loan and security agreement

1、1loan and security agreementcompany xyz, inc., a california corporationborrower100 twin peaks drivesuite 600baywatch, ca 94001address74-6667422borrower fed id tax no.$14,100,000credit limitnovember _, 1999corporate financethis loan and security agreement (collectively with the schedule to loan agree

2、ment (the “schedule”) attached hereto, the “agreement”) dated the date set forth on the cover page, is entered into by and between the borrower named on the cover page (jointly and severally, the “borrower”), whose address is set forth on the cover page and abc bank capital corporation (“abc bank”),

3、 whose address is 555 south bend avenue, los angeles, california 90001.1.definitions.1.1defined terms. as used in this agreement, the following terms have the definitions set forth below:“acquisition” has the meaning set forth in section 4.1(z) hereof.“acquisition documents” has the meaning set fort

4、h in section 4.1(z) hereof.“additional sums” has the meaning set forth in section 2.9(a) hereof.“affiliate” means any person controlling, controlled by or under common control with borrower. for purposes of this definition, “control” means the possession, directly or indirectly, of the power to dire

5、ct or cause direction of the management and policies of any person, whether through ownership of common or preferred stock or other equity interests, by contract or otherwise. without limiting the generality of the foregoing, each of the following shall be an affiliate: any officer, director, employ

6、ee or other agent of borrower, any shareholder, member or subsidiary of borrower, and any other person with whom or which borrower has common shareholders, officers or directors.“agreement” has the meaning set forth in the preamble.“applicable law” has the meaning set forth in section 8.2(a) hereof.

7、“applicable usury law” has the meaning set forth in section 2.8(b) hereof.“blocked account” has the meaning set forth in section 2.9(c) hereof.“business day” means any day on which commercial banks in both los angeles, california and phoenix, arizona are open for business.“capital expenditures” mean

8、s all expenditures made and liabilities incurred for the acquisition of any fixed asset or improvement, replacement, substitution or addition thereto which has a useful life of more than one year and including, without limitation, those arising in connection with capital leases.“capital lease” means

9、 any lease of property by borrower that, in accordance with gaap, should be capitalized for financial reporting purposes and reflected as a liability on the balance sheet of borrower.“closing fee” has the meaning set forth in the schedule.“closing date” means the date of the initial advance made by

10、abc bank pursuant to this agreement.“code” means the uniform commercial code as adopted and in effect in the state of arizona from time to time. “collateral” has the meaning set forth in section 3.1 hereof.“collateral monitoring fee” has the meaning set forth in the schedule.“current assets” at any

11、date means the amount at which the current assets of borrower would be shown on a balance sheet of borrower as at such date, prepared in accordance with gaap, provided that amounts due from affiliates and investments in affiliates shall be excluded therefrom.“current liabilities” at any date means t

12、he amount at which the current liabilities of borrower would be shown on a balance sheet of borrower as at such date, prepared in accordance with gaap, but always to include outstandings on the revolving credit loans regardless of their treatment under gaap.“deposit accounts” has the meaning set for

13、th in section 9105 of the code.“dominion account” has the meaning set forth in section 2.9(c) hereof.“ebitda” for any fiscal period of borrower means the net income of borrower for such fiscal period, plus interest expense, depreciation and amortization and provision for income taxes for such fiscal

14、 period, and minus non-recurring miscellaneous income and expenses, all calculated in accordance with gaap.“eligible inventory” means individually and collectively the eligible raw materials inventory and the eligible wip and finished goods inventory.“eligible raw materials inventory” means inventor

15、y which abc bank, in its permitted discretion, deems eligible raw materials inventory, based on such considerations as abc bank may from time to time deem appropriate. without limiting the generality of the foregoing, no inventory shall be eligible raw materials inventory unless, in abc banks permit

16、ted discretion, abc bankloan and security agreement2such inventory (i) consists of raw materials, in good, new and salable condition which are not obsolete or unmerchantable, and are not comprised of work in process, finished goods, packaging materials, supplies, consigned inventory or inventory at

17、third party processors or locations; (iii) meets all standards imposed by any governmental agency or authority; (iv) conforms in all respects to the warranties and representations set forth herein; (v) is at all times subject to abc banks duly perfected, first priority security interest; and (vi) is

18、 situated at a location for which borrower has delivered to abc bank an executed landlord, bailee or related agreement, in form and substance satisfactory to abc bank.“eligible receivables” means receivables arising in the ordinary course of borrowers business from the sale of goods or rendition of

19、services, which abc bank, in its permitted discretion, shall deem eligible based on such considerations as abc bank may from time to time deem appropriate. without limiting the foregoing, a receivable shall not be deemed to be an eligible receivable if (i) the account debtor has failed to pay the re

