Quickstart Loan and Security Agreement - Silicon Valley Bank and Teleworld Inc.
SILICON VALLEY BANK
QUICKSTART LOAN AND SECURITY AGREEMENT
Borrower: Teleworld Inc. Address: 2500 Augustine Drive, Building 5,
Suite 201, Santa Clara, CA 95054
Date: December 15, 1997
SILICON'S OFFER TO EXTEND FINANCING ON THE TERMS SET FORTH HEREIN SHALL EXPIRE
IF THIS AGREEMENT IS NOT EXECUTED BY BORROWER AND RETURNED TO SILICON WITHIN 30
DAYS OF THE ABOVE DATE.
This Loan And Security Agreement is entered into on the above date between
Silicon Valley Bank ("Silicon"), whose address is 3003 Tasman Drive, Santa
Clara, California 95054 and the borrower named above (jointly and severally, the
"Borrower"), whose chief executive office is located at the above address
("Borrower's Address").
1. Loans. Silicon will make loans to Borrower (the "Loans") up to the
amount (the "Credit Limit") shown on the Schedule to this Agreement (the
"Schedule"), provided no Event of Default and no event which, with notice or
passage of time or both, would constitute an Event of Default has occurred. All
Loan and other monetary Obligations will bear interest at the rate shown on the
Schedule. interest will be payable monthly, on the date shown on the monthly
billing from Silicon. Silicon may, in its discretion, charge interest due under
this Agreement to Borrower's deposit accounts maintained with Silicon.
2. Security Interest. As security for all present and future
indebtedness, guarantees, liabilities, and other obligations, of Borrower to
Silicon (collectively, the "Obligations"), Borrower hereby grants Silicon a
continuing security interest in all of Borrower's interest in the following
types of property, whether now owned or hereafter acquired, and wherever located
(collectively, the "Collateral"): All "accounts," "general intangibles,"
"contract rights," "chattel paper," "documents," "letters of credit,"
"instruments," "deposit accounts," "inventory," "farm products," "investment
property", "fixtures" and "equipment," as such terms are defined in Division 9
of the California Uniform Commercial Code in affect on the date hereof, and all
products, proceeds and insurance proceeds of the foregoing. Notwithstanding the
forgoing, "general intangibles" shall specifically exclude "intellectual
property".
3. Representatives And Agreements Of Borrower. Borrower represents to
Silicon as follows, and Borrower agrees that the following representations will
continue to be true, and that Borrower will comply with all of the following
agreements throughout the term of this Agreement:
3.1 Corporate Existence and Authority. Borrower, if a corporation, is and
will continue to be, duly authorized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The execution, delivery
and performance by Borrower of this Agreement, and all other documents
contemplated hereby have been duly and validly authorized, and do not violate
any law or any provision of, and are not grounds for acceleration under, any
agreement or instrument which is binding upon Borrower.
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3.2 Name; Places of Business. The name of Borrower set forth in this
Agreement is its correct name. Borrower shall give Silicon 15 days prior written
notice before changing its name. The address set forth in the heading to this
Agreement is Borrower's chief executive office. In addition, Borrower has places
of business and Collateral is located only at the locations set forth on the
Schedule. Borrower will give Silicon at least 15 days prior written notice
before changing its chief executive office or locating the Collateral at any
other location.
3.3 Collateral. Silicon has and will at all times continue to have a
first-priority perfected security interest in all of the Collateral to which
Silicon has made the necessary filings other than specific equipment not
financed by Silicon. Borrower will immediately advise Silicon in writing of any
material loss or damage to the Collateral.
3.4 Financial Condition and Statements. All financial statements now or in
the future delivered to Silicon have been, and will be, prepared in conformity
with generally accepted accounting principles. Since the last date covered by
any such statement, there has been no material adverse change in the financial
condition or business of Borrower. Borrower will provide Silicon: (i) within 30
days after the end of each month, a monthly financial statement prepared by
Borrower, and such other information as Silicon shall reasonably request; (ii)
within 120 days following the end of Borrower's fiscal year ending December 31,
1998 and each fiscal year ending thereafter, complete annual financial
statements, certified by independent certified public accountants acceptable to
Silicon and accompanied by the unqualified report thereon by said independent
certified public accountants; and (iii) other financial information reasonably
requested by Silicon from time to time.
