IMPERIAL BANK EXHIBIT 10.13
Member FDIC April 24, 1997
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Subject: Credit Terms and Borrower: Terayon Corporation
Conditions ("Agreement")
Gentlemen:
To induce you to make loans to the undersigned (herein called "Borrower"), and
in consideration of any loan or loans you, in your sole discretion, may make to
Borrower, Borrower warrants and agrees as follows:
A. Borrower represents and warrants that:
1. EXISTENCE AND RIGHTS.
Company is a corporation
Borrower is duly organized and existing and in good standing under the laws of
the State of California and is authorized and in good standing to do business in
the State of California. Borrower has powers and adequate authority, rights and
franchises to own its property and to carry on its business as now conducted,
and is duly qualified and in good standing in each State in which the character
of the properties owned by it therein or the conduct of its business makes such
qualification necessary, and Borrower has the power and adequate authority to
make and carry out this Agreement. Borrower has no investment in any other
business entity, except as previously disclosed to Bank.
2. AGREEMENT AUTHORIZED. The execution, delivery and performance of this
Agreement are duly authorized and do not require the consent or approval of any
governmental body or other regulatory authority; are not in contravention of or
in conflict with any law or regulation or any term or provision of Borrower's
articles of incorporation, by-laws, or Articles of Association, as the case may
be, and this Agreement is the valid, binding and legally enforceable obligation
of Borrower in accordance with its terms.
3. NO CONFLICT. The execution, delivery and performance of this Agreement
are not in contravention of or in conflict with any agreement, indenture or
undertaking to which Borrower is a party or by which it or any of its property
may be bound or affected, and do not cause any lien, charge or other encumbrance
to be created or imposed upon any such property by reason thereof.
4. LITIGATION. There is no litigation or other proceeding pending or
threatened against or affecting Borrower, and Borrower is not in default with
respect to any order, writ, injunction, decree or demand of any court or other
governmental or regulatory authority.
5. FINANCIAL CONDITION. The balance sheet of Borrower as of 2/28/97, and
the related profit and loss statement for the 2 months ended on that date, a
copy of which has heretofore been delivered to you by Borrower, and all other
statements and data submitted in writing by Borrower to you in connection with
this request for credit are true and correct and said balance sheet and profit
and loss statement truly present the financial condition of Borrower as of the
date thereof and the results of the operation of Borrower for the period covered
thereby, and have been prepared in accordance with generally accepted accounting
principles on a basis consistently maintained. Since such date there have been
no materially adverse changes in the financial condition or business of
Borrower. Borrower has no knowledge of any liabilities, contingent or otherwise,
as such date not reflected in said balance sheet, and Borrower has not entered
into any special commitments or substantial contracts which are not reflected in
said balance sheet, other than in the ordinary and normal course of its
business, which may have a materially adverse effect upon its financial
condition, operations or business as now conducted.
6. TITLE TO ASSETS. Borrower has good title to its assets, and the same are
not subject to any liens or encumbrances other than those permitted by Section
C.3 hereof.
7. TAX STATUS. Borrower has no liability for any delinquent state, local or
federal taxes, and if Borrower has contracted with any government agency,
Borrower has no liability for renegotiation of profits.
8. TRADEMARKS, PATENTS. Borrower, as of the date hereof, possesses all
necessary trademarks, trade names, copyrights, patents, patent rights, and
licenses to conduct its business as now operated, without any known conflict
with the valid trademarks, trade names, copyrights, patents and license rights
of others.
9. REGULATION U. The proceeds of this loan shall not be used to purchase or
carry margin stock (as defined with Regulation U of the Board of Governors of
the Federal Reserve system).
B. Borrower agrees that so long as it is indebted to you, it will, unless you
shall otherwise consent in writing:
1. RIGHTS AND FACILITIES. Maintain and preserve all rights, franchises and
other authority adequate for the conduct of its business; maintain its
properties, equipment and facilities in good order and repair, conduct its
business in an orderly manner without voluntary interruption and, if a
corporation or partnership, maintain and preserve its existence.
2. INSURANCE. Maintain public liability, property damage and workers'
compensation insurance and insurance on all its insurable property against fire
and other hazards with responsible insurance carriers to the extent usually
maintained by similar businesses.
