SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
EXHIBIT 10.2
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of December 11, 2006 (as
further amended, modified or restated from time to time, this “Agreement”), will serve to
set forth the terms of the financing transactions by and among XXXXXXXX FAMILY PARTNERSHIP, LTD., a
Texas limited partnership (“Lender”), XXXXXXXX.XXX, INC., f/k/a MULTIMEDIA ACCESS
CORPORATION, a Delaware corporation (“ViewCast”), OSPREY TECHNOLOGIES, INC., a Delaware
corporation (“Osprey”), and VIDEOWARE, INC., a Delaware corporation (“VideoWare”)
(ViewCast, Osprey, and VideoWare are jointly and severally referred to as “Borrower”).
RECITALS
WHEREAS, ViewCast and Lender have entered into that certain: (a) Amended and Restated Loan and
Security Agreement dated as of October 15, 2003 (as further amended, modified or restated as of
even date herewith, the “Original Loan and Security Agreement”); and (b) that certain
Amended and Restated Pledge Agreement dated as of October 15, 2003 (as further amended, modified or
restated as of even date herewith, the “Original Pledge Agreement”);
WHEREAS, ViewCast, Osprey and VideoWare and Lender desire to amend and restate the
indebtedness evidenced by that certain (a) Amended and Restated Promissory Note, dated as of
October 15, 2003, in the original principal amount of $2,000,000.00 and (b) Promissory Note, dated
as of October 15, 2003, in the original principal amount of $6,909,582.25 (as either has been
amended, modified or restated to date, collectively, the “Original Promissory Notes”) with
each of the Original Promissory Notes executed by Borrower and payable to the order of Lender and
secured by the Original Loan and Security Agreement and the Original Pledge Agreement (collectively
with all other agreements, instruments and documents evidencing, securing, governing, guaranteeing
or pertaining thereto, the “Original Loan Documents”);
WHEREAS, Borrower owes Lender $10,509,582.25 (the “Principal Balance”) under the
Original Promissory Notes;
WHEREAS, ViewCast and Lender are parties to that certain Exchange Agreement, dated as of even
date herewith (the “Exchange Agreement”) whereby $8,000,000 of the Principal Balance will
be exchanged for shares of ViewCast’s Series E Convertible Redeemable Preferred Stock and
$1,259,582.00 of the Principal Balance will be exchanged for shares of ViewCast’s common stock;
WHEREAS, as of the date hereof, immediately following the exchange under the Exchange
Agreement, Borrower owes Lender the remaining principal amount of $1,250,000.25 (the
“Outstanding Principal”) and owes Lender accrued and unpaid interest of $3,891,360.53 (the
“Accrued and Outstanding Interest”) (the Outstanding Principal and the Accrued and
Outstanding Interest are sometimes collectively referred to as the “Existing Debt”);
WHEREAS, ViewCast, Osprey and VideoWare desire to establish their borrowing potential on a
consolidated basis to the same extent possible if they were merged into a single
corporate entity and that this Agreement reflects an exchange of debt which would not
otherwise be available to ViewCast, Osprey and VideoWare if they were not jointly and severally
liable for payment of all of the Indebtedness (as defined below); and
WHEREAS, ViewCast, Osprey and VideoWare have determined that each will benefit specifically
and materially from the restructuring contemplated by this Agreement;
WHEREAS, ViewCast, Osprey and VideoWare have requested and bargained for the structure and
terms of and security for the transactions contemplated by this Agreement; and
WHEREAS, it is both a condition precedent to the obligations of Lender hereunder and a desire
of each entity constituting Borrower to execute and deliver to Lender this Agreement;
NOW THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
meanings indicated below:
(a) “Accrued and Outstanding Interest” shall have the meaning set forth in the
Recitals.
(b) “Affiliate” of any Person means any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such Person. For
the purpose of this definition, “control” and the correlative meanings of the terms
“controlled by” and “under common control with” mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting shares, membership interests, or partnership
interests or by contract or otherwise.
(c) “Applicable Bankruptcy Law” shall have the meaning set forth in Section
10(f).
(d) “Applicable Federal Rate” shall mean the variable rate of interest per annum
which is equal to the Applicable Federal Rate as published by the U.S. Department of the
Treasury from time to time in accordance with Section 1274(d) of the Internal Revenue Code of
1986.
(e) “Claims” shall have the meaning set forth in Section 12.
(f) “Business Day” shall mean shall mean any day other than a Saturday, Sunday
or any other day on which banks are authorized or required to be closed in the State of
Texas.
(g) “Code” shall mean the Uniform Commercial Code as in effect in the State of
Texas on the date of this Agreement or as it may hereafter be amended from time to time.
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(h) “Collateral” shall mean:
(i) All present and future accounts, chattel paper, documents, instruments, deposit
accounts, commercial tort claims, commodity accounts, commodity contracts, instruments,
investment property, letters of credit, letter of credit rights, contract rights, money and
general intangibles now or hereafter owned, held, or acquired by Borrower.
(ii) All present and hereafter acquired inventory and goods (including without
limitation, all raw materials, work in process and finished goods) held, possessed, owned,
held on consignment, or held for sale, lease, return or to be furnished under contracts of
services, in whole or in part, by Borrower wherever located.
(iii) All equipment and fixtures of whatsoever kind and character now or hereafter
possessed, held, acquired, leased or owned by Borrower, together with all replacements,
accessories, additions, substitutions and accessions to all of the foregoing, and all
records relating in any way to the foregoing.
(iv) All Patents, Copyrights, Trademarks and Licenses now or hereafter owned, held, or
acquired by Borrower (including without limitation, those Patents, Copyrights, Trademarks,
and Licenses set forth on Exhibit A attached hereto, if any).
The term “Collateral,” as used herein, shall also include all PRODUCTS and PROCEEDS
of all of the foregoing (including without limitation, insurance payable by reason of loss
or damage to the foregoing property) and any property, securities, guaranties or monies of
Borrower which may at any time come into the possession of Lender. The term Collateral
shall include all of Borrower’s records relating in any way to the foregoing (including,
without limitation, any computer software, whether on tape, disk, card, strip, cartridge or
any other form). The designation of proceeds does not authorize Borrower to sell, transfer
or otherwise convey any of the foregoing property except finished goods intended for sale or
services provided in the ordinary course of Borrower’s business or as otherwise provided
herein.
(i) “Consolidated Capital Expenditures” shall mean, for any period, all capital
expenditures of Borrower on a consolidated basis (i.e, capital expenditures for ViewCast,
Osprey and VideoWare) for such period, as determined in accordance with generally accepted
accounting principles.
(j) “Consolidated EBITDA” shall mean, for any period, the sum of (i)
consolidated net income for Borrower (i.e, net income, without duplication, for ViewCast,
Osprey and VideoWare) for such period, plus (ii) an amount which, in the
determination of consolidated net income for such period, has been deducted for (A)
consolidated interest expense, (B) total federal, state, local and foreign income, value
added and similar taxes accrued during such period, (C) losses (or minus gains) on
the sale or disposition of assets outside the ordinary course of business, and (D)
depreciation, amortization expense and other non-cash charges, all as determined in
accordance with generally accepted accounting principles.
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(k) “Copyright” shall mean all right, title and interest in and to the copyright
applications and copyrights of Borrower and those copyrights which are hereafter obtained
or acquired by Borrower and all registrations, applications and recordings thereof,
including, without limitation, all reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof, and all applications, registrations and recordings in the
United States Copyright Office or in any similar office or agency of the United States, or
any State thereof, all whether now owned or hereafter acquired by Borrower.
