EXHIBIT 10.21
SILICON VALLEY BANK
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This NOTE PURCHASE AGREEMENT (the "Agreement"), dated as of August 28,
1998, is between SILICON VALLEY BANK ("Buyer") and RADIUS INC., a California
Corporation ("Seller"), with its chief executive office at:
Street Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇: ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇: Santa ▇▇▇▇▇
State: California
Zip Code: 94303
Phone: 650/404-6000
1. DEFINITIONS. In this Agreement:
1.1 "Adjustments" is the meaning set forth in Section 7 hereof.
1.2 "Administrative Fee" is the meaning set forth in Section 2.4
hereof.
1.3 "Interest" is the meaning set forth in Section 2.3 hereof.
1.4 "Purchased Note" is that Promissory Note between Radius Inc., a
California Corporation, and Korean Data Services, Inc., a California
Corporation, dated August 7, 1998 in the amount of $5,200,000.00 in United
States Currency. "Purchased Note" also includes books and records about the
Purchased Note and proceeds from voluntary or involuntary dispositions,
including insurance proceeds.
1.5 "Reconciliation Period" is each calendar month of every year.
1.6 "Reserve" is the meaning set forth in Section 2.6 hereof.
1.7 "Related Property" is all returned or rejected goods connected
with the Purchased Note or books and records about the returned or rejected
goods; or proceeds from voluntary or involuntary dispositions of the returned
or rejected goods, including insurance proceeds.
1.8 "Schedule" is the attached schedule showing the: Purchase Date,
Schedule of Due Dates, Face Amount of Note, Total Purchased Note and Advance
Amount.
2. PURCHASE AND SALE OF NOTE.
2.1 Sale and Purchase. On the Purchase Date, Seller sells and Buyer
buys Seller's right, title, and interest (but none of Sellers obligations) to
payment on the Purchased Note, (the "Note Debtor").
2.2 Payment of Advance Amount. Buyer will pay Seller, on the
Purchase Date, $1,100,000 (the "Advance Amount").
2.3 Payment of Interest. On each Reconciliation Date Seller will
pay Buyer interest at the rate of 1.25(%) percent per month of 125% the
average daily outstanding balance of the Advance Amount during the applicable
Reconciliation Period (the "Interest"). Buyer will deduct the accrued
Interest from the Reserve as set forth in Section 2.6 below.
2.4 Payment of Administrative Fee. On the Reconciliation Date
Seller shall pay to Buyer an Administrative Fee equal to .50(%) percent of
125% the original amount of the Advance Amount (the "Administrative Fee").
2.5 In the event that the Advance Amount is less than One Million
Dollars and No/100**** ($1,000,000.00) by September 30, 1998, the interest
rate defined in Section 2.3 above will be 1.75(%) per month.
2.6 Establishment of a Reserve. Upon the purchase by Buyer of the
Purchased Note, Buyer shall establish a reserve. The reserve shall be the
amount by which the face amount of the Purchased Note exceeds the Advance
Amount on that Total Purchased Note (the "Reserve"); provided, the Reserve
with respect to that Total Purchased Note outstanding at any one time shall
be an amount not less than 20(%) percent of the Total Purchased Note at the
time and may be set at a higher percentage at Buyer's discretion. The reserve
shall be the book balance maintained on the records of Buyer and shall not be
a segregated fund.
3. COLLECTION, PAYMENTS AND REMITTANCES.
3.1 Application of Payments. All Payments for the Purchased Note,
not exceeding the Total Purchased Note plus any unpaid fees and interest (if
any), received by Seller or Buyer, are Buyers property.
3.2 No Obligation to Take Action. Buyer has a right, but no
obligation, to perform Seller's obligations.
3.3 Application of Payments. All payments in respect of the
Purchased Note, whether received from the Note Debtor or any other source and
whether received by Seller or Buyer, shall first be applied for the account
of Buyer until Buyer has received full and final payment in an amount equal
to the Advance Amount plus interest, administrative fees, expenses and
indemnity amounts payable to Buyer hereunder, with the remaining balance, if
any, payable to Seller.
