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
-1-
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
-2-
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-
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-
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-
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-
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-
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-
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.
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:
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.
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.
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.
-------------------------------
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.
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
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.
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
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
----------------------