EXHIBIT 10.13
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement"), dated as of the ____
day of September, 1998, is made and entered into on the terms and
conditions hereinafter set forth, by and between METRISA, INC., a
Delaware corporation ("Borrower"), and SIRROM INVESTMENTS,
INC., a Tennessee corporation ("Lender").
RECITALS:
WHEREAS, Borrower has requested that Lender make available
to Borrower a term loan in the original principal amount of Two Million
and No/100ths Dollars ($2,000,000) (the "Loan") on the terms and
conditions hereinafter set forth, and for the purpose(s) hereinafter set
forth; and
WHEREAS, in order to induce Lender to make the Loan to
Borrower, Borrower has made certain representations to Lender; and
WHEREAS, Lender, in reliance upon the representations and
inducements of Borrower, has agreed to make the Loan upon the terms
and conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the agreement of
Lender to make the Loan, the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrower and
Lender hereby agree as follows:
ARTICLE 1
THE LOAN
1.1 Evidence of Loan Indebtedness and Repayment. Subject
to the terms and conditions contained herein, the Lender shall make the
Loan to Borrower by wire transfer in immediately available funds. The
Loan shall be evidenced by a Secured Promissory Note in the original
principal amount of Two Million and No/100ths Dollars ($2,000,000),
dated as of the date hereof, executed by Borrower in favor of Lender (the
"Note"). The Loan shall be payable in accordance with the terms of the
Note. The Note, this Agreement and any other instruments and
documents executed by Borrower, any guarantor of Borrower, or any
shareholder, subsidiary or affiliate of Borrower ("Affiliates"), now or
hereafter evidencing, securing or in any way related to the indebtedness
evidenced by the Note are herein individually referred to as a "Loan
Document" and collectively referred to as the "Loan Documents." The
term "Obligations" as used herein shall refer to (a) the Loan to be made
concurrently or in connection with this Agreement, as evidenced by the
Note, and any renewals or extensions thereof, (b) the full and prompt
payment and performance of any and all other indebtednesses and other
obligations of Borrower to Lender, direct or contingent (including but not
limited to obligations incurred as endorser, guarantor or surety), however
evidenced or denominated, and however and whenever incurred,
including but not limited to indebtednesses incurred pursuant to any
present or future commitment of Lender to Borrower and (c) all future
advances made by Lender for taxes, levies, insurance and preservation of
the Collateral and all attorneys' fees, court costs and expenses of
whatever kind incident to the collection of any of said indebtedness or
other obligations and the enforcement and protection of the security
interest created hereby or by the other Loan Documents.
1.2 Processing Fee. Borrower shall pay Lender a processing
fee of Fifty Thousand Dollars ($50,000), Twenty-Five Thousand Dollars
($25,000) of which has previously been paid to Lender and Twenty-Five
Thousand Dollars ($25,000) of which shall be paid on the date the Loan
is funded by Lender. Upon Exercise of the Stock Purchase Warrant
issued pursuant to Section 4.1, Borrower will pay Lender a fee of Seventy
Thousand Four Hundred Thirty One Dollars ($70,431).
1.3 Prepayment. Borrower may prepay the indebtedness
evidenced by the Note in whole or in part at any time and from time to
time, without penalty or premium.
1.4 Purposes of Loan and Use of Proceeds. The purpose of
the Loan shall be to provide additional strategic acquisition and working
capital to Borrower.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Borrower's Representations. Borrower hereby represents
and warrants to Lender as follows:
(a) Corporate Status. Borrower is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Delaware; and has the corporate power to own and
operate its properties, to carry on its business as now conducted
and to enter into and to perform its obligations under this
Agreement and the other Loan Documents to which it is a party.
Borrower is duly qualified to do business and in good standing
in each state in which a failure to be so qualified would have a
material adverse effect on Borrower's financial condition or its
ability to conduct its business in the manner now conducted.
(b) Subsidiaries. Borrower neither owns nor has an
interest in, directly or indirectly, any other corporation,
partnership, joint venture or other business organization
("Subsidiaries").
(c) Authorization. Borrower has full legal right,
power and authority to conduct its business and affairs. Borrower
has full legal right, power and authority to enter into and perform
its obligations under the Loan Documents, without the consent or
approval of any other person, firm, governmental agency or other
legal entity. The execution and delivery of this Agreement, the
borrowing hereunder, the execution and delivery of each Loan
Document to which Borrower is a party, and the performance by
Borrower of its obligations thereunder are within the corporate
powers of Borrower and have been duly authorized by all
necessary corporate action properly taken and Borrower has
received all necessary governmental approvals, if any, that are
required. The officer(s) executing this Agreement, the Note and
all of the other Loan Documents to which Borrower is a party are
duly authorized to act on behalf of Borrower.
(d) Validity and Binding Effect. This Agreement and
the other Loan Documents are the legal, valid and binding
obligations of the Borrower, enforceable in accordance with their
respective terms, subject to limitations imposed by bankruptcy,
insolvency, moratorium or other similar laws affecting the rights
of creditors generally or the application of general equitable
principles.
(e) Capitalization. As of the date hereof, the
authorized capital stock of Borrower consists solely of 2,000,000
shares of common stock, $0.50 par value per share ("Common
Stock"), of which 1,022,911 shares are issued and outstanding
(the "Shares") and 143,738 shares of which are reserved for
issuance upon exercise of the Stock Purchase Warrant dated as of
the date hereof and issued to Lender (the "Warrant") and
10,000,000 shares of Preferred Stock of which 0 are issued and
outstanding; provided, however, that the number of shares
reserved for issuance upon exercise of the Warrant may be
increased from time to time in accordance with the term of the
Warrant. Attached hereto as Schedule 2.1(e) as a table showing
the capitalization of Borrower, as of the date hereof, on a fully
diluted basis. As of the date hereof, Borrower does not have
outstanding any stock or securities convertible or exchangeable
for any shares of its Common Stock or containing any profit
participation features, and does not have outstanding any rights
or options to subscribe for or to purchase its Common Stock or
any stock appreciation rights or phantom stock plans, except as
set forth on Schedule 2.1(e) and the Warrant. Schedule 2.1(e)
accurately sets forth the following with respect to all outstanding
options and rights to acquire the Borrower's Common Stock: (i)
the total number of shares issuable upon exercise of all
outstanding options; (ii) the range of exercise prices for all such
outstanding options; (iii) the number of shares issuable, the
exercise price and the expiration date for each such outstanding
option; and (iv) with respect to all outstanding options, warrants
and rights to acquire Borrower's capital stock other than the
Warrant, the holder, the number of shares covered, the exercise
price and the expiration date. As of the date hereof, Borrower is
not subject to any obligation (contingent or otherwise) to
repurchase, redeem, retire or otherwise acquire any shares of its
capital stock or any warrants, options or other rights to acquire its
capital stock, except as set forth in the Warrant or on Schedule
2.1(e). As of the date hereof, all of the outstanding shares of
Borrower's capital stock are validly issued, fully paid and
nonassessable. Except as set forth on Schedule 2.1(e), there are
no statutory or contractual preemptive rights, rights of first
refusal, anti-dilution rights or any similar rights, held by
stockholders or option holders of Borrower, with respect to the
issuance of the Warrant or the issuance of the Common Stock
upon exercise of the Warrant and all such rights have been
effectively waived with regard to the issuance of the Warrant, the
exercise of the Warrant and the issuance of the Common Stock
upon exercise of the Warrant. Borrower has not violated any
applicable federal or state securities laws in connection with the
offer, sale or issuance of any of its capital stock, and the offer,
sale and issuance of the Warrant hereunder do not require
registration under the Securities Act of 1933, as amended, or any
applicable state securities laws. To the best of Borrower's
knowledge, there are no agreements among Borrower's
shareholders with respect to any other aspect of Borrower's
affairs, except as set forth on Schedule 2.1(e).
