EXHIBIT 10.14
FIRST AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT
This First Amendment to Revolving Credit and Security Agreement (the
"Amendment") is entered into as of the 15th day of December, 1997, by and
between nSTOR CORPORATION, INC., a Delaware corporation (the
"Borrower"), and First Union National Bank, as successor by merger to First
Union National Bank of Florida, a national banking corporation (the "Bank").
W I T N E S E T H:
WHEREAS, Borrower and Bank entered into that certain Revolving Credit and
Security Agreement dated May 29,1997 (the "Agreement"); and
WHEREAS, Borrower and Bank desire to modify certain of the terms and
provisions of the Agreement.
NOW THEREFORE, for good and valuable considerations, the receipt of which
is hereby acknowledged, Borrower and Bank hereby modify the Agreement as
follows:
1. Loan Maturity Date: The term "Loan Maturity Date" as defined in Section
1.1 is hereby modified to read as follows:
"Loan Maturity Date" shall mean February 27, 1998, or such earlier date as
the Bank shall demand payment.
2. Maximum Loan Amount: The term "Maximum Loan Amount" as defined
in Section 1.1 of the Agreement is hereby modified to read as follows:
"Maximum Loan Amount" shall mean Three Million Two Hundred Fifty
Thousand Dollars ($3,250,000.00) or such other amount as the Bank may consent
to in writing from time to time.
3. Financial Covenants. The Bank does hereby waive any non-compliance by
Borrower as of the quarter ending September 30, 1997, and continuing until the
Loan Maturity Date, with the financial covenants set forth in Sections 5.26(c)
and 5.26(e) of Exhibit 5.26.
4. Reaffirmation. Except as hereby modified, the Agreement is reaffirmed
in its entirety.
BORROWER:
nSTOR CORPORATION, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
BY:___________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇
BANK:
FIRST UNION NATIONAL BANK
/s/ ▇▇▇▇ ▇▇▇▇▇▇
BY:___________________________________________
▇▇▇▇ ▇▇▇▇▇▇ - Vice President
New York
STATE OF ______________)
Nassau )
COUNTY OF ______________)
The foregoing instrument was acknowledged before me this 8th day of
December 1997, by_______________________, as ______________________ of
nSTOR CORPORATION, INC., a Delaware corporation, who [ ] is personally
known to me or [x] who has produced New York State Drivers License as
identification.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_________________________________
(Signature of person taking acknowledgment)
____________________________________
(name of officer taking acknowledgment)
Seal:
STATE OF FLORIDA _________)
)
COUNTY OF DADE ___________)
The foregoing instrument was acknowledged before me this ____ day of
December 1997, by ▇▇▇▇ ▇▇▇▇▇▇, as Vice President of First Union National
Bank, a national banking corporation, who [ ] is personally known to me or
[ ] who has produced ______________________________ as identification.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
____________________________________
(Signature of person taking acknowledgment)
____________________________________
(name of officer taking acknowledgment)
Seal:
EXHIBIT 10.15
SECOND AMENDMENT TO REVOLVING CREDIT AND SECURITY
AGREEMENT
This Second Amendment to Revolving Credit and Security Agreement (the
"Amendment") is entered into as of the 27th day of February, 1998, by and
between nSTOR CORPORATION, INC., a Delaware corporation (the
"Borrower"), and First Union National Bank, as successor by merger to First
Union National Bank of Florida, a national banking corporation (the "Bank").
W I T N E S E T H:
WHEREAS, Borrower and Bank entered into that certain Revolving Credit
and Security Agreement dated May 29,1997 as amended on December 15, 1997
(as amended, the "Agreement"); and
WHEREAS, The Loan Maturity Date was February 27, 1998; and
WHEREAS, Borrower has requested Bank to extend the Loan Maturity Date
to June 30, 1998; and
WHEREAS, Bank is willing to extend the Loan Maturity Date to June 30,
1998, subject to and conditioned upon the terms and conditions of this
Amendment.
NOW THEREFORE, for good and valuable considerations, the receipt of
which is hereby acknowledged, Borrower and Bank hereby modify the
Agreement as follows:
1. Loan Maturity Date: The term "Loan Maturity Date" as defined in Section
1.1 of the Agreement is hereby modified to read as follows:
"Loan Maturity Date" shall mean June 30, 1998, or such earlier date as
the Bank shall demand payment.
2. Maximum Loan Amount: The term "Maximum Loan Amount" as defined
in Section 1.1 of the Agreement is hereby modified to read as follows:
(a) "Maximum Loan Amount" shall mean until April 30, 1998, the amount
of Three Million Two Hundred Fifty Thousand Dollars ($3,250,000.00) or such
other amount as the Bank may consent to in writing from time to time.
(b) Commencing on April 30, 1998 and continuing thereafter until the
Loan Maturity Date, the "Maximum Loan Amount" shall be Three Million
Dollars ($3,000,000.00), or such other amount as the Bank may consent to in
writing from time to time, subject to the provisions of subsection 3
hereinbelow.
3. Additional Collateral in Lieu of Decrease in Maximum Loan Amount.
The Borrower shall have the right and option to deliver and pledge to the Bank
a Certificate of Deposit or a Money Market Pledge in the principal amount of
Two Hundred Fifty Thousand Dollars ($250,000.00) on or before April 30, 1998
as additional collateral for the Revolving Loan. The Certificate of Deposit or
Money Market Pledge shall be issued by Bank upon receipt of $250,000.00
from Borrower (and/or from Guarantor, nSTOR TECHNOLOGIES, INC.)
designated for use as a Certificate of Deposit or a Money Market Pledge, and
shall mature not earlier than July 1, 1998, and shall be held by Bank. If
Borrower (and/or Guarantor) does deliver and pledge the Certificate of Deposit
or Money Market Pledge with Bank on or before April 30, 1998, then
notwithstanding the provisions of subsection 2(b) above, the Maximum Loan
Amount between April 30, 1998 and the Loan Maturity Date shall be Three
Million Two Hundred Fifty Thousand Dollars ($3,250,000.00).
4. Subordination. Borrower agrees that all loans to Borrower from any
person or entity other than the Bank (excepting only the Permitted Debit as
defined in the Agreement) shall be fully subordinate to the Revolving Loan
held by Bank. Borrower agrees that except for nSTOR TECHNOLOGIES,
INC., which previously executed a Continuing Subordination Agreement, it
shall obtain the execution by each creditor of Borrower of a Subordination
Agreement in the form attached hereto as Exhibit A and shall deliver it to
Bank prior to accepting any loans from any creditor. Borrower further
acknowledges and agrees that it will not pay any principal to any creditor,
except the Permitted Debt described in the Agreement, until the Revolving
Note is paid in full and the Agreement terminated.
5. Waiver of Claims. As a material inducement for Bank to execute this
Amendment, Borrower does hereby waive and release, acquit, satisfy and
forever discharge Bank and its affiliates and assignees from any and all claims,
counterclaims, defenses, actions, causes of action, suits, controversies,
agreements, promises and demands whatsoever in law or in equity which
Borrower hereafter can, shall or may have against Bank, its affiliates or
assignees, for, upon or by reason of any matter, cause or thing whatsoever
through the date hereof arising out of or in connection with the Revolving
Loan. In addition, and without limiting the generality of the foregoing, and in
consideration of the Bank's execution of this Amendment, Borrower covenants
with and warrants unto Bank, and its affiliates and assignees, that there exist
no claims, counterclaims, defenses, objections, offsets or claims of offsets
against Bank or against the obligation of the Borrower to pay the indebtedness
evidenced by the Revolving Note to Bank when and as the same become due
and payable.
