LOAN AND SECURITY AGREEMENT
BORROWERS: SEER TECHNOLOGIES, INC. ("SEER")
LEVEL 8 SYSTEMS, INC. ("LEVEL 8")
ADDRESS: 0000 XXXXXXX XXXXXXX
XXXX, XXXXX XXXXXXXX 00000
DATE: MARCH 31, 1999
This Loan and Security Agreement is entered into on the above date between
GREYROCK CAPITAL, a Division of NationsCredit Commercial Corporation
("Greyrock"), whose address is 00000 Xxxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx, XX
00000 and the borrowers named above (jointly and severally, the "Borrower"),
whose chief executive office is located at the above address ("Borrower's
Address"). The Schedule to this Agreement (the "Schedule") being signed
concurrently is an integral part of this Agreement. (Definitions of certain
terms used in this Agreement are set forth in Section 8 below.) *
*AS TO SEER, THIS AGREEMENT AMENDS AND RESTATES IN ITS ENTIRETY THE LOAN AND
SECURITY AGREEMENT BETWEEN SEER AND GREYROCK DATED MARCH 26, 1997. ALL OTHER
SECURITY AGREEMENTS AND OTHER DOCUMENTS AND AGREEMENTS BETWEEN SEER AND GREYROCK
CONTINUE IN FULL FORCE AND EFFECT.
1. LOANS.
1.1 LOANS. Greyrock will make loans to Borrower (the "Loans"), in amounts
determined by Greyrock in its sole * discretion, up to the amounts (the "Credit
Limit") shown on the Schedule, provided no Default or Event of Default has
occurred and is continuing. If at any time or for any reason the total of all
outstanding Loans and all other Obligations exceeds the Credit Limit, Borrower
shall immediately pay the amount of the excess to Greyrock, without notice or
demand.
* REASONABLE BUSINESS
1.2 INTEREST. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set forth to
the contrary in this Agreement or in another written agreement signed by
Greyrock and Borrower. Interest shall be payable monthly, on the last day of the
month. Interest may, in Greyrock's discretion, be charged to Borrower's loan
account, and the same shall thereafter bear interest at the same rate as the
other Loans.
1.3 FEES. Borrower shall pay Greyrock the fee(s) shown on the Schedule, which
are in addition to all interest and other sums payable to Greyrock and are not
refundable.
2. SECURITY INTEREST.
2.1 SECURITY INTEREST. To secure the payment and performance of all of the
Obligations when due, Borrower hereby grants to Greyrock a security interest in
all of Borrower's interest in the following, whether now owned or hereafter
acquired, and wherever located (collectively, the "Collateral"): All Inventory,
Equipment, Receivables, and General Intangibles, including, without limitation,
all of Borrower's Deposit Accounts, all money, all collateral in which Greyrock
is granted a security interest pursuant to any other present or future
agreement, all property now or at any time in the future in Greyrock's
possession, and all proceeds (including proceeds of any insurance policies,
proceeds of proceeds and claims against third parties), all products of the
foregoing, and all books and records related to any of the foregoing.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
In order to induce Greyrock to enter into this Agreement and to make Loans,
Borrower represents and warrants to Greyrock as follows, and Borrower covenants
that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants:
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3.1 CORPORATE EXISTENCE AND AUTHORITY. Borrower, if a corporation, is and
will continue to be, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation. Borrower is and will continue
to be qualified and licensed to do business in all jurisdictions in which any
failure to do so would have a material adverse effect on Borrower. The
execution, delivery and performance by Borrower of this Agreement, and all other
documents contemplated hereby (i) have been duly and validly authorized, (ii)
are enforceable against Borrower in accordance with their terms (except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally), (iii) do not violate Borrower's articles or certificate of
incorporation, or Borrower's by-laws, or any law or any material agreement or
instrument which is binding upon Borrower or its property, and (iv) do not
constitute grounds for acceleration of any material indebtedness or obligation
under any material agreement or instrument which is binding upon Borrower or its
property.
3.2 NAME; TRADE NAMES AND STYLES. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule are all
prior names of Borrower and all of Borrower's present and prior trade names.
Borrower shall give Greyrock 30 days' prior written notice before changing its
name or doing business under any other name. Borrower has complied, and will in
the future comply, with all laws relating to the conduct of business under a
fictitious business name.
3.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in the
heading to this Agreement is Borrower's chief executive office. In addition,
Borrower has places of business and Collateral is located only at the locations
set forth on the Schedule. Borrower will give Greyrock at least 30 days prior
written notice before opening any additional place of business, changing its
chief executive office, or moving any of the Collateral to a location other than
Borrower's Address or one of the locations set forth on the Schedule*.
*, WHICH WRITTEN NOTICE SHALL BE DEEMED AUTOMATICALLY TO AMEND THE SCHEDULE
3.4 TITLE TO COLLATERAL; PERMITTED LIENS. Borrower is now, and will at all
times in the future be, the sole owner of all the Collateral, except for items
of Equipment which are leased by Borrower. The Collateral now is and will remain
free and clear of any and all liens, charges, security interests, encumbrances
and adverse claims, except for Permitted Liens. Greyrock now has, and will
continue to have, a first-priority perfected and enforceable security interest
in all of the Collateral, subject only to the Permitted Liens, and Borrower will
at all times defend Greyrock and the Collateral against all claims of others. So
long as any Loan is outstanding which is a term loan, none of the Collateral now
is or will be affixed to any real property in such a manner, or with such
intent, as to become a fixture. Borrower is not and will not become a lessee
under any real property lease pursuant to which the lessor may obtain any rights
in any of the Collateral and no such lease now prohibits, restrains, impairs or
will prohibit, restrain or impair Borrower's right to remove any Collateral from
the leased premises. Whenever any Collateral is located upon premises in which
any third party has an interest (whether as owner, mortgagee, beneficiary under
a deed of trust, lien or otherwise), Borrower shall, whenever requested by
Greyrock, use its best efforts to cause such third party to execute and deliver
to Greyrock, in form acceptable to Greyrock, such waivers and subordinations as
Greyrock shall specify, so as to ensure that Greyrock's rights in the Collateral
are, and will continue to be, superior to the rights of any such third party.
Borrower will keep in full force and effect, and will comply with all the terms
of, any lease of real property where any of the Collateral now or in the future
may be located.
3.5 MAINTENANCE OF COLLATERAL. Borrower will maintain the * Collateral in
good working condition, ordinary wear and tear excepted, and Borrower will
not use the * Collateral for any unlawful purpose. Borrower will ** advise
Greyrock in writing of any material loss or damage to the * Collateral.
* EQUIPMENT
** PROMPTLY
3.6 BOOKS AND RECORDS. Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with generally accepted accounting principles.
3.7 FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial statements now
or in the future delivered to Greyrock have been, and will be, prepared in
conformity with generally accepted accounting principles * and now and in the
future will completely and fairly reflect the financial condition of Borrower,
at the times and for the periods therein stated**. Between the last date covered
by any such statement provided to Greyrock and the date hereof, there has been
no material adverse change in the financial condition or business of Borrower.
Borrower is now and will continue to be solvent.
* (GAAP)
**, EXCEPT THAT UNAUDITED FINANCIAL STATEMENTS MAY NOT CONTAIN ALL THE NOTES
REQUIRED BY GAAP AND ARE SUBJECT TO NORMAL YEAR-END ADJUSTMENTS
3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has timely
filed, and will timely file, all tax returns and reports required by applicable
law, and Borrower has timely paid, and will timely pay, all applicable taxes,
assessments, deposits and contributions now or in the future owed by Borrower.
Borrower may, however, defer payment of any contested taxes, provided that
Borrower (i) in good faith contests Borrower's obligation to pay the taxes by
appropriate proceedings
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promptly and diligently instituted and conducted, (ii) notifies Greyrock in
writing of the commencement of, and any material development in, the
proceedings, and (iii) posts bonds or takes any other steps required to keep the
contested taxes from becoming a lien upon any of the Collateral. Borrower is
unaware of any claims or adjustments proposed for any of Borrower's prior tax
years which could result in * additional taxes becoming due and payable by
Borrower. Borrower has paid, and shall continue to pay all amounts necessary to
fund all present and future pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not and will not withdraw
from participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any such plan which could result
in any liability of Borrower, including any liability to the Pension Benefit
Guaranty Corporation or any other governmental agency. Borrower shall, at all
times, utilize the services of an outside payroll service providing for the
automatic deposit of all payroll taxes payable by Borrower.
* ANY MATERIAL AMOUNT OF
3.9 COMPLIANCE WITH LAW. Borrower has complied, and will comply, in all
material respects, with all provisions of all applicable laws and regulations,
including, but not limited to, those relating to Borrower's ownership of real or
personal property, the conduct and licensing of Borrower's business, and all
environmental matters.
