Exhibit 10.3
This LOAN AND SECURITY AGREEMENT is entered into as of August 30, 2001, by
and between IPRINT TECHNOLOGIES, INC. ("Creditor") and WOOD ALLIANCE, INC.,
d/b/a/ WOOD ASSOCIATES, INC. ("Borrower").
RECITALS
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Borrower wishes to obtain from Creditor, and Creditor desires to make a
loan to Borrower, for the purpose of funding certain sales and marketing
initiatives. 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
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The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
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1.1 Definitions. As used in this Agreement, the following terms shall
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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
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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.
"Comerica Subordination Agreement" means the Amended and Restated
Intercreditor Agreement entered into between Comerica Bank-California and
Creditor dated as of August 30, 2001.
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"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 August 29, 2002.
"Merger" means the merger between Creditor and Borrower as
contemplated under the Agreement and Plan of Reorganization dated as of June 23,
2001.
"Obligations" means all debt, principal, interest, Creditor
Expenses and other amounts owed to Creditor by Borrower pursuant to this
Agreement or any other agreement entered into in connection with this Agreement,
whether absolute or contingent, due or to become due, now existing or hereafter
arising, including any interest that accrues after the commencement of an
Insolvency Proceeding.
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"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.
"Responsible Officer" means each of the Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer and the Controller of
Borrower.
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"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
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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.
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(a) Loan. Subject to and upon the terms and conditions of this
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Agreement, Creditor agrees to make a loan to Borrower (the "Loan") in an
aggregate amount of One Million Dollars ($1,000,000). The Loan shall be payable
in one lump sum on the Maturity Date, provided that, Borrower shall repay the
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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
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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
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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
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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
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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
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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.
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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);
(d) Comerica Subordination Agreement;
(e) the Comerica Consent;
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(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.
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4.1 Grant of Security Interest. Borrower grants and pledges to
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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
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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.
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Borrower represents and warrants as follows:
5.1 Due Organization and Qualification. Borrower is a corporation
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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
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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
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the Collateral, free and clear of Liens, except for Permitted Liens.
5.4 Name; Location of Chief Executive Office. Except as disclosed in
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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
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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
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its debts (including trade debts) as they mature.
5.7 Taxes. Borrower and each Subsidiary have filed or caused to be
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filed all tax returns required to be filed, and have paid, or have made adequate
provision for the payment of, all taxes reflected therein.
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5.8 Subsidiaries. Borrower does not own any stock, partnership
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interest or other equity securities of any Person, except for Permitted
Investments.
5.9 Location of Assets and Collateral. Except as disclosed in the
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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
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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.
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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
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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
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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
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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
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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.
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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
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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
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its Subsidiaries to merge or consolidate, with or into any other business
organization (other than Creditor), or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person.
7.3 Indebtedness. Create, incur, assume or be or remain liable with
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respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.
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7.4 Encumbrances. Create, incur, assume or suffer to exist any Lien
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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
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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
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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
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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
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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,
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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
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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.
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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)
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days when due, any of the Obligations;
8.2 Covenant Default. If Borrower fails to materially perform any
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obligation under Article 6 or materially violates any of the covenants contained
in Article 7 of this Agreement, or fails or neglects to perform, keep, or
observe any other material term, provision, condition, covenant, or agreement
contained in this Agreement, in any of the Loan Documents, or in any other
present or future agreement between Borrower and Creditor entered into in
connection with this Agreement, and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within thirty (30) days after Borrower receives notice thereof
or any officer of Borrower becomes aware thereof;
8.3 Material Adverse Change. If there occurs a material adverse
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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;
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8.4 Attachment. If any material portion of Borrower's assets is
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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
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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
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(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 and (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), 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
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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
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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.
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9.1 Rights and Remedies. Upon the occurrence and during the
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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;
(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;
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(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
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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.
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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.
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This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of California, without regard to principles of
conflicts of law. Each of Borrower and Creditor hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
Xxxxx, State of California. BORROWER AND CREDITOR EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL
9
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
WOOD ALLIANCE, INC., D/B/A/ WOOD
ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
----------------------------
Title: CEO
-------------------------
IPRINT TECHNOLOGIES, INC.
By: /s/ Royal X. Xxxxxx
----------------------------
Title: CEO
-------------------------
10
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.
11
"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 AUGUST 30, 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
$1,000,000 August 30, 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 One Million Dollars ($1,000,000) plus interest at a rate
specified in the Loan and Security Agreement of even date herewith
between Borrower and Creditor (the "Loan Agreement"). Borrower shall
pay Creditor the amounts on the dates specified in the Loan Agreement.
On the Maturity Date, as defined in the Loan Agreement, the entire
remaining principal balance plus all accrued but unpaid interest shall
be due and payable, provided that the entire remaining principal
-------------
balance plus all accrued and unpaid interest shall be due and payable
at any time prior to the Maturity Date upon five (5) Business Day's
written notice from Creditor. In no event shall the amount of interest
paid hereunder exceed the maximum amount allowed by applicable law.
Borrower irrevocably waives the right to direct the application
of any and all payments at any time hereafter received by Creditor from
or on behalf of Borrower, and Borrower irrevocably agrees that Creditor
shall have the continuing exclusive right to apply any and all such
payments against the then due and owing obligations of Borrower as
Creditor may deem advisable. In the absence of a specific determination
by Creditor with respect thereto, all payments shall be applied in the
following order: (a) then due and payable fees and expenses; (b) then
due and payable interest payments; and (c) then due and payable
principal payments and optional prepayments.
All or part of the amounts due and owing hereunder may be prepaid
by Borrower in accordance with the terms and subject to the conditions
contained in the Loan Agreement.
Borrower promises to pay Creditor all costs and expenses of
collection of this Note and to pay all reasonable attorneys' fees
incurred in such collection or in any suit or action to collect this
Note. Borrower hereby consents to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waives
presentment, demand, protest, notice of protest, notice of default or
dishonor, notice of payment and nonpayment, and any and all other
notices and demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note, as well as any
applicable statute of limitations. No delay by Creditor in exercising
any power or right hereunder shall operate as a waiver of any power or
right. Time is of the essence as to all obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which shall
govern the rights and obligations of Borrower with respect to all
obligations hereunder. This Note is secured pursuant to the Loan
Agreement.
[remainder of page intentionally left blank]
This Note shall be deemed to be made under, and shall be
construed in accordance with and governed by, the laws of the State of
California, excluding conflicts of laws principles.
WOOD ALLIANCE, INC., D/B/A/ WOOD
ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
-----------------------
Print Name: Xxxxx Xxxx
---------------
Title: CEO
--------------------
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.
3