3. TAXES AND OTHER LIABILITIES. Pay and discharge, before the same become
delinquent and before penalties accrue thereon, all taxes, assessments and
governmental charges upon or against it or any of its properties, and all its
other liabilities at any time existing, except to the extent and so long as:
(a) the same are being contested in good faith and by appropriate
proceedings in such manners as not to cause any materially adverse effect upon
its financial condition or the loss of any right of redemption from any sale
thereunder, and
(b) it shall have set aside on its books reserves (segregated to the
extent required by generally accepted accounting practice) deemed by it adequate
with respect thereto.
4. RECORDS AND REPORTS. Maintain a standard and modern system of accounting
in accordance with generally accepted accounting principles on a basis
consistently maintained; permit your representatives to have access to, and to
examine its properties, books and records at all reasonable times; and furnish
you:
(a) As soon as available, and in any event within 25 days after the
close of each month of each fiscal year of Borrower, commencing with the month
next ending, a balance sheet, profit and loss statement and reconciliation of
Borrower's capital accounts as of the close of such period and covering
operations for the portion of Borrower's fiscal year ending on the last day of
such period, all in reasonable detail and stating in comparative form the
figures for the corresponding date and period in the previous fiscal year,
prepared in accordance with generally accepted accounting principles on a basis
consistently maintained by Borrower and certified by an appropriate officer of
Borrower, subject, however, to year-end audit adjustments;
(b) As soon as available, and in any event within 90 days after the
close of each fiscal year of Borrower, a report of audit of Company as of the
close of and for such fiscal year, all in reasonable detail and stating in
comparative form the figures as of the close of and for the previous fiscal
year, with the unqualified opinion of accountants satisfactory to you.
(c) Within 24 days after the close of each month of each fiscal year of
Borrower, a certificate by chief financial officer or partner of Borrower
stating that Borrower has performed and observed each and every covenant
contained in this Letter of Inducement to be performed by it and that no event
has occurred and no condition then exists which constitutes an event of default
hereunder or would constitute such an event of default upon the
lapse of time or upon the giving of notice and the lapse of time specified
herein, or, if any such event has occurred or any such condition exists,
specifying the nature thereof.
(d) Promptly after the receipt thereof by Borrower, copies of any
detailed audit reports submitted to Borrower by independent accountants in
connection with each annual or interim audit of the accounts of Borrower made by
such accountants;
(e) Promptly after the same are available, copies of all such proxy
statements, financial statements and reports as Borrower shall send to its
stockholders, if any, and copies of all reports which Borrower may file with the
Securities and Exchange Commission or any governmental authority at any time
substituted therefor; and
(f) Such other information relating to the affairs of Borrower as you
reasonably may request from time to time.
(g) Notice of Default. Promptly notify the Bank in writing of the
occurrence of any event of default hereunder or any event which upon notice and
lapse of time would be an event of default.
C. Borrower agrees that so long as it is indebted to you, it will not, without
your written consent:
1. TYPE OF BUSINESS; MANAGEMENT. Make any substantial change in the
character of its business; or make any change in its executive management.
2. OUTSIDE INDEBTEDNESS. Create, incur, assume or permit to exist any
indebtedness for borrowed moneys other than loans from you except obligations
now existing as shown in financial statement dated 2/28/97, excluding those
being refinanced by your bank; or sell or transfer, either with or without
recourse, any accounts or notes receivable or any moneys due to become due.
3. LIENS AND ENCUMBRANCES. Create, incur, or assume any mortgage, pledge,
encumbrance, lien or charge of any kind (including the charge upon property at
any time purchased or acquired under conditional sale or other title retention
agreement) upon any asset now owned or hereafter acquired by it, other than
liens for taxes not delinquent and liens in your favor.
4. LOANS, INVESTMENTS, SECONDARY LIABILITIES. Make any loans or advances to
any person or other entity other than in the ordinary and normal course of its
business as now conducted or make any investment in the securities of any person
or other entity other than the United States Government; or guarantee or
otherwise become liable upon the obligation of any person or other entity,
except by endorsement of negotiable instruments for deposit or collection in the
ordinary and normal course of its business.
5. ACQUISITION OR SALE OF BUSINESS; MERGER OR CONSOLIDATION. Purchase or
otherwise acquire the assets or business of any person or other entity; or
liquidate, dissolve, merge or consolidate, or commence any proceedings therefor;
or sell any assets except in the ordinary and normal course of its business as
now conducted; or sell, lease, assign, or transfer any substantial part of its
business or fixed assets, or any property or other assets necessary for the
continuance of its business as now conducted including without limitation the
selling of any property or other asset accompanied by the leasing back of the
same.
