LOAN AND SECURITY AGREEMENT
BORROWER: THE COBALT GROUP, INC.
ADDRESS: 0000 XXXXX XXXXXX, XXXXX 000
XXXXXXX, XX 00000
DATE: MAY 27, 1999
This Loan and Security Agreement is entered into on the above date between
GREYROCK CAPITAL, a Division of NationsCredit Commercial Corporation (GREYROCK),
whose address is 00000 Xxxxxxxx Xxxx. Xxxxx 0000, Xxx Xxxxxxx, XX 00000 and
the borrower named above (BORROWER), whose chief executive office is located at
the above address (BORROWER'S ADDRESS). The Schedule to this Agreement (the
SCHEDULE) being signed concurrently is an integral part of this Agreement.
(Definitions of certain terms used in this Agreement are set forth in Section 8
below.)
1. LOANS.
1.1 LOANS. Greyrock will make loans to Borrower (the LOANS), in amounts
determined by Greyrock in its good faith business judgment, up to the amounts
(the CREDIT LIMIT) shown on the Schedule, provided no Default or Event of
Default has occurred and is continuing. If at any time or for any reason the
total of all outstanding Loans and all other Obligations exceeds the Credit
Limit, Borrower shall immediately pay the amount of the excess to Greyrock, on
demand.
1.2 INTEREST. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set forth to
the contrary in this Agreement or in another written agreement signed by
Greyrock and Borrower. Interest shall be payable monthly, on the last day of
the month. Interest may, in Greyrock's discretion, be charged to Borrower's
loan account, and the same shall thereafter bear interest at the same rate as
the other Loans.
1.3 FEES. Borrower shall pay Greyrock the fee(s) shown on the Schedule, which
are in addition to all interest and other sums payable to Greyrock and are not
refundable.
2. SECURITY INTEREST.
2.1 SECURITY INTEREST. To secure the payment and performance of all of the
Obligations when due, Borrower hereby grants to Greyrock a security interest in
all of Borrower's interest in the following, whether now owned or hereafter
acquired, and wherever located (collectively, the COLLATERAL): All Receivables,
Inventory, Equipment, Investment Property and General Intangibles, including,
without limitation, all of Borrower's Deposit Accounts, all money, all
collateral in which Greyrock is granted a security interest pursuant to any
other present or future agreement, all property now or at any time in the future
in Greyrock's possession, and all proceeds (including proceeds of any insurance
policies, proceeds of proceeds and claims against third parties), all products
of the foregoing, and all books and records related to any of the foregoing.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
In order to induce Greyrock to enter into this Agreement and to make Loans,
Borrower represents and warrants to Greyrock as follows, and Borrower covenants
that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants:
3.1 CORPORATE EXISTENCE AND AUTHORITY. Borrower, if a corporation, is and
will continue to be, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation. Borrower is and will
continue to be qualified and licensed to do business in all jurisdictions in
which any failure to do so would have a material adverse effect on Borrower.
The execution, delivery and performance by Borrower of this Agreement, and all
other documents contemplated hereby (i) have been duly and validly authorized,
(ii) are enforceable against Borrower in accordance with their terms (except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally), (iii) do not violate Borrower's articles or
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certificate of incorporation, or Borrower's by-laws, or any law or any
material agreement or instrument which is binding upon Borrower or its
property, and (iv) do not constitute grounds for acceleration of any material
indebtedness or obligation under any material agreement or instrument which
is binding upon Borrower or its property.
3.2 NAME; TRADE NAMES AND STYLES. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule are all
prior names of Borrower and all of Borrower's present and prior trade names.
Borrower shall give Greyrock 30 days' prior written notice before changing its
name or doing business under any other name. Borrower has complied, and will in
the future comply, with all laws relating to the conduct of business under a
fictitious business name.
3.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in the
heading to this Agreement is Borrower's chief executive office. In addition,
Borrower has places of business and Collateral is located only at the locations
set forth on the Schedule. Borrower will give Greyrock at least 30 days prior
written notice before opening any additional place of business, changing its
chief executive office, or moving any of the Collateral to a location other than
Borrower's Address or one of the locations set forth on the Schedule, except (i)
in connection with sales or other dispositions of Inventory in the ordinary
course of business and (ii) the movement of Inventory to any additional location
reported to Greyrock if the location is within a jurisdiction in which Greyrock
has taken all necessary action in order to protect and perfect its security
interest therein. Borrower will be permitted to provide Greyrock notice within
30 days following the opening of new locations, provided that the Collateral at
any such new location shall not exceed $100,000 until such notice has been given
to Greyrock and Greyrock has taken all necessary action in order to protect and
perfect its security interest in any Inventory at such location.
3.4 TITLE TO COLLATERAL; PERMITTED LIENS. Borrower is now, and will at all
times in the future be, the sole owner of all the Collateral, except for items
of Equipment which are leased by Borrower. The Collateral now is and will
remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for Permitted Liens. Greyrock now has,
and will continue to have, a first-priority perfected and enforceable security
interest in all of the Collateral, subject only to the Permitted Liens, and
Borrower will at all times defend Greyrock and the Collateral against all claims
of others. So long as any Loan is outstanding which is a term loan, none of the
Collateral now is or will be affixed to any real property in such a manner, or
with such intent, as to become a fixture. Borrower will keep in full force and
effect, and will comply in all material respects with all the terms of, any
lease of real property where any of the Collateral now or in the future may be
located.
3.5 MAINTENANCE OF COLLATERAL. Borrower will maintain its tangible personal
property in good working condition, ordinary wear and tear excepted, and
Borrower will not use the Collateral for any unlawful purpose. Borrower will
immediately advise Greyrock in writing of any material loss or damage to the
Collateral.
3.6 BOOKS AND RECORDS. Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, comprising an
accounting system sufficient to prepare financial statements in accordance with
generally accepted accounting principles.
3.7 FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial statements now
or in the future delivered to Greyrock have been, and will be, prepared in
conformity with generally accepted accounting principles (except for the absence
of footnotes and subject to normal year-end adjustments with respect to
unaudited financial statements, and except in the case of projections or
forecasts for the understanding that although Borrower has prepared the same in
good faith utilizing assumptions it believes to be reasonable, Greyrock
recognizes that forecasts and assumptions by their nature involve approximations
and uncertainties). All financial statements now or in the future delivered to
Greyrock will fairly reflect the financial condition of Borrower, at the times
and for the periods therein stated. Between the last date covered by any such
statement provided to Greyrock and the date hereof, there has been no material
adverse change in the financial condition or business of Borrower.
3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has timely
filed, and will timely file, all tax returns and reports required by applicable
law, and Borrower has timely paid, and will timely pay, all applicable taxes,
assessments, deposits and contributions now or in the future owed by Borrower.
