Exhibit 99.3
EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT
THIS EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT (this "Exim
Agreement") dated as of December 30, 2002, between SILICON VALLEY BANK, a
California chartered bank, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 and with a loan production office located
at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton,
Massachusetts 02462, doing business under the name "Silicon Valley East"
("Bank") and (i) IBASIS, INC., a Delaware corporation with its chief executive
office located at 20 Second Avenue, Burlington, Massachusetts 01803 and (ii)
IBASIS GLOBAL, INC., Delaware corporation with its chief executive office
located at 20 Second Avenue, Burlington, Massachusetts 01803 (jointly and
severally, individually and collectively, "Borrower"), provides the terms on
which Bank shall lend to Borrower and Borrower shall repay Bank. The parties
agree as follows:
SECTION 3. RECITALS.
A. Borrower and Bank are parties to that certain Loan and Security
Agreement of even date, as may be amended from time to time (as may be amended,
the "Domestic Agreement"), together with related documents executed in
conjunction therewith.
B. Borrower and Bank desire in this Exim Agreement to set forth their
agreement with respect to a working capital facility to be guaranteed by the
Export-Import Bank of the United States (the "Exim Bank").
SECTION 4. LOAN AND TERMS OF PAYMENT
4.1 PROMISE TO PAY. Borrower hereby unconditionally promises to pay
Bank the unpaid principal amount of all Advances and interest on the unpaid
principal amount of the Advances as and when due in accordance with this Exim
Agreement.
4.2 REVOLVING ADVANCES. Subject to the terms and conditions of this
Exim Agreement, Bank agrees to make Advances to Borrower in an amount not to
exceed (i) the Exim Committed Line or the Borrowing Base, whichever is less,
minus (ii) the aggregate outstanding Advances (including any Letters of Credit
issued hereunder), as determined by the Borrowing Base Certificate to be
delivered to the Bank. Notwithstanding the foregoing, the aggregate amount of
Revolving Loans (as defined in the Domestic Agreement) plus all Advances
hereunder shall at no time exceed $15,000,000.
To evidence the Advances, Borrower shall execute and deliver to Bank on
the date hereof a promissory note (the "Note") in substantially the form
attached hereto as EXHIBIT B.
Whenever Borrower desires an Advance, Borrower will notify Bank by
facsimile transmission or telephone no later than 3:00 p.m. Eastern time, on the
Business Day that the Advance is to be made together with any additional
documentation required under the Borrower Agreement, including without
limitation, as set forth in Section 2.03 of the Borrower Agreement. In addition
to the procedure set forth in the preceding sentence, Bank is authorized to make
Advances under this Exim Agreement, based upon instructions received from a
Responsible Officer or without instructions if in Bank's discretion such
Advances are necessary to meet Obligations which have become due and remain
unpaid. Bank shall be entitled to rely on any telephonic notice given by a
person who Bank reasonably believes to be a Responsible Officer or a designee
(as designated in writing by a Responsible Officer) thereof, and Borrower shall
indemnify and hold Bank harmless for any damages or loss suffered by Bank as a
result of such reliance. Bank will credit the amount of Advances made under this
Section to Borrower's deposit account. Amounts borrowed pursuant to this Section
may be repaid at any time and re-borrowed at any time during the term of this
Exim Agreement so long as no Event of Default has occurred and is continuing.
4.3 LETTERS OF CREDIT. At the request of Borrower, Bank may, in its
good faith business judgment, issue or arrange for the issuance of letters of
credit for the account of Borrower, in each case in form and substance
satisfactory to Bank in its sole discretion (collectively, "Letters of Credit").
