SENIOR SUBORDINATED SECURED BRIDGE NOTE PURCHASE AGREEMENT
EXHIBIT
10.37
SENIOR
SUBORDINATED SECURED BRIDGE NOTE PURCHASE AGREEMENT
This
Senior Subordinated Secured Bridge Note Purchase Agreement, dated as of
September 1, 2005 (the “Agreement”),
by
and among Axeda Systems Inc., a Delaware corporation (the “Company”),
Axeda
Systems Operating Company, Inc., a Massachusetts corporation and an indirect
wholly owned subsidiary of the Company (“ASOC”),
and
Axeda IP, Inc., a Nevada corporation and an indirect wholly owned subsidiary
of
the Company (“AIP”
and,
together with ASOC, the “Guarantors”),
and
the persons listed on Schedule
1
hereto
(the “Purchasers”):
WITNESSETH:
WHEREAS,
pursuant to the terms of the Senior Secured Bridge Note Purchase Agreement,
dated as of July 8, 2005 and as amended from time to time, among the Company,
the Guarantors and the Purchasers (the “Senior
Bridge Agreement”),
the
Purchasers made senior secured loans to, and received promissory notes
representing an aggregate principal amount of $600,000 (the “Senior
Bridge Notes”)
from,
the Company (the “Senior
Bridge Debt”);
WHEREAS,
the Company, ASOC and AIP (“Sellers”)
and
ASOC Acquisition Corp., an affiliate of the Purchasers (“Buyer”),
entered into the Asset Purchase Agreement dated as of the date hereof (as it
may
be amended from time to time, the “Asset
Purchase Agreement”),
pursuant to which the Buyer has agreed to purchase substantially all of the
assets of Sellers’ device relationship management software and applications
business subject to the terms and conditions set forth in the Asset Purchase
Agreement; and
WHEREAS,
in connection with the execution of the Asset Purchase Agreement, the Purchasers
have agreed to make senior subordinated secured loans of up to an aggregate
principal amount of $900,000 to the Company and the Guarantors, upon the terms
and subject to the conditions set forth herein;
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. The
Notes and the Guaranty.
(a) The
Company has authorized the issuance and sale, in accordance with the terms
hereof, of the Company’s 7% Senior Subordinated Secured Bridge Notes in the
original aggregate principal amount of up to $900,000 (each individually, a
“Note”
and
collectively, the “Notes”).
Each
Note will be substantially in the form set forth in Exhibit A
hereto.
(b) The
Company’s obligations under the Notes shall be guarantied by the Guarantors. The
Guarantors shall execute and deliver to the Purchasers the Amended and Restated
Subsidiary Guaranty (the “Guaranty”)
in
substantially the form set forth in Exhibit B
hereto.
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2. Purchase
and Sale of Notes.
At the
Closing (as defined below), the Company shall issue and sell to the Purchasers,
and, subject to and in reliance upon the representations, warranties, terms
and
conditions contained herein, each Purchaser, severally and not jointly, shall
purchase from the Company, a Note in up to the aggregate principal amount set
forth opposite such Purchaser’s name on Schedule 1
hereto
under the heading “Maximum
Principal Amount.”
Subject to the terms and conditions hereof, the Maximum Principal Amount for
each Purchaser shall be payable in separate installments by each Purchaser
in
the amounts set forth opposite such Purchaser’s name on Schedule
1
hereto
under the headings “First
Installment Amount”
and
“Subsequent
Installment Amount,”
respectively (collectively for each Purchaser, the “Installment
Amounts”).
The
Installment Amounts shall be payable in accordance with the terms of Sections
3
and 4 hereof.
3. Closing.
(a) The
consummation of the purchase and sale of the Notes (the “Closing”)
shall
be held at 10:00 a.m. on September 1, 2005 (the “Closing
Date”),
or
such other date and time as shall be mutually agreed upon. At the Closing,
(i)
the Company shall issue the Notes, dated as of the Closing Date, payable to
the
order of each Purchaser in the aggregate principal amount set forth opposite
such Purchaser’s name on Schedule
1
hereto
under the heading “Maximum
Principal Amount,”
and
(ii) the Guarantors shall execute and deliver to the Purchasers the Guaranty.
