MetLife Capital Loan and Security Agreement
THIS LOAN AND SECURITY AGREEMENT entered into as of the 5th day of June, 1998,
by and between MetLife Capital Corporation, a Delaware corporation, whose
address is 10900 NE 4th Street, Suite 500, Bellevue, WA 98004 ("Lender") and
MedicaLogic, Inc., an Oregon Corporation, whose address is 20500 NW Evergreen
Parkway, Hillsboro, OR 97124 ("Borrower").
WHEREAS, Lender has agreed to make a commercial loan or loans to Borrower;
and
WHEREAS, as a condition to making the loans, and in order to secure the
repayment thereof, Lender has required Borrower to execute and deliver to Lender
this Loan and Security Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower and Lender agree as follows:
1. Creation of Security Interest. As security for the due and punctual
payment of any and all of the present and future obligations of the Borrower to
Lender, whether direct or contingent or joint or several, Borrower hereby
conveys, assigns and grants to Lender a continuing security interest in all of
Borrower's rights, title and interests in and to the equipment described in the
Supplemental Security Agreement(s) entered into pursuant to this Loan and
Security Agreement from time to time ("Equipment") including all present and
future additions, attachments and accessories thereto, all substitutions
therefor and replacement thereof and all proceeds thereof, including all
proceeds of insurance (such Equipment and property hereinafter called
"Collateral").
2. The Loans. (a) Subject to the terms and conditions of this Loan and
Security Agreement, Lender agrees to make a loan or loans to Borrower. The
maximum principal amount of any loan or loans to be made by Lender to Borrower
shall be within Lender's discretion, subject to the exercise of Lender's
reasonable business judgment, and shall be as stated in the loan commitment
letter issued by Lender to Borrower, or in the event a commitment letter is not
issued by Lender, in Lender's internal credit approval (each such loan or loans
shall be referred to as the "Loan Amount").
(b) The Loan Amount shall be repaid by Borrower as a term loan or term
loans ("Term Loan"). The Term Loan shall be evidenced by a promissory
note or notes in the form attached hereto as Exhibit "A" ("Term
Note"). The payment provisions of each Term Note shall be stated
therein.
(c) If requested by Borrower, and in accordance with the terms and
conditions of Section 3 hereof, Lender shall make interim fundings to
Borrower of a Term Loan as partial advances of the Loan Amount
("Interim Loans"). The Interim Loans shall either be for the payment
of the acquisition cost of any items of Equipment delivered and
accepted by Borrower prior to the expiration date of Lender's loan
commitment to Borrower ("Commitment Expiration Date") or to fund
progress payments to the vendor or manufacturer of the Equipment, if
the making of progress payments was agreed to by Lender in its
commitment or approval to make the loan or loans to Borrower. The
Interim Loans shall be evidenced by promissory notes in the form
attached hereto as Exhibit "B" ("Interim Note"). Interest on all
Interim Loans shall be payable as provided therein. The principal
amount due under the Interim Loans shall be due as provided in the
Interim Notes, at which time, provided no Event of Default hereunder
has occurred and is continuing or event which with the passing of time
or giving of notice or both would become an Event of Default hereunder
has occurred and is continuing, Lender shall consolidate all Interim
Loans and convert them to a Term Loan evidenced by a Term Note or
Notes. Whether or not a Term Loan is evidenced by one or more Term
Notes shall be as agreed between Lender and Borrower, or in the
absence of such an agreement, as decided by Lender, in the exercise of
its reasonable business judgment.
(d) In the event that the amount loaned pursuant to the Interim Loans is
less than the Loan Amount, subject to Borrower's compliance with the
terms and conditions of this Loan and Security Agreement (including
the satisfaction of the conditions of borrowing set forth in Section 7
of this Loan and Security Agreement, including but not limited to
providing Lender with a description of the items of Equipment), Lender
shall disburse to Borrower the balance of the Loan Amount on the same
date that the Interim Loans are converted into a term loan.
3. Method For Borrowing On Interim Loan. Borrower shall give Lender at
least five (5) business days written notice of a request for the disbursement of
an Interim Loan ("Request"), specifying the date on which the Interim Loan is to
be disbursed. Such Request shall be in the form attached hereto as Exhibit "C".
Such Request shall be accompanied by an original copy of the invoice or invoices
to be paid from the Interim Loan. Such Request shall constitute a representation
and warranty by the Borrower that (i) as of the date of the Request no Event of
Default or event which with the passing of time or the giving of notice or both
would constitute an Event of Default hereunder has occurred and is continuing
and (ii) in the event items of Equipment have been delivered to the Borrower,
Borrower has unconditionally accepted the Equipment from the vendor thereof.
Subject to the conditions of this Loan and Security Agreement, Lender shall
disburse the Interim Loan to the invoicing party, or if Borrower shall have paid
the amount of such invoice, Lender shall reimburse Borrower, upon receipt of
proof of payment from Borrower.
4. Cross Collateral/Cross Default. All Collateral shall secure the payment
and performance of all of Borrower's liabilities and obligations to Lender
hereunder and under any of the loan documents relating hereto including, but not
limited to, all Interim Notes and all Term Notes (the Loan and Security
Agreement, the Interim Notes, the Term Notes, the Supplemental Security
Agreement(s) and all other loan documents may be referred to herein collectively
as the "Loan Documents"). Lender's security interest in the Collateral shall not
be terminated until and unless all of Borrower's obligations to Lender under any
of the Loan Documents are fully paid and performed. The occurrence of an event
of default under any other of the Loan Documents shall be deemed to be an Event
of Default hereunder and an Event of Default hereunder shall be deemed to be an
event of default under any other of the Loan Documents.