6. Financial Covenants. The Bank does hereby waive any non-compliance by
Borrower as of the quarter ending March 31, 1998, and continuing until the
Loan Maturity Date, with the financial covenants set forth in Sections 5.26(c)
and 5.26(e) of Exhibit 5.26.
7. Reaffirmation. Except as hereby modified, the Agreement is reaffirmed
in its entirety.
BORROWER:
nSTOR CORPORATION, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By:________________________________
BANK:
FIRST UNION NATIONAL BANK
/s/ ▇▇▇▇ ▇▇▇▇▇▇
By:________________________________
Vice President
New York
STATE OF _________________________)
Nassau )
COUNTY OF__________________________)
The foregoing instrument was acknowledged before me this 12th day of March
1998, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, as Vice President of nSTOR CORPORATION,
INC., a Delaware corporation, who [ ] is personally known to me or [x] who has
produced New York State Drivers License as identification.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
____________________________________
(Signature of person taking acknowledgment)
____________________________________
(name of officer taking acknowledgment)
Seal:
STATE OF FLORIDA)
)
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this 9th day of March
1998, by ▇▇▇▇ ▇▇▇▇▇▇, as Vice President of First Union National Bank, a
national banking corporation, who [x] is personally known to me or [ ] who has
produced ______________________________ as identification.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
____________________________________
(Signature of person taking acknowledgment)
____________________________________
(name of officer taking acknowledgment)
Seal:
EXHIBIT A
SUBORDINATION AGREEMENT
_________________, 1998
TO: First Union National Bank
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned, as a creditor of nSTOR CORPORATION, INC., a Delaware
corporation, (hereinafter referred to as Borrower), know that Borrower
desires to obtain credit accommodation from you and that you are willing
to extend credit accommodation to Borrower from time to time, when and in
such amounts as you deem advisable, provided this Subordination Agreement
shall be and remain in full force and effect. To induce you to give such
credit accommodation to Borrower, I agree that:
1.) Any indebtedness now existing or hereafter contracted for and owing
by Borrower to you, notice of the creation, existence, extension and
renewal of which indebtedness being hereby waived by me, shall be paid in
full (including all expenses and costs pertaining thereto), prior to
payment of any part of any principal of all indebtedness now existing or
hereinafter contracted and owing by Borrower to me, and that I shall
receive no additional security from Borrower for such indebtedness to me,
nor assert any right, to which I may have or become entitled against the
Borrower or any of its properties, so long as Borrower shall be indebted
to you, without your prior written consent.
2.) No interest under any such note(s), security instrument(s) or other
instrument evidencing the Borrower's indebtedness to me, has been
previously assigned, pledged or transferred by me, in whole or in part, in
any manner whatsoever.
3.) All such indebtedness of Borrower to me, now existing or hereafter
contracted, is hereby assigned to you as security for the payment of all
such indebtedness of Borrower to you and nothing in this agreement shall
by implication diminish the effect of the assignment contained in this
paragraph.
4.) In any proceeding to wind up the affairs of Borrower, whether in
bankruptcy or otherwise, or for an arrangement with creditors, or for
reorganization of Borrower, you shall have the right to prove and vote my
claim and to receive all distributions thereon.
5.) Any such notes or other evidence of indebtedness which have been or
shall be issued to me by Borrower shall be endorsed with a memo reading:
"Payment of the instrument is subordinated to all debts now or hereafter
owed by maker to First Union National Bank."
6.) Upon any breach of this agreement by me or Borrower, all
indebtedness then owing by Borrower to you shall, at your option, become
due and payable at once. Any funds or property of any kind received by me
in violation of this agreement shall be held by me in trust for you and
shall be immediately forwarded, paid or delivered over to you properly
endorsed or transferred to your order. Your waiver of earlier breaches
hereunder shall not be construed as waiver of any later breach. This
agreement shall remain in full force and effect until released in writing
by you, and any such termination shall in no manner impair or affect my
liability then existing to you hereunder, or the priority of any claim
held by you against the Borrower at the time of such termination.
7.) Notwithstanding anything to the contrary contained herein, this
subordination agreement shall not apply to payments of accrued interest
only to the undersigned creditor provided that Borrower is not in default
under any loan from you.
Borrower joins in the foregoing agreement which shall be binding upon all
parties hereto and their respective heirs, assigns, successors, executors
and administrators.
CREDITOR
nSTOR CORPORATION, INC.
_________________________ By:_____________________________
Address of Creditor:
__________________
__________________
__________________
EXHIBIT 10.16
AMENDED AND RESTATED PROMISSORY NOTE
U.S. $2,000,000.00 March 5, 1998
FOR VALUE RECEIVED, the undersigned nSTOR TECHNOLOGIES, INC., a
Delaware corporation with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; FAX:(▇▇▇)▇▇▇-▇▇▇▇ (hereinafter
called "Maker") hereby promises to pay to the order of H. ▇▇▇▇▇ ▇▇▇▇, an
individual resident of the State of Florida, with a business address at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Fax:(▇▇▇)▇▇▇-▇▇▇▇,
(hereinafter called "Payee") at the address of Payee's principal place of
business stated above, or at such other place as the Payee may designate
in writing, the sum of TWO MILLION and 00/100ths U.S. Dollars (U.S.
$2,000,000.00) (the "Principal Amount"), plus interest on the outstanding
balance of the Principal Amount at the rate of ten percent (10%) per
annum, payable monthly, from the date hereof until the date when said sum
is paid in full in accordance with the terms hereof. The entire Principal
Amount plus all accrued interest thereon shall be due and payable in full
on September 5, 1999.
This note evidences an obligation under, and pursuant to the terms
of, an Amended and Restated Loan Agreement, dated of even date herewith
(the "Loan Agreement"), between Payee and Maker. This note is secured by
that certain Amended and Restated Security Agreement, dated of even date
herewith (the "Security Agreement"), between Maker and Payee and certain
other parties.
Each of the following shall constitute an event of default ("Event of
Default") hereunder: (i) failure by Maker to pay the Principal Amount plus
all accrued interest thereon in full on or before the date when due
hereunder, (ii) occurrence of an "Event of Default" under the Loan
Agreement (an "Event of Default" as defined therein), or (iii) occurrence
of an "Event of Default" under the Security Agreement (an "Event of
Default" as defined therein).
Upon the occurrence of an Event of Default hereunder, the entire
unpaid amount of this note shall thereupon be immediately due and payable,
and the Payee shall have all rights and remedies provided under this note,
the Loan Agreement, the Security Agreement, and applicable law.
Maker shall have the right, in Maker's discretion at any time,
without payment of premium or penalty, or prepay in whole or in part the
unpaid balance of this note.
Payment of this Note is subject to all of the terms and conditions of
the Loan Agreement.
This note shall be governed by and construed under the laws of the
State of Florida. The exclusive venue for any litigation in connection
with or arising out of this note shall be Palm Beach County, Florida, and
the Maker hereby consents and submits to the jurisdiction of the state and
federal courts sitting in Palm Beach County, Florida.
MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.
nSTOR TECHNOLOGIES, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇
By: __________________________________
▇▇▇▇ ▇. ▇▇▇▇
Name: ________________________________
President
Title: _______________________________
EXHIBIT 10.17
AMENDED AND RESTATED LOAN AGREEMENT
This Amended and Restated Loan Agreement (the "Agreement") is made as of
the 5th day of March, 1998 by and between nSTOR TECHNOLOGIES, INC. a
Delaware corporation, with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇ (the
"Borrower") and H. ▇▇▇▇▇ ▇▇▇▇, an individual resident of the State of
Florida, with a business address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇ (the "Lender").