Promptly following the Closing (but in any event within five (5) days following
the Closing), in exchange for the issuance of the Notes and the Guaranty, each
Purchaser shall deliver to the Company, by way of wire transfer of immediately
available United States funds, the amount set forth opposite such Purchaser’s
name on Schedule
1
hereto
under the heading “First
Installment Amount”
(the
“First
Installment”).
(b) The
obligations of the Purchasers to purchase the Notes and pay the First
Installment Amount at the Closing are subject to the following
conditions:
(i) The
representations and warranties of the Company set forth in this Agreement,
the
Security Agreement (defined below) and in the Asset Purchase Agreement shall
be
true and correct on and as of the date hereof and on and as of the Closing
Date
with the same effect as though such representations and warranties had been
made
on and as of such date, and the President of the Company shall have certified
to
the Purchasers in writing to such effect;
(ii) The
Company shall have performed and complied with all agreements contained in
this
Agreement and the other Bridge Loan Documents (defined below) required to be
performed or complied with by it prior to or at the date of such Closing, and
the President of the Company shall have certified to the Purchasers in writing
to such effect;
(iii) The
Company and the Guarantors shall have duly executed and delivered to the
Purchasers an Amended and Restated Security Agreement substantially in the
form
attached as Exhibit C
(the
“Security
Agreement”);
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(iv) The
Guarantors shall have duly executed and delivered to the Purchasers the
Guaranty;
(v) The
Purchasers shall have received evidence in form and substance reasonably
satisfactory to them that all filings, recordings and registrations, including,
without limitation, the filing of duly executed financing statements on form
UCC-1 and the requisite filings with the U.S. Patent & Trademark Office,
necessary or desirable to perfect the liens created by the Security Agreement
shall have been completed;
(vi) The
Company shall have obtained and delivered to the Purchasers, in form
satisfactory to the Purchasers, all necessary consents of governmental agencies
and third parties (including Laurus Master Fund, Ltd. (“Laurus”))
to
permit the Company to enter into and perform its obligations under this
Agreement, the other Bridge Loan Documents and the Asset Purchase Agreement;
(vii) All
corporate and other proceedings to be taken by the Company in connection with
the transactions contemplated hereby and all documents incident thereto shall
be
satisfactory in form and substance to the Purchasers, and the Purchasers shall
have received all such counterpart originals or certified or other copies of
such documents as they reasonably may request;
(viii) The
Company and Laurus shall have duly executed and delivered to the Purchasers
an
Amended and Restated Subordination Agreement substantially in the form attached
as Exhibit D
(the
“Subordination
Agreement”);
and
(ix) The
Company and the Guarantors shall have (A) duly executed and delivered
to
the Buyer the Asset Purchase Agreement and (B) delivered to the Buyer
the
Voting Agreements (as defined in the Asset Purchase Agreement) (the Asset
Purchase Agreement and the Voting Agreement collectively, the “Acquisition
Documents”)
duly
executed and delivered by the parties thereto other than the Buyer.
For
purposes of this Agreement, “Bridge
Loan Documents”
shall
mean this Agreement, the Notes, the Senior Bridge Agreement, the Senior Bridge
Notes, the Security Agreement, the Guaranty, the Subordination Agreement and
that certain Grant of Security Interest in Patents and Trademarks, dated as
of
July 8, 2005 (the “P&T
Security Agreement”),
in
each case as may be amended from time to time.
4. Subsequent
Installments.
(a) Each
of
the Purchasers shall, subject to the terms and conditions hereof, make one
or
more additional advances to the Company in the aggregate amount up to (and
not
to exceed) the amount set forth opposite such Purchaser’s name on Schedule
1
hereto
under the heading “Subsequent
Installment Amount,”
in one
or more fundings from time to time from the Closing Date through the business
day immediately preceding the Maturity Date (as defined below) (each such
advance, a “Subsequent
Installment”
and,
collectively, the “Subsequent
Installments”).
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(b) If
the
Company desires the Purchasers to make a Subsequent Installment, it shall
deliver a written request to the Purchasers, which request shall specify the
amount of such Subsequent Installment (which shall be in minimum increments
of
no less than $100,000), the intended use of such Subsequent Installment funds
and shall certify that the none of the events specified in clauses (i) through
(iv) in Section 4(c) below shall have occurred (the “Funding
Request Notice”);
provided,
however,
that in
no
event shall the Company make a request for a Subsequent Installment sooner
than
fifteen (15) days following the funding of the most recent First Installment
or
any Subsequent Installment, as the case may be.
