EXHIBIT 10.25
MASTER SECURITY AGREEMENT
NO. 609111
DATED AS OF MARCH 31, 2006 ("AGREEMENT")
THIS AGREEMENT is between Oxford Finance Corporation (together with its
successors and assigns, if any, "Secured Party") and ATHENAHEALTH, INC.
("Debtor"). Secured Party has an office at 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX
00000. Debtor is a corporation organized and existing under the laws of the
state of Delaware. Debtor's mailing address and principal place of business is
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
1. CREATION OF SECURITY INTEREST.
Debtor grants to Secured Party, its successors and assigns, a security
interest in and against all property listed on any collateral schedule now or in
the future annexed to or made a part of this Agreement ("Collateral Schedule"),
and in and against all additions, attachments, accessories and accessions to
such property, all substitutions, replacements or exchanges therefore, and all
insurance and/or other proceeds thereof (all such property is individually and
collectively called the "Collateral"). This security interest is given to secure
the payment and performance of all debts, obligations and liabilities of any
kind whatsoever of Debtor to Secured Party, now existing or arising in the
future, including but not limited to the payment and performance of certain
Promissory Notes from time to time identified on any Collateral Schedule
(collectively "Notes" and each a "Note"), and any renewals, extensions and
modifications of such debts, obligations and liabilities (such Notes, debts,
obligations and liabilities are called the "Indebtedness"). Debtor acknowledges
that, notwithstanding that the Note(s) may be paid in full, this Security
Agreement shall continue to secure the payment and performance of all other
debts, obligations and liabilities of any kind whatsoever of Debtor to Secured
Party, now existing or arising in the future, and that Secured Party shall be
under no obligation to release the Collateral unless and until all Indebtedness
of Debtor to Secured Party has been paid and satisfied; provided, however,
Secured Party, in its sole and exclusive discretion, may elect to release some
of the Collateral without prejudice to Secured Party's security interest in the
remaining Collateral.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor represents, warrants and covenants as of the date of this Agreement
and as of the date of each Collateral Schedule that:
(a) Due Organization. Debtor's exact legal name is as set forth in the
preamble of this Agreement and Debtor is, and will remain, duly
organized, existing and in good standing under the laws of the State
set forth in the preamble of this Agreement, has its chief executive
offices at the location specified in the preamble, and is, and will
remain duly qualified and licensed in every jurisdiction wherever
necessary to carry on its business and operations, except where the
failure to be so qualified and licensed would not reasonably be
expected to have a material adverse effect on Debtor's financial
condition;
(b) Power and Capacity to Enter Into and Perform Obligations. Debtor has
adequate power and capacity to enter into, and to perform its
obligations under this Agreement, each Collateral Schedule, each Note
and any other documents evidencing, or given in connection with, any
of the Indebtedness (all of the foregoing are called the "Debt
Documents");
(c) Due Authorization. This Agreement and the other Debt Documents have
been duly authorized, executed and delivered by Debtor and constitute
legal, valid and binding agreements of Debtor enforceable against
Debtor in accordance with their terms, except to the extent that the
enforcement of remedies may be limited under applicable bankruptcy and
insolvency laws or general equitable principles;
(d) Approvals and Consents. No approval, consent or withholding of
objections is required to be obtained by Debtor from any governmental
authority or instrumentality with respect to the entry into or
performance by Debtor of any of the Debt Documents, except any already
obtained;
(e) No Violations or Defaults. The entry into, and performance by, Debtor
of the Debt Documents will not (i) violate any of the organizational
documents of Debtor or any judgment, order, law or regulation
applicable to Debtor, or (ii) result in any breach of or constitute a
default under any contract to which Debtor is a party, or result in
the creation of any lien, claim or encumbrance on any of Debtor's
property (except for liens in favor of Secured Party) pursuant to any
indenture, mortgage, deed of trust, bank loan, credit agreement, or
other agreement or instrument to which Debtor is a party;
(f) Litigation. There are no suits or proceedings pending in court or
before any commission, board or other administrative agency against or
affecting Debtor which could, in the aggregate, have a material
adverse effect on Debtor, its business or operations, or its ability
to perform its obligations under the Debt Documents, nor does Debtor
have reason to believe that any such suits or proceedings are
threatened;
(g) Solvency. The fair salable value of Debtor's assets (including
goodwill minus disposition costs) exceeds the fair value of its
liabilities on a going-concern basis; the Debtor is not left with
unreasonably small capital after the transactions in this Agreement or
any Collateral Schedule and Debtor is able to pay its debts (including
trade debts) as they mature in the ordinary course of Debtor's
business.