6. DIVIDENDS, STOCK PAYMENTS. If a corporation, declare or pay any dividend
(other than dividends payable in common stock of Borrower) or make any other
distribution on any of its capital stock now outstanding or hereafter issued or
purchase, redeem or retire any of such stock.
D. The occurrence of any one of the following events of default shall, at your
option terminate your commitment to lend and make all sums of principal and
interest then remaining unpaid on all Borrower's indebtedness to you immediately
due and payable, all without demand, presentment or notice, all of which are
hereby expressly waived.
1. FAILURE TO PAY NOTE. Failure to pay any installment of principal or of
interest on any indebtedness of Borrower to you.
2. BREACH OF COVENANT. Failure of Borrower to perform any other term or
condition of this Agreement binding upon Borrower.
3. BREACH OF WARRANTY. Any of Borrower's representations or warranties made
herein or any statement or certificate at any time given in writing pursuant
hereto or in connection herewith shall be false or misleading in any material
respect.
4. INSOLVENCY; RECEIVER OR TRUSTEE. Borrower shall become insolvent or
admit its inability to pay its debts as they mature, or make an assignment for
the benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or
business.
5. JUDGMENTS, ATTACHMENTS. Any money judgment, writ or warrant of
attachment, or similar process shall be entered or filed against Borrower or any
of its assets and shall remain unvacated, unbonded or unstayed for a period of
10 days or in any event later than five days to the date of any proposed sale
thereunder.
BANKRUPTCY. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against Borrower and, if
instituted against it, shall be consented to.
E. MISCELLANEOUS PROCEDURE
1. FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of
your Bank or any holder of Notes issued hereunder, in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under this agreement or any note issued in
connection with a loan that your Bank may make hereunder, are cumulative to, and
not exclusive of, any rights or remedies otherwise available.
See Addendum dated April 24, 1997 attached hereto and incorporated herein by
this reference for additional terms. In the event of a conflict between this
Agreement and the Addendum, the terms in the Addendum prevail.
TERAYON CORPORATION
By:
---------------------------------
(Authorized Signature and Title)
2.
TERAYON CORPORATION
ADDENDUM TO CREDIT TERMS & CONDITIONS
DATED APRIL 24, 1997
A. CREDIT FACILITY
1. A $10,000 Revolving Line of Credit ("Line") for working capital with a
$500,000 sublimit for the issuance of trade-related commercial and
standby letters of credit.
2. A $1,000,000 Term Loan ("Term Loan") for the purchase of capital
equipment and software. (As of the date hereof, Term Loan has an
outstanding balance of $833,333.32. The outstanding balance is being
paid down with monthly principal repayments of $27,777.78 plus
interest. As of the date hereof, 30 monthly principal repayments
remain).
3. A $750,000 Term Loan ("Term Loan2") for the purchase of new equipment
and software and to refinance previously purchased equipment and
software. (As of the date hereof, Term Loan2 has an outstanding
balance of $222,271.10. The outstanding balance is being paid down
with monthly principal repayments of $17,097.77 plus interest. As of
the date hereof, 13 monthly principal repayments remain).
4. A $1,000,000 Term Loan ("Term Loan3") for the purchase of new
equipment and software. (Term Loan3 is split into two loan
amortization schedules hereinafter referred to as "Schedule 1" and
"Schedule 2". As of the date hereof, Schedule 1 has an outstanding
balance of $749,752.49. The outstanding balance is being paid down
with monthly principal repayments of $23,429.77 plus interest. As of
the date hereof, 32 monthly principal repayments remain on Schedule 1.
As of the date hereof, Schedule 2 has an outstanding balance of
$154,456.00. Payments of interest are due monthly through May 27,
1997. Thereafter, the $154,456.00 outstanding on Schedule 2 shall be
repaid with 30 monthly principal repayments of $5,148.53 plus interest
beginning June 27, 1997).
5. A $1,500,000 Term Loan ("Term Loan4") for the purchase of new
equipment and software.
