Document:

Exhibit 4.7

 

FOURTH SUPPLEMENTAL INDENTURE

 

FOURTH SUPPLEMENTAL INDENTURE, dated as of March 16, 2015 (this “Supplemental Indenture”), by and among ABBEY NATIONAL TREASURY SERVICES PLC, a public limited company incorporated in England and Wales (the “Issuer”), SANTANDER UK PLC, a public limited company incorporated in England and Wales (the “Guarantor”), and THE BANK OF NEW YORK MELLON, a banking corporation duly organized and existing under the laws of the State of New York, as Trustee (the “Trustee”), having its Corporate Trust Office at One Canada Square, London, E14 5AL.

 

W I T N E S S E T H:

WHEREAS, the Issuer, the Guarantor and the Trustee have executed and delivered an Indenture dated as of April 27, 2011 (the “Base Indenture”), as amended and supplemented by a second supplemental indenture entered into on September 10, 2014 (the “Second Supplemental Indenture” and, together with the Base Indenture and this Supplemental Indenture, the “Indenture”);

 

WHEREAS, Section 9.01(d) of the Base Indenture provides that the Issuer, the Guarantor and the Trustee may enter into a supplemental indenture to add to, change or eliminate any of the provisions of the Base Indenture; provided that any such change or elimination shall become effective only when there is no Senior Debt Security Outstanding of any series created prior to the execution of such supplemental indenture effecting such change or elimination which is entitled to the benefit of such provision, and adversely affected by such addition, change or elimination;

 

WHEREAS, Section 9.01(f) of the Base Indenture provides that the Issuer, the Guarantor and the Trustee may enter into a supplemental indenture to establish the forms or terms of the Senior Debt Securities of any series without the consent of Holders as permitted under Sections 2.01 or 3.01 of the Base Indenture;

 

WHEREAS, the Issuer desires to issue $1,000,000,000 2.375% Notes due 2020 (such series of Senior Debt Securities, the “Notes”) pursuant to the Base Indenture (as supplemented and amended by this Supplemental Indenture);

 

WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid and binding instrument in accordance with the terms of the Indenture have been performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized;

 

NOW, THEREFORE, each party agrees as follows for the benefit of the other parties and the equal and ratable benefit of the Holders of the Notes.

 

ARTICLE 1
 DEFINITIONS

 

Section 1.01.                          Definition of Terms. For all purposes of this Supplemental Indenture:

 

(a)                                 capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Base Indenture;

 

(b)                                 all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

 

 

(c)                                  the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

 

(d)                                 the section headings herein are for convenience only and shall not affect the construction of this Supplemental Indenture; and

 

(e)                                  the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

Section 1.02.                          Supplemental Definitions. The following definitions shall apply to the Notes only:

 

(a)                                 “Base Indenture” has the meaning set forth in the recitals to this Supplemental Indenture.

 

(b)                                 “Business Day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in the City of New York or London, England are authorized or required by law, regulation or executive order to close.

 

(c)                                  “Guarantor” has the meaning set forth in the introduction to this Supplemental Indenture.

 

(d)                                 “Indenture” has the meaning set forth in the recitals to this Supplemental Indenture.

 

(e)                                  “Interest Payment Date” has the meaning set forth in clause (d) of of this Supplemental Indenture.

 

(f)                                   “Issue Date” has the meaning set forth in clause (c) of Section 2.01 of this Supplemental Indenture.

 

(g)                                  “Issuer” has the meaning set forth in the introduction to this Supplemental Indenture.

 

(h)                                 “Maturity Date” has the meaning set forth in clause (e) of Section 2.01 of this Supplemental Indenture.

 

(i)                                     “Notes” has the meaning set forth in the recitals to this Supplemental Indenture.

 

(j)                                    “relevant UK resolution authority” means the Bank of England or any other authority with the ability to exercise a UK Bail-in Power.

 

(k)                                 “Regular Record Date” means the fifteenth calendar day, whether or not a Business Day, that precedes the relevant Fixed Rate Interest Payment Date or Floating Rate Interest Payment Date, as applicable.

 

(l)                                     “Santander UK Group” means the Guarantor, together with its subsidiary undertakings.

 

(m)                             “Trustee” has the meaning set forth in the introduction to this Supplemental Indenture.

 

2

 

(n)                                 “UK Bail-in Power” means any statutory power in the UK under the UK Banking Act 2009, as the same may be amended, re-enacted or replaced from time to time, pursuant to which liabilities (including accrued but unpaid interest) of a bank, investment firm and certain banking group companies (including relevant parent undertakings, subsidiaries and/or certain affiliates of banks and investment firms) can be (in part or in full) cancelled, written down, reduced, modified, varied, changed in form, transferred, diluted and/or converted into shares or other securities or obligations of the Issuer or any other person.

 

ARTICLE 2

THE NOTES

 

Section 2.01.                          The following terms relating to the Notes are hereby established:

 

(a)                                 The title of the Notes shall be “2.375% Notes due 2020”;

 

(b)                                 The principal amount of the Notes that may be authenticated and delivered under the Indenture shall not initially exceed $1,000,000,000 (except as otherwise provided in the Indenture);

 

(c)                                  The Notes shall be issued on March 16, 2015 (the “Issue Date”) and the principal on the Notes shall be payable on March 16, 2020, (the “Maturity Date”);

 

(d)                                 Interest on the Notes shall be payable semi-annually at a rate of 2.375% per annum. Interest will be payable in arrears on March 16 and September 16 of each year, beginning on September 16, 2015 (each, a “Interest Payment Date”), and on the Maturity Date, to the person in whose name the Notes are registered at the close of business on the Regular Record Date.  Interest on the Notes will be calculated as contemplated by Section 3.10 of the Base Indenture.  If any Interest Payment Date or Redemption Date, or the Maturity Date, as the case may be, would fall on a day that is not a Business Day, then the Interest Payment Date or Redemption Date, or the Maturity Date, as the case may be, will be postponed to the next succeeding Business Day, but no additional interest shall accrue and be paid unless the Issuer (or the Guarantor, if applicable) fails to make payment on such next succeeding Business Day;

 

(e)                                  No premium, upon redemption or otherwise, shall be payable by the Issuer on the Notes;

 

(f)                                   Principal of, and any interest on, the Notes shall be paid to the Holder through the Trustee, as Paying Agent, having offices in New York, New York;

 

(g)                                  The Notes shall not be redeemable except as provided in Section 11.08 of the Base Indenture. The Notes shall not be redeemable at the option of the Holders at any time;

 

(h)                                 The Issuer shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision;

 

(i)                                     The Notes shall be issued only in denominations of $1,000 and integral multiples of $1,000 in excess thereof;

 

(j)                                    The Notes shall be denominated in U.S. Dollars;

 

3

 

(k)                                 The payment of principal of, and interest on, the Notes shall be payable only in the coin or currency in which the Notes are denominated which, pursuant to clause (j) above, shall be U.S. Dollars;

 

(l)                                     The Notes will be subject to, and each Holder and beneficial owner of the Notes recognizes, acknowledges, agrees and consents that the Notes will be subject to, the exercise of any UK Bail-in Power by the relevant UK resolution authority. Each Holder and beneficial owner of the Notes recognizes, acknowledges, agrees to be bound by, and consents to, the exercise of any UK Bail-in Power by the relevant UK resolution authority pursuant to Article Four of this Supplemental Indenture;

 

(m)                             The Notes will be issued in the form of one or more Global Securities in registered form, without coupons attached, and the initial Holder with respect to each such Global Security shall be Cede & Co., as nominee of DTC;

 

(n)                                 Except in limited circumstances, the Notes will not be issued in definitive form; and

 

(o)                                 The form of the Notes shall be evidenced by one or more Global Securities in registered form substantially in the form of Exhibit A to this Supplemental Indenture.

 

ARTICLE 3

AMENDMENTS TO THE BASE INDENTURE

APPLICABLE TO THE NOTES ONLY

 

Section 3.01.                          Governing Law.  With respect to the Notes only, Article One of the Base Indenture is amended by amending and restating Section 1.12 in its entirety, which shall read as follows:

 

Section 1.12.                                 Governing Law.  This Indenture, the Senior Debt Securities and the related Guarantees shall be governed by, and construed in accordance with, the laws of the State of New York, except that (i) the authorization and execution of the Senior Debt Securities Indenture, the Senior Debt Securities and the related Guarantees shall be governed (in addition to the laws of the State of New York relevant to execution) by the respective jurisdictions of the Issuer, the Guarantor and the Trustee, as the case may be, and (ii) Section 4.01 and Section 4.04 of the Supplemental Indenture and the corresponding provisions in the Senior Debt Securities shall be governed by, and construed in accordance with, the laws of England and Wales.

 

ARTICLE 4

UK BAIL-IN POWER

 

Section 4.01.                          Consent to the Exercise of the UK Bail-in Power.  By its acquisition of the Notes, each Holder and beneficial owner of the Notes:

 

(a)                                 recognizes, acknowledges and agrees to be bound by and consents to the exercise of any UK Bail-in Power by the relevant UK resolution authority in relation to the Notes that may result in (i) the cancellation, write-down or reduction of all, or a portion, of the principal amount of, or any other outstanding amounts due under the Notes (including any interest which is accrued but unpaid) and/or (ii) any other modification, variation or change of form of the Notes and/or (iii) the conversion of all, or a

 

4

 

portion, of the principal amount of, or any other outstanding amounts due under the Notes (including any interest which is accrued but unpaid) into shares or other securities or other obligations of the Issuer, the Guarantor or another person to give effect to the exercise by the relevant UK resolution authority of such UK Bail-in Power, and recognizes, acknowledges, agrees and consents that its rights as a Holder and/or beneficial owner of the Notes will be subject to the provisions of any UK Bail-in Power which are expressed to implement such a reduction, write-down, cancellation, modification, variation, change of form or conversion and that it will accept in lieu of the Notes any ordinary shares or other instruments of ownership into which the Notes may be converted;

 

(b)                                 recognizes, acknowledges and agrees to be bound by and consents to the exercise of any UK Bail-in Power by the relevant UK resolution authority in relation to the Guarantees in relation to the Notes that may result in (i) the cancellation, write-down or reduction of all, or a portion, of the outstanding amounts due under the Guarantees and/or (ii) any other modification, variation or change of form of the Guarantees and/or (iii) the conversion of all, or a portion, of the obligations under the Guarantees into shares or other securities or other obligations of the Guarantor or another person to give effect to the exercise by the relevant UK resolution authority of such UK Bail-in Power, and recognizes, acknowledges, agrees and consents that its rights will be subject to the provisions of any UK Bail-in Power which are expressed to implement such a reduction, write-down, cancellation, modification, variation, change of form or conversion and that it will accept in lieu of the Guarantees any ordinary shares or other instruments of ownership into which the Guarantees may be converted;

 

(c)                                  recognizes, acknowledges and agrees that no repayment of the principal amount of the Notes or payment of interest on the Notes or a payment of any amount under the Guarantees will become due and payable after the exercise of any UK Bail-in Power by the relevant UK resolution authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Issuer and/or the Guarantor after the exercise of such UK Bail-in Power;

 

(d)                                 recognizes, acknowledges and agrees to be bound by and consents to the exercise of any UK Bail-in Power as it may be imposed without any prior notice by the relevant UK resolution authority of its decision to exercise such power with respect to such Notes and/or Guarantees; and

 

(e)                                  recognizes, acknowledges, agrees and consents that this Section 4.01 and Section 2.01 constitute the entire agreement between the Issuer, the Guarantor and each Holder and beneficial owner of the Notes on the matters described herein to the exclusion of any other agreements, arrangements or understandings between the parties relating to the Notes and/or the Guarantees.

 

Section 4.02.                          Duties of the Trustee upon Exercise of the UK Bail-in Power.  By its acquisition of the Notes, each Holder and beneficial owner of the Notes:

 

(a)                                 recognizes, acknowledges and agrees that the exercise of the UK Bail-in Power by the relevant UK resolution authority with respect to the Notes and/or the Guarantees in relation to the Notes including each and every consequence arising therefrom referred to in Section 4.01 shall not give rise to an Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;

 

(b)                                 to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the UK Bail-in Power by the relevant UK resolution authority with respect to the Notes including each and every consequence arising therefrom referred to in Section 4.01;

 

5

 

(c)                                  recognizes, acknowledges and agrees that, upon the exercise of any UK Bail-in Power by the relevant UK resolution authority with respect to the Notes and/or the Guarantees (a) the Trustee shall not be required to take any further directions from Holders of the affected Notes under Section 5.12 of the Base Indenture and (b) none of the Base Indenture or this Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any UK Bail-in Power by the relevant UK resolution authority including each and every consequence arising therefrom referred to in Section 4.01; and

 

(d)                                 shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Notes to take any and all necessary action, if required, to implement the exercise of any UK Bail-in Power with respect to the Notes and/or the Guarantees as it may be imposed including each and every consequence arising therefrom referred to in Section 4.01, without any further action or direction on the part of such Holder or beneficial owner of the Notes.

 

Section 4.03.                          Supplemental Indentures.  In addition to the right to enter into supplemental indentures pursuant to Sections 9.01 and 9.02 of the Base Indenture, the Issuer, the Guarantor and the Trustee may enter into one or more indentures supplemental to the Indenture to modify and amend the terms of the Indenture or the Notes, without the further consent of any Holders of Notes, to the extent necessary to give effect to the exercise by the relevant UK resolution authority of the UK Bail-in Power including each and every consequence arising therefrom referred to in Section 4.01.

 

Section 4.04.                          Subsequent Holders’ Agreement.  Each Holder or beneficial owner of the Notes that acquires its Notes in the secondary market shall be deemed to recognize, acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and beneficial owners of the Notes that acquire the Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Notes related to the UK Bail-in Power including each and every consequence arising therefrom referred to in Section 4.01.

 

Section 4.05.                          Notice to DTC.  Upon the exercise of the UK Bail-in Power by the relevant UK resolution authority with respect to the Notes, the Issuer shall provide a written notice to DTC as soon as practicable regarding such exercise of the UK Bail-in Power for purposes of notifying Holders of such occurrence and, where relevant, marking down the Notes. The Issuer shall also deliver a copy of such notice to the Trustee for information purposes.

 

Section 4.06.                          Outstanding Notes.  Notwithstanding Section 4.02(c) of this Supplemental Indenture, if, following the completion of the exercise of the UK Bail-in Power by the relevant UK resolution authority, the Notes and/or the Guarantees remain outstanding (for example, if the exercise of the UK Bail-in Power results in only a partial write-down of the principal of the Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Notes following such completion to the extent that the Issuer, the Guarantor and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Indenture; provided, however, that notwithstanding the exercise of the UK Bail-in Power by the relevant UK authority, there shall at all times be a trustee hereunder pursuant to, and in accordance with, Section 6.09 of the Base Indenture, and the resignation and/or removal of the Trustee and the appointment of a successor trustee will continue to be governed by Sections 6.10 and 6.11 of the Base Indenture, respectively, including to the extent no additional supplemental indenture or amendment is agreed upon pursuant to this Section 4.06.