3.10 LITIGATION. Except as disclosed in the Schedule, there is no claim,
suit, litigation, proceeding or investigation pending or (to best of Borrower's
knowledge) threatened by or against or affecting Borrower in any court or before
any governmental agency (or any basis therefor known to Borrower) which may
result, either separately or in the aggregate, in any material adverse change in
the financial condition or business of Borrower, or in any material impairment
in the ability of Borrower to carry on its business in substantially the same
manner as it is now being conducted. Borrower will promptly inform Greyrock in
writing of any claim, proceeding, litigation or investigation in the future
threatened or instituted by or against Borrower involving any single claim of
$50,000 or more, or involving $100,000 or more in the aggregate.
3.11 USE OF PROCEEDS. All proceeds of all Loans shall be used solely for
lawful business purposes.
4. RECEIVABLES.
4.1 REPRESENTATIONS RELATING TO RECEIVABLES. Borrower represents and warrants
to Greyrock as follows: Each Receivable with respect to which Loans are
requested by Borrower shall, on the date each Loan is requested and made,
represent an undisputed, bona fide, existing, unconditional obligation of the
Account Debtor created by the sale, delivery, and acceptance of goods or the
rendition of services, in the ordinary course of Borrower's business*.
*, EXCEPT FOR RECEIVABLES WITH RESPECT TO MAINTENANCE, SERVICES AND CUSTOM
DEVELOPMENT WORK, FOR WHICH BORROWER CUSTOMARILY BILLS IN ADVANCE, AS TO WHICH
RECEIVABLES BORROWER REPRESENTS AND WARRANTS TO GREYROCK THAT SUCH RECEIVABLES
ARE THE UNDISPUTED, BONA FIDE, EXISTING OBLIGATIONS OF THE ACCOUNT DEBTORS AND
BORROWER HAS NO REASON TO BELIEVE SUCH RECEIVABLES WILL NOT BE COLLECTED.
4.2 REPRESENTATIONS RELATING TO DOCUMENTS AND LEGAL COMPLIANCE. Borrower
represents and warrants to Greyrock as follows: All statements made and all
unpaid balances appearing in all invoices, instruments and other documents
evidencing the Receivables are and shall be true and correct and all such
invoices, instruments and other documents and all of Borrower's books and
records are and shall be genuine and in all respects what they purport to be,
and all * signatories and endorsers ** have the capacity to contract. All sales
and other transactions underlying or giving rise to each Receivable shall comply
with all applicable laws and governmental rules and regulations. All *
signatures and endorsements *** on all documents, instruments, and agreements
relating to all Receivables are and shall be genuine, and all such documents,
instruments and agreements are and shall be legally enforceable in accordance
with their terms.
* BORROWER
** AND, TO BORROWER'S KNOWLEDGE, ALL OTHER SIGNATORIES AND ENDORSERS
*** AND, TO BORROWER'S KNOWLEDGE, ALL OTHER SIGNATURES AND ENDORSEMENTS
4.3 SCHEDULES AND DOCUMENTS RELATING TO RECEIVABLES. Borrower shall
deliver to Greyrock transaction reports and loan requests, schedules and
assignments of all Receivables, and schedules of collections, all on
Greyrock's standard forms; provided, however, that Borrower's failure to
execute and deliver the same shall not affect or limit Greyrock's security
interest and other rights in all of Borrower's Receivables, nor shall
Greyrock's failure to advance or lend against a specific Receivable affect or
limit Greyrock's security interest and other rights therein. * by Greyrock,
Borrower shall furnish Greyrock with copies (or, at Greyrock's request,
originals) of all contracts, orders, invoices, and other similar documents,
and all original shipping instructions, delivery receipts, bills of lading,
and other evidence of delivery, for any goods the sale or disposition of
which gave rise to such Receivables, and Borrower warrants the genuineness of
all of the foregoing. Borrower shall also furnish to Greyrock an aged
accounts receivable trial balance in such form and at such intervals as
Greyrock shall request. In addition, Borrower shall deliver to Greyrock the
originals of all instruments, chattel paper, security agreements, guarantees
and other documents and property evidencing or securing any Receivables,
immediately upon receipt thereof and in the same form as received, with all
necessary indorsements.
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* UPON REASONABLE REQUEST
4.4 COLLECTION OF RECEIVABLES. Borrower shall have the right to collect all
Receivables, unless and until a Default or an Event of Default has occurred.
Borrower shall hold all payments on, and proceeds of, Receivables in trust for
Greyrock, and Borrower shall deliver all such payments and proceeds to Greyrock,
within one business day after receipt of the same, in their original form, duly
endorsed, to be applied to the Obligations in such order as Greyrock shall
determine.
4.5 DISPUTES. Borrower shall notify Greyrock promptly of all disputes or
claims relating to Receivables on the regular reports to Greyrock. Borrower
shall not forgive, or settle any Receivable for less than payment in full, or
agree to do any of the foregoing, except that Borrower may do so, provided that:
(i) Borrower does so in good faith, in a commercially reasonable manner, in the
ordinary course of business, and in arm's length transactions, which are
reported to Greyrock on the regular reports provided to Greyrock; (ii) no
Default or Event of Default has occurred and is continuing; and (iii) taking
into account all such settlements and forgiveness, the total outstanding Loans
and other Obligations will not exceed the Credit Limit.
4.6 RETURNS. Provided no Event of Default has occurred and is continuing, if
any Account Debtor returns any Inventory to Borrower in the ordinary course of
its business, Borrower shall promptly determine the reason for such return and
promptly issue a credit memorandum to the Account Debtor in the appropriate
amount (sending a copy to Greyrock). In the event any attempted return occurs
after the occurrence of any Event of Default*, Borrower shall (i) not accept any
return without Greyrock's prior written consent, ** (ii) hold the returned
Inventory in trust for Greyrock.
* THAT IS CONTINUING
** AND
4.7 VERIFICATION. Greyrock may, from time to time, verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Receivables, by means of mail, telephone or otherwise, either in the name of
Borrower or Greyrock or such other name as Greyrock may choose, and Greyrock or
its designee may, at any time, notify Account Debtors that it has a security
interest in the Receivables.
4.8 NO LIABILITY. Greyrock shall not under any circumstances be responsible
or liable for any shortage or discrepancy in, damage to, or loss or destruction
of, any goods, the sale or other disposition of which gives rise to a
Receivable, or for any error, act, omission, or delay of any kind occurring * in
the settlement, failure to settle, collection or failure to collect any
Receivable, or for settling any Receivable in good faith for less than the full
amount thereof, nor shall Greyrock be deemed to be responsible for any of
Borrower's obligations under any contract or agreement giving rise to a
Receivable. Nothing herein shall, however, relieve Greyrock from liability for
its own gross negligence or willful misconduct.
* IN GOOD FAITH
5. ADDITIONAL DUTIES OF THE BORROWER.
5.1 INSURANCE. Borrower shall, at all times, insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Greyrock, in such form and amounts as Greyrock
may reasonably require, and Borrower shall provide evidence of such insurance to
Greyrock, so that Greyrock is satisfied that such insurance is, at all times, in
full force and effect. All such insurance policies shall name Greyrock as an
additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to Greyrock. Upon receipt of the proceeds of any such
insurance, Greyrock shall apply such proceeds in reduction of the Obligations as
Greyrock shall determine in its sole discretion, except that, provided no
Default or Event of Default has occurred and is continuing, Greyrock shall
release to Borrower insurance proceeds with respect to Equipment totaling less
than $100,000, which shall be utilized by Borrower for the replacement of the
Equipment with respect to which the insurance proceeds were paid. Greyrock may
require reasonable assurance that the insurance proceeds so released will be so
used. If Borrower fails to provide or pay for any insurance, Greyrock may, but
is not obligated to, obtain the same at Borrower's expense. Borrower shall
promptly deliver to Greyrock copies of all reports made to insurance companies.
5.2 REPORTS. Borrower, at its expense, shall provide Greyrock with the
written reports set forth in the Schedule, and such other written reports with
respect to Borrower (including budgets, sales projections, operating plans and
other financial documentation), as Greyrock shall from time to time reasonably
specify.
5.3 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times, and on one
business day's notice, Greyrock, or its agents, shall have the right to inspect
the Collateral, and the right to audit and copy Borrower's books and records.
Greyrock shall take reasonable steps to keep confidential all information
obtained in any such inspection or audit, but Greyrock shall have the right to
disclose any such information * to its auditors, regulatory agencies, and
attorneys, and pursuant to any subpoena or other legal process. The foregoing
inspections and audits shall be at Borrower's expense and the charge therefor
shall be $600 per person per day (or such higher amount as shall represent
Greyrock's then current standard charge
4
for the same), plus reasonable out-of-pockets expenses. Borrower shall not be
charged more than $3,000 per audit (plus reasonable out-of-pockets expenses),
nor shall audits be done more frequently than four times per calendar year,
provided that the foregoing limits shall not apply after the occurrence of **
Event of Default, nor shall they restrict Greyrock's right to conduct audits
at its own expense (whether or not ** Event of Default has occurred).
Borrower will not enter into any agreement with any accounting firm, service
bureau or third party to store Borrower's books or records at any location
other than Borrower's Address, without first obtaining Greyrock's written
consent, which may be conditioned upon such accounting firm, service bureau
or other third party agreeing to give Greyrock the same rights with respect
to access to books and records and related rights as Greyrock has under this
Agreement.
