Exhibit 10.1
LOAN AND SECURITY AGREEMENT
THIS AGREEMENT is made as of this 15th day of September, 1995, by and
between WEST SUBURBAN BANK, an Illinois banking corporation ("BANK") and SOFTNET
SYSTEMS, INC., a New York Corporation ("PLEDGOR").
W I T N E S S E T H:
WHEREAS, Borrower (as such term is hereinafter defined) has requested a
revolving line of credit in the amount of SIX MILLION FIVE HUNDRED THOUSAND AND
NO/100 ($6,500,000.00) DOLLARS from Bank; and
WHEREAS, Bank has agreed to extend said revolving line of credit to
Borrower, subject to certain terms and conditions; and
WHEREAS, as one of the conditions of the extension of such credit to
Borrower, Bank requires that Pledgor execute and deliver this Agreement to Bank.
NOW THEREFORE, for and in consideration of any loan or advance (including
any loan or advance by renewal or extension) heretofore and hereafter made to
Borrower by Bank pursuant to this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. DEFINED TERMS
Whenever used herein, the following terms, when capitalized shall have the
following respective meanings unless the context shall clearly indicate
otherwise:
a. "BORROWER" or "BORROWERS" shall mean, collectively or individually,
SOFTNET, CDI, MTC, and KCI.
b. "CDI" shall mean COMMUNICATE DIRECT, INC., an Illinois Corporation.
c. "COLLATERAL" shall mean all of the following, whether now existing or
hereafter acquired, and wherever now or hereafter located:
i. All accounts, contract rights, instruments, documents, chattel paper,
general intangibles (including, but not limited to choses in action,
tax refunds, and insurance proceeds); any other obligations or
indebtedness owed to Pledgor from whatever source arising; all rights
of Pledgor to receive any payments in money or kind; all guaranties of
the foregoing and security therefor; all of the right, title and
interest of Pledgor in and with respect to the goods, services, or
other property that gave rise to or that secure any of the foregoing
and insurance policies and proceeds relating thereto, and all rights
of Pledgor as an unpaid seller of goods and services, including, but
not limited to, the rights of stoppage in transit, replevin,
reclamation, and resale; and all of the foregoing, whether now owned
or existing or hereafter created or acquired (collectively referred to
as "RECEIVABLES");
ii. All goods, merchandise and other personal property now owned or
hereafter acquired by Pledgor that are held for sale or lease, or are
furnished or to be furnished under any contract of service or are raw
materials, work-in-process, supplies, or materials used or consumed in
Pledgor's business, and all products thereof, and all substitutions,
replacements, additions, or accessions therefor and thereto
(collectively referred to as "INVENTORY");
iii. All machinery and equipment and furniture and fixtures, now owned or
hereafter acquired by Pledgor, and used or acquired for use in the
business of Pledgor, together with all accessories, accessions and
attachments thereto and all substitutions and replacements thereof and
parts therefor (collectively referred to as "EQUIPMENT");
iv. All furniture and fixtures now owned or hereafter acquired by Pledgor
and used or acquired for use in the business of Pledgor, and all
substitutions and replacements thereof;
v. All instruments, documents, securities, cash, and other property owned
by Pledgor or in which Pledgor has an interest, which now or hereafter
are at any time in the possession or control of Bank or in transit by
mail or carrier to or in the possession of any third party acting on
behalf of Bank, without regard to whether Bank received the same in
pledge, for safekeeping, as agent for collection or transmission or
otherwise or whether Bank had conditionally released the same; any
deposit accounts of Pledgor with Bank against which Bank may exercise
its right of set-off;
vi. All good will, trademarks, tradenames, licenses, patents, copyrights,
inventions, franchises, things in action, and all other property
interests, rights, privileges and general intangibles in which Pledgor
has an interest (collectively referred to as "GENERAL INTANGIBLES");
vii. All chattel paper and instruments evidencing any obligations to
Pledgor for payment of goods, merchandise or other personal property
sold or services rendered, and all interest of Pledgor in any goods,
merchandise, or other personal property the sale or lease of which
shall have given or shall give rise to any account, chattel paper, or
instrument;
viii. All goods, merchandise, and other personal property returned to
or repossessed by Pledgor, and all interest of Pledgor as an
unpaid vendor or lienor, including stoppage in transit, replevin
and reclamation;
ix. All ledger sheets, files, records, documents, and instruments
(including, but not limited to, computer programs, tapes, and related
electronic data processing software) evidencing an interest in or
relating to the above;
x. All other property interests of whatever nature in which Pledgor has
an interest which would be considered accounts, equipment, inventory,
general intangibles, instruments, or documents, as such terms are
defined in Article 9 of the Illinois Uniform Commercial Code; and
xi. All cash or non-cash products and proceeds of any of the foregoing,
including insurance proceeds.
Notwithstanding the generality of the foregoing, the term "COLLATERAL"
shall not include Pledgor's ownership interest in and to the shares of
common stock of Communicate Direct, Inc., Micrographic Technology
Corporation, and Kansas Communications, Inc.
d. "DEFAULT RATE" shall mean the Prime Rate (hereinbelow defined) plus four
(4.0%) percent per annum and shall be charged on the Indebtedness upon the
occurrence of an Event of Default.