The aggregate face amount of all outstanding Letters of Credit issued hereunder
from time to time shall not exceed $5,000,000.00 (the "Letter of Credit
Sublimit"), and shall be reserved against Advances which would otherwise be
available hereunder. Borrower shall pay all bank charges for the issuance of
Letters of Credit, together with such additional fee as Bank's letter of credit
department shall generally charge in connection with the issuance of the Letters
of Credit. Any payment by Bank under or in connection with a Letter of Credit
shall constitute an Advance hereunder on the date such payment is made. Each
Letter of Credit shall have an expiry date no later than thirty days prior to
the Exim Maturity Date. Except on account of Bank's gross negligence or wilful
misconduct, Borrower hereby agrees to indemnify, save, and hold Bank harmless
from any loss, cost, expense, or liability, including payments made by Bank,
expenses, and reasonable attorneys' fees incurred by Bank arising out of or in
connection with any Letters of Credit. Borrower agrees to be bound by the
regulations and interpretations of the issuer of any Letters of Credit
guarantied by Bank and opened for Borrower's account or by Bank's
interpretations of any Letter of Credit issued by Bank for Borrower's account,
and Borrower understands and agrees that Bank shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrower's instructions or those contained in the Letters of Credit or any
modifications, amendments, or supplements thereto except on account of Bank's
gross negligence or wilful misconduct. Borrower understands that Letters of
Credit may require Bank to indemnify the issuing bank for certain costs or
liabilities arising out of claims by Borrower against such issuing bank Except
on account of Bank's gross negligence or wilful misconduct, Borrower hereby
agrees to indemnify and hold Bank harmless with respect to any loss, cost,
expense, or liability incurred by Bank under any Letter of Credit as a result of
Bank's indemnification of any such issuing bank. The provisions of this Exim
Agreement, as it pertains to Letters of Credit, and any other present or future
documents or agreements between Borrower and Bank relating to Letters of Credit
are cumulative.
4.4 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations under this Exim Agreement owed by Borrower to Bank is greater than
the lesser of (i) the Borrowing Base or (ii) the Exim Committed Line, the
Borrower shall immediately pay to Bank, in cash, the amount of such excess.
4.5 INTEREST RATE; PAYMENTS.
(a) INTEREST RATE. Advances accrue interest on the outstanding
principal balance at a per annum rate equal to the Prime Rate (as
defined herein) plus one percent (1.0%). The interest rate applicable
to the Obligations shall change on each date there is a change in the
Prime Rate. After an Event of Default, Obligations shall bear interest
at three percent (3.0%) above the rate effective immediately before
the Event of Default. The interest rate shall increase or decrease
when the Prime Rate
changes. Interest is computed on the basis of a 360 day year for the
actual number of days elapsed.
(b) PAYMENTS. Interest is payable on the Payment Date of each
month. Bank may debit any of Borrower's deposit accounts (other than
deposit accounts exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of Borrower's
employees) including Account Number 3300098558 for monthly interest
payments due hereunder or other Bank Expenses due hereunder. Bank
shall promptly notify Borrower when it debits Borrower's accounts.
These debits are not a set-off. Payments received after 12:00 noon
Eastern time are considered received at the opening of business on the
next Business Day. When a payment is due on a day that is not a
Business Day, the payment is due the next Business Day and additional
fees or interest, as applicable, shall continue to accrue.
4.6 FEES. Borrower shall pay, without duplication of those fees paid or
to be paid under Section 3 of the Schedule to the Domestic Agreement, to Bank:
(i) INITIAL EXIM FEE. A fully earned, non-refundable Initial
Loan Fee (as defined in the Domestic Agreement) due on the date
hereof; and
(ii) SUPPLEMENTAL EXIM FEE. A fully earned as of the date
hereof, non-refundable Supplemental Loan Fee (as defined in the
Domestic Agreement) due on the earlier to occur of (i)
acceleration of the Obligations after an Event of Default or (ii)
December 31, 2003; and
(iii) BANK EXPENSES. All Bank Expenses (including reasonable
attorneys' fees and expenses incurred through and after the date
of this Agreement) when due.
4.7 USE OF PROCEEDS. Borrower will use the proceeds of Advances only
for the purposes specified in the Borrower Agreement. Borrower shall not use the
proceeds of the Advances for any purpose prohibited herein or by the Borrower
Agreement.
4.8 TERM. This Exim Agreement shall become effective once duly executed
and authorized by Borrower and Bank and shall continue in full force and effect
for a term ending on the Exim Maturity Date, on which date all Obligations shall
become immediately due and payable.
SECTION 5. CONDITIONS OF LOANS
5.1 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of Bank to
make each Advance, including the initial Advance, is subject to the following
conditions:
(a) timely receipt by Bank of a Borrowing Base Certificate as
defined in the Borrower Agreement;
(b) the Exim Guarantee shall be in full force and effect; and
(c) except as otherwise disclosed to the Bank, the
representations and warranties contained in Section 5 hereof shall be
true and accurate in all material respects on and as of the date of
such Advance as though made at and as of each such date (except to the
extent they relate specifically to an earlier date, in which case such
representations and warranties shall continue to have been true and
accurate as of such date), and no potential Event of Default or Event
of Default shall have occurred and be continuing, or would result from
such Advance.