* IN CONFIDENCE
** AN
5.4 REMITTANCE OF PROCEEDS. All proceeds arising from the sale or other
disposition of any Collateral shall be delivered, in kind, by Borrower to
Greyrock in the original form in which received by Borrower not later than the
following business day after receipt by Borrower, to be applied to the
Obligations in such order as Greyrock shall determine; provided that, if no
Default or Event of Default has occurred and is continuing, and if no term loan
is outstanding hereunder, then Borrower shall not be obligated to remit to
Greyrock the proceeds of the sale of Equipment * which is sold in the ordinary
course of business, in a good-faith arm's length transaction. Except for the
proceeds of the sale of Equipment * as set forth above, Borrower shall not
commingle proceeds of Collateral with any of Borrower's other funds or property,
and shall hold such proceeds separate and apart from such other funds and
property and in an express trust for Greyrock. Nothing in this Section limits
the restrictions on disposition of Collateral set forth elsewhere in this
Agreement.
* COLLATERAL
5.5 NEGATIVE COVENANTS. Except as may be permitted in the Schedule, Borrower
shall not, without Greyrock's prior written consent *, do any of the following:
(i) merge or consolidate with another corporation or entity **; (ii) acquire any
assets, except in the ordinary course of business; (iii) enter into any other
*** transaction outside the ordinary course of business; (iv) sell or transfer
any Collateral, except that, provided no Default or Event of Default has
occurred and is continuing, Borrower may (a) sell finished Inventory in the
ordinary course of Borrower's business, and (b) if no term loan is outstanding
hereunder, sell Equipment in the ordinary course of business, in good-faith
arm's length transactions; (v) store any Inventory or other Collateral with any
warehouseman or other third party; (vi) sell any Inventory on a sale-or-return,
guaranteed sale, consignment, or other contingent basis; (vii) make any loans of
any money or other assets****; (viii) incur any debts, outside the ordinary
course of business, which would have a material, adverse effect on Borrower or
on the prospect of repayment of the Obligations; (ix) guarantee or otherwise
become liable with respect to the obligations of another party or entity; (x)
pay or declare any dividends on Borrower's stock (except for dividends payable
solely in stock of Borrower); (xi) redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of Borrower's stock*****; (xii) make any
change in Borrower's capital structure which would have a material adverse
effect on Borrower or on the prospect of repayment of the Obligations; or (xiii)
dissolve or elect to dissolve; or (xiv) agree to do any of the foregoing.
* NOT TO BE UNREASONABLY WITHHELD
** (EXCEPT FOR A SUBSIDIARY OF BORROWER)
*** MATERIAL
**** OTHER THAN ADVANCES TO EMPLOYEES IN THE ORDINARY COURSE OF BUSINESS NOT
TO EXCEED, IN THE AGGREGATE TOTAL, $250,000
*****, EXCEPT FOR ORDINARY COURSE REPURCHASES FROM EMPLOYEES UPON TERMINATION
OF EMPLOYMENTS IN AN AMOUNT NOT TO EXCEED, IN THE AGGREGATE TOTAL, $1,000,000
PER CALENDAR YEAR
5.6 LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against Greyrock with respect to any Collateral or in any
manner relating to Borrower, Borrower shall, without expense to Greyrock, make
available Borrower and its officers, employees and agents, and Borrower's books
and records, without charge, to the extent that Greyrock may deem them
reasonably necessary in order to prosecute or defend any such suit or
proceeding.
5.7 NOTIFICATION OF CHANGES. Borrower will promptly notify Greyrock in
writing of any change in its officers or directors, the opening of any new bank
account or other deposit account, and any material adverse change in the
business or financial affairs of Borrower.
5.8 FURTHER ASSURANCES. Borrower agrees, at its expense, on request by
Greyrock, to execute all documents and take all actions, as Greyrock * may deem
reasonably necessary or useful in order to perfect and maintain Greyrock's
perfected security interest in the Collateral, and in order to fully consummate
the transactions contemplated by this Agreement.
* REASONABLY
5.9 INDEMNITY. Borrower hereby agrees to indemnify Greyrock and hold Greyrock
harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, causes of action, penalties, costs and expenses (including
* attorneys' fees), of every nature, character and description, which Greyrock
may sustain or incur based upon or arising out of any of the Obligations, any
actual or alleged failure to collect and pay over any
5
withholding or other tax relating to Borrower or its employees, any relationship
or agreement between Greyrock and Borrower, any actual or alleged failure of
Greyrock to comply with any writ of attachment or other legal process relating
to Borrower or any of its property, or any other matter, cause or thing
whatsoever occurred, done, omitted or suffered to be done by Greyrock **
relating to Borrower or the Obligations (except any such amounts sustained or
incurred as the result of the gross negligence or willful misconduct of Greyrock
or any of its directors, officers, employees, agents, attorneys, or any other
person affiliated with or representing Greyrock). Notwithstanding any provision
in this Agreement to the contrary, the indemnity agreement set forth in this
Section shall survive any termination of this Agreement and shall for all
purposes continue in full force and effect.
* REASONABLE
** IN GOOD FAITH
6. TERM.
6.1 MATURITY DATE. This Agreement shall continue in effect until the maturity
date set forth on the Schedule (the "Maturity Date"); provided that the Maturity
Date shall automatically be extended, and this Agreement shall automatically and
continuously renew, for successive additional terms of one year each, unless one
party gives written notice to the other, not less than sixty days prior to the
next Maturity Date, that such party elects to terminate this Agreement effective
on the next Maturity Date.
6.2 EARLY TERMINATION. This Agreement may be terminated prior to the Maturity
Date as follows: (i) by Borrower, effective three business days after written
notice of termination is given to Greyrock; or (ii) by Greyrock at any time
after the occurrence of an Event of Default, without notice, effective
immediately. If this Agreement is terminated by Borrower or by Greyrock under
this Section 6.2, Borrower shall pay to Greyrock a termination fee (the
"Termination Fee") in the amount shown on the Schedule. The Termination Fee
shall be due and payable on the effective date of termination and thereafter
shall bear interest at a rate equal to the highest rate applicable to any of the
Obligations.
6.3 PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier effective
date of termination, Borrower shall pay and perform in full all Obligations,
whether evidenced by installment notes or otherwise, and whether or not all or
any part of such Obligations are otherwise then due and payable. Without
limiting the generality of the foregoing, if on the Maturity Date, or on any
earlier effective date of termination, there are any outstanding letters of
credit issued based upon an application, guarantee, indemnity or similar
agreement on the part of Greyrock, then on such date Borrower shall provide to
Greyrock cash collateral in an amount equal to 110% * of the face amount of all
such letters of credit plus all interest, fees and costs due or (in Greyrock's
** estimation) likely to become due in connection therewith, to secure all of
the Obligations relating to said letters of credit, pursuant to Greyrock's then
standard form cash pledge agreement. Notwithstanding any termination of this
Agreement, all of Greyrock's security interests in all of the Collateral and all
of the terms and provisions of this Agreement shall continue in full force and
effect until all Obligations have been paid and performed in full; provided
that, without limiting the fact that Loans are subject to the discretion of
Greyrock, Greyrock may, in its sole discretion, refuse to make any further Loans
after termination. No termination shall in any way affect or impair any right or
remedy of Greyrock, nor shall any such termination relieve Borrower of any
Obligation to Greyrock, until all of the Obligations have been paid and
performed in full. Upon payment and performance in full of all the Obligations
and termination of this Agreement, Greyrock shall promptly deliver to Borrower
termination statements, requests for reconveyances and such other documents as
may be reasonably required to terminate Greyrock's security interests.
* 100%
** REASONABLE
7. EVENTS OF DEFAULT AND REMEDIES.
7.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement, and Borrower shall
give Greyrock immediate written notice thereof: (a) Any warranty,
representation, statement, report or certificate made or delivered to
Greyrock by Borrower or any of Borrower's officers, employees or agents, now
or in the future, shall be untrue or misleading in a material respect; or (b)
Borrower shall fail to pay when due any Loan or any interest thereon or any
other monetary Obligation; or (c) the total Loans and other Obligations
outstanding at any time shall exceed the Credit Limit ++++; or (d) Borrower
shall fail to perform any non-monetary Obligation which by its nature cannot
be cured; or (e) Borrower shall fail to perform any other non-monetary
Obligation, which failure is not cured within 5* business days after the date
performance is due; or (f) any levy, assessment, attachment, seizure, lien or
encumbrance (other than a Permitted Lien) is made on all or any part of the
Collateral which is not cured within 10 ** days after the occurrence of the
same; or (g) any default or event of default occurs under any obligation
secured by a Permitted Lien, which is not cured within any applicable cure
period or waived in writing by the holder of the Permitted Lien; or (i)
dissolution, termination of existence, *** insolvency or business failure of
Borrower or any Guarantor; or appointment of a receiver, trustee or
custodian, for all or any part of the property of, assignment for the benefit
of creditors by, or the commencement of any proceeding by Borrower or any
Guarantor under any reorganization, bankruptcy,
6
insolvency, arrangement, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, now or in the future in effect; or (j) the
commencement of any proceeding against Borrower or any Guarantor under any
reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, now or in the
future in effect, which is not cured by the dismissal thereof within 45 days
after the date commenced; or (k) revocation or termination **** of, or *****
limitation or denial of liability upon, any guaranty of the Obligations or
any attempt to do any of the foregoing; or (l) revocation or termination ****
of, or ***** limitation or denial of liability upon, any pledge of any
certificate of deposit, securities or other property or asset pledged by any
third party to secure any or all of the Obligations, or any attempt to do any
of the foregoing, or commencement of proceedings by or against any such third
party under any bankruptcy or insolvency law; or (m) Borrower makes any
payment on account of any indebtedness or obligation which has been
subordinated to the Obligations other than as permitted in the applicable
subordination agreement, or if any Person who has subordinated such
indebtedness or obligations terminates or in any way limits or terminates its
subordination agreement + or (n) ++; or (o) Borrower shall generally not pay
its debts as they become due, or Borrower shall conceal, remove or transfer
any part of its property, with intent to hinder, delay or defraud its
creditors, or make or suffer any transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law; or (p)
there shall be a material adverse change in Borrower's business or financial
condition+++. Greyrock may cease making any Loans hereunder during any of the
above cure periods, and thereafter if an Event of Default has occurred.