5. Representations And Warranties. Borrower hereby represents and warrants
as follows:
(a) Power and Authorization. Borrower has the full power and (corporate)
authority to execute, deliver and perform Borrower's obligations under
the Loan Documents. The execution and delivery of the Loan Documents
have been authorized by all requisite corporate (or partnership)
action on the part of Borrower. The execution, delivery and
performance of the Loan Documents have not constituted and will not
constitute a breach, default, or violation of or under Borrower's
articles of incorporation, bylaws (partnership agreement), or any
other agreement, indenture, contract, lease, law, order, decree,
judgment, or injunction to which Borrower is a party or may be bound
and have not resulted and will not result in the creation of any lien
upon the Equipment pursuant to any agreement, indenture, lease,
contract or other instrument to which Borrower is a party, except the
lien created by this Loan and Security Agreement.
(b) Existence. If Borrower is a corporation, Borrower (i) is duly
incorporated, validly existing and in good standing under the laws of
its state of incorporation, (ii) has all corporate powers and all
governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted, and (iii) is duly qualified
to transact business as a foreign corporation in each jurisdiction
where the Equipment will be located and in the jurisdiction where its
principal place of business is located. If Borrower is a partnership,
Borrower (i) has been duly formed as a (limited or general)
partnership under the laws of the state of its organization, (ii) is
comprised of the general partner(s) listed on the Schedule of Partners
attached to this Loan and Security Agreement, and (iii) is in good
standing under the laws of the state of its formation.
(c) Binding Effect. This Loan and Security Agreement constitutes the valid
and binding agreement of the Borrower; the Interim Notes and the Term
Note, when executed and delivered, will constitute the valid and
binding obligations of the Borrower; and the Loan Documents are
enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by the bankruptcy laws, and (ii)
rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.
(d) Litigation. There is no action, suit or proceeding pending against, or
to the knowledge of the Borrower, threatened against or affecting the
Borrower, before any court or arbitrator or any governmental body,
agency or official which has not been previously disclosed to the
Lender in writing and in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the business,
financial condition or results of operations of the Borrower or which
would in any manner draw into question the validity of any of the Loan
Documents.
(e) Filing of Tax Returns. The Borrower has filed all tax returns required
to have been filed and has paid all taxes shown to be due and payable
on such returns, including interest and penalties, and all other taxes
which are payable by it, to the extent the same have become due and
payable. The Borrower knows of no proposed tax assessment against it
and all tax liabilities of the Borrower are adequately provided for.
(f) Title. The Borrower has or shall have at the time it executes the Term
Note good and indefeasible title to the Collateral free and clear of
all liens other than the Lender's lien.
(g) Compliance with Law. The business and operations of the Borrower have
been and are being conducted in accordance with all applicable laws,
rules and regulations, other than violations which could not (either
individually or collectively) have a material adverse effect on the
financial condition or operations of the Borrower.
(h) Full Disclosure. All documents, records, instruments, certificates,
statements (including, but not by way of limitation, financial
statements of Borrower) and information provided to Lender by Borrower
in connection with this Loan and Security Agreement are true and
accurate in all material respects and do not contain any untrue
statement, or fail to contain any statement of a material fact
necessary to make the statements contained herein or therein not
misleading. There is no fact known to the Borrower that Borrower has
not disclosed in writing which could materially and adversely affect
the financial condition or operations of Borrower.
(i) Security Interest. The security interest granted to Lender hereunder
is a valid, first priority security interest in the Collateral and has
been or promptly after the execution of the Supplemental Security
Agreement describing the Collateral will be, perfected in accordance
with the requirements of all states in which any item of the
Collateral is located.
(j) Personal Property. Under the laws of the state(s) in which the
Collateral is to be located, the Collateral is deemed to consist
solely of personal property.
(k) Pollution and Environmental Control. Borrower has obtained all
permits, licenses and other authorizations which are required under,
and is in material compliance with, all federal, state, and local laws
and regulations relating to pollution, reclamation, or protection of
the environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, or
hazardous or toxic materials or wastes into air, water, or land, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants or hazardous or toxic materials or wastes. Borrower shall
maintain all such permits, licenses, and authorizations current.
6. Covenants. Borrower hereby agrees and covenants as follows:
(a) Payment. Borrower shall pay the indebtedness secured hereby as
provided herein and in the Interim Notes and Term Notes.
(b) Location of Collateral. Borrower will keep the Collateral located at
the location or locations stated on the Supplemental Security
Agreements, provided, however, that Borrower may change the location
of the collateral with Lender's prior written consent.
(c) No Liens. Except for the security interest granted hereby or under any
other agreement under which Lender is the secured party, whether as
mortgagee, beneficiary or otherwise, Borrower shall keep the
Collateral free and clear of any security interest, lien or
encumbrance of any kind and Borrower shall not sell, assign (by
operation of law or otherwise) exchange or otherwise dispose of any of
the Collateral.