(f) Trademarks, Patents, Etc. Schedule 2.1(f) is an
accurate and complete list of all patents, trademarks, tradenames,
trademark registrations, service names, service marks, copyrights,
licenses, formulas and applications therefor owned by Borrower
or used or required by Borrower in the operation of its business,
title to each of which is, except as set forth in Schedule 2.1(f)
hereto, held by Borrower free and clear of all adverse claims,
liens, security agreements, restrictions or other encumbrances.
Except as set forth in Schedule 2.1(f), Borrower owns or
possesses adequate (and will use its best efforts to obtain as
expediently as possible any additional) licenses or other rights to
use all patents, trademarks, trade names, service marks, trade
secrets or other intangible property rights and know-how
necessary to entitle Borrower to conduct its business as presently
being conducted. There is no infringement action, lawsuit, claim
or complaint which asserts that Borrower's operations violate or
infringe the rights or the trade names, trademarks, trademark
registrations, service names, service marks or copyrights of others
with respect to any apparatus or method of Borrower or any
adversely held trademarks, trade names, trademark registrations,
service names, service marks or copyrights, and Borrower is not
in any way making use of any confidential information or trade
secrets of any person, except with the consent of such person.
Except as set forth in Schedule 2.1(f), Borrower has taken
reasonable steps to protect its proprietary information (except
disclosure of source codes pursuant to licensing agreements) and
is the lawful owner of the proprietary information free and clear
of any claim of any third party. As used herein, "proprietary
information" includes without limitation, (i) any computer
programming language, software (excluding software licensed
from third parties), hardware, firmware or related documentation,
inventions, technical and nontechnical data related thereto, and
(ii) other documentation, inventions and data related to patterns,
plans, methods, techniques, drawings, finances, customer lists,
suppliers, products, special pricing and cost information, designs,
processes, procedures, formulas, research data owned or used by
Borrower or marketing studies conducted by Borrower, all of
which Borrower considers to be commercially important and
competitively sensitive and which generally has not been
disclosed to third parties.
(g) No Conflicts. Consummation of the transactions
contemplated hereby and the performance of the obligations of
Borrower under and by virtue of the Loan Documents do not
conflict with, and will not result in any breach of, or constitute a
default or trigger a lien under, any mortgage, security deed or
agreement, deed of trust, lease, bank loan or credit agreement,
corporate charter or bylaws, agreement or certificate of limited
partnership, partnership agreement, license, franchise or any other
instrument or agreement to which Borrower is a party or by which
Borrower or its respective properties may be bound or affected or
to which Borrower has not obtained an effective waiver.
(h) Litigation. There are no actions, suits,
arbitrations, administrative hearings or other proceedings
pending, or, to the knowledge of Borrower threatened, against or
affecting Borrower or any of Borrower's property or involving
the validity or enforceability of any of the Loan Documents at law
or in equity, or before any governmental or administrative
agency. To Borrower's knowledge, Borrower is not subject to
any order, writ, injunction, decree or demand of any court or any
governmental authority.
(i) Financial Statements. The financial statements of
Tytronics (Borrower's predecessor) dated September 30, 1997,
and the interim financial statements of Borrower dated June 30,
1998, which are attached hereto as Schedule 2.1(i)(A), are true
and correct in all material respects, have been prepared on the
basis of generally accepted accounting principles consistently
applied, and fairly present the financial condition of Borrower as
of the date(s) thereof. No material adverse change has occurred
in the financial condition of Borrower since the date(s) thereof,
and no additional borrowings have been made by Borrower since
the date(s) thereof other than as set forth on Schedule 2.1(i)(B).
(j) Other Agreements; No Defaults. Borrower is not
a party to any indenture, loan or credit agreement, lease or other
agreement or instrument, or subject to any charter or corporate
restriction, that could have a material adverse effect on the
business, properties, assets, operations or conditions, financial or
otherwise, of Borrower, or the ability of Borrower to carry out its
obligations under the Loan Documents to which it is a party.
Borrower is not in default in any respect in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument material to
its business to which it is a party, including but not limited to this
Agreement and the other Loan Documents, and no other default
or event has occurred and is continuing that with notice or the
passage of time or both would constitute a default or event of
default under any of same.
(k) Compliance With Law. Borrower has obtained all
necessary licenses, permits and approvals and authorizations
necessary or required in order to conduct its business and affairs
as heretofore conducted and as hereafter intended to be
conducted. Borrower is in compliance with all laws, regulations,
decrees and orders applicable to it (including but not limited to
laws, regulations, decrees and orders relating to environmental,
occupational and health standards and controls, antitrust,
monopoly, restraint of trade or unfair competition), except to the
extent that any noncompliance, in the aggregate, cannot
reasonably be expected to have a material adverse effect on its
business, operations, property or financial condition and will not
materially adversely affect Borrower's ability to perform its
obligations under the Loan Documents.
(l) Debt. Schedule 2.1(l) is a complete and correct
list of all credit agreements, indentures, purchase agreements,
promissory notes and other evidences of indebtedness, guaranties,
capital leases and other instruments, agreements and
arrangements presently in effect providing for or relating to
extensions of credit (including agreements and arrangements for
the issuance of letters of credit or for acceptance financing) in
respect of which the Borrower or any of its properties is in any
manner directly or contingently obligated and the maximum
principal or face amounts of the credit in question that are
outstanding and that can be outstanding are correctly stated, and
all liens of any nature given or agreed to be given as security
therefor are correctly described or indicated in Schedule 2.1(l).