Borrower may, however, defer payment of any contested taxes, provided that
Borrower (i) in good faith contests Borrower's obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, (ii)
notifies Greyrock in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other steps
required to keep the contested taxes from becoming a lien upon any of the
Collateral. As of the date hereof, Borrower is unaware of any claims or
adjustments proposed for any of Borrower's prior tax years which could result in
additional taxes becoming due and payable by Borrower. Borrower has paid, and
shall continue to pay all amounts necessary to fund all present and future
pension, profit sharing and deferred compensation plans in accordance with their
terms, and Borrower has not and will not withdraw from
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participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any such plan which could
result in any liability of Borrower, including any material liability to the
Pension Benefit Guarantee Corporation or any other governmental agency.
3.9 COMPLIANCE WITH LAW. Borrower has complied, and will comply, in all
material respects, with all provisions of all applicable laws and regulations,
including, but not limited to, those relating to Borrower's ownership of real or
personal property, the conduct and licensing of Borrower's business, and all
environmental matters.
3.10 LITIGATION. Except as disclosed in the Schedule, there is no claim,
suit, litigation, proceeding or investigation pending or (to best of Borrower's
knowledge) threatened by or against or materially affecting Borrower in any
court or before any governmental agency (or any basis therefor known to
Borrower) which is reasonably likely to result, either separately or in the
aggregate, in any material adverse change in the financial condition or business
of Borrower, or in any material impairment in the ability of Borrower to carry
on its business in substantially the same manner as it is now being conducted.
Borrower will promptly inform Greyrock in writing of any claim, proceeding,
litigation or investigation in the future threatened or instituted by or against
Borrower which can reasonably be expected to result in liability with respect to
any single claim of $50,000 or more, or $100,000 or more in the aggregate.
3.11 USE OF PROCEEDS.
* ALL PROCEEDS OF ALL LOANS SHALL BE USED SOLELY FOR AGRICULTURAL, COMMERCIAL,
INVESTMENT OR BUSINESS PURPOSES, AND NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD
PURPOSES.
3.12 YEAR 2000 COMPLIANCE. The Borrower has (i) initiated a review and
assessment of all areas within its and each of its subsidiaries' business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower or any of its subsidiaries (or its suppliers
and vendors) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis, and (iii) to date, implemented that plan in accordance with
that timetable. The Borrower reasonably believes that all computer applications
(including those of its suppliers and vendors) that are material to its or any
of its subsidiaries' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so could not reasonably be expected to have material adverse effect. The
Borrower will promptly notify Greyrock in the event the Borrower discovers or
determines that any computer application (including those of its suppliers and
vendors) that is material to its or any of its subsidiaries' business and
operations will not be Year 2000 compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to have a material
adverse effect.
4. RECEIVABLES.
4.1 REPRESENTATIONS RELATING TO RECEIVABLES. [Omitted].
4.2 REPRESENTATIONS RELATING TO DOCUMENTS AND LEGAL COMPLIANCE. [Omitted].
4.3 SCHEDULES AND DOCUMENTS RELATING TO RECEIVABLES. [Omitted].
4.4 COLLECTION OF RECEIVABLES. Borrower shall have the right to collect all
Receivables, unless and until a Default or an Event of Default has occurred. *
Borrower shall hold all payments on, and proceeds of, Receivables in trust for
Greyrock, and Borrower shall deliver all such payments and proceeds to Greyrock,
within one business day after receipt of the same, in their original form, duly
endorsed, to be applied to the Obligations in such order as Greyrock shall
determine.
*AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT OR EVENT OF
DEFAULT
4.5 DISPUTES. [Omitted].
4.6 VERIFICATION. [Omitted].
4.9 NO LIABILITY. Greyrock shall not under any circumstances be responsible
or liable for any transaction giving rise to a Receivable, or for any error,
act, omission, or delay of any kind occurring in the settlement, failure to
settle, collection or failure to collect any Receivable, or for settling any
Receivable in good faith for less than the full amount thereof, nor shall
Greyrock be deemed to be responsible for any of Borrower's obligations under any
contract or agreement giving rise to a Receivable. Nothing herein shall,
however, relieve Greyrock from liability for its own gross negligence or willful
misconduct.
5. ADDITIONAL DUTIES OF THE BORROWER.
5.1 INSURANCE. Borrower shall, at all times, insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Greyrock, in such form and amounts as Greyrock
may reasonably require, and Borrower shall provide evidence of such insurance to
Greyrock, so that Greyrock is reasonably satisfied that such insurance is, at
all times, in full force and effect. All liability insurance policies of
Borrower shall name Greyrock as an
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additional insured, and all property casualty and related insurance policies
of Borrower shall name Greyrock as a loss payee thereon and Borrower shall
cause a lenders loss payee endorsement in form reasonably accepted to
Greyrock to be delivered to Greyrock. Upon receipt of the proceeds of any
such insurance, Greyrock shall apply such proceeds in reduction of the
Obligations as Greyrock shall determine in its sole discretion, except that,
provided no Default or Event of Default has occurred and is continuing,
Greyrock shall release to Borrower insurance proceeds with respect to
Equipment totaling less than $100,000, which shall be utilized by Borrower
for the replacement of the Equipment with respect to which the insurance
proceeds were paid. Greyrock may require reasonable assurance that the
insurance proceeds so released will be so used. If Borrower fails to provide
or pay for any insurance, Greyrock may, but is not obligated to, obtain the
same at Borrower's expense. Borrower shall promptly deliver to Greyrock
copies of all reports made to insurance companies.
5.2 REPORTS. Borrower, at its expense, shall provide Greyrock with the
written reports set forth in the Schedule, and such other written reports with
respect to Borrower (including budgets, sales projections, operating plans and
other financial documentation), as Greyrock shall from time to time reasonably
specify.
5.3 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times, and on one
business day's notice, Greyrock, or its agents, shall have the right to inspect
the Collateral, and the right to audit and copy Borrower's books and records
(but excluding communications to or by Borrower's attorneys). Greyrock shall
take reasonable steps to keep confidential all information obtained in any such
inspection or audit, but Greyrock shall have the right to disclose any such
information to its auditors, regulatory agencies, and attorneys, and pursuant to
any subpoena or other legal process. The foregoing inspections and audits shall
be at Borrower's expense and the charge therefor shall be $600 per person per
day (or such higher amount as shall represent Greyrock's then current standard
charge for the same), plus reasonable out-of-pockets expenses. Borrower shall
not be charged more than $3,000 per audit (plus reasonable out-of-pockets
expenses), nor shall audits be done more frequently than four times per calendar
year, provided that the foregoing limits shall not apply after the occurrence of
a Default or Event of Default, nor shall they restrict Greyrock's right to
conduct audits at its own expense (whether or not a Default or Event of Default
has occurred). Borrower will not enter into any agreement with any accounting
firm, service bureau or third party to store Borrower's books or records at any
location other than Borrower's Address, without first obtaining Greyrock's
written consent, which may be conditioned upon such accounting firm, service
bureau or other third party agreeing to give Greyrock the same rights with
respect to access to books and records and related rights as Greyrock has under
this Agreement.