(l) [intentionally omitted]
(m) “Debt Payments” shall mean, as of any date of determination for Borrower,
the sum of all payments of principal and interest on indebtedness or Redeemable Preferred
Stock for the applicable period ending on the date of determination (including the payments
due on capital leases during the applicable period ending on the date of determination) and
excluding any voluntary or required prepayments on the Note.
(n) “Event of Default” shall have the meaning set forth in Section 10.
(o) “Exchange Agreement” shall have the meaning set forth in the Recitals.
(p) “Excess Cash Flow” shall mean, with respect to any six month period of
Borrower on a consolidated basis, an amount equal to (i) Consolidated EBITDA for such period,
minus (ii) Consolidated Capital Expenditures for such period, minus (iii)
Debt Payments made during such period, minus (iv) tax payments in respect of federal,
state, local and foreign income, franchise, property, sales, value added and similar taxes
made during such period, minus (v) any consolidated negative working capital at the
end of such period, minus (vi) a capital reserve for scheduled payments due and
budgeted operating and capital expenditures for the subsequent fiscal year period in excess
of any consolidated positive net working capital at the end of such period, and plus
(vii) distributions received by Borrower from any other wholly owned subsidiaries.
(q) “Existing Debt” shall have the meaning set forth in the Recitals.
(r) “Indebtedness” shall mean (i) all indebtedness, obligations and liabilities
of Borrower to Lender of any kind or character, now existing or hereafter arising, whether
direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several or joint and several, and regardless of whether such indebtedness, obligations and
liabilities may, prior to their acquisition by Lender, be or have been payable to or in favor
of a third party and subsequently acquired by Lender (it being contemplated that Lender may
make such acquisitions from third parties), including without limitation all indebtedness,
obligations and liabilities of Borrower to Lender now existing or hereafter arising under the
Note, this Agreement, the other Loan Documents or any draft, acceptance, guaranty,
endorsement, letter of credit, assignment, purchase, overdraft, discount, indemnity agreement
or otherwise, (ii) all accrued but unpaid interest on any of the indebtedness described in
Subsection (i) above, (iii) all obligations of Borrower to Lender under the Loan
Documents, (iv) all costs and expenses incurred by Lender in connection with the collection
and administration of all or any part of the indebtedness and obligations described in (i),
(ii) and (iii) above or the protection or preservation of, or realization upon, the
Collateral securing all or any part of such indebtedness and
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obligations, including without limitation all reasonable attorneys’ fees, and (v) all
renewals, extensions, modifications and rearrangements of the indebtedness and obligations
described in Subsections (i), (ii), (iii) and (iv) above.
(s) “Indemnified Person” shall have the meaning set forth in Section 12.
(t) “Licenses” shall mean the patent, trademark or copyright license agreements
of Borrower as any of the same may from time to time be amended or supplemented and those
licenses which are hereafter obtained or acquired by Borrower.
(u) “Loan” means all advances pursuant to the Loan Documents from time to time .
(v) “Loan Documents” shall mean this Agreement, the Note, the Pledge Agreement,
and the other agreements, instruments and documents evidencing, securing, governing,
guaranteeing or pertaining to the Loan.
(w) “Maturity Date” shall mean the date that is the earliest of: (i)
December 31, 2009; (ii) the date of the sale of all or substantially all of the assets or
equity of Borrower; (iii) the date of any merger of Borrower with any other entity in which
the shareholders of Borrower prior to the merger do not control the surviving entity
following the merger; or (iv) the date of the acceleration of the Indebtedness pursuant to
the terms of this Agreement.
(x) “Maximum Rate” means, at any particular time in question, the maximum rate
of interest that, under applicable law, may be charged on the Primary Principal Amount or the
Secondary Principal Amount, as applicable, at such time.
(y) “Measuring Date” shall have the meaning set forth in Section 3(a).
(z) “Note” shall have the meaning set forth in Section 4.
(aa) “Obligation” shall mean all Indebtedness arising under this Agreement.
(bb) “Outstanding Principal” shall have the meaning set forth in the Recitals.
(cc) “Patents” shall mean all right, title and interest in and to the patent
applications and patents of Borrower and those patents which are hereafter obtained or
acquired by Borrower and all registrations, applications and recordings thereof, including,
without limitation, all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, and all applications, registrations and recordings in the
United States Patent and Trademark Office or in any similar office or agency of the United
States, or any State thereof, all whether now owned or hereafter acquired by Borrower.
(dd) “Permitted Liens” shall have the meaning set forth in Section 7(c).
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(ee) “Person” means an individual, sole proprietorship, joint venture,
association, trust, estate, business trust, corporation, non-profit corporation, partnership,
limited liability company, sovereign government or agency, instrumentality, or political
subdivision thereof, or any similar entity or organization.
(ff) “Pledge Agreement” shall mean that certain Amended and Restated Pledge
Agreement dated October 15, 2003 as amended, modified, or restated from time to time between
Borrower and Lender, including by the Confirmation of Amended and Restated Pledge Agreement
dated as of even date herewith, executed by ViewCast and Lender.
(gg) “Primary Contract Rate” shall mean the rate of interest per annum which is
equal to: (a) the Prime Rate; plus (b) one percent (1%); provided,
however, that the “Primary Contract Rate” shall not exceed nine and one-half
percent (9.50%) prior to December 31, 2007.
(hh) “Prime Rate” shall mean the rate of interest per annum which is equal to
the variable rate of interest per annum equal to the prime rate as published from time to
time in the “Money Rates” table of The Wall Street Journal (Southwest Edition). If the prime
rate is no longer published in the “Money Rates” table of The Wall Street Journal (Southwest
Edition), then Lender will choose a substitute index that is based upon comparable
information.
(ii) “Secondary Contract Rate” shall mean, at any time, the Applicable Federal
Rate at such time.
(jj) “Trademarks” shall mean the registered trademarks and pending applications
therefor of Borrower and those trademarks which are hereafter adopted or acquired by
Borrower, and all right, title and interest therein and thereto, and all registrations,
applications, and recordings thereof, including, without limitation, applications,
registrations and recordings in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof, all whether now owned or
hereafter acquired by Borrower.
(kk) “Unpaid Principal” shall mean an amount equal to the aggregate amount of
the Outstanding Principal and the Accrued and Outstanding Interest.
All words and phrases used herein shall have the meaning specified in the Code except to the extent
such meaning is inconsistent with this Agreement. Terms not otherwise defined herein shall have
the same meanings as in the Note.
2. Restructuring of Existing Debt.
(a) Modification of Existing Debt. In consideration for, among other things,
Lender’s consummation of the Exchange Agreement, Borrower agrees to execute the Note, with
the principal amount of the Note being the Unpaid Principal and such amount representing the
aggregate of the Outstanding Principal (the “Primary Principal Amount”) and the
Accrued and Outstanding Interest (the “Secondary Principal Amount”). Borrower
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hereby
acknowledges and agrees that no right of offset, defense, counterclaim, claim, causes of
action or objection in favor of Borrower against Lender exists arising out of or
with respect to any of the Existing Debt, the Outstanding Principal, the Accrued and
Outstanding Interest, the Original Loan Documents, the Original Promissory Notes, or with
respect to any other documents or instruments now or heretofore evidencing, securing or in
any way relating to any of the foregoing, and Borrower does hereby expressly waive, release
and relinquish any and all such defenses, setoffs, claims, counterclaims and causes of
action, if any, against Lender relating to the Existing Debt, or the Original Loan Documents.
Borrower acknowledges and agrees that Lender is not required or obligated to make any
further advances to Borrower under the Original Loan Documents, the Note, this Agreement, or
any other Loan Document.
