EXHIBIT 10.21
[LOGO] Silicon Valley Bank
QuickStart Loan and Security Agreement
Borrower: Critical Path, Inc. Address: 000 Xxxxx Xxxxxx
Date: May 12, 1998 Xxx Xxxxxxxxx, XX 00000
SILICON'S OFFER TO EXTEND FINANCING ON THE TERMS SET FORTH HEREIN SHALL EXPIRE
IF THIS AGREEMENT IS NOT EXECUTED BY BORROWER AND RETURNED TO SILICON WITHIN
30 DAYS OF THE ABOVE DATE.
THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between
SILICON VALLEY BANK ("Silicon"), whose address is 0000 Xxxxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx 00000 and the borrower named above (jointly and severally, the
"Borrower"), whose chief executive office is located at the above address
("Borrower's Address").
1. Loans. Silicon will make loans to Borrower (the "Loans") in amounts
determined by Silicon in its reasonable business judgment up to the amount (the
"Credit Limit") shown on the Schedule to this Agreement (the "Schedule"),
provided no Event of Default and no event which, with notice or passage of time
or both, would constitute an Event of Default has occurred. All Loans and other
monetary Obligations will bear interest at the rate shown on the Schedule.
Interest will be payable monthly, on the date shown on the monthly billing from
Silicon. Silicon may, in its discretion, charge interest to Borrower's deposit
accounts maintained with Silicon.
2. Security Interest. As security for all present and future indebtedness,
guarantees, liabilities, and other obligations, of Borrower to Silicon
(collectively, the "Obligations"), Borrower hereby grants Silicon a continuing
security interest in all of Borrower's interest in the following types of
property, whether now owned or hereafter acquired, and wherever located
(collectively, the "Collateral"): All "accounts," "general intangibles,"
"contract rights," "chattel paper," "documents," "letters of credit,"
"instruments," "deposit accounts," "inventory," "farm products," investment
property," "fixtures" and "equipment," as such terms are defined in Division 9
of the California Uniform Commercial Code in effect on the date hereof, and all
products, proceeds and insurance proceeds of the foregoing.
3. Representations And Agreements Of Borrower. Borrower represents to Silicon
as follows, and Borrower agrees that the following representations will continue
to be true, and that Borrower will comply with all of the following agreements
throughout the term of this Agreement:
3.1 Corporate Existence and Authority. Borrower, if a corporation, is and
will continue to be, duly authorized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The execution,
delivery and performance by Borrower of this Agreement, and all other documents
contemplated hereby have been duly and validly authorized, and do not violate
any law or any provision of, and are not grounds for acceleration under, any
agreement or instrument which is binding upon Borrower.
3.2 Name; Places of Business. The name of Borrower set forth in this
Agreement is its correct name. Borrower shall give Silicon 15 days' prior
written notice before changing its name. 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 Silicon at least 15 days prior written
notice before changing its chief executive office or locating the Collateral at
any other location.
3.3 Collateral. Silicon has and will at all times continue to have a first-
priority perfected security interest in all of the Collateral other than
specific equipment to the extent that a security interest in such type of
Collateral can be perfected by filing a financing statement. Borrower will
immediately advise Silicon in writing of any material loss or damage to the
Collateral.
3.4 Financial Condition and Statements. All financial statements now or in
the future delivered to Silicon have been, and will be, prepared in conformity
with generally accepted accounting principles. Since the last date covered by
any such statement, there has been no material adverse change in the financial
condition or business of Borrower. Borrower will provide Silicon: (i) within
30 days after the end of each month, a monthly financial statement prepared by
Borrower, and such other information as Silicon shall reasonably request; (ii)
within 120 days following the end of Borrower's fiscal year, complete annual
financial statements, certified by independent certified public accountants
acceptable to Silicon and accompanied by the unqualified report thereon by said
independent certified public accountants; and (iii) other financial information
reasonably requested by Silicon from time to time.
3.5 Taxes; Compliance with Law. Borrower has filed, and will file, when due,
all tax returns and reports required by applicable law, and Borrower has paid,
and will pay, when due, all taxes, assessments, deposits and contributions now
or in the future owed by Borrower disputed in good faith and reserved for under
GAAP and would not be expected to cause a material adverse effect. Borrower has
complied, and will comply, in all material respects, with all applicable laws,
rules and regulations.