5.4 REMITTANCE OF PROCEEDS. All proceeds arising from the sale or other
disposition of any Collateral shall be delivered, in kind, by Borrower to
Greyrock in the original form in which received by Borrower not later than the
following business day after receipt by Borrower, to be applied to the
Obligations in such order as Greyrock shall determine; provided that, if no
Default or Event of Default has occurred and is continuing, and if no term loan
is outstanding hereunder, then Borrower shall not be obligated to remit to
Greyrock the proceeds of the sale of Equipment which is sold in the ordinary
course of business, in a good-faith arm's length transaction. Except for the
proceeds of the sale of Equipment as set forth above, Borrower shall not
commingle proceeds of Collateral with any of Borrower's other funds or property,
and shall hold such proceeds separate and apart from such other funds and
property and in an express trust for Greyrock. Nothing in this Section limits
the restrictions on disposition of Collateral set forth elsewhere in this
Agreement.
5.5 NEGATIVE COVENANTS. Except as may be permitted in the Schedule, Borrower
shall not, without Greyrock's prior written consent, do any of the following:
(a) merge or consolidate with another corporation or entity except in a
transaction in which (1) the shareholders of the Borrower hold 50% of the common
stock and all other capital stock of the surviving corporation immediately after
such merger or consolidation, (2) the Borrower is the surviving corporation and
(3) no Default or Event of Default shall exist either immediately prior to or
after giving effect to the transaction;
(b) acquire any assets, except (1) in the ordinary course of business or (2)
in a transaction or a series of transactions involving the payment of an
aggregate amount of $500,000 or less, provided that no Default or Event of
Default shall exist either immediately prior to or after giving effect to the
transaction;
(c) enter into any other transaction outside the ordinary course of business;
(d) sell or transfer any Collateral, except that, provided no Default or
Event of Default has occurred and is continuing, Borrower may (1) sell finished
Inventory in the ordinary course of Borrower's business, and (2) sell Equipment
in the ordinary course of business, in good-faith arm's length transactions, and
(3) enter into non-exclusive licenses in the ordinary course of business;
(e) make any loans of any money or other assets, except for (A) advances to
customers or suppliers, in each case, if created, acquired or made in the
ordinary course of business, (B) travel advances, employee relocation loans and
other employee loans and advances
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in the ordinary course of business, (C) loans to employees, officers and
directors for the purpose of purchasing equity securities of the Borrower,
(D) other loans to officers and employees approved by the Board of Directors
of the Borrower, and (E) other loans or extensions of credit not otherwise
permitted hereunder, provided that the aggregate amount of all the foregoing
items set forth in (A), (B), (C), (D) and E shall not exceed $500,000 at any
one time outstanding, and, provided further that no Default or Event of
Default shall exist either immediately prior to or after giving effect to the
making of the foregoing advances, loans or other extensions of credit
(f) incur any debts, outside the ordinary course of business, which would
have a material, adverse effect on Borrower or on the prospect of repayment of
the Obligations;
(g) guarantee or otherwise become liable with respect to the obligations of
another party or entity, except for guarantees and other similar third party
credit support relating to obligations of vendors and suppliers of Borrower in
respect of transactions entered into in the normal course of business, provided
that the aggregate amount of any such guarantees and other similar third party
credit support shall not exceed $500,000 at any time outstanding, and provided
that no Default or Event of Default shall exist either immediately prior to or
after giving effect to the making of the foregoing guarantees or the entering
into any third party credit support transactions;
(h) pay or declare any dividends on Borrower's stock (except for dividends
payable solely in stock of Borrower);
(i) redeem, retire, purchase or otherwise acquire, directly or indirectly,
any of Borrower's stock, except that Borrower may repurchase stock owned by
employees, directors and consultants of Borrower pursuant to terms of
employment, consulting or other stock restriction agreements at such time as any
such employee, director or consultant terminates his or her affiliation with the
Borrower, in a total amount not to exceed $100,000 in any fiscal year, provided
that no Default or Event of Default shall exist either immediately prior to or
after giving effect to such repurchase; *
(j) make any change in Borrower's capital structure which would have a
material adverse effect on Borrower or on the prospect of repayment of the
Obligations; *
(k) dissolve or elect to dissolve; or
(l) agree to do any of the foregoing.
*REDEMPTIONS AND CHANGES IN CAPITAL STRUCTURE IN CONNECTION WITH A SUBSTANTIALLY
CONTEMPORANEOUS INITIAL PUBLIC OFFERING OF EQUITY SECURITIES OF THE BORROWER
SHALL NOT BE DEEMED TO VIOLATE SECTIONS 5.5(i) OR (j) ABOVE.
5.6 LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against Greyrock with respect to any Collateral or in any
manner relating to Borrower, Borrower shall, without expense to Greyrock, make
available Borrower and its officers, employees and agents, and Borrower's books
and records (subject to preservation of Borrower's attorney-client privilege),
without charge, to the extent that Greyrock may deem them reasonably necessary
in order to prosecute or defend any such suit or proceeding.
5.7 NOTIFICATION OF CHANGES. Borrower will promptly notify Greyrock in writing
of any change in its executive officers or directors, the opening of any new
bank account or other deposit account, and any material adverse change in the
business or financial affairs of Borrower.
5.8 INVESTMENT PROPERTY. Upon the request of Greyrock, Borrower shall deliver
to Greyrock all certificated securities included in Investment Property*, with
all necessary indorsements, and obtain such account control agreements with
securities intermediaries and take such other action with respect to any
Investment Property, as Greyrock shall request, in form and substance
satisfactory to Greyrock. Borrower shall have the right to retain all Investment
Property payments and distributions, unless and until a Default or an Event of
Default has occurred. If a Default or an Event of Default exists, **Borrower
shall hold all payments on, and proceeds of, and distributions with respect to,
Investment Property in trust for Greyrock, and Borrower shall deliver all such
payments, proceeds and distributions to Greyrock, immediately upon receipt, in
their original form, duly endorsed, to be applied to the Obligations in such
order as Greyrock shall determine. Upon the request of Greyrock, any such
distributions and payments with respect to any Investment Property held in any
securities account shall be held and retained in such securities account as part
of the Collateral.
*OTHER THAN CERTIFICATES EVIDENCING BORROWER'S MEMBERSHIP INTEREST IN
PARTSVOICE LLC
**SUBJECT TO PRIOR PERMITTED LIENS
5.9 FURTHER ASSURANCES. Borrower agrees, at its expense, on request by
Greyrock, to execute all documents and take all actions, as Greyrock may deem
reasonably necessary or useful in order to perfect and maintain Greyrock's
perfected security interest in the Collateral, and in order to fully consummate
the transactions contemplated by this Agreement.