(b) No Revolving Facility. Borrower may not reborrow any sums paid or prepaid
under the Note, the Loan, or this Agreement.
(c) Joint and Several Obligation. Each obligation hereunder of Borrower is a
joint and several obligation of each entity constituting Borrower.
3. Payment of Obligation.
(a) Mandatory Prepayment from Excess Cash Flow. On a date within sixty (60)
days after each December 31 (each December 31 is a “Measuring Date”), beginning
within sixty (60) days after December 31, 2006, Borrower shall prepay the unpaid balance of
the Primary Principal Amount in an amount equal to fifty percent (50%) of the Excess Cash
Flow earned during the twelve (12) month period ending on the immediately preceding Measuring
Date.
(b) Mandatory Prepayment from Certain Asset Sales. Within three (3) Business
Days of Borrower’s receipt of the net proceeds of any asset sale not in the ordinary course
of business of at least $500,000, Borrower shall prepay the unpaid balance of the Primary
Principal Amount in an amount equal to seventy-five percent (75%) of such net cash proceeds.
(c) Payment of Interest on Primary Principal Amount. (i) Interest on the unpaid
Primary Principal Amount shall be calculated at a fluctuating rate per annum which shall be
equal to the lesser of: (x) the Maximum Rate; and (y) the Primary Contract Rate, each
change in the rate to be charged on the Primary Principal Amount to become effective without
notice to Borrower on the effective date of each such change in the Maximum Rate or the Prime
Rate, as the case may be; provided, however, that if at any time the Primary
Contract Rate shall exceed the Maximum Rate, thereby causing the interest on the Primary
Principal Amount to be limited to the Maximum Rate, then any subsequent reduction in the
Prime Rate shall not reduce the rate of interest on the Primary Principal Amount below the
Maximum Rate until the total amount of interest accrued on the Primary Principal Amount
equals the amount of interest which would have accrued on the Primary Principal Amount if the
Primary Contract Rate had at all times been in effect. (ii) Interest on the unpaid Primary
Principal Amount shall accrue daily and be paid monthly in arrears, on the last Business Day
of each month.
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(d) Payment of Interest on Secondary Principal Amount. Interest on the unpaid
Secondary Principal Amount shall be calculated at a fluctuating rate per annum which shall be
equal to the lesser of: (x) the Maximum Rate; and (y) the Secondary Contract Rate,
each change in the rate to be charged on the Secondary Principal Amount to become effective
without notice to Borrower on the effective date of each such change in the Maximum Rate or
the Applicable Federal Rate, as the case may be; provided, however, that if
at any time the Secondary Contract Rate shall exceed the Maximum Rate, thereby causing the
interest on the Secondary Principal Amount to be limited to the Maximum Rate, then any
subsequent reduction in the Applicable Federal Rate shall not reduce the rate of interest on
the Secondary Principal Amount below the Maximum Rate until the total amount of interest
accrued on the Secondary Principal Amount equals the amount of interest which would have
accrued on the Secondary Principal Amount if the Secondary Contract Rate had at all times
been in effect. (ii) Interest on the unpaid Secondary Principal Amount shall be paid in full
on the Maturity Date.
(e) Payment of Outstanding Obligation. On the Maturity Date, Borrower shall
repay the outstanding Unpaid Principal and all accrued and unpaid interest thereon.
4. Promissory Note. The Unpaid Principal shall be evidenced by a promissory note
(such promissory note to be in the form of Exhibit B attached hereto, together with any
amendments, modifications, replacements, substitutions, restatements, renewals, extensions and
increases thereof, the “Note”) duly executed by Borrower and payable to the order of
Lender. Interest on the Note shall accrue at the rate set forth herein. The principal of and
interest on the Note shall be due and payable in accordance with the terms and conditions set forth
in the Note and this Agreement. The Note shall be given in amendment, restatement and extension,
but not extinguishment, of all amounts left owing and unpaid (following the exchange of $9,259,582
pursuant to the Exchange Agreement) under the Original Promissory Notes.
5. Confirmation of Liens and Grant of Liens on Collateral. As collateral and security
for the Indebtedness, (a) Borrower hereby ratifies and confirms each and all of the liens
previously granted to Lender and (b) each Borrower hereby grants to Lender, its successors and
assigns, a first priority lien and security interest in and to all of the Collateral.
5. Representations and Warranties. Borrower hereby represents and warrants to Lender
as follows:
(a) Existence. Borrower is (i) duly organized, validly existing and in good
standing under the laws of the State of Delaware, and (ii) duly qualified and licensed in all
other states and jurisdictions where it is doing business, except where the failure to be so
qualified or licensed would not (A) have a material adverse effect on Borrower, or (B) affect
the enforceability of the lien granted Lender on the Collateral. Borrower has all requisite
power and authority to execute and deliver the Loan Documents.
(b) Binding Obligations. The execution, delivery, and performance of the Loan
Documents by Borrower have been duly authorized by all necessary action by Borrower, and
constitute legal, valid and binding obligations of Borrower, enforceable in accordance with
their respective terms, except as limited by bankruptcy, insolvency or
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similar laws of general application relating to the enforcement of creditors’ rights and
except to the extent specific remedies may generally be limited by equitable principles.
(c) No Consent. The execution, delivery and performance of the Loan Documents,
and the consummation of the transactions contemplated thereby, do not (i) conflict with,
result in a violation of, or constitute a default under (1) any provision of its
organizational documents or other instrument binding upon Borrower, (2) any law,
governmental regulation, court decree or order applicable to Borrower, or (3) any agreement,
judgment, license, order or permit applicable to or binding upon Borrower, (ii) require the
consent, approval or authorization of any third party, or (iii) result in or require the
creation of any lien, charge or encumbrance upon any assets or properties of Borrower or of
any person except as may be expressly contemplated in the Loan Documents.
(d) Financial Condition. Each financial statement of Borrower supplied to the
Lender truly discloses and fairly presents Borrower’s financial condition as of the date of
each such statement. There has been no material adverse change in such financial condition
or results of operations of Borrower subsequent to the date of the most recent financial
statement supplied to the Lender.
(e) Litigation. There are no actions, suits or proceedings, pending or, to the
knowledge of Borrower, threatened against or affecting Borrower, or the assets or properties
of Borrower, before any court or governmental department, commission or board, which, if
determined adversely, would have a material adverse effect on the assets, liabilities,
financial condition, properties, business or results of operations of Borrower.
(f) Taxes; Governmental Charges. Borrower has filed all federal, state and
local tax reports and returns required by any law or regulation to be filed by it and has
either duly paid all taxes, duties and charges indicated due on the basis of such returns and
reports, or made adequate provision for the payment thereof, and the assessment of any
material amount of additional taxes in excess of those paid and reported is not reasonably
expected.
(g) Ownership and Liens. Borrower has good and marketable title to the
Collateral free and clear of all liens, security interests, encumbrances or adverse claims,
(other than the Permitted Liens). To Borrower’s knowledge, no dispute, right of setoff,
counterclaim or defense exists with respect to all or any part of the Collateral. Borrower
has not executed any other security agreement currently affecting the Collateral and no
effective financing statement or other instrument similar in effect covering all or any part
of the Collateral is on file in any recording office.
(h) Security Interest. Borrower has, and will have at all times, full right,
power and authority to grant a security interest in the Collateral to Lender in the manner
provided herein, free and clear of any lien, security interest or other charge or encumbrance
other than the Permitted Liens. This Agreement creates a legal, valid and binding security
interest in favor of Lender in the Collateral securing the Indebtedness. Possession by
Lender of certain types of Collateral from time to time or the filing of the financing
statements delivered prior hereto or concurrently herewith by Borrower to
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Lender will perfect and establish the first priority of Lender’s security interest
hereunder in the Collateral.
