EXHIBIT 10.8
IMPERIAL BANK
Member FDIC
SECURITY AND LOAN AGREEMENT
(accounts receivable)
This Agreement is entered into between HYPERMEDIA COMMUNICATIONS, INC.
, a Corporation
(herein called "Borrower") and IMPERIAL BANK (herein called "Bank").
1. Bank hereby commits, subject to all the terms and conditions of this
Agreement and prior to the termination of its commitment as hereinafter
provided, to make loans to Borrower from time to time in such amounts as
may be determined by Bank up to, but not exceeding in the aggregate unpaid
principal balance, the following Borrowing Base:
70% of Eligible Accounts
and in no event more than $1,000,000.
2. The amount of each loan made by Bank to Borrower hereunder shall be
debited to the loan ledger account of Borrower maintained by Bank (herein
called "Loan Account") and Bank shall credit the Loan Account with all
loan repayments made by Borrower. Borrower promises to pay Bank (a) the
unpaid balance of Borrower's Loan Account on March 18, 1998 and (b) on or
before the tenth day of each month, interest on the average daily unpaid
balance of the Loan Account during the immediately preceding month at the
rate of two percent (2.0%) per annum in excess of the rate of interest
which Bank has announced as its prime lending rate ("Prime Rate") which
shall vary concurrently with any change in such Prime Rate. Interest shall
be computed at the above rate on the basis of the actual number of days
during which the principal balance of the loan account is outstanding
divided by 360, which shall for interest computation purposes be
considered one year. Upon uncured Event of Default, Bank may demand
payment of any or all of the amount due under the Loan Account including
accrued but unpaid interest at any time. Such notice may be given verbally
or in writing and should be effective upon receipt by Borrower. Bank is
hereby authorized to charge Borrower's deposit account(s) with Bank for
all sums due Bank under this Agreement.
3. Requests for loans hereunder shall be in writing duly executed by
Borrower in a form satisfactory to Bank and shall contain a certification
setting forth the matters referred to in Section 1, which shall disclose
that Borrower is entitled to the amount of loan being requested.
4. As used in this Agreement, the following terms shall have the following
meanings:
A. "Accounts" means any right to payment for goods sold or leased, or to
be sold or to be leased, or for services rendered or to be rendered
no matter how evidenced, including accounts receivable, contract
rights, chattel paper, instruments, purchase orders, notes, drafts,
acceptances, general intangibles and other forms of obligations and
receivables,
B. "Collateral" means any and all personal property of Borrower which is
assigned or hereafter is assigned to Bank as security or in which
Bank now has or hereafter acquires a security interest.
C. "Eligible Accounts" means all of Borrower's Accounts excluding,
however, (1) all Accounts under which payment is not received within
90 days from any invoice date, (2) all Accounts against which the
account debtor or any other person obligated to make payment thereon
asserts any defense, offset, counterclaim or other right to avoid or
reduce the liability represented by the Account and (3) any Accounts
if the account debtor or any other person liable in connection
therewith is insolvent, subject to bankruptcy or receivership
proceedings or has made an assignment for the benefit of creditors or
whose credit standing is unacceptable to Bank and Bank has so
notified Borrower. Eligible Accounts shall only include such accounts
as Bank in its sole discretion shall determine are eligible from time
to time.
The obligations of the Borrower hereunder are secured by that certain
General Security Agreement dated February 4, 1994 and the Borrower agrees
that where the term "incurred in connection with the Loan and Security
Agreement dated March 1, 1994 " appears in the first paragraph of the
General Security Agreement it shall refer to this Security and Loan
Agreement.
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8. Borrower represents and warrants to Bank: (i) If Borrower is a
corporation, that Borrower is duly organized and existing in the State of
its incorporation and the execution, delivery and performance hereof are
within Borrower's corporate powers, have been duly authorized and are not
in conflict with law or the terms of any charter, by-law or other
incorporation papers, or of any indenture, agreement or undertaking to
which Borrower is a party or by which Borrower is found or affected; (ii)
Borrower is, or at the time the collateral becomes subject to Bank's
security interest will be, the true and lawful owner of and has, or at the
time the Collateral becomes subject to Bank's security interest will have,
good and clear title to the Collateral, subject only to Bank's rights
therein; (iii) Each Account is, or at the time the Account comes into
existence will be, a true and correct statement of a bona fide
indebtedness incurred by the debtor named therein in the amount of the
Account for either merchandise sold or delivered (or being held subject to
Borrower's delivery instructions) to, or services rendered, performed and
accepted by, the account debtor; (iv) that there are or will be no
material defenses, counterclaims, or setoffs which may be asserted against
the Accounts; and (v) any and all financial information, including
information relating to the Collateral, submitted by Borrower to Bank,
whether previously or in the future, is or will be true and correct in all
material respects.
