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EXHIBIT 10.18
LOAN AND SECURITY AGREEMENT
Agreement No. 19101 Dated as of August 31, 1998
by and between
LIGHTHOUSE CAPITAL PARTNERS II, L.P.,
as lender
and
SKYSTREAM CORPORATION
a California corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
as borrower
TOTAL COMMITMENT: $2,000,000
Repayment Period: 24 months
Principal Repayment Factor: 4.167%
Stock Purchase Agreement:
Number of shares: 75,410
Class of stock: Common
Price per share: $0.225
The terms and information set forth on this cover page are a part of the
attached Loan and Security Agreement, dated as of the date first written above
(this "Agreement"), entered into by and between Lighthouse Capital Partners II,
L.P. ("Lender") and the borrower ("Borrower") set forth above. The terms and
conditions of the Loan Agreement agreed to between Lender and Borrower are as
follows:
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THIS LOAN AND SECURITY AGREEMENT is entered into as of August 31, 1998, by
and between LIGHTHOUSE CAPITAL PARTNERS II, L.P. ("Lender"), as lender and
SKYSTREAM CORPORATION, a California corporation ("Borrower").
RECITALS
Borrower wishes to borrow money from time to time from Lender and Lender
desires to lend money to Borrower. This Agreement sets forth the terms on which
Lender will lend to Borrower and Borrower will repay the loan to Lender.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. As used in this Agreement, the following terms
shall have the following definitions:
"Affiliate" means any Person that owns or controls directly
or indirectly five percent or more of the stock of another entity, any Person
that controls or is controlled by or is under common control with such Persons
or any Affiliate of such Persons or each of such Person's officers, directors,
joint venturers or partners.
"Basic Rate" means a per annum variable rate of interest
(based on a year of 360 days and actual days elapsed) equal to the Prime Rate
as quoted in the western edition of the Wall Street Journal on the date of
determination plus 450 basis points, which rate shall vary concurrently with
any change in the Prime Rate.
"Borrower's Books" means all of Borrower's books and
records including: ledgers; records concerning Borrower's assets or
liabilities, the Collateral, business operations or financial condition; and
all computer programs, or tape files, and the equipment, containing such
information.
"Business Day" means any day that is not a Saturday,
Sunday, or other day on which banks in the State of California are authorized
or required to close.
"Code" means the Uniform Commercial Code as adopted and in
effect in the State of California, as amended from time to time.
"Collateral" means the Property described on EXHIBIT A
attached hereto.
"Commitment" means $2,000,000.
"Commitment Termination Date" means December 31, 1998.
"Contingent Obligation" means, as applied to any Person,
any direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend, letter of credit or other
obligation of another, including any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly
liable. The amount of any Contingent Obligation shall be equal to the amount of
the obligation so guaranteed or otherwise supported.
"Default" means any event which with the passing of time or
the giving of notice or both would become an Event of Default hereunder.
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"Default Rate" means the per annum rate of interest equal to the Basic
Rate plus 3%, but such rate shall in no event be more than the highest rate
permitted by applicable law to be charged on commercial loans.
"Event of Default" has the meaning given to such term in SECTION 8.
"Facility Fee" has the meaning given to such term in SECTION 2.5(a).
"Funding Date" means any date on which a Loan is made to or on account of
Borrower under this Agreement.
"Government Authority" means (a) any federal, state, county, municipal or
foreign government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body, (c) any court or administrative tribunal or (d)
with respect to any Person, any arbitration tribunal or other non-governmental
authority to whose jurisdiction that Person has consented.
"Indebtedness" means (a) all indebtedness for borrowed money or the
deferred purchase price of Property or services, including reimbursement and
other obligations with respect to surety bonds and letters of credit, (b) all
obligations evidenced by notes, bonds, debentures or similar instruments, (c)
all capital lease obligations, and (d) all Contingent Obligations.
"Interim Payment" has the meaning given to such term in SECTION 2.4(b).
"Landlord Consent" means a consent in the form of EXHIBIT C or such other
form as Lender may agree to accept.
"Lender's Expenses" means all reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan
Documents; and Lender's reasonable attorneys' fees and expenses incurred in
amending, modifying, enforcing or defending the Loan Documents, including in
the exercise of any rights or remedies afforded hereunder or under applicable
law, whether or not suit is brought.
"Lien" means any pledge, bailment, lease, mortgage, hypothecation,
conditional sales and title retention agreement, charge, claim, encumbrance or
other lien in favor of any Person.
"Liquidation Event" means any of the following: (i) a merger of Borrower
with another entity; or (ii) the sale of all or substantially all of Borrower's
assets; or (iii) a transaction in which the shareholders immediately prior to
such transaction own less than 50% of the equity securities of Borrower
immediately after such transaction; or (iv) the initial public offering of any
of Borrower's equity securities.
"Loan" means each advance of credit by Lender to Borrower under this
Agreement.
"Loan Agreement Supplement" means a supplement to this Agreement in
substantially the form of EXHIBIT D.
"Loan Commencement Date" means October 1, 1999.
"Loan Documents" means, collectively, this Agreement, the Stock Purchase
Agreement, the Landlord Consent(s) and all other documents, instruments and
agreements entered into between Borrower and Lender in connection with this
Agreement, all as amended or extended from time to time.
"Maturity Date" means, with respect to each Loan, the last day of the
Repayment Period for such Loan, or if earlier, the date of acceleration of such
Loan by Lender following an Event of Default.
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"Minimum Funding Amount" means $500,000.
"Obligations" means all debt, principal, interest, fees, charges,
expenses and attorneys' fees and costs and other amounts, obligations,
covenants, and duties owing by Borrower to Lender of any kind and description
(whether pursuant to or evidenced by the Loan Documents, or by any other
agreement between Lender and Borrower, and whether or not for the payment of
money), whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, including the principal and interest
due with respect to the Loans, and including any debt, liability, or obligation
owing from Borrower to others that Lender may have obtained by assignment or
otherwise, and further including all interest not paid when due and all
Lender's Expenses that Borrower is required to pay or reimburse by the Loan
Documents, by law, or otherwise.
"Payment Date" has the meaning given to that term in SECTION 2.4(a).
"Permitted Indebtedness" means the following:
(a) any loans made from time to time by Lender;
(b) Indebtedness secured by the Permitted Lien in clause (d) of
the definition of Permitted Liens;
(c) Indebtedness, provided said Indebtedness is junior in
priority to the loans made by Lender under this Agreement and further provided
said other lender(s) shall have entered into a subordination agreement with
Lender reasonably acceptable to Lender;
(d) Indebtedness up to $750,000 in favor of Silicon Valley Bank
or another lender reasonably acceptable to Lender, provided Silicon Valley Bank
or the other lender has executed an intercreditor agreement reasonably
acceptable to Lender;
(e) Other senior Indebtedness not to exceed $1,000,000; and
(f) Other Indebtedness secured solely by Borrower's accounts
receivable.
"Permitted Liens" means the following:
(a) The Lien created by this Agreement;
(b) Any Liens existing as of the date hereof and disclosed in
SCHEDULE I;
(c) Liens securing indebtedness permitted pursuant to clause
(d) of the definition of Permitted Indebtedness provided Silicon Valley Bank
or the other lender has entered into an intercreditor agreement with Lender
reasonably acceptable to Lender;
(d) Liens and security interests (a) upon or in any equipment
acquired or held by Borrower to secure the purchase price of such equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such equipment and in an amount not greater than the purchase price thereof or
(b) existing on such equipment at the time of its acquisition, provided that
the Lien and security interest is confined solely to the property so acquired
and improvements thereon, and the proceeds of such equipment;
(e) Liens securing indebtedness permitted pursuant to clause
(c) of the definition of Permitted Indebtedness provided the liens are junior
to that of Lender and the other lenders have entered into a subordination
agreement with Lender reasonably acceptable to Lender;
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(f) Liens securing indebtedness permitted pursuant to clause
(e) of the definition of Permitted Indebtedness provided that the other
lender(s) have entered into an intercreditor agreement with Lender reasonably
acceptable to Lender;
(g) Liens securing indebtedness permitted pursuant to clause
(f) of the definition of Permitted Indebtedness provided the Lien is limited
solely to Borrower's accounts receivable in favor of a commercial bank or other
financial institution upon commercially reasonable terms (reasonably
satisfactory to Lender) including, without limitation, an advance rate that
does not exceed eighty percent (80%) of eligible accounts (using a definition
that is consistent with prudent lending practices). Lender will execute a
subordination agreement reasonably acceptable to Lender subordinating solely
Lender's security interest in Borrower's accounts receivable;
(h) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings, provided the same have no superior priority over
Lender's Lien in the Collateral;
(i) Liens to secure payment of worker's compensation,
employment insurance, old age pensions or other social security obligations of
Borrower in the ordinary course of business of Borrower;
(j) Liens on equipment leased by Borrower pursuant to an
operating lease in the ordinary course of business (including proceeds thereof
and accessions thereto) incurred solely for the purpose of financing the lease
of such equipment;
(k) Leases or subleases and licenses or sublicenses granted in
the ordinary course of Borrower's business and any interest or title of a
lessor or licensor under any lease or license;
(l) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under SECTION 8.5;
(m) Easements, reservations, rights-of-ways, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances affecting real property that could not reasonably be expected to
have a material adverse effect;
(n) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payments of customs duties in connection with the
importation of goods;
(o) Liens that are not prior to the Lien of Lender which
constitute rights of set-off of a customary nature or banker's Liens with
respect to amount on deposit, whether arising by operation of law or by
contract, in connection with arrangements entered into with banks in the
ordinary course of business;
(p) Liens of materialmen, mechanics, warehousemen, carriers, or
other similar Liens arising in the ordinary course of business or by operation
of law or regulation and securing obligations not yet due; and
(q) Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in
clauses (b) and (d) above, provided that any extension, renewal or replacement
Lien shall be limited to the Property encumbered by the existing Lien and the
principal amount of the indebtedness being extended, renewed or refinanced does
not increase.
"Person" means and includes any individual, any partnership, any
corporation, any business trust, any joint stock company, any limited liability
company, any unincorporated association or any other entity and any domestic or
foreign national, state or local government, any political subdivision thereof,
and any department, agency, authority or bureau of any of the foregoing.
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"Prepayment Fee" means an amount equal to one and one-half
percent (1.5%) of the principal amount prepaid prior to December 31, 2000 and
one percent (1.0%) of the principal amount prepaid on or after December 31,
2000 but prior to September 30, 2001.
"Principal Repayment Factor" means an amount equal to 4.167%.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, whether tangible or intangible.
"Repayment Period" means the period beginning on the first
Payment Date and continuing for the number of calendar months set forth
following such term on the cover page of this Agreement.
"Responsible Officer" means each of the Chief Executive Officer
and the Vice President of Finance and Administration of Borrower.
"Scheduled Payments" has the meaning given to such term in
SECTION 2.4(a).
"Stock Purchase Agreement" means the stock purchase agreement in
favor of Lender to purchase securities of Borrower substantially in the form of
EXHIBIT B.
"Subsidiary" means any corporation of which a majority of the
outstanding capital stock entitled to vote for the election of directors
(otherwise than as the result of a default) is owned by Borrower directly or
indirectly through Subsidiaries.
"Term" means the period from and after the date hereof until the
payment in full of all amounts and liabilities payable under this Agreement and
the other Loan Documents, including principal and interest on the Loans.