(i) Location. Borrower’s chief executive office and the office where the
records concerning the Collateral are kept is at its address set forth on the signature page
hereof. All Collateral shall be kept at such address and at such other locations as may be
identified to Lender in writing in advance from time-to-time in accordance with this
Agreement.
(j) Operation of Business. To the best of it’s knowledge, Borrower possesses
all licenses, permits, franchises, patents, copyrights, trademarks, and trade names, or
rights thereto, to conduct business as now conducted and as presently proposed to be
conducted, and Borrower is not in violation of any valid rights or others with respect to
any of the foregoing.
6. Affirmative Covenants. Until all Indebtedness of Borrower under the Loan Documents
is fully paid and satisfied, and Lender has no further commitment to lend hereunder, Borrower
agrees and covenants that it will, unless Lender shall otherwise consent in writing:
(a) Accounts and Records. Maintain its books and records in accordance with
generally accepted accounting principles.
(b) Right of Inspection. Permit Lender to visit its properties and
installations and to examine, audit and make and take away copies or reproductions of
Borrower’s books and records, at all reasonable times and upon prior written notice.
(c) Right to Additional Information. Furnish Lender with such information and
statements, lists of assets and liabilities, tax returns, and other reports with respect to
Borrower’s financial condition and business operations as Lender may reasonably request from
time to time.
(d) Compliance with Laws. Conduct its business in an orderly and efficient
manner consistent with good business practices, and perform and comply with all applicable
statutes, rules, regulations or ordinances imposed by any governmental unit upon Borrower,
its businesses, operations and properties (including without limitation, all applicable
environmental statutes, rules, regulations and ordinances), where the failure to perform or
comply could have a material adverse effect on the assets, liabilities, financial condition,
properties, business or results of operations of Borrower. ViewCast will timely make all
filings required by, and otherwise comply with all applicable obligations of, the federal
securities laws of the United States.
(e) Taxes. Pay and discharge when due all of its indebtedness and obligations,
including without limitation, all assessments, taxes, governmental charges, levies and liens,
of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior
to the date on which penalties would attach, and all lawful claims that, if unpaid, might
become a lien or charge upon any of Borrower’s properties, income, or profits; provided,
however, Borrower will not be required to pay and discharge any such assessment, tax, charge,
xxxx, xxxx or claim so long as (i) the legality of the same shall be
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contested in good faith by appropriate judicial, administrative or other legal
proceedings, and (ii) Borrower shall have established on its books adequate reserves with
respect to such contested assessment, tax, charge, xxxx, xxxx or claim in accordance with
generally accepted accounting principles, consistently applied.
(f) Insurance. Maintain insurance, including but not limited to, fire
insurance, comprehensive property damage, public liability, worker’s compensation, business
interruption and other insurance deemed reasonably necessary. Borrower will, at its own
expense, maintain insurance with respect to all Collateral in such amounts, against such
risks, in such form and with such insurers, as shall be satisfactory to Lender from time to
time. Each policy of insurance maintained by Borrower shall (i) name Borrower and Lender as
insured parties thereunder (without any representation or warranty by or obligation upon
Lender) as their interests may appear, (ii) contain the agreement by the insurer that any
loss thereunder shall be payable to Lender notwithstanding any action, inaction or breach of
representation or warranty by Borrower, (iii) provide that there shall be no recourse against
Lender for payment of premiums or other amounts with respect thereto, and (iv) provide that
at least thirty (30) days prior written notice of cancellation or of lapse shall be given to
Lender by the insurer. Borrower will deliver to Lender original or duplicate policies of
such insurance and, as often as Lender may reasonably request, a report of a reputable
insurance broker with respect to such insurance. Borrower will also, at the request of
Lender, duly execute and deliver instruments of assignment of such insurance policies and
cause the respective insurers to acknowledge notice of such assignment. All insurance
payments in respect of loss of or damage to any Collateral shall be paid to Lender and
applied by Lender in accordance with the Loan Documents.
(g) Notice of Indebtedness. Promptly inform Lender of the creation, incurrence
or assumption by Borrower of any actual or contingent liabilities not permitted under this
Agreement.
(h) Notice of Litigation. Promptly after the commencement thereof, notify
Lender of all actions, suits and proceedings before any court or any governmental department,
commission or board in which Borrower is a plaintiff or defendant or any of the properties or
assets of Borrower are the subject of such actions, suits or proceedings.
(i) Notice of Material Adverse Change. Promptly inform Lender of (i) any and
all material adverse changes in Borrower’s financial condition, and (ii) all claims made
against Borrower that could materially affect the financial condition of Borrower.
(j) Ownership and Liens. Borrower will maintain good and marketable title to
all Collateral free and clear of all liens, security interests, encumbrances or adverse
claims, except for the security interest created by this Agreement or Permitted Liens.
Borrower will cause any financing statement or other security instrument with respect to the
Collateral to be terminated, except for Permitted Liens. Borrower will defend at its expense
Lender’s right, title and security interest in and to the Collateral against the claims of
any third party.
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(k) Further Assurances. Borrower will from time to time at its expense promptly
execute and deliver all further instruments and documents and take all further action
necessary or appropriate or that Lender may reasonably request in order (i) to perfect and
protect the security interest created or purported to be created hereby and the priority of
such security interest, (ii) to enable Lender to exercise and enforce its rights and remedies
hereunder in respect of the Collateral, and (iii) to otherwise effect the purposes of this
Agreement, including without limitation: (1) executing and filing such financing or
continuation statements, or amendments thereto; and (2) furnishing to Lender from time to
time statements and schedules further identifying and describing the Collateral and such
other reports in connection with the Collateral, all in reasonable detail satisfactory to
Lender.
(l) Accounts and General Intangibles. Borrower will, except as otherwise
provided herein, collect, at Borrower’s own expense, all amounts due or to become due under
each of the accounts and general intangibles. In connection with such collections, Borrower
may and, at Lender’s direction, will take such action not otherwise forbidden herein as
Borrower or Lender may deem reasonably necessary or advisable to enforce collection or
performance of each of the accounts and general intangibles. Borrower will also duly perform
and cause to be performed all of its material obligations with respect to the goods or
services, the sale or lease or rendition of which gave rise or will give rise to each account
and all of its obligations to be performed under or with respect to the general intangibles.
Borrower also covenants and agrees to take any action and/or execute any documents that
Lender may request in order to comply with the Federal Assignment of Claims Act, as amended.
(m) Chattel Paper, Documents and Instruments. Borrower will take such action as
may be requested by Lender in order to cause any chattel paper, documents or instruments to
be valid and enforceable and will cause all chattel paper to have only one original
counterpart. Upon request by Lender, Borrower will deliver to Lender all originals of
chattel paper, documents or instruments and will xxxx all chattel paper with a legend
indicating that such chattel paper is subject to the security interest granted hereunder.
(n) Maintenance of Existence. Preserve and maintain its corporate existence and
good standing in the jurisdiction of its organization, and qualify and remain qualified as a
foreign entity in each jurisdiction in which such qualification is required.
(o) Maintenance of Properties. Maintain, keep, and preserve all of its
properties (tangible and intangible) necessary or useful in the conduct of its business.
(p) Conduct of Business. Continue to engage in an efficient and economical
manner in a business of the same general type as now conducted by it on the date of this
Agreement within Borrower’s powers under organizational documents.
7. Negative Covenants. Until all Indebtedness of Borrower under the Loan Documents is
fully paid and satisfied, and the Lender has no further commitment to lend hereunder, Borrower will
not, without the prior written consent of Lender:
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(a) Nature of Business. Make any material change in the nature of its business
as carried on as of the date hereof.