Lender has lent Borrower an aggregate of $2,100,000 since September 16,
1997 (the "Loan"). The Loan is evidenced by a promissory note in the
principal amount of $1,000,000 dated September 16, 1997, a promissory note
in the principal amount of $600,000 dated February 17, 1998 (collectively,
the "Prior Notes") and a convertible subordinated debenture in the
principal amount of $500,000 (the "Debenture"). In connection with the
issuance of the Notes, Borrower and Lender entered into loan agreements
dated September 16, 1997 and February 17, 1997, respectively (the "Loan
Agreements"). In consideration of the cancellation and surrender of the
Notes and the Debenture by Lender, Lender and Borrower desire to amend and
restate the Loan Agreements in accordance with the terms and conditions
set forth herein:
A. Loan and Note.
1. Subject to the terms and conditions of this Agreement, Lender agrees
to lend to Borrower, the principal amount of TWO MILLION and no/100 United
States Dollars ($2,000,000.00), as may be amended, renewed, increased,
restated, replaced, or otherwise modified from time to time (the "Amended
Loan"). The Amended Loan shall be evidenced by an amended and restated
promissory note of Borrower payable to order of Lender of even date
herewith, in the form attached hereto and incorporated herein as Exhibit
"A", as may be amended, renewed, increased, restated, replaced, or
otherwise modified from time to time (the "Note"), and shall bear interest
at the rate and be subject to such repayment and other terms as set forth
therein and herein.
2. The proceeds of the Amended Loan are to be used by the Borrower
solely as working capital in the ordinary course of Borrower's business.
3. Upon execution hereof, Lender shall surrender the Prior Notes and
the Debenture to Borrower for cancellation and Borrower shall pay Lender
$100,000 in cash plus all accrued and unpaid interest as of the date
hereof under the Prior Notes and the Debenture.
B. Collateral Security. The Borrower's obligations under this
Agreement and the Note shall be secured by a security interest (the
"Security Interest") in all assets of the Borrower pursuant to an amended
and restated security agreement of even date herewith, in the form
attached hereto as Exhibit B (the "Security Agreement"). The security
interest granted to Lender pursuant to the Security Agreement shall be (i)
subordinated to (A) the security interest in favor of First Union National
Bank N.A. (the "First Union Security Interest") as evidenced by the loan
or credit agreement in effect between First Union National Bank N.A. and
the nStor Corporation, Inc. ("NCI") as of the date hereof and the UCC-1
Financing Statement relating thereto filed of record with the Secretary of
State of the State of Florida as of the date hereof, (B) a security
interest in all assets of the Borrower and NCI to be given hereafter in
favor of Congress Financial Corporation (Florida), or a similar lender,
bank or financial institution (the "Congress Security Interest"), to
secure a revolving line of credit to NCI, and (C) the security interests
granted under other "Senior Indebtedness" (as hereinafter defined) (the
"Senior Indebtedness Security Interest") (the First Union Security
Interest, the Congress Security Interest and the Senior Indebtedness
Security Interest are collectively referred to hereinafter as the
"Permitted Liens"); and (ii) pari passu with (A) all security interests
granted or granted hereafter to H. ▇▇▇▇▇ ▇▇▇▇, and (B) the security
interests granted to other lenders as of the date hereof (the "Pari Passu
Liens"). The Borrower shall execute and deliver and cause to be executed
and delivered such further instruments and documents, including without
limitation UCC-1 Financing Statements, as shall be reasonably necessary
and proper to effectuate the granting and perfection of the Security
Interest. The Lender shall execute and deliver such further instruments
and documents as shall be reasonably necessary and proper to reflect the
subordination of the Security Interest to the Permitted Liens. For
purposes of this Agreement, Senior Indebtedness shall mean all
indebtedness, obligations and liabilities of Borrower to banks and other
financial institutions now existing or hereafter arising.
C. Loan Documents. This Agreement, the Note, the Security Agreement,
as the same may be amended, renewed, increased, restated, replaced, or
otherwise modified from time to time, together with such financing
statements, subordination agreements, and other instruments and documents
as shall be delivered in connection therewith shall be referred to
collectively herein as the "Loan Documents".
D. Warrants.
1. As additional consideration for the Amended Loan, the Borrower
hereby agrees to issue to Lender warrants to purchase 666,666 shares of
the Borrower's common stock (the "Warrants"), par value $0.05 per share
(the "Common Stock"). The Warrants shall have a term of three (3) years
and the exercise price of the Warrants shall be $1.50 per share of Common
Stock.
2. Upon execution hereof, Lender shall surrender the warrant to
purchase 53,334 shares of Common Stock dated February 17, 1998 (the "Prior
Warrant") to Borrower for cancellation.
E. Covenants of Borrower
Borrower hereby covenants and agrees with Lender as follows:
1. To duly and punctually perform, observe and comply with all of
the terms, provisions, conditions, covenants and agreements on its part to
be performed, observed and complied with hereunder and under the Loan
Documents. Borrower will not suffer or permit any Event of Default (as
hereinafter defined) to exist hereunder or thereunder. Borrower will
promptly give notice in writing to Lender of the occurrence of any event
or circumstance materially affecting in an adverse manner Borrower's
ability to repay the Amended Loan.
2. The Borrower shall not use the proceeds of the Amended Loan for
any purpose other than the permitted purposes set forth in Section A(2) of
this Agreement.
F. Representations and Warranties of Borrower. As a condition to and
as an inducement to the Lender to make the Amended Loan hereunder,
Borrower hereby represents, warrants and certifies to the Lender that as
of the date hereof, for so long as any portion of the Amended Loan, or any
accrued interest thereon, is outstanding and not paid to Lender in full
and for so long as any of Borrower's obligations under any of the Loan
Documents have not been satisfied, each of the following statements is and
will remain true and correct in all respects:
1. The execution and delivery of the Loan Documents, and the
performance by the Borrower of its obligations thereunder, will not be in
conflict with, or constitute (with or without the passage of time or
giving of notice) a breach or default under, or require any consent or
waiver (other than any consents or waivers that have been obtained), or
result in the creation of any mortgage, pledge, lien, encumbrance or
charge upon the assets of the Borrower under (i) any provision of the
articles of incorporation or bylaws of the Borrower as in effect on the
date hereof, (ii) any instrument, mortgage, deed of trust, contract or
agreement to which the Borrower is a party or by which it is bound, or
(iii) any judgment, decree or order of a court, tribunal or governmental
authority by which the Borrower is bound.
2. Each of the Loan Documents to which Borrower is a party has
been duly authorized and validly executed by the Borrower pursuant to all
requisite corporate action of the Borrower, and is and will remain the
duly valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms.
3. Neither the Borrower nor any of its properties or assets are
bound by, subject to or affected by any note, indebtedness, bond,
mortgage, lien, indenture, deed of trust, or other similar instrument or
obligation other than: (i) those established pursuant to the Loan
Documents, (ii) those underlying or those which may hereafter be
established as and underlying the Permitted Liens or the Pari Passu Liens,
and (iii) debt incurred in the ordinary course of business of the
Borrower.
4. Neither the Borrower nor any of its properties or assets are
subject to any order, writ, injunction, directive or decrees or statute,
rule or regulation not applicable to Florida corporations generally.
5. No authorizations, approvals, consents of, and no filings or
registrations with, any governmental or regulatory authority or agency are
necessary for the execution, delivery or performance by the Borrower of
any of the Loan Documents to which it is a party or for the validity or
enforceability thereof, except for the filings and recordings of UCC-1
Financing Statements pursuant to the Loan Documents.
