REVOLVING CREDIT LOAN & SECURITY
AGREEMENT
(ACCOUNTS AND INVENTORY)
EXHIBIT 10.6
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OBLIGOR# NOTE# AGREEMENT DATE
DECEMBER 11, 1996
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CREDIT LIMIT INTEREST RATE B+1.00% OFFICER NO./INITIALS
$1,000,000.00 9.25% 48704 XXXX XXXXX
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THIS AGREEMENT is entered into on DECEMBER 11, 1996, between COMERICA BANK-
CALIFORNIA ("Bank") as secured party, whose Headquarter Office is 000 XXXX XXXXX
XXXXX XXXXXX, XXX XXXX, XX and AGILE SOFTWARE CORPORATION ("Borrower"), a
CALIFORNIA CORPORATION whose sole place of business (if it has only one), chief
executive office (if it has more than one place of business) or residence (if an
individual is located at XXX XXXXXXX XXXX., 00XX XXXXX, XXX XXXX, XX.
The parties agree as follows:
1. DEFINITIONS
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1.1 "Agreement" as used in this Agreement means and includes this Revolving
Credit Loan & Security Agreement (Accounts and Inventory), any concurrent or
subsequent rider to this Revolving Credit Loan & Security Agreement (Accounts
and Inventory) and any extensions, supplements, amendments or modifications
to this Revolving Credit Loan & Security Agreement (Accounts and Inventory)
and to any such rider.
1.2 "Bank Expenses" as used in this Agreement means and includes: all costs
or expenses required to be paid by Borrower under this Agreement which are
paid or advanced by Bank; taxes and insurance premiums of every nature and
kind of Borrower paid by Bank; filing, recording, publication and search
fees, appraiser fees, auditor fees and costs, and title insurance premiums
paid or incurred by Bank in connection with Bank's transactions with
Borrower; costs and expenses incurred by Bank in collecting the Receivables
(with or without suit) to correct any default or enforce any provision of
this Agreement, or in gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, disposing of, preparing for sale
and/or advertising to sell the Collateral, whether or not a sale is
consummated; costs and expenses of suit incurred by Bank in enforcing or
defending this Agreement or any portion hereof, including, but not limited
to, expenses incurred by Bank in attempting to obtain relief from any stay,
restraining order, injunction or similar process which prohibits Bank from
exercising any of its rights or remedies; and attorneys' fees and expenses
incurred by Bank in advising, structuring, drafting, reviewing, amending,
terminating, enforcing, defending or concerning this Agreement, or any
portion hereof or any agreement related hereto, whether or not suit is
brought. Bank Expenses shall include Bank's in-house legal charges at
reasonable rates.
1.3 "Base Rate" as used in this Agreement means that variable rate of
interest so announced by Bank at its headquarters office in San Jose,
California as its "Base Rate" from time to time and which serves as the basis
upon which effective rates of interest are calculated for those loans making
reference thereto.
1.4 "Borrower's Books" as used in this Agreement means and includes all of
the Borrower's books and records including but not limited to: minute books;
ledgers; records indicating, summarizing or evidencing Borrower's assets,
liabilities, Receivables, business operations or financial condition, and all
information relating thereto, computer programs; computer disk or tape files;
computer printouts, computer runs; and other computer prepared information
and equipment of any kind.
1.5 "Borrowing Base" as used in this Agreement means the sum of: (1)
SEVENTY FIVE percent (75.00%) of the net amount of Eligible Accounts after
deducting therefrom all payments, adjustments and credits applicable thereto
("Accounts Receivable Borrowing Base"); and (2) the amount, if any, of the
advances against inventory agreed to be made pursuant to any Inventory Rider
("Inventory Borrowing Base"), or other rider, amendment or modification to
this Agreement, that may now or hereafter be entered into by Bank and
Borrower. Up to $350,000 can be advanced without regard to formula; Upon
borrowings exceeding $350,000 (including Letters of Credit) advance on
Accounts Receivable will be limited, in aggregate, to 75% of eligible
accounts receivable.
1.6 "Cash Flow" as used in this Agreement means, for any applicable period
of determination, the Net Income (after deduction for income taxes and other
taxes of such person determined by reference to income or profits of such
person) for such period, plus, to the extent deducted in computation of such
Net Income, the amount of depreciation and amortization expense and the
amount of deferred tax liability during such period, all as determined in
accordance with GAAP. The applicable period of determination will be N/A,
beginning with the period from ____________ to _________________________.
1.7 "Collateral" as used in this Agreement means and includes each and all
of the following: the Receivables; the Intangibles; the negotiable
collateral, the inventory; all money, deposit accounts and all other assets
of Borrower in which Bank receives a security interest or which hereafter
come into the possession, custody or control of Bank; and the proceeds of any
of the foregoing, including, but not limited to, proceeds of insurance
covering the collateral and any and all Receivables, Intangibles, negotiable
collateral, inventory, equipment, money, deposit accounts or other tangible
and intangible property of borrower resulting from the sale or other
disposition of the collateral, and the proceeds thereof. Notwithstanding
anything to the contrary contained herein, collateral shall not include any
waste or other materials which have been or may be designated as toxic or
hazardous by Bank.
1.8 "Credit" as used in this Agreement means all Obligations, except those
obligations arising pursuant to any other separate contract, instrument,
note, or other separate agreement which, by its terms, provides for a
specified interest rate and term.
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1.9 "Current Assets" as used in this Agreement means, as of any applicable
date of determination, all cash, non-affiliated customer receivables, United
States government securities, claims against the United States government, and
inventories.
1.10 "Current Liabilities" as used in this Agreement means, as of any
applicable date of determination, (i) all liabilities of a person that should
be classified as current in accordance with GAAP, including without limitation
any portion of the principal of the Indebtedness classified as current, plus
(ii) to the extent not otherwise included, all liabilities of the Borrower to
any of its affiliates whether or not classified as current in accordance with
GAAP.
1.11 "Daily Balance" as used in this Agreement means the amount determined
by taking the amount of the Credit owed at the beginning of a given day,
adding any new Credit advanced or incurred on such date, and subtracting any
payments or collections which are deemed to be paid and are applied by Bank in
reduction of the Credit on that date under the provisions of this Agreement.
1.12 "Eligible Accounts" as used in this Agreement means and includes those
accounts of Borrower which are due and payable within THIRTY (30) days, or
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less, from the date of invoice, have been validly assigned to Bank and
strictly comply with all of Borrower's warranties and representations to Bank;
but Eligible Accounts shall not include the following: (a) accounts with
respect to which the account debtor is an officer, employee, partner, joint
venturer or agent of Borrower; (b) accounts with respect to which goods are
placed on consignment, guaranteed sale or other terms by reason of which the
payment by the account debtor may be conditional; (c) accounts with respect to
which the account debtor is not a resident of the United States; (d) accounts
with respect to which the account debtor is the United States or any
department, agency or instrumentality of the United States; (e) accounts with
respect to which the account debtor is any State of the United States or any
city, county, town, municipality or division thereof; (f) accounts with
respect to which the account debtor is a subsidiary of, related to, affiliated
or has common shareholders, officers or directors with Borrower; (g) accounts
with respect to which Borrower is or may become liable to the account debtor
for goods sold or services rendered by the account debtor to Borrower; (h)
accounts not paid by an account debtor within ninety (90) days from the date
of the invoice; (i) accounts with respect to which account debtors dispute
liability or make any claim, or have any defense, crossclaim, counterclaim, or
offset; (j) accounts with respect to which any insolvency Proceeding is filed
by or against the account debtor, or if an account debtor becomes insolvent,
fails or goes out of business; and (k) accounts owed by any single account
debtor which exceed twenty percent (20%) of all of the Eligible Accounts; and
(l) accounts with a particular account debtor on which over twenty-five
percent (25%) of the aggregate amount owing is greater than ninety (90) days
from the date of the invoice.
1.13 "Event of Default" as used in this Agreement means those events
described in Section 7 contained herein below.
1.14 "Fixed Charges" as used in this Agreement means and includes, for any
applicable period of determination, the sum, without duplication, of (a) all
interest paid or payable during such period by a person on debt of such
person, plus (b) all payments of principal or other sums paid or payable
during such period by such person with respect to debt of such person having a
final maturity more than one year from the date of creation of such debt, plus
(c) all debt discount and expense amortized or required to be amortized during
such period by such person, plus (d) the maximum amount of all rents and other
payments paid or required to be paid by such person during such period under
any lease or other contract or arrangement providing for use of real or
personal property in respect of which such person is obligated as a lessee,
use or obligor, plus (e) all dividends and other distributions paid or payable
by such person or otherwise accumulating during such period on any capital
stock of such person, plus (f) all loans or other advances made by such person
during such period to any Affiliate of such person. The applicable period of
determination will be N/A, beginning with the period from ________________
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to ____________________.
1.15 "GAAP" as used in this Agreement means as of any applicable period,
generally accepted accounting principles in effect during such period.
1.16 "Insolvency Proceeding" as used in this Agreement means and includes
any proceeding or case commenced by or against the Borrower, or any guarantor
of Borrower's Obligations, or any of borrower's account debtors, under any
provisions of the Bankruptcy Code, as amended, or any other bankruptcy or
insolvency law, including but not limited to assignments for the benefit of
creditors, formal or informal moratoriums, composition or extensions with some
or all creditors, any proceeding seeking a reorganization, arrangement or any
other relief under the Bankruptcy code, as amended, or any other bankruptcy or
insolvency law.
1.17 "Intangibles" as used in this Agreement means and includes all of
Borrower's present and future general intangibles and other personal property
(including, without limitation, any and all rights in any legal proceedings,
goodwill, patents, trade names, copyrights, trademarks, blueprints, drawings,
purchase orders, computer programs, computer disks, computer tapes,
literature, reports, catalogs and deposit accounts) other than goods and
Receivables, as well as Borrower's Books relating to any of the foregoing.
1.18 "Inventory" as used in this Agreement means and includes all present
and future inventory in which Borrower has any interest, including, but not
limited to, goods held by Borrower for sale or lease or to be furnished under
a contract of service and all of Borrower's present and future raw materials,
work in process, finished goods, advertising materials, and packing and
shipping materials, wherever located and any documents of title representing
any of the above, and any equipment, fixtures or other property used in the
storing, moving, preserving, identifying, accounting for and shipping of
preparing for the shipping of inventory, and any and all other items hereafter
acquired by Borrower by way of substitution,
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LOAN & SECURITY AGREEMENT
(ACCOUNTS & INVENTORY)
replacement, return, repossession or otherwise, and all additions and
accessions thereto, and the resulting product or mass, and any documents of
title respecting any of the above.