++++AND SUCH EXCESS SHALL NOT BE REPAID BY BORROWER ON DEMAND BY GREYROCK
* 10
** 20 BUSINESS
*** OR
**** (WITHOUT GREYROCK'S CONSENT)
***** MATERIAL
+, WHICH LIMITATION OR TERMINATION HAS A MATERIALLY ADVERSE EFFECT ON
GREYROCK
++ LEVEL 8 SHALL OWN LESS THAN 70% OF THE ISSUED AND OUTSTANDING SHARES OF
STOCK OF SEER, OR THERE SHALL BE A CHANGE IN THE RECORD OR BENEFICIAL OWNERSHIP
OF AN AGGREGATE OF MORE THAN 40% OF THE OUTSTANDING SHARES OF STOCK OF LEVEL 8,
IN ONE OR MORE TRANSACTIONS, COMPARED TO THE OWNERSHIP OF OUTSTANDING SHARES OF
ITS STOCK IN EFFECT ON THE DATE HEREOF
+++; PROVIDED THAT NO OCCURRENCE OR CONDITION SHALL BE DEEMED TO BE A
MATERIAL ADVERSE CHANGE IN BORROWER'S BUSINESS OR FINANCIAL CONDITION HEREUNDER
TO THE EXTENT THAT SUCH OCCURRENCE OR CONDITION IS CONSISTENT IN ALL MATERIAL
RESPECTS WITH BORROWER'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF AND
FOR THE 12-MONTH PERIOD ENDED DECEMBER 31, 1996; OR (Q) THE FAILURE OF SEER
TECHNOLOGIES BENELUX B.V. OR SEER TECHNOLOGIES IRELAND LIMITED (COLLECTIVELY
"SUBSIDIARIES") TO EXECUTE AND DELIVER TO GREYROCK A CONTINUING GUARANTY OF ALL
OBLIGATIONS OF BORROWER TO GREYROCK, COLLATERALIZED BY A WRITTEN SECURITY
INTEREST IN THOSE ASSETS OF SUBSIDIARIES DESIGNATED BY GREYROCK AND ANY RELATED
DOCUMENTS REASONABLY REQUESTED BY GREYROCK ON OR BEFORE 10 DAYS AFTER THE DATE
HEREOF (IF NOT ALREADY COMPLETED).
++++AND SUCH EXCESS SHALL NOT BE REPAID BY BORROWER ON DEMAND BY GREYROCK
7.2 REMEDIES. Upon the occurrence and during the continuance of any Event
of Default, and at any time thereafter, Greyrock, at its option, and without
notice or demand of any kind (all of which are hereby expressly waived by
Borrower), may do any one or more of the following*: (a) Cease making Loans
or otherwise extending credit to Borrower under this Agreement or any other
document or agreement; (b) Accelerate and declare all or any part of the
Obligations to be immediately due, payable, and performable, notwithstanding
any deferred or installment payments allowed by any instrument evidencing or
relating to any Obligation; (c) Take possession of any or all of the
Collateral wherever it may be found, and for that purpose Borrower hereby
authorizes Greyrock without judicial process to enter onto any of Borrower's
premises without interference to search for, take possession of, keep, store,
or remove any of the Collateral, and remain on the premises or cause a
custodian to remain on the premises in exclusive control thereof, without
charge for so long as Greyrock ** deems it necessary in order to complete the
enforcement of its rights under this Agreement or any other agreement;
provided, however, that should Greyrock seek to take possession of any of the
Collateral by Court process, Borrower hereby irrevocably waives: (i) any bond
and any surety or security relating thereto required by any statute, court
rule or otherwise as an incident to such possession; (ii) any demand for
possession prior to the commencement of any suit or action to recover
possession thereof; and (iii) any requirement that Greyrock retain possession
of, and not dispose of, any such Collateral until after trial or final
judgment; (d) Require Borrower to assemble any or all of the Collateral and
make it available to Greyrock at places designated by Greyrock which are
reasonably convenient to Greyrock and Borrower, and to remove the Collateral
to such locations as Greyrock may deem advisable; (e) Complete the
processing, manufacturing or repair of any Collateral
7
prior to a disposition thereof and, for such purpose and for the purpose of
removal, Greyrock shall have the right to use Borrower's premises, vehicles,
hoists, lifts, cranes, equipment and all other property without charge; (f)
Sell, lease or otherwise dispose of any of the Collateral, in its condition
at the time Greyrock obtains possession of it or after further manufacturing,
processing or repair, at one or more public and/or private sales, in lots or
in bulk, for cash, exchange or other property, or on credit, and to adjourn
any such sale from time to time without notice other than oral announcement
at the time scheduled for sale. Greyrock shall have the right to conduct such
disposition on Borrower's premises without charge, for such time or times as
Greyrock deems reasonable, or on Greyrock's premises, or elsewhere and the
Collateral need not be located at the place of disposition. Greyrock may
directly or through any affiliated company purchase or lease any Collateral
at any such public disposition, and if permissible under applicable law, at
any private disposition. Any sale or other disposition of Collateral shall
not relieve Borrower of any liability Borrower may have if any Collateral is
defective as to title or physical condition or otherwise at the time of sale;
(g) Demand payment of, and collect any Receivables and General Intangibles
comprising Collateral and, in connection therewith, Borrower irrevocably
authorizes Greyrock to endorse or sign Borrower's name on all collections,
receipts, instruments and other documents, to take possession of and open
mail addressed to Borrower and remove therefrom payments made with respect to
any item of the Collateral or proceeds thereof, and, in Greyrock's sole
discretion, to grant extensions of time to pay, compromise claims and settle
Receivables, General Intangibles and the like for less than face value; and
(h) Demand and receive possession of any of Borrower's federal and state
income tax returns and the books and records utilized in the preparation
thereof or referring thereto. All reasonable attorneys' fees, expenses,
costs, liabilities and obligations incurred by Greyrock with respect to the
foregoing shall be added to and become part of the Obligations, shall be due
on demand, and shall bear interest at a rate equal to the highest interest
rate applicable to any of the Obligations. Without limiting any of Greyrock's
rights and remedies, *** of any Event of Default, the interest rate
applicable to the Obligations shall be increased by an additional four
percent per annum.
*, SUBJECT, IN EACH CASE, TO COMPLIANCE WITH THE CODE
** REASONABLY
*** DURING THE CONTINUATION
7.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. Borrower and
Greyrock agree that a sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to
Borrower at least seven days prior to the sale, and, in the case of a public
sale, notice of the sale is published at least seven days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Greyrock, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price in
cash or by cashier's check or wire transfer is required; (vi) With respect to
any sale of any of the Collateral, Greyrock may (but is not obligated to) direct
any prospective purchaser to ascertain directly from Borrower any and all
information concerning the same. Greyrock shall be free to employ other methods
of noticing and selling the Collateral, in its discretion, if they are
commercially reasonable.
