Exhibit 10.6
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT NO. 340040201 (this "Agreement") is
entered into as of August 14, 2002, by and between LIGHTHOUSE CAPITAL PARTNERS
IV, L.P. ("Lender") and SOUNDBITE COMMUNICATIONS, INC., a Delaware corporation
("Borrower").
RECITALS
Borrower wishes to borrow money from time to time from Lender and Lender
desires to lend money to Borrower. This Agreement sets forth the terms on which
Lender will lend to Borrower and Borrower will repay the loan to Lender.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"Affiliate" means any Person that owns or controls directly or
indirectly five percent (5%) or more of the stock of another entity, any Person
that controls or is controlled by or is under common control with such Persons
or any Affiliate of such Persons or each of such Person's officers, directors,
joint venturers or partners.
"Basic Rate" means a per annum rate of interest (based on a year
of 360 days and actual days elapsed) equal to 7.5%.
"Borrower's Books" means all of Borrower's books and records
including: ledgers; records concerning Borrower's assets or liabilities, the
Collateral, business operations or financial condition; and all computer
programs, or tape files, and the equipment, containing such information.
"Business Day" means any day that is not a Saturday, Sunday, or
other day on which banks in the State of California are authorized or required
to close.
"Code" means the Uniform Commercial Code as adopted and in effect
in the State of California, as amended from time to time.
"Collateral" means the Property described on EXHIBIT A attached
hereto.
"Commitment" means $1,500,000.
"Commitment Fee" means $10,000.00.
"Commitment Termination Date" means June 30, 2003.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend, letter of credit or other
obligation of another, including any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that Person,
or
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in respect of which that Person is otherwise directly or indirectly liable. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported.
"Default" means any event which with the passing of time or the
giving of notice or both would become an Event of Default hereunder.
"Default Rate" means the per annum rate of interest equal to the
Basic Rate plus 5%, but such rate shall in no event be more than the highest
rate permitted by applicable law to be charged on commercial loans.
"Event of Default" has the meaning given to such term in SECTION
8.
"Event of Loss" has the meaning given to that term in SECTION
6.10.
"Final Payment" means, with respect to each Loan, a payment (in
addition to and not in substitution for the regular monthly payments of
principal and accrued interest) due on the Maturity Date, equal to the Loan
Amount for such Loan at such time multiplied by the Final Payment Percentage.
"Final Payment Percentage" means 15%.
"Funding Date" means any date on which a Loan is made to or on
account of Borrower under this Agreement.
"Governmental Authority" means (a) any federal, state, county,
municipal or foreign government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality or public body, (c) any court or administrative
tribunal or (d) with respect to any Person, any arbitration tribunal or other
non-governmental authority to whose jurisdiction that Person has consented.
"Indebtedness" means (a) all indebtedness for borrowed money or
the deferred purchase price of Property or services, including reimbursement and
other obligations with respect to surety bonds and letters of credit, (b) all
obligations evidenced by notes, bonds, debentures or similar instruments, (c)
all capital lease obligations, and (d) all Contingent Obligations.
"Landlord Consent" means a consent in the form of EXHIBIT C or
such other form as Lender may agree to accept.
"Lender's Expenses" means all reasonable costs or expenses
(including reasonable attorneys' fees and expenses) incurred in connection with:
(a) the preparation and negotiation (in an amount not to exceed $10,000.00) of
the Loan Documents, (b),, and enforcement of the Loan Documents; (c) the
administration of the Loan Documents (limited to out-of-pocket costs and
expenses), (d), amending or modifying the Loan Documents on the request of or
for the benefit of Borrower, and/or (e) enforcing or defending the Loan
Documents, including in the exercise of any rights or remedies afforded
hereunder or under applicable law, whether or not suit is brought.
"Lien" means any pledge, bailment, lease, mortgage,
hypothecation, conditional sales and title retention agreement, charge, claim,
encumbrance or other lien in favor of any Person.
"Loan" means each advance of credit or cash by Lender to Borrower
under this Agreement.
"Loan Agreement Supplement" means a supplement to this Agreement
in substantially the form of EXHIBIT D.
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"Loan Amount" means, with respect to each Loan, as of any date,
the original principal amount of such Loan less the aggregate of all amounts
actually prepaid under SECTION 2.5 relating to prepayments of such Loan paid
prior to such date.
"Loan Commencement Date" means, with respect to each Loan, the
first Business Day of the calendar month following the Funding Date of such
Loan.
"Loan Documents" means, collectively, this Agreement, the
Warrant, the Landlord Consent(s) and all other documents, instruments and
agreements entered into between Borrower and Lender in connection with this
Agreement, all as amended or extended from time to time.
"Loan Factor" means 3.0913%.
"Maturity Date" means, with respect to each Loan, the last day of
the Repayment Period for such Loan, or the date of prepayment under SECTION 2.5.
"Minimum Funding Amount" means $150,000.
"Obligations" means all debt, principal, interest, fees, charges,
expenses and attorneys' fees and costs and other amounts, obligations,
convenants, and duties owing by Borrower to Lender whether pursuant to or
evidenced by the Loan Documents, or by any other loan agreement, lease, or
similar agreement between Lender and Borrower and any agreements directly
related thereto (including, without limitation, any warrant, negative pledge
agreement, security agreement, control agreement, landlord consent, or other
similar agreement entered into in connection with a loan agreement, lease or
similar agreement), and whether or not for the payment of money whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, including the principal, interest and Final Payment due with
respect to the Loans, and including any debt, liability, or obligation owing
from Borrower to others that Lender may have obtained by assignment or
otherwise, and further including all interest not paid when due and all Lender's
Expenses that Borrower is required to pay or reimburse by the Loan Documents, by
law, or otherwise.
"Payment Date" has the meaning given to that term in SECTION
2.4(a).
"Permitted Liens" means the following:
(A) The Lien created by this Agreement;
(B) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings, provided the same have no superior priority over
Lender's Lien in the Collateral;
(C) Liens to secure payment of worker's compensation,
employment insurance, old age pensions or other social security obligations of
Borrower in the ordinary course of business of Borrower; and
"Person" means and includes any individual, any partnership, any
corporation, any business trust, any joint stock company, any limited liability
company, any unincorporated association or any other entity and any domestic or
foreign national, state or local government, any political subdivision thereof,
and any department, agency, authority or bureau of any of the foregoing.
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"Prepayment Amount" means in the case of a mandatory prepayment
pursuant to SECTIONS 2.5(A) and 6.10, the original Stated Cost of the item of
Collateral with respect to which such prepayment relates.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, whether tangible or intangible.
"Repayment Period" means, with respect to each Loan, the period
beginning on the first Payment Date of such Loan and continuing for 36 calendar
months.
"Responsible Officer" means each of the President and the
Controller of Borrower.
"Scheduled Payments" has the meaning given to such term in
SECTION 2.4(A).
"Stated Cost" means with respect to an item of Collateral, the
original cost to Borrower of the item of Collateral net of any and all freight,
installation, tax and other soft costs.
"Stipulated Loan Value" means, with respect to each Loan, the
percentage set forth in ANNEX A to the Loan Agreement Supplement for such Loan,
determined as of the Payment Date on which payment of such amount is to be made,
or if such date is not a Payment Date, on the Payment Date immediately
succeeding such date.
"Subsidiary" means any corporation of which a majority of the
outstanding capital stock entitled to vote for the election of directors
(otherwise than as the result of a default) is owned by Borrower directly or
indirectly through Subsidiaries.
"Summary of Loan Agreement Supplement" means, with respect to
each Loan, the "Summary of Loan Agreement Supplement" attached as ANNEX B to the
Loan Agreement Supplement prepared by Lender in connection with such Loan.
"Term" means the period from and after the date hereof until the
payment in full of all amounts and liabilities payable under this Agreement and
the other Loan Documents, including principal and interest on the Loans and the
Final Payment with respect to each Loan.
"Warrant" means the warrant in favor of Lender to purchase
securities of Borrower substantially in the form of EXHIBIT B.
1.2 OTHER INTERPRETIVE PROVISIONS. References in this Agreement
to "Articles," "Sections," "Exhibits," "Schedules" and "Annexes" are to
recitals, articles, sections, exhibits, schedules and annexes herein and hereto
unless otherwise indicated. References in this Agreement and each of the other
Loan Documents to any document, instrument or agreement shall include (a) all
exhibits, schedules, annexes and other attachments thereto, (b) all documents,
instruments or agreements issued or executed in replacement thereof, and (c)
such document, instrument or agreement, or replacement or predecessor thereto,
as amended, modified and supplemented from time to time and in effect at any
given time. The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement or any other Loan Document shall refer to
this Agreement or such other Loan Document, as the case may be, as a whole and
not to any particular provision of this Agreement or such other Loan Document,
as the case may be. The words "include" and "including" and words or similar
import when used in this Agreement or any other Loan Document shall not be
construed to be limiting or exclusive. Unless otherwise indicated in this
Agreement or any other Loan Document, all accounting terms used in this
Agreement or any other Loan Document shall be construed, and all accounting and
financial computations hereunder or thereunder shall be computed, in accordance
with generally accepted accounting principles as in effect in the United States
of America from time to time.
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2. LOAN AND TERMS OF PAYMENT
2.1 COMMITMENT. Subject to the terms and conditions of this Agreement
and relying upon the representations and warranties herein set forth as and when
made or deemed to be made, Lender agrees to lend to Borrower, from time to time
prior to the Commitment Termination Date, the Loans; provided that the aggregate
principal amount of the Loans shall not exceed the Commitment at such time;
provided further, that the aggregate principal amount of any Loan shall not
exceed (i) in the case of new equipment (i.e. equipment delivered to Borrower
not more than 90 days prior to the Funding Date of such Loan), the aggregate
cost to Borrower of the equipment financed with such Loan net of any and all
freight, installation, tax and other soft costs or (ii) in the case of used
equipment, the lower of the net book value or the fair market value reasonably
assigned to such item of used equipment by Lender, after consultation with
Borrower, at the time of making the Loan financing such item of used Equipment
provided further that such financed personal property is delivered to Borrower
within ninety (90) days of the Funding Date for such personal property.
