<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MAY 28, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ -- _____ to ____ -- ____
Commission File Number 0-10558
ALPHA MICROSYSTEMS
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
CALIFORNIA 95-3108178
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
2722 S. FAIRVIEW STREET, SANTA ANA, CA 92704
(Address of principal executive offices)
Registrant's telephone number, including area code: (714) 957-8500
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As of July 7, 1995, there were 6,572,953 shares of the registrant's common
stock outstanding.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALPHA MICROSYSTEMS
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
(Unaudited)
May 28, Feb. 26,
1995 1995
----------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,083 $ 3,289
Accounts receivable, net 4,710 4,844
Inventories 1,771 1,948
Subsidiary held for sale - 269
Notes receivable 290 -
Prepaid expenses and other current assets 566 564
-------- --------
Total current assets 10,420 10,914
-------- --------
Property and equipment at cost 15,492 14,824
Less accumulated depreciation and amortization 11,517 11,220
-------- --------
Net property and equipment 3,975 3,604
Service contracts, net 937 1,039
Software costs, net 1,399 1,302
Goodwill, net 820 864
Other assets, net 167 179
-------- --------
$ 17,718 $ 17,902
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,275 $ 1,863
Deferred revenue 2,948 2,775
Other accrued liabilities 1,436 1,857
Accrued salaries and wages 473 836
Current portion of long-term debt 373 395
-------- --------
Total current liabilities 7,505 7,726
Long-term debt 110 140
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value; 5,000,000
shares authorized; none issued - -
Common stock, no par value; 20,000,000 shares
authorized; 6,557,403 shares
issued and outstanding at May 28, 1995 and
February 26, 1995 21,224 21,224
Accumulated deficit (11,068) (11,119)
Unamortized restricted stock plan expense (19) (19)
Foreign currency translation adjustment (34) (50)
-------- --------
Total shareholders' equity 10,103 10,036
-------- --------
$ 17,718 $ 17,902
======== ========
</TABLE>
See accompanying notes.
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<PAGE> 3
ALPHA MICROSYSTEMS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
May 28, May 29,
1995 1994
------ -------
<S> <C> <C>
Net sales:
Product $3,919 $ 4,868
Service 4,626 5,139
------ -------
Total net sales 8,545 10,007
------ -------
Cost of sales:
Product 2,380 3,094
Service 3,088 3,189
------ -------
Total cost of sales 5,468 6,283
------ -------
Gross Margin 3,077 3,724
Selling, general and administrative expense 2,751 3,251
Research and development expense 531 636
------ -------
Total operating expenses 3,282 3,887
------ -------
Income (loss) from operations (205) (163)
Interest income (29) (25)
Interest expense 4 2
Other (income) expense, net (216) 25
Foreign exchange (gain) loss (15) (18)
------ -------
Total other (income) expenses (256) (16)
------ -------
Income (loss) before taxes 51 (147)
(Benefit) provision for income taxes - 2
------ -------
Net income (loss) $ 51 $ (149)
====== =======
Net income (loss) per share $ 0.01 $ (0.02)
====== =======
Number of shares used in the
computation of per share amounts 6,579 6,612
====== =======
</TABLE>
See accompanying notes.
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ALPHA MICROSYSTEMS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
May 28, May 29,
1995 1994
------- -------
<S> <C> <C>
Cash flow from operating activities:
Net income (loss) $ 51 $ (149)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Gain on sale of fixed assets (211) -
Depreciation and amortization 509 659
Provision for losses on accounts receivable 2 4
Inventory provision 45 40
Other changes in operating assets and liabilities:
Accounts receivable 332 (39)
Inventories 132 (42)
Prepaid expenses and current assets 8 (87)
Accounts payable and other
accrued liabilities (71) 92
Accrued salaries and wages (362) (173)
Deferred revenue 174 (91)
Other, net 30 1
------ ------
Net cash provided (used) by
operating activities 639 215
------ ------
Cash flow from investing activities:
Proceeds from sale of fixed assets 200 -
Acquisition of businesses - (572)
Purchases of equipment (644) (182)
Capitalization of software costs (327) (90)
Other, net 6 1
------ ------
Net cash used in investing activities (765) (843)
------ ------
Cash flows from financing activities:
Issuance of stock - 33
Principal debt repayments (113) (332)
------ ------
Net cash provided by
financing activities (113) (299)
------ ------
Effect of exchange rate changes on cash 33 27
------ ------
Increase (decrease) in cash and
cash equivalents (206) (900)
Cash and cash equivalents at beginning of period 3,289 6,251
------ ------
Cash and cash equivalents at end of period $3,083 $5,351
====== ======
</TABLE>
See accompanying notes
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<PAGE> 5
ALPHA MICROSYSTEMS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM ACCOUNTING POLICY
In the opinion of management of Alpha Microsystems (the "Company" or
"Alpha Micro"), the accompanying unaudited condensed consolidated financial
statements contain all adjustments necessary to fairly present the consolidated
financial position of the Company at May 28, 1995, and the consolidated results
of operations and cash flows for the quarters ended May 28, 1995, and May 29,
1994. These condensed consolidated financial statements do not include all
disclosures presented annually under generally accepted accounting principles
and, therefore, they should be read in conjunction with the Company's annual
report on Form 10-K for the year ended February 26, 1995.
The results of operations for the quarter ended May 28, 1995, are not
necessarily indicative of the results to be expected for the full fiscal year.
REVENUE RECOGNITION
The Company recognizes revenue on its hardware and software sales on
delivery, and recognizes revenue on its service sales and post contract
customer support on a straight line basis over the contract period. When
significant obligations remain after a software product has been delivered,
revenue is not recognized until obligations have been completed or are no
longer significant. The costs of any insignificant obligations are accrued when
the related revenue is recognized. Revenue is recognized only when collection
of the resulting receivable is probable.
PER SHARE INFORMATION
Per share information is based upon the weighted average common and
common equivalent shares outstanding during the quarter ended May 28, 1995, and
the weighted average common shares outstanding during the quarter ended May 29,
1994.
TRANSLATION OF FOREIGN CURRENCIES
The Company's foreign entities use the local currency as the
functional currency. The Company translates all foreign entity assets and
liabilities at quarter-end exchange rates, all income and expense accounts at
average rates, and records adjustments resulting from translation in a separate
component of shareholders' equity.
2. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out
method) or market. Inventories, net of reserves for excess and obsolete
inventories, of $1,833,000 and $1,723,000 at May 28, 1995, and February 26,
1995, respectively, comprise the following:
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<PAGE> 6
<TABLE>
<CAPTION>
(IN THOUSANDS)
------------------------
MAY 28, FEBRUARY 26,
1995 1995
------- ------------
<S> <C> <C>
Raw materials $ 368 $ 581
Work in process 5 180
Finished goods 1,398 1,187
------ ------
$1,771 $1,948
====== ======
</TABLE>
3. DEBT
On July 10, 1995, the Company signed an agreement for a revolving line
of credit up to a maximum limit of $2,000,000, based upon 70% of the eligible
accounts receivable and under which letters of credit and the foreign exchange
portion shall not exceed in the aggregate at any one time $500,000. Borrowing
under the line of credit will bear interest of prime plus one and one half
percent (1.5%) and the commitment fee for the first year is $15,000. In
addition, the Company has agreed to issue 50,000 warrants to the lender after
the 40,000 warrants the lender previously received have been returned and
canceled.
The line of credit is secured by substantially all of the Company's
assets. Its availability will be subject to financial covenants requiring that
the Company maintain a quick ratio of not less than 1.3 to 1, a tangible net
worth of not less than $6,500,000, and a ratio of total liabilities to tangible
net worth of no more than 1.0 to 1. The agreement also includes covenants which
require that the Company must not have two or more consecutive quarterly losses
or an aggregate year-to-date loss of over $300,000, and the Company must make a
net profit on a consolidated basis for fiscal 1996. Currently, the Company has
no outstanding bank borrowings.
4. NOTE RECEIVABLE
As part of the consideration for selling the Belgian subsidiary to a
member of local management, the Company received a note for 15,000,000 Belgian
francs which is payable over the next two years.
5. SUBSEQUENT EVENT
On June 9, 1995, the Company acquired the ongoing service contracts
and certain related assets of Van Meter Enterprises, Inc., DBA Alpha
Technology, for a purchase price of $162,000. The purchase price will be paid
over a period of sixteen months, and the ultimate price and cash paid will be
conditional upon the revenues of the contracts purchased.
6. TAXES
The Company has significant federal net operating loss carryforwards
totaling approximately $15.0 million at February 26, 1995, which begin expiring
in 2006. As a result, the Company recorded no tax provision for the quarter
ended May 28, 1995. If there is a greater than 50% change in the Company's
ownership during any three-year period, the utilization of the net operating
loss and general business credit carryforward can be limited. During the last
three-year period ended February 26, 1995, the Company has experienced an
approximate 41% change in ownership.
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<PAGE> 7
7. GOODWILL AND INTANGIBLES
Management routinely evaluates events or conditions that might
diminish the fair market value of intangible assets. Intangible assets include
acquired service contracts, capitalized computer software costs and goodwill.
The book value of goodwill and acquired service contracts is associated with
the acquisition of companies or assets. Software cost is the accumulation of
capitalized development costs or the assigned value of software associated with
an acquisition.
8. CONTINGENCIES
LITIGATION
Two former employees of Alpha Microsystems Belgium S.A. ("AMB") have
asserted that AMB is in breach of its obligations under Belgium employment law
to pay salaries for up to two years in certain circumstances and have asserted
that the Company has direct liability for these obligations. The employees have
offered to settle their claim for $1.2 million. Management of the Company
believes that the claim is without merit and plans to vigorously defend the
Company against these claims.
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<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
SUMMARY
The following table was derived from the Condensed Consolidated Statements of
Operations as a percentage of net sales for the quarters ended May 28, 1995 and
May 29, 1994:
<TABLE>
<CAPTION>
RELATIONSHIP TO NET SALES
-------------------------
THREE MONTHS ENDED
-------------------------
MAY 28, MAY 29,
1995 1994
------- -------
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 64.0 62.8
----- -----
Gross margin 36.0 37.2
Selling general and administrative expense 32.2 32.5
Research and development expense 6.2 6.4
Interest income (0.3) (0.2)
Other (income) expense, net (2.5) 0.2
Foreign exchange (gain) loss (0.2) (0.2)
----- -----
Income (loss) from operations before taxes 0.6 (1.5)
Provision (benefit) for income taxes - -
----- -----
Net income (loss) 0.6% (1.5)%
===== =====
</TABLE>
GENERAL
The Company, which for its first decade was principally a designer and
vendor of computer hardware and related systems software, has been
transitioning its business to focus on areas offering higher growth potential.
The transition process has been difficult, and the Company has found it
necessary to make mid-course adjustments in response to market pressures.
Accordingly, during the last five years the Company has sustained periods of
substantial losses and major write-offs. In addition, there have been
significant management changes. While there has been progress in certain
product lines and operations, the Company has also been plagued by delays in
new product development, unanticipated product launch problems with its new
PANDA product which required a significant additional manpower commitment,
difficulties in building and maintaining the services operation, and lean
financial resources.
The Company's strategy is to strengthen its distribution channels,
concentrate on vertical markets, and expand its already broad base of support
services, including field maintenance and networking. In support of its
strategy, the Company has continued its efforts to consolidate European
operations, reduce expenses and establish new asset management techniques, and
shift toward system assembly and integration. The Company has altered its
strategy to adapt to changes in a highly competitive and dynamic marketplace.
Management will continue to monitor market and business conditions and will be
flexible in considering future shifts in strategy as appropriate.
During the first quarter of fiscal 1996, the Company made a small
profit of $51,000, or $0.01 per share, which was primarily associated with the
sale of its PICK distributed database product ("PICK"). PICK was sold on March
24, 1995 for $300,000 and generated a gain on sale of $211,000. As anticipated,
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<PAGE> 9
revenues declined as a result of the sale of the PICK and VSO product lines and
lower demand for the Company's traditional products. In response, management
has reduced expenses accordingly.
The Company's strategic marketing efforts continued to progress during
the first quarter. The Company obtained two new orders for PANDA from southern
California school districts, and has been test marketing the system in
additional regions, such as Texas, Virginia and Florida. The Company's early
test version of its AlphaHealthCare dental practice management software has
been introduced to key dental industry opinion leaders and has been well
received. This new product, currently in development, is scheduled to be
introduced during the last half of fiscal 1996.
Based upon the favorable market response, the Company intends to
significantly expand its sales and marketing resources for both vertical
products. While it is unlikely that revenues for these products will increase
sufficiently to offset the additional investment in the short term, the Company
believes that its capabilities to gain a larger market share over the long term
will be significantly enhanced.
RESULTS OF OPERATIONS
Three Months Ended May 28, 1995 and May 29, 1994
Net sales decreased $1,462,000, or 14.6%, to $8,545,000 for the
quarter ended May 28, 1995, from $10,007,000 for the quarter ended May 29,
1994. Total product revenues declined $949,000, or 19.5%, to approximately
$3,919,000 from approximately $4,868,000 for the comparable period.
Sales of the Company's traditional products declined $1,134,000,
offset by an increase of $185,000 in sales of the Company's vertical products.
Lower demand for the Company's traditional products, the sale of the PICK and
VSO product lines, and lower revenues from Belgian customers accounted for most
of the decline in product revenues. PICK and VSO revenues accounted for
approximately $200,000 in the quarter just ended, compared to approximately
$500,000 in the first quarter of fiscal 1995. The Belgian subsidiary, Alpha
Microsystems Belgium, S.A., which was sold to a member of its Belgian
management team at the end of fiscal 1995, had accounted for $437,000 in
revenues in the first quarter of fiscal 1995. In the first quarter of 1996,
sales to the Belgian company accounted for $193,000 in revenues; the decrease
was offset somewhat by the elimination of overhead and other expenses
associated with a subsidiary.
Total services revenues declined $513,000, or 10.0%, to $4,626,000 in
the quarter just ended from $5,139,000 for the same period in the prior year.
The decrease is attributable both to a reduction in services revenues from
prior acquisitions (Alpha Computer Services, Inc. and MGI Group International,
Inc.) and in traditional AMOS-based service contracts. The Company has been
successful in expanding its base of support services, including field
maintenance and networking, and intends to invest additional resources in this
area.
Total gross margin for the Company for the quarter ended May 28, 1995,
decreased to 36.0%, compared to 37.2% during the same period last year. Product
gross margin for the quarter ended May 28, 1995 increased to 39.3% compared to
36.4% during the same period in the prior year. The increase in product gross
margin was primarily due to a higher percentage of software support revenues
with a higher gross margin in the quarter just ended.
Service business gross margin declined to 33.2% during the quarter
ended May 28, 1995, from 37.9% during the same period in the prior year. The
decline was primarily due to reductions in cost of goods sold, primarily labor
costs, not fully offsetting the revenue decline. However, the sales
organization reduced selling, general and administrative expenses which
assisted in partially offsetting the overall impact of the service revenue
decline. To improve revenues, the service organization is focusing on obtaining
new
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<PAGE> 10
contracts for its networking support services, supporting vertical markets with
services, and increasing third party services.
Selling, general and administrative expenses decreased $500,000 to
$2,751,000 for the quarter ended May 28, 1995, compared to $3,251,000 in the
quarter ended May 29, 1994. Approximately $237,000 of this decrease was due to
the absence of the Belgian subsidiary. The Company has invested additional
resources and efforts to enhance its position in its vertical markets, which
accounted for an increase of $290,000 in selling, general and administrative
expenses to $785,000 for the quarter ended May 28, 1995, compared to $495,000
for the same period in the prior fiscal year.
On March 24, 1995, the Company sold to Sequoia Systems, Inc. for
$100,000 cash and $200,000 in note receivable its rights to reproduce and
license to others Pick64+ distributed database software. The transaction
generated a gain on sale of $211,000.
Research and development expenses incurred for the quarter just ended
decreased by $105,000 to $531,000 from $636,000 during the same period in the
prior fiscal year. This reduction is primarily due to refocusing the Company's
resources on new software development, $327,000 of which has been capitalized.
The Company reported net income of $51,000 for the quarter just ended,
compared to a net loss of $149,000 for the quarter ended May 29, 1994 for the
above-mentioned reasons, adjusted by immaterial differences in the foreign
exchange gain and the tax provision.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended May 28, 1995, the Company's working
capital decreased $273,000 to $2,915,000 from $3,188,000 at February 26, 1995.
Net cash and cash equivalents decreased during the quarter ended May 28, 1995
by $206,000 to $3,083,000, primarily to finance the Company's move to its new
facilities. Net cash provided by operating activities for the quarter ended May
28, 1995 was $639,000, compared to $215,000 for the same period in the previous
fiscal year.
Inventories decreased to $1,771,000 at May 28, 1995, from $1,948,000
at February 26, 1995. Net accounts receivable decreased to $4,710,000 from
$4,844,000 respectively, for the same comparable periods. The decrease is
primarily associated with the decline in business activity.
On July 10, 1995, the Company signed an agreement for a revolving line
of credit up to a maximum limit of $2,000,000, based upon 70% of the eligible
accounts receivable and under which letters of credit and the foreign exchange
portion shall not exceed in the aggregate at any one time $500,000. Borrowing
under the line of credit will bear interest of prime plus one and one half
percent (1.5%) and the commitment fee for the first year is $15,000. In
addition, the Company has agreed to issue 50,000 warrants to the lender after
the 40,000 warrants the lender previously received have been returned and
canceled.
The line of credit is secured by substantially all of the Company's
assets. Its availability is subject to financial covenants requiring that the
Company maintain a quick ratio of not less than 1.3 to 1, a tangible net worth
of not less than $6,500,000, and a ratio of total liabilities to tangible net
worth of no more than 1.0 to 1. The agreement also includes covenants which
require that the Company must not have two or more consecutive quarterly losses
or an aggregate year-to-date loss of over $300,000, and the Company must make a
net profit on a consolidated basis for fiscal 1996. Currently, the Company has
no outstanding bank borrowings.
As part of the Company's continuing efforts to reduce expenses, it has
entered into a new 66-month lease for and has moved into a 66,200 square foot
facility located within one mile of its prior 104,000 square foot facility. The
new lease, which began on July 1, 1995 and expires on December 31, 2000, will
provide significant savings.
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<PAGE> 11
The average annual rent for the new facility is $285,000, compared to
$680,000 in fiscal 1995 for the current facility. In addition, the Company
negotiated a cash rent reduction in exchange for paying the up-front cost of
certain leasehold improvements, and the Company has an option to extend the new
lease term for an additional three years.
The leasehold improvements for which the Company is responsible
include office construction, plumbing, wiring and general tenant improvements.
The Company estimates that the cost of these improvements is approximately
$700,000, which will be depreciated over the life of the lease. The cost of
these improvements, which was partially paid in the first quarter, is the
primary reason that Net property and equipment increased to $3,975,000 at May
28, 1995, compared to $3,604,000 at February 26, 1995.
The Company believes that current cash position augmented by operating
activities, supplemented as necessary with funds expected to be available under
the Company's line of credit, will provide it with sufficient resources to
finance its working capital requirements for the remainder of the fiscal year.
The Company's future capital requirements depend on a variety of factors,
including, but not limited to, the rate of decline in the traditional business,
the success and timing and amount of investment required to penetrate the
vertical markets, and service revenue growth or decline.
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<PAGE> 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) See Exhibit Index.
(b) No Form 8-K was filed during the first quarter ended
May 28, 1995.
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<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALPHA MICROSYSTEMS
(Registrant)
<TABLE>
<S> <C>
Date: July 10, 1995 By: /s/ Douglas J. Tullio
------------------------
President and
Chief Executive Officer
Date: July 10, 1995 By: /s/ Michael J. Lowell
------------------------
Vice President and
Chief Financial Officer
</TABLE>
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<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description of Documents Page
------ ------------------------ ----
<S> <C>
10.139 Loan and Security Agreement by and between Registrant
and Silicon Valley Bank dated July 10, 1995.
10.140 Warrant to Purchase 50,000 shares of common stock issued
to Silicon Valley Bank dated July 10, 1995.
10.141 Registration Rights Agreement by and between Registrant
and Silicon Valley Bank dated July 10, 1995.
10.142 Antidilution Agreement by and between Registrant and
Silicon Valley Bank dated July 10, 1995.
10.143 Collateral Assignment, Patent Mortgage and Security
Agreement by and between Registrant and
Silicon Valley Bank dated July 10, 1995.
10.144 Security Agreement by and between AlphaHealthCare, Inc.,
and Silicon Valley Bank dated July 10, 1995.
10.145 Continuing Guaranty by and between AlphaHealthCare, Inc.,
and Silicon Valley Bank dated July 10, 1995.
27. Financial Data Schedule.
</TABLE>
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<PAGE> 1
EXHIBIT 10.139
[LOGO] SILICON VALLEY BANK
LOAN AND SECURITY AGREEMENT
BORROWER: ALPHA MICROSYSTEMS
ADDRESS: 2722 SOUTH FAIRVIEW STREET
SANTA ANA, CALIFORNIA 92704
DATE: JULY 10, 1995
THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between
SILICON VALLEY BANK ("Silicon"), whose address is 3000 Lakeside Drive, Santa
Clara, California 95054-2895 and the borrower named above (the "Borrower"),
whose chief executive office is located at the above address ("Borrower's
Address").
1. LOANS.
1.1 LOANS. Silicon, in its reasonable discretion, will make loans to the
Borrower (the "Loans") in amounts determined by Silicon in its reasonable
discretion up to the amount (the "Credit Limit") shown on the Schedule to this
Agreement (the "Schedule"), provided no Event of Default and no event which,
with notice or passage of time or both, would constitute an Event of Default
has occurred. The Borrower is responsible for monitoring the total amount of
Loans and other Obligations outstanding from time to time, and Borrower shall
not permit the same, at any time, to exceed the Credit Limit. If at any time
the total of all outstanding Loans and all other Obligations exceeds the Credit
Limit, the Borrower shall immediately pay the amount of the excess to Silicon,
without notice or demand.
1.2 INTEREST. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule hereto. Interest shall be payable
monthly, on the due date shown on the monthly billing from Silicon to the
Borrower. Silicon may, in its discretion, charge interest to Borrower's
deposit accounts maintained with Silicon.
1.3 FEES. The Borrower shall pay to Silicon a loan origination fee in the
amount shown on the Schedule hereto concurrently herewith. This fee is in
addition to all interest and other sums payable to Silicon and is not
refundable.
2. GRANT OF SECURITY INTEREST.
2.1 OBLIGATIONS. The term "Obligations" as used in this Agreement means the
following: the obligation to pay all Loans and all interest thereon when due,
and to pay and perform when due all other present and future indebtedness,
liabilities, obligations, guarantees, covenants, agreements, warranties and
representations of the Borrower to Silicon, whether joint or several, monetary
or non-monetary, and whether created pursuant to this Agreement or any other
present or future agreement or otherwise. Silicon may, in its discretion,
require that Borrower pay monetary Obligations in cash to Silicon, or charge
them to Borrower's Loan account, in which event they will bear interest at the
same rate applicable to the Loans. Silicon may also, in its discretion, charge
any monetary Obligations to Borrower's deposit accounts maintained with
Silicon.
2.2 COLLATERAL. As security for all Obligations, the Borrower hereby grants
Silicon a continuing security interest in all of the Borrower's interest in the
types of property described below, whether now owned or hereafter acquired, and
wherever located (collectively, the "Collateral"): (a) All accounts, contract
rights, chattel paper, letters of credit, documents, securities, money, and
instruments, and all other obligations now or in the future owing to the
Borrower; (b) All inventory, goods, merchandise, materials, raw materials, work
in process, finished goods, farm products, advertising, packaging and shipping
materials, supplies, and all other tangible personal property which is held for
sale or lease or furnished under contracts of service or consumed in the
Borrower's business, and all warehouse receipts and other documents; and (c)
All equipment, including without limitation all machinery, fixtures, trade
fixtures, vehicles, furnishings, furniture, materials, tools, machine tools,
office equipment, computers and peripheral devices, appliances, apparatus,
parts, dies, and jigs; (d) All general intangibles including, but not limited
to, deposit accounts, goodwill, names, trade names, trademarks and the goodwill
of the business symbolized thereby, trade secrets, drawings, blueprints,
customer lists, patents, patent applications, copyrights, security deposits,
loan commitment fees, federal, state and
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<PAGE> 2
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
local tax refunds and claims, all rights in all litigation presently or
hereafter pending for any cause or claim (whether in contract, tort or
otherwise), and all judgments now or hereafter arising therefrom, all claims of
Borrower against Silicon, all rights to purchase or sell real or personal
property, all rights as a licensor or licensee of any kind, all royalties,
licenses, processes, telephone numbers, proprietary information, purchase
orders, and all insurance policies and claims (including without limitation
credit, liability, property and other insurance), and all other rights,
privileges and franchises of every kind; (e) All books and records, whether
stored on computers or otherwise maintained; and (f) All substitutions,
additions and accessions to any of the foregoing, and all products, proceeds
and insurance proceeds of the foregoing, and all guaranties of and security for
the foregoing; and all books and records relating to any of the foregoing.
Silicon's security interest in any present or future technology (including
patents, trade secrets, and other technology) shall be subject to any licenses
or rights now or in the future granted by the Borrower to any third parties in
the ordinary course of Borrower's business; provided that if the Borrower
proposes to sell, license or grant any other rights with respect to any
technology in a transaction that, in substance, conveys a major part of the
economic value of that technology, Silicon shall first be requested to release
its security interest in the same, and Silicon may withhold such release in its
discretion.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
The Borrower represents and warrants to Silicon as follows, and the Borrower
covenants that the following representations will continue to be true, and that
the Borrower will comply with all of the following covenants:
3.1 CORPORATE EXISTENCE AND AUTHORITY. The Borrower, if a corporation, is
and will continue to be, duly authorized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The Borrower is and
will continue to be qualified and licensed to do business in all jurisdictions
in which any failure to do so would have a material adverse effect on the
Borrower. The execution, delivery and performance by the Borrower of this
Agreement, and all other documents contemplated hereby have been duly and
validly authorized, are enforceable against the Borrower in accordance with
their terms, and do not violate any law or any provision of, and are not
grounds for acceleration under, any agreement or instrument which is binding
upon the Borrower.
3.2 NAME; TRADE NAMES AND STYLES. The name of the Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule hereto
are all prior names of the Borrower and all of Borrower's present and prior
trade names. The Borrower shall give Silicon 15 days' prior written notice
before changing its name or doing business under any other name. The Borrower
has complied, and will in the future comply, with all laws relating to the
conduct of business under a fictitious business name.
3.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in the
heading to this Agreement is the Borrower's chief executive office. In
addition, the Borrower has places of business and Collateral is located only at
the locations set forth on the Schedule to this Agreement. The Borrower will
give Silicon at least 15 days prior written notice before changing its chief
executive office or locating the Collateral at any other location.
3.4 TITLE TO COLLATERAL; PERMITTED LIENS. The Borrower is now, and will at
all times in the future be, the sole owner of all the Collateral, except for
items of equipment which are leased by the Borrower. The Collateral now is and
will remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for the following ("Permitted Liens"):
(i) purchase money security interests in specific items of equipment; (ii)
leases of specific items of equipment; (iii) liens for taxes not yet payable;
(iv) additional security interests and liens consented to in writing by Silicon
in its reasonable discretion, which consent shall not be unreasonably withheld;
and (v) security interests being terminated substantially concurrently with
this Agreement. Silicon will have the right to require, as a condition to its
consent under subparagraph (iv) above, that the holder of the additional
security interest or lien sign an intercreditor agreement on Silicon's then
standard form, acknowledge that the security interest is subordinate to the
security interest in favor of Silicon, and agree not to take any action to
enforce its subordinate security interest so long as any Obligations remain
outstanding, and that the Borrower agree that any uncured default in any
obligation secured by the subordinate security interest shall also constitute
an Event of Default under this Agreement. Silicon now has, and will continue
to have, a perfected and enforceable security interest in all of the
Collateral, subject only to the Permitted Liens, and the Borrower will at all
times defend Silicon and the Collateral against all claims of others. None of
the Collateral now is or will be affixed to any real property in such a manner,
or with such intent, as to become a fixture.
3.5 MAINTENANCE OF COLLATERAL. The Borrower will maintain the Collateral in
good working condition, and the Borrower will not use the Collateral for any
unlawful purpose. The Borrower will immediately advise Silicon in writing of
any material loss or damage to the Collateral.
3.6 BOOKS AND RECORDS. The Borrower has maintained and will maintain at the
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with generally accepted accounting principles.
