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Exhibit 10.17
CREDIT AGREEMENT
dated as of September 22, 2000
between
EROOM TECHNOLOGY, INC.
and
FLEET NATIONAL BANK
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TABLE OF CONTENTS
1. DEFINITIONS:.....................................................1
2. REVOLVING CREDIT FACILITY........................................9
2.1. COMMITMENT TO LEND....................................9
2.2. INTEREST..............................................10
2.3. REPAYMENTS AND PREPAYMENTS............................10
3. EQUIPMENT LOAN CREDIT FACILITY...................................11
3.1. THE EQUIPMENT LOAN; DISBURSEMENT PERIOD...............11
3.2. INTEREST..............................................12
3.3. REPAYMENTS AND PREPAYMENTS............................12
4. LETTER OF CREDIT FACILITY........................................12
4.1. LETTER OF CREDIT COMMITMENT...........................12
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER..............13
4.3. LETTER OF CREDIT PAYMENTS.............................13
4.4. OBLIGATIONS ABSOLUTE..................................14
4.5. RELIANCE BY ISSUER....................................14
4.6. LETTER OF CREDIT FEES.................................14
5. CHANGES IN CIRCUMSTANCES.........................................14
5.1. ADDITIONAL COSTS, ETC.................................14
5.2. CAPITAL ADEQUACY......................................15
5.3. CERTIFICATE...........................................16
6. FEES AND PAYMENTS................................................16
7. REPRESENTATIONS AND WARRANTIES...................................16
8. CONDITIONS PRECEDENT.............................................18
9. COVENANTS........................................................19
9.1. AFFIRMATIVE COVENANTS.................................19
9.2. NEGATIVE COVENANTS....................................21
9.3. FINANCIAL COVENANTS...................................22
10. EVENTS OF DEFAULT; ACCELERATION.................................22
11. SETOFF..........................................................24
12. USURY...........................................................24
13. MISCELLANEOUS...................................................25
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CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement") is made as of September 22, 2000,
by and between EROOM TECHNOLOGY, INC. (the "Borrower"), a Delaware corporation
having its principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000, and FLEET NATIONAL BANK (the "Bank"), a national banking
association with its office at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
1. DEFINITIONS:
Certain capitalized terms are defined below:
ACCOUNTS: All rights of the Borrower to any payment of money for goods
sold, leased or otherwise marketed in the ordinary course of business, whether
evidenced by or under or in respect of a contract or instrument, and to all
proceeds in respect thereof.
ADVANCE: See ss.3.
AGREEMENT: See preamble, which term shall include this Agreement and the
Schedules hereto, all as amended and in effect from time to time.
BANK: See preamble.
BASE ACCOUNTS: Those Accounts (net of any finance charges, late charges,
credits, commissions, contras or other offsets or counterclaims) (a) which the
Borrower reasonably determines to be collectible, (b) the account debtors in
respect of which are deemed creditworthy by the Bank, are solvent, are not
affiliated with the Borrower, and purchased the goods or services at arms'
length, (c) which are not outstanding for more than ninety (90) days past the
earlier to occur of (i) the date of invoice and (ii) the date of shipment (as to
goods) or of provision (as to services), (d) that are not due from an account
debtor located in Minnesota unless the Borrower (i) has received a certificate
of authority to do business and is in good standing in such state or (ii) has
filed a notice of business activities report with the appropriate office or
agency of such state for the current year, (e) in which the Bank has a valid and
perfected first-priority security interest, and over which there is no other
Lien, (f) which are in payment of fully performed and undisputed obligations,
and (g) which are payable in U.S. Bank currency from an office within the United
States or which are payable from an office outside the United States from
account debtors previously approved in writing by the Bank.
BASE RATE: The higher of (a) the annual rate of interest announced from
time to time by the Bank at its head office as the Bank's "base rate" or "prime
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. The Base Rate is a reference rate and does not necessarily represent the
lowest or the best rate being charged to any customer. Changes in the rate of
interest resulting from changes in the Base Rate shall take place immediately
without notice or demand of any kind.
BORROWER: See preamble.
BORROWING BASE: An amount equal to 80% of the Base Accounts.
BORROWING BASE REPORT: A report, in form and with supporting details
satisfactory to the Bank, setting forth the Borrower's computation of the
Borrowing Base.
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BUSINESS DAY: Any day other than a Saturday or a Sunday on which banks in
Boston, Massachusetts, are open for business generally.
CAPITALIZED LEASES: Leases under which the Borrower or any of its
Subsidiaries is the Lessee or obligor, the discounted, future rental payment
obligations under which are required to be capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries in accordance with GAAP.
CASH EQUIVALENTS: As to the Borrower and its Subsidiaries, (a) securities
issued or directly and fully guaranteed or insured by the United States of
America and having a maturity of not more than six (6) months from the date of
acquisition; (b) certificates of deposit and eurodollar time deposits with
maturities of six (6) months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six (6) months and overnight bank
deposits, in each case, (i) with the Bank or (ii) with any domestic commercial
bank organized under the laws of the United States of America or any state
thereof and foreign subsidiaries of such bank, having a rating of not less than
A or its equivalent by S&P or any successor and having total assets in excess of
$10,000,000,000; (c) repurchase obligations with a term of not more than seven
(7) days for underlying securities of the types described in clauses (a) and (b)
entered into with any financial institution meeting the qualifications in clause
(b) above; and (d) any commercial paper or finance company paper issued by (i)
the Bank or any holding company controlling the Bank or (ii) any other Person
that is rated not less than prime-two or A2 or their equivalents by Xxxxx'x
Investor Service, Inc. or S&P or their successors.
CHARTER DOCUMENTS: In respect of any entity, the certificate or articles of
incorporation or organization and the by-laws of such entity, or other
constitutive documents of such entity.
CLOSING DATE: The first date on which the conditions set forth in ss.8 have
been satisfied and any Advance or Revolving Credit Loan is to be made hereunder
or any Letter of Credit is to be issued hereunder.
COLLATERAL: All of the property, rights and assets of the Borrower that are
or are intended to be subject to the security interest created by the Security
Documents.
COMMITMENT: The obligation of the Bank to make Revolving Credit Loans to,
and to issue, extend and renew Letters of Credit for the account of, the
Borrower up to an aggregate outstanding principal amount not to exceed
$1,500,000, as such amount may be reduced from time to time or terminated
hereunder.
CONSENT: In respect of any person or entity, any permit, license or
exemption from, approval, consent of, registration or filing with any local,
state or federal governmental or regulatory agency or authority, required under
applicable law.
CONSOLIDATED CURRENT LIABILITIES. The sum of (a) all liabilities and other
Indebtedness of the Borrower and its Subsidiaries on a consolidated basis
maturing on demand or within one (1) year from the date as of which Consolidated
Current Liabilities are to be determined, plus, without duplication, plus (b)
the Total Outstandings, including, without limitation, the Maximum Drawing
Amount of any Letters of Credit outstanding, plus the outstanding amount of the
Equipment Loan, plus (c) such other liabilities as may properly be classified as
current liabilities in accordance with GAAP and including, whether or not so
classified, and minus (d) any liabilities which appear on the Borrower's balance
sheet as deferred revenues.
CONSOLIDATED NET INCOME (OR LOSS): The consolidated net income (or deficit)
of the Borrower and its Subsidiaries, after deduction of all expenses, taxes,
and other proper charges,
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determined in accordance with GAAP, after eliminating therefrom all
extraordinary nonrecurring items of income.
CONSOLIDATED TANGIBLE NET WORTH: The excess of Consolidated Total Assets
over Consolidated Total Liabilities, and less the sum of (a) the total book
value of all assets of the Borrower and its Subsidiaries properly classified as
intangible assets under GAAP, including such items as good will, the purchase
price of acquired assets in excess of the fair market value thereof, trademarks,
trade names, service marks, brand names, copyrights, patents and licenses, and
rights with respect to the foregoing; plus (b) all amounts representing any
write-up in the book value of any assets of the Borrower or its Subsidiaries
resulting from a revaluation thereof subsequent to the date of the most recent
audited Financials in existence (and delivered to the Bank) on the Closing Date;
plus (c) to the extent otherwise includable in the computation of Consolidated
Tangible Net Worth, any subscriptions receivable.