3.5 Taxes; Compliance with Law. Borrower has filed, and will file, when
due, all tax returns and reports required by applicable law, and Borrower has
paid, and will pay, when due, all taxes, assessments, deposits and contribution
now or in the future owed by Borrower. Borrower has complied, and will comply,
in all material respects, with all applicable laws, rules and regulations.
3.6 Insurance. Borrower shall at all times insure all of the tangible
personal property Collateral and carry such other business insurance as is
customary in Borrower's industry.
3.7 Access to Collateral and Books and Records. At reasonable times, on
one business day notice, Silicon, or its agents, shall have the right to inspect
the Collateral, and the right to audit and copy Borrower's books and records.
3.8 Operating Accounts. Borrower shall maintain its primary operating
accounts with Bank.
3.9 Additional Agreements. Borrower shall not, without Silicon's prior
written consent, which consent shall not be unreasonably withheld, do any of the
following: (i) enter into any transaction outside the ordinary course of
business except for a) the sale of capital stock to (1) venture capital
investors or (2) through a public offering registered under the Act, b) the
granting of non-exclusive licenses, cross-licenses or other similar arrangements
for the use of Borrower's property or c) the disposal of worn-out or obsolete
equipment; (ii) sell or transfer any Collateral, except in the ordinary course
of business; (iii) pay or declare any dividends on
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Borrower's stock (except for dividends payable solely in stock of Borrower); or
(iv) redeem, retire, purchase or otherwise acquire, directly or indirectly, any
of Borrower's stock other than the repurchase of up to five percent (5%) of
Borrower's then issued stock in any fiscal year from Borrower's employees or
directors pursuant to written agreement with Borrower. Notwithstanding anything
to the contrary contained herein, Borrower is permitted to merge or consolidate
with any other business organization, or acquire all or substantially all of the
capital stock or property of another business organization, provided that in
such merger, consolidation and acquisition, Borrower is the surviving entity and
an Event of Default does not exist before and after giving effect to such
transaction.
4. Term. This Agreement shall continue in effect until the maturity due
set forth on the Schedule (the "Maturity Date"). This Agreement may be
terminated, without penalty, prior to the Maturity Date as follows: (i) by
Borrower, effective three business days after written notice of termination is
given to Silicon; or (ii) by Silicon at any time after the occurrence of an
Event of Default, without notice, effective immediately. On the Maturity Date or
on any earlier effective date of termination, Borrower shall pay all Obligations
in full, whether or not such Obligations are otherwise then due and payable. No
termination shall in any way affect or impair any security interest or other
right or remedy of Silicon, nor shall any such termination relieve Borrower of
any Obligation to Silicon, until all of the Obligations have been paid and
performed in full.
5. Events of Default and Remedies. The occurrence of any of the
following events shall constitute an "Event of Default" under this Agreement:
(a) Any representation, statement, report or certificate given to Silicon by
Borrower or any of its officers, employees or agents, now or in the future, is
untrue or misleading in a material respect; or (b) Borrower fails to pay when
due any Loan or any interest thereon or any other monetary Obligation; or (c)
the total Obligations outstanding at any time exceed the Credit Limit; or (d)
Borrower fails to perform any other non-monetary Obligation, which failure is
not cured within 5 business days after the date due; or (e) Dissolution,
termination of existence (other than as specifically permitted herein),
insolvency or business failure of Borrower, or appointment of a receiver,
trustee or custodian, for all or any part of the property of, assignment for the
benefit of creditors by, or the commencement of any proceeding by or against
Borrower under any reorganization, bankruptcy, insolvency, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or in the future in effect; or (f) a material adverse change
in the business, operations, or financial or other condition of Borrower. If an
Event of Default occurs, Silicon, shall have the right to accelerate and declare
all of the Obligations to be immediately due and payable, increase the interest
rate by an additional four percent per annum, and exercise all rights and
remedies accorded it by applicable law.