4. REPURCHASE OBLIGATIONS.
4.1 Seller's Agreement to Repurchase. Seller will, at Buyer's
option, repurchase from Buyer the Purchased Note for a purchase price equal
to the unpaid principal of the Purchase Note if:
(a) There has been any breach of warranty, representation or
covenant in this Agreement; or
(b) The Note Debtor asserts any discount, allowance, return,
dispute, defense, right of recoupement, right of return, warranty claim, or
short payment; or
(c) The Purchased Note remains unpaid after October 1, 1999.
5. POWER OF ATTORNEY. Seller does hereby irrevocably appoint Buyer and
its successors and assigns as Seller's true and lawful attorney in fact, and
hereby authorizes Buyer, regardless of whether there has been an Event of
Default, (a) to sell, assign, transfer, pledge, compromise, or discharge the
whole or any part of the Purchased Note; (b) to demand, collect, receive,
▇▇▇, and give releases to the Note Debtor for those monies due or which may
become due upon or with respect to the Purchased Note and to compromise,
prosecute, or defend an action, claim, case or proceeding relating to the
Purchased Note, including filing a claim or voting of such claims in any
bankruptcy case, all in Buyer's name or Seller's name, as Buyer may choose;
(c) to prepare, file and sign Seller's name on any notice, claim, assignment,
demand, draft, or notice of or satisfaction of lien or mechanics' lien or
similar document with respect to Purchased Note; (d) to notify the Note
Debtor with respect to the Purchased Note to pay Buyer directly; (e) to
receive, open, and dispose of all mail addressed to Seller for the purpose of
collecting the Purchased Note; (g) to execute on behalf of Seller any and
all instruments, documents, financing statements and the like to perfect
Buyer's interest in the Purchased Note and Collateral; and (h) to do all acts
and things necessary or expedient, in furtherance of any such purposes. If
Buyer receives a check or item which is payment for both the Purchased Note
and another receivable, the funds shall first be applied to the Purchased
Note and, so long as there does not exist an Event of Default or an event
that notice, lapse of time or otherwise would constitute an Event of Default,
the excess shall be remitted to Seller. Upon the occurrence and continuation
of an Event of Default, all of the power of attorney rights granted by Seller
to Buyer hereunder shall be applicable with respect to the Purchased Note and
all Collateral.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS.
6.1 Purchased Note--Warranties, Representations and Covenants.
Seller represents, warrants and covenants for the Purchased Receivable:
(a) It is the owner with legal right to sell, transfer and
assign it;
(b) The correct amount is shown in Section 1.4 and is not
disputed;
(c) Payment is not contingent on any obligations or contact,
and it has fulfilled all its obligations as of the Purchase Date;
(d) There are no defenses, offsets, counterclaims or
agreements in which the Note Debtor may claim any deduction or discount;
(e) It reasonably believes the Note Debtor is not insolvent
as defined in the United States Bankruptcy Code ("US Code") or the California
Uniform Commercial Code ("UCC") and the Note Debtor has not filed or had
filed against it a voluntary or involuntary petition for relief under the US
Code; and
(f) The Note Debtor has not objected to payment for or the
quality or quantity of the subject of the Purchased Note.
6.2 Additional Warranties, Representation and Covenants. Seller
represents, warrants and covenants:
(a) Its name, form of organization, chief executive office
and the place where the records about the Purchased Note are kept is shown at
the beginning of this Agreement and it will give Buyer at least 10 days prior
written notice of changes to its name, organization, chief executive office
or location of records.
(b) It has not filed a voluntary petition or had filed
against it an involuntary petition under the US Code and does not anticipate
any filing.
7. ADJUSTMENTS. If the Note Debtor asserts a discount, allowance,
return, offset, defense, warranty claim, or the like (an "Adjustment"), Seller
will promptly advise Buyer and, with Buyer's approval, resolve the dispute.
8. INDEMNIFICATION.
(a) If the Note Debtor is released from the payment obligation for
the Purchased Note because of: (i) Seller's act or omission; or (ii) any of
the documentation about the Purchased Note which results in termination of
any of the Note Debtor's obligation for the Purchased Note, then Seller will
pay Buyer the lesser of the Purchased Note not payable or the unpaid portion
of the Purchased Note.