The making of each Advance shall be deemed to be a representation and
warranty by Borrower on the date of such Advance as to the accuracy of the facts
referred to in this Section 3.1.
SECTION 6. CREATION OF SECURITY INTEREST
6.1 GRANT OF SECURITY INTEREST. Borrower hereby grants Bank, to secure
the payment and performance in full of all of the Obligations and the
performance of each of Borrower's duties under the Loan Documents, a continuing
security interest in, and pledges and assigns to the Bank, the Collateral,
wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof. Borrower warrants and represents that the
security interest granted herein shall be a first priority security interest in
the Collateral. Upon the occurrence and during the continuance of an Event of
Default, Bank may place a "hold" on any deposit account pledged as Collateral.
Except as disclosed to Bank in writing, Borrower is not a party to, nor is bound
by, any material license or other material agreement with respect to which the
Borrower is the licensee that prohibits or otherwise restricts Borrower from
granting a security interest in Borrower's interest in such license or agreement
or any other property. Without prior consent from Bank, Borrower shall not enter
into, or become bound by, any such license or agreement which is reasonably
likely to have a material adverse impact on Borrower's business or financial
condition. Borrower shall take such steps as Bank reasonably requests to obtain
the consent of, or waiver by, any person whose consent or waiver is necessary
for all such licenses or contract rights to be deemed "Collateral" and for Bank
to have a security interest in it that might otherwise be restricted or
prohibited by law or by the terms of any such license or agreement, whether now
existing or entered into in the future. If Borrower shall at any time, acquire a
commercial tort claim, Borrower shall promptly notify Bank in a writing signed
by Borrower of the brief details thereof and grant to Bank in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably
satisfactory to Bank. Notwithstanding the foregoing, it is expressly
acknowledged and agreed that the security interest created in this Exim
Agreement in all of the Collateral (with the exception of Exim Eligible Foreign
Accounts, but only to the extent any Advances are actually made by the Bank to
the Borrower based upon such Exim Eligible Foreign Accounts), is subject to and
subordinate to the security interest granted to the Bank in the Domestic
Agreement with respect to the Collateral. Borrower agrees that any disposition
of the Collateral in violation of this Exim Agreement, by either the
Borrower or any other Person, shall be deemed to violate the rights of the Bank
under the Code. If this Exim Agreement is terminated, Bank's lien and security
interest in the Collateral shall continue until Borrower fully satisfies its
Obligations.
SECTION 7. REPRESENTATIONS AND WARRANTIES
Borrower represents, warrants and covenants as follows:
7.1 DOMESTIC LOAN DOCUMENTS. The representations and warranties
contained in the Domestic Loan Documents, which are incorporated by reference
into this Exim Agreement, are true and correct as of the date hereof.
SECTION 8. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until payment in full of all
Obligations, it shall do all of the following:
8.1 DOMESTIC LOAN DOCUMENTS. Borrower shall comply in all respects with
the terms and provisions of the Domestic Loan Documents, which terms and
provisions are incorporated into this Exim Agreement and shall survive the
termination of Domestic Agreement, which shall include, without limitation,
compliance with the financial reporting requirements set forth in the Domestic
Agreement and the financial covenants set forth the Domestic Agreement.
8.2 BORROWER AGREEMENT. Borrower shall comply with all of the terms of
the Borrower Agreement, including without limitation, the delivery of any and
all notices required pursuant to Sections 2.11 and/or 2.18 of the Borrower
Agreement. In the event of any conflict or inconsistency between any provision
contained in the Borrower Agreement with any provision contained in this Exim
Agreement, the more strict provision, with respect to Borrower, shall control.