1.2 OTHER PAYMENT PROVISIONS. References in this Agreement to
"Articles," "Sections," "Exhibits," "Schedules" and "Annexes" are to recitals,
articles, sections, exhibits, schedules and annexes herein and hereto unless
otherwise indicated. References in this Agreement and each of the other Loan
Documents to any document, instrument or agreement shall include (a) all
exhibits, schedules, annexes and other attachments thereto, (b) all documents,
instruments or agreement issued or executed in replacement thereof, and (c)
such document, instrument or agreement, or replacement or predecessor thereto,
as amended, modified and supplemented from time to time and in effect at any
given time. The words "hereof, "herein" and "hereunder" and words of similar
import when used in this Agreement or any other Loan Document shall refer to
this Agreement or such other Loan Document, as the case may be, as a whole and
not to any particular provision of this Agreement or such other Loan Document,
as the case may be. The words "include" and "including" and words or similar
import when used in this Agreement or any other Loan Document shall not be
construed to be limiting or exclusive. Unless otherwise indicated in this
Agreement or any other Loan Document, all accounting terms used in this
Agreement or any other Loan Document shall be construed, and all accounting and
financial computations hereunder or thereunder shall be computed, in accordance
with generally accepted accounting principles as in effect in the United States
of America from time to time.
2. LOAN AND TERMS OF PAYMENT
2.1 COMMITMENTS. Subject to the terms and conditions of this
Agreement and relying upon the representations and warranties herein set forth
as and when made or deemed to be made, Lender agrees to lend to Borrower, from
time to time prior to the Commitment Termination Date, the Loans; provided that
the aggregate principal amount of the Loans shall not exceed the Commitment at
such time. If prepaid, the principal of the Loans may not be re-borrowed.
2.2 USE OF PROCEEDS; THE LOAN.
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(a) USE OR PROCEEDS. The proceeds of the Loan shall be used
solely for general corporate requirements and working capital purposes.
(b) THE LOANS. The Loans shall be repayable in consecutive
monthly installments in accordance with the terms of SECTION 2.4. Lender may,
and is hereby authorized by Borrower to, endorse in its books and records
appropriate notations regarding Lender's interest in the Loans; provided,
however, that the failure to make, or an error in making, any such notation
shall not limit or otherwise affect the Obligations of Borrower hereunder.
2.3 PROCEDURE FOR MAKING LOAN.
(a) NOTICE. Whenever Borrower desires that Lender make a Loan,
Borrower shall so notify Lender in writing (or by telephone with prompt
confirmation in writing) at least five Business Days in advance of the desired
Funding Date, which notice shall be irrevocable. Lender's obligation to make
Loans shall be expressly subject to the satisfaction of the conditions set
forth in SECTIONS 3.1 and 3.2. Lender shall have the right, exercisable at any
time, to request that Borrower furnish Lender with such additional information
with respect to the Loans as Lender shall reasonably request.
(b) LOAN INTEREST RATE. Borrower shall pay interest on the unpaid
principal amount of each Loan from the Funding Date until such Loan has been
paid in full, at a per annum rate of interest equal to the Basic Rate. All
computations of interest on each Loan shall be based on a year of 360 days for
actual days elapsed. Notwithstanding any other provision hereof, the amount of
interest payable hereunder shall not in any event exceed the maximum amount
permitted by the law applicable to interest charged on commercial loans.
(c) DISBURSEMENT. Subject to the satisfaction of the conditions
set forth in SECTIONS 3.1 and 3.2 with respect to the initial Loan and the
satisfaction of the conditions set forth in SECTION 3.2 with respect to each
subsequent Loan, Lender shall disburse the Loans.
(d) TERMINATION OF COMMITMENT TO LEND. Notwithstanding anything
in the Loan Documents, Lender's obligation to lend the undisbursed portion of
the Commitment to Borrower hereunder shall terminate on the earlier of (i) at
the Lender's sole election, the occurrence and continuance of any Default or
Event of Default hereunder, and (ii) the Commitment Termination Date.
Notwithstanding the foregoing, Lender's obligation to lend the undisbursed
portion of the Commitment to Borrower shall terminate if, in Lender's sole
judgment, there has been a material adverse change in the general affairs,
management, results of operations, condition (financial or otherwise) or
prospects of Borrower, whether or not arising from transactions in the ordinary
course of business, or there has been any material adverse deviation by
Borrower from the business plan of Borrower presented to and not disapproved by
Lender, since the date of this Agreement.
2.4 AMORTIZATION OF PRINCIPAL AND INTEREST; INTERIM PAYMENT.
(a) PRINCIPAL AND INTEREST PAYMENTS ON PAYMENT DATES. Borrower
shall make payments of principal in advance, when due, and accrued interest
monthly in arrears for the aggregate amount of the Loans hereunder
(collectively, "Scheduled Payments"), commencing on the Loan Commencement Date
with respect to such Loans and continuing thereafter during the Repayment
Period on the first Business Day of each month (each a "Payment Date"), in an
amount equal to the sum of (a) the Principal Repayment Factor multiplied by the
aggregate amount of the Loans as of the Loan Commencement Date, and (b) accrued
interest on the outstanding principal amount of the Loans calculated at the
Basic Rate. In any event, all unpaid principal and accrued interest shall be
due and payable in full on the last Payment Date with respect to such Loan.
(b) INTERIM PAYMENT. In addition to the Scheduled Payments,
Borrower shall pay to Lender, monthly in arrears, an amount (the "Interim
Payment") equal to accrued interest on the original principal amount of the
Loans calculated at the Basic Rate from the Funding Date until the first
Payment Date with respect to each Loan.
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(c) FINAL PAYMENT. Unless a Loan is prepaid in full, on the
Maturity Date with respect to such Loan, Borrower shall pay the unpaid
principal and accrued interest and all other amounts due on such date with
respect to such Loan.
2.5 FEES. Borrower shall pay to Lender the following:
(a) FACILITY FEE. A Facility Fee equal to Twenty Thousand
Dollars ($20,000), which fee shall be due and payable upon execution of this
Agreement and shall be fully earned and non-refundable;
(b) COMMITMENT FEE. Borrower has paid to Lender a commitment
fee ("Commitment Fee") equal to Fifteen Thousand Dollars ($15,000). Such fee
shall be applied first as payment of amounts due under SECTION 3.1(h), then to
any other amounts due hereunder as and when such amounts become due;
(c) LATE FEE. A late charge on any Scheduled Payments or other
sums due hereunder which are a payment default as determined under SECTION 8.1,
in an amount equal to 2% of the past due amount, payable on demand.
2.6 PREPAYMENTS.
(a) MANDATORY PREPAYMENT UPON AN ACCELERATION. If the Loans are
accelerated following the occurrence of an Event of Default or otherwise, then
Borrower shall immediately pay to Lender (i) all unpaid Interim Payments and/or
Scheduled Payments with respect to the Loans due prior to the date of
prepayment, (ii) the outstanding principal amount of the Loans, (iii) the
Prepayment Fee, and (iv) all other sums, if any, that shall have become due and
payable hereunder with respect to the Loans.
(b) MANDATORY PREPAYMENT UPON A LIQUIDATION EVENT. If a
Liquidation Event shall occur, then Borrower shall within sixty (60) days of
such Liquidation Event pay to Lender (i) all unpaid Interim Payment and/or
Scheduled Payments with respect to the Loans due prior to the date of
prepayment, (ii) the outstanding principal amount of the Loans and any unpaid
accrued interest, and (iii) all other sums, if any, that shall have become due
and payable hereunder with respect to the Loans.
(c) VOLUNTARY PREPAYMENT. Borrower may voluntarily prepay a
Loan, provided that each of the following conditions is satisfied: Borrower
pays to Lender (i) all unpaid Interim Payments and/or Scheduled Payments with
respect to such Loan due prior to the date of prepayment, (ii) the outstanding
principal amount of the Loans and any unpaid accrued interest, (iii) the
Prepayment Fee, and (iv) all other sums, if any, that shall have become due and
payable hereunder with respect to such Loan.
(d) NO OTHER PREPAYMENT. Borrower may not prepay any Loan
except upon the occurrence of an event described in SECTIONS 2.6(a), (b) or (c)
above in which event the prepayment shall be made as described in such section.
2.7 OTHER PAYMENT TERMS.
(a) PLACE AND MANNER. Borrower shall make all payments due to
Lender by payments to Lender at the address specified in SECTION 11, in lawful
money of the United States and in same day or immediately available funds.
(b) DATE. Whenever any payment due hereunder shall fall due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in the
computation of interest or fees, as the case may be.
(c) DEFAULT RATE. If either (i) any amounts required to be paid
by Borrower under this Agreement or the other Loan Documents (including
principal, interest, and any fees or other amounts) remain
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unpaid after such amounts are due, provided however that Borrower will not be
charged a late fee in addition to the Default Rate on such amounts, or (ii) an
Event of Default has occurred and is continuing, Borrower shall pay interest on
the aggregate, outstanding balance hereunder from the date due or from the date
of the Event of Default, as applicable, until such past due amounts are paid in
full or until all Events of Defaults are cured, as applicable, at a per annum
rate equal to the Default Rate. All computations of such interest shall be based
on a year of 360 days for actual days elapsed.
2.8 MINIMUM FUNDING AMOUNT. Except with the prior consent of Lender,
in Lender's sole discretion, the amount of the requested Loan shall not be less
than the Minimum Funding Amount.
2.9 CREDITING PAYMENTS. The receipt by Lender of any wire transfer of
funds, check, or other item of payment shall be immediately applied
conditionally to reduce Obligations, but shall not be considered a payment on
account unless such wire transfer is of immediately available federal funds and
is made to the appropriate deposit account of Lender or unless and until such
check or other item of payment is honored when presented for payment.
Notwithstanding anything to the contrary contained herein, any wire transfer or
payment received by Lender after 1:00 p.m. California time shall be deemed to
have been received by Lender as of the opening of business on the immediately
following Business Day.
2.10 TERM. This Agreement shall become effective upon acceptance by
Lender and shall continue in full force and effect for a term ending on the
Maturity Date for the last Loan made hereunder. Notwithstanding the foregoing,
Lender shall have the right to terminate this Agreement immediately and without
notice upon the occurrence of an Event of Default.
3. CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO INITIAL LOAN. The obligation of Lender to
make the initial Loan is subject to the condition precedent that Lender shall
have received, in form and substance satisfactory to Lender, all of the
following:
(a) This Agreement duly executed by Borrower.
(b) The Negative Pledge Agreement duly executed by Borrower, in
the form of EXHIBIT E.
(c) The Stock Purchase Agreement to be issued to Lender duly
executed by Borrower.
(d) Use its best efforts to obtain a Landlord Consent from the
owner of the building in which Collateral is to be located, substantially in the
form of EXHIBIT C.
(e) A certificate of the secretary or assistant secretary of
Borrower with copies of the following documents attached: (i) the articles of
incorporation and bylaws of Borrower certified by Borrower as being in full
force and effect on the Funding Date, (ii) incumbency and representative
signatures, and (iii) resolutions authorizing the execution and delivery of
this Agreement and each of the other Loan Documents.
(f) A good standing certificate from Borrower's state of
incorporation and the state in which Borrower's principal place of business
is located, together with certificates of the applicable governmental
authorities stating that Borrower is in compliance with the franchise tax laws
of each such state, each dated as of a recent date.
(g) Evidence of the insurance coverage required by SECTION 6.8
of this Agreement.
(h) Payment of any unreimbursed Lender's Expenses for which
Borrower has received invoices at least two business days in advance, limited
to $5,000.
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(i) All necessary consents of shareholders and
other third parties with respect to the execution, delivery and performance of
this Agreement, the Stock Purchase Agreement and the other Loan Documents.
(j) Such other documents, and completion of such
other matters, as Lender may deem necessary or appropriate.
3.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of
Lender to make each Loan, including the initial Loan, is further subject to the
following conditions:
(a) A certificate from a Responsible Officer to the
effect that no Default or Event of Default has occurred and is continuing.
(b) Borrower and Lender shall have executed a Loan
Agreement Supplement with respect to the proposed Loan.
(c) Lender shall have received such documents,
instruments and agreements, including UCC financing statements or amendments to
UCC financing statements, as Lender shall reasonably request to evidence the
perfection and priority of the security interests granted to Lender pursuant to
Section 4.
(d) Borrower shall have delivered to Lender an
intercreditor agreement, release, or estoppel letter, as appropriate, from any
Person having an existing Lien superior to the Lien of Lender on any item of
Collateral.
(e) Such other documents, and completion of such
other matters, as Lender may deem necessary or appropriate.