6. General. If any provision of this Agreement is held to be
unenforceable, the remainder of this Agreement shall still continue in full
force and effect. This Agreement and any other written agreements, documents and
instruments executed in connection herewith are the complete agreement between
Borrower and Silicon and supersede all prior and contemporaneous negotiations
and oral representations and agreements, all of which are merged and integrated
in this Agreement. There are no oral understandings, representations or
agreements between the parties which are not in this Agreement or in other
written agreements signed by the parties in connection this Agreement. The
failure of Silicon at any time to require Borrower to comply
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strictly with any of the provisions of this Agreement shall not waive Silicon's
right later to demand and receive strict compliance. Any waiver of a default
shall not waive any other default. None of the provisions of this Agreement may
be waived except by a specific written waiver signed by an officer of Silicon
and delivered to Borrower. The provisions of this Agreement may not be amended,
except in a writing signed by Borrower and Silicon. Borrower shall reimburse
Silicon for all reasonable attorneys' fees and all other reasonable costs
incurred by Silicon, in connection with this Agreement (whether or not a lawsuit
is filed). If Silicon or Borrower files any lawsuit against the other predicated
on a breach of this Agreement, the prevailing party shall be entitled to recover
its reasonable costs and attorneys' fees from the non-prevailing party. Borrower
may not assign any rights under this Agreement without Silicon's prior written
consent. This Agreement shall be governed by the laws of the State of
California.
7. Mutual Waiver of Jury Trial. BORROWER AND SILICON EACH HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY CONDUCT, ACT OR OMISSION OF
SILICON OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
ATTORNEYS OR AFFILIATES.
Borrower:
TELEWORLD INC.
By: /s/ Michael Ramsay
-------------------------------------
President of Vice President
Silicon:
SILICON VALLEY BANK
By: /s/ John M. Swift
-------------------------------------
Title: Vice President
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4.
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SILICON VALLEY BANK
SCHEDULE TO
QUICKSTART LOAN AND SECURITY AGREEMENT (MASTER)
BORROWER: Teleworld Inc.
DATE: December 15, 1997
This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
Credit Limit (Aggregate)
(Section 1): $750,000.00 (includes, without limitation,
Equipment Advances and the Merchant Services
and Business Visa Reserve, if any)
Interest Rate (Section 1): A rate equal to the "Prime Rate" in effect
from time to time, plus 0.75% per annum.
Interest shall be calculated on the basis of
a 360-day year for the actual number of days
elapsed. "Prime Rate" means the rate
announced from time to time by Silicon as its
"prime rate;" it is a base rate upon which
other rates charged by Silicon are based, and
it is not necessarily the best rate available
at Silicon. The interest rate applicable to
the Obligations shall change on each date
there is a change in the Prime Rate.
Maturity Date (Section 4): June 15, 1999
Other Locations and Addresses
(Section 3.2):
Other Agreements: Borrower also agrees as follows:
1. Loan Fee. Borrower shall concurrently
pay Silicon a non-refundable Loan Fee in the
amount of $1,000.00.
2. Banking Relationship. Borrower shall at
all times maintain its primary banking
relationship with Silicon.
Borrower: Silicon:
Teleworld Inc. Silicon Valley Bank
By: /s/ Michael Ramsay By: /s/ John M. Swift
-------------------------- ---------------------------
President or Vice President Title: Vice President
5.
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SILICON VALLEY BANK
SCHEDULE TO
QUICKSTART LOAN AND SECURITY AGREEMENT (EQUIPMENT ADVANCES)
BORROWER: Teleworld Inc.
DATE: December 15, 1997
This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
Credit Limit (Equipment)
(Section 1): $750,000.00 (such amount to be funded under the
aggregate Credit Limit). Equipment Advances will
be made only on or prior to June 15, 1998 (the
"Last Advance Date") and only for the purpose of
purchasing equipment reasonably acceptable to
Silicon. Borrower must provide invoices for the
equipment to Silicon on or before the Last Advance
Date. Software may, however, comprise up to fifty
(50%) of each Equipment Advance.