B. MATURITY
1. Line: 364 days from the date hereof.
2. Term Loan: October 5, 1999
3. Term Loan2: May 5, 1998
4. Term Loan3: November 27, 1999
5. Term Loan4: November 6, 2000
C. TERMS
1. Line: Interest payable monthly, principal at maturity.
2. Term Loan: Equal monthly payment of principal in amount of
$27,777.78 per month plus interest, with 30 monthly
principal repayments remaining as of the date
hereof. The remaining balance, if any, shall be due
and payable at maturity.
3. Term Loan2: Equal monthly payments of principal in the amount
of $17,097.77 per month plus interest, with 13
monthly principal repayments remaining as of the
date hereof. The remaining balance, if any, shall
be due and payable at maturity.
4. Term Loan3: Schedule 1: Equal monthly payments of principal in
the amount of $23,429.77 per month plus interest,
with 32 monthly principal repayments remaining as
of the date hereof. The remaining balance, if any,
shall be due and payable at maturity.
Schedule 2: Monthly payments of interest through
May 27, 1997. Equal monthly payments of principal
beginning June 27, 1997 in an amount of $5,148.53
plus interest, with 30 monthly principal repayments
required as of the date hereof. The remaining
balance, if any, shall be due and payable at
maturity.
5. Term Loan4: Available for draws with interest only payable
monthly through November 5, 1997, followed by 36
equal monthly payments of principal plus interest
beginning December 5, 1997. The remaining balance,
if any, shall be due and payable at maturity.
D. COLLATERAL
An existing blanket first priority security interest perfected by a UCC
filing on all assets of Borrower including all present and future
inventory, chattel paper, accounts, contract rights, unencumbered
equipment, general intangibles, and fixtures and the product thereof.
E. BORROWING FORMULA
1. Line: Advances shall be limited to the lesser of
(i) 80% of Eligible Accounts (as hereinafter
defined); or (ii) $10,000,000. As used herein,
"Eligible Accounts" will include those accounts
receivable of Borrower which are outstanding less
than 90 days from invoice date subject to certain
exclusions for contra, foreign*, US government,
inter-company accounts, and accounts with over 25%
of the balance aged more than 90 days past invoice
date. Any account which alone exceeds 25% of total
accounts will have the amount in excess of 25%
excluded unless approved in writing by Bank.
*Foreign accounts approved in writing by Bank shall be eligible for
inclusion in the Borrowing Formula.
2. Term Loan: 85% against invoice price of equipment purchases
(excluding furniture, fixtures, and phone systems)
and software purchases less tax and freight.
Advances against software purchases shall not
exceed $750,000.
3. Term Loan2: 100% against license price of software less sales
tax and freight, up to a maximum of $500,000. 80%
against original equipment invoices (excluding
furniture, fixtures, and phone systems) less sales
tax and freight, up to a maximum of $250,000.
4. Term Loan3: 85% against invoice price of equipment purchases
(excluding fixtures, and phone systems) and
software purchases less tax and freight. Advances
against software purchases shall not exceed
$400,000.
5. Term Loan4: 85% against invoice price of equipment purchases
(excluding fixtures, and phone systems) and
software purchases less tax and freight. Advances
against software purchases shall not exceed
$500,000.
F. PRICING
1. INTEREST RATE:
2.
(a) Line: Bank's Prime Rate + 0.5% per annum.
(b) Term Loan: Bank's Prime Rate + 1.5% per annum.
(c) Term Loan2: Bank's Prime Rate + 1.5% per annum.
(d) Term Loan3: Bank's Prime Rate + 1.5% per annum.
(e) Term Loan4: Bank's Prime Rate + 1.5% per annum.
2. FACILITY FEE:
(a) Line: $5,000 due and payable concurrently with
execution hereof by Borrower.
(b) Term Loan: $5,000, already paid by Borrower to Bank.
(c) Term Loan2: $5,000, already paid by Borrower to Bank.
(d) Term Loan3: $5,000, already paid by Borrower to Bank.
(e) Term Loan4: $5,000, due and payable concurrently with
execution hereof by Borrower.
G. COVENANTS
1. Borrower to maintain on a monthly basis unless stated otherwise:
(a) Minimum Quick Ratio/1/ of 1.00 to 1.00.
(b) Minimum Tangible Net Worth/2/ of $6,000,000.
(c) Maximum Total Liabilities/3/ to Tangible Net Worth/2/ of 1.60
to 1.00.