(d) Insurance. Borrower shall procure and continuously maintain and pay
for (a) all risk physical damage and property insurance covering loss
or damage to the equipment for not less than the full replacement
value thereof naming Lender as loss payee and (b) bodily injury and
property damage combined single limit liability insurance, all in such
amounts and against such risks and hazards as are reasonably required
by Lender, with insurance companies and pursuant to contracts or
policies and with deductibles satisfactory to Lender. All contracts
and policies shall include provisions for the protection of Lender
notwithstanding any act or neglect of or breach or default by
Borrower, shall provide for payment of insurance proceeds to Lender,
shall provide that they may not be modified, terminated or cancelled
unless Lender is given at least thirty (30) days' advance written
notice thereof, and shall provide that the coverage is "primary
coverage" for the protection of Borrower or Lender notwithstanding any
other coverage carried by Lender protecting against similar risks.
Borrower shall promptly notify any appropriate insurer and Lender of
each and every occurrence, which may become the basis of a claim or
cause of action against the insured and provide Lender with all data
pertinent to such occurrence. Borrower shall furnish Lender with
certificates of such insurance or copies of policies upon request and
shall furnish Lender with renewal certificates not less than thirty
(30) days prior to the renewal date. Proceeds of all insurance are
payable first to Lender to the extent of its interest.
(e) Financing Statements. At the request of Lender, Borrower will join
Lender in executing one or more financing statements pursuant to the
Uniform Commercial Code and other documents deemed necessary by Lender
under applicable law to record or perfect its security interest in the
Collateral, including continuation statements, in form satisfactory to
Lender and will pay the cost of filing the same in all public offices
wherever filing is deemed by Lender to be necessary or desirable.
Borrower hereby authorizes Lender, in such jurisdictions where such
action is authorized by law, to effect any such recordation or filing
of financing statements or other documents without Borrower's
signature thereto.
(f) Change of Name or Address. Borrower will immediately notify Lender in
writing of any change in its place of business or the adoption or
change of any tradename or fictitious business name, and will upon
request of Lender, execute any additional financing statements or
other similar documents necessary to perfect or maintain its security
interest.
(g) Use of Equipment, Maintenance. Borrower will cause the Equipment to be
used in a careful and proper manner, will comply with and conform to
all governmental laws, rules and regulations relating thereto, and
will cause the Equipment to be operated in accordance with the
manufacturer's or supplier's instructions or manuals and only by
competent and duly qualified personnel. Borrower will cause the
Equipment to be kept and maintained in good repair, condition and
working order and will furnish all parts, replacements, mechanisms,
devices and servicing required therefor so that the value, condition
and operating efficiency thereof will at all times be maintained and
preserved, normal wear and tear excepted. All such repairs, parts,
mechanisms, devices and replacements shall immediately, without
further act, become part of the Equipment and subject to the security
interest created by this Loan and Security Agreement. Borrower will
not make any improvement, change, addition or alteration to the
Equipment if such improvement, change, addition or alteration will
impair the originally intended function or use of the Equipment or
impair the value of the Equipment as it existed immediately prior to
such improvement, change, addition or alteration. Any part added to
the Equipment in connection with any improvement, change, addition or
alteration shall immediately, without further act, become part of the
Equipment and subject to the security interest created by this Loan
and Security Agreement.
(h) Inspection. Lender may at any reasonable time or times inspect the
Equipment and may at any reasonable time or times inspect the books
and records of Borrower.
(i) Taxes. Borrower shall promptly pay, when due, all charges, fees,
assessments and taxes (excluding all taxes measured by Lender's
income) which may now or hereafter be imposed upon the ownership,
leasing, possession, sale or use of the Collateral.
(j) Performance by Lender. If Borrower fails to perform any agreement or
obligation contained herein, Lender may itself perform, or cause the
performance of such agreement or obligation. Borrower will pay, or
reimburse Lender, on demand, for any and all fees, including
attorneys' fees, costs and expenses of whatever kind or nature
incurred by Lender in connection with (i) the creation, preservation
and protection of Lender's security interest in the Collateral,
including, without limitation, all fees and taxes in connection with
the recording or filing of instruments and documents in public
offices, (ii) payments or discharge of any taxes or liens upon or in
respect of the Collateral, (iii) premiums for insurance with respect
to the Equipment and (iv) this Loan and Security Agreement and with
protecting, maintaining or preserving the Collateral and Lender's
interests therein, whether through judicial proceedings or otherwise,
or in connection with defending or prosecuting any actions, suits or
proceedings arising out of or related to the Loan and Security
Agreement and the Loan Documents or in connection with any debt
restructuring, loan workout negotiations or bankruptcy or insolvency
case or proceedings. All such amounts shall constitute obligations of
Borrower secured by the
Collateral. In the event that Borrower fails to perform any of its
agreements contained herein, Borrower will, on demand, reimburse
Lender for all such expenditures, together with interest thereon from
the date of such expenditure until fully reimbursed at the rate of two
percent (2%) per month on the outstanding balance of such expenditures
or the highest rate permitted by law, whichever is less.
(k) Power of Attorney. Borrower hereby irrevocably appoints Lender
Borrower's attorney-in-fact, with full authority in the place and
stead of Borrower and in the name of Borrower or otherwise, from time
to time in the Lender's discretion, to take any action and to execute
any instrument which Lender may deem necessary or advisable to
accomplish the purposes of this Loan and Security Agreement,
including, without limitation: (i) to obtain compromise and adjust
insurance required to be paid to Lender; (ii) to ask, demand, collect,
sue for, recover, receive, and give acquittance and receipts for
moneys due and to become due under or in respect of any of the
Collateral; (iii) to receive, endorse, and collect any drafts or other
instruments, documents, and chattel paper in connection with clause
(i) or (ii) above; and (iv) to file any claims or take any action or
institute any proceedings which Lender may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
the rights of Lender with respect to any of the Collateral.