(c) No
Purchaser shall be obligated to fund any Subsequent Installment if any of the
following shall have occurred: (i) any representation or warranty by the Company
contained in the Bridge Loan Documents or in the Acquisition Documents shall
be
untrue or incorrect in any way on the date of such Subsequent Installment;
(ii)
the Company has not performed or has otherwise breached the covenants set forth
in the Acquisition Documents required to be performed on or before the date
of
such Subsequent Installment; (iii) any breach or default (including an Event
of
Default (defined below)) shall have occurred and be continuing under this
Agreement or any of the Bridge Loan Documents, or (iv) the Company shall
have received any proposal or expression of interest relating to an Acquisition
Proposal (as defined in the Asset Purchase Agreement) which Acquisition Proposal
has not been rejected by the Company within five (5) business days of receipt
(or prior to delivery of the Funding Request Notice (if earlier)).
(d) Subject
to the satisfaction of the conditions contained in this Section 4, the funding
of any Subsequent Installment shall occur within five business days after the
receipt of the applicable Funding Request Notice by delivery by Purchasers
to
the Company via wire transfer of immediately available United States funds,
the
amount listed in the Funding Request Notice delivered to such Purchaser. All
Installment Amounts and all payments of principal and interest under each Note
(or any portion, installment or drawdown thereon) shall be recorded by the
applicable Purchaser and endorsed on the grid which is part of such Purchaser’s
Note. The entries on the grid which is part of such Note shall be prima
facie
evidence
of amounts outstanding thereunder. The failure to make any such endorsement
or
any error in any such endorsement shall not affect the obligations of the
Company or the Guarantors in respect of the First Installment or any Subsequent
Installment. In no event shall the aggregate amount of all Subsequent
Installments advanced by any Purchaser exceed the amount set forth opposite
such
Purchaser’s name on Schedule
1
hereto
under the heading “Subsequent
Installment Amount.”
On or
before the date of any Subsequent Installment, the Company shall deliver to
the
Purchasers such documents as may be requested by them.
5. Terms
of the Notes.
(a) Maturity.
The
aggregate principal amount of the Notes, together with all accrued interest
thereon, shall be due and payable in full (without notice, demand or
presentment) on the earliest to occur of the following (the earliest of such
events, the “Maturity
Date”):
(i)
the date on which the Asset Purchase Agreement shall have been terminated (the
payment in full of the Notes shall be a condition precedent to such termination
of the Asset Purchase Agreement); (ii) the date on which the Company or any
of
its subsidiaries or affiliates enters into a letter of intent, written
understanding or definitive agreement relating to an Acquisition Proposal or
the
Company otherwise takes any action adverse to the transactions contemplated
under the Asset Purchase Agreement; (iii) the date on which the Asset
Sale
(as defined in the Asset Purchase Agreement) is consummated; (iv) the
occurrence of an Event of Default (as defined below) and (v) December 15,
2005.
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(b) Interest.
The
aggregate principal amount of the Notes, from time to time outstanding, shall
bear interest at a rate per annum equal to seven percent (7%). All accrued
interest on the Notes shall be due and payable on the Maturity Date. All
interest shall be computed for the actual number of days elapsed on the basis
of
a 360-day year and shall compound annually. From and after the occurrence of
an
Event of Default, the unpaid principal balance of the Notes and, to the extent
permitted by law, the overdue interest thereon, shall bear interest at a rate
per annum equal to ten percent (10%).
(c) Payment;
Usury.
(i) All
payments by the Company under this Agreement shall be made in United States
dollars without set-off or counterclaim and be free and clear and without any
deduction or withholding for any taxes or fees of any nature whatever, unless
the obligation to make such deduction or withholding is imposed by law. The
Company, to the extent permitted by applicable law, waives presentment for
payment, protest and demand, and notice of protest, demand and/or dishonor
and
nonpayment of the Notes, notice of any Event of Default, and all other notices
or demands otherwise required by law that the Company may lawfully waive. If
any
day on which a payment is due pursuant to the terms of this Note is not a day
on
which banks in the Commonwealth of Massachusetts are generally open (a
“Business
Day”),
such
payment shall be due on the next Business Day following, and such extension
of
time shall in such case be included in the computation of payment of interest
due.
