- IMPERIAL BANK Member SECURITY AND LOAN AGREEMENT (ACCOUNTS
RECEIVABLE)
This Agreement is entered into between C/Net, Inc., a
Corporation (herein called "Borrower ") and IMPERIAL BANK (herein
called "Bank").
1. Bank hereby commits, subject to all the terms and conditions of
this Agreement and prior to the termination of its commitment as
hereinafter provided, to make loans to Borrower from time to time
in such amounts as may be determined by Bank up to, but not
exceeding in the aggregate unpaid principal balance, the following
Borrowing Base: 80.000 % of Eligible Accounts and in no event more
than $ 5,000,000. 00
2. The amount of each loan made by Bank to Borrower hereunder
shall be debited to the loan ledger account of Borrower maintained
by Bank (herein _ called "Loan Account ") and Bank shall credit
the Loan Account with all loan repayments made by Borrower.
Borrower promises to pay Bank (a t unpaid balance of Borrower's
Loan Account on demand and (b) on or before the tenth day of each
month, interest on the average daily un balance of the Loan
Account during the immediately preceding month at the rate of No &
500/1000ths percent ( 0. .50)
per annum in excess of the rate of interest which Bank has
announced as its prime lending rate ("Prime Rate.) which shall
vary concurrent! with any change in such Prime Rate. Interest
shall be computed at the above rate on the basis of the actual
number of days during which the principal balance of the loan
account is outstanding divided by 360, which shall for interest
computation purposes be considered one year. Bank at its option
may demand payment of any or all of the amount due under the Loan
Account including accrued but unpaid interest at any time. Such
notice may be given verbally or in writing and should be effective
upon receipt by Borrower. The amount of interest payable each
month by Borrower shall not be less than a minimum monthly charge
of $ 250.00 . Bank is hereby authorized to charge Borrower's
deposit account(s) with Bank for all sums due Bank under this
Agreement.
3. Requests for loans hereunder shall be in writing duly executed
by Borrower in a form satisfactory to Bank and shall contain a
certification setting forth the matters referred to in Section 1,
which shall disclose that Borrower is entitled to the amount of
loan being requested.
4. As used in this Agreement, the following terms shall have the
following meanings:
A "Accounts" means any right to payment for goods sold or leased,
or to be sold or to be leased, or for services rendered or to be
rendered no matter how evidenced, including accounts receivable,
contract rights, chattel paper, instruments, purchase orders,
notes, drafts, acceptances, general intangibles and other forms of
obligations and receivables.
B. "Collateral" means any and all personal property of Borrower
which is assigned or hereafter is assigned to Bank as security or
in which Bank now has or hereafter acquires a security interest.
C. "EIigible Accounts" means all of Borrower's Accounts excluding,
however, (1) all Accounts under which payment is not received
within 120* days from any invoice date, (2) all Accounts against
which the account debtor or any other person obligated to make
payment thereon asserts any defense, offset, counterclaim or other
right to avoid or reduce the liability represented by the Account
and (3) any Accounts if the account debtor or any other person
liable in connection therewith is insolvent, subject to bankruptcy
or receivership proceedings or has made an assignment for the
benefit of creditors or whose credit standing is unacceptable to
Bank and Bank has so notified Borrower. Eligible Accounts shall
only include such accounts as Bank in its sole discretion shall
determine are eligible from time to time.
5. Borrower hereby assigns to Bank ail Borrower's present and
future Accounts, including all proceeds due thereunder, all
guaranties and security therefor, hereby grants to Bank a
continuing security interest in all moneys in the Collateral
Account referred to in Section 6 hereof, as security for any and
all obligations of Borrower to Bank, whether now owing or
hereafter incurred and whether direct, indirect, absolute or
contingent. So long as Borrower is indebted to Bank or Bank is
committed to extend credit to Borrower, Borrower will execute and
deliver to Bank such assignments, including Bank's standard forms
of Specific or General Assignment covering individual Accounts,
notices, financing statements, and other documents and papers as
Bank may require in order to affirm, effectuate or further assure
the assignment to Bank of the Collateral or to give any third
party, including the account debtors obligated on the Accounts,
notice of Bank's interest in the Collateral.