3.7 FINANCIAL CONDITION AND STATEMENTS. All financial statements now or in
the future delivered to Silicon have been, and will be, prepared in conformity
with generally accepted accounting principles and now and in the future will
completely and accurately reflect the financial condition of the Borrower, at
the times and for the periods therein stated. Since the last date covered by
any such statement, there has been no material adverse change in the
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<PAGE> 3
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
financial condition or business of the Borrower. The Borrower is now and will
continue to be solvent. The Borrower will provide Silicon: (i) within 30 days
after the end of each month, a monthly financial statement prepared by the
Borrower, and a Compliance Certificate in such form as Silicon shall reasonably
specify, signed by the Chief Financial Officer of the Borrower, certifying that
as of the end of such month the Borrower was in full compliance with all of the
terms and conditions of this Agreement, and setting forth calculations showing
compliance with the financial covenants set forth on the Schedule and such
other information as Silicon shall reasonably request; and (ii) * [and (ii)
within 120 days following the end of the Borrower's fiscal year, complete
annual financial statements, certified by independent certified public
accountants acceptable to Silicon.]
* (II) WITHIN 5 DAYS AFTER THE EARLIER OF THE DATE THE REPORT 10-Q IS FILED OR
IS REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, SUCH 10-Q
REPORT, A QUARTERLY FINANCIAL STATEMENT PREPARED BY THE BORROWER, AND A
COMPLIANCE CERTIFICATE, SIGNED BY THE CHIEF FINANCIAL OFFICER OF THE BORROWER,
CERTIFYING THAT THROUGHOUT SUCH PERIOD THE BORROWER WAS IN FULL COMPLIANCE WITH
ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT, AND SETTING FORTH
CALCULATIONS SHOWING COMPLIANCE WITH THE FINANCIAL COVENANTS SET FORTH ON THE
SCHEDULE AND SUCH OTHER INFORMATION AS SILICON SHALL REASONABLY REQUEST; AND
(III) WITHIN 5 DAYS AFTER THE EARLIER OF THE DATE THE REPORT 10-K IS FILED OR
IS REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, SUCH 10-K
REPORT, COMPLETE ANNUAL FINANCIAL STATEMENTS, CERTIFIED BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS ACCEPTABLE TO SILICON, AND A COMPLIANCE
CERTIFICATE FOR THE PERIOD THEN ENDED, SIGNED BY THE CHIEF FINANCIAL OFFICER OF
THE BORROWER, CERTIFYING THAT THROUGHOUT SUCH PERIOD THE BORROWER WAS IN FULL
COMPLIANCE WITH ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT, AND SETTING
FORTH CALCULATIONS SHOWING COMPLIANCE WITH THE FINANCIAL COVENANTS SET FORTH ON
THE SCHEDULE AND SUCH OTHER INFORMATION AS SILICON SHALL REASONABLY REQUEST.
3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. The Borrower has timely
filed, and will timely file, all tax returns and reports required by foreign,
federal, state and local law, and the Borrower has timely paid, and will timely
pay, all foreign, federal, state and local taxes, assessments, deposits and
contributions now or in the future owed by the Borrower. The Borrower may,
however, defer payment of any contested taxes, provided that the Borrower (i)
in good faith contests the Borrower's obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, (ii)
notifies Silicon in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other steps
required to keep the contested taxes from becoming a lien upon any of the
Collateral. The Borrower is unaware of any claims or adjustments proposed for
any of the Borrower's prior tax years which could result in additional taxes
becoming due and payable by the Borrower. The Borrower has paid, and shall
continue to pay all amounts necessary to fund all present and future pension,
profit sharing and deferred compensation plans in accordance with their terms,
and the Borrower has not and will not withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event
with respect to, any such plan which could result in any liability of the
Borrower, including, without limitation, any liability to the Pension Benefit
Guaranty Corporation or its successors or any other governmental agency.
3.9 COMPLIANCE WITH LAW. The Borrower has complied, and will comply, in all
material respects, with all provisions of all foreign, federal, state and local
laws and regulations relating to the Borrower, including, but not limited to,
those relating to the Borrower's ownership of real or personal property,
conduct and licensing of the Borrower's business, and environmental matters.
3.10 LITIGATION. Except as disclosed in the Schedule, there is no claim,
suit, litigation, proceeding or investigation pending or (to best of the
Borrower's knowledge) threatened by or against or affecting the Borrower in any
court or before any governmental agency (or any basis therefor known to the
Borrower) which may result, either separately or in the aggregate, in any
material adverse change in the financial condition or business of the Borrower,
or in any material impairment in the ability of the Borrower to carry on its
business in substantially the same manner as it is now being conducted. The
Borrower will promptly inform Silicon in writing of any claim, proceeding,
litigation or investigation in the future threatened or instituted by or
against the Borrower involving amounts in excess of $250,000.
3.11 USE OF PROCEEDS. All proceeds of all Loans shall be used solely for
lawful business purposes.
4. ADDITIONAL DUTIES OF THE BORROWER.
4.1 FINANCIAL AND OTHER COVENANTS. The Borrower shall at all times comply
with the financial and other covenants set forth in the Schedule to this
Agreement.
4.2 OVERADVANCE; PROCEEDS OF ACCOUNTS. If for any reason the total of all
outstanding Loans and all other Obligations exceeds the Credit Limit, without
limiting Silicon's other remedies, and whether or not Silicon declares an Event
of Default, Borrower shall remit to Silicon all checks and other proceeds of
Borrower's accounts and general intangibles, in the same form as received by
Borrower, within one day after Borrower's receipt of the same, to be applied to
the Obligations in such order as Silicon shall determine in its discretion.
4.3 INSURANCE. The Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Silicon, in such form and amounts as Silicon
may reasonably require. All such insurance policies shall name Silicon as an
additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to Silicon. Upon receipt of the proceeds of any
such insurance, Silicon shall apply such proceeds in
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<PAGE> 4
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
reduction of the Obligations as Silicon shall determine in its sole and
absolute discretion, except that, provided no Event of Default has occurred,
Silicon shall release to the Borrower insurance proceeds with respect to
equipment totaling less than $100,000, which shall be utilized by the Borrower
for the replacement of the equipment with respect to which the insurance
proceeds were paid. Silicon may require reasonable assurance that the
insurance proceeds so released will be so used. If the Borrower fails to
provide or pay for any insurance, Silicon may, but is not obligated to, obtain
the same at the Borrower's expense. The Borrower shall promptly deliver to
Silicon copies of all reports made to insurance companies.
4.4 REPORTS. The Borrower shall provide Silicon with such written reports
with respect to the Borrower (including without limitation budgets, sales
projections, operating plans and other financial documentation), as Silicon
shall from time to time reasonably specify *.
* , WHICH REPORTS, IF BORROWER INFORMS SILICON ARE CONFIDENTIAL, SILICON SHALL
MAINTAIN AS SUCH IN ACCORDANCE WITH THE CONFIDENTIALITY PROVISION (AS DEFINED
IN SECTION 4.5)
4.5 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At all reasonable times, and
upon one business day notice, Silicon, or its agents, shall have the right to
inspect the Collateral, and the right to audit and copy the Borrower's
accounting books and records and Borrower's books and records relating to the
Collateral. Silicon shall take reasonable steps to keep confidential all
information obtained in any such inspection or audit, but Silicon shall have
the right to disclose any such information to its auditors, regulatory
agencies, and attorneys, and pursuant to any subpoena or other legal process *.
The foregoing audits shall be at Silicon's expense, except that the Borrower
shall reimburse Silicon for its reasonable out of pocket costs for semi-annual
accounts receivable audits by third parties retained by Silicon, and Silicon
may debit Borrower's deposit accounts with Silicon for the cost of such
semi-annual accounts receivable audits (in which event Silicon shall send
notification thereof to the Borrower) **. Notwithstanding the foregoing, after
the occurrence of an Event of Default all audits shall be at the Borrower's
expense.
* (THE "CONFIDENTIALITY PROVISION")
** , WITH THE UNDERSTANDING THAT COST ASSOCIATED WITH THE FIRST SUCH AUDIT
WILL NOT EXCEED $2,500, AND THE COST ASSOCIATED WITH SUBSEQUENT AUDITS WILL NOT
EXCEED $1,800 PER AUDIT
4.6 NEGATIVE COVENANTS. Except as may be permitted in the Schedule hereto,
the Borrower shall not, without Silicon's prior written consent, do any of the
following: (i) merge or consolidate with another corporation, except that the
Borrower may merge or consolidate with another corporation if the Borrower is
the surviving corporation in the merger and the aggregate value of the assets
acquired in the merger do not exceed 25% of Borrower's Tangible Net Worth (as
defined in the Schedule) as of the end of the month prior to the effective date
of the merger, and the assets of the corporation acquired in the merger are not
subject to any liens or encumbrances, except Permitted Liens; (ii) acquire any
assets outside the ordinary course of business for an aggregate purchase price
exceeding 25% of Borrower's Tangible Net Worth (as defined in the Schedule) as
of the end of the month prior to the effective date of the acquisition; (iii)
enter into any other transaction outside the ordinary course of business
(except as permitted by the other provisions of this Section); (iv) sell or
transfer any Collateral, except for the sale of finished inventory in the
ordinary course of the Borrower's business, and except for the sale of obsolete
or unneeded equipment * in the ordinary course of business; (v) make any loans
of any money or any other assets; (vi) incur any debts, outside the ordinary
course of business, which would have a material, adverse effect on the Borrower
or on the prospect of repayment of the Obligations; (vii) guarantee or
otherwise become liable with respect to the obligations of another party or
entity; (viii) pay or declare any dividends on the Borrower's stock (except for
dividends payable solely in stock of the Borrower); (ix) redeem, retire,
purchase or otherwise acquire, directly or indirectly, any of the Borrower's
stock; (x) make any change in the Borrower's capital structure which has a
material adverse effect on the Borrower or on the prospect of repayment of the
Obligations; or (xi) dissolve or elect to dissolve. Transactions permitted by
the foregoing provisions of this Section are only permitted if no Event of
Default and no event which (with notice or passage of time or both) would
constitute an Event of Default would occur as a result of such transaction.
* OR SOFTWARE
4.7 LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against Silicon with respect to any Collateral or in any
manner relating to the Borrower, the Borrower shall, without expense to
Silicon, make available the Borrower and its officers, employees and agents and
the Borrower's books and records to the extent that Silicon may deem them
reasonably necessary in order to prosecute or defend any such suit or
proceeding.
4.8 VERIFICATION. Silicon may, from time to time, following prior
notification to Borrower, verify directly with the respective account debtors
the validity, amount and other matters relating to the Borrower's accounts, by
means of mail, telephone or otherwise, either in the name of the Borrower or
Silicon or such other name as Silicon may reasonably choose, provided that no
prior notification to Borrower shall be required following an Event of Default.
4.9 EXECUTE ADDITIONAL DOCUMENTATION. The Borrower agrees, at its expense,
on request by Silicon, to execute all documents in form satisfactory to
Silicon, as Silicon, may deem reasonably necessary or useful in order to
perfect and maintain Silicon's perfected security interest in the Collateral,
and in order to fully consummate all of the transactions contemplated by this
Agreement.
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<PAGE> 5
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
5. TERM.
5.1 MATURITY DATE. This Agreement shall continue in effect until the
maturity date set forth on the Schedule hereto (the "Maturity Date").
5.2 EARLY TERMINATION. This Agreement may be terminated, without penalty,
prior to the Maturity Date as follows: (i) by the Borrower, effective three
business days after written notice of termination is given to Silicon; or (ii)
by Silicon at any time after the occurrence of an Event of Default, without
notice, effective immediately.
5.3 PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier effective
date of termination, the Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether
or not all or any part of such Obligations are otherwise then due and payable.
Without limiting the generality of the foregoing, if on the Maturity Date, or
on any earlier effective date of termination, there are any outstanding letters
of credit issued by Silicon or issued by another institution based upon an
application, guarantee, indemnity or similar agreement on the part of Silicon,
then on such date Borrower shall provide to Silicon cash collateral in an
amount equal to the face amount of all such letters of credit plus all
interest, fees and cost due or to become due in connection therewith, to secure
all of the Obligations relating to said letters of credit, pursuant to
Silicon's then standard form cash pledge agreement. Notwithstanding any
termination of this Agreement, all of Silicon's security interests in all of
the Collateral and all of the terms and provisions of this Agreement shall
continue in full force and effect until all Obligations have been paid and
performed in full; provided that, without limiting the fact that Loans are
subject to the reasonable discretion of Silicon, Silicon may, in its sole
discretion, refuse to make any further Loans after termination. No termination
shall in any way affect or impair any right or remedy of Silicon, nor shall any
such termination relieve the Borrower of any Obligation to Silicon, until all
of the Obligations have been paid and performed in full. Upon payment and
performance in full of all the Obligations, Silicon shall promptly deliver to
the Borrower termination statements, requests for reconveyances and such other
documents as may be required to fully terminate any of Silicon's security
interests.
6. EVENTS OF DEFAULT AND REMEDIES.
6.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement, and the Borrower shall
give Silicon immediate written notice thereof: (a) Any warranty,
representation, statement, report or certificate made or delivered to Silicon
by the Borrower or any of the Borrower's officers, employees or agents, now or
in the future, shall be untrue or misleading in any material respect; or (b)
the Borrower shall fail to pay when due any Loan or any interest thereon or any
other monetary Obligation; or (c) the total Loans and other Obligations
outstanding at any time exceed the Credit Limit; or (d) the Borrower shall fail
to comply with any of the financial covenants set forth in the Schedule or
shall fail to perform any other non-monetary Obligation which by its nature
cannot be cured; or (e) the Borrower shall fail to pay or perform any other
non-monetary Obligation, which failure is not cured within [5 business] * days
after the date due; or (f) Any levy, assessment, attachment, seizure, lien or
encumbrance is made on all or any part of the Collateral which is not cured
within [10] * days after the occurrence of the same; or (g) Dissolution,
termination of existence, insolvency or business failure of the Borrower; or
appointment of a receiver, trustee or custodian, for all or any part of the
property of, assignment for the benefit of creditors by, or the commencement of
any proceeding by the Borrower under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, now or in the future in effect; or (h) the
commencement of any proceeding against the Borrower or any guarantor of any of
the Obligations under any reorganization, bankruptcy, insolvency, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof within 30 days after the date commenced; (i) revocation or
termination of, or limitation or denial of liability upon, any guaranty of the
Obligations or any attempt to do any of the foregoing; or commencement of
proceedings by any guarantor of any of the Obligations under any bankruptcy or
insolvency law; or (j) revocation or termination of, or limitation or denial of
liability upon, any pledge of any certificate of deposit, securities or other
property or asset of any kind pledged by any third party to secure any or all
of the Obligations, or any attempt to do any of the foregoing; or commencement
of proceedings by or against any such third party under any bankruptcy or
insolvency law; or (k) the Borrower makes any payment on account of any
indebtedness or obligation which has been subordinated to the Obligations other
than as permitted in the applicable subordination agreement or if any person
who has subordinated such indebtedness or obligations terminates or in any way
limits his subordination agreement; or (l) there shall be a change in the
record or beneficial ownership of an aggregate of more than [20%] ** of the
outstanding shares of stock of the Borrower, in one or more transactions,
compared to the ownership of outstanding shares of stock of the Borrower in
effect on the date hereof, without the prior written consent of Silicon; or (m)
the Borrower shall generally not pay its debts as they become due; or the
Borrower shall conceal, remove or transfer any part of its property, with
intent to hinder, delay or defraud its creditors, or make or suffer any
transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law. Silicon may cease making any Loans
hereunder during any of the above cure periods, and thereafter if an Event of
Default has occurred.
* 30
** 30%
6.2 REMEDIES. Upon the occurrence of any Event of Default, and at any time
thereafter, Silicon, at its option,
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<PAGE> 6
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
and without notice or demand of any kind (all of which are hereby expressly
waived by the Borrower), may do any one or more of the following: (a) Cease
making Loans or otherwise extending credit to the Borrower under this Agreement
or any other document or agreement; (b) Accelerate and declare all or any part
of the Obligations to be immediately due, payable, and performable,
notwithstanding any deferred or installment payments allowed by any instrument
evidencing or relating to any Obligation; (c) Take possession of any or all of
the Collateral wherever it may be found, and for that purpose the Borrower
hereby authorizes Silicon without judicial process to enter onto any of the
Borrower's premises without interference to search for, take possession of,
keep, store, or remove any of the Collateral, and remain on the premises or
cause a custodian to remain on the premises in exclusive control thereof
without charge for so long as Silicon deems it reasonably necessary in order to
complete the enforcement of its rights under this Agreement or any other
agreement; provided, however, that should Silicon seek to take possession of
any or all of the Collateral by Court process, the Borrower hereby irrevocably
waives: (i) any bond and any surety or security relating thereto required by
any statute, court rule or otherwise as an incident to such possession; (ii)
any demand for possession prior to the commencement of any suit or action to
recover possession thereof; and (iii) any requirement that Silicon retain
possession of and not dispose of any such Collateral until after trial or final
judgment; (d) Require the Borrower to assemble any or all of the Collateral and
make it available to Silicon at places designated by Silicon which are
reasonably convenient to Silicon and the Borrower, and to remove the Collateral
to such locations as Silicon may deem advisable; (e) Require Borrower to
deliver to Silicon, in kind, all checks and other payments received with
respect to all accounts and general intangibles, together with any necessary
indorsements, within one day after the date received by the Borrower; (f)
Complete the processing, manufacturing or repair of any Collateral prior to a
disposition thereof and, for such purpose and for the purpose of removal,
Silicon shall have the right to use the Borrower's premises, vehicles, hoists,
lifts, cranes, equipment and all other property without charge; (g) Sell, lease
or otherwise dispose of any of the Collateral in its condition at the time
Silicon obtains possession of it or after further manufacturing, processing or
repair, at any one or more public and/or private sales, in lots or in bulk, for
cash, exchange or other property, or on credit, and to adjourn any such sale
from time to time without notice other than oral announcement at the time
scheduled for sale. Silicon shall have the right to conduct such disposition
on the Borrower's premises without charge, for such time or times as Silicon
deems reasonable, or on Silicon's premises, or elsewhere and the Collateral
need not be located at the place of disposition. Silicon may directly or
through any affiliated company purchase or lease any Collateral at any such
public disposition, and if permissible under applicable law, at any private
disposition. Any sale or other disposition of Collateral shall not relieve the
Borrower of any liability the Borrower may have if any Collateral is defective
as to title or physical condition or otherwise at the time of sale; (h) Demand
payment of, and collect any accounts and general intangibles comprising
Collateral and, in connection therewith, the Borrower irrevocably authorizes
Silicon to endorse or sign the Borrower's name on all collections, receipts,
instruments and other documents, to take possession of and open mail addressed
to the Borrower and remove therefrom payments made with respect to any item of
the Collateral or proceeds thereof, and, in Silicon's sole discretion, to grant
extensions of time to pay, compromise claims and settle accounts and the like
for less than face value; (i) Offset against any sums in any of Borrower's
general, special or other deposit accounts with Silicon; and (j) Demand and
receive possession of any of the Borrower's federal and state income tax
returns and the books and records utilized in the preparation thereof or
referring thereto. All reasonable attorneys' fees, expenses, costs,
liabilities and obligations incurred by Silicon with respect to the foregoing
shall be added to and become part of the Obligations, shall be due on demand,
and shall bear interest at a rate equal to the highest interest rate applicable
to any of the Obligations. Without limiting any of Silicon's rights and
remedies, from and after the occurrence of any Event of Default, the interest
rate applicable to the Obligations shall be increased by an additional four
percent per annum.
6.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. The Borrower and
Silicon agree that a sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to the
Borrower at least seven days prior to the sale, and, in the case of a public
sale, notice of the sale is published at least seven days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Silicon, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price
in cash or by cashier's check or wire transfer is required; (vi) With respect
to any sale of any of the Collateral, Silicon may (but is not obligated to)
direct any prospective purchaser to ascertain directly from the Borrower any
and all information concerning the same. Silicon may employ other methods of
noticing and selling the Collateral, in its discretion, if they are
commercially reasonable.
6.4 POWER OF ATTORNEY. Upon the occurrence of any Event of Default, without
limiting Silicon's other rights and remedies, the Borrower grants to Silicon an
irrevocable power of attorney coupled with an interest, authorizing and
permitting Silicon (acting through any of its employees, attorneys or agents)
at any time, at its option, but without obligation, with or without notice to
the Borrower, and at the Borrower's expense, to do any or all of the following,
in the Borrower's name or otherwise: (a) Execute on behalf of the Borrower any
documents that Silicon may, in its sole and absolute discretion, deem advisable
in order to perfect and maintain Silicon's security
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<PAGE> 7
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
interest in the Collateral, or in order to exercise a right of the Borrower or
Silicon, or in order to fully consummate all the transactions contemplated
under this Agreement, and all other present and future agreements; (b) Execute
on behalf of the Borrower any document exercising, transferring or assigning
any option to purchase, sell or otherwise dispose of or to lease (as lessor or
lessee) any real or personal property which is part of Silicon's Collateral or
in which Silicon has an interest; (c) Execute on behalf of the Borrower, any
invoices relating to any account, any draft against any account debtor and any
notice to any account debtor, any proof of claim in bankruptcy, any Notice of
Lien, claim of mechanic's, materialman's or other lien, or assignment or
satisfaction of mechanic's, materialman's or other lien; (d) Take control in
any manner of any cash or non-cash items of payment or proceeds of Collateral;
endorse the name of the Borrower upon any instruments, or documents, evidence
of payment or Collateral that may come into Silicon's possession; (e) Endorse
all checks and other forms of remittances received by Silicon; (f) Pay, contest
or settle any lien, charge, encumbrance, security interest and adverse claim in
or to any of the Collateral, or any judgment based thereon, or otherwise take
any action to terminate or discharge the same; (g) Grant extensions of time to
pay, compromise claims and settle accounts and general intangibles for less
than face value and execute all releases and other documents in connection
therewith; (h) Pay any sums required on account of the Borrower's taxes or to
secure the release of any liens therefor, or both; (i) Settle and adjust, and
give releases of, any insurance claim that relates to any of the Collateral and
obtain payment therefor; (j) Instruct any third party having custody or control
of any books or records belonging to, or relating to, the Borrower to give
Silicon the same rights of access and other rights with respect thereto as
Silicon has under this Agreement; and (k) Take any action or pay any sum
required of the Borrower pursuant to this Agreement and any other present or
future agreements. Silicon shall exercise the foregoing powers in a
commercially reasonable manner. Any and all reasonable sums paid and any and
all reasonable costs, expenses, liabilities, obligations and attorneys' fees
incurred by Silicon with respect to the foregoing shall be added to and become
part of the Obligations, shall be payable on demand, and shall bear interest at
a rate equal to the highest interest rate applicable to any of the Obligations.
In no event shall Silicon's rights under the foregoing power of attorney or any
of Silicon's other rights under this Agreement be deemed to indicate that
Silicon is in control of the business, management or properties of the
Borrower.
6.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any sale
of the Collateral shall be applied by Silicon first to the costs, expenses,
liabilities, obligations and attorneys' fees incurred by Silicon in the
exercise of its rights under this Agreement, second to the interest due upon
any of the Obligations, and third to the principal of the Obligations, in such
order as Silicon shall determine in its sole discretion. Any surplus shall be
paid to the Borrower or other persons legally entitled thereto; the Borrower
shall remain liable to Silicon for any deficiency. If, Silicon, in its sole
discretion, directly or indirectly enters into a deferred payment or other
credit transaction with any purchaser at any sale or other disposition of
Collateral, Silicon shall have the option, exercisable at any time, in its sole
discretion, of either reducing the Obligations by the principal amount of
purchase price or deferring the reduction of the Obligations until the actual
receipt by Silicon of the cash therefor.
6.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set forth in
this Agreement, Silicon shall have all the other rights and remedies accorded a
secured party under the California Uniform Commercial Code and under all other
applicable laws, and under any other instrument or agreement now or in the
future entered into between Silicon and the Borrower, and all of such rights
and remedies are cumulative and none is exclusive. Exercise or partial
exercise by Silicon of one or more of its rights or remedies shall not be
deemed an election, nor bar Silicon from subsequent exercise or partial
exercise of any other rights or remedies. The failure or delay of Silicon to
exercise any rights or remedies shall not operate as a waiver thereof, but all
rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed.
7. GENERAL PROVISIONS.
7.1 NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by regular first-class mail, or
certified mail return receipt requested, addressed to Silicon or the Borrower
at the addresses shown in the heading to this Agreement, or at any other
address designated in writing by one party to the other party. All notices
shall be deemed to have been given upon delivery in the case of notices
personally delivered to the Borrower or to Silicon, or at the expiration of two
business days following the deposit thereof in the United States mail, with
postage prepaid.
7.2 SEVERABILITY. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.
7.3 INTEGRATION. This Agreement and such other written agreements, documents
and instruments as may be executed in connection herewith are the final, entire
and complete agreement between the Borrower and Silicon and supersede all prior
and contemporaneous negotiations and oral representations and agreements, all
of which are merged and integrated in this Agreement. There are no oral
understandings, representations or agreements between the parties which are not
set forth in this Agreement or in other written agreements signed by the
parties in connection herewith.
7.4 WAIVERS. The failure of Silicon at any time or times to require the
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future
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<PAGE> 8
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
agreement between the Borrower and Silicon shall not waive or diminish any
right of Silicon later to demand and receive strict compliance therewith. Any
waiver of any default shall not waive or affect any other default, whether
prior or subsequent thereto. None of the provisions of this Agreement or any
other agreement now or in the future executed by the Borrower and delivered to
Silicon shall be deemed to have been waived by any act or knowledge of Silicon
or its agents or employees, but only by a specific written waiver signed by an
officer of Silicon and delivered to the Borrower. The Borrower waives demand,
protest, notice of protest and notice of default or dishonor, notice of payment
and nonpayment, release, compromise, settlement, extension or renewal of any
commercial paper, instrument, account, general intangible, document or guaranty
at any time held by Silicon on which the Borrower is or may in any way be
liable, and notice of any action taken by Silicon, unless expressly required by
this Agreement.
7.5 NO LIABILITY FOR ORDINARY NEGLIGENCE. Neither Silicon, nor any of its
directors, officers, employees, agents, attorneys or any other person
affiliated with or representing Silicon shall be liable for any claims,
demands, losses or damages, of any kind whatsoever, made, claimed, incurred or
suffered by the Borrower or any other party through the ordinary negligence of
Silicon, or any of its directors, officers, employees, agents, attorneys or any
other person affiliated with or representing Silicon.
7.6 AMENDMENT. The terms and provisions of this Agreement may not be waived
or amended, except in a writing executed by the Borrower and a duly authorized
officer of Silicon.
7.7 TIME OF ESSENCE. Time is of the essence in the performance by the
Borrower of each and every obligation under this Agreement.
7.8 ATTORNEYS FEES AND COSTS. The Borrower shall reimburse Silicon for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Silicon, pursuant to,
or in connection with, or relating to this Agreement (whether or not a lawsuit
is filed), including, but not limited to, any reasonable attorneys' fees and
costs Silicon incurs in order to do the following: prepare and negotiate this
Agreement and the documents relating to this Agreement; obtain legal advice in
connection with this Agreement; enforce, or seek to enforce, any of its rights;
prosecute actions against, or defend actions by, account debtors; commence,
intervene in, or defend any action or proceeding; initiate any complaint to be
relieved of the automatic stay in bankruptcy; file or prosecute any probate
claim, bankruptcy claim, third-party claim, or other claim; examine, audit,
copy, and inspect any of the Collateral or any of the Borrower's books and
records; protect, obtain possession of, lease, dispose of, or otherwise enforce
Silicon's security interest in, the Collateral; and otherwise represent Silicon
in any litigation relating to the Borrower. In satisfying Borrower's
obligation hereunder to reimburse Silicon for attorneys fees, Borrower may, for
convenience, issue checks directly to Silicon's attorneys, Levy, Small &
Lallas, but Borrower acknowledges and agrees that Levy, Small & Lallas is
representing only Silicon and not Borrower in connection with this Agreement.
If either Silicon or the Borrower files any lawsuit against the other
predicated on a breach of this Agreement, the prevailing party in such action
shall be entitled to recover its reasonable costs and attorneys' fees,
including (but not limited to) reasonable attorneys' fees and costs incurred in
the enforcement of, execution upon or defense of any order, decree, award or
judgment. All attorneys' fees and costs to which Silicon may be entitled
pursuant to this Paragraph shall immediately become part of the Borrower's
Obligations, shall be due on demand, and shall bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations.
7.9 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of the parties hereto; provided, however,
that the Borrower may not assign or transfer any of its rights under this
Agreement without the prior written consent of Silicon, and any prohibited
assignment shall be void. No consent by Silicon to any assignment shall
release the Borrower from its liability for the Obligations.
7.10 JOINT AND SEVERAL LIABILITY. If the Borrower consists of more than one
person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.