Interest Rate (Section 1): A rate equal to the "Prime Rate" in effect from
time to time, plus 0.75% per annum. Interest shall
be calculated on the basis of a 360-day year for
the actual number of days elapsed. "Prime Rate"
means the rate announced from time to time by
Silicon as its "prime rate;" it is a base rate
upon which other rates charged by Silicon are
based, and it is not necessarily the best rate
available at Silicon. The interest rate applicable
to the Obligations shall change on each date there
is a change in the Prime Rate.
Maturity Date (Section 4): After the Last Advance Date, the unpaid principal
balance of the Equipment Advances shall be repaid
in 36 equal monthly installments of principal,
plus interest, commencing on July 15, 1998 and
continuing on the same day of each month
thereafter until the entire unpaid principal
balance of the Equipment Advances and all accrued
unpaid interest have been paid (subject to
Silicon's right to accelerate the Equipment
Advances on an Event of Default).
Borrower: Silicon:
Teleworld Inc. Silicon Valley Bank
By: /s/ Michael Ramsay By: /s/ John M. Swift
------------------------------ -----------------------------
President or Vice President Vice President
6.
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SILICON VALLEY BANK
CERTIFIED RESOLUTION
Borrower: TELEWORLD, INC., a corporation organized under the laws
of the State of Delaware
Date: December 15, 1997
I, the undersigned, corporate officer of the above-named borrower, a
corporation organized under the laws of the state set forth above, do hereby
certify that the following is a full, true and correct copy of resolutions duly
and regularly adopted by the Board of Directors of said corporation as required
by law, and by the by-laws of said corporation, and that said resolutions are
still in full force and effect and have not been in any way modified, repealed,
rescinded, amended or revoked.
Resolved, that this corporation borrow from Silicon Valley Bank
("Silicon"), from time to time, such sum or sums of money as, in the judgment of
the officer or officers authorized hereby, this corporation may require.
Resolved Further, that any officer of this corporation be, and he or she is
hereby authorized, in the name of this corporation, to execute and deliver to
Silicon the loan agreements, security agreements, notes, financing statements,
and other documents and instruments providing for such loans and evidencing or
securing such loans, and said authorized officers are authorized from time to
time to execute renewals, extensions and/or amendments of said loan agreements,
security agreements and other documents and instruments.
Resolved Further, that said authorized officers be and they are hereby
authorized, as security for any and all indebtedness of this corporation to
Silicon, whether arising pursuant to this resolution or otherwise, to grant, to
Silicon, or deed in trust for its benefit, any property of any and every kind,
belonging to this corporation, including, but not limited to, any and all real
property, accounts, inventory, equipment, general intangibles, instruments,
documents, chattel paper, notes, money, deposit accounts, furniture, fixtures,
goods, and other property of every kind, and to execute and deliver to Silicon
any and all pledge agreements, mortgages, deeds of trust, financing statements,
security agreements and other agreements, which said instruments and the note or
notes and other instruments referred to in the preceding paragraph may contain
such provisions, covenants, recitals and agreements as Silicon may require, and
said authorized officers may approve, and the execution thereof by said
authorized officers shall be conclusive evidence of such approval.
Resolved Further, that said authorized officers be and they are hereby
authorized to issue warrants to purchase this corporation's capital stock, for
such class, series and number, and on such terms, as said officers shall deem
appropriate.
Resolved Further, that Silicon may conclusively rely on a certified copy of
these resolutions and a certificate of the corporate officer of this corporation
as to the officers of this corporation and their offices and signatures, and
continue to conclusively rely on such certified copy of these resolutions and
said certificate for all past, present and future transactions until
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written notice of any change hereto or thereto is given to Silicon by this
corporation by certified mail, return receipt requested.
The undersigned further hereby certifies that the following persons are the duly
elected and acting officer of corporation named above as borrower and that the
following are their actual signatures:
<TABLE>
<CAPTION>
NAMES OFFICE(S) ACTUAL SIGNATURES
----- --------- -----------------
<S> <C> <C>
James Barton CTO /s/ James Barton
------------------------------ ------------------------------- -------------------------------
Mike Ramsay CEO /s/ Michael Ramsay
------------------------------ ------------------------------- -------------------------------
______________________________ _______________________________ _______________________________
</TABLE>
In Witness Whereof, I have hereunto set my hand as such corporate officer on the
date set forth above.