(d) Minimum Liquid Asset Coverage/4/ of $5,000,000.
(e) Losses not to exceed $5,000,000 in the quarter ending
3/31/97, $4,800,000 in the quarter ending 6/30/97, and
$4,400,000 in the quarter ending 9/30/97. After tax
profitability on a fiscal quarterly basis beginning with the
quarter ending 12/31/97.
(f) Borrower to provide to Bank with evidence satisfactory to
Bank that Borrower has received a minimum of $9,000,000 in
new equity by 6/30/97.
Definitions:
/1/Quick Ratio is cash plus accounts receivable divided by current
liabilities.
/2/Tangible Net Worth is the financial statement net worth of the Borrower
prepared according to generally accepted accounting principles less
intangible assets, plus indebtedness fully subordinated to the debt due to
the Bank.
/3/Total Liabilities are all the Borrower's liabilities except for
indebtedness fully subordinated to the debt due tot he Bank and deferred
revenues.
/4/Minimum Liquid Asset Coverage defined as unrestricted cash and cash
equivalents plus 60% of eligible accounts receivable minus any outstanding
balance on the line of credit and/or any outstanding standby or commercial
letters of credit under the line of credit.
2. Borrower to provide to Bank:
3.
(a) Unqualified audited financial statements within 90 days after
each fiscal year end.
(b) Company prepared monthly financial statements and Compliance
Certificate within 25 days after the end of each month.
(c) Monthly agings of accounts receivable and accounts payable
with Borrowing Base Certificate within 10 days after the end
of each month.
(d) Budgets, sales projections, operating plan, or other
financial exhibits which Bank may reasonably request.
3. Other Covenants:
(a) Borrower's primary banking and investment accounts to be
maintained at Bank.
(b) Without Bank's prior approval, Borrower shall not:
(1) Enter into any mergers or acquisitions or major debt
agreements, except for equipment leases.
(2) Pay cash dividends or repurchase stock.
(3) Hypothecate existing assets.
(4) Loan money or guarantee loans of others.
(c) Borrower shall notify Bank in writing of any legal action
commenced against it which may result in damages over
$50,000. Borrower shall provide Bank with such notice
immediately upon Borrower's receipt of notice of such legal
action.
(d) Borrower shall provide Bank proof of insurance of all
tangible corporate assets and a Lender's Loss Payable Clause
with Bank as loss payee.
H. OTHER CONDITIONS
1. Borrower shall execute and deliver to Bank any and all documents
required by Bank.
2. Prior to Line disbursement, Bank shall conduct an initial collateral
audit by Bank's designated agent at Borrower's expense, with results
satisfactory to Bank. Thereafter, Bank shall conduct annual
collateral audits by Bank's designated agent at Borrower's expense,
with results satisfactory to Bank.
TERAYON CORPORATION
By:
------------------------
Title:
---------------------
Date:
----------------------
4.
Imperial Bank
Member FDIC
NOTE
$1,500,000.00 San Jose, California April 24, 1997
On November 6, 2000, and as hereinafter provided for value received, the
undersigned promises to pay to IMPERIAL BANK ("Bank"), a California banking
corporation, or order, at its Santa ▇▇▇▇▇ Valley Regional office, the principal
sum of $1,500,000.00, or such sums up to the maximum, if so stated, as the Bank
may now or hereafter advance to or for the benefit of the undersigned in
accordance with the terms hereof, together with interest from date of
disbursement or N/A , whichever is later, on the unpaid principal
----------------
balance [ ] at the rate of _____% per year [x] at the rate of 1.500% per year in
excess of the rate of interest which Bank has announced as its prime lending
rate (the "Prime Rate"), which shall vary concurrently with any change in such
Prime Rate, or $250.00, whichever is greater. Interest shall be computed at the
above rate on the basis of the actual number of days during which the principal
balance is outstanding, divided by 360, which shall for interest computation
purposes, be considered one year.
Interest shall be payable [x] monthly [ ] quarterly [ ] included with principal
[x] in addition to principal [ ] * beginning May 6, 1997, and if not so paid
shall become a part of the principal. All payments shall be applied first to
interest and the remainder, if any, on principal. [ ] (if checked), Principal
shall be payable in installments of $_____________, or more, each installment
on the _____ day of each _____________________, beginning
_________________________. Advances not to exceed any unpaid balance owing at
any one time equal to the maximum amount specified above, may be made at the
option of Bank.
