Banc of America Leasing & Capital, LLC Master Loan and Security Agreement Number: 17507-70000
Exhibit
10.2
| Banc of America Leasing & Capital, LLC | Master Loan and Security Agreement Number: 17507-70000 |
This Master Loan and Security Agreement, dated as of June 13, 2007 (this “Agreement”), is by and
between Banc of America Leasing & Capital, LLC, a Delaware limited liability company having an
office at Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (together with its successors and assigns,
“Lender”), and iRobot Corporation as “Borrower”, a corporation existing under the laws of
the state of Delaware, and having its chief executive office and any organizational
identification number as specified with its execution of this Agreement below. Certain defined
terms used herein are identified in bold face and quotation marks throughout this Agreement and in
Section 14 below. This Agreement sets forth the terms and conditions for the financing of Equipment
between Lender and Borrower pursuant to one or more “Equipment Notes” incorporating by reference
the terms of this Agreement, together with all exhibits, addenda, schedules, certificates, riders
and other documents and instruments executed and delivered in connection with such Equipment Note
(as amended from time to time, an “Equipment Note”). Each Equipment Note constitutes a separate,
distinct and independent financing of Equipment and contractual obligation of Borrower. This
Agreement is not an agreement or commitment by Lender or Borrower to enter into any future
Equipment Notes or other agreements, or for Lender to provide any financial accommodations to
Borrower. Lender shall not be obligated under any circumstances to advance any progress payments or
other funds for any Equipment or to enter into any Equipment Note if there shall have occurred a
material adverse change in the operations, business, properties or condition, financial or
otherwise, of Borrower or any Guarantor since the delivery of the most recent annual audited
financial statements of Borrower in accordance with Section 13. This Agreement and each Equipment
Note shall become effective only upon Lender’s acceptance and execution thereof at its corporate
offices set forth above.
1. Equipment Notes; Grant of Security Interest.. Lender and Borrower agree to finance
Equipment described in one or more Equipment Notes entered into from time to time, together with
all other documentation from Borrower required by Lender with respect to such Equipment Note. Upon
receipt of any item or group of Equipment intended for financing hereunder, Borrower shall execute
an Equipment Note, with all information fully completed and irrevocably accepting such Equipment
for Equipment Note, and deliver such Equipment Note to Lender for its review and acceptance. To
secure the punctual payment and performance of Borrower’s Obligations under each Equipment Note
and, as a separate grant of security, to secure the payment and performance of all other
Obligations owing to Lender, Borrower grants to Lender a continuing security interest in all of
Borrower’s right, title and interest in and to all Equipment, together with: (i) all parts,
attachments, accessories and accessions to, substitutions and replacements for, each item of
Equipment; (ii) all accounts, chattel paper, and general intangibles arising from or related to any
sale, lease, rental or other disposition of any Equipment to third parties, or otherwise resulting
from the possession, use or operation of any Equipment by third parties, including instruments,
investment property, deposit accounts, letter of credit rights, and supporting obligations arising
thereunder or in connection therewith; (iii) all insurance, warranty and other claims against third
parties with respect to any Equipment; (iv) all software and other intellectual property rights
used in connection therewith; (v) proceeds of all of the foregoing, including insurance proceeds
and any proceeds in the form of goods, accounts, chattel paper, documents, instruments, general
intangibles, investment property, deposit accounts, letter of credit rights and supporting
obligations; and (vi) all books and records regarding the foregoing, in each case, now existing or
hereafter arising (the “Collateral”). Provided that there then exists no Event of Default,
Lender’s security interest in Collateral subject to an Equipment Note shall terminate upon the
payment and performance of all Obligations of Borrower under the applicable Equipment Note.
Notwithstanding the grant of a security interest in any Collateral, Borrower shall have no right to
sell, lease, rent, dispose or surrender possession, use or operation of any Equipment to any third
parties without the prior written consent of Lender.
2. Payments. Each Equipment Note shall provide for scheduled “Payments” of principal and interest
payable by Borrower to Lender in the amounts and at the times during the “Equipment Note Term”
through and including the “Maturity Date”, all as provided in the Equipment Note. If any Payment or
other amount payable hereunder is not paid within 10 days of its due date, Borrower shall pay an
administrative late charge of 5% of the amount not timely paid. Such amount shall be payable in
addition to all amounts payable by Borrower as a result of the exercise of any of the remedies
herein provided. All Payments and other amounts payable under an Equipment Note shall be made in
immediately available funds at Lender’s address above or such other place as Lender shall specify
in writing. Borrower shall have the right to prepay any Equipment Note upon payment of the
prepayment charge provided in the applicable Equipment Note, if any. It is the intention of Lender
to comply with all applicable usury laws and, accordingly, it is agreed that notwithstanding
anything to the contrary contained herein or in any Equipment Note, in no event shall any provision
herein or therein require or permit interest in excess of the maximum amount permitted by
applicable law. If necessary to give effect to these provisions, Lender will, at its option, in
accordance with applicable law, either refund any amount to Borrower to the extent in excess of
that allowed by applicable law, or credit such excess amount against the then unpaid principal
balance under the applicable Equipment Note(s). Unless otherwise provided herein, all amounts
received under any Equipment Note will be applied, first, to accrued late charges, fees and
other costs and expenses due and owing, second, to accrued interest and, third, to
unpaid principal.