By: /s/ Sally Ann Reiss
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Its: om/Finance
--------------------------------------
8.
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FINANCING STATEMENT - FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code and will remain effective, with certain exceptions, for 5 years
from date of filing.
<TABLE>
<S> <C>
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A. NAME & TEL # OF CONTRACT AT FILER B. FILING OFFICE ACCT # (optional)
(optional)
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C. RETURN COPY TO: (Name and Mailing Address)
Data File Services, Inc.
P.O. Box 275
Van Nuys, CA 91408-2750
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D. OPTIONAL DESIGNATION (if applicable): [_] LESSOR/LESSEE [_] CONSIGNOR/CONSIGNEE [_] NON-UCC FILING
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</TABLE>
<TABLE>
<S> <C>
1 DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) FILED WITH:
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1a. ENTITY'S NAME
TELEWORLD INC.
OR
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1b. INDIVIDUAL'S LAST NAME FIRST NAME
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1c. MAILING ADDRESS CITY
2500 AUGUSTINE DRIVE SANTA CLARA
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1d. S.S. OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY'S STATE
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION
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2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name (2a or 2b) JMS/RC116
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2a. ENTITY'S NAME
OR
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2b. INDIVIDUAL'S LAST NAME FIRST NAME
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2c. MAILING ADDRESS CITY
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2d. S.S. OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITY 2f. ENTITY'S STATE
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION
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3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME -
insert only one secured party name (3a or 3b)
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3a. ENTITY'S LAST NAME
SILICON VALLEY BANK
OR
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3b. INDIVIDUAL'S LAST NAME FIRST NAME
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3c. MAILING ADDRESS CITY
3003 Tasman Drive Santa Clara
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4. This FINANCING STATEMENT covers the following types or items of property:
SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF.
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5. CHECK This FINANCING STATEMENT is signed by the Secured Party
BOX [_] instead of the Debtor to perfect a security interest (a)
(if applicable) in collateral already subject to a security interest in
another jurisdiction when it was brought into this state,
or when the debtor's location was changed to this state,
or (b) in accordance with other statutory provisions
(additional date may be required)
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6. REQUIRED SIGNATURE(S)
/s/ Michael Ramsay
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<CAPTION>
<S> <C>
CALIFORNIA
------------------------------------------------------------
MIDDLE NAME SUFFIX
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STATE COUNTRY POSTAL CODE
CA 95054
1g. ENTITY'S ORGANIZATIONAL I.D.#, if any
[_] NONE
------------------------------------------------------------
TRANS 1595
------------------------------------------------------------
MIDDLE NAME SUFFIX
------------------------------------------------------------
STATE COUNTRY POSTAL CODE
------------------------------------------------------------
2g. ENTITY'S ORGANIZATIONAL I.D.#, if any
[_] NONE
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MIDDLE NAME SUFFIX
------------------------------------------------------------
STATE COUNTRY POSTAL CODE
CA 95054
------------------------------------------------------------
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7. If filed in Florida (check one)
[_] Documentary [_] Documentary stamp tax
Stamp tax paid not applicable
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8. [_] This FINANCING STATEMENT is to filed (for record)
(or recorded) in the REAL ESTATE RECORDS
Attach Addendum (if applicable)
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9. [_] CHECK TO REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
(ADDITIONAL FEE)
(optional) [_] All debtors [_] Debtor 1 [_] Debtor 2
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</TABLE>
(1) FILING OFFICER COPY - NATIONAL FINANCING STATEMENT (FORM UCC 1) (TRANS)
(REV. 12/1/95) Prepared by ______ File _________, Inc., P.O. Box 275
Van Nuys, CA 91408-0275 Tel (518) 808-2200
<PAGE>
EXHIBIT "A" TO UCC-1 FINANCING STATEMENT
DEBTOR: TELEWORLD INC.