(ii) For
so
long as any of the Notes remain outstanding, the Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of
any
stay, extension or usury law wherever enacted, now or at any time hereafter
in
force, which may affect the covenants or the performance of this Agreement;
and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Purchasers, but will suffer and permit the execution
of
every such power as though no such law has been enacted.
(iii) Notwithstanding
anything herein or in the Notes which may be to the contrary, in no event,
contingency, or circumstances whatsoever shall the interest or any amount deemed
to be interest payable by the Company hereunder with respect to the Notes exceed
the maximum amount permitted by applicable law and, to the extent that any
payments in excess of such permitted amount are finally determined to have
been
received by the Purchasers, such excess shall be considered payments in respect
of the principal of the Notes and, if the principal of the Notes has been paid
in full, shall be refunded to the Company.
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(d) Security.
The
Notes shall be secured by and entitled to the benefits of the Security Agreement
and the P&T Security Agreement.
6. Use
of
Proceeds.
The
Company shall use, and shall cause it subsidiaries (including the Guarantors)
to
use, the proceeds from the sale of the Notes first to pay the accounts payable,
operating expenses and other liabilities directly attributable to the operation
of the Business (as defined in the Asset Purchase Agreement) and thereafter
to
pay such other expenses and liabilities of the Company and the Guarantors
incurred or as may be incurred in the ordinary course of business; provided,
that
the Company and the Guarantors shall, and shall cause their respective
subsidiaries to, use a portion of the proceeds to retain the services of
employees and consultants involved in the Business to assure that the Business
has sufficient personnel to continue operating in the ordinary course consistent
with historical practice. If requested, the Company shall promptly provide
the
Purchasers with an accounting detailing the use of proceeds from the Senior
Bridge Notes and the Notes.
7. Priority.
The
Notes shall be subordinate only to the Senior Bridge Debt and shall be
pari
passu
with the
Laurus Debt (defined below) pursuant to the Subordination Agreement. The Notes
are senior in all other respects (including the right of payment) to all other
indebtedness of the Company and the Guarantors, now existing or hereafter
incurred. All other indebtedness for borrowed money of the Company or the
Guarantors, now existing or hereafter incurred, shall be unsecured (other than
the Senior Bridge Debt and the Laurus Debt) and shall be subordinated to the
Notes.
8. No
Prepayment.
The
Notes may not be prepaid by the Company.
9. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Purchasers that as of the Closing
Date and the date of each Subsequent Installment (a “Subsequent
Installment Date”):
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the state
of
its incorporation. Each of the Company and the Guarantors is duly licensed
or
qualified to transact business as a foreign corporation and is in good standing
in each jurisdiction in which the nature of the business transacted by it or
the
character of the properties owned or leased by it requires such licensing or
qualification.
(b) The
Bridge Loan Documents have been duly authorized, executed and delivered by
each
of the Company and the Guarantors (to the extent a party thereto) and constitute
the legal, valid and binding obligations of the Company and the Guarantors
(to
the extent a party thereto), enforceable in accordance with their respective
terms.
-6-
(c) Neither
the execution and delivery of the Bridge Loan Documents nor the performance
thereof has constituted or resulted in, nor will constitute or result in, a
default or violation in any respect of any law or regulation applicable to
the
Company or the Guarantors or any term or provision of the organizational
documents (including charter and by-laws) of the Company or the Guarantors,
or
any agreement or instrument by which either the Company or the Guarantors is
bound or to which their properties or assets are subject.
(d) No
authorization, consent, approval, license, exemption of, or filing or
registration with, any court or governmental department, commission, board,
bureau, agency or instrumentality, is or will be necessary for, or in connection
with, the offer, issuance, sale, execution or delivery by the Company or the
Guarantors of, or for the performance by the Company and the Guarantors of
their
obligations under, the Bridge Loan Documents.
(e) There
is
no litigation or governmental proceeding or investigation pending or, to the
knowledge of the Company, threatened against the Company or the Guarantors
or
affecting any of their properties or assets, nor has there occurred any event
or
does there exist any condition on the basis of which any litigation, proceeding
or investigation might properly be instituted, that would prevent, restrict
or
impair the transactions contemplated by the Bridge Loan Documents or the
performance by the Company and the Guarantors of their obligations under the
Bridge Loan Documents.