Notwithstanding the foregoing and only with respect to the first Loan hereunder,
Equipment purchased on or after March 1, 2002 shall be financed. If prepaid, the
principal of the Loans may not be re-borrowed.
2.2 USE OF PROCEEDS; THE LOAN.
(A) USE OF PROCEEDS. The proceeds of the Loan shall be used
solely for the acquisition of computers, peripherals, analytical and test
equipment, laboratory equipment and furniture, office furniture and equipment
and other equipment as approved by Lender. Up to Four Hundred Fifty Thousand
Dollars ($450,000) may be used to finance software, leasehold improvements and
other soft costs.
(B) THE LOANS. The Loans shall be repayable in consecutive
monthly installments in accordance with the terms of SECTION 2.4. Lender may,
and is hereby authorized by Borrower to, endorse in its books and records
appropriate notations regarding Lender's interest in the Loans; provided,
however, that the failure to make, or an error in making, any such notation
shall not limit or otherwise affect the Obligations of Borrower hereunder.
2.3 PROCEDURE FOR MAKING LOAN.
(A) NOTICE. Whenever Borrower desires that Lender make a Loan,
Borrower shall so notify Lender in writing (or by telephone with prompt
confirmation in writing) at least ten Business Days in advance of the desired
Funding Date, which notice shall be irrevocable. Lender's obligation to make
Loans shall be expressly subject to the satisfaction of the conditions set forth
in SECTIONS 3.1 with respect to the initial Loan and Section 3.2 with respect to
the initial Loan and each subsequent Loan. Lender shall have the right,
exercisable at any time, to request that Borrower furnish Lender with such
additional information with respect to the Loans as Lender shall reasonably
request.
(B) LOAN INTEREST RATE. Borrower shall pay interest on the unpaid
principal amount of each Loan from the Loan Commencement Date until such Loan
has been paid in full, at a per annum rate of interest equal to the Basic Rate.
The Basic Rate shall be fixed for the Repayment Period and shall not be subject
to change in the absence of a manifest error. All computations of interest on
each Loan shall be based on a year of 360 days for actual days elapsed.
Notwithstanding any other provision hereof, the amount of interest payable
hereunder shall not in any event exceed the maximum amount permitted by the law
applicable to interest charged on commercial loans.
(C) STIPULATED LOAN VALUE CALCULATION. On each Loan Commencement
Date, Lender shall calculate a schedule of Stipulated Loan Values with respect
to the applicable Loan, The schedule of Stipulated Loan Values applicable to
such Loan shall be set forth in the Loan Agreement Supplement prepared by Lender
with respect to such Loan and shall be conclusive in the absence of a manifest
error.
(D) DISBURSEMENT. Subject to the satisfaction of the conditions
set forth in SECTIONS 3.1 and 3.2 with respect to the initial Loan and the
satisfaction of the conditions set forth in SECTION 3.2 with respect to each
subsequent Loan. Lender shall disburse the Loans.
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(E) TERMINATION OF COMMITMENT TO LEND. Notwithstanding anything
in the Loan Documents, Lender's obligation to lend the undisbursed portion of
the Commitment to Borrower hereunder shall terminate on the earlier of (i) at
the Lender's sole election, the occurrence and continuance of any Default or
Event of Default hereunder, and (ii) the Commitment Termination Date.
Notwithstanding the foregoing, Lender's obligation to lend the undisbursed
portion of the Commitment to Borrower shall terminate if, in Lender's sole
judgment, there has been a material adverse change in the general affairs,
management, results of operations or condition (financial or otherwise) of
Borrower, whether or not arising from transactions in the ordinary course of
business, or Borrower engages in any business other than telecommunications
services, including interactive voice messaging, as determined by Lender in its
sole discretion.
2.4 AMORTIZATION OF PRINCIPAL AND INTEREST; INTERIM PAYMENT; FINAL
PAYMENT; COMMITMENT FEE; LENDER'S EXPENSES.
(A) PRINCIPAL AND INTEREST PAYMENTS ON PAYMENT DATES. Borrower
shall make payments of principal and accrued interest in advance for each Loan
(collectively, "Scheduled Payments"), commencing on the Loan Commencement Date
(or commencing on the Funding Date if the Funding Date is the first Business Day
of the calendar month) with respect to such Loan and continuing thereafter
during the Repayment Period on the first Business Day of each calendar month
(each a "Payment Date"), in an amount equal to the Loan Factor multiplied by the
Loan Amount for such Loan as of such Payment Date. In any event, all unpaid
principal and accrued interest shall be due and payable in full on the last
Payment Date with respect to such Loan.
(B) INTERIM PAYMENT. In addition to the Scheduled Payments, on
the Loan Commencement Date for the Loan (unless the Funding Date is the first
Business Day of the calendar month) Borrower shall pay to Lender an amount (the
"Interim Payment") equal to the Loan Amount multiplied by the product of (i) the
quotient derived from dividing the Basic Rate by three hundred and sixty (360),
and (ii) the number of days from the Funding Date of the Loan until the first
Payment Date with respect to the Loan.
(C) FINAL PAYMENT. On the Maturity Date, Borrower shall pay, in
addition to the unpaid principal and accrued interest and all other amounts due
on such date with respect to such Loan, an amount equal to the Final Payment
with respect to such Loan.
(D) COMMITMENT FEE; LENDER'S EXPENSES. The Commitment Fee shall
be applied to in the following order: to Lender's Expenses, Interim Payments,
the first month's payment and every subsequent payment until fully applied.
Borrower shall pay Lender's Expenses upon demand.
(E) LATE FEES. A late charge ("Late Fee") on any Scheduled
Payments or other sums due hereunder which are past due, in an amount equal to
2% of the past due amount, payable on demand. Prior to acceleration of the
Obligations by Lender following an Event of Default, Lender may charge a Late
Fee, but default interest (at the Default Rate) shall not be charged. Following
acceleration of the Obligations by Lender after an Event of Default, Lender may
charge default interest (at the Default Rate), but shall not charge Late Fees.
2.5 PREPAYMENTS.
(A) PREPAYMENT UPON AN EVENT OF LOSS. If any Collateral is
subject to an Event of Loss and Borrower is required to or elects to prepay the
Loans with respect to such Collateral pursuant to SECTION 6.10, then the Loans
shall be prepaid to the extent and in the manner provided in such section.
(B) MANDATORY PREPAYMENT UPON AN ACCELERATION. If the Loans are
accelerated following the occurrence of an Event of Default (other than
following an Event of Loss), then Borrower shall immediately pay to Lender (i)
all unpaid Interim and/or Scheduled Payments with respect to the Loans due prior
to the date of prepayment, (ii) the Stipulated Loan Value with respect to each
Loan multiplied by the Loan Amount of such Loan, and (iii) the Final Payment,
and (iv) all other sums, if any, that shall have become due and payable
hereunder with respect to such Loan.
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(C) VOLUNTARY PREPAYMENT. Borrower may voluntarily prepay the
Loans, provided that each of the following conditions is satisfied: Borrower
pays to Lender (i) all unpaid Interim Payments and/or Scheduled Payments with
respect to the Loans due prior to the date of prepayment, (ii) the outstanding
principal amount of the Loans and any unpaid accrued interest, (iii) the Final
Payment, and (iv) all other sums, if any, that shall have become due and payable
hereunder with respect to the Loans.
2.6 OTHER PAYMENT TERMS.
(A) PLACE AND MANNER. Borrower shall make all payments due to
Lender at the address specified in SECTION 11, in lawful money of the United
States and in same day or immediately available funds.
(B) DATE. Whenever any payment due hereunder shall fall due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall be included in the computation of
interest or fees, as the case may be. If payment is due on a day other than a
Business Day, failure to pay on such day shall not be an Event of Default, but
failure to pay on the next succeeding Business Day shall be an Event of Default.
(C) DEFAULT RATE. If either (i) any amounts required to be paid
by Borrower under this Agreement or the other Loan Documents (including
principal, interest, the Final Payment payable with respect to any Loan, and any
fees or other amounts) remain unpaid after such amounts are due, or (ii) an
Event of Default has occurred and is continuing, Borrower shall pay interest on
the aggregate, outstanding balance hereunder from the date due or from the date
of the Event of Default, as applicable, until such past due amounts are paid in
full or until all Events of Defaults are cured, as applicable, at a per annum
rate equal to the Default Rate. All computations of such interest shall be based
on a year of 360 days for actual days elapsed.
2.7 MINIMUM FUNDING AMOUNT. Except with the prior consent of Lender,
in Lender's sole discretion, the amount of the requested Loan shall not be less
than the Minimum Funding Amount.
2.8 CREDITING PAYMENTS. The receipt by Lender of any wire transfer of
funds, check, or other item of payment shall be immediately applied
conditionally to reduce Obligations, but shall not be considered a payment on
account unless such wire transfer is of immediately available federal funds and
is made to the appropriate deposit account of Lender or unless and until such
check or other item of payment is honored when presented for payment.
Notwithstanding anything to the contrary contained herein, any wire transfer or
payment received by Lender after 11:00 a.m. California time shall be deemed to
have been received by Lender as of the opening of business on the immediately
following Business Day.
2.9 TERM. This Agreement shall become effective upon acceptance by
Lender and shall continue in full force and effect during the Term.
Notwithstanding the foregoing, Lender shall have the right to terminate this
Agreement immediately and without notice upon the occurrence of an Event of
Default.
3. CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO INITIAL LOAN. The obligation of Lender to
make the initial Loan is subject to the condition precedent that Lender shall
have received, in form and substance satisfactory to Lender, all of the
following:
(A) This Agreement duly executed by Borrower.
(B) The Warrant to be issued to Lender duly executed by Borrower.
(C) Borrower shall obtain a Landlord Consent from the owner of
the building in which Collateral is to be located.