3.3 COVENANT TO DELIVER. Borrower agrees (not as a
condition but as a covenant) to deliver to Lender each item required to be
delivered to Lender as a condition to the Loan, if such Loan is advanced.
Borrower expressly agrees that the extension of such Loan prior to the receipt
by Lender of any such item shall not constitute a waiver by Lender of
Borrower's obligation to deliver such item.
4. CREATION OF SECURITY INTEREST
4.1 GRANT OF SECURITY INTEREST. Borrower grants to Lender a
valid, continuing security interest in all presently existing and hereafter
acquired or arising Collateral, subject only to the Permitted Liens, in order
to secure prompt, full and complete payment of any and all Obligations and in
order to secure prompt, full and complete performance by Borrower of each of
its covenants and duties under each of the Loan Documents.
4.2 DURATION OF SECURITY INTEREST. Lender's security
interest in the Collateral shall continue until the payment in full and the
satisfaction of all Obligations, whereupon such security interest shall
terminate. Lender shall, at Borrower's sole cost and expense, execute such
further documents and take such further actions as may be necessary to effect
the release contemplated by this SECTION 4.2, including duly executing and
delivering termination statements for filing in all relevant jurisdictions
under the Code.
4.3 POSSESSION OF COLLATERAL. So long as no Event of
Default has occurred and is continuing, Borrower shall remain in full
possession, enjoyment and control of the Collateral (except only as may be
otherwise required by Lender for perfection of its security interest therein)
and shall be entitled to manage, operate and use the same and each part thereof
with the rights and franchises appertaining thereto; provided, however, that
the possession, enjoyment, control and use of the Collateral shall at all times
be subject to the observance and performance of the terms of this Agreement.
4.4 MARKINGS ON THE COLLATERAL. At Lender's request at any
time during the Term of the Loan (including any extension thereof), Borrower
shall place in a conspicuous location on each item of equipment that
constitutes Collateral, a plaque or other marking to be supplied by Lender
which reads substantially as follows:
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Lighthouse Capital Partners II, L.P. has a security interest in this
item of equipment.
Such plaque or other marking shall not be removed (or if removed or damaged
such plaque or other marking shall be replaced) until the security interest in
favor of Lender in such item of Collateral is terminated pursuant to this
Agreement.
4.5 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower
shall from time to time execute and deliver to Lender, all financing statements
and other documents such Lender may reasonably request, in form satisfactory to
Lender, to perfect and continue Lender's perfected security interests in the
Collateral, subject only to Permitted Liens, and in order to consummate fully
all of the transactions contemplated under the Loan Documents.
4.6 RIGHT TO INSPECT. Lender (through any of its officers,
employees, or agents) shall have the right, upon reasonable prior notice, from
time to time during Borrower's usual business hours, to inspect Borrower's
Books and to make copies thereof and to check, test, and appraise the
Collateral in order to verify Borrower's financial condition or the amount,
condition of, or any other matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants as follows:
5.1 DUE ORGANIZATION AND QUALIFICATION. Borrower is a
corporation duly existing and in good standing under the laws of its state of
incorporation and qualified and licensed to do business in, and is in good
standing in, any state in which the conduct of its business or its ownership of
Property requires that it be so qualified or in which the Collateral is
located, except for such states as to which any failure so to qualify would not
reasonably be expected to have a material adverse effect on Borrower's ability
to perform its obligations under this Agreement (a "Material Adverse Effect").
5.2 AUTHORITY. Borrower has all necessary power and authority to
execute, deliver, and perform in accordance with the terms thereof, the Loan
Documents to which it is a party. Borrower has all requisite power and
authority to own and operate its properties and to carry on its businesses as
now conducted.
5.3 SUBSIDIARIES. Borrower has no Subsidiaries, except those
listed in Schedule 2 hereto.
5.4 CONFLICT WITH OTHER INSTRUMENTS, ETC. Neither the execution
and delivery of any Loan Document to which Borrower is a party nor the
consummation of the transactions therein contemplated nor compliance with the
terms, conditions and provisions thereof will conflict with or result in a
breach of (a) any of the terms, conditions or provisions of the articles of
incorporation and the by-laws, or other organizational documents of Borrower or
(b) any law or any regulation, order, writ, injunction or decree of any court
or governmental instrumentality or (c) any material agreement or instrument to
which Borrower is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject, or constitute a default
thereunder or result in the creation or imposition of any Lien, other than
Permitted Liens, except to the extent such conflict or breach could not
reasonably be expected to have a Material Adverse Effect.
5.5 AUTHORIZATION; ENFORCEABILITY. The execution and delivery of
this Agreement, the granting of the security interest in the Collateral, the
incurring of the Loans, the execution and delivery of the other Loan Documents
to which Borrower is a party and the consummation of the transactions herein
and therein contemplated have each been duly authorized by all necessary action
on the part of Borrower. The Loan Documents have been duly executed and
delivered and constitute legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other
similar laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity.
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5.6 NO PRIOR ENCUMBRANCES. Borrower has good and indefeasible title
to the Collateral, free and clear of liens, claims, security interests, or
encumbrances, except for the lien held by the Lender and except for other
Permitted Liens. Except as disclosed in SCHEDULE I, Borrower has not acquired
any part of the Collateral from an assignor outside the ordinary course of such
assignor's business.
5.7 NAME; LOCATION OF CHIEF EXECUTIVE OFFICE, PRINCIPAL PLACE OF
BUSINESS AND COLLATERAL. Borrower has not done business under any name other
than that specified on the signature page hereof. The chief executive office,
principal place of business, and the place where Borrower maintains its records
concerning the Collateral are presently located at the address set forth on the
cover page. The Collateral is presently located at the addresses set forth on
the cover page.
5.8 LITIGATION. There are no actions or proceedings pending by or
against Borrower before any court or administrative agency in which an adverse
decision could reasonably be expected to have a material adverse effect on
Borrower or the aggregate value of the Collateral. Borrower does not have
knowledge of any such pending or threatened actions or proceedings. Borrower
will promptly notify Lender in writing if any action, proceeding or
governmental investigation involving Borrower is commenced that may result
in damages or costs to Borrower of Fifty Thousand Dollars ($50,000) or more.
5.9 FINANCIAL STATEMENTS. All financial statements relating to
Borrower or any Affiliate that have been or may hereafter be delivered by
Borrower to Lender present fairly in all material respects Borrower's financial
condition as of the date thereof and Borrower's results of operations for the
period then ended.
5.10 SOLVENCY. Borrower is solvent and able to pay its debts
(including trade debts) as they mature.
5.11 TAXES. Borrower has filed or caused to be filed all tax returns
required to be filed, and has paid, or has made adequate provision for the
payment of, all taxes that are due and payable.
5.12 CONSENTS AND APPROVALS. No approval, authorization or consent
of any trustee or holder of any indebtedness or obligation of Borrower or of
any other Person under any such material agreement, contract, lease or license
or similar document or instrument to which Borrower is a party or by which
Borrower is bound, is required to be obtained by Borrower in order to make or
consummate the transactions contemplated under the Loan Documents. All consents
and approvals of, filings and registrations with, and other actions in respect
of, all Governmental Authorities required to be obtained by Borrower in order
to make or consummate the transactions contemplated under the Loan Documents
have been, or prior to the time when required will have been, obtained, given,
filed or taken and are or will be in full force and effect.
5.13 TRADEMARKS, PATENTS, COPYRIGHTS, FRANCHISES AND LICENSES.
Borrower possesses and owns all necessary trademarks, trade names, copyrights,
patents, patent rights, franchises and licenses which are material to the
conduct of its business as now operated.
5.14 MATERIAL CONTRACTS. Borrower has disclosed to Lender in writing
all currently effective material contracts and agreements (whether written or
oral) to which Borrower is a party. There are no material defaults under any
such contract or agreement by Borrower that could reasonably be expected to
have a Material Adverse Effect. Borrower has delivered to Lender true and
correct copies of all such contracts or agreements (or, with respect to oral
contracts or agreements, written descriptions of the material terms thereof).
5.15 FULL DISCLOSURE. No representation, warranty or other statement
made by Borrower in any Loan Document, certificate or written statement
furnished to Lender contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained in
such certificates or statements not misleading.
6. AFFIRMATIVE COVENANTS
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Borrower covenants and agrees that, until the full and complete payment of
the Obligations and the termination of the Commitments, Borrower shall do all
of the following:
6.1 GOOD STANDING. Borrower shall maintain its corporate existence and
its good standing in its jurisdiction of incorporation and maintain
qualification in such jurisdiction in which the failure to so qualify could
reasonably be expected to have a material adverse effect on the financial
condition, operations or business of Borrower. Borrower shall maintain in force
all licenses, approvals and agreements, the loss of which could reasonably be
expected to have a material adverse effect on its financial condition,
operations or business.
6.2 GOVERNMENT COMPLIANCE. Borrower shall comply with all statutes, laws,
ordinances and government rules and regulations to which it is subject,
noncompliance with which could reasonably be expected to materially adversely
affect the financial condition, operations or business of Borrower.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Borrower shall deliver
to Lender: (a) as soon as available, but in any event within thirty (30) days
after the end of each month, a company prepared balance sheet, income statement
and cash flow statement covering Borrower's operations during such period,
certified by a Responsible Officer; (b) as soon as available, but in any event
within one hundred twenty (120) days after the end of Borrower's fiscal year,
audited financial statements of Borrower prepared in accordance with generally
accepted accounting principles, consistently applied, together with an
unqualified opinion on such financial statements of a nationally recognized or
other independent public accounting firm reasonably acceptable to Lender; (c)
promptly upon becoming available, copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders; (d)
immediately upon receipt of notice thereof, a report of any material legal
actions pending or threatened against Borrower; and (e) such other financial
information as Lender may reasonably request from time to time.
6.4 CERTIFICATES OF COMPLIANCE. Each time financial statements are
furnished pursuant to SECTION 6.3 above, there shall be delivered to Lender a
certificate signed by a Responsible Officer (each an "Officer's Certificate")
with respect to such financial reports to the effect that: (i) no Event of
Default or Default has occurred and is continuing hereunder since the date of
this Agreement or, if later, since the date of the prior Officer's Certificate
or, if such an event or condition has occurred and is continuing, the nature
and extent thereof and the action Borrower proposes to take with respect
thereto, and (ii) Borrower is in compliance with the provisions of SECTIONS 6
and 7.
6.5 NOTICE OF DEFAULTS. As soon as possible, and in any event within five
(5) days after the discovery of a Default or an Event of Default provide Lender
with an Officer's Certificate of Borrower setting forth the facts relating to
or giving rise to such Default or Event of Default and the action which
Borrower proposes to take with respect thereto.
6.6 TAXES. Borrower shall make due and timely payment or deposit of all
federal, state, and local taxes, assessments, or contributions required of it
by law or imposed upon any properties belonging to it, and will execute and
deliver to Lender, on demand, appropriate certificates attesting to the payment
or deposit thereof; and Borrower will make timely payment or deposit of all tax
payments and withholding taxes required of it by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Lender with proof
satisfactory to Lender indicating that Borrower has made such payments or
deposits; provided that Borrower need not make any payment if the amount or
validity of such payment is contested in good faith by appropriate proceedings
and is adequately reserved against Borrower.
6.7 USE; MAINTENANCE.
(a) Borrower, at its expense, shall make all necessary site
preparations and cause the Collateral to be operated in accordance with any
applicable manufacturer's manuals or instructions. So long as no Default or
Event of Default has occurred and is continuing, Borrower shall have the right
to quietly possess and use the Collateral as provided herein without
interference by Lender.
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(b) Borrower, at its expense, shall maintain the Collateral in
good condition, reasonable wear and tear excepted, and will comply in all
material respects with all laws, rules and regulations to which the use and
operation of the Collateral may be or become subject. Such obligation shall
extend to repair and replacement of any partial loss or damage to the
Collateral, regardless of the cause. If maintenance is mandated by
manufacturer, Borrower shall obtain and keep in effect, at all times during the
Term maintenance service contracts with suppliers approved by Lender, such
approval not to be unreasonably withheld. All parts furnished in connection
with such maintenance or repair shall immediately become part of the
Collateral. All such maintenance, repair and replacement services shall be
immediately paid for and discharged by Borrower with the result that no Lien
will attach to the Collateral.
