Exhibit 10.3

 

 

 

 

 

 

 

 

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NOTE

 

SBA Loan #

18932771-04

SBA Loan Name

VERITONE ONE, INC.

Date

April 14, 2020

Loan Amount

$1,646,700.00

Interest Rate

1.000%

Borrower

VERITONE ONE, INC.

Operating Company

 

Lender

SUNWEST BANK

1.   PROMISE TO PAY:

In return for the Loan, Borrower promises to pay to the order of Lender the
amount of

ONE MILLION SIX HUNDRED FORTY SIX THOUSAND SEVEN HUNDRED AND 00/100

Dollars, interest on the unpaid principal balance, and all other amounts
required by this Note.

 

2.   DEFINITIONS:

 

“Collateral” means any property taken as security for payment of this Note or
any guarantee of this Note. “Guarantor” means each person or entity that signs a
guarantee of payment of this Note.

“Loan” means the loan evidenced by this Note.

“Loan Documents” means the documents related to this loan signed by Borrower,
any Guarantor, or anyone who pledges collateral.

“SBA” means the Small Business Administration, an Agency of the United States of
America.

 

 

 

 

 

 

 

 

 

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3.   PAYMENT TERMS:

Borrower must make all payments at the place Lender designates. The payment
terms for this Note are:

 

Initial Deferment Period: No payments are due on this loan for 6 months from the
date of first disbursement of this loan. Interest will continue to accrue during
the deferment period.

 

Loan Forgiveness: Borrower may apply to Lender for forgiveness of the amount due
on this loan in an amount equal to the sum of the following costs incurred by
Borrower during the 8-week period beginning on the date of first disbursement of
this loan:

 

 

a.

Payroll costs

 

b.

Any payment of interest on a covered mortgage obligation (which shall not
include any prepayment of or payment of principal on a covered mortgage
obligation)

 

c.

Any payment on a covered rent obligation

 

d.

Any covered utility payment

 

The amount of loan forgiveness shall be calculated (and may be reduced) in
accordance with the requirements of the Paycheck Protection Program, including
the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) (P.L. 116-136). Not more than 25% of the amount
forgiven can be attributable to non-payroll costs. In the event Borrower has
received an EIDL advance, such amount shall be subtracted from the loan
forgiveness amount.

 

Maturity: This Note will mature two years from date of first disbursement of
this loan.

 

Repayment Terms: The interest rate on this Note is one percent per year. The
interest rate is fixed and will not be changed during the life of the loan.

 

Borrower must pay monthly principal and interest payments on the outstanding
principal balance of the Loan amortized over the term of the Loan, unless
otherwise forgiven in whole or part in accordance with the  CARES Act as
described above, beginning seven months from the month this Note is dated until
the Maturity Date. Payments of principal and interest must be made on such date
as designated by the Lender in the months they are due. Any Loan balance
remaining following forgiveness by the SBA (as described above) will be fully
re-amortized over the remaining term of the Loan. The entire principal balance
remaining unpaid,  along with all accrued and unpaid interest, shall be due and
payable on the Maturity Date.

 

Lender will apply each installment payment first to pay interest accrued to the
day Lender receives the payment, then to bring principal current, then to pay
any late fees, and will apply any remaining balance to reduce principal.

 

Loan Prepayment: Notwithstanding any provision in this Note to the contrary:

 

Borrower may prepay this Note at any time without penalty. Borrower may prepay
20 percent or less of the unpaid principal balance at any time without notice.
If Borrower prepays more than 20 percent and the Loan has been sold on the
secondary market, Borrower must: a. Give Lender written notice; b. Pay all
accrued interest; and c. If the prepayment is received less than 21 days from
the date Lender received the notice, pay an amount equal to 21 days interest
from the date lender received the notice, less any interest accrued during the
21 days and paid under b. of this paragraph. If Borrower does not prepay within
30 days from the date Lender received the notice, Borrower must give Lender a
new notice.

 

Non-Recourse. Lender and SBA shall have no recourse against any individual
shareholder, member or partner of Borrower for non-payment of the loan, except
to the extent that such shareholder, member or partner uses the loan proceeds
for an unauthorized purpose.

 

SBA will pay lenders fees for processing Paycheck Protection Program loans in
the following amounts: i. Five (5) percent for loans of not more than $350,000;
ii. Three (3) percent for loans of more than $350,000 and less than $2,000,000;
and iii. One (1) percent for loans of at least $2,000,000.

