Loan and Security Agreement
Borrower: Seer Technologies, Inc.
Address: 0000 Xxxxxxx Xxxxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Date: March 26, 1997
This Loan and Security Agreement is entered into on the
above date between GREYROCK BUSINESS CREDIT, a Division of
NationsCredit Commercial Corporation ("GBC"), whose address
is 00000 Xxxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxxxx, XX 00000
and the borrower named above ("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.)
1. LOANS.
1.1 Loans. GBC will make loans to Borrower (the "Loans"),
in amounts determined by GBC 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 GBC,
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 GBC
and Borrower. Interest shall be payable monthly, on the last day of the
month. Interest may, in GBC'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 GBC the fee(s) shown on the
Schedule, which are in addition to all interest and other
sums payable to GBC 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
GBC 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 GBC is granted a security interest pursuant to any
other present or future agreement, all property now or at
any time in the future in GBC'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 GBC to enter into this Agreement and to
make Loans, Borrower represents and warrants to GBC
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:
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 GBC 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 GBC 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. GBC 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 GBC 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 GBC, use its best efforts to cause such third
party to execute and deliver to GBC, in form acceptable to
GBC, such waivers and subordinations as GBC shall
specify, so as to ensure that GBC'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 GBC 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 GBC 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 GBC 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 promptly
and diligently instituted and conducted, (ii) notifies GBC 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 ofall 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 GBC 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 GBC 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 GBC 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 GBC 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 GBC transaction reports and loan requests, schedules and
assignments of all Receivables, and schedules of collections, all on
GBC's standard forms; provided, however, that Borrower's failure to execute
and deliver the same shall not affect or limit GBC's security
interest and other rights in all of Borrower's Receivables, nor shall
GBC's failure to advance or lend against a specific Receivable affect or
limit GBC's security interest and other rights therein. By GBC, Borrower
shall furnish GBC with copies (or, at GBC'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 GBC an aged accounts
receivable trial balance in such form and at such intervals as GBC shall
request. In addition, Borrower shall deliver to GBC 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.
* Upon reasonable request
4.4 Collection of Receivables. Borrower shall have the
right to collect all Receivables, unless and until
an Event of Default has occurred. Borrower shall hold
all payments on, and proceeds of, Receivables in trust for
GBC, and Borrower shall deliver all such payments and
proceeds to GBC, 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 GBC shall
determine.
4.5 Disputes. Borrower shall notify GBC promptly of all
disputes or claims relating to Receivables on the regular
reports to GBC. 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 GBC on the regular reports provided to GBC; (ii)
no 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 GBC). In the event any attempted return occurs
after the occurrence of any Event of Default*, Borrower shall (i)
not accept any return without GBC's prior written consent,
* that is continuing ** and
4.7 Verification. GBC 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 GBC or such other name as GBC may choose, and
GBC or its designee may, at any time, notify
Account Debtors that it has a security interest in the
Receivables.
4.8 No Liability. GBC 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 GBC 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 GBC 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 GBC, in such form and amounts as GBC may
reasonably require, and Borrower shall provide evidence of
such insurance to GBC, so that GBC is satisfied that
such insurance is, at all times, in full force and effect.
All such insurance policies shall name GBC as an additional
loss payee, and shall contain a lenders loss payee
endorsement in form reasonably acceptable to GBC. Upon
receipt of the proceeds of any such insurance, GBC shall
apply such proceeds in reduction of the Obligations as GBC
shall determine in its sole discretion, except that, provided no Default or
Event of Default has occurred and is continuing, GBC shall release to
Borrower insurance proceeds, which shall be utilized by Borrower for
the replacement of the Equipment with respect to which the insurance proceeds
were paid. GBC may require reasonable assurance that the
insurance proceeds so released will be so used. If
Borrower fails to provide or pay for any insurance, GBC may,
but is not obligated to, obtain the same at Borrower's
expense. Borrower shall promptly deliver to GBC copies of
all reports made to insurance companies.
5.2 Reports. Borrower, at its expense, shall provide GBC
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 GBC 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, GBC, or its
agents, shall have the right to inspect the Collateral, and
the right to audit and copy Borrower's books and records.