(h) Financial Statements Prepared In Accordance with GAAP. All financial
statements delivered to Secured Party in connection with the
Indebtedness have been prepared in accordance with generally accepted
accounting principles, and since the date of the most recent financial
statement, there has been no material adverse change in Debtor's
financial condition;
(i) Use of Collateral. The Collateral is not, and will not be, used by
Debtor for personal, family or household purposes;
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(j) Collateral in Good Condition and Repair. The Collateral is, and will
remain, in good condition and repair, normal wear and tear and
depreciation excepted, and Debtor will not be negligent in its care
and use;
(k) Location of Collateral. All of the tangible Collateral is located at
the locations set forth on each Collateral Schedule. Debtor shall give
the Secured Party 30 days prior written notice of any relocation of
any such tangible Collateral;
(l) Ownership of Collateral. Debtor is, and will remain, the sole and
lawful owner, and in possession of, the Collateral, and has the sole
right and lawful authority to grant the security interest described in
this Agreement;
(m) Encumbrances. The Collateral is, and will remain, free and clear of
all liens, claims and encumbrances of any kind whatsoever, except for
Permitted Liens;
(n) Intellectual Property Rights. Debtor will (i) protect, defend and
maintain the validity and enforceability of its material Intellectual
Property and promptly advise Secured Party in writing of material
infringements and (ii) not allow any Intellectual Property material to
Debtor's business to be abandoned, forfeited or dedicated to the
public without Secured Party's written consent.
(o) Taxes. All federal, state and local tax returns required to be filed
by Debtor have been filed with the appropriate governmental agencies
and all taxes due and payable by Debtor have been timely paid. Debtor
will pay when due all taxes, assessments and other liabilities except
as contested in good faith and by appropriate proceedings and for
which adequate reserves have been established;
(p) No Defaults. No event or condition exists under any material
agreement, instrument or document to which Debtor is a party or may be
subject, or by which Debtor or any of its properties are bound, which
constitutes a default or an event of default thereunder, or will, with
the giving of notice, passage of time, or both, would constitute a
default or event of default thereunder;
(q) Certification of Financial Information. All reports, certificates,
schedules, notices and financial information submitted by Debtor to
the Secured Party pursuant to this Agreement shall be certified as
true and correct in all material respects as of the date thereof by
the president or chief financial officer of Debtor; and
(r) Notice of Material Adverse Change. Debtor shall give the Secured Party
prompt written notice of any event, occurrence or other matter which
(a) has resulted or would reasonably be expected to result in a
material adverse change in its financial condition or business
operations, or (b) would materially impair the ability of Debtor to
perform its obligations hereunder or under any of the other financing
agreements to which it is a party, or (c) which would materially
impair the ability of Secured Party to enforce the Indebtedness or
realize upon the Collateral in accordance herewith.
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(s) Change in Management. Debtor shall, except with the prior written
consent of Secured Party, upon any resignation by or removal of the
persons holding the offices of Chief Executive Officer or Chief
Financial Officer of Debtor, fill such offices within sixty (60) days
with candidates reasonably acceptable to Secured Party.
(t) Transactions with Affiliates. Debtor shall not, without the prior
written consent of Secured Party, directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Debtor
except for transactions that are in the ordinary course of Debtor's
business, upon fair and reasonable terms that are no less favorable to
Debtor than would be obtained in an arm's length transaction with a
nonaffiliated Person. For the avoidance of doubt, Debtor shall be
entitled, in its reasonable business judgment, to make regular
compensation payments to its officers, employees, consultants, agents
and directors.
(u) Audits. Debtor shall allow Secured Party to audit Debtor's Collateral
at Debtor's expense. Such audits will be conducted no more often than
every six (6) months unless a default has occurred and is continuing.