e. "EVENTS OF DEFAULT" shall mean the occurrence of any one or more of the
following events (subject to applicable cure periods, if any):
i. Borrower's failure to make prompt payment when due, of any
payment due on any of the Indebtedness;
ii. Any representation, warranty or other information made or
furnished to Bank by or on behalf of Pledgor or any Borrower
shall prove to have been false or incorrect in any material
respect;
iii. If Pledgor or any Borrower shall make a general assignment for
the benefit of creditors, or shall state in writing or by public
announcements its inability to pay its debts as they become due,
or shall file a petition in bankruptcy, or shall be adjudicated a
bankrupt, or insolvent, or shall file a petition seeking any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation, or shall file an answer
admitting or not contesting the material allegations of a
petition against it in any such proceeding, or shall seek or
consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of Pledgor or any Borrower or any material
portion of its assets;
iv. If, within sixty (60) days after the commencement of any
proceeding against Pledgor or any Borrower seeking any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceeding shall not have
been dismissed, or if, within sixty (60) days after the
appointment, without the consent or acquiescence of Pledgor or
any Borrower, or any trustee, receiver or liquidator of Pledgor
or any Borrower or any material portion of its assets, such
appointment shall not have been vacated;
v. Entry against Pledgor or any Borrower of any judgment which in
the reasonable exercise of Bank's judgment may materially affect
its ability to repay the Indebtedness;
vi. Dissolution, merger or consolidation of Pledgor or any Borrower,
or sale, transfer, lease or other disposition of substantially
all of the assets of Pledgor or any Borrower other than in the
ordinary course of business;
vii. If, in the reasonable exercise of its judgment, Bank deems itself
insecure as insecurity is defined under Section 1-208 of the
Illinois Uniform Commercial Code;
viii. The making of any levy, seizure, or attachment upon any of
the Collateral;
ix. If, due to any act or omission by Pledgor or any Borrower, any
third party claim or action is brought against Bank arising out
of the Loan transaction or by reason of Bank's extension of
credit or security interests identified herein;
x. Failure of Pledgor or any Borrower to fully comply with the
requirements of any governmental agency or authority, if, in the
reasonable exercise of Bank's judgment such failure to comply
will materially affect the ability of Pledgor or any Borrower to
repay the Indebtedness;
xi. Any material adverse change in the financial condition of Pledgor
or any Borrower;
xii. Loss, theft, damage or destruction of any material portion of the
Collateral for which there is either no insurance coverage or for
which, in the reasonable opinion of Bank, there is insufficient
coverage; or
xiii. Failure to promptly perform any other covenant, promise or
agreement contained herein or in the other Loan Documents,
or in any other agreement, document or instrument
hereinafter delivered by Pledgor or any Borrower to Bank.
f. "FINANCIALS" shall mean those financial statements of Borrower heretofore,
concurrently herewith or hereafter delivered by or on behalf of Borrower to
Bank.
g. "INDEBTEDNESS" shall mean all obligations of Pledgor under this Agreement,
all obligations of the Borrowers under the Note and the other Loan
Documents, and all principal, interest, taxes, fees, charges, expenses, and
reasonable attorneys' fees chargeable under the Loan Documents.
h. "KCI" shall mean KANSAS COMMUNICATIONS, INC., a Kansas Corporation.
i. "LOAN" shall mean the obligations of Borrower to Bank as evidenced by the
Loan Documents, as defined herein.
j. "LOAN DOCUMENTS" shall mean all agreements, instruments and documents now
or from time to time executed by and/or on behalf of Borrower and Pledgor
and delivered to Bank, together with any amendments, modifications or
renewals and replacements and specifically including, but not limited to,
the following:
i. the Note;
ii. this Agreement;
iii. the Loan and Security Agreement of even date herewith executed and
delivered by CDI in favor of Bank;
iv. the Loan and Security Agreement of even date herewith executed and
delivered by MTC in favor of Bank;
v. the Loan and Security Agreement of even date herewith executed and
delivered by KCI in favor of Bank;
vi. the Stock Pledge Agreement executed and delivered by SoftNet in favor
of Bank pertaining to 377,770 shares of common stock of IMNET Systems,
Inc.; and
vii. all Uniform Commercial Code Financing Statements heretofore or
hereafter executed by Pledgor and each of the Borrowers pertaining to
the Loan granting a first security interest in the Collateral
described therein.
k. "MATURITY DATE" shall mean the maturity date under the Note or any
extensions, modifications, or replacements thereof, on which date all
principal, interest and other sums or Indebtedness thereunder or under the
other Loan Documents shall be due and payable in full.
l. "MTC" shall mean MICROGRAPHIC TECHNOLOGY CORPORATION, a Delaware
Corporation.
m. "NOTE" shall mean the Revolving Credit Note executed by Borrower in favor
of Bank in the amount of SIX MILLION FIVE HUNDRED THOUSAND AND NO/100
($6,500,000.00) DOLLARS evidencing the Loan, including all extensions,
modifications, and renewals thereof.
n. "PRIME RATE" shall mean at any time the rate of interest announced and
published from time to time by Xxxx Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx, as
its prime rate of interest and in effect daily. The Prime Rate is not
necessarily the lowest rate charged by the Bank to its most creditworthy
customers on commercial loans. In the event West Suburban Bank
discontinues the use of its Prime Rate, then in such event the term "Prime
Rate" shall mean that rate published from time to time in The Wall Street
Journal, Midwest Edition, as the prime rate of interest, and in the event
more than one such rate is so published in The Wall Street Journal, Midwest
Edition on any applicable date, the highest such rate shall be applicable.
o. "SOFTNET" shall mean SOFTNET SYSTEMS, INC., a New York Corporation.
2. BASIC TERMS OF THE LOAN
a. MAXIMUM AMOUNT/AVAILABILITY. The maximum aggregate principal balance of
the Loan shall not at any time exceed SIX MILLION FIVE HUNDRED THOUSAND AND
NO/100 ($6,500,000.00) DOLLARS (the "CREDIT LIMIT"). Principal which is
repaid may, subject to the terms and conditions hereof, be eligible for
disbursement again. Provided that no Event of Default has occurred,
Borrower may make any number of draws ("ADVANCES") per month subject to the
terms and limitations set forth herein and in the other Loan Documents.
Each Advance shall be in xxx amount not less than Fifty Thousand and No/100
($50,000.00) Dollars. If a request for an Advance is received by Bank
after 2:00 p.m., Bank shall not be obligated to fund such Advance until the
following business day. Bank will render to Borrower each month a
statement of Borrower's account which shall constitute an account stated
and shall be deemed to be correct and accepted by and binding upon Borrower
unless Bank receives a written notification of Borrower's exceptions within
thirty (30) days after the date such statement was rendered to Borrower.
b. PURPOSE/USE OF PROCEEDS. Borrower may utilize and draw available funds
under the Loan for any proper business purpose.
c. BORROWING BASE LIMITATION. Notwithstanding the amount of the Credit Limit
set forth above, the amount of principal at any time outstanding under the
Loan shall not exceed the Borrowing Base. The "BORROWING BASE" shall mean
at any time an amount equivalent to Eighty (80%) Percent of Borrowers'
aggregate Eligible Receivables, Fifty (50%) Percent of the net value (after
deduction of reasonable reserves and allowances) of Borrowers' aggregate
Eligible Inventory, and Twenty-Five (25%) Percent of the fair market value
of the shares of stock of IMNET Systems, Inc. owned by SoftNet as
determined from time to time by Bank based upon published price quotations.