(m) Taxes. Borrower has filed or caused to be filed all
tax returns that are required to be filed (except for returns that
have been appropriately extended), and has paid, or will pay when
due, all taxes shown to be due and payable on said returns and all
other taxes, impositions, assessments, fees or other charges
imposed on it by any governmental authority, agency or
instrumentality, prior to any delinquency with respect thereto
(other than taxes, impositions, assessments, fees and charges
currently being contested in good faith by appropriate
proceedings, for which appropriate amounts have been reserved).
No tax liens have been filed against Borrower or any of its
property.
(n) Certain Transactions. Except as set forth on
Schedule 2.1(n) hereto, Borrower is not indebted, directly or
indirectly, to any of its shareholders, officers or directors or to
their respective spouses or children, in any amount whatsoever,
and none of said shareholders, officers or directors or any
members of their immediate families, are indebted to Borrower
or have any direct or indirect ownership interest in any firm or
corporation with which Borrower has a business relationship, or
any firm or corporation which competes with Borrower, except
that shareholders, officers and/or directors of Borrower may own
no more than 4.9% of outstanding stock of publicly traded
companies which may compete with Borrower. No shareholder,
officer or director or any member of their immediate families, is,
directly or indirectly, interested in any material contract with
Borrower. Borrower is not a guarantor or indemnitor of any
indebtedness of any other person, firm, corporation or other legal
entity.
(o) Small Business Concern. Borrower, together with
its "affiliates" (as that term is defined in Title 13, Code of Federal
Regulations, 121.103), is a "small business concern" within the
meaning of the Small Business Investment Act of 1958, as
amended, and the regulations promulgated thereunder. The
information set forth in the Small Business Administration Forms
480, 652 and Parts A and B of Form 1031 regarding Borrower
upon delivery, pursuant to Section 4.1 hereof, will be accurate
and complete. Borrower does not presently engage in, and it will
not hereafter engage in, any activities, and Borrower will not use
directly or indirectly, the proceeds from the Loan, for any purpose
for which a Small Business Investment Company is prohibited
from providing funds by the Small Business Investment Act and
the regulations thereunder, including Title 13, Code of Federal
Regulations 107.720.
(p) Statements Not False or Misleading. No
representation or warranty given as of the date hereof by
Borrower contained in this Agreement or any schedule attached
hereto or any statement in any document, certificate or other
instrument furnished or to be furnished by Borrower to Lender
pursuant hereto, taken as a whole, contains or will (as of the time
so furnished) contain any untrue statement of a material fact, or
omits or will (as of the time so furnished) omit to state any
material fact which is necessary in order to make the statements
contained therein not misleading.
(q) Margin Regulations. Borrower is not engaged in
the business of extending credit for the purpose of purchasing or
carrying margin stock. No proceeds received pursuant to this
Agreement will be used to purchase or carry any equity security
of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
(r) Significant Contracts. Schedule 2.1(r) is a
complete and correct list of all contracts, agreements and other
documents pursuant to which Borrower receives revenues in
excess of $75,000 per fiscal year or has committed to make
expenditures in excess of $75,000 per fiscal year. Each such
contract, agreement and other document is in full force and effect
as of the date hereof and Borrower knows of no reason why such
contracts, agreements and other documents would not remain in
full force and effect pursuant to the terms thereof.
(s) Environment. Borrower has duly complied with,
and its business, operations, assets, equipment, property,
leaseholds or other facilities are in compliance with, the
provisions of all federal, state and local environmental, health,
and safety laws, codes and ordinances, and all rules and
regulations promulgated thereunder. Borrower has been issued
and will maintain all required federal, state and local permits,
licenses, certificates and approvals relating to (i) air emissions;
(ii) discharges to surface water or groundwater; (iii) noise
emissions; (iv) solid or liquid waste disposal; (v) the use,
generation, storage, transportation or disposal of toxic or
hazardous substances or wastes (which shall include any and all
such materials listed in any federal, state or local law, code or
ordinance and all rules and regulations promulgated thereunder as
hazardous or potentially hazardous); or (vi) other environmental,
health or safety matters. Borrower has not received notice of, or
knows of, or suspects facts which might constitute any violations
of any federal, state or local environmental, health or safety laws,
codes or ordinances, and any rules or regulations promulgated
thereunder with respect to its businesses, operations, assets,
equipment, property, leaseholds, or other facilities. Except in
accordance with a valid governmental permit, license, certificate
or approval, to Borrower's knowledge, there has been no
emission, spill, release or discharge into or upon (i) the air;
(ii) soils, or any improvements located thereon; (iii) surface water
or groundwater; or (iv) the sewer, septic system or waste
treatment, storage or disposal system servicing the premises, of
any toxic or hazardous substances or wastes at or from the
premises; and accordingly the premises of Borrower are free of all
such toxic or hazardous substances or wastes. There has been no
complaint, order, directive, claim, citation or notice by any
governmental authority or any person or entity with respect to
(i) air emissions; (ii) spills, releases or discharges to soils or
improvements located thereon, surface water, groundwater or the
sewer, septic system or waste treatment, storage or disposal
systems servicing the premises; (iii) noise emissions; (iv) solid or
liquid waste disposal; (v) the use, generation, storage,
transportation or disposal of toxic or hazardous substances or
waste; or (vi) other environmental, health or safety matters
affecting Borrower or its business, operations, assets, equipment,
property, leaseholds or other facilities. Borrower does not have
any indebtedness, obligation or liability (absolute or contingent,
matured or not matured), with respect to the storage, treatment,
cleanup or disposal of any solid wastes, hazardous wastes or other
toxic or hazardous substances (including without limitation any
such indebtedness, obligation, or liability with respect to any
current regulation, law or statute regarding such storage,
treatment, cleanup or disposal).
(t) Fees/Commissions. Borrower has not agreed to
pay any finder's fee, commission, origination fee (except for the
processing and commitment fees due pursuant to Section 1.2
hereof and a commission payable to Gateway Financial Group in
the amount of $60,000) or other fee or charge to any person or
entity with respect to the Loan and investment transactions
contemplated hereunder.
(u) ERISA. Borrower is in compliance in all material
respects with all applicable provisions of Title IV of the
Employee Retirement Income Security Act of 1974, Pub. L. No.
93-406, September 2, 1974, 00 Xxxx. 000, 00 X.X.X.X. 0000 et
seq. (1975), as amended form time to time ("ERISA"). Neither
a reportable event nor a prohibited transaction (as defined in
ERISA) has occurred and is continuing with respect to any
pension plan that is subject to the requirements of ERISA (a
"Plan"); no notice of intent to terminate a Plan has been filed nor
has any Plan been terminated; no circumstances exist which
constitute grounds entitling the Pension Benefit Guaranty
Corporation (together with any entity succeeding to or all of its
functions, the "PBGC") to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC
instituted any such proceedings; neither Borrower nor any
commonly controlled entity (as defined in ERISA) has
completely or partially withdrawn from a multiemployer plan (as
defined in ERISA); Borrower and each commonly controlled
entity has met its minimum funding requirements under ERISA
with respect to all of its Plans and the present fair market value of
all Plan property exceeds the present value of all vested benefits
under each Plan, as determined on the most recent valuation date
of the Plan and in accordance with the provisions of ERISA and
the regulations thereunder for calculating the potential liability of
Borrower or any commonly controlled entity to the PBGC or the
Plan under Title IV or ERISA; and neither Borrower nor any
commonly controlled entity has incurred any liability to the
PBGC under ERISA.
