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EXHIBIT 20.03
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement (as it may from time to time be
amended, restated, supplemented or otherwise modified, this "AGREEMENT") is
entered into effective as of June 2, 2000 (the "EFFECTIVE DATE") by and among
HNC SOFTWARE, INC., a Delaware corporation ("LENDER"), on the one hand, and
BRUCE HANSEN, an individual, and JODY A. HANSEN, his spouse (hereinafter
collectively and individually referred to as "BORROWER"), on the other hand.
This Agreement, the Note (as defined in Section 1.2), the Second Deed of Trust
(as defined in Section 1.4) and any other documents entered into pursuant to
this Agreement or in connection with the Loan (as defined in Section 1.1), are
hereinafter sometimes collectively referred to as the "LOAN DOCUMENTS."
R E C I T A L S
WHEREAS, Lender desires to loan certain funds to Borrower and Borrower
wishes to borrow certain funds from Lender on the terms and conditions set forth
herein;
WHEREAS, the proceeds of such loan shall be used by Borrower to purchase
an improved real property residence in ___________ (the "PROPERTY"); and
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties and covenants set forth in this Agreement, Lender
and Borrower hereby agree as follows:
1. AMOUNT AND TERMS OF LOAN.
1.1 LOAN. Subject to the terms and conditions of this Agreement,
and in reliance on the representations, warranties and covenants of Borrower in
this Agreement and in the other Loan Documents, at and upon the Escrow Closing
(as defined below), Lender shall loan Borrower the principal amount of Six
Hundred Thousand Dollars (US $600,000) (the "LOAN"), which shall be used to fund
Borrower's purchase of the Property. The Loan will only be made to the Borrower
upon the closing of escrow of Borrower's purchase of the Property (the "ESCROW
CLOSING") and will be advanced as part of the Escrow Closing.
1.2 PROMISSORY NOTE; INTEREST. Borrower's indebtedness to Lender
under the Loan Documents shall be evidenced by a Secured Full Recourse
Promissory Note executed by Borrower and delivered to Lender at or before the
Escrow Closing in substantially the form attached as Exhibit A (the "NOTE"). As
provided in the Note, interest on the unpaid principal amount of the Loan will
accrue beginning on June 2, 2000 at a rate equal to eight and fifty
one-hundredths percent (8.50%) per annum, which rate is not less than the
minimum rate established pursuant to Section 1274(d) of the Internal Revenue
Code of 1986, as amended, provided, however, that the rate at which interest
will accrue on unpaid principal under the Loan evidenced by the Note will not
exceed the highest rate permitted by applicable law. All payments under the Loan
shall be made in lawful money of the United States. Interest on the unpaid
principal amount of the Loan will begin to accrue on June 2, 2000 and will
continue to accrue until the date on which the entire principal amount owing
under the Loan has been repaid in full.
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1.3 MATURITY OF LOAN. The unpaid principal amount of this Loan
and all unpaid interest accrued thereon will be immediately due and payable to
Lender in full on that date (the "MATURITY DATE") that is the earlier to occur
of the following:
(a) June 2, 2005; and
(b) ninety (90) days after the date of termination of Bruce
Hansen's employment with Lender for any reason or no reason (where, for this
purpose, Bruce Hansen will be deemed to be employed by Lender if he is employed
by Lender or a wholly-owned subsidiary of Lender).
1.4 SECURITY. Borrower's indebtedness to Lender under the Loan
Documents will be secured by a second deed of trust in customary form (the
"SECOND DEED OF TRUST") on the Property. The Second Deed of Trust will be
executed by Borrower in favor of Lender, with a company that is approved by both
Borrower and Lender to act as trustee, and will be delivered by Borrower to
Lender at or prior to the Escrow Closing. In the event that Borrower grants a
first deed of trust or similar lien on the Property to secure a loan used to
fund Borrower's payment of the purchase price of the Property, Lender agrees not
to file the Second Deed of Trust with the County Recorder until Borrower's first
lender has filed its deed of trust on the Property, and the Second Deed of Trust
shall be senior to all liens on the Property excepting only such first deed of
trust.