8.3 NOTICE IN EVENT OF FILING OF ACTION FOR DEBTOR'S RELIEF. Borrower
shall notify Bank in writing within five (5) Business Days of the occurrence of
any of the following: (1) Borrower begins or consents in any manner to any
proceeding or arrangement for its liquidation in whole or in part or to any
other proceeding or arrangement whereby any of its assets are subject generally
to the payment of its liabilities or whereby any receiver, trustee, liquidator
or the like is appointed for it or any substantial part of its assets (including
without limitation the filing by Borrower of a petition for appointment as
debtor-in-possession under Title 11 of the U.S. Code); (2) Borrower fails to
obtain the dismissal or stay on appeal within thirty (30) calendar days of the
commencement of any proceeding arrangement referred to in (1) above; (3)
Borrower begins any other procedure for the relief of financially distressed or
insolvent debtors, or such procedure has been commenced against it, whether
voluntarily or involuntarily, and such procedure has not been effectively
terminated, dismissed or stayed within thirty (30) calendar days after the
commencement thereof, or (4) Borrower begins any procedure for its dissolution,
or a procedure therefor has been commenced against it.
8.4 PAYMENT IN DOLLARS. Borrower shall require payment in United States
Dollars for the products, unless the Exim Bank otherwise agrees in writing
hereafter.
8.5 FURTHER ASSURANCES. At any time and from time to time Borrower
shall (i) execute and deliver such further instruments, (ii) take such further
action as may reasonably be requested by Bank, and (iii) deliver such additional
information, reports, contracts, invoices and other data concerning the
Collateral as may reasonably be requested by Bank, all of the foregoing in
furtherance of the purposes of this Exim Agreement.
SECTION 9. NEGATIVE COVENANTS
Prior to the (i) payment in full of outstanding Obligations, and (ii)
termination of Bank's commitment to make any Advance, Borrower shall not do any
of the following without the Bank's written consent:
9.1 DOMESTIC LOAN DOCUMENTS. Violate or otherwise fail to comply with
any material provisions of the Domestic Loan Documents, which provisions are
incorporated into this Exim Agreement.
9.2 BORROWER AGREEMENT. Violate or otherwise fail to comply with any
material provision of the Borrower Agreement, including without limitation the
negative covenants set forth in Section 2.15.
9.3 EXIM GUARANTEE. Take any action, or permit any action to be taken,
that causes or, with the passage of time, could reasonably be expected to cause,
the Exim Guarantee to cease to be in full force and effect.
SECTION 10. EVENTS OF DEFAULT
Any one of the following is an Event of Default:
10.1 PAYMENT DEFAULT. If Borrower fails to pay when due, any of the
Obligations.
10.2 COVENANT DEFAULT; CROSS DEFAULT. If Borrower fails or neglects to
perform, keep, or observe any material term, provision, condition, covenant, or
agreement contained in this Exim Agreement, in any of the Domestic Loan
Documents which terms and provisions are incorporated into this Exim Agreement
and shall survive the termination of Domestic Agreement, the Borrower Agreement,
or the Exim Loan Documents, or an Event of Default occurs under any of the
Domestic Loan Documents or the Borrower Agreement; or
10.3 EXIM GUARANTEE. If the Exim Guarantee ceases for any reason to be
in full force and effect, or if the Exim Bank declares the Exim Guarantee void
or revokes or purports to revoke any obligations under the Exim Guarantee.
SECTION 11. BANK'S RIGHTS AND REMEDIES
11.1 RIGHTS AND REMEDIES. When an Event of Default occurs and continues
Bank may, without notice or demand, do any or all of the following:
(a) Declare all Obligations immediately due and payable (but if
an Event of Default described in Section 7.1(i) of the Domestic
Agreement occurs all Obligations are immediately due and payable
without any action by Bank);
(b) Stop advancing money or extending credit for Borrower's
benefit under this Exim Agreement or under any other agreement between
Borrower and Bank;
(c) Settle or adjust disputes and claims directly with account
debtors for amounts, on terms and in any order that Bank considers
advisable in its commercially reasonable discretion;
(d) Make any payments and do any acts it reasonably necessary to
protect its security interest in the Collateral. Borrower shall
assemble the Collateral if Bank requests and make it available as Bank
reasonably designates. Bank may enter premises where the Collateral is
located, take and maintain possession of any part of the Collateral,
and pay, purchase, contest, or compromise any Lien which appears to be
prior or superior to its security interest and pay all expenses
incurred. Borrower grants Bank a license to enter and occupy any of
its premises, without charge, to exercise any of Bank's rights or
remedies;
(e) Apply to the Obligations any (i) balances and deposits of
Borrower it holds, or (ii) any amount held by Bank owing to or for the
credit or the account of Borrower;
(f) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell the Collateral. Bank is
granted a non-exclusive, royalty-free license or other right to use,
without charge, Borrower's labels, patents, copyrights, mask works,
rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any similar property as it
pertains to the Collateral, in completing production of, advertising
for sale, and selling any Collateral and, in connection with Bank's
exercise of its rights under this Section, Borrower's rights under all
licenses and all franchise agreements inure to Bank's benefit; and
(g) Dispose of the Collateral according to the Code.