(v) Perfection Certificate. Debtor has previously delivered to the Secured
Party a certificate signed by the Debtor and entitled "Perfection
Certificate" (the "Perfection Certificate"). The Debtor represents and
warrants to the Secured Party as follows: (a) the Debtor's exact legal
name is that indicated on the Perfection Certificate and on the
signature page hereof, (b) the Debtor is an organization of the type,
and is organized in the jurisdiction set forth in the Perfection
Certificate, (c) the Perfection Certificate accurately sets forth the
Debtor's organizational identification number or accurately states
that the Debtor has none, (d) the Perfection Certificate accurately
sets forth the Debtor's place of business or, if more than one, its
chief executive office, as well as the Debtor's mailing address, if
different, (e) all other information set forth on the Perfection
Certificate pertaining to the Debtor is accurate and complete, and (f)
that there has been no change in any information provided in the
Perfection Certificate since the date on which it was executed by the
Debtor.
(w) Primary Account and Wire Transfer Instructions. Debtor maintains its
Primary Account (the "Primary Operating Account") and the Wire
Transfer Instructions for the Primary Operating Account are as
follows:
Silicon Valley Bank
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
ABA No.: 000000000
Account No.: 3300498541
Account Name: athenahealth, Inc.
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Debtor hereby agrees that Loans will be advanced to the account
specified above and regularly scheduled payments will be automatically
debited from the same account.
(x) Right to Invest. Debtor hereby grants to Secured Party a right (but
not an obligation) to invest up to $750,000.00 in the Debtor's
Subsequent Financing on the same terms, conditions and pricing offered
to the lead investor of such financing. Debtor shall give Secured
Party at least thirty (30) days prior written notice of such
Subsequent Financing containing the terms, conditions and pricing of
such Subsequent Financing. As used herein, "Subsequent Financing"
shall mean the next round of private equity financing in which the
Debtor receives, in the aggregate, at least $2,000,000.00 of gross
cash proceeds (excluding any bridge debt financing except to the
extent actually converted to equity in the Debtor).
3. COLLATERAL.
The Debtor, covenants and agrees that, so long as any of the Debt Documents
shall remain in effect, or unless the Secured Party shall otherwise consent in
writing:
(a) Possession of Collateral; Inspection of Collateral. Until the
declaration of any default, Debtor shall remain in possession of the
Collateral; except that Secured Party shall have the right to possess:
(i) any chattel paper or instrument that constitutes a part of the
Collateral, and (ii) any other Collateral in which Secured Party's
security interest may be perfected only by possession. Secured Party
may inspect any of the Collateral during normal business hours after
giving Debtor reasonable prior notice.
(b) Maintenance of Collateral. Debtor shall (i) use the Collateral only in
its trade or business, (ii) maintain all of the Collateral in good
operating order and repair, normal wear and tear and depreciation
excepted, (iii) use and maintain the Collateral only in compliance
with manufacturers recommendations and all applicable laws, and (iv)
keep all of the Collateral free and clear of all liens, claims and
encumbrances (except for Permitted Liens).
(c) Disposition of Collateral. Secured Party does not authorize and Debtor
agrees it shall not: (i) part with possession of any of the Collateral
(except to Secured Party or for maintenance and repair), (ii) remove
any of the Collateral from the continental United States, or (iii)
sell, rent, lease, mortgage, license, grant a security interest in or
otherwise transfer or encumber (except for Permitted Liens) any of the
Collateral.
(d) Taxes. Debtor shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any
of the Collateral, on its use, or on this Agreement or any of the
other Debt Documents. At its option, Secured Party may discharge
taxes, liens, security interests or other encumbrances at any time
levied or placed on the Collateral and may pay for the maintenance,
insurance and preservation of the Collateral and effect compliance
with the terms
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of this Agreement or any of the other Debt Documents. Debtor agrees to
reimburse Secured Party, on demand, all costs and expenses reasonably
incurred by Secured Party in connection with such payment or
performance and agrees that such reimbursement obligation shall
constitute Indebtedness.
(e) Books and Records. Debtor shall, at all times, keep accurate and
complete records of the Collateral, and Secured Party shall have the
right to inspect and make copies of all of Debtor's books and records
relating to the Collateral during normal business hours, after giving
Debtor reasonable prior notice.
(f) Third Party Possession of Collateral. Debtor agrees and acknowledges
that any third person who may at any time possess all or any portion
of the Collateral shall be deemed to hold, and shall hold, the
Collateral as the agent of, and as pledge holder for, Secured Party.