1.5 OPTIONAL PREPAYMENTS. Borrower may prepay any unpaid
principal and interest due under the Loan at any time, without penalty, in whole
or in part in increments of at least One Thousand Dollars ($1,000). Each
prepayment will be applied as follows: (a) first to the payment of accrued
interest, and (b) second, to the extent that the amount of such prepayment
exceeds the amount of all such accrued interest, to the payment of principal on
the Loan.
1.6 EMPLOYMENT NOT PROMISED. The parties acknowledge that nothing
in this Agreement or in any exhibit hereto shall affect Lender's right or
ability to terminate Bruce Hansen's employment with Lender or any subsidiary or
affiliate of Lender and nothing in this Agreement or in any exhibit hereto shall
be construed as a promise of continued employment of Bruce Hansen by Lender or
any affiliate of Lender.
2. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower hereby
represents and warrants to Lender that:
2.1 USE OF LOAN PROCEEDS. Borrower will apply the entire Loan
proceeds towards the payment of the purchase price of the Property, and Borrower
is purchasing the Property as Borrower's principal residence.
2.2 RECEIPT OF LOAN PROCEEDS. Borrower acknowledges and agrees
with Lender that any disbursement of the proceeds of the Loan made by Lender to
any account or person designated to receive such proceeds by either Bruce Hansen
or Jody A. Hansen shall be conclusively deemed to be an advancement of such
proceeds of the Loan to Borrower and Borrower will, on demand, confirm that
Borrower has received all proceeds of the Loan that have been disbursed to third
parties at Borrower's direction, and that Borrower has received the full benefit
of such proceeds.
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2.3 TITLE TO PROPERTY. The Property will be in the name of
Borrower and is free and clear of all mortgages, deeds of trust, liens,
encumbrances and security interests, except for: (a) if Borrower has a first
lender for the Property, the first deed of trust filed by such first lender; (b)
statutory liens for the payment of current taxes that are not yet delinquent;
and (c) subject to approval by Lender, encumbrances identified in the
preliminary title report for the Property attached as Exhibit B.
2.4 BALLOON PAYMENT. Borrower acknowledges that the unpaid
principal amount of this Loan and all unpaid interest accrued thereon will be
immediately due and payable to Lender in full as one balloon payment on the
Maturity Date.
3. COVENANTS OF BORROWER.
3.1 INSURANCE COVERING COLLATERAL. Borrower shall maintain all
risk property damage and casualty insurance policies covering the Property in an
amount at least equal to the value of the dwelling and other improvements on the
Property.
3.2 FURTHER ASSURANCES. In addition to the obligations and
documents that this Agreement expressly requires Borrower to execute, deliver
and perform, Borrower will execute, deliver and perform any and all further acts
or documents which Lender may reasonably require in order to carry out the
purposes of this Agreement and/or any of the other Loan Documents.
4. CONDITIONS PRECEDENT TO OBLIGATIONS OF LENDER. The obligation of
Lender to advance the Loan is subject to the satisfaction (or written waiver by
Lender) of each and all of the following conditions precedent:
4.1 REPRESENTATIONS TRUE. All representations and warranties of
Borrower contained in this Agreement and in all other Loan Documents will be
true, correct and complete in all respects.
4.2 AGREEMENT, NOTE AND SECOND DEED OF TRUST. Lender will have
received from Borrower this Agreement, the Note and the Second Deed of Trust,
each duly executed by Borrower.
4.3 ESCROW CLOSING. The Loan need not be advanced to Borrower
until the Escrow Closing and shall be delivered at the Escrow Closing.
4.4 LOAN EFFECTIVE DATE. The Effective Date of the Loan shall be
June 2, 2000.