(b) Seller indemnifies and holds Buyer harmless from any taxes
from this transaction (except Buyer's income taxes) and costs, expenses and
reasonable attorney fees if Buyer promptly notifies it if any taxes of which
Buyer has notice.
9. REPURCHASE EVENTS. Any of the following is an Event of Repurchase:
(a) Seller fails to pay Buyer any amount when due;
(b) An involuntary lien, garnishment, attachment or the like is
issued against or attaches to the Purchased Note or Related Property; and
(c) Seller breaches a covenant, agreement, warranty, or
representation in this Agreement and the breach is not cured to Buyer's
satisfaction within 10 days after Buyer gives Seller oral or written notice.
A breach that cannot be cured is an immediate default; and
(d) The Note Debtor fails to pay any amount under the Purchased
Note when due.
10. REPURCHASE OPTION. When an Event of Repurchase occurs Buyer shall
have a right to require Seller to repurchase all of the affected Purchased
Note for a purchase price equal to the amount specified in Section 4.1. Buyer
shall also have all rights and remedies under this Agreement and the law,
including those of a secured party under the UCC, and the right to collect,
dispose of, sell, lease or use all Purchased Note and Related Property.
11. FEES, COSTS AND EXPENSES. Immediately on demand Seller will pay
all reasonable fees, costs and expenses (including attorney and professional
fees) that Buyer incurs from (a) preparing, negotiating, administering and
enforcing this Agreement or any other agreement, including amendments, waiver
or consents, (b) litigation or disputes relating to the Purchased Note, the
Related Property, this Agreement or any other agreement, (c) enforcing rights
against Seller, (d) protecting or enforcing its title to the Purchased Note
or its security interest in the Related Property, (e) collecting any amounts
due from Seller or for a Purchased Note under a breach of Seller's
representation, warranty or covenant and (f) any bankruptcy case or
insolvency proceeding involving Seller.
12. CHOICE OF LAW, VENUE AND JURY WAIVER. California law governs this
Agreement.
Seller and Buyer each submit to the exclusive jurisdiction of the State and
Federal courts in Santa ▇▇▇▇▇ County, California.
SELLER AND BUYER EACH WAIVE ITS RIGHT TO A JURY TRIAL FROM ANY CAUSE OF
ACTION RELATED TO AGREEMENT, INCLUDING CONTRACT, TORT, BREACH OF DUTY OR
OTHER CLAIM. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER
THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
13. NOTICES. Notices or demands by either party about this Agreement
must be in writing and personally delivered or sent by an overnight delivery
service, by certified mail postage prepaid return receipt requested, or by
FAX to the address below:
Seller: Radius, Inc.
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Attn: Chief Financial Officer
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Buyer: Silicon Valley Financial Services/Silicon Valley Bank
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Attn: Credit Manager
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
A party may change notice address by written notice to the other party.
14. GENERAL PROVISIONS.
14.1 Successors and Assigns. This Agreement binds and is for
the benefit of successors and permitted assigns of each party. Seller may not
assign this Agreement or any rights under it without Buyer's prior written
consent which may be granted or withheld in Buyers discretion. Buyer may,
without the consent of or notice to Seller, sell, transfer, or grant
participation in any part of Buyer's obligations, rights, or benefits under
this Agreement.
14.2 Indemnification. Seller will indemnify, defend and hold
harmless Buyer and its officers, employees, and agents against: (a)
obligations, demands, claims, and liabilities asserted by any other party in
connection with the transaction contemplated by this Agreement; and (b)
losses or expenses incurred, or paid by Borrower from or consequential to
transactions between Buyer and Seller (including reasonable attorneys fees
and expenses), except for losses caused by Buyer's gross negligence or
willful misconduct.
14.3 Time of Essence. Time is of the essence for performance
of all obligations in this Agreement.
14.4 Severability of Provision. Each provision of this
Agreement is severable from every other provision in determining the
enforceability of any provision.