(b) Liquidations, Mergers, Consolidations. Liquidate, merge or consolidate with
or into any other entity.
(c) Liens. Create or incur any lien or encumbrance on any of its assets, other
than (i) liens and security interests securing indebtedness owing to Lender, (ii) liens
existing on the date hereof and, to the extend previously required, previously approved in
writing by Lender, (iii) purchase money security interests incurred in connection with
Borrower’s acquisition of goods; (iv) liens for taxes, assessments, customs, duties or
similar charges either (A) not yet due, or (B) being contested in good faith by appropriate
proceedings and for which Borrower has established adequate reserves, (v) liens imposed by
mandatory provisions of law such as for materialmen’s, mechanic’s, warehousemen’s and other
like liens arising in the ordinary course of Borrower’s or any Affiliate’s respective
business, (vi) pledges or deposits in connection with leases, real estate bids or contracts
(other than contracts involving the borrowing of money), (vii) encumbrances consisting of
zoning restrictions, easements, or other restrictions on the use of real property, provided
that such encumbrances do not impair the use of such property for the uses intended, and none
of which is violated by existing or proposed structures or land use, and (viii) liens
approved in writing by Lender (collectively, the “Permitted Liens”).
(d) Indebtedness. Create, incur or assume any indebtedness for borrowed money
or issue or assume any other note, debenture, bond or other evidences of indebtedness, or
guarantee any such indebtedness or such evidences of indebtedness of others, other than (i)
borrowings from Lender, (ii) borrowings for a permitted purpose not to exceed $250,000.00 per
year, (iii) trade payables in the ordinary course of business, (iv) indebtedness between or
among Borrower and one or more wholly-owned subsidiaries of Borrower so long as evidenced by
a note and the note is pledged to Lender; (v) indebtedness secured by Permitted Liens; or
(vi) as previously consented to in writing by Lender.
(e) Loan. Make loans to, or guarantee any obligation of, any other Person,
without written permission from the Lender; provided that such limitation shall not apply in
respect of any loan by and between Borrower and any wholly-owned subsidiary of Borrower, or
to any guaranty by Borrower of the indebtedness of any wholly-owned subsidiary of Borrower,
or vice versa.
(f) Transactions with Affiliates. Enter into any transaction, including,
without limitation, the purchase, sale or exchange of property or the rendering of any
service, with any Affiliate of Borrower, except in the ordinary course of and pursuant to the
reasonable requirements of Borrower’s business and upon fair and reasonable terms no less
favorable to Borrower than would be obtained in a comparable arm’s-length transaction with a
Person not an Affiliate of Borrower.
(g) Dividends. Declare or pay any dividends on any equity interest of Borrower,
make any other distributions with respect to any payment on account of the
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purchase, redemption, or other acquisition or retirement of any equity interest of
Borrower, or make any other distribution, sale, transfer or lease of any of Borrower’s assets
other than in the ordinary course of business, unless any such amounts are directly utilized
for the payment of (i) principal or interest on indebtedness and obligations owing from time
to time by Borrower to Lender, or (ii) taxes owing by a shareholder of Borrower to the extent
that such taxes are incurred as a result of the business operations of Borrower.
(h) Transfer or Encumbrance. Borrower will not (i) sell, assign (by operation
of law or otherwise), transfer, exchange, lease or otherwise dispose of any of the
Collateral, (ii) xxxxx x xxxx or security interest in or execute, file or record any
financing statement or other security instrument with respect to the Collateral other than
the Permitted Liens, or (iii) deliver actual or constructive possession of any of the
Collateral to any party other than Lender, except for (1) transfers previously disclosed to
Lender, (2) sales of inventory in the ordinary course of business, and (3) the sale or other
disposal of any item of equipment which is worn out or obsolete and which has been replaced
by an item of equal suitability and value, owned by Borrower and made subject to the security
interest under this Agreement, but which is otherwise free and clear of any lien, security
interest, encumbrance or adverse claim other than Permitted Liens; provided, however, the
exceptions permitted in clauses (1) through (3) above shall automatically terminate upon the
occurrence of an Event of Default.
(i) Impairment of Security Interest. Take any action that would in any manner
impair the value or enforceability of Lender’s security interest in any Collateral.
(j) Compromise of Collateral. Adjust, settle, compromise, amend or modify any
Collateral, except an adjustment, settlement, compromise, amendment or modification in good
faith and in the ordinary course of business; provided, however, this exception shall
automatically terminate upon the occurrence of an Event of Default. Borrower shall provide
to Lender such information concerning (i) any adjustment, settlement, compromise, amendment
or modification of any Collateral, and (ii) any claim asserted by any account debtor for
credit, allowance, adjustment, dispute, setoff or counterclaim, as Lender may reasonably
request from time to time.
(k) Financing Statement Filings. Cause or permit any change in the location of
(i) any Collateral, (ii) any records concerning any Collateral, (iii) Borrower’s chief
executive office, or (iv) the state of Borrower’s organization to a jurisdiction other than
as represented herein unless Borrower shall have notified Lender in writing of such change at
least sixty (60) days prior to the effective date of such change, and shall have first taken
all action required by Lender for the purpose of further perfecting or protecting the
security interest in favor of Lender in the Collateral.
(l) Capital Expenditures. Make capital expenditures in any fiscal year in
excess of $100,000.00 in the aggregate.
(m) Leases. Create, incur, assume, or suffer to exist, any obligation as lessee
for the rental or hire of any real or personal property, except leases (i) totaling in the
aggregate an amount equal to or less than $500,000.00 in any fiscal year of Borrower and
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Loan and Security Agreement
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(ii) for a maximum lease period thirty-six (36) months or less without written
permission from Lender, except for real property leases which may have a maximum lease period
of sixty (60) months.
(n) Investments. Purchase any stock or debt obligations for cash (except
obligations of the U.S. government).
(o) Changes in Management or Ownership. Make any changes in management that
might materially change the character or operating philosophy of Borrower.
8. Reporting Requirements. Until the Indebtedness of Borrower under this Agreement
and the other Loan Documents is fully paid and satisfied, and the Lender has no further commitment
to lend hereunder, Borrower will, unless Lender shall otherwise consent in writing, furnish to
Lender:
(a) Interim Financial Statements. As soon as available, and in any event within
forty-five (45) days after the end of each calendar quarter, financial statements of Borrower
as of the end of such calendar quarter all in form and substance and in reasonable detail
satisfactory to Lender and duly certified (subject to year-end review adjustments) by an
appropriate person (i) as being true and correct in all material aspects to the best of his
or her knowledge (subject to year end adjustments), and (ii) as having been prepared in
accordance with generally accepted accounting principles, consistently applied.
(b) Annual Financial Statements and Tax Returns. As soon as available and in
any event within (i) one hundred-twenty (120) days after the end of each fiscal year of
Borrower, a balance sheet, cash flow and income statement of Borrower as of the end of such
fiscal year, in each case compiled by independent public accountants of recognized standing
acceptable to Lender, and (ii) within thirty (30) days of filing, annual income tax returns
for Borrower.
(c) Notice of Litigation. Promptly after the commencement thereof, notice of
all actions, suits, and proceedings before any court or governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign, affecting Borrower which, if
determined adversely to Borrower could have a material adverse effect on the financial
condition, properties, or operations of Borrower.
(d) Notice of Default and Events of Default. As soon as possible and in any
event within thirty (30) days after the concurrence of each default or event of default, a
written notice setting forth the details of such default or event of default and the action
which is proposed to be taken by Borrower with respect thereto.