7.11 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used in
this Agreement for convenience. The Borrower acknowledges that the headings
may not describe completely the subject matter of the applicable paragraph, and
the headings shall not be used in any manner to construe, limit, define or
interpret any term or provision of this Agreement. This Agreement has been
fully reviewed and negotiated between the parties and no uncertainty or
ambiguity in any term or provision of this Agreement shall be construed
strictly against Silicon or the Borrower under any rule of construction or
otherwise.
7.12 MUTUAL WAIVER OF JURY TRIAL. THE BORROWER AND SILICON EACH HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN SILICON AND THE BORROWER, OR ANY CONDUCT, ACTS
OR OMISSIONS OF SILICON OR THE BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH SILICON OR
THE BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE.
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<PAGE> 9
SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT
7.13 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of Silicon and the
Borrower shall be governed by, and in accordance with, the laws of the State of
California. Any undefined term used in this Agreement that is defined in the
California Uniform Commercial Code shall have the meaning assigned to that term
in the California Uniform Commercial Code. As a material part of the
consideration to Silicon to enter into this Agreement, the Borrower (i) agrees
that all actions and proceedings relating directly or indirectly hereto shall,
at Silicon's option, be litigated in courts located within California, and that
the exclusive venue therefor shall be Orange County; (ii) consents to the
jurisdiction and venue of any such court and consents to service of process in
any such action or proceeding by personal delivery or any other method
permitted by law; and (iii) waives any and all rights the Borrower may have to
object to the jurisdiction of any such court, or to transfer or change the
venue of any such action or proceeding.
BORROWER:
ALPHA MICROSYSTEMS
BY DOUGLAS J. TULLIO
--------------------------------
PRESIDENT OR VICE PRESIDENT
BY JOHN F. GLADE
--------------------------------
SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY TERRY BESS
--------------------------------
TITLE VICE PRESIDENT
-----------------------------
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<PAGE> 10
[LOGO] SILICON VALLEY BANK
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: ALPHA MICROSYSTEMS
ADDRESS: 2722 SOUTH FAIRVIEW STREET
SANTA ANA, CALIFORNIA 92704
DATE: JULY 10, 1995
THIS SCHEDULE is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of:
(i) $2,000,000 at any one time
outstanding; or (ii) 70% of the Net
Amount of Borrower's accounts, which
Silicon in its discretion deems eligible
for borrowing*. "Net Amount" of an
account means the gross amount of the
account, minus all applicable sales, use,
excise and other similar taxes and minus
all discounts, credits and allowances of
any nature granted or claimed.
* , SUBJECT TO THE RESERVE AS SET FORTH
IN PARAGRAPH 6 OF THE SECTION OF THIS
SCHEDULE ENTITLED "OTHER COVENANTS
(SECTION 4.1)".
Without limiting the fact that the
determination of which accounts are
eligible for borrowing is a matter of
Silicon's discretion, the following will
not be deemed eligible for borrowing*:
accounts outstanding for more than 90
days from the invoice date, accounts
subject to any contingencies, accounts
owing from the United States or any
department, agency or instrumentality of
the United States or any state, city or
municipality**, accounts owing from an
account debtor outside the United States
*** (unless pre-approved by Silicon in
its discretion, or backed by a letter of
credit satisfactory to Silicon, or FCIA
insured satisfactory to Silicon),
accounts owing from one account debtor to
the extent they exceed 25% of the total
eligible accounts outstanding, accounts
owing from an affiliate of Borrower, and
accounts owing from an account debtor to
whom Borrower is or may be liable for
goods purchased from such account debtor
or otherwise. In addition, if more than
50% of the accounts owing from an account
debtor are outstanding more than 90 days
from the invoice date or are otherwise
not eligible accounts, then all accounts
owing from that account debtor will be
deemed ineligible for borrowing.
* (WITHOUT LIMITING THE DISCRETION OF
SILICON TO DETERMINE WHICH ACCOUNTS ARE
ELIGIBLE FOR BORROWING, SILICON MAY DEEM
OTHER ACCOUNTS INELIGIBLE FOR BORROWING
AFTER REVIEW OF THE ACCOUNTS
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<PAGE> 11
SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
RECEIVABLE AUDIT BEING CONDUCTED PRIOR TO
THE MAKING OF LOANS HEREUNDER)
** (PROVIDED THAT SUCH RESTRICTIONS DO
NOT APPLY TO SCHOOL DISTRICT ACCOUNT
DEBTORS RELATING TO ACCOUNTS ARISING FROM
THE PANDA SOFTWARE PRODUCT)
*** OR CANADA
LETTER OF CREDIT SUBLIMIT: Silicon, in its reasonable discretion,
will from time to time during the term of
this Agreement issue letters of credit
for the account of the Borrower ("Letters
of Credit"), in an aggregate amount at
any one time outstanding not to exceed
$500,000, upon the request of the
Borrower, provided that, on the date the
Letters of Credit are to be issued,
Borrower has available to it Accounts
Loans in an amount equal to or greater
than the face amount of the Letters of
Credit to be issued. Prior to the
issuance of any Letters of Credit,
Borrower shall execute and deliver to
Silicon Applications for Letters of
Credit and such other documentation as
Silicon shall specify (the "Letter of
Credit Documentation"). Fees for the
Letters of Credit shall be as provided in
the Letter of Credit Documentation.
Letters of Credit may have a maturity
date up to twelve months beyond the
Maturity Date in effect from time to
time, provided that if on the Maturity
Date, or on any earlier effective date of
termination, there are any outstanding
letters of credit issued by Silicon or
issued by another institution based upon
an application, guarantee, indemnity or
similar agreement on the part of Silicon,
then on such date Borrower shall provide
to Silicon cash collateral in an amount
equal to the face amount of all such
letters of credit plus all interest, fees
and cost due or to become due in
connection therewith, to secure all of
the Obligations relating to said letters
of credit, pursuant to Silicon's then
standard form cash pledge agreement.
The Credit Limit set forth aboveand the
Accounts Loans available under this
Agreement at any time shall be reduced by
the face amount of Letters of Credit from
time to time outstanding.
FOREIGN EXCHANGE
CONTRACT SUBLIMIT Up to $1,000,000 (the "Contract Limit")
of the Credit Limit may be utilized for
spot and future foreign exchange
contracts (the "Exchange Contracts").
The Credit Limit available at any time
shall be reduced by the following amounts
(the "Foreign Exchange Reserve") on each
day (the "Determination Date"): (i) on
all outstanding Exchange Contracts on
which delivery is to be effected or
settlement allowed more than two business
days from the Determination Date, 20% of
the gross amount of the Exchange
Contracts; plus (ii) on all outstanding
Exchange Contracts on which delivery is
to be effected or settlement allowed
within two business days after the
Determination Date, 100% of the gross
amount of the Exchange Contracts. In
lieu of the Foreign Exchange Reserve for
100% of the gross amount of any Exchange
Contract, the Borrower may request that
Silicon debit the Borrower's bank account
with Silicon for such amount, provided
Borrower has immediately available funds
in such amount in its bank account.
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<PAGE> 12
SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
Silicon may, in its discretion, terminate
the Exchange Contracts at any time (a)
that an Event of Default occurs or (b)
that there is not sufficient availability
under the Credit Limit and Borrower does
not have available funds in its bank
account to satisfy the Foreign Exchange
Reserve. If either Silicon or Borrower
terminates the Exchange Contracts, and
without limitation of the FX Indemnity
Provisions (as referred to below),
Borrower agrees to reimburse Silicon for
any and all fees, costs and expenses
relating thereto or arising in connection
therewith.
Borrower shall not permit the total gross
amount of all Exchange Contracts on which
delivery is to be effected and settlement
allowed in any two business day period to
be more than $500,000 (the "Settlement
Limit"), nor shall Borrower permit the
total gross amount of all Exchange
Contracts to which Borrower is a party,
outstanding at any one time, to exceed
the Contract Limit.
Notwithstanding the above, however, the
amount which may be settled in any two
(2) business day period may, in Silicon's
sole discretion, be increased above the
Settlement Limit up to, but in no event
to exceed, the amount of the Contract
Limit (the "Discretionary Settlement
Amount") under either of the following
circumstances (the "Discretionary
Settlement Circumstances"):
(i) if there is sufficient availability
under the Credit Limit in the amount
of the Foreign Exchange Reserve as
of each Determination Date, provided
that Silicon in advance shall reserve
the full amount of the Foreign Exchange
Reserve against the Credit Limit; or
(ii) if there is insufficient
availability under the Credit Limit as
to settlements within any two (2)
business day period if Silicon is able
to: (A) verify good funds overseas
prior to crediting Borrower's deposit
account with Silicon (in the case of
Borrower's sale of foreign currency);
or (B) debit Borrower's deposit account
with Silicon prior to delivering
foreign currency overseas (in the case
of Borrower's purchase of foreign
currency);
Provided that it is expressly understood
that Silicon's willingness adopt the
Discretionary Settlement Amount is a
matter of Silicon's sole discretion and
the existence of the Discretionary
Settlement Circumstances in no way means
or implies that Silicon shall be
obligated to permit the Borrower to
exceed the Settlement Limit in any two
business day period.
In the case of Borrower's purchase of
foreign currency, Borrower in advance
shall instruct Silicon upon settlement
either to treat the settlement amount as
an advance under the Credit Limit, or to
debit Borrower's account for the amount
settled.
The Borrower shall execute all standard
form applications and agreements of
Silicon in connection with the Exchange
Contracts, and without limiting any of
the terms of such applications and
agreements,
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<PAGE> 13
SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
the Borrower will pay all standard fees
and charges of Silicon in connection
with the Exchange Contracts.
Without limiting any of the other terms
of this Loan Agreement or any such
standard form applications and agreements
of Silicon, Borrower agrees to indemnify
Silicon and hold it harmless, from and
against any and all claims, debts,
liabilities, demands, obligations,
actions, costs and expenses (including,
without limitation, attorneys' fees of
counsel of Silicon's choice), of every
nature and description, which it may
sustain or incur, based upon, arising out
of, or in any way relating to any of the
Exchange Contracts or any transactions
relating thereto or contemplated thereby
(collectively referred to as the "FX
Indemnity Provisions").
The Exchange Contracts shall have
maturity dates no later than the
Maturity Date.
INTEREST RATE (Section 1.2): A rate equal to the "Prime Rate" in
effect from time to time, plus 1.50% per
annum. Interest shall be calculated on
the basis of a 360-day year for the
actual number of days elapsed. "Prime
Rate" means the rate announced from time
to time by Silicon as its "prime rate;"
it is a base rate upon which other rates
charged by Silicon are based, and it is
not necessarily the best rate available
at Silicon. The interest rate applicable
to the Obligations shall change on each
date there is a change in the Prime Rate.
LOAN ORIGINATION FEE
(Section 1.3): $15,000. (Any Commitment Fee previously
paid by the Borrower in connection with
this loan shall be credited against this
Fee.)
MATURITY DATE
(Section 5.1): JULY __, 1996
PRIOR NAMES OF BORROWER
(Section 3.2): NONE
TRADE NAMES OF BORROWER
(Section 3.2): NONE
OTHER LOCATIONS AND ADDRESSES
(Section 3.3): SEE ATTACHEMENT A
MATERIAL ADVERSE LITIGATION
(Section 3.10): NONE
NEGATIVE COVENANTS-EXCEPTIONS
(Section 4.6): Without Silicon's prior written consent,
Borrower may do the following, provided
that, after giving effect thereto, no
Event of Default has occurred and no
event has occurred which, with notice or
passage of time or both, would constitute
an Event of Default, and provided that
the following are done in compliance with
all applicable laws, rules and
regulations: (i) repurchase shares of
Borrower's stock pursuant to any employee
stock purchase or benefit plan, provided
that the total amount paid by Borrower
for such stock does not exceed $500,000
in any fiscal year or (ii) make loans or
effect other transfers
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<PAGE> 14
SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
of funds to its subsidiary,
AlphaHealthCare, Inc. provided that
Borrower is and remains a 100% owner of
AlphaHealthCare, Inc.
FINANCIAL COVENANTS
(Section 4.1): Borrower shall comply with all of the
following covenants. Compliance shall be
determined as of the end of each month,
except as otherwise specifically provided
below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of "Quick
Assets" to current liabilities of not
less than 1.30 to 1.
TANGIBLE NET WORTH: Borrower shall maintain a tangible net
worth of not less than $6,500,000.
DEBT TO TANGIBLE
NET WORTH RATIO: Borrower shall maintain a ratio of total
liabilities to tangible net worth of not
more than 1.00 to 1.
PROFITABILITY Borrower shall not incur a loss (after
taxes) for any fiscal year, provided that
Borrower may incur losses (after taxes)
in two consecutive fiscal quarters during
any fiscal years if the aggregate amount
of such losses for such two fiscal
quarters does not exceed $300,000.
DEFINITIONS: "Current assets," and "current
liabilities" shall have the meanings
ascribed to them in accordance with
generally accepted accounting principles.
"Tangible net worth" means the excess of
total assets over total liabilities,
determined in accordance with generally
accepted accounting principles, excluding
however all assets which would be
classified as intangible assets under
generally accepted accounting principles,
including without limitation goodwill,
licenses, patents, trademarks, trade
names, copyrights, capitalized software
and organizational costs, licences and
franchises.
"Quick Assets" means cash on hand or on
deposit in banks, readily marketable
securities issued by the United States,
readily marketable commercial paper rated
"A-1" by Standard & Poor's Corporation
(or a similar rating by a similar rating
organization), certificates of deposit
and banker's acceptances, and accounts
receivable (net of allowance for doubtful
accounts).
DEFERRED REVENUES: For purposes of the above quick asset
ratio, deferred revenues shall not be
counted as current liabilities. For
purposes of the above debt to tangible
net worth ratio, deferred revenues shall
not be counted in determining total
liabilities but shall be counted in
determining tangible net worth for
purposes of such ratio. For all other
purposes deferred revenues shall be
counted as liabilities in accordance with
generally accepted accounting principles.
SUBORDINATED DEBT: "Liabilities" for purposes of the
foregoing covenants do not include
indebtedness which is subordinated to the
indebtedness to Silicon under a
subordination agreement in form specified
by Silicon or by
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<PAGE> 15
SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
language in the instrument evidencing the
indebtedness which is acceptable to
Silicon.
OTHER COVENANTS
(Section 4.1): Borrower shall at all times comply with
all of the following additional
covenants:
1. BANKING RELATIONSHIP. Borrower
shall at all times maintain its primary
banking relationship with Silicon.
2. MONTHLY BORROWING BASE CERTIFICATE
AND LISTING. Within 20 days after the
end of each month, Borrower shall provide
Silicon with a Borrowing Base Certificate
in such form as Silicon shall specify,
and an aged listing of Borrower's
accounts receivable.
3. WARRANTS. The Borrower shall
provide Silicon with five-year warrants
to purchase 50,000 shares of Common stock
of the Borrower, at a price per share
equal to the market price per share as
reflected on the date prior to the
Borrower's execution of this Agreement,
on the terms and conditions in the
Warrant to Purchase Stock and related
documents being executed concurrently
with this Agreement. Upon the issuance
and delivery of such new warrant to
Silicon, Silicon agrees to cancel and
return to the Borrower the warrant for
20,000 shares of Common Stock of the
Borrower that the Borrower had previously
issued to Silicon in connection with the
prior Silicon loan facility with the
Borrower.
4. INDEBTEDNESS. Without limiting any
of the foregoing terms or provisions of
this Agreement, Borrower shall not in the
future incur indebtedness for borrowed
money, except for (i) indebtedness to
Silicon, and (ii) indebtedness incurred
in the future for the purchase price of
or lease of equipment in an aggregate
amount not exceeding $100,000 at any time
outstanding.
5. COPYRIGHT SECURITY AGREEMENT. In
connection with the Agreement, the
Borrower agrees to execute and deliver to
Silicon concurrently herewith a security
agreement regarding the intellectual
property collateral of Borrower on
Silicon's standard form.
6. RESERVE AGAINST AVAILABILITY.
Borrower understands and agrees that
Silicon has established a reserve of
$350,000 that reduces the amount of
Loans, Letters of Credit and Exchange
Contracts which would otherwise be
available to Borrower under the terms of
the Credit Limit and that such reserve
will remain in effect until such time
that the Borrower has provided to Silicon
a copy of a filed and duly executed UCC
termination statement for the UCC-1
financing statement filed with the
California Secretary of State on February
14, 1991 as File No. 91026128, with
Borrower, as debtor, and Metropolitan
Life Insurance Company, as secured party.
7. ALPHAHEALTHCARE, INC. Borrower
shall cause its subsidiary corporation,
ALPHAHEALTHCARE, INC., to execute and
deliver to Silicon a guaranty of the
Obligations, a security agreement to
collateralize such guaranty obligation,
and such other agreements and instruments
relating thereto as Silicon determines
are reasonably necessary, with each of
such agreements to be on Silicon's
standard form.
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<PAGE> 16
SILICON VALLEY BANK SCHEDULE TO LOAN AND SECURITY AGREEMENT
8. INITIAL AUDIT. The first,
semi-annual audit referred to in
Section 4.5 of this Agreement shall
be completed by prior to the making
of any Loans hereunder.
BORROWER:
ALPHA MICROSYSTEMS
BY DOUGLAS J. TULLIO
-------------------------------
PRESIDENT OR VICE PRESIDENT
BY JOHN F. GLADE
-------------------------------
SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY TERRY BESS
-------------------------------
TITLE VICE PRESIDENT
----------------------------
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<PAGE> 17
ATTACHMENT A
<PAGE> 18
ALPHA MICROSYSTEMS SALES REGIONS
INTERNATIONAL
PETER WHITE, MANAGING DIRECTOR
European Operations
Enterprise House
1B Roxborough Way
Foundation Park, Cannon Lane
Maidenhead, Berkshire, UK
SL63UK
Phone 011-44-1628-822120
Fax 011-44-1628-824478
CUSTOMER RELATIONS
PEGGY DENSON - DIRECTOR
2722 S. Fairview St.
Santa Ana, CA 92704
Phone 714-641-6260
Fax 714-641-7676
NATIONAL SALES
PHIL SMITH - VICE PRESIDENT
Sales and Marketing
5808 Leslie Lane
Mt. Airy, MD 21771
Phone 301-829-9598
Inhouse phone 714-641-6431
Fax 301-829-9599
DALE HICKS - REGION MANAGER
1061 E. Indiantown Road
Suite 410
Jupiter, FL 33477
Phone 407-745-7748
Fax 407-745-0577
DON WHITE - SALES ENGINEER
2652 Oakbrook Drive
Largo, FL 34640
Phone 813-584-7748
Fax 813-584-7868
ORDER ADMINISTRATION
SANDY SLIFKA
2722 S. Fairview St.
Santa Ana, CA 92704
Phone 800-289-2574
Fax 714-641-7676
DENISE FUNK
2722 S. Fairview St.
Santa Ana, CA 92704
Phone 800-289-2574
Fax 714-641-7676
HELEN JOHNSON
2722 S. Fairview St.
Santa Ana, CA 92704
Phone 800-289-2574
Fax 714-641-7676
PACIFIC RIM, ASIA, LATIN
AMERICA
ABEL BACA - MANAGER
2722 S. Fairview St.
Santa Ana, CA 92704
Phone 714-641-6492
Fax 714-641-7676
LINDA SIMPSON - MANAGER ORDER
ADMINISTRATION AND EXPORT
ADMINISTRATOR
2722 S. Fairview St.
Santa Ana, CA 92704
Phone 714-641-6255
Fax 714-641-7676
<PAGE> 19
NEW OFFICE ADDRESS IN SAN DIEGO, CA, & HOME OFFICES IN CHARLOTTE, NC, MAINE, &
SALT LAKE CITY, UT, AND PERSONNEL CHANGES.
CONFIDENTIAL 7/6/95
ALPHA MICROSYSTEMS
SERVICES OPERATION
2722 S. FAIRVIEW STREET
P.O. BOX 25059
SANTA ANA, CA 92799
<TABLE>
<S> <C> <C> <C>
Customer Service: (800) 548-4848 Corporate Main Line: (800) 777-7406
</TABLE>
FIELD OFFICE LOCATIONS
ALEXANDRIA #656 (leased)
5220 Rue Verdun, Suite B
Alexandria, LA 71303
(318) 442-6682
Kent Arrington
ATLANTA #672 (leased)
Franklin Office Park, Suite 402
7001 Peachtree Industrial Blvd.
Norcross, GA 30092
(404) 447-0303
FAX (404) 447-0527
Ron Thomas
AUSTIN #651 (HOME)
10 Matador Trail
Wimberley, TX 78676
(512) 842-1103
Steve Head
BOSTON (North) #687 (HOME)
10 Ferry Avenue
Hudson, NH 03051
(603) 881-7238
Mark Turner
BOSTON (South) #687 (leased)
200 Revere St., Suite 1
Canton, MA 02021
(617) 828-0086 (FAX, also)
Dave Keenan - E.I.C.
BUFFALO #689 (HOME)
435 Schiller Street
Buffalo, NY 14212
(716) 895-9189
Doc Doiron
CANADA (Toronto) #691 (leased)
475 Cochrane Dr., Unit 8
Markham, Ontario L3R 9R5
(905) 470-9855
FAX (905) 470-2175
Bruno Macchiusi - Branch Mgr. (#602)
Malcolm Skinner, Bill Yong
CANADA (Montreal) #691 (HOME)
266 Carufel Charlemagne
Montreal, Quebec J5Z 1A3
(514) 585-1161
Guy Cote'
CANADA (Ottawa) #691 (HOME)
369 Ryan Street
Gatineau, Quebec J8P 3B5
(819) 643-3153
Wolfgang Strauss
CHARLOTTE #676 (HOME)
9101 Windknob Court
Huntersville, NC 28078
(704) 948-3986 (FAX, also)
Jim Jay
CHICAGO #661 (leased)
1438 Elmhurst Road
Elk Grove Village, IL 60007
(708) 593-6661, 62, 63, 68
FAX (708) 593-7853
Tim Bryce - E.I.C.
John Annarella, Darrell Ghere,
Bob Miller, Scott Walker
CLEVELAND #667 (leased)
1917 N. Ridge Rd., Suite B
Lorain, OH 44055
(216) 277-6780
FAX (216) 277-6980
Rich Guziewicz - E.I.C
Jim DeSantis
CONCORD #631 (leased)
2490 Arnold Industrial Way, Suite N
Concord, CA 94520
(510) 356-2401, 02
FAX (510) 356-2420
Arthur Tong, Reg. Specialist (#601)
Craig Chang, E.I.C.
Mark Ayres, Jay Bass, Joe Boylan,
Ben Fernandes, Dave Henderson,
Mike McIntyre, Bill Munn, Bob Snyder
<PAGE> 20
DALLAS #652 (leased)
1600 North I-35, Suite 108
Carrollton, TX 75006
(214) 323-1762, 1662, 1862
FAX (214) 466-3888
Michael Zappavigna - E.I.C.
Gene Childress - Reg. Specialist (#602)
Charley Farley
DENVER #611 (leased)
4760 Oakland, Suite 120
Denver, CO 80239
(303) 371-2455, 2516; FAX (303) 371-2455
Kenny Odom - E.I.C.
DETROIT #664 (leased)
Parkside Pavilion
18292 Middlebelt Rd.
Livonia, MI 48152
(810) 442-7050, 51
Bill Edwards
AMSO SALES: #440 (leased)
7938 Cooley Lake Rd., Suite 400W
Waterford, MI 48327
(810) 360-7394
FAX (810) 360-7399
Christine Stiltner, National Sales Mgr.
Bonnie Peterson
48588 Lakeview Circle, #238 (HOME)
Utica, MI 48317
(800) 365-1267, (810) 254-6223
FAX ( 810) 254-4857
Mary Jacobs, John Reeves
EUGENE #641 (HOME)
3412 Parish Street Send boxes or pkgs to:
Eugene, OR 97401 c/o Alpha HealthCare
(503) 484-6664 (FAX,also) 10 Coburg Road
Bill Tamulinas Eugene, OR 97401
FT. LAUDERDALE #673 (leased)
1287 E. Newport Ctr Dr., Suite 201
Deerfield Beach, FL 33442
(305) 427-6703
FAX (305) 427-9803
Steve Siegel, Branch Mgr. (#602)
Pete Perico, Bill Wright
FRESNO #634 (leased)
4539 N. Brawley, #103
Fresno, CA 93722
(209) 275-5999
Hoss Riahizadeh
HOUSTON #653 (leased)
13003 Southwest Fwy., Suite 190
Stafford, TX 77477
(713) 240-5005, 6, 7
FAX (713) 240-5005
Ray Parker Jr. - District Mgr. (#602)
Jimmy Britton, Eric Mortimer
JACKSONVILLE #674 (HOME)
127 Wimbledon Court
Port Orange, FL 32127
(904) 756-6489
FAX (904) 756-6489
Joe Teira - E.I.C.
KANSAS CITY #613 (leased)
15000 W. 106th St.
Lenexa, KS 66215
(913) 492-8720, 8711
FAX (913) 492-8711
Jim Moore - District Mgr. (#602)
Gary Anderson
LONG ISLAND #685 (leased)
415 Central Ave., Suite C
Bohemia, NY 11716
(516) 567-5640
John Arends, Jerry Erb
LOS ANGELES #628 (leased)
6910 E. Hayvenhurst Ave., Suite 106
Van Nuys, CA 91406
(818) 994-2772, 994-2873
FAX (818) 994-2898
Tom Dager - E.I.C.
Mark Dunlap, Manny Gil, Greg Kollasch,
Chris Quinn, Enrique Serrano
MAINE #687 (HOME)
11 Mountain View Drive
Minot, ME 04258
(207) 966-3418
John Ayres
MIAMI #673 (leased)
5209 N.W. 74th Ave., Suite 205
Miami, FL 33166
(305) 592-4089
Hal Pacheco
MINNEAPOLIS #614 (leased)
7362 University Ave. NE, Suite 202
Fridley, MN 55432-3102
(612) 574-2126 (FAX, also)
Jim Jackson
NASHVILLE #657 (HOME)
open
(800) 548-4848
NEW JERSEY #686 (leased)
(aka EDISON)
1090 King George's Post Rd., Suite 603
Edison, NJ 08837
(908) 225-5353, FAX (908) 225-5359
Mark Fletcher - District Mgr. (#602)
Mike Reta - Reg. Specialist (#602)
Ben Varricchio - E.I.C.
Sandy Leonhardt, Chris Pisano, Rick Rice
<PAGE> 21
NEW ORLEANS #655 (leased)
3001 Ridgelake Dr.
Metairie, LA 70002
(504) 831-8211
Mike Frey
NEW YORK #686 (HOME)
61 Clearview Circle
Hopewell Junction, NY 12533
(914) 896-7379
Jasbeer Rai
PHILADELPHIA #688 (leased)
137-F Gaither Drive
Mt. Laurel, NJ 08054
(609) 722-1010
FAX (609) 722-1171
Jay White - E.I.C.
John Geary
PHOENIX #626 (leased)
8146 N. 23rd Ave., Suite F
Phoenix, AZ 85021
(602) 864-1138
FAX (602) 864-8607
Julie Atkinson, Murray Rehder
PORTLAND #642 (leased)
8536 S.W. St. Helens Dr., Suite A
Wilsonville, OR 97070
(503) 682-0434
FAX (503) 682-4496
Jon Jagow
SACRAMENTO #633 (leased)
11275 Sunrise Gold Circle, Suite U
Rancho Cordova, CA 95742
(916) 852-1119
FAX (916) 852-1502
Gary Duncan, Jim Haddock
Steve Brown (AMSO SALES #635)
ST. L0UIS #665 (HOME)
3628 Brookville Drive
St. Louis, MO 63125
(314) 845-7655
Barry King
SALT LAKE CITY #646 (HOME)
1282 Bluebird, #20
West Valley, UT 84119
(801) 262-2931
Brian Latturner
SAN DIEGO #624 (leased)
9169 Chesapeake Drive
San Diego, CA 92123
(619) 277-6303
FAX (619) 277-2482
Jeff Dotson, Richard Schulenberg
SAN DIMAS #627 (leased)
555 W. Allen Ave., Suite 4
San Dimas, CA 91773
(909) 394-1691, 2
FAX (909) 394-1694
Steve Dolphin, Robert Garcia, Tony Gawel,
Bruce Hopkins, Jay Rentmeester
SANTA ANA #621 (leased)
Regional Office
3511 W. Sunflower Ave.
Santa Ana, CA 92704
(714) 957-8500 (800) 548-4848 - Dispatch
FAX (714) 641-7677
Franci Shrake - Field Service Admin. (#601)
Matt Sanna - District Mgr. (#601)
Alex Gonzalez - Reg. Specialist (#601)
Ron Narike - E.I.C.
Ken Brandt, Greg Gordon,
Monte Hale, Michael Novellino
SEATTLE #643 (leased)
#12 37th St., N.W.