7.4 POWER OF ATTORNEY. Upon the occurrence and during the continuance of any
Event of Default, without limiting Greyrock's other rights and remedies,
Borrower grants to Greyrock an irrevocable power of attorney coupled with an
interest, authorizing and permitting Greyrock (acting through any of its
employees, attorneys or agents) at any time, at its option, but without
obligation, with or without notice to Borrower, and at Borrower's expense, to do
any or all of the following, in Borrower's name or otherwise, but Greyrock
agrees to exercise the following powers in a commercially reasonable manner: (a)
Execute on behalf of Borrower any documents that Greyrock may, in its sole *
discretion, deem advisable in order to perfect and maintain Greyrock's security
interest in the Collateral, or in order to exercise a right of Borrower or
Greyrock, or in order to fully consummate all the transactions contemplated
under this Agreement, and all other present and future agreements; (b) Execute
on behalf of Borrower any document exercising, transferring or assigning any
option to purchase, sell or otherwise dispose of or to lease (as lessor or
lessee) any real or personal property which is part of Greyrock's Collateral or
in which Greyrock has an interest; (c) Execute on behalf of Borrower, any
invoices relating to any Receivable, any draft against any Account Debtor and
any notice to any Account Debtor, any proof of claim in bankruptcy, any Notice
of Lien, claim of mechanic's, materialman's or other lien, or assignment or
satisfaction of mechanic's, materialman's or other lien; (d) Take control in any
manner of any cash or non-cash items of payment or proceeds of Collateral;
endorse the name of Borrower upon any instruments, or documents, evidence of
payment or Collateral that may come into Greyrock's possession; (e) Endorse all
checks and other forms of remittances received by Greyrock; (f) Pay, contest or
settle any lien, charge, encumbrance, security interest and adverse claim in or
to any of the Collateral, or any judgment based thereon, or otherwise take any
action to terminate or discharge the same; (g) Grant extensions of time to pay,
compromise claims and settle Receivables and General Intangibles for less than
face value and execute all releases and other documents in connection therewith;
(h) Pay any sums required on account of
8
Borrower's taxes or to secure the release of any liens therefor, or both; (i)
Settle and adjust, and give releases of, any insurance claim that relates to any
of the Collateral and obtain payment therefor; (j) Instruct any third party
having custody or control of any books or records belonging to, or relating to,
Borrower to give Greyrock the same rights of access and other rights with
respect thereto as Greyrock has under this Agreement; and (k) Take any action or
pay any sum required of Borrower pursuant to this Agreement and any other
present or future agreements. Any and all reasonable sums paid and any and all
reasonable costs, expenses, liabilities, obligations and reasonable attorneys'
fees incurred by Greyrock with respect to the foregoing shall be added to and
become part of the Obligations, shall be payable on demand, and shall bear
interest at a rate equal to the highest interest rate applicable to any of the
Obligations. In no event shall Greyrock's rights under the foregoing power of
attorney or any of Greyrock's other rights under this Agreement be deemed to
indicate that Greyrock is in control of the business, management or properties
of Borrower.
* REASONABLE
7.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any sale
or other disposition of the Collateral shall be applied by Greyrock first to the
reasonable costs, expenses, liabilities, obligations and attorneys' fees
incurred by Greyrock in the exercise of its rights under this Agreement, second
to the interest due upon any of the Obligations, and third to the principal of
the Obligations, in such order as Greyrock shall determine in its sole
discretion. Any surplus shall be paid to Borrower or other persons legally
entitled thereto; Borrower shall remain liable to Greyrock for any deficiency.
If Greyrock, in its sole discretion, directly or indirectly enters into a
deferred payment or other credit transaction with any purchaser at any sale of
Collateral, Greyrock shall have the option, exercisable at any time, in its sole
discretion, of either reducing the Obligations by the principal amount of
purchase price or deferring the reduction of the Obligations until the actual
receipt by Greyrock of the cash therefor.
7.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set forth in
this Agreement, Greyrock shall have all the other rights and remedies accorded a
secured party under the California Uniform Commercial Code and under all other
applicable laws, and under any other instrument or agreement now or in the
future entered into between Greyrock and Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise by
Greyrock of one or more of its rights or remedies shall not be deemed an
election, nor bar Greyrock from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of Greyrock to exercise any
rights or remedies shall not operate as a waiver thereof, but all rights and
remedies shall continue in full force and effect until all of the Obligations
have been fully paid and performed.
8. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
"ACCOUNT DEBTOR" means the obligor on a Receivable.
"AFFILIATE" means, with respect to any Person, a director, officer, or any
parent or subsidiary of such Person, or any Person controlling, controlled by
or under common control with such Person.
"AGREEMENT" and "THIS AGREEMENT" means this Loan and Security Agreement and
all modifications and amendments thereto, extensions thereof, and replacements
therefor.
"BUSINESS DAY" means a day on which Greyrock is open for business.
"CODE" means the Uniform Commercial Code as adopted and in effect in the
State of California from time to time.
"COLLATERAL" has the meaning set forth in Section 2.1 above.
"DEFAULT" means any event which with notice or passage of time or both, would
constitute an Event of Default.
"DEPOSIT ACCOUNT" has the meaning set forth in Section 9105 of the Code.
"ELIGIBLE RECEIVABLES" MEANS RECEIVABLES ARISING IN THE ORDINARY COURSE OF
BORROWER'S BUSINESS FROM THE SALE OF GOODS OR RENDITION OF SERVICES, WHICH
GREYROCK, IN ITS REASONABLE BUSINESS JUDGMENT, SHALL DEEM ELIGIBLE FOR
BORROWING, BASED ON SUCH CONSIDERATIONS AS GREYROCK MAY FROM TIME TO TIME DEEM
APPROPRIATE. WITHOUT LIMITING THE FACT THAT THE DETERMINATION OF WHICH
RECEIVABLES ARE ELIGIBLE FOR BORROWING IS A MATTER OF GREYROCK'S REASONABLE
BUSINESS DISCRETION, THE FOLLOWING (THE "MINIMUM ELIGIBILITY REQUIREMENTS") ARE
THE MINIMUM REQUIREMENTS FOR A RECEIVABLE TO BE AN ELIGIBLE RECEIVABLE: (I) THE
RECEIVABLE MUST NOT BE OUTSTANDING FOR MORE THAN 90 DAYS FROM ITS DUE DATE, (II)
THE RECEIVABLE MUST NOT BE SUBJECT TO ANY CONTINGENCIES (INCLUDING RECEIVABLES
ARISING FROM SALES ON CONSIGNMENT, GUARANTEED SALE OR OTHER TERMS PURSUANT TO
WHICH PAYMENT BY THE ACCOUNT DEBTOR MAY BE CONDITIONAL) EXCEPT FOR RECEIVABLES
WITH RESPECT TO MAINTENANCE, SERVICES AND CUSTOM DEVELOPED WORK, FOR WHICH
BORROWER CUSTOMARILY BILLS IN ADVANCE, (III) THE RECEIVABLE MUST NOT BE OWING
FROM AN ACCOUNT DEBTOR WITH WHOM THE BORROWER HAS ANY DISPUTE (WHETHER OR NOT
RELATING TO THE PARTICULAR RECEIVABLE), (IV) THE RECEIVABLE MUST NOT BE OWING
FROM AN AFFILIATE OF BORROWER, (V) THE
9
RECEIVABLE MUST NOT BE OWING FROM AN ACCOUNT DEBTOR WHICH IS SUBJECT TO ANY
INSOLVENCY OR BANKRUPTCY PROCEEDING, OR WHOSE FINANCIAL CONDITION IS NOT
ACCEPTABLE TO GREYROCK, OR WHICH, FAILS OR GOES OUT OF A MATERIAL PORTION OF ITS
BUSINESS, (VI) THE RECEIVABLE MUST NOT BE OWING FROM AN ACCOUNT DEBTOR TO WHOM
BORROWER IS OR MAY BE LIABLE FOR GOODS PURCHASED FROM SUCH ACCOUNT DEBTOR OR
OTHERWISE. IF MORE THAN 50% OF THE RECEIVABLES OWING FROM AN ACCOUNT DEBTOR ARE
OUTSTANDING MORE THAN 90 DAYS FROM THEIR DUE DATE (WITHOUT REGARD TO UNAPPLIED
CREDITS) OR ARE OTHERWISE NOT ELIGIBLE RECEIVABLES, THEN ALL RECEIVABLES OWING
FROM THAT ACCOUNT DEBTOR WILL BE DEEMED INELIGIBLE FOR BORROWING. GREYROCK MAY,
FROM TIME TO TIME, IN ITS DISCRETION, REVISE THE MINIMUM ELIGIBILITY
REQUIREMENTS, UPON WRITTEN NOTICE TO THE BORROWER.
"EQUIPMENT" means all of Borrower's present and hereafter acquired machinery,
molds, machine tools, motors, furniture, equipment, furnishings, fixtures, trade
fixtures, motor vehicles, tools, parts, dyes, jigs, goods and other tangible
personal property (other than Inventory) of every kind and description used in
Borrower's operations or owned by Borrower and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions or improvements to any of the foregoing, wherever
located.
"EVENT OF DEFAULT" means any of the events set forth in Section 7.1 of this
Agreement.
"GENERAL INTANGIBLES" means all general intangibles of Borrower, whether now
owned or hereafter created or acquired by Borrower, including, without
limitation, all choses in action, causes of action, corporate or other business
records, Deposit Accounts, inventions, designs, drawings, blueprints, patents,
patent applications, trademarks and the goodwill of the business symbolized
thereby, names, trade names, trade secrets, goodwill, copyrights, registrations,
licenses, franchises, customer lists, security and other deposits, rights in all
litigation presently or hereafter pending for any cause or claim (whether in
contract, tort or otherwise), and all judgments now or hereafter arising
therefrom, all claims of Borrower against Greyrock, rights to purchase or sell
real or personal property, rights as a licensor or licensee of any kind,
royalties, telephone numbers, proprietary information, purchase orders, and all
insurance policies and claims (including life insurance, key man insurance,
credit insurance, liability insurance, property insurance and other insurance),
tax refunds and claims, computer programs, discs, tapes and tape files, claims
under guaranties, security interests or other security held by or granted to
Borrower, all rights to indemnification and all other intangible property of
every kind and nature (other than Receivables).