6. Except as set forth on Schedule A attached hereto, there are no
actions, suits, proceedings or investigations pending or threatened,
including without limitation, actions, suits or proceedings relating to
product or service liability claims, against or affecting the Borrower or
any of its properties or business, at law or in equity, or before or by
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
whether as plaintiff or defendant, which individually or in the aggregate
could have a material adverse effect on the properties, operations or
financial condition of the Borrower. There is no state of facts or
contemplated event which may reasonably be expected to give rise to such
claim, action, suit, proceeding or investigation which could have a
material adverse effect on the properties, operations or financial
condition of the Borrower. The Borrower is not operating under, or
subject to, or in default with respect to, any judgment, order, writ,
injunction, rule, regulation or decree of any court or federal, state,
municipal or other governmental agency or body, domestic or foreign.
7. The Borrower is not in violation of, or default under (i) any
instrument, mortgage, deed of trust, contract or agreement to which it is
a party or by which it is bound, or (ii) any provision of the articles of
incorporation or bylaws of the Borrower.
8. There are no liens, mortgages, encumbrances, security interests
or rights of third parties with respect to the Collateral (as defined in
the Security Agreement) other than as permitted under the Loan Documents.
9. As of the date hereof, after taking into account the
transactions contemplated by the Loan Documents, the fair value of the
Borrower or any and all property (tangible and intangible) of the Borrower
is greater than the total amount of liabilities, including any contingent
liabilities, of the Borrower.
10. As of the date hereof, after taking into account the
transactions contemplated by the Loan Documents, the present fair salable
value of the Borrower or of the assets (tangible or intangible) of the
Borrower is not less than the amount that will be required to pay the
probable liabilities of the Borrower on its existing debts as the debts
become absolute and matured.
11. As of the date hereof, after taking into account the
transactions contemplated by the Loan Documents, the Borrower is able to
realize upon its assets (tangible and intangible) and pay its debts and
other liabilities, contingent obligations and other commitments as they
mature in the normal course of business.
12. The Borrower owns, holds or licenses all material patents,
trademarks, franchises, licenses, permits, rights-of-way and consents as
are required or necessary to own its material properties and assets and to
conduct its businesses as presently conducted.
13. As of the date hereof, after taking into account the
transactions contemplated by the Loan Documents, the Borrower does not
have an unreasonably small capital, taking into consideration, among other
things, the following:
(a) The cash and other current assets of the Borrower;
(b) The experience of the management in operating the business and
in acquiring and disposing of assets;
(c) Contingent liabilities of the Borrower;
(d) The amortization requirements of all long-term debt and the
anticipated interest payable on all debt; and
(e) Customary terms of trade payables in the business in which the
Borrower is engaged.
G. Events of Default. The following events shall constitute "Events of
Default" hereunder:
1. Borrower fails to pay any principal, interest, or other amount
due on any indebtedness owed Lender under the Loan Documents within ten
(10) days after any such amount becomes due in accordance with the terms
thereof or hereof;
2. There occurs an "Event of Default" under the Security Agreement
or under the Note (as "Event of Default" is defined in those documents
respectively) or Borrower fails to fully and promptly perform any
agreement, term, covenant, or condition of this Agreement, the Note or the
Security Agreement;
3. There occurs an event of default under any other instrument,
agreement or document evidencing indebtedness from the Borrower to any
other person or entity;
4. Borrower liquidates or dissolves, Borrower commences, or
consents to or acquiesces in, a voluntary proceeding in bankruptcy or
insolvency; Borrower applies for, or consents or acquiesces in, the
appointment of a receiver for all or a substantial part of its property;
Borrower makes an assignment for the benefit of creditors; or Borrower is
unable to pay its debts as they mature or admits in writing its inability
to pay it debts as they mature;
5. An involuntary proceeding in bankruptcy or insolvency is
commenced against Borrower; a receiver is involuntarily appointed for all
or a substantial part of the property of Borrower; or an order is entered
for the issuance of a warrant of attachment, execution, distraint, or
similar process against all or a substantial part of the property of
Borrower; and
6. Any breach of a representation, warranty or covenant made by
Buyer hereunder or if any representation or warranty made by Buyer
hereunder is untrue.
H. Remedies of Lender. Borrower agrees that the occurrence of such
Event of Default shall constitute a default under each of the Loan
Documents, and, other than as provided in Section F.1 hereof, in the event
such Event of Default shall continue unremedied for a period of thirty
(30) days after the earlier to occur of (i) an officer of Borrower becomes
aware of such default or (ii) notice of such default to the Borrower by
the Lender, Lender shall be entitled to: (1) accelerate and declare
immediately due and payable all indebtedness evidenced by this Agreement
and the Note; (2) exercise any and all of the various remedies therein
provided herein, in the Note, in the Security Agreement and in any other
of the Loan Documents; and (3) cumulatively exercise all other rights,
options and privileges, and remedies provided by law or in equity.
I. Notices. All notices, requests and other communications to either
party hereunder shall be in writing and shall be given to such party at
its address or telefax number set forth at the beginning of this Agreement
or such other address or telefax number of which such party may hereafter
give notice to the other. Each such notice, request or other
communication shall be effective (i) if given by telefax, upon
transmission with a machine-generated transmittal confirmation, (ii) if
given by mail, 72 hours after such communication is deposited in the
United States mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered at the
address specified in this Section.
J. Miscellaneous
1. Whenever in this Agreement one of the parties hereto is named or
referred to, the heirs, legal representatives, permitted successors and
permitted assigns of such party shall be included, and all covenants and
agreements contained in this Agreement by or on behalf of Borrower or by
or on behalf of Lender shall bind and inure to the benefit of their
respective heirs, legal representatives, permitted successors and
permitted assigns, whether so expressed or not.
2. The headings of the sections, paragraphs and subdivisions of
this Agreement are for the convenience of reference only, are not to be
considered a part hereof and shall not limit or otherwise affect any of
the terms hereof.
3. Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only by written instrument
signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
4. This Agreement shall be governed in its enforcement,
construction and interpretation by the laws of the State of Florida,
without reference to principles of conflict of laws.
5. In the event any legal proceedings are instituted between the
parties concerning this Agreement or the Note, the prevailing party shall
be entitled to recover its costs of suit, including reasonable attorneys'
fees, at both trial and appellate levels from the losing party.
6. BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTE, OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
LENDER TO ENTER INTO THE LOAN.
7. This Agreement may not be amended or modified except by a
writing signed by both parties hereto.
8. The exclusive venue for any litigation in connection with or
arising out of this Agreement or the Note shall be Palm Beach County,
Florida.
9. This Agreement, the Note, the Security Agreement and the other
Loan Documents shall constitute the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof, and there
are no other agreements or understandings, oral or written, that are not
merged herein or superseded hereby.
10. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of
the date first set forth above.
BORROWER
nSTOR TECHNOLOGIES, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇
By:_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President
LENDER
/s/ H. ▇▇▇▇▇ ▇▇▇▇
_______________________________
H. ▇▇▇▇▇ ▇▇▇▇
EXHIBIT 10.18
PROMISSORY NOTE
U.S. $1,000,000.00 March 5, 1998
FOR VALUE RECEIVED, the undersigned nSTOR TECHNOLOGIES, INC., a Delaware
corporation with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇ (hereinafter called
"Maker") hereby promises to pay to the order of Fairway Partnership, a
Minnesota general partnership ("Fairway"), with a business address at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Phone: (612)
▇▇▇-▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇ (hereinafter called "Payee") at the address
of Payee's principal place of business stated above, or at such other
place as the Payee may designate in writing, the sum of ONE MILLION and
00/100ths U.S. Dollars (U.S. $1,000,000.00) (the "Principal Amount"), plus
interest on the outstanding balance of the Principal Amount at the rate of
ten percent (10%) per annum, payable monthly, from the date hereof until
the date when said sum is paid in full in accordance with the terms
hereof. The entire Principal Amount plus all accrued interest thereon
shall be due and payable in full on September 5, 1999.