(f) No
person
has or will have, as a result of the transactions contemplated by this Bridge
Loan Documents, any right, interest or valid claim against or upon the Company
for any commission, fee or other compensation as a finder or broker because
of
any act or omission by the Company or any agent of the Company.
(g) Other
than indebtedness for borrowed money of the Company payable to Laurus pursuant
to that certain Securities Purchase Agreement, dated as of October 4, 2004,
between the Company and Laurus (the “Laurus
Debt”)
and
the Senior Bridge Debt, there is no other indebtedness for borrowed money of
the
Company or the Guarantors.
10. Covenants
of the Company.
Each of
the Company and the Guarantors hereby covenants and agrees that, as long as
any
of the Notes are outstanding, it will not, and will cause each of its direct
and
indirect subsidiaries (if any) not to:
(a)
(i) Incur
any additional
indebtedness or (ii) repay any outstanding indebtedness for borrowed money
other
than cash payments on the Senior Bridge Debt, pro rata payment on the Laurus
Debt in accordance with Section 5 of the Subordination Agreement or payments
on
the Laurus Debt in the form of equity permitted under Section 3 of the
Subordination Agreement;
(b) Create,
incur, assume or suffer to exist, or permit any subsidiary to create, incur,
assume or suffer to exist, any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance (including the lien or retained security
title of a conditional vendor) of any nature, upon or with respect to any of
its
properties, now owned or hereinafter acquired, or assign or otherwise convey
any
right to receive income, except that the foregoing restrictions shall not apply
to liens, security interests or other charges or encumbrances (i) granted to
the
Purchasers pursuant to the Notes, (ii) granted in connection with the incurrence
of the Senior Bridge Debt or the Laurus Debt, (iii) for taxes, assessments
or
governmental charges or levies on property of the Company or any subsidiary
if
the same shall not at the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by appropriate proceedings
or
(iv) imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and
other similar liens arising in the ordinary course of business;
-7-
(c) Merge
or
consolidate with, or sell, assign, lease or otherwise dispose of or voluntarily
part with the control of (whether in one transaction or in a series of
transactions) any portion of its assets associated with the Business (whether
now owned or hereinafter acquired) or sell, assign or otherwise dispose of
(whether in one transaction or in a series of transactions) any of its accounts
receivable associated with the Business (whether now in existence or hereinafter
created), to, any person, or permit any subsidiary to do any of the foregoing
(other than pursuant to the Asset Purchase Agreement);
(d) Declare
or pay any dividends, purchase, redeem, retire, or otherwise acquire for value
any of its capital stock (or rights, options or warrants to purchase such
shares) now or hereafter outstanding, return any capital to its stockholders
as
such, or make any distribution of assets to its stockholders as such, or permit
any subsidiary to do any of the foregoing;
(e) Enter
into any transaction with any holder of 5% or more of any class of capital
stock
of the Company, or any member of their families or any corporation or other
entity in which any one or more of such stockholders or members of their
immediate families directly or indirectly holds five percent (5%) or more of
any
class of capital stock except in the ordinary course of business and on terms
not less favorable to the Company or the subsidiary than it would obtain in
a
transaction between unrelated parties; or
(f) Amend
or
modify any of the terms of any of the agreements or instruments relating to
any
indebtedness for money borrowed, except the Senior Bridge Debt; provided,
however,
that
the terms of the agreements and instruments relating to the Laurus Debt may
be
amended and modified solely in accordance with Section 6(c) of the Subordination
Agreement.
11. Event
of Default.