Auburn, WA 98001
(206) 735-9569, 67; 735-1831, 41
FAX (206) 735-3896
Randy Dotson - District Manager (#601)
Shirley Weller, Admin. Asst. (#601)
Sothy Kem, Kirk Norman,
Jeff Rugon, Bruce Wartella
SPOKANE #644 (leased)
E. 9922 Montgomery Ave., Suite 2
Spokane, WA 99206
(509) 926-6705, 1396 OR 922-4061
FAX (509) 924-7120
Bob Donovan, Sean Frank,
Renee Hill, Dave Murphy
TAMPA #674 (HOME)
9507 Norchester Circle
Tampa, FL 33647
(813) 991-0187
FAX (813) 973-7082
Bob Cunningham
WILMINGTON, DE #684 (HOME)
9705 Matzon Road
Baltimore, MD 21220
(410) 687-4605
Bill Linton
<PAGE> 1
EXHIBIT 10.140
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
<TABLE>
<S> <C> <C>
WARRANT TO PURCHASE 50,000 ISSUE DATE: JULY ___, 1995
SHARES OF THE COMMON EXPIRATION DATE: JULY ___, 2000
STOCK OF ALPHA MICROSYSTEMS INITIAL EXERCISE PRICE: $______ PER SHARE
</TABLE>
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other
good and valuable consideration, SILICON VALLEY BANK ("Holder") is entitled to
purchase the number of fully paid and non-assessable shares of the class of
securities (the "Shares") of the corporation (the "Company") at the initial
exercise price per Share (the "Warrant Price") all as set forth above and as
adjusted pursuant to Article 2 of this Warrant, subject to the provisions and
upon the terms and conditions set forth in this Warrant.
ARTICLE 1. EXERCISE.
1.1 METHOD OF EXERCISE. Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company. Unless Holder is exercising the
conversion right set forth in Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Warrant Price for the Shares being purchased.
1.2 CONVERSION RIGHT. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the
fair market value of one Share. The fair market value of the Shares shall be
determined pursuant Section 1.4.
1.3 ALTERNATIVE STOCK APPRECIATION RIGHT. At Holder's option, the Company
shall pay Holder the fair market value of the Shares issuable upon conversion
of this Warrant pursuant to Section 1.2 in cash in lieu of such Shares.
1.4 FAIR MARKET VALUE. If the Shares are traded in a public market, the
fair market value of the Shares shall be the closing price of the Shares (or
the closing price of the Company's stock into which the Shares are convertible)
reported for the business day immediately before Holder delivers its Notice of
Exercise to the Company. If the Shares are not traded in a public market, the
Board of Directors of the Company shall determine fair market value in its
reasonable good faith judgment. The foregoing notwithstanding, if Holder
advises the Board of Directors in writing that Holder disagrees with such
determination, then the Company and Holder shall promptly agree upon a
reputable investment banking firm to undertake such valuation. If the
valuation of such investment banking firm is greater than that determined by
the Board of Directors, then all fees and expenses of such investment banking
firm shall be paid by the Company. In all other circumstances, such fees and
expenses shall be paid by Holder.
1.5 DELIVERY OF CERTIFICATE AND NEW WARRANT. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.6 REPLACEMENT OF WARRANTS. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of mutilation, or surrender and cancellation of this Warrant, the Company
at its expense shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor.
1.7 REPURCHASE ON SALE, MERGER OR CONSOLIDATION OF THE COMPANY.
1.7.1. "ACQUISITION". For the purpose of this Warrant, "Acquisition" means
any sale, license, or other disposition of all or substantially all of the
assets of the Company, or any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction.
1.7.2. ASSUMPTION OF WARRANT. If upon the closing of any Acquisition the
successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of
this Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
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<PAGE> 2
WARRANT TO PURCHASE STOCK
1.7.3. NONASSUMPTION. If upon the closing of any Acquisition the successor
entity does not assume the obligations of this Warrant and Holder has not
otherwise exercised this Warrant in full, then the unexercised portion of this
Warrant shall be deemed to have been automatically converted pursuant to
Section 1.2 and thereafter Holder shall participate in the acquisition on the
same terms as other holders of the same class of securities of the Company.
1.7.4. PURCHASE RIGHT. Notwithstanding the foregoing, at the election of
Holder, the Company shall purchase the unexercised portion of this Warrant for
cash upon the closing of any Acquisition for an amount equal to (a) the fair
market value of any consideration that would have been received by Holder in
consideration of the Shares had Holder exercised the unexercised portion of
this Warrant immediately before the record date for determining the
shareholders entitled to participate in the proceeds of the Acquisition, less
(b) the aggregate Warrant Price of the Shares, but in no event less than zero.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, then upon exercise of this Warrant, for each Share acquired,
Holder shall receive, without cost to Holder, the total number and kind of
securities to which Holder would have been entitled had Holder owned the Shares
of record as of the date the dividend or subdivision occurred.
2.2 RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other event. Such an
event shall include any automatic conversion of the outstanding or issuable
securities of the Company of the same class or series as the Shares to common
stock pursuant to the terms of the Company's Articles of Incorporation upon the
closing of a registered public offering of the Company's common stock. The
Company or its successor shall promptly issue to Holder a new Warrant for such
new securities or other property. The new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Section 2.2
shall similarly apply to successive reclassifications, exchanges,
substitutions, or other events.
2.3 ADJUSTMENTS FOR COMBINATIONS, ETC. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser
number of shares, the Warrant Price shall be proportionately increased.
2.4 ADJUSTMENTS FOR DILUTING ISSUANCES. The Warrant Price and the number of
Shares issuable upon exercise of this Warrant or, if the Shares are Preferred
Stock, the number of shares of common stock issuable upon conversion of the
Shares, shall be subject to adjustment, from time to time in the manner set
forth on Exhibit A in the event of Diluting Issuances (as defined on Exhibit
A).
2.5 NO IMPAIRMENT. The Company shall not, by amendment of its Articles of
Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed under this Warrant by the Company, but shall
at all times in good faith assist in carrying out of all the provisions of this
Article 2 and in taking all such action as may be necessary or appropriate to
protect Holder's rights under this Article against impairment. If the Company
takes any action affecting the Shares or its common stock other than as
described above that adversely affects Holder's rights under this Warrant, the
Warrant Price shall be adjusted downward and the number of Shares issuable upon
exercise of this Warrant shall be adjusted upward in such a manner that the
aggregate Warrant Price of this Warrant is unchanged.
2.6 FRACTIONAL SHARES. No fractional Shares shall be issuable upon exercise
or conversion of the Warrant and the number of Shares to be issued shall be
rounded down to the nearest whole Share. If a fractional share interest arises
upon any exercise or conversion of the Warrant, the Company shall eliminate
such fractional share interest by paying Holder amount computed by multiplying
the fractional interest by the fair market value of a full Share.
2.7 CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows:
(a) The initial Warrant Price referenced on the first page of this Warrant
is not greater than (i) the price per share at which the Shares were last
issued in an
-2-
<PAGE> 3
WARRANT TO PURCHASE STOCK
arms-length transaction in which at least $500,000 of the Shares were sold and
(ii) the fair market value of the Shares as of the date of this Warrant.
(b) All Shares which may be issued upon the exercise of the purchase right
represented by this Warrant, and all securities, if any, issuable upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 NOTICE OF CERTAIN EVENTS. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class or series or
other rights; (c) to effect any reclassification or recapitalization of common
stock; (d) to merge or consolidate with or into any other corporation, or sell,
lease, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up; or (e) offer holders of registration rights the
opportunity to participate in an underwritten public offering of the company's
securities for cash, then, in connection with each such event, the Company
shall give Holder (1) at least 20 days prior written notice of the date on
which a record will be taken for such dividend, distribution, or subscription
rights (and specifying the date on which the holders of common stock will be
entitled thereto) or for determining rights to vote, if any, in respect of the
matters referred to in (c) and (d) above; (2) in the case of the matters
referred to in (c) and (d) above at least 20 days prior written notice of the
date when the same will take place (and specifying the date on which the
holders of common stock will be entitled to exchange their common stock for
securities or other property deliverable upon the occurrence of such event);
and (3) in the case of the matter referred to in (e) above, the same notice as
is given to the holders of such registration rights.
3.3 INFORMATION RIGHTS. So long as the Holder holds this Warrant and/or any
of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of recognized standing and
(c) within forty-five (45) days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
3.4 REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED. The Company
agrees that the Shares or, if the Shares are convertible into common stock of
the Company, such common stock, shall be subject to the registration rights set
forth on Exhibit B, if attached.
ARTICLE 4. MISCELLANEOUS.
4.1 TERM: NOTICE OF EXPIRATION. This Warrant is exercisable, in whole or in
part, at any time and from time to time on or before the Expiration Date set
forth above. The Company shall give Holder written notice of Holder's right to
exercise this Warrant in the form attached as Appendix 2 not more than 90 days
and not less than 30 days before the Expiration Date. If the notice is not so
given, the Expiration Date shall automatically be extended until 30 days after
the date the Company delivers the notice to Holder.
4.2 LEGENDS. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 COMPLIANCE WITH SECURITIES LAWS ON TRANSFER. This Warrant and the
Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, if
reasonably requested by the Company). The Company shall not require Holder to
provide an opinion of counsel if the transfer is to an affiliate of Holder or
if there is no material question as to the availability of current information
as referenced in Rule 144(c), Holder represents that it has complied with Rule
144(d) and (e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of Holders
notice of proposed sale.
4.4 TRANSFER PROCEDURE. Subject to the provisions of Section 4.2, Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise
of this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) by giving the Company notice of the portion
of the Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the
Company for reissuance to the transferee(s) (and Holder if applicable). Unless
the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, the Company shall have the right to refuse to
transfer any portion of this Warrant to any person who directly competes with
the Company.
-3-
<PAGE> 4
WARRANT TO PURCHASE STOCK
4.5 NOTICES. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.
4.6 WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 ATTORNEYS FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
ALPHA MICROSYSTEMS
BY DOUGLAS J. TULLIO
----------------------------
CHAIRMAN OF THE BOARD,
PRESIDENT OR VICE PRESIDENT
BY JOHN F. GLADE
-----------------------------
SECRETARY OR ASS'T SECRETARY
-4-
<PAGE> 5
WARRANT TO PURCHASE STOCK
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ____________ shares of the
Common/Series ____ Preferred [strike one] Stock of __________ pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised with respect to _______ of the Shares covered by the
Warrant.
[Strike paragraph that does not apply.]
3. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
__________________________
(NAME)
__________________________
__________________________
(ADDRESS)
4. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
_____________________________________
(Signature)
_____________________________________
(Date)
APPENDIX 2
NOTICE THAT WARRANT IS ABOUT TO EXPIRE
_____________, __
(Name of Holder)
(Address of Holder)
Attn: Chief Financial Officer
Dear ____________:
This is to advise you that the Warrant issued to you described below will
expire on ________________, 19__.
Issuer:
Issue Date:
Class of Security Issuable:
Exercise Price per Share:
Number of Shares Issuable:
Procedure for Exercise:
Please contact [name of contact person at (phone number)] with any questions
you may have concerning exercise of the Warrant. This is your only notice of
pending expiration.
(Name of Issuer)
By_____________________________
Its____________________________
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<PAGE> 6
WARRANT TO PURCHASE STOCK
EXHIBIT A
ANTI-DILUTION PROVISIONS
In the event of the issuance (a "Diluting Issuance") by the Company, after the
Issue Date of the Warrant, of securities at a price per share less than the
higher of the then conversion price of the Company's Preferred Stock or the
Warrant Price, then the number of shares issuable upon exercise of the Warrant,
shall be adjusted as a result of Diluting Issuances in accordance with the
Holder's standard form of Anti-Dilution Agreement in effect on the Issue Date.
Under no circumstances shall the aggregate Warrant Price payable by the Holder
upon exercise of the Warrant increase as a result of any adjustment arising
from a Diluting Issuance.
EXHIBIT B
REGISTRATION RIGHTS
The Shares (if common stock), or the common stock issuable upon conversion of
the Shares, shall be deemed "registrable securities" or otherwise entitled to
"piggy back" registration rights in accordance with the terms of the following
agreement (the "Agreement") between the Company and its investor(s):
________________________________________________ [Identify Agreement by date,
title and parties. If no Agreement exists, indicate by "none".]
The Company agrees that no amendments will be made to the Agreement which
would have an adverse impact on Holder's registration rights thereunder without
the consent of Holder. By acceptance of the Warrant to which this Exhibit B is
attached, Holder shall be deemed to be a party to the Agreement.
If no Agreement exists, then the Company and the Holder shall enter into
Holder's standard form of Registration Rights Agreement as in effect on the
Issue Date of the Warrant.
-6-
<PAGE> 1
EXHIBIT 10.141
[LOGO] SILICON VALLEY BANK
REGISTRATION RIGHTS AGREEMENT
ISSUER: ALPHA MICROSYSTEMS
ADDRESS: 3511 WEST SUNFLOWER
SANTA ANA, CALIFORNIA 92704
DATE: JULY 10, 1995
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the above date by and
between SILICON VALLEY BANK ("Purchaser"), whose address is 3000 Lakeside
Drive, Santa Clara, California 95054-2895 and the above Company, whose
address is set forth above.
RECITALS
A. Concurrently with the execution of this Agreement, the Purchaser is
purchasing from the Company a Warrant to Purchase Stock (the "Warrant")
pursuant to which Purchaser has the right to acquire from the Company the
Shares (as defined in the Warrant).
B. By this Agreement, the Purchaser and the Company desire to set forth the
registration rights of the Shares all as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means (i) the Shares (if Common Stock)
or all shares of Common Stock of the Company issuable or issued upon conversion
of the Shares and (ii) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which
is issued as) a dividend or other distribution with respect to, or in exchange
for or in replacement of, any stock referred to in (i).
(c) The terms "Holder" or "Holders" means the Purchaser or qualifying
transferees under subsection 1.8 hereof who hold Registrable Securities.
(d) The term "SEC" means the Securities and Exchange Commission.
1.2 COMPANY REGISTRATION.
(a) Registration. If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the account
of any of its shareholders, other than a registration on Form S-1 or S-8
relating solely to employee stock option or purchase plans, or a registration
on Form S-4 relating solely to an SEC Rule 145 transaction, or a registration
on any other form (other than Form S-1, S-2, S-3 or S-18, or their successor
forms) or any successor to such forms, which does not include substantially the
same information as would be required to be included in a registration
statement covering the sale of Registrable Securities, the Company will:
(i) promptly give to each Holder written notice thereof (which shall include
a list of the jurisdictions in which the Company intends to attempt to qualify
such securities under the applicable blue sky or other state securities laws);
and
(ii) include in such registration (and compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 30 days after receipt of such written notice from the
Company, by any Holder or Holders, except as set forth in subsection 1.2(b)
below.
(b) Underwriting. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall
so advise
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<PAGE> 2
SILICON VALLEY BANK REGISTRATION RIGHTS AGREEMENT
the Holders as a part of the written notice given pursuant to subsection
1.2(a)(i). In such event the right of any Holder to registration pursuant to
this subsection 1.2 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other shareholders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.
1.3 EXPENSES OF REGISTRATION. All expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 1 including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, shall be borne
by the Company except the Company shall not be required to pay underwriters'
fees, discounts or commissions relating to Registrable Securities. All
expenses of any registered offering not otherwise borne by the Company shall be
borne pro rata among the Holders participating in the offering and the Company.
1.4 REGISTRATION PROCEDURES. In the case of each registration, qualification
or compliance effected by the Company pursuant to this Registration Rights
Agreement, the Company will keep each Holder participating therein advised in
writing as to the initiation of each registration, qualification and compliance
and as to the completion thereof. Except as otherwise provided in subsection
1.3, at its expense the Company will:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such registration
statement to become effective, and, upon the request of the Holders of a
majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to 120 days.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus, including
a preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders, provided
that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
with the managing underwriter of such offering. Each Holder participating in
such underwriting shall also enter into and perform its obligations under such
an agreement.
(f) Notify each Holder of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act or the happening of any event as a result of
which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
1.5 INDEMNIFICATION.
(a) The Company will indemnify each Holder of Registrable Securities and each
of its officers, directors and partners, and each person controlling such
Holder, with respect to which such registration, qualification or compliance
has been effected pursuant to this Rights Agreement, and each underwriter, if
any, and each person who controls any underwriter of the Registrable Securities
held by or issuable to such Holder, against all claims, losses, expenses,
damages and liabilities (or actions in respect thereto) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Securities Exchange
Act of 1934, as amended ("Exchange Act"), or any state securities law
applicable to the Company or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any such state law and relating to action
or inaction required of the Company in connection with any such registration,
qualification of compliance, and will reimburse each such Holder, each of its
officers, directors and partners, and each person controlling such Holder, each
such underwriter and each person who controls any such underwriter, within a
reasonable amount of time after incurred for any reasonable legal and any other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability or
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<PAGE> 3
SILICON VALLEY BANK REGISTRATION RIGHTS AGREEMENT
action; provided, however, that the indemnity agreement contained in this
subsection 1.5(a) shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld); and provided further, that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability arises
out of or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by such
Holder or underwriter specifically for use therein.
(b) Each Holder will, if Registrable Securities held by or issuable to such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company, such Holders, such directors,
officers, partners, persons or underwriters for any reasonable legal or any
other expenses incurred in connection with investigating, defending or settling
any such claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by an
instrument duly executed by such Holder specifically for use therein; provided,
however, that the indemnity agreement contained in this subsection 1.5(b) shall
not apply to amounts paid in settlement of any such claim, loss, damage,
liability or action if such settlement is effected without the consent of the
Holder (which consent shall not be unreasonably withheld); and provided
further, that the total amount for which any Holder shall be liable under this
subsection 1.5(b) shall not in any event exceed the aggregate proceeds received
by such Holder from the sale of Registrable Securities held by such Holder in
such registration.
(c) Each party entitled to indemnification under this subsection 1.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense; and provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure resulted
in prejudice to the Indemnifying Party; and provided further, that an
Indemnified Party (together with all other Indemnified Parties which may be
represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the fees and expenses to be paid by the Indemnifying
Party, if representation of such Indemnified Party by the counsel retained by
the Indemnifying Party would be inappropriate due to actual or potential
differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
1.6 INFORMATION BY HOLDER. Any Holder or Holders of Registrable Securities
included in any registration shall promptly furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.7 RULE 144 REPORTING. With a view to making available to Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees at all times to:
(a) make and keep public information available, as those terms are understood
and defined in SEC Rule 144, after 90 days after the effective date of the
first registration filed by the Company for an offering of its securities to
the general public;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to furnish to such
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
90 days after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of
the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as the Holder may reasonably request in complying with any rule
or regulation of the SEC allowing the Holder to sell any such securities
without registration.
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<PAGE> 4
SILICON VALLEY BANK REGISTRATION RIGHTS AGREEMENT
1.8 TRANSFER OF REGISTRATION RIGHTS. Holders' rights to cause the Company to
register their securities and keep information available, granted to them by
the Company under subsections 1.2 and 1.7 may be assigned to a transferee or
assignee of a Holder's Registrable Securities not sold to the public, provided,
that the Company is given written notice by such Holder at the time of or
within a reasonable time after said transfer, stating the name and address of
said transferee or assignee and identifying the securities with respect to
which such registration rights are being assigned. The Company may prohibit
the transfer of any Holders' rights under this subsection 1.8 to any proposed
transferee or assignee who the Company reasonably believes is a competitor of
the Company.
2. GENERAL.
2.1 WAIVERS AND AMENDMENTS. With the written consent of the record or
beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter
into a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities. Upon the effectuation of
each such waiver, consent, agreement of amendment or modification, the Company
shall promptly give written notice thereof to the record holders of the
Registrable Securities who have not previously consented thereto in writing.
This Agreement or any provision hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought, except
to the extent provided in this subsection 2.1.
2.2 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.
2.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
2.4 ENTIRE AGREEMENT. Except as set forth below, this Agreement and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
2.5 NOTICES. ETC. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first class mail, postage
prepaid, certified or registered mail, return receipt requested, addressed (a)
if to Holder, at such Holder's address as set forth in the heading to this
Agreement, or at such other address as such Holder shall have furnished to the
Company in writing, or (b) if to the Company, at the Company's address set
forth in the heading to this Agreement, or at such other address as the Company
shall have furnished to the Holder in writing.
2.6 SEVERABILITY. In case any provision of this Agreement shall be invalid,
illegal, or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement or any provision of the other Agreements
shall not in any way be affected or impaired thereby.
2.7 TITLES AND SUBTITLES. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
2.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
COMPANY:
ALPHA MICROSYSTEMS
BY DOUGLAS J. TULLIO
------------------------------
PRESIDENT OR VICE PRESIDENT
BY JOHN F. GLADE
------------------------------
SECRETARY OR ASS'T SECRETARY
PURCHASER:
SILICON VALLEY BANK
BY TERRY BESS
------------------------------
TITLE VICE PRESIDENT
---------------------------
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<PAGE> 1
EXHIBIT 10.142
[LOGO] SILICON VALLEY BANK
ANTIDILUTION AGREEMENT
ISSUER: ALPHA MICROSYSTEMS
ADDRESS: 3511 WEST SUNFLOWER
SANTA ANA, CALIFORNIA 92704
DATE: JULY 10, 1995
THIS AGREEMENT is entered into as of the above date by and between SILICON
VALLEY BANK ("Purchaser"), whose address is 3000 Lakeside Drive, Santa Clara,
California 95054-2895, and the above Company, whose address is set forth
above.
RECITALS
A. Concurrently with the execution of this Antidilution Agreement, the
Purchaser is purchasing from the Company a Warrant to Purchase Stock (the
"Warrant") pursuant to which Purchaser has the right to acquire from the
Company the Shares (as defined in the Warrant).
B. By this Antidilution Agreement, the Purchaser and the Company desire to
set forth the adjustment in the number of Shares issuable upon exercise of the
Warrant as a result of a Diluting Issuance (as defined in Exhibit A to the
Warrant).
C. Capitalized terms used herein shall have the same meaning as set forth in
the Warrant.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. DEFINITIONS. As used in this Antidilution Agreement, the following terms
have the following respective meanings:
(a) "Option" means any right, option, or warrant to subscribe for, purchase,
or otherwise acquire common stock or Convertible Securities.
(b) "Convertible Securities" means any evidences of indebtedness, shares of
stock, or other securities directly or indirectly convertible into or
exchangeable for common stock.
(c) "Issue" means to grant, issue, sell, assume, or fix a record date for
determining persons entitled to receive, any security (including Options),
whichever of the foregoing is the first to occur.
(d) "Additional Common Shares" means all common stock (including reissued
shares) issued (or deemed to be issued pursuant to Section 2) after the date of
the Warrant. Additional Common Shares does not include, however, any common
stock issued in a transaction described in Sections 2.1 and 2.2 of the Warrant;
any common stock Issued upon conversion of preferred stock outstanding on the
date of the Warrant; the Shares; or common stock Issued as incentive or in a
nonfinancing transaction to employees, officers, directors, or consultants to
the Company.
(e) The shares of common stock ultimately Issuable upon exercise of an Option
(including the shares of common stock ultimately Issuable upon conversion or
exercise of a Convertible Security Issuable pursuant to an Option) are deemed
to be Issued when the Option is Issued. The shares of common stock ultimately
Issuable upon conversion or exercise of a Convertible Security (other than a
Convertible Security Issued pursuant to an Option) shall be deemed Issued upon
Issuance of the Convertible Security.
2. DEEMED ISSUANCE OF ADDITIONAL COMMON SHARES. The shares of common stock
ultimately Issuable upon exercise of an Option (including the shares of common
stock ultimately Issuable upon conversion or exercise of a Convertible Security
Issuable pursuant to an Option) are deemed to be Issued when the Option is
Issued. The shares of common stock ultimately Issuable upon conversion or
exercise of a Convertible Security (other than a Convertible Security Issued
pursuant to an Option) shall be deemed Issued upon Issuance of the Convertible
Security. The maximum amount of common stock Issuable is determined without
regard to any future
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<PAGE> 2
SILICON VALLEY BANK ANTIDILUTION AGREEMENT
adjustments permitted under the instrument creating the Options or Convertible
Securities.
3. ADJUSTMENT OF WARRANT PRICE FOR DILUTING ISSUANCES.
3.1 RATCHET ADJUSTMENT. If the Company issues Additional Common Shares
after the date of the Warrant and the consideration per Additional Common Share
(determined pursuant to Section 9) is less than the Warrant Price in effect
immediately before such Issue, the Warrant Price shall be reduced to the lesser
of:
(a) the amount of such consideration per Additional Common Share; or
(b) if the Company's common stock is traded on a national securities exchange
or the National Association of Securities Dealers Automated Quotation System,
the last reported bid or sale price of the Company's common stock on the first
trading day following a public announcement of the Issuance.
3.2 ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the Warrant
Price, the number of Shares issuable upon exercise of the Warrant shall be
increased to equal the quotient obtained by dividing (a) the product resulting
from multiplying (i) the number of Shares issuable upon exercise of the Warrant
and (ii) the Warrant Price, in each case as in effect immediately before such
adjustment, by (b) the adjusted Warrant Price.
3.3 SECURITIES DEEMED OUTSTANDING. For the purpose of this Section 3, all
securities issuable upon exercise of any outstanding Convertible Securities or
Options, warrants, or other rights to acquire securities of the Company shall
be deemed to be outstanding.
4. NO ADJUSTMENT FOR ISSUANCES FOLLOWING DEEMED ISSUANCES. No adjustment to
the Warrant Price shall be made upon the exercise of Options or conversion of
Convertible Securities.
5. ADJUSTMENT FOLLOWING CHANGES IN TERMS OF OPTIONS OR CONVERTIBLE
SECURITIES. If the consideration payable to, or the amount of common stock
Issuable by, the Company increases or decreases, respectively, pursuant to the
terms of any outstanding Options or Convertible Securities, the Warrant Price
shall be recomputed to reflect such increase or decrease. The recomputation
shall be made as of the time of the Issuance of the Options or Convertible
Securities. Any changes in the Warrant Price that occurred after such Issuance
because other Additional Common Shares were Issued or deemed Issued shall also
be recomputed.
6. RECOMPUTATION UPON EXPIRATION OF OPTIONS OR CONVERTIBLE SECURITIES. The
Warrant Price computed upon the original Issue of any Options or Convertible
Securities, and any subsequent adjustments based thereon, shall be recomputed
when any Options or rights of conversion under Convertible Securities expire
without having been exercised. In the case of Convertible Securities or
Options for common stock, the Warrant Price shall be recomputed as if the only
Additional Common Shares Issued were the shares of common stock actually Issued
upon the exercise of such securities, if any, and as if the only consideration
received therefor was the consideration actually received upon the Issue,
exercise or conversion of the Options or Convertible Securities. In the case
of Options for Convertible Securities, the Warrant Price shall be recomputed as
if the only Convertible Securities Issued were the Convertible Securities
actually Issued upon the exercise thereof, if any, and as if the only
consideration received therefor was the consideration actually received by the
Company (determined pursuant to Section 9), if any, upon the Issue of the
Options for the Convertible Securities.
7. LIMIT ON READJUSTMENTS. No readjustment of the Warrant Price pursuant to
Sections 5 or 6 shall increase the Warrant Price more than the amount of any
decrease made in respect of the Issue of any Options or Convertible Securities.
8. 30 DAY OPTIONS. In the case of any Options that expire by their terms
not more than 30 days after the date of Issue thereof, no adjustment of the
Warrant Price shall be made until the expiration or exercise of all such
Options.
9. COMPUTATION OF CONSIDERATION. The consideration received by the Company
for the Issue of any Additional Common Shares shall be computed as follows:
(a) Cash shall be valued at the amount of cash received by the Corporation,
excluding amounts paid or payable for accrued interest or accrued dividends.
(b) Property. Property other than cash shall be computed at the fair market
value thereof at the time of the Issue as determined in good faith by the Board
of Directors of the Company.
(c) Mixed Consideration. The consideration for Additional common Shares
Issued together with other property of the Company for consideration that
covers both shall be determined in good faith by the Board of Directors.
(d) Options and Convertible Securities. The consideration per Additional
Common Share for Options and Convertible Securities shall be determined by
dividing:
(i) the total amount, if any, received or receivable by the Company for the
Issue of the Options or Convertible Securities, plus the minimum amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment
of such consideration) payable to the Company upon exercise of the Options or
conversion of the Convertible Securities, by
(ii) the maximum amount of common stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of
-2-
<PAGE> 3
SILICON VALLEY BANK ANTIDILUTION AGREEMENT
such number) ultimately Issuable upon the exercise of such Options or the
conversion of such Convertible Securities.
10. GENERAL.
10.1 GOVERNING LAW. This Antidilution Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.
10.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
10.3 ENTIRE AGREEMENT. Except as set forth below, this Antidilution Agreement
and the other documents delivered pursuant hereto constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
10.4 NOTICES. ETC. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first class mail, postage
prepaid, certified or registered mail, return receipt requested, addressed (a)
if to Purchaser at Purchaser's address as set forth in the heading to this
Agreement, or at such other address as Purchaser shall have furnished to the
Company in writing, or (b) if to the Company, at the Company's address set
forth in the heading to this Agreement, or at such other address as the Company
shall have furnished to the Purchaser in writing.