5.10 INDEMNITY. Borrower hereby agrees to indemnify Greyrock and hold
Greyrock harmless from and against any and all claims, debts, liabilities,
demands, obligations, actions, causes of action, penalties, and reasonable costs
and expenses (including reasonable attorneys' fees), of every nature, character
and description, which Greyrock may sustain or incur based
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upon or arising out of any of the Obligations, any actual or alleged failure
to collect and pay over any withholding or other tax relating to Borrower or
its employees, any relationship or agreement between Greyrock and Borrower,
any actual or alleged failure of Greyrock to comply with any writ of
attachment or other legal process relating to Borrower or any of its
property, or any other matter, cause or thing whatsoever occurred, done,
omitted or suffered to be done by Greyrock relating to Borrower or the
Obligations (except any such amounts sustained or incurred as the result of
the gross negligence or willful misconduct of Greyrock or any of its
directors, officers, employees, agents, attorneys, or any other person
affiliated with or representing Greyrock). Notwithstanding any provision in
this Agreement to the contrary, the indemnity agreement set forth in this
Section shall survive any termination of this Agreement and shall for all
purposes continue in full force and effect.
6. TERM.
6.1 MATURITY DATE. This Agreement shall continue in effect until the maturity
date set forth on the Schedule (the MATURITY DATE).
6.2 EARLY TERMINATION. This Agreement may be terminated prior to the Maturity
Date as follows: (i) by Borrower, effective three business days after written
notice of termination is given to Greyrock; or (ii) by Greyrock at any time
after the occurrence of an Event of Default, effective immediately (with only
reasonably prompt, subsequent notice).
6.3 PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier effective
date of termination, Borrower shall pay and perform in full all Obligations,
whether evidenced by installment notes or otherwise, and whether or not all or
any part of such Obligations are otherwise then due and payable. Without
limiting the generality of the foregoing, if on the Maturity Date, or on any
earlier effective date of termination, there are any outstanding letters of
credit issued based upon an application, guarantee, indemnity or similar
agreement on the part of Greyrock, then on such date Borrower shall provide to
Greyrock cash collateral in an amount equal to 100% of the face amount of all
such letters of credit plus all interest, fees and costs due or (in Greyrock's
estimation) likely to become due in connection therewith, to secure all of the
Obligations relating to said letters of credit, pursuant to Greyrock's then
standard form cash pledge agreement. Notwithstanding any termination of this
Agreement, all of Greyrock's security interests in all of the Collateral and all
of the terms and provisions of this Agreement shall continue in full force and
effect until all Obligations have been paid and performed in full; provided
that, without limiting the fact that Loans are subject to the discretion of
Greyrock, Greyrock may, in its sole discretion, refuse to make any further Loans
after termination. No termination shall in any way affect or impair any right
or remedy of Greyrock, nor shall any such termination relieve Borrower of any
Obligation to Greyrock, until all of the Obligations have been paid and
performed in full. Upon payment and performance in full of all the Obligations
and termination of this Agreement, Greyrock shall promptly deliver to Borrower
termination statements, requests for reconveyances and such other documents as
may be reasonably required to terminate Greyrock's security interests. Greyrock
shall not fail to deliver to Borrower termination statements and other such
documents as may be reasonably required to terminate Greyrock's security
interest solely by virtue of Borrower's ongoing liability under Section 5.9
hereof relating to claims that have not been asserted and are not otherwise
known to Greyrock or the Borrower at such time.
7. EVENTS OF DEFAULT AND REMEDIES.
7.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an EVENT OF DEFAULT under this Agreement, and Borrower shall give
Greyrock immediate written notice thereof: (a) Any warranty, representation,
statement, report or certificate made or delivered to Greyrock by Borrower or
any of Borrower's officers, employees or agents, now or in the future, shall be
untrue or misleading in a material respect as of the date given or made; or (b)
Borrower shall fail to pay any Loan or any interest thereon or any other
monetary Obligation, within three (3) days of the due date; or (c) the total
Loans and other Obligations outstanding at any time shall exceed the Credit
Limit and Borrower shall fail to pay any such excess within one (1) day of
demand; or (d) Borrower shall fail to perform any non-monetary Obligation which
by its nature cannot be cured; or (e) Borrower shall fail to perform any other
non-monetary Obligation, which failure is not cured within 5 business days after
the date performance is due; or (f) any levy, assessment, attachment, seizure,
lien or encumbrance (other than a Permitted Lien) is made on all or any part of
the Collateral which is not cured within 10 days after the occurrence of the
same; or (g) any default or event of default occurs under any obligation secured
by a Permitted Lien, which is not cured within any applicable cure period or
waived in writing by the holder of the Permitted Lien (provided that if the
amount involved is less than $100,000 then the same shall not be an Event of
Default unless and until the holder of the Permitted Lien commences any action
to enforce its lien against any Collateral); or (h) Borrower breaches any
material contract or obligation, which * has or may reasonably be expected to
have a material adverse effect on Borrower's business or financial condition; or
(i) dissolution, termination of existence, insolvency or business failure of
Borrower or any Guarantor; or appointment of a receiver, trustee or custodian,
for all or any part of the property of, assignment for the benefit of creditors
by, or the commencement of any proceeding by Borrower or any Guarantor under any
reorganization, bankruptcy,
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insolvency, arrangement, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, now or in the future in effect; or (j) the
commencement of any proceeding against Borrower or any Guarantor under any
reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, now or in the
future in effect, which is not cured by the dismissal thereof within 45 days
after the date commenced; or (k) revocation or termination of, or limitation
or denial of liability upon, any guaranty of the Obligations or any attempt
to do any of the foregoing; or (l) revocation or termination of, or
limitation or denial of liability upon, any pledge of any certificate of
deposit, securities or other property or asset pledged by any third party to
secure any or all of the Obligations, or any attempt to do any of the
foregoing, or commencement of proceedings by or against any such third party
under any bankruptcy or insolvency law; or (m) Borrower makes any payment on
account of any indebtedness or obligation which has been subordinated to the
Obligations other than as permitted in the applicable subordination
agreement, or if any Person who has subordinated such indebtedness or
obligations terminates or in any way limits or terminates its subordination
agreement; or (n) there shall be a change in the record or beneficial
ownership of an aggregate of more than 25% of the outstanding shares of stock
of Borrower, in one or more transactions, compared to the ownership of
outstanding shares of stock of Borrower in effect on the date hereof, without
the prior written consent of Greyrock; or (o) Borrower shall generally not
pay its debts as they become due, or Borrower shall conceal, remove or
transfer any part of its property, with intent to hinder, delay or defraud
its creditors, or make or suffer any transfer of any of its property which is
reasonably likely to be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or (p) there shall be a material adverse change in
Borrower's business or financial condition. Greyrock may cease making any
Loans hereunder during any of the above cure periods, and thereafter if an
Event of Default has occurred and is continuing.