(l) No Duties. The powers conferred on Lender hereunder are solely to
protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of
any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Lender shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any
Collateral.
(m) Financial Data. Borrower will furnish to Lender and will cause any
guarantor of Borrower's obligations to furnish to Lender on request
(i) annual balance sheet and profit and loss statements prepared in
accordance with generally accepted accounting principles and practices
consistently applied and, if Lender so requires, accompanied by the
annual audit report of an independent certified public accountant
reasonably acceptable to Lender, and (ii) all other financial
information and reports that Lender may from time to time reasonably
request, including, if Lender so requires, income tax returns of
Borrower and any guarantor of Borrower's obligations hereunder.
7. Conditions of Borrowing. Lender shall not be obligated to make any loan
hereunder unless:
(a) The Interim Notes or Term Notes evidencing such loan shall have been
duly executed and delivered to Lender;
(b) Borrower shall have executed and delivered to Lender the Supplemental
Security Agreement describing the Collateral and stating, except with
respect to progress payment fundings, the location thereof;
(c) Except with respect to progress payment fundings, Lender shall have
received evidence (as described in Section 6d hereof) that insurance
has been obtained in accordance with the provisions of this Loan and
Security Agreement;
(d) Lender shall have received any and all third party consents, waivers
or releases deemed necessary or desirable by it in connection with the
loan and the Collateral being financed, including, without limitation,
Uniform Commercial Code lien releases and the consent and waiver, in
form and substance satisfactory to Lender, of each and every realty
owner, landlord and mortgagee holding an interest in or encumbrance on
the real property where any of the Collateral is to be located;
(e) All filings, recordings and other actions deemed necessary or
desirable by Lender in order to establish, protect, preserve and
perfect its security interest in the Collateral being financed by such
loan as a valid perfected first priority security interest shall have
been duly effected, including, without limitation, the filing of
financing statements and the recordation of landlord (owners) and/or
mortgagee waivers or disclaimers, all in form and substance
satisfactory to Lender, and all fees, taxes and other charges relating
to such filings and recordings shall have been paid by Borrower.
(f) The representations and warranties contained in this Loan and Security
Agreement shall be true and correct in all respects on and as of the
date of the making of any loan hereunder with the same effect as the
date of the making of any loan hereunder with the same effect as if
made on and as of such date;
(g) In the sole judgment of Lender, there shall have been no material
adverse change in the financial condition, business or operations of
Borrower from the earliest date of any financial statement, credit
report, business report or similar document submitted to Lender for
its review;
(h) All Loan Documents shall be satisfactory to Lender's attorneys; and
(i) Lender shall have received, in form and substance satisfactory to
Lender, such other documents as Lender shall require including, but
not limited to a Request, proof of payment, vendor invoices and
certificates of authority and incumbency.
8. Default. The occurrence of any of the following events, following the
giving of any required notice and/or the expiration of any applicable period of
grace, shall constitute an event of default ("Event of Default") hereunder:
(a) Borrower's default in payment of any installment of the principal of
or interest on any Interim Note or Term Note when and after the same
shall become due and payable, whether at the due date thereof or by
acceleration or otherwise, which default shall continue unremedied for
ten (10) days; or
(b) The failure by Borrower to make payment of any other amount payable
hereunder or under any Interim Note or Term Note, and the continuance
of such failure for more than ten (10) days after written notice
thereof by Lender to Borrower; or
(c) The failure by Borrower to perform or observe any covenant, condition,
obligation or agreement to be performed or observed by it hereunder,
which failure shall continue unremedied for thirty (30) days after
written notice thereof by Lender to Borrower; or
(d) The occurrence of a default described in Section 4 hereof; or
(e) Any warranty, representation or statement made or furnished with
respect to the Borrower or the Collateral to Lender by or on behalf of
Borrower, in connection with this Loan and Security Agreement, or the
indebtedness secured hereby, shall prove to have been false in any
adverse, material respect when made or furnished; or
(f) Borrower shall become insolvent or bankrupt or make an assignment for
the benefit of creditors or consent to the appointment of a trustee or
receiver; or a trustee or a receiver shall be appointed for Borrower
or for a substantial part of its property without its consent and
shall not be dismissed for a period of sixty (60) days; or bankruptcy,
reorganization, liquidation, insolvency or dissolution proceedings
shall be instituted by or against Borrower and, if instituted against
Borrower, shall be consented to or be pending and not dismissed for a
period of sixty (60) days; or any execution or writ of process shall
be issued under any action or proceeding against Borrower in such
capacity whereby any of the Collateral may be taken or restrained;
Borrower shall cease doing business as a going concern; or, without
the prior written consent of Lender, Borrower shall sell, transfer or
dispose of all or substantially all of its assets or property; or
(g) The liquidation, merger, consolidation, reorganization, conversion to
an "S" status or dissolution, if Borrower is a corporation or
partnership, of Borrower, if in Lender's reasonable opinion, such act
shall materially and adversely affect Borrower's ability to perform
under any of the Loan Documents; or
(h) Any item of Collateral is seized or levied on under legal or
governmental process or for any reason Lender deems itself insecure.