Any partial prepayment shall be applied to the installments, if any, in
inverse order of maturity. Should default be made in the payment of principal
or interest when due, or in the performance or observance, when due, of any
item, covenant or condition of any deed of trust, security agreement or other
agreement (including amendments or extensions thereof) securing or pertaining to
this note, at the option of the holder hereof and without notice or demand, the
entire balance of principal and accrued interest then remaining unpaid shall (a)
become immediately due and payable, and (b) thereafter bear interest, until paid
in full, at the increased rate of 5% per year in excess of the rate provided for
above, as it may vary from time to time.
Defaults shall include, but not be limited to, the failure of the maker(s)
to pay principal or interest when due; the filing as to each person obligated
hereon, whether as maker, co-maker, endorser or guarantor (individually or
collectively referred to as the "Obligor") of a voluntary or involuntary
petition under the provisions of the Federal Bankruptcy Act; the issuance of any
attachment or execution against any asset of any Obligor; the death of any
Obligor; or any deterioration of the financial condition of any Obligor which
results in the holder hereof considering itself, in good faith, insecure.
[x] If any installment payment or principal balance payment due hereunder is
delinquent ten or more days, Obligor agrees to pay a late charge in the amount
of 5% of the payment so due and unpaid, in addition to the payment; but nothing
in this paragraph is to be construed as any obligation on the part of the holder
of this note to accept payment of any installment past due or less than the
total unpaid principal balance after maturity.
If this note is not paid when due, each Obligor promises to pay all costs
and expenses of collection and reasonable attorney's fees incurred by the holder
hereof on account of such collection, plus interest at the rate applicable to
principal, whether or not suit is filed hereon. Each Obligor shall be jointly
and severally liable hereon and consents to renewals, replacements and
extensions of time for payment hereof, before, at, or after maturity; consents
to the acceptance, release or substitution of security for this note, and waives
demand and protest and the right to assert any statute of limitations. Any
married person who signs this note agrees that recourse may be had
against separate property for any obligations hereunder. The indebtedness
evidenced hereby shall be payable in lawful money of the United States. In any
action brought under or arising out of this note, each Obligor, including
successor(s) or assign(s) hereby consents to the application of California law,
to the jurisdiction of any competent court within the State of California, and
to service of process by any means authorized by California law.
No single or partial exercise of any power hereunder, or under any deed of
trust, security agreement or other agreement in connection herewith shall
preclude other or further exercises thereof or the exercise of any other such
power. The holder hereof shall at all times have the right to proceed against
any portion of the security for this note in such order and in such manner as
such holder may consider appropriate, without waiving any rights with respect to
any of the security. Any delay or omission on the part of the holder hereof in
exercising any right hereunder, or under any deed of trust, security agreement
or other agreement, shall not operate as a waiver of such right, or of any other
right, under this note or any deed of trust, security agreement or other
agreement in connection herewith.
* See Addendum attached.
_________________________ TERAYON CORPORATION
_________________________ ____________________________
_________________________ ____________________________
2.
ADDENDUM TO NOTE
Advances under the Note shall be available through November 5, 1997
("Amortization Date"). Commencing on the sixth day of the calendar month
immediately following the initial disbursement of funds hereunder and on the
sixth day of each calendar month thereafter through and including the
Amortization Date, the undersigned shall make monthly payments equal to the
accrued interest hereunder. On the Amortization Date the outstanding balance of
disbursements made under the Note shall be converted to an amortizing loan
payable in 36 equal monthly principal payments, plus accrued interest, thereof,
with said monthly payments due and payable on the sixth day of each calendar
month commencing on the 6th day of December 1997.
All principal and accrued but unpaid interest shall in any event be due and
payable on November 6, 2000.
TERAYON CORPORATION
_______________________________
IMPERIAL BANK
Member FDIC
ITEMIZATION OF AMOUNT FINANCED
DISBURSEMENT INSTRUCTIONS
Name(s): TERAYON CORPORATION Date: April 24, 1997
$ paid to you directly by Cashiers Check No.
$ 1,500,000.00 credited to deposit account No. ▇▇-▇▇▇-▇▇▇
$ when advances are requested from undisbursed funds
paid to Loan(s) No.