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(D) An officer's certificate of Borrower with copies of the
following documents attached: (i) the certificate of incorporation certified by
the secretary of state and bylaws of Borrower certified by Borrower as being in
full force and effect on the Funding Date, (ii) incumbency and representative
signatures, and (iii) resolutions authorizing the execution and delivery of this
Agreement and each of the other Loan Documents.
(E) A good standing certificate from Borrower's state of
incorporation and the state in which Borrower's principal place of business is
located, together with certificates of the applicable governmental authorities
stating that Borrower is in compliance with the franchise tax laws of each such
state, each dated as of a recent date.
(F) Evidence of the insurance coverage required by SECTION 6.9 of
this Agreement.
(G) All necessary consents of shareholders and other third
parties with respect to the execution, delivery and performance of this
Agreement, the Warrant and the other Loan Documents.
(H) Payment of any unreimbursed Lender's Expenses.
(I) Such other documents, and completion of such other matters,
as Lender may reasonably request.
3.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of Lender to
make each Loan, including the initial Loan, is further subject to the following
conditions:
(A) Evidence that no Default or Event of Default has occurred and
is continuing.
(B) Borrower shall have provided to Lender with respect to the
Collateral, copies of vendor invoices, bills of sale, receipts, agreements,
proof of payment, and other documents as Lender shall reasonably request to
evidence the ownership by Borrower of, the payment in full of the purchase price
of, and the fair market value of, such Collateral, each in form and substance
reasonably satisfactory to Lender.
(C) Borrower and Lender shall have executed a Loan Agreement
Supplement with respect to the proposed Loan.
(D) To the extent not already delivered to Lender, Lender shall
have received such documents, instruments and agreements, including UCC
financing statements or amendments to UCC financing statements, as Lender shall
reasonably request to evidence the perfection and priority of the security
interests granted to Lender pursuant to SECTION 4.
(E) Borrower shall have delivered to Lender a subordination
agreement, release, or estoppel letter, as appropriate, from any Person having
an existing Lien superior to the Lien of Lender on any item of Collateral;
including, without limitation, Comerica.
(F) Such other documents, and completion of such other matters,
as Lender may reasonably request.
3.3 COVENANT TO DELIVER. Borrower agrees (not as a condition but as a
covenant) to deliver to Lender each item required to be delivered to Lender as a
condition to the Loan, if such Loan is advanced. Borrower expressly agrees that
the extension of such Loan prior to the receipt by Lender of any such item shall
not constitute a waiver by Lender of Borrower's obligation to deliver such item.
4. CREATION OF SECURITY INTEREST
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4.1 GRANT OF SECURITY INTEREST. Borrower grants to Lender a valid,
first priority, continuing security interest in all presently existing and
hereafter acquired or arising Collateral, subject only to Permitted Liens, in
order to secure prompt, full and complete payment of any and all Obligations and
in order to secure prompt, full and complete performance by Borrower of each of
its covenants and duties under each of the Loan Documents.
4.2 DURATION OF SECURITY INTEREST. Lender's security interest in the
Collateral shall continue until the payment in full and the satisfaction of all
Obligations, whereupon such security interest shall terminate; provided,
however, if any item of Collateral is subject to an Event of Loss, then
following the prepayment of the Loan with respect to such item pursuant to
SECTION 2.5, Lender shall release its security interest in such item of
Collateral. Lender shall, at Borrower's sole cost and expense, execute and
Borrower is authorized to file such further documents and take such further
actions as may be necessary to effect the release contemplated by this SECTION
4.2, including duly executing and delivering termination statements for filing
in all relevant jurisdictions under the Code.
4.3 POSSESSION OF COLLATERAL. So long as no Event of Default has
occurred and is continuing, Borrower shall remain in full possession, enjoyment
and control of the Collateral (except only as may be otherwise required by
Lender for perfection of their security interest therein) and shall be entitled
to manage, operate and use the same and each part thereof with the rights and
franchises appertaining thereto; provided, however, that the possession,
enjoyment, control and use of the Collateral shall at all times be subject to
the observance and performance of the terms of this Agreement.
4.4 MARKINGS ON THE COLLATERAL. At Lender's request at any time during
the Term of the Loan (including any extension thereof), Borrower shall place in
a conspicuous location on each item of Collateral a plaque or other marking to
be supplied by Lender which reads substantially as follows:
Lighthouse Capital Partners IV, L.P. has a first priority security
interest in this item of equipment.
Such plaque or other marking shall not be removed (or if removed or damaged such
plaque or other marking shall be replaced) until the security interest in favor
of Lender in such item of Collateral is terminated pursuant to this Agreement.
4.5 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. Borrower shall from
time to time execute and deliver to Lender, all financing statements and other
documents such Lender may reasonably request, in form satisfactory to Lender, to
perfect and continue Lender's perfected security interests in the Collateral,
subject only to Permitted Liens, and in order to consummate fully all of the
transactions contemplated under the Loan Documents.
4.6 RIGHT TO INSPECT. Lender (through any of its officers, employees,
or agents) shall have the right, upon reasonable prior notice, from time to time
during Borrower's usual business hours, to inspect Borrower's Books and to make
copies thereof and to check, test, and appraise the Collateral in order to
verify Borrower's financial condition or the amount, condition of, or any other
matter relating to, the Collateral. Prior to an Event of Default, Lender shall
not exercise its rights set forth in this Section 4.6 more than twice per
calendar year.
5. REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants as follows:
5.1 DUE ORGANIZATION AND QUALIFICATION. Borrower is a corporation duly
existing and in good standing under the laws of its state of incorporation and
qualified and licensed to do business in, and is in good standing in, any state
in which the conduct of its business or its ownership of Property requires that
it be so qualified or in which the Collateral is located, except for such states
as to which any failure so to qualify would not have a material adverse effect
on Borrower.
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5.2 AUTHORITY. Borrower has all necessary power and authority to
execute, deliver, and perform in accordance with the terms thereof, the Loan
Documents to which it is a party. Borrower has all requisite power and authority
to own and operate its properties and to carry on its businesses as now
conducted.
5.3 SUBSIDIARIES. Borrower has no Subsidiaries.
5.4 CONFLICT WITH OTHER INSTRUMENTS, ETC. Neither the execution and
delivery of any Loan Document to which Borrower is a party nor the consummation
of the transactions therein contemplated nor compliance with the terms,
conditions and provisions thereof will conflict with or result in a breach of;
(a) any of the terms, conditions or provisions of the certificate of
incorporation and the by-laws, or other organizational documents of Borrower, or
(b) any law or any regulation, order, writ, injunction or decree of any court or
governmental instrumentality material to the business of Borrower or its ability
to perform in accordance with the Loan Documents, or (c) any material agreement
or instrument to which Borrower is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject, or
constitute a default thereunder or result in the creation or imposition of any
Lien, other than Permitted Liens.
5.5 AUTHORIZATION; ENFORCEABILITY. The execution and delivery of this
Agreement, the granting of the security interest in the Collateral, the
incurring of the Loans, the execution and delivery of the other Loan Documents
to which Borrower is a party and the consummation of the transactions herein and
therein contemplated have each been duly authorized by all necessary action on
the part of Borrower. The Loan Documents have been duly executed and delivered
and constitute legal, valid and binding obligations of Borrower, enforceable in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency or other similar laws of general
application relating to or affecting the enforcement of creditors' rights or by
general principles of equity.
5.6 NO PRIOR ENCUMBRANCES. Borrower has good and indefeasible title to
the Collateral, free and clear of liens, claims, security interests, or
encumbrances, except for the first priority lien held by the Lender and except
for other Permitted Liens. Borrower has not acquired any part of the Collateral
from an assignor outside the ordinary course of such assignor's business.
5.7 NAME; LOCATION OF CHIEF EXECUTIVE OFFICE, PRINCIPAL PLACE OF
BUSINESS AND COLLATERAL. Borrower has not done business under any name other
than that specified on the signature page hereof and "SoundBite Corporation",
The chief executive office, principal place of business, and the place where
Borrower maintains its records concerning the Collateral are presently located
at the address set forth in SECTION 11. The Collateral is presently located at
the addresses set forth in SECTION 11.
5.8 LITIGATION. There are no actions or proceedings pending by or
against Borrower before any court or administrative agency in which an adverse
decision could reasonably be expected to have a material adverse effect on
Borrower or the aggregate value of the Collateral. Borrower does not have
knowledge of any such pending or threatened actions or proceedings. Borrower
will promptly notify Lender in writing if any action, proceeding or governmental
investigation involving Borrower is commenced that could reasonably be expected
to result in damages or costs to Borrower of One Hundred Thousand Dollars
($100,000) or more.
5.9 FINANCIAL STATEMENTS. All financial statements relating to
Borrower that have been delivered by Borrower to Lender present fairly in all
material respects Borrower's financial condition as of the date thereof and
Borrower's results of operations for the period then ended.
5.10 SOLVENCY. Borrower is solvent and able to pay its debts
(including trade debts) as they mature.
5.11 TAXES. Borrower has filed or caused to be filed, or filed an
extension with respect to, all tax returns required to be filed, and has paid,
or has made adequate provision for the payment of, all taxes that are due and
payable.
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5.12 CONSENTS AND APPROVALS. No approval, authorization or consent of
any trustee or holder of any indebtedness or obligation of Borrower or of any
other Person under any such material agreement, contract, lease or license or
similar document or instrument to which Borrower is a party or by which Borrower
is bound, is required to be obtained by Borrower in order to make or consummate
the transactions contemplated under the Loan Documents except for such
approvals, authorizations or consents that have already been obtained. All
material consents and approvals of, filings and registrations with, and other
actions in respect of, all Governmental Authorities required to be obtained by
Borrower in order to make or consummate the transactions contemplated under the
Loan Documents have been, of prior to the time when required will have been,
obtained, given, filed or taken and are or will be in full force and effect.
5.13 TRADEMARKS, PATENTS, COPYRIGHTS, FRANCHISES AND LICENSES.
Borrower possesses and owns all necessary trademarks, trade names, copyrights,
patents, patent rights, franchises and licenses which are material to the
conduct of its business as now operated.