GBC shall take reasonable steps to keep confidential all
information obtained in any such inspection or audit, but
GBC 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 GBC's
then current standard charge 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 GBC'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 GBC's written consent, which may be conditioned
upon such accounting firm, service bureau or other third party agreeing
to give GBC the same rights with respect to access to books and records
and related rights as GBC 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
GBC 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 GBC 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 GBC 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 GBC. 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 GBC'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
Event of Default has occurred and is continuing, Borrower may
(a) sell finished Inventory in the ordinary course of Borrower's
business, and (b) 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 direpayment
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 GBC with respect to any Collateral or in any manner
relating to Borrower, Borrower shall, without expense to GBC, make available
Borrower and its officers, employees and agents, and Borrower's books and
records, without charge, to the extent that GBC 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 GBC 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 GBC,
to execute all documents and take all actions, as GBC * may deem
necessary or useful in order to perfect and maintain GBC'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 GBC and hold GBC
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 GBC 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
withholding or other tax relating to Borrower or its employees, any
relationship or agreement between GBC and Borrower, any actual or
alleged failure of GBC 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
GBC ** relating to Borrower or the Obligations (except any such amounts
sustained or incurred as the result of the gross
negligence or willful misconduct of GBC or any of its
directors, officers, employees, agents, attorneys, or any other
person affiliated with or representing GBC). 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 GBC; or (ii) by GBC at any time
after the occurrence of an Event of Default, without notice, effective
immediately. If this Agreement is terminated by Borrower or by GBC under
this Section 6.2, Borrower shall pay to GBC 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 GBC, then on such date Borrower shall
provide to GBC cash collateral in an amount equal to * of
the face amount of all such letters of credit plus all interest,
fees and costs due or (in GBC's ** estimation) likely to become
due in connection therewith, to secure all of the Obligations
standard form cash pledge agreement. Notwithstanding any termination
of this Agreement, all of GBC'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
GBC, GBC 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 GBC, nor shall any such termination relieve Borrower of
any Obligation to GBC, 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, GBC shall promptly deliver
to Borrower termination statements, requests for reconveyances and such
other documents as may be reasonably required to terminate GBC'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 GBC immediate written notice thereof: (a) Any warranty,
representation, statement, report or certificate made or delivered to
GBC 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 nonmonetary Obligation which by
its nature cannot be cured; or (e) Borrower shall fail to perform any other
nonmonetary 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 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, 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 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 indebted-
ness or obligations terminates or in any way limits or terminates its
subordination agreement(1) or (n) there shall be a change in the record or
beneficial ownership without the prior written consent of GBC; 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(4)
. GBC may cease making any Loans hereunder during any of the above cure
periods, and thereafter if an Event of Default has occurred.
* 10
** 20 business
*** or
**** (without GBC's consent)
***** material
(1), which limitation or termination has a materially adverse effect on GBC
(2) an aggregate
(3) whereby Welsh Xxxxxx Xxxxxxxx & Xxxxx VI, L.P., a Delaware limited
partnership's equity ownership decreases to less than 51%
(4); 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
GBC a Continuing Guaranty of all Obligations of Borrower to
GBC, collateralized by a written security interest in those assets of
Subsidiaries designated by GBC and any related documents reasonably
requested by GBC; or (r) failure of Welsh, Carson, Xxxxxxxx & Xxxxx VI,
L.P., a Delaware limited partnership, to maintain in effect, until all
Obligations of Borrower to GBC indefeasibly paid in full and
totally discharged, a Guaranty on terms identical or substantially similar
to that certain Guaranty dated July 15, 1996 in favor of NationsBank, N.A.
located in Dallas, Texas whereby Welsh, Carson, Xxxxxxxx & Xxxxx VI, L.P. has,
among other things, guaranteed payment of the "Guaranteed Indebtedness"
(therein defined) of Borrower to said bank
7.2 Remedies. Upon the occurrence and during the continuance of any
Event of Default, and at any time thereafter, GBC, 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 GBC 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 GBC ** deems
it necessary in order to complete the enforcement of its
rights under this Agreement or any other agreement; provided, however,
that should GBC 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 GBC 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 GBC at places designated by GBC which are reasonably convenient
to GBC and Borrower, and to remove the Collateral to such locations as GBC
may deem advisable; (e) Complete the processing, manufacturing or repair of
any Collateral prior to a disposition thereof and, for such purpose and for
the purpose of removal, GBC 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 GBC 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. GBC shall have the
right to conduct such disposition on Borrower's premises without charge,
for such time or times as GBC deems reasonable, or on GBC's premises, or
elsewhere and the Collateral need not be located at the place of disposition.