$ amounts paid to Bank for:
Amounts paid to others on your behalf:
$ to Title Insurance Company
$ to Public Officials
$ to
$ to
$ to
$ to
$ 1,500,000.00 SUBTOTAL (NOTE AMOUNT)
LESS $ .00 Prepaid Finance Charge (Loan fee(s))
$ 1,500,000.00 TOTAL (AMOUNT FINANCED)
Upon consummation of this transaction, this document will also serves as the
authorization for Imperial Bank to disburse the loan proceeds as stated above.
TERAYON CORPORATION
--------------------------------- --------------------------------
Signature Signature
--------------------------------- --------------------------------
Signature Signature
Imperial Bank
Member FDIC
AUTOMATIC DEBIT AUTHORIZATION
TO: Imperial Bank
RE: LOAN #_________________________
You are hereby authorized and instructed to charge account No. ▇▇-▇▇▇-▇▇▇ in the
name of TERAYON CORPORATION for principal and interest payments due on above
referenced loan as set forth below and credit the loan referenced above.
[x] Debit each interest payment as it becomes due according to the terms of the
note and any renewals or amendments thereof.
[ ] Debit each principal payment as it becomes due according to the terms of
the note and any renewals or amendments thereof.
This Authorization is to remain in full force and effect until revoked in
writing.
Borrower Signature:
TERAYON CORPORATION
By: Date:
--------------------------- -----------------------------
Imperial Bank
Member FDIC
CORPORATE RESOLUTION REGARDING CREDIT
OFFICE: Santa ▇▇▇▇▇ Valley Regional ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RESOLVED, that TERAYON CORPORATION borrow from IMPERIAL BANK,
hereinafter referred to as "Bank," from time to time, such sums of money as, in
the judgment of the officer or officers hereinafter authorized, this corporation
may require, provided that the aggregate amount of such borrowing, pursuant to
this resolution, shall not at any one time exceed the principal sum of Thirteen
Million Six Hundred Thousand Four Hundred Seventy Nine and No/100 Dollars
($13,600,479.00), in addition to such amount as may be otherwise authorized;
RESOLVED FURTHER, that any 1 of the following named officers:
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▇▇▇▇ ▇▇▇▇▇ the CEO/Secretary
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▇▇▇▇▇▇ ▇▇▇▇▇ the President
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the
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the
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of this corporation (the officer or officers acting in combination, authorized
to act pursuant hereto being hereinafter designated as "authorized officers"),
be and they are hereby authorized, directed and empowered, for and on behalf and
in the name of this corporation (1) to execute and deliver to the Bank such
notes or other evidences or indebtedness of this corporation for the monies so
borrowed, with interest thereon, as the Bank may require, and to execute and
deliver, from time to time, renewals or extensions of such notes or other
evidences of indebtedness; (2) to grant a security interest in, transfer, or
otherwise hypothecate or deed in trust for Bank's benefit and deliver by such
instruments in writing or otherwise as may be demanded by the Bank, any of the
property of this corporation as may be required by the Bank to secure the
payment of any notes or other indebtedness of this corporation or third parties
to the Bank, whether arising pursuant to this resolution or otherwise; and (3)
to perform all acts and execute and deliver all instruments which the Bank may
deem necessary to carry out the purposes of this resolution.
RESOLVED FURTHER, that said authorized officers be and they are hereby
authorized and empowered, and that any one of said authorized officers be and
he/she is hereby authorized and empowered (1) to discount with or sell to the
Bank conditional sales contracts, notes, acceptances, drafts, bailment
agreements, leases, receivables and evidences of indebtedness payable to this
corporation, upon such terms as may be agreed upon by them and the Bank, and to
endorse in the name of this corporation said notes, acceptances, drafts,
bailment agreements, leases, receivables and evidences of indebtedness so
discounted, and to guarantee the payment of the same to the Bank, and (2) to
apply for and obtain from the Bank letters of credit and in connection therewith
to execute such agreement, applications, guarantees, indemnities and other
financial undertakings as Bank may require;
RESOLVED FURTHER, that said authorized officers are also authorized to
direct the disposition of the proceeds of any such obligation, and to accept or
direct delivery from the Bank of any property of this corporation at any time
held by the Bank;
RESOLVED FURTHER, that the authority given hereunder shall be deemed
retroactive and any and all acts authorized hereunder performed prior to the
passage of this resolution are hereby ratified and affirmed;
RESOLVED FURTHER, that this resolution will continue in full force and
effect until the Bank shall receive official notice in writing from this
corporation of the revocation thereof by a resolution duly adopted by the Board
of Directors of this corporation, and that the certification of the Secretary of
this corporation as to the signatures of the above named persons shall be
binding on this corporation.