1.19 "Net Income" as used in this Agreement means the net income (or loss)
of a person for any period determined in accordance with GAAP but excluding in
any event:
(a) any gains or losses on the sale or other disposition, not in the
ordinary course of business, of investments or fixed or capital
assets, and any taxes on the excluded gains and any tax deductions or
credits on account on any excluded losses; and
(b) in the case of the Borrower, net earnings of any Person in which
Borrower has an ownership interest, unless such net earnings shall
have actually been received by Borrower in the form of cash
distributions.
1.20 "Judicial Officer or Assignee" as used in this Agreement means and
includes any trustee, receiver, controller, custodian, assignee for the
benefit of creditors or any other person or entity having powers or duties
like or similar to the powers and duties of trustee, receiver, controller,
custodian or assignee for the benefit of creditors.
1.21 "Obligations" as used in this Agreement means and includes any and all
loans, advances, overdrafts, debts, liabilities (including, without
limitation, any and all amounts charged to Borrower's account pursuant to any
agreement authorizing Bank to charge Borrower's account), obligations, lease
payments, guaranties, covenants and duties owing by Borrower to Bank of any
kind and description whether advanced pursuant to or evidenced by this
Agreement; by any note or other instrument; or by any other agreement between
Bank and Borrower and whether or not for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including, without limitation, any debt, liability or
obligation owing from Borrower to others which Bank may have obtained by
assignment, participation, purchase or otherwise, and further including,
without limitation, all interest not paid when due and all Bank Expenses which
Borrower is required to pay or reimburse by this Agreement, by law, or
otherwise.
1.22 "Person" or "person" as used in this Agreement means and includes any
individual, corporation, partnership, joint venture, association, trust,
unincorporated association, joint stock company, government, municipality,
political subdivision or agency, or other entity.
1.23 "Receivables" as used in this Agreement means and includes all
presently existing and hereafter arising accounts, instruments, documents,
chattel paper, general intangibles, all other forms of obligations owing to
Borrower, all of Borrower's rights in, to and under all purchase orders
heretofore or hereafter received, all moneys due to Borrower under all
contracts or agreements (whether or not yet earned or due), all merchandise
returned to or reclaimed by Borrower and the Borrower's books (except minute
books) relating to any of the foregoing.
1.24 "Subordinated Debt" as used in this Agreement means indebtedness of
the Borrower to third parties which has been subordinated to the Obligations
pursuant to a subordination agreement in form and content satisfactory to the
Bank.
1.25 "Subordination Agreement" as used in this Agreement means a
subordination agreement in form satisfactory to Bank making all present and
future indebtedness of the Borrower to N/A subordinate to the Obligations.
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1.26 "Tangible Effective Net Worth" as used in this Agreement means net
worth as determined in accordance with GAAP consistently applied, increased by
Subordinated Debt, if any, and decreased by the following: patents, licenses,
goodwill, subscription lists, organization expenses, trade receivables
converted to notes, money due from affiliates (including officers, directors,
subsidiaries and commonly held companies).
1.27 "Tangible Net Worth" as used in this Agreement means, as of any
applicable date of determination, the excess of
a. the net book value of all assets of a person (other than patents,
patent rights, trademarks, trade names, franchises, copyrights,
licenses, goodwill, and similar intangible assets) after all
appropriate deductions in accordance with GAAP (including, without
limitation, reserves for doubtful receivables, obsolescence,
depreciation and amortization), over
b. all Debt of such person.
1.28 "Total Liabilities" as used in this Agreement means the total of all
items of indebtedness, obligation or liability which, in accordance with GAAP
consistently applied, would be included in determining the total liabilities
of the Borrower as of the date Total Liabilities is to be determined,
including without limitation (a) all obligations secured by any mortgage,
pledge, security interest or other lien on property owned or acquired, whether
or not the obligations secured thereby shall have been assumed; (b) all
obligations which are capitalized lease obligations; and (c) all guaranties,
endorsements or other contingent or surety obligations with respect to the
indebtedness of others, whether or not reflected on the balance sheets of the
Borrower, including any obligation to furnish funds, directly or indirectly
through the purchase of goods, supplies, services, or by way of stock
purchase, capital contribution, advance or loan or any obligation to enter
into a contract for any of the foregoing.
1.29 "Working Capital" as used in this Agreement means, as of any
applicable date of determination, Current Assets less Current Liabilities.
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1.30 Any and all terms used in this Agreement shall be construed and
defined in accordance with the meaning and definition of such terms under and
pursuant to the California Uniform Commercial Code (hereinafter referred to
as the "Code") as amended.
1.31 As of 6/30/1997 all existing current obligations under stand-by and
commercial Letters of Credit will be reserved under the Borrowing Base.
2. LOAN AND TERMS OF PAYMENT
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For value received, Borrower promises to pay to the order of Bank such
amount, as provided below, together with interest, as provided for below.
2.1 Upon the request of Borrower, made at any time and from time to time
during the term hereof, and so long as no Event of Default has occurred,
Bank shall lend to Borrower an amount equal to the Borrowing Base; provided,
however, that in no event shall Bank be obligated to make advances to
Borrower under this Section 2.1 whenever the Daily Balance exceeds, at any
time, either the Borrowing Base or the sum of ONE MILLION AND NO/100
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($1,000,000.00), such amount being referred to herein as an "Overadvance".
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2.2 Except as hereinbelow provided, the Credit shall bear interest, on the
Daily Balance owing, at a rate of ONE AND NO/1000 (1.000) percentage points
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per annum above the Base Rate (the "Rate"). The Credit shall bear interest,
from and after the occurrence of an Event of Default and without constituting
a waiver of any such Event of Default, on the Daily Balance owing, at a rate
three (3) percentage points per annum above the Rate. All Interest chargeable
under this Agreement that is based upon a per annum calculation shall be
computed on the basis of a three hundred sixty (360) day year for actual days
elapsed.
The Base Rate as of the date of this Agreement is EIGHT AND 250/1000
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(8.250%) per annum. In the event that the Base Rate announced is, from time
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to time hereafter changed, adjustment in the Rate shall be made and based on
the Base Rate in effect on the date of such change. The Rate, as adjusted,
shall apply to the Credit until the Base Rate is adjusted again. The minimum
interest payable by the Borrower under this Agreement shall in no event be
less than N/A per month. All interest payable by Borrower under the Credit,
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shall be due and payable on the first day of each calendar month during the
term of this Agreement and Bank may, at its option, elect to treat such
interest and any and all Bank Expenses as advances under the Credit, which
amounts shall thereupon constitute Obligations and shall thereafter accrue
interest at the rate applicable to the Credit under the terms of the
Agreement.
2.3 Without affecting Borrower's obligation to repay immediately any
Overadvance in accordance with Section 2.1 hereof, all Overadvances shall
bear additional interest on the amount thereof at a rate equal to N/A
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(N/A%) percentage points per month in excess of the interest rate set forth
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in Section 2.2, from the date incurred and for each month thereafter, until
repaid in full.
3. TERM.
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3.1 This Agreement shall remain in full force and effect until JANUARY 1,
1998, or until terminated by notice by Borrower. Notice of such
termination by Borrower shall be effectuated by mailing of a registered or
certified letter not less than thirty (30) days prior to the effective date
of such termination, addressed to the Bank at the address set forth herein
and the termination shall be effective as of the date so fixed in such
notice. Notwithstanding the foregoing, should Borrower be in default of one
or more of the provisions of this Agreement, Bank may terminate this
Agreement at any time without notice. Notwithstanding the foregoing, should
either Bank or Borrower become insolvent or unable to meet its debts as they
mature, or fail, suspend, or go out of business, the other party shall have
the right to terminate this Agreement at any time without notice. On the date
of termination all Obligations shall become immediately due and payable
without notice or demand; no notice of termination by Borrower shall be
effective until Borrower shall have paid all Obligations to Bank in full.
Notwithstanding termination, until all Obligations have been fully satisfied,
Bank shall retain its security interest in all existing Collateral and
Collateral arising thereafter, and Borrower shall continue to perform all of
its Obligations.
3.2 After termination and when Bank has received payment in full of
Borrower's obligations to Bank, Bank shall reassign to Borrower all
Collateral held by Bank, and shall execute a termination of all security
agreements and security interests given by Borrower to Bank, upon the
execution and delivery of mutual general releases.
4. CREATION OF SECURITY INTEREST.
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4.1 Borrower hereby grants to Bank a continuing security interest in all
presently existing and hereafter arising Collateral in order to secure prompt
repayment of any and all Obligations owed by Borrower to Bank and in order to
secure prompt performance by Borrower of each and all of its covenants and
Obligations under this Agreement and otherwise created. Bank's security
interest in the Collateral shall attach to all Collateral without further act
on the part of Bank or Borrower. In the event that any Collateral, including
proceeds, is evidenced by or consists of a letter of credit, advice of
credit, instrument, money, negotiable documents, chattel paper or similar
property (collectively, "Negotiable Collateral"), Borrower shall, immediately
upon receipt thereof, endorse and assign such Negotiable Collateral over to
Bank and deliver actual physical possession of the Negotiable Collateral to
Bank.
4.2 Bank's security interest in Receivables shall attach to all
Receivables without further act on the part of Bank or Borrower. Upon request
from Bank, Borrower shall provide Bank with schedules describing all
Receivables created or acquired by Borrower (including without limitation
agings listing the names and addresses of, and amounts owing by date by
account debtors), and shall execute and deliver written assignments of all
Receivables to Bank all in a form acceptable to Bank, provided, however,
Borrower's failure to execute and deliver such schedules and/or assignments
shall not effect or limit Bank's security interest and other rights in and to
the Receivables. Together with each schedule,
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Borrower shall furnish Bank with copies of Borrower's customers' invoices or
the equivalent, and original shipping or delivery receipts for all
merchandise sold, and Borrower warrants the genuineness thereof. Bank or
Bank's designee may notify customers or account debtors of collection costs
and expenses to Borrower's account but, unless and until Bank does so or
gives Borrower other written instructions, Borrower shall collect all
Receivables for Bank, receive in trust all payments thereon as Bank's
trustee, and, if so requested to do so from Bank, Borrower shall immediately
deliver said payments to Bank in their original form as received from the
account debtor and all letters of credit, advices of credit, instruments,
documents, chattel paper or any similar property evidencing or constituting
Collateral. Notwithstanding anything to the contrary contained herein, if
sales of inventory are made for cash, Borrower shall immediately deliver to
Bank, in identical form, all such cash, checks, or other forms of payment
which Borrower receives. The receipt of any check or other item of payment by
Bank shall not be considered a payment on account until such check or other
item of payment is honored when presented for payment, in which event, said
check or other item of payment shall be deemed to have been paid to Bank TWO
(2) calendar days after the date Bank actually receives such check or other
item of payment.