(e) General Information. Such other information respecting the condition or
operations, financial or otherwise, of Borrower or any subsidiary as the Lenders may from
time to time reasonably request, including copies of all filings with the Securities and
Exchange Commission.
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Loan and Security Agreement
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9. Rights of Lender. Lender shall have the rights contained in this Section at all
times that this Agreement is effective.
(a) Additional Financing Statements Filings. Borrower hereby authorizes Lender
to file, without the signature of Borrower, one or more financing or continuation statements,
and amendments thereto, relating to the Collateral. Borrower hereby irrevocably authorizes
Lender at any time and from time to time to file in any Uniform Commercial Code jurisdiction
any initial financing statements and amendments thereto that (i) indicate the Collateral (A)
as all assets of Borrower or words of similar effect, regardless of whether any particular
asset comprised in the Collateral falls within the scope of Article or Chapter 9 of the Code,
or (B) as being of an equal or lesser scope or with greater detail, and (ii) contain any
other information required by Chapter 9 of the Code for the sufficiency or filing office
acceptance of any financing statement or amendment.
(b) Power of Attorney. Borrower hereby irrevocably appoints Lender as
Borrower’s attorney-in-fact, such power of attorney being coupled with an interest, with full
authority in the place and stead of Borrower and in the name of Borrower or otherwise, from
time to time in Lender’s reasonable discretion, to take any action and to execute any
instrument which Lender may deem necessary or appropriate to accomplish the purposes of this
Agreement, including without limitation: (i) to obtain and adjust insurance required by
Lender hereunder; (ii) to demand, collect, xxx for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of the
Collateral; (iii) to receive, endorse and collect any drafts or other instruments, documents
and chattel paper in connection with clause (i) or (ii) above; and (iv) to file any claims or
take any action or institute any proceedings which Lender may deem necessary or appropriate
for the collection and/or preservation of the Collateral or otherwise to enforce the rights
of Lender with respect to the Collateral.
(c) Performance by Lender. If Borrower fails to perform any agreement or
obligation provided herein, Lender may itself perform, or cause performance of, such
agreement or obligation, and the expenses of Lender incurred in connection therewith shall be
a part of the Indebtedness, secured by the Collateral and payable by Borrower on demand.
(d) Borrower’s Receipt of Proceeds. All amounts and proceeds (including
instruments and writings) received by Borrower in respect of such accounts or general
intangibles shall be received in trust for the benefit of Lender hereunder and, upon request
of Lender, shall be segregated from other property of Borrower and shall be forthwith
delivered to Lender in the same form as so received (with any necessary endorsement) and
applied to the Indebtedness in accordance with the Loan Documents.
(e) Notification of Account Debtors. Lender may at its reasonable discretion
from time to time notify any or all obligors under any accounts or general intangibles (i) of
Lender’s security interest in such accounts or general intangibles and direct such obligors
to make payment of all amounts due or to become due to Borrower thereunder directly to
Lender, and (ii) to verify the accounts or general intangibles with such obligors. Lender
shall have the right, at the expense of Borrower, to enforce
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collection of any such accounts or general intangibles and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same extent as
Borrower.
10. Events of Default. Each of the following shall constitute an “Event of
Default” under this Agreement:
(a) The failure, refusal or neglect of Borrower to pay when due any part of the
principal of, or interest on, the Note, or any other Indebtedness owing to Lender by Borrower
from time to time and such failure, refusal or neglect shall continue unremedied for a period
of five (5) Business Days after written notice from Lender to Borrower.
(b) The failure of Borrower to timely and properly observe, keep or perform any
covenant, agreement, warranty or condition required herein or in any of the other Loan
Documents which is not cured within ten (10) Business Days following written notice from
Lender to Borrower.
(c) The occurrence of an event of default under any of the other Loan Documents or under
any other agreement now existing or hereafter arising between Lender and Borrower which is
not cured within ten (10) Business Days following written notice from Lender to Borrower.
(d) Any representation contained herein or in any of the other Loan Documents made by
Borrower is false or misleading in any material respect.
(e) The occurrence of any event which permits the acceleration of the maturity of any
indebtedness owing by Borrower or any of its subsidiaries to any third party under any
agreement or understanding.
(f) If Borrower: (i) becomes insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits in writing its inability to pay
its debts as they become due; (ii) generally is not paying its debts as such debts become
due; (iii) has a receiver, trustee or custodian appointed for, or take possession of, all or
substantially all of its assets, either in a proceeding brought by it or in a proceeding
brought against it and such appointment is not discharged or such possession is not
terminated within sixty (60) days after the effective date thereof or it consents to or
acquiesces in such appointment or possession; (iv) files a petition for relief under the
United States Bankruptcy Code or any other present or future federal or state insolvency,
Bankruptcy or similar laws (all of the foregoing hereinafter collectively called
“Applicable Bankruptcy Law”) or an involuntary petition for relief is filed against
it under any Applicable Bankruptcy Law and such involuntary petition is not dismissed within
sixty (60) days after the filing thereof, or an order for relief naming it is entered under
any Applicable Bankruptcy Law, or any composition, rearrangement, extension, reorganization
or other relief of Borrowers now or hereafter existing is requested or consented to by it;
(v) fails to have discharged within a period of thirty (30) days any attachment,
sequestration or similar writ levied upon any property of it; or (vi) fails to pay within
thirty (30) days any final money judgment against it.
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(g) Except as otherwise provided in this Agreement, the liquidation, dissolution, merger
or consolidation of any Borrower.
(h) The entry of any judgment against Borrower or the issuance or entry of any
attachments or other liens against any of the property of Borrower for an amount in excess of
$10,000.00 (individually or in the aggregate) if undischarged, unbonded or undismissed on the
date on which such judgment could be executed upon.
(i) The Collateral or any portion thereof is taken on execution or other process of law
in any action against Borrower.
(j) The holder of any lien or security interest on any of the assets of Borrower,
including without limitation, the Collateral (without hereby implying the consent of Lender
to the existence or creation of any such lien or security interest on the Collateral),
declares a default thereunder or institutes foreclosure or other proceedings for the
enforcement of its remedies thereunder.
(k) This Agreement shall at any time after its execution and delivery and for any reason
cease (i) to create a valid and perfected first priority security interest in and to the
property purported to be subject to this Agreement; or (ii) to be in full force and effect or
shall be declared null and void, or the validity of enforceability hereof shall be contested
by Borrower, or Borrower shall deny it has any further liability or obligation under this
Agreement or the other Loan Documents.
Nothing contained in this Agreement shall be construed to limit the events of default enumerated in
any of the other Loan Documents and all such events of default shall be cumulative.
11. Remedies and Related Rights. If an Event of Default shall have occurred, and
without limiting any other rights and remedies provided herein, under any of the Loan Documents or
otherwise available to Lender, Lender may exercise one or more of the rights and remedies provided
in this Section.
(a) Remedies. Upon the occurrence of any one or more of the foregoing Events of
Default, (i) the entire unpaid balance of principal of the Note, together with all accrued
but unpaid interest thereon, and all other indebtedness owing to Lender by Borrower at such
time shall, at the option of Lender, become immediately due and payable without further
notice, demand, presentation, notice of dishonor, notice of intent to accelerate, notice of
acceleration, protest or notice of protest of any kind, all of which are expressly waived by
Borrower, and (ii) Lender may, at its option, cease further advances under the Note and this
Agreement; provided, however, concurrently and automatically with the
occurrence of an Event of Default under Section 13(f): (i) further advances under the
Note and this Agreement, and (ii) the Note and all other Indebtedness owing to Lender by
Borrower at such time shall, without any action by Lender, become due and payable, without
further notice, demand, presentation, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest or notice of protest of any kind, all of which are expressly
waived by Borrower. All rights and remedies of Lender set forth in this Agreement and in any
of the other Loan Documents may also be exercised by Lender, at its option to be exercised in
its sole discretion, upon the occurrence of an Event of Default,
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Loan and Security Agreement
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and not in substitution or diminution of any rights now or hereafter held by Lender
under the terms of any other agreement.