*BREACH
7.2 REMEDIES. Upon the occurrence and during the continuance of any Event of
Default, Greyrock, at its option, may do any one or more of the following,
without notice or demand of any kind (all of which are hereby expressly waived
by Borrower), except that Greyrock shall give Borrower one general notice,
concurrently with or prior to exercising any of the following remedies, which
notice may be given via facsimile (which will be deemed to have been given the
day of electronic confirmation of delivery via facsimile (or if that day is not
a Business Day, then the next Business Day after electronic confirmation of
delivery via facsimile)), stating, in general terms, that "Greyrock is
proceeding to exercise its rights and remedies" or words of similar effect (but
no such notice shall be required if exigent circumstances make it unduly
difficult or impractical to give any such notice): (a) Cease making Loans or
otherwise extending credit to Borrower under this Agreement or any other
document or agreement; (b) Accelerate and declare all or any part of the
Obligations to be immediately due, payable, and performable, notwithstanding any
deferred or installment payments allowed by any instrument evidencing or
relating to any Obligation; (c) Take possession of any or all of the Collateral
wherever it may be found, and for that purpose Borrower hereby authorizes
Greyrock without judicial process to enter onto any of Borrower's premises
without interference to search for, take possession of, keep, store, or remove
any of the Collateral, and remain on the premises or cause a custodian to remain
on the premises in exclusive control thereof, without charge by Borrower for so
long as Greyrock reasonably deems it necessary in order to complete the
enforcement of its rights under this Agreement or any other agreement; provided,
however, that should Greyrock seek to take possession of any of the Collateral
by Court process, Borrower hereby irrevocably waives: (i) any bond and any
surety or security relating thereto required by any statute, court rule or
otherwise as an incident to such possession; (ii) any demand for possession
prior to the commencement of any suit or action to recover possession thereof;
and (iii) any requirement that Greyrock retain possession of, and not dispose
of, any such Collateral until after trial or final judgment; (d) Require
Borrower to assemble any or all of the Collateral and make it available to
Greyrock at places designated by Greyrock which are reasonably convenient to
Greyrock and Borrower, and to remove the Collateral to such locations as
Greyrock may reasonably deem advisable; (e) Complete the processing,
manufacturing or repair of any Collateral prior to a disposition thereof and,
for such purpose and for the purpose of removal, Greyrock shall have the right
to use Borrower's premises, vehicles, hoists, lifts, cranes, equipment and all
other property without charge by Borrower; (f) Collect, receive, dispose of and
realize upon any Investment Property, including withdrawal of any and all funds
from any securities accounts; (g) Sell, lease or otherwise dispose of any of the
Collateral, in its condition at the time Greyrock obtains possession of it or
after further manufacturing, processing or repair, at one or more public and/or
private sales, in lots or in bulk, for cash, exchange or other property, or on
credit, and to adjourn any such sale from time to time without notice other than
oral announcement at the time scheduled for sale. Greyrock shall have the right
to conduct such disposition on Borrower's premises without charge, for such time
or times as Greyrock deems reasonable, or on Greyrock's premises, or elsewhere
and the Collateral need not be located at the place of disposition. Greyrock
may directly or through any affiliated company purchase or lease any Collateral
at any such public disposition, and if
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permissible under applicable law, at any private disposition. Any sale or
other disposition of Collateral shall not relieve Borrower of any liability
Borrower may have if any Collateral is defective as to title or physical
condition or otherwise at the time of sale; (g) Demand payment of, and
collect any Receivables and General Intangibles comprising Collateral and, in
connection therewith, Borrower irrevocably authorizes Greyrock to endorse or
sign Borrower's name on all collections, receipts, instruments and other
documents, to take possession of and open mail addressed to Borrower and
remove therefrom payments made with respect to any item of the Collateral or
proceeds thereof, and, in Greyrock's good faith business judgment, to grant
extensions of time to pay, compromise claims and settle Receivables, General
Intangibles and the like for less than face value; and (h) Demand and receive
possession of any of Borrower's federal and state income tax returns and the
books and records utilized in the preparation thereof or referring thereto.
Borrower recognizes that Greyrock may be unable to make a public sale of any
or all of the Investment Property, by reasons of prohibitions contained in
applicable securities laws or otherwise, and expressly agrees that a private
sale to a restricted group of purchasers for investment and not with a view
to any distribution thereof shall be considered a commercially reasonable
sale. All reasonable attorneys' fees, expenses, costs, liabilities and
obligations incurred by Greyrock with respect to the foregoing shall be added
to and become part of the Obligations, shall be due on demand, and shall bear
interest at a rate equal to the highest interest rate applicable to any of
the Obligations.
7.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. Borrower and
Greyrock agree that a sale or other disposition (collectively, SALE) of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to
Borrower at least seven days prior to the sale, and, in the case of a public
sale, notice of the sale is published at least seven days before the sale in
a newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Greyrock, with or without the Collateral being present; (iv) The sale
commences at any time between 8:00 a.m. and 6:00 p.m; (v) Payment of the
purchase price in cash or by cashier's check or wire transfer is required;
(vi) With respect to any sale of any of the Collateral, Greyrock may (but is
not obligated to) direct any prospective purchaser to ascertain directly from
Borrower any and all information concerning the same. Greyrock shall be free
to employ other methods of noticing and selling the Collateral, in its
discretion, if they are commercially reasonable.
7.4 POWER OF ATTORNEY. Upon the occurrence and during the continuance of any
Event of Default, without limiting Greyrock's other rights and remedies,
Borrower grants to Greyrock an irrevocable power of attorney coupled with an
interest, authorizing and permitting Greyrock (acting through any of its
employees, attorneys or agents) at any time, at its option, but without
obligation, with or without notice to Borrower, and at Borrower's expense, to do
any or all of the following, in Borrower's name or otherwise, but Greyrock
agrees to exercise the following powers in a commercially reasonable manner:
(a) Execute on behalf of Borrower any documents that Greyrock may, in its sole
discretion, deem advisable in order to perfect and maintain Greyrock's security
interest in the Collateral, or in order to exercise a right of Borrower or
Greyrock, or in order to fully consummate all the transactions contemplated
under this Agreement, and all other present and future agreements; (b) Execute
on behalf of Borrower any document exercising, transferring or assigning any
option to purchase, sell or otherwise dispose of or to lease (as lessor or
lessee) any real or personal property which is part of Greyrock's Collateral or
in which Greyrock has an interest; (c) Execute on behalf of Borrower, any
invoices relating to any Receivable, any draft against any Account Debtor and
any notice to any Account Debtor, any proof of claim in bankruptcy, any Notice
of Lien, claim of mechanic's, materialman's or other lien, or assignment or
satisfaction of mechanic's, materialman's or other lien; (d) Take control in any
manner of any cash or non-cash items of payment or proceeds of Collateral;
endorse the name of Borrower upon any instruments, or documents, evidence of
payment or Collateral that may come into Greyrock's possession; (e) Endorse all
checks and other forms of remittances received by Greyrock; (f) Pay, contest or
settle any lien, charge, encumbrance, security interest and adverse claim in or
to any of the Collateral, or any judgment based thereon, or otherwise take any
action to terminate or discharge the same; (g) Grant extensions of time to pay,
compromise claims and settle Receivables and General Intangibles for less than
face value and execute all releases and other documents in connection therewith;
(h) Pay any sums required on account of Borrower's taxes or to secure the
release of any liens therefor, or both; (i) Settle and adjust, and give releases
of, any insurance claim that relates to any of the Collateral and obtain payment
therefor; (j) Instruct any third party having custody or control of any books or
records belonging to, or relating to, Borrower to give Greyrock the same rights
of access and other rights with respect thereto as Greyrock has under this
Agreement; (k) Execute and deliver to any securities intermediary or other
Person any entitlement order, account control agreement or other notice,
document or instrument with respect to any Investment Property, and (l) Take any
action or pay any sum required of Borrower pursuant to this Agreement and any
other present or future agreements. Any and all reasonable sums paid and any
and all reasonable costs, expenses, liabilities, obligations and reasonable
attorneys' fees incurred by Greyrock with
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respect to the foregoing shall be added to and become part of the
Obligations, shall be payable on demand, and shall bear interest at a rate
equal to the highest interest rate applicable to any of the Obligations. In
no event shall Greyrock's rights under the foregoing power of attorney or any
of Greyrock's other rights under this Agreement be deemed to indicate that
Greyrock is in control of the business, management or properties of Borrower.