4.3 Bank's security interest in inventory shall attach to all inventory
without further act on the part of Bank or Borrower. Upon Bank's request
Borrower will from time to time at Borrower's expense pledge, assemble and
deliver such inventory to Bank or to a third party as Bank's bailee; or hold
the same in trust for Bank's account or store the same in a warehouse in
Bank's name; or deliver to Bank documents of title representing said
inventory; or evidence of Bank's security interest in some other manner
acceptable to Bank. Until a default by Borrower under this Agreement or any
other Agreement between Borrower and Bank. Borrower may, subject to the
provisions hereof and consistent herewith, sell the inventory, but only in
the ordinary course of Borrower's business. A sale of inventory in Borrower's
ordinary course of business does not include an exchange or a transfer in
partial or total satisfaction of a debt owing by Borrower.
4.4 Borrower shall execute and deliver to Bank concurrently with Borrower's
execution of this Agreement, and at any time or times hereafter at the
request of Bank, all financing statements, continuation financing statements,
security agreements, mortgages, assignments, certificates of title,
affidavits, reports, notices, schedules of accounts, letters of authority and
all other documents that Bank may request, in form satisfactory to Bank, to
perfect and maintain perfected Bank's security interest in the Collateral and
in order to fully consummate all of the transactions contemplated under this
Agreement. Borrower hereby irrevocably makes, constitutes and appoints Bank
(and any of Bank's officers, employees or agents designated by Bank) as
Borrower's true and lawful attorney-in-fact with power to sign the name of
Borrower on any financing statements, continuation financing statements,
security agreement, mortgage, assignment, certificate of title, affidavit,
letter of authority, notice of other similar documents which must be executed
and/or filed in order to perfect or continue perfected Bank's security
interest in the Collateral.
Borrower shall make appropriate entries in Borrower's Books disclosing
Bank's security interest in the Receivables. Bank (through any of its
officers, employees or agents) shall have the right at any time or times
hereafter during Borrower's usual business hours, or during the usual
business hours of any third party having control over the records of
Borrower, to inspect and verify Borrower's Books in order to verify the
amount or condition of, or any other matter, relating to, said Collateral and
Borrower's financial condition.
4.5 Borrower appoints Bank or any other person whom Bank may designate as
Borrower's attorney-in-fact, with power to endorse Borrower's name on any
checks, notes, acceptances, money order, drafts or other forms of payment or
security that may come into Bank's possession; to sign Borrower's name on any
invoice or xxxx of lading relating to any Receivables, on drafts against
account debtors, on schedules and assignments of Receivables, on
verifications of Receivables and on notices to account debtors; to establish
a lock box arrangement and/or to notify the post office authorities to change
the address for delivery of Borrower's mail addressed to Borrower to an
address designated by Bank, to receive and open all mail addressed to
Borrower, and to retain all mail relating to the Collateral and forward all
other mail to Borrower; to send, whether in writing or by telephone, requests
for verification of Receivables; and to do all things necessary to carry out
this Agreement. Borrower ratifies and approves all acts of the attorney-in-
fact. Neither Bank nor its attorney-in-fact will be liable for any acts or
omissions or for any error of judgement or mistake of fact or law. This power
being coupled with an interest, is irrevocable so long as any Receivables in
which Bank has a security interest remain unpaid and until the Obligations
have been fully satisfied.
4.6 In order to protect or perfect any security interest which Bank is
granted hereunder, Bank may, in its sole discretion, discharge any lien or
encumbrance or bond the same, pay any insurance, maintain guards,
warehousemen, or any personnel to protect the Collateral, pay any service
bureau, or, obtain any records, and all costs for the same shall be added to
the Obligations and shall be payable on demand.
4.7 Borrower agrees that Bank may provide information relating to this
Agreement or relating to Borrower to Bank's parent, affiliates, subsidiaries
and service providers.
5. CONDITIONS PRECEDENT
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5.1 Conditions precedent to the making of the loans and the extension of
the financial accommodations hereunder, Borrower shall execute, or cause to
be executed, and deliver to Bank, in form and substance satisfactory to Bank
and its counsel, the following:
a. This Agreement and other documents required by Bank;
b. Financing statements (Form UCC-1) in form satisfactory to Bank for
filing and recording with the appropriate governmental authorities;
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(ACCOUNTS AND INVENTORY)
c. If Borrower is a corporation, then certified extracts from the minutes
of the meeting of its board of directors, authorizing the borrowings and
the granting of the security interest provided for herein and authorizing
specific officers to execute and deliver the agreements provided for
herein;
d. If Borrower is a corporation, then a certificate of good standing
showing that Borrower is in good standing under the laws of the state of
its incorporation and certificates indicating that Borrower is qualified
to transact business and is in good standing in any other state in which
it conducts business;
e. If Borrower is a partnership, then a copy of Borrower's partnership
agreement certified by each general partner of Borrower;
f. UCC searches, tax lien and litigation searches, fictitious business
statement filings, insurance certificates, notices or other similar
documents which Bank may require and in such form as Bank may require, in
order to reflect, perfect or protect Bank's first priority security
interest in the Collateral and in order to fully consummate all of the
transactions contemplated under this Agreement;
g. Evidence that Borrower has obtained insurance and acceptable
endorsements;
h. Waivers executed by landlords and mortgagees of any real property on
which any Collateral is located; and
i. Warranties and representations of officers.
6. WARRANTIES REPRESENTATIONS AND COVENANTS.
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6.1 If so requested by Bank, Borrower shall, at such intervals designated by
Bank, during the term hereof execute and deliver a Report of Accounts Receivable
or similar report, in form customarily used by Bank. Borrower's Borrowing Base
at all times pertinent hereto shall not be less than the advances made
hereunder. Bank shall have the right to recompute Borrower's Borrowing Base in
conformity with this Agreement.
6.2 If any warranty is breached as to any account, or any account is not paid
in full by an account debtor within NINETY (90) days from the date of invoice,
or an account debtor disputes liability or makes any claim with respect thereto,
or a petition in bankruptcy or other application for relief under the Bankruptcy
Code or any other insolvency law is filed by or against an account debtor, or an
account debtor makes and assignment for the benefit of creditors, becomes
insolvent, fails or goes out of business, then Bank may deem ineligible any and
all accounts owing by that account debtor, and reduce Borrower's Borrowing Base
by the amount thereof. Bank shall retain its security interest in all
Receivables and accounts, whether eligible or ineligible, until all Obligations
have been fully paid and satisfied. Returns and allowances, if any, as between
Borrower and its customers, will be on the same basis and in accordance with the
usual customary practices of the Borrower, as they exist at this time. Any
merchandise which is returned by an account debtor or otherwise recovered shall
be set aside, marked with Bank's name, and Bank shall retain a security interest
therein. Borrower shall promptly notify Bank of all disputes and claims and
settle or adjust them on terms approved by Bank. After default by Borrower
hereunder, no discount, credit or allowance shall be granted to any account
debtor by Borrower and no return of merchandise shall be accepted by Borrower
without Bank's consent, Bank may, after default by Borrower, settle or adjust
disputes and claims directly with account debtors for amounts and upon terms
which Bank considers advisable, and in such cases Bank will credit Borrower's
account with only the net amounts received by Bank in payment of the accounts,
after deducting all Bank Expenses in connection therewith.
6.3 Borrower warrants, represents, covenants and agrees that:
a. Borrower has good and marketable title to the Collateral. Bank has and
shall continue to have a first priority perfected security interest in and
to the Collateral. The Collateral shall at all times remain free and clear
of all liens, encumbrances and security interests (except those in favor
of Bank).
b. All accounts are and will, at all times pertinent hereto, be bona fide
existing obligations created by the sale and delivery of merchandise or
the rendition of services to account debtors in the ordinary course of
business, free of liens, claims, encumbrances and security interests
(except as held by Bank and except as may be consented to, in writing, by
Bank) and are unconditionally owed to Borrower without defenses, disputes,
offsets, counterclaims, rights of return or cancellation, and Borrower
shall have received no notice of actual or imminent bankruptcy or
insolvency of any account debtor at the time an account due from such
account debtor is assigned to Bank.
c. At the time each account is assigned to Bank, all property giving rise
to such account shall have been delivered to the account debtor or to the
agent for the account debtor for immediate shipment to, and unconditional
acceptance by, the account debtor. Borrower shall deliver to Bank, as Bank
may from time to time require, delivery receipts, customer's purchase
orders, shipping instruction, bills of lading and any other evidence of
shipping arrangements. Absent such a request by Bank, copies of all such
documentation shall be held by Borrower as custodian for Bank.
6.4 At the time each eligible account is assigned to Bank, all such eligible
accounts will be due and payable on terms set forth in Section 1.12, or on such
other terms approved in writing by Bank in advance of the creation of such
accounts and which are expressly set forth on the face of all invoices, copies
of which shall be held by Borrower as custodian for Bank, and no such eligible
account will then be past due.
6
REVOLVING
LOAN & SECURITY AGREEMENT
(ACCOUNTS AND INVENTORY)
6.5 Borrower shall keep the inventory only at the following locations: _______
__________________________________________ and the owner or mortgagees of the
respective locations are:____________________________________________________
a. Borrower, immediately upon demand by Bank therefor, shall now and from time
to time hereafter, at such intervals as are requested by Bank, deliver to
Bank, designations of inventory specifying Borrower's cost of inventory, the
wholesale market value thereof and such other matters and information relating
to the inventory as Bank may request;
b. Borrower's inventory, valued at the lower of Borrower's cost or the
wholesale market value thereof, at all times pertinent hereto shall not be
less than N/A Dollars ($N/A) of which no less than N/A Dollars ($N/A)
--- ------ --- ------
shall be in raw materials and finished goods;
c. All of the inventory is and shall remain free from all purchase money or
other security interests, liens or encumbrances, except as held by Bank;
d. Borrower does now keep and hereafter at all times shall keep correct and
accurate records itemizing and describing the kind, type, quality and quantity
of the inventory, its cost therefor and selling price thereof, and the daily
withdrawals therefrom and additions thereto, all of which records shall be
available upon demand to any of Bank's officers, agents and employees for
inspection and copying;
e. All inventory, now and hereafter at all times, shall be new inventory of
good and merchantable quality free from defects;
f. Inventory is not now and shall not at any time or times hereafter be
located or stored with a bailee, warehouseman or other third party without
Bank's prior written consent, and, in such event, Borrower will concurrently
therewith cause any such bailee, warehouseman or other third party to issue
and deliver to Bank, in a form acceptable to Bank, warehouse receipts in
Bank's name evidencing the storage of inventory or other evidence of Bank's
prior rights in the inventory. In any event, Borrower shall instruct any third
party to hold all such inventory for Bank's account subject to Bank's security
interests and its instructions; and
g. Bank shall have the right upon demand now and/or at all times hereafter,
during Borrower's usual business hours, to inspect and examine the inventory
and to check and test the same as to quality, quantity, value and condition
and Borrower agrees to reimburse Bank for Bank's reasonable costs and expenses
in so doing.