CONSOLIDATED TOTAL ASSETS: All assets of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
CONSOLIDATED TOTAL LIABILITIES: All liabilities of the Borrower and its
Subsidiaries on a consolidated basis that in accordance with GAAP are properly
classified as liabilities and all Indebtedness of the Borrower and its
Subsidiaries, whether or not so classified.
DEFAULT: An event or act which with the giving of notice and/or the lapse
of time, would become an Event of Default.
DISBURSEMENT PERIOD: See ss.3.
DISTRIBUTION: The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
DRAWDOWN DATE: In respect of any Advance or Revolving Credit Loan, the date
on which such Advance or Revolving Credit Loan is made to the Borrower.
ENVIRONMENTAL LAWS: All laws pertaining to environmental matters, including
without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, in each case
as amended, and all rules, regulations, judgments, decrees, orders and licenses
arising under all such laws.
EQUIPMENT. All equipment purchased or otherwise acquired by the Borrower
with the proceeds of the Equipment Loan for use in the Borrower's business,
which purchases or other acquisitions, as the case may be, shall not have been
determined to be unacceptable to the Bank.
EQUIPMENT LOAN: See ss.3.
EQUIPMENT LOAN MARGIN. Three-quarters of one percent (3/4%) per annum.
EQUIPMENT LOAN MATURITY DATE: June 1, 2004, or such earlier date on which
all Advances may become due and payable pursuant to the terms hereof.
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EQUIPMENT NOTE: See ss.3.1.
ERISA: The Employee Retirement Income Security Act of 1974, as amended, and
all rules, regulations, judgments, decrees, and orders arising thereunder.
EVENT OF DEFAULT: Any of the events listed in ss.10 hereof.
FEDERAL FUNDS EFFECTIVE RATE: For any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Bank from three
funds brokers of recognized standing selected by the Bank.
FEE LETTER: The fee letter, dated or to be dated on or prior to the Closing
Date, between the Borrower and the Bank and in form and substance satisfactory
to the Bank.
FINANCIALS: In respect of any period, the consolidated balance sheet of any
person or entity and its Subsidiaries as at the end of such period, and the
related statement of income and consolidated statement of cash flow for such
period, each setting forth in comparative form the figures for the previous
comparable fiscal period, all in reasonable detail and prepared in accordance
with GAAP.
GUARANTOR: A Subsidiary (or former Subsidiary) of the Borrower that shall
have guaranteed the Obligations pursuant to a guaranty agreement in form and
substance satisfactory to Bank.
GAAP: Generally accepted accounting principles consistent with those
adopted by the Financial Accounting Standards Board and its predecessor, (a)
generally, as in effect from time to time, and (b) for purposes of determining
compliance by the Borrower with its financial covenants set forth herein, as in
effect for the fiscal year therein reported in the most recent Financials
submitted to the Bank prior to execution of this Agreement.
INDEBTEDNESS: As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses,
(c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(d) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith),
(e) every obligation of such Person under any Capitalized Lease,
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(f) every obligation of such Person under any lease (a "Synthetic
Lease") treated as an operating lease under GAAP and as a loan or financing
for U.S. income tax purposes,
(g) all sales by such Person of (i) accounts or general intangibles
for money due or to become due, (ii) chattel paper, instruments or
documents creating or evidencing a right to payment of money or (iii) other
receivables (collectively "receivables"), whether pursuant to a purchase
facility or otherwise, other than in connection with the disposition of the
business operations of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing arrangement,
and together with any obligation of such Person to pay any discount,
interest, fees, indemnities, penalties, recourse, expenses or other amounts
in connection therewith,
(h) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
shares of capital stock of any class issued by such Person, any warrants,
options or other rights to acquire any such shares, or any rights measured
by the value of such shares, warrants, options or other rights, to the
extent such equity related purchase obligation will be due and payable
prior to the repayment in full in cash of the Obligations, the termination
of the Commitment and the termination of any obligation of the Bank to make
Advances.
(i) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices (a "derivative contract"),
(j) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to
the extent that such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law,
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(a) through (j) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (A) to purchase or pay
(or advance or supply funds for the purchase of) any security for the
payment of such primary obligation, (B) to purchase property, securities or
services for the purpose of assuring the payment of such primary
obligation, or (C) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (v) any
Capitalized Lease shall be the principal component of the aggregate of the
rentals obligation under such Capitalized Lease payable over the term thereof
that is not subject to termination by the lessee, (w) any sale of receivables
shall be the amount of unrecovered capital or principal investment of the
purchaser (other than the Borrower or any of its wholly-owned Subsidiaries)
thereof, excluding amounts representative of yield or interest earned on
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such investment, (x) any Synthetic Lease shall be the stipulated loss value,
termination value or other equivalent amount, (y) any derivative contract shall
be the maximum amount of any termination or loss payment required to be paid by
such Person if such derivative contract were, at the time of determination, to
be terminated by reason of any event of default or early termination event
thereunder, whether or not such event of default or early termination event has
in fact occurred and (z) any equity related purchase obligation shall be the
maximum fixed redemption or purchase price thereof inclusive of any accrued and
unpaid dividends to be comprised in such redemption or purchase price.
INTERNATIONAL STANDBY PRACTICES: With respect to any standby Letter of
Credit, International Standby Practices (ISP98), International Chamber of
Commerce Publication No. 590, or any successor code of standby letter of credit
practices among banks adopted by the Bank in the ordinary course of its business
as a standby letter of credit issuer and in effect at the time of issuance of
such Letter of Credit.
INVESTMENTS: All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LETTER OF CREDIT: See ss.4.1(a).
LETTER OF CREDIT APPLICATION: See ss.4.1(a).
LETTER OF CREDIT FEE: See ss.4.6.
LIENS: Any encumbrance, mortgage, pledge, hypothecation, charge,
restriction or other security interest of any kind securing any obligation of
any Person.
LOAN: Collectively, the Equipment Loan and the Revolving Credit Loans.
LOAN DOCUMENTS: This Agreement, the Notes, the Letter of Credit
Applications, and the Security Documents, in each case as from time to time
amended or supplemented.
LOAN REQUEST: See ss.2.1.
MATERIALLY ADVERSE EFFECT: Any material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance or properties of the
Borrower individually, or the Borrower and its Subsidiaries taken together, or
the Collateral; (b) the rights and remedies of the Bank under any of the Loan
Documents or (c) the ability of the Borrower to perform its obligations under
the Loan Documents.
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MAXIMUM DRAWING AMOUNT: The maximum aggregate amount from time to time that
beneficiaries may draw under outstanding Letters of Credit, as such aggregate
amount may be reduced from time to time pursuant to the terms of the Letters of
Credit.
NOTES: Collectively, the Equipment Note and the Revolving Credit Loan Note.
OBLIGATIONS: All indebtedness, obligations and liabilities of the Borrower
and its Subsidiaries to the Bank, existing on the date of this Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Agreement or any other Loan Document or in respect of any of
the Loans or Letters of Credit or the Notes or other instruments at any time
evidencing any thereof.
PERMITTED ACQUISITION: An acquisition by the Borrower or any of its
Subsidiaries of (a) other Persons which at the time of such acquisition become
Guarantors and grant first priority perfected Liens in all of their property and
assets to secure the Obligations, or (b) divisions or business segments of other
Persons (whether by way of purchase of assets or capital stock, merger or
otherwise), but no such acquisition shall be a Permitted Acquisition unless:
(i) when added to all prior Permitted Acquisitions, the aggregate purchase
price for such proposed acquisition and all such other acquisitions made since
the Closing Date shall not exceed 10% of the Consolidated Tangible Net Worth of
the Borrower as of the end of the most recent fiscal quarter ended before the
effective date of such proposed acquisition;
(ii) the acquired Person, division or business segment is engaged primarily
in the same business as the Borrower and its Subsidiaries, the structure of the
acquisition shall be acceptable to the Bank and, with respect to acquisitions of
equity interests, the Borrower shall own, directly or indirectly, not less than
100% of the Voting Stock and 100% of the equity interests of the acquired
Person;
(iii) the acquisition shall be approved by the Board of Directors (or
Persons performing similar functions) of the acquired Person;
(iv) Borrower shall have provided to the Bank updated annual projections
satisfactory to the Bank which give effect to the proposed acquisition; and
(v) no Default or Event of Default shall exist at the time of or after
giving effect to the acquisition; for the purpose of determining whether a
Default will exist after giving effect to the acquisition, each of the financial
covenants will be tested on a pro forma basis after giving effect to the
acquisition.