"GUARANTOR" means any Person who has guaranteed any of the Obligations.
"INVENTORY" means all of Borrower's now owned and hereafter acquired goods,
merchandise or other personal property, wherever located, to be furnished under
any contract of service or held for sale or lease (including all raw materials,
work in process, finished goods and goods in transit), and all materials and
supplies of every kind, nature and description which are or might be used or
consumed in Borrower's business or used in connection with the manufacture,
packing, shipping, advertising, selling or finishing of such goods, merchandise
or other personal property, and all warehouse receipts, documents of title and
other documents representing any of the foregoing.
"LIBOR RATE" means (i) the one-month London Interbank Offered Rate for
deposits in U.S. dollars, as shown each day in The Wall Street Journal (Eastern
Edition) under the caption "Money Rates - London Interbank Offered Rates
(LIBOR)"; or (ii) if the Wall Street Journal does not publish such rate, the
offered one-month rate for deposits in U.S. dollars which appears on the Reuters
Screen LIBO Page as of 10:00 a.m., New York time, each day, PROVIDED that if at
least two rates appear on the Reuters Screen LIBO Page on any day, the "LIBOR
Rate" for such day shall be the arithmetic mean of such rates; or (iii) if the
Wall Street Journal does not publish such rate on a particular day and no such
rate appears on the Reuters Screen LIBO Page on such day, the rate per annum at
which deposits in U.S. dollars are offered to the principal London office of The
Chase Manhattan Bank, in the London interbank market at approximately 11:00
A.M., London time, on such day in an amount approximately equal to the
outstanding principal amount of the Loans, for a period of one month, in each of
the foregoing cases as determined in good faith by Greyrock, which determination
shall be conclusive absent manifest error.
"OBLIGATIONS" means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to Greyrock, whether evidenced by this Agreement or any
note or other instrument or document, whether arising from an extension of
credit, opening of a letter of credit, banker's acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect (including, without
limitation, those acquired by assignment and any participation by Greyrock in
Borrower's debts owing to others), absolute or contingent, due or to become due,
including, without limitation, all interest, charges, expenses, fees, attorney's
fees, expert witness fees, audit fees, letter of credit fees, loan fees,
termination fees, minimum interest charges and any other sums chargeable to
Borrower under this Agreement or under any other present or future instrument or
agreement between Borrower and Greyrock.
"PERMITTED LIENS" means the following: (i) purchase money security interests
in * specific items of Equipment; (ii) leases of specific items of Equipment;
(iii) liens for taxes not yet payable; (iv) additional security interests and
liens which are subordinate to the security interest in favor of Greyrock and
are consented to in writing by Greyrock
10
(which consent shall not be unreasonably withheld); (v) security interests being
terminated substantially concurrently with this Agreement; (vi) liens of
materialmen, mechanics, warehousemen, carriers, or other similar liens arising
in the ordinary course of business and securing obligations which are not
delinquent; ** (vii) liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by liens of the type described above in
clauses (i) or (ii) *** above, provided that any extension, renewal or
replacement lien is limited to the property encumbered by the existing lien and
the principal amount of the indebtedness being extended, renewed or refinanced
does not increase; (viii) **** Liens in favor of customs and revenue authorities
which secure payment of customs duties in connection with the importation of
goods. Greyrock will have the right to require, as a condition to its consent
under subparagraph (iv) above, that the holder of the additional security
interest or lien sign an intercreditor agreement on Greyrock's then standard
form, acknowledge that the security interest is subordinate to the security
interest in favor of Greyrock, and agree not to take any action to enforce its
subordinate security interest so long as any Obligations remain outstanding, and
that Borrower agree that any uncured default in any obligation secured by the
subordinate security interest shall also constitute an Event of Default under
this Agreement.
* INVENTORY AND
** (VII) LIENS INCURRED AGAINST DEPOSITS MADE IN THE ORDINARY COURSE OF
BUSINESS IN CONNECTION WITH WORKER'S COMPENSATION, UNEMPLOYMENT INSURANCE AND
SOCIAL SECURITY BENEFITS;
(VIII) LIENS AGAINST CASH SECURING THE PERFORMANCE OF BIDS, TENDERS,
STATUTORY OBLIGATIONS, SURETY AND OTHER OBLIGATIONS OF A LIKE NATURE INCURRED IN
THE ORDINARY COURSE OF BUSINESS;
(IX) LIENS UPON ANY REAL PROPERTY ACQUIRED OR IMPROVED BY BORROWER OR AN
AFFILIATE THEREOF THAT ARE INCURRED WITHIN SIX (6) MONTHS AFTER SUCH ACQUISITION
OR IMPROVEMENT TO SECURE OR PROVIDE FOR THE PAYMENT OF ANY PART OF THE PURCHASE
PRICE OF SUCH REAL PROPERTY OR THE COST OF SUCH IMPROVEMENT;
(X) LIENS IN FAVOR OF GREYROCK;
(XI)
*** (IV) OR (IX)
**** (XII)
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.
"RECEIVABLES" means all of Borrower's now owned and hereafter acquired
accounts (whether or not earned by performance), letters of credit, contract
rights, chattel paper, instruments, securities, documents and all other forms of
obligations at any time owing to Borrower, all guaranties and other security
therefor, all merchandise returned to or repossessed by Borrower, and all rights
of stoppage in transit and all other rights or remedies of an unpaid vendor,
lienor or secured party.
OTHER TERMS. All accounting terms used in this Agreement, unless otherwise
indicated, shall have the meanings given to such terms in accordance with
generally accepted accounting principles, consistently applied. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meanings
provided by the Code, to the extent such terms are defined therein.
9. GENERAL PROVISIONS.
9.1 INTEREST COMPUTATION. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by Greyrock
(including proceeds of Receivables and payment of the Obligations in full) shall
be deemed applied by Greyrock on account of the Obligations three Business Days
after receipt by Greyrock of immediately available funds. Greyrock shall not,
however, be required to credit Borrower's account for the amount of any item of
payment which is unsatisfactory to Greyrock in its * discretion, and Greyrock
may charge Borrower's Loan account for the amount of any item of payment which
is returned to Greyrock unpaid.
* REASONABLE
9.2 APPLICATION OF PAYMENTS. All payments with respect to the Obligations may
be applied, and in Greyrock's sole discretion reversed and re-applied, to the
Obligations, in such order and manner as Greyrock shall determine in its sole
discretion.
9.3 CHARGES TO ACCOUNT. Greyrock may, in its discretion, require that
Borrower pay monetary Obligations in cash * to Greyrock, or charge them to
Borrower's Loan account, in which event they will bear interest at the same rate
applicable to the Loans.
* IMMEDIATELY AVAILABLE FUNDS
9.4 MONTHLY ACCOUNTINGS. Greyrock shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed * correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Greyrock), unless Borrower
notifies Greyrock in writing to the contrary within sixty days after each
account is rendered, describing the nature of any alleged errors or admissions.
* REBUTTABLY PRESUMED
9.5 NOTICES. All notices to be given under this Agreement shall be in writing
and shall be given either personally or by reputable private delivery service or
by regular first-class mail, or certified mail return receipt requested,
addressed to Greyrock or Borrower at the
11
addresses shown in the heading to this Agreement, or at any other address
designated in writing by one party to the other party. All notices shall be
deemed to have been given upon delivery in the case of notices personally
delivered, or at the expiration of one business day following delivery to the
private delivery service, or two business days following the deposit thereof in
the United States mail, with postage prepaid.
9.6 SEVERABILITY. Should any provision of this Agreement be held by any court
of competent jurisdiction to be void or unenforceable, such defect shall not
affect the remainder of this Agreement, which shall continue in full force and
effect.
9.7 INTEGRATION. This Agreement and such other written agreements, documents
and instruments as may be executed in connection herewith are the final, entire
and complete agreement between Borrower and Greyrock and supersede all prior and
contemporaneous negotiations and oral representations and agreements, all of
which are merged and integrated in this Agreement. THERE ARE NO ORAL
UNDERSTANDINGS, REPRESENTATIONS OR AGREEMENTS BETWEEN THE PARTIES WHICH ARE NOT
SET FORTH IN THIS AGREEMENT OR IN OTHER WRITTEN AGREEMENTS SIGNED BY THE PARTIES
IN CONNECTION HEREWITH.
9.8 WAIVERS. The failure of Greyrock at any time or times to require Borrower
to strictly comply with any of the provisions of this Agreement or any other
present or future agreement between Borrower and Greyrock shall not waive or
diminish any right of Greyrock later to demand and receive strict compliance
therewith. Any waiver of any default shall not waive or affect any other
default, whether prior or subsequent, and whether or not similar. None of the
provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to Greyrock shall be deemed to have been
waived by any act or knowledge of Greyrock or its agents or employees, but only
by a specific written waiver signed by an authorized officer of Greyrock and
delivered to Borrower. Borrower waives demand, protest, notice of protest and
notice of default or dishonor, notice of payment and nonpayment, release,
compromise, settlement, extension or renewal of any commercial paper,
instrument, account, General Intangible, document or guaranty at any time held
by Greyrock on which Borrower is or may in any way be liable, and notice of any
action taken by Greyrock, unless expressly required by this Agreement.