7.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any sale
or other disposition of the Collateral shall be applied by Greyrock first to the
reasonable costs, expenses, liabilities, obligations and attorneys' fees
incurred by Greyrock in the exercise of its rights under this Agreement, second
to the interest due upon any of the Obligations, and third to the principal of
the Obligations, in such order as Greyrock shall determine in its sole
discretion. Any surplus shall be paid to Borrower or other persons legally
entitled thereto; Borrower shall remain liable to Greyrock for any deficiency.
If Greyrock, in its sole discretion, directly or indirectly enters into a
deferred payment or other credit transaction with any purchaser at any sale of
Collateral, Greyrock shall have the option, exercisable at any time, in its sole
discretion, of either reducing the Obligations by the principal amount of
purchase price or deferring the reduction of the Obligations until the actual
receipt by Greyrock of the cash therefor.
7.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set forth in
this Agreement, Greyrock shall have all the other rights and remedies accorded a
secured party under the California Uniform Commercial Code and under all other
applicable laws, and under any other instrument or agreement now or in the
future entered into between Greyrock and Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise by
Greyrock of one or more of its rights or remedies shall not be deemed an
election, nor bar Greyrock from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of Greyrock to exercise any
rights or remedies shall not operate as a waiver thereof, but all rights and
remedies shall continue in full force and effect until all of the Obligations
have been fully paid and performed.
8. DEFINITIONS. AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS HAVE THE
FOLLOWING MEANINGS:
ACCOUNT DEBTOR means the obligor on a Receivable.
AFFILIATE means, with respect to any Person, a relative, partner, shareholder,
director, officer, or employee of such Person, or any parent or subsidiary of
such Person, or any Person controlling, controlled by or under common control
with such Person.
AGREEMENT and THIS AGREEMENT means this Loan and Security Agreement and all
modifications and amendments thereto, extensions thereof, and replacements
therefor.
BUSINESS DAY means a day on which Greyrock is open for business.
CODE means the Uniform Commercial Code as adopted and in effect in the State of
California from time to time.
COLLATERAL has the meaning set forth in Section 2.1 above.
DEFAULT means any event which with notice or passage of time or both, would
constitute an Event of Default.
DEPOSIT ACCOUNT has the meaning set forth in Section 9105 of the Code.
EQUIPMENT means all of Borrower's present and hereafter acquired machinery,
molds, machine tools, motors, furniture, equipment, furnishings, fixtures, trade
fixtures, motor vehicles, tools, parts, dyes, jigs, goods and other tangible
personal property (other than Inventory) of every kind and description used in
Borrower's operations or owned by Borrower and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions or improvements to any of the foregoing, wherever
located.
EVENT OF DEFAULT means any of the events set forth in Section 7.1 of this
Agreement.
GENERAL INTANGIBLES means all general intangibles of Borrower, whether now
owned or hereafter created or acquired by Borrower, including, without
limitation, all choses in action, causes of action, corporate or other business
records, Deposit Accounts, inventions, designs, drawings, blueprints, patents,
patent applications, trademarks and the goodwill of the business symbolized
thereby, names, trade names, trade secrets, goodwill, copyrights, registrations,
licenses, franchises, customer lists, security and other deposits, rights in
all litigation presently or hereafter pending for any cause or claim (whether in
contract, tort or otherwise), and all judgments now or hereafter arising
therefrom, all claims of Borrower against Greyrock, rights to purchase or sell
real or personal property, rights as a licensor or licensee of any kind,
royalties, telephone numbers, proprietary information, purchase orders, and all
insurance policies and claims (including life insurance, key man insurance,
credit insurance, liability insurance, property insurance and other insurance),
tax refunds and claims, computer programs, discs, tapes and tape files, claims
under guaranties, security interests or other security held by or granted to
Borrower, all rights to indemnification and all other intangible property of
every kind and nature (other than Receivables).
GUARANTOR means any Person who has guaranteed any of the Obligations.
INVENTORY means all of Borrower's now owned and hereafter acquired goods,
merchandise or other personal
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property, wherever located, to be furnished under any contract of service or
held for sale or lease (including all raw materials, work in process,
finished goods and goods in transit), and all materials and supplies of every
kind, nature and description which are or might be used or consumed in
Borrower's business or used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of such goods, merchandise or
other personal property, and all warehouse receipts, documents of title and
other documents representing any of the foregoing.
INVESTMENT PROPERTY means any and all investment property of Borrower,
including all securities, whether certificated or uncertificated, security
entitlements, securities accounts, commodity contracts and commodity accounts,
and all financial assets held in any securities account or otherwise, wherever
located, and whether now existing or hereafter acquired or arising.
OBLIGATIONS means all present and future Loans, advances, debts, liabilities,
obligations, guaranties, covenants, duties and indebtedness at any time owing by
Borrower to Greyrock, whether evidenced by this Agreement or any note or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, banker's acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect (including, without limitation, those
acquired by assignment and any participation by Greyrock in Borrower's debts
owing to others), absolute or contingent, due or to become due, including,
without limitation, all interest, charges, expenses, fees, attorney's fees,
expert witness fees, audit fees, letter of credit fees, loan fees, termination
fees, minimum interest charges and any other sums chargeable to Borrower under
this Agreement or under any other present or future instrument or agreement
between Borrower and Greyrock.