Secured Party may at any time give notice to any third person
described in the preceding sentence that such third person is holding
the Collateral as the agent of, and as pledge holder for, the Secured
Party.
(g) Change of Address, Name or Jurisdiction. The Debtor has not at any
time within the past four (4) months either changed its name or
changed the state of jurisdiction in which it is organized and
existing, nor has it maintained its chief executive office or any of
the Collateral at any other location, except as set forth above, and
shall not do so hereafter except upon prior written notice to the
Secured Party. The Secured Party shall be entitled to rely upon the
foregoing unless it receives 14 days' advance written notice of a
change in the Debtor's name, state of jurisdiction, address of the
Debtor's chief executive offices or location of the Collateral.
(h) Fixtures. Not permit any item of the Collateral to become a fixture to
real estate or an accession to other property without the prior
written consent of the Secured Party, and the Collateral is now and
shall at all times remain personal property except with the Secured
Party's prior written consent. If any of the Collateral is or will be
attached to real estate in such a manner as to become a fixture under
applicable state law and if such real estate is encumbered, the Debtor
will obtain from the holder of each Lien or encumbrance a written
consent and subordination to the security interest hereby granted, or
a written disclaimer of any interest in the Collateral, in a form
reasonably acceptable to the Secured Party.
(i) Distributions. Debtor shall not (i) pay any dividends or make any
distributions on its equity securities; (ii) purchase, redeem, retire,
defease or otherwise acquire for value any of its equity securities
(other than repurchases pursuant to the terms of employee stock
purchase plans, employee restricted stock agreements or similar
arrangements in an aggregate amount not to exceed Two Hundred Fifty
Thousand Dollars ($250,000) in any fiscal year); (iii) return any
capital to any holder of its equity securities as such; (iv) make any
distribution of assets, equity securities, obligations or securities
to any holder of its equity securities as such; or (v) set apart any
sum for any such purpose; provided however, Debtor may pay dividends
payable solely in common stock.
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(j) Indebtedness Payments. Debtor shall not (i) prepay, redeem, purchase,
defease or otherwise satisfy in any manner prior to the scheduled
repayment thereof any Additional Indebtedness for borrowed money or
lease obligations, (ii) amend, modify or otherwise change the terms of
any Additional Indebtedness for borrowed money or lease obligations so
as to accelerate the scheduled repayment thereof or (iii) repay any
notes to officers, directors or shareholders except as expressly
provided for in a duly executed subordination agreement in favor of
and approved by Secured Party.
(k) Additional Indebtedness. Debtor shall not create, incur, assume or
permit to exist any Additional Indebtedness except Permitted
Indebtedness.
4. INSURANCE.
(a) Risk of Loss. Debtor shall at all times bear the entire risk of any
loss, theft, damage to, or destruction of, any of the Collateral not
in Secured Party's possession from any cause whatsoever.
(b) Insurance Requirements. Debtor agrees to keep the Collateral insured
against loss or damage by fire and extended coverage perils, theft,
burglary, and for any or all Collateral, which are vehicles, for risk
of loss by collision, and if requested by Secured Party, against such
other risks as Secured Party may reasonably require. The insurance
coverage shall be in an amount no less than the full replacement value
of the Collateral, and deductible amounts, insurers and policies shall
be reasonably acceptable to Secured Party. Debtor shall deliver to
Secured Party upon its request any policies and certificates of
insurance evidencing such coverage as may be reasonably requested by
Secured Party. Each policy shall name Secured Party as a loss payee,
shall provide for coverage to Secured Party regardless of the breach
by Debtor of any warranty or representation made therein, shall not be
subject to co-insurance, and shall provide that coverage may not be
canceled or altered by the insurer except upon thirty (30) days prior
written notice to Secured Party. Debtor appoints Secured Party as its
attorney-in-fact to make proof of loss, claim for insurance and
adjustments with insurers, and to receive payment of and execute or
endorse all documents, checks or drafts in connection with insurance
payments. Secured Party shall not exercise such power to act as
Debtor's attorney-in-fact unless Debtor is in default hereunder. If
Debtor is in default hereunder, proceeds of insurance shall be
applied, at the option of Secured Party, to repair or replace the
Collateral or to reduce any of the Indebtedness.