6.6 Borrower represents, warrants and covenants with Bank that Borrower will
not, without Bank's prior written consent:
x. Xxxxx a security interest in or permit a lien, claim or encumbrance upon
any of the Collateral to any person, association, firm, corporation, entity or
governmental agency or instrumentality;
b. Permit any levy, attachment or restraint to be made affecting any of
Borrower's assets;
c. Permit any Judicial Officer or Assignee to be appointed or to take
possession of any or all of Borrower's assets;
d. Other than sales of inventory in the ordinary course of Borrower's
business, to sell, lease, or otherwise dispose of, move, or transfer, whether
by sale or otherwise, any of Borrower's assets;
e. Change its name, business structure, corporate identity or structure; add
any new fictitious names, liquidate, merge or consolidate with or into any
other business organization;
f. Move or relocate any Collateral;
g. Acquire any other business organization;
h. Enter into any transaction not in the usual course of Borrower's business;
i. Make any investment in securities of any person, association, firm, entity,
or corporation other than the securities of the United States of America;
j. Make any change in Borrower's financial structure or in any of its business
objectives, purposes or operations which would adversely effect the ability of
Borrower to repay Borrower's Obligations;
k. Incur any debts outside the ordinary course of Borrower's business except
renewals or extensions of existing debts and interest thereon;
l. Make any advance or loan except in the ordinary course of Borrower's
business as currently conducted;
7
REVOLVING
LOAN & SECURITY AGREEMENT
(ACCOUNTS AND INVENTORY)
m. Make icons, advances or extensions of credit to any Person, except for
sales on open account and otherwise in the ordinary course of business;
n. Guarantee or otherwise, directly or indirectly, in any way be or become
responsible for obligations of any other Person, whether by agreement to
purchase the indebtedness of any other Person, agreement for the furnishing of
funds to any other Person through the furnishing of goods, supplies or
services, by way of stock purchase, capital contribution, advance or loan, for
the purpose of paying or discharging (or causing the payment or discharge of)
the indebtedness of any other Person, or otherwise, except for the endorsement
of negotiable instruments by the Borrower in the ordinary course of business
for deposit or collection.
o. (a) Sell, lease, transfer or otherwise dispose of properties and assets
having an aggregate book value of more than N/A Dollars ($N/A) (whether in one
--- ------
transaction or in a series of transactions) except as to the sale of inventory
in the ordinary course of business; (b) change its name, consolidate with or
merge into any other corporation, permit another corporation to merge into it,
acquire all or substantially all the properties or assets of any other Person,
enter into any reorganization or recapitalization or reclassify its capital
stock, or (c) enter into any sale-leaseback transaction;
p. Subordinate any indebtedness due to it from a person to indebtedness of
other creditors of such person;
q. Purchase or hold beneficially any stock or other securities of, or make any
investment or acquire any interest whatsoever in, any other Person except for
the common stock of the Subsidiaries owned by the Borrower on the date of this
Agreement and except for certificates of deposit with maturities of one year
or less of United States commercial banks with capital, surplus and undivided
profits in excess of $100,000,000 and direct obligations of the United States
Government maturing within one year from the date of acquisition thereof; or
r. Allow any fact, condition or event to occur or exist with respect to any
employee pension or profit sharing plans established or maintained by it which
might constitute grounds for termination of any such plan or for the court
appointment of a trustee to administer any such plan.
6.7 Borrower is not a merchant whose sales for resale of goods for personal,
family or household purposes exceeded seventy-five percent (75%) in dollar
volume of its total sales of all goods during the 12 months preceding the filing
by Bank of a financing statement describing the Collateral. At no time hereafter
shall Borrower's sales for resale of goods for personal, family or household
purposes exceed seventy-five (75%) in dollar volume of its total sales.
6.8 Borrower's sole place of business or chief executive office or residence
is located at the address indicated above and Borrower covenants and agrees that
it will not, during the term of the Agreement, without prior written
notification to Bank, relocate said sole place of business or chief executive
office or residence.
6.9 If Borrower is a corporation, Borrower represents, warrants and covenants
as follows:
a. Borrower will not make any distribution or declare or pay any dividend (in
stock or in cash) to any shareholder or on any of its capital stock, of any
class, whether now or hereafter outstanding, or purchase, acquire, repurchase,
redeem or retire any such capital stock;
b. Borrower is and shall at all times hereafter be a corporation duly
organized and exleting in good standing under the laws of the state of its
incorporation and qualified and licensed to do business in California or any
other state in which it conducts its business;
c. Borrower has the right and power and is duly authorized to enter into this
Agreement; and
d. The execution by Borrower of this Agreement shall not constitute a breach
of any provision contained in Borrower's articles of incorporation or by-laws,
6.10 The execution of and performance by Borrower of all of the terms and
provisions contained in this Agreement shall not result in a breach of or
constitute an event of default under any agreement to which Borrower is now or
hereafter becomes a party.
6.11 Borrower shall promptly notify Bank in writing of its acquisition by
purchase, lease or otherwise of any after acquired property of the type included
in the Collateral, with the exception of purchases of inventory in the ordinary
course of business.
6.12 All assessments and taxes, whether real, personal or otherwise, due
payable by, or imposed, levied or assessed against, Borrower or any of its
property have been paid, and shall hereafter be paid in full, before
delinquency, Borrower shall make due and timely payment or deposit of all
federal, state and local taxes, assessments or contributions required of it by
law, and will execute and deliver to Bank, on demand, appropriate certificates
attesting to the payment or deposit thereof. Borrower will make timely payment
or deposit of all F.I.C.A. payments and withholding taxes required of it by
applicable laws, and will upon request furnish Bank with proof satisfactory to
it that Borrower has made such payments or deposit. If Borrower fails to pay any
such assessment, tax, contribution, or make such deposit, or furnish the
required proof, Bank may, in its sole and absolute discretion and without notice
to Borrower,
8
REVOLVING
LOAN & SECURITY AGREEMENT
(Accounts & Inventory)
(i) make payment of the same or any part thereof; or (ii) set up such reserves
in Borrower's account as Bank deems necessary to satisfy the liability therefor,
or both. Bank may conclusively rely on the usual statements of the amount owing
or other official statements issued by the appropriate governmental agency.
Each amount so paid or deposited by Bank shall constitute a Bank Expense and an
additional advance to Borrower.
6.13 There are no actions or proceedings pending by or against Borrower
or any guarantor of Borrower before any court or administrative agency and
Borrower has no knowledge of any pending, threatened or imminent litigation,
governmental investigations or claims, complaints, actions or prosecutions
involving Borrower or any guarantor of Borrower, except as heretofore
specifically disclosed in writing to Bank. If any of the foregoing arise during
the term of the Agreement, Borrower shall immediately notify Bank in writing.
6.14 a. Borrower, at its expense, shall keep and maintain its assets
insured against loss or damage by fire, theft, explosion, sprinklers and all
other hazards and risks ordinarily insured against by other owners who use such
properties in similar businesses for the full insurable value thereof. Borrower
shall also keep and maintain business interruption insurance and public
liability and property damage insurance relating to Borrower's ownership and use
of the Collateral and its other assets. All such policies of insurance shall be
in such form, with such companies, and in such amounts as may be satisfactory to
Bank. Borrower shall deliver to Bank certified copies of such policies of
insurance and evidence of the payments of all premiums therefor. All such
policies of insurance (except those of public liability and property damage)
shall contain an endorsement in a form satisfactory to Bank showing Bank as a
loss payee thereof, with a waiver of warranties (Form 438-BFU), and all proceeds
payable thereunder shall be payable to Bank and, upon receipt by Bank shall be
applied on account of the Obligations owing to Bank. To secure the payment of
the Obligations, Borrower grants Bank a security interest in and to all such
policies of insurance (except those of public liability and property damage) and
the proceeds thereof, and Borrower shall direct all insurers under such policies
of insurance to pay all proceeds thereof directly to Bank.
b. Borrower hereby irrevocably appoints Bank (and any of Bank's officers,
employees or agents designated by Bank) as Borrower's attorney for the purpose
of making, selling and adjusting claims under such policies of insurance,
endorsing the name of Borrower on any check, draft, instruments or other item of
payment for the proceeds of such policies of insurance and for making all
determinations and decisions with respect to such policies of insurance.
Borrower will not cancel any of such policies without Bank's prior written
consent. Each such insurer shall agree by endorsement upon the policy or
policies of insurance issued by it to Borrower as required above, or by
independent instruments furnished to Bank, that it will give Bank at least ten
(10) days written notice before any such policy or policies of insurance shall
be altered or cancelled, and that no act or default of Borrower, or any other
person, shall affect the right of Bank to recover under such policy or policies
of insurance required above or to pay any premium in whole or in part relating
thereto. Bank without waiving or releasing any Obligations or any Event of
Default, may, but shall have no obligation to do so, obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect to such policies which Bank deems advisable. All sums so disbursed by
Bank, as well as reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall constitute Bank Expenses and are payable on
demand.
6.15 All financial statements and information relating to Borrower which
have been or may hereafter be delivered by Borrower to Bank are true and correct
and have been prepared in accordance with GAAP consistently applied and there
has been no material adverse change in the financial condition of Borrower since
the submission of such financial information to Bank.
6.16 a. Borrower at all times hereafter shall maintain a standard and
modern system of accounting in accordance with GAAP consistently applied with
ledger and account cards and/or computer tapes and computer disks, computer
printouts and computer records pertaining to the Collateral which contain
information as may from time to time be requested by Bank, not modify or change
its method of accounting or enter into, modify or terminate any agreement
presently existing, or at any time hereafter entered into with any third party
accounting firm and/or service bureau for the preparation and/or storage of
Borrower's accounting records without the written consent of Bank first obtained
and without said accounting firm and/or service bureau agreeing to provide
information regarding the Receivables and Inventory and Borrower's financial
condition to Bank; permit Bank and any of its employees, officers or agents,
upon demand, during Borrower's usual business hours, or the usual business hour
of third persons having control thereof, to have access to and examine all of
the Borrower's Books relating to the Collateral, Borrower's Obligations to Bank,
Borrower's financial condition and the results of Borrower's operations and in
connection therewith, permit Bank or any of its agents, employees or officers to
copy and make extracts therefrom.
b. Borrower shall deliver to Bank within thirty (30) days after the end of each
month, a company prepared balance sheet and profit and loss statement covering
Borrower's operations and deliver to Bank within one hundred twenty (120) days
after the end of each of Borrower's fiscal years a(n) audited statement of the
financial condition of the Borrower for each such fiscal year, including but not
limited to, a balance sheet and profit and loss statement and any other report
requested by Bank relating to the Collateral and the financial condition of
Borrower, and a certificate signed by an authorized employee of Borrower to the
effect that all reports, statements, computer disk or tape files, computer
printouts, computer runs, or other computer prepared information of any kind or
nature relating to the foregoing or documents delivered or caused to be
delivered to Bank under this subparagraph are complete, correct and thoroughly
present the financial condition of borrower and that there exists on the date of
delivery to Bank no condition or event which constitutes a breach or Event of
Default under this Agreement.