10.5 SEVERABILITY. In case any provision of this Antidilution Agreement shall
be invalid, illegal, or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Antidilution Agreement shall
not in any way be affected or impaired thereby.
10.6 TITLES AND SUBTITLES. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Antidilution Agreement.
10.7 COUNTERPARTS. This Antidilution Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
COMPANY:
ALPHA MICROSYSTEMS
BY DOUGLAS J. TULLIO
---------------------------------
PRESIDENT OR VICE PRESIDENT
BY JOHN F. GLADE
---------------------------------
SECRETARY OR ASS'T SECRETARY
PURCHASER:
SILICON VALLEY BANK
BY TERRY BESS
---------------------------------
TITLE VICE PRESIDENT
------------------------------
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<PAGE> 1
EXHIBIT 10.143
COLLATERAL ASSIGNMENT, PATENT MORTGAGE
AND SECURITY AGREEMENT
This Collateral Assignment, Patent Mortgage and Security Agreement is
made as of the 10th day of July 1995, by and between Alpha Microsystems
("Assignor"), and Silicon Valley Bank, a California banking corporation
("Assignee").
RECITALS
A. Assignee has agreed to lend to Assignor certain funds (the
"Loans"), pursuant to a Loan and Security Agreement of even date herewith (the
"Loan Agreement") and Assignor desires to borrow such funds from Assignee.
B. In order to induce Assignee to make the Loans, Assignor has
agreed to assign certain intangible property to Assignee for purposes of
securing the obligations of Assignor to Assignee.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Assignment, Patent Mortgage and Grant of Security Interest.
As collateral security for the prompt and complete payment and performance of
all of Assignor's present or future indebtedness, obligations and liabilities
to Assignee, Assignor hereby assigns, transfers, conveys and grants a security
interest and mortgage to Assignee, as security, but not as an ownership
interest, in and to Assignor's entire right, title and interest in, to and
under the following (all of which shall collectively be called the
"Collateral"):
(a) All of present and future United States registered
copyrights and copyright registrations, including, without limitation, the
registered copyrights listed in Exhibit A-1 to this Agreement (and including
all of the exclusive rights afforded a copyright registrant in the United
States under 17 U.S.C. Sec. 106 and any exclusive rights which may in the future
arise by act of Congress or otherwise) and all present and future applications
for copyright registrations (including applications for copyright registrations
of derivative works and compilations) (collectively, the "Registered
Copyrights"), and any and all royalties, payments, and other amounts payable to
Assignor in connection with the Registered Copyrights, together with all
renewals and extensions of the Registered Copyrights, the right to recover for
all past, present, and future infringements of the Registered Copyrights, and
all computer programs, computer databases, computer program flow diagrams,
source codes, object codes and all tangible property embodying or incorporating
the Registered Copyrights, and all other rights of every kind whatsoever
accruing thereunder or pertaining thereto.
(b) All present and future copyrights which are not
registered in the United States Copyright Office (the "Unregistered
Copyrights"), whether now owned or hereafter acquired, including without
limitation the Unregistered Copyrights listed in Exhibit A-2 to this Agreement,
and any and all royalties, payments, and other amounts payable to Assignor in
connection with the Unregistered Copyrights, together with all renewals and
extensions of the Unregistered Copyrights, the right to recover for all past,
present, and future infringements of the Unregistered Copyrights, and all
computer programs, computer databases, computer program flow diagrams, source
codes, object codes and all tangible property embodying or incorporating the
Unregistered Copyrights, and all other rights of every kind whatsoever accruing
thereunder or pertaining thereto. The Registered Copyrights and the
Unregistered Copyrights collectively are referred to herein as the
"Copyrights."
(c) All right, title and interest in and to any and all
present and future license agreements with respect to the Copyrights, including
without limitation the license agreements listed in Exhibit A-3 to this
Agreement (the "Licenses").
(d) All present and future accounts, accounts receivable
and other rights to payment arising from, in connection with or relating to the
Copyrights.
(e) 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;
(f) Any and all design rights which may be available to
Assignor now or hereafter existing, created, acquired or held;
-1-
<PAGE> 2
(g) 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 set forth on Exhibit B
attached hereto (collectively, the "Patents");
(h) 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 Assignor connected
with and symbolized by such trademarks, including without limitation those set
forth on Exhibit C attached hereto (collectively, the "Trademarks")
(i) 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 sue for and collect such damages for said use
or infringement of the intellectual property rights identified above;
(j) 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;
(k) All amendments, extensions, renewals and extensions
of any of the Copyrights, Trademarks or Patents; and
(l) 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.
THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE CONSTRUED
AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE ASSIGNOR'S
OBLIGATIONS TO ASSIGNEE UNDER THE LOAN AGREEMENT.
2. Authorization and Request. Assignor authorizes and requests
that the Register of Copyrights and the Commissioner of Patents and Trademarks
record this conditional assignment.
3. Covenants and Warranties. Assignor represents, warrants,
covenants and agrees as follows:
(a) Assignor is now the sole owner of the Collateral,
except for non-exclusive licenses granted by Assignor to its customers in the
ordinary course of business.
(b) Listed on Exhibits A-1 and A-2 are all * copyrights
owned by Assignor, in which Assignor has an interest, or which are used in
Assignor's business **.
* MATERIAL
** AND WHICH, IN ANY EVENT, RELATE TO OR RESULT IN 100% OF THE
ACCOUNTS THAT ASSIGNOR INCLUDES AND WILL INCLUDE IN THE COLLATERAL REPORTS THAT
ASSIGNOR PROVIDES TO ASSIGNEE FOR BORROWING PURPOSES UNDER THE LOAN AGREEMENT
(c) Each employee, agent and/or independent contractor
who has participated in the creation of the property constituting the
Collateral has either executed an assignment of his or her rights of authorship
to Assignor or is an employee of Assignor acting within the scope of his or her
employment and was such an employee at the time of said creation.
(d) All of Assignor's present and future software,
computer programs and other works of authorship subject to United States
copyright protection, the sale, licensing or other disposition of which results
in royalties receivable, license fees receivable, accounts receivable or other
sums owing to Assignor (collectively, "Receivables"), have been and shall be
registered with the United States Copyright Office prior to the date Assignor
requests or accepts any loan from Assignee with respect to such Receivables and
prior to the date Assignor includes any such Receivables in any accounts
receivable aging, borrowing base report or certificate or other similar report
provided to Assignee, and Assignor shall provide to Assignee copies of all such
registrations promptly upon the receipt of the same.
(e) Assignor shall undertake all reasonable measures to
cause its employees, agents and
-2-
<PAGE> 3
independent contractors to assign to Assignor all rights of authorship to any
copyrighted material in which Assignor has or may subsequently acquire any
right or interest.
(f) Performance of this Assignment does not conflict with
or result in a breach of any agreement to which Assignor is bound, except to
the extent that certain intellectual property agreements prohibit the
assignment of the rights thereunder to a third party without the licensor's or
other party's consent and this Assignment constitutes an assignment.
(g) During the term of this Agreement, Assignor will not
transfer or otherwise encumber any interest in the Collateral, except for
non-exclusive licenses granted by Assignor in the ordinary course of business
or as set forth in this Assignment;
(h) Each of the Patents is valid and enforceable, and no
part of the Collateral has been judged invalid or unenforceable, in whole or in
part, and no claim has been made that any part of the Collateral violates the
rights of any third party;
(i) Assignor shall promptly advise Assignee of any
material adverse change in the composition of the Collateral, including but not
limited to any subsequent ownership right of the Assignor in or to any
Trademark, Patent or Copyright not specified in this Assignment;
(j) Assignor shall (i) protect, defend and maintain the
validity and enforceability of the Trademarks, Patents and Copyrights, (ii) use
its best efforts to detect infringements of the Trademarks, Patents and
Copyrights and promptly advise Assignee in writing of material infringements
detected and (iii) not allow any Trademarks, Patents, or Copyrights to be
abandoned, forfeited or dedicated to the public without the written consent of
Assignee, which shall not be unreasonably withheld unless Assignor determines
that reasonable business practices suggest that abandonment is appropriate.
(k) Assignor shall promptly register the most recent
version of any of Assignor's Copyrights, if not so already registered, and
shall, from time to time, execute and file such other instruments, and take
such further actions as Assignee may reasonably request from time to time to
perfect or continue the perfection of Assignee's interest in the Collateral;
(l) This Assignment creates, and in the case of after
acquired Collateral, this Assignment will create at the time Assignor first has
rights in such after acquired Collateral, in favor of Assignee a valid and
perfected first priority security interest in the Collateral in the United
States securing the payment and performance of the obligations evidenced by the
Loan Agreement upon making the filings referred to in clause (m) below;
(m) To its knowledge, except for, and upon, the filing
with the United States Patent and Trademark office with respect to the Patents
and Trademarks and the Register of Copyrights with respect to the Copyrights
necessary to perfect the security interests and assignment created hereunder
and except as has been already made or obtained, no authorization, approval or
other action by, and no notice to or filing with, any U.S. governmental
authority or U.S. regulatory body is required either (i) for the grant by
Assignor of the security interest granted hereby or for the execution, delivery
or performance of this Assignment by Assignor in the U.S. or (ii) for the
perfection in the United States or the exercise by Assignee of its rights and
remedies thereunder;
(n) All information heretofore, herein or hereafter
supplied to Assignee by or on behalf of Assignor with respect to the Collateral
is accurate and complete in all material respects.
(o) Assignor shall not enter into any agreement that
would materially impair or conflict with Assignor's obligations hereunder
without Assignee's prior written consent, which consent shall not be
unreasonably withheld. Assignor shall not permit the inclusion in any material
contract to which it becomes a party of any provisions that could or might in
any way prevent the creation of a security interest in Assignor's rights and
interest in any property included within the definition of the Collateral
acquired under such contracts, except that certain contracts may contain
anti-assignment provisions that could in effect prohibit the creation of a
security interest in such contracts.
(p) Upon any executive officer of Assignor obtaining
actual knowledge thereof, Assignor will promptly notify Assignee in writing of
any event that materially adversely affects the value of any
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<PAGE> 4
material Collateral, the ability of Assignor to dispose of any material
Collateral or the rights and remedies of Assignee in relation thereto,
including the levy of any legal process against any of the Collateral.
4. Assignee's Rights. Assignee shall have the right, but not the
obligation, to take, at Assignor's sole expense, any actions that Assignor is
required under this Assignment to take but which Assignor fails to take, after
fifteen (15) days' notice to Assignor. Assignor shall reimburse and indemnify
Assignee for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this section 4.
5. Inspection Rights. Assignor hereby grants to Assignee and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Assignor, and any of Assignor's
plants and facilities that manufacture, install or store products (or that have
done so during the prior six-month period) that are sold utilizing any of the
Collateral, and to inspect the products and quality control records relating
thereto upon reasonable written notice to Assignor and as often as may be
reasonably requested, but not more than one (1) in every six (6) months;
provided, however, nothing herein shall entitle Assignee access to Assignor's
trade secrets and other proprietary information.
6. Further Assurances; Attorney in Fact.
(a) Upon an Event of Default, on a continuing basis
thereafter, Assignor will, subject to any prior licenses, encumbrances and
restrictions and prospective licenses, make, execute, acknowledge and deliver,
and file and record in the proper filing and recording places in the United
States, all such instruments, including, appropriate financing and continuation
statements and collateral agreements and filings with the United States Patent
and Trademarks Office and the Register of Copyrights, and take all such action
as may reasonably be deemed necessary or advisable, or as requested by
Assignee, to perfect Assignee's security interest in all Copyrights, Patents
and Trademarks and otherwise to carry out the intent and purposes of this
Collateral Assignment, or for assuring and confirming to Assignee the grant or
perfection of a security interest in all Collateral.
(b) Upon an Event of Default, Assignor hereby irrevocably
appoints Assignee as Assignor's attorney-in-fact, with full authority in the
place and stead of Assignor and in the name of Assignor, Assignee or otherwise,
from time to time in Assignee's discretion, upon Assignor's failure or
inability to do so, to take any action and to execute any instrument which
Assignee may deem necessary or advisable to accomplish the purposes of this
Collateral Assignment, including:
(i) To modify, in its sole discretion, this
Collateral Assignment without first obtaining Assignor's approval of or
signature to such modification by amending Exhibit A-1, Exhibit A-2, Exhibit
A-3, Exhibit B and Exhibit C, thereof, as appropriate, to include reference to
any right, title or interest in any Copyrights, Patents or Trademarks acquired
by Assignor after the execution hereof or to delete any reference to any right,
title or interest in any Copyrights, Patents or Trademarks in which Assignor no
longer has or claims any right, title or interest; and
(ii) To file, in its sole discretion, one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of Assignor where permitted by law.
7. Events of Default. The occurrence of any of the following
shall constitute an Event of Default under the Assignment:
(a) An Event of Default occurs under the Loan
Agreement; or
(b) Assignor breaches any warranty or agreement made by
Assignor in this Assignment.
8. Remedies. Upon the occurrence and continuance of an Event of
Default, Assignee shall have the right to exercise all the remedies of a
secured party under the California Uniform Commercial Code, including without
limitation the right to require Assignor to assemble the Collateral and any
tangible property in which Assignee has a security interest and to make it
available to Assignee at a place designated by Assignee. Assignee shall have a
nonexclusive, royalty free license to use the Copyrights, Patents and
Trademarks to the extent reasonably necessary to permit Assignee to exercise
its rights and remedies upon the occurrence of an Event of Default. Assignor
will pay any expenses (including reasonable attorney's fees)
-4-
<PAGE> 5
incurred by Assignee in connection with the exercise of any of Assignee's
rights hereunder, including without limitation any expense incurred in
disposing of the Collateral. All of Assignee's rights and remedies with
respect to the Collateral shall be cumulative.
9. Indemnity. Assignor agrees to defend, indemnify and hold
harmless Assignee and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Agreement, and
(b) all losses or expenses in any way suffered, incurred, or paid by Assignee
as a result of or in any way arising out of, following or consequential to
transactions between Assignee and Assignor, whether under this Assignment or
otherwise (including without limitation, reasonable attorneys fees and
reasonable expenses), except for losses arising form or out of Assignee's gross
negligence or willful misconduct.
10. Release. At such time as Assignor shall completely satisfy
all of the obligations secured hereunder, Assignee shall execute and deliver to
Assignor all assignments and other instruments as may be reasonably necessary
or proper to terminate Assignee's security interest in the Collateral, subject
to any disposition of the Collateral which may have been made by Assignee
pursuant to this Agreement. For the purpose of this Agreement, the obligations
secured hereunder shall be deemed to continue if Assignor enters into any
bankruptcy or similar proceeding at a time when any amount paid to Assignee
could be ordered to be repaid as a preference or pursuant to a similar theory,
and shall continue until it is finally determined that no such repayment can be
ordered.
11. No Waiver. No course of dealing between Assignor and
Assignee, nor any failure to exercise nor any delay in exercising, on the part
of Assignee, any right, power, or privilege under this Agreement or under the
Loan Agreement or any other agreement, shall operate as a waiver. No single or
partial exercise of any right, power, or privilege under this Agreement or
under the Loan Agreement or any other agreement by Assignee shall preclude any
other or further exercise of such right, power, or privilege or the exercise of
any other right, power, or privilege by Assignee.
12. Rights Are Cumulative. All of Assignee's rights and remedies
with respect to the Collateral whether established by this Agreement, the Loan
Agreement, or any other documents or agreements, or by law shall be cumulative
and may be exercised concurrently or in any order.
13. Course of Dealing. No course of dealing, nor any failure to
exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
14. Attorneys' Fees. If any action relating to this Assignment is
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys fees, costs and
disbursements.
15. Amendments. This Assignment may be amended only by a written
instrument signed by both parties hereto. To the extent that any provision of
this Agreement conflicts with any provision of the Loan Agreement, the
provision giving Assignee greater rights or remedies shall govern, it being
understood that the purpose of this Agreement is to add to, and not detract
from, the rights granted to Assignee under the Loan Agreement. This Agreement,
the Loan Agreement, and the documents relating thereto comprise the entire
agreement of the parties with respect to the matters addressed in this
Agreement.
16. Severability. The provisions of this Agreement are severable.
If any provision of this Agreement is held invalid or unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such provision or part thereof in any other
jurisdiction, or any other provision of this Agreement in any jurisdiction.
17. Counterparts. This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
18. California Law and Jurisdiction. This Assignment shall be
governed by the laws of the State of California, without regard for choice of
law provisions. Assignor and Assignee consent to the nonexclusive jurisdiction
of any state or federal court located in Orange County, California.
-5-
<PAGE> 6
19. Confidentiality. In handling any confidential information,
Assignee shall exercise the same degree of care that it exercises with respect
to its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received
pursuant to this Assignment except that the disclosure of this information may
be made (i) to the affiliates of the Assignee, (ii) to prospective transferee
or purchasers of an interest in the obligations secured hereby, provided that
they have entered into a comparable confidentiality agreement in favor of
Assignor and have delivered a copy to Assignor, (iii) as required by law,
regulation, rule or order, subpoena judicial order or similar order and (iv) as
may be required in connection with the examination, audit or similar
investigation of Assignee.
20. WAIVER OF RIGHT TO JURY TRIAL. ASSIGNEE AND ASSIGNOR EACH
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO: (I) THIS AGREEMENT; OR (II) ANY
OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN ASSIGNEE AND ASSIGNOR;
OR (III) ANY CONDUCT, ACTS OR OMISSIONS OF ASSIGNEE OR ASSIGNOR OR ANY OF THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS
AFFILIATED WITH ASSIGNEE OR ASSIGNOR; IN EACH OF THE FOREGOING CASES, WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment on the day
and year first above written.
ADDRESS OF ASSIGNOR: ASSIGNOR:
2722 South Fairview Street ALPHA MICROSYSTEMS
Santa Ana, California 92704
By: DOUGLAS J. TULLIO
------------------------
Name: DOUGLAS J. TULLIO
----------------------
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<PAGE> 7
STATE OF CALIFORNIA )
) ss.
COUNTY OF ________________ )
On _____________________, 1995, before me, __________________________
_________________________________________, Notary Public, personally appeared
_______________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
_______________________________
(Seal)
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<PAGE> 8
Exhibit "A-1" attached to that certain Collateral Assignment, Patent Mortgage
and Security Agreement
EXHIBIT "A-1"
REGISTERED COPYRIGHTS
<TABLE>
<S> <C> <C>
REG. NO. REG. DATE COPYRIGHT
- -------- --------- ---------
</TABLE>
See listing on Exhibit A-1 Continuation, attached hereto and made a part
hereof.
-8-
<PAGE> 9
EXHIBIT A-1 CONTINUATION
COPYRIGHT LISTS
<TABLE>
<CAPTION>
COPYRIGHTS APPLIED FOR REGISTRATION DATE NUMBER
- ---------------------- ----------------- ------
<S> <C> <C>
16 PORT AM113 AUTOGEN 1.0 (B06) 09/02/88 346 916
8 PORT AM113 AUTOGEN 1.0 (B04) 09/02/88 346 920
16 PORT AM113 AUTOGEN 1.0 (B04) 09/02/88 346 919
4 PORT AM1 13 AUTOGEN 1.0 (B04) 09/02/88 346 889
32 PORT AM113 AUTOGEN 1.0 (B04) 09/02/88 346 918
32 Port AM113 Autogen 1.0 (B06) 09/02/88 346 917
ALPHAMATE 2.0(A00) 09/02/88 346 890
ALPHAMATE 1.0(A00) 09/02/88 346 914
UNLIMITED PORT AM-113 AUTOGEN 1.0 (B04) 09/02/88 346 915
UNLIMITED PORT AM-113 AUTOGEN 1.0 (B06) 09/02/88 346 913
Hdw Supp 1.6 (for AMOS "D")(D00) 11/15/88 351 885
Hdw Supp 2.2 (for AMOS 2.0)(D00) 11/15/88 351 893
AlphaNET 2.0(A00) 11/15/88 351 577
AlphaCALC 1.2A(A00) 11/15/88 351 888
AlphaCOBOL 2.0(A00) 11/15/88 351 545
Amigos 1.0A(B00) 11/15/88 351 918
AM-72/AM62G Terminal Support 1.0A(B00) 11/15/88 351 940
AMOS/32 2.0A(C01) 02/06/89 375 500
AlphaC 1.0B (A00)
AMOS/L 2.0A (C01) 02/06/89 375 498
SMC BASIC 1.0(A00) 11/12/86 260-172
SMC BASIC 1.0A(A01) 11/12/86 260-174
ALPHACALC 1.2(C01) 03/30/87 276-619
ALPHACALC 1.0(A01) 05/26/87 283 136
ALPHACALC 1.1(B00) 05/26/87 283 135
ALPHACALC 1.1-3(B01) 05/26/87 283 137
ALPHACOBOL 1.2A(A00) 11/12/86 260 173
ALPHACOBOL 1.2A(B00) 11/12/86 261 955
Videotrax German 2.1 (A00) 09/28/87 299 430
Videotrax Spanish 2.1 (A00) 09/28/87 299 431
Videotrax French 2.1 (A00) 09/28/87 299 432
Videotrax 3.1 (A00) 09/28/87 299 427
Videotrax 3.06 (A00) 09/28/87 299 424
Videotrax 2.2 (A00) 09/28/87 299 428
Alpha RJE/L 2.0 (B01) 03/30/87 276 620
Alpha RJE/L JES III 03/30/87 276 621
Alpha RJE/L 1.0 (A00) 03/30/87 276 626
AM-515 1.0(A00) 09/28/87 299 426
AM-515 Phase II 1.0(A01) 09/28/87 299 429
</TABLE>
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<PAGE> 10
<TABLE>
<S> <C> <C>
AM 350 PHASE I UPDATE 1.0 (A00) 11/03/87 305 356
AM 350 PHASE II 1.1 (A00) 11/03/87 305 357
AM 350 PHASE II 1.1 (A01) 11/03/87 305 358
ALPHAWRITE 1.1A-A (B01) 03/30/87 276 625
ALPHAWRITE 1.0 (A00) 03/30/87 276 624
ALPHAWRITE 1.0A(A01) 03/30/87 276 623
ALPHAWRITE 1.1 (B00) 03/30/87 276 622
ALPHAWRITE 1.2 (C00) 11/17/86 275 799
UNIX PORTING TOOLS 1.0 07/18/86 268-178
ALPHA C 1.0 07/18/86 268-179
AM-640 1.0(A00) 10/02/87 307 324
AMOS/L 2.0 (B03) 06/09/88 333-277
AMOS/L 1.3C (A00) 09/28/87 299 433
06/09/88 333 278
AMOS/L 1.3D (A00) 06/27/88 331 385
AMOS/L 1.0A(C00) 10/02/87 307 325
AMOS/L 1.0B (D00) 10/02/87 307 323
AMOS/L 1.0(A01) 10/02/87 307 322
AMOS/L VERSION 1.3 11/10/86 268-177
AMOS/L VERSION 1.2 10/10/85 218 563
AMOS/L VERSION 1.1 10/10/85 218 562
AMOS VERSION 1.0 10/10/85 227 303
AMOS/L VERSION 1.3B(A02) 12/23/86 266 880
AMOS/L VERSION 1.1 A 12/09/83 403 376
AMOS/32 1.0A (A00) 06/09/88 342 755
AMOS/32 2.0 (B03) 06/09/88 342 768
AMOS/32 1.0D(A00) 06/27/88 331-384
AMOS/32 1.0B(B06) 08/18/88 340-147
AMOS/32 1.01(A00) 09/28/87 299 423
AlphaMAIL 1.0A(A00) 06/27/88 331 386
AlphaMAIL 1.0A(B00) 06/27/88 331 387
AlphaMAIL 1.0 (A00) 11/12/86 260-168
Hardware Support Software 2.0 (B00) 06/09/88 333-276
Hardware Support Software 1.2 (C00) 06/27/88 333-120
Hardware Support Software 1.1 (B06) 06/27/88 333-121
4 PORT AM113 AUTOGEN 1.0 (B06) 08/18/88 341-985
AMIGOS 1.0 (A01) 08/18/88 340-145
LASER PRINTER SUPPORT 1.0(A00) 08/18/88 340-146
AMOS 32 1.0B(B06) 08/18/88 340-147
SYSXER 1.0(A00) 03/18/88 340-148
Hdw Supp 1.5 (for 1.3/D1.0D)(A00) 09/09/88 346-086
AlphaWRITE 1.2A (A00) 09/09/88 346-087
AM-324 VME LPR Support 09/09/88 346-084
4 Port AM-113 Autogen 1.0(B06) 09/09/88 346-083
8 Port AM-113 Autogen 1.0(B06) 09/09/88 346-085
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C> <C>
16 PORT AM-113 AUTOGEN 1.0 02/13/90 410-288
8 PORT AM-113 AUTOGEN 1.0 02/13/90 410-289
ALPHAMATE/AMOS 2.0 02/13/90 410-287
ALPHAMATE 2.0 PC SUPPORT 09/20/89 386-541
ALPHAMATE 3.0 PC SUPPORT 09/20/89 386-542
ALPHAMATE/DOS 2.0 09/20/89 386-538
ALPHANET 1.0 02/13/90 410-286
32 PORT AM-113 AUTOGEN 1.0 09/20/89 386-540
ELS/MS-DOS UPDATE 2.0 09/20/89 386-539
ALPHAMATE 3.0 AMOS SUPPORT 09/20/89 386-537
Hdw Sup 3.0 12/20/89 397-590
(for Amos 2.1)(A00)
AlphaCOBOL 1.2B(A01) 12/20/89 397-533
Amos/L 2.1(A00) 12/20/89 409-166
Amos/32 2.1(A00) 12/20/89 397-591
Amos 645 Support 1.0(A00) 12/20/89 398-319
Hdw Sup 2.5 (For AMOS 2.0A)(A00) 12/20/89 398-318
AlphaPASCAL 1.0(A01) 12/20/89 398-317
AlphaMATE/MS DOS 1.0(B00) 12/20/89 398-316
Hdw Sup 2.6 (For AMOS 2.0A)(B00) 12/20/89 398-315
Hdw Sup 1.7 (For AMOS "D")(F00) 12/20/89 398-314
ELS/MS-DOS Supp 1.0A(A02) 12/20/89 398-313
ELS/MS-DOS Update 1.0A(A00) 12/20/89 398-312
Unlimited Port AM-113 Autogen 1.0(B03) 12/20/89 398-311
4 Port AM-113 Autogen 1.0(B03)
AlphaNet 2.1 (B00) 04/18/90 412-292
Ver-A-Tel 1.0 EL TIS (A00) 04/18/90 423-849
Ver-A-Tel 1.0 TIS (A00) 04/18/90 423-853
Ver-A-Tel 1.0 EL RACS (A00) 04/18/90 423-850
Ver-A-Tel 1.0 RACS (A00) 04/18/90 423-851
Ver-A-Tel 1.0 Prompts(A00) 04/18/90 423-852
Videotrax 4.0 (A00) 04/18/90 412-291
Monver 1.0 (A00) 04/18/90 423-848
Multi 1.0 (A01) 04/18/90 412-290
Multi 2.0 (A00) 04/18/90 412-289
Hdw Sup 1.8 (For AMOS "D") (G00) 04/18/90 412-285
Hdw Sup 1.9 (For AMOS "D") (J00) 04/18/90 412-288
Hdw Sup 2.7 (For AMOS 2.0A) (C00) 04/18/90 412-287
Hdw Sup 2.8 (For AMOS 2.0A) (D00) 04/18/90 412-286
Hdw Sup Software 1.0(A00) 09/27/90 434-955
Hdw Sup Software 1.0(A03) 09/27/90 434-956
Hdw Sup Software 1.1(A05) 09/27/90 434-954
Hdw Sup 1.6 PRI (For AMOS "D")(E00) 09/27/90 434-953
Hdw Sup 1.8 PR3 (For AMOS "D")(H00) 09/27/90 434-952
Hdw Sup 2.0 (A04) 09/27/90 434-951
Hdw Sup 3.1 (For AMOS 2.1)(B00) 09/27/90 434-950
Hdw Sup 3.2 (For AMOS 2.1)(D00) 09/27/90 434-949
Ver-A-Tel 1.0A RACS(B00) 09/27/90 434-948
Ver-A-Tel VVS 2.0(B00)
</TABLE>
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<PAGE> 12
<TABLE>
<S> <C> <C>
Ver-A-Tel 1.0A El Racs(B00) 09/27/90 434-947
Ver-A-Tel 1.0A El Tis(B00) 09/27/90 434-945
Ver-A-Tel 1.0A Tis(B00) 09/27/90 434-946
Ver-A-Tel VVS 2.0(B00) 09/27/90 434-938
AMOS/L 1.3E(A00) 09/27/90 434-939
AMOS/LC 1.3E(A00) 09/27/90 434-957
AMOS/LC 1.3F(B00) 09/27/90 434-959
AMOS/LC 2.1A(A00) 09/27/90 434-958
AM-645 Support 1.0A(B00)
Rexon Disk Diagnostics 1.32(A00) 09/27/90 434-937
Rexon Disk Diagnostics 1.33(B00) 09/27/90 434-942
Rexon Disk Diagnostics 1.4 (C00) 09/27/90 434-943
Rexon Disk Diagnostics 1.5(D00) 09/27/90 434-941
E3270 3.0(C00) 09/27/90 434-940
AlphaHealthCare FOCUS M 07/06/93 545-934
AlphaHealthCare FOCUS 5.2 7/20/93 546-052
RJE Plus 3.0(A00) 09/27/90 434-944
AMOS/L 2.1B 09/27/94 656-550
8 PORT AM-113 AUTOGEN 1.2 09/27/94 648-554
4 PORT AM-113 AUTOGEN 1.2 09/27/94 648-940
AMPC 2.0 AUTOGEN 2.2A PR 5/92
8 PORT AMPC 2.0 AGEN 1.4
AMOS 2.2A PR5/92 09/27/94 648-939
4 PORT AM-113 AGEN 1.4 09/27/94 648-941
AMPC 2.0 AGEN 2.2B PR 11/92 09/27/94 656-556
AMOS/L 1.4 09/27/94 656-543
AMOS/32 1.4 09/27/94 652-520
AMOS/LC 1.4 09/27/94 652-521
AMOS/32 1.4A 09/27/94 652-522
AMOS/L 1.4A 09/27/94 652-523
AMOS/LC 1.4A 09/27/94 652-517
4 PORT AMPC 2.0 AGEN 1.4 09/27/94 653-557
AMOS 2.2B PR8/92 09/27/94 653-555
AMOS/LC 2.1B 09/27/94 656-553
ALPHARJE 3.0 09/27/94 656-551
8 PORT AM-113 AGEN 1.4
ALPHAOFFICE 1.0 12/12/94 664-315
ALPHACALC 2.0 12/12/94 663-955
ALPHANET 2.3 12/12/94 663-616
ALPHAC 1.1 12/12/94 663-954
AMIGOS 1.1 12/12/94 664-540
ESP 2.1 PR5/93
ALPHANET 2.2A 12/12/94 663-617
ALPHANET 2.2 12/12/94 663-618
SYSXER/DIAGNOSTICS 2.4 12/12/94 663-957
SYSXER/DIAGNOSTICS 3.0 (D00) 12/12/94 663-959
SYSXER/DIAGNOSTICS 2.5 12/12/94 663-956
ALPHAWRITE 2.1A 12/12/94 664-759
ALPHAWRITE 2.1 12/12/94 664-758
ALPHAWRITE 2.1B 12/12/94 664-760
ALPHAWRITE 2.0 12/12/94 664-757
ALPHAWRITE 2.1C 12/12/94 664-539
</TABLE>
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<PAGE> 13
<TABLE>
<S> <C> <C>
MUTI 2.1 12/12/94 664-542
ALPHATCP 1.0 12/12/94 664-314
ALPHATCP 1.1 12/12/94 664-756
SYSXER/DIAGNOSTICS 3.0 (C00) 12/12/94 663-958
PANDA 1.0(BP4)
Voice Oper. Sys 1.0 (A00) 04/04/94 629-496
Hdw. Sup 1.11 (M00) 04/04/94 629-022
Hdw. Sup 1.12(P00) 04/04/94 626-024
Hdw. Sup 3.3 (F00) 04/04/94 629-023
Hdw. Sup 1.10 (K00) 04/04/94 629-025
AMOS/32 1.0B (B06) 06/27/88 341-664
AMOS/32 1.0 (A00) 09/28/87 299-422
AMOS/L Version 1.0 10/10/85 227-304
AMOS/L Version 1.1 A (68) 10/15/85 222-223
AlphaC 1.0B(A00) 02/06/89 375-499
</TABLE>
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<PAGE> 14
Exhibit "A-2" attached to that certain Collateral Assignment, Patent Mortgage
and Security Agreement
EXHIBIT "A-2"
UNREGISTERED COPYRIGHTS
DESCRIPTION OF COPYRIGHTS
-14-
<PAGE> 15
Exhibit "A-3" attached to that certain Collateral Assignment, Patent Mortgage
and Security Agreement
EXHIBIT "A-3"
DESCRIPTION OF LICENSE AGREEMENTS
-15-
<PAGE> 16
Exhibit "B" attached to that certain Collateral Assignment, Patent Mortgage and
Security Agreement
EXHIBIT "B"
PATENTS
<TABLE>
<S> <C> <C> <C>
DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
- ---------- ------------------ ----------- ------
</TABLE>
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<PAGE> 17
Exhibit "C" attached to that certain Collateral Assignment, Patent Mortgage and
Security Agreement
EXHIBIT "C"
TRADEMARKS
<TABLE>
<S> <C> <C> <C>
MARK COUNTRY SERIAL NO. STATUS
- ---- ------- ---------- ------
</TABLE>
-17-
<PAGE> 1
EXHIBIT 10.144
[LOGO] SILICON VALLEY BANK
SECURITY AGREEMENT
OBLIGOR: ALPHAHEALTHCARE, INC.