"ELIGIBLE RECEIVABLES" shall mean Borrowers' aggregate Receivables which
meet the following criteria:
(a) delivery of the products covered by the Receivable or the rendition of
services covered by the Receivable has been completed;
(b) no return, rejection or repossession has occurred;
(c) such products or services have been accepted by Borrower's customer
and no dispute, offset, defense or counterclaim has been asserted by
such customer;
(d) Borrower reasonably expects to collect the full amount of the
Receivable;
(e) no more than ninety (90) days have elapsed from the invoice date;
(f) the entity from which the Receivable is collectible is domiciled in
and maintains its principal place of business within the United States
of America; and
(g) the entity from which the Receivable is collectible is not one of the
Borrowers.
"ELIGIBLE INVENTORY" shall mean Borrowers' aggregate Inventory which meet
the following criteria:
(a) it is not stored with a bailee, warehouseman, or similar party without
Bank's approval;
(b) Bank has not determined in its sole discretion that it is unacceptable
due to age, type, category, quality, and/or quantity;
(c) it does not in any way fail to meet or it violates any warranty,
representation or covenant contained in this Agreement or any other
agreement to which Borrower is a party; and
(d) is held in the ordinary course of Borrower's business.
Notwithstanding the amount of Eligible Inventory, the amount of principal
advanced with respect to the Eligible Inventory portion of the Borrowing
Base shall not exceed the sum of Two Million and No/100 ($2,000,000.00)
Dollars. Receivables or Inventory which are at any time Eligible
Receivables or Eligible Inventory but which subsequently fail to meet any
of their respective foregoing requirements shall forthwith cease to be
Eligible Receivables or Eligible Inventory. All determinations as to
Eligible Receivables, Eligible Inventory, and valuation of IMNET Systems,
Inc. stock shall be made by Bank in its sole discretion. If at any time
the amount outstanding under the Loan exceeds the Borrowing Base, Borrower
shall promptly reduce the amount outstanding thereunder by the amount of
such excess.
d. BORROWING BASE CERTIFICATES AND RECEIVABLES DOCUMENTATION. On or before
the 20th day of each month, Pledgor shall provide Borrowing Base
certificates in form satisfactory to Bank, which certificates shall include
such information as is necessary in order to enable Bank to determine
whether outstanding Advances are within the Borrowing Base limitation. The
Borrowing Base certificates shall certify that no Events of Default exist
under the Loan Documents, that no events have occurred which with the
passage of time or the giving of notice would or could constitute an Event
of Default, and that the Borrowing Base information set forth therein is
true and correct. In addition, Pledgor shall furnish to the Bank such
detailed information regarding the Receivables and Inventory as may be
reasonably requested from time to time, including but not limited to:(i)
Receivables listings and agings; (ii) copies of sales invoices which
specify the location at which the products or services were furnished or
performed; (iii) evidence of shipment or delivery; (iv) purchaser orders,
vendors' invoices, or other documentary evidence of Pledgor's purchase of
Inventory; and/or (v) such further documents, schedules, or information as
Bank may reasonably request.
e. QUARTERLY FIELD AUDITS. At Pledgor's expense, Bank shall have the right
(but not the obligation) to retain independent certified public accountants
acceptable to Bank for the purpose of conducting physical inventory
inspections and performing audits of Pledgor's books, records, and accounts
on a quarterly basis in order to determine whether outstanding Advances are
within the Borrowing Base limitation and whether an Event of Default has
occurred. Pledgor shall make its books, records, and assets available to
such accountants for such purpose.
f. LOAN TERM. The Loan term shall expire on January 15, 1997, on which date
all amounts outstanding under the Loan shall be immediately due and payable
without notice or demand.
g. INTEREST RATE. The rate of interest charged on the outstanding principal
balance during the entire term of the Loan shall be the Prime Rate (as
defined herein) in effect from time to time plus one (1.0%) percent per
annum. During the term of the Loan, changes in the interest rate will take
effect contemporaneously with changes in the Prime Rate on a daily basis
without notice.
h. REPAYMENT TERMS. Monthly payments of interest only shall be made in
arrears and shall be due and payable on the 1st day of each month during
the term of the Loan. At the end of the term of the Loan, the entire
unpaid principal balance, accrued unpaid interest and other sums due and
owing Lender pertaining to the Loan shall be due and payable in full.
i. PREPAYMENT. All or part of the principal balance of the Loan may be
prepaid in whole or in part at any time without penalty. Partial
prepayments of principal shall be in amounts of not less than Fifty
Thousand ($50,000.00) Dollars.
j. AUTHORIZATION TO REQUEST ADVANCES. Advances may be requested only by any
one or more of the following individuals: XXXX X. XXXXXXXX, XXXXXX X.
XXXXXXX, and XXXXXXX XXXX.
3. LOAN FEES AND EXPENSES
In addition to all other amounts payable to Bank, Pledgor agrees to pay
Bank (i) a loan fee in the amount of Forty Thousand and No/100 ($40,000.00)
Dollars, and (ii) all closing costs, including, but not limited to, attorneys'
fees, appraisal, credit report, recording charges, and any other costs and fees
reasonably expended by Bank and incident to the closing of the Loan to be paid
promptly upon demand. In the event Pledgor fails to so pay Bank within five (5)
days after demand, the amount of such costs shall become additional indebtedness
under the Note and shall bear interest at the rate stated therein.
4. GRANT OF SECURITY INTEREST
To secure the payment of all of the Indebtedness and the performance of all
obligations under the Loan Documents, Pledgor hereby pledges, assigns and grants
to Bank a continuing first, blanket security interest in any and all of the
Collateral.
5. FILING AND RECORDING
Pledgor shall, at its cost and expense, cause all instruments and documents
given as security pursuant to this Agreement to be duly recorded and/or filed or
otherwise perfected in all places necessary, in the opinion of Bank, to perfect
and protect the lien or security interest of Bank in the property covered
thereby. Pledgor hereby authorizes Bank to file any UCC or similar financing
statement in respect of any security interest created pursuant to this Agreement
which may at any time be required or which, in the opinion of Bank, may at any
time be desirable although the same may have been executed only by Bank, or, at
the option of Bank, to sign such financing statement on behalf of Pledgor and
file the same, and Pledgor hereby irrevocably designates Bank, its agents,
representatives and designees as agents and attorneys-in-fact for Pledgor for
this purpose. In the event that any re-recording or refiling thereof (or the
filing of any statements of continuation or assignment of any financing
statement) is required to protect and preserve such lien or security interest,
Pledgor shall, at its cost and expense, cause the same to be recorded and/or
refiled at the time and in the manner requested by Bank.
