Loan Assumption Agreement among Sherwood Partners, SEEC, and Comdisco Ventures (January 8, 2003)
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This agreement, dated January 8, 2003, is between Sherwood Partners (as assignee for Asera, Inc.), SEEC, Inc., and Comdisco Ventures, Inc. SEEC agrees to assume and pay a portion of Asera's outstanding debt to Comdisco, specifically $506,440.37, including principal and accrued interest, at an annual interest rate of 8.75%. The agreement also includes Comdisco's consent to the transfer of Asera's assets and releases Asera from further liability for the assumed debt, provided SEEC fulfills its obligations. Certain conditions and consents are required for the agreement to take effect.
EX-10.3 6 j9836201exv10w3.txt LOAN ASSUMPTION AGREEMENT Exhibit 10.3 LOAN ASSUMPTION AGREEMENT THIS LOAN ASSUMPTION AGREEMENT (this "Agreement") is entered into as of January 8, 2003, by and among Sherwood Partners, Inc., a California corporation ("Sherwood"), solely as the assignee for the benefit of creditors of Asera, Inc., a Delaware corporation ("Asera"), SEEC, Inc., a Pennsylvania corporation ("SEEC"), and Comdisco Ventures, Inc., a Delaware corporation ("Comdisco"). RECITALS WHEREAS, Asera is obligated to Comdisco pursuant to that certain Restructuring Agreement dated as of November 15, 2002, by and between Asera and Comdisco (the "Restructuring Agreement") for, among other things, payment of those certain "Outstanding Reimbursement Obligations" as evidenced by the "Reimbursement Note" (as each such term is defined in the Restructuring Agreement), and Asera's Outstanding Reimbursement Obligations to Comdisco, as of January 8, 2003, are $1,000,000 in principal amount, plus approximately $12,880.74 in accrued interest from November 15, 2002. WHEREAS, Asera's Outstanding Repayment Obligations and all indebtedness, accrued and unpaid interest thereon, and any other "Secured Obligations" (as such term is defined in the Restructuring Agreement) owing by Asera to Comdisco pursuant to the Restructuring Agreement and the "Subject Agreements" (as such term is defined in the Restructuring Agreement; and for purposes of this Agreement, the Restructuring Agreement and all such Subject Agreements are hereinafter referred to, collectively, as the "Comdisco Loan Documents") (all such indebtedness, collectively, the "Comdisco Indebtedness"), are secured by the "Collateral" (as such term is defined in the Restructuring Agreement); WHEREAS, concurrently with the execution hereof, Asera intends to make a general assignment for the benefit of creditors (the "Assignment") whereby all of its assets (including, without limitation, the Collateral) will be transferred to Sherwood as the assignee (hereinafter Sherwood shall be referred to as the "Assignee"); WHEREAS, concurrently with the execution hereof but effective as of immediately following the Assignment, the Assignee has agreed to sell, and SEEC has agreed to purchase, the Required Assets (as such term is defined in the Asset Purchase Agreement (defined below), a true, correct and complete copy is attached hereto as Exhibit "A") including, without limitation, the Collateral, and to assume the Assumed Liabilities (as such term is defined in the Asset Purchase Agreement), including, without limitation, a portion of the Comdisco Indebtedness, pursuant to that certain Asset Purchase Agreement dated as of January 8, 2003 (the "Asset Purchase Agreement"), by and between the Assignee and SEEC (such sale and purchase, the "Asset Sale"); WHEREAS, in connection with the Asset Sale, Comdisco desires that SEEC assume a portion of the Comdisco Indebtedness, subject to the terms and conditions hereof; and 1 WHEREAS, concurrently herewith, each of (i) Venture Lending & Leasing III, Inc. ("VLL") in its capacity as collateral agent ("Agent") for itself as a lender and for the WTI Syndicate (hereinafter defined), Third Coast Capital a Division of DVI Financial Services, Inc. ("TCC"), Venture Banking Group, a Division of Cupertino National Bank ("VBG"), GATX Ventures, Inc. ("GATX"), and Heller Financial Leasing, Inc., a GE Capital company ("Heller") (VLL, TCC, VBG, GATX and Heller are hereinafter referred to collectively as the "WTI Syndicate"), and (ii) KPCB Holdings, Inc., as nominee, a Delaware corporation ("KPCB"), as representative and collateral agent for and on behalf of the Bridge Lenders (as such term is defined in that certain Note and Warrant Purchase Agreement dated as of November 15, 2002, by and among Asera, KPCB and the other signatories thereto) are entering into loan assumption agreements with the Assignee and SEEC. AGREEMENT NOW THEREFORE, in consideration of the foregoing and the agreements contained herein, the parties agree as follows: Section 1. Assumption and Payment of Indebtedness. (a) Assumption. Subject to the terms hereof, SEEC hereby assumes, as of the Effective Date (as defined herein), a $506,440.37 portion of the Outstanding Repayment Obligations (representing a principal obligation of $500,000, plus accrued and unpaid interest of $6,440.37 as of January 8, 2003) (the "Restructured Comdisco Debt"). The Restructured Comdisco Debt shall accrue simple interest from and after January 8, 2003, at the rate of eight and three quarters percent (8.75%) per annum ($121.37 per diem) until paid. (b) Payment of Assumed Obligations. SEEC acknowledges that the obligations