 

6

 

Section 4.07.                          Compensation and Reimbursement.  The Issuer’s obligations to reimburse and indemnify the Trustee pursuant to Section 6.07 of the Base Indenture shall survive any exercise of the UK Bail-in Power.

 

ARTICLE 5

MISCELLANEOUS

 

Section 5.01.                    Effect of this Supplemental Indenture; Ratification and Integral Part.  This Supplemental Indenture shall become effective upon its execution and delivery.

 

Except as hereby expressly amended with respect to the Notes only, the Base Indenture is in all respects ratified and confirmed and all the terms, provisions and conditions thereof shall be and remain in full force and effect. This Supplemental Indenture shall be deemed an integral part of the Base Indenture in the manner and to the extent herein and therein provided.

 

Section 5.02.                          Responsibility for Recitals, Etc.  The recitals herein shall be taken as the statements of the Issuer and the Guarantor, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture.

 

Section 5.03.                          Priority.  This Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided. The provisions of this Supplemental Indenture shall, with respect to the Notes and subject to the terms hereof, supersede the provisions of the Base Indenture to the extent the Base Indenture is inconsistent herewith.

 

Section 5.04.                          Governing Law.  This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York, except that (i) the authorization and execution by the Issuer and the Guarantor of this Supplemental Indenture and (ii) Section 4.01 and Section 4.04 of this Supplemental Indenture and the corresponding provisions in the Notes shall be governed by, and construed in accordance with, the laws of England and Wales.

 

Section 5.05.                    Counterparts.  This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

Section 5.06.                    Entire Agreement.  This Supplemental Indenture constitutes the entire agreement of the parties hereto with respect to the amendments to the Base Indenture set forth herein.

 

[Remainder of page intentionally left blank]

 

7

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

	
 
    	
ABBEY NATIONAL TREASURY   SERVICES PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ A Mazaira
    
	
 
    	
Name:
    	
A Mazaira
    
	
 
    	
Title: 
    	
Authorised   Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SANTANDER UK PLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ J Wainwright
    
	
 
    	
Name: 
    	
J Wainwright
    
	
 
    	
Title: 
    	
Authorised Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE BANK OF NEW YORK   MELLON,
    
	
 
    	
as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paul Cattermole
    
	
 
    	
Name:
    	
Paul   Cattermole
    
	
 
    	
Title:
    	
Vice   President
    

 

8

 

 

EXHIBIT A

 

FORM OF NOTES

 

A-1

 

This Security is in global form within the meaning of the Senior Debt Securities Indenture hereinafter referred to and is registered in the name of The Depository Trust Company, a New York corporation (“DTC”), or a nominee of DTC, which may be treated by the Issuer, the Guarantor, the Trustee and any agent thereof as owner and holder of this Security for all purposes.

 

By its acquisition of the Securities represented by this Global Security, each holder and beneficial owner of the Securities recognizes, acknowledges, agrees and consents that the Securities will be subject to the exercise of any UK Bail-in Power (as defined herein) by the relevant UK resolution authority (as defined herein). Each holder and beneficial owner of the Securities also, by its acquisition of the Securities, recognizes, acknowledges, agrees and consents to the exercise of any UK Bail-in Power by the relevant UK resolution authority in relation to the Securities that may result in (i) the cancellation, write-down or reduction of all, or a portion, of the principal amount of, or any other outstanding amounts due under the Securities (including any interest which is accrued but unpaid) and/or (ii) any other modification, variation or change of form of the Securities and/or (iii) the conversion of all, or a portion, of the principal amount of, or any other outstanding amounts due under the Securities (including any interest which is accrued but unpaid) into shares or other securities or other obligations of the Issuer, the Guarantor or another person to give effect to the exercise by the relevant UK resolution authority of such UK Bail-in Power, and the rights of the holders and beneficial owners of the Securities will be subject to the provisions of any UK Bail-in Power which are expressed to implement such a reduction, write -down, cancellation, modification, variation, change of form or conversion and that it will accept in lieu of the Securities any ordinary shares or other instruments of ownership into which the Securities may be converted.

 

By its acquisition of the Securities represented by this Global Security, each holder and beneficial owner of the Securities recognizes, acknowledges, agrees and consents to the exercise of any UK Bail-in Power by the relevant UK resolution authority in relation to the Guarantees in relation to the Securities.

 

Unless this certificate is presented by an authorized representative of DTC to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

 

Unless and until it is exchanged in whole or in part for Securities in definitive form in the limited circumstances referred to in the Senior Debt Securities Indenture, this Global Security may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee to a successor depositary or a nominee of such successor depositary.

 

A-2

 

	
Registered No. [    ]
    	
Principal Amount: $[    ]
    
	
CUSIP: [    ]  
    	
 
    
	
ISIN: [    ]
    	
 
    

 

ABBEY NATIONAL TREASURY SERVICES PLC

 

[    ]% Notes due [    ]

 

Fully, Unconditionally and Irrevocably Guaranteed by

 

SANTANDER UK PLC

 

Abbey National Treasury Services plc, a public limited company incorporated in England and Wales (hereinafter called the “Issuer,” which term shall include any successor entity under the Senior Debt Securities Indenture), for value received, hereby promises to pay to Cede & Co., as nominee for DTC, or registered assigns, upon presentation, the principal sum of [    ] ($[    ]) on [    ] (the “Maturity Date”) and to pay interest thereon from [    ], or from the most recent interest payment date to which interest has been paid or duly provided for, semi-annually in arrears on [    ] and [    ] in each year (each, an “Interest Payment Date”), and on the Maturity Date, commencing on [    ], at the rate of [    ]% per annum, until the entire principal hereof is paid or made available for payment.

 

The interest so payable, and punctually paid or duly provided for on any Interest Payment Date will, as provided in the Senior Debt Securities Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such interest, which shall be the fifteenth calendar day (whether or not a Business Day) preceding the related Interest Payment Date.  Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may either be paid to the Person in whose name this Security is registered at the close of business on a Special Record Date for the payment of Defaulted Interest to be fixed by the Issuer, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Senior Debt Securities Indenture.

 

Payment of the principal of and interest on and any Additional Amounts in respect of this Global Security will be paid to DTC for the purpose of permitting DTC to credit the principal and interest received by it in respect of this Global Security to the accounts of the beneficial owners thereof; provided, however, that if this Security is not a Global Security, payment of the principal of, interest on and Additional Amounts, if any, in respect of this Security will be made at the office or agency of the Trustee in The City of New York, or elsewhere as provided in the Senior Debt Securities Indenture, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; and provided, further, that at the option of the Issuer payment of interest may be made by (a) check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (b) transfer to an account of the Person entitled thereto located inside the United States.

 

If an Interest Payment Date or Redemption Date, or the Maturity Date, as the case may be, would fall on a day that is not a Business Day, then the Interest Payment Date, or

 

A-3

 

Redemption Date, or the Maturity Date, as the case may be, will be postponed to the next succeeding Business Day, but no additional interest shall be paid unless the Issuer fails to make payment on such next succeeding Business Day.

 

All amounts of principal, and premium, if any, and interest, on the Securities will be paid by the Issuer without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the country in which the Issuer is organized or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by fiscal or other laws, regulations and directives.  For the purposes of this Security, the phrase “fiscal or other laws, regulations and directives” shall include any obligation of the Issuer to withhold or deduct from a payment pursuant to an agreement described in Section 1471(b) of the Internal Revenue Code of 1986, as amended (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any regulations thereunder or official interpretations thereof or any law implementing an intergovernmental approach thereto (collectively, “FATCA”).  If deduction or withholding of any such Taxes shall at any time be required by the Taxing Jurisdiction, the Issuer will pay such additional amounts of, or in respect of, the principal amount of, premium, if any, and interest, on the Securities (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders of the Securities, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, and interest, which would have been payable in respect of the Securities had no such deduction or withholding been required; provided, however, that the foregoing will not apply to any such Tax which would not have been payable or due but for the fact that:

 

(i)                                     the Holder or the beneficial owner of this Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of this Security, or the collection of any payment of (or in respect of) principal of, premium, if any, or interest, on this Security;

 

(ii)                                  except in the case of a winding-up of the Issuer in the United Kingdom, this Security is presented (where presentation is required) for payment in the United Kingdom;

 

(iii)                               this Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting (where presentation is required) the same for payment at the close of such 30 day period;

 

(iv)                              the Holder or the beneficial owner of this Security or the beneficial owner of any payment of (or in respect of) principal of, or interest, on this Security failed to comply with a request of the Issuer or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any information requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or

 

A-4

 

administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

 

(v)                                 the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directives;

 

(vi)                              this Security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting (where presentation is required) this Security to another paying agent in a Member State of the European Union; or

 

(vii)                           any combination of subclauses (i) through (vi) above;

 

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.  For the avoidance of doubt, all payments in respect of the Securities will be made subject to any withholding or deduction required pursuant to any fiscal or other laws, regulations and directives, including FATCA, and the Issuer shall not be required to pay Additional Amounts with respect to the principal of, interest and any other payments on, the Securities on account of any such deduction or withholding required pursuant to FATCA.

 

Whenever in this Security there is mentioned, in any context, the payment of the principal of (and premium, if any) or interest, on, or in respect of, the Securities such mention shall be deemed to include mention of the payment of Additional Amounts provided for herein to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions hereof and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

 

A “Business Day” is any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in the City of New York or London, England are authorized or required by law, regulation or executive order to close.

 

Additional provisions of this Security are set forth following the signature page hereof, which provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Senior Debt Securities Indenture or be valid or obligatory for any purpose.

 

A-5

 

[The remainder of this page has been left blank intentionally]

 

A-6

 

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed this [    ] day of [    ], [    ].

 

	
 
    	
ABBEY NATIONAL TREASURY SERVICES PLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Senior Debt Securities of the series designated herein referred to in the within-mentioned Senior Debt Securities Indenture.

 

Dated:

 

THE BANK OF NEW YORK MELLON,
 as Trustee

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    

 

A-7

 

GUARANTEE

 

OF

 

SANTANDER UK PLC

 

For value received, Santander UK plc, a public limited company incorporated under the laws of England and Wales (the “Guarantor,” which term includes any Person as a successor Guarantor under the Senior Debt Securities Indenture referred to in the Senior Debt Security upon which this Guarantee is endorsed), hereby unconditionally and irrevocably guarantees to the Holder of the Senior Debt Security upon which this Guarantee is endorsed the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Senior Debt Security, when and as the same shall become due and payable, whether at maturity, by acceleration, redemption, repayment or otherwise, in accordance with the terms of such Senior Debt Security and of the Senior Debt Securities Indenture.  In case of the failure of Abbey National Treasury Services plc, a public limited company incorporated in England and Wales (the “Issuer,” which term shall include any successor entity under the Senior Debt Securities Indenture), to punctually pay any such principal, premium, interest or Additional Amounts, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise, and as if such payment were made by the Issuer.

 

The indebtedness evidenced by this Guarantee is ranked equally and pari passu with all other unsecured and unsubordinated indebtedness of the Guarantor.

 

All payments of principal of and premium, if any, and interest, if any on, or in respect of, such Senior Debt Security shall be made by the Guarantor without withholding or deduction at source for, or on account of, any present or future income, stamp and other Taxes now or hereinafter imposed or levied, collected, withheld or assessed by or on behalf of the United Kingdom, or the jurisdiction of residence or incorporation of the Guarantor, or any political subdivision or taxing authority thereof or therein (the “Guarantor Taxing Jurisdiction”), unless such taxes, fees, duties, assessments or governmental charges are required to be withheld or deducted by fiscal or other laws, regulations and directives.  For the purposes of this Guarantee, the phrase “fiscal or other laws, regulations and directives” shall include any obligation of the Guarantor to withhold or deduct from a payment pursuant to an agreement described in Section 1471(b) of Code or otherwise imposed pursuant to FATCA. If a withholding or deduction at source is required, the Guarantor shall, subject to the same limitations and exceptions set forth in the Senior Debt Securities Indenture, pay to the Holder of such Senior Debt Security such Additional Amounts as may be necessary so that every net payment of principal, premium, if any, interest or any other amount made to such Holder, after such withholding or deduction, shall not be less than the amount provided for in such Senior Debt Security and the Senior Debt Securities Indenture to be then due and payable.  For the avoidance of doubt, all payments in respect of such Senior Debt Security will be made subject to any withholding or deduction required pursuant to any fiscal or other laws, regulations and directives, including FATCA, and the Guarantor shall not be required to pay Additional Amounts with respect to the principal of, interest and any other payments on, such Senior Debt Security on account of any such deduction or withholding required pursuant to FATCA.

 

A-8

 

The Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute, irrevocable and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Senior Debt Security or the Senior Debt Securities Indenture, any failure to enforce the provisions of such Senior Debt Security or the Senior Debt Securities Indenture, or any waiver, modification, consent or indulgence granted with respect thereto by the Holder of such Senior Debt Security or the Trustee, the recovery of any judgment against the Issuer or any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor.  The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to any such Senior Debt Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, any premium and interest on, and any Additional Amounts with respect to, the Senior Debt Securities and the complete performance of all other obligations contained in such Senior Debt Security.  The Guarantor further agrees, to the fullest extent that it lawfully may do so, that, as between the Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in the Senior Debt Securities Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or prohibition extant under any bankruptcy, insolvency, reorganization or other similar law of any jurisdiction preventing such acceleration in respect of the obligations guaranteed hereby.

 

This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time payment on such Senior Debt Security, in whole or in part, is rescinded or must otherwise be restored to the Issuer or the Guarantor upon the bankruptcy, liquidation or reorganization of the Issuer or otherwise.

 

The Guarantor shall be subrogated to all rights of the Holder of such Senior Debt Security against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of, any premium and interest on, and any Additional Amounts with respect to, such Senior Debt Security shall have been paid in full.

 

As a separate and alternative stipulation, the Guarantor unconditionally and irrevocably agrees that any sum expressed to be payable by the Issuer under the Senior Debt Securities Indenture or such Senior Debt Security but which is for any reason (whether or not now known or becoming known to the Issuer, the Guarantor, the Trustee or any Holder of such Senior Debt Security) not recoverable from the Guarantor on the basis of a Guarantee will nevertheless be recoverable from it as if it were the sole principal debtor and will be paid by it to the Trustee on demand.  This indemnity constitutes a separate and independent obligation from the other obligations in the Senior Debt Securities Indenture, gives rise to a separate and independent cause of action and will apply irrespective of any indulgence granted by the Trustee or any Holder of such Senior Debt Security.