(b) Other Remedies. Lender may from time to time at its discretion, without
limitation and without notice except as expressly provided in any of the Loan Documents:
(i) exercise in respect of the Collateral all the rights and remedies of a Lender under
the Code (whether or not the Code applies to the affected Collateral);
(ii) require Borrower to, and Borrower hereby agrees that it will at its expense and
upon request of Lender, assemble the Collateral as directed by Lender and make it available
to Lender at a place to be designated by Lender which is reasonably convenient to both
parties;
(iii) reduce its claim to judgment or foreclose or otherwise enforce, in whole or in
part, the security interest granted hereunder by any available judicial procedure;
(iv) sell or otherwise dispose of, at its office, on the premises of Borrower or
elsewhere, the Collateral, as a unit or in parcels, by public or private proceedings, and by
way of one or more contracts (it being agreed that the sale or other disposition of any part
of the Collateral shall not exhaust Lender’s power of sale, but sales or other dispositions
may be made from time to time until all of the Collateral has been sold or disposed of or
until the Indebtedness has been paid and performed in full), and at any such sale or other
disposition it shall not be necessary to exhibit any of the Collateral;
(v) buy the Collateral, or any portion thereof, at any public sale;
(vi) buy the Collateral, or any portion thereof, at any private sale if the Collateral
is of a type customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations;
(vii) apply for the appointment of a receiver for the Collateral, and Borrower hereby
consents to any such appointment; and
(viii) at its option, retain the Collateral in satisfaction of the Indebtedness
whenever the circumstances are such that Lender is entitled to do so under the Code or
otherwise.
Borrower agrees that in the event Borrower is entitled to receive any notice under the
Uniform Commercial Code, as it exists in the state governing any such notice, of the sale or
other disposition of any Collateral, reasonable notice shall be deemed given when such
notice is deposited in a depository receptacle under the care and custody of the United
States Postal Service, postage prepaid, at Borrower’s address set forth on the signature
page hereof, five (5) days prior to the date of any public sale, or after which a private
sale, of any of such Collateral is to be held. Lender shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. Lender may adjourn any
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Loan and Security Agreement
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public or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and place to which
it was so adjourned.
(c) Application of Proceeds. If any Event of Default shall have occurred,
Lender may at its discretion apply or use any cash held by Lender as Collateral, and any cash
proceeds received by Lender in respect of any sale or other disposition of, collection from,
or other realization upon, all or any part of the Collateral as follows in such order and
manner as Lender may elect:
(i) to the repayment or reimbursement of the reasonable costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) incurred by Lender in
connection with (1) the administration of the Loan Documents, (2) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization upon, the
Collateral, and (3) the exercise or enforcement of any of the rights and remedies of Lender
hereunder;
(ii) to the payment or other satisfaction of any liens and other encumbrances upon the
Collateral;
(iii) to the satisfaction of the Indebtedness;
(iv) by holding such cash and proceeds as Collateral;
(v) to the payment of any other amounts required by applicable law (including without
limitation, Section 9.504(a)(3) of the Code or any other applicable statutory provision);
and
(vi) by delivery to Borrower or any other party lawfully entitled to receive such cash
or proceeds whether by direction of a court of competent jurisdiction or otherwise.
(d) Deficiency. In the event that the proceeds of any sale of, collection from,
or other realization upon, all or any part of the Collateral by Lender are insufficient to
pay all amounts to which Lender is legally entitled, Borrower and any party who guaranteed or
is otherwise obligated to pay all or any portion of the Indebtedness shall be liable for the
deficiency, together with interest thereon as provided in the Loan Documents.
(e) Non-Judicial Remedies. In granting to Lender the power to enforce its
rights hereunder without prior judicial process or judicial hearing, Borrower expressly
waives, renounces and knowingly relinquishes any legal right which might otherwise require
Lender to enforce its rights by judicial process. Borrower recognizes and concedes that
non-judicial remedies are consistent with the usage of trade, are responsive to commercial
necessity and are the result of a bargain at arm’s length. Nothing herein is intended to
prevent Lender or Borrower from resorting to judicial process at either party’s option.
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(f) Other Recourse. Borrower waives any right to require Lender to proceed
against any third party, exhaust any Collateral or other security for the Indebtedness, or to
have any third party joined with Borrower in any suit arising out of the Indebtedness or any
of the Loan Documents, or pursue any other remedy available to Lender. Borrower further
waives any and all notice of acceptance of this Agreement and of the creation, modification,
rearrangement, renewal or extension of the Indebtedness. Borrower further waives any defense
arising by reason of any disability or other defense of any third party or by reason of the
cessation from any cause whatsoever of the liability of any third party. Until all of the
Indebtedness shall have been paid in full, Borrower shall have no right of subrogation and
Borrower waives the right to enforce any remedy which Lender has or may hereafter have
against any third party, and waives any benefit of and any right to participate in any other
security whatsoever now or hereafter held by Lender. Borrower authorizes Lender, and without
notice or demand and without any reservation of rights against Borrower and without affecting
Borrower’s liability hereunder or on the Indebtedness to (i) take or hold any other property
of any type from any third party as security for the Indebtedness, and exchange, enforce,
waive and release any or all of such other property, (ii) apply such other property and
direct the order or manner of sale thereof as Lender may in its discretion determine, (iii)
renew, extend, accelerate, modify, compromise, settle or release any of the Indebtedness or
other security for the Indebtedness, (iv) waive, enforce or modify any of the provisions of
any of the Loan Documents executed by any third party, and (v) release or substitute any
third party.
12. Indemnity. Borrower hereby indemnifies and agrees to hold harmless and defend
Lender, and its officers, directors, employees, agents and representatives (each an
“Indemnified Person”) from and against any and all liabilities, obligations, claims,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
or nature (collectively, the “Claims”) which may be imposed on, incurred by, or asserted
against, any Indemnified Person arising in connection with the Loan Documents, the Indebtedness or
the Collateral (including without limitation, the enforcement of the Loan Documents and the defense
of any Indemnified Person’s actions and/or inactions in connection with the Loan Documents).
WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT
TO ANY CLAIMS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH
INDEMNIFIED PERSON AND/OR ANY OTHER INDEMNIFIED PERSON, except to the limited extent the Claims
against an Indemnified Person are proximately caused by such Indemnified Person’s gross negligence
or willful misconduct. If Borrower or any third party ever alleges such gross negligence or
willful misconduct by any Indemnified Person, the indemnification provided for in this Section
shall nonetheless be paid upon demand, subject to later adjustment or reimbursement, until such
time as a court of competent jurisdiction enters a final judgment as to the extent and effect of
the alleged gross negligence or willful misconduct. The indemnification provided for in this
Section shall survive the termination of this Agreement and shall extend and continue to benefit
each individual or entity who is or has at any time been an Indemnified Person hereunder.