(v) Title to Properties. Borrower has good,
indefeasible and insurable title to, or valid leasehold interests in,
all its real properties and good title to its other assets, free and
clear of all liens other than Permitted Liens (as defined in Section
3.15 hereof).
(w) Limited Offering of Note and Warrant. Neither
Borrower nor anyone acting on its behalf has offered the Note, the
Warrant or any similar securities for sale to, or solicited any offer
to buy any of the same from, or otherwise approached or
negotiated in respect thereof, with, any person other than Lender
and not more than 35 other institutional investors. Neither
Borrower nor anyone acting on its behalf has taken, or will take,
any action which would subject the issuance or sale of the Note
and Warrant to Section 5 of the Securities Act of 1933, as
amended, or the registration or qualification provisions of the
blue sky laws of any state.
(x) Registration Rights. Except as described in the
Warrant, Borrower is not under any obligation to register under
the Securities Act of 1933, as amended, or the Trust Indenture
Act of 1939, as amended, any of its presently outstanding
securities or any of its securities that may subsequently be issued.
(y) Employees. Borrower has no current labor
problems or disputes which have resulted or Borrower reasonably
believes could be expected to have a material adverse effect on
the operations, properties or financial condition of Borrower, or
Borrower's ability to perform its obligations hereunder.
(z) Issuance Taxes. All taxes imposed on Borrower
in connection with the issuance, sale and delivery of the Note, the
Warrant and the capital stock issuable upon exercise of the
Warrant have been or will be fully paid, and all laws imposing
such taxes have been or will be fully satisfied by Borrower.
(aa) Solvency. As of the date hereof and giving effect
to the making of the Loan, Borrower (i) has capital sufficient to
carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its
debts as they mature, (ii) owns property having a value, both at
fair valuation and at present fair saleable value, greater than the
amount required to pay its probable liabilities (including
contingencies), and (iii) does not believe that it will incur debts
or liabilities beyond its ability to pay such debts or liabilities as
they mature.
(bb) Location of Properties, Places of Business. The
only jurisdictions in which Borrower maintains any tangible
personal property or carries on business are as listed in Schedule
2.1(bb) hereto. All xxxxxxxx for the supply of goods and services
by Borrower are made from, and require payment to be made to,
the chief executive office of the Borrower.
(cc) Year 2000 Compatibility. Borrower has reviewed
its financial accounting systems and other computer systems for
year 2000 compatibility and is taking all necessary steps to ensure
that such issues will not have a material adverse effect on
Borrower's business, operations, property or financial condition.
ARTICLE 3
COVENANTS AND AGREEMENTS
Borrower covenants and agrees that during the term of this
Agreement:
3.1 Payment of Obligations. Borrower shall pay the
indebtedness evidenced by the Note according to the terms thereof, and
shall timely pay or perform, as the case may be, all of the other
obligations of Borrower to Lender, direct or contingent, however
evidenced or denominated, and however and whenever incurred,
including but not limited to indebtedness incurred pursuant to any present
or future commitment of Lender to Borrower, together with interest
thereon, and any extensions, modifications, consolidations and/or
renewals thereof and any notes given in payment thereof.
3.2 Financial Statements and Reports. Borrower shall furnish
to Lender (a) as soon as practicable and in any event within one hundred
twenty (120) days after the end of each fiscal year of Borrower, an
audited balance sheet of Borrower as of the close of such fiscal year, an
audited statement of operations of Borrower as of the close of such fiscal
year and an audited statement of cash flows for Borrower for such fiscal
year, prepared in accordance with generally accepted accounting
principles consistently applied and accompanied by an unqualified audit
report prepared by an independent certified public accountant acceptable
to Lender showing the financial condition of Borrower at the close of
such fiscal year and the results of its operations during such fiscal year
and accompanied by a certificate of the President of Borrower, stating
that to the best of the knowledge of such officer, Borrower has kept,
observed, performed and fulfilled each covenant, term and condition of
this Agreement and the other Loan Documents during the preceding fiscal
year and that no Event of Default has occurred and is continuing (or if an
Event of Default has occurred and is continuing, specifying the nature of
same, the period of existence of same and the action Borrower proposes
to take in connection therewith), (b) within thirty (30) days of the end of
each calendar month, a status report indicating the financial performance
of Borrower during such month and the financial position of Borrower as
of the end of such month in the format required by Lender (which format
will be delivered to Borrower on a diskette), (c) within forty-five (45)
days of the end of each quarter, a balance sheet of Borrower as of the
close of such quarter and a statement of operations of Borrower as of the
close of such quarter, all in reasonable detail, and prepared substantially
in accordance with generally accepted accounting principles consistently
applied (except for the absence of footnotes and subject to year-end
adjustments), and (d) with reasonable promptness, such other financial
data, including without limitation, accounts receivable agings, as Lender
may reasonably request. Without Lender's prior written consent (except
as required by FASB), Borrower shall not modify or change any
accounting policies or procedures, including Borrower's fiscal year, in
effect on the date hereof.
3.3 Maintenance of Books and Records; Inspection.
Borrower shall maintain its books, accounts and records in accordance
with generally accepted accounting principles consistently applied, and
after reasonable notice from Lender permit Lender, its officers and
employees and any professionals designated by Lender in writing, at
Borrower's expense, to visit and inspect any of its properties, corporate
books and financial records, and to discuss its accounts, affairs and
finances with Borrower or the principal officers of Borrower during
reasonable business hours, all at such times as Lender may reasonably
request; provided that no such inspection shall materially interfere with
the conduct of Borrower's business.
3.4 Insurance. Without limiting any of the requirements of
any of the other Loan Documents, Borrower shall maintain, in amounts
customary for entities engaged in comparable business activities, (a) to
the extent required by applicable law, worker's compensation insurance
(or maintain a legally sufficient amount of self insurance against worker's
compensation liabilities, with adequate reserves, under a plan approved
by Lender, such approval not to be unreasonably withheld or delayed),
and (b) fire and "all risk" casualty insurance on its properties against such
hazards and in at least such amounts as are customary in Borrower's
business. Borrower will make reasonable efforts to obtain and maintain
public liability insurance in an amount, and at a cost, deemed reasonable
to the Borrower's Board of Directors. At the request of Lender, Borrower
will deliver forthwith a certificate specifying the details of such insurance
in effect.