6.8 INSURANCE.
(a) Borrower shall obtain and maintain for the Term, at its own
expense, (a) "all risk" insurance against loss or damage to the Collateral, and
(b) commercial general liability insurance (including contractual liability,
products liability and completed operations coverage's), reasonably
satisfactory to Lender and such other insurance against such other risks of
loss and with such terms, as shall in each case be reasonably satisfactory to
or reasonably required by Lender (as to carriers, amounts, deductibles and
otherwise). The amount of the "all risk" insurance shall be the greater of (i)
the replacement value of the Collateral (as new) or (ii) the outstanding
principal amount of the Loans and all other then outstanding amounts payable
under the Loan Documents. Such amounts shall be determined to Lender's
reasonable satisfaction as of each anniversary date of this Agreement and the
appropriate amount of coverage shall be put in effect on the next succeeding
renewal or inception date of such insurance.
(b) The amount of such commercial general public liability
insurance (other than products liability coverage and completed operations
insurance) shall be at least $1,000,000 per occurrence. The amount of such
products liability and completed operations insurance shall be at least
$1,000,000 per occurrence. The deductible with respect to the "all-risk" and
product liability insurance shall not exceed $25,000; otherwise there shall be
no deductible with respect to any insurance required to be maintained hereunder
without the prior written approval of Lender. Such "all risk" insurance shall:
(a) name Lender as loss payee as it interests may appear with respect to the
Collateral, (b) provide each insurer's waiver of its right of subrogation
against Lender and Borrower, and (c) provide that such insurance (i) shall not
be invalidated by any action of, or breach of warranty by, Borrower of a
provision of any of its insurance policies, and (ii) shall waive set-off,
counterclaim or offset against Lender. Each liability policy shall (A) name
Lender as an additional insured and (B) provide that such insurance shall have
cross-liability and severability of interest endorsements (which shall not
increase the aggregate policy limits of Borrower's insurance). All insurance
policies (C) shall provide that Borrower's insurance shall be primary without a
right of contribution of Lender's insurance, if any, or any obligation on the
part of Lender to pay premiums of Borrower, and (D) shall contain a clause
requiring the insurer to give Lender at least thirty (30) days prior written
notice of its cancellation (other than cancellation for non-payment for which
ten (10) days notice shall be sufficient). Borrower shall, on or prior to the
date of and prior to each policy renewal, furnish to Lender certificates of
insurance or other evidence satisfactory to Lender that such insurance coverage
is in effect.
6.9 LOSS; DAMAGE; DESTRUCTION AND SEIZURE.
(a) Borrower shall bear the risk of the Collateral being lost,
stolen, destroyed, damaged beyond repair, rendered permanently unfit for use,
or seized by a governmental authority for any reason whatsoever at any time
until the expiration or termination of the Term.
(b) So long as no Event of Default has occurred and is
continuing, any proceeds of insurance maintained pursuant to Section 6.8
received by Lender or Borrower with respect to an item of Collateral, the
repair of which is practicable, shall, at the election of Borrower, be applied
either to the repair or replacement of such Collateral or, upon Lender's
receipt of evidence of the repair or replacement of the Collateral reasonably
satisfactory to Lender, to the reimbursement of Borrower for the cost of such
repair or replacement. All replacement parts and equipment acquired by Borrower
in replacement of Collateral pursuant to this Section 6.9(b) shall immediately
become part of the Collateral upon acquisition by Borrower. Borrower shall take
such actions
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and provide such documentation as may be reasonably requested by Lender to
protect and preserve its security interest and otherwise to avoid any
impairment of Lender's rights under the Loan Documents in connection with such
repair or replacement.
6.10 FURTHER ASSURANCES. At any time and from time to time Borrower
shall execute and deliver such further instruments and take such further action
as may reasonably be requested by Lender to effect the purposes of this
Agreement.
7. NEGATIVE COVENANTS
Borrower covenants and agrees that until the full and complete
payment of the Obligations and termination of the Commitments, Borrower will
not do any of the following:
7.1 CHIEF EXECUTIVE OFFICER; LOCATION OF COLLATERAL. During the
continuance of this Agreement, change the chief executive officer or principal
place of business or remove or cause to be removed, except in the ordinary
course of Borrower's business, the Collateral or the records concerning the
Collateral from the premises listed on the coverage page without thirty (30
days prior written notice to Lender.
7.2 EXTRAORDINARY TRANSACTIONS AND DISPOSAL OF ASSETS. Enter into
any transaction not in the ordinary and usual course of Borrower's business,
including the sale, lease, license or other disposition of, moving, relocation,
or transfer, whether by sale or otherwise, of Borrower's assets, other than (i)
sales of inventory in the ordinary and usual course of Borrower's business as
presently conducted and (ii) sales or other dispositions in the ordinary course
of business of assets, other than Collateral, that have become worn out or
obsolete or that are promptly being replaced. Notwithstanding anything
contained in this SECTION 7.2, Borrower may do any of the following: (i) grant
non-exclusive licenses and similar arrangements for use of the intellectual
property of the Borrower in the ordinary course of business, (ii) declare and
make any dividend payment or other distribution payable on its equity
securities, (iii) convert any of its convertible securities existing as of the
date hereof into other securities pursuant to the terms of such convertible
securities or otherwise in exchange therefor, (iv) repurchase stock from former
contractors or employees of Borrower in accordance with the terms of
repurchase, vesting or similar agreements between Borrower and such employees,
(v) repurchase equity securities with the proceeds from the issuance of equity
securities, and (vi) make investments in the ordinary course of business.
7.3 RESTRUCTURE. Change Borrower's name without thirty (30) days
prior written notice to Lender; make any material change in Borrower's
financial structure or business operations; cause, permit, or suspend operation
of Borrower's business.
7.4 LIENS. Create, incur assume or suffer to exist any Lien or any
other encumbrance of any kind with respect to any of its Property, whether now
owned or hereafter acquired, except for Permitted Liens.
7.5 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness other than Permitted Indebtedness.
8. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:
8.1 PAYMENT DEFAULT. If Borrower fails to pay when due and payable or
when declared due and payable in accordance with the Loan Documents, any
portion of the Obligations, and such failure continues for a period of five (5)
business days after written notice from Lender.
8.2 CERTAIN COVENANT DEFAULTS. If Borrower fails to perform any
obligation under SECTIONS 6.8, 6.9, or 6.10, or violates any of the covenants
contained in SECTION 7 of this Agreement.
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8.3 OTHER COVENANT DEFAULTS. If Borrower fails or neglects to
perform, keep, or observe any other material term, provision, condition,
covenant or agreement contained in this Agreement, in any of the other Loan
Documents, or in any other present or future agreement between Borrower and
Lender and as to any default under such other term, provision, condition,
covenant or agreement that can be cured, has failed to cure such default within
fifteen (15) business days after the occurrence of such default.
8.4 MATERIAL ADVERSE CHANGE. If there occurs an event that
could reasonably be expected to (a) have a material adverse effect on the
ability of the Borrower to perform its obligations under this Agreement or (b)
materially impair the value or priority of Lender's security interests in the
Collateral.
8.5 ATTACHMENT. If any material portion of Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any trustee, receiver or Person acting in a
similar capacity and such attachment, seizure, writ or distress warrant or levy
has not been removed, discharged or rescinded within thirty (30) days, or if
Borrower is enjoined, restrained, or in any way prevented by court order from
continuing to conduct all or any material part of its business affairs, or if
a judgment or other claim becomes a lien or encumbrance upon any material
portion of Borrower's assets, or if a notice of lien, levy, or assessment is
filed of record with respect to any of Borrower's assets by the United States
Government, or any department, agency, or instrumentality thereof, or by any
state, country, municipal, or governmental agency, and the same is not paid
within thirty (30) days after Borrower receives notice thereof, provided that
none of the foregoing shall constitute an Event of Default where such action or
event is stayed or an adequate bond has been posted pending a good faith
contesting by Borrower.
8.6 Other agreements. If there is a default in any agreement to
which Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in a principal amount of at least One Hundred
Thousand Dollars ($100,000).
8.7 JUDGMENTS. If a judgment or judgments for the payment of
money in an amount, individually or in the aggregate, of at least One Hundred
Thousand Dollars ($100,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of thirty (30) days.
8.8 REDEMPTION OR REPURCHASE. Borrower shall, after the date of
this Agreement, redeem or repurchase (a) any shares of any class or series of
its preferred stock or (b) more than Fifty Thousand Dollars ($50,000) in the
aggregate of common stock, in each case whether pursuant to a mandatory
redemption or otherwise.
8.9 MISREPRESENTATIONS. If any material misrepresentation or
material misstatement exists now or hereafter in any warranty, representation,
statement, or report made to Lender by Borrower or any officer or director of
Borrower.
8.10 BREACH OF STOCK PURCHASE AGREEMENT. If Borrower shall breach
the terms of the Stock Purchase Agreement.
8.11 ENFORCEABILITY. If any Loan Document shall in any material
respect cease to be, or Borrower shall assert that any Loan Document is not, a
legal, valid and binding obligation of Borrower enforceable in accordance with
its terms.
8.12 INVOLUNTARY BANKRUPTCY OR INSOLVENCY. If a proceeding shall
have been instituted in a court having jurisdiction in the premises seeking a
decree or order for relief in respect of Borrower in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee, custodian,
trustee (or similar official) of Borrower or for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
forty-five (45) consecutive days or such court shall enter a decree or order
granting the relief sought in such proceeding.
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8.13 VOLUNTARY BANKRUPTCY OR INSOLVENCY. If Borrower shall
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian (or other similar official) of Borrower or for any
substantial part of its property, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action in furtherance of any of the foregoing.
9. LENDER'S RIGHT AND REMEDIES
9.1 RIGHTS AND REMEDIES. Upon the occurrence and continuance of
any Default or Event of Default, Lender shall have no further obligation to
advance money or extend credit to or for the benefit of Borrower. In addition,
upon the occurrence and during the continuance of an Event of Default, Lender
shall have the rights, options, duties and remedies of a secured party as
permitted by law and, in addition to and without limitation of the foregoing,
Lender may, at its election, without notice of election and without demand, do
any one or more of the following, all of which are authorized by Borrower.
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, including the
outstanding principal amount of each Loan, immediately due and payable
(provided that upon the occurrence of an Event of Default described in Sections
8.12 or 8.13 all Obligations shall become immediately due and payable without
any action by Lender);
(b) Without notice to or demand upon Borrower, make such
payments and do such acts as Lender consider necessary or reasonable to protect
its security interest in the Collateral. Borrower agrees to assemble the
Collateral if Lender so requires, and to make the Collateral available to
Lender as Lender may designate. Borrower authorizes Lender to enter the
premises where the Collateral is located, to take and maintain possession of
the Collateral, or any part of it, and to pay, purchase, contest, or compromise
any encumbrance, charge, or lien which in Lender's determination appears to be
prior or superior to its security interest and to pay all expenses incurred in
connection therewith. With respect to any of Borrower's owned premises,
Borrower hereby grants Lender a license to enter into possession of such
premises and to occupy the same, without charge, for up to one hundred twenty
(120) days in order to exercise any of Lender's rights or remedies provided
herein, at law, in equity, or otherwise;
(c) Without notice to Borrower, set off and apply to the
Obligations any and all indebtedness at any time owing to or for the credit or
the account of Borrower;
(d) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Collateral. Lender is hereby granted a license or other right,
solely pursuant to the provisions of this Section 9.1, to use, without charge,
Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks and advertising matter, or any
Property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Lender's exercise of its rights under this Section 9.1,
Borrower's rights under all licenses and all franchise agreements shall inure
to Lender's benefit:
(e) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions for cash or on
terms, in such manner and at such places (including Borrower's premises) as
Lender determines are commercially reasonable;
(f) Lender may credit bid and purchase at any public sale;
and
(g) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.