I, ▇▇▇▇ ▇▇▇▇▇, Secretary of the above named corporation, duly
organized and existing under the laws of the State of California, do hereby
certify that the foregoing is a full, true and correct copy of a resolution of
the Board of Directors of said corporation, duly and regularly passed and
adopted by the Board of Directors of said corporation.
I further certify that said resolution is still in full force and
effect and has not been amended or revoked, and that the specimen signatures
appearing below are the signatures of the officers authorized to sign for this
corporation by virtue of said resolution.
Executed on April 24, 1997.
Signature:
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▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Secretary)
Signature:
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▇▇▇▇▇▇ ▇▇▇▇▇
Signature:
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Signature:
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Signature:
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IMPERIAL BANK
Member FDIC
ITEMIZATION OF AMOUNT FINANCED
DISBURSEMENT INSTRUCTIONS
Name(s): TERAYON CORPORATION Date: April 24, 1997
$ paid to you directly by Cashiers Check No.
$ 10,000,000.00 credited to deposit account No. ▇▇-▇▇▇-▇▇▇
$ when advances are requested from undisbursed funds paid
on Loan(s) No.
$ 500,000.00 amounts paid to Bank for: the issuance of trade-
related*
Amounts paid to others on your behalf:
$ to Title Insurance Company
$ to Public Officials
$ to *standby and commercial letters of credit
$ to ** within $10,000,000.00 maximum credit
$ to
$ to
$ 10,000,000.00 SUBTOTAL (NOTE AMOUNT)
LESS $ .00 Prepaid Finance Charge (Loan fee(s))
$ 10,000,000.00 TOTAL (AMOUNT FINANCED)
Upon consummation of this transaction, this document will also serves as the
authorization for Imperial Bank to disburse the loan proceeds as stated above.
TERAYON CORPORATION
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Signature Signature
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Signature Signature
Imperial Bank
Member FDIC
AUTOMATIC DEBIT AUTHORIZATION
TO: Imperial Bank
RE: LOAN #_________________________
You are hereby authorized and instructed to charge account No. ▇▇-▇▇▇-▇▇▇ in the
name of TERAYON CORPORATION for principal and interest payments due on above
referenced loan as set forth below and credit the loan referenced above.
[x] Debit each interest payment as it becomes due according to the terms of the
note and any renewals or amendments thereof.
[x] Debit each principal payment as it becomes due according to the terms of
the note and any renewals or amendments thereof.
This Authorization is to remain in full force and effect until revoked in
writing.
Borrower Signature:
TERAYON CORPORATION
By: Date:
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IMPERIAL BANK
Member FDIC
AGREEMENT TO PROVIDE INSURANCE
(REAL OR PERSONAL PROPERTY)
TO: IMPERIAL BANK Date: April 24, 1997
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Borrower: TERAYON CORPORATION
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
In consideration of a loan in the amount of $13,600,479.00, secured by all
tangible personal property including inventory and equipment
I/We agree to obtain adequate insurance coverage to remain in force during the
term of the loan.
I/We also agree to advise the below named agent to add Imperial Bank as loss
payee on the new or existing insurance policy, and to furnish Bank at above
address with a copy of said policy/endorsements and any subsequent renewal
policies.
I/We understand that the policy must contain:
3. Fire and extended coverage in an amount sufficient to cover:
(a) The amount of the loan, OR
(b) All existing encumbrances, whichever is greater,
But not in excess of the replacement value of the improvements on the
real property.
1. Lender's "Loss Payable" Endorsement Form 438 BFU in favor of Imperial
Bank, or any other form acceptable to Bank.
INSURANCE INFORMATION
Insurance Co./Agent: Telephone No.:
TERAYON CORPORATION
Signature of Obligor:
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Signature of Obligor:
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FOR BANK USE ONLY
INSURANCE VERIFICATION: Date: _______________
Person Spoken to: _____________________________________________________
Policy Number: ________________________________________________________
Effective From: _______________________________________________________
Verified By: __________________________________________________________
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