14.5 Amendments in Writing, Integration. All amendments to
this Agreement must be in writing. This Agreement is the entire agreement
about this subject matter and supersedes prior negotiations or agreements.
14.6 Counter Parts. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts and
when executed and delivered are one Agreement.
14.7 Survival. All covenants, representations and warranties
made in this Agreement continue in full force while any Purchased Note amount
remains outstanding. Seller's indemnification obligations survive until all
statutes of limitations for actions that may be brought against Buyer have run.
14.8 Confidential Information. Buyer will use the same degree
of care in handling
Seller's confidential information that is used for its own proprietary
information, but may disclose information; (i) to its subsidiaries or
affiliates in connection with their business with Seller, (ii) to prospective
transferees or purchasers of any interest in the Agreement, (iii) as required
by law, regulation, subpoena, or other order, (iv) as required in connection
with an examination or audit and (v) as it considers appropriate exercising
the remedies under this Agreement. Confidential information does not include
information that is either: (a) in the public domain or in Buyer's possession
when disclosed, or becomes part of the public domain after disclosure to
Buyer; or (b) disclosed to Buyer by a third party, if Buyer does not know
that the third party, is prohibited from disclosing the information.
SELLER: RADIUS INC.
A CALIFORNIA CORPORATION
By /s/ [illegible]
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Title CFO
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BUYER: SILICON VALLEY BANK
By /s/ [illegible]
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Title VICE PRESIDENT
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SCHEDULE DATED AUGUST 28, 1998
TO
NOTE PURCHASE AGREEMENT
DATED AS OF AUGUST 28, 1998
SELLER: Radius Inc.
BUYER: Silicon Valley Bank
PURCHASE DATE: August 28, 1998
SCHEDULE OF DUE DATES: See attached Schedule of Due Dates
FACE AMOUNT OF NOTE: $5,200,000.00 ***USD
TOTAL PURCHASED NOTE: $5,200,000.00 ***USD
ADVANCE AMOUNT: $1,100,000 ***USD
Seller warrants and represents that (a) its warranties and representation in
the Agreement are true and correct as of the date of this Schedule and (b) no
Event of Default has occurred under the Agreement.
SELLER: RADIUS INC.
A CALIFORNIA CORPORATION
By /s/ [illegible]
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Title CFO
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BUYER: SILICON VALLEY BANK
By /s/ [illegible]
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Title VICE PRESIDENT
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CORPORATE RESOLUTION TO SELL
I, the Secretary or Assistant Secretary of Radius, Inc. (the "Seller"),
certify that:
The Seller is a California corporation, and
Attachments 1 and 2 are copies of Seller's Articles of
Incorporation and Bylaws which are currently effective, and
At a duly held meeting of Seller's directors at which a quorum was
present (or by other authorized corporate action) the following
resolutions were adopted:
"RESOLVED THAT any ( ) of the following officers of Seller,
whose signatures are below:
Name Title Signature
▇▇▇▇ ▇▇▇▇▇▇▇ CEO
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ CFO /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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acting for Seller are authorized to:
EXECUTE PURCHASE AGREEMENT. To enter a Note Purchase Agreement with
Silicon Valley Bank ("Buyer") on terms agreed by them and Buyer
for the sale of certain Seller's notes and to execute renewals,
extensions, modifications, refinancings, consolidations or
substitutions of any notes and to do other acts and things and
execute and deliver other documents that they consider necessary to
carry out the effect of these Resolutions.
FURTHER RESOLVED THAT:
any acts authorized by these Resolutions but performed before their
passage are ratified, and
these Resolutions remain effective and Buyer may rely on them until
it receives written notice of their revocation, but that notice will
not affect any of Seller's agreements or commitments then
effective."