9.
REVOLVING
LOAN & SECURITY AGREEMENT
(Accounts & Inventory)
c. In addition to the financial statements requested above, the Borrower
agrees to provide Bank with the following schedules:
x Accounts Receivable Agings on a MONTHLY basis: *
---------------------- ----------------------------------------
x Accounts Payable Agings on a MONTHLY basis: *
---------------------- ----------------------------------------
Job Progress Reports on a basis; and
______________________ ________________________________________
x BORROWING BASE CERTIFICATES on a MONTHLY basis: *
---------------------- ----------------------------------------
* within 15 days of month end
6.17 Borrower shall maintain the following financial ratios and covenants
on a consolidated and non-consolidated basis:
a. Working Capital in an amount not less than n/a
------------------------------
___________________________________________________________________________
b. Tangible Effective Net Worth in an amount not less than $750,000.00
-----------------
___________________________________________________________________________
c. a ratio of Current Assets to Current Liabilities of not less than n/a
-------
___________________________________________________________________________
d. a quick ratio of cash plus securities plus Receivables to Current
Liabilities of not less than 1.25:1.00
-----------------------------------------------
___________________________________________________________________________
e. a ratio of Total Liabilities (less debt subordinated to Bank) to
tangible Effective Net Worth of less than 2.50:1.00
----------------------------------
___________________________________________________________________________
f. a ratio of Cash Flow to Fixed Charges of not less than n/a
------------------
___________________________________________________________________________
g. Net income after taxes of ______________________________________________
___________________________________________________________________________
h. Borrower shall not without Bank's prior written consent acquire or
expend for or commit itself to acquire or expend for fixed assets by lease,
purchase or otherwise in an aggregate amount that exceeds no/100
------------------
n/a Dollars ($ n/a 0.00) in any fiscal year; and
-------------------------- ---------------
i. Upon a capital raising event of $1,000,000 or greater, Borrower and
------------------------------------------------------------------------
Lender will review and revisit financial covenants.
------------------------------------------------------------------------
All financial covenants shall be computed in accordance with GAAP
consistently applied except as otherwise specifically set forth in this
Agreement. All monies due from affiliates (including officers, directors and
shareholders) shall be excluded from Borrower assets for all purposes hereunder.
6.18 Borrower shall promptly supply Bank (and cause any guarantor to
supply Bank) with such other information (including tax returns) concerning its
financial affairs (or that any guarantor) as Bank may request from time to time
hereafter, and shall promptly notify Bank of any material adverse change in
Borrower's financial condition and of any condition or event which constitutes a
breach of or an event which constitutes an Event of Default under this
Agreement.
6.19 Borrower is now and shall be at all times hereafter solvent and able
to pay its debts (including trade debts) as they mature.
6.20 Borrower shall immediately and without demand reimburse Bank for all
sums expended by Bank in connection with any action brought by Bank to correct
any default or enforce any provision of this Agreement, including all Bank
Expenses; Borrower authorizes and approves all advances and payments by Bank for
items described in this Agreement as Bank Expenses.
6.21. Each warranty, representation and agreement contained in this
Agreement shall be automatically deemed repeated with each advance and shall be
conclusively presumed to have been relied on by Bank regardless of any
investigations made or information possessed by Bank. The warranties,
representations and agreements set forth herein shall be cumulative and in
addition to any and all other warranties, representations and agreements which
Borrower shall give, or cause to be given, to Bank, either now or hereafter.
6.22 Borrower shall keep all of its principal bank accounts with Bank and
shall notify the Bank immediately in writing of the existence of any other bank
account, deposit account, or any other account into which money can be
deposited.
6.23. Borrower shall furnish to the Bank: (a) as soon as possible, but in
no event later than thirty (30) days after Borrower knows or has reason to know
that any reportable event with respect to any deferred compensation plan has
occurred, a statement of the chief financial officer of Borrower setting forth
the details concerning such reportable
10.
REVOLVING
LOAN & SECURITY AGREEMENT
(Accounts & Inventory)
event and the action which Borrower proposes to take with respect thereto,
together with a copy of the notice of such reportable event given to the Pension
Benefit Guaranty Corporation, if a copy of such notice is available to Borrower;
(b) promptly after filing thereof with the United States Secretary of Labor or
the Pension Benefit Guaranty Corporation, copies of each annual report with
respect to each deferred compensation plan; (c) promptly after receipt thereof,
a copy of any notice Borrower may receive from the Pension Benefit Guaranty
Corporation or the Internal Revenue Service with respect to any deferred
compensation plan; provided, however, this subparagraph shall not apply to
notice of general application issued by the Pension Benefit Guaranty Corporation
or the Internal Revenue Service; and (d) when the same is made available to
participants in the deferred compensation plan, all notices and other forms of
information from time to time disseminated to the participants by the
administrator of the deferred compensation plan.
6.24 Borrower is now and shall at all times hereafter remain in compliance
with all federal, state and municipal laws, regulations and ordinances relating
to the handling, treatment and disposal of toxic substances, wastes and
hazardous material and shall maintain all necessary authorizations and permits.
6.25 Borrower shall maintain Insurance on the life of N/A in an
------------
amount not to be less than No/100 Dollars ($ n/a )
------------------------- ----------------
under one or more policies issued by insurance companies satisfactory to Bank,
which policies shall be assigned to Bank as security for the Obligations and on
which Bank shall be named as sole beneficiary.
6.26 Borrower shall limit direct and indirect compensation paid to the
following employees: _______________________, __________________, to an
aggregate of N/A Dollars ($ N/A ) per __________.
-------------------------- -------------
7. EVENTS OF DEFAULT
-----------------
Any one or more of the following events shall constitute a default by
Borrower under the Agreement:
a. If Borrower fails or neglects to perform, keep or observe any term,
provision, condition, covenant, agreement, warranty or representation
contained in this Agreement, or any other present or future agreement
between Borrower and Bank;
b. If any representation, statement, report, or certificate made or
delivered by Borrower, or any of its officers, employees or agents to Bank
is not true and correct;
c. If Borrower fails to pay when due and payable or declared due and
payable, all or any portion of the Borrower's Obligations (whether of
principal, interest, taxes, reimbursement of Bank Expenses, or otherwise);
d. If there is a material impairment of the prospect of repayment of all
or any portion of Borrower's Obligations or a material impairment of the
value or priority of Bank's security interest in the Collateral;
e. If all or any of Borrower's assets are attached, seized, subject to a
writ or distress warrant, or are levied upon, or come into the possession
of any Judicial Officer or Assignee and the same are not released,
discharged or bonded against within ten (10) days thereafter;
f. If any insolvency Proceeding is filed or commenced by or against
Borrower without being dismissed within ten (10) days thereafter;
g. If any proceeding is filed or commenced by or against Borrower for its
dissolution or liquidation;
h. 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;
i. If a notice of lien, levy or assessment is filed of record with respect
to any or all of Borrower's assets by the United States Government, or any
department, agency or instrumentality thereof, or by any state, county
municipal, or other government agency, or if any taxes or debts owing at
any time hereafter to any one or more of such entitles becomes a lien,
whether xxxxxx or otherwise, upon any or all of the Borrower's assets and
the same is not paid on the payment date thereof;
j. If a judgement or other claim becomes a lien or encumbrance upon any or
all of Borrower's assets and the same is not satisfied, dismissed or bonded
against within ten (10) days thereafter;
k. If Borrower's records are prepared and kept by an outside computer
service bureau at the time this Agreement is entered into or during the
term or this Agreement such an agreement with an outside service bureau is
entered into, and at any time thereafter, without first obtaining the
written consent of Bank, Borrower terminates, modifies, amends or changes
its contractual relationship with said computer service bureau or said
computer service bureau fails to provide Bank with any requested
information or financial data pertaining to Bank's Collateral, Borrower's
financial condition or the results of Borrower's operations;
l. If Borrower permits a default in any material agreement to which
Borrower is a party with third parties so as to result in an acceleration
of the maturity of Borrower's indebtedness to others, whether under any
indenture, agreement or otherwise;
11.
REVOLVING
LOAN & SECURITY AGREEMENT
(Accounts & Inventory)
m. If Borrower makes any payment on account of indebtedness which has been
subordinated to Borrower's Obligations to Bank;
n. If any misrepresentation exists now or thereafter in any warranty or
representation made to Bank by any officer or director of Borrower, or if
any such warranty or representation is withdrawn by any officer or
director;
o. If any party subordinating its claims to that of Bank's or any
guarantor of Borrower's Obligations dies or terminates its subordination or
guaranty, becomes insolvent or an insolvency Proceeding is commenced by or
against any such subordinating party or guarantor;
p. If Borrower is an individual and Borrower dies;
q. If there is a change of ownership or control of N/A percent
--------------
(__________ %) or more of the issued and outstanding stock of Borrower; or
r. If any reportable event, which the Bank determines constitutes grounds
for the termination of any deferred compensation plan by the Pension
Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a trustee to administer any such plan,
shall have occurred and be continuing thirty (30) days after written notice
of such determination shall have been given to Borrower by Bank, or any
such Plan shall be terminated within the meaning of Title IV of the
Employment Retirement Income Security Act ("ERISA"), or a trustee shall be
appointed by the appropriate United States District Court to administer any
such plan, or the Pension Benefit Guaranty Corporation shall institute
proceedings to terminate any plan and in case of any event described in
this Section 7.0, the aggregate amount of the Borrower's liability to the
Pension Benefit Guaranty Corporation under Sections 4062, 4063 or 4064 of
ERISA shall exceed five percent (5%) of Borrower's Tangible Effective Net
Worth.
Notwithstanding anything contained in Section 7 to the contrary, Bank
shall refrain from exercising its rights and remedies and Event of Default
shall thereafter not be deemed to have occurred by reason of the occurrence
of any of the events set forth in Sections 7.e, 7.f or 7.j of this
Agreement if, within ten (10) days from the date thereof, the same is
released, discharged, dismissed, bonded against or satisfied; provided,
however, if the event is the institution of Insolvency Proceedings against
Borrower, Bank shall not be obligated to make advances to Borrower during
such cure period.