For the purpose of determining whether the Borrower will continue to
satisfy its financial covenants on a pro forma basis after giving effect to an
acquisition, the financial statements and results of operations of the acquired
Person (or division or business segment) will be combined with the financial
statements and results of operations of the Borrower and its Subsidiaries in
such manner as may be acceptable to the Bank, its being understood that the Bank
will have the right to make such adjustment thereto as the Bank may deem to be
appropriate to reflect the anticipated effect of the acquisition on the equity,
indebtedness and income of the Borrower.
PERSON: Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
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QUICK ASSETS: All cash, Cash Equivalents and Accounts of the Borrower that
are not subject to any Lien except for Liens in favor of the Bank pursuant to
the Loan Documents.
REIMBURSEMENT OBLIGATION: The Borrower's obligation to reimburse the Bank
on account of any drawing under any Letter of Credit as provided in ss.3.2.
REQUIREMENT OF LAW: In respect of any person or entity, any law, treaty,
rule, regulation or determination of an arbitrator, court, or other governmental
authority, in each case applicable to or binding upon such person or entity or
affecting any of its property.
RESTRICTED PAYMENT: In relation to the Borrower and its Subsidiaries, any
(a) Distribution or (b) payment or prepayment by the Borrower or its
Subsidiaries to any shareholder of the Borrower, or to any affiliate of the
Borrower, any Subsidiary or any such shareholder.
REVOLVING CREDIT LOANS: Any loan made or to be made to the Borrower
pursuant to ss.2.1 hereof.
REVOLVING CREDIT LOAN MARGIN: One-quarter of one percent (1/4%) per annum.
REVOLVING CREDIT LOAN MATURITY DATE: September 21, 2001, or such earlier
date on which all the Revolving Credit Loans may become due and payable pursuant
to the terms hereof.
REVOLVING CREDIT LOAN NOTE: See ss.2.1.
SECURITY AGREEMENT: The Security Agreement, dated or to be dated on or
prior to the Closing Date, between the Borrower and the Bank and in form and
substance satisfactory to the Bank.
SECURITY DOCUMENTS. The Security Agreement and all other instruments and
documents now or at any time hereafter securing the whole or any part of the
Obligations, including without limitation Uniform Commercial Code financing
statements, required to be executed or delivered pursuant to any Security
Document.
SOFTWARE: All computer software purchased or otherwise acquired by the
Borrower with the proceeds of the Equipment Loan for use in the Borrower's
business, which purchases or other acquisitions, as the case may be, must be
acceptable to the Bank.
SUBSIDIARY: In respect of the Borrower, any business entity of which the
Borrower at any time owns or controls directly or indirectly more than fifty
percent (50%) of the outstanding shares of stock having voting power, regardless
of whether such right to vote depends upon the occurrence of a contingency.
SYNTHETIC LEASE: See the definition of "Indebtedness".
TOTAL OUTSTANDINGS: At any time of reference thereto, the sum of (a)
Revolving Credit Loans outstanding at such time, (b) the Maximum Drawing Amount
at such time and (c) any Unpaid Reimbursement Obligations at such time.
TRANCHE A: With respect to Advances made between the Closing Date and
December 31, 2000, the principal payments due on January 2, 2001 and each month
thereafter through and including the payment due in September, 2003 shall be in
an amount equal to one-thirty-third
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(1/33) of the sum of the principal amounts of the Advances made between the
Closing Date and December 31, 2000.
TRANCHE B: With respect to the Advances made between January 1, 2001 and
March 31, 2001, the principal payments due in April, 2001 and each month
thereafter through and including the payment due in December, 2003 shall be in
an amount equal to one-thirty-third (1/33) of the sum of the principal amounts
of the Advances made between January 1, 2001 and March 31, 2001, inclusive.
TRANCHE C: With respect to the Advances made between April 1, 2001 and June
30, 2001, the principal payments due in July, 2001 and each month thereafter
through and including the payment due in March, 2004 shall be in an amount equal
to one-thirty-third (1/33) of the amount of the aggregate principal amount of
the Advances made between April 1, 2001 and June 30, 2001, inclusive.
TRANCHE D: With respect to the Advances made between July 1, 2001 and the
end of the Disbursement Period, the principal payments due on and after October
1, 2001 shall be in an amount equal to one-thirty-third (1/33) of the sum of the
principal amounts of the Advances made between July 1, 2001 and the end of the
Disbursement Period, inclusive.
UNRESTRICTED CASH: All cash and Cash Equivalents of the Borrower and its
Subsidiaries at the Bank, in each case which are not subject to any Lien,
encumbrance, security interest or other restriction, except for the Lien in
favor of the Bank.
UNIFORM CUSTOMS: With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Bank in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION: Any Reimbursement Obligation for which the
Borrower does not reimburse the Bank on the date specified in, and in accordance
with, ss.4.2(a).
VOTING STOCK - Securities of any class or classes of a corporation,
association, trust, limited liability company or other business entity the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of directors (or Persons performing similar functions).
2. REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND.
(a) Upon the terms and subject to the conditions of this
Agreement, the Bank agrees to lend to the Borrower such sums that the
Borrower may request, from the date hereof until but not including the
Revolving Credit Loan Maturity Date, PROVIDED that the sum of the
outstanding principal amount of all Revolving Credit Loans (after giving
effect to all amounts requested) shall not exceed the lesser of (i) the
Commitment MINUS the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations and (ii) the Borrowing Base. Loans shall be in
the minimum aggregate amount of $100,000 or an integral multiple thereof.
(b) The Borrower shall notify the Bank in writing or
telephonically not later than 12:00 p.m. Boston time on the day of the
Drawdown Date (which must be a
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Business Day) of the Revolving Credit Loan being requested, of the
principal amount of such Revolving Credit Loan (a "Loan Request"). Subject
to the foregoing, so long as the Commitment is then in effect and the
applicable conditions set forth in ss.8 hereof have been met, the Bank
shall advance the amount requested to the Borrower's bank account at the
Bank in immediately available funds not later than the close of business on
such Drawdown Date.
(c) Notwithstanding the notice requirement set forth above in this
ss.2.1, the Bank agrees to make Revolving Credit Loans to the Borrower
sufficient to pay to the Bank any Unpaid Reimbursement Obligations on the
date on which such Reimbursement Obligations become Unpaid Reimbursement
Obligations. The Borrower hereby requests and authorizes the Bank to make
from time to time such Revolving Credit Loans by means of paying Unpaid
Reimbursement Obligations. The Borrower acknowledges and agrees that the
making of such Revolving Credit Loans shall, in each case, be subject in
all respects to the provisions of this Agreement, including, without
limitation, the limitations set forth in ss.2.1(a) and the requirements of
the applicable conditions in ss.8. All actions taken by the Bank pursuant
to the provisions of this ss.2.1(c) shall be conclusive and binding on the
Borrower.
(d) The obligation of the Borrower to repay to the Bank the principal
of the Revolving Credit Loans and interest accrued thereon shall be
evidenced by a promissory note (the "Revolving Credit Loan Note") in the
maximum aggregate principal amount of $1,500,000 executed and delivered by
the Borrower and payable to the order of the Bank, in form and substance
satisfactory to the Bank.
2.2. INTEREST. So long as no Event of Default is continuing, the Borrower
shall pay interest on the Revolving Credit Loans at a rate per annum which is
equal to the sum of (a) the Base Rate, and (b) the Revolving Credit Loan Margin,
such interest to be payable in arrears on the first day of each calendar month
for the immediately preceding calendar month, commencing with the first such day
following the date hereof. While an Event of Default is continuing, amounts
payable under any of the Loan Documents shall bear interest (compounded monthly
and payable on demand in respect of overdue amounts) at a rate per annum which
is equal to the sum of (i) the Base Rate, and (ii) four percent (4%) above the
Revolving Credit Loan Margin until such amount is paid in full or (as the case
may be) such Event of Default has been cured or waived in writing by the Bank
(after as well as before judgment). In addition, if the entire amount of any
required principal and/or interest is not paid in full within ten (10) days
after the same is due, the Borrower shall pay to the Bank a late fee equal to
five percent (5%) of the required payment.