Lender shall be entitled to deem itself insecure when some event
occurs, fails to occur or is threatened or some objective condition
exists or is threatened which significantly impairs the prospects that
any of Borrower's obligations to Lender will be paid when due, which
significantly impairs the value of the Collateral to Lender or which
significantly affects the financial or business condition of Borrower.
The occurrence of an Event of Default shall terminate any
commitment or obligation by Lender to make any of the loans
contemplated by this Loan and Security Agreement.
9. Remedies Upon Default. Upon the occurrence of an Event of Default
hereunder, Lender may, at its option, do any one or more of the following:
(a) Declare all obligations of Borrower to Lender to be immediately due
and payable, whereupon all unpaid principal of and interest on said
indebtedness and other amounts declared due and payable shall be and
become immediately due and payable;
(b) Take possession of all or any of the Collateral and exclude therefrom
Borrower and all others claiming under Borrower, and thereafter hold,
store, use, operate, manage, maintain and control, make repairs,
replacements, alterations, additions and improvements to and exercise
all rights and powers of Borrower in respect to the Collateral or any
part thereof. In the event Lender demands, or attempts to take
possession of the Collateral in the exercise of any rights under this
Loan and Security Agreement, Borrower promises and agrees to promptly
turn over and deliver complete possession thereof to Lender;
(c) Require Borrower to assemble the Collateral, or any portion thereof,
at a place designated by Lender and reasonably convenient to both
parties, and promptly to deliver such Collateral to Lender, or an
agent or representative designated by it;
(d) Sell, lease or otherwise dispose of the Collateral at public or
private sale, without having the Collateral at the place of sale, and
upon terms and in such manner as Lender may determine (and Lender may
be a purchaser at any sale); and
(e) Exercise any remedies of a secured party under the Uniform Commercial
Code as adopted in the state where the Collateral is located or any
other applicable law.
Except as to portions of the Collateral which are perishable or
threaten to decline speedily in value or are of a type customarily
sold on a recognized market, Lender shall give Borrower at least ten
(10)
days' prior written notice of the time and place of any public or
private sale of the Collateral or other intended disposition thereof
to be made. Such notice may be mailed to Borrower at the address set
forth in the first paragraph of this Loan and Security Agreement.
Borrower hereby specifically agrees (to the extent that applicable law
and public policy allows it to effectively do so) that any public or
private sale held in accordance with the terms of this Loan and
Security Agreement shall, for the purpose of the Uniform Commercial
Code as adopted in the state where the Collateral is located and for
all other purposes, be deemed to have been conducted in a commercially
reasonable manner and in good faith.
The proceeds of any sale under Section 9(d) shall be applied as
follows:
(i) To the repayment of the costs and expenses of retaking,
holding and preparing for the sale and the selling of the
Collateral (including legal expenses and attorneys' fees)
and the discharge of all assessments, encumbrances, charges
or liens, if any, on the Collateral prior to the lien hereof
(except any taxes, assessments, encumbrances, charges or
liens subject to which such sale shall have been made);
(ii) To the payment of the whole amount then due and unpaid of
the indebtedness of Borrower to Lender;
(iii) To the payment of other amounts then secured hereunder; and
(iv) The surplus, if any, shall be paid to the Borrower or to
whomsoever may be lawfully entitled to receive the same.
Lender shall have the right to enforce one or more remedies
hereunder, successively or concurrently, and such action shall not
operate to estop or prevent Lender from pursuing any further remedy
which it may have, and any repossession or retaking or sale of the
Collateral pursuant to the terms hereof shall not operate to release
Borrower until full payment of any deficiency has been made in cash.
10. Limitation on Interest: It is the intent of the parties to this Loan
and Security Agreement to contract in strict compliance with applicable usury
laws from time to time in effect. In furtherance thereof, the parties stipulate
and agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay for the use, forbearance or
detention of money at a rate in excess of the maximum interest rate permitted to
be charged by applicable law from time to time in effect.
11. Personal Property/Tags. No item of Equipment will be attached or
affixed to realty or any building without Lender's prior knowledge and written
consent and waiver of the landlord and the mortgagee, if any, of the real
property. If so requested by Lender, Borrower will affix tags supplied by
Lender, reflecting Lender's security interest in the Equipment.
12. Loss and Damage. Borrower shall bear the risk of damage, loss, theft,
or destruction, partial or complete of the Equipment, whether or not such loss
or damage is covered by insurance, except that while Borrower is not in default,
Lender agrees to apply toward payment of obligations of Borrower insurance
proceeds payable to Lender by reason of such damage, loss, theft, or
destruction. In the event of any damage, loss, theft, or destruction, partial or
complete, of any item of Equipment, Borrower shall promptly notify Lender in
writing and at the option of Lender (a) repair or restore the Equipment to good
condition and working order, or (b) replace the Equipment with similar equipment
in good repair, condition and working order, or (c) pay Lender, in cash, an
amount equal to the unamortized equipment cost for the item or if the Equipment
was not purchased with the loan proceeds, the pro rata portion of the
outstanding principal balance due under the Interim Note or Term Note, as the
case may be, and all other amounts relating to that item of Equipment then due
and owing hereunder, and upon payment of that amount, Lender's lien shall be
terminated with respect to that item of Equipment only, and Lender will release
its interest in that item of Equipment.