If,
while any part of the principal of or interest on the Notes remains unpaid,
any
one of the following “Events
of Default”
shall
occur:
(a) the
failure by the Company to pay the principal of or interest and expenses on
the
Notes when such payment is due;
(b) the
Company’s breach of its obligations under any of the Bridge Loan Documents or
the Acquisition Documents;
(c) the
Company shall (i) have a receiver, trustee or liquidator appointed for it or
for
all or a substantial part of its assets; (ii) from this date forward, admit
in
writing to its inability to pay its debts as they mature; (iii) make a general
assignment for the benefit of creditors; (iv) be adjudicated bankrupt or
insolvent; (v) file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with creditors to take advantage
of any insolvency law; (vi) file any answer admitting the material allegations
of a petition filed against it in any bankruptcy, reorganization or insolvency
proceeding or fail to dismiss such petition within sixty (60) days after the
filing thereof; or (vii) take any action for the purpose of effecting any of
the
foregoing;
-8-
(d) a
payment
default by the Company with respect to indebtedness that results in the
acceleration of such indebtedness;
(e) any
representation or warranty made by the Company in any of the Bridge Loan
Documents or the Acquisition Documents or in any certificate, instrument or
written statement contemplated by or made or delivered pursuant to or in
connection with the Bridge Loan Documents or the Acquisition Documents, shall
prove to have been incorrect when made in any material respect;
(f) except
as
set forth in Section 11(a), the failure by the Company to observe and perform
any material covenant, condition and agreement under any of the Bridge Loan
Documents or the Acquisition Documents which failure is not cured within fifteen
(15) days after written notice from any Purchaser or discovery by the Company;
or
(g) an
order,
judgment or decree shall be entered by any court of competent jurisdiction,
approving a petition seeking reorganization or liquidation of the Company,
or
appointing a receiver, trustee or liquidator of the Company of all or a
substantial part of its assets, which such order, judgment or decree has not
been effectively stayed within fifteen (15) days after entry;
then
and
in every such event, any Purchaser may, without notice to the Company, declare
the Notes to be forthwith due and payable, whereupon the Notes shall forthwith
become due and payable without presentment, demand, protest or further notice
of
any kind, all of which are expressly waived by the Company; provided,
however,
that
upon the happening of any event under subsections (c) or (g) of this Section
11,
then the Notes shall, without the taking of any action by the Purchasers,
immediately become due and payable.
12. Amendments,
Waivers, Etc.
Any
provision in this Agreement and the Notes to the contrary notwithstanding,
changes in or additions to this Agreement or the Notes may be made, and
compliance with any covenant or provision herein or therein set forth may be
omitted or waived, if the Company shall obtain consent thereto in writing from
the holder or holders of at least a majority in principal amount of all Notes
then outstanding.
13. Choice
of Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the Commonwealth of Massachusetts, without giving effect to the principles
of
conflicts of law thereof.
14. Expenses.
Any
expense incurred by the Purchasers (including, without limitation, reasonable
attorneys’ fees and disbursements) in connection with the exercise of any right
or remedy upon the occurrence of an Event of Default, or the enforcement of
any
rights under any of the Bridge Loan Documents, including costs of collection
and
reasonable attorneys’ fees and expenses, shall be paid by the Company within
five days of receiving written notice thereof from a Purchaser.
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15. Notices.
All
notices, requests, demands and other communications provided for hereunder
shall
be in writing (including telecopy communication) and telecopied or delivered:
If
to a
Purchaser, at the address set forth in the signature pages hereto or at such
other address as to which such Purchaser may inform the other parties in writing
in compliance with the terms of this Section 15, with a copy to Xxxxxxx
Procter LLP, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attn: Xxxx
X.
Xxxxxxx, Fax. No.: (000) 000-0000.
If
to the
Company or the Guarantors, at 00 Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000,
Fax No. (000) 000-0000 or at such other address as shall be designated by the
Company in a written notice to the other parties complying as to delivery with
the terms of this Section 15, with a copy to Arent Fox PLLC, 0000 Xxxxxxxx,
Xxx Xxxx, XX 00000-0000, Attn: Xxxxxx X. Xxxxxx, Fax No. (000)
000-0000.
All
such
notices, requests, demands and other communications shall be in writing and
shall be deemed to have been given (i) on the date of delivery, if personally
delivered or telecopied to the party to whom notice is to be given, (ii) upon
confirmed receipt after being deposited with a nationally recognized overnight
delivery service for next business day delivery or (iii) on the third Business
Day after mailing, if mailed to the party to whom notice is to be given, by
certified mail, return receipt requested, postage prepaid, and addressed to
the
addressee at the address of the addressee set forth herein, or to the most
recent address, specified by written notice, given to the sender pursuant to
this paragraph.
16. Waiver
of Jury Trial.