6. REPRESENTATIONS AND WARRANTIES
Except as disclosed in writing to Bank, Pledgor warrants and represents to
and covenants with Bank that:
a. SoftNet is now and at all times hereafter shall be a corporation duly
organized and existing and in good standing under the laws of the State of
New York and qualified or licensed to do business in Illinois, New York,
and all other states in which the laws thereof require SoftNet to be so
qualified and/or licensed to do business;
b. CDI was formerly known as CDI Acquisition Corp. and is the surviving
corporation of a corporate merger by and between CDI and CDI Acquisition
Corp., which merger has been fully and legally consummated, and CDI is now
and at all times hereafter shall be a corporation duly organized and
existing and in good standing under the laws of the State of Illinois and
qualified or licensed to do business in Illinois, Wisconsin, and all other
states in which the laws thereof require CDI to be so qualified and/or
licensed to do business;
c. MTC was formerly known as MTC Acquisition Corp. and is the surviving
corporation of a corporate merger by and between MTC and Micrographic
Technology Corporation, a California corporation, which merger has been
fully and legally consummated, and MTC is now and at all times hereafter
shall be a corporation duly organized and existing and in good standing
under the laws of the State of Delaware and qualified or licensed to do
business in California, Indiana, and all other states in which the laws
thereof require MTC to be so qualified and/or licensed to do business;
d. KCI is the surviving corporation of a corporate merger by and between KCI
and KCI Acquisition Corp., which merger has been fully and legally
consummated, and KCI is now and at all times hereafter shall be a
corporation duly organized and existing and in good standing under the laws
of the State of Kansas and qualified or licensed to do business in Kansas,
Missouri, and all other
states in which the laws thereof require KCI to be so qualified and/or licensed
to do business;
e. SoftNet is now and at all times hereafter shall be the owner of 100% of the
issued and outstanding shares of stock of CDI, MTC, and KCI;
f. SoftNet's places of business are located at 000 Xxxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxxxxx, 00000, and 00-00 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx, 00000;
g. CDI's places of business are located at 0000 X. Xxxxx Xxxxxxx, Xxxxxxx
Xxxxx, Xxxxxxxx, 00000, and 000 X. Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx,
00000;
h. MTC's places of business are located at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxx, 00000, and 0000 X. Xxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxx, 00000;
i. KCI's places of business are located at 0000 Xxxxxxxx Xxxxx, Xxxxxx,
Xxxxxx, 00000, 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxx, 00000, 0000 Xxxx Xxxxx,
Xxxxx Xx. 0, Xxxxxxx, Xxxxxx, 00000, and 0000 X-00 Xxxxx, X.X., Xxxx Xx. X,
Xxxxxxxx, Xxxxxxxx, 00000.
j. Pledgor has the right, power and capacity and is duly authorized and
empowered to enter into, execute, deliver and perform this Agreement and
the other Loan Documents to which Pledgor is a party;
k. The execution, delivery and/or performance by Pledgor of this Agreement and
the other Loan Documents to which Pledgor is a party shall not, by the
lapse of time, the giving of notice or otherwise, constitute a violation of
any applicable law or a breach of any provision contained in Pledgor's
Articles of Incorporation, By-Laws, or similar document, or contained in
any agreement, instrument or document to which Pledgor is now or hereafter
becomes a party or by which it is or may become bound;
l. Pledgor has and at all times hereafter shall have good, indefeasible and
merchantable title to and ownership of the Collateral, free and clear of
all liens, claims, security interests and encumbrances except those of Bank
and those others, if any, as disclosed in writing to Bank;
m. Pledgor is now and at all times hereafter shall be solvent and generally
paying its debts as they mature and Pledgor now owns and shall at all times
hereafter own property which, at a fair valuation, is greater than the sum
of its debts;
n. Pledgor now has and shall have at all times hereafter capital sufficient to
carry on its business and transactions and all businesses and transactions
in which it is about to engage;
o. There are no actions or proceedings which are pending or threatened against
Pledgor which might result in any material and adverse change in its
financial condition or materially adversely affect its assets or the
Collateral;
p. Except for trade payables arising in the ordinary course of its business
since the dates reflected in the Financials and except as disclosed in the
Financials, Pledgor has no indebtedness;
q. Pledgor is not subject to the renegotiation of any government contracts;
r. Pledgor possesses adequate assets, licenses, patents, copyrights,
trademarks and tradenames to continue to conduct its business as previously
conducted by it;
s. Pledgor has and is in good standing with respect to all governmental
permits, certificates, consents and franchises necessary to continue to
conduct its business as previously conducted by it and to own or lease and
operate its properties as now owned or leased by it;
t. None of said permits, certificates, consents or franchises contain any
term, provision, condition or limitation more burdensome than such as are
generally applicable to persons engaged in the same or similar business as
Pledgor;
u. Pledgor is not a party to any contract or agreement or subject to any
change, restriction, judgment, decree or order materially and adversely
affecting its business, property, assets, operations or condition,
financial or otherwise;
v. Pledgor is not in violation of any applicable statute, regulation or
ordinance of the United States of America, of any state, city, town,
municipality, county or of any other jurisdiction, or of any agency
thereof, in any respect materially and adversely affecting its business,
property, assets, operations or condition, financial or otherwise;
w. None of the Borrowers is in default with respect to any indenture, loan
agreement, mortgage, deed or other similar agreement relating to the
borrowing of monies to which it is a party or by which it is bound;
x. The Financials fairly and accurately present the assets, liabilities and
financial conditions and results of operations of Pledgor and the
respective Borrowers and such other persons described therein as of and for
the periods ending on such dates and have been prepared in accordance with
generally accepted accounting principles and such principles have been
applied on a basis consistently followed in all material respects
throughout the periods involved;
y. There has been no material and adverse change in the assets, liabilities or
financial condition of Pledgor or the respective Borrowers since the date
of the Financials;
z. No financing statement covering the Collateral is on file in any public
office or is presently in the possession of any third party other than any
which have been disclosed to the Bank in writing;
aa. Pledgor is and will be the lawful owner of all Collateral, free of any and
all liens and claims whatsoever, other than the security interest
hereunder, with full power to subject the Collateral to the security
interest hereunder;
bb. All information furnished to Bank concerning the Collateral and financial
affairs of Pledgor, and all other written information heretofore or
hereafter furnished by Pledgor to Bank, is and will be true and correct in
all material respects; and
cc. Pledgor has filed all federal, state and local tax returns and other
reports it is required to file and has paid or made adequate provision for
payment of all such taxes, assessments and other governmental charges.