5. DEFAULT AND REMEDIES.
5.1 DEFAULT. Borrower will be deemed to be in default of the Loan
("DEFAULT") upon the occurrence of one of the following events:
(a) failure by Borrower to pay Lender (or, in the event another
party holds the Note, such holder) in full the amount of unpaid principal and
accrued interest due under the Loan
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on or before the Maturity Date, and failure by Borrower to cure this failure to
pay within five (5) calendar days after Lender gives Borrower written notice of
such failure to pay; or
(b) Borrower's sale, gift, assignment or other transfer of the
Property, except for transfers which, by law, cannot be restricted by a
due-on-sale clause.
5.2 REMEDIES UPON DEFAULT. Upon the occurrence of a Default,
Lender may pursue all its rights and remedies available at law or in equity,
including, but not limited to, the following: (a) the right to accelerate the
payment of all of the unpaid principal and accrued interest due under the Loan
so that such payment will automatically become immediately due and payable in
full without the need for any further action on the part of Lender or any other
holder of the Note; and (b) the right to bring suit to enforce payment under the
Note of all of the unpaid principal and accrued interest under the Loan. The
rights and remedies of Lender herein provided will be cumulative and not
exclusive of any other rights or remedies provided by law or otherwise.
6. MISCELLANEOUS.
6.1 SUCCESSORS AND ASSIGNS; ASSIGNMENT. Except as otherwise
provided in this Agreement, this Agreement, and the rights and obligations of
the parties hereunder, will be binding upon and will inure to the benefit of
their respective successors, assigns, heirs, executors, administrators and legal
representatives. Lender may assign any of its rights and obligations under this
Agreement. Borrower shall not assign any of its rights and obligations under
this Agreement, except with the prior written consent of Lender, and any
assignment purported to be made without such consent shall be void and of no
effect.
6.2 GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the internal laws of the State of California as
applied to agreements entered into in California by California residents,
without giving effect to that body of laws pertaining to conflict of laws.
6.3 NOTICES. Any and all notices required or permitted to be
given to a party pursuant to the provisions of this Agreement must be in writing
and will be effective and deemed to provide such party sufficient notice under
this Agreement on the earliest of the following: (a) at the time of personal
delivery, if delivery of the notice is in person; (b) at the time of
transmission by facsimile or telecopier, addressed to the other party at its
facsimile number or telecopier address specified herein (or hereafter modified
by subsequent notice to the parties hereto), with confirmation of receipt made
by printed confirmation sheet verifying successful transmission of the
facsimile; (c) one (1) business day after deposit with an express overnight
courier for United States deliveries, or two (2) business days after such
deposit for deliveries outside of the United States, with proof of delivery from
the courier requested; or (d) three (3) business days after deposit in the
United States mail by registered or certified mail (return receipt requested)
for United States deliveries.
All notices for delivery outside the United States will be
sent by facsimile or by express courier. All notices not delivered personally or
by facsimile will be sent with postage and/or other charges prepaid and properly
addressed to the party to be notified at the
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address set forth below, or at such other address as such other party may
designate by ten (10) days advance written notice to the other parties hereto.
Notices to Lender will be marked "Attention: Vice President, Corporate Finance."
If to Lender: If to Borrower:
HNC Software Inc. Bruce Hansen and Jody A. Hansen
5935 Cornerstone Court West ___________________________
San Diego, CA 92121 ___________________________
Attention: Vice President, Corporate Finance Facsimile: ___________________
Facsimile: (858) 452-3220
6.4 FURTHER ASSURANCES. The parties agree to execute such further
documents and instruments and to take such further actions as may be reasonably
necessary to carry out the purposes and intent of this Agreement.
6.5 TITLES AND HEADINGS. The titles, captions and headings of
this Agreement are included for ease of reference only and will be disregarded
in interpreting or construing this Agreement. Unless otherwise specifically
stated, all references herein to "sections" and "exhibits" will mean "sections"
and "exhibits" to this Agreement.