9. Borrower will: (i) Furnish Bank from time to time such financial
statements and information as required under the Credit Terms and
Conditions dated March 19, 1997; (iv) Promptly notify Bank of any
attachment or other legal process levied against any of the Collateral and
any information received by Borrower relative to the Collateral, including
the Accounts, the account debtors or other persons obligated in connection
therewith, which may in any way materially affect the value of the
Collateral or the rights and remedies of Bank in respect thereto; (v)
Reimburse Bank upon demand for any and all legal costs, including
reasonable attorneys' fees, and other expense incurred in collecting any
sums payable by Borrower under Borrower's Loan Account or any other
obligation secured hereby, enforcing any term or provision of this
Security Agreement or otherwise or in the checking, handling and
collection of the Collateral and the preparation and enforcement of any
agreement relating thereto; (vi) Notify Bank of each location and of each
office of Borrower at which records of Borrower relating to the Accounts
are kept; (vii) Provide, maintain and deliver to Bank policies insuring
the Collateral against loss or damage by such risks and in such amounts,
forms and companies as Bank may require and with loss payable solely to
Bank, and, in the event Bank takes possession of the Collateral, the
insurance policy or policies and any unearned or returned premium thereon
shall at the option of Bank become the sole property of Bank, such
policies and the proceeds of any other Insurance covering or in any way
relating to the Collateral, whether now in existence or hereafter
obtained, being hereby assigned to Bank; and (viii) In the event the
unpaid balance of Borrower's Loan Account shall exceed the maximum amount
of outstanding loans to which Borrower is entitled under Section 1 hereof,
Borrower shall immediately pay to Bank, from its own funds and not from
the proceeds of Collateral, for credit to Borrower's Loan Account the
amount of such excess.
10. Upon an Event of Default which is not cured within the applicable cure
period, Bank may at any time, without 5 days prior written notice to
Borrower, collect the Accounts and may give notice of assignment to any
and all account debtors, and Borrower does hereby make, constitute and
appoint Bank its irrevocable, true and lawful attorney with power to
receive, open and dispose of all mail addressed to Borrower, to endorse
the name of Borrower upon any checks or other evidences of payment that
may come into the possession of Bank upon the Accounts to endorse the name
of the undersigned upon any document or instrument relating to the
Collateral; in its name or otherwise, to demand, ▇▇▇ for, collect and give
acquittances for any and all moneys due or to become due upon the
Accounts; to compromise, prosecute or defend any action, claim or
proceeding with respect thereto; and to do any and all things necessary
and proper to carry out the purpose herein contemplated.
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12. Should an Event of Default (as defined in the Credit Terms and
Conditions dated March 19, 1997) occur and be continuing after the
applicable cure period; then in any such event, Bank may, at its option
and without demand first made and without notice to Borrower, do any one
or more of the following: (a) Terminate its obligation to make loans to
Borrower as provided in Section 1 hereof; (b) Declare all sums secured
hereby immediately due and payable; (c) Immediately take possession of the
Collateral wherever it may be found, using all necessary force so to do,
or require Borrower to assemble the Collateral and make it available to
Bank at a place designated by Bank which is reasonably convenient to
Borrower and Bank, and Borrower waives all claims for damages due to or
arising from or connected with any such taking; (d) Proceed in the
foreclosure of Bank's security interest and sale of the Collateral in any
manner permitted by law, or provided for herein; (e) Sell, lease or
otherwise dispose of the Collateral at public or private sale, with or
without having the Collateral at the place of sale, and upon terms and in
such manner as Bank may determine, and Bank may purchase same at any such
sale; (f) Retain the Collateral in full satisfaction of the obligations
secured thereby; (g) Exercise any remedies of a secured party under the
Uniform Commercial Code as in effect in the State of California. Prior to
any such disposition, Bank may, at its option. cause any of the Collateral
to be repaired or reconditioned in such manner and to such extent as Bank
may deem advisable, and any sums expanded therefor by Bank shall be repaid
by Borrower and secured hereby. Bank shall have the right to enforce one
or more remedies hereunder successively or concurrently, and any such
action shall not estop or prevent Bank from pursuing any further remedy
which it may have hereunder or by law. If a sufficient sum is not realized
from any such disposition of Collateral to pay all obligations secured by
this Security Agreement, Borrower hereby promises and agrees to pay Bank
any deficiency.
13. If any writ of material attachment, garnishment, execution or other
legal process be issued against any property of Borrower, or if any
assessment for taxes against Borrower, other than real property, is made
by the Federal or State government or any department thereof, the
obligation of Bank to make loans to Borrower as provided in Section 1
hereof shall immediately terminate and the unpaid balance of the Loan
Account, all other obligations secured hereby and all other sums due
hereunder shall within 10 days become due and payable without demand,
presentment or notice.
14. Borrower authorizes Bank to destroy all invoices, delivery receipts,
reports and other types of documents and records submitted to Bank in
connection with the transactions contemplated herein at any time
subsequent to four months from the time such items are delivered to Bank.
15. Nothing herein shall in any way limit the effect of the conditions set
forth in any other security or other agreement executed by Borrower, but
each and every condition hereof shall be in addition thereto.
16. Additional Provisions: To the extent of any conflict between the terms
hereof and the terms contained in the letter agreement dated ▇▇▇▇▇ ▇▇,
▇▇▇▇, (▇▇▇ accepted and agreed to March 12, 1997) and the Credit Terms and
Conditions with Addendum dated March 19, 1997, the terms of the Credit
Terms and Conditions will prevail.
Executed this 19th day of March, 1997
HYPERMEDIA COMMUNICATIONS, INC.
IMPERIAL BANK By:/S/ ▇▇▇▇ ▇▇▇▇▇ C.F.O
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(Authorized Signature and Title)
By:/S/ ▇▇▇▇ ▇▇▇▇▇ A.V.P. By:
--------------------------------- -------------------------------
(Title) (Authorized Signature and Title)
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