5.14 MATERIAL CONTRACTS. Upon request, Borrower shall disclose to
Lender in "writing all currently effective material contracts and agreements
(whether written or oral) to which Borrower is a party. Borrower shall determine
in its reasonable discretion which contracts are material, but material
contracts shall include any contract or agreement involving payments in excess
of $100,000. There are no material defaults under any such contract or agreement
by Borrower. Borrower has made available to Lender true and correct copies of
all such contracts or agreements (or, with respect to oral contracts or
agreements, written descriptions of the material terms thereof).
5.15 FULL DISCLOSURE. No representation, warranty or other statement
made by Borrower in any Loan Document, certificate or written statement
furnished to Lender contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements contained in
such certificates or statements not misleading when made.
6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until the full and complete
payment of the Obligations under this Agreement and the termination of the
Commitments, Borrower shall do all of the following:
6.1 GOOD STANDING. Borrower shall maintain its corporate existence and
its good standing in its jurisdiction of incorporation and maintain
qualification in each jurisdiction in which the failure to so qualify could have
a material adverse effect on the financial condition, operations or business of
Borrower. Borrower shall maintain in force all licenses, approvals and
agreements, the loss of which could have a material adverse effect on its
financial condition, operations or business.
6.2 GOVERNMENT COMPLIANCE. Borrower shall comply with all statutes,
laws, ordinances and government rules and regulations to which it is subject,
noncompliance with which could materially adversely affect the financial
condition, operations or business of Borrower.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Borrower shall
deliver to Lender: (a) as soon as available, but in any event within thirty (30)
days after the end of each calendar month, a company prepared balance sheet,
income statement and cash flow statement covering Borrower's operations during
such period, certified by a Responsible Officer; (b) as soon as available, but
in any event within one hundred twenty (120) days after the end of Borrower's
fiscal year, audited financial statements of Borrower prepared in accordance
with generally accepted accounting principles, consistently applied, together
with an unqualified (other than a going concern qualification) opinion on such
financial statements of a nationally recognized or other independent public
accounting firm reasonably acceptable to Lender; (c) promptly upon becoming
available, copies of all statements, reports and notices sent or made available
generally by Borrower to its security holders; and (d) such other financial
information as Lender may reasonably request from time to time.
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6.4 CERTIFICATES OF COMPLIANCE. Each time financial statements are
furnished pursuant to SECTION 6.3 above, there shall be delivered to Lender a
certificate signed by a Responsible Officer (each an "Officer's Certificate")
with respect to such financial reports to the effect that: (i) no Event of
Default has occurred and is continuing hereunder since the date of this
Agreement or, if later, since the date of the prior Officer's Certificate or, if
such an event or condition has occurred and is continuing, the nature and extent
thereof and the action Borrower proposes to take with respect thereto, and (ii)
Borrower is in compliance with the provisions of SECTIONS 6 AND 7.
6.5 NOTICE OF DEFAULTS. As soon as possible, and in any event within
five (5) days after the discovery of an Event of Default, provide Lender with an
Officer's Certificate of Borrower setting forth the facts relating to or giving
rise to such Event of Default and the action which Borrower proposes to take
with respect thereto.
6.6 NOTICE OF EVENT OF LOSS; REAL PROPERTY LEASES. As soon as
possible, and in any event within ten (10) days thereafter, Borrower shall
notify Lender in writing in reasonable detail of any Event of Loss. Borrower
shall notify Lender in writing of any failure to pay any rent when due within
five (5) days of its failure to do so, and shall immediately provide written
notice to Lender of any lease termination or receipt of any notice from the
landlord indicated intent to terminate the lease.
6.7 TAXES. Borrower shall make due and timely payment or deposit of
all federal, state, and local taxes, assessments, or contributions required of
it by law or imposed upon any properties belonging to it which Borrower is aware
of or which is material to the business of Borrower or its ability to perform
under the Loan Documents, and will execute and deliver to Lender, on demand,
appropriate certificates attesting to the payment or deposit thereof. Borrower
shall make due and timely payment or deposit of all federal, state, and local
taxes, assessments, or contributions required of it by law or imposed upon any
properties belonging to it if the failure to pay or deposit such amounts will
result in a Lien on the Collateral other than a Permitted Lien. Borrower will
make timely payment or deposit of all tax payments and withholding taxes
required of it by applicable laws, including those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal income taxes, and
will, upon request, furnish Lender with proof satisfactory to Lender indicating
that Borrower has made such payments or deposits; provided that Borrower need
not make any payment if the amount or validity of such payment is contested in
good faith by appropriate proceedings and is adequately reserved against by
Borrower.
6.8 USE; MAINTENANCE.
(a) Borrower, at its expense, shall make all necessary site
preparations and cause all Collateral to be operated in material compliance with
any applicable manufacturer's manuals or instructions. So long as no Event of
Default has occurred and is continuing, Borrower shall have the light to quietly
possess and use the Collateral as provided herein without interference by Lender
(except as may be otherwise required by Lender for perfection of its security
interest).
(b) Borrower, at its expense, shall maintain the Collateral in
good condition, reasonable wear and tear excepted, and will comply in all
material respects with all laws, rules and regulations to which the use and
operation of the Collateral may be or become subject. Such obligation shall
extend to repair and replacement of any partial loss or damage to the
Collateral, regardless of the cause, If maintenance is mandated by manufacturer,
Borrower shall obtain and keep in effect, at all times during the Term
maintenance service contracts with suppliers approved by Lender, such approval
not to be unreasonably withheld. All parts furnished in connection with such
maintenance or repair shall immediately become part of the Collateral. All such
maintenance, repair and replacement services shall be promptly paid for and
discharged by Borrower with the result that no Lien will attach to the
Collateral.
6.9 INSURANCE.
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(A) Borrower, at its own expense, shall obtain and maintain in amounts
and coverages reasonably requested by Lender (a) insurance against loss or
damage to the Collateral, (b) commercial general liability insurance, including
contractual liability, products liability and completed operations coverage
according to standard industry practices, The amount of insurance covering loss
or damage to the Collateral shall be the greater of (i) the replacement value of
the Collateral (as new) or (ii) the outstanding principal amount of the funds
disbursed hereunder and all other then outstanding amounts payable under the
Loan Documents.
(B) The amount of commercial general public liability insurance (other
than products liability coverage and completed operations insurance) shall be at
least $2,000,000 per occurrence. The amount of such products liability and
completed operations insurance shall be at least $2,000,000 per occurrence. The
deductible with respect to insurance against loss or damage to the Collateral
and product liability insurance shall not exceed $50,000; otherwise there shall
be no deductible with respect to any insurance required to be maintained
hereunder without the prior written approval of Lender. Each such insurance
policy shall: (i) name Lender loss payee or additional insured, as appropriate,
(ii) provide for insurer's waiver of its right of subrogation against Lender and
Borrower, (iii) provide that such insurance shall not be invalidated by any
action of, or breach of warranty by, Borrower and waive set-off,
counterclaim or offset against Lender, (iv) provide that Borrower's insurance
shall be primary without a right of contribution of Lender's insurance, if any,
or any obligation on the part of Lender to pay premiums of Borrower, and (v)
require the insurer to give Lender at least thirty (30) days prior written
notice of cancellation. Borrower shall, on or prior to the first disbursement of
funds hereunder and prior to each policy renewal, furnish to Lender
certificates of insurance. Borrower shall give Lender prompt notice of any
damage to, or loss of any Collateral which exceeds Fifty Thousand Dollars
($50,000) in the aggregate.
6.10 LOSS; DAMAGE; DESTRUCTION AND SEIZURE.
(A) Borrower shall bear the risk of the Collateral being lost, stolen,
destroyed, damaged beyond repair, rendered permanently unfit for use, or seized
by a governmental authority for any reason whatsoever at any time until the
expiration or termination of the Term.
(B) If during the Term any item of Collateral is lost, stolen,
destroyed, damaged beyond repair, rendered permanently unfit for use, or seized
by a governmental authority for any reason whatsoever for a period equal to at
least the remainder of the Term (an "Event of Loss"), then in each case Lender
shall receive from the proceeds of insurance maintained pursuant to SECTION 6.9,
from any award paid by the seizing governmental authority or, to the extent not
received from the proceeds of insurance or award or both, from Borrower, on or
before the Payment Date next succeeding such Event of Loss, an amount equal to
the sum of: (i) all accrued and unpaid Interim Payments and Scheduled Payments
with, respect to such Loan due prior to the next such Payment Date, (ii) a
prepayment in an amount equal to the Stipulated Loan Value with respect to such
Loan multiplied by the Prepayment Amount of each affected item of Collateral and
(iii) all other sums, if any, that shall have become due and payable hereunder
with respect to such Loan, including interest at the Default Rate with respect
to any past due amounts. On the date of receipt by Lender of the amount
specified above with respect to each such item of Collateral subject to an Event
of Loss, this Agreement shall terminate as to such Collateral. Notwithstanding
the foregoing and except as provided in SECTION 6.10(C), any proceeds of
insurance maintained by Borrower pursuant to SECTION 6.9 and received by
Borrower, or awards received from governmental authorities, shall be paid to
Lender promptly upon their receipt by Borrower. If any proceeds of insurance or
awards received from governmental authorities are in excess of the amount owed
under this SECTION 6.10, Lender shall promptly remit to Borrower the amount in
excess of the amount owed to Lender.
(C) So long as no Event of Default has occurred and is continuing, any
proceeds of insurance maintained pursuant to SECTION 6.9 received by Lender or
Borrower with respect to an item of Collateral, the repair of which is
practicable, shall, at the election of Borrower, be applied either to the repair
or replacement of such Collateral or, upon Lender's receipt of evidence of the
repair or replacement of the Collateral reasonably satisfactory to Lender, to
the reimbursement of Borrower for the cost of such repair or replacement. All
replacement parts and equipment acquired by Borrower in replacement of
Collateral pursuant to this SECTION 6.10(C) shall immediately become part of the
Collateral upon acquisition by Borrower. Borrower shall take such actions and
provide such documentation
13
as may be reasonably requested by Lender to protect and preserve its first
priority security interest and otherwise to avoid any impairment of Lender's
rights under the Loan Documents in connection with such repair or replacement.