13. Waiver and Agreement. Neither the failure nor any delay on the part of Lender to
exercise any right, power or privilege herein or under any of the other Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of such right, power or
Second Amended and Restated
Loan and Security Agreement
Loan and Security Agreement
Page 21
privilege preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. No waiver of any provision in this Agreement or in any of the other Loan
Documents and no departure by Borrower therefrom shall be effective unless the same shall be in
writing and signed by Lender, and then shall be effective only in the specific instance and for the
purpose for which given and to the extent specified in such writing. No modification or amendment
to this Agreement or to any of the other Loan Documents shall be valid or effective unless the same
is signed by the party against whom it is sought to be enforced.
14. Benefits. This Agreement shall be binding upon and inure to the benefit of Lender
and Borrower, and their respective successors and assigns, provided, however, that Borrower may
not, without the prior written consent of Lender, assign any rights, powers, duties or obligations
under this Agreement or any of the other Loan Documents.
15. Notices. All notices, requests, demands or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and given by (a) personal
delivery, (b) expedited delivery service with proof of delivery, or (c) United States mail, postage
prepaid, registered or certified mail, return receipt requested, sent to the intended addressee at
the address set forth on the signature page hereof and shall be deemed to have been received
either, in the case of personal delivery, as of the time of personal delivery, in the case of
expedited delivery service, as of the time of the expedited delivery and in the manner provided
herein, or in the case of mail, upon the third day after deposit in a depository receptacle under
the care and custody of the United States Postal Service. Either party shall have the right to
change its address for notice hereunder to any other location within the continental United States
by notice to the other party of such new address at least thirty (30) days prior to the effective
date of such new address.
16. Construction. This Agreement and the other Loan Documents have been executed and
delivered in the State of Texas, shall be governed by and construed in accordance with the laws of
the State of Texas, and shall be performable by the parties hereto in the county in Texas where the
Lender’s address set forth on the signature page hereof is located.
17. Invalid Provisions. If any provision of this Agreement or any of the other Loan
Documents are held to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable and the remaining provisions of this Agreement or any of the
other Loan Documents shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance.
18. Expenses. Borrower shall pay all costs and expenses (including, without
limitation, reasonable attorneys’ fees) in connection with (a) the drafting and execution of the
Loan Documents and the transactions contemplated therein (b) any action required in the course of
administration of the indebtedness and obligations evidenced by the Loan Documents, and (c) any
action in the enforcement of Lender’s rights upon the occurrence of an Event of Default.
19. Participation of the Loan. Borrower agrees that Lender may, at its option, sell
interests in the Loan and its rights under this Agreement to a financial institution or
institutions and, in connection with each such sale, Lender may disclose any financial and other
information available to Lender concerning Borrower to each perspective purchaser subject to
obtaining a
Second Amended and Restated
Loan and Security Agreement
Loan and Security Agreement
Page 22
confidentiality agreement with each prospective purchaser prior to disclosing Borrower’s
confidential information.
20. Conflicts. In the event any term or provision hereof is inconsistent with or
conflicts with any provision of the other Loan Documents, the terms and provisions contained in
this Agreement shall be controlling.
21. Counterparts. This Agreement may be separately executed in any number of
counterparts, each of which shall be an original, but all of which, taken together, shall be deemed
to constitute one and the same instrument.
22. Amendment and Consolidation. This Agreement is an amendment and restatement of
the Original Loan and Security Agreement.
23. Interpretation. Whenever the context requires in this Agreement, the gender of
all words used in Agreement include the masculine, feminine, and neuter and the singular form of
nouns, pronouns, and verbs shall include the plural and vice versa. Use of “herein,” “hereof,”
“hereby,” “hereunder,” or similar terms in this Agreement refer to this Agreement as a whole and
not to any particular provision or part hereof. Unless otherwise specified, all references to a
Section refer to sections of this Agreement. The terms “include,” “includes,” and “including” mean
“include without limitation,” “includes without limitation,” and “including without limitation” and
the term “or” has the inclusive meaning represented by the phrase “and/or.”
24. Time of the Essence. Time is of the essence with respect to all obligations of
Borrower to give notice and otherwise take action hereunder.
NOTICE OF FINAL AGREEMENT
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES,
AND THE SAME MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK;
SIGNATURE PAGES FOLLOW
SIGNATURE PAGES FOLLOW
Second Amended and Restated
Loan and Security Agreement
Loan and Security Agreement
Page 23
AGREED and accepted as of the date first written above.
| LENDER: | ADDRESS: | |||||
| XXXXXXXX FAMILY PARTNERSHIP, LTD. | 0000 Xxxxxxxxxx Xxxxx, | |||||
| Xxxxxxxxxx, XX 00000 | ||||||
By:
|
/s/ X.X. Xxxxxxxx, Xx. | |||||
Name:
|
X.X. Xxxxxxxx, Xx. | |||||
Title:
|
General Partner | |||||
| BORROWER: | ADDRESS: | |||||
| XXXXXXXX.XXX, INC. | ||||||
By:
|
/s/ Xxxxxx X. Xxxxxx | 0000 X. Xxxxx Xxxxxxx | ||||
Name:
|
Xxxxxx X. Xxxxxx | Suite 300 | ||||
Title:
|
Chief Financial Officer | Xxxxx, XX 00000 | ||||
| OSPREY TECHNOLOGIES, INC. | ||||||
By:
|
/s/ Xxxxxx X. Xxxxxx | 0000 X. Xxxxx Xxxxxxx | ||||
Name:
|
Xxxxxx X. Xxxxxx | Suite 300 | ||||
Title:
|
Chief Financial Officer | Xxxxx, XX 00000 | ||||
| VIDEOWARE, INC. | ||||||
By:
|
/s/ Xxxxxx X. Xxxxxx | 0000 X. Xxxxx Xxxxxxx | ||||
Name:
|
Xxxxxx X. Xxxxxx | Suite 300 | ||||
Title:
|
Chief Financial Officer | Xxxxx, XX 00000 | ||||
Signature Page
to Second Amended and Restated Loan and Security Agreement
to Second Amended and Restated Loan and Security Agreement
EXHIBIT A
TRADEMARKS, PATENTS, COPYRIGHTS AND LICENSES
TRADEMARKS, PATENTS, COPYRIGHTS AND LICENSES
Trademarks:
EZStream®
Niagara®
Niagara®
Niagara SCX®
Osprey®
SchedulStream®
SimulStream®
ViewCast®
Viewpoint VBX®
WorkFone®
Your Video On The Web®
EaseStream™
Increase your Revenue Stream with ViewCast™
Personal Viewpoint™
Viewpoint Pro™
Osprey®
SchedulStream®
SimulStream®
ViewCast®
Viewpoint VBX®
WorkFone®
Your Video On The Web®
EaseStream™
Increase your Revenue Stream with ViewCast™
Personal Viewpoint™
Viewpoint Pro™
Patents:
Application Number: 11/220,025
Title: Streaming Media Encoder With Confidence Monitor
Title: Streaming Media Encoder With Confidence Monitor
Application Number: 11/220,181
Title: Streaming Media Encoder With Front Panel Control Interface
Title: Streaming Media Encoder With Front Panel Control Interface
Application Number: 11/399,081
Title: Quick-Change Acesssory Mount for a Portable Meadi Encoder
Title: Quick-Change Acesssory Mount for a Portable Meadi Encoder
Application Number: 11/399,093
Title: Portable Media Encoder With Remote Session Management Interface
Title: Portable Media Encoder With Remote Session Management Interface
Application Number: 11/398,841
Title: Media Encoder with Remote Setup Management Interface
Title: Media Encoder with Remote Setup Management Interface
Application Number: 11/391,014
Title: Portable Media Encoder
Title: Portable Media Encoder
Application Number: 11/353,750
Title: Audio Encoding and Transmission Method
Title: Audio Encoding and Transmission Method
Copyrights and Licenses - Software is copyrighted as internally developed.