7. AGREEMENTS OF PLEDGOR
Pledgor hereby covenants, represents and warrants that:
a. Pledgor shall, upon request of Bank, execute such financing statements and
other documents (and pay the cost of filing or recording the same in all
public offices deemed necessary by Bank) and do such other acts and things,
all as Bank may from time to time request to establish and maintain a
perfected security interest in the Collateral (free of all liens, claims
and rights to third parties whatsoever) to secure the payment of the
Indebtedness and to consummate the transactions contemplated in or by this
Agreement or the Loan Documents;
b. Pledgor shall at all times maintain its accounts and depository
relationships at Bank, excepting solely accounts having inconsequential
balances maintained for convenience purposes at remote locations;
c. Pledgor shall keep at its principal place of business, its records
concerning the Collateral, which records will be of such character as will
enable Bank or its agents to determine at any time the status thereof;
d. Pledgor shall use the proceeds of all loans made by Bank to Pledgor
pursuant to this Agreement and the Loan Documents solely for the purposes
provided herein and consistently with all applicable laws and statutes.
Pledgor further warrants and represents to Bank and covenants with Bank
that Pledgor is not in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Loans and/or Advances made by Bank to or for the benefit of
Pledgor hereunder will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any
margin stock;
e. Each Advance made by Bank to Pledgor pursuant to this Agreement or the Loan
Documents shall constitute an automatic warranty and representation by
Pledgor to Bank that there does not then exist an "EVENT OF DEFAULT";
f. Pledgor hereby authorizes and directs Bank to disburse, for and on behalf
of Borrower and for Pledgor's account, the proceeds of loans made by Bank
to Pledgor pursuant to this Agreement to such person or persons as Pledgor
shall direct, whether in writing or orally;
g. Bank, in its sole and absolute discretion, without notice thereof to
Pledgor, may disburse any or all proceeds of loans made to Pledgor pursuant
to this Agreement and/or the Loan Documents to pay any costs, expenses or
other amounts required to be paid by Pledgor hereunder and not so paid,
and/or to pay any person as Bank deems necessary to insure that the
security interest granted to Bank in the Collateral shall at all times have
the priority represented and covenanted by this Agreement and the Loan
Documents. Pledgor agrees to reimburse Bank for such costs, expenses, and
other amounts within thirty (30) days of receipt of Bank's accounting of
and request of payment for same. In the event Pledgor fails to so
reimburse Bank within said thirty (30) days, then the monies so disbursed
by Bank shall become part of the Indebtedness, payable to Bank on demand;
h. Pledgor shall, upon request of Bank, allow the Bank physical access to the
Collateral and Pledgor's places of business for purposes of inspecting and
auditing same and shall deliver to Bank any and all evidence of ownership
of, certificates of title to, or other documents evidencing any interest in
any and all of the Collateral;
i. Pledgor shall furnish Bank such information concerning Pledgor, the
Collateral and the account debtors under the Receivables as Bank may from
time to time request;
j. Pledgor shall furnish to Bank:
i. as soon as practicable and in any event within 10 days after the close
of each month, an aging of Pledgor's accounts receivables and accounts
payables in such form and detail acceptable to Bank, and unaudited
financial statements (including balance sheet, income statement, and
statement of changes in financial position) of Pledgor, all in
reasonable detail, certified by the chief financial or accounting
officer of Pledgor to be true and correct, to the best of his
knowledge and belief, based upon a reasonable review of the affairs of
Pledgor conducted by him, subject to normal recurring year-end audit
adjustments, and to have been prepared in accordance with generally
accepted accounting principles consistently applied by Pledgor;
ii. as soon as practicable and in any event within 120 days after the
close of each fiscal year of Pledgor, financial statements (including
balance sheet, income statement, and statement of changes in financial
position) of Pledgor, as of the end of and for the fiscal year just
closed, setting forth the corresponding figures of the previous fiscal
year in comparative form, all in reasonable detail and certified
(without any qualification or exception deemed material by Bank) by
independent certified public accountants reasonably acceptable to
Bank; and
iii. as soon as practicable and in any event within 30 days after the due
date for filing (including any extensions), copies of federal and
state income tax returns filed annually by Pledgor.
k. Pledgor shall not assign, create, or permit to exist any lien or security
interest in any Collateral to or in favor of anyone other than Bank, and
Pledgor shall not sell, lease, or assign any of the Collateral other than
in the ordinary course of its business.
l. Pledgor shall, at its own cost and expense, maintain the following
insurance coverage with respect to its properties:
i. insurance against loss of or damage to Pledgor's properties by fire
and such other risks, including, but not limited to, risks insured
against under extended coverage policies with all risk, in each case
in amounts at all times sufficient to prevent the Pledgor from
becoming a co-insurer under the terms of applicable policies and, in
any event, in amounts not less than the greater of (a) the principal
balance remaining outstanding from time to time on the Note, and (b)
the full insurable value of Pledgor's properties, as determined from
time to time;
ii. comprehensive general liability insurance against any and all claims
(including all costs and expenses of defending the same) for bodily
injury or death and for property damage occurring upon, in or about
the Pledgor's properties and the adjoining streets or passageways in
amounts not less than ONE MILLION AND NO/100 ($1,000,000.00) DOLLARS,
or such other respective amounts which Bank shall from time to time
reasonably require, having regard to the circumstances and usual
practice at the time of prudent owners of comparable properties in the
area in which the Pledgor's business is located;
iii. explosion insurance in respect of boilers, heating apparatus or other
pressure vessels, if any, located on the Pledgor's properties in such
amounts as shall from time to time be reasonably satisfactory to Bank;
iv. such other insurance as is customarily purchased in the area for
similar types of business and property, in such amounts and against
such insurable risks as from time to time may reasonably be required
by Bank;
Pledgor shall deliver to Bank the originals of all insurance policies or
certificates of coverage under blanket policies, including renewal or
replacement policies, and in the case of insurance about to expire shall
deliver renewal or replacement policies as to the issuance thereof or
certificates in the case of blanket policies not less than thirty (30) days
prior to their respective dates of expiration.