This note evidences an obligation under, and pursuant to the terms of, a
Loan Agreement, dated of even date herewith (the "Loan Agreement"),
between Payee and Maker. This note is secured by that certain Amended and
Restated Security Agreement, dated of even date herewith (the "Security
Agreement") between Maker, Payee and certain other parties.
Each of the following shall constitute an event of default ("Event of
Default") hereunder: (i) failure by Maker to pay the Principal Amount plus
all accrued interest thereon in full on or before the date when due
hereunder, (ii) occurrence of an "Event of Default" under the Loan
Agreement (an "Event of Default" as defined therein), or (iii) occurrence
of an "Event of Default" under the Security Agreement (an "Event of
Default" as defined therein).
Upon the occurrence of an Event of Default hereunder, the entire unpaid
amount of this note shall thereupon be immediately due and payable, and
the Payee shall have all rights and remedies provided under this note, the
Loan Agreement, the Security Agreement, and applicable law.
Maker shall have the right, in Maker's discretion at any time, without
payment of premium or penalty, to prepay in whole or in part the unpaid
balance of this note.
Payment of this Note is subject to all of the terms and conditions of the
Loan Agreement.
This note shall be governed by and construed under the laws of the State
of Florida. The exclusive venue for any litigation in connection with or
arising out of this note shall be Palm Beach County, Florida, and the
Maker hereby consents and submits to the jurisdiction of the state and
federal courts sitting in Palm Beach County, Florida.
MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE.
nSTOR TECHNOLOGIES, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇
By:____________________________
▇▇▇▇ ▇. ▇▇▇▇, President
EXHIBIT 10.19
AMENDED AND RESTATED SECURITY AGREEMENT
This AMENDED AND RESTATED SECURITY AGREEMENT ("Agreement") made and
entered into this 5th day of March, 1998, by nSTOR TECHNOLOGIES, INC., a
Delaware corporation, with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ("Debtor")
in favor of H. ▇▇▇▇▇ ▇▇▇▇, an individual resident of the State of Florida
("Levy"), with a business address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇, Fairway Partnership, a
Minnesota general partnership ("Fairway"), with a business address at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Phone: (612)
▇▇▇-▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇ Gimmelstob, an individual resident
of the State of Florida ("Gimmelstob"), with a business address at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Phone: (▇▇▇) ▇▇▇-▇▇▇▇, and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, an individual resident of the State of Florida ("▇▇▇▇▇▇"), with
a business address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇; Phone: (▇▇▇) ▇▇▇-▇▇▇▇ ("▇▇▇▇▇▇") (Levy, Fairway, Gimmelstob and
▇▇▇▇▇▇ are collectively referred to as the "Secured Parties");
WITNESSETH:
WHEREAS, each of Fairway, Gimmelstob and ▇▇▇▇▇▇ have entered into Loan
Agreements of even date herewith with Debtor (collectively, the "New Loan
Agreements");
WHEREAS, Levy and Debtor have entered into an Amended and Loan Agreement
of even date herewith (the "Amended and Restated Loan Agreement", together
with the New Loan Agreements, the "Loan Agreements");
and
WHEREAS, pursuant to the Loan Agreements, as security for payment of the
indebtedness due thereunder and under the Promissory Notes of even date
therewith delivered pursuant to the Loan Agreement (the "Notes"), and in
consideration of the financial accommodations and agreements therein
contained, Debtor agreed to grant to Secured Parties a lien and security
interest in all assets now owned or hereafter acquired by Debtor;
WHEREAS, Debtor and Levy desire to amend and restate their Security
Agreements dated September 16, 1997, February 11, 1998 and February 17,
1998 (the "Prior Security Agreements") to include Fairway, Gimmelstob and
▇▇▇▇▇▇ as secured parties;
NOW, THEREFORE, in consideration of the foregoing, Debtor and Secured
Parties hereby agree to amend and restate the Prior Security Agreements as
follows:
1. Definitions. When used herein, the following capitalized defined
terms shall have the following respective meanings:
"Account Debtor" shall mean the party obligated on or under any Account
Receivable.
"Account Receivable" shall mean (a) any present or future right of the
Debtor to receive and collect payment for goods or services now or
hereafter rendered, to an Account Debtor, (b) all present and future
chattel paper and instruments acquired by the Debtor drawn, made, issued
or otherwise created in connection with any transaction giving rise to an
Account Receivable and any proceeds thereof, (c) all present and future
rights of the Debtor to proceeds of any insurance, indemnity, warranty or
guaranty with respect to any goods sold or leased or services rendered in
a transaction giving rise to an Account Receivable, (d) all present and
future rights of the Debtor to claim for damages arising out of a breach
of or default under any contract, to terminate any contract giving rise to
any Account Receivable, to perform thereunder and to compel performance
and otherwise exercise all remedies thereunder, (e) all goods in the
Debtor's possession or held for the Debtor's account the sale or lease of
which shall have given rise to an Account Receivable and the proceeds of
any resale or subsequent lease thereof, and (f) all present and future
rights of Debtor to receive cash, property or other distributions from any
partnership arising out of or in connection with Debtor's interest as a
limited or general partner in such partnership.
"Chattel Paper" shall mean all of Debtor's now owned or hereafter acquired
chattel paper, such term having the broadest meaning attributable to it
under the Uniform Commercial Code in force in the state of Florida
(hereinafter the "Uniform Commercial Code").
"Collateral" shall mean all right, title and interest of the Debtor in and
to (i) any Account Receivable, (ii) all Inventory, (iii) all Equipment,
(iv) all Fixtures, (v) all Personal Property, (vi) all Chattel Paper,
(vii) all General Intangibles, (viii) all Documents, (ix) all Instruments,
(x) all bank accounts, cash, stock and all other assets of any nature or
kind now owned or hereafter acquired by Debtor, and all interest of Debtor
in any of the foregoing, together with (xi) all additions to,
substitutions for and all proceeds, products and accessions of any and all
property described and designated as (i) through (x) above and all
proceeds, monies, income, products and benefits attributable or accruing
to any of the foregoing property and which Debtor is or may hereafter
become entitled to receive on account of said property.
"Default" shall mean the occurrence of any one or more of the following
events: (a) the Debtor's failure to pay, when due, any amount payable in
respect of all or any portion of the Indebtedness; (b) the loss, theft,
destruction or encumbrance of, or substantial damage to, the Collateral or
any portion thereof or the making of any levy, seizure or attachment
thereof or therein; (c) the Debtor's failure to refusal to perform, or
breach or violation of any of the terms, covenants, representations or
warranties of, or occurrence of any event of default under this Agreement,
the Loan Agreements, the Notes or any other instrument, document or
agreement evidencing, securing or relating to any portion of the
Indebtedness; (d) the Debtor's failure to pay debts as and when due and
payable, or the making of any assignment by Debtor for the benefit of
creditors; (e) the commencement of any proceedings by or against Debtor
under any insolvency, bankruptcy or other debtor relief laws in any
jurisdiction, including without limitation any such proceedings seeking
the liquidation, arrangement, or reorganization of the Debtor under any
bankruptcy or insolvency procedure, or any formal or informal proceeding
for the liquidation, dissolution or settlement of claims by or against the
Debtor; (f) any application for the appointment of a receiver for the
assets of Debtor, (g) the entry of a judgment against the Debtor or (h)
the occurrence of an Event of Default under the Loan Agreements or the
Notes (as Event of Default is defined therein).
"Documents" shall mean all documents now owned or hereafter acquired by
Debtor, such term having the broadest meaning attributable to it under the
Uniform Commercial Code or other applicable law.