13. Assignment. Borrower may not assign or transfer any rights under this
Loan and Security Agreement or to the Collateral without Lender's prior written
consent.
14. Indemnification. Borrower shall indemnify and hold harmless Lender from
and against any and all claims, losses, liabilities, causes of action, costs and
expenses (including the fees of Lender's attorneys) ("Claims") in any way
relating to or arising out of this Loan and Security Agreement, the other Loan
Documents or the Collateral, except for any Claims resulting solely and directly
from Lender's gross negligence or willful misconduct.
15. Notices. Whenever Borrower or Lender shall desire to give or serve any
notice, demand, request or other communication with respect to this Loan and
Security Agreement, each such notice, demand, request or communication shall be
in writing and shall be effective only if the same is physically delivered or is
by certified mail, postage prepaid, return receipt requested, or by overnight
courier, postage prepaid, mailed to the parties at the addresses set forth in
the first paragraph of this Loan and Security Agreement, with a copy to Lender's
Vice President of Credit. Any party hereto may change its address for such
notices by delivering or mailing to the other parties hereto, as aforesaid, a
notice of such change.
16. No Waiver by Lender. By exercising or failing to exercise any of its
rights, options or elections hereunder, Lender shall not be deemed to have
waived any breach or default on the part of Borrower or to have released
Borrower from any of the obligations secured hereby, unless such waiver or
release is in writing and is signed by Lender. In addition, the waiver by Lender
of any breach hereof for default in payment of an indebtedness secured hereby
shall not be deemed to constitute a waiver of any succeeding breach or default.
17. Further Agreements. From time to time, Borrower will execute such
further instruments as Lender may reasonably require, in order to protect,
preserve, and maintain the security interest granted hereby.
18. Binding upon Successors. All agreements, covenants, conditions and
provisions of this Loan and Security Agreement shall apply to and bind the
successors and assigns of all parties hereto.
19. Governing Laws. This Loan and Security Agreement shall be governed by
the laws of the State of Washington.
20. Amendment. This Loan and Security Agreement can be modified or
rescinded only by a writing expressly referring to this Loan and Security
Agreement, signed by both of the parties hereto.
21. Invalidity of Provisions. Every provision of this Loan and Security
Agreement is intended to be severable. In the event that any term or provision
hereof is declared by a court to be illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the balance of the
terms and provisions hereof, which terms and provisions shall remain binding and
enforceable, then to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.
IN WITNESS WHEREOF, Borrower and Lender have duly executed this Loan and
Security Agreement the day and year first above written.
Lender: MetLife Capital Corporation Borrower: MedicaLogic, Inc.
---------------------------- ----------------------------
By: MITCHELL J. STEVENS By: GUY E. FIELDS
-------------------------------- ----------------------------------
(Print Name): Mitchell J. Stevens (Print Name): Guy E. Fields
---------------------- ------------------------
Title: Vice President Title: Vice President of Finance
----------------------------- -------------------------------
Social Security Number: _______________
(If Borrower is an individual)
Federal Tax Identification
Number: 930890696
-----------------------------
EXHIBIT "A"
No. ______________________ TERM PROMISSORY NOTE
$ ______________________ ___________________, 19 _____
FOR VALUE RECEIVED, the undersigned, _____________________
("Maker"), promises to pay to the order of MetLife Capital Corporation
("Payee"), at its office at 10900 N.E. 4th St., Suite 500, Box C - 97550,
Bellevue, Washington 98009, the principal sum of ($_____________) Dollars
together with interest on unpaid principal from the date of disbursement of
such principal amount until payment in full at a rate of _________________
percent (_______%) per annum ("Rate") computed on the basis of a 360 day year
of twelve consecutive thirty day months. Interest hereunder shall be paid on
the unpaid principal, together with principal, in ____________ (___)
installments of _______________________________ ($________) Dollars
commencing on _______________ and monthly thereafter until
__________________________ on which date the entire balance of principal and
interest unpaid shall be due and payable. It is agreed that each installment,
when paid, shall be applied by the holder hereof, first so much as shall be
required to the payment of interest accrued as specified hereto, and the
balance thereof to the repayment of the principal sum.
Except as may be otherwise expressly provided herein, this Note may not
be prepaid in whole or in part, except with the prior written consent of Payee.
Maker shall have the privilege of prepaying all (but not part) of the then
outstanding balance under this Note on ______________ or on any installment due
date thereafter, subject to giving thirty (30) days prior written notice to
Payee specifying the date of prepayment and further subject to payment of a
prepayment premium equal to the amount, if any, required to offset the adverse
impact to Payee of any decline in interest rates. The prepayment premium is
determined by (i) calculating the decrease, expressed in basis points (but not
less than zero) in the current weekly average yield for ___________ (____) year
U.S. Treasury Constant Maturities as published in Federal Reserve Statistical
Release H.15(519) (the "Index") from the weekly average yield of ____________ as
of _________________________ to the Friday (or, if Friday is not a business day,
the last business day) of the week immediately preceding the prepayment date
(ii) dividing the difference by 100, (iii) multiplying the result by the
applicable "Premium Factor" set forth below, and (iv) multiplying the product by
the principal to be prepaid. Any prepayment shall be applied first to the
prepayment premium, if any, next to accrued interest and late charges (if any),
and thereafter to the principal then outstanding. The Premium Factor shall be
the amount shown on the following chart for the month in which prepayment
occurs.