Such policies of insurance shall contain an endorsement, in form and
substance acceptable to Bank, showing loss payable to Bank, and shall
provide that the insurance companies will give Bank at least thirty (30)
days written notice before any such policy or policies of insurance shall
be altered or canceled and that no act or default of any other person or
entity shall affect the right of Bank to recover under such policy or
policies of insurance in case of loss or damage. Pledgor hereby directs
all insurers under such policies of insurance to pay all proceeds payable
thereunder directly to Bank and hereby irrevocably appoints Bank as
Pledgor's agent and attorney-in-fact to make, settle and adjust claims
under such policies of insurance and endorse the name of Pledgor on any
check, draft, instrument or other item of payment for the proceeds of such
policies of insurance.
m. Pledgor shall pay promptly, on or before the due date or within any
applicable grace period, all taxes, levies, assessments, charges, liens,
claims or encumbrances of any federal, state or local agency, body or
department upon the Indebtedness, Pledgor's business, assets, income or
receipts and shall not permit the same to arise, or to remain, and will
promptly discharge the same;
n. Pledgor shall notify Bank in writing prior to any change in location of its
principal place of business or any change in location of the Collateral;
o. Pledgor shall maintain all Equipment in good operating condition and
repair, and make all necessary repairs thereto, and replacements of parts
thereof so that the value and operating efficiency thereof shall at all
times be maintained and preserved. Pledgor further shall keep complete and
accurate books and records with respect to the Equipment;
p. Pledgor shall notify Bank if any Receivables arise out of contracts with
the United States or any department, agency or instrumentality thereof and
take any steps requested by Bank to perfect the assignment of the rights of
Pledgor to Bank as required under the Federal Assignment of Claims Act or
any similar act or regulation;
q. Pledgor shall indemnify and hold Bank harmless from any and all claims,
demands, losses, liabilities, actions, lawsuits and other proceedings,
judgments, awards, decrees, costs and expenses (including reasonable
attorneys' fees), arising directly or indirectly, in whole or in part, out
of the acts and omissions whether negligent, willful or otherwise, of
Pledgor, or any of its officers, directors, agents, subagents, employees,
in connection with the Loan and the Loan Documents or as a result of (a)
ownership or the Collateral or any interest therein or receipt of any sum
therefrom, (b) any accident, injury to or death of persons or loss of or
damage to property occurring in, on or about the Collateral, (c) any use,
non-use or condition of the Collateral or any part thereof, (d) any failure
on the part of the Pledgor to perform or comply with any of the terms, of
the Loan Documents, or (e) the performance of any labor or services or the
furnishing of any materials or other property with respect to the
Collateral or any part thereof;
r. Regardless of the adequacy of any Collateral securing Pledgor's obligations
hereunder, any deposits or sums at any time credited by or payable or due
from Bank to Pledgor, or any monies, cash, cash equivalents, securities,
instruments, documents or other assets of Pledgor in the possession or
control of Bank or its bailee for any purpose may at any time be reduced to
cash and applied by Bank to or setoff by Bank against the Indebtedness
hereunder;
s. All of the representations and warranties contained herein, and all
representations and warranties contained in the other Loan Documents or any
other document or instrument delivered to Bank in connection herewith will
be and remain true and correct during the term of this Agreement;
t. Pledgor shall at all times comply with all laws, statutes, rules, and
regulations applicable to Pledgor, its business, and its assets, including
but not limited to the Occupational Safety and Health Act, the Fair Labor
Standards Act, and the Americans With Disabilities Act, and shall promptly
provide Bank with copies of all notices of violations or purported
violations thereof received by Pledgor; and
u. Pledgor shall promptly given written directions to each of Pledgor's
customers who are or may become indebted to Pledgor with respect to
Receivables to remit payments thereon to such post office address as Bank
may designate from time to time (which post office is initially designated
as Lombard, Illinois) (the "LOCK BOX"). Bank shall have access to such
post office box and shall have the right to take possession of, endorse,
and deposit to Pledgor's account at Bank any and all checks, drafts, and
other instruments for the payment of money relating to the Receivables
whether delivered to the Lock Box or otherwise, and Pledgor hereby waives
notice of presentment, protest, and non-payment of any instrument so
endorsed. Bank's administration, processing, crediting and reporting of
payments and other items received and other services described in the Lock
Box Agreement (referred to herein) shall be subject to reasonable and/or
customary "Lock Box" processing and handling fees. Relative to the
foregoing, Pledgor hereby covenants and agrees to execute and enter into a
Lock Box Agreement, in form and content satisfactory to Bank and to from
time to time perform such other actions and execute such other instruments
as may be requested by Bank which are reasonably necessary (in Bank's
reasonable judgment) to evidence or effectuate such Lock Box arrangements
and requirements.
8. REMEDIES
a. If any Event of Default shall occur, then or at any time thereafter at the
option of Bank, Bank may declare all Indebtedness to be due and payable
without notice, protest, presentment or demand, all of which are expressly
waived by Pledgor. Bank shall have in addition to any other rights and
remedies contained in this Agreement and the other Loan Documents, and any
other agreements, guarantees, notes, instruments, and documents heretofore,
now, or at any time hereafter executed by Pledgor and delivered to Bank,
all of the rights and remedies of a secured party under the Illinois
Commercial Code, all of which rights and remedies shall be cumulative, and
nonexclusive, to the extent permitted by law. Bank shall also have the
following rights and remedies:
i. to declare the Note in default and the Indebtedness shall thereupon
become immediately due and payable in full;
ii. to terminate Bank's obligations under this Agreement to extend credit
of any kind or to make any disbursement, whereupon the commitment and
obligations of Bank to extend credit or to make disbursements
hereunder shall be terminated;
iii. to notify or require Pledgor to notify any and all account debtors or
parties against which Pledgor has a claim that the Receivables have
been assigned to Bank and/or that Bank has a security interest
therein and that all payments should be delivered to a lock box or
post office box designed by Bank and solely within the control of
Bank;
iv. to endorse the name of Pledgor upon any instruments of payments
(including payments made under any policy of insurance) that may come
into the possession of Bank in full or part payment of any amount
owing to Bank;
v. to sell, assign, xxx for, collect, or compromise payment of all or
any part of the Collateral in the name of Pledgor or in its own name,
or make any other disposition of the Collateral, or any part thereof,
which disposition may be cash, credit, or any combination thereof;
vi. to purchase all of any part of the Collateral at public, or private
sale, and in lieu of actual payment of such purchase price, may set
off the amount of such price against the Indebtedness;
vii. to require Pledgor to assemble the Collateral and make it available
to Bank at a place to be designated by Bank;
viii. to set off, without notice to Pledgor, any and all deposits or other
sums at any time credited by or due from Bank to Pledgor, whether in
a special account or other account or represented by a certificate of
deposit (whether or not matured); and
ix. to apply the net proceeds realized by Bank upon a sale or other
disposition of the Collateral, or any part thereof, after deduction
of the expenses of retaking, holding, preparing for sale, selling, or
the like, and reasonable attorneys' fees and other expenses incurred
by Bank, toward satisfaction of the Indebtedness hereunder. Bank
shall account to Pledgor for any surplus realized upon such sale or
other disposition and Pledgor shall remain liable for any deficiency.