9.2 WAIVER BY BORROWER. Upon the occurrence of an Event of
Default, to the extent permitted by law, Borrower covenants that it will not at
any time insist upon or plead, or in any manner whatever
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claim or take any benefit or advantage of, any stay or extension law now or at
any time hereafter in force, nor claim, take nor insist upon any benefit or
advantage of or from any law now or hereafter in force providing for the
valuation or appraisement of the Collateral or any part thereof prior to any
sale or sales thereof to be made pursuant to any provision herein contained, or
to the decree, judgment or order of any court of competent jurisdiction; nor,
after such sale or sales, claim or exercise any right under any statute now or
hereafter made or enacted by any state or otherwise to redeem the Property so
sold or any part thereof, and, to the full extent legally permitted, except as
to rights expressly provided herein, hereby expressly waives for itself and on
behalf of each and every Person, except decree or judgment creditors of
Borrower acquiring any interest in or title to the Collateral or any part
thereof subsequent to the date of this Agreement, all benefit and advantage of
any such law or laws, and covenants that it will not invoke or utilize any such
law or laws or otherwise hinder, delay or impede the execution of any power
herein granted and delegated to Lender, but will suffer and permit the execution
of every such power as though no such power, law or laws had been made or
enacted.
9.3 EFFECT OF SALE. Any sale, whether under any power of sale
hereby given or by virtue of judicial proceedings, shall operate to divest all
right, title, interest, claim and demand whatsoever, either at law or in
equity, of Borrower in and to the Property sold, and shall be a perpetual bar,
both at law and in equity, against Borrower, its successors and assigns, and
against any and all Persons claiming the Property sold or any part thereof
under, by or through Borrower, its successors or assigns.
9.4 POWER OF ATTORNEY IN RESPECT OF THE COLLATERAL. Borrower
does hereby irrevocably appoint Lender (which appointment is coupled with an
interest) on the occurrence and continuance of a Default or an Event of
Default, the true and lawful attorney in fact of Borrower with full power of
substitution, for it and in its name: (a) to ask, demand, collect, receive,
receipt for, ▇▇▇ for, compound and give acquittance for any and all rents,
issues, profits, avails, distributions, income, payment draws and other sums in
which a security interest is granted under Section 4 with full power to settle,
adjust or compromise any claim thereunder as fully as if Lender were a Borrower
itself, (b) to receive payment of and to endorse the name of Borrower to any
items of Collateral (including checks, drafts and other orders for the payment
of money) that come into Lender's possession or under Lender's control, (c) to
make all demands, consents and waivers, or take any other action with respect
to, the Collateral, (d) in Lender's discretion to file any claim or take any
other action or proceedings, either in its own name or in the name of Borrower
or otherwise, which Lender may reasonably deem necessary or appropriate to
protect and preserve the right, title and interest of Lender in and to the
Collateral, or (e) to otherwise act with respect thereto as though Lender were
the outright owner of the Collateral.
9.5 LENDER'S EXPENSES. If Borrower fails to pay any amounts or
furnish any required proof of payment due to third persons or entities, as
required under the terms of this Agreement, then Lender may do any or all of
the following: (a) make payment of the same or any part thereof; (b) set up
such reserves in Borrower's loan account as Lender deem necessary to protect
Lender from the exposure created by such failure; or (c) obtain and maintain
insurance policies of the type discussed in SECTION 6.8 of this Agreement, and
take any action with respect to such policies as Lender deem prudent. Any
amounts paid or deposited by Lender shall constitute Lender's Expenses, shall
be immediately due and payable, and shall bear interest at the then applicable
rate hereinabove provided, and shall be secured by the Collateral. Any payments
made by Lender shall not constitute an agreement by Lender to make similar
payments in the future or a waiver by Lender of any Event of Default under this
Agreement.
9.6 REMEDIES CUMULATIVE. Lender's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Lender shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Lender of one
right or remedy shall be deemed an election, and no waiver by Lender of any
Event of Default on Borrower's part shall be deemed a continuing waiver. No
delay by Lender shall constitute a waiver, election, or acquiescence by it.
9.7 APPLICATION OF COLLATERAL PROCEEDS. The proceeds and/or
avails of the Collateral, or any part thereof, and the proceeds and the avails
of any remedy hereunder (as well as any other amounts of any kind held by
Lender at the time of or received by Lender after, the occurrence of an Event
of Default hereunder) shall be paid to and applied as follows:
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(a) First, to the payment of reasonable out-of-pocket costs and
expenses, including all amounts expended to preserve the value of the
Collateral, of foreclosure or suit, if any, and of such sale and the exercise
of any other rights or remedies, and of all proper fees, expenses, liability
and advances, including reasonable legal expenses and attorneys' fees, incurred
or made hereunder by Lender;
(b) Second, to the payment to Lender of the amount then owing
or unpaid on the Loans for Scheduled Payments, the unpaid principal amount of
the Loans, and all other Obligations with respect to all Loans, and in case
such proceeds shall be insufficient to pay the whole amount so due, owing or
unpaid upon the Loans, then to the unpaid interest thereon, then to the unpaid
principal amount of the Loans, and then to the payment of other amounts then
payable to Lender under any of the Loan Documents; and
(c) Third, to the payment of the surplus, if any, to Borrower,
its successors and assigns, or to whomsoever may be lawfully entitled to
receive the same.
9.8 REINSTATEMENT OF RIGHTS. If Lender shall have proceeded to
enforce any right under this Agreement or any other Loan Document by
foreclosure, sale, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely, then and in every such case (unless otherwise ordered by a court of
competent jurisdiction), Lender shall be restored to its former position and
rights hereunder with respect to the Property subject to the security interest
created under this Agreement.
10. WAIVERS; INDEMNIFICATION
10.1 DEMAND; PROTEST. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Lender on which Borrower may in any way be
liable.
10.2 LENDER'S LIABILITY FOR COLLATERAL. So long as Lender complies
with its obligations, if any, under Section 9207 of the Code, Lender shall not
in any way or manner be liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner
or fashion from any cause; (c) any diminution in the value thereof; or (d) any
act or default of any carrier, warehouseman, bailee, forwarding agency, or
other Person whomsoever. All risk of loss, damage or destruction of the
Collateral shall be borne by Borrower.
10.3 INDEMNIFICATION. Whether or not the transactions contemplated
hereby shall be consummated:
(a) GENERAL INDEMNITY. Borrower shall pay, indemnify, and hold
Lender and each of its officers, directors, employees, counsel, partners,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all reasonable liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including Lender's Expenses and reasonable attorney's fees and the allocated
cost of in-house counsel) of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement and other Loan Documents, or the transactions contemplated hereby and
thereby, and with respect to any investigation, litigation or proceeding
(including any case, action or proceeding before any court or other Governmental
Authority relating to bankruptcy, reorganization, insolvency, liquidation,
dissolution or relief of debtors or any appellate proceeding) related to this
Agreement or the Loans or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
arising from the gross negligence or willful misconduct of such Indemnified
Person.
(b) SURVIVAL; DEFENSE. The obligations in this SECTION 10.3
shall survive payment of all other Obligations. At the election of any
Indemnified Person, Borrower shall defend such Indemnified Person using
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legal counsel satisfactory to such Indemnified Person in such Person's sole
reasonable discretion, at the sole cost and expense of Borrower. All amounts
owing under this SECTION 10.3 shall be paid within thirty (30) days after
written demand.
11. NOTICES
Unless otherwise provided in this Agreement, all notices or demands
by any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements
and other informational documents which may be sent by first-class mail,
postage prepaid) shall be personally delivered or sent by certified mail,
postage prepaid, return receipt requested, or by prepaid facsimile to Borrower
or to Lender, as the case may be, at their respective addresses set forth below:
If to Borrower: Skystream Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: Lighthouse Capital Partners II, LP
▇▇▇ ▇▇▇▇▇'▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Contract Administrator
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
12. GENERAL PROVISIONS
12.1 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure
to the benefit of the respective successors and permitted assigns of each of
the parties; provided, however, that neither this Agreement nor any rights
hereunder may be assigned by Borrower without Lender's prior written consent,
which consent may be granted or withheld in Lender's sole discretion. Lender
shall have the right with the consent of Borrower (which consent shall not be
unreasonably withheld) to sell, transfer, negotiate, or grant participations in
all or any part of, or any interest in such Lender's rights and benefits
hereunder, provided that consent of Borrower shall not be required in the case
of sales, transfers or negotiations, or grant of participations, to affiliates
of Lender that do not compete, directly or indirectly, with Borrower.
12.2 TIME OF ESSENCE. Time is of the essence for the performance
of all obligations set forth in this Agreement.
12.3 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
12.4 ENTIRE AGREEMENT; CONSTRUCTION; AMENDMENTS AND WAIVERS.
(a) This Agreement and each of the other Loan Documents
dated as of the date hereof, taken together, constitute and contain the entire
agreement between Borrower and Lender and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
between the parties, whether written or oral, respecting the subject matter
hereof.
(b) This Agreement is the result of negotiations between
and has been reviewed by each of Borrower and Lender executing this Agreement
as of the date hereof and their respective counsel; accordingly, this Agreement
shall be deemed to be the product of the parties hereto, and no ambiguity shall
be construed in favor of
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or against Borrower or Lender. Borrower and Lender agree that they intend the
literal words of this Agreement and the other Loan Documents and that no parol
evidence shall be necessary or appropriate to establish Borrower's or Lender's
actual intentions.
(c) Any and all amendments, modifications, discharges or
waivers of, or consents to any departures from any provision of this Agreement
or of any of the other Loan Documents shall not be effective without the
written consent of Lender and Borrower. Any waiver or consent with respect to
any provision of the Loan Documents shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Borrower in any case shall entitle Borrower to any other or further
notice or demand in similar or other circumstances. Any amendment,
modification, waiver or consent effected in accordance with this SECTION 12.4
shall be binding upon Lender and on Borrower.
12.5 RELIANCE BY LENDER. All covenants, agreements, representations
and warranties made herein by Borrower shall, notwithstanding any investigation
by Lender, be deemed to be material to and to have been relied upon by Lender.
12.6 NO SET-OFFS BY BORROWER. All sums payable by Borrower pursuant
to this Agreement or any of the other Loan Documents shall be payable without
notice or demand and shall be payable in United States Dollars without set-off
or reduction of any manner whatsoever.
12.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
12.8 SURVIVAL. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Lender
with respect to the expenses, damages, losses, costs and liabilities described
in SECTION 10.3 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Lender have run.
13. RELATIONSHIP OF PARTIES. Borrower and Lender acknowledge, understand
and agree that the relationship by virtue of this Agreement between the
Borrower, on the one hand, and Lender, on the other, is, and at all time shall
remain solely that of a borrower and lender. Lender shall not under any
circumstances be construed to be a partner or joint venturer of Borrower or any
of its Affiliates; nor shall the Lender under any circumstances be deemed to be
in a relationship of confidence or trust or a fiduciary relationship with
Borrower or any of its Affiliates, or to owe any fiduciary duty to Borrower or
any of its Affiliates. Lender does not undertake or assume any responsibility
or duty to Borrower or any of its Affiliates to select, review, inspect,
supervise, pass judgment upon or otherwise inform the Borrower or any of its
Affiliates of any matter in connection with its or their Property, any
Collateral held by Lender or the operations of Borrower or any of its
Affiliates. Borrower and each of its Affiliates shall rely entirely on their
own judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment or supply of information undertaken or
assumed by Lender in connection with such matters is solely for the protection
of Lender and neither Borrower nor any Affiliate is entitled to rely thereon.
THIS SECTION INTENTIONALLY LEFT BLANK.
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14. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF
BORROWER AND LENDER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS LOCATED IN THE COUNTY OF SANTA ▇▇▇▇▇, STATE OF CALIFORNIA.
BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS
OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
BORROWER: LENDER:
SKYSTREAM CORPORATION LIGHTHOUSE CAPITAL PARTNERS II, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: LIGHTHOUSE MANAGEMENT
--------------------------- PARTNERS II, L.P., its general partner
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: LIGHTHOUSE CAPITAL PARTNERS, INC.,
------------------------ as general partner
Title: Chief Executive Officer By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------ --------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------
Title: Managing Director
-----------------------------
Exhibit A - Collateral
Exhibit B - Form of Common Stock Purchase Agreement
Exhibit C - Landlord Consent
Exhibit D - Form of Loan Agreement Supplement
Exhibit E - Negative Pledge Agreement
Schedule 1 - Existing Liens
Schedule 2 - Subsidiaries
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EXHIBIT A
DEBTOR/BORROWER: SKYSTREAM CORPORATION
SECURED PARTY/LENDER: LIGHTHOUSE CAPITAL PARTNERS II, L.P.
COLLATERAL
The Collateral shall consist of all right, title and interest of Debtor
in, to and under all of the following wherever located and whether now owned or
hereafter owned or acquired (collectively, the "Collateral"):
1. All Accounts of Debtor;
2. All Chattel Paper of Debtor;
3. All Contracts of Debtor;
4. All Documents of Debtor;
5. All Equipment of Debtor;
6. All Fixtures of Debtor;
7. All General Intangibles of Debtor; not including Intellectual
Property;
8. All Proceeds of Intellectual Property;
9. All Instruments of Debtor;
10. All Inventory of Debtor;
11. All Investment Property of Debtor;
12. All property of Debtor held by Secured Party or any other party
for whom Secured Party is acting as agent hereunder, including, without
limitation, all property of every description now or hereafter in the
possession or custody of or in transit to Secured Party or such other party for
any purpose, including, without limitation, safekeeping, collection or pledge,
for the account of Debtor, or as to which Debtor may have any right or power;
13. All other goods and personal property of Debtor whether tangible
or intangible and whether now or hereafter owned or existing, leased, consigned
by or to, or acquired by Debtor and wherever located; and
14. To the extent not otherwise included, all Proceeds of each of
the foregoing and all accessions to, substitutions and replacements for, and
rents, profits and products of each of the foregoing.
--------------------- ---------------------
Debtor Initial Secured Party Initial
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DEFINED TERMS. Unless otherwise defined herein, the following terms shall
have the following meanings (such meanings being equally applicable to both the
singular and plural forms of the terms defined):
"ACCOUNTS" means any "account," as such term is defined in Section 9106 of
the UCC, now owned or hereafter acquired by Debtor and, in any event, shall
include, without limitation, all accounts receivable, book debts and other
forms of obligations (other than forms of obligations evidenced by Chattel
Paper, Documents or Instruments) now owned or hereafter received or acquired by
or belonging or owing to Debtor (including, without limitation, under any
trade name, style or division thereof) whether arising out of goods sold or
services rendered by Debtor or from any other transaction, whether or not the
same involves the sale of goods or services by Debtor (including, without
limitation, any such obligation which may be characterized as an account or
contract right under the UCC) and all of Debtor's rights in, to and under all
purchase orders or receipts now owned or hereafter acquired by it for goods or
services, and all of Debtor's rights to any goods represented by any of the
foregoing (including, without limitation, unpaid seller's rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned, reclaimed
or repossessed goods), and all monies due or to become due to Debtor under all
purchase orders and contracts for the sale of goods or the performance of
services or both by Debtor (whether or not yet earned by performance on the
part of Debtor or in connection with any other transaction), now in existence
or hereafter occurring, including, without limitation, the right to receive the
proceeds of said purchase orders and contracts, and all collateral security and
guarantees of any kind given by any Person with respect to any of the foregoing.
"CHATTEL PAPER" means any "chattel paper," as such term is defined in
SECTION 9105(1)(b) of the UCC, now owned or hereafter acquired by Debtor.
"CONTRACTS" means all contracts, undertakings, franchise agreements or
other agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which Debtor may now or hereafter have any right,
title or interest, including, without limitation, with respect to an Account,
any agreement relating to the terms of payment or the terms of performance
thereof.
"COPYRIGHT LICENSE" means all of the following now owned or hereafter
acquired by Debtor: any agreement granting any right in or to any Copyright or
Copyright registration (whether Debtor is the licensee or the licensor
thereunder) including, without limitation, licenses pursuant to which Debtor
has obtained the exclusive right to use a copyright owned by a third party.
"COPYRIGHTS" means all of the following in which Debtor now holds or
hereafter acquires any interest: (i) all copyrights, whether registered or
unregistered, held pursuant to the laws of the United States, any State thereof
or of any other country; (ii) registrations, applications and recordings in the
United States Copyright Office or in any similar office or agency of the United
States, any state thereof or any other country or political subdivision
thereof; (iii) any continuations, renewals or extensions thereof; (iv) any
registrations to be issued in any pending applications; (v) prior versions of
works covered by copyright and all works based upon, derived from, or
incorporating such works; (vi) income, royalties, damages, claims, and payments
now and hereafter due and payable with respect to copyrights including, without
limitation, damages and payments for past, present or future infringement;
(vii) rights to ▇▇▇ for past, present and future infringements of copyright;
and (viii) any other rights corresponding to any of the foregoing rights
throughout the world.
"DOCUMENTS" means any "documents," as such term is defined in Section
9105(1)(f) of the UCC, now owned or hereafter acquired by Debtor.
"EQUIPMENT" means any "equipment," as such term is defined in Section
9109(2) of the UCC, now or hereafter owned or acquired by Debtor and, in any
event, shall include, without limitation, all machinery, equipment,
furnishings, vehicle, computers and other electronic data-processing and any
other office equipment of any nature whatsoever, any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
----------------------- -----------------------
Debtor Initial Security Party Initial
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"FIXTURES" means "fixtures," such term is defined in Section 9313(1)(a) of
the UCC, now or hereafter owned or acquired by Debtor and, in any event, shall
include, without limitation, regardless of where located, all of the fixtures,
systems, machinery, apparatus, equipment and fittings of every kind and nature
whatsoever and all appurtenances and additions thereto and substitutions or
replacements thereof, now or hereafter attached or affixed to or constituting a
part of, or located in or upon, real property wherever located, including,
without limitation, all heating, electrical, mechanical, lighting, lifting,
plumbing, ventilating, air-conditioning and air cooling, refrigerating, food
preparation, incinerating and power, loading and unloading, signs, escalators,
elevators, boilers, communication, switchboards, sprinkler and other fire
prevention and extinguishing fixtures, systems, machinery, apparatus and
equipment, and all engines, motors, dynamos, machinery, pipes, pumps, tanks,
conduits and ducts constituting a part of any of the foregoing, together with
all right, title and interest of Debtor in and to all extensions, improvements,
betterments, renewals, substitutes, and replacements of, and all additions and
appurtenances to any of the foregoing property, and all conversions of the
security constituted thereby, immediately upon any acquisition or release
thereof or any such conversion, as the case may be.
"GENERAL INTANGIBLES" means any "general intangibles," as such term is
defined in SECTION 9106 of the UCC, now owned or hereafter acquired by Debtor
and, in any event, shall include, without limitation, all right, title and
interest which Debtor may now or hereafter have in or under any Contract, all
customer lists, interests in partnerships, joint ventures and other business
associations, permits, trade secrets, proprietary or confidential information,
technical information, procedures, designs, knowledge, know-how, software, data
bases, data, skill, expertise, recipes, experience, processes, models,
drawings, materials and records, goodwill, claims in or under insurance
policies, including unearned premiums, uncertificated securities, deposit
accounts, rights to receive tax refunds and other payments and rights of
indemnification.
"INSTRUMENTS" means any "instrument," as such term is defined in SECTION
9105(1)(i) of the UCC now owned or hereafter acquired by Debtor, including,
without limitation, all notes, certificated securities, and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.
"INTELLECTUAL PROPERTY" means all Copyrights, Patents, Trademarks, trade
secrets, customer lists, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
recipes, experience, processes, models, drawings, materials and records, and
all Licenses related to the foregoing in which Debtor is the licensee.
"INVENTORY" means any "inventory," as such term is defined in Section
9109(4) of the UCC, wherever located, now or hereafter owned or acquired by,
Debtor and, in any event, shall include, without limitation, all inventory,
merchandise, goods and other personal property which are held by or on behalf
of Debtor for sale or lease or are furnished or are to be furnished under a
contract of service or which constitute raw materials, work in process or
materials used or consumed or to be used or consumed in Debtor's business, or
the processing, packaging, promotion, delivery or shipping of the same, and all
furnished goods whether or not such inventory is listed on any schedules,
assignments or reports furnished to Secured Party from time to time and whether
or not the same is in transit or in the constructive, actual or exclusive
occupancy or possession of Debtor or is held by Debtor or by others for
Debtor's account, including, without limitation, all goods covered by purchase
orders and contracts with suppliers and all goods billed and held by suppliers
and all inventory which may be located on premises of Debtor or of any
carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or
other persons.
"INVESTMENT PROPERTY" means any "investment property," as such term is
defined in Section 9115(1)(f) of the UCC, now owned or hereafter acquired by
Debtor, including, without limitation, a security, whether certificated or
uncertificated, a security entitlement, a securities account, a commodity
contract or a commodity account.
____________________ ____________________
Debtor Initial Secured Party Initial
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"LICENSE" means any Copyright License, Patent License, Trademark License
or other license of rights or interests now held or hereafter acquired by
Debtor.
"PATENT LICENSE" means any of the following now owned or hereafter
acquired by Debtor; any written agreement granting any right with respect to
any invention on which a Patent is in existence.
"PATENTS" means all of the following in which Debtor now holds or
hereafter acquires any interest: (a) letters patent of the United States or any
other county, all registrations and recordings thereof, and all applications
for letters patent of the United States or any other county, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political subdivision
thereof; (b) all reissues, continuations, continuations-in-part or extensions
thereof; (c) all ▇▇▇▇▇ patents, divisionals, and patents of addition; and (d)
all patents to issue in any such applications.
"PROCEEDS" means "proceeds," as such term is defined in SECTION 9-306(1)
of the UCC and, in any event, shall include, without limitation, (a) any and
all Accounts, Chattel Paper, Instruments, cash or other proceeds payable to
Debtor from time to time in respect of the Collateral, (b) any and all proceeds
of any insurance, indemnity, warranty or guaranty payable to Debtor from time
to time with respect to any of the Collateral, (c) any and all payments (in any
form whatsoever) made or due and payable to Debtor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral above by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), and (d) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral or any Contract.
"TRADEMARK LICENSE" means any written agreement granting any right in and
to any Trademark or Trademark registration (whether Debtor is the licensee or
the licensor thereunder).
"TRADEMARKS" means any of the following now owned or hereafter acquired by
Debtor: (a) any and all trademarks, trade names, corporate names, company
names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and any applications in connection therewith, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political subdivision
thereof (the "Marks"), (b) any reissues, extensions or renewals thereof, (c)
the goodwill of the business symbolized by or associated with Marks, (d)
income, royalties, damages and payments now and hereafter due and/or payable
with respect to Marks, including, without limitation, damages, claims and
recoveries for past, present or future infringement, misappropriation, or
dilution, and (e) rights to ▇▇▇ for past, present and future infringements of
Marks.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of California; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Secured Party's security interest in any collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of California, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection of priority and for purposes of
definitions related to such provisions.
-------------- ---------------------
Debtor Initial Secured Party Initial
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EXHIBIT B
SKYSTREAM CORPORATION
COMMON STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of this 31st day of August, 1998, by and between
SKYSTREAM CORPORATION, a California corporation (the "Corporation"), and
LIGHTHOUSE CAPITAL PARTNERS II, L.P. (the "Purchaser").
All capitalized terms in this Agreement shall have the meaning assigned to
them in this Agreement or in the attached Appendix.