3. Unconditional Financing; Disclaimer Of Warranties. Borrower’s Obligations under each Equipment
Note (i) shall be non-cancelable, absolute and unconditional under all circumstances for the entire
Equipment Note Term, (ii) shall be unaffected by the loss or destruction of any Equipment, and
(iii) shall not be subject to any abatement, deferment, reduction, set-off, counterclaim,
recoupment or defense for any reason whatsoever. LENDER IS NOT A VENDOR OR AGENT OF THE EQUIPMENT
VENDOR, AND HAS NOT ENGAGED IN THE SALE OR DISTRIBUTION OF ANY EQUIPMENT. LENDER MAKES NO EXPRESS
OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO TITLE, MERCHANTABILITY, PERFORMANCE, CONDITION,
EXISTENCE, FITNESS OR SUITABILITY FOR BORROWER’S PURPOSES OF ANY EQUIPMENT, PATENT, TRADEMARK OR
COPYRIGHT INFRINGEMENTS, THE CONFORMITY OF THE EQUIPMENT TO THE DESCRIPTION THEREOF IN ANY
EQUIPMENT NOTE OR ANY OTHER REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE EQUIPMENT.
If Equipment is not delivered or properly installed, does not operate as warranted, becomes
obsolete, or is unsatisfactory for any reason, Borrower shall make all claims on account thereof
solely against Vendor and not against Lender. Borrower is solely responsible for the selection,
shipment, delivery and installation of the Equipment and its Vendors, expressly disclaims any
reliance upon any statements or representations made by Lender in connection therewith, and has
received and approved the terms of any purchase orders, warranties, licenses or agreements with
respect to the Equipment. To the extent that the manufacturer of Equipment provides any warranties
with respect thereto, Borrower shall enforce such warranties and obtain at its own
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expense the customary services furnished by the manufacturer in connection with the Equipment.
4. Use; Maintenance; Location; Inspection. Borrower shall: (i) use, operate, protect and maintain
the Equipment (a) in good operating order, repair, condition and appearance, in the same condition
as when received, ordinary wear and tear excepted, (b) consistent with prudent industry practice
(but in no event less than the extent to which Borrower maintains other similar equipment in the
prudent management of its assets and properties), and (c) in compliance with all applicable
insurance policies, laws, ordinances, rules, regulations and manufacturer’s recommended maintenance
and repair procedures, and (ii) maintain comprehensive books and records regarding the use,
operation, maintenance and repair of the Equipment. The Equipment shall be used only within the 48
contiguous United States, solely for business purposes (and not for any consumer, personal, home,
or family purpose), and shall not be abandoned or used for any unlawful purpose. Borrower shall not
discontinue use of Equipment valued at more than $100,000.00 in the aggregate except for normal
maintenance nor, through modifications, alterations or otherwise, impair the current or residual
value, useful life, utility or originally intended function of any Equipment without Lender’s prior
consent. Any replacement or substitution of parts, improvements, upgrades, or additions to the
Equipment during the Equipment Note Term shall be part of the Collateral subject to Lender’s
security interest and subject to the Equipment Note, except that if no Event of Default exists,
Borrower may at its expense remove improvements or additions provided by Borrower that can be
readily removed without impairing the value, function or remaining useful life of the Equipment.
Borrower shall not change the location or, in the case of over-the-road vehicles, the base of
Equipment valued at more than $100,000.00 in the aggregate specified in its Equipment Note without
Lender’s prior written consent. Lender shall have the right to enter any premises where Equipment
is located and inspect it (together with related books and records) at any reasonable time during
regular business hours upon reasonable prior notice.