The commencement of any action, legal or equitable, shall not affect
the security interest of Bank in the Collateral until the
Indebtedness hereunder or any judgment therefor are fully paid.
b. During the continuance of an Event of Default, Bank may at any time and
from time to time employ and maintain in any of Pledgor's premises a
custodian selected by Bank who shall have full authority to do all acts
necessary to protect Bank's interests and to report to the Bank thereon.
Pledgor hereby agrees to cooperate with any such custodian and to do
whatever Bank may reasonably request to preserve the Collateral. All
reasonable expenses incurred by Bank by reason of the employment of the
custodian shall be charged to Pledgor's account and added to the
Indebtedness to the Bank.
c. Any notice required to be given by Bank of a sale, lease, other disposition
of the Collateral which is given to Pledgor not less than five (5) days
prior to such proposed action shall constitute commercially reasonable and
fair notice to Pledgor thereof.
d. Upon the occurrence of an Event of Default, Pledgor agrees that Bank may,
if Bank deems it reasonable, postpone or adjourn any such sale of the
Collateral from time to time by an announcement at the time and place of
sale or by announcement at the time and place of such postponed or
adjourned sale, without being required to give a new notice of sale.
Pledgor agrees that Bank has no obligation to preserve rights against prior
parties to the Collateral. Further, to the extent permitted by law,
Pledgor waives and releases any cause of action and claim against Bank as a
result of Bank's possession, collection or sale of the Collateral, any
liability or penalty for failure of Bank to comply with any requirement
imposed by law on Bank relating to notice of sale, holding of sale or
reporting of sale of the Collateral, and any right of redemption from such
sale.
e. Upon the occurrence of any event which with the passage of time or the
giving of notice would or could constitute an Event of Default, Bank's
obligations under this Agreement to extend credit or to make disbursements
shall be terminated at Bank's option without advance notice to Pledgor.
9. EXPENSE OF ENFORCEMENT
Pledgor shall pay and reimburse Bank for all costs, expenses and reasonable
attorneys' fees incurred by Bank in seeking to protect or perfect a security
interest in the Collateral, in enforcing the terms of this Agreement or the
other Loan Documents upon Borrower's or Pledgor's failure to perform any
provision thereof (whether or not the effect of such failure is cured or
curable), in defending any action or proceeding relating hereto or to the
Collateral, or in connection with any probate or bankruptcy actions or
proceedings; preparations for the commencement of any action, proceeding or
suit; and preparations for the defense of any threatened action, proceeding or
suit which might affect the Collateral, whether or not actually filed,
including, without limitation, appraiser's fees, attorney's fees, accountant's
fees, storage costs, rental charges, transportation expenses, documentary and
expert evidence fees and costs, stenographers' charges, title and Torrens
charges. All such costs, expenses and fees shall become additional Indebtedness
secured by the Collateral and shall become immediately due and payable at the
Default Rate when paid or incurred by Bank.
If at any time, by assignment or otherwise, Bank transfers any Indebtedness
due hereunder or any Collateral, or other security therefor, such transfer shall
include all of Bank's rights and powers, under this Agreement with respect to
said Indebtedness, Collateral, or other security transferred and the transferee,
shall become vested with all the same rights and powers, whether or not they are
specifically referred to in the instrument of transfer. If and to the extent
that Bank retains any other Indebtedness and to the extent that Bank retains any
other Indebtedness or Collateral or other security, Bank will continue to have
the rights and powers herein set forth with respect thereto.
In the Event of Default, Bank shall have the exclusive right to determine
how, when and what application of payments and credits, if any, whether derived
from the Borrower, the Pledgor, the Collateral, or any other source, shall be
made on the Indebtedness, and such determination shall be conclusive upon the
Borrower and Pledgor.
10. REMEDIES ARE CUMULATIVE
Each right, power and remedy of Bank, now or hereafter existing at law or
in equity, shall be cumulative and concurrent and shall be in addition to every
right, power and remedy provided for in the Loan Documents, and the exercise of
any right, power or remedy shall not preclude the simultaneous or later exercise
of any other right, power or remedy.
11. WAIVER
No delay or failure by Bank to insist upon the strict performance of any
term hereof or of the other Loan Documents or to exercise any rights, power or
remedy provided for herein or therein as a consequence of an Event of Default
hereunder or thereunder, and no acceptance of any payment of the principal,
interest or premium, if any, on the Indebtedness during the continuance of any
such Event of Default, shall constitute a waiver of any such term, such Event of
Default or such right, power or remedy. The exercise by Bank of any right,
power or remedy conferred upon Bank by this or any other Loan Document or by law
or equity shall not preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. No waiver of any Event of Default
hereunder shall affect or alter this Agreement, which shall continue in full
force and effect with respect to any other then existing or subsequent Events of
Default.
12. AMENDMENT
This Agreement shall not be amended, modified or terminated orally but may
only be amended, modified or terminated pursuant to written agreement between
Pledgor and Bank.
13. NOTICES
Any notice or other communications required or permitted hereunder shall be
(a) in writing and shall be deemed to be given when either (i) delivered in
person; (ii) deposited in a regularly maintained receptacle of the United States
mail as registered or certified mail, postage prepaid; or (iii) when dispatched
if sent by private courier service; and (b) addressed as follows or to such
other address as the parties hereto may designate in writing from time to time:
Bank: West Suburban Bank
Attn: Xxxxxxx X. Xxxxxxxxx, Senior Vice President
000 Xxxxx Xxxxxxxx-Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Pledgor: SoftNet Systems, Inc.
Attn: Xxxxxx Xxxxxxx, C.F.O.
000 Xxxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
14. CROSS DEFAULT CLAUSE
The occurrence of any Event of Default hereunder shall be deemed an Event
of Default under each of the Loan Documents, entitling Bank to exercise all or
any remedies available to Bank under the terms of any or all Loan Documents, and
the occurrence of any Event of Default under any other Loan Document shall be
deemed an Event of Default hereunder, entitling Bank to exercise any or all
remedies provided for herein.
15. INCORPORATION BY REFERENCE
The terms of the Loan Documents are incorporated herein and made a part
hereof by reference.