THE
COMPANY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION
OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS
OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
EXCEPT AS PROHIBITED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT WHICH IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE
ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE COMPANY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE PURCHASERS HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE PURCHASERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO
ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE PURCHASERS HAVE
BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED HEREIN.
17. Prior
Agreements; Survivability.
This
Agreement, together with the other Bridge Loan Documents and the Acquisition
Documents, constitute the entire agreement between the parties and supercedes
any other prior understandings or agreements concerning the subject matter
hereof. All representations and warranties made in this Agreement and the Bridge
Loan Documents or any other instrument or document delivered in connection
herewith or therewith, shall survive the execution and delivery hereof or
thereof.
-10-
18. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns. This Agreement, and the
rights and obligations of each Purchaser hereunder, may be assigned by such
Purchaser to any person or entity to which the Notes are transferred by such
Purchaser, and such transferee shall be deemed a “Purchaser” for purposes of
this Agreement; provided that the transferee provides written notice of such
assignment to the Company. The Company may not assign its rights under this
Agreement.
19. Counterparts.
This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, with the same effect as if all parties had
signed the same document. All such counterparts shall be deemed an original,
shall be construed together and shall constitute one and the same instrument.
This Agreement shall become effective when each party hereto shall have received
a counterpart, or facsimile of a counterpart, of this Agreement, signed by
the
other parties hereto.
20. No
Waiver; Cumulative Remedies.
No
failure or delay on the part of any of the Purchasers, or any other holder
of
the Notes in exercising any right, power or remedy hereunder shall operate
as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. The remedies herein provided
are
cumulative and not exclusive of any remedies provided by law.
21. Severability.
The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.
22. Further
Assurances.
From
and after the date of this Agreement, upon the request of a Purchaser, the
Company and the Guarantors each shall execute and deliver such instruments,
documents and other writings as may be necessary or desirable to confirm and
carry out and to effectuate fully the intent and purposes of this Agreement
and
the other Bridge Loan Documents.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-11-
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
COMPANY:
By:
/s/
Xxxxxx X. Xxxxxxx Xx.
Name:
Xxxxxx X. Xxxxxxx Xx.
Title:
Chief Executive Officer
GUARANTORS:
AXEDA
SYSTEMS OPERATING COMPANY, INC.
By:
/s/
Xxxxx
X. Xxxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxxx
Title:
Chief Financial Officer
AXEDA
IP,
INC.
By:
/s/
Xxxx
Xxxxxxx
Name:
Xxxx Xxxxxxx
Title:
Secretary
-12-
PURCHASERS:
JMI
EQUITY
FUND V, L.P.
By:
JMI
Associates V, L.L.C.
its
General Partner
By:
/s/
Xxxxxxxx X. Xxxxxxx
Name:
Xxxxxxxx X. Xxxxxxx
Title:
Managing Member
Address:
0000
Xx.
Xxxx Xxxxxx
Xxxxxxxxx,
XX 00000
JMI
EQUITY
FUND V (AI), L.P.
By:
JMI
Associates V, L.L.C.
its
General Partner
By:
/s/
Xxxxxxxx X. Xxxxxxx
Name:
Xxxxxxxx X. Xxxxxxx
Title:
Managing Member
Address:
0000
Xx.
Xxxx Xxxxxx
Xxxxxxxxx,
XX 00000
-13-
Schedule
1
|
Name
of Purchaser
|
Maximum
Principal Amount
|
First
Installment Amount
|
Subsequent
Installment
Amount
|
|||||||
|
JMI
Equity Fund
V,
L.P
|
$
|
850,726.50
|
$
|
850,726.50
|
--
|
|||||
|
JMI
Equity Fund
V
(AI), L.P
|
49,273.50
|
49,273.50
|
--
|
|||||||
|
Total:
|
$
|
900,000.00
|
$
|
900,000.00
|
--
|
|||||
EXHIBIT
A
THIS
NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
NOTE UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
7%
SENIOR
SUBORDINATED SECURED BRIDGE NOTE
[$______] September
1, 2005
FOR
VALUE
RECEIVED, Axeda Systems, Inc., a Delaware corporation, with its principal
executive offices located at 00 Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000
(“Company”),
hereby promises to pay to the order of [___________] (“Holder”),
at
[______________] or at such other place as may be designated from time to time
in writing by Holder, up to a maximum principal amount of _______ Dollars
($____) or, if less, the aggregate unpaid principal amount of the loans advanced
by the Holder pursuant to the terms of the Senior Subordinated Secured Bridge
Note Purchase Agreement, dated as of September 1, 2005, among the Company,
Axeda Systems Operating Company, Inc., a Massachusetts corporation and an
indirect wholly owned subsidiary of the Company and Axeda IP, Inc., a Nevada
corporation and an indirect wholly owned subsidiary of the Company
(collectively, the “Guarantors”),
and
the purchasers named therein (as may be amended, restated or modified from
time
to time, the “Agreement”),
on
the dates and terms set forth in the Agreement, together with interest thereon
on the dates and at the rates set forth in the Agreement. All payments received
by Holder hereunder will be applied first to costs of collection, if any, then
to interest and the balance to principal. All principal and interest outstanding
on this Note shall be payable in lawful money of the United States of
America.