 

 

 

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4.   DEFAULT:

 

Borrower is in default under this Note if Borrower does not make a payment when
due under this Note, or if Borrower or Operating Company:

 

A.

Fails to do anything required by this Note and other Loan Documents;

 

B.

Defaults on any other loan with Lender;

 

C.

Does not preserve, or account to Lender’s satisfaction for, any of the
Collateral or its proceeds;

 

D.

Does not disclose, or anyone acting on their behalf does not disclose, any
material fact to Lender or SBA;

 

 

E.

Makes, or anyone acting on their behalf makes, a materially false or misleading
representation to Lender or SBA;

 

 

F.

Defaults on any loan or agreement with another creditor, if Lender believes the
default may materially affect Borrower’s ability to pay this Note;

 

 

G.

Fails to pay any taxes when due;

 

H.

Becomes the subject of a proceeding under any bankruptcy or insolvency law;

 

I.

Has a receiver or liquidator appointed for any part of their business or
property;

 

J.

Makes an assignment for the benefit of creditors;

 

K.

Has any adverse change in financial condition or business operation that Lender
believes may materially affect Borrower’s ability to pay this Note;

 

 

L.

Reorganizes, merges, consolidates, or otherwise changes ownership or business
structure without Lender’s prior written consent; or

 

 

M.

Becomes the subject of a civil or criminal action that Lender believes may
materially affect Borrower’s ability to pay this Note.

 

 

5.   LENDER’S RIGHTS IF THERE IS A DEFAULT:

 

Without notice or demand and without giving up any of its rights, Lender may:

 

A.

Require immediate payment of all amounts owing under this Note;

 

B.

Collect all amounts owing from any Borrower or Guarantor;

 

C.

File suit and obtain judgment;

 

D.

Take possession of any Collateral; or

 

E.

Sell, lease, or otherwise dispose of, any Collateral at public or private sale,
with or without advertisement.

 

 

6.   LENDER’S GENERAL POWERS:

 

Without notice and without Borrower’s consent, Lender may:

 

 

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A.

Bid on or buy the Collateral at its sale or the sale of another lienholder, at
any price it chooses;

 

B.

Incur expenses to collect amounts due under this Note, enforce the terms of this
Note or any other Loan Document, and preserve or dispose of the Collateral.
Among other things, the expenses may include payments for property taxes, prior
liens, insurance, appraisals, environmental remediation costs, and reasonable
attorney’s fees and costs. If Lender incurs such expenses, it may demand
immediate repayment from Borrower or add the expenses to the principal balance;

 

 

C.

Release anyone obligated to pay this Note;

 

D.

Compromise, release, renew, extend or substitute any of the Collateral; and

 

E.

Take any action necessary to protect the Collateral or collect amounts owing on
this Note.

 

7.   WHEN FEDERAL LAW APPLIES:

 

When SBA is the holder, this Note will be interpreted and enforced under federal
law, including SBA regulations. Lender or SBA may use state or local procedures
for filing papers, recording documents, giving notice, foreclosing liens, and
other purposes. By using such procedures, SBA does not waive any federal
immunity from state or local control, penalty, tax, or liability. As to this
Note, Borrower may not claim or assert against SBA any local or state law to
deny any obligation, defeat any claim of SBA, or preempt federal law.

 

8.   SUCCESSORS AND ASSIGNS:

 

Under this Note, Borrower and Operating Company include the successors of each,
and Lender includes its successors and assigns.

 

9.   GENERAL PROVISIONS:

 

A.

All individuals and entities signing this Note are jointly and severally liable.

 

B.

Borrower waives all suretyship defenses.

 

C.

Borrower must sign all documents necessary at any time to comply with the Loan
Documents and to enable Lender to acquire, perfect, or maintain Lender’s liens
on Collateral.

 

 

D.

Lender may exercise any of its rights separately or together, as many times and
in any order it chooses. Lender may delay or forgo enforcing any of its rights
without giving up any of them.

 

 

E.

Borrower may not use an oral statement of Lender or SBA to contradict or alter
the written terms of this Note.

 

 

F.

If any part of this Note is unenforceable, all other parts remain in effect.

 

G.

To the extent allowed by law, Borrower waives all demands and notices in
connection with this Note, including presentment, demand, protest, and notice of
dishonor. Borrower also waives any defenses based upon any claim that Lender did
not obtain any guarantee; did not obtain, perfect, or maintain a lien upon
Collateral; impaired Collateral; or did not obtain the fair market value of
Collateral at a sale.