16. COMPLIANCE WITH APPLICABLE LAW
Pledgor agrees that the obligations evidenced by this Agreement constitute
an excepted transaction under the Truth-In-Lending Act, 15 U.S.C., Section 1601
et seq. and said obligations constitute a business loan which comes within the
purview of Section 4(1)(c) of "An Act In Relation To The Rate Of Interest And
Lending Of Money" approved May 24, 1879, as amended, 815 ILCS 205/4(1)(c). The
Loan is further subject to all rules and regulations of the Federal Deposit
Insurance Corporation and the Illinois Commissioner of Banks and Trust
Companies, as well as the laws of the State of Illinois and of the United
States. In no event shall Bank be obligated to advance funds to the extent that
Bank will not result in being adequately secured, as determined by Bank in its
reasonable discretion.
17. HEADINGS
The various headings used in this Agreement as headings for paragraphs or
otherwise are for convenience only and shall not be used in interpreting the
text of the paragraphs in which they appear and shall not limit or otherwise
affect the meanings thereof.
18. SEVERABILITY
If any provision in this Agreement is held by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administration or judicial decision, or public policy, and if such court should
declare such provision of this Agreement to be illegal, invalid, unlawful, void,
voidable, or unenforceable as written, then such provisions shall be given full
force and effect to the fullest possible extent that is legal, valid and
enforceable. The remainder of this Agreement shall be construed as if such
illegal, invalid, unlawful, void, voidable, or unenforceable provision was not
contained therein. The rights, obligations and interest of the Pledgor and the
holder hereof under the remainder of this Agreement shall continue in full force
and effect.
19. COPIES OF LEGAL PROCESS
If any action or proceeding shall be instituted relating to the Collateral
or Loan Documents or to accomplish any purpose which would materially affect
this Agreement, Pledgor shall immediately, upon service of notice thereof,
deliver to Bank a true copy of each petition, summons, complaint, citation,
garnishment, notice of motion, order to show cause, and all other process,
pleadings and papers, however designated, served in any such action or
proceeding.
20. NAMES
Regardless of their form, all words shall be deemed singular or plural and
to have such gender as required by the text.
21. GOVERNING LAW/VENUE
This Agreement and the Loan shall be governed by and construed in
accordance with the law of the State of Illinois. Pledgor irrevocably agrees
that, in Bank's sole and absolute discretion, all actions, suits and proceedings
in any manner or way arising out of or in respect to this Agreement, any
documents heretofore or hereafter executed or executed concurrently herewith, or
the Collateral, shall be litigated in courts within the County of Du Page, State
of Illinois, or having jurisdiction with respect to said county. Pledgor
expressly submits to the jurisdiction of any state or federal court located
within or having jurisdiction over said county. Pledgor waives any right it may
have to change the venue of any litigation brought in accordance herewith.
22. COMPLETION OF DOCUMENTS
If this Agreement contains any blanks when executed by Pledgor, Bank is
hereby authorized, without notice to Pledgor, to complete any such blanks
according to the terms upon which any Loan has been granted.
23. RECIPROCAL WAIVER OF JURY TRIAL
Pledgor and Bank each hereby irrevocably waive their respective right to a
trial by jury in the event that any action or proceeding shall be instituted to
enforce or defend any rights or remedies under this Agreement or any of the
other Loan Documents.
24. ASSIGNABILITY BY BANK
Bank may assign, negotiate, pledge or otherwise hypothecate all or any
portion of the Loan or grant participations therein, or in any of its rights and
security thereunder, and in case of such assignment, Pledgor will accord full
recognition thereto and agree that all rights and remedies of Bank in connection
with the interest so assigned shall be enforceable against Pledgor by such
assignee with the same force and effect and to the same extent as the same would
have been enforceable by Bank but for such assignment.
25. BANK NEITHER A PARTNER NOR A JOINT VENTURER
Bank, by making the Loan, or taking any action hereto will not be deemed to
be a partner or joint venturer with Pledgor, and Pledgor will and does hereby
indemnify, hold harmless and shall forever defend Bank from any and all damages
arising out of any claims that the Loan constitutes a partnership or joint
venture between Bank and Pledgor.
26. ENTIRE AGREEMENT
This Agreement, together with the other Loan Documents, contains the sole
and entire agreement of the parties hereto with respect to the subject matter
hereof. Any and all prior discussions, negotiations, commitments, writings and
understandings relating to the loan transaction are merged into this Agreement.
This Agreement and the other Loan Documents cannot be changed or amended except
in writing signed by the parties hereto.
27. BENEFIT OF AGREEMENT
This Agreement shall be binding upon and inure to the benefit of Pledgor
and Bank and their respective successors and assigns, except that the
obligations of Bank to make Advances hereunder shall not inure to the benefit of
any successors and assigns of Pledgor.
28. COUNTERPARTS
This Agreement may be executed by the parties hereto individually or in any
combination, in one or more counterparts, each of which shall be an original and
all of which shall together constitute one and the same agreement.
29. NO PARTY DEEMED DRAFTER
Each party hereto acknowledges that this Agreement has been negotiated at
arms-length by the parties and their respective counsel and that neither party
shall be deemed the author or drafter of this Agreement or the other Loan
Documents for purposes of construction of the terms thereof or for any other
purpose.30. TIME OF ESSENCE
Time is of the essence of this Agreement.
IN WITNESS WHEREOF, this Agreement is executed and effective as of the date
first set forth above.
PLEDGOR: BANK:
SOFTNET SYSTEMS, INC. WEST SUBURBAN BANK
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
Its:_______________________________ Its: Sr. V.P.
Attest: /s/ Xxxxxxx Xxxx
Its: Asst. Sec.
STATE OF ILLINOIS )
) SS.
COUNTY OF XXXX )
I, the undersigned, a Notary Public in and for the County and State
aforesaid, DO HEREBY CERTIFY that Xxxxxx Xxxxxxx, V.P. of Finance of SOFTNET
SYSTEMS, INC., a New York Corporation, and Xxxxxxx Xxxx, Asst. Sec. of said
Corporation, personally known to me to be the same persons whose names are
subscribed to the foregoing instrument as such V.P. of Finance and Asst. Sec.,
respectively, appeared before me this day in person and acknowledged that they
signed and delivered the said instrument as their own free and voluntary act and
as the free and voluntary act of said Corporation; and the said Asst. Sec. then
and there acknowledged that, as custodian of the Corporate Seal of said
Corporation, did affix the Corporate Seal of said Corporation to said
instrument, for the uses and purposes therein set forth. GIVEN under my hand
and official seal this 15th day of September, 1995.
/s/ Xxxxxxx X. Xxxxxx
Notary Public