6.11 RIGHT TO PURCHASE SECURITIES.
(A) Borrower hereby grants Lender the one-time right, to be exercised
in such Lender's sole discretion, to purchase up to $150,000 of Next Round Stock
(as defined below) at the Next Round Closing (as defined below), at a price per
share no greater than that paid by the lead investor for a share of Next Round
Stock, and in connection with such right, Borrower agrees to deliver written
notice to Lender at least ten days before the Next Round Closing clearly
referring to this Agreement and informing Lender of its right to purchase the
Next Round Stock; (ii) that Lender's rights with respect to such Next Round
Stock (including, without limitation, any registration or informational rights
and any rights of first refusal) shall be no less favorable than the rights
granted to any of the other purchasers of Next Round Stock; and (iii) that
Lender must become party to those agreements relating to the Next Round Stock
and the rights described above that the other investors in Next Round Stock
execute.
(B) As used in this SECTION 6.11, (i) "Next Round Financing" means the
Borrower's next bona fide round of preferred stock equity financing after the
date hereof resulting in net aggregate proceeds to the Borrower of at least
$3,000,000.00; (ii) "Next Round Closing" means the date on which the Next Round
Financing closes; and (iii) "Next Round Stock" means the class or series of
equity securities issued in connection with the Next Round Financing.
(C) Any other term or provision of this Agreement to the contrary
notwithstanding, the provisions of this SECTION 6.11 shall survive satisfaction
of the Obligations, the termination of the Commitments, and termination of this
Agreement. Notwithstanding the foregoing, the provisions of this Section 6.11
shall terminate upon an initial Public Offering (as such term is defined in the
Warrant) of the Borrower's stock and the acceleration of the Obligations by
Lender following an Event of Default.
6.12 FURTHER ASSURANCES; FULL DISCLOSURE.; Financial Statements. At
any time and from time to time Borrower shall execute and deliver such further
instruments and take such further action as may reasonably be requested by
Lender to effect the purposes of this Agreement. Borrower agrees that no
representation, warranty or other statement made by Borrower in any Loan
Document, certificate or written statement to be furnished to Lender shall
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained in such certificates or
statements not misleading when made. Borrower agrees that all financial
statements relating to Borrower that have been or will be delivered by Borrower
to Lender present fairly in all material respects Borrower's financial condition
as of the date thereof and Borrower's results of operations for the period then
ended.
7. NEGATIVE COVENANTS
Borrower covenants and agrees that until the full and complete payment
of the Obligations under this Agreement and termination of the Commitments,
Borrower will not do any of the following:
7.1 CHIEF EXECUTIVE OFFICE; LOCATION OF COLLATERAL. During the
continuance of this Agreement, change the chief executive office or principal
place of business from the premises listed in SECTION 11, change its state of
incorporation, or remove or cause to be removed the Collateral or records
concerning the Collateral from the premises indicated in the applicable Loan
Agreement Supplement without twenty (20) days prior written notice to Lender;
provided, however, in no event shall the chief executive office, state of
incorporation, principal place of business, the Collateral or records be moved
outside of the United States.
7.2 EXTRAORDINARY TRANSACTIONS AND DISPOSAL OF ASSETS. Enter into any
transaction without Lender's consent, which consent will not be unreasonably
withheld with respect to matters other than Collateral but which may be withheld
at Lender's sole and absolute discretion with respect to Collateral, not in the
ordinary and usual
14
course of Borrower's business, including the sale, lease, license or other
disposition of, moving, relocation, or transfer, whether by sale or otherwise,
of Borrower's assets, other than (i) sales of inventory (other than inventory
financed with a Loan) in the ordinary and usual course of Borrower's business as
presently conducted (ii) sales or other dispositions in the ordinary course of
business of equipment (other than Collateral) that has become worn out or
obsolete or that is promptly being replaced; and (iii) nonexclusive leases
and/or licenses in the ordinary course of business of Borrower's intellectual
property. Notwithstanding the foregoing, Borrower shall be permitted to move
assets between its facilities provided that all other provisions of this
Agreement have been complied with, including, without limitation, delivering to
Lender a Landlord Consent with respect to any facility where the Collateral is
located.
7.3 RESTRUCTURE. Change Borrower's name; make any material change in
Borrower's financial structure or business operations (other than through the
sale of preferred stock to equity investors in the ordinary course of business)
which could reasonably be expected to have a material adverse effect on Lender,
the Collateral or the Loans; other than through the sale of preferred stock to
equity investors in the ordinary course of business, cause, permit, or suffer a
change in control, such that stockholders of Borrower on the date hereof no
longer own a majority of the capital stock of Borrower (on a fully-diluted
basis); or suspend operation of Borrower's business.
7.4 LIENS. Create, incur, assume or suffer to exist any Lien or any
other encumbrance of any kind with respect to any of the Collateral, whether now
owned or hereafter acquired, except for Permitted Liens.
7.5 [Not Used]
7.6 INVESTMENTS. Make any Investment in any Person, other than
Permitted Investments, or permit any Subsidiary to do so.
7.7 DISTRIBUTIONS. Pay any dividends or make any distribution or
payment or redeem, retire or purchase any capital stock.
7.8 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Borrower except
for transactions that are in the ordinary course of Borrower's business, on
terms no less favorable to Borrower than would be obtained in an arm's length
transaction with a non-affiliated Person.
7.9 COMPLIANCE. Become an "investment company" under the Investment Company
Act of 1940 or undertake as one of its important activities extending credit to
purchase or carry margin stock, or use the proceeds of any Loan for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, if the violation could reasonably be expected to have a material
adverse effect on Borrower's business or operations or would reasonably be
expected to cause a material adverse change in the business or financial
condition of Borrower, or permit any of its Subsidiaries to do so.
8. EVENTS OF DEFAULT
Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:
8.1 PAYMENT DEFAULT. If Borrower fails to pay within 5 days of the
date when due and payable or when declared due and payable in accordance with
the Loan Documents, any portion of the Obligations.
8.2 CERTAIN COVENANT DEFAULTS. If Borrower fails to perform any
obligation under SECTIONS 6.8, 6.9, OR 6.10, or violates any of the covenants
contained in SECTION 7 of this Agreement.
8.3 OTHER COVENANT DEFAULTS. If Borrower fails or neglects to perform,
keep, or observe any other material term, provision, condition, covenant, or
agreement contained in this Agreement, in any of the
15
other Loan Documents, or in any other present or future loan agreement, lease or
similar agreement between Borrower and Lender (and any related agreement,
including, without limitation, any warrant, security agreement, negative pledge
agreement, control agreement, and landlord consent) and as to any default under
such other term, provision, condition, covenant or agreement that can be cured,
has failed to cure such default within thirty (30) days after the occurrence of
such default.
8.4 MATERIAL ADVERSE CHANGE. If there occurs a material adverse change
in Borrower's business, or if there is a material impairment of the prospect of
repayment of any portion of the Obligations owing to Lender or a material
impairment of the value or priority of Lender's security interests in the
Collateral.
8.5 ATTACHMENT. If any material portion of the Collateral is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any trustee, receiver or Person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of the
Collateral, or if a notice of lien, levy, or assessment is filed of record with
respect to any of the Collateral by the United States Government, or any
department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within ten (10) days
after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contesting by Borrower.
8.6 OTHER AGREEMENTS. If there is a default by the Borrower in any
agreement to which Borrower is a party with a third party or parties resulting
in a right by such third party or parties, whether or not exercised, to
accelerate the maturity of any Indebtedness in excess of One Hundred Thousand
Dollars ($100,000); or if there is a breach by Borrower of any real property
lease agreement which gives the landlord a right to terminate the lease.
8.7 JUDGMENTS. If a judgment or judgments for the payment of money in
an amount, individually or in the aggregate, of at least One Hundred Thousand
Dollars ($100,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of thirty (30) days.
8.8 REDEMPTION OR REPURCHASE. Borrower shall, after the date of this
Agreement, redeem or repurchase (a) any shares of any class or series of its
preferred stock or (b) more than Fifty Thousand Dollars ($50,000) in the
aggregate per year of common stock, in each case whether pursuant to a mandatory
redemption or otherwise.
8.9 MISREPRESENTATIONS. If any material misrepresentation or material
misstatement exists or existed at the time made in any warranty, representation,
statement, or report made to Lender by any accountant or similar agent with
respect to financial information, or by Borrower or any officer, or director of
Borrower with respect to any information.
8.10 BREACH OF WARRANT. If Borrower shall breach the terms of the
Warrant in any material respect.
8.11 ENFORCEABILITY. If (a) any Loan Document shall in any material
respect cease to be a legal, valid and binding obligation of Borrower
enforceable in accordance with its terms; provided, however, that the foregoing
shall not be an Event of Default if amending such Loan Document will cure such
default and Borrower promptly takes any actions reasonably requested by Lender
to amend such Loan Document, or (b) Borrower shall assert that any Loan Document
is not, a legal, valid and binding obligation of Borrower enforceable in
accordance with its terms.
8.12 INVOLUNTARY BANKRUPTCY OR INSOLVENCY. If a proceeding shall have
been instituted in a court having jurisdiction in the premises seeking a decree
or order for relief in respect of Borrower in an involuntary
16
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee (or similar official) of Borrower or for any substantial part
of its property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
forty-five (45) consecutive days or such court shall enter a decree or order
granting the relief sought in such proceeding.