20、ceivable within (a) a period of ninety (90) days after invoice date or (b) a period of sixty (60) days after due date, but not to exceed ninety (90) days from invoice date, to the extent of any amount remaining unpaid after such period; (ii) the account debtor has failed to pay more than 25% of all

21、outstanding receivables owed by it to borrower within ninety (90) days after invoice date; (iii) the account debtor is an affiliate of borrower; (iv) the goods relating thereto are placed on consignment, guaranteed sale, “bill and hold,” “cod” or other terms pursuant to which payment by the account

22、debtor may be conditional; (v) the account debtor is not located in the united states or ontario, canada, unless the receivable is supported by a letter of credit or other form of guaranty or security, in each case in form and substance satisfactory to abc bank; (vi) the account debtor is the united

23、 states or any department, agency or instrumentality thereof or any state, city or municipality of the united states, except to the extent that the requirements of section 6.1.12 have been satisfied; (vii) borrower is or may become liable to the account debtor for goods sold or services rendered by

24、the account debtor to borrower; (viii) the account debtors total obligations to borrower exceed 15% of all eligible receivables, to the extent of such excess, unless (a) the account debtor is boeing/mcdonnell douglas, in which case its receivables shall not be eligible receivables to the extent that

25、 such account debtors total obligations to borrower exceed 60% of all eligible receivables, (b) the account debtor is applied materials, in which case its receivables shall not be eligible receivables to the extent that such account debtors total obligations to borrower exceed 40% of all eligible re

26、ceivables or (c) the account debtor is lam research, in which case its receivables shall not be eligible receivables to the extent that such account debtors total obligations to borrower exceed 25% of all eligible receivables; (ix) the account debtor disputes liability or makes any claim with respec

27、t thereto (up to the amount of such liability or claim), or is subject to any insolvency or bankruptcy proceeding, or becomes insolvent, fails or goes out of a material portion of its business; (x) the amount thereof consists of late charges or finance charges; (xi) the amount thereof consists of a

28、credit balance more than ninety (90) days past due; (xii) the face amount thereof exceeds $70,000, unless accompanied by evidence of shipment of the goods relating thereto satisfactory to abc bank in its permitted discretion; (xiii) the invoice constitutes a progress billing on a project not yet com

29、pleted, except that the final billing at such time as the matter has been completed and delivered to the customer may be deemed an eligible receivable; (xiv) the amount thereof is not yet represented by an invoice or bill issued in the name of the applicable account debtor; (xv) the amount thereof i

30、s denominated in or payable with any currency other than u.s. dollars; or (xvi) such receivable is not at all times subject to abc banks duly perfected first priority security interest.“eligible wip and finished goods inventory” means inventory which abc bank, in its permitted discretion, deems elig

31、ible wip and finished goods inventory, based on such considerations as abc bank may from time to time deem appropriate. without limiting the generality of the foregoing, no inventory shall be eligible wip and finished goods inventory unless, in abc banks permitted discretion, such inventory (i) cons

32、ists of work in process or finished materials, in good, new and salable condition which are not obsolete or unmerchantable, and are not comprised of packaging materials, supplies, consigned inventory or inventory at third party processors or locations; (ii) is supported by a specific purchase order;

33、 (iii) meets all standards imposed by any governmental agency or authority; (iv) conforms in all respects to the warranties and representations set forth herein; (v) is at all times subject to abc banks duly perfected, first priority security interest; and (vi) is situated at a location for which bo

34、rrower has delivered to abc bank an executed landlord, bailee or related agreement, in form and substance satisfactory to abc bank.“equipment” means all of borrowers present and hereafter acquired machinery, molds, machine tools, motors, furniture, equipment, furnishings, fixtures, trade fixtures, m

35、otor vehicles, tools, parts, dyes, jigs, goods and other tangible personal property (other than inventory) of every kind and description used in borrowers operations or owned by borrower and any interest in any of the foregoing, and all attachments, accessories, accessions, abc bankloan and security

36、 agreement3replacements, substitutions, additions or improvements to any of the foregoing, wherever located.“environmental costs” has the meaning set forth in section 8.2(b) hereof.“erisa” means the employment retirement income security act of 1974, as amended, and the regulations thereunder.“erisa

37、affiliate” means each trade or business (whether or not incorporated and whether or not foreign) which is or may hereafter become a member of a group of which borrower is a member and which is treated as a single employer under erisa section 4001(b)(1), or irc section 414.“event of default” means an

38、y of the events set forth in section 7.1 of this agreement.“examination fee” has the meaning set forth in the schedule.“excess availability” means, as of the date of determination thereof, the amount by which the average daily total principal balance of the revolving credit loans, based on the formu

39、las and reserves set forth in the schedule, exceeds the sum of the receivable loans and the inventory loans then actually outstanding, such excess then being reduced by an amount necessary to provide for the payment of all accounts payable of borrower which are more than 30 days past due date and al