assumed pursuant hereto under the Comdisco Loan Documents (i) are owing to Comdisco from Asera, and (ii) upon the Effective Date will be owing to Comdisco from SEEC, without any defense, offset or counterclaim of any kind or nature whatsoever as of the date hereof. SEEC shall pay the Restructured Comdisco Debt, and accrued interest thereon, in full, on or before the Effective Date, by wire transfer to the account designated in "Exhibit C" attached hereto, or by other cash equivalent payment reasonably acceptable to Comdisco. (c) Consents and Waiver. (i) Assignment for the Benefit of Creditors. Subject to the provisions hereof, Comdisco will and hereby does consent to Asera's making a general assignment for the benefit of creditors and naming Sherwood as the Assignee. It shall be a condition precedent to effectiveness of the consent set forth in this Section 1(c)(i) hereof, that the Closing (as such term is defined in the Asset Purchase Agreement) shall have occurred under the Asset Purchase Agreement as in effect on the date hereof and subject to no amendments except as expressly consented to by Comdisco. (ii) Asset Sale. Subject to the provisions hereof and the satisfaction of all of the conditions precedent set forth in Section 6 of this Agreement, Comdisco will and hereby does consent to the sale of the Required Assets to SEEC. 2 (iii) Conversion of Bridge Indebtedness. Subject to the provisions hereof and the satisfaction of all of the conditions precedent set forth herein and in that certain Consent and Agreement of even date herewith, a true, correct and complete of which is attached hereto as "Exhibit B" (the "Consent"), by and among KPCB, Asera, Sherwood and SEEC, Comdisco will and hereby does consent to the Bridge Conversion (as such term is defined in the Consent). (iv) Waiver. Effective upon the granting of the consents described in Sections 1(c)(i), 1(c)(ii) and 1(c)(iii) hereof, Comdisco hereby waives any and all defaults or Events of Default under the Comdisco Loan Documents that may have occurred or shall occur as a result of the Assignment, Asset Sale or Bridge Conversion. Effective as of the Effective Date, the execution and delivery of this Agreement by Comdisco shall constitute a cure of any such default or Event of Default. Section 2. No Further Liability. It is the intention of Comdisco to not retain as liable parties all makers and endorsers of the Comdisco Loan Documents and such maker, endorser, or guarantor is hereby, as of the Effective Date, released by virtue of this Agreement and the assumption of the Restructured Comdisco Debt by SEEC pursuant hereto (subject to revival and reinstatement under Section 5). Section 3. Release of Comdisco. To the fullest extent permitted by applicable law, except for each of Asera's and Assignee's respective claims under this Agreement, each of Asera (by and through the Assignee) and the Assignee (solely in its capacity as assignee for the benefit of creditors of Asera), on the one hand, releases Comdisco, on the other, from any and all claims, demands, debts, issues, causes of action and liabilities, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, then existing or thereafter arising, that are based in whole or part on any act, omission or other occurrence relating to the Comdisco Loan Documents and the transactions contemplated therein or arising in connection therewith, including, without limiting the generality of the foregoing, those arising in connection with any written or oral communications between or among any of them or any other person or entity, or the actions of any of them, as the case may be, or their officers, directors, shareholders, employees, attorneys, agents, successors, assigns, heirs and representatives in connection with any of the foregoing, and further including any claims of the Assignee with respect to fraudulent of preferential transfers or claims of a similar nature. EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IT IS AWARE OF, FAMILIAR WITH, UNDERSTANDS, AND EXPRESSLY WAIVES THE PROVISIONS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE, AND ANY OTHER SIMILAR STATUTE, CODE, LAW OR REGULATION TO THE FULLEST EXTENT IT MAY WAIVE SUCH RIGHTS AND BENEFITS. SECTION 1542 PROVIDES: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Section 4. Assignee to Administer Assets and Liabilities of Asera. As a material inducement to Comdisco to enter into this Agreement, Assignee agrees that it will fully and finally administer the assets and liabilities of Asera as an assignee for the benefit of creditors under applicable California law, and each of Assignee and Asera covenants and agrees that it 3 will not file a petition for bankruptcy relief with respect to Asera or its assets. Assignee and Asera each acknowledges that Comdisco is relying on Asera's and Assignee's agreements herein, and in the concurrent consents of the WTI Syndicate and KPCB and consummation of the Asset Purchase Agreement, to constitute the functional equivalent of, and to be in lieu of, a Chapter 7 liquidation of Asera; that Comdisco intends that consummation of this Agreement shall be the full and final resolution of all of its rights and obligations with respect to Asera and its assets; and that Comdisco would not have entered into this Agreement and granted to Asera the accommodations provided herein (in particular, the release from obligations provided by Section 