ADDRESS: 10 COBURG ROAD
EUGENE, OREGON 97401
DATE: JULY 10, 1995
THIS SECURITY AGREEMENT is entered into on the above date between SILICON
VALLEY BANK ("Silicon"), whose address is 3000 Lakeside Drive, Santa Clara,
California 95054-2895 and the person named above (the "Obligor"), whose chief
executive office is located at the above address ("Obligor's Address").
1. GRANT OF SECURITY INTEREST.
1.1 OBLIGATIONS. The term "Obligations" as used in this Agreement means
the following: the obligation to pay and perform when due all present and
future indebtedness, liabilities, obligations, guarantees, covenants,
agreements, warranties and representations of the Obligor to Silicon, whether
joint or several, monetary or non-monetary, and whether created pursuant to
this Agreement or any other present or future agreement or otherwise, including
without limitation the obligations of the Obligor under the Obligor's Guarantee
in favor of Silicon of all present and future indebtedness, liabilities and
obligations of ALPHA MICROSYSTEMS to Silicon.
1.2 COLLATERAL. As security for all Obligations, the Obligor hereby
grants Silicon a continuing security interest in all of the Obligor's interest
in the types of property described below, whether now owned or hereafter
acquired, and wherever located (collectively, the "Collateral"): (a) All
accounts, contract rights, chattel paper, letters of credit, documents,
securities, money, and instruments, and all other obligations now or in the
future owing to the Obligor; (b) All inventory, goods, merchandise, materials,
raw materials, work in process, finished goods, farm products, advertising,
packaging and shipping materials, supplies, and all other tangible personal
property which is held for sale or lease or furnished under contracts of
service or consumed in the Obligor's business, and all warehouse receipts and
other documents; and (c) All equipment, including without limitation all
machinery, fixtures, trade fixtures, vehicles, furnishings, furniture,
materials, tools, machine tools, office equipment, computers and peripheral
devices, appliances, apparatus, parts, dies, and jigs; (d) All general
intangibles including, but not limited to, deposit accounts, goodwill, names,
trade names, trademarks and the goodwill of the business symbolized thereby,
trade secrets, drawings, blueprints, customer lists, patents, patent
applications, copyrights, security deposits, loan commitment fees, federal,
state and local tax refunds and claims, all rights in all litigation presently
or hereafter pending for any cause or claim (whether in contract, tort or
otherwise), and all judgments now or hereafter arising therefrom, all claims of
Obligor against Silicon, all rights to purchase or sell real or personal
property, all rights as a licensor or licensee of any kind, all royalties,
licenses, processes, telephone numbers, proprietary information, purchase
orders, and all insurance policies and claims (including without limitation
credit, liability, property and other insurance), and all other rights,
privileges and franchises of every kind; (e) All books and records, whether
stored on computers or otherwise maintained; and (f) All substitutions,
additions and accessions to any of the foregoing, and all products, proceeds
and insurance proceeds of the foregoing, and all guaranties of and security for
the foregoing; and all books and records relating to any of the foregoing.
Silicon's security interest in any present or future technology (including
patents, trade secrets, and other technology) shall be subject to any licenses
or rights now or in the future granted by the Obligor to any third parties in
the ordinary course of Obligor's business; provided that if the Obligor
proposes to sell, license or grant any other rights with respect to any
technology in a transaction that, in substance, conveys a major part of the
economic value of that technology, Silicon shall first be requested to release
its security interest in the same, and Silicon may withhold such release in its
discretion.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF OBLIGOR.
The Obligor represents and warrants to Silicon as follows, and the Obligor
covenants that the following
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<PAGE> 2
SILICON VALLEY BANK SECURITY AGREEMENT
representations will continue to be true, and that the Obligor will comply with
all of the following covenants:
2.1 CORPORATE EXISTENCE AND AUTHORITY. The Obligor, if a corporation, is
and will continue to be, duly authorized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The Obligor is and
will continue to be qualified and licensed to do business in all jurisdictions
in which any failure to do so would have a material adverse effect on the
Obligor. The execution, delivery and performance by the Obligor of this
Agreement, and all other documents contemplated hereby have been duly and
validly authorized, are enforceable against the Obligor in accordance with
their terms, and do not violate any law or any provision of, and are not
grounds for acceleration under, any agreement or instrument which is binding
upon the Obligor.
2.2 NAME; TRADE NAMES AND STYLES. The name of the Obligor set forth in
the heading to this Agreement is its correct name. Listed on the Schedule to
this Agreement (the "Schedule") are all prior names of the Obligor and all of
of Obligor's present and prior trade names. The Obligor shall give Silicon 15
days' prior written notice before changing its name or doing business under any
other name. The Obligor has complied, and will in the future comply, with all
laws relating to the conduct of business under a fictitious business name.
2.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in
the heading to this Agreement is the Obligor's chief executive office. In
addition, the Obligor has places of business and Collateral is located only at
the locations set forth on the Schedule to this Agreement. The Obligor will
give Silicon at least 15 days prior written notice before changing its chief
executive office or locating the Collateral at any other location.
2.4 TITLE TO COLLATERAL; PERMITTED LIENS. The Obligor is now, and will at
all times in the future be, the sole owner of all the Collateral, except for
items of equipment which are leased by the Obligor. The Collateral now is and
will remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for the following ("Permitted Liens"):
(i) purchase money security interests in specific items of equipment; (ii)
leases of specific items of equipment; (iii) liens for taxes not yet payable;
(iv) additional security interests and liens consented to in writing by Silicon
in its sole discretion, which consent shall not be unreasonably withheld; and
(v) security interests being terminated substantially concurrently with this
Agreement. Silicon will have the right to require, as a condition to its
consent under subparagraph (iv) above, that the holder of the additional
security interest or lien sign an intercreditor agreement on Silicon's then
standard form, acknowledge that the security interest is subordinate to the
security interest in favor of Silicon, and agree to give written notice of any
default to Silicon at least 60 days prior to taking any action to enforce its
subordinate security interest, and that the Obligor agree that any uncured
default in any obligation secured by the subordinate security interest shall
also constitute an Event of Default under this Agreement. Silicon now has, and
will continue to have, a perfected and enforceable security interest in all of
the Collateral, subject only to the Permitted Liens, and the Obligor will at
all times defend Silicon and the Collateral against all claims of others. None
of the Collateral now is or will be affixed to any real property in such a
manner, or with such intent, as to become a fixture.
2.5 MAINTENANCE OF COLLATERAL. The Obligor will maintain the Collateral
in good working condition, and the Obligor will not use the Collateral for any
unlawful purpose. The Obligor will immediately advise Silicon in writing of
any material loss or damage to the Collateral.
2.6 BOOKS AND RECORDS. The Obligor has maintained and will maintain at
the Obligor's Address complete and accurate books and records, comprising an
accounting system in accordance with generally accepted accounting principles.
2.7 FINANCIAL CONDITION AND STATEMENTS. All financial statements now or
in the future delivered to Silicon have been, and will be, prepared in
conformity with generally accepted accounting principles and now and in the
future will completely and accurately reflect the financial condition of the
Obligor, at the times and for the periods therein stated. Since the last date
covered by any such statement, there has been no material adverse change in the
financial condition or business of the Obligor. The Obligor is now and will
continue to be solvent. * The Obligor will provide Silicon: (i) within 30
days after the end of each month, a monthly financial statement prepared by the
Obligor, and setting forth such other information as Silicon shall reasonably
request; and (ii) within 120 days following the end of the Obligor's fiscal
year, complete annual financial statements, certified by independent certified
public accountants acceptable to Silicon.
* IF SO REQUESTED BY SILICON, THE
2.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. The Obligor has
timely filed, and will timely file, all tax returns and reports required by
foreign, federal, state and local law, and the Obligor has timely paid, and
will timely pay, all foreign, federal, state and local taxes, assessments,
deposits and contributions now or in the future owed by the Obligor. The
Obligor may, however, defer payment of any contested taxes, provided that the
Obligor (i) in good faith contests the Obligor's obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, (ii)
notifies Silicon in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other steps
required to keep the contested taxes from becoming a lien upon any of the
Collateral. The Obligor is unaware of any claims or adjustments proposed for
any of the Obligor's prior tax years which could result in additional taxes
becoming due and payable by the Obligor. The Obligor has paid, and shall
continue to pay all amounts necessary to fund all present and future pension,
profit sharing and deferred compensation plans in accordance with their terms,
and the Obligor has not and will not withdraw from participation
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<PAGE> 3
SILICON VALLEY BANK SECURITY AGREEMENT
in, permit partial or complete termination of, or permit the occurrence of any
other event with respect to, any such plan which could result in any liability
of the Obligor, including, without limitation, any liability to the Pension
Benefit Guaranty Corporation or its successors or any other governmental
agency.
2.9 COMPLIANCE WITH LAW. The Obligor has complied, and will comply, in
all material respects, with all provisions of all foreign, federal, state and
local laws and regulations relating to the Obligor, including, but not limited
to, those relating to the Obligor's ownership of real or personal property,
conduct and licensing of the Obligor's business, and environmental matters.
2.10 LITIGATION. Except as disclosed in the schedule, there is no claim,
suit, litigation, proceeding or investigation pending or (to best of the
Obligor's knowledge) threatened by or against or affecting the Obligor in any
court or before any governmental agency (or any basis therefor known to the
Obligor) which may result, either separately or in the aggregate, in any
material adverse change in the financial condition or business of the Obligor,
or in any material impairment in the ability of the Obligor to carry on its
business in substantially the same manner as it is now being conducted. The
Obligor will promptly inform Silicon in writing of any claim, proceeding,
litigation or investigation in the future threatened or instituted by or
against the Obligor involving amounts in excess of $100,000.
3. ADDITIONAL DUTIES OF OBLIGOR.
3.1 Insurance. The Obligor shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Silicon, in such form and amounts as Silicon
may reasonably require. All such insurance policies shall name Silicon as an
additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to Silicon. Upon receipt of the proceeds of any
such insurance, Silicon shall apply such proceeds in reduction of the
Obligations as Silicon shall determine in its sole and absolute discretion,
except that, provided no Event of Default has occurred, Silicon shall release
to the Obligor insurance proceeds with respect to equipment totalling less than
$100,000, which shall be utilized by the Obligor for the replacement of the
equipment with respect to which the insurance proceeds were paid. Silicon may
require reasonable assurance that the insurance proceeds so released will be so
used. If the Obligor fails to provide or pay for any insurance, Silicon may,
but is not obligated to, obtain the same at the Obligor's expense. The Obligor
shall promptly deliver to Silicon copies of all reports made to insurance
companies.
3.2 REPORTS. The Obligor shall provide Silicon with such written reports
with respect to the Obligor, as Silicon shall from time to time reasonably
specify *.
* , WHICH, IF THE OBLIGOR IDENTIFIES SUCH INFORMATION AS CONFIDENTIAL, SILICON
WILL REGARD AS SUCH IN ACCORDANCE WITH THE CONFIDENTIALITY PROVISION (AS
DEFINED IN SECTION 3.3)
3.3 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At all reasonable times, and
upon one business day notice, Silicon, or its agents, shall have the right to
inspect the Collateral, and the right to audit and copy the Obligor's
accounting books and records and Obligor's books and records relating to the
Collateral. Silicon shall take reasonable steps to keep confidential all
information obtained in any such inspection or audit, but Silicon shall have
the right to disclose any such information to its auditors, regulatory
agencies, and attorneys, and pursuant to any subpoena or other legal process *.
* (THE "CONFIDENTIALITY PROVISION")
3.4 NEGATIVE COVENANTS. Except as may be permitted in the Schedule
hereto, the Obligor shall not, without Silicon's prior written consent, do any
of the following: (i) merge or consolidate with another corporation, except
that the Obligor may merge or consolidate with another corporation if the
Obligor is the surviving corporation in the merger, and the assets of the
corporation acquired in the merger are not subject to any liens or
encumbrances, except Permitted Liens; (ii) enter into any transaction outside
the ordinary course of business; (iii) sell or transfer any Collateral, except
for the sale of finished inventory in the ordinary course of the Obligor's
business, and except for the sale of obsolete or unneeded equipment * in the
ordinary course of business; (iv) make any loans of any money or any other
assets; (v) incur any debts, outside the ordinary course of business, which
would have a material, adverse effect on the Obligor or on the prospect of
repayment of the Obligations; (vii) guarantee or otherwise become liable with
respect to the obligations of another party or entity; (vii) pay or declare any
dividends on the Obligor's stock (except for dividends payable solely in stock
of the Obligor); (viii) redeem, retire, purchase or otherwise acquire, directly
or indirectly, any of the Obligor's stock; (ix) make any change in the
Obligor's capital structure which has a material adverse effect on the Obligor
or on the prospect of repayment of the Obligations; or (x) dissolve or elect to
dissolve. Transactions permitted by the foregoing provisions of this Section
are only permitted if no Event of Default and no event which (with notice or
passage of time or both) would constitute an Event of Default would occur as a
result of such transaction.
* OR SOFTWARE
3.5 LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against Silicon with respect to any Collateral or in any
manner relating to the Obligor, the Obligor shall, without expense to Silicon,
make available the Obligor and its officers, employees and agents and the
Obligor's books and records to the extent that Silicon may deem them reasonably
necessary in order to prosecute or defend any such suit or proceeding.
3.6 VERIFICATION. Silicon may, from time to time, following prior
notification to Obligor, verify directly with the respective account debtors
the validity, amount and other matters relating to the Obligor's accounts, by
means of mail, telephone or otherwise, either in the name of the
-3-
<PAGE> 4
SILICON VALLEY BANK SECURITY AGREEMENT
Obligor or Silicon or such other name as Silicon may reasonably choose,
provided that no prior notification to Obligor shall be required following an
Event of Default.
3.7 EXECUTE ADDITIONAL DOCUMENTATION. The Obligor agrees, at its expense,
on request by Silicon, to execute all documents in form satisfactory to
Silicon, as Silicon, may deem reasonably necessary or useful in order to
perfect and maintain Silicon's perfected security interest in the Collateral,
and in order to fully consummate all of the transactions contemplated by this
Agreement.
4. TERM.
4.1 Maturity Date. This Agreement shall continue in effect until all
Obligations have been paid and performed in full.
4.2 PAYMENT OF OBLIGATIONS. Upon payment and performance in full of all
the Obligations, Silicon shall promptly deliver to the Obligor termination
statements, requests for reconveyances and such other documents as may be
required to fully terminate any of Silicon's security interests.
5. EVENTS OF DEFAULT AND REMEDIES.
5.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" under this Agreement, and the
Obligor shall give Silicon immediate written notice thereof: (a) Any warranty,
representation, statement, report or certificate made or delivered to Silicon
by the Obligor or any of the Obligor's officers, employees or agents, now or in
the future, shall be untrue or misleading in any material respect; or (b) the
Obligor shall fail to pay when due any monetary Obligation; or (c) the Obligor
shall fail to perform any non-monetary Obligation which by its nature cannot be
cured; or (d) the Obligor shall fail to pay or perform any other non-monetary
Obligation, which failure is not cured * days after the date due; or (e) Any
levy, assessment, attachment, seizure, lien or encumbrance is made on all or
any part of the Collateral which is not cured * days after the occurrence of
the same; or (f) Dissolution, termination of existence, insolvency or business
failure of the Obligor; or appointment of a receiver, trustee or custodian, for
all or any part of the property of, assignment for the benefit of creditors by,
or the commencement of any proceeding by the Obligor under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect;
or (g) the commencement of any proceeding against the Obligor or any guarantor
of any of the Obligations under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof within 30 days after the date commenced; (h) revocation or
termination of, or limitation of liability upon, any guaranty of the
Obligations; or commencement of proceedings by any guarantor of any of the
Obligations under any bankruptcy or insolvency law; or (j) the Obligor makes
any payment on account of any indebtedness or obligation which has been
subordinated to the Obligations or if any person who has subordinated such
indebtedness or obligations terminates or in any way limits his subordination
agreement; or (k) the Obligor shall generally not pay its debts as they become
due; or the Obligor shall conceal, remove or transfer any part of its property,
with intent to hinder, delay or defraud its creditors, or make or suffer any
transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law.
* 30
5.2 REMEDIES. Upon the occurrence of any Event of Default, and at any
time thereafter, Silicon, at its option, and without notice or demand of any
kind (all of which are hereby expressly waived by the Obligor), may do any one
or more of the following: (a) Accelerate and declare all or any part of the
Obligations to be immediately due, payable, and performable, notwithstanding
any deferred or installment payments allowed by any instrument evidencing or
relating to any Obligation; (b) Take possession of any or all of the Collateral
wherever it may be found, and for that purpose the Obligor hereby authorizes
Silicon without judicial process to enter onto any of the Obligor's premises
without interference to search for, take possession of, keep, store, or remove
any of the Collateral, and remain on the premises or cause a custodian to
remain on the premises in exclusive control thereof without charge for so long
as Silicon deems it reasonably necessary in order to complete the enforcement
of its rights under this Agreement or any other agreement; provided, however,
that should Silicon seek to take possession of any or all of the Collateral by
Court process, the Obligor hereby irrevocably waives: (i) any bond and any
surety or security relating thereto required by any statute, court rule or
otherwise as an incident to such possession; (ii) any demand for possession
prior to the commencement of any suit or action to recover possession thereof;
and (iii) any requirement that Silicon retain possession of and not dispose of
any such Collateral until after trial or final judgment; (c) Require the
Obligor to assemble any or all of the Collateral and make it available to
Silicon at places designated by Silicon which are reasonably convenient to
Silicon and the Obligor, and to remove the Collateral to such locations as
Silicon may deem advisable; (d) Require Obligor to deliver to Silicon, in kind,
all checks and other payments received with respect to all accounts and general
intangibles, together with any necessary indorsements, within one day after the
date received by the Obligor; (e) Complete the processing, manufacturing or
repair of any Collateral prior to a disposition thereof and, for such purpose
and for the purpose of removal, Silicon shall have the right to use the
Obligor's premises, vehicles, hoists, lifts, cranes, equipment and all other
property without charge; (f) Sell, lease or otherwise dispose of any of the
Collateral in its condition at the time Silicon obtains possession of it or
after further manufacturing, processing or repair, at any one or more public
and/or private sales, in lots or in bulk, for cash, exchange or other property,
or on credit, and to adjourn any such sale from time to time without notice
-4-
<PAGE> 5
SILICON VALLEY BANK SECURITY AGREEMENT
other than oral announcement at the time scheduled for sale. Silicon shall
have the right to conduct such disposition on the Obligor's premises without
charge, for such time or times as Silicon deems reasonable, or on Silicon's
premises, or elsewhere and the Collateral need not be located at the place of
disposition. Silicon may directly or through any affiliated company purchase
or lease any Collateral at any such public disposition, and if permissible
under applicable law, at any private disposition. Any sale or other
disposition of Collateral shall not relieve the Obligor of any liability the
Obligor may have if any Collateral is defective as to title or physical
condition or otherwise at the time of sale; (g) Demand payment of, and collect
any accounts and general intangibles comprising Collateral and, in connection
therewith, the Obligor irrevocably authorizes Silicon to endorse or sign the
Obligor's name on all collections, receipts, instruments and other documents,
to take possession of and open mail addressed to the Obligor and remove
therefrom payments made with respect to any item of the Collateral or proceeds
thereof, and, in Silicon's sole discretion, to grant extensions of time to pay,
compromise claims and settle accounts and the like for less than face value;
(i) Offset against any sums in any of Obligor's general, special or other
deposit accounts with Silicon; and (h) Demand and receive possession of any of
the Obligor's federal and state income tax returns and the books and records
utilized in the preparation thereof or referring thereto. All reasonable
attorneys' fees, expenses, costs, liabilities and obligations incurred by
Silicon with respect to the foregoing shall be added to and become part of the
Obligations, shall be due on demand, and shall bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations. Without
limiting any of Silicon's rights and remedies, from and after the occurrence of
any Event of Default, the interest rate applicable to the Obligations shall be
increased by an additional four percent per annum.
5.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. The Obligor and
Silicon agree that a sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to the
Obligor at least seven days prior to the sale, and, in the case of a public
sale, notice of the sale is published at least seven days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Silicon, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price
in cash or by cashier's check or wire transfer is required; (vi) With respect
to any sale of any of the Collateral, Silicon may (but is not obligated to)
direct any prospective purchaser to ascertain directly from the Obligor any and
all information concerning the same. Silicon may employ other methods of
noticing and selling the Collateral, in its discretion, if they are
commercially reasonable.
5.4 POWER OF ATTORNEY. Upon the occurrence of any Event of Default,
without limiting Silicon's other rights and remedies, the Obligor grants to
Silicon an irrevocable power of attorney coupled with an interest, authorizing
and permitting Silicon (acting through any of its employees, attorneys or
agents) at any time, at its option, but without obligation, with or without
notice to the Obligor, and at the Obligor's expense, to do any or all of the
following, in the Obligor's name or otherwise: (a) Execute on behalf of the
Obligor any documents that Silicon may, in its sole and absolute discretion,
deem advisable in order to perfect and maintain Silicon's security interest in
the Collateral, or in order to exercise a right of the Obligor or Silicon, or
in order to fully consummate all the transactions contemplated under this
Agreement, and all other present and future agreements; (b) Execute on behalf
of the Obligor any document exercising, transferring or assigning any option to
purchase, sell or otherwise dispose of or to lease (as lessor or lessee) any
real or personal property which is part of Silicon's Collateral or in which
Silicon has an interest; (c) Execute on behalf of the Obligor, any invoices
relating to any account, any draft against any account debtor and any notice to
any account debtor, any proof of claim in bankruptcy, any Notice of Lien, claim
of mechanic's, materialman's or other lien, or assignment or satisfaction of
mechanic's, materialman's or other lien; (d) Take control in any manner of any
cash or non-cash items of payment or proceeds of Collateral; endorse the name
of the Obligor upon any instruments, or documents, evidence of payment or
Collateral that may come into Silicon's possession; (e) Endorse all checks and
other forms of remittances received by Silicon; (f) Pay, contest or settle any
lien, charge, encumbrance, security interest and adverse claim in or to any of
the Collateral, or any judgment based thereon, or otherwise take any action to
terminate or discharge the same; (g) Grant extensions of time to pay,
compromise claims and settle accounts and general intangibles for less than
face value and execute all releases and other documents in connection
therewith; (h) Pay any sums required on account of the Obligor's taxes or to
secure the release of any liens therefor, or both; (i) Settle and adjust, and
give releases of, any insurance claim that relates to any of the Collateral and
obtain payment therefor; (j) Instruct any third party having custody or control
of any books or records belonging to, or relating to, the Obligor to give
Silicon the same rights of access and other rights with respect thereto as
Silicon has under this Agreement; and (k) Take any action or pay any sum
required of the Obligor pursuant to this Agreement and any other present or
future agreements. Silicon shall exercise the foregoing powers in a
commercially reasonable manner. Any and all reasonable sums paid and any and
all reasonable costs, expenses, liabilities, obligations and attorneys' fees
incurred by Silicon with respect to the foregoing shall be added to and become
part of the Obligations, shall be payable on demand, and shall bear interest at
a rate equal to the highest interest rate applicable to any of the Obligations.
In no event shall Silicon's rights under the foregoing power of attorney or any
of Silicon's other rights under this Agreement be deemed to indicate
-5-
<PAGE> 6
SILICON VALLEY BANK SECURITY AGREEMENT
that Silicon is in control of the business, management or properties of the
Obligor.