I ALSO CERTIFY that the officers or agents above are duly elected or
appointed by Seller and hold the positions opposite their names and that
their signatures are true and that the Resolutions are effective and have not
been modified or revoked.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ August 28, 1998
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(signature) Assistant Secretary or Secretary Date
SCHEDULE OF DUE DATES
TO
NOTE PURCHASE AGREEMENT
DATED AS OF AUGUST 20, 1998
DUE DATE AMOUNT DUE
August 7, 1998 $350,000.00
September 1, 1998 $350,000.00
October 1, 1999 $350,000.00
November 1, 1999 $350,000.00
December 1, 1999 $350,000.00
January 1, 1999 $350,000.00
February 1, 1999 $350,000.00
March 1, 1999 $350,000.00
April 1, 1999 $350,000.00
May 1, 1999 $350,000.00
June 1, 1999 $350,000.00
July 1, 1999 $350,000.00
August 1, 1999 $350,000.00
September 1, 1999 $350,000.00
October 1, 1999 $300,000.00
TOTAL PURCHASED NOTE $5,200,000.00
NOTE PURCHASE MODIFICATION AGREEMENT
This Note Purchase Modification Agreement is entered into as of
September 23, 1998, by and between Radius, Inc., (the "Seller") whose address
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Silicon Valley
Financial Services, a division of Silicon Valley Bank ("Buyer"), whose
address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
be owing by Seller to Buyer, Seller is indebted to Buyer pursuant to, among
other documents, a Note Purchase Agreement, dated August 28, 1998 by and
between Seller and Buyer (the "Note Purchase Agreement"). Capitalized terms
used without definition herein shall have the meanings assigned to them in
the Note Purchase Agreement.
Hereinafter, all indebtedness owing by Seller to Buyer shall be referred to
as the "indebtedness" and the Note Purchase Agreement and any and all other
documents executed by Seller in favor of Buyer shall be referred to as the
"Existing Documents."
2. DESCRIPTION OF CHANGE IN TERMS.
A. MODIFICATION(S) TO NOTE PURCHASE AGREEMENT, EFFECTIVE AS OF THE
DATE FIRST WRITTEN ABOVE:
Section 2.2 of the Note Purchase Agreement is amended and restated
to read in full as follows:
"2.2 Payment of Advance Amount. Buyer will pay Seller, on the
Purchase Date, the amount of One Million One Hundred Thousand and
No/100*****$1,100,000.00 (the "Initial Advance"). Upon payment by
Buyer to Seller of the Initial Advance, Buyer and Seller shall
execute a Schedule to this Agreement evidencing the receipt by
Seller of the Initial Advance. At one or more times after the
Purchase Date, Buyer shall, upon the request of Seller, advance
additional sums to Seller aggregating not more than Three Million
Sixty Thousand and No/100*****($3,060,000.00), (the "Additional
Advances"; the Additional Advances and the Initial Advance are
collectively called the "Advance Amount"). Upon payment by Buyer to
Seller of each Additional Advance, Buyer and Seller shall execute a
Schedule to this Agreement evidencing the receipt by Seller of such
Additional Advance."
3. CONSISTENT CHANGES. The Existing Documents are each hereby amended
wherever necessary to reflect the changes described above.
4. NO DEFENSES OF SELLER. Seller agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Indebtedness.
5. CONTINUING VALIDITY. Seller understands and agrees that in modifying the
existing Indebtedness, Buyer is relying upon Seller's representations,
warranties, and agreements, as set forth in the Existing Documents. Except as
expressly modified pursuant to this Note Purchase Modification Agreement, the
terms of the Existing Documents remain unchanged and in full force and
effect. Buyer's agreement to modifications to the existing Indebtedness
pursuant to this Note Purchase Modification Agreement in no way shall
obligate Buyer to make any future modifications to the Indebtedness. Nothing
in this Note Purchase Modification Agreement shall constitute a satisfaction
of the Indebtedness. It is the intention of Buyer and Seller to retain as
liable parties all makers and endorsers of Existing Documents, unless the
party is expressly released by Buyer in writing. No maker, endorser, or
guarantor will be released by virtue of this
1
Note Purchase Modification Agreement. The terms of this paragraph apply not
only to this Note Purchase Modification Agreement, but also to any subsequent
Note Purchase modification agreements.
This Note Purchase Modification Agreement is executed as of the date first
written above.
SELLER: BUYER:
Radius, Inc. Silicon Valley Financial Services,
a division of Silicon Valley Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ [illegible]
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: [illegible]
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Title: Secretary Title: Vice President
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