PERMITTED LIENS means the following: (i) purchase money security interests in
specific items of Equipment; (ii) leases of specific items of Equipment; (iii)
liens for taxes, fees, assessments or other governmental charges or levies,
either not delinquent or being contested in good faith by appropriate
proceedings, provided the same have no priority over any of Greyrock's security
interests; (iv) additional security interests and liens which are subordinate to
the security interest in favor of Greyrock and are consented to in writing by
Greyrock (which consent shall not be unreasonably withheld); (v) security
interests being terminated substantially concurrently with this Agreement;
(vi) liens of materialmen, mechanics, warehousemen, carriers, or other similar
liens arising in the ordinary course of business and securing obligations which
are not delinquent more than 45 days or are being contested in good faith by
appropriate proceedings, (vii) any judgment, attachment or similar lien, unless
the judgment it secures is not fully covered by insurance and has not been
discharged or execution thereof effectively stayed and bonded against pending
appeal within 30 days of the entry thereof, provided that, if the judgment is
not fully covered by insurance or execution thereof has not been so stayed or
bonded, Greyrock shall not be required to make any Loans or otherwise extend
credit to, or for the benefit of Borrower; (viii) Liens (1) upon or in any
equipment acquired or to be acquired, held or leased by the Borrower to secure
the purchase price of such equipment or indebtedness incurred solely for the
purpose of financing the acquisition of such equipment or (2) existing on such
equipment at the time of its acquisition or lease, provided that the Lien is
confined solely to the equipment so acquired and improvements thereon; (ix)
Liens which constitute banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with any bank or other
financial institution, whether arising by operation of law or pursuant to
contract; provided that such deposit account (a) is not a dedicated cash
collateral account, and (b) is not intended by the Borrower to provide
collateral to the depository institution; (x) Liens in existence on the date
hereof and listed on Exhibit B hereto; (xi) liens incurred in connection with
the extension, renewal or refinancing of the indebtedness secured by liens of
the type described above in clauses (i) through (vi) and (viii) above, provided
that any extension, renewal or replacement lien is limited to the property
encumbered by the existing lien and the principal amount of the indebtedness
being extended, renewed or refinanced does not increase; (x) Liens in favor of
customs and revenue authorities which secure payment of customs duties in
connection with the importation of goods *. Greyrock will have the right to
require, as a condition to its consent under subparagraph (iv) above, that the
holder of the additional security interest or lien sign an intercreditor
agreement satisfactory to Greyrock in its reasonable discretion, acknowledge
that the security interest is subordinate to the security interest in favor of
Greyrock, and agree not to take any action to enforce its subordinate security
interest so long as any Obligations remain outstanding, and that Borrower agree
that any uncured default in any obligation secured by the subordinate security
interest, which is not cured within any applicable cure period, shall also
constitute an Event of Default under this Agreement.
*(xi) A SECURITY INTEREST GRANTED IN THE MEMBERSHIP INTEREST OF BORROWER IN
PARTSVOICE LLC TO THE SELLERS THEREOF
PERSON means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, government, or any
agency or political division thereof, or any other entity.
RECEIVABLES means all of Borrower's now owned and hereafter acquired accounts
(whether or not earned by performance), letters of credit, contract rights,
chattel
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paper, instruments, documents and all other forms of obligations at any time
owing to Borrower, all guaranties and other security therefor, all
merchandise returned to or repossessed by Borrower, and all rights of
stoppage in transit and all other rights or remedies of an unpaid vendor,
lienor or secured party.
OTHER TERMS. All accounting terms used in this Agreement, unless otherwise
indicated, shall have the meanings given to such terms in accordance with
generally accepted accounting principles, consistently applied. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meanings
provided by the Code, to the extent such terms are defined therein.
9. GENERAL PROVISIONS.
9.1 INTEREST COMPUTATION. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by Greyrock
(including proceeds of Receivables and payment of the Obligations in full) shall
be deemed applied by Greyrock on account of the Obligations __ Business Days
after receipt by Greyrock of immediately available funds. Greyrock shall not,
however, be required to credit Borrower's account for the amount of any item of
payment which is unsatisfactory to Greyrock in its discretion, and Greyrock may
charge Borrower's Loan account for the amount of any item of payment which is
returned to Greyrock unpaid.
9.2 APPLICATION OF PAYMENTS. All payments with respect to the Obligations may
be applied, and in Greyrock's sole discretion reversed and re-applied, to the
Obligations, in such order and manner as Greyrock shall determine in its sole
discretion.
9.3 CHARGES TO ACCOUNT. Greyrock may, in its discretion, require that
Borrower pay monetary Obligations in cash to Greyrock, or charge them to
Borrower's Loan account, in which event they will bear interest at the same rate
applicable to the Loans.
9.4 MONTHLY ACCOUNTINGS. Greyrock shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Greyrock), unless
Borrower notifies Greyrock in writing to the contrary within sixty days after
each account is rendered, describing the nature of any alleged errors or
admissions.
9.5 NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either (i) personally or by reputable private
delivery service or by regular first-class mail, or certified mail return
receipt requested, addressed to Greyrock or Borrower at the addresses shown
in the heading to this Agreement, or at any other address designated in
writing by one party to the other party, or (ii) by fax to the fax numbers
provided by each party to the other. All notices shall be deemed to have
been given upon delivery in the case of notices personally delivered, or at
the expiration of one business day following delivery to the private delivery
service, or two business days following the deposit thereof in the United
States mail, with postage prepaid, or on receipt during business hours in the
case or the first Business Day after receipt during non-business hours in the
case of notices given by fax.
9.6 SEVERABILITY. Should any provision of this Agreement be held by any court
of competent jurisdiction to be void or unenforceable, such defect shall not
affect the remainder of this Agreement, which shall continue in full force and
effect.
9.7 INTEGRATION. This Agreement and such other written agreements, documents
and instruments as may be executed in connection herewith are the final, entire
and complete agreement between Borrower and Greyrock and supersede all prior and
contemporaneous negotiations and oral representations and agreements, all of
which are merged and integrated in this Agreement. THERE ARE NO ORAL
UNDERSTANDINGS, REPRESENTATIONS OR AGREEMENTS BETWEEN THE PARTIES WHICH ARE NOT
SET FORTH IN THIS AGREEMENT OR IN OTHER WRITTEN AGREEMENTS SIGNED BY THE PARTIES
IN CONNECTION HEREWITH.
9.8 WAIVERS. The failure of Greyrock at any time or times to require Borrower
to strictly comply with any of the provisions of this Agreement or any other
present or future agreement between Borrower and Greyrock shall not waive or
diminish any right of Greyrock later to demand and receive strict compliance
therewith. Any waiver of any default shall not waive or affect any other
default, whether prior or subsequent, and whether or not similar. None of the
provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to Greyrock shall be deemed to have been
waived by any act or knowledge of Greyrock or its agents or employees, but only
by a specific written waiver signed by an authorized officer of Greyrock and
delivered to Borrower. Borrower waives demand, protest, notice of protest and
notice of default or dishonor, notice of payment and nonpayment, release,
compromise, settlement, extension or renewal of any commercial paper,
instrument, account, General Intangible, document or guaranty at any time held
by Greyrock on which Borrower is or may in any way be liable, and notice of any
action taken by Greyrock, unless expressly required by this Agreement.
9.9 AMENDMENT. The terms and provisions of this Agreement may not be waived
or amended, except in a writing executed by Borrower and a duly authorized
officer of Greyrock.
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9.10 TIME OF ESSENCE. Time is of the essence in the performance by Borrower
of each and every obligation under this Agreement.