5. Loss And Damage. Borrower assumes all risk of (and shall promptly notify Lender in writing of
any occurrence of) any damage to or loss, theft, confiscation or destruction of Equipment valued at
more than $100,000.00 in the aggregate from any cause whatsoever (a “Casualty”). If any Equipment
suffers a Casualty which Lender determines is reparable, Borrower shall at its expense promptly
place the same in good repair, condition or working order. If any Equipment suffers a Casualty
which Lender determines is beyond repair or materially impairs its residual value (a “Total Loss”),
Borrower shall at Lender’s option either (a) promptly replace such Equipment with a similar item
reasonably acceptable to Lender having an equivalent value, utility and remaining useful life of
such Equipment, whereupon such replacement items shall constitute Equipment and Collateral for all
purposes hereunder and the applicable Equipment Note, or (b) on the Payment date following such
Casualty pay Lender the Prepayment Amount for such Equipment, together with the Payment scheduled
for payment on such date, and all accrued interest, late charges and other amounts then due and
owing under the Equipment Note. Upon such payment following a Total Loss, the Equipment Note with
respect to the Equipment suffering a Total Loss shall be deemed discharged, and Lender’s security
interest in such Equipment shall terminate. If less than all Equipment under a Equipment Note
suffers a Total Loss, (i) the Prepayment Amount with respect to any such item of Equipment shall be
calculated by reference to the allocable portion of the unpaid principal balance of the applicable
Equipment Note, as reasonably determined by Lender, and (ii) the remaining Payments under the
Equipment Note shall be proportionately reduced as reasonably calculated by Lender upon Lender’s
receipt of the payments described above.
6. Insurance. Borrower, at its own expense, shall keep each item of Equipment insured against all
risks for its replacement value, and in no event less than its Prepayment Amount, and shall
maintain public liability and, with respect to any Equipment that is over-the-road vehicles,
automotive liability insurance against such risks and for such amounts as Lender may require. All
such insurance shall (a) be with companies rated “A-” or better by A.M. Best Company, in such form
as Lender shall approve, (b) specify Lender and Borrower as insureds and provide that it may not be
canceled or altered in any way that would affect the interest of Lender without at least 30 days’
prior written notice to Lender (10 days’ in the case of nonpayment of premium), (c) be primary,
without right of contribution from any other insurance carried by Lender and contain waiver of
subrogation and “breach of warranty” provisions satisfactory to Lender, (d) provide that all
amounts payable by reason of loss or damage to Equipment shall be payable solely to Lender
(excepting therefrom insurance proceeds not in excess of $100,000.00), unless Lender otherwise
agrees, and (e) contain such other endorsements as Lender may reasonably require. Borrower shall
provide Lender with evidence satisfactory to Lender of the required insurance upon the execution of
any Equipment Note and promptly upon any renewal of any required policy.
7. Indemnities; Taxes. Borrower’s indemnity and reimbursement obligations set forth below shall
survive the cancellation, termination or expiration of any Equipment Note or this Agreement.
(a) General Indemnity. Borrower shall indemnify, on an after-tax basis, defend and
hold harmless Lender and its respective officers, directors, employees, agents and Affiliates
(“Indemnified Persons”) against all claims, liabilities, losses and expenses whatsoever (except
those determined by final decision of a court of competent jurisdiction to have been directly and
primarily caused by the Indemnified Person’s gross negligence or willful misconduct), including
court costs and reasonable attorneys’ fees and expenses (together, “Attorneys’ Fees”), in any way
relating to or arising out of the Equipment or any Equipment Note at any time, or the ordering,
acquisition, rejection, installation, possession, maintenance, use, ownership, condition,
destruction or return of the Equipment, including any claims based in negligence, strict liability
in tort, environmental liability or infringement.
(b) General Tax Indemnity. Borrower shall pay or reimburse Lender, and indemnify,
defend and hold Lender harmless from, on an after-tax basis, all taxes, assessments, fees and other
governmental charges paid or required to be paid by Lender or Borrower in any way arising out of or
related to the Equipment or any Equipment Note before or during the Equipment Note Term or after
the Equipment Note Term following an Event of Default, including foreign, Federal, state, county
and municipal fees, taxes and assessments, and property, value-added, sales, use, gross receipts,
excise, stamp and documentary taxes, and all related penalties, fines, additions to tax and
interest charges (“Impositions”), excluding only Federal and state taxes based on Lender’s net
income. Upon Lender’s request, Borrower shall furnish proof of its payment of any Imposition.
8. Borrower Representations and Agreements. Borrower represents, warrants and agrees that: (a)
Borrower has had for the previous 5 years (except as previously disclosed to Lender in writing) the
legal name and form of business organization in the state described above; (b) Borrower’s chief
executive office and notice address, taxpayer identification number and any organizational
identification number is as described with its execution of this Agreement below; (c) Borrower
shall notify Lender in writing at least 30 days before changing its legal name, state of
organization, chief executive office location or organizational identification number; (d) Borrower
is duly organized and existing in good standing under the laws of the state described above and all
other jurisdictions where legally required in order to carry on its business, shall maintain its
good standing in all such jurisdictions, and shall conduct its businesses and manage its properties
in compliance with all applicable laws, rules or regulations binding on Borrower; (e) the
execution, delivery and performance of this Agreement, each Equipment Note and Related Agreement to
which it is a party has been duly authorized by Borrower, each of which are and will be binding on
and enforceable against Borrower in accordance with their terms, and do not and will not contravene
any other instrument or agreement binding on Borrower; and (f) there is no pending litigation, tax
or environmental claim, proceeding, dispute or regulatory or
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enforcement action (and Borrower shall promptly notify Lender of any of the same that may hereafter
arise) that may adversely affect any Equipment or Borrower’s financial condition or impair its
ability to perform its Obligations, except in each case referred to in clause (d), (e) or (f) to
the extent that failure to do so could not reasonably be expected to cause a material adverse
change in the operations, business, properties or condition, financial or other wise, of Borrower.