40、l book overdrafts.“excess cash flow” means operating cash flow/permitted less each of (i) total contractual debt service; and (ii) management fees actually paid.“abc bank affiliate” has the meaning set forth in section 9.22 hereof.“gaap” means generally accepted accounting principles in the united s

41、tates of america as in effect from time to time as set forth in the opinions and pronouncements of the accounting principles board and the american institute of certified public accountants and the statements and pronouncements of the financial accounting standards boards which are applicable to the

42、 circumstances as of the date of determination consistently applied, except that, for the financial covenants set forth in this agreement, gaap shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the audited financial

43、statements delivered to abc bank prior to the date hereof.“general intangibles” means all general intangibles of borrower, whether now owned or hereafter created or acquired by borrower, including, without limitation, all choses in action, causes of action, corporate or other business records, depos

44、it accounts, inventions, designs, drawings, blueprints, trademarks, licenses and patents, names, trade secrets, goodwill, copyrights, registrations, licenses, franchises, customer lists, security and other deposits, rights in all litigation presently or hereafter pending for any cause or claim (whet

45、her in contract, tort or otherwise), and all judgments now or hereafter arising therefrom, all claims of borrower against abc bank, rights to purchase or sell real or personal property, rights as a licensor or licensee of any kind, royalties, telephone numbers, proprietary information, purchase orde

46、rs, and all insurance policies and claims (including without limitation credit, liability, property and other insurance) tax refunds and claims, computer programs, discs, tapes and tape files, claims under guaranties, security interests or other security held by or granted to borrower to secure paym

47、ent of any of the receivables by an account debtor, all rights to indemnification and all other intangible property of every kind and nature (other than receivables).“guarantor(s)” has the meaning set forth in the schedule.“hazardous substance” has the meaning set forth in section 8.2(a) hereof.“ind

48、ebtedness” means all of borrowers present and future obligations, liabilities, debts, claims and indebtedness, contingent, fixed or otherwise, however evidenced, created, incurred, acquired, owing or arising, whether under written or oral agreement, operation of law or otherwise, and includes, witho

49、ut limiting the foregoing (i) the obligations, (ii) obligations and liabilities of any person secured by a lien, claim, encumbrance or security interest upon property owned by borrower, even though borrower has not assumed or become liable therefor, (iii) obligations and liabilities created or arisi

50、ng under any lease (including capital leases) or conditional sales contract or other title retention agreement with respect to property used or acquired by borrower, even though the rights and remedies of the lessor, seller or lender are limited to repossession, (iv) all unfunded pension fund obliga

51、tions and liabilities and (v) deferred tax liabilities.“indebtedness for borrowed money” means without duplication, all indebtedness: (i) in respect of borrowed money (including, without limitation, pursuant to the loan documents or any capital leases), (ii) evidenced by a note, debenture, or other

52、like written obligation to pay money (including, without limitation, all interest on the obligations), (iii) for the deferred purchase price of property (other than trade payables arising in the ordinary course of business), or (iv) in respect of obligations under conditional sales or other title re

53、tention agreements; and all guaranties of any or all of the foregoing, all as reflected on attachment “b” to the schedule.abc bankloan and security agreement4“initial term” has the meaning set forth on the schedule.“inventory” means all of borrowers now owned and hereafter acquired goods, merchandis

54、e or other personal property, wherever located, to be furnished under any contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in borrowers business or us

55、ed in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods, merchandise or other personal property, and all documents of title or other documents representing them.“inventory loans” has the meaning set forth in the schedule.“irc” means the internal reve

56、nue code of 1986, as amended, and the regulations thereunder.“l(fā)oans” has the meaning set forth in section 2.2 hereof.“l(fā)oan documents” means, collectively, this agreement, any note or notes executed by borrower and payable to abc bank, and any other present or future agreement entered into in connect

57、ion with this agreement, together with all alterations, amendments, changes, extensions, modifications, refinancings, refundings, renewals, replacements, restatements, or supplements, of or to any of the foregoing.“l(fā)oan party” means borrower, each guarantor, each subordinating creditor and each othe

58、r party (other than abc bank) to any loan document.“l(fā)oan reserves” means, as of any date of determination, such amounts as abc bank may from time to time establish and revise in good faith reducing the amount of revolving credit loans which would otherwise be available to borrower under the lending

59、formula(s) provided in the schedule: (a) to reflect events, conditions, contingencies or risks which, as determined by abc bank in good faith, do or may affect either (i) the collateral or any other property which is security for the obligations or its value, (ii) the assets, business or prospects o

60、f borrower or any guarantor or (iii) the security interests and other rights of abc bank in the collateral (including the enforceability, perfection and priority thereof) or (b) to reflect abc banks good faith belief that any collateral report or financial information furnished by or on behalf of bo