HyperMedia Communications, Inc.
SEC Form 10-K FY97
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, 1999 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.
5.
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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 with Addendum
dated March 19, 1997 and amended March 19, 1998 (the "Credit Terms and
Conditions"); (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, with 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)
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,
the terms of the Credit Terms and Conditions will prevail.
Executed this 19th day of March, 1998
HYPERMEDIA COMMUNICATIONS, INC.
IMPERIAL BANK By: /s/ ▇▇▇▇ ▇▇▇▇▇ Chief Financial Officer
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(Authorized Signature and Title)
By : /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, Assistant Vice President By:
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(Title) (Authorized Signature and Title)
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