2.3. REPAYMENTS AND PREPAYMENTS. The Borrower hereby agrees to pay the Bank
on the Revolving Credit Loan Maturity Date the entire unpaid principal of and
interest on all Revolving Credit Loans. The Borrower may elect to prepay the
outstanding principal of all or any part of any Revolving Credit Loan, without
premium or penalty, in a minimum amount of $100,000 or an integral multiple
thereof or, if less, the entire amount remaining unpaid, upon written notice to
the Bank given by 10:00 a.m. Boston time on the date of such prepayment, of the
amount to be prepaid. The Borrower shall be entitled to reborrow before the
Revolving Credit Maturity Date such amounts, upon the terms and subject to the
conditions of this Agreement. Each repayment or prepayment of principal of any
Revolving Credit Loan shall be accompanied by payment of the unpaid interest
accrued to such date on the principal being repaid or prepaid. If at any time
the Total Outstandings shall exceed the lesser of (a) the Commitment and (b) the
Borrowing Base, the Borrower shall immediately pay the amount of such excess to
the Bank for application to the Revolving Credit Loans or, if no Revolving
Credit Loans are outstanding, to be held by the Bank as cash collateral to
secure the payment of all
13
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Reimbursement Obligations up to the Maximum Drawing Amount. The Borrower may
elect to reduce or terminate the Commitment by a minimum principal amount of
$500,000 or an integral multiple thereof, upon written notice to the Bank given
by 10:00 a.m. Boston time at least two (2) Business Days prior to the date of
such reduction or termination. The Borrower shall not be entitled to reinstate
the Commitment following such reduction or termination.
3. EQUIPMENT LOAN CREDIT FACILITY.
3.1. THE EQUIPMENT LOAN; DISBURSEMENT PERIOD.
(a) Upon the terms and subject to the conditions of this Agreement,
the Bank agrees to make the Equipment Loan to the Borrower in Advances (as
hereinafter defined) during the Disbursement Period (as hereinafter
defined) as set forth in paragraph (b) below. The Equipment Loan shall be
in a maximum principal amount of $1,500,000 or so much thereof as shall
have been advanced by the Bank to the Borrower during the Disbursement
Period. The Equipment Loan shall be evidenced by a promissory note of the
Borrower, in form and substance satisfactory to the Bank (the "Equipment
Note"), dated as of the Closing Date and payable to the order of the Bank.
(b) Advances of principal may be requested by the Borrower during the
period running from the Closing Date through and including September 21,
2001 (the "Disbursement Period") on the following terms and conditions
(each portion of the Equipment Loan so advanced being an "Advance"). The
Borrower shall notify the Bank in writing by not later than 11:00 a.m.
(Boston time) on the day prior to the date on which the Advance is to be
made (both of which days must be a Business Day) (the "Drawdown Date") of
the principal amount of the Advance, which principal amount shall not
exceed (a) in the case of an Advance to fund the purchase of Equipment,
100% of the purchase price (as reflected on the invoice for such Equipment)
of such Equipment, exclusive of soft costs relating thereto (including,
without limitation, taxes, insurance, shipping and handling costs); and (b)
in the case of an Advance to fund the purchase of Software, 100% of the
purchase price (as reflected on the invoice for such Software) of such
Software, exclusive of soft costs relating thereto (including, without
limitation, taxes, insurance, and shipping and handling costs), PROVIDED,
HOWEVER, in no event shall the aggregate amount of all Advances made to
fund the purchase of Software exceed the lesser of (i) $225,000 and (ii) on
the last day of the Disbursement Period, 15% of the aggregate amount of all
Advances made during the Disbursement Period. In no event shall the
aggregate amount of all Advances (after giving effect to all requested
amounts) made hereunder exceed $1,500,000. Each request for an Advance
shall be in a minimum amount of $100,000 and shall be accompanied by a
description of the Equipment or Software, as the case may be, to be
purchased (or already purchased with respect to Equipment or Software
purchased within 120 days prior to the Closing Date), the seller of the
Equipment or Software, as the case may be, the invoice for such Equipment
or Software, and the purchase price of such Equipment or Software, as the
case may be (which purchase price shall not be less than the amount of the
Advance requested). Subject to the foregoing, so long as no Default or
Event of Default has occurred and is continuing and if the applicable
conditions set forth in this Agreement have been met, including, but not
limited to, the Borrower taking all action necessary to perfect the Bank's
security interest in the Equipment and/or Software being purchased, the
Bank shall advance the amount requested to the Borrower's account at the
Bank in immediately available funds not later than the close of business on
such Drawdown Date. Each request for an Advance hereunder shall constitute
a representation and warranty by the Borrower that (a) the conditions set
forth in ss.8 hereof have been satisfied on the date of such request, and
(b) the Borrower is using all of the proceeds of such requested
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Advance to purchase the Equipment or Software, as the case may be,
described in such request, and for no other purposes.
3.2. INTEREST. So long as no Event of Default is continuing, the Borrower
shall pay interest on the Equipment Loan (or that portion which has been
advanced by the Bank to the Borrower pursuant to ss.3.1) at a rate per annum
which is equal to the sum of (a) the Base Rate, and (b) the Equipment Loan
Margin, such interest to be payable in arrears on the first day of each calendar
month for the immediately preceding calendar month, commencing with the first
such day following the date hereof. While an Event of Default is continuing,
amounts payable under any of the Loan Documents shall bear interest (compounded
monthly and payable on demand in respect of overdue amounts) at a rate per annum
which is equal to the sum of (i) the Base Rate, and (ii) four percent (4%) above
the Equipment Loan Margin until such amount is paid in full or (as the case may
be) such Event of Default has been cured or waived in writing by the Bank (after
as well as before judgment. In addition, if the entire amount of any required
principal and/or interest is not paid in full within ten (10) days after the
same is due, the Borrower shall pay to the Bank a late fee equal to five percent
(5%) of the required payment.
3.3. REPAYMENTS AND PREPAYMENTS. The Borrower hereby agrees to pay to the
Bank the principal amount of the Equipment Loan in forty-two (42) consecutive
monthly installments due on the first Business Day of each calendar month,
commencing on January 2, 2001, with a final payment of the full amount of the
remaining balance of the Equipment Loan on the Equipment Loan Maturity Date.
Each such payment of principal shall be in the amount of each Tranche A, Tranche
B, Tranche C and Tranche D, respectively, due and owing for such month. The
Borrower may elect to prepay the outstanding principal of all or any part of any
Equipment Loan, without premium or penalty, in a minimum amount of $100,000 or
an integral multiple thereof (or, if less, the entire amount remaining unpaid),
upon written notice to the Bank given by 10:00 a.m. Boston time on the date of
such prepayment, of the amount to be prepaid. Each repayment or prepayment of
principal of the Equipment Loan shall be applied to the remaining installments
in the inverse order of their due dates and shall be accompanied by payment of
the unpaid interest accrued to such date on the principal being repaid or
prepaid. No amount repaid with respect to the Equipment Loan may be reborrowed.