3.6 Insurance. Borrower shall at all times insure all of the tangible
personal property Collateral and carry such other business insurance as is
customary in Borrower's industry.
3.7 Access to Collateral and Books and Records. At reasonable times, on one
business day notice, Silicon, or its agents, shall have the right to inspect the
Collateral, and the right to audit and copy Borrower's books and records.
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Silicon Valley Bank QuickStart Loan and Security Agreement
3.8 Operating Accounts. Borrower shall maintain its primary operating
accounts with Bank.
3.9 Additional Agreements. Borrower shall not, without Silicon's prior
written consent, do any of the following: (i) enter into any transaction
outside the ordinary course of business except for the sale of capital stock to
venture investors, provided that Borrower promptly delivers written notification
to Silicon of any such sale; (ii) sell or transfer any Collateral, except in the
ordinary course of business; (iii) pay or declare any dividends on Borrower's
stock (except for dividends payable solely in stock of Borrower); or (iv)
redeem, retire, purchase or otherwise acquire, directly or indirectly, any of
Borrower's stock other than the repurchase of up to five percent (5%) of
Borrower's then issued stock in any fiscal year from Borrower's employees or
directors pursuant to written agreement with Borrower.
4. Term. This Agreement shall continue in effect until the maturity date set
forth on the Schedule (the "Maturity Date"). This Agreement may be terminated,
without penalty, prior to the Maturity Date as follows: (i) by Borrower,
effective three business days after written notice of termination is given to
Silicon; or (ii) by Silicon at any time after the occurrence of an Event of
Default, without notice, effective immediately. On the Maturity Date or on any
earlier effective date of termination, Borrower shall pay all Obligations in
full, whether or not such Obligations are otherwise then due and payable. No
termination shall in any way affect or impair any security interest or other
right or remedy of Silicon, nor shall any such termination relieve Borrower of
any Obligation to Silicon, until all of the Obligations have been paid and
performed in full.
5. Events of Default and Remedies. The occurrence of any of the following
events shall constitute an "Event of Default" under this Agreement: (a) Any
representation, statement, report or certificate given to Silicon by Borrower or
any of its officers, employees or agents, now or in the future, is untrue or
misleading in a material respect when given or made, or (b) Borrower fails to
pay when due any Loan or any interest thereon or any other monetary Obligation;
or (c) the aggregate amount of Loans made hereunder at any time exceed the
Credit Limit; or (d) Borrower fails to perform any other non-monetary
Obligation, which failure is not cured within 15 business days after the date
due; or (e) Dissolution, termination of existence, insolvency or business
failure of Borrower; 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 or against Borrower 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; or (f) a material adverse change in the business, operations,
or financial or other condition of Borrower. If an Event of Default occurs,
Silicon, shall have the right to accelerate and declare all of the Obligations
to be immediately due and payable, increase the interest rate by an additional
four percent per annum, and exercise all rights and remedies accorded it by
applicable law.
6. General. If any provision of this Agreement is held to be unenforceable,
the remainder of this Agreement shall still continue in full force and effect.
This Agreement and any other written agreements, documents and instruments
executed in connection herewith are the complete agreement between Borrower and
Silicon 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 in this Agreement or in other written
agreements signed by the parties in connection this Agreement. The failure of
Silicon at any time to require Borrower to comply strictly with any of the
provisions of this Agreement shall not waive Silicon's right later to demand and
receive strict compliance. Any waiver of a default shall not waive any other
default. None of the provisions of this Agreement may be waived except by a
specific written waiver signed by an officer of Silicon and delivered to
Borrower. The provisions of this Agreement may not be amended, except in a
writing signed by Borrower and Silicon. Borrower shall reimburse Silicon for all
reasonable attorneys' fees and all other reasonable costs incurred by Silicon,
in connection with this Agreement (whether or not a lawsuit is filed). If
Silicon or Borrower files any lawsuit against the other predicated on a breach
of this Agreement, the prevailing party shall be entitled to recover its
reasonable costs and attorneys' fees from the non-prevailing party. Borrower
may not assign any rights under this Agreement without Silicon's prior written
consent. This Agreement shall be governed by the laws of the State of
California.