11.2 EXIM DIRECTION. Upon the occurrence of an Event of Default, Exim
Bank shall have a right to: (i) direct Bank to exercise the remedies specified
in Section 9.1 and (ii) request that Bank accelerate the maturity of any other
loans to Borrower as to which Bank has a right to accelerate.
11.3 EXIM NOTIFICATION. Bank shall have the right to immediately notify
Exim Bank in writing if it has knowledge of the occurrence of any of the
following events: (1) any failure to pay any amount due under this Exim
Agreement or the Note; (2) the Borrowing
Base is less than the sum of outstanding Advances hereunder; (3) any failure to
pay when due any amount payable to Bank by the Borrower under any loan(s)
extended by Bank to Borrower; (4) the filing of an action for debtor's relief
by, against, or on behalf of Borrower; or (5) any threatened or pending material
litigation against Borrower, or any material dispute involving Borrower.
In the event that it sends such a notification to Exim Bank, Bank shall
have the right to thereafter send Exim Bank a written report on the status of
the events covered by said notification on each Business Day which occurs every
thirty (30) calendar days after the date of said notification, until such time
as Bank files a claim with Exim Bank or said default or other events have been
cured. Bank shall not have any obligation to make any Advances following said
notification to Exim Bank, unless Exim Bank gives its written approval thereto.
If directed to do so by Exim Bank, Bank shall have a right promptly to exercise
any rights it may have against Borrower to demand the immediate repayment of all
amounts outstanding under the Exim Loan Documents.
11.4 REMEDIES CUMULATIVE. Bank's rights and remedies under this Exim
Agreement, the Exim Loan Documents, the Domestic Loan Documents and all other
agreements shall be cumulative. Bank shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by Bank of one right or remedy shall be deemed an election, and no
waiver by Bank of any Event of Default on Borrower's part shall be deemed a
continuing waiver. No delay by Bank shall constitute a waiver, election, or
acquiescence by it. No waiver by Bank shall be effective unless made in a
written document signed on behalf of Bank and then shall be effective only in
the specific instance and for the specific purpose for which it was given.
11.5 POWER OF ATTORNEY. Borrower hereby irrevocably appoints Bank as
its lawful attorney-in-fact, to be effective upon the occurrence and during the
continuance of an Event of Default, to: (i) endorse Borrower's name on any
checks or other forms of payment or security; (ii) sign Borrower's name on any
invoice or bill of lading for any Account or drafts against account debtors;
(iii) settle and adjust disputes and claims about the Accounts directly with
account debtors, for amounts and on terms Bank determines reasonable; (iv) make,
settle, and adjust all claims under Borrower's insurance policies; and (v)
transfer the Collateral into the name of Bank or a third party as the Code
permits. Borrower hereby appoints Bank its power of attorney to sign Borrower's
name on any documents necessary to perfect or continue the perfection of any
security interest regardless of whether an Event of Default has occurred until
all Obligations have been satisfied in full and Bank is under no further
obligation to make Advances hereunder. Bank's foregoing appointment as
Borrower's attorney in fact, and all of Bank's rights and powers, coupled with
an interest, are irrevocable until all Obligations have been fully repaid and
performed and Bank's obligation to provide Advances terminates.
11.6 ACCOUNTS COLLECTION. In the event that an Event of Default occurs
and is continuing, Bank may notify any Person owing Borrower money of Bank's
security interest in the funds and verify and/or collect the amount of the
Account. Any amounts received by Borrower shall be held in trust by Borrower for
Bank, and, if requested by Bank,
Borrower shall immediately deliver such receipts to Bank in the form received
from the account debtor, with proper endorsements for deposit.
11.7 BANK EXPENSES. All reasonable amounts paid by Bank as provided
herein are Bank Expenses and are immediately due and payable, and shall bear
interest at the then applicable rate and be secured by the Collateral. No
payments by Bank shall be deemed an agreement to make similar payments in the
future or Bank's waiver of any Event of Default.