8.13 VOLUNTARY BANKRUPTCY OR INSOLVENCY. If Borrower shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, shall consent to the entry of an order for relief in
an involuntary case under any such law, or shall consent to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee, custodian (or
other similar official) of Borrower or for any substantial part of its property,
or shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action in furtherance of any of the foregoing,
9. LENDER'S RIGHTS AND REMEDIES
9.1 RIGHTS AND REMEDIES. Upon the occurrence and continuance of any
Default or Event of Default, Lender shall have no further obligation to advance
money or extend credit to or for the benefit of Borrower. In addition, upon the
occurrence and during the continuance of an Event Of Default, Lender shall have
the rights, options, duties and remedies of a secured party as permitted by law
and, in addition to and without limitation of the foregoing, Lender may, at its
election, without notice of election and without demand, do any one or more of
the following in accordance with applicable law, all of which are authorized by
Borrower:
(A) Declare all Obligations, whether evidenced by this Agreement,
by any of the other Loan Documents, or otherwise, including the Stipulated Loan
Value of the Loan Amount of each Loan, immediately due and payable (provided
that upon the occurrence of an Event of Default described in SECTION 8.12 or
8.13 all Obligations shall become immediately due and payable without any action
by Lender);
(B) Without notice to or demand upon Borrower, make such payments
and do such acts as Lender considers necessary or reasonable to protect its
security interest in the Collateral. Borrower agrees to assemble the Collateral
if Lender so requires, and to make the Collateral available to Lender as Lender
may designate at a location reasonably convenient to Lender and Borrower.
Borrower authorizes Lender to peaceably enter the premises where the Collateral
is located, to peaceably take and maintain possession of the Collateral, or any
part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which in Lender's determination appears to be prior or superior
to its security interest and to pay all expenses reasonably incurred in
connection therewith. With respect to any of Borrower's owned premises, Borrower
hereby grants Lender a license to enter into possession of such premises and to
occupy the same, without charge, for up to one hundred twenty (120) days in
order to exercise any of Lender's rights or remedies provided herein, at law, in
equity, or otherwise;
(C) Without prior notice to Borrower, set off and apply to the
Obligations any and all indebtedness at any time owing to or for the credit or
the account of Borrower;
(D) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral, Lender is hereby granted a license or other right,
solely pursuant to the provisions of this SECTION 9.1, to use, without charge,
Borrower's labels, patents (if inventory is financed), copyrights (if inventory
is financed), rights of use of any name, trade secrets (if any inventory is
financed and provided Lender has executed a confidentiality agreement reasonably
requested by Borrower), trade names, trademarks, service marks, and advertising
matter, or any Property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral
and, in connection with Lender's exercise of its rights under this SECTION 9.1,
Borrower's rights under all licenses and all franchise agreements shall inure to
Lender's benefit;
(E) Sell the Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including Borrower's premises) as Lender
determines are commercially reasonable;
17
(F) Lender may credit bid and purchase at any public sale; and
(G) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower and any
surplus will be paid immediately to Borrower.
9.2 WAIVER BY BORROWER. Upon the occurrence and continuance of an
Event of Default, to the extent permitted by law, Borrower covenants that it
will not at any time insist upon or plead, or in any manner whatever claim or
take any benefit or advantage of, any stay or extension of law now or at any
time hereafter in force, nor claim, take nor insist upon any benefit or
advantage of or from any law now or hereafter in force providing for the
valuation or appraisement of the Collateral or any part thereof prior to any
sale or sales thereof to be made pursuant to any provision herein contained, or
to the decree, judgment or order of any court of competent jurisdiction; nor,
after such sale or sales, claim, or exercise any right under any statute now or
hereafter made or enacted by any state or otherwise to redeem the Collateral so
sold or any part thereof, and, to the full extent legally permitted, except as
to rights expressly provided herein, hereby expressly waives for itself and on
behalf of each and every Person, except decree or judgment creditors of Borrower
acquiring any interest in or title to the Collateral or any part thereof
subsequent to the date of this Agreement, all benefit and advantage of any such
law or laws, and covenants that it will not invoke or utilize any such law or
laws or otherwise hinder, delay or impede the execution of any power herein
granted and delegated to Lender, but will suffer and permit the execution of
every such power as though no such power, law or laws had been made or enacted
9.3 EFFECT OF SALE. Any sale, whether under any power of sale hereby
given or by virtue of judicial proceedings, shall operate to divest all right,
title, interest, claim and demand whatsoever, either at law or in equity, of
Borrower in and to the Collateral sold, and shall be a perpetual bar, both at
law and in equity, against Borrower, its successors and assigns, and against any
and all Persons claiming the Collateral sold or any part thereof under, by or
through Borrower, its successors or assigns.
9.4 POWER OF ATTORNEY IN RESPECT OF THE COLLATERAL. Borrower does
hereby irrevocably appoint Lender (which appointment is coupled with an
interest) on the occurrence and continuance of an Event of Default, the true and
lawful attorney in fact of Borrower with full power of substitution, for it and
in its name: (a) to ask, demand, collect, receive, receipt for, xxx for,
compound and give acquittance for any and all rents, issues, profits, avails,
distributions, income, payment draws and other sums in which a security interest
is granted under Section 4 with full power to settle, adjust or compromise any
claim thereunder as fully as if Lender were Borrower itself, (b) to receive
payment of and to endorse the name of Borrower to any items of Collateral
(including checks, drafts and other orders for the payment of money) that come
into such Lender's possession or under such Lender's control, (c) to make all
demands, consents and waivers, or take any other action with respect to, the
Collateral, (d) in Lender's discretion to file any claim or take any other
action or proceedings, either in its own name or in the name of Borrower or
otherwise, which Lender may reasonably deem necessary or appropriate to protect
and preserve the right, title and interest of Lender in and to the Collateral,
or (e) to otherwise act with respect thereto as though Lender were the outright
owner of the Collateral.
9.5 LENDER'S EXPENSES. If Borrower fails to pay any amounts or furnish
any required proof of payment due to third persons or entities, as required
under the terms of this Agreement, then Lender may do any or all of the
following; (a) make payment of the same or any part thereof; (b) set up such
reserves in Borrower's loan account as Lender deems necessary to protect Lender
from the exposure created by such failure; or (c) obtain and maintain insurance
policies of the type discussed in SECTION 6.9 of this Agreement, and take any
action with respect to such policies as Lender deems prudent. Any amounts paid
or deposited by Lender shall constitute Lender's Expenses, shall be immediately
due and payable, and shall bear interest at the then applicable rate hereinabove
provided, and shall be secured by the Collateral. Any payments made by Lender
shall not constitute an agreement by Lender to make similar payments in the
future or a waiver by Lender of any Event of Default under this Agreement.
9.6 REMEDIES CUMULATIVE. Lender's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Lender shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Lender of one
right or remedy
18
shall be deemed an election, and no waiver by Lender of any Event of Default on
Borrower's part shall be deemed a continuing waiver. No delay by Lender shall
constitute a waiver, election, or acquiescence by it.
9.7 APPLICATION OF COLLATERAL PROCEEDS. The proceeds and/or avails of
the Collateral, or any part thereof, and the proceeds and the avails of any
remedy hereunder (as well as any other amounts of any kind held by Lender at the
time of or received by Lender after the occurrence of an Event of Default
hereunder) shall be paid to and applied as follows:
(A) First, to the payment of out-of-pocket costs and expenses,
including all amounts expended to preserve the value of the Collateral, of
foreclosure or suit, if any, and of such sale and the exercise of any other
rights or remedies, and of all proper fees, expenses, liability and advances,
including reasonable legal expenses and attorneys' fees, incurred or made
hereunder by Lender;
(B) Second, to the payment to Lender of the amount then owing or
unpaid on the Loans for Scheduled Payments, the Stipulated Loan Value of the
Loan Amount, and all other Obligations with respect to all Loans, and in case
such proceeds shall be insufficient to pay in full the whole amount so due,
owing or unpaid upon the Loans, then to the unpaid interest thereon, then to
unpaid principal thereof, then to the Stipulated Loan Value of the Loan Amount
with respect to the Loan, and then to the payment of other amounts then payable
to Lender under any of the Loan Documents; and
(C) Third, to the payment of the surplus, if any, to Borrower,
its successors and assigns, or to whomsoever may be lawfully entitled to receive
the same.
9.8 REINSTATEMENT OF RIGHTS. If Lender shall have proceeded to enforce
any right under this Agreement or any other Loan Document by foreclosure, sale,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely, then and in
every such case (unless otherwise ordered by a court of competent jurisdiction),
Lender shall be restored to its former position and rights hereunder with
respect to the Collateral subject to the security interest created under this
Agreement
10. WAIVERS; INDEMNIFICATION
10.1 DEMAND; PROTEST. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Lender on which Borrower may in any way be
liable.
10.2 LEADER'S LIABILITY FOR COLLATERAL. So long as Lender complies
with its obligations, if any, under Section 9207 of the Code and other
applicable law, Lender shall not in any way or manner be liable or responsible
for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto
occurring or arising in any manner or fashion from any cause; (c) any diminution
in the value thereof, or (d) any act or default of any carrier, warehouseman,
bailee, forwarding agency, or other Person whomsoever. All risk of loss, damage
or destruction of the Collateral shall be borne by Borrower.
10.3 INDEMNIFICATION. Whether or not the transactions contemplated
hereby shall be consummated:
(A) GENERAL INDEMNITY. Borrower shall pay, indemnify, and hold
Lender and each of its officers, directors, employees, counsel, partners, agents
and attorneys-in-fact (each, an "Indemnified Person") harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including Lender's
Expenses and reasonable attorney's fees) of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement and any other Loan Documents, or the transactions contemplated
hereby and thereby, and with respect to any investigation, litigation or
proceeding (including any case, action or proceeding before any court or other
Governmental Authority
19
relating to bankruptcy, reorganization, insolvency, liquidation, dissolution or
relief of debtors or any appellate proceeding) related to this Agreement or the
Loans or the use of the proceeds thereof, whether or not any Indemnified Person
is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that Borrower shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person.
(B) SURVIVAL; DEFENSE. The obligations in this SECTION 10.3 shall
survive payment of all other Obligations. At the election of any Indemnified
Person, Borrower shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's sole discretion, at the
sole cost and expense of Borrower. All amounts owing under this SECTION 10.3
shall be paid within thirty (30) days after written demand.