SECURED PARTY: SILICON VALLEY BANK
Debtor hereby grants Secured Party a security interest in all of the
following, whether now owned or hereafter acquired, and wherever located, as
collateral for the payment and performance of all present and future
indebtedness, liabilities, guarantees and obligations of Debtor to Secured
Party: All "accounts," "general intangibles," "contract rights," "chattel
paper," "documents," "letters of credit," "instruments," "deposit accounts,"
"inventory," "farm products," "fixtures," "investment property," and
"equipment," as such terms are defined in Division 9 of the California Uniform
Commercial Code in effect on the date hereof, and all products, proceeds and
insurance proceeds of any or all of the foregoing. Notwithstanding the
forgoing, "general intangibles" shall specifically exclude "intellectual
property".
Debtor Initial here: _________
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SILICON VALLEY BANK
INDEMNIFICATION AND PLEDGE AGREEMENT
Merchant Services/Business Credit Card Program
Client Name: TELEWORLD, INC.
---------------
Service Type:
. Merchant Services (through N/A
----------)
Merchant #: N/A
----------
. Business Credit Card (Processor: ______________________)
Cardholders: (attach list if more than three names)
1) Michael Ramsay Credit Limit:_________________
-------------------
2) James Barton Credit Limit:_________________
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3) SallyAnn Reiss Credit Limit:_________________
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Type of Coverage:
. Sublimit under existing line of credit
Line Amount: $750,000.00 Maturity Date: June 15/99
---------- ----------
Reserve Amount: $20,000.00
---------
. Certificate of Deposit
Amount: $ ______ Certificate #:______ Term:__________
The undersigned hereby indemnifies and holds Silicon Valley Bank ("Silicon")
harmless from any and all claims, demands, liabilities, charges, claims, costs
losses, damages, and expenses (including attorney's fees) (collectively, the
"Liabilities"), if any, that Silicon incurs or may incur in connection with the
Merchant Services and/or Business Credit Card program referenced above. To
secure its obligations to Silicon, the undersigned pledges and assigns to
Silicon, and grants to Silicon a security interest in, the above referenced
certificate of deposit(s) (the "Collateral"); and agrees that Silicon, to
satisfy all or any portion of the Liabilities, may at any time or from time to
time, exercise any and all rights and remedies against said Collateral, all
without notice to or demand upon the undersigned. The undersigned further agrees
that Silicon may at Silicon's option, without notice or demand, pay any
outstanding Liabilities by charging such amount and/or making reserves against
any line-of-credit the undersigned may have with Silicon. The foregoing
agreements, indemnification obligations, and pledge, assignment, and security
interest grant shall survive termination of the underlying programs.
Client Name:
Teleworld, Inc.
By: /s/ Michael Ramsay By: /s/ James Barton
----------------------------- -----------------------------
Name: Michael Ramsay Name: James Barton
---------------------------- ---------------------------
Title: CEO Title: CFO
--------------------------- --------------------------
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SILICON VALLEY BANK
SCHEDULE TO QUICKSTART LOAN AND SECURITY AGREEMENT
(MERCHANT SERVICES/BUSINESS CREDIT CARD SUBLIMIT)
BORROWER: TELEWORLD, INC.
---------------
DATE: 1/13/98
---------------
This Schedule is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
Merchant The Credit Limit shall be reduced by an amount equal to
Services/Business the sum of (a) $N/A (the "Merchant Service Reserve") and
Credit Card (b) $20,000.00 (the "Business Credit Card Reserve").
Sublimit Silicon may, in its sole discretion, charge as Loans, any
(Section 1): amounts that may become due or owing to Silicon in
connection with merchant credit card processing services
and/or Business Credit Card services furnished to Borrower
by or through Silicon, collectively, the "Credit Card
Services." Borrower shall execute all standard form
applications and agreements, including without limitation,
the Indemnification and Pledge Agreement, of Silicon in
connection with the Credit Card Services and, without
limiting any of the terms of such applications and
agreements, Borrower will pay all standard fees and
charges of Silicon in connection with the Credit Card
Services and, without limiting any of the terms of such
applications and agreements, Borrower will pay all
standard fees and charges of Silicon in connection with
the Credit Card Services.
Maturity Date June 15, 1999
(Section 4): ----------------
Borrower: Silicon:
Teleworld, Inc. Silicon Valley Bank
By: /s/ Michael Ramsay By: /s/ John M. Swift
--------------------------------- ------------------------
President or Vice President Title: Vice President