"Fixtures" shall mean all goods, chattels, fixtures, equipment and all
personal property affixed or in any manner attached to any land and/or
building(s) or structure(s) thereon, now owned or hereafter acquired by
Debtor or in which Debtor now owns or hereafter acquired any interest,
including all additions, accessions and appurtenances thereto, all
replacements and substitutions therefor, and all proceeds, products and
accessions, thereof, however attached or affixed and wherever located. As
used herein the term "Fixtures" shall have the broadest meaning
attributable to it under the Uniform Commercial Code or other applicable
law.
"General Intangibles" shall mean all personal property other than goods,
accounts, chattel paper, documents and instruments, now owned or hereafter
acquired by Debtor, such term having the broadest meaning attributable to
it under the Uniform Commercial Code or other applicable law, and
including without limitation all things in action, all contract rights,
subscription rights and all rights and interests of any nature or kind now
owned or hereafter acquired by Debtor in any partnership, venture or other
business association or entity.
"Indebtedness" shall mean (a) all liabilities and obligations of Debtor to
Secured Parties arising under or pursuant to any or all of the Loan
Agreements, the Notes or this Agreement, (b) all renewals, extensions,
increases, modifications and/or rearrangements or reschedulings of any or
all of the foregoing referenced liabilities and obligations and of any
part thereof, and any substitutions of the same, to which the Secured
Parties may hereafter agree in writing, and (c) all costs, expenses and
attorneys' fees and legal expenses which may be paid or incurred by the
Secured Parties in connection with (x) enforcing payment by Debtor of the
Indebtedness, (y) enforcing its security interest hereunder, or (z)
protecting, preserving, handling, dealing with, selling or otherwise
disposing of or realizing upon the Collateral or its security interest
therein.
"Instruments" shall mean all instruments now owned or hereafter acquired
by Debtor, such term having the broadest meaning attributable to it under
the Uniform Commercial Code or other applicable law.
"Inventory" shall mean all goods now or hereafter (a) held by Debtor for
sale or lease, (b) furnished or to be furnished by Debtor to a third party
under any contract of service, (c) held by Debtor as raw materials or work
in process or (d) used or consumed by Debtor in the ordinary course of
business.
"Personal Property" shall mean all goods and all personal property of any
nature or description, wherever located, now owned or hereafter acquired
by Debtor, together with all additions or appurtenances thereto, all
substitutions therefor, and all proceeds, products and accessions thereof.
As used herein the term "goods" shall have the broadest meaning
attributable to it under the Uniform Commercial Code or other applicable
law.
2. Grant of Security Interest. As security for the payment of the
Indebtedness, the Debtor hereby grants, pledges and assigns to the Secured
Parties a continuing security interest in the Collateral.
3. Perfection of Security Interest.
(a) Financing Statements and Other Actions. The Debtor hereby
authorizes the Secured Parties to file one or more financing or
continuation statements, and amendments thereto, relating to all or any
part of the Collateral, without the signature of the Debtor where
permitted by applicable law, and agrees itself to take all such other
actions and to execute and deliver and file or cause to be filed such
financing statements, continuation statements, and other documents, as the
Secured Parties may reasonably require in order to establish and maintain
a perfected, valid and continuing security interest of the Secured Parties
in the Collateral.
(b) Delivery. The Debtor agrees immediately to deliver to the
Secured Parties, appropriately endorsed to the order of the Secured
Parties, any Document or Instrument of which the Debtor is or becomes
owner or holder.
4. Records; Information. The Debtor agrees to keep at its principal
place of business, as shown in the opening paragraph of this Agreement,
its records concerning the Collateral, which records shall be sufficiently
accurate to enable the Secured Parties or its designee to determine at any
time the status thereof. The Debtor agrees promptly to furnish to the
Secured Parties such information concerning the Debtor, the Collateral and
any Account Debtor as the Secured Parties may reasonably request.
5. Representations and Warranties of the Debtor. The Debtor represents
and warrants that: (a) it is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is qualified to do business in all such jurisdictions in
which it is doing business, (b) the execution, delivery and performance of
this Agreement and the above pledge and assignment and grant of a security
interest in the Collateral to the Secured Parties have been duly
authorized and are not contrary to or in violation of law, any order of a
court or government agency, the Debtor's certificate of incorporation or
by-laws, or any other agreement, instrument, or other document to which
the Debtor is a party or by which the Debtor or any of its assets may be
bound, (c) this Agreement is the legal, valid and binding obligation of
the Debtor and, subject to the making of any filings required pursuant to
Section 3(a) hereof and the delivery of any Collateral to the Secured
Parties pursuant to Section 3(b) hereof, creates a valid, enforceable and
perfected security interest in the Collateral, first and prior to any or
all other liens, claims, encumbrances or security interests except for the
Permitted Liens and the Pari Passu Liens (as such terms are defined in the
Loan Agreements), and the Debtor is duly authorized to make all filings
and take all other actions necessary or desirable to perfect and to
continue perfected such security interest, (d) all of the Debtor's right,
title and interest in and to the Collateral is free and clear of all
liens, claims, charges, pledges, security interests and encumbrances,
except for the security interests granted to the Secured Parties herein,
the Permitted Liens and the Pari Passu Liens (as such terms are defined in
the Loan Agreements), and (e) no consent of any person or entity is
required, except such as have been obtained in writing by Debtor and
delivered to Secured Parties, in order to render this Agreement, the Loan
Agreements and the Notes fully enforceable against the Debtor in
accordance with their terms or to prevent the execution and delivery of
this Agreement, the Loan Agreements and the Notes from violating the terms
of or giving rise to a default or event of default under any other
agreement, instrument or document to which the Debtor is a party or by
which the Debtor or any of its assets are bound.
6. Covenants.
(a) Affirmative Covenants. The Debtor shall (i) perform and
observe all the terms and provisions of any agreement for the rendering of
services or any other agreement, giving rise to an Account Receivable to
be performed or observed by it, maintain any such agreement in full force
and effect, enforce any such agreement in accordance with its terms, and
take all such action to such and as may be from time to time requested by
the Secured Parties; (ii) at the Debtor's expense, furnish to the Secured
Parties promptly upon receipt thereof copies of all notices, requests and
other documents received by the Debtor in connection with any Account
Receivable, and from time to time (x) furnish to the Secured Parties such
information and reports regarding any Account Receivable as the Secured
Parties may reasonably request, and (y) upon request of the Secured
Parties, make to any Account Debtor such demand and request for
information and reports or for such action as the Debtor may be entitled
to make in connection with any Account Receivable; (iii) at the Debtor's
expense, take such action as the Debtor or the Secured Parties may deem
necessary or advisable to enforce collection of amounts due or to become
due in respect of any Account Receivable; (iv) take out and maintain in
effect such policies of insurance covering the Collateral as the Secured
Parties may reasonably require; and (v) maintain and preserve the
Collateral in good condition and take all such action to such end as may
be from time to time requested by the Secured Parties.
(b) Negative Covenants. The Debtor shall not without the prior
written consent of the Secured Parties (i) sell, assign or otherwise
dispose of the Collateral, or (ii) create or suffer to exist any security
interest, financing statement, lien or other encumbrances upon or with
respect to the Collateral to secure indebtedness of any person or entity,
except for the security interest granted to the Secured Parties hereunder
and the Permitted Liens (as defined in the Loan Agreements).