3.5 Taxes and Assessments. Borrower shall (a) file all tax
returns and appropriate schedules thereto that are required to be filed
under applicable law, prior to the date of delinquency, (b) pay and
discharge all taxes, assessments and governmental charges or levies
imposed upon Borrower upon its income and profits or upon any
properties belonging to it, prior to the date on which penalties attach
thereto, and (c) pay all taxes, assessments and governmental charges or
levies that, if unpaid, might become a lien or charge upon any of its
properties; provided, however, that Borrower in good faith may contest
any such tax, assessment, governmental charge or levy described in the
foregoing clauses (b) and (c) so long as appropriate reserves in
accordance with generally accepted accounting principles are maintained
with respect thereto.
3.6 Corporate Existence. Borrower shall maintain its
corporate existence and good standing in the state of its incorporation,
and its qualification and good standing as a foreign corporation in each
jurisdiction in which such qualification is necessary pursuant to
applicable law.
3.7 Compliance with Law and Other Agreements. Except
where the failure to do so would not materially adversely affect
Borrower's operations, properties, financial condition or its ability to
fulfill its obligations under the Loan Documents, Borrower shall maintain
its business operations and property owned or used in connection
therewith in compliance with (a) all applicable federal, state and local
laws, regulations and ordinances governing such business operations and
the use and ownership of such property, and (b) all agreements, licenses,
franchises, indentures and mortgages to which Borrower is a party or by
which Borrower or any of its properties is bound. Without limiting the
foregoing, Borrower shall pay all of its indebtedness promptly in
accordance with the terms thereof.
3.8 Notice of Default; Perceived Breach. Borrower shall give
written notice to Lender of the occurrence of any default, event of default
or Event of Default under this Agreement or any other Loan Document
promptly upon the occurrence thereof.
3.9 Notice of Litigation. Borrower shall give notice, in
writing, to Lender of (a) any actions, suits or proceedings, instituted by
any persons whomsoever against Borrower or affecting any of the assets
of Borrower wherein the amount at issue is in excess of Fifty Thousand
and No/100ths Dollars ($50,000.00) and (b) any dispute, not resolved
within sixty (60) days of the commencement thereof, between Borrower
on the one hand and any governmental regulatory body on the other hand,
which dispute might materially interfere with the normal operations of
Borrower.
3.10 Conduct of Business. Borrower will continue to engage
in a business of the same general type and manner as conducted by it on
the date of this Agreement.
3.11 ERISA Plan. If Borrower has in effect, or hereafter
institutes, a Plan that is subject to the requirements of ERISA, then the
following warranty and covenants shall be applicable during such period
as any such Plan shall be in effect: (a) Borrower hereby warrants that no
fact that might constitute grounds for the involuntary termination of the
Plan, or for the appointment by the appropriate United States District
Court of a trustee to administer the Plan, exists at the time of execution
of this Agreement; (b) Borrower hereby covenants that throughout the
existence of the Plan, Borrower's contributions under the Plan will meet
the minimum funding standards required by ERISA and Borrower will
not institute a distress termination of the Plan; and (c) Borrower
covenants that it will send to Lender a copy of any notice of a reportable
event (as defined in ERISA) required by ERISA to be filed with the
Labor Department or the Pension Benefit Guaranty Corporation, at the
time that such notice is so filed.
3.12 Dividends, Distributions, Stock Rights, etc. Without the
prior written consent of Lender, Borrower shall not declare or pay any
dividend of any kind (other than stock dividends payable to all holders of
any class of capital stock), in cash or in property, on any class of the
capital stock of Borrower (except for the repurchase of the stock of
terminated employees (other than Xxxx Xxxxx) which shall not exceed
$25,000 per year in the aggregate and the repurchase of the stock of J.
Xxxxxxx Xxxxxxx and Xxxxxx Xxxxxxx in an amount not to exceed
$32,000), or purchase, redeem, retire or otherwise acquire for value any
shares of such stock, nor make any distribution of any kind in cash or
property in respect thereof, nor make any return of capital of
shareholders, nor make any payments in cash or property in respect of
any stock options, stock bonus or similar plan nor grant any preemptive
rights with respect to the capital stock of Borrower.
3.13 Guaranties; Loans; Payment of Debt. Without the prior
written consent of Lender, Borrower shall not guarantee nor be liable in
any manner, whether directly or indirectly, or become contingently liable
after the date of this Agreement in connection with the obligations or
indebtedness of any person or entity whatsoever, except for the
endorsement of negotiable instruments payable to Borrower for deposit
or collection in the ordinary course of business. Without the prior written
consent of Lender, Borrower shall not (a) make any loan, advance or
extension of credit to any person other than in the normal course of its
business, or (b) make any payment on any subordinated debt except in
accordance with subordination agreements in effect on the date hereof
and with respect to Permitted Liens as defined in Section 3.15, and other
than trade payables incurred in the ordinary course of Borrower's
business.
3.14 Debt. Without the prior written consent of Lender,
Borrower shall not create, incur, assume or suffer to exist indebtedness
of any description whatsoever, excluding:
(a) the indebtedness evidenced by the Note;
(b) the endorsement of negotiable instruments payable to
Borrower for deposit or collection in the ordinary course
of business;
(c) trade payables incurred in the ordinary course of business
(each of which, individually, does not exceed $75,000);
and
(d) the indebtedness listed on Schedule 2.1(l) hereto which
shall include debt senior to Lender in an amount not to
exceed $2.0 million.
(e) Commencing January 1, 1999, "Total Funded Long Term
Debt" (excluding current portion) in amounts less than the
product of 4.7 x Earnings Before Interest, Taxes,
Depreciation and Amortization, determined in accordance
with generally accepted accounting principles on a twelve
(12) month trailing basis ("EBITDA") at the end of each
fiscal quarter. Beginning January 1, 2001, Borrower shall
not be permitted to incur Total Funded Long Term Debt
in excess of 4.5 x EBITDA calculated in accordance with
the previous sentence.
3.15 No Liens. Without prior written consent of Lender,
Borrower shall not create, incur, assume or suffer to exist any lien,
security interest, security title, mortgage, deed of trust or other
encumbrance upon or with respect to any of its assets, now owned or
hereafter acquired, except the following permitted liens (the "Permitted
Liens"):
(a) liens in favor of Lender;
(b) liens for taxes or assessments or other governmental
charges or levies if not yet due and payable;
(c) liens on leased equipment granted in connection with the
leasing of such equipment in favor of the lessor of such
equipment;
(d) liens described on Schedule 2.1(l) hereto.