5. REPORTS.
(a) Notice of Events. Debtor shall promptly notify Secured Party of (i)
any change in the name of Debtor, (ii) any change in the state of its
incorporation or registration, (iii) any relocation of its chief
executive offices, (iv) any of the Collateral being lost, stolen,
missing, destroyed, materially damaged or worn out, (v) any lien,
claim or encumbrance other than Permitted Liens attaching to or being
made
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against any of the Collateral, or (vi) any occurrence of any default
pursuant to Section 7 herein.
(b) Financial Statements, Reports and Certificates. Debtor will deliver to
Secured Party within one hundred eighty (180) days of the close of
each fiscal year of Debtor, Debtor's complete financial statements
including a balance sheet, income statement, statement of
shareholders' equity and statement of cash flows, each prepared in
accordance with generally accepted accounting principles consistently
applied, certified by a recognized firm of certified public
accountants satisfactory to Secured Party (it being agreed that
Debtor's current accountants are satisfactory to Secured Party
hereunder). Debtor will deliver to Secured Party copies of Debtor's
quarterly financial statements including a balance sheet, income
statement and statement of cash flows, each prepared by Debtor in
accordance with generally accepted accounting principles consistently
applied by Debtor and certified by Debtor's chief financial officer,
within forty-five (45) days after the close of each of Debtor's fiscal
quarter. Debtor will deliver to Secured Party copies of all Forms 10-K
and 10-Q, if any, within 30 days after the dates on which they are
filed with the Securities and Exchange Commission. Debtor will deliver
to Secured Party copies of Debtor's monthly financial statements
including a balance sheet and income statement, and statement of
cashflows, each prepared by Debtor in accordance with generally
accepted accounting principles consistently applied by Debtor and
certified by Debtor's chief financial officer, within thirty (30) days
after the close of each month. Concurrently with delivery of the
foregoing information, and from time to time promptly upon the
reasonable request of Secured Party, Debtor will deliver to Secured
Party a Compliance Certificate substantially consistent with the form
of the document attached hereto as Schedule A. Debtor will deliver to
Secured Party promptly upon request of Secured Party, in form
reasonably satisfactory to Secured Party, such other and additional
information as Secured Party may reasonably request from time to time.
6. FURTHER ASSURANCES.
(a) Further Assurances Regarding Security Interests. Debtor shall, upon
request of Secured Party, furnish to Secured Party such further
information, execute and deliver to Secured Party such documents and
instruments and shall do such other acts and things as Secured Party
may at any time reasonably request relating to the perfection or
protection of the security interest created by this Agreement or for
the purpose of carrying out the intent of this Agreement. Without
limiting the foregoing, Debtor shall cooperate and do all acts deemed
necessary or advisable by Secured Party to continue in Secured Party a
perfected first security interest in the Collateral, and shall obtain
and furnish to Secured Party any subordinations, releases, landlord
waivers, lessor waivers, mortgagee waivers, or control agreements, and
similar documents as may be from time to time reasonably requested by,
and in form and substance reasonably satisfactory to, Secured Party.
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(b) Authorization To File Financing Statements. Debtor shall perform any
and all acts requested by the Secured Party to establish, maintain and
continue the Secured Party's security interest and liens in the
Collateral, including but not limited to, executing or authenticating
such instruments and documents when and as reasonably requested by the
Secured Party. Debtor hereby authorizes Secured Party through any of
Secured Party's employees, agents or attorneys to file any and all
financing statements, including, without limitation, any original
filings, continuations, transfers or amendments thereof required to
perfect Secured Party's security interest and liens in the Collateral
under the UCC without authentication or execution by Debtor. Debtor
hereby irrevocably authorizes the Secured Party at any time and from
time to time to file in any filing office in any Uniform Commercial
Code jurisdiction any initial financing statement(s) and amendments
thereto that (a) indicate the Collateral (i) is subject to Secured
Party's security interest, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article 9 of the
Uniform Commercial Code of the State or such jurisdiction, or (ii) as
being of an equal or lesser scope or with greater detail, and (b)
provide any other information required by part 5 of Article 9 of the
Uniform Commercial Code of the State or such other jurisdiction for
the sufficiency or filing office acceptance of any financing statement
or amendment, including (i) whether the Debtor is an organization, the
type of organization and any organization identification number issued
to the Debtor, and (ii) in the case of a financing statement filed as
a fixture filing, a sufficient description of real property to which
the Collateral relates. The Debtor agrees to furnish any such
information to the Secured Party promptly upon the Secured Party's
reasonable request.