6.6 ENTIRE AGREEMENT. The Loan Documents constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Agreement, and supersede all prior understandings and agreements, whether
oral or written, between or among the parties hereto with respect to the
specific subject matter hereof.
6.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same agreement.
6.8 SEVERABILITY. The invalidity or unenforceability of any term
or provision of this Agreement will not affect the validity or enforceability of
any other term or provision.
6.9 FACSIMILE SIGNATURES. This Agreement may be executed and
delivered by facsimile and upon such delivery the facsimile signature will be
deemed to have the same effect as if the original signature had been delivered
to the other party. The original signature copy shall be delivered to the other
party by express overnight delivery. The failure to deliver the original
signature copy and/or the nonreceipt of the original signature copy shall have
no effect upon the binding and enforceable nature of this Agreement.
6.10 AMENDMENT AND WAIVERS. Neither this Agreement nor any other
Loan Document may be amended except by a written agreement executed by each of
the parties hereto. No amendment of or waiver of, or modification of any
obligation under this Agreement or any other Loan Document will be enforceable
unless set forth in a writing signed by the party against which enforcement is
sought. Any amendment effected in accordance with this section will be binding
upon all parties hereto and each of their respective successors and assigns. No
delay or failure to require performance of any provision of this Agreement shall
constitute a waiver of that provision as to that or any other instance. No
waiver granted under this Agreement or any other
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Loan Document as to any one provision herein or therein shall constitute a
subsequent waiver of such provision or of any other provision herein or therein,
nor shall it constitute the waiver of any performance other than the actual
performance specifically waived.
6.11 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, is intended to confer upon any third party any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
6.12 JURISDICTION. The parties agree that any controversy or
claim arising out of or relating to this Agreement shall be tried and litigated
exclusively in a state or federal court of competent jurisdiction located in San
Diego County in the State of California.
6.13 WAIVER OF JURY TRIAL. The parties waive any right they may
have to a trial by jury in respect of any litigation based on, or arising out
of, under or in connection with, this Agreement or any other Loan Document, or
any course of conduct, course of dealing, verbal or written statement or other
action of any party. In addition, Borrower hereby waives presentment, notice of
non-payment, notice of dishonor, protest, demand and diligence.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]
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IN WITNESS WHEREOF, the parties have duly executed and delivered
this Agreement as of the Effective Date.
BORROWER: LENDER:
HNC SOFTWARE INC.
/s/ Bruce Hansen By: /s/ Russell C. Clark
----------------------------------- ---------------------------------
Bruce Hansen Russell C. Clark
Vice President, Corporate Finance
/s/ Jody Hansen
-----------------------------------
Jody A. Hansen
ATTACHMENTS:
Exhibit A - Secured Full Recourse Promissory Note
Exhibit B - List of Encumbrances on the Property
[SIGNATURE PAGE TO LOAN AGREEMENT]
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EXHIBIT A
SECURED FULL RECOURSE PROMISSORY NOTE
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SECURED FULL RECOURSE PROMISSORY NOTE
San Diego, California
$600,000 June 2, 2000
For value received, Bruce Hansen, an individual, and Jody A. Hansen, his
spouse (collectively and individually referred to as the "BORROWER"), hereby
jointly and severally promise to pay to the order of HNC Software Inc., a
Delaware corporation (the "LENDER"), at the Lender's principal place of business
at 5935 Cornerstone Court West, San Diego, California 92121, or at such other
place as the Lender may direct, the principal sum of Six Hundred Thousand
Dollars ($600,000), together with interest accrued on unpaid principal from June
2, 2000 at the rate of eight and fifty one-hundredths percent (8.50%) per annum,
which rate is not less than the minimum rate established pursuant to Section
1274(d) of the Internal Revenue Code of 1986, as amended; provided, however,
that the rate at which interest will accrue on unpaid principal under this Note
will not exceed the highest rate permitted by applicable law. This Secured Full
Recourse Promissory Note, as it may be amended, restated, supplemented or
otherwise modified from time to time, is referred to herein as this "NOTE", and
the loan evidenced by this Note is hereafter referred to as the "LOAN". All
payments under this Note shall be made in lawful money of the United States.