3.16 Mergers, Consolidations, Acquisitions and Sales. Without
the prior written consent of Lender, Borrower shall not (a) be a party to
any merger, consolidation or corporate reorganization, to the extent the
Borrower is not the surviving entity (b) sell, transfer, convey, or lease all
or any substantial part of its assets, nor (c) create any Subsidiaries nor
convey any of its assets to any Subsidiary. In the event that Borrower
shall acquire all or substantially all of the assets or stock of, or any
partnership or joint venture interest in, any other person, firm or entity,
and shall issue indebtedness to the sellers thereof (to the extent permitted
under Section 3.14), such indebtedness shall be subordinate to the Loan
on terms acceptable to Lender.
3.17 Transactions With Affiliates. Borrower shall not enter
into any transaction, including, without limitation, the purchase, sale or
exchange of property or the rendering of any service, with any affiliate,
except in the ordinary course of and pursuant to the reasonable
requirements of Borrower's business and upon fair and reasonable terms
no less favorable to Borrower than Borrower would obtain in a
comparable arm's length transaction with a person not an affiliate. For
the purposes of this Section 3.17, "affiliate" shall mean a person,
corporation, partnership or other entity controlling, controlled by or under
common control with Borrower.
3.18 Employment Contracts. Without the prior written consent
of Lender, Borrower shall not (a) enter into any employment agreement
or other written compensation agreement that has a term of greater than
one year with any of Borrower's executive officers or (b) increase total
compensation paid to the executive officers of Borrower by more than ten
percent (12.5%) per year.
3.19 Environment. Borrower shall be and remain in
compliance with the provisions of all federal, state and local
environmental, health, and safety laws, codes and ordinances, and all
rules and regulations issued thereunder; notify Lender immediately of any
notice of a hazardous discharge or environmental complaint received
from any governmental agency or any other party; notify Lender
immediately of any hazardous discharge from or affecting its premises;
immediately contain and remove the same, in compliance with all
applicable laws; promptly pay any fine or penalty assessed in connection
therewith; permit Lender to inspect the premises, to conduct tests thereon,
and to inspect all books, correspondence, and records pertaining thereto;
and at Lender's request, and at Borrower's expense, provide a report of a
qualified environmental engineer, satisfactory in scope, form, and content
to Lender, and such other and further assurances reasonably satisfactory
to Lender that the condition has been corrected.
3.20 Landlord Consents. Borrower shall use its best efforts to
obtain a Landlord Consent and Subordination of Lien, in a form
reasonably satisfactory to Lender, from each landlord from whom
Borrower now or hereafter may lease space.
ARTICLE 4
CONDITIONS TO CLOSING
4.1 Closing of the Loan. The obligation of Lender to fund the
Loan on the date hereof (the "Closing Date") is subject to the fulfillment,
on or prior to the Closing Date, of each of the following conditions:
(a) Borrower shall have performed and complied in
all material respects with all of the covenants, agreements,
obligations and conditions required by this Agreement.
(b) Lender shall have received an opinion of the
Borrower's counsel, Bowditch & Xxxxx, dated the Closing Date,
in form and substance satisfactory to Lender's counsel, Xxxxxxxx
& Xxxxxxxx, P.C.
(c) Borrower shall have delivered to Lender a Note
executed by Borrower, in form and substance satisfactory to
Lender.
(d) Borrower shall have delivered to Lender a Stock
Purchase Warrant executed by Borrower, in form and substance
satisfactory to Lender, and the related Warrant Valuation Letter
executed by Borrower.
(e) Borrower shall have delivered to Lender a
Security Agreement and related UCC-1 Financing Statement(s),
executed by Borrower, each of which is in form and substance
satisfactory to Lender.
(f) Borrower shall have delivered to Lender a
Landlord's Consent and Subordination of Lien, executed by each
of Borrower's landlords, in form and substance satisfactory to
Lender.
(g) Borrower shall have delivered to Lender an
Intellectual Property Security Agreement executed by Borrower,
in form and substance satisfactory to Lender.
(h) Borrower shall have delivered to Lender an
Authorization Agreement for Pre-Authorized Payments (Debit)
executed by Borrower, in form and substance satisfactory to
Lender.
(i) Borrower shall have delivered to Lender the Small
Business Administration Forms 480, 652 and 1031 (Parts A and
B) completed by Borrower.
(j) Borrower shall have delivered to Lender the Small
Business Administration Economic Impact Assessment
completed by Borrower, in form and substance satisfactory to
Lender.
(k) Borrower shall have delivered to Lender an
Escrow Agreement, executed by Borrower, in form and substance
satisfactory to Lender.
(l) Borrower shall have delivered to Lender copies of
the corporate charter and other publicly filed organizational
documents of Borrower, certified by the Secretary of State or
other appropriate public official in the jurisdiction in which
Borrower is incorporated.
(m) Borrower shall have delivered to Lender certified
(as of the date of this Agreement) copies of all corporate action
taken by Borrower, including resolutions of its Board of
Directors, authorizing the execution, delivery and performance of
the Loan Documents.
(n) Borrower shall have delivered to Lender a
certificate as to the legal existence and good standing of the
Borrower, issued by the Secretary of State or other appropriate
public official in the jurisdiction in which the Borrower is
incorporated.
(o) Borrower shall have delivered to Lender
certificates of the Secretaries of State or other appropriate public
officials as to Borrower's qualification to do business and good
standing in each jurisdiction in which a failure to be so qualified
would have a material adverse effect on its financial condition or
its ability to conduct its business in the manner now conducted
and as hereafter intended to be conducted.
(p) Lender shall enter into a Subordination Agreement
with Silicon Valley Bank ("Senior Lender") on terms satisfactory
to Lender.