8. BANK'S RIGHTS AND REMEDIES
--------------------------
8.1 Upon the occurrence of an Event of Default by Borrower under this
Agreement, Bank 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 Borrower's Obligations, whether evidenced by this
Agreement, Installment notes, demand notes or otherwise, immediately
due and payable to the Bank;
b. Cease advancing money or extending credit to or for the benefit of
Borrower under this Agreement, or any other agreement between Borrower
and Bank;
c. Terminate this Agreement as to any future liability or obligation
of Bank, but without affecting Bank's rights and security interests in
the Collateral, and the Obligations of the Borrower to Bank.
d. Without notice to or demand upon Borrower or any guarantor, make
such payments and do such acts as Bank considers necessary or
reasonable to protect its security interest in the Collateral.
Borrower agrees to assemble the Collateral if Bank so requires and to
make the Collateral available to Bank as Bank may designate. Borrower
authorizes Bank to enter the premises where the Collateral is located,
take and maintain possession of the Collateral and the premises (at no
charge to Bank), or any part thereof, and to pay, purchase, contest or
compromise any encumbrance, charge or lien which in the opinion of
Bank appears to be prior or superior to its security interest and to
pay all expenses incurred in connection therewith;
e. Without limiting Bank's rights under any security interest, Bank
is hereby granted a license or other right to use, without charge,
Borrower's labels, patents, copyrights, rights of use of any name,
trade secrets, trade names, trademarks and advertising matter, or any
property of a similar nature as it pertains to the Collateral, in
completing production of, advertising for sale and selling any
Collateral and Borrower's rights under all license and all franchise
agreement shall inure to Bank's benefit, and Bank shall have the right
and power to enter into sublicense agreements with respect to all such
rights with third parties on terms acceptable to Bank;
f. Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sales and sell (in the manner provided for
herein) the inventory;
g. Sell or dispose the Collateral at either a public or private sale,
or both, by way of one or more contracts or transactions, for cash or
on terms, in such manner and at such places (including Borrower's
premises) as is commercially reasonable in the opinion of Bank. It is
not necessary that the Collateral be present at any such sale;
h. Bank shall give notice of the disposition of the Collateral as
follows:
12.
REVOLVING
LOAN & SECURITY AGREEMENT
(Accounts & Inventory)
(1) Bank shall give the Borrower and each holder of a security
interest in the Collateral who has filed with Bank a written
request for notice, a notice in writing of the time and place of
public sale, or, if the sale is a private sale or some
disposition other than a public sale is to be made of the
Collateral, the time on or after which the private sale or other
disposition is to be made:
(2) The notice shall be personally delivered or mailed, postage
prepaid, to Borrower's address appearing in this Agreement, at
least five (5) calendar days before the date fixed for the sale,
or at least five (5) calendar days before the date on or after
which the private sale or other disposition is to be made,
unless the Collateral is perishable or threatens to decline
speedily in value. Notice to persons other than Borrower
claiming an interest in the Collateral shall be sent to such
addresses as they have furnished to Bank;
(3) If the sale is to be a public sale, Bank shall also give
notice of the time and place by publishing a notice one time at
least five (5) calendar days before the date of the sale in a
newspaper of general circulation in the county in which the sale
is to be held; and
(4) Bank may credit bid and purchase at any public sale.
i. Borrower shall pay all Bank Expenses incurred in connection with
Bank's enforcement and exercise of any of its rights and remedies as
herein provided, whether or not suit is commenced by Bank;
j. Any deficiency which exists after disposition of the Collateral as
provided above will be paid immediately by Borrower. Any excess will
be returned, without interest and subject to the rights of third
parties, to Borrower by Bank or, in Bank's discretion, to any party
who Bank believes, in good faith, is entitled to the excess; and
k. Without constituting a retention of Collateral in satisfaction of
an obligation within the meaning of 9505 of the Uniform Commercial
Code or an action under California Code of Civil Procedure 726, apply
any and all amounts maintained by Borrower as deposit accounts (as
that term is defined under 8105 of the Uniform Commercial Code) or
other accounts that Borrower maintains with Bank against the
Obligations.
8.2 Bank's rights and remedies under this Agreement and all other
agreements shall be cumulative. Bank shall have all other rights and
remedies not inconsistent herewith as provided by law or in equity. No
exercise by Bank of one right or remedy shall be deemed an election, and no
waiver by Bank of any default on Borrower's part shall be deemed a
continuing waiver. No delay by Bank shall constitute a waiver, election or
acquiescence by Bank.
9. TAXES AND EXPENSES REGARDING BORROWER'S PROPERTY.
------------------------------------------------
If Borrower fails to pay promptly when due to another person or entity, monies
which Borrower is required to pay by reason of any provision in the Agreement,
Bank may, but need not, pay the same and charge Borrower's account therefor, and
Borrower shall promptly reimburse Bank. All such sums shall become additional
indebtedness owing to Bank, shall bear interest at the rate hereinabove
provided, and shall be secured by all Collateral. Any payments made by Bank
shall not constitute (i) an agreement by it to make similar payments in the
future; or (ii) a waiver by Bank of any default under this Agreement. Bank need
not inquire as to, or contest the validity of, any such expense, tax, security
interest, encumbrance or lien and the receipt of the usual official notice of
the payment thereof shall be conclusive evidence that the same was validly due
and owing. Such payments shall constitute Bank Expenses and additional
advances to Borrower.
10. WAIVERS.
-------
10.1 Borrower agrees that checks and other instruments received by
Bank in payment or on account of Borrower's Obligations constitute only
conditional payment until such items are actually paid to the Bank and
Borrower waives the right to direct the application of any and all payments
at any time or times hereafter received by Bank on account of Borrower's
Obligations and Borrower agrees that Bank shall have the continuing
exclusive right to apply and reapply such payments in any manner as Bank
may deem advisable, notwithstanding any entry by Bank upon its books.
10.2 Borrower waives demand, protest, notice of protest, notice of
default or dishonor, notice of payment and nonpayment, notice of any
default, nonpayment at maturity, release, compromise, settlement, extension
or renewal of any or all commercial paper, accounts, documents, instruments
chattel paper, and guarantees at any time held by Bank on which Borrower
may in any way be liable.
10.3 Bank shall not in any way or manner be liable or responsible for
(a) the safekeeping of the inventory; (b) any loss or damage thereto
occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency or other person whomsoever. All
risk of loss, damage or destruction of inventory shall be borne by
Borrower.
10.4 Borrower waives the right and the right to assert a confidential
relationship, if any, it may have with any accountant, accounting firm
and/or service bureau or consultant in connection with any information
requested by Bank pursuant to or in accordance with this Agreement, and
agrees that a Bank may contact directly any such accountants, accounting
firm and/or service bureau or consultant in order to obtain such
information.
10.5 BORROWER AND BANK EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY TRANSACTION
HEREUNDER, OR CONTEMPLATED HEREUNDER OR ANY OTHER CLAIM (INCLUDING TORT OR
BREACH OF DUTY CLAIMS) OR DISPUTE HOWSOEVER ARISING BETWEEN BANK AND
BORROWER.
13.
REVOLVING
LOAN & SECURITY AGREEMENT
(Accounts & Inventory)
10.6 In the event that Bank elects to waive any rights or remedies
hereunder, or compliance with any of the terms hereof, or delays or fails to
pursue or enforce any terms, such waiver, delay or failure to pursue or
enforce shall only be effective with respect to that single act and shall
not be construed to affect any subsequent transactions or Bank's right to
later pursue such rights and remedies.
11. ONE CONTINUING LOAN TRANSACTION.
-------------------------------
All loans and advances heretofore, now or at any time or times hereafter made by
Bank to Borrower under this Agreement or any other agreement between Bank and
Borrower, shall constitute one loan secured by Bank's security interests in the
Collateral and by all other security interests, liens, encumbrances heretofore,
now or from time to time hereafter granted by Borrower to Bank.
Notwithstanding the above, (i) to the extent that any portion of the Obligations
are a consumer loan, that portion shall not be secured by any deed of trust or
mortgage on or other security interest in the Borrower's principal dwelling
which is not a purchase money security interest as to that portion, unless
expressly provided to the contrary in another place, or (ii) if the Borrower (or
any of them) has (have) given or give(s) Bank a deed of trust or mortgage
covering real property, that deed of trust or mortgage shall not secure the loan
and any other Obligation of the Borrower (or any of them), unless expressly
provided to the contrary in another place.
12. NOTICES.
-------
Unless otherwise provided in this Agreement, all notices or demands by either
party on the other relating to this Agreement shall be in writing and sent by
regular United States mail, postage prepaid, properly addressed to Borrower or
to Bank at the addresses stated in this Agreement, or to such other addresses as
Borrower or Bank may from time to time specify to the other in writing.
Requests to Borrower by Bank hereunder may be made orally.
13. AUTHORIZATION TO DISBURSE.
-------------------------
Bank is hereby authorized to make loans and advances hereunder upon telephonic
or other instructions received from anyone purporting to be an officer,
employee, or representative of Borrower, or at the discretion of Bank if said
loans and advances are necessary to meet any Obligations of Borrower to Bank.
Bank shall have no duty to make inquiry or verify the authority of any such
party, and Borrower shall hold Bank harmless from any damage, claims or
liability by reason of Bank's honor of, or failure to honor, any such
instructions.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
-----------------------------------
Any documents, schedules, invoices or other papers delivered to Bank, may be
destroyed or otherwise disposed of by Bank six (6) months after they are
delivered to or received by Bank, unless Borrower requests, in writing, the
return of the said documents, schedules, invoices or other papers and makes
arrangements, at Borrower's expense, for their return.
15. CHOICE OF LAW.
-------------
The validity of this Agreement, its construction, interpretation and
enforcement, and the rights of the parties hereunder and concerning the
Collateral, shall be determined according to the laws of the State of
California. The parties agree that all actions or proceedings arising in
connection with this Agreement shall be tried and litigated only in the state
and federal courts in the Northern District of California or County of Santa
Xxxxx.
16. GENERAL PROVISIONS.
-------------------
16.1 This Agreement shall be binding and deemed effective when
executed by the Borrower and accepted and executed by Bank at its
Headquarter Office.
16.2 This Agreement shall bind and inure to the benefit of the
respective successors and assign of each of the parties, provided,
however, that Borrower may not assign this Agreement or any rights
hereunder without Bank's prior written consent and any prohibited
assignment shall be absolutely void. No consent to an assignment by Bank
shall release Borrower or any guarantor from their Obligations to Bank.
Bank may assign this Agreement and its rights and duties hereunder. Bank
reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in Bank's rights and
benefits hereunder. In connection therewith, Bank may disclose all
documents and information which Bank now or hereafter may have relating to
Borrower or Borrower's business.