Interest will begin to accrue on June 2, 2000 and will continue to accrue until
the date on which the entire principal amount owing under this Note has been
repaid in full.
This Note is issued pursuant to and governed by the terms and conditions
of that certain Loan and Security Agreement dated June 2, 2000, between the
Lender and Borrower (the "LOAN AGREEMENT"). The following is a statement of the
additional rights and obligations of the holder of this Note and the terms and
conditions to which this Note is subject, and to which the holder, by the
acceptance of this Note, agrees:
1. SECURITY. Payment of this Note is secured by a second deed of
trust (the "SECOND DEED OF TRUST") on certain real property located at
________________ (the "PROPERTY"). The Second Deed of Trust will be executed by
Borrower in favor of the Lender, with a company that is approved by both
Borrower and the Lender to act as trustee, and will be delivered by Borrower to
the Lender at or prior to the closing of escrow of Borrower's purchase of the
Property.
2. MATURITY OF LOAN. The unpaid principal amount of this Note and
all unpaid interest accrued thereon shall be immediately due and payable to the
Lender in full on the date (the "MATURITY DATE") that is the earlier to occur of
the following:
(a) June 2, 2005; and
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(b) ninety (90) days after the date of termination of Bruce
Hansen's employment with Lender for any reason or no reason (where, for this
purpose, Bruce Hansen will be deemed to be employed by Lender if he is employed
by Lender or a wholly-owned subsidiary of Lender).
3. DEFAULT. Borrower will be deemed to be in default of this Note
("DEFAULT") upon the occurrence of one of the following events:
(a) failure by Borrower to pay the Lender (or, in the event
another party holds this Note, such holder) in full the amount of unpaid
principal and accrued interest due under this Note on or before Maturity Date,
and failure by Borrower to cure this failure to pay within five (5) calendar
days after the Lender gives Borrower written notice of such failure to pay; or
(b) Borrower's sale, gift, assignment or other transfer of the
Property, except for transfers which, by law, cannot be restricted by a
due-on-sale clause.
4. REMEDIES UPON DEFAULT. Upon the occurrence of a Default, the
Lender may pursue all its rights and remedies available at law or in equity,
including, but not limited to, the following: (a) the right to accelerate the
payment of all of the unpaid principal and accrued interest due under this Note
so that such payment will automatically become immediately due and payable in
full without the need for any further action on the part of the Lender or any
other holder of this Note; and (b) the right to bring suit to enforce payment
under this Note of all of the unpaid principal and accrued interest under this
Note. The rights and remedies of the Lender herein provided will be cumulative
and not exclusive of any other rights or remedies provided by law or otherwise.
5. PREPAYMENT. Borrower may prepay any unpaid principal and
interest due under this Note at any time, without penalty, in whole or in part
in increments of at least Ten Thousand Dollars ($10,000). Each prepayment will
be applied as follows: (a) first to the payment of accrued interest, and (b)
second, to the extent that the amount of such prepayment exceeds the amount of
all such accrued interest, to the payment of principal.
6. SUCCESSORS AND ASSIGNS; ASSIGNMENT. Except as otherwise
provided in this Note, this Note and the rights and obligations of the parties
hereunder, will be binding upon and will inure to the benefit of their
respective successors, assigns, heirs, executors, administrators and legal
representatives. The Lender may assign any of its rights and obligations under
this Note. Borrower shall not assign any of its rights and obligations under
this Note, except with the prior written consent of the Lender.
7. GOVERNING LAW. This Note will be governed by and construed in
accordance with the internal laws of the State of California as applied to
agreements entered into in California by California residents, without giving
effect to that body of laws pertaining to conflict of laws.