4. LETTER OF CREDIT FACILITY.
4.1. LETTER OF CREDIT COMMITMENT.
(a) Subject to the terms and conditions hereof and the execution and
delivery by the Borrower of a letter of credit application on the Bank's
customary form (a "Letter of Credit Application"), the Bank, in reliance
upon the representations and warranties of the Borrower contained herein,
agrees to issue, extend and renew from time to time from the date hereof
until but not including the date which is fourteen (14) days prior to the
then scheduled Revolving Credit Loan Maturity Date, for the account of the
Borrower, standby and documentary letters of credit (each a "Letter of
Credit"), in such form as may be requested by the Borrower and agreed to by
the Bank; PROVIDED, HOWEVER, that, after giving effect to such request, (i)
the sum of the aggregate Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not exceed $675,000 at any one time, and
(ii) the sum of the principal amount of Total Outstandings shall not exceed
the least of (A) the Commitment and (B) the Borrowing Base. No Letter of
Credit shall be issued, extended or renewed with an expiration date
occurring after the then scheduled Revolving Credit Loan Maturity Date;
(b) Each Letter of Credit Application shall be completed to the
satisfaction of the Bank. In the event that any provision of any Letter of
Credit Application shall be
15
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inconsistent with any provision of this Agreement, then the provisions of
this Agreement shall, to the extent of any such inconsistency, govern;
(c) Each Letter of Credit issued, extended or renewed hereunder shall,
among other things, (a) provide for the payment of sight drafts for honor
thereunder when presented in accordance with the terms thereof and when
accompanied by the documents described therein, and (b) have an expiry date
no later than the date which is ninety (90) days after to the Revolving
Credit Loan Maturity Date. Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs or, in the case of a
standby Letter of Credit, either the Uniform Customs or the International
Standby Practices. To the extent the Borrower requests any Letter of Credit
be issued, renewed or extended with an expiry date after the date which is
ninety (90) days after the Revolving Credit Loan Maturity Date, it shall be
in the sole and absolute discretion of the Bank as to whether the Bank so
issues, renews or extends such Letter of Credit and, to the extent the Bank
elects to issue, renew or extend such Letter of Credit, the Borrower shall
deliver to the Bank, on the date of such issuance, extension or renewal,
cash in an amount equal to the Maximum Drawing Amount of such Letter of
Credit, to be held by the Bank as cash collateral for the Obligations.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the Bank
to issue, extend and renew each Letter of Credit, the Borrower hereby agrees to
reimburse the Bank for or to pay to the Bank with respect to each Letter of
Credit issued, extended or renewed by the Bank hereunder,
(a) except as otherwise expressly provided in ss.4.2(b), on each date
that any draft presented under such Letter of Credit is honored by the
Bank, or the Bank otherwise makes a payment with respect thereto, (i) the
amount paid by the Bank under or with respect to such Letter of Credit, and
(ii) the amount of any taxes, fees, charges or other costs and expenses
whatsoever incurred by the Bank in connection with any payment made by the
Bank under, or with respect to, such Letter of Credit;
(b) upon the termination of the Commitment prior to the Revolving
Credit Maturity Date, or the acceleration of the Reimbursement Obligations with
respect to all Letters of Credit in accordance with ss.10 an amount equal to the
Maximum Drawing Amount, which amount shall be held by the Bank as cash
collateral for all Reimbursement Obligations.
Unless funded by a Revolving Credit Loan pursuant to ss.2.1(c)(i), each
such payment shall be made to the Bank at the Bank's office at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 in immediately available funds. Interest on
any and all amounts remaining unpaid by the Borrower under this ss.4.2 and not
required to be funded by a Revolving Credit Loan pursuant to ss.2.1(c)(i) at any
time from the date such amounts become due and payable (whether as stated in
this ss.4.2, by acceleration or otherwise) until payment in full (whether before
or after judgment) shall be payable to the Bank on demand at the rate specified
in ss.2.2 following an Event of Default.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Bank shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. The responsibility of the Bank to the Borrower shall be only
to determine that the documents (including each draft) delivered
16
-14-
under each Letter of Credit in connection with such presentment shall be in
conformity in all material respects with such Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.4 shall
be absolute and unconditional under any and all circumstances and irrespective
of the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrower
may have or have had against the Bank or any beneficiary of a Letter of Credit.
The Borrower further agrees with the Bank that the Bank shall not be responsible
for, and the Reimbursement Obligations shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrower against the beneficiary of any Letter of Credit or
any such transferee. The Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit other than
as a result of the Bank's gross negligence or willful misconduct. The Borrower
agrees that any action taken or omitted by the Bank under or in connection with
each letter of Credit and the related drafts and documents, if done in good
faith and without gross negligence or willful misconduct, shall be binding upon
the Borrower and shall not result in any liability on the part of the Bank to
the Borrower.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4, the
Bank shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper person or entity and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Bank.
4.6. LETTER OF CREDIT FEES. The Borrower shall, on the date of issuance or
of any extension or renewal of any Letter of Credit and at such other time or
times as such charges are customarily made by the Bank, pay a fee (in each case
a "Letter of Credit Fee") to the Bank in respect of each Letter of Credit an
amount equal to 1.5% of the face amount of such Letter of Credit, PLUS the
Bank's customary issuance, amendment and other administrative processing fees.
5. CHANGES IN CIRCUMSTANCES.
5.1. ADDITIONAL COSTS, ETC. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to the Bank by
any central bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall:
(a) subject the Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the
other Loan Documents, or the Loan (other than taxes based upon or measured
by the income or profits of the Bank), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to the Bank of the principal of or
the interest on the Loan
17
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or any other amounts payable to the Bank under this Agreement or any of the
other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or letters of credit
issued by, or commitments of an office of the Bank, or
(d) impose on the Bank any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loan, or any class
of loans, letters of credit or commitments of which the Loan forms a part,
and the result of any of the foregoing is
(i) to increase the cost to the Bank of making, funding, issuing,
renewing, extending or maintaining the Loan, or
(ii) to reduce the amount of principal, interest, or other amount
payable to the Bank hereunder on account of the Loan, or
(iii) to require the Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by the Bank from
the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by the Bank at
any time and from time to time and as often as the occasion therefor may arise,
pay to the Bank such additional amounts as will be sufficient to compensate the
Bank for such additional cost, reduction, payment or foregone interest or other
sum.
5.2. CAPITAL ADEQUACY. If after the date hereof the Bank determines that
(a) the adoption of or change in any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) regarding
capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by a court or governmental authority with
appropriate jurisdiction, or (b) compliance by the Bank or any corporation
controlling the Bank with any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) of any such
entity regarding capital adequacy, has the effect of reducing the return on the
Bank's commitment with respect to the Loan to a level below that which the Bank
could have achieved but for such adoption, change or compliance (taking into
consideration the Bank's then existing policies with respect to capital adequacy
and assuming full utilization of such entity's capital) by any amount deemed by
the Bank to be material, then the Bank may notify the Borrower of such fact,
promptly after the Bank becomes aware of such circumstances. To the extent that
the amount of such reduction in the return on capital is not reflected in the
Base Rate, the Borrower and the Bank shall thereafter attempt to negotiate in
good faith, within thirty (30) days of the day on which the Borrower receives
such notice, an adjustment payable hereunder that will adequately compensate the
Bank in light of these circumstances. If the Borrower and the Bank are unable to
agree to such adjustment within thirty (30) days of the date on which the
Borrower receives such notice, then commencing on the date of such notice (but
not earlier than the effective date of any such increased capital requirement),
the fees payable hereunder shall increase by an amount that will, in the Bank's
reasonable determination, provide adequate compensation. The Bank shall allocate
such cost increases among its customers in good faith and on an equitable basis.
18
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5.3. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.ss.5.1 or 5.2 and a brief explanation of such amounts
which are due, submitted by the Bank to the Borrower, shall be conclusive,
absent manifest error, that such amounts are due and owing.
6. FEES AND PAYMENTS.
The Borrower shall pay to the Bank a closing fee on the Closing Date in the
amount of $5,625. In addition, the Borrower shall pay to the Bank, on the
Closing Date, a commitment fee in the amount of $5,625. All payments to be made
by the Borrower hereunder or under any of the other Loan Documents shall be made
on the due date thereof to the Bank in U.S. dollars in immediately available
funds at the Bank's office in Boston, Massachusetts or at such other place that
the Bank may from time to time designate, in each case at or about 11:00 a.m.