ARTICLE 5
DEFAULT AND REMEDIES
5.1 Events of Default. The occurrence of any of the following
shall constitute an Event of Default hereunder:
(a) Default in the payment of the principal of or
interest on the indebtedness evidenced by the Note in accordance
with the terms of the Note, which default is not cured within ten
(10) days;
(b) Any misrepresentation by Borrower, any
guarantor of the Loan, or any Affiliate as to any material matter
hereunder or under any of the other Loan Documents, or delivery
by Borrower of any schedule, statement, resolution, report,
certificate, notice or writing to Lender that is untrue in any
material respect on the date as of which the facts set forth therein
are stated or certified;
(c) Failure of Borrower, any guarantor of the Loan, or
any Affiliate to perform any of its obligations, covenants or
agreements under this Agreement, the Note or any of the other
Loan Documents;
(d) Borrower (i) shall generally not pay or shall be
unable to pay its debts as such debts become due, or (ii) shall
make an assignment for the benefit of creditors or petition or
apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets, or (iii) shall
commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, whether now or hereafter in effect,
or (iv) shall have had any such petition or application filed or any
such proceeding commenced against it that is not dismissed
within sixty (60) days, or (v) shall indicate, by any act or
intentional and purposeful omission, its consent to, approval of or
acquiescence in any such petition, application, proceeding or
order for relief or the appointment of a custodian, receiver or
trustee for it or a substantial part of its assets, or (vi) shall suffer
any such custodianship, receivership or trusteeship to continue
undischarged for a period of sixty (60) days or more;
(e) Borrower shall be liquidated, dissolved,
partitioned or terminated, or the charter thereof shall expire or be
revoked;
(f) A default or event of default shall occur under any
of the other Loan Documents and, if subject to a cure right, such
default or event of default shall not be cured within the applicable
cure period;
(g) Borrower shall default in the timely payment or
performance of any obligation now or hereafter owed to Lender
in connection with any other indebtedness of Borrower now or
hereafter owed to Lender;
(h) Borrower shall have defaulted and continue to be
in default in the timely payment of or performance of any
covenant relating to any other indebtedness or obligation, which
in the aggregate exceeds Twenty-Five Thousand and No/100ths
Dollars ($25,000.00) or materially adversely affects Borrower's
operations, properties or financial condition, including the
indebtedness owed to Senior Lender;
(i) Xxxx X. Xxxxx shall not longer serve as an officer
or director of Borrower; and
(j) There shall have occurred a material adverse
change in Borrower's financial condition, properties or business.
With respect to any Event of Default described above that is
capable of being cured and that does not already provide its own cure
procedure (a "Curable Default"), the occurrence of such Curable Default
shall not constitute an Event of Default hereunder if such Curable Default
is fully cured and/or corrected within thirty (30) days (ten (10) days, if
such Curable Default may be cured by payment of a sum of money) of
notice thereof to Borrower given in accordance with the provisions
hereof; provided, however, that this provision shall not require notice to
Borrower and an opportunity to cure any Curable Default of which
Borrower has had actual knowledge for the requisite number of days set
forth.
5.2 Acceleration of Maturity; Remedies. Upon the
occurrence of any Event of Default described in subsection 5.1(d), the
indebtedness evidenced by the Note as well as any and all other
indebtedness of Borrower to Lender shall be immediately due and
payable in full; and upon the occurrence of any other Event of Default
described above, Lender at any time thereafter may at its option
accelerate the maturity of the indebtedness evidenced by the Note as well
as any and all other indebtedness of Borrower to Lender; all without
notice of any kind. Upon the occurrence of any such Event of Default
and the acceleration of the maturity of the indebtedness evidenced by the
Note:
(a) Lender shall be immediately entitled to exercise
any and all rights and remedies possessed by Lender pursuant to
the terms of the Note and all of the other Loan Documents; and
(b) Lender shall have any and all other rights and
remedies that Lender may now or hereafter possess at law, in
equity or by statute.
5.3 Remedies Cumulative; No Waiver. No right, power or
remedy conferred upon or reserved to Lender by this Agreement or any
of the other Loan Documents is intended to be exclusive of any other
right, power or remedy, but each and every such right, power and remedy
shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder, under any of the other Loan
Documents or now or hereafter existing at law, in equity or by statute.
No delay or omission by Lender to exercise any right, power or remedy
accruing upon the occurrence of any Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein, and
every right, power and remedy given by this Agreement and the other
Loan Documents to Lender may be exercised from time to time and as
often as may be deemed expedient by Lender.
5.4 Proceeds of Remedies. Any or all proceeds resulting from
the exercise of any or all of the foregoing remedies shall be applied as set
forth in the Loan Document(s) providing the remedy or remedies
exercised, if none is specified, or if the remedy is provided by this
Agreement, then as follows:
First, to the costs and expenses, including without
limitation reasonable attorneys' fees and disbursements, incurred
by Lender in connection with the exercise of its remedies;
Second, to the expenses of curing the default that has
occurred, in the event that Lender elects, in its sole discretion, to
cure the default that has occurred;
Third, to the payment of the Obligations of Borrower,
including but not limited to the payment of the principal of and
interest on the indebtedness evidenced by the Note, in such order
of priority as Lender shall determine in its sole discretion; and
Fourth, the remainder, if any, to Borrower or to any other
person lawfully thereunto entitled.
ARTICLE 6
TERMINATION
6.1 Termination of this Agreement. This Agreement shall
remain in full force and effect until the payment in full by Borrower of
the Obligations, at which time Lender shall cancel the Note and deliver
it to Borrower; provided, however, that the indemnities provided in
Section 7.15 shall survive the termination of this Agreement.
ARTICLE 7
MISCELLANEOUS
7.1 Performance By Lender. If Borrower shall default in the
payment, performance or observance of any covenant, term or condition
of this Agreement, which default is not cured within the applicable cure
period, then Lender may, at its option, pay, perform or observe the same,
and all payments made or costs or expenses incurred by Lender in
connection therewith (including but not limited to reasonable attorneys'
fees), with interest thereon at the highest default rate provided in the
Note, shall be immediately repaid to Lender by Borrower and shall
constitute a part of the Obligations. Lender shall be the sole judge of the
necessity for any such actions and of the amounts to be paid.
7.2 Successors and Assigns Included in Parties. Whenever in
this Agreement one of the parties hereto is named or referred to, the heirs,
legal representatives, successors, successors-in-title and assigns of such
parties shall be included, and all covenants and agreements contained in
this Agreement by or on behalf of Borrower or by or on behalf of Lender
shall bind and inure to the benefit of their respective heirs, legal
representatives, successors-in-title and assigns, whether so expressed or
not.
7.3 Costs and Expenses. Borrower agrees to pay all
reasonable costs and expenses incurred by Lender in connection with the
making of the Loan, including but not limited to filing fees, recording
taxes and reasonable attorneys' fees, promptly upon demand of Lender.
Borrower further agrees to pay all premiums for insurance required to be
maintained by Borrower pursuant to the terms of the Loan Documents
and all of the out-of-pocket costs and expenses incurred by Lender in
connection with the collection of the Loan, amendment to the Loan
Documents, or prepayment of the Loan, including but not limited to
reasonable attorneys' fees, promptly upon demand of Lender.
7.4 Assignment. The Note, this Agreement and the other
Loan Documents may be endorsed, assigned and/or transferred in whole
or in part by Lender, and any such holder and/or assignee of the same
shall succeed to and be possessed of the rights and powers of Lender
under all of the same to the extent transferred and assigned. Lender may
grant participations in all or any portion of its interest in the indebtedness
evidenced by the Note, and in such event Borrower shall continue to
make payments due under the Loan Documents to Lender and Lender
shall have the sole responsibility of allocating and forwarding such
payments in the appropriate manner and amounts. Borrower shall not
assign any of its rights nor delegate any of its duties hereunder or under
any of the other Loan Documents without the prior written consent of
Lender.