8. NOTICES. Any and all notices required or permitted to be given
to a party pursuant to the provisions of this Note must be in writing and will
be effective and deemed to provide such party sufficient notice under this Note
on the earliest of the following: (a) at the time of personal delivery, if
delivery of the notice is in person; (b) at the time of transmission by
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facsimile or telecopier, addressed to the other party at its facsimile number or
telecopier address specified herein (or hereafter modified by subsequent notice
to the parties hereto), with confirmation of receipt made by printed
confirmation sheet verifying successful transmission of the facsimile; (c) one
(1) business day after deposit with an express overnight courier for United
States deliveries, or two (2) business days after such deposit for deliveries
outside of the United States, with proof of delivery from the courier requested;
or (d) three (3) business days after deposit in the United States mail by
registered or certified mail (return receipt requested) for United States
deliveries.
All notices for delivery outside the United States will be sent by
facsimile or by express courier. All notices not delivered personally or by
facsimile will be sent with postage and/or other charges prepaid and properly
addressed to the party to be notified at the address set forth below, or at such
other address as such other party may designate by ten (10) days advance written
notice to the other parties hereto. Notices to the Lender will be marked
"Attention: Vice President, Corporate Finance."
If to Lender: If to Borrower:
HNC Software Inc. Bruce Hansen and Jody A. Hansen
5935 Cornerstone Court West ___________________________
San Diego, CA 92121 ___________________________
Attention: Vice President, Corporate Finance Facsimile: __________________
Facsimile: (858) 452-3220
9. FURTHER ASSURANCES. The parties agree to execute such further
documents and instruments and to take such further actions as may be reasonably
necessary to carry out the purposes and intent of this Note.
10. TITLES AND HEADINGS. The titles, captions and headings of
this Note are included for ease of reference only and will be disregarded in
interpreting or construing this Note. Unless otherwise specifically stated, all
references herein to "sections" and "exhibits" will mean "sections" and
"exhibits" to this Note.
11. ENTIRE AGREEMENT. This Note and the documents referred to
herein constitute the entire agreement and understanding of the parties with
respect to the subject matter of this Note, and supersede all prior
understandings and agreements, whether oral or written, between or among the
parties hereto with respect to the specific subject matter hereof.
12. SEVERABILITY. The invalidity or unenforceability of any term
or provision of this Note will not affect the validity or enforceability of any
other term or provision.
13. AMENDMENT AND WAIVERS. This Note may not be amended except by
a written agreement executed by each of the parties hereto. No amendment of or
waiver of, or modification of any obligation under this Note or any other Loan
Document will be enforceable unless set forth in a writing signed by the party
against which enforcement is sought. Any amendment effected in accordance with
this Section will be binding upon all parties hereto and each of their
respective successors and assigns. No delay or failure to require performance of
any provision of this Note shall constitute a waiver of that provision as to
that or any other
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instance. No waiver granted under this Note or any other Loan Document as to any
one provision herein or therein shall constitute a subsequent waiver of such
provision or of any other provision herein or therein, nor shall it constitute
the waiver of any performance other than the actual performance specifically
waived.
14. ADDITIONAL WAIVERS. The parties waive any right they may have
to a trial by jury in respect of any litigation based on, or arising out of,
under or in connection with, this Note, or any course of conduct, course of
dealing, verbal or written statement or other action of any loan party or any
secured party. In addition, Borrower hereby waives presentment, notice of
non-payment, notice of dishonor, protest, demand and diligence.
IN WITNESS WHEREOF, Borrower has executed this Note as of the date and
year first above written.
BORROWER:
/s/ Bruce Hansen
-----------------------------------
Bruce Hansen
/s/ Jody Hansen
-----------------------------------
Jody A. Hansen
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EXHIBIT B
LIST OF ENCUMBRANCES ON PROPERTY