This
7%
Senior Subordinated Secured Bridge Note is one of a duly authorized series
of 7%
Senior Subordinated Secured Bridge Notes (each, a “Note,”
and
collectively, the “Notes”)
with
an original aggregate principal amount of up to $900,000 issued pursuant to,
and
entitled to the benefits of, the Agreement, which Agreement sets forth certain
terms and conditions of, and certain rights, limitations, duties and obligations
relating to, the Notes. In the event any term of this Note conflicts with the
terms of the Agreement, the terms of the Agreement shall govern. Capitalized
terms used herein but not otherwise defined herein have the meanings given
to
them in the Agreement. This Note is entitled to the benefits of the Guaranty,
the Security Agreement and the Subordination Agreement.
The
Notes
will be senior in all respects (including the right of payment) to all other
indebtedness of the Company, now existing or hereafter incurred; provided,
however,
that
the Notes will be subordinate to the Senior Bridge Debt and pari
passu
with the
Laurus Debt.
The
Holder is authorized to endorse on the schedules annexed hereto and made a
part
hereof the date and amount of the First Installment and each Subsequent
Installment made pursuant to the Agreement and the date and amount of each
payment or prepayment (if permitted) of principal or interest thereon. Each
such
endorsement shall constitute prima
facie
evidence
of the accuracy of the information endorsed. The failure to make any such
endorsement or any error in any such endorsement shall not affect the
obligations of the Company in respect of the First Installment or any Subsequent
Installment.
If
this
Note is not paid in accordance with its terms, Company shall pay to Holder,
in
addition to principal and accrued interest thereon, all costs of collection
of
the principal and accrued interest, including, but not limited to, reasonable
attorneys’ fees, court costs and other costs for the enforcement of payment of
this Note.
This
Note
is delivered in and shall be enforceable in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to the principles of
conflicts of laws thereof, and shall be construed in accordance therewith,
and
shall have the effect of a sealed instrument.
The
Company hereby expressly waives presentment, demand, and protest, notice of
demand, dishonor and nonpayment of this Note, and all other notices or demands
of any kind in connection with the delivery, acceptance, performance, default
or
enforcement hereof, and hereby consents to any delays, extensions of time,
renewals, waivers or modifications that may be granted or consented to by the
holder hereof with respect to the time of payment or any other provision hereof
or of the Agreement.
In
the
event any one or more of the provisions of this Note shall for any reason be
held to be invalid, illegal or unenforceable, in whole or in part or in any
respect, or in the event that any one or more of the provisions of this Note
operate or would prospectively operate to invalidate this Note, then and in
any
such event, such provision(s) only shall be deemed null and void and shall
not
affect any other provision of this Note and the remaining provisions of this
Note shall remain operative and in full force and effect and in no way shall
be
affected, prejudiced, or disturbed thereby. This Note is assignable pursuant
to
the terms of the Agreement.
IN
WITNESS WHEREOF, Company has caused this Note to be executed and delivered
as of
the date first above written.
AXEDA
SYSTEMS, INC.
By:
Name:
Title:
|
Date
|
Installment
Amount
|
Amount
of
Principal
Paid
|
Amount
of
Interest
Paid
|
Outstanding
Principal
Balance
|
Notation
Made
By
|
|||||||||||
Exhibit
B
GUARANTY
Exhibit
C
SECURITY
AGREEMENT
Exhibit
D
SUBORDINATION
AGREEMENT