2), but for the agreements of the Assignee and Asera under this Section 4. Section 5. Revival of Obligations. If Comdisco shall hereafter be required in any bankruptcy case, legal action or comparable proceeding to refund or disgorge all or any portion of any payment made by or on behalf of Asera or SEEC with respect to the Outstanding Repayment Obligations or other Secured Obligations, or the value thereof, then, (i) the liabilities of the Asera, and of any maker, endorser, or guarantor of the Comdisco Loan Documents shall be automatically revived, reinstated and restored in such amount or amounts and shall exist as though such consideration or portion thereof had never been paid or delivered to Comdisco, (ii) the provisions of Section 2 shall be rendered null, void and of no effect whatsoever. Section 6. Effective Date. This Agreement shall not be effective until each of the following conditions precedent has been fulfilled to the satisfaction of Comdisco (such date, the "Effective Date"): (a) Closing of Asset Sale. The Closing (as such term is defined in the Asset Purchase Agreement) of the Asset Sale pursuant to the Asset Purchase Agreement in form and substance satisfactory to Comdisco shall have occurred. (b) Legal Fees. Asera shall have paid to Comdisco or its counsel, Murphy Sheneman Julian & Rogers, an amount necessary to reimburse Comdisco for attorneys' fees, costs and expenses incurred by Comdisco in connection with the negotiation, drafting and consummation of this Agreement as of the Effective Date. (c) Appointment of Assignee. Asera shall have effected the Assignment and Sherwood shall be duly appointed as the Assignee. (d) Loan Assumptions. KPCB, as representative and collateral agent for the Bridge Lenders, and the WTI Syndicate shall have entered into loan assumption agreements in substantially the form provided to Comdisco on January 7, 2003, and such assumption agreements shall have become effective. (e) Board Resolutions of SEEC. Comdisco shall have received a Secretary's Certificate executed by the Secretary of SEEC, which shall certify that attached thereto is a complete and correct copy of resolutions duly adopted by SEEC's Board of Directors, which resolutions have not been modified, amended, or rescinded in any respect and are in full force and effect as of the Effective Date, and which resolutions authorize and ratify any actions previously, concurrently, or subsequently taken by SEEC with respect to the execution and performance of this Agreement. 4 (f) Payment of Restructured Comdisco Debt. SEEC shall have paid the Restructured Comdisco Debt in accordance with Section 1(b). Section 7. Waivers. To the maximum extent permitted by law, SEEC waives (a) all rights to require Comdisco to proceed against Asera or Sherwood, or proceed against, enforce or exhaust any security for the Secured Obligations (as such term is defined in the Restructuring Agreement) or to marshal assets or to pursue any other remedy in Comdisco's power whatsoever; (b) all defenses arising by reason of any disability or other defense of Asera or Sherwood, the cessation for any reason of the liability of Asera or Sherwood, any defense that any other indemnity, guaranty or security was to be obtained, any claim that Comdisco has made SEEC's obligations more burdensome or more burdensome than Sherwood's or Asera's obligations, and the use of any proceeds of the Obligations other than as intended or understood by Comdisco or SEEC; (c) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Agreement, and all other notices or demands to which SEEC might otherwise be entitled; (d) all rights to file a claim in connection with the Obligations in a proceeding filed by or against Asera or Sherwood; (e) all rights to require Comdisco to enforce any of its remedies and (f) until the Obligations are satisfied or fully paid, with such payment not subject to return: (i) all rights of subrogation, contribution, indemnification or reimbursement, (ii) all rights, remedies and defenses SEEC may have or acquire against Comdisco. Section 8. Miscellaneous. (a) Notice. All notices and other communications required or permitted under this Agreement shall be effective upon receipt and shall be in writing and may be delivered in person, by telecopy, overnight delivery service or registered or certified United States mail, addressed to the address set forth on the signature page hereto (with copies to such other parties as noted thereon), or such other address as a party may provide to the other no later than ten (10) days prior to any such notice or communication. All notices and other communications shall be effective upon the earlier of actual receipt thereof by the person to whom notice is directed or (i) in the case of notices and communications sent by personal delivery or telecopy, one business day after such notice or communication arrives at the applicable address or was successfully sent to the applicable telecopy number, (ii) in the case of notices and communications sent by overnight delivery service, at noon (local time) on the second business day following the day such notice or communication was sent, and (iii) in the case of notices and communications sent by United States mail, seven days after such notice or communication shall have been deposited in the United States mail. (b) Governing Law. This Agreement shall be governed in all respects by and construed in accordance with the laws of the State of California without any regard to conflicts of law principals. (c) Amendments. Prior to the Effective Date, any provision of this Agreement may be amended by a written instrument signed by the Assignee, SEEC and Comdisco. From and following the Effective Date, any provision of this Agreement may be amended by a written instrument signed by SEEC and Comdisco. 