Number of Months Remaining (Years) Premium Factor
18 - 13 (2)
12 - 1 (1)
In the event the Federal Reserve Board ceases to publish Statistical Release
H.15(519), then the decrease in _____________ (____) - Year U.S. Treasury
Constant Maturities will be determined from another source designated by Payee.
If Maker shall have given to Payee notice of Maker's intention to so
prepay, Maker shall not then be entitled to withdraw such notice, and the
indebtedness proposed to be prepaid in such notice together with the aforesaid
prepayment fee, if applicable, shall be due and payable upon the date specified
for such prepayment in such notice. Upon the occurrence of an Event of Default
and acceleration of payment of indebtedness evidenced hereby during a period
open to prepayment, Maker shall pay to Payee, in addition to any and all other
sums due and payable hereunder, as liquidated damages for the loss of Payee's
investment and not as a penalty, an amount equal to the prepayment fee which
would have been payable hereunder on such date of acceleration in the event of a
voluntary prepayment. Maker and Payee agree that the foregoing amounts do not
constitute penalties but rather constitute reasonable calculations of the
investment loss that would be sustained by Payee in the event of such
prepayment.
It is specifically understood and agreed by Maker that, in the event of
a default under this Note or under any instrument securing the Note, a tender of
payment of the unpaid principal and accrued interest then outstanding shall be
deemed a prepayment, and, accordingly, said tender must include the premium
herein above required, or if said tender is made prior to the time this
privilege is operative, then said tender must include a premium equal to six (6)
months' interest at the Rate computed on the principal amount so tendered. It is
further understood and agreed by Maker that Payee shall not be obligated to
accept said tender, and said tender shall for all purposes be deemed ineffectual
and deficient, unless said tender shall include the premium herein above
required.
In the event that Payee does not receive any payment on the date due,
Maker will pay Payee a late charge of five percent (5%) of the payment
outstanding together with the payment and, provided said sum is received within
ten (10) days of the date due, Payee agrees not to demand immediate payment of
the whole sum of principal and interest as otherwise permitted herein.
If, from any circumstances whatsoever, payment of any obligation due
under this Note at the time such performance shall be due shall involve
exceeding the maximum amount currently prescribed by any applicable usury
statute or any other applicable law, then such obligation shall be reduced to
such maximum amount, so that in no event shall any payment be possible under
this Note, or under any other instrument evidencing or securing the indebtedness
evidenced hereby, that is in excess of such maximum amount.
In the event that an Event of Default shall occur under the Loan and
Security Agreement (as hereinafter defined) or any other instrument now or
hereafter securing repayment hereof, following any required notice and/or the
expiration of any applicable period of grace, then, and in such event, the
principal indebtedness evidenced hereby, and any other sums advanced hereunder,
together with all unpaid interest accrued thereon, shall, at the option of
Payee, at once become due and payable and may be collected forthwith, regardless
of the stipulated date of maturity. TIME IS OF THE ESSENCE WITH RESPECT TO THIS
NOTE. Interest shall accrue on the outstanding principal for so long as such
default continues, regardless of whether or not there has been an acceleration
of the indebtedness evidenced hereby as set forth herein, at the rate equal to
the lesser of fifteen percent (15%) per annum or the maximum rate allowable
under law. All such interest shall be paid at the time of and as a condition
precedent to the curing of any such default should Payee, at its sole option,
allow such default to be cured. In the event this Note, or any part thereof, is
collected by or through an attorney-at-law, Maker agrees to pay all costs of
collection including, but not limited to, reasonable attorneys' fees, whether or
not suit is filed.
This Note is one of the notes referred to in and is secured by the Loan
and Security Agreement dated June 5, 1998 between Maker and Payee. The terms of
the Loan and Security Agreement are incorporated herein by reference.
Maker waives any right of exemption and waives presentment, protest and
demand and notice of protest, demand and of dishonor and nonpayment of this
Note, and consents that any holder hereof shall have the right, without notice,
to grant any extension or extensions of time for payment of this Note or any
part thereof or any other indulgences or forbearances whatsoever, or may release
any of the security for this Note without in any way affecting the liability of
any other party for the payment of this Note.
The due payment and performance of Maker's obligations hereunder shall
be without regard to any counterclaim, right of offset, or any other
counterclaim whatsoever which Maker may have against Payee and without regard to
any other obligations of any nature whatsoever which Payee may have to Maker,
and no such counterclaim or offset shall be asserted by Maker in any action,
suit or proceeding instituted by Payee for payment of Maker's obligations
hereunder.
This Note and the Loan and Security Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.
Maker acknowledges that there is no presumption that the value of the
property securing this Note is equal to the face amount of the Note, and that a
deficiency judgment may be necessary in proceedings taken for enforcement
hereof.
No amendment to this Note shall be binding upon Payee unless it is in
writing and duly signed by Payee.
IN WITNESS WHEREOF, the Maker has caused these presents to be duly
signed the date first above written.