16.3 Paragraph headings and paragraph numbers have been set forth
herein for convenience only; unless the contrary is compelled by the
context, everything contained in each paragraph applies equally to this
entire Agreement.
16.4 Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed or resolved against Bank or Borrower, whether under any
rule of construction or otherwise; on the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to
the ordinary meaning of the words used so as to fairly accomplish the
purposes and intentions of all parties hereto. When permitted by the
context, the singular includes the plural and vice versa.
14.
REVOLVING
LOAN & SECURITY AGREEMENT
(Accounts & Inventory)
16.5 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.
16.6 This Agreement cannot be changed or terminated orally. Except as
to currently existing Obligations owing by Borrower to Bank, all prior
agreements, understandings, representations, warranties, and negotiations,
if any, with respect to the subject matter hereof, are merged into this
Agreement.
16.7 The parties intend and agree that their respective rights,
duties, powers liabilities, obligations and discretions shall be
performed, carried out, discharged and exercised reasonably and in good
faith.
IN WITNESS WHEREOF, the parties hereto have caused this Revolving Credit
Loan & Security Agreement (Accounts and Inventory) to be executed as of the date
first hereinabove written.
ATTEST: BORROWER: AGILE SOFTWARE CORPORATION
___________________________________ By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Title: Signature of Xxxxx X. Xxxxxx
Accepted and effective as of Title: President & CEO
DECEMBER 11, 1996 at Bank's ----------------------------------
---------------------
Headquarter Office
By:_____________________________________
Signature of
(Bank) Title:__________________________________
By:________________________________ By:_____________________________________
Signature of XXXX XXXXX Signature of
Title: VICE PRESIDENT Title:__________________________________
-----------------------------
By:_____________________________________
Signature of
Title:__________________________________
15.
Comerica Bank-California 00 Xxxx Xxxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
(000) 000-0000
MODIFICATION TO REVOLVING CREDIT LOAN & SECURITY AGREEMENT
----------------------------------------------------------
This First Modification to Revolving Credit Loan & Security Agreement (this
"Modification") is entered into by and between AGILE SOFTWARE CORPORATION
--------------------------
("Borrower") and Comerica Bank-California ("Bank") as of this 24TH day of
----
September 1997 at San Jose, California.
--------------
RECITALS
--------
A. Bank and Borrower have previously entered into or are concurrently
herewith entering into a Revolving Credit Loan & Security Agreement (Accounts &
Inventory) (the "Agreement") dated December 11, 1996.
-----------------
B. Borrower has requested, and Bank has agreed, to modify the Agreement
as set forth below.
AGREEMENT
---------
For good and valuable consideration, the parties agree as set forth below:
Incorporation by Reference. The Agreement as modified hereby and the
--------------------------
Recitals are incorporated herein by this reference.
Section 1.5 "Borrowing Base" as used in this Agreement means the sum
-----------
of: (1) Seventy-five percent (75.00%) of the net amount of Eligible Accounts
after deducting therefrom all payments, adjustments and credits applicable
thereto ("Accounts Receivable Borrowing Base"); and (2) the amount, if any, of
the advances against inventory agreed to be made pursuant to any Inventory
Rider ("Inventory Borrowing Base"), or other rider, amendment or modification to
this Agreement, that may now or hereafter be entered into by Bank and Borrower.
Up to $500,000.00 can be advanced without regard to formula; Upon borrowings
exceeding $500,000.00 (including Letters of Credit) and potential letter of
credit obligations, advance on Accounts Receivable will be limited, in
aggregate, to 75% of eligible Accounts Receivable and 100% of pledged cash.
Section 1.31 LETTER OF CREDIT SUB-FEATURE - The amount of $250,000.00
------------
for the issuance of Letters of Credit is to be allowed within the Borrowing Base
and within the Line amount. Letters of Credit are allowed to expire up to 180
days past the expiration of the Line. If the Line is not renewed, Letters of
Credit must be cash secured.
Section 2.1 Upon the request of Borrower, made at any time and from
-----------
time to time during the term hereof, and so long as no Event of Default has
occurred, Bank shall lend to
Borrower an amount equal to the Borrowing Base; provided, however, that in no
event shall Bank be obligated to make advances to Borrower under this Section
2.1 whenever the Daily Balance exceeds, at any time, either the Borrowing Base
or the sum of TWO MILLION AND NO/100 DOLLARS ($2,000.000.00), such amount being
------------------------------ ---------------
referred to herein as an "Overadvance".
Section 2.4 A fee of 1.5% Per Annum of the Line ($30,000.00) is to
-----------
be paid as follows: 1/3 ($10,000.00) due on acceptance and 2/3 ($20,000.00) due
upon the earlier of the Maturity date or a Capital Raising Event.
Section 3.1 This Agreement shall remain in full force and effect
-----------
until August 31, 1998, or until terminated by notice by Borrower. Notice of such
---------------
termination by Borrower shall be effectuated by mailing of a registered or
certified letter not less than thirty (30) days prior to the effective date of
such termination, addressed to the Bank at the address set forth herein and the
termination shall be effective as of the date so fixed in such notice.
Notwithstanding the foregoing, should borrower be in default of one or more of
the provisions of this Agreement, Bank may terminate this Agreement at any time
without notice. Notwithstanding the foregoing, should either Bank or Borrower
become insolvent or unable to meet its debts as they mature, or fail, suspend,
or go out of business, the other party shall have the right to terminate this
Agreement at any time without notice. On the date of termination all Obligations
shall become immediately due and payable without notice or demand; no notice of
termination by Borrower shall be effective until Borrower shall have paid all
Obligations to Bank in full. Notwithstanding termination, until all obligations
have been fully satisfied, Bank shall retain its security interest in all
existing Collateral and Collateral arising thereafter, and Borrower shall
continue to perform all of its Obligations.
Section 6.16c In addition to the financial statements requested above,
-------------
the Borrower agrees to provide Bank with the following schedules:
X Accounts Receivable Agings on a MONTHLY basis *
---------- -------
X Accounts Payable Agings on a MONTHLY basis *
---------- -------
X Borrowing Base Certificates on a MONTHLY basis *
---------- -------
X Compliance Certificate within 30 days of month end;
----------
X Other reports as reasonably requested.
----------
*within 15 days of month end
Section 6.17(b) is ELIMINATED.
---------------
Section 6.17(d) A quick ratio of 1.25:1.00 to be calculated as Cash +
---------------
Accounts Receivable/Current Liabilities excluding Deferred Revenue tested
monthly.
Section 6.17(e) is ELIMINATED.
---------------
Section 6.17(g) Net Income after taxes of Q4 ending 4/30/98, maximum
---------------
loss of $500,000.00; Quarterly Profitability (after taxes)of $50,000.00 or more
beginning with the quarter ending 7/31/98 and thereafter - OR - to complete a
Capital Raising Event by 7/31/98 of $2,000,000.00 or greater.
Section 6.17(i) Upon a capital raising event of $2,000,000.00 or
---------------
greater, the financial covenants will be renegotiated.
Section 6.17(j) Borrower to provide "Comfort Letters" from Xxxx
---------------
Xxxxxxx Ventures & Sequoia Capital indicating a willingness of continued support
if needed.
Legal Effect. Except as specifically set forth in this Modification,
------------
all of the terms and conditions of the Agreement remain in full force and
effect.
Integration. This is an integrated Modification and supersedes all
-----------
prior negotiations and agreements regarding the subject matter hereof. All
amendments hereto must be in writing and signed by the parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set forth
above.
COMERICA BANK-CALIFORNIA
By:_________________________________
R. Xxxx Xxxxx
Title: Vice President
-----------------------------
BORROWER:
AGILE SOFTWARE CORPORATION
By: /s/
---------------------------------
Title: CFO (Acting)
------------------------------
[LOGO OF COMERICA]
--------------------------------------------------------------------------------
Comerica Bank-California 00 Xxxx Xxxxxxx Xxxx
Xxx Xxxx, Xxxxxxxxxx 00000
(000) 000-0000
MODIFICATION TO REVOLVING LOAN & SECURITY AGREEMENT
---------------------------------------------------
This Second Modification to Revolving Loan & Security Agreement (this
"Modification") is entered into by and between AGILE SOFTWARE CORPORATION
("Borrower") and Comerica Bank-California ("Bank") as of this 3rd day of
February, 1998, at San Jose, California.
RECITALS
--------
A. Bank and Borrower have previously entered into or are concurrently
herewith entering into a Revolving Loan & Security Agreement (Accounts &
Inventory) (the "Agreement") dated December 11, 1996.
B. Borrower has requested, and Bank has agreed, to modify the Agreement as
set forth below.
AGREEMENT
---------
For good and valuable consideration, the parties agree as set forth below:
Incorporation by Reference. The Agreement as modified hereby and the
--------------------------
Recitals are incorporated herein by this reference.
Section 1.5 "Borrowing Base" as used in this Agreement means the sum of: (1)
Seventy-Five percent (75.00%) of the net amount of Eligible
Accounts after deducting therefrom all payments, adjustments and
credits applicable thereto ("Accounts Receivable Borrowing Base");
and (2) the amount, if any, of the advances against Inventory
agreed to be made pursuant to any Inventory Rider ("Inventory
Borrowing Base"), or other rider, amendment or modification to this
Agreement, that may now or hereafter be entered into by Bank and
Borrower. Up to $500,000.00 can be advanced without regard to
formula; Upon borrowings exceeding $500,000.00 (including Letters
of Credit) and potential letter of credit obligations, advance on
Accounts Receivable will be limited, in aggregate, to 75% of
Eligible Accounts Receivable and 100% of pledged cash. Training and
service receivables will be eligible for borrowing. Foreign
accounts will be limited to $750,000.00 in aggregate.
Section 2.2 Except as hereinbelow provided, the Credit shall
bear interest, on the Daily Balance owing, at a rate of Zero
(0.00%) percentage points per annum above the Base Rate (the
"Rate"). The Credit shall bear interest, from and after the
occurrence of an Event of Default and without constituting a
waiver of any such Event of Default, on the Daily Balance owing,
at a rate three (3) percentage points per annum above the Rate.
All interest chargeable under this Agreement that is based upon a
per annum calculation shall be computed on the basis of a three
hundred sixty (360) day year for actual days elapsed.
The Base Rate as of the date of this Agreement is Eight and
500/1000 (8.500%) per annum. In the event that the Base Rate
announced is, from time to time hereafter changed, adjustment in
the Rate shall be made and based on the Base Rate in effect on
the date of such change. The Rate, as adjusted, shall apply to
the Credit until the Base Rate is adjusted again. The minimum
interest payable by the Borrower under this Agreement shall in no
event be less than N/A per month. All interest payable by
-------
Borrower under the Credit shall be due and payable on the first
day of each calendar month during the term of this Agreement and
Bank may, at its option, elect to treat such interest and any and
all Bank Expenses as advances under the Credit, which amounts
shall thereupon constitute Obligations and shall thereafter
accrue interest at the rate applicable to the Credit under the
terms of the Agreement.