5 (d) Benefits of Agreement. This Agreement is entered into for the sole protection and benefit of the parties hereto, their respective successors and assigns, and no other person or entity shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, this Agreement. (e) Expenses. All costs and expenses incurred by Comdisco in connection with the transactions contemplated by this Agreement shall be paid by SEEC. (f) Entire Agreement. This Agreement (together with each of the documents referenced herein and each of the schedules and exhibits appended thereto), constitutes the entire agreement of the parties with respect to the matters set forth herein and supersedes any prior agreements, commitments, discussions and understandings, oral or written, with respect thereto. (g) Successors and Assigns. The provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties to this Agreement. SEEC may not assign, except as expressly contemplated herein, any rights, obligations or benefits under this Agreement without the prior written consent of Comdisco. (h) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be valid, legal, and enforceable under all applicable laws and regulations. If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be invalid, illegal, or unenforceable only to the extent of such invalidity, illegality, or limitation on enforceability without affecting the remaining provisions of this Agreement, or the validity, legality, or enforceability of such provision in any other jurisdiction. (i) Counterparts. This Agreement may be executed in any number of counterparts, including counterparts transmitted by facsimile or electronic transmission, each of which shall be an original, but all of which together shall constitute one instrument. (j) Further Assurances. Each party to this Agreement shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments and documents as the other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. (k) Construction; Titles; Gender. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. Whenever used herein, the singular number shall include the plural and the plural the singular, and the use of any gender shall be applicable to all genders. 6 Section 9. Representations. In order to induce Comdisco to enter into this Agreement and to continue the financial accommodations under the Restructuring Agreement, SEEC hereby represents and warrants to Comdisco that: (a) Corporate Existence; Compliance with Law. SEEC (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, (ii) has the corporate power and authority and the legal right to own and operate its property, and to conduct the business in which it is currently engaged, (iii) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership or operation of property or the conduct of its business require such qualification, and (iv) is in compliance with all material laws applicable to SEEC and its business, except to the extent that the failure to so qualify as a foreign corporation as required by clause (iii) of this Section or to comply with all requirements of applicable law as required by clause (iv) of this Section would not have a material adverse effect on the business, operations, property or financial condition of SEEC, and would not materially adversely affect the ability of SEEC to perform its obligations under this Agreement. (b) Corporate Power; Authorization; Enforceable Obligations. SEEC has the corporate power and authority and the legal right to make, execute, deliver and perform its obligations under this Agreement, and has taken all necessary corporate action to authorize the assumption and payment of the Restructured Comdisco Debt on the terms and conditions of this Agreement, and to authorize the execution, delivery and performance of this Agreement. No consent or authorization of, filing with, or other act by or in respect of any other person (including stockholders and creditors of SEEC) or any governmental authority, is required in connection with the execution, delivery, performance, validity or enforceability against SEEC of this Agreement or the Comdisco Indebtedness, except for such consents as have been obtained or made. This Agreement and the Restructured Comdisco Debt are the legal, valid and binding obligations of SEEC, enforceable against SEEC in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally. (This space intentionally left blank) 7 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
"SHERWOOD" or "ASSIGNEE" SHERWOOD PARTNERS, INC., a California corporation, solely as assignee for the benefit of creditors of Asera, Inc., a Delaware corporation By: /s/ Michael A. Maidy --------------------------- Name: Michael A. Maidy Title: President Address: 1849 Sawtelle Blvd., Ste. 543 Los Angeles, CA 90025 Facsimile: 310 ###-###-#### Attention: Michael Maidy with a copy to: Sulmeyer, Kupetz, Baumann & Rothman 300 South Grand Ave., 14th Floor Los Angeles, California 90071 Facsimile: 213 ###-###-#### Attention: David S. Kupetz 8