11.8 BANK'S LIABILITY FOR COLLATERAL. So long as the Bank complies with
reasonable banking practices regarding the safekeeping of collateral, the Bank
shall not be liable or responsible for: (a) the safekeeping of the Collateral;
(b) any loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other person. Absent Bank's gross negligence or wilful misconduct, Borrower
bears all risk of loss, damage or destruction of the Collateral.
11.9 DEMAND WAIVER. Borrower waives demand, 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 held by Bank on which
Borrower is liable.
SECTION 12. NOTICES
Unless otherwise provided in this Exim Agreement, all notices or
demands by any party relating to this Exim 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 a
recognized overnight delivery service, by certified mail, postage prepaid,
return receipt requested, or by telefacsimile to Borrower or to Bank, as the
case may be, at the address set forth in the Domestic Loan Documents. 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.
SECTION 13. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
Massachusetts law governs the Loan Documents without regard to
principles of conflicts of law. Borrower and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in Massachusetts; provided,
however, that if for any reason Bank cannot avail itself of such courts in the
Commonwealth of Massachusetts, Borrower accepts jurisdiction of the courts and
venue in Santa Clara County, California. NOTWITHSTANDING THE FOREGOING, THE BANK
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS
NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE
ENFORCE THE BANK'S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY.
BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS EXIM AGREEMENT, THE LOAN DOCUMENTS
OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT,
TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT
FOR BOTH PARTIES TO ENTER INTO THIS EXIM AGREEMENT. EACH PARTY HAS REVIEWED THIS
WAIVER WITH ITS COUNSEL.
SECTION 14. GENERAL PROVISIONS
14.1 SUCCESSORS AND ASSIGNS. This Exim Agreement binds and is for the
benefit of the successors and permitted assigns of each party. Borrower may not
assign this Exim Agreement or any rights or Obligations under it without Bank's
prior written consent which may be granted or withheld in Bank's reasonable
discretion. Bank has the right, without the consent of or notice to Borrower, to
sell, transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank's obligations, rights and benefits under this Exim Agreement,
the Loan Documents or any related agreement.
14.2 INDEMNIFICATION. Borrower hereby indemnifies, defends and holds
the Bank and its officers, employees and agents harmless against: (a) all
obligations, demands, claims, and liabilities asserted by any other party in
connection with the transactions contemplated by the Loan Documents; and (b) all
losses or reasonable Bank Expenses incurred, or paid by Bank from, following, or
consequential to transactions between Bank and Borrower (including reasonable
attorneys' fees and expenses), except for losses caused by Bank's gross
negligence or willful misconduct.
14.3 RIGHT OF SET-OFF. Borrower and any guarantor hereby grant to Bank,
a lien, security interest and right of setoff as security for all Obligations to
Bank, whether now existing or hereafter arising upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of the Bank or in
transit to any of them. At any time after the occurrence and during the
continuance of an Event of Default, without demand or notice, Bank may set off
the same or any part thereof and apply the same to any liability or obligation
of Borrower and any guarantor even though unmatured and regardless of the
adequacy of any other collateral securing the loan. ANY AND ALL RIGHTS TO
REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY
GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
14.4 TIME OF ESSENCE. Time is of the essence for the performance of all
Obligations in this Exim Agreement.
14.5 SEVERABILITY OF PROVISION. Each provision of this Exim Agreement
is severable from every other provision in determining the enforceability of any
provision.
14.6 AMENDMENTS IN WRITING; INTEGRATION. All amendments to this Exim
Agreement must be in writing signed by both Bank and Borrower. This Exim
Agreement and the Loan Documents represent the entire agreement about this
subject matter, and supersede prior negotiations or agreements. Without the
prior written consent of Exim Bank, no material amendment of or deviation from
the terms of this Exim Agreement or the Note shall be made that would adversely
affect the
interests of Exim Bank under the Exim Guarantee, including without limitation
the rescheduling of any payment terms provided for in this Exim Agreement. All
prior agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Exim Agreement and the Loan
Documents merge into this Exim Agreement and the Loan Documents.
14.7 COUNTERPARTS. This Exim Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, are an original, and all taken together,
constitute one agreement.
14.8 SURVIVAL. All covenants, representations and warranties made in
this Exim Agreement continue in full force while any Obligations remain
outstanding. The obligation of Borrower in Section 12.2 to indemnify Bank
shall survive until the statute of limitations with respect to such claim or
cause of action shall have run.