GBC 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 GBC 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 GBC'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 GBC with respect
to the foregoing shall be added to and become part of the Obligations,
Without limiting any of GBC'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 GBC
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
GBC, 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, GBC may
(but is not obligated to) direct any prospective purchaser to ascertain from
the Borrower any and all information concerning the same. GBC 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 GBC's other rights and remedies,
Borrower grants to GBC an irrevocable power of attorney coupled with an
interest, authorizing and permitting GBC (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
GBC agrees to exercise the following powers in a commercially
reasonable manner: (a) Execute on behalf of Borrower any documents that
GBC may, in its sole * discretion, deem advisable in order to perfect and
maintain GBC's security interest in the Collateral, or in order to exercise
a right of Borrower or GBC, 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 GBC's Collateral or in which GBC 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 GBC's
possession; (e) Endorse all checks and
other forms of remittances received by GBC; (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 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 GBC the same rights of access and other
rights with respect thereto as GBC has under this Agreement; and (k)
Take any action or p her rights under this Agreement be deemed to indicate
that GBC 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 GBC first to the reasonable costs, expenses,
liabilities, obligations and attorneys' fees incurred by GBC 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 GBC shall determine in its sole discretion.
Any surplus shall be paid to Borrower or other persons legally entitled
thereto; Borrower shall remain liable to GBC for any deficiency.
If GBC, 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 GBC of the cash therefor.
7.6 Remedies Cumulative. In addition to the rights and remedies set
forth in this Agreement, GBC 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 GBC and Borrower, and
all of such rights and remedies are cumulative and none is exclusive.
Exercise or partial exercise by GBC of one or more of its rights or
remedies shall not be deemed an election, nor bar GBC from
subsequent exercise or partial exercise of any other rights or remedies.
The failure or delay of GBC 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, 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 GBC 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 GBC, in its reasonable business judgment, shall deem eligible
for borrowing, based on such considerations as GBC 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 GBC'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 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 GBC, 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. GBC 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 GBC, 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 GBC, 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 GBC, 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 GBC 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 GBC.
"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 GBC and are consented
to in writing by GBC (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.
GBC 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 intercreditors
agreement on GBC's then standard form, acknowledge that the security
interest is subordinate to the security interest in favor of GBC, 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 constititute 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 GBC;
(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 GBC
(including proceeds of Receivables and payment of the Obligations in full)
shall be deemed applied by GBC on account of the Obligations three Business
Days after receipt by GBC of immediately available funds. GBC shall not,
however, be required to credit Borrower's account for the amount of any
item of payment which is unsatisfactory to GBC in its * discretion, and
GBC may charge Borrower's Loan account for the amount of any item of payment
which is returned to GBC unpaid.
* reasonable
9.2 Application of Payments. All payments with respect to the
Obligations may be applied, and in GBC's sole discretion reversed
and re-applied, to the Obligations, in such order and manner as GBC
shall determine in its sole discretion.
9.3 Charges to Account. GBC may, in its discretion, require that
Borrower pay monetary Obligations * to GBC, 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. GBC shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be * correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by GBC), unless
Borrower notifies GBC 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 GBC or Borrower at the 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 GBC
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 GBC 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 GBC shall not waive or diminish any right of GBC 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 GBC shall be deemed to have
been waived by any act or knowledge of GBC or its agents or employees,
but only by a specific written waiver signed by an authorized officer
of GBC 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 GBC on which Borrower is or
may in any way be liable, and notice of any action taken by GBC,
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 GBC.
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 GBC
for all reasonable attorneys' fees and all filing, recording,
search, title insurance, appraisal, audit, and other reasonable
costs incurred by GBC, 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 GBC
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 GBC's security interest in, the Collateral; and otherwise
represent GBC in any litigation relating to Borrower. If either GBC
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 GBC 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 GBC;
provided, however, that Borrower may not assign or transfer any of its
rights under this Agreement without the prior written consent of
GBC, and any prohibited assignment shall be void. No consent by
GBC 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 GBC, 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 GBC, 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
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 GBC, or on any other person
authorized to accept service on behalf of GBC, 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 GBC 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 GBC 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 GBC 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 GBC and
Borrower shall be governed by the laws of the State of California.
As a material part of the consideration to * to enter into this
Agreement, Borrower (i) agrees that all actions and proceedings
relating directly or indirectly to this Agreement shall, at GBC'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 GBC 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 GBC AND BORROWER, OR
ANY CONDUCT, ACTS OR OMISSIONS OF GBC OR BORROWER OR ANY OF THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS
AFFILIATED WITH GBC 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__/s/Xxxxxx Dmiszewicki______
President or Vice President
By__/s/Xxxxxx McKinnie_____
Secretary
[AFFIX CORPORATE SEAL]
GBC:
GREYROCK BUSINESS CREDIT,
a Division of NationsCredit Commercial Corporation
By _ /s/ Xxxxxxx Suhl______
Title President______
SCHEDULE TO LOAN AND SECURITY AGREEMENT
Schedule to
Loan and Security Agreement
Borrower: Seer Technologies, Inc.