7. Mutual Waiver of Jury Trial. BORROWER AND SILICON 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 CONDUCT, ACT OR OMISSION OF
SILICON OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
ATTORNEYS OR AFFILIATES.
Borrower:
CRITICAL PATH, INC.
By /s/ Xxxxx Xxxxxx
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President or Vice President
Silicon:
SILICON VALLEY BANK
By______________________________________
Title____________________________________
[LOGO] Silicon Valley Bank
Schedule to
QuickStart Loan and Security Agreement (Master)
Borrower: Critical Path, Inc.
Date: May 12, 1998
This Schedule is an integral part of the Loan and Security Agreement between
Silicon Valley Bank ("Silicon") and the above-named borrower ("Borrower") of
even date.
Credit Limit (Aggregate)
(Section 1): $1,000,000 (includes, without limitation,
Equipment Advances and the Merchant Services and
Business Visa Reserve, if any)
Interest Rate (Section 1): A rate equal to the "Prime Rate" in effect from
time to time, plus 2.0% per annum. Interest
shall be calculated on the basis of a 360-day
year for the actual number of days elapsed.
"Prime Rate" means the rate announced from time
to time by Silicon as its "prime rate;" it is a
base rate upon which other rates charged by
Silicon are based, and it is not necessarily the
best rate available at Silicon. The interest
rate applicable to the Obligations shall change
on each date there is a change in the Prime
Rate.
Maturity Date (Section 4): November 12, 2001 (Revolving portion matures on
November 12, 1999)
Other Locations and Addresses
(Section 3.2): N/A
--------------------------
Other Agreements: Borrower also agrees as follows:
1. Loan Fee. Borrower shall concurrently pay
Silicon a non-refundable Loan Fee in the amount
of $10,000.
2. Banking Relationship. Borrower shall at all
times maintain its primary banking relationship
with Silicon.
Borrower: Silicon:
CRITICAL PATH, INC. SILICON VALLEY BANK
By /s/ Xxxxx Xxxxxx By_______________________________
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President or Vice President Title______________________________
[LOGO] Silicon Valley Bank
Schedule to
QuickStart Loan and Security Agreement (Equipment Advances)
Borrower: Critical Path, Inc.
Date: May 12, 1998
This Schedule is an integral part of the Loan and Security Agreement between
Silicon Valley Bank ("Silicon") and the above-named borrower ("Borrower") of
even date.
Credit Limit (Equipment)
(Section 1): $1,000,000 (such amount to be funded under the
aggregate Credit Limit). Equipment Advances will be
made only on or prior to November 12, 1998 (the
"Last Advance Date") and only for the purpose of
purchasing equipment reasonably acceptable to
Silicon. Borrower must provide invoices for the
equipment to Silicon on or before the Last Advance
Date.
Interest Rate (Section 1): A rate equal to the "Prime Rate" in effect from
time to time, plus 2.0% per annum. Interest shall
be calculated on the basis of a 360-day year for
the actual number of days elapsed. "Prime Rate"
means the rate announced from time to time by
Silicon as its "prime rate;" it is a base rate upon
which other rates charged by Silicon are based, and
it is not necessarily the best rate available at
Silicon. The interest rate applicable to the
Obligations shall change on each date there is a
change in the Prime Rate.
Maturity Date (Section 4): After the Last Advance Date, the unpaid principal
balance of the Equipment Advances shall be repaid
in 36 equal monthly installments of principal, plus
interest, commencing on December 12, 1998 and
continuing on the same day of each month thereafter
until the entire unpaid principal balance of the
Equipment Advances and all accrued unpaid interest
have been paid (subject to Silicon's right to
accelerate the Equipment Advances on an Event of
Default).