7. Rights of the Secured Parties upon Default. On and after the
occurrence of a Default by the Debtor, all the Indebtedness shall, at the
option of the Secured Parties, become immediately due and payable, without
notice or demand. The Secured Parties may (a) enforce collection of any
of the Collateral by suit or any other lawful means available to the
Secured Parties, (b) surrender, release or exchange all or any part of the
Collateral, or compromise or extend or renew for any period any
indebtedness thereunder or evidenced thereby, (c) assert all other rights
of a secured party under the Uniform Commercial Code or other applicable
law, including, without limitation, the right to take possession of, hold,
collect, sell, lease or otherwise retain, liquidate or dispose of all or
any portion of the Collateral. The proceeds of any collection,
liquidation or other disposition of the Collateral shall be applied by the
Secured Parties first to the payment of all expenses (including without
limitation, all fees, taxes, reasonable attorney's fees and legal
expenses) incurred by the Secured Parties in connection with retaking,
holding, collecting, or liquidating the Collateral. The balance of such
proceeds, if any, shall, to the extent permitted by law, be applied to the
payment of the Indebtedness in such order of application as the Secured
Parties may, in its sole discretion, elect. In case of any deficiency,
the Debtor shall, whether or not then due, remain liable therefor. In
addition to the foregoing, the Secured Parties shall be entitled to
exercise any and all other rights and remedies provided to Secured Parties
under this Agreement, the Loan Agreements, the Notes, and applicable law
and equity.
8. The Secured Parties' Duties and Right to Perform. The powers
conferred on the Secured Parties hereunder are solely to protect the
Secured Parties' interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. The Secured Parties shall have no
duty as to the Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to
the Collateral. If the Debtor fails to perform any of its obligations
hereunder, or under any agreement giving use to or in connection with any
Account Receivable, the Secured Parties may themselves perform, or cause
the performance of, such agreement, and the expenses of the Secured
Parties incurred in connection therewith shall be payable by the Debtor.
9. Indemnity and Expenses. The Debtor agrees to indemnify the Secured
Parties from and against any and all claims, losses and liabilities
arising out of or connected with this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses or
liabilities resulting solely from the Secured Parties' gross negligence or
wilful misconduct.
10. Security Interest Absolute. All rights of the Secured Parties
hereunder, and all obligations of the Debtor hereunder, shall be absolute
and unconditional, irrespective of:
(a) any lack of validity or enforceability of the Indebtedness or
any agreement or instrument contemplated thereby;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Indebtedness, or any other amendment
or waiver of or any consent to any departure from the terms of the
Indebtedness or any other agreements contemplated thereby;
(c) any exchange, release or non-perfection of any other security
interest, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Indebtedness; or
(d) any other circumstance (other than payment in full) which might
otherwise constitute a defense available to, or a discharge of, the Debtor
in respect of the Indebtedness or in respect of this Agreement.
11. Cumulative Security. Neither the execution and delivery of this
Agreement nor the taking hereafter of any security for payment of the
Indebtedness shall in any manner impair or affect any other security for
payment of the Indebtedness. All such present and future additional
security is to be considered as cumulative security.
12. Continuing Agreement. This is a continuing agreement and the grant
of a security interest hereunder shall remain in full force and effect and
all the rights, powers and remedies of Secured Parties hereunder shall
continue to exist until the Indebtedness is paid in full as the same
becomes due and payable and until Secured Parties, upon request of Debtor,
has executed a written termination statement, reassigned to Debtor without
recourse the Collateral and all rights conveyed hereby, and returned
possession of the Collateral to Debtor.
13. Notices. All notices, requests and other communications to either
party hereunder shall be in writing and shall be given to such party at
its address or telefax number set forth at the beginning of this Agreement
or such other address or telefax number of which such party may hereafter
give notice to the other. Each such notice, request or other
communication shall be effective (i) if given by telefax, upon
transmission with a machine-generated transmittal confirmation, (ii) if
given by mail, 72 hours after such communication is deposited in the
United States mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered at the
address specified in this Section.
14. Remedy and Waiver. Secured Parties may remedy any Default without
waiving the Default rendered, and may waive any Default without waiving
any prior or subsequent Default. No failure or delay by the Secured
Parties in the exercise of any right or remedy under this Agreement or
under the Uniform Commercial Code or any applicable law shall operate as
a waiver hereunder or thereunder, and no partial exercise by the Secured
Parties of any right or remedy of the Secured Parties hereunder or
thereunder shall preclude the further exercise by the Secured Parties of
any other right or remedy hereunder or thereunder.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
16. Successors and Assigns. The rights and obligations of the parties
hereto shall be binding on and shall inure to the benefit of their
successors and assigns, except that in accordance with Section 6 of this
Agreement, the rights and obligations hereunder may not be assigned by
Debtor.
17. Modification. This agreement or any provision hereof may be modified
or amended only by a written agreement signed by both parties hereto.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
DEBTOR
nSTOR TECHNOLOGIES, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇
By:______________________________
▇▇▇▇ ▇. ▇▇▇▇, President
Title:
SECURED PARTIES
/s/ H. ▇▇▇▇▇ ▇▇▇▇
__________________________________
H. ▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ Gimmelstob
__________________________________
▇▇▇▇▇▇▇ Gimmelstob
FAIRWAY PARTNERSHIP
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Revocable Trust
_____________________________________
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Revocable Trust,
a partner
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
EXHIBIT 10.20
COLLATERAL ASSIGNMENT OF NOTE, LOAN AGREEMENT,
SECURITY AGREEMENT AND SECURITY INSTRUMENTS
THIS COLLATERAL ASSIGNMENT OF NOTE, LOAN AGREEMENT, SECURITY AGREEMENT AND
SECURITY INSTRUMENTS (the "Assignment") is made the 5th day of March,
1998, by NSTOR TECHNOLOGIES, INC., a Delaware corporation ("Assignor") in
favor of in favor of H. ▇▇▇▇▇ ▇▇▇▇, an individual resident of the State of
Florida ("Levy"), Fairway Partnership, a Minnesota general partnership,
▇▇▇▇▇▇▇ Gimmelstob, an individual resident of the State of Florida, and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual resident of the State of Florida
(collectively, the "Assignees").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency whereof
is hereby acknowledged, and to insure the full and timely payment of all
sums due and to become due and performance under those certain Promissory
Notes dated March 5, 1998 in favor of Assignees (the "Assignee Notes"),
the Assignor does hereby collaterally grant, transfer and assign unto the
Assignees as collateral security the Assignor's entire right, title and
interest in and to the following original instruments (collectively
referred to herein as the "Assigned Instruments"):
1. Revolving Credit Note ("Note") in the original principal amount of
$5,000,000 issued by Assignor to nStor Corporation, Inc. ("Borrower")
dated March 5, 1998.
2. Amended and Restated Loan Agreement between Borrower and Assignor,
dated March 5, 1998 ("Loan Agreement").
3. Amended and Restated Security Agreement between Borrower and
Assignor, dated March 5, 1998 ("Loan Agreement").
4. UCC-1 Financing Statement filed with the Secretary of State of
Florida at File No. 980000051936.
By this Assignment, Assignor agrees and by its acceptance hereof Assignee
agrees that any uncured default after any applicable notice and cure
period under the Loan Agreement, as defined therein, shall constitute a
default under this Assignment. This Assignment shall constitute a present
assignment, transfer and conveyance by Assignor to Assignee of the
Assigned Instruments.
This Assignment is made subject to all of the applicable terms and
conditions of the Assignee Notes.
As an inducement for Assignees to accept this Assignment, Assignor hereby
represents and warrants to Assignees that: (i) the Assigned Instruments
are in full force and effect in accordance with their terms and have not
been amended, (ii) no default has occurred and is continuing under any of
the Assigned Instruments, and to the best knowledge of Assignor, no
circumstance or state of facts exists which, with the giving of notice or
passage of time, or both, would result in the occurrence of any such
default, (iii) Borrower has made all payments heretofore due and owing
pursuant to the Assigned Instruments, and (iv) neither Borrower nor
Assignor has any rights of offset or defenses with respect to its
respective obligations under the Assigned Instruments.
This Assignment may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, this Assignment has been executed as of the date
first set forth above.