 

The Guarantor may, without the consent of the Holders, assume all of the rights and obligations of the Issuer under the Senior Debt Securities Indenture with respect to such Senior Debt Security and under such Senior Debt Security if, after giving effect to such assumption, no Event of Default or event which with the giving of notice or lapse of time, or both, would become an Event of Default, shall have occurred and be continuing.  Upon such

 

A-9

 

an assumption, the Guarantor shall execute a supplemental indenture evidencing its assumption of all such rights and obligations of the Issuer and the Issuer shall be released from its liabilities under the Senior Debt Securities Indenture and under such Senior Debt Security as obligor on such Senior Debt Security.  The Guarantor shall assume all of the rights and obligations of the Issuer under the Senior Debt Securities Indenture with respect to such Senior Debt Security and under such Senior Debt Security if, upon a default by the Issuer in the due and punctual payment of the principal, premium, if any, or interest on such Senior Debt Security, the Guarantor is prevented by any court order or judicial proceeding from fulfilling its obligations under Section 12.01 of the Senior Debt Securities Indenture with respect to such Senior Debt Security.  Such assumption shall result in such Senior Debt Security becoming the direct obligations of the Guarantor and shall be effected without the consent of the Holders of such Senior Debt Security.  Upon such an assumption, the Guarantor shall execute a supplemental indenture evidencing its assumption of all such rights and obligations of the Issuer, and the Issuer shall be released from its liabilities hereunder and under such Senior Debt Security as obligor on such Senior Debt Security.

 

No reference herein to such Senior Debt Securities Indenture and no provision of such Senior Debt Securities Indenture shall alter or impair the guarantees of the Guarantor, which are absolute and unconditional, of the due and punctual payment of the principal of, interest on and Additional Amounts payable in respect of the Senior Debt Security upon which this Guarantee is endorsed.

 

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Senior Debt Security shall have been executed by manual or facsimile signature by or on behalf of the Trustee under such Senior Debt Securities Indenture.

 

All terms used in this Guarantee that are defined in such Senior Debt Securities Indenture and not otherwise defined herein shall have the meanings assigned to them in such Senior Debt Securities Indenture.

 

This Guarantee shall be governed by and construed in accordance with the laws of the State of New York.

 

[The remainder of this page has been left blank intentionally]

 

A-10

 

IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed this [    ] day of [    ], [    ].

 

 

	
 
    	
SANTANDER UK PLC, 
    
	
 
    	
as the Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
Name: 
    
	
 
    	
 
    	
Title:
    

 

A-11

 

[    ]% Notes due [    ]

 

This Security is one or all of a duly authorized issue of securities of the Issuer (herein called the “Securities”), initially limited in aggregate principal amount to $[    ], issued and to be issued in one or more series under an Indenture, dated as of April 27, 2011 (herein called the “Original Senior Debt Securities Indenture”), among the Issuer, Santander UK plc, as Guarantor (the “Guarantor”) and The Bank of New York Mellon, as trustee (herein called the “Trustee”, which term includes any successor trustee under the Senior Debt Securities Indenture (as defined herein)), as supplemented by the Second Supplemental Indenture, dated as of September 10, 2014 (the “Second Supplemental Indenture”), and the Fourth Supplemental Indenture, dated as March 16, 2015 (the “Fourth Supplemental Indenture” and, together with the Original Senior Debt Securities Indenture and the Second Supplemental Indenture, the “Senior Debt Securities Indenture”), to which Senior Debt Securities Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one or all of the series designated as the “[    ]% Notes due [    ].”

 

As provided in and subject to the provisions of the Senior Debt Securities Indenture, the Issuer and, if applicable, the Guarantor will have the option to redeem the Securities in whole on any Interest Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of the Securities to the date fixed for redemption (or, in the case of Original Issue Discount Securities, the accreted face amount thereof, together with accrued interest, if any), if, at any time, the Issuer (or, if applicable, the Guarantor) shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or, based upon a written legal opinion of independent United Kingdom counsel of recognized standing as set forth in the Senior Debt Securities Indenture, any change in the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after a date included in the terms of such Securities:

 

(a)                                 in making payment under the Securities in respect of principal or premium, if any, or interest, if any, it (or the Guarantor, if applicable) has or will or would on the next Interest Payment Date become obligated to pay Additional Amounts;

 

(b)                                 any payment of Interest on an Interest Payment Date in respect of the Securities has been treated as a “distribution”, or the payment of interest on the next Interest Payment Date in respect of any of the Securities would be treated as a “distribution,” in each case within the meaning of Section 1000 of the Corporation Tax Act 2010 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

 

(c)                                  on an Interest Payment Date the Issuer (or the Guarantor, if applicable) was not entitled, or on the next Interest Payment Date the Issuer (or the Guarantor, if applicable) would not be entitled, to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Issuer would be materially reduced).

 

A-12

 

In the event of a redemption as described in the paragraphs above, notice of such redemption to the Holders of the Securities of any series to be redeemed in whole but not in part at the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to such Holders of the Securities of such series at their last addresses as they shall appear upon the Security Register of the Issuer.

 

The Senior Debt Securities Indenture contains provisions for satisfaction and discharge of the Senior Debt Securities Indenture applicable to the Issuer and the Guarantor, in each case, upon compliance by the Issuer and the Guarantor with certain conditions set forth in the Senior Debt Securities Indenture, which provisions apply to this Security.

 

If an Event of Default with respect to the Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Senior Debt Securities Indenture.

 

As provided in and subject to the provisions of the Senior Debt Securities Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Senior Debt Securities Indenture or for the appointment of an administrator, receiver or trustee or for any other remedy thereunder, unless such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to such Security specifying such Event of Default and stating that such notice is a “Notice of Default” under the Senior Debt Securities Indenture; the Holders of not less than 25% in aggregate principal amount of such Security shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name, as Trustee hereunder; such Holders have offered to the Trustee reasonable indemnity or security satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; the Trustee for 60 days after its receipt of such notice, request and offer of indemnity or security has failed to institute any such proceeding; and no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of such Security.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or interest hereon on or after the respective due dates expressed herein.

 

The Senior Debt Securities Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities under the Senior Debt Securities Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of not less than a majority in principal amount of the outstanding Securities affected by such amendment.  The Senior Debt Securities Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time outstanding, on behalf of the Holders of all Securities, to waive compliance by the Issuer or the Guarantor, or both, with certain provisions of the Senior Debt Securities Indenture and certain past defaults under the Senior Debt Securities Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

No reference herein to the Senior Debt Securities Indenture and no provision of this Security or of the Senior Debt Securities Indenture shall alter or impair the obligation of the

 

A-13

 

Issuer, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

The Issuer may, from time to time, without the consent of the Holders of the Securities, issue additional Securities of this series, guaranteed by the Guarantor, having the same ranking and same interest rate, Stated Maturity, redemption terms and other terms, except for the price to the public and issue date and first Interest Payment Date, as this Security; provided, however, that such additional Securities must be either treated as part of the same issue of debt instruments for U.S. federal income tax purposes or be issued with an issue price that is no less than the adjusted issue price of this Security at the time of issuance of such additional Securities for U.S. federal income tax purposes.  Any such additional Securities, together with this Security, will constitute a single series of Senior Debt Securities under the Senior Debt Securities Indenture.

 

As provided in the Senior Debt Securities Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Senior Debt Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place of payment where the principal of and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Senior Debt Security Registrar duly executed by the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations containing identical terms and provisions, of a like aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 in excess thereof.  As provided in the Senior Debt Securities Indenture and subject to certain limitations set forth therein, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but, subject to certain exceptions set forth in the Senior Debt Securities Indenture, the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuer, the Guarantor, the Trustee or any such agent shall be affected by notice to the contrary.

 

The obligations of the Issuer and the Guarantor under the Senior Debt Securities Indenture and this Security and all documents delivered in the name of the Issuer or the Guarantor, as the case may be, in connection herewith and therewith do not and shall not constitute personal obligations of the directors, officers, employees, agents or shareholders of the Issuer or the Guarantor or any of them, and shall not involve any claim against or personal liability on the part of any of them, and all persons including the Trustee shall look solely to the assets of the Issuer and the Guarantor for the payment of any claim thereunder or for the performance thereof and shall not seek recourse against such directors, officers,

 

A-14

 

employees, agents or shareholders of the Issuer or the Guarantor or any of them or any of their personal assets for such satisfaction.  The performance of the obligations of the Issuer and the Guarantor under the Senior Debt Securities Indenture and this Security and all documents delivered in the name of the Issuer or the Guarantor, as the case may be, in connection therewith shall not be deemed a waiver of any rights or powers of the Issuer or the Guarantor or their respective directors or shareholders under the Issuer’s or the Guarantor’s respective Memorandum and Articles of Association.

 

By its acquisition of the Securities, each Holder and beneficial owner of the Securities: (i) recognizes, acknowledges and agrees to be bound by and consents to the exercise of any UK Bail-in Power by the relevant UK resolution authority in relation to the Securities that may result in (a) the cancellation, write-down or reduction of all, or a portion, of the principal amount of, or any other outstanding amounts due under the Securities (including any interest which is accrued but unpaid) and/or (b) any other modification, variation or change of form of the Securities and/or (c) the conversion of all, or a portion, of the principal amount of, or any other outstanding amounts due under the Securities (including any interest which is accrued but unpaid) into shares or other securities or other obligations of the Issuer, the Guarantor or another person to give effect to the exercise by the relevant UK resolution authority of such UK Bail-in Power, and recognizes, acknowledges, agrees and consents that its rights as a Holder and/or beneficial owner of the Securities will be subject to the provisions of any UK Bail-in Power which are expressed to implement such a reduction, write-down, cancellation, modification, variation, change of form or conversion and that it will accept in lieu of the Securities any ordinary shares or other instruments of ownership into which the Securities may be converted; (ii) recognizes, acknowledges and agrees to be bound by and consents to the exercise of any UK Bail-in Power by the relevant UK resolution authority in relation to the Guarantees in relation to the Securities that may result in (x) the cancellation, write-down or reduction of all, or a portion, of the outstanding amounts due under the Guarantees and/or (y) any other modification, variation or change of form of the Guarantees and/or (z) the conversion of all, or a portion, of the obligations under the Guarantees into shares or other securities or other obligations of the Guarantor or another person to give effect to the exercise by the relevant UK resolution authority of such UK Bail-in Power, and recognizes, acknowledges, agrees and consents that its rights will be subject to the provisions of any UK Bail-in Power which are expressed to implement such a reduction, write-down, cancellation, modification, variation, change of form or conversion and that it will accept in lieu of the Guarantees any ordinary shares or other instruments of ownership into which the Guarantees may be converted; (iii) recognizes, acknowledges and agrees that no repayment of the principal amount of the Securities or payment of interest on the Securities or a payment of any amount under the Guarantees will become due and payable after the exercise of any UK Bail-in Power by the relevant UK resolution authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Issuer and/or the Guarantor after the exercise of such UK Bail-in Power; (iv) recognizes, acknowledges and agrees to be bound by and consents to the exercise of any UK Bail-in Power as it may be imposed without any prior notice by the relevant UK resolution authority of its decision to exercise such power with respect to such Securities and/or Guarantees; and (v) recognizes, acknowledges, agrees and consents that Section 2.01 and Section 4.01 of the Fourth Supplemental Indenture constitute the entire agreement between the Issuer, the Guarantor and each Holder and beneficial owner of the Securities on the matters described therein to the exclusion of any other agreements, arrangements or understandings between the parties relating to the Securities and/or the Guarantees.

 

A-15

 

By its acquisition of the Securities, each Holder and beneficial owner of the Securities: (i) recognizes, acknowledges and agrees that the exercise of the UK Bail-in Power by the relevant UK resolution authority with respect to the Securities and/or the Guarantees in relation to the Securities shall not give rise to an Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”); (ii) to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the UK Bail-in Power by the relevant UK resolution authority with respect to the Securities; (iii) recognizes, acknowledges and agrees that, upon the exercise of any UK Bail-in Power by the relevant UK resolution authority, (a) the Trustee shall not be required to take any further directions from Holders under Section 5.12 of the Original Senior Debt Securities Indenture and (b) the Senior Debt Securities Indenture shall not impose any duties upon the Trustee whatsoever with respect to the exercise of any UK Bail-in Power by the relevant UK resolution authority; and (iv) shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Securities to take any and all necessary action, if required, to implement the exercise of any UK Bail-in Power with respect to the Securities and/or the Guarantees as it may be imposed, without any further action or direction on the part of such Holder or beneficial owner of the Securities. Notwithstanding clause (iii), if, following the completion of the exercise of the UK Bail-in Power by the relevant UK resolution authority, the Securities and/or the Guarantees remain outstanding (for example, if the exercise of the UK Bail-in Power results in only a partial write-down of the principal of the Securities), then the Trustee’s duties under the Senior Debt Securities Indenture shall remain applicable with respect to the Securities following such completion to the extent the Issuer, the Guarantor and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Senior Debt Securities Indenture; provided, however, that notwithstanding the exercise of the UK Bail-in Power by the relevant UK authority, there will at all times be a trustee hereunder pursuant to, and in accordance with, Section 6.09 of the Original Senior Debt Securities Indenture and the resignation and/or removal of the Trustee and the appointment of a successor trustee shall continue to be governed by Sections 6.10 and 6.11 of the Original Senior Debt Securities Indenture, respectively, including to the extent no additional supplemental indenture or amendment to the Senior Debt Securities Indenture is agreed upon pursuant to the Senior Debt Securities Indenture.

 

In addition to the right to enter into supplemental indentures pursuant to Sections 9.01 and 9.02 of the Original Senior Debt Securities Indenture, the Issuer, the Guarantor and the Trustee may enter into one or more indentures supplemental to the Senior Debt Securities Indenture to modify and amend the terms of the Senior Debt Securities Indenture or the Securities, without the further consent of any Holders, to the extent necessary to give effect to the exercise by the relevant UK resolution authority of the UK Bail-in Power.

 

EACH HOLDER OR BENEFICIAL OWNER OF THE SECURITIES THAT ACQUIRES ITS SECURITIES IN THE SECONDARY MARKET SHALL BE DEEMED TO RECOGNIZE, ACKNOWLEDGE AND AGREE TO BE BOUND BY AND CONSENT TO THE SAME PROVISIONS SPECIFIED IN THE SENIOR DEBT SECURITIES INDENTURE TO THE SAME EXTENT AS THE HOLDERS OF THE SECURITIES THAT ACQUIRE THE SECURITIES UPON THEIR INITIAL ISSUANCE, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO THE ACKNOWLEDGEMENT AND

 

A-16

 

AGREEMENT TO BE BOUND BY AND CONSENT TO THE TERMS OF THE SECURITIES RELATED TO THE UK BAIL-IN POWER.

 

Upon the exercise of the UK Bail-in Power by the relevant UK resolution authority with respect to the Securities, the Issuer shall provide a written notice to DTC as soon as practicable regarding such exercise of the UK Bail-in Power for purposes of notifying Holders of such occurrence. The Issuer shall also deliver a copy of such notice to the Trustee for information purposes.

 

“UK Bail-in Power” means any statutory power in the UK under the UK Banking Act 2009, as the same may be amended, re-enacted or replaced from time to time pursuant to which liabilities (including accrued but unpaid interest) of a bank, investment firm and certain banking group companies (including relevant parent undertakings, subsidiaries and/or certain affiliates of banks and investment firms) can be (in part or in full) cancelled, written down, reduced, modified, varied, changed in form, transferred, diluted and/or converted into shares or other securities or obligations of the Issuer or any other person.

 

“relevant UK resolution authority” means the Bank of England or any other authority with the ability to exercise a UK Bail-in Power.

 

All terms used in this Security that are defined in the Senior Debt Securities Indenture and not otherwise defined herein shall have the meanings assigned to them in the Senior Debt Securities Indenture.

 

The Senior Debt Securities Indenture and the Securities, including this Security, shall be governed by and construed in accordance with the law of the State of New York, except that matters relating to Section 4.01 and Section 4.04 of the Fourth Supplemental Indenture (and the corresponding provisions in this Security) shall be governed by and construed in accordance with the laws of England and Wales.

 

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuer has caused “CUSIP” numbers to be printed on the Securities as a convenience to the Holders of the Securities.  No representation is made as to the correctness or accuracy of such CUSIP numbers as printed on the Securities, and reliance may be placed only on the other identification numbers printed hereon.

 

A-17

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned hereby
 sells, assigns and transfers unto

 

PLEASE INSERT SOCIAL

SECURITY OR OTHER IDENTIFYING

NUMBER OF ASSIGNEE

 

	
 
    	
 
    

 

 

(Please Print or Typewrite Name and Address, including Zip Code, of Assignee)

 

 

the within Security of the company and                          hereby does irrevocably constitute and appoint

 

 

attorney to transfer said Security on the books of the within-named company with full power of substitution in the premises.

 

	
Dated:
    	
 
    
	
 
    
	
Signature
    	
 
    
			

 

NOTICE: The signature to this assignment must correspond with the name as it appears on the first page of the within Security in every particular, without alteration or enlargement or any change whatever.

 

	
Signature Guaranteed: 
    	
 
    

 

NOTICE: Signature(s) must be guaranteed by an “eligible guarantor institution” that is a member or participant in a “signature guarantee program” (e.g., the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion Program and the New York Stock Exchange Medallion Program).

 

A-18ex10-1.htm

Exhibit 10.1

 

AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT

 

	
Borrowers:
	
SELECTICA, INC.

2121 South El Camino Real, Suite 1000

San Mateo, California 94403

 
	
Lender:
	
BRIDGE BANK, National Association

55 Almaden Boulevard, Suite 100

San Jose, CA 95113

	  	
SELECTICA SOURCING INC.

2121 South El Camino Real, Suite 1000

San Mateo, California 94403

 
	  	  

 

This BUSINESS FINANCING AGREEMENT, dated as of July 25, 2014, is made and entered into between BRIDGE BANK, NATIONAL ASSOCIATION (“Lender”), on the one hand, and SELECTICA, INC., a Delaware corporation (“Parent”), and SELECTICA SOURCING INC., a Delaware corporation (“Sourcing”) (Parent and Sourcing are sometimes collectively referred to herein as “Borrowers” and each individually as a “Borrower”), on the other hand, with reference to the following facts:

 

A.     Parent and Lender previously entered into that certain Business Loan Agreement, dated as of September 27, 2011 (as amended to date, the “Prior Agreement”), pursuant to which Lender has been providing financing to Borrowers, upon the terms and conditions set forth therein.

 

B.     Borrowers and Lender desire to amend and restate the Prior Agreement in its entirety in accordance with the terms and conditions of this Agreement.

 

NOW THEREFORE, in consideration of the mutual promises set forth in this Agreement, Borrowers and Lender hereby agree as follows:

 

	
1.
	
REVOLVING CREDIT LINE. 

 

	 	
1.1
	
Advances.

 

	 	
(a)
	
ABL Advances. Subject to the terms and conditions of this Agreement, from the date on which this Agreement becomes effective until the Maturity Date, Lender will make ABL Advances to Borrowers not exceeding the ABL Credit Limit or the Borrowing Base, whichever is less; provided that in no event shall Lender be obligated to make any ABL Advance that results in an Overadvance or while any Overadvance is outstanding.

 

	 	
(b)
	
Cash-Secured Advances. Subject to the terms and conditions of this Agreement, from the date on which this Agreement becomes effective until the Maturity Date, Lender will make Cash-Secured Advances to Borrowers not exceeding the Cash-Secured Credit Limit; provided that in no event shall Lender be obligated to make any Cash-Secured Advance unless the Cash Collateral is on deposit with Lender and subject to Lender’s first priority perfected security interest..

 

	 	
(c)
	
Revolving Advances. Amounts borrowed under this Section may be repaid and reborrowed during the term of this Agreement. It shall be a condition to each Advance that (a) an Advance Request acceptable to Lender has been received by Lender, (b) all of the representations and warranties set forth in Section 3 are true and correct on the date of such Advance as though made at and as of each such date, and (c) no Default has occurred and is continuing, or would result from such Advance. 

 

	 	
1.2
	
Advance Requests. Borrowers may request that Lender make an Advance by delivering to Lender an Advance Request therefor and Lender shall be entitled to rely on all the information provided by Borrowers to Lender on or with the Advance Request. The Lender may honor Advance Requests, instructions or repayments given by any Authorized Person.

 

	 	
1.3
	
Due Diligence. Lender may audit each Borrower’s Receivables and any and all records pertaining to the Collateral, at any time and from time to time at Lender’s sole discretion (but no more frequently than annually unless an Event of Default has occurred and is continuing), and at Borrowers’ expense (not to exceed $5,000 per year unless an Event of Default has occurred and is continuing). Lender may at any time and from time to time contact Account Debtors and other persons obligated or knowledgeable in respect of Receivables to confirm the Receivable Amount of such Receivables, to determine whether Receivables constitute Eligible Receivables, and for any other purpose in connection with this Agreement. If any of the Collateral or Borrowers’ books or records pertaining to the Collateral are in the possession of a third party, Borrowers authorize that third party to permit Lender or its agents to have access to perform inspections or audits thereof and to respond to Lender's requests for information concerning such Collateral and records.

 

 

 

1

 

 

	 	
1.4
	
Collections.

 

	 	
(a)
	
Lender shall have the exclusive right to receive all Collections on all Receivables. Each Borrower shall (i) immediately notify, transfer and deliver to Lender all Collections such Borrower receives for deposit into the Collection Account, and (ii) immediately enter into a collection services agreement acceptable to Lender (the "Lockbox Agreement") pursuant to which all Collections received in the Lockbox shall be deposited into the Collection Account. Each Borrower shall use the Lockbox address as the remit to and payment address for all of such Borrower's Collections Account Debtors, and each Borrower shall instruct all Account Debtors to make payments either directly to the Lockbox for deposit by Lender directly to the Collection Account, or instruct them to deliver such payments to Lender by wire transfer, ACH, or other means as Lender may direct for deposit to the Lockbox or Collection Account. It will be considered an immediate Event of Default if this does not occur or the Lockbox is not operational within 60 days of the date of this Agreement.

 

	 	
(b)
	
At Lender's option, Lender may either (i) transfer all Collections deposited into the Collection Account to Borrower's Account, or (ii) apply the Collections deposited into the Collection Account to the outstanding Account Balance, in either case, within three business days of the date received; provided that upon the occurrence and during the continuance of any Default, Lender may apply all Collections to the Obligations in such order and manner as Lender may determine. Lender has no duty to do any act other than to apply such amounts as required above. If an item of Collections is not honored or Lender does not receive good funds for any reason, any amount previously transferred to Borrower's Account or applied to the Account Balance shall be reversed as of the date transferred or applied, as applicable, and, if applied to the Account Balance, the Finance Charge will accrue as if the Collections had not been so applied. Lender shall have, with respect to any goods related to the Receivables, all the rights and remedies of an unpaid seller under the UCC and other applicable law, including the rights of replevin, claim and delivery, reclamation and stoppage in transit.

 

	 	
1.5
	
Receivables Activity Report. Within 30 days after the end of each Monthly Period, Lender shall send to Borrowers a report covering the transactions for that Monthly Period, including the amount of all Advances, Collections, Adjustments, Finance Charges, and other fees and charges. The accounting shall be deemed correct and conclusive unless Borrowers make written objection to Lender within 30 days after the Lender sends the accounting to Borrowers.

 

	 	
1.6
	
Adjustments. In the event any Adjustment or dispute is asserted by any Account Debtor, Borrowers shall promptly advise Lender and shall, subject to the Lender’s approval, resolve such disputes and advise Lender of any Adjustments; provided that in no case will the aggregate Adjustments made with respect to any Receivable exceed 5% of its original Receivable Amount unless Borrowers have obtained the prior written consent of Lender, which consent shall not be unreasonably withheld or delayed.

 

	 	
1.7
	
Recourse; Maturity. Advances and the other Obligations shall be with full recourse against Borrowers. On the Maturity Date, Borrowers will pay all then outstanding Advances and other Obligations to the Lender or such earlier date as shall be herein provided.

 

	 	
1.8
	
Letter of Credit Line. Subject to the terms and conditions of this Agreement, Lender hereby agrees to issue or cause an Affiliate to issue letters of credit for the account of Borrowers (each, a "Letter of Credit" and collectively, "Letters of Credit") from time to time; provided that (a) the Letter of Credit Obligations shall not at any time exceed the Letter of Credit Sublimit and (b) the Letter of Credit Obligations will be treated as ABL Advances for purposes of determining availability under the ABL Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other ABL Advances. The form and substance of each Letter of Credit shall be subject to approval by Lender, in its sole discretion. Each Letter of Credit shall be subject to the additional terms of the Letter of Credit agreements, applications and any related documents required by Lender in connection with the issuance thereof (each, a "Letter of Credit Agreement"). Each draft paid under any Letter of Credit shall be repaid by Borrowers in accordance with the provisions of the applicable Letter of Credit Agreement. No Letter of Credit shall be issued that results in an Overadvance or while any Overadvance is outstanding. Upon the Maturity Date, the amount of Letters of Credit Obligations shall be secured by unencumbered cash on terms acceptable to Lender if the term of this Agreement is not extended by Lender.

 

	 	
1.9
	
Cash Management Services. Borrowers may use availability hereunder up to the Cash Management Sublimit for Lender's cash management services, which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in various cash management services agreements related to such services (the "Cash Management Services"). The entire Cash Management Sublimit will be treated as an ABL Advance for purposes of determining availability under the ABL Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other ABL Advances. The Cash Management Services shall be subject to additional terms set forth in applicable cash management services agreements.

 

 

 

2

 

 

	 	
1.10
	
Foreign Exchange Facility. Borrowers may enter in foreign exchange forward contracts with Lender under which Borrowers commit to purchase from or sell to Lender a set amount of foreign currency more than one business day after the contract date (the "FX Forward Contracts"). The total FX Forward Contracts at any one time may not exceed 10 times the amount of the FX Sublimit. Ten percent (10%) of the amount of each outstanding FX Forward Contract shall be treated as an ABL Advance for purposes of determining availability under the ABL Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other ABL Advances. Lender may terminate the FX Forward Contracts if an Event of Default occurs. Each FX Forward Contract shall be subject to additional terms set forth in the applicable FX Forward Contract or other agreements executed in connection with the foreign exchange facility.

 

	 	
1.11
	
Overadvances. Upon any occurrence of an Overadvance, Borrowers shall immediately pay down the ABL Advances such that, after giving effect to such payments, no Overadvance exists.

 

	
2.
	
Fees and Finance Charges. 

 

	 	
2.1
	
Finance Charges. Lender may, but is not required to, deduct the amount of accrued Finance Charge from Collections received by Lender. Within 10 days of each Month End, Borrower shall pay to Lender any accrued and unpaid Finance Charge as of such Month End. 

 

	 	
2.2
	
Fees. 

 

	 	
(a)
	
Termination Fee. In the event this Agreement is terminated on or before March 20, 2015, Borrowers shall pay Lender the Termination Fee.

 

	 	
(b)
	
Facility Fee. Borrowers shall pay the Facility Fee to Lender on March 20 of each year.

 

	 	
(c)
	
Minimum Monthly Interest. Within ten days after each Month End, Borrowers shall pay to Lender the Minimum Monthly Interest for the Monthly Period ending on such Month End.

 

	 	
(d)
	
Letter of Credit Fees. Borrowers shall pay to Lender fees upon the issuance of each Letter of Credit, upon the payment or negotiation of each draft under any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including without limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in accordance with Lender's standard fees and charges then in effect for such activity.

 

	 	
(e)
	
Maintenance Fee. Waived.

 

	 	
(f)
	
Cash Management and FX Forward Contract Fees. Borrowers shall pay to Lender fees in connection with the Cash Management Services and the FX Forward Contracts as determined in accordance with Lender’s standard fees and charges then in effect for such activity. 

 

	 	
(g)
	
Due Diligence Fee. Borrowers shall pay the Due Diligence Fee to Lender on March 20 of each year.

 

	
3.
	
Representations and Warranties. Each Borrower represents and warrants: 

 

	 	
3.1
	
No representation, warranty or other statement of Borrower in any certificate or written statement given to Lender contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading. 

 

	 	
3.2
	
Such Borrower is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified.

 

	 	
3.3
	
The execution, delivery and performance of this Agreement has been duly authorized, and does not conflict with such Borrower’s organizational documents, nor constitute an Event of Default under any material agreement by which such Borrower is bound. Such Borrower is not in default under any agreement to which or by which it is bound, which default would reasonably be expected to have a material adverse impact on Borrower’s business.

 

	 	
3.4
	
Such Borrower has good title to the Collateral and all inventory is in all material respects of good and marketable quality, free from material defects.

 

	 	
3.5
	
Such Borrower’s name, form of organization, chief executive office, and the place where the records concerning all Receivables and Collateral are kept are set forth at the beginning of this Agreement. Such Borrower is located at its address for notices set forth in this Agreement.

 

 

 

3

 

 

	 	
3.6
	
If such Borrower owns, holds or has any interest in, any registered copyrights, patents or registered trademarks, and licenses of any of the foregoing, such interest has been specifically disclosed and identified to Lender in writing.

 

	
4.
	
Miscellaneous Provisions. Each Borrower will: 

 

	 	
4.1
	
Maintain its corporate existence and good standing in its jurisdictions of incorporation and maintain its qualification in each jurisdiction necessary to such Borrower's business or operations and not merge or consolidate with or into any other business organization, or acquire all or substantially all of the capital stock or property of a third party, unless (i) any such acquired entity becomes a “borrower” under this Agreement and (ii) Lender has previously consented to the applicable transaction in writing.

 

	 	
4.2
	
Give Lender at least 30 days prior written notice of changes to its name, organization, chief executive office or location of records.

 

	 	
4.3
	
Pay all its taxes including gross payroll, withholding and sales taxes when due (except with respect to taxes not yet delinquent or any taxes being disputed in good faith by such Borrower in appropriate proceedings, and for which adequate reserves have been set aside with respect thereto as required by GAAP and, by reason of such contest or nonpayment, no property is subject to a material risk of loss or forfeiture) and will deliver reasonably satisfactory evidence of payment to Lender if requested.

 

	 	
4.4
	
Maintain:

 

	 	
(a)
	
insurance reasonably satisfactory to Lender as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of such Borrower's properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers' compensation, and any other insurance which is usual for such Borrower's business. Each such policy shall provide for at least thirty (30) days prior notice to Lender of any cancellation thereof.

 

	 	
(b)
	
all risk property damage insurance policies (including without limitation windstorm coverage, and hurricane coverage as applicable) covering the tangible property comprising the collateral. Each insurance policy must be for the full replacement cost of the collateral and include a replacement cost endorsement. The insurance must be issued by an insurance company reasonably acceptable to Lender and must include a lender's loss payable endorsement in favor of Lender in a form reasonably acceptable to Lender.

 

Upon the request of Lender, such Borrower shall deliver to Lender a copy of each insurance policy, or, if permitted by Lender, a certificate of insurance listing all insurance in force.

 

	 	
4.5
	
Immediately transfer and deliver to Lender all Collections such Borrower receives.

 

	 	
4.6
	
Not create, incur, assume, or be liable for any indebtedness, other than Permitted Indebtedness.

 

	 	
4.7
	
Immediately notify Lender if such Borrower hereafter obtains any interest in any copyrights, patents, trademarks or licenses that are significant in value or are material to the conduct of its business.

 

	 	
4.8
	
Provide the following financial information and statements in form and content reasonably acceptable to Lender, and such additional information as reasonably requested by Lender from time to time. Lender has the right to require Borrowers to deliver financial information and statements to Lender more frequently than otherwise provided below, and to use such additional information and statements to measure any applicable financial covenants in this Agreement.

 

	 	
(a)
	
Within 120 days of Parent’s fiscal year end, the annual financial statements of Borrowers, certified and dated by an authorized financial officer. These financial statements must be audited (with an opinion reasonably satisfactory to the Lender) by a Certified Public Accountant reasonably acceptable to Lender. The statements shall be prepared on a consolidated basis.

 

	 	
(b)
	
At all times, no later than 45 days after the end of each fiscal quarter of Parent (including the last period in each fiscal year), quarterly financial statements of Borrowers, certified and dated by an authorized financial officer. The statements shall be prepared on a consolidated basis, and reviewed by a Certified Public Account acceptable to Lender.

 

	 	
(c)
	
Within 60 days after the end of each month (including the last period in each fiscal year) and no later than 15 days prior to each Advance, monthly financial statements of Borrowers, certified and dated by an authorized financial officer. The statements shall be prepared on a consolidated and consolidating basis.

 

 

 

4

 

 

	 	
(d)
	
Promptly, upon sending or receipt, copies of any management letters and correspondence relating to management letters, sent or received by Borrowers to or from Borrowers’ auditor. If no management letter is prepared, Borrowers shall, upon Lender's request, obtain a letter from such auditor stating that no deficiencies were noted that would otherwise be addressed in a management letter.

 

	 	
(e)
	
Copies of the Form 10-K Annual Report, and Form 10-Q Quarterly Report for Parent within 5 business days of the date of filing with the Securities and Exchange Commission.

 

	 	
(f)
	
Annual financial projections specifying the assumptions used in creating the projections. Annual projections shall in any case be provided to Lender no less than 30 days after the beginning of each fiscal year.

 

	 	
(g)
	
Together with each financial statement delivered pursuant to (a), (b) and (c) above, a compliance certificate of Borrowers, signed by an authorized financial officer, signed by an authorized officer, setting forth (i) the information and computations (in sufficient detail) to establish compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such default exists, specifying the nature thereof and the action Borrowers are taking and proposes to take with respect thereto.

 

	 	
(h)
	
Within 60 days after the end of each calendar month, and no later than 15 days prior to each Advance, a borrowing base certificate, in form and substance satisfactory to Lender, setting forth Eligible Receivables and Receivable Amounts thereof as of the last day of the preceding calendar month.

 

	 	
(i)
	
Within 60 days after the end of each calendar month, and no later them 15 days prior to each Advance, a detailed aging of each Borrower’s receivables by invoice date, together with payable aging, inventory analysis, deferred revenue report (showing short term vs. long term deferred revenue), billings detail, cash collections journal, credit memo report, pipeline report, and such other matters as Lender may request.

 

	 	
(j)
	
Promptly upon Lender's request, copies of invoices, supporting purchase orders, proof-of–delivery, acceptable documentation, such other books, records, statements, lists of property and accounts, budgets, forecasts or reports as to Borrowers and as to each guarantor of Borrowers’ obligations to Lender as Lender may request.

 

	 	
4.9
	
Maintain all depository and operating accounts with Lender and, in the case of any investment accounts not maintained with Lender, grant to Lender a first priority perfected security interest in and “control” (within the meaning of Section 9104 of the UCC) of such account pursuant to documentation acceptable to Lender. Notwithstanding the foregoing, Sourcing shall be permitted to maintain cash in deposit accounts other than with Lender, provided that (i) such deposit accounts are subject to a deposit account control agreement, duly executed by all parties thereto as Lender shall require to perfect and maintain perfected Lender’s security interest in such deposit accounts, all in form and substance satisfactory to Lender, and (ii) Sourcing closes such deposit accounts and transfers all funds therein to deposit accounts maintained with Lender as soon as practicable but in no event later than 180 days after the date of this Agreement.

 

	 	
4.10
	
Reserved.

 

	 	
4.11
	
Promptly provide to Lender such additional information and documents regarding the finances, properties, business or books and records of such Borrower or any guarantor or any other obligor as Lender may reasonably request.

 

	 	
4.12
	
Maintain Borrowers’ financial condition as follows in accordance with GAAP (except to the extent modified by the definitions herein):

 

	 	
(a)
	
Current Ratio not at any time less than 1.75 to 1.0, measured as of the end of each month.

 

	
5.
	
Security Interest. To secure the prompt payment and performance to Lender of all of the Obligations, each Borrower hereby grants to Lender a continuing security interest in the Collateral. No Borrower is authorized to sell, assign, transfer or otherwise convey any Collateral without Lender’s prior written consent, except for (a) non-exclusive licenses and similar arrangements for the use of the property of such Borrower in the ordinary course of business, other licenses that would not result in a legal transfer of title of the licensed property but that may be exclusive, or licenses or transfers under such Borrower’s source code escrow arrangements, (b) sales or disposal of surplus, worn-out or obsolete equipment or (c) transfers of other assets of any Borrower that do not in the aggregate exceed Two Hundred and Fifty Thousand Dollars ($250,000) in the aggregate for all Borrowers during any fiscal year of Parent. For the avoidance of doubt, payments of money by any Borrower for its ordinary course business expenses (such as: the payment, in each case in the ordinary course of such Borrower’s business, of: payroll, rent, debt service, accounts payable, payments to vendors or other third parties for goods provided or services rendered to or on behalf of such Borrower) shall not be considered a sale, assignment, transfer or conveyance restricted by the provisions of this Agreement. Each Borrower agrees to sign any instruments and documents reasonably requested by Lender to evidence, perfect, or protect the interests of Lender in the Collateral. Each Borrower agrees to deliver to Lender the originals of all instruments, chattel paper and documents evidencing or related to Receivables and Collateral. No Borrower shall grant or permit any lien or security in the Collateral or any interest therein other than Permitted Liens.

 

 

 

5

 

 

	
6.
	
Power of Attorney. Each Borrower irrevocably appoints Lender and its successors and as true and lawful attorney in fact, and authorizes Lender (a) to, whether or not there has been an Event of Default, (i) notify all Account Debtors with respect to the Receivables to pay Lender directly; (ii) receive and open all mail addressed to such Borrower for the purpose of collecting the Receivables; (iii) endorse such Borrower’s name on any checks or other forms of payment on the Receivables; (iv) execute on behalf of such Borrower any and all instruments, documents, financing statements and the like to perfect Lender’s interests in the Receivables and Collateral; (v) debit any Borrower’s deposit accounts maintained with Lender for any and all Obligations due under this Agreement; and (vi) do all acts and things necessary or expedient, in furtherance of any such purposes, and (b) to, upon the occurrence and during the continuance of an Event of Default, (x) demand, collect, receive, sue, and give releases to any Account Debtor for the monies due or which may become due upon or with respect to the Receivables and to compromise, prosecute, or defend any action, claim, case or proceeding relating to the Receivables, including the filing of a claim or the voting of such claims in any bankruptcy case, all in Lender’s name or such Borrower’s name, as Lender may choose; (y) prepare, file and sign such Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or similar document; or (z) sell, assign, transfer, pledge, compromise, or discharge the whole or any part of the Receivables. Upon the occurrence and continuation of an Event of Default, all of the power of attorney rights granted by each Borrower to Lender hereunder shall be applicable with respect to all Receivables and all Collateral.

 

	
7.
	
Default and Remedies. 

 

	 	
7.1
	
Events of Default. The occurrence of any one or more of the following shall constitute an Event of Default hereunder.

 

	 	
(a)
	
Failure to Pay. Borrowers fail to make a payment when due under this Agreement.

 

	 	
(b)
	
Lien Priority. Lender fails to have an enforceable first lien (except for any prior liens to which Lender has consented in writing or liens with respect to Permitted Indebtedness for purchase money indebtedness (including capital leases)) on or security interest in the Collateral.

 

	 	
(c)
	
False Information. Any Borrower (or any guarantor) has given Lender any materially false or misleading information or representations or has failed to disclose any material fact relating to the subject matter of this Agreement.

 

	 	
(d)
	
Reserved.

 

	 	
(e)
	
Bankruptcy. Any Borrower (or any guarantor) files a bankruptcy petition, a bankruptcy petition is filed against any Borrower (or any guarantor) or Borrower (or any guarantor) makes a general assignment for the benefit of creditors.

 

	 	
(f)
	
Receivers. A receiver or similar official is appointed for a substantial portion of any Borrower’s (or any guarantor’s) business, or the business is terminated.

 

	 	
(g)
	
Judgments. Any judgments or arbitration awards are entered against any Borrower (or any guarantor), or any Borrower (or any guarantor) enters into any settlement agreements with respect to any litigation or arbitration and the aggregate amount of all such judgments, awards, and agreements for all Borrowers exceeds $250,000.

 

	 	
(h)
	
Material Adverse Change. A material adverse change occurs, or is reasonably likely to occur, in any Borrower’s (or any guarantor’s) business condition (financial or otherwise), operations, properties or ability to repay the credit.

 

	 	
(i)
	
Cross-default. Any default occurs under any agreement in connection with any credit any Borrower (or any guarantor) or any of any Borrower’s Affiliates has obtained from anyone else or which any Borrower (or any guarantor) or any of any Borrower’s Affiliates has guaranteed (other than trade amounts payable incurred in the ordinary course of business and not more than 60 days past due) and such default is not cured within the time period, if any, provided in such agreement.

 

	 	
(j)
	
Default under Related Documents. Any default occurs under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document required by or delivered in connection with this Agreement and such default is not cured within the time period, if any, provided in such agreement, or any such document is no longer in effect.

 

 

 

6

 

 

	 	
(k)
	
Other Agreements. Any Borrower (or any guarantor) or any of any Borrower’s Affiliates fails to meet the conditions of, or fails to perform any obligation under any other agreement any Borrower (or any guarantor) or any of any Borrower’s Affiliates has with Lender or any Affiliate of Lender and such default is not cured within the time period, if any, provided in such agreement.

 

	 	
(l)
	
Change of Control. The holders of the capital ownership of Parent as of the date hereof cease to own and control, directly and indirectly, at least 60% of the capital ownership of Parent, or Parent ceases to own and control, directly and indirectly, 100% of the capital ownership of each other Borrower.

 

	 	
(m)
	
Other Breach Under Agreement. Borrowers fail to meet the conditions of, or fails to perform any obligation under, any term of this Agreement not specifically referred to above and such default is not cured within the time period, if any, provided in such agreement.

 

	 	
7.2
	
Remedies. Upon the occurrence of an Event of Default, (1) without implying any obligation to do so, Lender may cease making Advances or extending any other financial accommodations to Borrowers; (2) all or a portion of the Obligations shall be, at the option of and upon demand by Lender, or with respect to an Event of Default described in Section 7.1(e), automatically and without notice or demand, due and payable in full; and (3) Lender shall have and may exercise all the rights and remedies under this Agreement and under applicable law, including the rights and remedies of a secured party under the California Uniform Commercial Code, all the power of attorney rights described in Section 6 with respect to all Collateral, and the right to collect, dispose of, sell, lease, use, and realize upon all Receivables and all Collateral in any commercial reasonable manner.

 

	
8.
	
Accrual of Interest. All interest and finance charges hereunder calculated at an annual rate shall be based on a year of 360 days, which results in a higher effective rate of interest than if a year of 365 or 366 days were used. If any amount due under Section 2.2, amounts due under Section 9, and any other Obligations not otherwise bearing interest hereunder is not paid when due, such amount shall bear interest at a per annum rate equal to the Finance Charge Percentage until the earlier of (i) payment in good funds or (ii) entry of a trial judgment thereof, at which time the principal amount of any money judgment remaining unsatisfied shall accrue interest at the highest rate allowed by applicable law.

 

	
9.
	
Fees, Costs and Expenses; Indemnification. Borrowers will pay to Lender upon demand all fees, costs and expenses (including reasonable fees of attorneys and professionals and their reasonable costs and expenses) that Lender incurs or may from time to time impose in connection with any of the following: (a) preparing, negotiating, administering, and enforcing this Agreement or any other agreement executed in connection herewith, including any amendments, waivers or consents in connection with any of the foregoing, (b) any litigation or dispute (whether instituted by Lender, any Borrower or any other person) in any way relating to the Receivables, the Collateral, this Agreement or any other agreement executed in connection herewith or therewith, (c) enforcing any rights against any Borrower or any guarantor, or any Account Debtor, (d) protecting or enforcing its interest in the Receivables or the Collateral, (e) collecting the Receivables and the Obligations, or (f) the representation of Lender in connection with any bankruptcy case or insolvency proceeding involving any Borrower, any Receivable, the Collateral, any Account Debtor, or any guarantor. Borrowers shall indemnify and hold Lender harmless from and against any and all claims, actions, damages, costs, expenses, and liabilities of any nature whatsoever arising in connection with any of the foregoing except to the extent caused by the gross negligence or intentional misconduct of Lender.

 

	
10.
	
Integration, Severability Waiver, Choice of Law, FORUM AND VENUE. 

 

	 	
10.1
	
This Agreement and any related security or other agreements required by this Agreement, collectively: (a) represent the sum of the understandings and agreements between Lender and Borrowers concerning this credit; (b) replace any prior oral or written agreements between Lender and Borrowers concerning this credit; and (c) are intended by Lender and Borrowers as the final, complete and exclusive statement of the terms agreed to by them. In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail. If any provision of this Agreement is deemed invalid by reason of law, this Agreement will be construed as not containing such provision and the remainder of the Agreement shall remain in full force and effect. Lender retains all of its rights, even if it makes an Advance after a default. If Lender waives a default, it may enforce a later default. Any consent or waiver under, or amendment of, this Agreement must be in writing, and no such consent, waiver, or amendment shall imply any obligation by Lender to make any subsequent consent, waiver, or amendment. 

 

	 	
10.2
	
THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA. THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SANTA CLARA, CALIFORNIA, OR, AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS JURISDICTION OVER THE SUBJECT MATTER AND PARTIES IN CONTROVERSY. EACH PARTY HERETO WAIVES ANY RIGHT TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION AND STIPULATES THAT THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SANTA CLARA, CALIFORNIA SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR ANY OTHER RELATED DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 11.

 

 

 

7

 

 

	
11.
	
Notices; Telephonic and Telefax Authorizations. All notices shall be given to Lender and Borrowers at the addresses or faxes set forth on the signature page of this agreement and shall be deemed to have been delivered and received: (a) if mailed, three (3) calendar days after deposited in the United States mail, first class, postage pre-paid, (b) one (1) calendar day after deposit with an overnight mail or messenger service; or (c) on the same date of confirmed transmission if sent by hand delivery, telecopy, telefax or telex. Lender may honor telephone or telefax instructions for Advances or repayments given, or purported to be given, by any one of the Authorized Persons. Borrowers will indemnify and hold Lender harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions Lender reasonably believes are made by any Authorized Person. This paragraph will survive this Agreement's termination, and will benefit Lender and its officers, employees, and agents.

 

	
12.
	
Definitions and Construction. 

 

	 	
12.1
	
Definitions. In this Agreement: 

 

“ABL Advance” means an advance made by Lender to Borrower under Section 1.1(a) of this Agreement.

 

“ABL Credit Limit” means $3,000,000, which is intended to be the maximum amount of ABL Advances at any time outstanding.

 

“Account Balance” means at any time the aggregate of the Advances outstanding as reflected on the records maintained by Lender, together with any past due Finance Charges thereon.

 

“Account Debtor” has the meaning in the California Uniform Commercial Code and includes any person liable on any Receivable, including without limitation, any guarantor of any Receivable and any issuer of a letter of credit or banker’s acceptance assuring payment thereof.

 

“Adjustments” means all discounts, allowances, disputes, offsets, defenses, rights of recoupment, rights of return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor with respect to any Receivable, but excluding any early payment discounts of less than 5%.

 

“Advance” means an ABL Advance or a Cash-Secured Advance.

 

“Advance Rate” means 80% or such greater or lesser percentage as Lender may from time to time establish in its sole discretion upon notice to Borrowers.

 

“Advance Request” means a writing in form and substance satisfactory to Lender and signed by an Authorized Person requesting either an ABL Advance or a Cash-Secured Advance.

 

“Agreement” means this Business Financing Agreement.

 

"Affiliate" means, as to any person or entity, any other person or entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, such person or entity. 

 

“Authorized Person” means any one of the individuals authorized to sign on behalf of Borrowers, and any other individual designated by any one of such authorized signers.

 

"Borrowing Base" means at any time the result of (i) the Eligible Receivable Amount multiplied by the Advance Rate, minus (ii) such reserves as Lender may deem proper and necessary from time to time. Eligible Receivables owing to Sourcing shall not be included in the Borrowing Base until Lender has received an audit of Sourcing’s Receivables, with results satisfactory to Lender.

 

“Cash Collateral” means the sum of $4,000,000 in cash collateral in which Borrowers’ have granted to Lender a first priority perfected security interest to secure the Cash-Secured Advances and all other Obligations.

 

"Cash Management Sublimit" means $250,000. 

 

“Cash-Secured Advance” means an advance made by Lender to Borrowers under Section 1.1(b) of this Agreement.

 

 

 

8

 

 

“Cash-Secured Credit Limit” means $4,000,000, which is intended to be the maximum amount of Cash-Secured Advances at any time outstanding.

 

“CD Rate” means a variable per annum rate of interest equal to the rate payable by Lender for a certificate of deposit having a 30 day maturity. The CD Rate shall change daily as and when the rate payable by Lender for a certificate of deposit having a 30 day maturity changes.

 

“Collateral” means all of each Borrower’s rights and interest in any and all personal property, whether now existing or hereafter acquired or created and wherever located, and all products and proceeds thereof and accessions thereto, including but not limited to the following: (a) all accounts (including health care insurance receivables), chattel paper (including tangible and electronic chattel paper), inventory (including all goods held for sale or lease or to be furnished under a contract for service, and including returns and repossessions), equipment (including all accessions and additions thereto), instruments (including promissory notes), investment property (including securities and securities entitlements), documents (including negotiable documents), deposit accounts, letter of credit rights, money, any commercial tort claim of such Borrower which is now or hereafter identified by Borrowers or Lender, general intangibles (including payment intangibles and software), goods (including fixtures) and all of such Borrower’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records; (b) the Cash Collateral, and (c) any and all cash proceeds and/or noncash proceeds thereof, including without limitation, insurance proceeds, and all supporting obligations and the security therefore or for any right to payment.

 

“Collections” means all payments from or on behalf of an Account Debtor with respect to Receivables.

 

“Compliance Certificate” means a certificate in the form attached as Exhibit A to this Agreement by an Authorized Person that, among other things, the representations and warranties set forth in this Agreement are true and correct as of the date such certificate is delivered.

 

“Credit Limit” means $7,000,000, which is intended to be the maximum amount of Advances at any time outstanding.

 

“Current Deferred Revenue” is all amounts received or invoiced, as appropriate, in advance of performance under contracts and not yet recognized as revenue, and treated as current under GAAP. 

 

“Current Ratio” means (i) the aggregate of unrestricted cash and cash equivalents, including investment grade commercial paper, maintained on deposit at Lender (or subject to a control agreement in form and substance reasonably acceptable to Lender in its sole discretion) plus Eligible Receivables, divided by (ii) an amount equal to total current liabilities minus Current Deferred Revenue.

 

“Default” means any Event of Default or any event that with notice, lapse of time or otherwise would constitute an Event of Default.

 

“Due Diligence Fee” means a payment of an annual fee equal to $1,000 due on March 20 of each year so long us any Advance is outstanding or available hereunder.

 

“Eligible Receivable” means a Receivable that satisfies all of the following:

 

	 	
(a)
	
The Receivable has been created by a Borrower in the ordinary course of such Borrower’s business and without any obligation on the part of such Borrower to render any further performance (other than warranty obligations in the ordinary course of business).

 

	 	
(b)
	
There are no conditions which must be satisfied before the applicable Borrower is entitled to receive payment of the Receivable, and the Receivable does not arise from COD sales, consignments or guaranteed sales.

 

	 	
(c)
	
The Account Debtor upon the Receivable does not claim any defense to payment of the Receivable, whether well founded or otherwise.

 

	 	
(d)
	
The Receivable is not the obligation of an Account Debtor who has asserted or may be reasonably be expected to assert any counterclaims or offsets against the applicable Borrower (including offsets for any “contra accounts” owed by such Borrower to the Account Debtor for goods purchased by such Borrower or for services performed for Borrower).

 

	 	
(e)
	
The Receivable represents a genuine obligation of the Account Debtor and to the extent any credit balances exist in favor of the Account Debtor, such credit balances shall be deducted in calculating the Receivable Amount.

 

 

 

9 

 

 

	 	
(f)
	
The applicable Borrower has sent an invoice to the Account Debtor in the amount of the Receivable.

 

	 	
(g)
	
The applicable Borrower is not prohibited by the laws of the state where the Account Debtor is located from bringing an action in the courts of that state to enforce the Account Debtor’s obligation to pay the Receivable. The applicable Borrower has taken all appropriate actions to ensure access to the courts of the state where Account Debtor is located, including, where necessary; the filing of a Notice of Business Activities Report or other similar filing with the applicable state agency or the qualification by such Borrower as a foreign corporation authorized to transact business in such state.

 

	 	
(h)
	
The Receivable is owned by the applicable Borrower free of any title defects or any liens or interests of others except the security interest in favor of Lender, and Lender has a perfected, first priority security interest in such Receivable.

 

	 	
(i)
	
The Account Debtor on the Receivable is not any of the following: (1) an employee, Affiliate, parent or subsidiary of the applicable Borrower, or an entity which has common officers or directors with such Borrower; (2) the U.S. government or any agency or department of the U.S. government unless the applicable Borrower complies with the procedures in the Federal Assignment of Claims Act of 1940 (41 U.S.C.§15) with respect to the Receivable, and the underlying contract expressly provides that neither the U.S. government nor any agency or department thereof shall have the right of set-off against such Borrower; (3) any person or entity located in a foreign country unless (A) the Receivable is supported by an irrevocable letter of credit issued by a bank acceptable to Lender, and (B) if requested by Lender, the original of such letter of credit and/or any usance drafts drawn under such letter of credit and accepted by the issuing or confirming bank have been delivered to Lender; or (4) an Account Debtor as to which 35% or more of the aggregate dollar amount of all outstanding Receivables owing from such Account Debtor have not been paid within 90 days from invoice date.

 

	 	
(j)
	
The Receivable is not in default (a Receivable will be considered in default if any of the following occur: (i) the Receivable is not paid within 90 days from its invoice date; (ii) the Account Debtor obligated upon the Receivable suspends business, makes a general assignment for the benefit of creditors, or fails to pay its debts generally as they come due; or (iii) any petition is filed by or against the Account Debtor obligated upon the Receivable under any bankruptcy law or any other law or laws for the relief of debtors).

 

	 	
(k)
	
The Receivable does not arise from the sale of goods which remain in the applicable Borrower’s possession or under such Borrower’s control.

 

	 	
(l)
	
The Receivable is not evidenced by a promissory note or chattel paper, nor is the Account Debtor obligated to the applicable Borrower under any other obligation which is evidenced by a promissory note.

 

	 	
(m)
	
The Receivable is not that portion of Receivables due from an Account Debtor which is in excess of 35% of the applicable Borrower's aggregate dollar amount of all outstanding Receivables.

 

	 	
(n)
	
The Receivable is otherwise acceptable to Lender.

 

"Eligible Receivable Amount" means at any time the sum of the Receivable Amounts of the Eligible Receivables.

 

“Event of Default” has the meaning set forth in Section 7.1.

 

“Facility Fee” means a payment of an annual fee equal to 0.75 percentage points of the Credit Limit due on March 20 of each year so long us any Advance is outstanding or available hereunder.

 

“Finance Charge” means for each Monthly Period an interest amount equal to the Finance Charge Percentage of the average daily Account Balance outstanding during such Monthly Period.

 

“Finance Charge Percentage” means, (a) with respect to all ABL Advances, a rate per year equal to the Prime Rate plus one quarter of one percentage point (0.25), plus an additional 5.00 percentage points during any period that an Event of Default has occurred and is continuing, and (b) with respect to all Cash-Secured Advances, a rate per year equal to the CD Rate plus two (2) percentage points, plus an additional 5.00 percentage points during any period that an Event of Default has occurred and is continuing.

 

"FX Sublimit" means $250,000.

 

“GAAP” means generally accepted accounting principles consistently applied and used consistently with prior practices.

 

“Lender” means Bridge Bank, National Association, and its successors and assigns.

 

 

 

10

 

 

"Letter of Credit" has the meaning set forth in Section 1.8.

 

“Letters of Credit Obligation" means, at any time, the sum of, without duplication, (i) the maximum amount available to be drawn on all outstanding Letters of Credit issued by Lender or by Lender’s Affiliate and (ii) the aggregate amount of all amounts drawn and unreimbursed with respect to Letters of Credit issued by the Lender or by Lender’s Affiliate.

 

“Letter of Credit Sublimit" means $250,000. 

 

“Loan Documents” means this Agreement and all other agreements, instruments and documents executed in connection herewith.

 

“Maturity Date” means March 20, 2016 or such earlier date as Lender shall have declared the Obligations immediately due and payable pursuant to Section 7.2.

 

“Minimum Monthly Interest” means for any Monthly Period the amount (if any) by which $4,000 exceeds the Finance Charge for that Monthly Period.

 

“Month End” means the last calendar day of each Monthly Period.

 

“Monthly Period” means each calendar month.

 

“Obligations” means all liabilities and obligations of Borrowers (or any of them) to Lender of any kind or nature, present or future, arising under or in connection with this Agreement or under any other document, instrument or agreement, whether or not evidenced by any note, guarantee or other instrument, whether arising on account or by overdraft, whether direct or indirect (including those acquired by assignment) absolute or contingent, primary or secondary, due or to become due, now owing or hereafter arising, and however acquired; including, without limitation, all Advances, Finance Charges, fees, interest, expenses, professional fees and attorneys’ fees.

 

“Overadvance” means at any time an amount equal to the greater of (a) the amounts (if any) by which the total amount of the outstanding ABL Advances (including deemed ABL Advances with respect to the FX Sublimit and the Letter of Credit Sublimit and, only if any Cash Management Services are outstanding, the total amount of the Cash Management Sublimit) exceeds the lesser of the ABL Credit Limit or the Borrowing Base, or (b) the amounts (if any) by which the total amount of the outstanding deemed ABL Advances with respect to the FX Sublimit and the Letter of Credit Sublimit exceeds the Subfacility Maximum.

 

“Permitted Indebtedness” means:

 

	 	
(a)
	
Indebtedness under this Agreement or that is otherwise owed to the Lender.

 

	 	
(b)
	
Indebtedness existing on the date hereof and specifically disclosed on a schedule to this Agreement.

 

	 	
(c)
	
Purchase money indebtedness (including capital leases) incurred to acquire capital assets in ordinary course of business and not exceeding $150,000 in total principal amount at any time outstanding.

 

 

11 

 

 

	 	
(d)
	
Other indebtedness in an aggregate amount not to exceed $250,000 at any time outstanding; provided that such indebtedness is junior in priority (if secured) to the Obligations and provided that the incurrence of such Indebtedness does not otherwise cause and Event of Default hereunder.

 

	 	
(e)
	
Indebtedness incurred in the refinancing of any indebtedness set forth in (a) through (d) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon the Borrower.

 

	 	
(f)
	
Subordinated Debt.

 

	 	
(g)
	
Unsecured Indebtedness to trade creditors in the ordinary course of business not more than 120 days past due, and accrued expenses incurred in the ordinary course of business.

 

“Permitted Liens” means the following but only with respect to property not consisting of Receivables:

 

	 	
(a)
	
Liens securing any of the indebtedness described in clauses (a) through (d) of the definition of Permitted Indebtedness.

 

	 	
(b)
	
Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings, provided the same have no priority over any of Lender’s security interests.

 

	 	
(c)
	
Liens incurred in connection with the extension, renewal or refinancing of the indebtedness described in clause (e) of the definition of Permitted Indebtedness, provided that any extension, renewal or replacement lien shall be limited to the property encumbered by the existing lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

 

	 	
(d)
	
Liens securing Subordinated Debt.

 

	 	
(e)
	
statutory Liens, such as inchoate mechanics’, inchoate materialmen’s, landlord’s, warehousemen’s, and carriers’ liens, and other similar liens, other than those described in clause (b) above, arising in the ordinary course of business with respect to obligations which are not delinquent or are being contested in good faith by appropriate proceedings, provided that, if delinquent, adequate reserves have been set aside with respect thereto as required by GAAP and, by reason of nonpayment, no property is subject to a material risk of loss or forfeiture.

 

“Prime Rate” means the greater of 3.25% per year or the variable per annum rate of interest most recently announced by Lender as its "Prime Rate." Lender may price loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate shall take effect at the opening of business on the day specified in the public announcement of a change in Lender’s Prime Rate.

 

“Receivable Amount” means as to any Receivable, the Receivable Amount due from the Account Debtor after deducting all discounts, credits, offsets, payments or other deductions of any nature whatsoever, whether or not claimed by the Account Debtor.

 

“Receivables” means a Borrower’s rights to payment arising in the ordinary course of such Borrower’s business, including accounts, chattel paper, instruments, contract rights, documents, general intangibles, letters of credit, drafts, and bankers acceptances.

 

“Subfacility Maximum” means $500,000.

 

“Subordinated Debt” means indebtedness of Borrower that is expressly subordinated to the indebtedness of Borrower owed to Lender pursuant to a subordination agreement reasonably satisfactory in form and substance to Lender.

 

“Termination Fee” means a payment equal to 1% of the Credit Limit.

 

“UCC” means the California Uniform Commercial Code, as amended or supplemented from time to time.

 

	 	
12.2
	
Construction: 

 

	 	
(a)
	
In this Agreement: (i) references to the plural include the singular and to the singular include the plural; (ii) references to any gender include any other gender; (iii) the terms “include” and “including” are not limiting; (iv) the term “or” has the inclusive meaning represented by the phrase “and/or,” (v) unless otherwise specified, section and subsection references are to this Agreement, and (vi) any reference to any statute, law, or regulation shall include all amendments thereto and revisions thereof.

 

	 	
(b)
	
Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved using any presumption against either Borrowers or Lender, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each party hereto and their respective counsel. In case of any ambiguity or uncertainty, this Agreement shall be construed and interpreted according to the ordinary meaning of the words used to accomplish fairly the purposes and intentions of all parties hereto.

 

	 	
(c)
	
Titles and section headings used in this Agreement are for convenience only and shall not be used in interpreting this Agreement.

 

	
13.
	
Jury Trial Waiver. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED PARTIES.

 

 

 

12

 

 

	
14.
	
JUDICIAL REFERENCE PROVISION.

 

	 	
14.1
	
In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect to proceed under this Judicial Reference Provision.

 

	 	
14.2
	
With the exception of the items specified in Section 14.3, below, any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “Loan Documents”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise appropriate under applicable law (the “Court”).

 

	 	
14.3
	
The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This reference provision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this reference provision as provided herein.

 

	 	
14.4
	
The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of the Court (or his or her representative).

 

	 	
14.5
	
The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision. 

 

	 	
14.6
	
The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.

 

	 	
14.7
	
Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.

 

	 	
14.8
	
The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision. 

 

 

 

13

 

 

	 	
14.9
	
If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.

 

	 	
14.10
	
THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

 

	
15.
	
EXECUTION, EFFECTIVENESS, SURVIVAL. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other documents executed in connection herewith constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective upon the execution and delivery hereof by Borrowers and Lender and shall continue in full force and effect until the Maturity Date and thereafter so long as any Obligations remain outstanding hereunder. Lender reserves the right to issue press releases, advertisements, and other promotional materials describing any successful outcome of services provided on Borrowers’ behalf. Each Borrower agrees that Lender shall have the right to identify such Borrower by name in those materials.

 

	
16.
	
Other Agreements. Any security agreements, liens and/or security interests securing payment of any obligations of Borrowers (or any of them) owing to Lender or its Affiliates also secure the Obligations, and are valid and subsisting and are not adversely affected by execution of this Agreement. An Event of Default under this Agreement constitutes a default under other outstanding agreements between Borrower and Lender or its Affiliates.

 

	
17.
	
REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment of the Obligations by any Borrower or any guarantor, or the transfer to Lender of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federal law relating to creditors' rights, including provisions of the United States Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a "Voidable Transfer"), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and reasonable attorneys' fees of Lender related thereto, the liability of Borrowers and such guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.

 

	
18.
	
PATRIOT ACT NOTIFICATION. Lender hereby notifies Borrowers that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 ("Patriot Act"), Lender is required to obtain, verify and record information that identifies Borrowers, which information includes the names and addresses of Borrowers and other information that will allow Lender to identify Borrowers in accordance with the Patriot Act.

 

	
19.
	
JOINT AND SEVERAL LIABILITY; SINGLE LOAN ACCOUNT.

 

	 	
19.1
	
Joint and Several Liability. Each Borrower agrees that it is jointly and severally, directly and primarily liable to Lender for payment, performance and satisfaction in full of the Obligations and that such liability is independent of the duties, obligations, and liabilities of the other Borrower. Lender may bring a separate action or actions on each, any, or all of the Obligations against any Borrower, whether action is brought against the other Borrowers or whether the other Borrowers are joined in such action. In the event that any Borrower fails to make any payment of any Obligations on or before the due date thereof, the other Borrowers immediately shall cause such payment to be made or each of such Obligations to be performed, kept, observed, or fulfilled.

 

	 	
19.2
	
Primary Obligation; Waiver of Marshaling. This Agreement and the Loan Documents to which Borrowers are a party are a primary and original obligation of each Borrower, are not the creation of a surety relationship, and are an absolute, unconditional, and continuing promise of payment and performance which shall remain in full force and effect without respect to future changes in conditions, including any change of law or any invalidity or irregularity with respect to this Agreement or the Loan Documents to which Borrowers are a party. Each Borrower agrees that its liability under this Agreement and the Loan Documents which Borrowers are a party shall be immediate and shall not be contingent upon the exercise or enforcement by Lender of whatever remedies they may have against the other Borrowers, or the enforcement of any lien or realization upon any security Lender may at any time possess. Each Borrower consents and agrees that Lender shall be under no obligation to marshal any assets of any Borrower against or in payment of any or all of the Obligations.

 

 

 

14

 

 

	 	
19.3
	
Financial Condition of Borrowers. Each Borrower acknowledges that it is presently informed as to the financial condition of the other Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Borrower hereby covenants that it will continue to keep informed as to the financial condition of the other Borrowers, the status of the other Borrowers and of all circumstances which bear upon the risk of nonpayment. Absent a written request from any Borrower to Lender for information, each Borrower hereby waives any and all rights it may have to require Lender to disclose to such Borrower any information which Lender may now or hereafter acquire concerning the condition or circumstances of the other Borrowers.

 

	 	
19.4
	
Continuing Liability. The liability of each Borrower under this Agreement and the Loan Documents to which Borrowers are a party includes Obligations arising under successive transactions continuing, compromising, extending, increasing, modifying, releasing, or renewing the Obligations, changing the interest rate, payment terms, or other terms and conditions thereof, or creating new or additional Obligations after prior Obligations have been satisfied in whole or in part. To the maximum extent permitted by law, each Borrower hereby waives any right to revoke its liability under this Agreement and Loan Documents as to future indebtedness, and in connection therewith, each Borrower hereby waives any rights it may have under Section 2815 of the California Civil Code.

 

	 	
19.5
	
Additional Waivers. Each Borrower absolutely, unconditionally, knowingly, and expressly waives:

 

	 	
(a)
	
(1) notice of acceptance hereof; (2) notice of any Loans or other financial accommodations made or extended under this Agreement and the Loan Documents to which Borrowers are a party or the creation or existence of any Obligations; (3) notice of the amount of the Obligations, subject, however, to each Borrower's right to make inquiry of Lender to ascertain the amount of the Obligations at any reasonable time; (4) notice of any adverse change in the financial condition of the other Borrowers or of any other fact that might increase such Borrower's risk hereunder; (5) notice of presentment for payment, demand, protest, and notice thereof as to any instruments among the Loan Documents to which Borrowers are a party; and (6) all other notices (except if such notice is specifically required to be given to Borrowers hereunder or under the Loan Documents to which Borrowers are a party) and demands to which such Borrower might otherwise be entitled.

 

	 	
(b)
	
its right, under Sections 2845 or 2850 of the California Civil Code, or otherwise, to require Lender to institute suit against, or to exhaust any rights and remedies which Lender has or may have against, the other Borrowers or any third party, or against any collateral for the Obligations provided by the other Borrowers, or any third party. Each Borrower further waives any defense arising by reason of any disability or other defense (other than the defense that the Obligations shall have been fully and finally performed and indefeasibly paid) of the other Borrowers or by reason of the cessation from any cause whatsoever of the liability of the other Borrowers in respect thereof.

 

	 	
(c)
	
(1) any rights to assert against Lender any defense (legal or equitable), set-off, counterclaim, or claim which such Borrower may now or at any time hereafter have against the other Borrowers or any other party liable to Lender; (2) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Obligations or any security therefor; (3) any defense such Borrower has to performance hereunder, and any right such Borrower has to be exonerated, provided by Sections 2819, 2822, or 2825 of the California Civil Code, or otherwise, arising by reason of: the impairment or suspension of Lender's rights or remedies against the other Borrowers; the alteration by Lender of the Obligations; any discharge of the other Borrowers' obligations to Lender by operation of law as a result of Lender's intervention or omission; or the acceptance by Lender of anything in partial satisfaction of the Obligations; and (4) the benefit of any statute of limitations affecting such Borrower's liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Obligations shall similarly operate to defer or delay the operation of such statute of limitations applicable to such Borrower's liability hereunder.

 

	 	
(d)
	
Each Borrower absolutely, unconditionally, knowingly, and expressly waives any defense arising by reason of or deriving from (i) any claim or defense based upon an election of remedies by Lender including any defense based upon an election of remedies by Lender under the provisions of Sections 580a, 580b, 580d, and 726 of the California Code of Civil Procedure or any similar law of California or any other jurisdiction; or (ii) any election by Lender under Section 1111(b) of the Bankruptcy Code to limit the amount of, or any collateral securing, its claim against Borrowers. Pursuant to California Civil Code Section 2856(b):

 

	 	
(i)
	
Each Borrower waives all rights and defenses arising out of an election of remedies by the creditor, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed such Borrower's rights of subrogation and reimbursement against the other Borrowers by the operation of Section 580(d) of the California Code of Civil Procedure or otherwise.

 

 

 

15

 

 

	 	
(ii)
	
Each Borrower waives all rights and defenses that such Borrower may have because the Obligations are secured by real property. This means, among other things: (1) Lender may collect from such Borrower without first foreclosing on any real or personal property collateral pledged by the other Borrowers; and (2) if Lender forecloses on any real property collateral pledged by the other Borrowers: (A) the amount of the Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and (B) Lender may collect from such Borrower even if Lender, by foreclosing on the real property collateral, has destroyed any right such Borrower may have to collect from the other Borrowers. This is an unconditional and irrevocable waiver of any rights and defenses each Borrower may have because the Obligations are secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

 

	 	
(e)
	
Each Borrower hereby absolutely, unconditionally, knowingly, and expressly waives: (i) any right of subrogation such Borrower has or may have as against the other Borrowers with respect to the Obligations; (ii) any right to proceed against the other Borrowers or any other Person, now or hereafter, for contribution, indemnity, reimbursement, or any other suretyship rights and claims, whether direct or indirect, liquidated or contingent, whether arising under express or implied contract or by operation of law, which such Borrower may now have or hereafter have as against the other Borrowers with respect to the Obligations; and (iii) any right to proceed or seek recourse against or with respect to any property or asset of the other Borrowers.

 

	 	
(f)
	
WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS AGREEMENT, EACH BORROWER HEREBY ABSOLUTELY, KNOWINGLY, UNCONDITIONALLY, AND EXPRESSLY WAIVES AND AGREES NOT TO ASSERT ANY AND ALL BENEFITS OR DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2825, 2839, 2845, 2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580c, 580d, AND 726, CALIFORNIA UNIFORM COMMERCIAL CODE SECTIONS 3116, 3118, 3119, 3419, 3605, 9504, 9505, AND 9507, AND CHAPTER 2 OF TITLE 14 OF PART 4 OF DIVISION 3 OF THE CALIFORNIA CIVIL CODE.

 

	 	
19.6
	
Settlements or Releases. Each Borrower consents and agrees that, without notice to or by such Borrower, and without affecting or impairing the liability of such Borrower hereunder, Lender may, by action or inaction:

 

	 	
(a)
	
compromise, settle, extend the duration or the time for the payment of, or discharge the performance of, or may refuse to or otherwise not enforce this Agreement and the Loan Documents, or any part thereof, with respect to the other Borrowers or any guarantor;

 

	 	
(b)
	
release the other Borrowers or any guarantor or grant other indulgences to the other Borrowers or any guarantor in respect thereof;

 

	 	
(c)
	
amend or modify in any manner and at any time (or from time to time) this Agreement or any of the Loan Documents; or

 

	 	
(d)
	
release or substitute any guarantor, if any, of the Obligations, or enforce, exchange, release, or waive any security for the Obligations or any other guaranty of the Obligations, or any portion thereof.

 

	 	
19.7
	
No Election. Lender shall have the right to seek recourse against each Borrower to the fullest extent provided for herein, and no election by Lender to proceed in one form of action or proceeding, or against any party, or on any obligation, shall constitute a waiver of Lender's right to proceed in any other form of action or proceeding or against other parties unless Lender has expressly waived such right in writing. Specifically, but without limiting the generality of the foregoing, no action or proceeding by Lender under this Agreement and the Loan Documents shall serve to diminish the liability of any Borrower under this Agreement and the Loan Documents to which Borrowers are a party except to the extent that Lender finally and unconditionally shall have realized indefeasible payment by such action or proceeding.

 

	 	
19.8
	
Indefeasible Payment. The Obligations shall not be considered indefeasibly paid unless and until all payments to Lender are no longer subject to any right on the part of any Person, including any Borrower, any Borrower as a debtor in possession, or any trustee (whether appointed pursuant to the Bankruptcy Code, or otherwise) of any Borrower's Assets to invalidate or set aside such payments or to seek to recoup the amount of such payments or any portion thereof, or to declare same to be fraudulent or preferential. Upon such full and final performance and indefeasible payment of the Obligations, Lender shall have no obligation whatsoever to transfer or assign its interest in this Agreement and the Loan Documents to any Borrower. In the event that, for any reason, any portion of such payments to Lender is set aside or restored, whether voluntarily or involuntarily, after the making thereof, then the obligation intended to be satisfied thereby shall be revived and continued in full force and effect as if said payment or payments had not been made, and any Borrower shall be liable for the full amount Lender is required to repay plus any and all costs and expenses (including attorneys' fees and attorneys' fees incurred in proceedings brought under the Bankruptcy Code) paid by Lender in connection therewith.

 

 

 

16

 

 

	 	
19.9
	
Single Loan Account. At the request of Borrowers to facilitate and expedite the administration and accounting processes and procedures of the Loans and Borrowings, Lender has agreed, in lieu of maintaining separate loan accounts on Lender's books in the name of each of the Borrowers, that Lender may maintain a single loan account under the name of all of both Borrowers (the "Loan Account"). All Loans shall be made jointly and severally to Borrowers and shall be charged to the Loan Account, together with all interest and other charges as permitted under and pursuant to this Agreement. The Loan Account shall be credited with all repayments of Obligations received by Lender, on behalf of Borrowers, from either Borrower pursuant to the terms of this Agreement.

 

	 	
19.10
	
Apportionment of Proceeds of Loans. Each Borrower expressly agrees and acknowledges that Lender shall have no responsibility to inquire into the correctness of the apportionment or allocation of or any disposition by any of Borrowers of (a) the Loans or any Borrowings, or (b) any of the expenses and other items charged to the Loan Account pursuant to this Agreement. The Loans and all such Borrowings and such expenses and other items shall be made for the collective, joint, and several account of Borrowers and shall be charged to the Loan Account.

 

	
20.
	
NO NOVATION. Borrowers and Lender hereby agree that, effective upon the execution and delivery of this Agreement by each such party, the terms and provisions of the Prior Agreement shall be and hereby are amended, restated and superseded in their entirety by the terms and provisions of this Agreement. Nothing herein contained shall be construed as a substitution or novation of the obligations of Parent outstanding under the Prior Agreement or instruments securing the same, which obligations shall remain in full force and effect, except to the extent that the terms thereof are modified hereby or by instruments executed concurrently herewith. Nothing expressed or implied in this Agreement shall be construed as a release or other discharge of Borrowers, or any guarantor from any of its obligations or liabilities under the Prior Agreement or any of the Loan Documents executed in connection therewith. Parent hereby (i) confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the effectiveness of this Agreement, all references in any such Loan Document to "the Business Finance Credit Agreement", "thereto", "thereof", "thereunder" or words of like import referring to the Prior Agreement shall mean the Prior Agreement as amended and restated by this Agreement; and (ii) confirms and agrees that to the extent that the Prior Agreement or any Loan Document executed in connection therewith purports to collaterally assign or pledge to Lender a security interest in or Lien on, any Collateral as security for the Obligations from time to time existing in respect of the Prior Agreement, such pledge, collateral assignment or grant of the security interest or Lien is hereby ratified and confirmed in all respects as a collateral assignment, pledge or grant to Lender and shall remain effective as of the first date it became effective.

 

* * *

[remainder of this page intentionally left blank]

* * *

 

 

 

17

 

 

 

	
21.
	
NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the day and year above written.

 

	
BORROWER:
	
LENDER:

	  	  
	SELECTICA, INC.,	BRIDGE BANK, NATIONAL ASSOCIATION
	a Delaware corporation	 
	 	 
	 	 
	By                                                                                                                     	By                                                                                                                     
	
Name:   Todd A. Spartz

Title:     Chief Financial Officer 
	
Name:    Christopher Hill

Title:      Vice President

	 	 
	
Address for Notices:

Selectica, Inc.

2121 South El Camino Real, Suite 1000

San Mateo, California 94403

Fax: (408) 570-9705
	
Address for Notices:

55 Almaden Blvd.

San Jose, CA 95113

Fax: (408) 423-8510

	  	  
	SELECTICA SOURCING INC.,	 
	a Delaware corporation	 
	 	 
	 	 
	By                                                                                                                     	 
	
Name:   Todd A. Spartz

Title:     Chief Financial Officer 
	  
	  	  
	
Address for Notices:

Selectica Sourcing Inc.

2121 South El Camino Real, Suite 1000

San Mateo, California 94403

Fax: (408) 570-9705
	  

 

 

SIGNATURE PAGE TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT

 

 

 

 

 

 

AMENDMENT NUMBER ONE TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT AND WAIVER OF DEFAULTS

 

This AMENDMENT NUMBER ONE TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT AND WAIVER OF DEFAULTS (this “Amendment”), dated as of December 31, 2014, is entered into by and among Bridge Bank, National Association (“Lender”), on the one hand, and Selectica, Inc., a Delaware corporation (“Selectica”), and Selectica Sourcing Inc., a Delaware corporation (“Sourcing,” together with Selectica, each a “Borrower,” and collectively “Borrowers”) on the other hand, with reference to the following facts:

 

A.     Borrowers and Lender previously entered into that certain Amended and Restated Business Financing Agreement, dated as of July 25, 2014 (as amended, the “Agreement”); 

 

B.     Borrowers are in default of the provision of the Agreement set forth in the table set forth on Schedule A attached hereto, as at the dates indicated in such Schedule (the “Existing Defaults”);

 

C.     Borrowers have requested that Lender (1) waive the Existing Defaults, (2) make certain amendments to the Agreement; and

 

D.     Lender has agreed with such requests, subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows:

 

Defined Terms. All initially capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Agreement.

 

Amendments to Section 4.12. Section 4.12 is hereby amended and restated in its entirety as follows:

 

	 	
4.12
	
Maintain Borrowers' financial condition as follows in accordance with GAAP (except to the extent modified by the definitions herein):

 

An Asset Coverage Ratio shall not be less than 2.00 to 1.00, tested as of the end of each month, beginning with the month ended October 31, 2014.

 

EBITDA to not negatively deviate by more than 20% of the projections approved by Borrowers’ boards of directors with respect to the fiscal quarter ending December 31, 2014.

 

Amendments to Section 12.1.

 

The following defined term is hereby deleted in its entirety:

 

“Current Ratio”

 

The following new defined terms are hereby added to Section 12.1 of the Agreement in alphabetical order:

 

“Asset Coverage Ratio” means (i) the sum of (a) Borrowers’ unrestricted cash maintained on deposit at Lender (or subject to a control agreement in form and substance reasonably acceptable to Lender in its sole discretion) (excluding proceeds of Cash-Secured Advances) plus (b) Eligible Receivables (as reported on the most recent borrowing base certificate), divided by (ii) the Obligations (excluding Cash-Secured Advances).

 

 

 

1

 

 

“EBITDA” means, with respect to the Borrowers on a consolidated basis, the sum of (a) net profit, plus (b) interest, plus (c) depreciation, plus (d) amortization, plus (d) stock compensation expense, each as defined in accordance with GAAP.

 

Amendment to Exhibit A. Exhibit A to the Agreement is hereby amended and restated in its entirety as set forth in Schedule B attached hereto.

 

Waiver of Existing Defaults. Upon the terms and subject to the conditions set forth in this Amendment, Lender hereby waives the Existing Defaults. This waiver of the Existing Defaults shall be effective only in this specific instance and for the specific purpose for which it is given, and shall not entitle Borrowers to any other or further waiver in any similar or other circumstances.

 

Conditions Precedent to Effectiveness of Amendment. The effectiveness of this Amendment and the waiver of the Existing Defaults set forth in Section 5 above are subject to and contingent upon the fulfillment of each and every one of the following conditions to the satisfaction of Lender:

 

Lender shall have received this Amendment, duly executed by Borrowers; 

 

Lender shall have received an amendment fee in the amount of $12,500, which fee shall be fully-earned and non-refundable;

 

After giving effect to this Amendment, no Event of Default or Default shall have occurred and be continuing; and

 

After giving effect to this Amendment, all of the representations and warranties set forth herein and in the Agreement shall be true, complete and accurate in all respects as of the date hereof (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement).

 

Representations and Warranties. In order to induce Lender to enter into this Amendment, each Borrower hereby represents and warrants to Lender that:

 

After giving effect to this Amendment, no Event of Default or Default is continuing;

 

After giving effect to this Amendment, all of the representations and warranties set forth in the Agreement and in the Agreement are true, complete and accurate in all respects (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement); and

 

This Amendment has been duly executed and delivered by Borrowers, and the Agreement continues to constitute the legal, valid and binding agreements and obligations of Borrowers, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, and similar laws and equitable principles affecting the enforcement of creditors’ rights generally.

 

Counterparts; Telefacsimile Execution. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of a manually executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver a manually executed counterpart of this Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

 

 

 

2

 

 

Integration. The Agreement as amended by this Amendment constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and thereof, and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof.

 

No Other Waiver. The execution of this Amendment and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default (other than the Existing Defaults), whether or not known to Lender and whether or not existing on the date of this Amendment.

 

Release.

 

Each Borrower hereby absolutely and unconditionally releases and forever discharges Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which any Borrower has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown. Each Borrower certifies that it has read the following provisions of California Civil Code Section 1542:

 

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

 

Each Borrower understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if it should eventually suffer additional damages arising out of the facts referred to above, it will not be able to make any claim for those damages. Furthermore, each Borrower acknowledges that it intends these consequences even as to claims for damages that may exist as of the date of this release but which it does not know exist, and which, if known, would materially affect its decision to execute this Agreement, regardless of whether its lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

 

Reaffirmation of the Agreement. The Agreement as amended hereby remains in full force and effect.

 

[remainder of page intentionally left blank]

 

 

 

3

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of the date first hereinabove written.

 

	  	
SELECTICA, INC.,
a Delaware corporation

 

 

By                                                                                                                     

Name:                                                                                                               

Title:                                                                                                                  

	  	  
	 	 
	  	
SELECTICA SOURCING INC.,
a Delaware corporation

 

 

By                                                                                                                     

Name:                                                                                                               

Title:                                                                                                                  

	  	  
	  	  
	  	
BRIDGE BANK, NATIONAL ASSOCIATION

 

 

By                                                                                                                             

Name:                                                                                                                       

Title:                                                                                                                         

 

 

Amendment Number One to Amended and Restated Business Financing Agreement and Waiver of Defaults

 

 

 

 

 

 

AMENDMENT NUMBER TWO TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT

 

This AMENDMENT NUMBER TWO TO AMENDED AND RESTATED BUSINESS FINANCING AGREEMENT (this “Amendment”), dated as of March 11, 2015, is entered into by and among Bridge Bank, National Association (“Lender”), on the one hand, and Selectica, Inc., a Delaware corporation (“Selectica”), and Selectica Sourcing Inc., a Delaware corporation (“Sourcing,” together with Selectica, each a “Borrower,” and collectively “Borrowers”) on the other hand, with reference to the following facts:

 

A.     Borrowers and Lender previously entered into that certain Amended and Restated Business Financing Agreement, dated as of July 25, 2014, as amended by that certain Amendment Number One to Amended and Restated Business Financing Agreement and Waiver of Defaults, dated as of December 31, 2014 (as so amended, the “Agreement”); 

 

B.     Borrowers have requested that Lender (1) increase the ABL Credit Limit to $5,000,000, (2) provide an additional $1,900,000 non-formula sublimit under the ABL Credit Limit, and (3) make certain other amendments to the Agreement; and

 

C.     Lender has agreed with such requests, subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing, the parties hereto hereby agree as follows:

 

Defined Terms. All initially capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Agreement.

 

Amendments to Section 12.1.

 

The following defined terms set forth in Section 12.1 of the Agreement are hereby amended and restated in their entirety as follows:

 

“ABL Credit Limit” means $5,000,000, which is intended to be the maximum amount of ABL Advances at any time outstanding.

 

"Borrowing Base" means at any time the result of (i) the Eligible Receivable Amount multiplied by the Advance Rate, plus (ii) the Non-Formula Sublimit, minus (iii) such reserves as Lender may deem proper and necessary from time to time.

 

“Credit Limit” means $9,000,000, which is intended to be the maximum amount of Advances at any time outstanding.

 

The following new defined term is hereby added to Section 12.1 of the Agreement in alphabetical order:

 

“Non-Formula Sublimit” means $1,900,000.

 

Conditions Precedent to Effectiveness of Amendment. The effectiveness of this Amendment is subject to and contingent upon the fulfillment of each and every one of the following conditions to the satisfaction of Lender:

 

Lender shall have received this Amendment, duly executed by Borrowers; 

 

 

 

1 

 

 

Lender shall have received a guaranty duly executed by Lloyd Miller, III, an individual, in form and substance satisfactory to Lender in Lender’s sole and absolute discretion;

 

Lender shall have received a guaranty duly executed by Milfam II, L.P. (“Milfam”), and resolutions to guaranty duly executed by Milfam, each in form and substance satisfactory to Lender in Lender’s sole and absolute discretion;

 

No Event of Default or Default shall have occurred and be continuing; and

 

All of the representations and warranties set forth herein and in the Agreement shall be true, complete and accurate in all respects as of the date hereof (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement).

 

Representations and Warranties. In order to induce Lender to enter into this Amendment, each Borrower hereby represents and warrants to Lender that:

 

No Event of Default or Default is continuing;

 

All of the representations and warranties set forth in the Agreement and in the Agreement are true, complete and accurate in all respects (except for representations and warranties which are expressly stated to be true and correct as of the date of the Agreement); and

 

This Amendment has been duly executed and delivered by Borrowers, and the Agreement continues to constitute the legal, valid and binding agreements and obligations of Borrowers, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, and similar laws and equitable principles affecting the enforcement of creditors’ rights generally.

 

Counterparts; Telefacsimile Execution. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as delivery of a manually executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile also shall deliver a manually executed counterpart of this Amendment but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

 

Integration. The Agreement as amended by this Amendment constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and thereof, and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof and thereof.

 

No Waiver. The execution of this Amendment and the acceptance of all other agreements and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default , whether or not known to Lender and whether or not existing on the date of this Amendment.

 

Release.

 

Each Borrower hereby absolutely and unconditionally releases and forever discharges Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which any Borrower has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown. Each Borrower certifies that it has read the following provisions of California Civil Code Section 1542:

 

 

 

2 

 

 

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

 

Each Borrower understands and acknowledges that the significance and consequence of this waiver of California Civil Code Section 1542 is that even if it should eventually suffer additional damages arising out of the facts referred to above, it will not be able to make any claim for those damages. Furthermore, each Borrower acknowledges that it intends these consequences even as to claims for damages that may exist as of the date of this release but which it does not know exist, and which, if known, would materially affect its decision to execute this Agreement, regardless of whether its lack of knowledge is the result of ignorance, oversight, error, negligence, or any other cause.

 

Reaffirmation of the Agreement. The Agreement as amended hereby remains in full force and effect.

 

[remainder of page intentionally left blank]

 

 

 

3 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of the date first hereinabove written.

 

	  	
SELECTICA, INC.,
a Delaware corporation

 

 

By                                                                                                                     

Name:                                                                                                               

Title:                                                                                                                  

	  	  
	 	 
	  	
SELECTICA SOURCING INC.,
a Delaware corporation

 

 

By                                                                                                                     

Name:                                                                                                               

Title:                                                                                                                  

 

 

Amendment Number Two to Amended and Restated Business Financing Agreement

 

 

 

 

 

 

	  	
BRIDGE BANK, NATIONAL ASSOCIATION

 

 

By                                                                                                                     

Name:                                                                                                               

Title:                                                                                                                  

 

 

Amendment Number Two to Amended and Restated Business Financing Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}]]