Address: 0000 Xxxxxxx Xxxxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Date: March 26, 1997
This Schedule is an integral part of the Loan and Security Agreement between
Greyrock Business Credit, a Division of NationsCredit Commercial
Corporation ("GBC") and the above-borrower ("Borrower") of even date.
1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser
of: (i) $25,000,000 (the "Dollar Limit") at any one
time outstanding; or (ii) 80% of the amount of
Borrower's Eligible Receivables (as defined in
Section 8 above); provided that until GBC obtains a
participant to participate in the Loans in a
principal amount of $5,000,000, pursuant to a
written participation agreement in form specified by
GBC, the Dollar Limit shall be $20,000,000.
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 highest "LIBOR Rate" in
effect during such month, plus 5% per annum, provided that the
interest charged for each month shall be a
minimum of $20,000, regardless of the amount of the
obligations outstanding. Interest shall be calculated on
the basis of a 360-day year for the actual number of days
elapsed. "LIBOR Rate" has the meaning set forth in Section
8 above.
3. FEES (Section 1.3/Section 6.2):
Loan Fee: $250,000, payable concurrently herewith.
Termination Fee: $20,000 per month for each month
(or portion thereof) from the effective date of
termination to the Maturity Date
NSF Check Charge: $15.00 per item.
Wire Transfers: $15.00 per transfer.
4. MATURITY DATE
(Section 6.1): March 31, 1998, 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 GBC 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 GBC.
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 days after the end of each month.
5. Monthly accounts payable agings, aged by invoice date,
and outstanding or held check registers within 10 days after
the end of each month.
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
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) NationsBank, N.A. Line of Credit. Borrower presently has a $12.5
million line of credit (the "Other credit Line") from NationsBank, N.A.
("NationsBank"), which is guaranteed by Welsh, Carson, Xxxxxxxx & Xxxxx VI,
L.P., a Delaware limited partnership ("Welsh"), pursuant to a written
guaranty dated July 15, 1996 (the "Welsh Guaranty"). Borrower agrees to
keep the Other Credit Line in effect throughout the term of this Agreement,
and to cause Welsh to keep the Welsh Guaranty in effect throughout the term of
this Agreement. Borrower also agrees (subject to the Credit
Limit set forth in Section 1.1 above), to maintain, at all
times, outstanding Loans under this Agreement in an amount
not less than the principal balance of the outstanding
loans under the Other Credit Line.
(2) Subordination Agreement. To the extend NationsBank has any
security interests in any assets of Borrower,
Borrower, prior to the funding of the first Loan hereunder,
Borrower shall provide GBC with a subordination agreement on
GBC's standard form, executed by NationsBank, subordinating such security
interests to the lien and security interest granted GBC by Borrower
(the "Subordination Agreement").
Throughout the term of this Agreement, Borrower shall cause
the Subordination Agreement to continue in full force and effect.
(3) Copyright Filings. Concurrently, Borrower is
executing and delivering to GBC a Security Agreement in
Copyrighted Works (the "Copyright Agreement"). Within 60
days after the date hereof, Borrower shall (i) cause all of
its 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
Copyright Agreement with all of the information called for
with respect to such software, (iii) cause the Copyright
Agreement to be filed for recordation in the United States Copyright Office,
and (iv) provide evidence of such recordation to GBC.
Borrower:
SEER TECHNOLOGIES, INC.
By_/s/Xxxxxx Dmiszewicki_
President or Vice President
By_/s/Xxxxxx McKinnie_____
Secretary or Ass't Secretary
[AFFIX CORPORATE SEAL]
GBC:
GREYROCK BUSINESS CREDIT,
a Division of NationsCredit Commercial Corporation
By_Richard Suhl__
Title__President___
EXHIBIT A
SEER TECHNOLOGIES, INC.
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
00 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
0 Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Tysons Dulles Plaza
0000 Xxxxxx Xxxx Xxxx
Xxxxx 000
XxXxxx, XX 00000
3rd Floor
Samarine House
00 Xxxxxxxx Xxxxxx
Xxxxxxxx 0000
XXXXX XXXXXX