(Boston time or other local time of the place of payment), without recoupment,
set-off or counterclaim and free and clear and without any deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by law to
make such deductions or withholding. If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under any of the
other Loan Documents, the Borrower will pay to the on the date on which such
amount is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Bank to receive
the same net amount which the Bank would have received on such due date had no
such obligation been imposed upon the Borrower. The Borrower will deliver
promptly to the Bank certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document. The Bank shall be entitled to
charge any account of the Borrower with the Bank for any sum due and payable by
the Borrower to the Bank hereunder or under any of the other Loan Documents. If
any payment hereunder is required to be made on a day which is not a Business
Day, it shall be paid on the immediately succeeding Business Day, with interest
and any applicable fees adjusted accordingly. All computations of interest or of
the commitment fee payable hereunder shall be made by the Bank on the basis of
actual days elapsed and on a 360-day year.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Bank on the date hereof, on the
date of any Loan Request, on the date of each request for an Advance or a Letter
of Credit, on each Drawdown Date and on the date on which each Letter of Credit
is issued, extended or renewed that:
(a) the Borrower and each of its Subsidiaries is duly organized,
validly existing, and in good standing under the laws of its jurisdiction
of incorporation and is duly qualified and in good standing in every other
jurisdiction where it is doing business, and the execution, delivery and
performance by the Borrower and each of its Subsidiaries of the Loan
Documents to which it is a party (i) are within its corporate authority,
(ii) have been duly authorized, (iii) do not conflict with or contravene
its Charter Documents;
(b) upon execution and delivery thereof, each Loan Document shall
constitute the legal, valid and binding obligation of the Borrower and its
Subsidiaries party thereto, enforceable in accordance with its terms;
(c) the Borrower has good and marketable title to all its material
properties, subject only to Liens permitted hereunder, and possesses all
assets, including intellectual
19
-17-
properties, franchises and Consents, adequate for the conduct of its
business as now conducted, without known conflict with any rights of
others. The Borrower maintains insurance with financially responsible
insurers, copies of the policies for which will, upon the Bank's request
therefor, be delivered to the Bank, covering such risks and in such amounts
and with such deductibles as are customary in the Borrower's business and
are adequate;
(d) the Borrower has provided to the Bank its audited Financials as at
December 31, 1999 and for the fiscal period then ended, and such Financials
are complete and correct and fairly present the position of the Borrower
and its Subsidiaries as at such date and for such period in accordance with
GAAP consistently applied. The Borrower has also provided to the Bank its
forecast of the consolidated operations of the Borrower and its
Subsidiaries for the period through December 31, 2001, and such forecast
has been prepared in good faith based upon reasonable assumptions;
(e) since December 31, 1999, there has been no materially adverse
change of any kind in the Borrower or any of its Subsidiaries which would
have a Materially Adverse Effect;
(f) there are no legal or other proceedings or investigations pending
or, to the Borrower's knowledge, threatened against the Borrower or any of
its Subsidiaries before any court, tribunal or regulatory authority which
would, if adversely determined, alone or together, have a Materially
Adverse Effect;
(g) the execution, delivery, performance of its obligations, and
exercise of its rights under the Loan Documents by the Borrower, including
borrowing under this Agreement and the obtaining of Letters of Credit (i)
do not require any Consents; and (ii) are not and will not be in conflict
with or prohibited or prevented by (A) any Requirement of Law, or (B) any
Charter Document, corporate minute or resolution, instrument, agreement or
provision thereof, in each case binding on it or affecting its property;
(h) the Borrower is not in violation of (i) any Charter Document,
corporate minute or resolution, (ii) any instrument or agreement, in each
case binding on it or affecting its property, or (iii) any Requirement of
Law, in any such case in a manner which could have a Materially Adverse
Effect, including, without limitation, all applicable federal and state tax
laws, ERISA and Environmental Laws;
(i) upon execution and delivery of the Security Documents and the
filing of documents thereby required, the Bank shall have first-priority
perfected Liens on the Collateral, subject only to Liens permitted
hereunder and entitled to priority under applicable law, with no financing
statements, chattel mortgages, real estate mortgages or similar filings on
record anywhere which conflict with such first-priority Liens of the Bank;
(j) except for eRoom Technology Europe, Inc., a Massachusetts
corporation and wholly owned Subsidiary of the Borrower, the Borrower has
no Subsidiaries and is not a party to any partnership or joint venture;
(k) the Borrower and its Subsidiaries (i) have made or filed all
federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject,
(ii) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns,
20
-18-
reports and declarations, except those being contested in good faith and by
appropriate proceedings and (iii) have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to
the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the executive officers of the Borrower
know of no basis for any such claim;
(l) no Default or Event of Default has occurred and is continuing;
(m) neither the Borrower nor any of its Subsidiaries is a "holding
company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is it an "investment company", or
an "affiliated company" or a "principal underwriter" of an "investment
company", as such terms are defined in the Investment Company Act of 1940;
(n) except (i) for arm's length transactions pursuant to which the
Borrower or any of its Subsidiaries makes payments in the ordinary course
of business upon terms no less favorable than the Borrower or such
Subsidiary could obtain from third parties and (ii) as otherwise permitted
by ss.9.2(c)(iv), none of the officers, directors, or employees of the
Borrower or any of its Subsidiaries is presently a party to any transaction
with the Borrower or any of its Subsidiaries (other than for services as
employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to
the knowledge of the Borrower, any corporation, partnership, trust or other
entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner;
(o) the proceeds of the Equipment Loan shall be used solely to finance
the purchase of Equipment and Software; the proceeds of the Revolving
Credit Loans will be used solely for working capital purposes, and the
Borrower will obtain the Letters of Credit solely for working capital
purposes, and no portion of the Loans or the Letters of Credit are to be
used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board
of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224;
and
(p) none of this Agreement or any of the other Loan Documents contains
any untrue statement of a material fact or omits to state a material fact
(known to the Borrower or any of its Subsidiaries in the case of any
document or information not furnished by it or any of its Subsidiaries)
necessary in order to make the statements herein or therein in light of the
circumstances in which they were made, not misleading. There is no fact
known to the Borrower or any of its Subsidiaries which materially adversely
affects, or which is reasonably likely in the future to materially
adversely affect, the business, assets or financial condition of the
Borrower or any of its Subsidiaries, exclusive of effects resulting from
changes in general economic, business or industry conditions, legal
standards or regulatory conditions.
8. CONDITIONS PRECEDENT.
In addition to the making of the foregoing representations and warranties
and the delivery of the Loan Documents and such other documents and the taking
of such actions as the Bank may require at or prior to the time of executing
this Agreement, the obligation of the Bank
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to make any Loan (including any Advance) or to issue, renew or extend any Letter
of Credit to the Borrower hereunder is subject to the satisfaction of the
following further conditions precedent:
(a) each of the representations and warranties of the Borrower to the
Bank herein, in any of the other Loan Documents or any documents,
certificate or other paper or notice in connection herewith shall be true
and correct in all material respects as of the time made or claimed to have
been made;
(b) no Default or Event of Default shall be continuing;
(c) all proceedings in connection with the transactions contemplated
hereby shall be in form and substance satisfactory to the Bank, and the
Bank shall have received all information and documents as it may have
reasonably requested;
(d) no change shall have occurred in any law or regulation or in the
interpretation thereof that in the reasonable opinion of the Bank would
make it unlawful for the Bank to make such Loan or to issue, extend or
renew any Letter of Credit;
(e) the Borrower shall have delivered to the Bank (i) certified copies
of the Charter Documents; (ii) evidence that all corporate action necessary
for the valid execution, delivery and performance by the Borrower of the
Loan Documents has been duly and effectively taken; (iii) an incumbency
certificate signed by a duly authorized officer of the Borrower, and giving
the name and bearing a specimen signature of each individual who shall be
authorized to sign, in the name and on behalf of the Borrower, each of the
Loan Documents and to give notices and to take action on the Borrower's
behalf under the Loan Documents; and (iv) a favorable legal opinion
addressed to the Bank in form and substance satisfactory to the Bank from
counsel to the Borrower; and
(f) the Bank shall have received the results of its commercial finance
examination, with such results being in form and substance satisfactory to
the Bank.