9.11 ATTORNEYS FEES AND COSTS. Borrower shall reimburse Greyrock for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Greyrock, pursuant to,
or in connection with, or relating to this Agreement (whether or not a lawsuit
is filed), including, but not limited to, any reasonable attorneys' fees and
costs Greyrock incurs in order to do the following: prepare and negotiate this
Agreement and the documents relating to this Agreement; obtain legal advice in
connection with this Agreement or Borrower; enforce, or seek to enforce, any of
its rights; prosecute actions against, or defend actions by, Account Debtors;
commence, intervene in, or defend any action or proceeding; initiate any
complaint to be relieved of the automatic stay in bankruptcy; file or prosecute
any probate claim, bankruptcy claim, third-party claim, or other claim; examine,
audit, copy, and inspect any of the Collateral or any of Borrower's books and
records; protect, obtain possession of, lease, dispose of, or otherwise enforce
Greyrock's security interest in, the Collateral; and otherwise represent
Greyrock in any litigation relating to Borrower. If either Greyrock or Borrower
files any lawsuit against the other predicated on a breach of this Agreement,
the prevailing party in such action shall be entitled to recover its reasonable
costs and attorneys' fees, including (but not limited to) reasonable attorneys'
fees and costs incurred in the enforcement of, execution upon or defense of any
order, decree, award or judgment. All attorneys' fees and costs to which
Greyrock may be entitled pursuant to this Paragraph shall immediately become
part of Borrower's Obligations, shall be due on demand, and shall bear interest
at a rate equal to the highest interest rate applicable to any of the
Obligations.
9.12 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of Borrower and Greyrock; provided, however,
that Borrower may not assign or transfer any of its rights under this Agreement
without the prior written consent of Greyrock, and any prohibited assignment
shall be void. No consent by Greyrock to any assignment shall release Borrower
from its liability for the Obligations.
9.13 JOINT AND SEVERAL LIABILITY. If Borrower consists of more than one
Person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.
9.14 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used in
this Agreement for convenience. Borrower and Greyrock acknowledge that the
headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. The term
"including", whenever used in this Agreement, shall mean "including (but not
limited to)". This Agreement has been fully reviewed and negotiated between the
parties and no uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against Greyrock or Borrower under any
rule of construction or otherwise.
9.15 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of Greyrock and Borrower
shall be governed by the laws of the State of California. As a material part of
the consideration to Greyrock to enter into this Agreement, Borrower (i) agrees
that all actions and proceedings relating directly or indirectly to this
Agreement shall, at Greyrock's option, be litigated in courts located within
California, and that the exclusive venue therefor shall be Los Angeles County;
(ii) consents to the jurisdiction and venue of any such court and consents to
service of process in any such action or proceeding by personal delivery or any
other method permitted by law; and (iii) waives any and all rights Borrower may
have to object to the jurisdiction of any such court, or to transfer or change
the venue of any such action or proceeding.
9.16 MUTUAL WAIVER OF JURY TRIAL. BORROWER AND GREYROCK EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN GREYROCK AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF GREYROCK OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH GREYROCK OR
BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE.
BORROWER:
THE COBALT GROUP, INC.
BY
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PRESIDENT OR VICE PRESIDENT
BY
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SECRETARY OR ASS'T SECRETARY
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GREYROCK:
GREYROCK CAPITAL,
A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION
BY
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TITLE
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Version -1
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SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: THE COBALT GROUP, INC.
ADDRESS: 0000 XXXXX XXXXXX, XXXXX 000
XXXXXXX, XX 00000
DATE: MAY 27, 1999
This Schedule is an integral part of the Loan and Security Agreement between
GREYROCK CAPITAL, A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION (GREYROCK)
and the above-borrower (BORROWER) of even date.
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1. CREDIT LIMIT
(Section 1.1): An amount not to exceed $5,000,000 at any one time outstanding.
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2. INTEREST.
INTEREST RATE (Section 1.2):
A rate equal to the "Prime Rate" plus 2% per annum,
calculated on the basis of a 360-day year for the
actual number of days elapsed, provided that the
interest rate in effect in each month shall not be
less than 8% per annum. The interest rate applicable
to all Loans shall be adjusted monthly as of the
first day of each month, and the interest to be
charged for each month shall be based on the highest
"Prime Rate" in effect during said month. "Prime
Rate" means the actual "Reference Rate" or the
substitute therefor of the Bank of America NT & SA
(or its successor) whether or not that rate is the
lowest interest rate charged by said bank. If the
Prime Rate, as defined, is unavailable, "Prime Rate"
shall mean the highest of the prime rates published
in the Wall Street Journal on the first business day
of the month, as the base rate on corporate loans at
large U.S. money center commercial banks.
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3. FEES (Section 1.3/Section 6.2):
Loan Fee: $100,000, payable concurrently herewith.
NSF Check Charge: $15.00 per item.
Wire Transfers: $15.00 per transfer.
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4. MATURITY DATE
(Section 6.1): The earlier of (i) DECEMBER 31, 1999 or (ii) three days
after the date Borrower issues any of its stock in a
public offering of its stock, or (iii) the date
Borrower receives proceeds for the issuance of its
stock or debt or other securities in an amount in
excess of $10,000,000 in one transaction or a series
of transactions after the date hereof (other than
stock issued in a public offering).
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5. REPORTING.
(Section 5.2):
Borrower shall provide Greyrock with the following:
1. Annual financial statements, as soon as
available, and in any event within 90 days
following the end of Borrower's fiscal year,
certified by independent certified public
accountants acceptable to Greyrock.
2. Quarterly unaudited financial statements, as
soon as available, and in any event within 30
days after the end of each fiscal quarter of
Borrower.
3. Monthly unaudited financial statements, as soon
as available, and in any event within 30 days
after the end of each month.
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6. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(Section 3.2): None
PRIOR TRADE
NAMES OF BORROWER
(Section 3.2): None
EXISTING TRADE
NAMES OF BORROWER
(Section 3.2): None
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OTHER LOCATIONS AND
ADDRESSES (Section 3.3): See Exhibit A hereto
MATERIAL ADVERSE
LITIGATION (Section 3.10): None
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7. OTHER PROVISIONS:
(1) PARTSVOICE. Borrower represents and warrants to
Greyrock that, under the agreements executed in
connection with its acquisition of its membership
interest in Partsvoice LLC ("Partsvoice"), it is
not permitted to have Partsvoice guarantee
Borrower's obligations or grant security interests
in Partsvoice's assets to secure Borrower's
obligations.
(2) LEGAL OPINION. Borrower is concurrently
providing to Greyrock the opinion of its counsel
covering the due organization and good standing of
Borrower and the due authorization, execution and
delivery of this Agreement and the documents
relating thereto. Within 20 days after the date
hereof Borrower shall provide to Greyrock the
opinion of its counsel covering such other matters
as Greyrock shall specify (which shall be customary
in loan transactions and shall include customary
exceptions and disclaimers).
Borrower: Greyrock:
THE COBALT GROUP, INC. GREYROCK CAPITAL,
a Division of NationsCredit
Commercial Corporation
By By
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President or Vice President
Title
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By
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Secretary or Ass't Secretary
Version -1
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EXHIBIT A
TO
SCHEDULE TO LOAN AND SECURITY AGREEMENT
Additional Locations:
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
000 Xxxxxxx xx Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
0000 XX Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