11. NOTICES
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by certified mail, postage
prepaid, return receipt requested, or by prepaid facsimile to Borrower or to
Lender, as the case may be, at their respective addresses set forth below:
If to Borrower: SoundBite Communications, Inc.
Three Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
FAX:(000)000-0000
If to Lender: Lighthouse Capital Partners IV, L.P.
000 Xxxxx'x Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Contract Administrator
FAX:(000)000-0000
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other,
12. GENERAL PROVISIONS
12.1 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower without Lender's prior written consent, which
consent may be granted or withheld in Lender's sole discretion. Lender shall
have the right without the consent of or notice to Borrower to sell, transfer,
negotiate, or grant participations in all or any part of, or any interest in
such Lender's rights and benefits hereunder.
12.2 TIME OF ESSENCE. Time is of the essence for the performance of
all obligations set forth in this Agreement
12.3 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
12.4 ENTIRE AGREEMENT; CONSTRUCTION; AMENDMENTS AND WAIVERS.
(A) This Agreement and each of the other Loan Documents dated as
of the date hereof, taken together, constitute and contain the entire agreement
between Borrower and Lender and supersede any and all
20
prior agreements, negotiations, correspondence, understandings and
communications between the parties, whether written or oral, respecting the
subject matter hereof.
(B) This Agreement is the result of negotiations between and has
been reviewed by each of Borrower and Lender executing this Agreement as of the
date hereof and their respective counsel; accordingly, this Agreement shall be
deemed to be the product of the parties hereto, and no ambiguity shall be
construed in favor of or against Borrower or Lender. Borrower and Lender agree
that they intend the literal words of this Agreement and the other Loan
Documents and that no parol evidence shall be necessary or appropriate to
establish Borrower's or Lender's actual intentions.
(C) Any and all amendments, modifications, discharges or waivers
of, or consents to any departures from any provision of this Agreement or of any
of the other Loan Documents shall not be effective without the written consent
of Lender. Any waiver or consent with respect to any provision of the Loan
Documents shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Borrower in any case
shall entitle Borrower to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, waiver or consent effected in
accordance with this SECTION 12.4 shall be binding upon Lender and on Borrower.
12.5 RELIANCE BY LENDER. All covenants, agreements, representations
and warranties made herein by Borrower shall, notwithstanding any investigation
by Lender, be deemed to be material to and to have been relied upon by Lender.
12.6 NO SET-OFFS BY BORROWER. All sums payable by Borrower pursuant to
this Agreement or any of the other Loan Documents shall be payable without
notice or demand and shall be payable in United States Dollars without set-off
or reduction of any manner whatsoever.
12.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
12.8 SURVIVAL. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Lender
with respect to the expenses, damages, losses, costs and liabilities described
in SECTION 10.3 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Lender have run.
13. NO ORIGINAL ISSUE DISCOUNT. Borrower and Lender hereby acknowledge and
agree that the warrant (the "Warrant") to purchase stock transferred to Lender
under the Warrant to purchase stock is part of an investment unit within the
meaning of Section 1273(c)(2) of the Internal Revenue Code which includes the
Loans. Borrower and Lender further agree as between Borrower and Lender, that
the fair market value of the Warrant is equal to US$100 and that, pursuant to
Treas. Reg. Section l.1273-2(h), US$100 of the issue price of the investment
unit will be allocable to the Warrant and the balance shall be allocable to the
Loans. Borrower and Lender agree to prepare their federal income tax returns in
a manner consistent with the foregoing agreement and, pursuant to Treas. Reg.
Section 1.1273, the original issue discount on the Loans shall be considered to
be zero.
14. RELATIONSHIP OF PARTIES. Borrower and Lender acknowledge, understand
and agree that the relationship between the Borrower, on the one hand, and
Lender, on the other, is, and at all times shall remain solely that of a
borrower and lender. Lender shall not under any circumstances be construed to be
a partner or joint venturer of Borrower or any of its Affiliates; nor shall the
Lender under any circumstances be deemed to be in a relationship of confidence
or trust or a fiduciary relationship with Borrower or any of its Affiliates, or
to owe any fiduciary duty to Borrower or any of its Affiliates. Lender does not
undertake or assume any responsibility or duty to Borrower or any of its
Affiliates to select, review, inspect, supervise, pass judgment upon or
otherwise inform the Borrower or any of its Affiliates of any matter in
connection with its or their Property, any Collateral held by Lender or the
operations of
21
Borrower or any of its Affiliates. Borrower and each of its Affiliates shall
rely entirely on their own judgment with respect to such matters, and any
review, inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by Lender in connection with such matters is solely for
the protection of Lender and neither Borrower nor any Affiliate is entitled to
rely thereon.
15. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF BORROWER
AND LENDER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF SANTA XXXXX, STATE OF CALIFORNIA. BORROWER AND
LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF
THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
BORROWER: LENDER:
SOUNDBITE COMMUNICATIONS, INC. LIGHTHOUSE CAPITAL PARTNERS IV, L.P.
By: /s/ Xxxx XxXxxxxxx By: LIGHTHOUSE MANAGEMENT PARTNERS IV,
--------------------------------- L.L.C., its general partner
Name: Xxxx XxXxxxxxx
Title: CEO
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: XXXXXX X. XXXX
Title: COO
Exhibit A - Collateral
Exhibit B - Equity Terms
Exhibit C - Landlord Consent
Exhibit D - Loan Agreement Supplement
Exhibit E - Ancillary Documents
22
EXHIBIT A
DEBTOR/BORROWER: SOUNDBITE COMMUNICATIONS, INC.
SECURED PARTY/LENDER: LIGHTHOUSE CAPITAL PARTNERS IV, L.P.
COLLATERAL
The Collateral shall consist of all right, title and interest of Debtor in
and to all the following:
All right, title, interest, claims and demands of Debtor in and to each and
every item of goods, equipment, software, inventory, fixtures or personal
property that is financed pursuant to any Loan and Security Agreement by and
between Debtor and Secured Party, including without limitation, that described
in ANNEX A attached hereto whether now owned or hereafter acquired, wherever
located, together with all substitutions, renewals or replacements of and
additions, improvements, accessions and accumulations to any and all of the
foregoing, together with all the rents, issues, income, profits and avails
therefrom and all of the products and proceeds thereof resulting from the sale,
lease, license or other disposition thereof, including without limitation,
insurance, proceeds of insurance, proceeds of proceeds, cash proceeds, non-cash
proceeds, condemnation, requisition or similar payments, and all proceeds from
sales, renewals, releases or other dispositions thereof. Undefined terms used
herein shall have the meanings given to them in the UCC, in effect from time to
time.
1
ANNEX A
TO
EXHIBIT A
The following represent further specific descriptions of the financed
property:
2
EXHIBIT B
EQUITY TERMS
See Warrant
1
EXHIBIT C
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Lighthouse Capital Partners IV, L.P.
000 Xxxxx'x Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attn.: Contract Administration
CONSENT TO REMOVAL OF PERSONAL PROPERTY
KNOW ALL PERSONS BY THESE PRESENTS:
(a) The undersigned has an interest as owner and landlord in that certain
real property (the "Real Property") in the County of ____________, Commonwealth
of Massachusetts, described as: SEE EXHIBIT 1 ATTACHED HERETO FOR FULL LEGAL
DESCRIPTION, and commonly known as Three Xxxxxxxxxx Xxxxx Xxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (Parcel No.______).
(b) SOUNDBITE COMMUNICATIONS, INC., a Delaware corporation ("Borrower"),
has entered into or will enter into a Loan and Security Agreement No. 340040201
with LIGHTHOUSE CAPITAL PARTNERS IV, L.P. ("Lender") (as amended and
supplemented from time to time, the "Agreement").
(c) Lender, as a condition to entering into the Agreement, requires that
the undersigned consent to the removal by Lender of the equipment and other
assets in which Lender has a security interest pursuant to the Agreement
(hereinafter the "Equipment") from the Real Property, no matter how it is
affixed thereto, and to the other matters set forth below.
NOW, THEREFORE, for good and sufficient consideration, receipt of which is
hereby acknowledged, the undersigned consents to the placing of the Equipment on
the Real Property, and agrees with Lender as follows:
1. The undersigned waives and releases each and every right which
undersigned now has, under the laws of the Commonwealth of Massachusetts or by
virtue of the lease for the Real Property now in effect, to levy or distrain
upon for rent, in arrears, in advance or both, or to claim or assert title to
the Equipment that is already on said Real Property, or may hereafter be
delivered or installed thereon.
2. The Equipment shall be considered to be personal property and shall not
be considered part of the Real Property regardless of whether or by what means
it is or may become attached or affixed to the Real Property.
3. The undersigned will permit Lender, or its agent or representative, to
enter upon the Real Property for the purpose of exercising any right it may have
under the terms of the Agreement or otherwise, including, without limitation,
the right to remove the Equipment; provided, however, that if Lender, in
removing the Equipment damages any improvements of the undersigned on the Real
Property, Lender will, at its expense, cause same to be repaired, normal wear
and tear excepted. The right of Lender to enter the Real Properly shall not
terminate until thirty (30) days after Lender receives written notice from the
undersigned of the expiration or termination of the Lease; provided such 30 day
period shall be extended by the number of days Lender is prohibited by law from
removing the Equipment.
4. This agreement shall be binding upon the heirs, successors and assigns
of the undersigned and shall inure to the benefit of Lender and its successors
and assigns.
1
IN WITNESS WHEREOF, the undersigned has executed this instrument this ____ day
of _________, 2002.
LANDLORD Notarial Acknowledgment required.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ATTACH LEGAL DESCRIPTION OF THE REAL PROPERTY
2
EXHIBIT D
LOAN AGREEMENT SUPPLEMENT XX. 00
XXXX XXXXXXXXX XXXXXXXXXX XX. 00, dated ______________ ("Supplement"), to
the Loan and Security Agreement No. 340040201 dated as of August 14, 2002 (the
"Agreement") by and between SOUNDBITE COMMUNICATIONS, Inc., a Delaware
corporation (the "Borrower"), and LIGHTHOUSE CAPITAL PARTNERS IV, L.P. (the
"Lender").