Witnesses:
NSTOR TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
______________________________
▇▇▇▇ ▇. ▇▇▇▇, Presdient
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
________________________________
Printed Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
/a/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
________________________________
Printed Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Accepted:
/s/ H. ▇▇▇▇▇ ▇▇▇▇
________________________________
H. ▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ Gimmelstob
________________________________
▇▇▇▇▇▇▇ Gimmelstob
FAIRWAY PARTNERSHIP
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Revocable Trust,
a partner
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
By:___________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
STATE OF FLORIDA )
) SS.
COUNTY OF PALM BEACH)
The foregoing instrument was acknowledged before me this 6th day of March,
1998, by ▇▇▇▇ ▇. ▇▇▇▇, as President of nStor Technologies, Inc., a
Delaware corporation. He is personally known to me or has produced
_________________ as identification.
(NOTARY SEAL)
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
Notary Public, State of Florida
Commission No.
EXHIBIT 10.21
H. ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
March 6, 1998
H. ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fairway Partnership
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: Loan to nStor Technologies, Inc.
Lady and Gentlemen:
This letter is intended to memorialize and confirm [certain of] the terms
of our agreement to participate in a combined loan in the aggregate
principal amount of $5,000,000.00 (hereinafter sometimes referred to as
the "Combined Loan") to be advanced to nStor Technologies, Inc.
("Borrower") by H. ▇▇▇▇▇ ▇▇▇▇ ("▇▇▇▇"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"),
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Gimelstob") and Fairway Partnership ("Fairway").
Levy, Marden, Gimelstob and Fairway are hereinafter sometimes collectively
referred to as the "Constituent Lenders" and each, individually, as a
"Constituent Lender".
The Combined Loan shall be comprised of four (4) constituent loans
(hereinafter sometimes collectively referred to as the "Constituent
Loans", and each, individually, as a "Constituent Loan"), such Constituent
Loans to be in the principal amount of, respectively, $2,000,000.00 (the
"Levy Constituent Loan"), $1,000,000.00 (the "▇▇▇▇▇▇ Constituent Loan"),
$1,000,000.00 (the "Gimelstob Constituent Loan"), and $1,000,000.00 (the
"Fairway Constituent Loan").
The Levy Constituent Loan shall be advanced to the Borrower by Levy; the
▇▇▇▇▇▇ Constituent Loan shall be advanced to the Borrower by ▇▇▇▇▇▇; the
Gimelstob Constituent Loan shall be advanced to the Borrower by Gimelstob;
the Fairway Constituent Loan shall be advanced to the Borrower by ▇▇▇▇▇▇.
Each Constituent Loan shall be:
(a) advanced to the Borrower simultaneously with the advancement of the
other Constituent Loans;
(b) advanced to the Borrower pursuant to a Loan Agreement to be entered
into by and between the Borrower and the Constituent Lender making such
Constituent Loan; and
(c) evidenced by Promissory Note of the Borrower in the amount of that
Constituent Loan and made payable to the order of that Constituent Lender.
Any and all payments made by the Borrower in respect of either the
Combined Loan or any Constituent Loan shall be distributed among the
Constituent Lenders on a pari passu and pro rata basis. For example, a
$1,000,000.00 principal payment by the Borrower in respect of either the
Combined Loan of any Constituent Loan shall be distributed among the
Constituent Lenders as follows: $400,000.00 to Levy; $200,000.000 to
▇▇▇▇▇▇; $200,000.000 to Gimelstob; and $200,000.000 to Fairway; with such
distributions to be made on a pari passu basis.
To the extent that any Constituent Lender shall receive payment from (or
for the account of) the Borrower of any amount which is in excess of such
Constituent Lender's pro rata share of the aggregate amount of all
payments then being made by (or for the account of) the Borrower to all
Constituent Lenders, the Constituent Lender receiving such excess payment
shall be deemed to have received same as trustee for the benefit of all
Constituent Lenders, and such Constituent Lender shall be obligated,
forthwith, to remit to the other Constituent Lenders such portion of such
excess payment as shall be necessary in order to ensure that each
Constituent Lender shall receive its correct pro rata share of the
aggregate amount of all payments then being made by (or for the account
of) the Borrower.
The Combined Loan (consisting of the four [4] Constituent Loans) shall be
secured by a single combined lien upon, and security interest in, certain
assets of the Borrower (the "Collateral), such lien and security interest
to be created pursuant to the terms of a single Security Agreement to be
executed by the Borrower and the Constituent Lenders, and to be perfected
by the filing of one or more UCC-1 Financing Statements, etc. Such lien
and security interest shall be owned and held by the Constituent Lenders
as tenants in common, with each Constituent Lender owning and holding an
undivided pro rata interest in such combined lien and security interest as
follows: Levy shall own and hold an undivided forty percent (40%)
interest therein; ▇▇▇▇▇▇ shall own and hold an undivided twenty percent
(20%) interest therein; Gimelstob shall own and hold an undivided twenty
percent (20%) interest therein; and Fairway shall own and hold an
undivided twenty percent (20%) interest therein.
The undivided pro rata interest of each Constituent Lender in such
combined lien and security interest shall enjoy equal priority with the
undivided pro rata interests therein of all other Constituent Lenders. No
Constituent Lender shall have any lien, claim or charge upon any of the
Collateral which shall be senior or superior to the lien, claim or charge
of any other Constituent Lender nor shall any Constituent Lender have any
lien, claim or charge upon any of the Collateral which is in excess of
his/its undivided pro rata share thereof, to wit: Forty Percent (40%) for
Levy; Twenty Percent (20%) for ▇▇▇▇▇▇; Twenty Percent (20%) for Gimelstob;
and Twenty Percent (20%) for Fairway.
Any and all proceeds derived from any disposition of the Collateral shall
be distributed among the Constituent Lenders on a pari passu and pro rata
basis, i.e., in the respective proportions noted above.
In the event that the Constituent Lenders shall acquire title to, or any
other rights in, the Collateral, or any part thereof, the Constituent
Lenders shall be deemed to own and hold such title and/or other rights as
tenants in common, with each Constituent Lender owning and holding an
undivided pro rata interest in such Collateral as follows: Levy shall own
and hold an undivided forty percent (40%) interest therein; ▇▇▇▇▇▇ shall
own and hold an undivided twenty percent (20%) interest therein; Gimelstob
shall own and hold an undivided twenty percent (20%) interest therein; and
Fairway shall own and hold an undivided twenty percent (20%) interest
therein.
In the event that any Constituent Lender shall, individually, acquire
title to, or any other rights in, the Collateral, or any part thereof as
a result of the foreclosure or enforcement of any security interest with
secures such Constituent Lender's Constituent Loan, such Constituent
Lender shall be deemed, without need of any further action or
confirmation, to own and hold such Collateral as trustee for the benefit
of all Constituent Lenders, who shall be deemed to own and hold the
beneficial interests in such Collateral as tenants in common, in the
respective proportions noted above.
Any and all costs of collection and enforcement of the Combined Loan shall
be shared by the Constituent Lenders on a pari passu and pro rata basis.
By signing this letter in the place designated below, we acknowledge and
confirm our agreement to the foregoing terms and conditions.
Sincerely,
/s/ H. ▇▇▇▇▇ ▇▇▇▇
_________________________________
H. ▇▇▇▇▇ ▇▇▇▇
Confirmed, Acknowledged and Agreed:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Revocable Trust
_________________________________
Fairway Partnership
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Revocable Trust
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
By:_____________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
CONSENT AND AGREEMENT OF BORROWER
nStor Technologies, Inc. hereby consents to, and agrees to comply with,
the terms and provisions of the foregoing letter agreement.
nStor Technologies, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇
By:____________________________
▇▇▇▇ ▇. ▇▇▇▇, President