9. Title; Personal Property. Borrower shall be the sole owner of Equipment free and clear of all
liens or encumbrances, other than Lender’s rights under the Equipment Note. Borrower will not
create or permit to exist any lien, security interest, charge or encumbrance on any Equipment
except those in favor of Lender. The Equipment shall remain personal property at all times,
notwithstanding the manner in which it may be affixed to realty. Borrower shall obtain and record
such instruments and take such steps as may be necessary to (i) prevent any creditor, landlord,
mortgagee or other entity (other than Lender) from having any lien, charge, security interest or
encumbrance on any Equipment, and (ii) ensure Lender’s right of access to and removal of Equipment
in accordance with the terms hereof.
10. Default. Each of the following (a “Default”) shall, with the giving of any notice or passage of
any time period specified, constitute an “Event of Default” hereunder and under all Equipment
Notes: (1) Borrower fails to pay any Payments or other amount owing under any Equipment Note within
10 days of its due date; (2) Borrower fails to maintain insurance as required herein, or sells,
leases, assigns, conveys, or suffers to exist any lien, charge, security interest or encumbrance
on, any Equipment without Lender’s prior consent, or any Equipment is subjected to levy, seizure or
attachment; (3) Borrower fails to perform or comply with any other covenant or obligation under any
Equipment Note or Related Agreement and, if curable, such failure continues for 30 days after
written notice thereof by Lender to Borrower; (4) any representation, warranty or other written
statement made to Lender by Borrower in connection with this Agreement, any Equipment Note, Related
Agreement or other Obligation, or by any Guarantor pursuant to any Guaranty (including financial
statements) proves to have been incorrect in any material respect when made; (5) Borrower (w)
enters into any merger or consolidation with, or sells or transfers all or any substantial portion
of its assets to, or enters into any partnership or joint venture other than in the ordinary course
of business with, any entity, (x) dies (if a natural person), dissolves, liquidates or ceases or
suspends the conduct of business, or ceases to maintain its existence, (y) if Borrower is a
privately held entity, enters into or suffers any transaction or series of transactions as a result
of which Borrower is directly or indirectly controlled by persons or entities not directly or
indirectly controlling Borrower as of the date hereof, or (z) if Borrower is a publicly held
entity, there shall be a change in the ownership of Borrower’s stock or other equivalent ownership
interest such that Borrower is no longer subject to the reporting requirements of, or no longer has
a class of equity securities registered under, the Securities Act of 1933 or the Securities
Exchange Act of 1934; (6) Borrower undertakes any general assignment for the benefit of creditors
or commences any voluntary case or proceeding for relief under the federal bankruptcy code, or any
other law for the relief of debtors, or takes any action to authorize or implement any of the
foregoing; (7) the filing of any petition or application against Borrower under any law for the
relief of debtors, including proceedings under the federal bankruptcy code, or for the subjection
of property of Borrower to the control of any court, receiver or agency for the benefit of
creditors if such petition or application is consented to by Borrower or is otherwise not dismissed
within 60 days from the date of filing; (8) any default occurs under any other lease, credit or
other agreement or instrument to which Borrower and Lender or any Affiliate of Lender are now or
hereafter party; (9) any default occurs under any other agreement or instrument to which Borrower
is a party and under which there is outstanding, owing or committed an aggregate amount greater
than $250,000; (10) any attempted repudiation, breach or default of any Guaranty; or (11) the
occurrence of any event described in clauses (4) through (9) above with reference to any Guarantor
or any controlling shareholder, general partner or member of Borrower. Borrower shall promptly
notify Lender in writing of any Default or Event of Default.