Section 6.16b Borrower shall deliver to Bank within thirty (30) days after the
end of each Month, a Company Prepared balance sheet and profit
and loss statement covering Borrower's operations and deliver to
Bank within One Hundred Twenty (120) days after the end of each
Borrower's fiscal years a CPA Audited statement of the financial
condition of the Borrower for each such fiscal year, including
but not limited to, a balance sheet and profit and loss statement
and any other report requested by Bank relating to the collateral
and the financial condition of Borrower, and a certificate signed
by an authorized employee of Borrower to the effect that all
reports, statements, computer disk or tape files, computer
printouts, computer runs, or other computer prepared information
of any kind or nature relating to the foregoing or documents
delivered or caused to be delivered to Bank under this
subparagraph are complete, correct and thoroughly present the
financial condition of borrower and
delivery to Bank no condition or event which constitutes a
breach or Event of Default under this Agreement.
Section 6.17b Tangible Net Worth in an amount not less than $1,000,000.00 to
increase by 80% of new equity and quarterly net profit after tax,
when applicable.
Section 6.17d a quick ratio of cash plus securities plus Receivables to Current
Liabilities of not less than 1.50:1.00 - Quick Ratio excludes
deferred revenue from current liabilities
Legal Effect. Except as specifically set forth in this Modification,
------------
all of the terms and conditions of the Agreement remain in full force and
effect.
Integration. This is an integrated Modification and supersedes all prior
-----------
negotiations and agreements regarding the subject matter hereof. All amendments
hereto must be in writing and signed by the parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set forth
above.
AGILE SOFTWARE CORPORATION COMERICA BANK-CALIFORNIA
By: [ILLEGIBLE] By: /s/ R. Xxxx Xxxxx
------------------------- -------------------------
R. Xxxx Xxxxx
Title: CFO Title: Vice President
----------------------
MODIFICATION TO REVOLVING LOAN & SECURITY AGREEMENT
---------------------------------------------------
This Third Modification to Revolving Loan & Security Agreement (this
"Modification") is entered into by and between AGILE SOFTWARE CORPORATION
("Borrower") and Comerica Bank-California ("Bank") as of this 17th day of
September, 1998, at San Jose, California.
RECITALS
--------
A. Bank and Borrower have previously entered into or are concurrently
herewith entering into a Revolving Loan & Security Agreement (Accounts &
Inventory) (the "Agreement") dated December 11, 1996.
B. Borrower has requested, and Bank has agreed, to modify the Agreement as
set forth below.
AGREEMENT
---------
For good and valuable consideration, the parties agree as set forth below:
Incorporated by Reference. The Agreement as modified hereby and the
-------------------------
Recitals are incorporated herein by this reference.
Section 1.5 "Borrowing Base" as used in this Agreement means the sum of: (1)
eighty percent (80.00%) of the net amount of Eligible Accounts
after deducting therefrom all payments, adjustments, and credits
applicable thereto ("Accounts Receivable Borrowing Base"); and (2)
the amount if any, of the advances against Inventory Rider
("Inventory Borrowing Base"), or other rider, amendment or
modification to this Agreement. That may now or hereafter be
entered into by Bank and Borrower. The entire amount outstanding,
including potential
letter of credit obligations, will be limited to eighty percent
(80%) of eligible accounts receivable.
Section 1.12
(e) Accounts with respect to which the accounts debtor is any State
of the United States or any city, county, town, municipality or
division thereof. Training and service receivables will be
eligible for borrowing and foreign accounts will be limited to
$750,000.00 in aggregate.
Section 3.1 This Agreement shall remain in full force and effect until
August 31, 1999, or until terminated by notice by Borrower.
Notice of such termination by Borrower shall be effectuated by
mailing of a registered or certified letter not less than thirty
(30) days prior to the effective date of such termination,
addressed to the Bank at the address set forth herein and the
termination shall be effective as of the date so fixed in such
notice. Notwithstanding the foregoing, should Borrower be in
default of one or more of the provisions of this Agreement, Bank
may terminate this Agreement at any time without notice.
Notwithstanding the foregoing, should either Bank or Borrower
become insolvent or unable to meet its debts as they mature, or
fail, suspend, or go out of business, the other party shall have
the right to terminate this Agreement at any time without
notice. On the date of termination all Obligations shall become
immediately due and payable without notice or demand; no notice
of termination by Borrower shall be effective until Borrower
shall have paid all Obligations to Bank in full. Notwithstanding
termination, until all Obligations have been fully satisfied,
Bank shall retain its security interest in all existing
Collateral and Collateral arising thereafter, and Borrower shall
continue to perform all of its Obligations.
2
Section 6.17b Tangible Net Worth in an amount not less than $2,000,000.00 to
increase by 50% of new equity and quarterly net profit after
tax.
Legal Effect. Except as specifically set forth in this Modification, all of
------------
the terms and conditions of the Agreement remain in full force and effect.
Integration. This is an integrated Modification and supersedes all prior
-----------
negotiations and agreements regarding the subject matter hereof. All amendments
hereto must be in writing and signed by the parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set forth
above.
AGILE SOFTWARE CORPORATION COMERICA BANK-CALIFORNIA
By: By: /s/ Xxxx Xxxxx
------------------------------ ------------------------------
Xxxx Xxxxx
Title: Chief Financial Officer Title: Vice President
---------------------------
MODIFICATION OF REVOLVING CREDIT
LOAN & SECURITY AGREEMENT
This Fourth Modification to Revolving Credit Loan & Security Agreement
(Accounts & Inventory) (this "Modification") is entered into by and between
Agile Software Corporation ("Borrower") and COMERICA BANK-CALIFORNIA ("Bank") as
of this 17th day of July, 1999, at San Jose, California.
RECITALS
--------
A. Bank and Borrower have previously entered into a Loan & Security
Agreement (Accounts & Inventory) (the "Agreement") dated December 11, 1996.
B. Borrower has requested, and Bank has agreed, to modify the Agreement as
set forth below.
AGREEMENT
---------
For good and valuable consideration, the parties agree as set forth below:
Incorporation by Reference. The Agreement as modified hereby and the
--------------------------
Recitals are incorporated herein by this reference;
Section 1.31 Letter of Credit Sub-feature - The amount of $500,000.00 for the
-----------
issuance of Letters of Credit is to be allowed within the Borrowing Base
and within the Line amount. Letters of Credit are allowed to expire up to
180 days past the expiration of the Line. If the Line is not renewed,
Letters of Credit must be cash secured.
Section 2.1 Upon the request of the Borrower, made at any time and from time
to time during the term hereof, and so long as no Event of Default has
occurred, Bank shall lend to Borrower an amount equal to the Borrowing
Base; provided, however, that in no event shall Bank be obligated to make
advances to Borrower under this Section 2.1 whenever the Daily Balance
exceeds, at any time, either the Borrowing Base or the sum of Five Million
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and No/100 Dollars ($5,000,000.00), such amount being referred to herein as
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"Overadvance."
Section 6.17 Borrower shall maintain the following financial ratios and
covenants on a consolidated and consolidating basis:
(b) Effective Tangible Net Worth in an amount not less than Six
Million and No/100 Dollars ($6,000,000.00), to increase by
80% of new equity and 75% of Quarterly NPAT, when
applicable, reduced by 100% of quarterly losses.
(g) Maximum net quarterly losses of $3,000,000.00 for the first
quarter ending July 31, 1999; $2,600,000.00 for the second
quarter ending October 31, 1999; $1,750,000.00 for the third
quarter ending January 31, 2000; $1,000,000.00 for the
fourth quarter ending April 30, 2000; $500,000.00 for the
first quarter ending July 31, 2000. Losses to exclude one-
time non-cash charges for stock acquisitions or non-cash
compensation charges.
(h) Borrower shall not without Bank's prior written consent
acquire or expend for or commit itself to acquire or expend
for fixed assets by lease, purchase or otherwise in an
aggregate amount that exceeds Two Million Five Hundred
Dollars ($2,500,000.00) in any fiscal year; and
Section 3.1 This Agreement shall remain in full force and effect until August
31, 2000 or until terminated by notice by Borrower. Notice of such
termination by Borrower shall be effectuated by mailing of a registered
or certified letter not less than thirty (30) days prior to the
effective date of such termination, addressed to the Bank at the address
set forth herein and the termination shall be effective as of the date
so fixed in such notice. Notwithstanding the foregoing, should Borrower
be in default of one or more of the provisions of this Agreement, Bank
may terminate this Agreement at any time without notice. Notwithstanding
the foregoing, should either Bank or Borrower become insolvent or unable
to meet its debts as they mature, or fail, suspend, or go out of
business, the other party shall have the right to terminate this
Agreement at any time without notice. On the date of termination all
Obligations shall become immediately due and payable without notice or
demand; no notice of termination by Borrower shall be effective until
Borrower shall have paid all Obligations to Bank in full.
Notwithstanding termination, until all Obligations have been fully
satisfied, Bank shall retain its security interest in all existing
Collateral and Collateral arising thereafter, and Borrower shall
continue to perform all of its Obligations.
Section 6. Section 6 of this Agreement is hereby amended by adding the
following at the end thereof.
6.27 Borrower shall perform all acts reasonably necessary to ensure that: (i)
Borrower and any business in which Borrower holds a substantial
interest, (ii) all customers, suppliers and vendors that are material to
Borrower's business, become Year 2000 Compliant in a timely manner. Such
acts shall include, without limitation, performing a comprehensive
review and assessment of all of Borrower's systems and adopting a
detailed plan, with itemized budget, for the remediation, monitoring
and testing of such systems. As used in this paragraph, "Year 2000
Compliant" shall mean, in regard to any entity, that all software,
hardware, firmware, equipment, goods or systems utilized by or material to
the business operations or financial condition of such entity, will
properly perform date sensitive functions before, during and after the year
2000. Borrower shall, immediately upon request, provide to Bank such
certifications or other evidence of Borrower's compliance with terms of
this paragraph as Bank may from time to time require.
Legal Effect. Except as specifically set forth in this Modification, all
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of the terms and conditions of the Agreement remain in full force and effect.
Integration. This is an integrated Modification and supersedes all prior
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negotiations and agreements regarding the subject matter hereof. All amendments
hereto must be in writing and signed by the parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set forth
above.
COMERICA BANK-CALIFORNIA AGILE SOFTWARE CORPORATION
By: By:
Xxxx Xxxx Xxxx
Title: Vice President Title:
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