Borrower: ___________________________
By: ___________________________
Witness: ___________________________ (Print Name) ___________________________
Title: ___________________________
2
EXHIBIT "B"
No. ______________________ INTERIM PROMISSORY NOTE NO. ONE
$ ______________________ ___________________, 19 _____
FOR VALUE RECEIVED, the undersigned, _____________________ ("Maker"), promises
to pay to the order of MetLife Capital Corporation ("Payee"), at its office at
10900 N.E. 4th St., Suite 500, ___________, Bellevue, Washington 98004, the
principal sum of ____________________________________ ($_____________) together
with interest on unpaid principal from the date of disbursement of such
principal amount until payment in full at a rate per annum equal to ________
percent (_______%) (the "Reference Rate"). The Reference Rate shall be adjusted
as of the date of any announced change thereto. Interest shall be computed on
the basis of a 360 day year and actual days elapsed. Interest shall accrue on
the unpaid principal, commencing on the date that funds are advanced to Maker by
Payee hereunder and shall be payable on the fifteenth (15) day of each month
until _______________ on which date the entire balance of principal and interest
unpaid shall be due and payable.
In the event that Payee does not receive any monthly payment on the
date due, Maker will pay Payee a late charge of five percent (5%) of the monthly
payment outstanding together with the monthly payment and, provided said sum is
received within ten (10) days of the date due. Payee agrees not to demand
immediate payment of the whole sum of principal and interest as otherwise
permitted herein.
If, from any circumstances whatsoever, payment of any obligation due
under this Note at the time such performance shall be due shall involve
exceeding the maximum amount currently prescribed by any applicable usury
statute or any other applicable law, then such obligation shall be reduced to
such maximum amount, so that in no event shall any payment be possible under
this Note, or under any other instrument evidencing or securing the indebtedness
evidenced hereby, that is in excess of such maximum amount.
In the event that an Event of Default shall occur under the Loan and
Security Agreement (as hereinafter defined) or any other instrument now or
hereafter securing repayment hereof, following any required notice and/or the
expiration of any applicable period of grace, then, and in such event, the
principal indebtedness evidenced hereby, and any other sums advanced hereunder,
together with all unpaid interest accrued thereon, shall, at the option of
Payee, at once become due and payable and may be collected forthwith, regardless
of the stipulated date of maturity. TIME IS OF THE ESSENCE WITH RESPECT TO THIS
NOTE. Interest shall accrue on the outstanding principal for so long as such
default continues, regardless of whether or not there has been an acceleration
of the indebtedness evidenced hereby as set forth herein, at the rate equal to
the lesser of fifteen percent (15%) per annum or the maximum rate allowable
under law. All such interest shall be paid at the time of and as a condition
precedent to the curing of any such default should Payee, at its sole option,
allow such default to be cured. In the event this Note, or any part thereof, is
collected by or through an attorney-at-law, Maker agrees to pay all costs of
collection including, but not limited to, reasonable attorneys' fees, whether or
not suit is filed.
This Interim Note is one of the notes referred to in and is secured by
the Loan and Security Agreement dated ___________________ between Maker and
Payee. The terms of the Loan and Security Agreement are incorporated herein by
reference.
Maker waives any right of exemption and waives presentment, protest and
demand and notice of protest, demand and of dishonor and nonpayment of this
Interim Note, and consents that any holder hereof shall have the right, without
notice, to grant any extension or extensions of time for payment of this Interim
Note or any part thereof or any other indulgences or forbearances whatsoever, or
may release any of the security for this Interim Note without in any way
affecting the liability of any other party for the payment of this Interim Note.
The due payment and performance of Maker's obligations hereunder shall
be without regard to any counterclaim, right of offset, or any other
counterclaim whatsoever which Maker may have against Payee and without regard to
any other obligations of any nature whatsoever which Payee may have to Maker,
and no such counterclaim or offset shall be asserted by Maker in any action,
suit or proceeding instituted by Payee for payment of Maker's obligations
hereunder.
This Interim Note and the Loan and Security Agreement shall be governed
by and construed in accordance with the laws of the State of Washington.
Maker acknowledges that there is no presumption that the value of the
property securing this Interim Note is equal to the face amount of the Interim
Note, and that a deficiency judgment may be necessary in proceedings taken for
enforcement hereof.
No amendment to this Interim Note shall be binding upon Payee unless it
is in writing and duly signed by Payee.
IN WITNESS WHEREOF, the Maker has caused these presents to be duly
signed the date first above written.
Maker: ___________________________
By: ___________________________
(Print Name) ___________________________
Title: ___________________________
Address: ___________________________
___________________________
EXHIBIT "C"
LOAN # REQUEST FOR ADVANCE OF
NO. LOAN PROCEEDS
In accordance with the Loan and Security Agreement dated ______________, the
undersigned, as Borrower, hereby requests Lender to make a disbursement of the
Loan Amount in the amount of $___________. To the extent that any item of
Equipment has been delivered to Borrower, Borrower represents and warrants that
it has inspected and accepted such item of Equipment and that such item has been
duly assembled and is in good working order.
[ ] The undersigned further authorizes and directs Lender to disburse the
proceeds of this Loan in payment of the following invoices, copies of
which are attached herein.
or
[ ] The undersigned has previously paid the following invoices and requests
MetLife Capital Corporation to disburse the proceeds of this Loan to
the undersigned. Copies of the invoices and proof of such payment are
attached hereto:
VENDOR INVOICE NO. AMOUNT
- --------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
TOTAL ___________________________
DATE: _____________________________
(Borrower): _____________________________
By: _____________________________
(Print Name): _____________________________
Title: _____________________________