6. Until Bank exercises its rights to collect the Accounts
pursuant to paragraph 10, Borrower will collect with diligence all
Borrower's Accounts, provided that no legal action shall be
maintained thereon or in connection therewith without Bank's prior
written consent. Any collection of Accounts by Borrower, whether
in the form of cash, checks, notes, or other instruments for the
payment of money (properly endorsed or assigned where required to
enable Bank to collect same), shall be in trust for Bank, and
Borrower shall keep all such collections separate and apart from
all other funds and property so as to be capable of identification
as the property of Bank and deliver said collections daily to Bank
in the identical form received. The proceeds of such collections
when received by Bank may be applied by Bank directly to the
payment of Borrower's Loan Account or any other obligation secured
hereby. Any credit given by Bank upon receipt of said proceeds
shall be conditional credit subject to collection. Returned items
at Bank's option may be charged to Borrower's general account. All
collections of the Accounts shall be set forth on an itemized
schedule, showing the name of the account debtor, the amount of
each payment and such other information as Bank may request.
7. Until Bank exercises its rights to collect the Accounts
pursuant to paragraph 10, Borrower may continue its present
policies with respect to returned merchandise and adjustments.
However, Borrower shall immediately notify Bank of all cases
involving returns, repossessions, and loss or damage of or to
merchandise represented by :he Accounts and of any credits,
adjustments or disputes arising in connection with the goods or
services represented by the Accounts and, in any of such events,
Borrower will immediately pay to Bank from its own funds (and not
from the proceeds of Accounts or Inventory) for application to
Borrower's Loan Account or any other obligation secured hereby the
amount of any credit for such returned or repossessed merchandise
and adjustments made to any of the Accounts.
8. Borrower represents and warrants to Bank: (i) If Borrower is a
corporation, that Borrower is duly organized and existing in the
State of its incorporation and the execution, delivery and
performance hereof are within Borrower's corporate powers, have
been duly authorized and are not in conflict with law or the terms
of any charter, by-law or other incorporation papers, or of any
indenture, agreement or undertaking to which Borrower is a party
or by which Borrower is found or affected; (ii) Borrower is, or at
the time the collateral becomes subject to Bank's security
interest will be, the true and lawful owner of and has, or at the
time the Collateral becomes subject to Bank's security interest
will have, good and clear title to the Collateral, subject only to
Bank's rights therein; (iii) Each Account is, or at the time the
Account comes into existence will be, a true and correct statement
of a bona fide indebtedness incurred by the debtor named therein
in the amount of the Account for either merchandise sold or
delivered (or being held subject to Borrower's delivery
instructions) to, or services rendered, performed and accepted by,
the account debtor; (iv) That there are or will be no defenses,
counterclaims, or setoffs which may be asserted against the
Accounts; and (v) any and all financial information, including
information relating to the Collateral, submitted by Borrower to
Bank, whether previously or in the future, is or will be true and
correct.
9. Borrower will: (i) Furnish Bank from time to time such
financial statements and information as Bank may reasonably
request and inform Bank immediately upon the occurrence of a
material adverse change therein; (ii) Furnish Bank periodically,
in such form and detail and at such times as Bank may require,
statements showing aging and reconciliation of the Accounts and
collections thereon; (iii) Permit representatives of Bank to
inspect the Borrower's and records relating to the Collateral and
make extracts therefrom at any reasonable time and to arrange for
verification of the Accounts, under reasonable procedures,
acceptable to Bank, directly with the account debtors or otherwise
at Borrower's expense; (iv) Promptly notify Bank of any attachment
or other legal process levied against any of the Collateral and
any information received by Borrower relative to the Collateral,
including the Accounts, the account debtors or other persons
obligated in connection therewith, which may in any way affect the
value of the Collateral or the rights and remedies of Bank in
respect thereto; (v) Reimburse Bank upon demand for any and all
legal costs, including reasonable attorneys' fees, and other
expense incurred in collecting any sums payable by Borrower under
Borrower's Loan Account or any other obligation secured hereby,
enforcing any term or provision of this Security Agreement or
otherwise or in the checking, handling and collection of the
Collateral and the preparation and enforcement of any agreement
relating thereto; (vi) Notify Bank of each location and of each
office of Borrower at which records of Borrower relating to the
Accounts are kept; (vii) Provide, maintain and deliver to Bank
policies insuring the Collateral against loss or damage by such
risks and in such amounts, forms and companies as Bank may require
and with loss payable solely to Bank, and, in the event Bank takes
possession of the Collateral, the insurance policy or policies and
any unearned or returned premium thereon shall at the option of
Bank become the sole property of Bank, such policies and the
proceeds of any other insurance covering or in any way relating to
the Collateral, whether now in existence or hereafter obtained,
being hereby assigned to Bank; and (viii) In the event the unpaid
balance of Borrower's Loan Account shall exceed the maximum amount
of outstanding loans to which Borrower is entitled under Section 1
hereof, Borrower shall immediately pay to Bank, from its own funds
and not from the proceeds of Collateral, for credit to Borrower's
Loan Account the amount of such excess.