SECTION 15. DEFINITIONS
15.1 DEFINITIONS. EXCEPT AS OTHERWISE DEFINED, TERMS THAT ARE
CAPITALIZED IN THIS EXIM AGREEMENT SHALL HAVE THE MEANINGS ASSIGNED IN THE
DOMESTIC LOAN DOCUMENTS. As used in this Exim Agreement, the following terms
shall have the following definitions:
"ACCOUNTS" means all presently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods (including, without
limitation, the licensing of software and other technology) or the
rendering of services by Borrower, whether or not earned by
performance, and any and all credit insurance, guaranties, and other
security therefor, as well as all merchandise returned to or reclaimed
by Borrower and Borrower's books relating to any of the foregoing.
"ADVANCES" means any loans or other extensions of credit
hereunder.
"BANK EXPENSES" means all: reasonable costs or expenses
(including reasonable attorneys' fees and expenses) incurred in
connection with the preparation, negotiation, and administration of the
Exim Loan Documents, including any reasonable costs incurred in
relation to opposing or seeking to obtain relief from any stay or
restructuring order prohibiting Bank from exercising its rights as a
secured creditor, foreclosing upon or disposing of Collateral, or such
related matters; and Bank's reasonable attorneys' fees and expenses
incurred in enforcing or defending the Exim Loan Documents, whether or
not suit is brought, unless a final court of competent jurisdiction
finds the Bank acted with gross negligence or willful misconduct.
"BORROWER AGREEMENT" means the Export-Import Bank of the
United States Working Capital Guarantee Program Borrower Agreement
between Borrower and Bank.
"BORROWING BASE" means an amount equal to seventy-five percent
(75%) of Exim Eligible Foreign Accounts which Exim
Eligible Foreign Accounts are billed and collected by the Borrower in
the United States.
"COLLATERAL" is the property described on EXHIBIT A.
"DOMESTIC AGREEMENT" has the meaning set forth in recital
paragraph A.
"DOMESTIC LOAN DOCUMENTS" means the Domestic Agreement and all
instruments, documents, and agreements executed in connection with the
Domestic Agreement.
"EXIM BANK" means Export-Import Bank of the United States.
"EXIM COMMITTED LINE" means Five Million Dollars ($5,000,000).
"EXIM ELIGIBLE FOREIGN ACCOUNTS" means those Accounts payable
in United States Dollars that arise in the ordinary course of
Borrower's business and are derived from exports originating in the
United States AND (i) with respect to which the account debtor is not a
resident of the United States; (ii) that have been validly assigned or
pledged to Bank in a manner satisfactory to the Bank giving the Bank a
first priority perfected security interest, or its equivalent, in such
Accounts, (iii) comply with all of Borrower's representations and
warranties to Bank, and (iv) that either (A) the Bank approves on a
case by case basis (which shall be required with respect to those
Account with a balance more than 25% concentration of total foreign
Accounts on open account terms) or (B) are supported by letter(s) of
credit acceptable to Bank. Standards of eligibility may be fixed
revised from time to time by Bank in Bank's commercially reasonable
judgment and upon notification thereof to the Borrower in accordance
with the provisions hereof. Exim Eligible Foreign Accounts shall NOT
include the following:
(a) Accounts with a term in excess of sixty (60) days from the
date of invoice;
(b) Accounts that the account debtor has failed to pay within
sixty (60) calendar days of the original due date of the invoice
unless such accounts are insured through Exim Bank export credit
insurance for comprehensive commercial and political risk, or through
Exim Bank approved private insurers for comparable coverage, in which
case ninety (90) calendar days shall apply;
(c) Account which arise for the sales of items not in the
ordinary course of Borrower's business;
(d) Accounts not owned by Borrower or which are subject to any
rights, claim or interest of another Person or than the lien in favor
of Bank;
(e) Accounts with respect to which an invoice has not been sent;
(f) Accounts billed and payable outside of the United States;
(g) Accounts with respect to an account debtor, fifty percent
(50%) or more of whose Accounts the account debtor has failed to pay
within sixty (60) days of the invoice due date;
(h) Accounts with respect to an account debtor, including
Subsidiaries and Affiliates, whose total obligations to Borrower
exceed twenty-five percent (25%) of the aggregate dollar amount of all
foreign Accounts to the extent of such excess;
(i) Accounts payable in currency other than United States
Dollars;
(j) Accounts generated by the sale of products purchased for