9.9 AMENDMENT. The terms and provisions of this Agreement may not be waived
or amended, except in a writing executed by Borrower and a duly authorized
officer of Greyrock.
9.10 TIME OF ESSENCE. Time is of the essence in the performance by Borrower
of each and every obligation under this Agreement.
9.11 ATTORNEYS FEES AND COSTS. Borrower shall reimburse Greyrock for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Greyrock, pursuant to,
or in connection with, or relating to this Agreement (whether or not a lawsuit
is filed), including, but not limited to, any reasonable attorneys' fees and
costs Greyrock incurs in order to do the following: prepare and negotiate this
Agreement and the documents relating to this Agreement; obtain legal advice in
connection with this Agreement or Borrower; enforce, or seek to enforce, any of
its rights; prosecute actions against, or defend actions by, Account Debtors;
commence, intervene in, or defend any action or proceeding; initiate any
complaint to be relieved of the automatic stay in bankruptcy; file or prosecute
any probate claim, bankruptcy claim, third-party claim, or other claim; examine,
audit, copy, and inspect any of the Collateral or any of Borrower's books and
records; protect, obtain possession of, lease, dispose of, or otherwise enforce
Greyrock's security interest in, the Collateral; and otherwise represent
Greyrock in any litigation relating to Borrower. If either Greyrock or Borrower
files any lawsuit against the other predicated on a breach of this Agreement,
the prevailing party in such action shall be entitled to recover its reasonable
costs and attorneys' fees, including (but not limited to) reasonable attorneys'
fees and costs incurred in the enforcement of, execution upon or defense of any
order, decree, award or judgment. All attorneys' fees and costs to which
Greyrock may be entitled pursuant to this Paragraph shall immediately become
part of Borrower's Obligations, shall be due on demand, and shall bear interest
at a rate equal to the highest interest rate applicable to any of the
Obligations.
9.12 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of Borrower and Greyrock; provided, however,
that Borrower may not assign or transfer any of its rights under this Agreement
without the prior written consent of Greyrock, and any prohibited assignment
shall be void. No consent by Greyrock to any assignment shall release Borrower
from its liability for the Obligations.
9.13 JOINT AND SEVERAL LIABILITY. If Borrower consists of more than one
Person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.
9.14 LIMITATION OF ACTIONS. Any claim or cause of action by Borrower against
Greyrock, its directors, officers, employees, agents, accountants or attorneys,
based upon, arising from, or relating to this Loan Agreement, or any other
present or future document or agreement, or any other transaction contemplated
hereby or thereby or relating hereto or thereto, or any other matter, cause or
thing whatsoever, occurred, done, omitted or suffered to be done by Greyrock,
its directors, officers, employees, agents, accountants or attorneys, shall be
barred unless asserted by Borrower by the commencement of an action or
proceeding in a court of competent
12
jurisdiction by the filing of a complaint within one year after the first act,
occurrence or omission upon which such claim or cause of action, or any part
thereof, is based, and the service of a summons and complaint on an officer of
Greyrock, or on any other person authorized to accept service on behalf of
Greyrock, within thirty (30) days thereafter. Borrower agrees that such one-year
period is a reasonable and sufficient time for Borrower to investigate and act
upon any such claim or cause of action. The one-year period provided herein
shall not be waived, tolled, or extended except by the written consent of
Greyrock in its sole discretion. This provision shall survive any termination of
this Loan Agreement or any other present or future agreement.
9.15 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used in
this Agreement for convenience. Borrower and Greyrock acknowledge that the
headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. The term
"including", whenever used in this Agreement, shall mean "including (but not
limited to)". This Agreement has been fully reviewed and negotiated between the
parties and no uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against Greyrock or Borrower under any
rule of construction or otherwise.
9.16 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of Greyrock and Borrower
shall be governed by the laws of the State of California. As a material part of
the consideration to Greyrock * to enter into this Agreement, Borrower (i)
agrees that all actions and proceedings relating directly or indirectly to this
Agreement shall, at Greyrock's option, be litigated in courts located within
California, and that the exclusive venue therefor shall be Los Angeles County;
(ii) consents to the jurisdiction and venue of any such court and consents to
service of process in any such action or proceeding by personal delivery or any
other method permitted by law; and (iii) waives any and all rights Borrower may
have to object to the jurisdiction of any such court, or to transfer or change
the venue of any such action or proceeding.
* THE PARTIES
9.17 MUTUAL WAIVER OF JURY TRIAL. BORROWER AND GREYROCK EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN GREYROCK AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF GREYROCK OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH GREYROCK OR
BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE.
In witness whereof, the parties hereto have executed and delivered this
Agreement under seal the date first above written.
BORROWER:
SEER TECHNOLOGIES, INC.
BY
------------------------------------------------
PRESIDENT OR VICE PRESIDENT
BY
------------------------------------------------
SECRETARY OR ASS'T SECRETARY
BORROWER:
LEVEL 8 SYSTEMS, INC.
BY
------------------------------------------------
PRESIDENT OR VICE PRESIDENT
BY
------------------------------------------------
SECRETARY OR ASS'T SECRETARY
GREYROCK:
GREYROCK CAPITAL,
A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION
BY
------------------------------------------------
TITLE
------------------------------------------------
13
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWERS: SEER TECHNOLOGIES, INC.
XXXXX 0 SYSTEMS, INC.
ADDRESS: 0000 XXXXXXX XXXXXXX
XXXX, XXXXX XXXXXXXX 00000
DATE: MARCH 31, 1999
This Schedule is an integral part of the Loan and Security Agreement between
GREYROCK CAPITAL, A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION
("Greyrock") and the above-borrower ("Borrower") of even date.
1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of: $25,000,000 (the
"Dollar Limit") at any one time outstanding; or the sum
of the following subparagraphs (a), (b) and (c):
(a) RECEIVABLE LOANS. Loans ("Receivable Loans") up to
the sum of the following percentages of Borrower's
Eligible Receivables (as defined in Section 8 above):
(i) 80% of the amount of eligible U.S. accounts;
PLUS
(ii) the lesser of 80% of Unbilled Receivables (as
defined below) or $7,000,000; PLUS
(iii) the lesser of 80% of the amount of eligible
Australian Receivables or $2,000,000; PLUS
(iv) 80% of the amount of eligible Irish
Receivables; PLUS
(V) 80% of the amount of eligible Netherlands
Receivables.
1
As used herein "Unbilled Receivables" shall mean
Receivables with respect to which the invoice and other
necessary billing documentation have not been submitted
to the applicable Account Debtor in connection with a
completed (or contracted) sale of goods, rendition of
services or licensing of software but which otherwise
qualify as Eligible Receivables for purposes of the
Loan Agreement.
Receivable Loans will be made separately to each
Borrower based on the Receivables of each Borrower.
Loans with respect, but subject to the dollar limits
set forth above, which shall apply to the total
Receivable Loans to all Borrowers.
(b) TERM LOAN. A Loan (the "Term Loan") in the original
principal amount of $7,000,000, which shall be made
concurrently herewith to Seer.
(c) EQUIPMENT LOAN. A Loan (the "Equipment Loan") in
the original principal amount of $2,500,000, which
shall be made concurrently herewith to Seer.
(d) FOREIGN ACCOUNTS. Notwithstanding the foregoing,
Loans will not be made with respect to Australian,
Irish or Netherlands Receivables unless and until the
following conditions are satisfied:
(i) Borrower or one of its subsidiaries has good
title to the Receivables, free and clear of all
liens, security interests and encumbrances (other
than in favor of Greyrock);
(ii) if the Receivables are owned by a subsidiary of
Borrower, such subsidiary shall execute and deliver
to Greyrock a continuing guaranty in form and
substance satisfactory to Greyrock with respect to
all of the Obligations and a security agreement or
other documentation specified by Greyrock, granting
to Greyrock a first priority perfected security
interest in all of such Receivables and all such
subsidiary's other assets, and Greyrock shall
receive such opinions, certificates and other
documents in connection therewith as it shall
specify; and
(iii) if the Receivables are owned by Borrower,
Borrower shall execute and deliver to Greyrock a
security agreement or other supplemental or
additional documentation specified by Greyrock,
confirming the grant to Greyrock a first priority
perfected security interest in all of such
Receivables and Greyrock shall receive such
opinions, certificates and other documents in
connection therewith as it shall specify.
2
Borrower shall cause all of the foregoing documents and
agreements and security interests to continue in full
force and effect throughout the term of this Agreement.