Borrower: Silicon:
CRITICAL PATH, INC. SILICON VALLEY BANK
By /s/ Xxxxx Xxxxxx By_______________________________
-------------------------------
President or Vice President Title______________________________
[LOGO] Silicon Valley Bank
Certified Resolution
Borrower: Critical Path, Inc., a corporation organized under the laws of the
State of California
Date: May 12, 1998
I, the undersigned, corporate officer of the above-named borrower, a
corporation organized under the laws of the state set forth above, do hereby
certify that the following is a full, true and correct copy of resolutions duly
and regularly adopted by the Board of Directors of said corporation as required
by law, and by the by-laws of said corporation, and that said resolutions are
still in full force and effect and have not been in any way modified, repealed,
rescinded, amended or revoked.
RESOLVED, that this corporation borrow from Silicon Valley Bank ("Silicon"),
from time to time, such sum or sums of money as, in the judgment of the officer
or officers authorized hereby, this corporation may require.
RESOLVED FURTHER, that any officer of this corporation be, and he or she is
hereby authorized, in the name of this corporation, to execute and deliver to
Silicon the loan agreements, security agreements, notes, financing statements,
and other documents and instruments providing for such loans and evidencing or
securing such loans, and said authorized officers are authorized from time to
time to execute renewals, extensions and/or amendments of said loan agreements,
security agreements, and other documents and instruments.
RESOLVED FURTHER, that said authorized officers be and they are hereby
authorized, as security for any and all indebtedness of this corporation to
Silicon, whether arising pursuant to this resolution or otherwise, to grant, to
Silicon, or deed in trust for its benefit, any property of any and every kind,
belonging to this corporation, including, but not limited to, any and all real
property, accounts, inventory, equipment, general intangibles, instruments,
documents, chattel paper, notes, money, deposit accounts, furniture, fixtures,
goods, and other property of every kind, and to execute and deliver to Silicon
any and all pledge agreements, mortgages, deeds of trust, financing statements,
security agreements and other agreements, which said instruments and the note or
notes and other instruments referred to in the preceding paragraph may contain
such provisions, covenants, recitals and agreements as Silicon may require, and
said authorized officers may approve, and the execution thereof by said
authorized officers shall be conclusive evidence of such approval.
RESOLVED FURTHER, that said authorized officers be and they are hereby
authorized to issue warrants to purchase this corporation's capital stock, for
such class, series and number, and on such terms, as said officers shall deem
appropriate
RESOLVED FURTHER, that Silicon may conclusively rely on a certified copy of
these resolutions and a certificate of the corporate officer of this corporation
as to the officers of this corporation and their offices and signatures, and
continue to conclusively rely on such certified copy of these resolutions and
said certificate for all past, present and future transactions until written
notice of any change hereto or thereto is given to Silicon by this corporation
by certified mail, return receipt requested.
The undersigned further hereby certifies that the following persons are the duly
elected and acting officers of the corporation named above as borrower and that
the following are their actual signatures:
NAMES OFFICE(S) ACTUAL SIGNATURES
----- --------- -----------------
Xxxxx Xxxxxx CEO x /s/ Xxxxx Xxxxxx
------------------------------ ------------------------------ ---------------------------
______________________________ ______________________________ x___________________________
______________________________ ______________________________ x___________________________
IN WITNESS WHEREOF, I have hereunto set my hand as such corporate officer on the
date set forth above.
By /s/ Xxxxx Xxxxxx /s/ Xxx Xxxxxxxx
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Its CEO Controller
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EXHIBIT "A" TO UCC-1 FINANCING STATEMENT
DEBTOR: CRITICAL PATH, INC.
SECURED PARTY: SILICON VALLEY BANK
Debtor hereby grants Secured Party a security interest in all of the
following, whether now owned or hereafter acquired, and wherever located, as
collateral for the payment and performance of all present and future
indebtedness, liabilities, guarantees and obligations of Debtor to Secured
Party: All "accounts," "general intangibles," "contract rights, " "chattel
paper," "documents," "letters of credit," "instruments," "deposit accounts,"
"inventory," "farm products," "fixtures," "investment property," and
"equipment," as such terms are defined in Division 9 of the California Uniform
Commercial Code in effect on the date hereof, and all products, proceeds and
insurance proceeds of any or all of the foregoing.
Debtor Initial here:____________