7.5 Time of the Essence. Time is of the essence with respect
to each and every covenant, agreement and obligation of Borrower
hereunder and under all of the other Loan Documents.
7.6 Severability. If any provision(s) of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not
be affected thereby and shall be enforced to the greatest extent permitted
by law.
7.7 Interest and Loan Charges Not to Exceed Maximum
Allowed by Law. Anything in this Agreement, the Note or any of the
other Loan Documents to the contrary notwithstanding, in no event
whatsoever, whether by reason of advancement of proceeds of the Loan,
acceleration of the maturity of the unpaid balance of the Loan or
otherwise, shall the interest and other charges agreed to be paid to Lender
for the use of the money advanced or to be advanced hereunder exceed
the maximum amounts collectible under applicable laws in effect from
time to time. It is understood and agreed by the parties that, if for any
reason whatsoever the interest or loan charges paid or contracted to be
paid by Borrower in respect of the indebtedness evidenced by the Note
shall exceed the maximum amounts collectible under applicable laws in
effect from time to time, then ipso facto, the obligation to pay such
interest and/or loan charges shall be reduced to the maximum amounts
collectible under applicable laws in effect from time to time, and any
amounts collected by Lender that exceed such maximum amounts shall
be applied to the reduction of the principal balance of the indebtedness
evidenced by the Note and/or refunded to Borrower so that at no time
shall the interest or loan charges paid or payable in respect of the
indebtedness evidenced by the Note exceed the maximum amounts
permitted from time to time by applicable law.
7.8 Article and Section Headings; Defined Terms. Numbered
and titled article and section headings and defined terms are for
convenience only and shall not be construed as amplifying or limiting any
of the provisions of this Agreement.
7.9 Notices. Any and all notices, elections or demands
permitted or required to be made under this Agreement shall be in
writing, signed by the party giving such notice, election or demand and
shall be delivered personally, telecopied, or sent by certified mail or
overnight via nationally recognized courier service (such as Federal
Express), to the other party at the address set forth below, or at such other
address as may be supplied in writing and of which receipt has been
acknowledged in writing. The date of personal delivery or telecopy or
two (2) business days after the date of mailing (or the next business day
after delivery to such courier service), as the case may be, shall be the
date of such notice, election or demand. For the purposes of this
Agreement:
The Address of Lender is: Sirrom Investments, Inc.
Xxxxx 000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telecopy No.: 615/726-1208
with a copy to: Xxxxxxxx & Xxxxxxxx, P.C.
Xxxxx 000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy No.: 615/256-9958
The Address of Borrower is: Metrisa, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Telecopy No.: 781/275-9665
with a copy to: Bowditch & Xxxxx
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy No.: 508/756-7636
7.10 Entire Agreement. This Agreement and the other written
agreements between Borrower and Lender represent the entire agreement
between the parties concerning the subject matter hereof, and all oral
discussions and prior agreements are merged herein; provided, if there is
a conflict between this Agreement and any other document executed
contemporaneously herewith with respect to the Obligations, the
provision of this Agreement shall control. The execution and delivery of
this Agreement and the other Loan Documents by Borrower were not
based upon any fact or material provided by Lender, nor was Borrower
induced or influenced to enter into this Agreement or the other Loan
Documents by any representation, statement, analysis or promise by
Lender.
7.11 Governing Law and Amendments. This Agreement shall
be construed and enforced under the laws of the State of Tennessee
applicable to contracts to be wholly performed in such State. No
amendment or modification hereof shall be effective except in a writing
executed by each of the parties hereto.
7.12 Survival of Representations and Warranties. All
representations and warranties contained herein or in any of the Loan
Documents or made by or furnished on behalf of Borrower in connection
herewith or in any Loan Documents shall survive the execution and
delivery of this Agreement and the other Loan Documents.
7.13 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties to this Agreement in
separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and
the same Agreement.
7.14 Construction and Interpretation. Should any provision of
this Agreement require judicial interpretation, the parties hereto agree that
the court interpreting or construing the same shall not apply a
presumption that the terms hereof shall be more strictly construed against
one party by reason of the rule of construction that a document is to be
more strictly construed against the party that itself or through its agent
prepared the same, it being agreed that Borrower, Lender and their
respective agents have participated in the preparation hereof.
7.15 General Indemnification. Borrower agrees to indemnify
Lender, its officers, directors, employees and agents (individually, an
"Indemnified Party" and collectively, the "Indemnified Parties") and each
of them and agrees to hold each of them harmless from and against any
and all losses, liabilities, damages, costs, expenses and claims of any and
every kind whatsoever (except those arising solely by reason of the gross
negligence or willful misconduct of an Indemnified Party) which may be
imposed on, incurred by, or asserted against the Indemnified Parties or
any of them arising by reason of any action or inaction or omission to any
act legally required of Borrower (including as required pursuant hereto
or pursuant to any other Loan Document).
7.16 Standard of Care; Limitation of Damages. Lender shall
be liable to Borrower only for matters arising from this Agreement or
otherwise related to the Obligations resulting from Lender's gross
negligence or willful misconduct, and liability for all other matters is
hereby waived. Lender shall not in any event be liable to Borrower for
special or consequential damages arising from this Agreement or
otherwise related to the Obligations.
7.17 Consent to Jurisdiction; Exclusive Venue. Borrower
hereby irrevocably consents to the jurisdiction of the United States
District Court for the Middle District of Tennessee and of all Tennessee
state courts sitting in Davidson County, Tennessee, for the purpose of any
litigation to which Lender may be a party and which concerns this
Agreement or the Obligations. It is further agreed that venue for any such
action shall lie exclusively with courts sitting in Davidson County,
Tennessee, unless Lender agrees to the contrary in writing.
7.18 Waiver of Trial by Jury. LENDER AND BORROWER
HEREBY KNOWINGLY AND VOLUNTARILY WITH THE
BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY
ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS,
WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW
OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING
TO THIS AGREEMENT OR THE LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, or have caused this Agreement to be executed by their duly
authorized officers, as of the day and year first above written.
LENDER:
SIRROM INVESTMENTS, INC.,
a Tennessee corporation
By:_________________________
Title:_______________________
BORROWER:
METRISA, INC.,
a Delaware corporation
By:_________________________
Title:_______________________
Index of Schedules
Schedule 2.1(b) - Subsidiaries
Schedule 2.1(e) - Capitalization Table
Schedule 2.1(f) - Intellectual Property
Schedule 2.1(i)(A) and (B) - Financial Statements
Schedule 2.1(l) - Debt and Liens
Schedule 2.1(n) - Shareholder Loans
Schedule 2.1(q) - Significant Contracts
Schedule 2.1(aa) - Location of Properties and Place of Business
{J:\clients\bus\h2148\0100\00051660.TXT;1}
1