11. Remedies. (a) Upon the occurrence and during the continuance of an Event of Default, Lender
may, in its discretion, exercise any one or more of the following remedies with respect to any or
all Equipment Notes or Equipment: (1) accelerate the maturity of any Equipment Note and declare the
Prepayment Amount thereof to be immediately due and payable together with any other unpaid
principal, accrued interest or other amounts due and owing thereunder; (2) cause Borrower to
promptly discontinue use of or disable any Equipment, and, at Borrower’s expense, have the
Equipment assembled, prepared and adequately protected for shipment (together with all related
manuals, documents and records, and any other Collateral), and either surrendered to Lender in
place or shipped (freight and insurance pre-paid) to such location as Lender may designate within
the forty-eight contiguous United States, in the condition required under Section 4 hereof,
qualified for the manufacturer’s (or its authorized servicing representative’s) then available
service contract or warranty, and able to be put into immediate service and to perform at
manufacturer’s rated levels (if any); (3) remedy such Event of Default or proceed by court action,
either at law or in equity, to enforce performance of the applicable provisions of any Equipment
Note; (4) with or without court order, enter upon the premises where Equipment is located and
repossess and remove the same, all without liability for damage to such premises or by reason such
entry or repossession, except for Lender’s gross negligence or willful misconduct; (5) dispose of
any Equipment in a public or private transaction, or hold, use, operate or keep idle the Equipment,
free and clear of any rights or interests of Borrower therein; (6) recover direct, incidental,
consequential and other damages for the breach of any Equipment Note, including the payment of all
unpaid principal, accrued interest and other amounts payable thereunder, and all costs and expenses
incurred by Lender in exercising its remedies or enforcing its rights thereunder (including all
Attorneys’ Fees); (7) without notice to Borrower, apply or set-off against any Obligations then due
all security deposits, advance payments, proceeds of letters of credit, certificates of deposit
(whether or not matured), securities or other additional collateral held by Lender or otherwise
credited by or due from Lender to Borrower; or (8) pursue all other remedies provided under the UCC
or other applicable law. Borrower shall pay interest equal to the lesser of (a) the Interest Rate
as set forth in the applicable Equipment Notes plus 2% per annum, or (b) the highest rate permitted
by applicable law (“Default Rate”) on (i) any amount other than Payments owing under any Equipment
Note and not paid when due, (ii) any Payment not paid within 30 days of its due date, and (iii) any
amount required to be paid upon acceleration of any Equipment Note under this Section 11. Any
payments received by Lender during an Event of Default, including proceeds of any disposition of
Equipment, shall be applied in the following order: (A) to all of Lender’s costs (including
Attorneys’ Fees), charges and expenses incurred in taking, removing, holding, repairing and selling
or leasing the Equipment or other Collateral or enforcing the provisions hereof; (B) to the
satisfaction of all outstanding Obligations; and (C) the balance, if any, shall be disbursed to
Borrower unless otherwise required by law. Lender shall account to Borrower for any surplus
realized upon such sale or other disposition, and Borrower shall remain liable for any deficiency
with respect to the Obligations.
(b) No remedy referred to in this Section 11 shall be exclusive, each shall be cumulative (but
not duplicative of recovery of any Obligation) and in addition to any other remedy referred to
above or otherwise available to Lender at law or in equity, and all such remedies shall survive the
acceleration of any Equipment Note. Lender’s exercise or partial exercise of, or failure to
exercise, any remedy shall not restrict Lender from further exercise of that remedy or any other
available remedy. No extension of time for payment or performance of any Obligation shall operate
to release, discharge, modify, change or affect the original liability of Borrower for any
Obligations, either in whole or in part. Lender may proceed against any Collateral or Guarantor, or
may proceed contemporaneously or in the first instance against Borrower, in such order and at such
times during an Event of Default as Lender
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determines in its sole discretion. In any action to repossess any Equipment or other Collateral,
Borrower waives any bonds and any surety or security required by any applicable laws as an incident
to such repossession. Notices of Lender’s intention to accelerate, acceleration, nonpayment,
presentment, protest, dishonor, or any other notice whatsoever (other than notices of Default
specifically required of Lender pursuant to Section 10 above) are waived by Borrower and any
Guarantor. Any notice given by Lender of any disposition of Collateral or other intended action of
Lender which is given in accordance with this Agreement at least 10 business days prior to such
action, shall constitute fair and reasonable notice of such action.
(c) Borrower is or may become indebted under or in respect of one or more leases, loans,
notes, credit agreements, reimbursement agreements, security agreements, title retention or
conditional sales agreements, or other documents, instruments or agreements, whether now existing
or hereafter arising, evidencing Borrower’s obligations for the payment of borrowed money or other
financial accommodations owing to one or more Affiliates of Lender or any of its successors by
merger or otherwise (“Affiliated Obligations”). If Borrower pays or prepays all or substantially
all of its Affiliated Obligations, whether or not such payment or prepayment is voluntarily or
involuntarily made by Borrower before or after any default or acceleration of such Affiliated
Obligations, then Borrower shall pay, at Lender’s option and immediately upon notice from Lender,
all or any part of Borrower ‘s Obligations owing to Lender in connection with this Agreement,
including but not limited to Borrower ‘s payment of the Prepayment Amount for all or any Equipment
Notes, as set forth in such notice from Lender.