military purposes or that are due and payable from a military Buyer;
(k) Accounts, if any, generated by sales of Inventory which
constitutes defense articles or defense services;
(l) Accounts with respect to which the account debtor is located
in a country in which Exim Bank is legally prohibited from doing
business as designated in the Country Limitation Schedule (as such
term is defined in the Borrower Agreement);
(m) Accounts with respect to which the account debtor is an
Affiliate, officer or director of Borrower;
(n) Accounts backed by a letter of credit unacceptable to Bank or
not negotiated by Bank;
(o) Accounts evidenced by a letter of credit until the date of
shipment of the items covered by the subject letter of credit;
(p) Accounts with a credit balance over sixty (60) days from
invoice date;
(q) So called contra Accounts, accounts payable, customer deposit
or credit accounts (to the extent of such contra Account, account
payable, customer deposit or credit account);
(r) Accounts from demonstration or promotional equipment, or in
which goods are consigned, sales guaranteed, sales or return, sales on
approval, bill and hold, or other terms if the Account Debtor's
payment may be conditional or subject to acceptance;
(s) Accounts with respect to which the account debtor has
disputed liability or makes any claim with respect thereto (but only
to the extent of the amount subject to such dispute or claim), or is
subject to any Insolvency Proceeding, or becomes insolvent, or goes
out of business, or the Account is uncollectible for any reason;
(t) Accounts as to which any covenant, representation or warranty
contained in the Loan Documents with respect to such Account has been
breached;
(u) Accounts as to which Bank does not have a valid, perfected
first priority lien;
(v) Accounts for which the items giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor
or the services giving rise to such Account have not been performed by
Borrower and accepted by the Account Debtor or the Account does not
represent a final sale or goods or services;
(w) Accounts for which Borrower has made any agreement with the
Account Debtor for any deduction therefrom (only to the extent of such
deduction), except for discounts or allowances made in the ordinary
course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each
respective invoice related thereto;
(x) Accounts for which any of the items giving rise to such
Accounts have been returned, rejected or repossessed;
(y) Accounts the collection of which Bank or Exim Bank determines
in its reasonable judgment to be doubtful; and
(z) Accounts which are not "Eligible Export-Related Accounts
Receivable", as such term is defined in the Borrower Agreement.
"EXIM GUARANTEE" means that certain Master Guarantee Agreement
or other agreement, as amended from time to time, the terms of which
are incorporated by reference into this Exim Agreement, pursuant to
which Exim Bank guarantees Borrower's obligations under this Exim
Agreement.
"EXIM LOAN DOCUMENTS" means, collectively, this Exim
Agreement, the Domestic Loan Documents, any note or notes executed by
Borrower, and any other agreement entered into between Borrower and
Bank in connection with this Exim Agreement, all as amended or extended
from time to time.
"EXIM MATURITY DATE" is December 29, 2004.
"LETTER OF CREDIT" is defined in Section 2.3.
"LETTER OF CREDIT SUBLIMIT" is defined in Section 2.3.
"NOTE" is defined in Section 2.2.
"OBLIGATIONS" shall mean all debts, principal, interest,
Advances, Letters of Credit, Bank Expenses arising under the Exim Loan
Documents, the Borrower Agreement, the Domestic Loan Documents and
other amounts Borrower owes Bank now or later, and including interest
accruing after Insolvency Proceedings begin
and debts, liabilities, or obligations of Borrower assigned to Bank.
"PAYMENT DATE" means the first calendar day of each month
commencing on the first such date after the date hereof and ending on
the Exim Maturity Date.
"PRIME RATE" means the greater of (i) 5.25% or (ii) the rate
announced from time to time by Bank as its "prime rate;" it is a base
rate upon which other rates charged by Bank are based, and it is not
necessarily the best rate available at Bank.
"RESPONSIBLE OFFICER" means each of the Chief Executive
Officer and Chief Financial Officer of the Borrower.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first above written.
BORROWER:
IBASIS, INC.
By: /s/ OFER GNEEZY
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Name:
Title:
IBASIS GLOBAL, INC.
By: /s/ RICHARD TENNANT
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Name:
Title:
SILICON:
SILICON VALLEY BANK, D/B/A
SILICON VALLEY EAST
By: /S/ JOHN PECK
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Name:
Title: