{"id":41323,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/starter-kit-loan-and-security-agreement-imperial-bank-and-ebay.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"starter-kit-loan-and-security-agreement-imperial-bank-and-ebay","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/starter-kit-loan-and-security-agreement-imperial-bank-and-ebay.html","title":{"rendered":"Starter Kit Loan and Security Agreement &#8211; Imperial Bank and eBay Inc."},"content":{"rendered":"<pre>                                 IMPERIAL BANK\n                                 -------------\n                          INNOVATIVE BUSINESS BANKING\n\n                    STARTER KIT LOAN AND SECURITY AGREEMENT\n\nBorrower:  eBay, Inc.             Address:  2005 Hamilton Ave., Suite 270\n          -----------                       --------------------------------\n\nDate:   July 20, 1997                       San Jose, CA 95125\n      -----------------                     ------------------\n\nTHIS LOAN AND SECURITY AGREEMENT ('Agreement') is made and entered into on the\nabove date between IMPERIAL BANK ('Bank'), whose address is 226 Airport Parkway,\n                                                            --------------------\nSan Jose, CA  95110 and the party(ies) named above (jointly and severally,\n-------------------                                                       \n'Borrower'), whose chief executive office is located at the above address\n('Borrower's Address').\n\n1.   LOANS. Bank will make loans to Borrower (the 'Loans') in amounts determined\nby Bank in its reasonable business judgment up to the amount (the 'Credit\nLimit') shown on the Schedule to this Agreement (the 'Schedule'), provided no\nEvent of Default and no event which, with notice or passage of time or both,\nwould constitute an Event of Default is occurring or has occurred. All Loans and\nother monetary Obligations will bear interest at the rate shown on the Schedule.\nInterest will be payable monthly, on the date shown on the monthly billing from\nBank. Bank may, in its discretion, charge Borrower's deposit accounts maintained\nwith Bank for any amounts coming due under this Agreement.\n\n2.   SECURITY INTEREST. As security for all present and future indebtedness,\nguarantees, liabilities, and other obligations, of Borrower to Bank\n(collectively, the 'Obligations'), Borrower hereby grants Bank a continuing\nsecurity interest in all of Borrower's right title and interest in and to any\nproperty now or hereafter described in a security agreement executed by Borrower\nto Bank as well as the following types of property, whether now owned or\nhereafter acquired, and wherever located (collectively, the 'Collateral'): All\n'accounts', 'general intangibles,' 'chattel paper,' 'documents,' 'letters of\ncredit,' 'instruments,' 'deposit accounts,' 'inventory,' 'farm products,'\n'fixtures' and 'equipment,' as such terms are defined in Division 9 of the\nCalifornia Uniform Commercial Code in effect on the date hereof, and all\nproducts, proceeds and insurance proceeds of the foregoing.\n\n3.   REPRESENTATIONS AND AGREEMENTS OF BORROWER. Borrower represents to Bank as\nfollows, and Borrower agrees that the following representations will continue to\nbe true, and that Borrower will comply with all of the following agreements\nthroughout the term of this Agreement.\n\n3.1  CORPORATE EXISTENCE AND AUTHORITY. Borrower, if a corporation, is and will\ncontinue to be, duly authorized, validly existing and in good standing under the\nlaws of the jurisdiction of its incorporation. The execution, delivery and\nperformance by Borrower of this Agreement, and all other documents contemplated\nhereby have been \n\n \nduly and validly authorized, and do not violate any law or any provision of and\nare not grounds for acceleration under, any agreement or instrument which is\nbinding upon Borrower.\n\n3.2  NAME: PLACE OF BUSINESS. The name of Borrower set forth in this Agreement\nis its correct name. Borrower shall give Bank 15 days prior written notice\nbefore changing its name. The address set forth in the heading to this Agreement\nis Borrower's chief executive office. In addition, Borrower has places of\nbusiness and Collateral is located only at the locations set forth on the\nSchedule. Borrower will give Bank at least 15 days prior written notice before\nchanging its chief executive office or locating the Collateral at any other\nlocation.\n\n3.3  COLLATERAL. Bank has and will at all times continue to have a first-\npriority perfected security interest in all of the Collateral (including\nintellectual property) other than specific equipment identified in existing\nfiled or to be filed Financing Statements. Borrower will immediately advise Bank\nin writing of any material loss or damage to the Collateral.\n\n3.4  FINANCIAL CONDITION AND STATEMENTS. All financial statements now or in the\nfuture delivered to Bank have been, and will be prepared in conformity with\ngenerally accepted accounting principles. Since the last date covered by any\nsuch statement, there has been no material adverse change in the financial\ncondition or business of Borrower. Borrower will provide Bank: (i) within 30\ndays after the end of each month, a monthly financial statement prepared by\nBorrower, and such other information as Bank shall reasonably request: (ii)\nwithin 90 days following the end of Borrower's fiscal year, complete annual\nfinancial statements, certified by independent certified public accountants\nacceptable to Bank and accompanied by the unqualified report thereon by said\nindependent certified public accountants; and (iii) other financial information\nreasonably requested by Bank from time to time.\n\n3.5  TAXES: COMPLIANCE WITH LAW. Borrower has filed, and will file, when due,\nall tax returns and reports required by applicable law, and Borrower has paid,\nand will pay, when due, all taxes, assessments, deposits and contributions now\nor in the future owed by Borrower. Borrower has complied, and will comply, in\nall material respects, with all applicable laws, rules and regulations.\n\n3.6  INSURANCE. Borrower will at all times adequately insure all of the tangible\npersonal property Collateral and carry such other business insurance as is\ncustomary in Borrower's industry, with Bank named as Loss Payee.\n\n3.7  ACCESS TO COLLATERAL AND BOOKS AND RECORDS. At reasonable times, on one\nbusiness day's notice, Bank or its agents, shall have the right to inspect the\nCollateral, and the right to audit and copy Borrower's books and records.\n\n \n3.8   BANKING RELATIONSHIP AND OPERATING ACCOUNTS. Borrower shall maintain its\nprimary operating deposit accounts with Bank. Borrower shall at all times\nmaintain its primary banking relationship with Bank.\n\n3.9   ADDITIONAL AGREEMENTS. Borrower shall not, without Bank's prior written\nconsent, such consent not to be unreasonably withheld, do any of the following:\n(i) enter into any transaction outside the ordinary course of business except\nfor the sale of capital stock to venture investors, provided that Borrower\npromptly delivers written notification to Bank of any such stock sale; (ii) sell\nor transfer any Collateral, except in the ordinary course of business; (iii) pay\nor declare any dividends on Borrower's stock (except for dividends payable\nsolely in stock of Borrower); (iv) redeem, retire, purchase or otherwise\nacquire, directly or indirectly, any of Borrower's stock other than the\nrepurchase of up to five percent (5%) of Borrower's then issued stock in any\nfiscal year from Borrower's employees or directors pursuant to written\nagreements with Borrower; (v) incur additional borrowed moneys other than\nindebtedness fully subordinated to the debt due to Bank, and equipment leases;\n(vi) merge, liquidate a substantial portion of its assets, or acquire other\nassets other than in the normal course of business; or (vi) merge, liquidate a\nsubstantial portion of its assets, or acquire other assets other than in the\nnormal course of business; or (vii) make loans, investments, or advances to\noutside parties other than in the normal course of business except in connection\nwith Board-approved employee stock purchase plans.\n\n3.10  NOTICE OF LEGAL PROCEEDINGS. Borrower will notify Bank in writing of any\nlegal action commenced against it which may result in damages over $50,000.\n\n4.    TERM. This Agreement shall continue in effect until the maturity date set\nforth on the Schedule (the 'Maturity Date'). This Agreement may be terminated,\nwithout penalty, prior to the Maturity Date as follows: (i) by Borrower,\neffective three business days after written notice of termination is given to\nBank; or (ii) by Bank at any time after the occurrence of an Event of Default,\nwithout notice, effective immediately. On the Maturity Date or on any earlier\neffective date of termination, Borrower shall pay all Obligations in full,\nwhether or not such Obligations are otherwise then due and payable. No\ntermination shall in any way affect or impair any security interest or other\nright or remedy of Bank, nor shall any such termination relieve Borrower of any\nObligation to Bank, until all of the Obligations have been paid and performed in\nfull.\n\n5.    EVENTS OF DEFAULT AND REMEDIES. The occurrence of any of the following\nevents shall constitute an 'Event of Default' under this Agreement: (a) Any\nrepresentation, statement, report or certificate given to Bank by Borrower or\nany of its officers, employees or agents, now or in the future, is untrue or\nmisleading in a material respect; or (b) Borrower fails to pay when due any Loan\nor any interest thereon or any other monetary Obligation; or (c) the total\nObligations outstanding at any time exceed the Credit Limit or (d) Borrower\nfails to perform any other non-monetary Obligation, which failure is not cured\nwithin 10 business days after the date due; or (e) Dissolution, termination of\nexistence, insolvency or business failure of Borrower or appointment of a\n\n \nreceiver, trustee or custodian, for all or any part of the property of\nassignment for the benefit of creditors by, or the commencement of any\nproceeding by or against Borrower under any reorganization, bankruptcy,\ninsolvency, arrangement, readjustment of debt, dissolution or liquidation law or\nstatute of any jurisdiction, now or in the future in effect; or (f) a material\nadverse change in the business, operations, or financial or other condition of\nBorrower. If an Event of Default occurs, Bank, shall have the right to\naccelerate and declare all of the Obligations to be immediately due and payable,\nincrease the interest rate by an additional five percent per annum, and exercise\nall rights and remedies recorded by applicable law. If any interest payment,\nprincipal payment or principal balance payment due from Borrower is delinquent\nten or more days, Borrower agrees to pay Bank a late charge in the amount of 5%\nof the payment so due and unpaid, in addition to the payment, but nothing in\nthis provision is to be construed as any obligation on the part of Bank to\naccept payment of any payment past due or less than the total unpaid principal\nbalance after maturity. All payments shall be applied first to any late charges\nowing, then to interest and the remainder, if any, to principal.\n\n6.   GENERAL. If any provision of this Agreement is held to be unenforceable,\nthe remainder of this Agreement shall still continue in full force and effect.\nThis Agreement and any other written agreements, documents and instruments\nexecuted in connection herewith are the complete agreement between Borrower and\nBank and supersede all prior and contemporaneous negotiations and oral\nrepresentations and agreements, all of which are merged and integrated in this\nAgreement. There are no oral understandings, representations or agreements\nbetween the parties which are not in this Agreement or in other written\nagreements signed by the parties in connection this Agreement. The failure of\nBank at any time to require Borrower to comply strictly with any of the\nprovisions of this Agreement. The failure of Bank at any time to require\nBorrower to comply strictly with any of the provisions of this Agreement shall\nnot waive Bank's right later to demand and receive strict compliance. Any waiver\nof a default shall not waive any other default. None of the provisions of this\nAgreement may be waived except by a specific written waiver signed by an officer\nof Bank and delivered to Borrower. The provisions of this Agreement may not be\namended, except in a writing signed by Borrower and Bank. Borrower shall\nreimburse Bank for all reasonable attorney's fees and all other reasonable costs\nincurred by Bank, in connection with this Agreement (whether or not a lawsuit is\nfiled) including any post petition bankruptcy activities. If Bank or Borrower\nfiles any lawsuit against the other predicated on a breach of this Agreement,\nthe prevailing party shall be entitled to recover its reasonable costs and\nattorney's fees from the non-prevailing party. Borrower may not assign any\nrights under this Agreement without Bank's prior written consent. This Agreement\nshall be governed by the laws of the State of California to the jurisdiction of\nwhose courts Borrower hereby agrees to submit.\n\n7.   MUTUAL WAIVER OF JURY TRAIL. BORROWER AND BANK EACH HEREBY WAIVE THE RIGHT\nTO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN\nANY WAY RELATING TO, THIS AGREEMENT OR ANY CONDUCT, ACT OR OMISSION OF BANK OR\n\n \nBORROWER OR ANY OR THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR\nAFFILIATES.\n\n8.   REFERENCE PROCEEDINGS. a. Each controversy, dispute or claim ('Claim')\nbetween the parties arising out of or relating to this Agreement, which is not\nsettled in writing within ten days after the 'Claim Date' (defined as the date\non which a party gives written notice to all other parties that a controversy,\ndispute or claim exists), will be settled by a reference proceeding in Los\nAngeles, California in accordance with the provisions of Section 63B et seq. of\n                                                                     -- ---\nthe California Code of Civil Procedure, or their successor section ('CCP'),\nwhich shall constitute the exclusive remedy for the settlement of any Claim,\nincluding whether such Claim is subject to the reference proceeding and the\nparties waive their rights to initiate any legal proceedings against each other\nin any court or jurisdiction other than the Superior Court of Los Angeles (the\n'Court'). The referee shall be a retired Judge selected by mutual agreement of\nthe parties, and if they cannot so agree within thirty days after the Claim\nDate, the referee shall be selected by the Presiding Judge of the Court. The\nreferee shall be appointed to sit as a temporary judge, as authorized by law.\nThe referee shall (a) be requested to set the matter for hearing within sixty\n(60) days after the Claim Date and (b) try any and all issues of law or fact and\nreport a statement of decision upon them, if possible, within ninety (90) days\nof the Claim Date. Any decision rendered by the referee will be final, binding\nand conclusive and judgment shall entered pursuant to CCP 644 in the Court. All\ndiscovery permitted by this Agreement shall be completed no later than fifteen\n(15) days before the first hearing date established by the referee. The referee\nmay extend such period in the event of a party's refusal to provide requested\ndiscovery for any reason whatsoever, including, without limitation, legal\nobjections raised to such discovery or unavailability of a witness due to\nabsence or illness. No party shall be entitled to 'priority' in conducting\ndiscovery. Depositions may be taken by either party upon seven (7) days written\nnotice, and, request for production or inspection of documents shall be\nresponded to within ten (10) days after service. All disputes relating to\ndiscovery which cannot be resolved by the parties shall be submitted to the\nreferee whose decision shall be final and binding upon the parties.\n\nb.   The referee shall be required to determine all issues in accordance with\nexisting case law and the statutory laws of the State of California. The rules\nof evidence applicable to proceedings at law in the State of California will be\napplicable to the reference proceeding. The referee shall be empowered to enter\nequitable as well as legal relief, to provide all temporary and\/or provisional\nremedies and to enter equitable orders that will be binding upon the parties.\nThe referee shall issue a single judgment at the close of the reference\nproceeding which shall dispose of all of the claims of the parties that are the\nsubject of the reference. The parties hereto expressly reserve the right to\ncontest or appeal from the final judgment or any appealable order or appealable\njudgment entered by the referee. The parties expressly reserve the right to\nfindings of fact, conclusions of law, a written statement of decision, and the\nright to move for a new trail or a different judgment, which new trial, if\ngranted, is also to be a reference proceeding under this provision.\n\n \nBorrower:                             Bank:\n\neBay, Inc.                            IMPERIAL BANK\n------------------------------                                         \n\nBy:  \/s\/ PIERRE OMIDYAR               By:  \/s\/ D. SOUSA\n     -------------------------             ---------------------------\n         CEO\n\nBy:  \/s\/ J. SKOLL                     Title:  AVP\n     -------------------------                ------------------------\n         President\n\n \n                                 IMPERIAL BANK\n                                 -------------\n                          INNOVATIVE BUSINESS BANKING\n\n          Master Schedule to Starter Kit Loan and Security Agreement\n\nBORROWER:                 eBay, Inc.\n                       -----------------\n\nDATE:                     July 20, 1997\n                       ---------------------\n\n     This Schedule is incorporated into and an integral part of the Starter Kit\nLoan and Security Agreement between Imperial Bank ('Bank') and the above-named\nBorrower of even date.\n\n \n                             \nCREDIT LIMIT (AGGREGATE)     $750,000 (includes, without limitation, Equipment Advances\n(Section 1):                 and the Letter of Credit Reserve, if any).\n \nINTEREST RATE (Section 1):   The rate equal to Bank's Prime Rate in effect from time to\n                             time, plus 1.25% per year.  Interest shall be calculated\n                             on the basis of a 360 day year for the actual number of\n                             days elapsed.  The Prime Rate shall be the rate announced\n                             from time to time by Bank as its 'Prime Rate;' as a base\n                             rate upon which other rates charged by Bank are based, and\n                             it is not necessarily the best rate available at Bank.\n                             The interest rate applicable to the Obligations shall\n                             change on each date there is a change in the Prime Rate.\n\nMATURITY DATE (Section 4):   January 5, 1999.\n\nOTHER LOCATIONS AND          ________________________________________________\nADDRESSES                    ________________________________________________\n(Section 3.2):               ________________________________________________\n                             ________________________________________________ \n\nOTHER AGREEMENTS:            1.  LOAN FEE.  Borrower shall concurrently pay Bank a\n                             non-refundable Loan Fee in the amount of $3,000.\n\n                             2. RECEIPT OF EQUITY. As a condition to any\n                             advances and prior to funding, Borrower shall\n                             provide Bank with evidence of receipt of not less\n                             than $3,000,000 in new equity from investor(s)\n                             acceptable to Bank.\n\n\n \nBorrower:                             Bank:\n\neBay, Inc.                            IMPERIAL BANK\n-----------------------------                                         \n\nBy:  \/s\/ PIERRE OMIDYAR               By:  \/s\/ D. SOUSA\n     ------------------                    ------------------------\n         CEO\n\nBy:  \/s\/ J. SKOLL                     Title:  AVP\n     ------------------                       ---------------------\n         President\n\n \n                                 IMPERIAL BANK\n                                 -------------\n                          INNOVATIVE BUSINESS BANKING\n\n    SCHEDULE TO STARTER KIT LOAN AND SECURITY AGREEMENT (EQUIPMENT ADVANCES)\n\nBORROWER:     eBay, Inc.\n            -------------------------\n\nDATE:         July 20, 1997\n            -------------------------\n\n     This Schedule is an integral part of the Loan and Security Agreement\nbetween Imperial Bank ('Bank') and the above-named Borrower of even date.