5.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any
sale of the Collateral shall be applied by Silicon first to the costs,
expenses, liabilities, obligations and attorneys' fees incurred by Silicon in
the exercise of its rights under this Agreement, second to the interest due
upon any of the Obligations, and third to the principal of the Obligations, in
such order as Silicon shall determine in its sole discretion. Any surplus
shall be paid to the Obligor or other persons legally entitled thereto; the
Obligor shall remain liable to Silicon for any deficiency. If, Silicon, in its
sole discretion, directly or indirectly enters into a deferred payment or other
credit transaction with any purchaser at any sale or other disposition of
Collateral, Silicon shall have the option, exercisable at any time, in its sole
discretion, of either reducing the Obligations by the principal amount of
purchase price or deferring the reduction of the Obligations until the actual
receipt by Silicon of the cash therefor.
5.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set forth
in this Agreement, Silicon shall have all the other rights and remedies
accorded a secured party under the California Uniform Commercial Code and under
all other applicable laws, and under any other instrument or agreement now or
in the future entered into between Silicon and the Obligor, and all of such
rights and remedies are cumulative and none is exclusive. Exercise or partial
exercise by Silicon of one or more of its rights or remedies shall not be
deemed an election, nor bar Silicon from subsequent exercise or partial
exercise of any other rights or remedies. The failure or delay of Silicon to
exercise any rights or remedies shall not operate as a waiver thereof, but all
rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed.
6. GENERAL PROVISIONS.
6.1 NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by regular first-class mail, or
certified mail return receipt requested, addressed to Silicon or the Obligor at
the addresses shown in the heading to this Agreement, or at any other address
designated in writing by one party to the other party. All notices shall be
deemed to have been given upon delivery in the case of notices personally
delivered to the Obligor or to Silicon, or at the expiration of two business
days following the deposit thereof in the United States mail, with postage
prepaid.
6.2 SEVERABILITY. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.
6.3 INTEGRATION. This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between the Obligor and Silicon and
supersede all prior and contemporaneous negotiations and oral representations
and agreements, all of which are merged and integrated in this Agreement.
There are no oral understandings, representations or agreements between the
parties which are not set forth in this Agreement or in other written
agreements signed by the parties in connection herewith.
6.4 WAIVERS. The failure of Silicon at any time or times to require the
Obligor to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between the Obligor and Silicon shall not
waive or diminish any right of Silicon later to demand and receive strict
compliance therewith. Any waiver of any default shall not waive or affect any
other default, whether prior or subsequent thereto. None of the provisions of
this Agreement or any other agreement now or in the future executed by the
Obligor and delivered to Silicon shall be deemed to have been waived by any act
or knowledge of Silicon or its agents or employees, but only by a specific
written waiver signed by an officer of Silicon and delivered to the Obligor.
The Obligor waives demand, protest, notice of protest and notice of default or
dishonor, notice of payment and nonpayment, release, compromise, settlement,
extension or renewal of any commercial paper, instrument, account, general
intangible, document or guaranty at any time held by Silicon on which the
Obligor is or may in any way be liable, and notice of any action taken by
Silicon, unless expressly required by this Agreement.
6.5 NO LIABILITY FOR ORDINARY NEGLIGENCE. Neither Silicon, nor any of its
directors, officers, employees, agents, attorneys or any other person
affiliated with or representing Silicon shall be liable for any claims,
demands, losses or damages, of any kind whatsoever, made, claimed, incurred or
suffered by the Obligor or any other party through the ordinary negligence of
Silicon, or any of its directors, officers, employees, agents, attorneys or any
other person affiliated with or representing Silicon.
6.6 AMENDMENT. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by the Obligor and a duly
authorized officer of Silicon.
6.7 TIME OF ESSENCE. Time is of the essence in the performance by the
Obligor of each and every obligation under this Agreement.
6.8 ATTORNEYS FEES AND COSTS. The Obligor shall reimburse Silicon for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Silicon, pursuant to,
or in connection with, or relating to this Agreement (whether or not a lawsuit
is filed), including, but not limited to, any reasonable attorneys' fees and
costs Silicon incurs in order to do the following: prepare and negotiate this
Agreement and the documents relating to this Agreement; obtain legal advice in
connection with this Agreement; enforce, or seek to enforce, any of its rights;
prosecute actions against, or defend actions by, account debtors; commence,
intervene in, or defend any action or
-6-
<PAGE> 7
SILICON VALLEY BANK SECURITY AGREEMENT
proceeding; initiate any complaint to be relieved of the automatic stay in
bankruptcy; file or prosecute any probate claim, bankruptcy claim, third-party
claim, or other claim; examine, audit, copy, and inspect any of the Collateral
or any of the Obligor's books and records; protect, obtain possession of,
lease, dispose of, or otherwise enforce Silicon's security interest in, the
Collateral; and otherwise represent Silicon in any litigation relating to the
Obligor. If either Silicon or the Obligor files any lawsuit against the other
predicated on a breach of this Agreement, the prevailing party in such action
shall be entitled to recover its reasonable costs and attorneys' fees,
including (but not limited to) reasonable attorneys' fees and costs incurred in
the enforcement of, execution upon or defense of any order, decree, award or
judgment. All attorneys' fees and costs to which Silicon may be entitled
pursuant to this Paragraph shall immediately become part of the Obligor's
Obligations, shall be due on demand, and shall bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations.
6.9 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of the parties hereto; provided, however,
that the Obligor may not assign or transfer any of its rights under this
Agreement without the prior written consent of Silicon, and any prohibited
assignment shall be void. No consent by Silicon to any assignment shall
release the Obligor from its liability for the Obligations.
6.10 JOINT AND SEVERAL LIABILITY. If the Obligor consists of more than one
person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Obligor shall not constitute a compromise
with, or a release of, any other Obligor.
6.11 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used in
this Agreement for convenience. The Obligor acknowledges that the headings may
not describe completely the subject matter of the applicable paragraph, and the
headings shall not be used in any manner to construe, limit, define or
interpret any term or provision of this Agreement. This Agreement has been
fully reviewed and negotiated between the parties and no uncertainty or
ambiguity in any term or provision of this Agreement shall be construed
strictly against Silicon or the Obligor under any rule of construction or
otherwise.
6.12 MUTUAL WAIVER OF JURY TRIAL. THE OBLIGOR AND SILICON EACH HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT
OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN SILICON AND THE OBLIGOR, OR ANY
CONDUCT, ACTS OR OMISSIONS OF SILICON OR THE OBLIGOR OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH
SILICON OR THE OBLIGOR, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE.
6.13 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of Silicon and the
Obligor shall be governed by, and in accordance with, the laws of the State of
California. Any undefined term used in this Agreement that is defined in the
California Uniform Commercial Code shall have the meaning assigned to that term
in the California Uniform Commercial Code. As a material part of the
consideration to Silicon to enter into this Agreement, the Obligor (i) agrees
that all actions and proceedings relating directly or indirectly hereto shall,
at Silicon's option, be litigated in courts located within California, and that
the exclusive venue therefor shall be Orange County; (ii) consents to the
jurisdiction and venue of any such court and consents to service of process in
any such action or proceeding by personal delivery or any other method
permitted by law; and (iii) waives any and all rights the Obligor may have to
object to the jurisdiction of any such court, or to transfer or change the
venue of any such action or proceeding.
OBLIGOR:
ALPHAHEALTHCARE, INC.
BY DOUGLAS J. TULLIO
------------------------------
PRESIDENT OR VICE PRESIDENT
BY JOHN F. GLADE
------------------------------
SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY TERRY BESS
------------------------------
TITLE VICE PRESIDENT
---------------------------
-7-
<PAGE> 8
[LOGO] SILICON VALLEY BANK
SCHEDULE TO
SECURITY AGREEMENT
OBLIGOR: ALPHAHEALTHCARE, INC.
ADDRESS: 10 COBURG ROAD
EUGENE, OREGON 97401
DATE: JULY __, 1995
PRIOR NAMES OF OBLIGOR
(Section 3.2): ALPHA MICROSYSTEMS DENTAL PRODUCTS, INC.
TRADE NAMES OF OBLIGOR
(Section 3.2): NONE
OTHER LOCATIONS AND
ADDRESSES (Section 3.3): 2722 SOUTH FAIRVIEW STREET, SANTA ANA, CA 92704
MATERIAL ADVERSE
LITIGATION (Section 3.10): NONE
-1-
<PAGE> 9
This FINANCING STATEMENT is presented for filing and will remain effective,
with certain exceptions, for five years from the date of filing, pursuant to
Section 9403 of the California Uniform Commercial Code.
<TABLE>
<S> <C> <C> <C>
1. DEBTOR (Last Name First - If An Individual) 1A.Soc Sec No or Id No.
ALPHA MICROSYSTEMS
1B. MAILING ADDRESS 1C. CITY, STATE 1D. ZIP CODE
2722 South Fairview Street Santa Ana, California 92704
2. ADDITIONAL DEBTOR (IF ANY) (Last Name First - If An Individual) 2A.Soc Sec No or Id No.
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FED TAX NO.
None .
4. SECURED PARTY 4A.Soc Sec No or Id No.
Name: SILICON VALLEY BANK
Mailing Address: 3000 Lakeside Drive
Santa Clara, California 95054-2895
5. ASSIGNEE OF SECURED PARTY 5A.Soc Sec No or Id No.
Name:
Mailing Address:
</TABLE>
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record
when required by instruction 4).
Debtor hereby grants Secured Party a security interest in all of the following,
whether now owned or hereafter payment and performance of all present and future
indebtedness, liabilities, guarantees and obligations of Debtor to Secured
Party: All "accounts," "general intangibles," "chattel paper," "documents,"
"letters of credit," "instruments," "deposit accounts," "inventory," "farm
products," "fixtures" and "equipment," as such terms are defined in Division 9
of the California Uniform Commercial Code in effect on the date hereof, and all
life and other insurance policies and claims, and all rights in all litigation
presently or hereafter pending for any cause or claim (whether in contract,
tort or otherwise), and all judgments now or hereafter arising therefrom; and
all products, proceeds and insurance proceeds of any or all of the foregoing;
including without limitation all types and items of property described on
Exhibit A hereto (but this Financing Statement and Security Agreement shall be
fully effective notwithstanding any lack of any Exhibit A). Debtor is not
authorized to sell, transfer, or further encumber any of the foregoing
collateral, except for the sale of finished inventory in the ordinary course
of business.
7. CHECK IF APPLICABLE: X-PRODUCTS OF COLLATERAL ARE ALSO COVERED.
<TABLE>
<S> <C> <C>
SIGNATURE(S) OF DEBTOR: DATE: July __, 1995 C THIS SPACE FOR USE OF FILING OFFICER
ALPHA MICROSYSTEMS O (DATE, TIME, FILE NUMBER AND FILING
D OFFICER)
By MICHAEL J. LOWELL E
Title CFO AND V.P.
1
SIGNATURE(S) OF SECURED PARTY: 2
3
SILICON VALLEY BANK 4
5
By__________________________________ 6
Title________________________________ 7
8
9
RETURN COPY TO: 0
SILICON VALLEY BANK
3000 LAKESIDE DRIVE
SANTA CLARA, CALIFORNIA 95054-2895
ATTENTION: DOCUMENTATION DEPT.
</TABLE>
<PAGE> 10
EXHIBIT "A"
TO FINANCING STATEMENT AND SECURITY AGREEMENT
This FINANCING STATEMENT and SECURITY AGREEMENT covers the following
types or items of property, and the undersigned,ALPHA
MICROSYSTEMS ("Debtor") hereby grants SILICON VALLEY BANK ("Secured
Party") a security interest therein as collateral for the payment and
performance of all present and future indebtedness, liabilities,
guarantees and obligations of Debtor to Secured Party. Debtor agrees
that said security interest may be enforced by Secured Party in
accordance with the terms and provisions of all security and other
agreements between Secured Party and Debtor, the California Uniform
Commercial Code, or both (but this document shall be fully effective
as a security agreement, even if there is no other security or other
agreement between Secured Party and Debtor): (a) All accounts,
contract rights, chattel paper, letters of credit, documents,
securities, money, and instruments, and all other obligations now or
in the future owing to the Debtor; (b) All inventory, goods,
merchandise, materials, raw materials, work in process, finished
goods, farm products, advertising, packaging and shipping materials,
supplies, and all other tangible personal property which is held for
sale or lease or furnished under contracts of service or consumed in
the Debtor's business, and all warehouse receipts and other documents;
and (c) All equipment, including without limitation all machinery,
fixtures, trade fixtures, vehicles, furnishings, furniture, materials,
tools, machine tools, office equipment, computers and peripheral
devices, appliances, apparatus, parts, dies, and jigs; (d) All general
intangibles including, but not limited to, deposit accounts, goodwill,
names, trade names, trademarks and the goodwill of the business
symbolized thereby, trade secrets, drawings, blueprints, customer
lists, patents, patent applications, copyrights, security deposits,
loan commitment fees, federal, state and local tax refunds and claims,
all rights in all litigation presently or hereafter pending for any
cause or claim (whether in contract, tort or otherwise), and all
judgments now or hereafter arising therefrom, all claims of Debtor
against Secured Party, all rights to purchase or sell real or personal
property, all rights as a licensor or licensee of any kind, all
royalties, licenses, processes, telephone numbers, proprietary
information, purchase orders, and all insurance policies and claims
(including without limitation credit, liability, property and other
insurance), and all other rights, privileges and franchises of every
kind; (e) All books and records, whether stored on computers or
otherwise maintained; and (f) All substitutions, additions and
accessions to any of the foregoing, and all products, proceeds and
insurance proceeds of the foregoing, and all guaranties of and
security for the foregoing; and all books and records relating to any
of the foregoing.
ALPHA MICROSYSTEMS
By MICHAEL J. LOWELL
----------------------------------
Title CFO and V.P.
-------------------------------
<PAGE> 11
This FINANCING STATEMENT is presented for filing and will remain effective,
with certain exceptions, for five years from the date of filing, pursuant to
Section 9403 of the California Uniform Commercial Code.
<TABLE>
<S> <C> <C> <C>
1. DEBTOR (Last Name First - If An Individual) 1A.Soc Sec No or Id No.
ALPHAHEALTHCARE, INC.
1B. MAILING ADDRESS 1C. CITY, STATE 1D. ZIP CODE
10 Coburg Road Eugene, Oregon 97401
2. ADDITIONAL DEBTOR (IF ANY) (Last Name First - If An Individual) 2A.Soc Sec No or Id No.
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FED TAX NO.
None .
4. SECURED PARTY 4A.Soc Sec No or Id No.
Name: SILICON VALLEY BANK
Mailing Address: 3000 Lakeside Drive
Santa Clara, California 95054-2895
</TABLE>
5. ASSIGNEE OF SECURED PARTY
5A.Soc Sec No or Id No.
Name:
Mailing Address:
6. This FINANCING STATEMENT covers the following types or items
of property (include description of real property on which
located and owner of record when required by instruction 4).
Debtor hereby grants Secured Party a security interest in all of
the following, whether now owned or hereafter acquired, and
wherever located, as collateral for the payment and performance of
all present and future indebtedness, liabilities, guarantees and
obligations of Debtor to Secured Party: All "accounts," "general
intangibles," "chattel paper," "documents," "letters of credit,"
"instruments," "deposit accounts," "inventory," "farm products,"
"fixtures" and "equipment," as such terms are defined in Division
9 of the California Uniform Commercial Code in effect on the date
hereof, and all life and other insurance policies and claims, and
all rights in all litigation presently or hereafter pending for
any cause or claim (whether in contract, tort or otherwise), and
all judgments now or hereafter arising therefrom; and all
products, proceeds and insurance proceeds of any or all of the
foregoing; including without limitation all types and items of
property described on Exhibit A hereto (but this Financing
Statement and Security Agreement shall be fully effective
notwithstanding any lack of any Exhibit A). Debtor is not
authorized to sell, transfer, or further encumber any of the
foregoing collateral, except for the sale of finished inventory in
the ordinary course of business.
<TABLE>
<S> <C> <C>
7. CHECK IF APPLICABLE: X-PRODUCTS OF COLLATERAL ARE ALSO COVERED.
SIGNATURE(S) OF DEBTOR: DATE: July __, 1995 C THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER AND FILING
ALPHAHEALTHCARE, INC. O OFFICER)
D
By DOUGLAS J. TULLIO E
-------------------------
Title PRESIDENT
----------------------
1
SIGNATURE(S) OF SECURED PARTY: 2
3
SILICON VALLEY BANK
4
5
By TERRY BESS
------------------------- 6
Title VICE PRESIDENT
---------------------- 7
8
9
RETURN COPY TO:
0
SILICON VALLEY BANK
3000 Lakeside Drive
Santa Clara, California 95054-2895
Attention: DOCUMENTATION DEP'T
</TABLE>
<PAGE> 12
EXHIBIT "A"
TO FINANCING STATEMENT AND SECURITY AGREEMENT
This FINANCING STATEMENT and SECURITY AGREEMENT covers the following
types or items of property, and the undersigned, ALPHAHEALTHCARE, INC.
("Debtor") hereby grants SILICON VALLEY BANK ("Secured Party") a
security interest therein as collateral for the payment and
performance of all present and future indebtedness, liabilities,
guarantees and obligations of Debtor to Secured Party. Debtor agrees
that said security interest may be enforced by Secured Party in
accordance with the terms and provisions of all security and other
agreements between Secured Party and Debtor, the California Uniform
Commercial Code, or both (but this document shall be fully effective
as a security agreement, even if there is no other security or other
agreement between Secured Party and Debtor): (a) All accounts,
contract rights, chattel paper, letters of credit, documents,
securities, money, and instruments, and all other obligations now or
in the future owing to the Debtor; (b) All inventory, goods,
merchandise, materials, raw materials, work in process, finished
goods, farm products, advertising, packaging and shipping materials,
supplies, and all other tangible personal property which is held for
sale or lease or furnished under contracts of service or consumed in
the Debtor's business, and all warehouse receipts and other documents;
and (c) All equipment, including without limitation all machinery,
fixtures, trade fixtures, vehicles, furnishings, furniture, materials,
tools, machine tools, office equipment, computers and peripheral
devices, appliances, apparatus, parts, dies, and jigs; (d) All general
intangibles including, but not limited to, deposit accounts, goodwill,
names, trade names, trademarks and the goodwill of the business
symbolized thereby, trade secrets, drawings, blueprints, customer
lists, patents, patent applications, copyrights, security deposits,
loan commitment fees, federal, state and local tax refunds and claims,
all rights in all litigation presently or hereafter pending for any
cause or claim (whether in contract, tort or otherwise), and all
judgments now or hereafter arising therefrom, all claims of Debtor
against Secured Party, all rights to purchase or sell real or personal
property, all rights as a licensor or licensee of any kind, all
royalties, licenses, processes, telephone numbers, proprietary
information, purchase orders, and all insurance policies and claims
(including without limitation credit, liability, property and other
insurance), and all other rights, privileges and franchises of every
kind; (e) All books and records, whether stored on computers or
otherwise maintained; and (f) All substitutions, additions and
accessions to any of the foregoing, and all products, proceeds and
insurance proceeds of the foregoing, and all guaranties of and
security for the foregoing; and all books and records relating to any
of the foregoing.
ALPHAHEALTHCARE, INC.
By DOUGLAS J. TULLIO
-------------------------
Title PRESIDENT
----------------------
<PAGE> 1
EXHIBIT 10.145
[LOGO] SILICON VALLEY BANK
CONTINUING GUARANTY
BORROWER: ALPHA MICROSYSTEMS
GUARANTOR: ALPHAHEALTHCARE, INC.
DATE: JULY 10, 1995
THIS CONTINUING GUARANTY is executed by the above-named guarantor (the
"Guarantor"), as of the above date, in favor of SILICON VALLEY BANK
("Silicon"), whose address is 3000 Lakeside Drive, Santa Clara, California
95054-2895, with respect to the Indebtedness of the above-named borrower
("Borrower")
1. CONTINUING GUARANTY. Guarantor hereby unconditionally guarantees and
promises to pay on demand to Silicon, at the address indicated above, or at
such other address as Silicon may direct, in lawful money of the United States,
and to perform for the benefit of Silicon, all Indebtedness of Borrower now or
hereafter owing to or held by Silicon. As used herein, the term "Indebtedness"
is used in its most comprehensive sense and shall mean and include without
limitation: (a) any and all debts, duties, obligations, liabilities,
representations, warranties and guaranties of Borrower or any one or more of
them, heretofore, now, or hereafter made, incurred, or created, whether
directly to Silicon or acquired by Silicon by assignment or otherwise, or held
by Silicon on behalf of others, however arising, whether voluntary or
involuntary, due or not due, absolute or contingent, liquidated or
unliquidated, certain or uncertain, determined or undetermined, monetary or
nonmonetary, written or oral, and whether Borrower may be liable individually
or jointly with others, and regardless of whether recovery thereon may be or
hereafter become barred by any statute of limitations, discharged or
uncollectible in any bankruptcy, insolvency or other proceeding, or otherwise
unenforceable; and (b) any and all amendments, modifications, renewals and
extensions of any or all of the foregoing, including without limitation
amendments, modifications, renewals and extensions which are evidenced by any
new or additional instrument, document or agreement; and (c) any and all
attorneys' fees, court costs, and collection charges incurred in endeavoring to
collect or enforce any of the foregoing against Borrower, Guarantor, or any
other person liable thereon (whether or not suit be brought) and any other
expenses of, for or incidental to collection thereof. As used herein, the term
"Borrower" shall include any successor to the business and assets of Borrower,
and shall also include Borrower in its capacity as a debtor or debtor in
possession under the federal Bankruptcy Code, and any trustee, custodian or
receiver for Borrower or any of its assets, should Borrower hereafter become
the subject of any bankruptcy or insolvency proceeding, voluntary or
involuntary; and all indebtedness, liabilities and obligations incurred by any
such person shall be included in the Indebtedness guaranteed hereby. This
Guaranty is given in consideration for credit and other financial
accommodations which may, from time to time, be given by Silicon to Borrower in
Silicon's sole discretion, but Guarantor acknowledges and agrees that
acceptance by Silicon of this Guaranty shall not constitute a commitment of any
kind by Silicon to extend such credit or other financial accommodation to
Borrower or to permit Borrower to incur Indebtedness to Silicon. All sums due
under this Guaranty shall bear interest from the date due until the date paid
at the highest rate charged with respect to any of the Indebtedness.
2. WAIVERS. Guarantor hereby waives: (a) presentment for payment,
notice of dishonor, demand, protest, and notice thereof as to any instrument,
and all other notices and demands to which Guarantor might be entitled,
including without limitation notice of all of the following: the acceptance
hereof; the creation, existence, or acquisition of any Indebtedness; the amount
of the Indebtedness from time to time outstanding; any foreclosure sale or
other disposition of any property which secures any or all of the Indebtedness
or which secures the obligations of any other guarantor of any or all of the
Indebtedness; any adverse change in Borrower's financial position; any other
fact which might increase Guarantor's risk; any default, partial payment or
non-payment of all or any part of the Indebtedness; the occurrence of any other
Event of Default (as hereinafter defined); any and all agreements and
arrangements between
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<PAGE> 2
SILICON VALLEY BANK CONTINUINING GUARANTY
Silicon and Borrower and any changes, modifications, or extensions thereof, and
any revocation, modification or release of any guaranty of any or all of the
Indebtedness by any person (including without limitation any other person
signing this Guaranty); (b) any right to require Silicon to institute suit
against, or to exhaust its rights and remedies against, Borrower or any other
person, or to proceed against any property of any kind which secures all or any
part of the Indebtedness, or to exercise any right of offset or other right
with respect to any reserves, credits or deposit accounts held by or maintained
with Silicon or any indebtedness of Silicon to Borrower, or to exercise any
other right or power, or pursue any other remedy Silicon may have; (c) any
defense arising by reason of any disability or other defense of Borrower or any
other guarantor or any endorser, co-maker or other person, or by reason of the
cessation from any cause whatsoever of any liability of Borrower or any other
guarantor or any endorser, co-maker or other person, with respect to all or any
part of the Indebtedness, or by reason of any act or omission of Silicon or
others which directly or indirectly results in the discharge or release of
Borrower or any other guarantor or any other person or any Indebtedness or any
security therefor, whether by operation of law or otherwise; (d) any defense
arising by reason of any failure of Silicon to obtain, perfect, maintain or
keep in force any security interest in, or lien or encumbrance upon, any
property of Borrower or any other person; (e) any defense based upon any
failure of Silicon to give Guarantor notice of any sale or other disposition of
any property securing any or all of the Indebtedness, or any defects in any
such notice that may be given, or any failure of Silicon to comply with any
provision of applicable law in enforcing any security interest in or lien upon
any property securing any or all of the Indebtedness including, but not limited
to, any failure by Silicon to dispose of any property securing any or all of
the Indebtedness in a commercially reasonable manner; (f) any defense based
upon or arising out of any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against Borrower or any other guarantor or any endorser, co-maker or other
person, including without limitation any discharge of, or bar against
collecting, any of the Indebtedness (including without limitation any interest
thereon), in or as a result of any such proceeding; and (g) the benefit of any
and all statutes of limitation with respect to any action based upon, arising
out of or related to this Guaranty. Until all of the Indebtedness has been
paid, performed, and discharged in full, nothing shall discharge or satisfy the
liability of Guarantor hereunder except the full performance and payment of all
of the Indebtedness. If any claim is ever made upon Silicon for repayment or
recovery of any amount or amounts received by Silicon in payment of or on
account of any of the Indebtedness, because of any claim that any such payment
constituted a preferential transfer or fraudulent conveyance, or for any other
reason whatsoever, and Silicon repays all or part of said amount by reason of
any judgment, decree or order of any court or administrative body having
jurisdiction over Silicon or any of its property, or by reason of any
settlement or compromise of any such claim effected by Silicon with any such
claimant (including without limitation the Borrower), then and in any such
event, Guarantor agrees that any such judgment, decree, order, settlement and
compromise shall be binding upon Guarantor, notwithstanding any revocation or
release of this Guaranty or the cancellation of any note or other instrument
evidencing any of the Indebtedness, or any release of any of the Indebtedness,
and the Guarantor shall be and remain liable to Silicon under this Guaranty for
the amount so repaid or recovered, to the same extent as if such amount had
never originally been received by Silicon, and the provisions of this sentence
shall survive, and continue in effect, notwithstanding any revocation or
release of this Guaranty. Until all of the Indebtedness has been irrevocably
paid and performed in full, Guarantor hereby expressly and unconditionally
waives all rights of subrogation, reimbursement and indemnity of every kind
against Borrower, and all rights of recourse to any assets or property of
Borrower, and all rights to any collateral or security held for the payment and
performance of any Indebtedness, including (but not limited to) any of the
foregoing rights which Guarantor may have under any present or future document
or agreement with any Borrower or other person, and including (but not limited
to) any of the foregoing rights which Guarantor may have under any equitable
doctrine of subrogation, implied contract, or unjust enrichment, or any other
equitable or legal doctrine. Neither Silicon, nor any of its directors,
officers, employees, agents, attorneys or any other person affiliated with or
representing Silicon shall be liable for any claims, demands, losses or
damages, of any kind whatsoever, made, claimed, incurred or suffered by
Guarantor or any other party through the ordinary negligence of Silicon, or any
of its directors, officers, employees, agents, attorneys or any other person
affiliated with or representing Silicon.
3. CONSENTS. Guarantor hereby consents and agrees that, without notice
to or by Guarantor and without affecting or impairing in any way the
obligations or liability of Guarantor hereunder, Silicon may, from time to time
before or after revocation of this Guaranty, do any one or more of the
following in Silicon's sole and absolute discretion: (a) accelerate, accept
partial payments of, compromise or settle, renew, extend the time for the
payment, discharge, or performance of, refuse to enforce, and release all or
any parties to, any or all of the Indebtedness; (b) grant any other indulgence
to Borrower or any other person in respect of any or all of the Indebtedness or
any other matter; (c) accept, release, waive, surrender, enforce, exchange,
modify, impair, or extend the time for the performance, discharge, or payment
of, any and all property of any kind securing any or all of the Indebtedness or
any guaranty of any or all of the Indebtedness, or on which Silicon at any time
may have a lien, or refuse to enforce its rights or make any compromise or
settlement or agreement therefor in respect of any or all of such property; (d)
substitute or add, or take any action or omit to take any action which results
in the release of, any one or more endorsers or guarantors of all or any part
of the Indebtedness, including, without limitation one or more parties to this
Guaranty, regardless of any destruction or impairment of any right of
contribution or other right of Guarantor; (e) amend, alter or change in any
respect whatsoever any term or provision relating to any or all of the
Indebtedness, including the rate of interest thereon; (f) apply any sums
received from Borrower, any other
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<PAGE> 3
SILICON VALLEY BANK CONTINUING GUARANTY
guarantor, endorser, or co-signer, or from the disposition of any collateral or
security, to any indebtedness whatsoever owing from such person or secured by
such collateral or security, in such manner and order as Silicon determines in
its sole discretion, and regardless of whether such indebtedness is part of the
Indebtedness, is secured, or is due and payable; (g) apply any sums received
from Guarantor or from the disposition of any collateral or security securing
the obligations of Guarantor, to any of the Indebtedness in such manner and
order as Silicon determines in its sole discretion, regardless of whether or
not such Indebtedness is secured or is due and payable. Guarantor consents and
agrees that Silicon shall be under no obligation to marshal any assets in favor
of Guarantor, or against or in payment of any or all of the Indebtedness.