1. ACQUISITION OF SHARES
(a) SALE AND PURCHASE. On the terms and conditions set forth in this
Agreement, the Corporation agrees to sell to the Purchaser, and Purchaser
agrees to purchase 75,410 shares of Common Stock (the "Shares") of the
Corporation. The sale and purchase shall occur at the offices of the
Corporation on the date set forth above or at such other place and time as the
parties may agree. Attached hereto as Exhibit A is a current capitalization
table for the Corporation.
(b) CONSIDERATION. The Purchaser agrees to pay $0.225 for each Share (the
"Purchase Price"). The Corporation represents and warrants that the Purchase
Price is at least 100% of the Fair Market Value of the Shares. Payment shall be
made on the transfer date in cash or cash equivalents. Upon receipt by the
Corporation of the Purchase Price with respect to the Shares, the Corporation
shall issue a duly executed certificate representing the Shares (the
"Closing"). The Corporation further covenants that the Shares will, upon
issuance, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance thereof.
(c) STOCKHOLDER RIGHTS. Purchaser (or any successor in interest) shall
have all the rights of a stockholder (including voting, dividend and
liquidation rights) with respect to the Shares, subject, however, to the
transfer restrictions of Section 2 below.
2. SECURITIES LAW COMPLIANCE/TRANSFER RESTRICTIONS
(a) RESTRICTED SECURITIES. The Shares have not been registered under the
1933 Act.
(b) PURCHASER REPRESENTATIONS. In connection with the issuance and
acquisition of Shares under this Agreement, Purchaser hereby represents and
warrants to the Corporation as follows:
(i) Purchaser is acquiring the Shares for investment for its
account only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the 1933 Act.
(ii) Purchaser understands that the Shares have not been registered
under the 1933 Act by reason of a specific exemption therefrom and that the
Shares must be held indefinitely, unless they are subsequently registered under
the 1933 Act or Purchaser determines that such registration is not required.
(iii) Purchaser will not sell, transfer or otherwise dispose of the
Shares in violation of the 1933 Act, the Securities Exchange Act of 1934, or
the rules promulgated thereunder, including Rule 144 under the 1933 Act.
Purchaser agrees that it will not dispose of the Shares unless and until it has
complied with all requirements of this Agreement applicable to the disposition
of Shares, and only if (i) the proposed disposition does not require
registration of the Shares under the 1933 Act or all appropriate action
necessary for compliance with the registration requirements of the 1933 Act or
with any exemption from registration available under the 1933 Act (including
Rule 144) has been taken and (ii) the proposed disposition will not result in
the contravention of any transfer restrictions applicable to the Shares under
the Rules of the California Corporations Commissioner.
1
28
(iv) Notwithstanding anything to the contrary contained herein,
Purchase may grant a security interest in its rights hereunder and the Shares
to third parties.
(c) CORPORATION REPRESENTATIONS. The Corporation hereby represents and
warrants to Purchaser as follows:
(1) The execution and delivery of this Agreement do not, and
the issuance of the Shares in accordance with the terms hereof will not, with
or without the passage of time or giving of notice, (i) violate or contravene
the Corporation's Articles of Incorporation or Bylaws, or any law, statute,
regulation, rule, judgment or order applicable to the Corporation, (ii)
violate, contravene or result in a breach or default under any contract,
agreement or instrument to which the Corporation is a party or by which the
Corporation or any of its assets are bound, (iii) result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Corporation or the suspension, revocation, impairment, forfeiture
or nonrenewal of any permit license, authorization or approval applicable to
the Corporation, its business or operations or any of its assets or properties,
or (iv) require the consent or approval of or the filing of any notice or
registration with any person or entity.
(2) The Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. The
Corporation has all requisite corporate power and authority to own and operate
its properties and assets, to execute and deliver this Agreement, to issue and
sell the Shares, to carry out the provisions of this Agreement, and to carry on
its business as presently conducted and as presently proposed to be conducted.
(3) The authorized capital stock of the Corporation,
immediately prior to the Closing, will consist of 20,000,000 shares of Common
Stock (par value $0.01 per share), of which (i) 4,349,367 shares are issued and
outstanding, (ii) 6,704,831 shares are reserved for the conversion of the
Preferred Stock and (iii) 2,175,633 shares are reserved for future issuance to
key employees pursuant to the Corporation's stock option plan. In addition,
4,425,000 shares of Series A Preferred Stock are authorized, of which 4,425,000
shares are issued and outstanding and 35,385 are reserved for issuance upon the
exercise of certain Warrants. All issued and outstanding shares of the
Corporation's Common Stock (i) have been duly authorized and validly issued,
(ii) are fully paid and nonassessable, and (iii) were issued in compliance with
all applicable state and federal laws concerning the issuance of securities.
(4) All corporate action on the part of the Corporation, its
officers, directors and shareholders necessary for the authorization of this
Agreement, the performance of all obligations of the Corporation hereunder and
thereunder at the Closing and the authorization, sale, issuance and delivery of
the Shares pursuant hereto has been taken or will be taken prior to the
Closing. The Agreement, when executed and delivered, will be a valid and
binding obligation of the Corporation enforceable in accordance with its terms,
except as limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights, and (ii) general principles of equity that restrict the
availability of equitable remedies.
(5) The Corporation has good and marketable title to its
properties and assets, including the properties and assets reflected in the
most recent balance sheet included in the financial statements of the
Corporation delivered to the Purchaser, and good title to its leasehold
estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance
or charge, other than (i) those resulting from taxes which have not yet become
delinquent, (ii) minor liens and encumbrances which do not materially detract
from the value of the property subject thereto or materially impair the
operations of the Corporation, and (iii) those that have otherwise arisen in
the ordinary course of business.
(6) The Corporation owns or possesses sufficient legal rights
to all patents, trademarks, service marks, trade names, copyrights, trade
secrets, information and other proprietary rights and processes necessary for
its business as now conducted and as proposed to be conducted, without any
known infringement of the rights of others.
2
29
(7) The Corporation is not in violation or default of any term of its
Articles of Incorporation or Bylaws, or of any provision of any mortgage,
indenture, contract, agreement, instrument or contract to which it is party or
by which it is bound or of any judgment, decree, order, writ or, to its
knowledge, any law, statute, regulation, rule, judgment or order applicable to
the Corporation which would materially and adversely affect the business,
assets, liabilities, financial condition, operations or prospects of the
Corporation.
(8) There is no action, suit, proceeding or investigation pending or
to the Corporation's knowledge currently threatened against the Corporation
that questions the validity of this Agreement or the consummation of the
transactions contemplated hereby, or which might result, either individually or
in the aggregate, in any material adverse change in the assets, condition,
affairs or prospects of the Corporation, financially or otherwise, or any
change in the current equity ownership of the Corporation, nor is the
Corporation aware that there is any basis for the foregoing. The foregoing
includes, without limitation, actions pending or threatened (or any basis
therefor know to the Corporation) involving the prior employment of any of the
Corporation's employees, their use in connection with the Corporation's
business of any information or techniques allegedly proprietary to any of their
former employers, or their obligations under any agreements with prior
employers. The Corporation is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency
or instrumentality. There is no action, suit, proceeding or investigation by
the Corporation currently pending or which the Corporation intends to initiate.
(d) RIGHTS OF THE CORPORATION. The Corporation shall not be required to (i)
transfer on its books any Shares that have been sold or transferred in
contravention of this Agreement or (ii) treat as the owner of Shares, or
otherwise to accord voting, dividend or liquidation rights to, any transferee
to whom Shares have been transferred in contravention of this Agreement.
3. NOTICES OF RECORD DATE, ETC. IN THE EVENT OF:
(a) any taking by the Corporation of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase, sell or otherwise acquire or dispose of any shares of
stock of any class or any other securities or property, or to receive any other
right;
(b) any reclassification of the capital stock of the Corporation, capital
reorganization of the Corporation, consolidation or merger involving the
Corporation, or sale or conveyance of all or substantially all of its assets; or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Corporation;
then in each such event the Corporation will provide or cause to be
provided to the Purchaser a written notice thereof. Such notice shall be
provided at least twenty (20) business days prior to the date specified in such
notice on which any such action is to be taken.
4. RIGHTS OF PARTICIPATION. The Corporation hereby grants the Purchaser the
right of participation as set forth on Exhibit B, which is incorporated herein
by reference.
5. WAIVER OF RIGHT OF FIRST REFUSAL. The Corporation hereby waives any
"first-refusal rights" of the Corporation with respect to the Shares,
including, without limitation, the right of first refusal provided for in
Article 8.6 of the bylaws of the Corporation.
6. GENERAL PROVISIONS
(a) NOTICES. Any notice required to be given under this Agreement shall be
in writing and shall be deemed effective upon personal delivery or upon deposit
in the U.S. mail, registered or certified, postage prepaid and properly
addressed to the party entitled to such notice at the address indicated below
such party's signature line on this Agreement or at such other address as such
party may designate by ten (10) days advance written notice under this paragraph
to all other parties to this Agreement.
3
30
7. MISCELLANEOUS PROVISIONS
(a) ADDITIONAL UNDERTAKINGS. Purchaser and Corporation hereby agree to
take whatever additional action and execute whatever additional documents the
other party may deem reasonably necessary or advisable in order to carry out
or effect the provisions of this Agreement.
(b) AGREEMENT IS ENTIRE CONTRACT. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
(c) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California without resort to the
State's conflict-of-laws rules.
(d) COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
(e) SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the Corporation and its successors and
assigns and upon Purchaser and its successors and assigns, whether or not any
such person shall have become a party to this Agreement and have agreed in
writing to join herein and be bound by the terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.
SKYSTREAM CORPORATION
By: EXHIBIT ONLY
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Chief Executive Officer
--------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
PURCHASER
LIGHTHOUSE CAPITAL PARTNERS II, L.P.
By: LIGHTHOUSE MANAGEMENT
PARTNERS II, L.P., ITS GENERAL PARTNER
By: LIGHTHOUSE CAPITAL PARTNERS, INC.,
ITS GENERAL PARTNER
By:
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Managing Director
--------------------------------------
Address: ▇▇▇ ▇▇▇▇▇'▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4
31
APPENDIX
The following definitions shall be in effect under the Agreement:
A. "Agreement" shall mean this Common Stock Purchase Agreement.
B. "Board" shall mean the Corporation's Board of Directors.
C. "Common Stock" shall mean the Corporation's common stock.
D. "Corporation" shall mean SkyStream Corporation, a California
corporation.
E. "Fair Market Value" shall mean the fair market value of a Share, as
determined by the Board of Directors in good faith. Such determination shall be
conclusive and binding on all persons.
F. "1933 Act" shall mean the Securities Act of 1933, as amended.
G. "Purchaser" shall mean the person to whom the Shares are issued.
H. "Shares" shall have the meaning assigned to such term in Section
1.(a).
5
32
EXHIBIT A
CAPITALIZATION TABLE
SEE ATTACHED PAGES.
1
33
EXHIBIT B
RIGHT OF PARTICIPATION
SEE ATTACHED PAGES.
1
34
EXHIBIT B
RIGHT OF PARTICIPATION
(a) Right of Participation. Subject to the terms and conditions contained
in this Exhibit B, the Company hereby grants to Purchaser, the right of
participation to purchase its Pro Rata Portion of any New Securities (as
defined in Section (b)) which the Company may, from time to time, propose to
sell and issue. A Holder's "Pro Rata Portion" for purposes of this Section (a)
is the ratio that (x) the sum of the number of shares of the Company's Common
Stock then held by such Purchaser and the number of shares of the Company's
Common Stock issuable upon conversion of any Preferred Stock then held by
Purchaser, bears to (y) the sum of the total number of shares of the Company's
Common Stock then outstanding and the number of shares of the Company's Common
Stock issuable upon conversion of the then outstanding Preferred Stock.