\n\nCREDIT LIMIT           $750,000 (such amount to be funded under the aggregate\n(EQUIPMENT)            Credit Limit). Equipment Advances will be made only on or\n(Section 1):           prior to January 5, 1998 (the 'Last Advance Date') and\n                       only for the purpose of purchasing equipment reasonably\n                       acceptable to Bank. Borrower must provide invoices for\n                       the equipment to Bank on or before the Last Advance Date.\n                        \nINTEREST RATE          The rate equal to Bank's Prime Rate in effect from time\n(Section 1):           to time, plus 1.25% per annum. Interest shall be\n                       calculated on the basis of a 360 day year for the actual\n                       number of days elapsed. The Prime Rate shall be the rate\n                       announced from time to time by Bank as its 'Prime Rate;'\n                       as a base rate upon which other rates charged by Bank are\n                       based, and it is not necessarily the best rate available\n                       at Bank. The interest rate applicable to the Obligations\n                       shall change on each date there is a change in the Prime\n                       Rate.\n \nMATURITY DATE          After the Last Advance Date, the unpaid principal balance\n(Section 4):           of the Equipment Advances shall be repaid in 24 equal\n                       monthly installments of principal, plus interest,\n                       commencing on February 5, 1998 and continuing on the same\n                       day of each month thereafter until the entire unpaid\n                       principal balance of the Equipment Advances and all\n                       accrued unpaid interest have been paid (subject to Bank's\n                       right to accelerate the Equipment Advances on an Event of\n                       Default).\n\nBorrower:                          Bank:\n\neBay, Inc.                         IMPERIAL BANK\n-------------------------\nBy:  \/s\/ PIERRE OMIDYAR            By:  \/s\/ D. SOUSA\n     --------------------              ________________________\n        CEO\n\nBy:  \/s\/ J. SKOLL                  Title:  AVP\n     --------------------                  ---------------------\n        President\n\n\n\n \n                                 IMPERIAL BANK\n                                 -------------\n                          INNOVATIVE BUSINESS BANKING\n\nSCHEDULE TO STARTER KIT LOAN AND SECURITY AGREEMENT (LETTERS OF CREDIT SUBLIMIT)\n\nBORROWER:     eBay, Inc.\n             ----------------\n\nDATE:         July 20, 1997\n             -------------------\n\n     This Schedule is an integral part of the Loan and Security Agreement\nbetween Imperial Bank ('Bank') and the above-named Borrower of even date.\n\n\n                      \nLETTERS OF CREDIT        The aggregate Credit Limit Shall be reduced by an amount equal\nSublimit (Section        to $205,000 (the 'Letter of Credit Reserve'). Bank may, in its\n 1):                     sole discretion, advance as Loans, any amounts that may become\n                         due or owing to Bank in connection with letter of credit\n                         services furnished to Borrower by or through Bank (the 'Letter\n                         of Credit Services').  Borrower shall execute all standard form\n                         applications and agreements of Bank in connection with the\n                         Letter of Credit Services and, without limiting any of the\n                         terms of such applications and agreements, Borrower will pay\n                         all standard fees and charges of Bank in connection with the\n                         Letter of Credit Services and, without limiting any of the\n                         terms of such applications and agreements, Borrower will pay\n                         all standard fees and charges of Bank in connection with the\n                         Letter of Credit Services.\n                                                        \nMATURITY DATE            January 5, 1999.\n(Section 4):\n \n\nBorrower:                               Bank:\n\neBay, Inc.                              IMPERIAL BANK\n----------------------                                         \n\nBy:  \/s\/ PIERRE OMIDYAR                 By:  \/s\/ D. SOUSA\n     ------------------                      --------------------\n       CEO\n\nBy:  \/s\/ J. SKOLL                       Title:  AVP\n     ------------                             --------------------\n       President\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7840],"corporate_contracts_industries":[9415],"corporate_contracts_types":[9560,9567],"class_list":["post-41323","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-imperial-bank","corporate_contracts_industries-financial__banks","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41323"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41323"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41323"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}