Capitalized terms used herein but not otherwise defined herein are used
with the respective meanings given to such terms in the Agreement.
The amount being advanced under this Supplement is $___________.
Attached as ANNEX A hereto is the Stipulated Loan Value Table which sets
forth the schedule of Stipulated Loan Values with respect to the Loan.
Attached as ANNEX B hereto is the Summary of Loan Agreement Supplement.
Attached as ANNEX C hereto is a list of equipment added to the Collateral
financed under the Agreement.
Borrower hereby certifies that (a) the foregoing information is true and
correct and authorizes Lender to endorse in its books and records, the Basic
Rate applicable to the Loan contemplated in this Loan Agreement Supplement and
the principal amount set forth in the Summary of Loan Agreement Supplement; (b)
the representations and warranties made by Borrower in SECTION 5 of the Loan
Agreement and in the other Loan Documents are true and correct on the date
hereof and will be true and correct on the Funding Date; (c) Borrower has met or
will by the Funding Date meet all conditions set forth in SECTION 3 of the Loan
Agreement; (d) Borrower is now, and on the Funding Date will be, in compliance
with the covenants and the requirements contained in SECTIONS 6 and 7 of the
Loan Agreement; and (e) no Default or Event of Default has occurred and is
continuing under the Loan Agreement.
This Supplement is being delivered in the State of California.
This Supplement may be executed by Borrower and Lender in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, Borrower and Lender have caused this Supplement to be
duly executed and delivered as of this day and year first above written.
BORROWER; LENDER:
SOUNDBITE COMMUNICATIONS, INC. LIGHTHOUSE CAPITAL PARTNERS IV, L.P.
By: LIGHTHOUSE MANAGEMENT
By: PARTNERS IV, L.L.C., its general
--------------------------------- partner
Name:
-------------------------------
Title: By:
------------------------------ ------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Annex A - Stipulated Loan Value Table
Annex B - Summary of Loan Agreement Supplement
Annex C - List of Collateral
ANNEX A
STIPULATED LOAN VALUE TABLE
TO
LOAN AGREEMENT SUPPLEMENT NO. 01
To LOAN AND SECURITY AGREEMENT NO. 340040201, dated August 14, 2002
("Agreement"), by and between LIGHTHOUSE CAPITAL PARTNERS IV, L.P., a Delaware
limited partnership ("Lender"), and SOUNDBITE COMMUNICATIONS, INC., a Delaware
corporation ("Borrower").
(All capitalized terms not otherwise defined herein shall have the meanings
given to such terms in the Agreement).
STIPULATED LOAN VALUE. In the case of an Event of Loss, the Stipulated Loan
Value for each item of Equipment is the Stated Cost for the item(s) multiplied
by Stipulated Loan Value Percentage for the Payment Number following the month
of the Event of Loss.
Stipulated
Loan
Payment Value
Number Percentage*
------- -----------
1 111.88%
2 109.78%
3 106.95%
4 104.54%
5 102.11%
6 99.65%
7 97.18%
8 94.68%
9 92.16%
10 89.627%
11 87.01%
12 84.46%
13 81.84%
14 79.20%
15 76.53%
16 73.84%
17 71.12%
18 68.38%
Stipulated
Loan
Payment Value
Number Percentage*
------- -----------
19 65.61%
20 62.81%
21 59.98%
22 57.13%
23 54.25%
24 51.34%
25 48.41%
26 45.45%
27 42.67%
28 39.46%
29 36.44%
30 33.39%
31 30.31%
32 27.21%
33 24.08%
34 20.93%
35 17.75%
36 and thereafter 15.00%
* Each Stipulated Loan Value amount assumes payment of all Scheduled Payments
due on or before the indicated Payment Date.
Borrower: ___________________________ Lender: ________________________________
ANNEX B
SUMMARY OF LOAN AGREEMENT SUPPLEMENT NO. 01, to
LOAN AND SECURITY AGREEMENT NO. 340040201 dated August 14, 2002 ("Agreement"),
by and between LIGHTHOUSE CAPITAL PARTNERS IV, L.P. ("Lender") and
SOUNDBITE COMMUNICATIONS, INC., a Delaware corporation ("Borrower").
(All capitalized terms not otherwise defined herein shall have the meanings
given to such terms in the Agreement.)
Loan Funding Date: __________, 20__
Original Loan Amount: $__________
Basic Rate: _____%
Interim Payment: $__________
Loan Factor: _____%
Scheduled Payment Amount*: $__________
Final Payment*: An additional amount equal to the Final Payment Percentage
multiplied by the original Loan Amount then in effect, shall be
paid on the Maturity Date with respect to such Loan.
LENDER:
LIGHTHOUSE CAPITAL PARTNERS IV, L.P.
By: LIGHTHOUSE MANAGEMENT PARTNERS IV,
L.L.C., its general partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT E
ANCILLARY DOCUMENTS
Officer's Certificate
Insurance Request form
SOUNDBITE COMMUNICATIONS, INC.
OFFICER'S CERTIFICATE
The undersigned, _________________, hereby certifies that:
1. He/She is the duly elected and acting __________ of SOUNDBITE
COMMUNICATIONS, INC., a Delaware corporation (the "Company").
2. That on the date hereof, each person listed below holds the office in
the Company indicated opposite his or her name and that the signature appearing
thereon is the genuine signature of each such person:
NAME OFFICE SIGNATURE
---- ------ ---------
-------------------------- ----------------------- -------------------------
-------------------------- ----------------------- -------------------------
-------------------------- ----------------------- -------------------------
3. Attached hereto as EXHIBIT A is a true and correct copy of the
Certificate of Incorporation of the Company, as amended, as in effect as of the
date hereof.
4. Attached hereto as EXHIBIT B is a true and correct copy of the Bylaws of
the Company, as amended, as in effect as of the date hereof.
5. Attached hereto as EXHIBIT C is a copy of the resolutions of the Board
of Directors of the Company authorizing and approving the Company's execution,
delivery and performance of a loan facility with Lighthouse Capital Partners IV,
L.P.
IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate
on _____________________.
SOUNDBITE COMMUNICATIONS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
I, the President of the Company, do hereby certify that ______________ is
the duly qualified, elected and acting ___________________ of the Company and
that the above signature is his or her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Officer's Certificate on ________________.
SOUNDBITE COMMUNICATIONS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EVIDENCE OF INSURANCE
RE: Loan and Security Agreement No. 340040201 ("Agreement")
Please submit the attached Certificate of Insurance to your Insurance Broker as
soon as possible.
Please note that the Certificate of Insurance is required prior to funding.
Broker: Please prepare a Certificate of
Insurance as described and send to
To: ________________________________ Certificate Holder via fax and regular
From: SOUNDBITE COMMUNICATIONS, INC. mail below.
CERTIFICATE OF INSURANCE DATE(MM/DD/YY
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER
OF INFORMATION ONLY AND CONFERS NO
RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AMEND, EXTEND OR
ALTER THE COVERAGE AFFORDED BY THE
POLICIES BELOW.
INSURERS AFFORDING COVERAGE
INSURED INSURER A: _____________________________
INSURER B: _____________________________
SoundBite Communications, Inc. INSURER C: _____________________________
COVERAGES
THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED
ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR
CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES
DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH
POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
IN
SR EFFECTIVE EXPIRATION
LT TYPE OF POLICY DATE(MM DATE
R INSURANCE NUMBER /DD/YY) (MM/DD/YY LIMITS
--- --------------------- ------ --------- ---------- ---------------------------------
A X GENERAL EACH OCCURRENCE $2,000,000
LIABILITY FIRE DAMAGE (Any one
COMMERCIAL fire) $ included
GENERAL MED EXP (Any one
LIABLITY CLAIMS Person) $ 10,000
MADE X OCCUR PERSONAL & ADV
INJURY $1,000,000
_____________________ GENERAL AGGREGATE $2,000,000
PRODUCTS-COM/OP AGG $2,000,000
_____________________
________________
GEN'L AGGREGATE
LIMIT APPLIES PER
POLICY PROJECT LOC
AUTOMOBILE COMBINED SINGLE
LIABILITY ANY LIMIT
AUTO (Ea accident) $ ________
ALL OWNED BODILY INJURY
AUTOS (Per person) $ ________
SCHEDULED BODILY INJURY
AUTOS HIRED (Per accident) $ ________
AUTOS PROPERTY DAMAGE (Per
NON-OWNED AUTOS accident $ ________
OTHER THAN
_____________________ EA OCC $ ________
________________ AUTO ONLY AGG $ ________
A EXCESS LIABILITY EACH OCCURRENCE
OCCUR AGGREGATE
CLAIMS MADE $ ________
DEDUCTIBLE $ ________
RETENTION $ ________ $ ________
A OTHER Limit: 1,500,000 'All Risk"
Business Personal of Direct
Property Physical
Loss or
Damage
(Subject
to Policy
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/EXCLUSIONS ADDED BY
ENDORSEMENT/SPECIAL PROVISIONS
CERTIFICATE HOLDER
Lighthouse Capital Partners IV, L.P. SHOULD ANY OF THE ABOVE DESCRIBED
000 Xxxxx'x Xxxxxxx Xxxx POLICIES BE CANCELLED BEFORE THE
Greenbrae, CA. 94904-3011 EXPIRATION DATE THEREOF, THE ISSUING
Attn: Contract Administration INSURER WILL ENDEAVOR TO MAIL 30 DAYS
Fax: 000-000-0000 Phone:000-000-0000 WRITTEN NOTICE TO THE CERTIFICATE HOLDER
NAMED TO THE LEFT, BUT FAILURE TO DO SO
SHALL IMPOSE NO OBLIGATION OR LIABILITY
OF ANY KIND UPON THE INSURER, ITS AGENTS
OR REPRESENTATIVES.