12. Assignment. Lender and any Assignee may assign or transfer any of Lender’s interests in any
Equipment Note or Equipment without notice to Borrower,. Borrower agrees that: (i) the rights of
any Assignee shall not be affected by any breach or default of Lender or any prior Assignee, and
Borrower shall not assert any defense, rights of set-off or counterclaim against any Assignee, nor
hold or attempt to hold such Assignee liable for any such breach or default; (ii) unless otherwise
agreed by Lender and Assignee, Lender shall have no duties or responsibilities as a secured party
with respect to the applicable Equipment or Collateral after such assignment and Lender shall be
released from such duties or responsibilities, and (iii) Borrower shall execute and deliver upon
request such additional documents, instruments and assurances as Lender reasonably deems necessary
in order to (y) acknowledge and confirm all of the terms and conditions of any Equipment Note and
Lender’s or such Assignee’s rights with respect thereto, and Borrower’s compliance with all of the
terms and provisions thereof, and (z) preserve, protect and perfect Lender’s or Assignee’s right,
title or interest hereunder and in any Equipment, including, without limitation, such UCC financing
statements or amendments, control agreements, corporate or member resolutions, votes, notices of
assignment of interests, and confirmations of Borrower’s obligations and representations and
warranties with respect thereto as of the dates requested. Lender may disclose to any potential
Assignee any information regarding Borrower, any Guarantor and their Affiliates. Borrower shall not
sell, assign, pledge, hypothecate or in any way dispose of any of its rights or obligations under
any Equipment Note, or enter into any lease of any Equipment, without Lender’s prior written
consent. Any purported sale, assignment, pledge, hypothecation, disposal or lease by Borrower made
without Lender’s prior written consent shall be null and void.
13. Financial and Other Data. (a) During any Equipment Note Term, Borrower shall (i) maintain books
and records in accordance with generally accepted accounting principles consistently applied
(“GAAP”) and prudent business practice; (ii) promptly provide Lender, within 120 days after the
close of each fiscal year, and, upon Lender’s request, within 45 days of the end of each quarter of
Borrower’s and any Guarantor’s fiscal year, a copy of financial statements for Borrower and each
Guarantor requested by Lender, in each case prepared in accordance with GAAP and (in the case of
annual statements) audited by independent certified public accountants and (in the case of
quarterly statements) certified by the chief financial officer of Borrower or Guarantor, as
applicable; provided, however, that for so long as Borrower or any such Guarantor is
legally and timely filing annual and quarterly financial reports on Forms 10-K and 10-Q with the
Securities and Exchange Commission which are readily available to the public, the filing of such
reports shall satisfy the foregoing financial statement reporting requirements for such entity; and
(iii) furnish Lender all other financial information and reports and such other information as
Lender may reasonably request concerning Borrower, any Guarantor and their respective affairs, or
the Equipment or its condition, location, use or operation.
(b) Borrower represents and warrants that all financial statements at any time furnished by or
on behalf of Borrower or any Guarantor are accurate in all material respects and reasonably reflect
as of their respective dates, results of operations and the financial condition of Borrower, such
Guarantor or other entity they purport to cover. Credit and other information regarding Borrower,
any Guarantor or their Affiliates, any Equipment Note or Equipment may be disclosed by Lender to
its Affiliates, agents and potential Assignees.
14. Definitions
As used herein, the following terms shall have the meanings assigned or referred to them
below:
“Affiliate” means any entity controlling, controlled by or under common control with the
referent entity; “control” includes (i) the ownership of 25% or more of the voting stock or other
ownership interest of any entity and (ii) the status of a general partner of a partnership or
managing member of a limited liability company.
“Assignee” means any assignee or transferee of all or any of Lender’s right, title and
interest in any Equipment Note or any Equipment.
“Code” means the Internal Revenue Code of 1986, as amended.
“Equipment” means the items, units and groups of personal property, licensed materials and
fixtures described in each Equipment Note, together with all replacements, parts, additions,
accessories and substitutions therefor; and “item of Equipment” means a commercial unit of such
property which in commercial usage is treated as a single whole, division of which materially
impairs its character or value on the market or in use, and includes each functionally integrated
and separately marketable group or unit of Equipment and may be a single article (such as a
machine) or a set of articles (such as a suite of furniture or a line of machinery).
“Guarantor” means any guarantor, surety, endorser, general partner or co-lessee of Borrower,
or other party liable in any capacity, or providing additional collateral security for, the payment
or performance of any Obligations of Borrower.
“Guaranty” means any guaranty, surety instrument, security, indemnity, “keep-well” agreement
or other instrument or arrangement from or with any Guarantor.
“Obligations” means and includes all obligations of Borrower owing to Lender under this
Agreement, any Equipment Note or Related Agreement, or of any Guarantor owing to Lender under any
Guaranty, together with all other obligations, indebtedness and liabilities of Borrower to Lender
under any other financings, leases, loans, notes, progress payment agreements, guaranties or other
agreements, of every kind and description, now existing or hereafter arising, direct or indirect,
joint or several, absolute or contingent, whether for payment or performance, regardless of how the
same may arise or by what instrument, agreement or book account they may be evidenced, including
without limitation, any such obligations, indebtedness and liabilities of Borrower to others which
may be obtained by Lender through purchase, negotiation, discount, transfer, assignment or
otherwise.