9. COVENANTS.
9.1. AFFIRMATIVE COVENANTS. The Borrower agrees that so long as there are
any Loans or Letters of Credit outstanding and until the termination of the
Commitment and until the obligation of the Bank, if any, to make Advances
pursuant to ss.3 hereof shall terminate and the obligation of the Bank, if any,
to issue, renew or extend any Letter of Credit pursuant to ss.4 hereof shall
terminate and the payment and satisfaction in full of all the Obligations, the
Borrower will, and where applicable will cause each of its Subsidiaries to
comply with its obligations as set forth throughout this Agreement and to:
(a) furnish the Bank: (i) as soon as available but in any event within
ninety (90) days after the close of each fiscal year, its audited
Financials for such fiscal year, certified by the Borrower's accountants;
(ii) as soon as available but in any event within forty-five (45) days
after the end of each fiscal quarter its unaudited Financials for such
quarter, certified by its chief financial officer; (iii) as soon as
available but in any event within thirty (30) days after the end of each
fiscal month, its unaudited Financials for such month, certified by its
chief financial officer; (iv) together with the quarterly and monthly
Financials, a certificate of the Borrower setting forth computations
demonstrating compliance with the Borrower's financial covenants set forth
herein, and certifying that no Default or Event of Default has occurred, or
if it has, the actions taken by the Borrower with respect thereto; (v)
within thirty (30) days after the end of each
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calendar month, or at such other time or times as the Bank may request, a
Borrowing Base report, in form and detail satisfactory to the Bank,
demonstrating the Borrowing Base as at the end of such month, together with
an accounts receivable aging report or other applicable date requested;
(vi) within five (5) days of the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower; and (vii) from time
to time such other financial data and information (including accountant's
management letters) as the Bank may reasonably request;
(b) keep true and accurate books of account in accordance with GAAP,
maintain its current fiscal year and permit the Bank or its designated
representatives to inspect the Borrower's premises during normal business
hours, to examine and be advised as to such or other business records upon
the request of the Bank, and to permit the Bank's commercial finance
examiners to conduct periodic commercial finance examinations, all with
prior notice to the Borrower (unless a Default or Event of Default shall
have occurred and be continuing whereupon no such notice shall be
required);
(c) (i) maintain its corporate existence, business and assets, (ii)
keep its business and assets adequately insured, (iii) maintain its chief
executive office in the United States, (iv) continue to engage in the same
lines of business, and (v) comply with all Requirements of Law, including
ERISA and Environmental Laws;
(d) notify the Bank promptly in writing of (i) the occurrence of any
Default or Event of Default, (ii) any noncompliance with ERISA or any
Environmental Law or proceeding in respect thereof which could have a
Materially Adverse Effect, (iii) any change of address, (iv) any material
threatened or pending litigation or similar proceeding affecting the
Borrower or such Subsidiary or any material change in any such litigation
or proceeding previously reported and (v) claims against any assets or
properties of the Borrower or such Subsidiary encumbered in favor of the
Bank;
(e) use the proceeds of the Revolving Credit Loans solely for working
capital purposes, and obtain Letters of Credit solely for working capital
purposes, and use the proceeds of the Equipment Loan solely to finance the
purchase of Equipment and Software, and, in each case, not for the carrying
of "margin security" or "margin stock" within the meaning of Regulations U
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.
Parts 221 and 224; and
(f) cooperate with the Bank, take such action, execute such documents,
and provide such information as the Bank may from time to time request in
order further to effect the transactions contemplated by and the purposes
of the Loan Documents, including without limitation, the delivery at the
Borrower's expense of additional security, appraisals, title insurance,
surveys, or environmental assessments;
(g) maintain all of its primary operating and depository bank accounts
at the Bank;
(h) upon receipt of an affidavit of an officer of the Bank as to the
loss, theft, destruction or mutilation of any Note or any Security
Document, together with an indemnification agreement from the Bank
acceptable to the Borrower, and in the case of any such loss, theft,
destruction or mutilation, upon cancellation of such Note or Security
Document, the Borrower shall issue in lieu thereof, a replacement Note or
Security Document in the principal amount thereof and otherwise of like
tenor;
23
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(i) provide the Bank with evidence in form and substance satisfactory
to the Bank by not later than March 31, 2001 that the Borrower has, by such
date, consummated either the initial public offering of its capital stock
registered under the Securities Act of 1933 or consummated its Series E
equity issuance, in either case receiving net cash proceeds from such
transaction in an aggregate amount of not less than $20,000,000; and
(j) cause each Subsidiary existing on the Closing Date to become a
Guarantor on the Closing Date and the Borrower will cause each Subsidiary
created or acquired after the Closing Date to become a Guarantor promptly
upon becoming a Subsidiary, and Borrower shall cause each such current or
future Subsidiary of Borrower to execute and deliver to the Bank (i) a
guaranty in form and substance satisfactory to Bank, and (ii) such further
Security Documents and other instruments and documents as the Bank may
reasonably require in order to grant to the Bank a first priority perfected
lien on and security interest in all of such Subsidiary's assets, together
with legal opinions in form and substance satisfactory to the Bank to be
delivered to the Bank opining as to the authorization, validity and
enforceability of such Guaranty and Security Documents and (as to the
applicable Security Documents) the perfection of such liens and security
interests.
9.2. NEGATIVE COVENANTS. The Borrower agrees that so long as there are any
Loans or Letters of Credit outstanding and until the termination of the
Commitment and until the obligation of the Bank, if any, to make Advances
pursuant to ss.3 and the obligation of the Bank, if any, to issue, renew or
extend any Letter of Credit pursuant to ss.4 shall terminate and the payment and
satisfaction in full of all the Obligations, the Borrower will not and where
applicable will not permit its Subsidiaries to:
(a) create, incur or assume any Indebtedness other than (i)
Indebtedness to the Bank, (ii) Indebtedness in respect of the acquisition
of property which does not exceed $500,000 in the aggregate at any time,
(iii) endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of
business; and (iv) Indebtedness not included above and listed on SCHEDULE
9.2(a) hereto;
(b) create or incur any Liens on any of the property or assets of the
Borrower or any of its Subsidiaries except (i) Liens in favor of the Bank
securing the Obligations; (ii) Liens securing taxes or other governmental
charges not yet due; (iii) deposits or pledges made in connection with
social security obligations; (iv) Liens of carriers, warehousemen,
mechanics and materialmen, less than 120 days old as to obligations not yet
due; (v) easements, rights-of-way, zoning restrictions and similar minor
Liens which individually and in the aggregate do not have a Materially
Adverse Effect; (vi) purchase money security interests in or purchase money
mortgages on real or personal property securing purchase money Indebtedness
permitted by ss.9.2(a)(ii), covering only the property so acquired; and
(vii) other Liens existing on the date hereof and listed on SCHEDULE 9.2(b)
hereto;
(c) make any Investments other than Investments in (i) marketable
obligations of the United States maturing within one (1) year, (ii)
certificates of deposit, bankers' acceptances and time and demand deposits
of United States banks having total assets in excess of $10,000,000,000,
(iii) such other investments as the Bank may from time to time approve in
writing, (iv) Investments consisting of loans and advances to employees in
the ordinary course of business not to exceed $50,000 in the aggregate at
any time outstanding, (v) Investments in eRoom Technology Europe, Ltd.
existing on the
24
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Closing Date, or (vi) Permitted Acquisitions; PROVIDED, HOWEVER, that in
each such case referred to in this ss.9.2(c) (with the exception of the
loans and advances referred to in ss.9.2(c)(iv) and the Investments made
pursuant to ss.9.2(c)(v)), arrangements have been made to the satisfaction
of the Bank for the perfection and protection and the preservation of the
Bank's Lien therein;
(d) make any Restricted Payments other than (i) repurchases of capital
stock or other securities from terminated or departing employees or
directors, and (ii) repurchases of capital stock or other securities from
employees or directors pursuant to the Borrower's exercise of its rights of
first refusal, in each case if an amount not to exceed $100,000 in the
aggregate during any calendar year;
(e) become party to a merger or sale-leaseback transaction, or to
effect any disposition of assets other than in the ordinary course of
business consistent with past practices, or to purchase, lease or otherwise
acquire assets other than in the ordinary course except for Permitted
Acquisitions; or
(f) enter into any agreement (excluding this Agreement and the other
Loan Documents) prohibiting the creation or assumption of any lien upon its
properties, revenues or assets or those of any of its Subsidiaries, whether
now owned or hereafter acquired other than agreements with Persons
prohibiting nay such lien on assets in which such Person has a security
interest which is permitted by ss.9.2(b).
9.3. FINANCIAL COVENANTS. The Borrower agrees that so long as there are any
Loans or Letters of Credit outstanding and until the termination of the
Commitment and until the obligation of the Bank, if any, to make Advances
pursuant to ss.3 and to issue, extend or renew any Letter of Credit pursuant to
ss.4 shall terminate, and the payment and satisfaction in full of all the
Obligations, the Borrower will not and where applicable will not permit its
Subsidiaries to:
(a) make capital expenditures which in the aggregate and on a
consolidated basis exceed $1,500,000 per annum;
(b) permit either (i) Consolidated Tangible Net Worth at any time to
be less than the sum of (1) $3,000,000 PLUS (2) twenty-five percent (25%)
of the proceeds of any sale by the Borrower or any Subsidiary of (x) equity
securities issued by the Borrower or any Subsidiary after June 30, 2000, or
(y) warrants or subscription rights for equity securities issued by the
Borrower or any Subsidiary after June 30, 2000; or (ii) permit the ratio of
(1) Unrestricted Cash as at any date of determination to (2) Consolidated
Net Income (or Loss) for the period of three consecutive calendar months
most recently ended to be less than 1.00:1.00 at any time; or
(c) permit the ratio of Quick Assets to Consolidated Current
Liabilities to be less than 2.00:1.00 at any time.