(b) Definition of New Securities. Except as set forth below, "New
Securities" shall mean any shares of capital stock of the Company, including
Common Stock and Preferred Stock, whether authorized or not, and rights, options
or warrants to purchase said shares of Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible into said
shares of Common Stock or Preferred Stock. Notwithstanding the foregoing, "New
Securities" does not include (i) Common Stock issued or issuable upon conversion
of any Preferred Stock, (ii) securities offered to the public generally pursuant
to a registration statement under the Securities Act, (iii) securities issued
pursuant to the acquisition of another corporation by the Company by merger,
purchase of substantially all of the assets or shares or other reorganization
whereby the Company or its shareholders own not less than a majority of the
voting power of the surviving or successor corporation, (iv) shares of the
Company's Common Stock or related options or warrants convertible into or
exercisable for such Common Stock issued to employees, officers and directors
of, and consultants to, the Company, pursuant to any arrangement approved by the
Board of Directors of the Company, (v) shares of the Company's Common Stock or
related options convertible into or exercisable for such Common Stock issued to
banks, commercial lenders, lessors and other financial institutions in
connection with the borrowing of money or the leasing of equipment by the
Company approved by the Board of Directors of the Company, (vi) stock issued
pursuant to any rights or agreements, including, without limitation, convertible
securities, options and warrants, provided that the Company shall have complied
with the rights of participation established by this Exhibit B with respect to
the initial sale or grant by the Company of such rights or agreements, or (vii)
stock issued in connection with any stock split, stock dividend or
recapitalization by the Company.
(c) Notice of Right. In the event the Company proposes to undertake an
issuance of New Securities, it shall give each Purchaser written notice of its
intention, describing the type of New Securities and the price and terms upon
which the Company proposes to issue the same. Each Purchaser shall have twenty
(20) days from the date of receipt of any such notice to agree to purchase
shares of such New Securities (up to the amount referred to in Section (a)),
for the price
35
and upon the terms specified in the notice, by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased.
(d) Exercise of Right. If any Purchaser exercises its right of
participation under this Agreement, the closing of the purchase of the New
Securities with respect to which such right has been exercised shall take place
within ninety (90) calendar days after the Purchaser gives notice of such
exercise, which period of time shall be extended in order to comply with
applicable laws and regulations. Upon exercise of such right of participation,
the Company and the Purchaser shall be legally obligated to consummate the
purchase contemplated thereby and shall use their best efforts to secure any
approvals required in connection therewith.
(e) Lapse and Reinstatement of Right. In the event a Purchaser fails to
exercise the right of participation provided in this Exhibit B within said
twenty (20) day period, the Company shall have ninety (90) days thereafter to
sell or enter into an agreement (pursuant to which the sale of New Securities
covered thereby shall be closed, if at all, within sixty (60) days from the
date of said agreement) to sell the New Securities not elected to be purchased
by such Purchaser at the price and upon the terms no more favorable to the
purchasers of such securities than specified in the Company's notice. In the
event the Company has not sold the New Securities or entered into an agreement
to sell the New Securities within said ninety (90) day period (or sold and
issued New Securities in accordance with the foregoing within sixty (60) days
from the date of said agreement), the Company shall not thereafter issue or
sell any New Securities without first offering such securities to the Purchasers
in the manner provided above.
(f) No Assignment. The right of Purchaser to purchase any part of the New
Securities may not be assigned or transferred.
(g) Termination of Participation Right. The rights of participation
granted under this Exhibit B shall terminate on and be of no further force or
effect upon the consummation of the Company's sale of its Common Stock in an
underwritten public offering pursuant to an effective registration statement
filed under the Securities Act immediately subsequent to which the Company
shall be obligated to file annual and quarterly reports with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act.
2
36
EXHIBIT C
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Lighthouse Capital Partners II, L.P.
▇▇▇ ▇▇▇▇▇'▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: Contract Administration
________________________________________________________________________________
CONSENT TO REMOVAL OF PERSONAL PROPERTY
KNOW ALL PERSONS BY THESE PRESENTS:
(a) The undersigned has an interest as owner and landlord in that
certain real property (the "Real Property") in the County of Santa ▇▇▇▇▇, State
of California, described as: SEE EXHIBIT 1 ATTACHED HERETO FOR FULL LEGAL
DESCRIPTION, and commonly known as ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Parcel No. _______________).
(b) SKYSTREAM CORPORATION, a California corporation ("Borrower"), has
entered into or will enter into a Loan and Security Agreement with LIGHTHOUSE
CAPITAL PARTNERS II, L.P. ("Lender") (as amended and supplemented from time to
time, the "Agreement").
(c) Lender, as a condition to entering into the Agreement, requires
that the undersigned consent to the removal by Lender of the equipment and
other assets covered by the Agreement (hereinafter the "Equipment") from the
Real Property, no matter how it is affixed thereto, and to the other matters
set forth below.
NOW, THEREFORE, for good and sufficient consideration, receipt of which is
hereby acknowledged, the undersigned consents to the placing of the Equipment
on the Real Property, and agrees with Lender as follows:
1. The undersigned waives and releases each and every right which
undersigned now has, under the laws of the State of California or by virtue of
the lease from the Real Property now in effect, to levy or distrain upon for
rent, in arrears, in advance or both, or to claim or assert title to the
Equipment that is already on said Real Property, or may hereafter be delivered
or installed thereon.
2. The Equipment shall be considered to be personal property and shall
not be considered part of the Real Property regardless of whether or by what
means it is or may become attached or affixed to the Real Property.
3. The undersigned will permit Lender, or its agent or representative,
to enter upon the Real Property for the purpose of exercising any right it may
have under the terms of the Agreement or otherwise, including, without
limitation, the right to remove the Equipment; provided, however, that if
Lender, in removing the Equipment damages any improvements of the undersigned
on the Real Property, Lender will, at its expense, cause same to be repaired,
normal wear and tear excepted. The right of Lender to enter the Real Property
shall not terminate until thirty (30) days after Lender receives written notice
from the undersigned of the termination of the Lease.
4. This agreement shall be binding upon the heirs, successors and
assigns of the undersigned and shall inure to the benefit of Lender and its
successors and assigns.
1
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IN WITNESS WHEREOF, the undersigned has executed this instrument this ___ day
of ________________, 1998
LANDLORD Notarial Acknowledgment required.
By: EXHIBIT ONLY
Name:
---------------------------
Title:
--------------------------
ATTACH LEGAL DESCRIPTION OF THE REAL PROPERTY
2
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EXHIBIT D
FORM OF LOAN AGREEMENT SUPPLEMENT
LOAN AGREEMENT SUPPLEMENT ▇▇. ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇, dated October 6, 1998 ("Supplement"), to
the Loan and Security Agreement dated as of October 6, 1998 (the "Loan
Agreement") by and between SKYSTREAM CORPORATION, a California corporation
("Borrower"), and LIGHTHOUSE CAPITAL PARTNERS II, L.P. (the "Lender").
Capitalized terms used herein but not otherwise defined herein are used
with the respective meanings given to such terms in the Loan Agreement.
The amount being advanced under this Loan Agreement Supplement No. 01 is
$________.
Borrower hereby certifies that (a) the foregoing information is true and
correct and authorizes Lender to endorse in its books and records, the Basic
Rate applicable to the Funding Date of the Loan contemplated in this Loan
Agreement Supplement and the principal amount set forth above; (b) the
representations and warranties made by Borrower in SECTION 5 of the Loan
Agreement and in the other Loan Documents are true and correct on the date
hereof and will be true and correct on the Funding Date; (c) Borrower has met
or will by the Funding Date meet all conditions set forth in SECTION 3 of the
Loan Agreement; (d) Borrower is now, and on the Funding Date will be, in
compliance with the covenants and the requirements contained in SECTIONS 6 AND
7 of the Loan Agreement; and (e) no Default or Event of Default has occurred
and is continuing under the Loan Agreement.
This Supplement is being delivered in the State of California.
This Supplement may be executed by Borrower and Lender in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, Borrower and Lender have caused this Supplement to be
duly executed and delivered as of this day and year first above written.
SKYSTREAM CORPORATION LIGHTHOUSE CAPITAL PARTNERS II, L.P.
By: EXHIBIT ONLY By: LIGHTHOUSE MANAGEMENT PARTNERS, II
L.P., its general partner
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
By: LIGHTHOUSE CAPITAL PARTNERS, INC.,
Title: Chief Executive Officer its general partner
By:
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President, Operations
1
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EXHIBIT E
NEGATIVE PLEDGE AGREEMENT
THIS NEGATIVE PLEDGE AGREEMENT is made as of August 31, 1998 by and
between SKYSTREAM CORPORATION ("Borrower") and LIGHTHOUSE CAPITAL PARTNERS II,
L.P. ("Lender").
In connection with the Loan Documents being concurrently executed between
Borrower and Lender, Borrower agrees as follows:
Except as otherwise permitted in the Loan Documents, Borrower shall
not sell, transfer, assign, mortgage, pledge, lease, grant a security interest
in, or encumber any of Borrower's intellectual property, including, without
limitation, the following:
(a) Any and all copyright rights, copyright applications,
copyright registration and like protection in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not
the same also constitutes a trade secret, now or hereafter existing, created,
acquired or held (collectively, the "Copyrights");
(b) Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to Borrower
now or hereafter existing, created, acquired or held;
(d) All patents, patent applications and like protections,
including, without limitation, improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same,
including, without limitation, the patents and patent applications
(collectively, the "Patents");
(e) Any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks (collectively, the "Trademarks");
(f) Any and all claims for damages by way of past, present and
future infringements of any of the rights included above, with the right, but
not the obligation, to ▇▇▇ for and collect such damages for said use or
infringement of the intellectual property rights identified above;
(g) All licenses or other rights to use any of the Copyrights,
Patents or Trademarks and all license fees and royalties arising from such use
to the extent permitted by such license or rights;
(h) All amendments, extensions, renewals and extensions of any of
the Copyrights, Patents or Trademarks; and
(i) All proceeds and products of the foregoing, including,
without limitation, all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
It shall be an Event of Default under the Loan Documents between
Borrower and Lender if there is a breach of any term of this Negative Pledge
Agreement.
Notwithstanding anything in this Agreement, Borrower may grant
non-exclusive licenses with respect to its intellectual property in the
ordinary course of business.
1
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Capitalized items used herein without definition shall have the same
meanings as set forth in the Loan and Security Agreement of even date herewith.
SKYSTREAM CORPORATION
By: EXHIBIT ONLY
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: Chief Executive Officer
----------------------------
LIGHTHOUSE CAPITAL PARTNERS II, L.P.
BY: LIGHTHOUSE MANAGEMENT PARTNERS II, L.P.
its general partner
BY: LIGHTHOUSE CAPITAL PARTNERS, INC.
its general partner
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------
Title: Managing Director
----------------------------
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SCHEDULE 1
EXISTING LIENS
------------------------------------------------------------------------------------------------
FILE STATE
SECURED PARTY NUMBER DATE FILED FILED DESCRIPTION
------------------------------------------------------------------------------------------------
Silicon Valley Bank 9700360589 12/31/96 CA Blanket Lien
------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Lease Funding ▇▇▇▇▇▇▇▇▇▇ 11/5/97 CA Equipment Schedule 01
------------------------------------------------------------------------------------------------
Venture Leasing Associates 9731860528 11/10/97 CA Equipment Schedule 02
------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 9800960544 1/5/98 CA Equipment Schedule 03
------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Lease Funding 9802260250 1/21/98 CA Equipment Schedule 04
------------------------------------------------------------------------------------------------
Venture Leasing Associates 9806960108 3/5/98 CA Equipment Schedule 06
------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Lease Funding ▇▇▇▇▇▇▇▇▇▇ 6/11/98 CA Equipment Schedule 08
------------------------------------------------------------------------------------------------
Venture Leasing Associates 9817060759 6/17/98 CA Equipment Schedule 07
------------------------------------------------------------------------------------------------
Venture Leasing Associates Pending Pending CA Equipment Schedule 09
------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Lease Funding Pending Pending CA Equipment Schedule 05
------------------------------------------------------------------------------------------------
1
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SCHEDULE 2
SUBSIDIARIES
NONE
1