10. Bank may at any time, without prior notice to Borrower,
collect the Accounts and may give notice of assignment to any and
all account debtors, and Borrower does hereby make, constitute and
appoint Bank its irrevocable, true and lawful attorney with power
to receive, open and dispose of all mail addressed to Borrower, to
endorse the name of Borrower upon any checks or other evidences of
payment that may come into the possession of Bank upon the
Accounts to endorse the name of the undersigned upon any document
or instrument relating to the Collateral; in its name or
otherwise, to demand, xxx for, collect and give acquittances for
any and all moneys due or to become due upon the Accounts; to
compromise, prosecute or defend any action, claim or proceeding
with respect thereto; and to do any and all things necessary and
proper to carry out the purpose herein contemplated.
11. Until Borrower's Loan Account and all other obligations
secured hereby shall have been repaid in full, Borrower shall not
sell, dispose of or grant a security interest in any of the
Collateral other than to Bank, or execute any financing statements
covering the Collateral in favor of any secured party or person
other than Bank.
12. Should: (i) Default be made in the payment of any obligation,
or breach be made in any warranty, statement, promise, term or
condition, contained herein or hereby secured; (ii) Any statement
or representation made for the purpose of obtaining credit
hereunder prove false; (iii) Bank deem the Collateral inadequate
or unsafe or in danger of misuse; (iv) Borrower become insolvent
or make an assignment for the benefit of creditors; or (v) Any
proceeding be commended by or against Borrower under any
bankruptcy, reorganization, arrangement, readjustment of debt or
moratorium law or statute; then in any such event, Bank may, at
its option and without demand first made and without notice to
Borrower, do any one or more of the following: (a) Terminate its
obligation to make loans to Borrower as provided in Section 1
hereof; (b) Declare all sums secured hereby immediately due and
payable; (c) Immediately take possession of the Collateral
wherever it may be found, using all necessary force so to do, or
require Borrower to assemble the Collateral and make it available
to Bank at a place designated by Bank which is reasonably
convenient to Borrower and Bank, and Borrower waives all claims
for damages due to or arising from or connected with any such
taking; (d) Proceed in the foreclosure of Bank's security interest
and sale of the Collateral in any manner permitted by law, or
provided for herein; (e) Sell, lease or otherwise dispose of the
Collateral at public or private sale, with or without having the
Collateral at the place of sale, and upon terms and in such manner
as Bank may determine, and Bank may purchase same at any such
sale; (f) Retain the Collateral in full satisfaction of the
obligations secured thereby; (9) Exercise any remedies of a
secured party under the Uniform Commercial Code. Prior to any such
disposition, Bank may, at its option, cause any of the Collateral
to be repaired or reconditioned in such manner and to such extent
as Bank may deem advisable, and any sums expended therefor by Bank
shall be repaid by Borrower and secured hereby. Bank shall have
the right to enforce one or more remedies hereunder successively
or concurrently, and any such action shall not estop or prevent
Bank from pursuing any further remedy which it may have hereunder
or by law. If a sufficient sum is not realized from any such
disposition of Collateral to pay all obligations secured by this
Security Agreement, Borrower hereby promises and agrees to pay
Bank any deficiency.
13. If any writ of attachment, garnishment, execution or other
legal process be issued against any property of Borrower, or if
any assessment for taxes against Borrower, other than real
property, is made by the Federal or State government or any
department thereof, the obligation of Bank to make loans to
Borrower as provided in Section 1 hereof shall immediately
terminate and the unpaid balance of the Loan Account, all other
obligations secured hereby and all other sums due hereunder shall
immediately become due and payable without demand, presentment or
notice.
14 Borrower authorizes Bank to destroy all invoices, delivery
receipts, reports and other types of documents and records
submitted to Bank in connection with the transactions contemplated
herein at any time subsequent to four months from the time such
items are delivered to Bank.
15 Nothing herein shall in any way limit the effect of the
conditions set forth in any other security or other agreement
executed by Borrower, but each and every condition hereof shall be
in addition thereto.
*16. Additional Provisions: See attached Addendum which includes
Reference Provision , See attached Libor Addendum
Executed this 24th day of July ,19 97
CNET, INC.
(Name of Borrower)
IMPERIAL BANK BY:
BY: Xxxxxxx X. Xxxxxx Regional Vice President
*If none, insert "None"