10. EVENTS OF DEFAULT; ACCELERATION.
If any of the following events ("Events of Default") shall occur:
(a) the Borrower or any Subsidiary shall fail to pay when due and
payable any principal of the Loans when the same becomes due;
25
-23-
(b) the Borrower shall fail to pay interest on the Loans, any
Reimbursement Obligations not funded by a Revolving Credit Loan pursuant to
ss.2.1(c), or any other sum due under any of the Loan Documents when the
same becomes due and payable;
(c) the Borrower shall fail to perform any term, covenant or agreement
contained in ss.ss.9.1(a), 9.1(d) through (i), 9.2 and 9.3;
(d) the Borrower or any Subsidiary shall fail to perform any other
term, covenant or agreement contained in the Loan Documents within twenty
(20) days after the Bank has given written notice of such failure to the
Borrower;
(e) any representation or warranty of the Borrower or any of its
Subsidiaries in the Loan Documents or in any certificate or notice given in
connection therewith shall have been false or misleading in any material
respect at the time made or deemed to have been made;
(f) the Borrower or any of its Subsidiaries shall be in default (after
any applicable period of grace or cure period) under any agreement or
agreements evidencing Indebtedness owing to the Bank or any affiliates of
the Bank or in excess of $50,000 in aggregate principal amount, or shall
fail to pay such Indebtedness when due, or within any applicable period of
grace;
(g) any of the Loan Documents shall cease to be in full force and
effect,
(h) the Borrower or any of its Subsidiaries (i) shall make an
assignment for the benefit of creditors, (ii) shall be adjudicated bankrupt
or insolvent, (iii) shall seek the appointment of, or be the subject of an
order appointing, a trustee, liquidator or receiver as to all or part of
its assets, (iv) shall commence, approve or consent to, any case or
proceeding under any bankruptcy, reorganization or similar law and, in the
case of an involuntary case or proceeding, such case or proceeding is not
dismissed within sixty (60) days following the commencement thereof, or (v)
shall be the subject of an order for relief in an involuntary case under
federal bankruptcy law;
(i) the Borrower or any of its Subsidiaries shall generally be unable
to pay its debts as they mature;
(j) there shall remain undischarged for more than thirty (30) days any
final judgment or execution action against the Borrower or any of its
Subsidiaries that, together with other outstanding claims and execution
actions against the Borrower and its Subsidiaries exceeds $250,000 in the
aggregate;
(k) at any time after to the initial underwritten public offering of
the Borrower's common stock registered under the Securities Act of 1933
(the "IPO"), any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) other than the
shareholders existing on the Closing Date shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities
and Exchange Commission under said Act) of thirty-five percent (35%) of the
of the outstanding shares of common stock of the Borrower; or, during any
period of twelve consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the Borrower;
THEN, or at any time thereafter:
26
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(1) In the case of any Event of Default under clause (h) or (i), the
Commitment shall automatically terminate and the obligation of the Bank, if
any, to make Advances pursuant to ss.3 hereof or to issue, extend or renew
any Letter of Credit pursuant to ss.4 hereof shall automatically terminate
and the Bank shall be relieved of all further obligations to make Loans or
to issue, renew or extend any Letters of Credit, and the entire unpaid
principal amount of the Loans, all interest accrued and unpaid thereon, all
Unpaid Reimbursement Obligations, and all other amounts payable thereunder
and under the other Loan Documents shall automatically become forthwith due
and payable, without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived by the Borrower, and the Bank may
require that cash be delivered to the Bank in the amount of the Maximum
Drawing Amount to be held by the Bank as cash collateral for all
Reimbursement Obligations; and
(2) In the case of any Event of Default other than (h) and (i), the
Bank may, by written notice to the Borrower during the continuation of such
Event of Default, terminate the Commitment and/or its obligation, if any,
to make Advances pursuant to ss.3 hereof and/or its obligation, if any, to
issue, extend or renew any Letter of Credit pursuant to ss.4 hereof and/or
declare the unpaid principal amount of the Loans, all interest accrued and
unpaid thereon, all Unpaid Reimbursement Obligations, and all other amounts
payable hereunder and under the other Loan Documents to be forthwith due
and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower, and the
Bank may require that cash be delivered to the Bank in the amount of the
Maximum Drawing Amount to be held by the Bank as cash collateral for all
Reimbursement Obligations.
No remedy herein conferred upon the Bank is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and in addition to
every other remedy hereunder, now or hereafter existing at law or in equity or
otherwise.
11. SETOFF.
Regardless of the adequacy of any collateral for the Obligations, any
deposits or other sums credited by or due from the Bank to the Borrower may be
applied to or set off against any principal, interest and any other amounts then
due from the Borrower to the Bank at any time without notice to the Borrower, or
compliance with any other procedure imposed by statute or otherwise, all of
which are hereby expressly waived by the Borrower.
12. USURY.
All agreements between the Borrower and the Bank are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of the maturity of the Note or otherwise, shall the amount paid or
agreed to be paid to the Bank for the use or the forbearance of the Indebtedness
represented by the Notes exceed the maximum permissible under applicable law. In
this regard, it is expressly agreed that it is the intent of the Borrower and
the Bank, in the execution, delivery and acceptance of the Notes, to contract in
strict compliance with the laws of the Commonwealth of Massachusetts. If, under
any circumstances whatsoever, performance or fulfillment of any provision of the
Notes or any of the other Loan Documents at the time such provision is to be
performed or fulfilled shall involve exceeding the limit of validity prescribed
by applicable law, then the obligation so to be performed or fulfilled shall be
reduced automatically to the limits of such validity, and if under any
circumstances whatsoever the Bank should ever receive as interest an amount
which would exceed the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the
27
-25-
principal balance evidenced by the Notes and not to the payment of interest. The
provisions of this ss.12 shall control every other provision of this Agreement
and the Notes.
13. MISCELLANEOUS.
The Borrower agrees to indemnify and hold harmless the Bank and its
officers, employees, affiliates, agents, and controlling persons from and
against all claims, damages, liabilities and losses of every kind arising out of
the Loan Documents, including without limitation, against those in respect of
the application of Environmental Laws to the Borrower and its Subsidiaries
absent the gross negligence or willful misconduct of the Bank. The Borrower
shall pay to the Bank promptly on demand all reasonable costs and expenses
(including any taxes and reasonable legal and other professional fees and fees
of its commercial finance examiner) incurred by the Bank in connection with the
preparation, negotiation, execution, amendment, administration or enforcement of
any of the Loan Documents. Any communication to be made hereunder shall (a) be
made in writing, but unless otherwise stated, may be made by telex, facsimile
transmission or letter, and (b) be made or delivered to the address of the party
receiving notice which is identified with its signature below (unless such party
has by five (5) days written notice specified another address), and shall be
deemed made or delivered, when dispatched, left at that address, or five (5)
days after being mailed, postage prepaid, to such address. This Agreement shall
be binding upon and inure to the benefit of each party hereto and its successors
and assigns, but the Borrower may not assign its rights or obligations
hereunder. The Bank may assign all or any portion of its rights and obligations
hereunder to any Person, and may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of the
Notes) to any of the twelve Federal Reserve Banks organized under ss.4 of the
Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement thereof
shall release the Bank from its obligations hereunder or under any of the other
Loan Documents. This Agreement may not be amended or waived except by a written
instrument signed by the Borrower and the Bank, and any such amendment or waiver
shall be effective only for the specific purpose given. No failure or delay by
the Bank to exercise any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other right, power or privilege. The provisions of this Agreement are
severable and if any one provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, such invalidity or unenforceability
shall affect only such provision in such jurisdiction. This Agreement, together
with all Schedules hereto, expresses the entire understanding of the parties
with respect to the transactions contemplated hereby. This Agreement and any
amendment hereby may be executed in several counterparts, each of which shall be
an original, and all of which shall constitute one agreement. In proving this
Agreement, it shall not be necessary to produce more than one such counterpart
executed by the party to be charged. THIS AGREEMENT AND THE NOTES ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL BE CONSTRUED IN
ACCORDANCE THEREWITH AND GOVERNED THEREBY. THE BORROWER AGREES THAT ANY SUIT FOR
THE ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN. The
Borrower, as an inducement to the Bank to enter into this Agreement, hereby
waives its right to a jury trial with respect to any action arising in
connection with any Loan Document.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first above written.
EROOM TECHNOLOGY, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and CFO
Address:
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxx, Vice President
Address:
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