 

 

 

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10.   STATE-SPECIFIC PROVISIONS:

 

 

DELAWARE (for residents of Delaware)

CONFESSION OF JUDGMENT. IN THE EVENT OF ANY DEFAULT OR EVENT OF DEFAULT UNDER
THIS NOTE, INCLUDING WITHOUT LIMITATION, ANY PAYMENT UNDER THIS NOTE NOT BEING
PAID WHEN DUE, WHETHER AT MATURITY BY ACCELERATION OR OTHERWISE, BORROWER HEREBY
IRREVOCABLY APPOINTS AND CONSTITUTES LENDER AS BORROWER’S DULY APPOINTED
ATTORNEY-AT-LAW TO APPEAR IN OPEN COURT IN IN ANY COURT OF COMPETENT
JURISDICTION, AND TO CONFESS JUDGMENT PURSUANT TO THE PROVISIONS OF TITLE 10
SECTION 4732 OF THE DELAWARE CODE, AS AMENDED, AGAINST BORROWER FOR ALL
PRINCIPAL AND INTEREST AND ANY OTHER AMOUNTS DUE AND PAYABLE UNDER THIS NOTE,
TOGETHER WITH ATTORNEY’S FEES AND COLLECTION FEES AS PROVIDED IN THIS NOTE (TO
THE EXTENT PERMITTED BY LAW). THIS POWER OF ATTORNEY IS COUPLED WITH AN INTEREST
AND MAY NOT BE REVOKED AND/OR TERMINATED BY BORROWER. THIS POWER OF ATTORNEY
SHALL NOT BE REVOKED AND/OR TERMINATED BY VIRTUE OF THE DEATH, DISABILITY,
AND/OR DISSOLUTION OF BORROWER. NO SINGLE EXERCISE OF THE POWER TO CONFESS
JUDGMENT SHALL BE DEEMED TO EXHAUST THE POWER, AND NO JUDGMENT AGAINST BORROWER
SHALL BAR SUBSEQUENT ACTION OR JUDGMENT AGAINST SUCH ENTITY AGAINST WHOM THE
JUDGMENT HAS NOT BEEN OBTAINED IN THIS NOTE.

 

OHIO (for residents of Ohio)

CONFESSION OF JUDGMENT. BORROWER HEREBY AUTHORIZES ANY ATTORNEY-AT-LAW TO APPEAR
IN ANY COURT OF RECORD IN ANY COUNTY IN THE STATE OF OHIO OR ELSEWHERE WHERE
BORROWER HAS A PLACE OF BUSINESS, SIGNED A NOTE, OR CAN BE FOUND, AFTER THE
LENDER DECLARES A DEFAULT AND ACCELERATES THE BALANCES DUE UNDER THIS AGREEMENT,
TO WAIVE THE ISSUANCE OF SERVICE OF PROCESS, AND CONFESS JUDGMENT AGAINST
BORROWER IN FAVOR OF LENDER FOR THE AMOUNTS THEN APPEARING DUE, TOGETHER WITH
THE COSTS OF SUIT, AND THEREUPON TO RELEASE ALL ERRORS AND WAIVE ALL RIGHT OF
APPEAL AND STAY OF EXECUTION. BORROWER AGREES AND CONSENTS THAT ANY ATTORNEY
CONFESSING JUDGMENT ON BEHALF OF BORROWER HEREUNDER MAY ALSO BE COUNSEL FOR
LENDER AND ANY OF ITS AFFILIATES, WAIVES ANY CONFLICT OF INTEREST WHICH MIGHT
OTHERWISE ARISE, AND CONSENTS TO LENDER, OR ITS AGENT, PAYING SUCH CONFESSING
ATTORNEY A LEGAL FEE OR ALLOWING SUCH ATTORNEYS’ FEES TO BE PAID FROM ANY
PROCEEDS OF COLLECTION OF AGREEMENT OR COLLATERAL SECURITY THEREFOR.

 

OREGON (for residents of Oregon)

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES, AND COMMITMENTS MADE BY LENDER
CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY,
OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY GRANTOR’S/BORROWER’S RESIDENCE MUST
BE IN WRITING, EXPRESS CONSIDERATION, AND BE SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF LENDER TO BE ENFORCEABLE.