“Prepayment Amount” means, collectively, the entire unpaid principal balance of any Equipment
Note as of any particular date, together with (a) all accrued interest and other charges then owing
under such Equipment Note, and (b) the prepayment charge provided in the applicable Equipment Note,
if any.
Master
Loan and Security Agreement – 4.1.06
4
“Related Agreement” means and includes any Guaranty and any approval letter or progress
payment, assignment, security or other agreement or addendum related to this Agreement, any
Equipment Note or any Collateral to which Borrower or any Guarantor is a party.
“UCC” means the Uniform Commercial Code in effect in the state specified in Section 15(f) of
this Agreement.
“Vendor” means the manufacturer, distributor, supplier or other seller (whether or not a
merchant or dealer) of the Equipment and any sales representative or agent thereof.
15. Miscellaneous. (a) At Lender’s request, Borrower shall execute, deliver, file and record such
financing statements and other documents as Lender reasonably deems necessary to protect Lender’s
interest in the Equipment and to effectuate the purposes of any Equipment Note or Related
Agreement, and Borrower authorizes, and irrevocably appoints Lender as its agent and
attorney-in-fact, with right of substitution and coupled with an interest, to (i) execute, deliver,
file, and record any such item, and to take such action for Borrower and in Borrower’s name, place
and stead, (ii) make minor corrections to manifest errors in factual data in any Equipment Note and
any addenda, attachments, exhibits and riders thereto, and (iii) during an Event of Default,
enforce claims relating to the Equipment against insurers, Vendors or other persons, and to make,
adjust, compromise, settle and receive payment under such claims; but without any obligation to do
so.
(b) Federal law requires all financial institutions to obtain, verify and record information
that identifies each entity that obtains a loan or other financial accommodation. The first time
Borrower requests a financial accommodation from Lender, the Lender may ask for Borrower’s (or any
Guarantor’s) legal name, address, tax ID number and other identifying information. Borrower shall
promptly provide copies of business licenses or other documents evidencing the existence and good
standing of Borrower or any Guarantor requested by Lender.
(c) Time is of the essence in the payment and performance of all of Borrower’s Obligations
under any Equipment Note or Related Agreement. This Agreement, and each Equipment Note or Related
Agreement may be executed in one or more counterparts, each of which shall constitute one and the
same agreement. All demands, notices, requests, consents, waivers and other communications
concerning this Agreement and any Equipment Note or Related Agreement shall be in writing and shall
be deemed to have been duly given when received, personally delivered or three business days after
being deposited in the mail, first class postage prepaid, or the business day after delivery to an
express carrier, charges prepaid, addressed to each party at the address provided herein, or at
such other address as may hereafter be furnished in writing by such party to the other.
(d) Except as otherwise agreed between Borrower and Lender in writing, Borrower shall
reimburse Lender upon demand for costs and expenses reasonably incurred by Lender in connection
with the execution and delivery of this Agreement, any Equipment Note or Related Agreement.
Borrower shall reimburse Lender on demand for all costs (including reasonable Attorneys’ Fees)
incurred by Lender in connection with Borrower’s exercise of any purchase or extension option under
any Equipment Note, or any amendment or waiver of the terms of this Agreement or any Equipment Note
or Related Agreement requested by Borrower.
(e) Any provisions of this Agreement or any Equipment Note or Related Agreement which are
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such unenforceability without invalidating the remaining provisions thereof, and any such
unenforceability shall not render unenforceable such provisions in any other jurisdiction. Any
requirement for the execution and delivery of any document, instrument or notice may be satisfied,
in Lender’s discretion, by authentication as a record within the meaning of, and to the extent
permitted by, Article 9 of the UCC.
(f) THIS AGREEMENT AND ANY EQUIPMENT NOTE OR RELATED AGREEMENT, AND THE LEGAL RELATIONS OF THE
PARTIES THERETO, SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES; THE PARTIES CONSENT
AND SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS OF SUCH STATE FOR THE PURPOSES OF
ANY SUIT, ACTION OR OTHER PROCEEDING ARISING THEREFROM, AND EXPRESSLY WAIVE ANY OBJECTIONS THAT IT
MAY HAVE TO THE VENUE OF SUCH COURTS. THE PARTIES EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION BROUGHT ON OR WITH RESPECT THERETO. IN NO EVENT SHALL LENDER HAVE ANY LIABILITY TO BORROWER
FOR INCIDENTAL, GENERAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES. Any cause of action by
Borrower against Lender relating to this Agreement or any Equipment Note or Related Agreement shall
be brought within two years after any such cause of action first arises, and Borrower hereby waives
the benefit of any longer period provided by statute.
