----------------------
Permitted Indebtedness (Section 1.1)
----------------------
Indebtedness to Comerica Bank (as described in Section 4.1 of this
Schedule of Exceptions) in the amount of $7,942,000.
Indebtedness to Dell pursuant to equipment leases in the amount of
$219,000.
Indebtedness to Dell pursuant to computer leases in the amount of
$97,545.
Indebtedness to CDW Leasing, LLC in the amount of $120,988.
Indebtedness to iPrint Technologies, Inc. in the amount of $200,000.
Indebtedness to iPrint Technologies, Inc. in the amount of $1,000,000
Permitted Investments (Section 1.1)
---------------------
Permitted Liens (Section 1.1)
---------------
Comerica Bank's lien (as described in Section 4.1 of this Schedule of
Exceptions).
Westport Business Park Ltd.'s lien (as described in Section 4.1 of this
Schedule of Exceptions).
Dell's specific equipment lien, as amended pursuant to this Agreement.
CDW Leasing, LLC's specific equipment lien in California.
Fidelity Leasing Inc.'s specific equipment lien in California.
Grant of Security Interest (Section 4.1)
--------------------------
Comerica Bank's first priority security interest in California granted
pursuant to that certain Amended and Restated Revolving Loan and Security
Agreement, dated January 31, 2000, by and between Comerica Bank and Wood
Alliance, S.P. Inc.
Westport Business Park Ltd.'s lien in Texas on specified assets on the
premises located at 0000 Xxxxxxxx, Xxxxx #000, Xxxxxxx, Xxxxx, 00000, as amended
pursuant to this Agreement, granted under that certain Lease Agreement by and
between Westport Business Park Ltd. and Wood Associates, Inc.
iPrint Technologies, Inc.'s security interest granted pursuant to the
Loan and Security Agreement, dated June 29, 2001, by and between iPrint
Technologies, Inc. and Wood Alliance, Inc., d/b/a/ Wood Associates, Inc.
iPrint Technologies, Inc.'s security interest granted pursuant to the
Loan and Security Agreement, dated August 30, 2001, by and between iPrint
Technologies, Inc. and Wood Alliance, Inc., d/b/a/ Wood Associates, Inc.
Prior Names (Section 5.4)
-----------
Wood Alliance, S.P. Inc.
Location of Assets and Collateral (Section 5.9)
---------------------------------
California
Texas
13
Tangible Assets (Section 6.3)
---------------
California
Texas
14
"THIS NOTE AND THE PAYMENT HEREOF IS SUBJECT TO AND GOVERNED
BY THE TERMS OF THAT CERTAIN AMENDED AND RESTATED
INTERCREDITOR AND SUBORDINATION AGREEMENT DATED AS OF
SEPTEMBER 24, 2001 BY AND AMONG BORROWER, CREDITOR AND
COMERICA BANK-CALIFORNIA, UNDER WHICH THIS NOTE AND
BORROWER'S OBLIGATIONS HEREUNDER ARE SUBORDINATED IN THE
MANNER SET FORTH THEREIN TO THE PRIOR PAYMENT OF CERTAIN
OBLIGATIONS OF BORROWER TO THE HOLDERS OF THE SENIOR DEBT AS
DEFINED THEREIN."
PROMISSORY NOTE
$200,000 September 24, 2001
FOR VALUE RECEIVED, the undersigned, WOOD ALLIANCE, INC., D/B/A/ WOOD
ASSOCIATES, INC. (the "Borrower"), promises to pay to the order of IPRINT
TECHNOLOGIES, INC. ("Creditor"), at such place as the holder hereof may
designate, in lawful money of the United States of America, the sum of Two
Hundred Thousand Dollars ($200,000) plus interest at a rate specified in the
Loan and Security Agreement of even date herewith between Borrower and Creditor
(the "Loan Agreement"). Borrower shall pay Creditor the amounts on the dates
specified in the Loan Agreement. On the Maturity Date, as defined in the Loan
Agreement, the entire remaining principal balance plus all accrued but unpaid
interest shall be due and payable, provided that the entire remaining principal
balance plus all accrued and unpaid interest shall be due and payable at any
time prior to the Maturity Date upon five (5) Business Day's written notice from
Creditor. In no event shall the amount of interest paid hereunder exceed the
maximum amount allowed by applicable law.
Borrower irrevocably waives the right to direct the application of any
and all payments at any time hereafter received by Creditor from or on behalf of
Borrower, and Borrower irrevocably agrees that Creditor shall have the
continuing exclusive right to apply any and all such payments against the then
due and owing obligations of Borrower as Creditor may deem advisable. In the
absence of a specific determination by Creditor with respect thereto, all
payments shall be applied in the following order: (a) then due and payable fees
and expenses; (b) then due and payable interest payments; and (c) then due and
payable principal payments and optional prepayments.
All or part of the amounts due and owing hereunder may be prepaid by
Borrower in accordance with the terms and subject to the conditions contained in
the Loan Agreement.
Borrower promises to pay Creditor all costs and expenses of collection
of this Note and to pay all reasonable attorneys' fees incurred in such
collection or in any suit or action to collect this Note. Borrower hereby
consents to renewals and extensions of time at or after the maturity hereof,
without notice, and hereby waives presentment, demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, and
any and all other notices and demands in connection with the delivery,
acceptance, performance, default or enforcement of this Note, as well as any
applicable statute of limitations. No delay by Creditor in exercising any power
or right hereunder shall operate as a waiver of any power or right. Time is of
the essence as to all obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which shall govern
the rights and obligations of Borrower with respect to all obligations
hereunder. This Note is secured pursuant to the Loan Agreement.
[remainder of page intentionally left blank]
1
This Note shall be deemed to be made under, and shall be
construed in accordance with and governed by, the laws of the State of
California, excluding conflicts of laws principles.
WOOD ALLIANCE, INC., D/B/A/ WOOD
ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
_______________________________
Print Name: Xxxxx Xxxx
_______________________
Title: CEO
____________________________
2
DEBTOR: WOOD ALLIANCE, INC., D/B/A/ WOOD ASSOCIATES, INC.
SECURED PARTY: IPRINT TECHNOLOGIES, INC.
EXHIBIT A
---------
COLLATERAL DESCRIPTION ATTACHMENT
TO UCC-1 FINANCING STATEMENT
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 financial assets, 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 Creditor
(herein referred to as "Creditor" 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.
Notwithstanding the foregoing, the Collateral shall not
include any software products, licenses or other contract rights to the extent
that the granting of a security interest in such items is contrary to applicable
law, or prohibited by the terms of such software products, licenses or other
contract rights.