 

PENNSYLVANIA (for residents of Pennsylvania)

CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY
ATTORNEY OR THE PROTHONOTARY OF CLERK OF COURT IN THE COMMONWEALTH OF
PENNSYLVANIA, OR ELSEWHERE, TO APPEAR AT ANY TIME FOR BORROWER AFTER A DEFAULT
UNDER THIS NOTE, AND WITH OR WITHOUT COMPLAINT FILED, CONFESS OR ENTER JUDGMENT
AGAINST BORROWER FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED
INTEREST, LATE CHARGES, AND ANY AND ALL AMOUNTS EXPENDED OR ADVANCED BY LENDER
RELATING TO ANY COLLATERAL SECURING THIS NOTE, TOGETHER WITH COSTS OF SUIT, AND
AN ATTORNEY’S COMMISSION OF TEN PERCENT (10%) OF THE UNPAID PRINCIPAL BALANCE
AND ACCRUED INTEREST FOR COLLECTION, BUT IN ANY EVENT, NOT LESS THAN FIVE
HUNDRED DOLLARS ($500), ON WHICH JUDGMENT OR JUDGMENTS ONE OR MORE EXECUTIONS
MAY ISSUE IMMEDIATELY; AND FOR SO DOING, THIS NOTE OR A COPY OF THIS NOTE
VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. THE AUTHORITY GRANTED IN THIS
NOTE TO CONFESS JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE
OF THAT AUTHORITY BUT SHALL CONTINUE FROM TIME TO TIME, AND AT ALL TIMES, UNTIL
PAYMENT IN FULL OF ALL AMOUNTS DUE UNDER THIS NOTE. BORROWER HEREBY WAIVES ANY
RIGHT BORROWER MAY HAVE TO NOTICE OR TO A HEARING IN CONNECTION WITH ANY SUCH
CONFESSION OF JUDGMENT, AND STATES THAT EITHER A REPRESENTATIVE OF LENDER
SPECIFICALLY CALLED THIS CONFESSION OF JUDGMENT PROVISION TO BORROWER’S
ATTENTION OR BORROWER HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL.

 

VIRGINIA (for residents of Virginia)

CONFESSION OF JUDGMENT. UPON A DEFAULT IN PAYMENT OF THIS NOTE AT MATURITY,
WHETHER BY ACCELERATION OR OTHERWISE, BORROWER HEREBY IRREVOCABLY AUTHORIZES AND
EMPOWERS LENDER, AS BORROWER’S ATTORNEY-IN-FACT, TO APPEAR IN THE CLERK’S OFFICE
AND TO CONFESS JUDGMENT AGAINST BORROWER FOR THE UNPAID AMOUNT OF THIS NOTE AS
EVIDENCED BY THE AFFIDAVIT SIGNED BY AN OFFICER OF LENDER SETTING FORTH THE
AMOUNT THEN DUE, ATTORNEYS’ FEES PLUS COSTS OF SUIT, AND TO RELEASE ALL ERRORS,
AND WAIVE ALL RIGHTS OF APPEAL. BY A WRITTEN INSTRUMENT, LENDER MAY APPOINT A
SUBSTITUTE FOR THE ABOVE-NAMED ATTORNEY-IN-FACT. IF A COPY OF THIS NOTE,
VERIFIED BY AN AFFIDAVIT, SHALL HAVE BEEN FILED IN THE PROCEEDING, IT WILL NOT
BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY. BORROWER WAIVES THE
RIGHT TO ANY STAY OF EXECUTION AND THE BENEFIT OF ALL EXEMPTION LAWS NOW OF
HEREAFTER IN EFFECT. NO SINGLE EXERCISE OF THE FOREGOING WARRANT AND POWER TO
CONFESS JUDGMENT WILL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH
EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID; BUT THE
POWER WILL CONTINUE UNDIMINISHED AND MAY BE EXERCISED FROM TIME TO TIME, AS
LENDER MAY ELECT, UNTIL ALL AMOUNTS OWING ON THIS NOTE HAVE BEEN PAID IN FULL.

 

WASHINGTON (for residents of Washington)

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

 

WISCONSIN (for residents of Wisconsin)

EACH BORROWER WHO IS MARRIED REPRESENTS THAT THIS OBLIGATION IS INCURRED IN THE
INTEREST OF HIS OR HER MARRIAGE OR FAMILY.

 

 

 

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11.   BORROWER’S NAME(S) AND SIGNATURE(S):

 

By signing below, each individual or entity becomes obligated under this Note as
Borrower.

BORROWER:

 

VERITONE ONE, INC.

 

 

By:

/s/ Chad Steelberg

 

Name: Chad Steelberg

 

Title: CEO

 

 

 

 

 

 

 

By:

/s/ Jeffrey Coyne

 

Name: Jeffrey Coyne

 

Title: Secretary

 

 

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