Guarantor further consents and agrees that Silicon shall have no duties or
responsibilities whatsoever with respect to any property securing any or all of
the Indebtedness. Without limiting the generality of the foregoing, Silicon
shall have no obligation to monitor, verify, audit, examine, or obtain or
maintain any insurance with respect to, any property securing any or all of the
Indebtedness.
4. ACCOUNT STATED. Silicon's books and records showing the account
between it and the Borrower shall be admissible in evidence in any action or
proceeding as prima facie proof of the items therein set forth. Silicon's
monthly statements rendered to the Borrower shall be binding upon the Guarantor
(whether or not the Guarantor receives copies thereof), and shall constitute an
account stated between Silicon and the Borrower, unless Silicon receives a
written statement of the Borrower's exceptions within 30 days after the
statement was mailed to the Borrower. The Guarantor assumes full
responsibility for obtaining copies of such monthly statements from the
Borrower, if the Guarantor desires such copies.
5. EXERCISE OF RIGHTS AND REMEDIES; FORECLOSURE OF TRUST DEEDS.
Guarantor consents and agrees that, without notice to or by Guarantor and
without affecting or impairing in any way the obligations or liability of
Guarantor hereunder, Silicon may, from time to time, before or after revocation
of this Guaranty, exercise any right or remedy it may have with respect to any
or all of the Indebtedness or any property securing any or all of the
Indebtedness or any guaranty thereof, including without limitation judicial
foreclosure, nonjudicial foreclosure, exercise of a power of sale, and taking a
deed, assignment or transfer in lieu of foreclosure as to any such property,
and Guarantor expressly waives any defense based upon the exercise of any such
right or remedy, notwithstanding the effect thereof upon any of Guarantor's
rights, including without limitation, any destruction of Guarantor's right of
subrogation against Borrower and any destruction of Guarantor's right of
ocontribution or other right against any other guarantor of any or all of the
Indebtedness or against any other person, whether by operation of Sections
580a, 580d or 726 of the California Code of Civil Procedure, or any comparable
provisions of the laws of any other jurisdiction, or any other statutes or
rules of law now or hereafter in effect, or otherwise. Without limiting the
generality of the foregoing, (a) Guarantor waives all rights and defenses
arising out of an election of remedies by Silicon, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for any of
the Indebtedness, has destroyed the guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the
Code of Civil Procedure or otherwise. (b) Guarantor further waives all rights
and defenses arising out of an election of remedies by Silicon, even though
that election of remedies, such as a nonjudicial foreclosure with respect to
security for any of the Indebtedness, has destroyed the guarantor's rights of
subrogation, reimbursement and contribution against any other guarantor of the
guaranteed obligation, by the operation of Section 580d of the Code of Civil
Procedure or otherwise. (c) Guarantor understands that if Silicon forecloses
any present or future trust deed, which secures any or all of the Indebtedness
or which secures any other guaranty of any or all of the Indebtedness, by
nonjudicial foreclosure, Guarantor may, as a result, have a complete defense to
liability under this Guaranty, based on the legal doctrine of estoppel and
Sections 580a, 580d or 726 of the California Code of Civil Procedure, and
Guarantor hereby expressly waives all such defenses. (d) Guarantor understands
and agrees that, in the event Silicon in its sole discretion forecloses any
trust deed now or hereafter securing any or all of the Indebtedness, by
nonjudicial foreclosure, Guarantor will remain liable to Silicon for any
deficiency, even though Guarantor will lose his right of subrogation against
the Borrower, and even though Guarantor will be unable to recover from the
Borrower the amount of the deficiency for which Guarantor is liable, and even
though Guarantor may have retained his right of subrogation against Borrower if
Silicon had foreclosed said trust deed by judicial foreclosure as opposed to
nonjudicial foreclosure, and even though absent the waivers set forth herein
Guarantor may have had a complete defense to any liability for any deficiency
hereunder. (e) Guarantor understands and agrees that, in the event Silicon in
its sole discretion forecloses any trust deed now or hereafter securing any
other guaranty of any or all of the Indebtedness, by nonjudicial foreclosure,
Guarantor will remain liable to Silicon for any deficiency, even though
Guarantor will lose his right of subrogation or contribution against the other
guarantor, and even though Guarantor will be unable to recover from the other
guarantor any part of the deficiency for which Guarantor is liable, and even
though Guarantor may have retained his right of subrogation or contribution
against the other guarantor if Silicon had foreclosed said trust deed by
judicial foreclosure as opposed to nonjudicial foreclosure, and even though
absent the waivers set forth herein Guarantor may have had a complete defense
to any liability for any deficiency hereunder.
6. ACCELERATION. Notwithstanding the terms of all or any part of the
Indebtedness, the obligations of the Guarantor hereunder to pay and perform all
of the Indebtedness shall, at the option of Silicon, immediately become due and
payable, without notice, and without regard to the expressed maturity of any of
the Indebtedness, in the event: (a) any warranty, representation, statement,
report, or certificate made or delivered to Silicon by Borrower or Guarantor,
or any of their respective officers, partners,
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<PAGE> 4
SILICON VALLEY BANK CONTINUING GUARANTY
employees, or agents, is incorrect, false, untrue, or misleading when given in
any material respect; or (b) Borrower or Guarantor shall fail to pay or perform
when due all or any part of the Indebtedness; or (c) Guarantor shall fail to
pay or perform when due any indebtedness or obligation of Guarantor to Silicon
or to any parent, subsidiary or corporate affiliate of Silicon, whether under
this Guaranty or any other instrument, document, or agreement heretofore or
hereafter entered into*; or (d) there occurs in Silicon's judgment a material
impairment of the prospect of payment or performance of any or all of the
Indebtedness; or (e) any event shall occur which may or does result in the
acceleration of the maturity of any indebtedness of Borrower or Guarantor to
others (regardless of any requirement of notice, opportunity to cure or other
condition prior to the exercise of any right of acceleration); or (f) Borrower
or Guarantor shall fail promptly to perform or comply with any term or
condition of any agreement with any third party which does or may result in a
material adverse effect on the business of Borrower or Guarantor; or (g) there
shall be made or exist any levy, assessment, attachment, seizure, lien, or
encumbrance for any cause or reason whatsoever upon all or any part of the
property of Borrower or Guarantor (unless discharged by payment, release or
bond not more than [ten] ** days after such event has occurred); or (h) there
shall occur the dissolution, termination of existence, insolvency, or business
failure of Borrower or Guarantor, or the appointment of a receiver, trustee or
custodian for Borrower or Guarantor or all or any part of the property of
either of them, or the assignment for the benefit of creditors by Borrower or
Guarantor, or the commencement of any proceeding by or against Borrower or
Guarantor under any reorganization, bankruptcy, insolvency, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or hereafter in effect; or (i) Borrower or Guarantor shall be
deceased or declared incompetent by any court or a guardian or conservator
shall be appointed for either of them or for the property of either of them; or
(j) Guarantor or Borrower shall generally not pay their respective debts as
they become due or shall enter into any agreement (whether written or oral), or
offer to enter into any such agreement, with all or a significant number of its
creditors regarding any moratorium or other indulgence with respect to its
debts or the participation of such creditors or their representatives in the
supervision, management, or control of the business of either of them; or (k)
Borrower or Guarantor shall conceal, remove or permit to be concealed or
removed any part of its property, with intent to hinder, delay or defraud its
creditors, or make or suffer any transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law, or shall
make any transfer of its property to or for the benefit of any creditor at a
time when other creditors similarly situated have not been paid; or (l) the
board of directors or shareholders of Borrower or Guarantor shall adopt any
resolution or plan for its dissolution or the liquidation of all or
substantially all of its assets; or (m) Guarantor shall revoke this Guaranty or
contest or deny liability under this Guaranty. All of the foregoing are
hereinafter referred to as "Events of Default".
* , PROVIDED THAT WITH RESPECT TO THE FAILURE TO PERFORM ANY NON-MONETARY
OBLIGATION ONLY, SUCH FAILURE IS NOT CURED WITHIN 30 DAYS AFTER THE DATE DUE
** 30
7. RIGHT TO ATTACHMENT REMEDY. Guarantor agrees that, notwithstanding
the existence of any property securing any or all of the Indebtedness, Silicon
shall have all of the rights of an unsecured creditor of Guarantor, including
without limitation the right to obtain a temporary protective order and writ of
attachment against Guarantor with respect to any sums due under this Guaranty.
Guarantor further agrees that in the event any property secures the obligations
of Guarantor under this Guaranty, to the extent that Silicon, in its sole and
absolute discretion, determines prior to the disposition of such property that
the amount to be realized by Silicon therefrom may be less than the
indebtedness of the Guarantor under this Guaranty, Silicon shall have all the
rights of an unsecured creditor against Guarantor, including without limitation
the right of Silicon, prior to the disposition of said property, to obtain a
temporary protective order and writ of attachment against Guarantor. Guarantor
waives the benefit of Section 483.010(b) of the California Code of Civil
Procedure and of any and all other statutes and rules of law now or hereafter
in effect requiring Silicon to first resort to or exhaust all such collateral
before seeking or obtaining any attachment remedy against Guarantor. Silicon
shall have no liability to Guarantor as a result thereof, whether or not the
actual deficiency realized by Silicon is less than the anticipated deficiency
on the basis of which Silicon obtains a temporary protective order or writ of
attachment.
8. INDEMNITY. Guarantor hereby agrees to indemnify Silicon and hold
Silicon harmless from and against any and all claims, debts, liabilities,
demands, obligations, actions, causes of action, penalties, costs and expenses
(including without limitation attorneys' fees), of every nature, character and
description, which Silicon may sustain or incur based upon or arising out of
any of the Indebtedness, any actual or alleged failure to collect and pay over
any withholding or other tax relating to Borrower or its employees, any
relationship or agreement between Silicon and Borrower, any actual or alleged
failure of Silicon to comply with any writ of attachment or other legal process
relating to Borrower or any of its property, or any other matter, cause or
thing whatsoever occurred, done, omitted or suffered to be done by Silicon
relating in any way to Borrower or the Indebtedness (except any such amounts
sustained or incurred as the result of the gross negligence or willful
misconduct of Silicon or any of its directors, officers, employees, agents,
attorneys, or any other person affiliated with or representing Silicon).
Notwithstanding any provision in this Guaranty to the contrary, the indemnity
agreement set forth in this Section shall survive any termination or revocation
of this Guaranty and shall for all purposes continue in full force and effect.
9. SUBORDINATION. Any and all rights of Guarantor under any and all
debts, liabilities and obligations owing from Borrower to Guarantor, including
any security for and guaranties of any such obligations, whether now existing
or
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<PAGE> 5
SILICON VALLEY BANK CONTINUING GUARANTY
hereafter arising, are hereby subordinated in right of payment to the prior
payment in full of all of the Indebtedness. No payment in respect of any such
subordinated obligations shall at any time be made to or accepted by Guarantor
if at the time of such payment any Indebtedness is outstanding. If any Event
of Default has occurred, Borrower and any assignee, trustee in bankruptcy,
receiver, or any other person having custody or control over any or all of
Borrower's property are hereby authorized and directed to pay to Silicon the
entire unpaid balance of the Indebtedness before making any payments whatsoever
to Guarantor, whether as a creditor, shareholder, or otherwise; and insofar as
may be necessary for that purpose, Guarantor hereby assigns and transfers to
Silicon all rights to any and all debts, liabilities and obligations owing from
Borrower to Guarantor, including any security for and guaranties of any such
obligations, whether now existing or hereafter arising, including without
limitation any payments, dividends or distributions out of the business or
assets of Borrower. Any amounts received by Guarantor in violation of the
foregoing provisions shall be received and held as trustee for the benefit of
Silicon and shall forthwith be paid over to Silicon to be applied to the
Indebtedness in such order and sequence as Silicon shall in its sole discretion
determine, without limiting or affecting any other right or remedy which
Silicon may have hereunder or otherwise and without otherwise affecting the
liability of Guarantor hereunder. Guarantor hereby expressly waives any right
to set-off or assert any counterclaim against Borrower.
10. REVOCATION. This is a Continuing Guaranty relating to all of the
Indebtedness, including Indebtedness arising under successive transactions
which from time to time continue the Indebtedness or renew it after it has been
satisfied. Guarantor waives all benefits of California Civil Code Section
2815, and agrees that the obligations of Guarantor hereunder may not be
terminated or revoked in any manner except by giving 90 days' advance written
notice of revocation to Silicon at its address above by registered first-class
U.S. mail, postage prepaid, return receipt requested, and only as to new loans
made by Silicon to Borrower more than 90 days after actual receipt of such
written notice by Silicon. No termination or revocation of this Guaranty shall
be effective until 90 days following the date of actual receipt of said written
notice of revocation by Silicon. Notwithstanding such written notice of
revocation or any other act of Guarantor or any other event or circumstance,
Guarantor agrees that this Guaranty and all consents, waivers and other
provisions hereof shall continue in full force and effect as to any and all
Indebtedness which is outstanding on or before the 90th day following actual
receipt of said written notice of revocation by Silicon, and all extensions,
renewals and modifications of said Indebtedness (including without limitation
amendments, extensions, renewals and modifications which are evidenced by new
or additional instruments, documents or agreements executed before or after
expiration of said 90-day period), and all interest thereon, accruing before or
after expiration of said 90-day period, and all attorneys' fees, court costs
and collection charges, incurred before or after expiration of said 90-day
period, in endeavoring to collect or enforce any of the foregoing against
Borrower, Guarantor or any other person liable thereon (whether or not suit be
brought) and any other expenses of, for or incidental to collection thereof.
11. INDEPENDENT LIABILITY. Guarantor hereby agrees that one or more
successive or concurrent actions may be brought hereon against Guarantor, in
the same action in which Borrower may be sued or in separate actions, as often
as deemed advisable by Silicon. The liability of Guarantor hereunder is
exclusive and independent of any other guaranty of any or all of the
Indebtedness whether executed by Guarantor or by any other guarantor (including
without limitation any other persons signing this Guaranty). The liability of
Guarantor hereunder shall not be affected, revoked, impaired, or reduced by any
one or more of the following: (a) the fact that the Indebtedness exceeds the
maximum amount of Guarantor's liability, if any, specified herein or elsewhere
(and no agreement specifying a maximum amount of Guarantor's liability shall be
enforceable unless set forth in a writing signed by Silicon or set forth in
this Guaranty); or (b) any direction as to the application of payment by
Borrower or by any other party; or (c) any other continuing or restrictive
guaranty or undertaking or any limitation on the liability of any other
guarantor (whether under this Guaranty or under any other agreement); or (d)
any payment on or reduction of any such other guaranty or undertaking; or (e)
any revocation, amendment, modification or release of any such other guaranty
or undertaking; or (f) any dissolution or termination of, or increase,
decrease, or change in membership of any Guarantor which is a partnership.
Guarantor hereby expressly represents that he was not induced to give this
Guaranty by the fact that there are or may be other guarantors either under
this Guaranty or otherwise, and Guarantor agrees that any release of any one or
more of such other guarantors shall not release Guarantor from his obligations
hereunder either in full or to any lesser extent. If Guarantor is a married
person, Guarantor hereby expressly agrees that recourse may be had against his
or her separate property for all of his or her obligations hereunder.
12. FINANCIAL CONDITION OF BORROWER. Guarantor is fully aware of the
financial condition of Borrower and is executing and delivering this Guaranty
at Borrower's request and based solely upon his own independent investigation
of all matters pertinent hereto, and Guarantor is not relying in any manner
upon any representation or statement of Silicon with respect thereto.
Guarantor represents and warrants that he is in a position to obtain, and
Guarantor hereby assumes full responsibility for obtaining, any additional
information concerning Borrower's financial condition and any other matter
pertinent hereto as Guarantor may desire, and Guarantor is not relying upon or
expecting Silicon to furnish to him any information now or hereafter in
Silicon's possession concerning the same or any other matter. By executing
this Guaranty, Guarantor knowingly accepts the full range of risks encompassed
within a contract of continuing guaranty, which risks Guarantor acknowledges
include without limitation the possibility that Borrower will incur additional
Indebtedness for which Guarantor will be liable hereunder after Borrower's
financial condition or ability to pay such Indebtedness has deteriorated and/or
after bankruptcy or insolvency proceedings have been
-5-
<PAGE> 6
SILICON VALLEY BANK CONTINUING GUARANTY
commenced by or against Borrower. Guarantor shall have no right to require
Silicon to obtain or disclose any information with respect to the Indebtedness,
the financial condition or character of Borrower, the existence of any
collateral or security for any or all of the Indebtedness, the filing by or
against Borrower of any bankruptcy or insolvency proceeding, the existence of
any other guaranties of all or any part of the Indebtedness, any action or
non-action on the part of Silicon, Borrower, or any other person, or any other
matter, fact, or occurrence.
13. REPORTS AND FINANCIAL STATEMENTS OF GUARANTOR. Guarantor shall, at
its sole cost and expense, at any time and from time to time, prepare or cause
to be prepared, and provide to Silicon upon Silicon's request (i) such
financial statements and reports concerning Guarantor for such periods of time
as Silicon may designate, (ii) any other information concerning Guarantor's
business, financial condition or affairs as Silicon may request, and (iii)
copies of any and all foreign, federal, state and local tax returns and reports
of or relating to Guarantor as Silicon may from time to time request.
Guarantor hereby intentionally and knowingly waives any and all rights and
privileges it may have not to divulge or deliver said tax returns, reports and
other information which are requested by Silicon hereunder or in any litigation
in which Silicon may be involved relating directly or indirectly to Borrower or
to Guarantor. Guarantor further agrees immediately to give written notice to
Silicon of any adverse change in Guarantor's financial condition and of any
condition or event which constitutes an Event of Default under this Guaranty.
All reports and information furnished to Silicon hereunder shall be complete,
accurate and correct in all respects. Whenever requested, Guarantor shall
further deliver to Silicon a certificate signed by Guarantor (and, if Guarantor
is a partnership, by all general partners of Guarantor, in their individual
capacities, and, if Guarantor is a corporation, by the president and secretary
of Guarantor, in their individual capacities) warranting and representing that
all reports, financial statements and other documents and information delivered
or caused to be delivered to Silicon under this Guaranty, are complete, correct
and thoroughly and accurately present the financial condition of Guarantor, and
that there exists on the date of delivery of said certificate to Silicon no
condition or event which constitutes an Event of Default under this Guaranty.
14. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that (i) it is in Guarantor's direct interest to assist Borrower in
procuring credit, because Borrower is an affiliate of Guarantor, furnishes
goods or services to Guarantor, purchases or acquires goods or services from
Guarantor, and/or otherwise has a direct or indirect corporate or business
relationship with Guarantor, (ii) this Guaranty has been duly and validly
authorized, executed and delivered and constitutes the valid and binding
obligation of Guarantor, enforceable in accordance with its terms, and (iii)
the execution and delivery of this Guaranty does not violate or constitute a
default under (with or without the giving of notice, the passage of time, or
both) any order, judgment, decree, instrument or agreement to which Guarantor
is a party or by which it or its assets are affected or bound.
15. COSTS. Whether or not suit be instituted, Guarantor agrees to
reimburse Silicon on demand for all reasonable attorneys' fees and all other
reasonable costs and expenses incurred by Silicon in enforcing this Guaranty,
or arising out of or relating in any way to this Guaranty, or in enforcing any
of the Indebtedness against Borrower, Guarantor, or any other person, or in
connection with any property of any kind securing all or any part of the
Indebtedness. Without limiting the generality of the foregoing, and in
addition thereto, Guarantor shall reimburse Silicon on demand for all
reasonable attorneys' fees and costs Silicon incurs in any way relating to
Guarantor, Borrower or the Indebtedness, in order to: obtain legal advice;
enforce or seek to enforce any of its rights; commence, intervene in, respond
to, or defend any action or proceeding; file, prosecute or defend any claim or
cause of action in any action or proceeding (including without limitation any
probate claim, bankruptcy claim, third-party claim, secured creditor claim,
reclamation complaint, and complaint for relief from any stay under the
Bankruptcy Code or otherwise); protect, obtain possession of, sell, lease,
dispose of or otherwise enforce any security interest in or lien on any
property of any kind securing any or all of the Indebtedness; or represent
Silicon in any litigation with respect to Borrower's or Guarantor's affairs.
In the event either Silicon or Guarantor files any lawsuit against the other
predicated on a breach of this Guaranty, the prevailing party in such action
shall be entitled to recover its attorneys' fees and costs of suit from the
non-prevailing party.
16. NOTICES. Any notice which a party shall be required or shall desire
to give to the other hereunder (except for notice of revocation, which shall be
governed by Section 10 of this Guaranty) shall be given by personal delivery or
by telecopier or by depositing the same in the United States mail, first class
postage pre-paid, addressed to Silicon at its address set forth in the heading
of this Guaranty and to Guarantor at his address set forth under his signature
hereon, and such notices shall be deemed duly given on the date of personal
delivery or one day after the date telecopied or 3 business days after the date
of mailing as aforesaid. Silicon and Guarantor may change their address for
purposes of receiving notices hereunder by giving written notice thereof to the
other party in accordance herewith. Guarantor shall give Silicon immediate
written notice of any change in his address.
17. CLAIMS. Guarantor agrees that any claim or cause of action by
Guarantor against Silicon, or any of Silicon's directors, officers, employees,
agents, accountants or attorneys, based upon, arising from, or relating to this
Guaranty, or any other present or future agreement between Silicon and
Guarantor or between Silicon and Borrower, or any other transaction
contemplated hereby or thereby or relating hereto or thereto, or any other
matter, cause or thing whatsoever, whether or not relating hereto or thereto,
occurred, done, omitted or suffered to be done by Silicon, or by Silicon's
directors, officers, employees, agents, accountants or attorneys, whether
sounding in contract or in
-6-
<PAGE> 7
SILICON VALLEY BANK CONTINUING GUARANTY
tort or otherwise, shall be barred unless asserted by Guarantor by the
commencement of an action or proceeding in a court of competent jurisdiction
within Los Angeles County, California, by the filing of a complaint within one
year after the first act, occurrence or omission upon which such claim or cause
of action, or any part thereof, is based and service of a summons and complaint
on an officer of Silicon or any other person authorized to accept service of
process on behalf of Silicon, within 30 days thereafter. Guarantor agrees that
such one year period is a reasonable and sufficient time for Guarantor to
investigate and act upon any such claim or cause of action. The one year
period provided herein shall not be waived, tolled, or extended except by a
specific written agreement of Silicon. This provision shall survive any
termination of this Guaranty or any other agreement.
18. CONSTRUCTION; SEVERABILITY. If more than one person has executed this
Guaranty, the term "Guarantor" as used herein shall be deemed to refer to all
and any one or more such persons and their obligations hereunder shall be joint
and several. Without limiting the generality of the foregoing, if more than
one person has executed this Guaranty, this Guaranty shall in all respects be
interpreted as though each person signing this Guaranty had signed a separate
Guaranty, and references herein to "other guarantors" or words of similar
effect shall include without limitation other persons signing this Guaranty.
As used in this Guaranty, the term "property" is used in its most comprehensive
sense and shall mean all property of every kind and nature whatsoever,
including without limitation real property, personal property, mixed property,
tangible property and intangible property. Words used herein in the masculine
gender shall include the neuter and feminine gender, words used herein in the
neuter gender shall include the masculine and feminine, words used herein in
the singular shall include the plural and words used in the plural shall
include the singular, wherever the context so reasonably requires. If any
provision of this Guaranty or the application thereof to any party or
circumstance is held invalid, void, inoperative or unenforceable, the remainder
of this Guaranty and the application of such provision to other parties or
circumstances shall not be affected thereby, the provisions of this Guaranty
being severable in any such instance.
19. GENERAL PROVISIONS. Silicon shall have the right to seek recourse
against Guarantor to the full extent provided for herein and in any other
instrument or agreement evidencing obligations of Guarantor to Silicon, and
against Borrower to the full extent of the Indebtedness. No election in one
form of action or proceeding, or against any party, or on any obligation, shall
constitute a waiver of Silicon's right to proceed in any other form of action
or proceeding or against any other party. The failure of Silicon to enforce
any of the provisions of this Guaranty at any time or for any period of time
shall not be construed to be a waiver of any such provision or the right
thereafter to enforce the same. All remedies hereunder shall be cumulative and
shall be in addition to all rights, powers and remedies given to Silicon by law
or under any other instrument or agreement. Time is of the essence in the
performance by Guarantor of each and every obligation under this Guaranty. If
Borrower is a corporation, partnership or other entity, Guarantor hereby agrees
that Silicon shall have no obligation to inquire into the power or authority of
Borrower or any of its officers, directors, partners, or agents acting or
purporting to act on its behalf, and any Indebtedness made or created in
reliance upon the professed exercise of any such power or authority shall be
included in the Indebtedness guaranteed hereby. This Guaranty is the entire
and only agreement between Guarantor and Silicon with respect to the guaranty
of the Indebtedness of Borrower by Guarantor, and all representations,
warranties, agreements, or undertakings heretofore or contemporaneously made,
which are not set forth herein, are superseded hereby. No course of dealings
between the parties, no usage of the trade, and no parol or extrinsic evidence
of any nature shall be used or be relevant to supplement or explain or modify
any term or provision of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty. The terms and provisions hereof may not be
waived, altered, modified, or amended except in a writing executed by Guarantor
and a duly authorized officer of Silicon. All rights, benefits and privileges
hereunder shall inure to the benefit of and be enforceable by Silicon and its
successors and assigns and shall be binding upon Guarantor and his heirs,
executors, administrators, personal representatives, successors and assigns.
Neither the death of Guarantor nor notice thereof to Silicon shall terminate
this Guaranty as to his estate, and, notwithstanding the death of Guarantor or
notice thereof to Silicon, this Guaranty shall continue in full force and
effect with respect to all Indebtedness, including without limitation
Indebtedness incurred or created after the death of Guarantor and notice
thereof to Silicon. Section headings are used herein for convenience only.
Guarantor acknowledges that the same may not describe completely the subject
matter of the applicable Section, and the same shall not be used in any manner
to construe, limit, define or interpret any term or provision hereof.
20. GOVERNING LAW; VENUE AND JURISDICTION. This instrument and all acts
and transactions pursuant or relating hereto and all rights and obligations of
the parties hereto shall be governed, construed, and interpreted in accordance
with the internal laws of the State of California. In order to induce Silicon
to accept this Guaranty, and as a material part of the consideration therefor,
Guarantor (i) agrees that all actions or proceedings relating directly or
indirectly hereto shall, at the option of Silicon, be litigated in courts
located within Los Angeles County, California, (ii) consents to the
jurisdiction of any such court and consents to the service of process in any
such action or proceeding by personal delivery or any other method permitted by
law; and (iii) waives any and all rights Guarantor may have to transfer or
change the venue of any such action or proceeding.
21. MUTUAL WAIVER OF RIGHT TO JURY TRIAL. SILICON AND GUARANTOR HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION, CLAIM, LAWSUIT OR PROCEEDING
BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (i) THIS GUARANTEE OR
ANY SUPPLEMENT OR
-7-
<PAGE> 8
SILICON VALLEY BANK CONTINUING GUARANTY
AMENDMENT THERETO; OR (ii) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT
BETWEEN SILICON AND GUARANTOR; OR (iii) ANY BREACH, CONDUCT, ACTS OR OMISSIONS
OF SILICON OR GUARANTOR OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSON AFFILIATED WITH OR
REPRESENTING SILICON OR GUARANTOR; IN EACH OF THE FOREGOING CASES, WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
22. RECEIPT OF COPY. Guarantor acknowledges receipt of a copy of
this Guaranty.
Guarantor Signature: ALPHAHEALTHCARE, INC.
By Douglas J. Tullio
-------------------------
Title President
----------------------
Address: 10 Coburg Road
Eugene, Oregon 97401
-8-
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<FISCAL-YEAR-END> FEB-26-1996
<PERIOD-START> FEB-27-1995
<PERIOD-END> MAY-28-1995
<CASH> 3,083
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<PP&E> 15,492
<DEPRECIATION> 11,517
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<BONDS> 0
<COMMON> 21,224
0
0
<OTHER-SE> (11,068)
<TOTAL-LIABILITY-AND-EQUITY> 17,718
<SALES> 8,545
<TOTAL-REVENUES> 8,545
<CGS> 5,468
<TOTAL-COSTS> 5,468
<OTHER-EXPENSES> 3,282
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<INTEREST-EXPENSE> 4
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<INCOME-TAX> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
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