(g) EACH EQUIPMENT NOTE, TOGETHER WITH THIS AGREEMENT AND ANY RELATED AGREEMENTS, (i)
CONSTITUTES THE FINAL AND ENTIRE AGREEMENT BETWEEN THE PARTIES SUPERSEDING ALL CONFLICTING TERMS OR
PROVISIONS OF ANY PRIOR PROPOSALS, APPROVAL LETTERS, TERM SHEETS OR OTHER AGREEMENTS OR
UNDERSTANDINGS BETWEEN THE PARTIES, (ii) MAY NOT BE CONTRADICTED BY EVIDENCE OF (y) ANY PRIOR
WRITTEN OR ORAL AGREEMENTS OR UNDERSTANDINGS, OR (z) ANY CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR UNDERSTANDINGS BETWEEN THE PARTIES; and (iii) MAY NOT BE AMENDED, NOR MAY ANY RIGHTS
THEREUNDER BE WAIVED, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY CHARGED WITH SUCH
AMENDMENT OR WAIVER.
Master
Loan and Security Agreement – 4.1.06
5
In Witness Whereof, Lender and Borrower have executed this Agreement as of the date first
above written.
| BANC OF AMERICA LEASING & CAPITAL, LLC (Lender) | iRobot Corporation (Borrower) | |||||||||
| By: | /s/ Xxxxxx X. Xxxxxxx | By: | /s/ Xxxxxxxx X. Clear | |||||||
| Print Name: | Xxxxxx X. Xxxxxxx | Print Name: | Xxxxxxxx X. Clear | |||||||
| Title: | Assistant Vice President | Title: | Senior Vice President and CFO | |||||||
| Taxpayer ID # : | 00-0000000 | |||||||||
| Org. ID # (if any) | ||||||||||
| Chief Executive Office: | ||||||||||
Master
Loan and Security Agreement – 4.1.06
6
| Banc of America Leasing & Capital, LLC | Addendum to Master Loan and Security Agreement No. 17507-70000 |
This Addendum (“Addendum”) to Master Loan and Security Agreement No. 17507-70000 dated as
of June 13, 2007 (the “Agreement”) is by and between Banc of America Leasing & Capital, LLC
(“BALC”) and iRobot Corporation (“Customer”), who have determined that it is to their mutual
benefit to make certain amendments to the Agreement. All capitalized terms used herein without
definition shall have the respective meaning set forth or referred to them in the Agreement. For
purposes of this Addendum, all financial terms contained herein that are not specifically defined
herein shall have the meanings and values determined in accordance with generally accepted
accounting principles in the United States, as defined by controlling pronouncements of the
Financial Accounting Standards Board, as from time to time supplemented and amended, and
consistently applied. Accordingly, for good and valuable consideration, intending to be legally
bound and pursuant to the terms and conditions of the Agreement, it is hereby agreed as follows:
| A. | For so long as any Obligations of the Customer owing to BALC remain outstanding, Customer covenants and agrees that it shall: |
| 1) | Minimum Liquidity: |
Maintain a Quick Ratio: Current Assets (means the aggregate of cash plus short term
marketables plus accounts receivable) divided by Current Liabilities (means the current
portion of the Borrower’s obligations for borrowed money, including Obligations as defined in
that certain Credit Agreement dated as of June 5, 2007 between Borrower and Bank of America,
N.A.) equal to at least 1.5 to 1.0 on a quarterly basis.
| 2) | Minimum Net Worth: maintain a “Tangible Net Worth” (shareholders’ equity less intangible assets) of at least $75,000,000.00 at all times. | ||
| 3) | Minimum Profitability: maintain “Net Profits” (Net income before taxes and extraordinary items) of at least $1.00 on an annual basis. | ||
| 4) | Compliance Certificates: provide BALC, promptly upon request, one or more compliance certificates in form and substance satisfactory in all respects to BALC, together with supporting financial information and statements certified by Customer’s chief financial officer certifying as to Customer’s compliance with the financial covenants set forth above and that no Event of Default, or event or condition which, with notice or the passage of time or both, exists under the Agreement. |
It is expressly agreed by the parties that this Addendum is supplemental to the Agreement and
made a part thereof and all the terms, conditions and provisions thereof, unless specifically
modified herein, are to remain in full force and effect. In the event of any conflict,
inconsistency or incongruity between the provisions of this Addendum and any of the provisions of
the Agreement, the provisions of this Addendum shall in all respects govern and control.
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed on the dates set
forth below.
| Customer: iRobot Corporation | Banc of America Leasing & Capital, LLC | |||||||
By:
|
/s/ Xxxxxxxx X. Clear | By: | /s/ Xxxxxx X. Xxxxxxx | |||||
| Print Name: Xxxxxxxx X. Clear | Print Name: Xxxxxx X. Xxxxxxx | |||||||
| Title: Senior Vice President and CFO | Title: Assistant Vice President | |||||||
| Date: | Date: June 19, 2007 | |||||||
Addendum
– Group 2 & 3 Conditions – 4.1.06
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