(e) TERM LOAN AND EQUIPMENT LOAN--REPAYMENT TERMS
(1) The Term Loan shall be disbursed concurrently
herewith and shall be repaid in 24 equal monthly
installments of $291,667 each, commencing on JANUARY
1, 2000 and continuing on the same day of each month
thereafter until paid in full; provided that as
provided in Section 6.3 above the entire unpaid
principal balance of the Term Loan and all other
Obligations shall be due an payable on termination
of this Agreement.
(2) The Equipment Loan shall be disbursed
concurrently herewith and shall be repaid in 30
equal monthly installments of $83,333 each,
commencing on APRIL 1, 1999 and continuing on the
same day of each month thereafter until paid in
full; provided that as provided in Section 6.3 above
the entire unpaid principal balance of the Equipment
Loan and all other Obligations shall be due an
payable on termination of this Agreement.
(3) Accrued interest on the Term Loan and the
Equipment Loan shall be paid monthly on the last day
of each month as provided in Section 1.2 above and
Section 2 below.
(4) The Term Loan and Equipment Loan after being
repaid in whole or in part may not be reborrowed.
LETTER OF CREDIT SUBLIMIT Greyrock, in its reasonable business discretion, will
from time to time during the term of this Agreement
issue letters of credit for the account of the
Borrower ("Letters of Credit"), in accordance
with a Letter of Credit Agreement of even date,
in an aggregate amount at any one time outstanding
not to exceed $500,000, upon the request of the
Borrower, provided that, on the date the Letters
of Credit are to be issued, Borrower has available
to it Loans in an amount equal to or greater than
the face amount of the Letters of Credit to be
issued, and provided that no further LCs will be
issued after SEPTEMBER 30, 1999. Fees for the
Letters of Credit shall be as provided in said
Letter of Credit Agreement. The Credit Limit set
forth above and the Loans available under this
Agreement at any time shall be reduced by the face
amount of Letters of Credit from time to time
outstanding.
3
2. INTEREST.
INTEREST RATE (Section 1.2):
The interest rate in effect throughout each calendar
month during the term of this Agreement shall be the
following, which shall be applicable to all Loans
(including without limitation the Receivable Loans, the
Term Loan and the Equipment Loan) and all other
Obligations:
PERIOD INTEREST RATE
------ -------------
Date hereof through
June 30, 1999 Prime Rate
July 1, 1999 through
June 30, 2000 Prime Rate plus 1% per annum
July 1, 2000 and
thereafter Prime Rate plus 2% per annum
Interest shall be calculated on the basis of a 360-day
year for the actual number of days elapsed. The
interest rate applicable to all Loans shall be adjusted
monthly as of the first day of each month, and the
interest to be charged for each month shall be based on
the highest "Prime Rate" in effect during said month.
"Prime Rate" shall mean the actual "Reference Rate' or
the substitute therefor of the Bank of America NT & SA
(or its successor) whether or not that rate is the
lowest interest rate charged by said bank. If the Prime
Rate, as defined, is unavailable, "Prime Rate" shall
mean the highest of the prime rates published in the
Wall Street Journal on the first business day of the
month, as the base rate on corporate loans at large
U.S. money center commercial banks."
3. FEES (Section 1.3/Section 6.2):
Loan Fee: NOT APPLICABLE
Termination Fee: NOT APPLICABLE
4
NSF Check Charge: $15.00 per item.
Wire Transfers: $15.00 per transfer.
4. MATURITY DATE
(Section 6.1): DECEMBER 31, 1999, subject to automatic renewal as
provided in Section 6.1 above, and early termination as
provided in Section 6.2 above.
5. REPORTING. (Section 5.2):
Borrower shall provide Greyrock with the following:
1. Annual financial statements, as soon as
available, and in any event within 90 days following
the end of Borrower's fiscal year, certified by
independent certified public accountants acceptable
to Greyrock.
2. Quarterly unaudited financial statements, as soon
as available, and in any event within 45 days after
the end of each fiscal quarter of Borrower.
3. Monthly unaudited financial statements, as soon
as available, and in any event within 30 days after
the end of each month.
4. Monthly Receivable agings, aged by invoice date,
within 10 Business Days after the end of each month
which is not a fiscal quarter end and 15 Business
Days after the end of each month which is a fiscal
quarter end.
5. Monthly accounts payable agings, aged by invoice
date, and outstanding or held check registers within
10 Business Days after the end of each month which
is not a fiscal quarter end and 15 Business Days
after the end of each month which is a fiscal
quarter end.
6. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(Section 3.2): None
PRIOR TRADE
NAMES OF BORROWER
(Section 3.2): None
EXISTING TRADE
NAMES OF BORROWER
(Section 3.2): None
5
OTHER LOCATIONS AND
ADDRESSES
(Section 3.3): See Exhibit A hereto
MATERIAL ADVERSE
LITIGATION
(Section 3.10): None
7. OTHER COVENANTS:
Borrower shall at all times comply with all of the
following additional covenants:
(1) SEER COPYRIGHT FILINGS. Seer has previously
executed and delivered to Greyrock a Security
Agreement in Copyrighted Works (the "Seer Copyright
Agreement"), which shall continue in full force and
effect. Borrower represents and warrants to Greyrock
that the Seer Copyright Agreement covers all of
Seer's computer software, the licensing of which
results in Receivables and that all such software
has been registered with the United States Copyright
Office. Without limiting the generality of the
foregoing, Borrower represents and warrants that all
of the software listed on Exhibit B to the Seer
Copyright Agreement is included in the software
listed on Exhibit A to the Seer Copyright Agreement,
which is registered with the United States Copyright
Office.
(2) LEVEL 8 COPYRIGHT FILINGS. Concurrently, Level 8
is executing and delivering to Greyrock a Security
Agreement in Copyrighted Works (the "Level 8
Copyright Agreement"). Within 45 days after the date
hereof, Borrower shall (i) cause all of Level 8's
computer software, the licensing of which results in
Receivables, to be filed for registration with the
United States Copyright Office, (ii) complete the
Exhibits to the Level 8 Copyright Agreement with all
of the information called for with respect to such
software, (iii) cause the Level 8 Copyright
Agreement to be filed for recordation in the United
States Copyright Office, and (iv) provide evidence
of such recordation to Greyrock.
(3) EQUITY. On or before MAY 31, 1999, Borrower
shall raise not less than $10,000,000 cash proceeds
of the issuance by Borrower of equity or
subordinated debt securities, and on or before said
date, Borrower shall provide Greyrock with written
evidence of the same satisfactory to Greyrock in its
discretion. Without limiting any of the other terms
of this Agreement, a breach of this Section 7(3)
shall constitute an Event of Default under this
Agreement.
(4) GUARANTIES. Concurrently each Borrower shall
execute an unlimited Cross-Corporate Continuing
Guaranty with respect to the other Borrower, and
Borrower shall cause the same to
6
continue in full force and effect throughout the
term of this Agreement. Borrower represents and
warrants that (i) each of its subsidiaries is listed
on Exhibit B hereto, (ii) the subsidiaries shown
thereon as foreign subsidiaries (other than the
subsidiaries incorporated in Ireland, Australia and
the Netherlands) are and shall at all times continue
to be sales offices only without significant assets,
and (iii) the subsidiaries shown thereon as U.S.
subsidiaries are and shall at all times continue to
be dormant corporations without assets. Each
Borrower shall, within 45 days after the date
hereof, cause all of the subsidiaries listed on
Exhibit B to execute and deliver to Greyrock
Continuing Guaranties with respect to Borrower and
security agreements and other documents as Greyrock
shall specify in order to grant Greyrock a
first-priority security interest in all of the
assets of said subsidiaries.
(5) UCC FILINGS. Borrower represents and warrants
that all indebtedness secured by the following UCC-1
Financing Statements has been paid and performed in
full, and Borrower shall cause the following UCC-1
Financing Statements to be terminated of record and
shall provide evidence of the same to Greyrock
within 10 days after the date hereof:
FILING OFFICE FILING DATE FILE NO. SECURED PARTY
------------- ----------- ------- -------------
Florida Secy of 06/12/96 960000121248 Tech Data Corporation
State.
New York Secy of 09/14/94 188514 Xxxxxxx Xxxxx Business
State Financial Services Inc.
New York Secy of 06/13/96 118047 Tech Data Corporation
State
(6) BANK ACCOUNTS. Within 30 days after the date
hereof, Borrower shall cause its banks located in the
United States, to execute and deliver such
documentation as Greyrock shall reasonably specify in
order to provide Greyrock with a first-priority
perfected security interest in the same.
7
Borrower: Borrower:
Seer Technologies, Inc. LEVEL 8 SYSTEMS, INC.
By By
------------------------------------ -------------------------------
President or Vice President President or Vice President
By By
------------------------------------ -------------------------------
Secretary or Ass't Secretary Secretary or Ass't Secretary
Greyrock:
Greyrock Capital,
a Division of NationsCredit Commercial Corporation
By
---------------------------------
Title
------------------------------
8
EXHIBIT A
SEER TECHNOLOGIES, INC.-LOCATIONS
LEVEL 8 SYSTEMS, INC.-LOCATIONS
9
EXHIBIT B
U.S. SUBSIDIARIES
FOREIGN SUBSIDIARIES
10