(c) Indemnification. Debtor shall indemnify and defend the Secured Party,
its successors and assigns, and their respective directors, officers
and employees, from and against all claims, actions and suits
(including, without limitation, related attorneys' fees) of any kind
whatsoever arising, directly or indirectly, in connection with any of
the Collateral or the Debt Documents, provided that Debtor shall have
no obligation to indemnify or defend the Secured Party, its successors
and assigns, and their respective directors, officers and employees,
from and against any claims, actions and suits arising from the
Secured Party's gross negligence or willful misconduct, or any breach
of any Debt Document caused by the gross negligence or willful
misconduct of Secured Party, its successors and assigns, or their
respective directors, officers or employees.
7. DEFAULT AND REMEDIES.
(a) Defaults. Debtor shall be in default under this Agreement and each of
the other Debt Documents if any one of the following should occur:
(i) Debtor breaches its obligation to pay when due any installment or
other amount due or coming due under any of the Debt Documents;
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(ii) Debtor, without the prior written consent of Secured Party,
attempts to or does sell, rent, lease, license, mortgage, grant a
security interest in, or otherwise transfer or encumber, or allow
Liens (except for Permitted Liens) upon, any of the Collateral;
(iii) Debtor breaches any of its insurance obligations under Section 4
(iv) Debtor breaches any of its obligations under Sections 2(m) or
2(x), or Sections 3(i), (j), or (k);
(v) Debtor breaches any of its other non-payment obligations either
under any of the Debt Documents or any other financing
arrangement between Debtor and a third party and fails to cure
that breach within thirty (30) days after it has occurred;
(vi) Any warranty, representation or statement made by Debtor in any
of the Debt Documents or otherwise in connection with any of the
Indebtedness shall be false or misleading in any material
respect;
(vii) Any of the Collateral is subjected to attachment, execution,
levy, seizure or confiscation in any legal proceeding or
otherwise, or if any legal or administrative proceeding is
commenced against Debtor or any of the Collateral, which in the
reasonable judgment of Secured Party subjects any of the
Collateral to a material risk of attachment, execution, levy,
seizure or confiscation and no bond is posted or protective order
obtained to negate such risk;
(viii) Debtor breaches or is in default under any other agreement
between Debtor and Secured Party;
(ix) Debtor or any guarantor or other obligor for any of the
Indebtedness (collectively "Guarantor") dissolves, terminates its
existence, becomes insolvent or ceases to do business as a going
concern;
(x) If Debtor or any Guarantor is a natural person, and Debtor or any
such Guarantor dies or becomes incompetent;
(xi) A receiver is appointed for all or of any part of the property of
Debtor or any Guarantor, or Debtor or any Guarantor makes any
assignment for the benefit of creditors;
(xii) Debtor or any Guarantor files a petition under any bankruptcy,
insolvency or similar law, or any such petition is filed against
Debtor or any Guarantor and is not dismissed within sixty (60)
days;
(xiii) Debtor's improper filing of an amendment or termination
statement relating to a filed financing statement describing the
Collateral;
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(xiv) Debtor shall merge with or consolidate into any other entity or
sell all or substantially all of its assets or in any manner
terminate its existence;
(xv) If Debtor is a privately held corporation, more than 50% of
Debtor's voting capital stock issued and outstanding from time to
time, is not retained by the holders of such stock on the date
the Agreement is executed or their affiliates;
(xvi) If Debtor is a publicly held corporation, there shall be a
change in the ownership of Debtor's stock such that Debtor is no
longer subject to the reporting requirements of the Securities
Exchange Act of 1934 or no longer has A class of equity
securities registered under Section 12 of the Securities Act of
1933;
(xvii) Debtor defaults on any payment obligation in an amount in
excess of $250,000 under: (a) any agreement to pay Additional
Indebtedness, or (b) any other financing arrangement between
Debtor and a third party; ;
(xviii) There is a material impairment in the perfection or priority
of the Secured Party's security interest in the Collateral or
(xix) There has been a material adverse change in the financial
condition or business operations of Debtor from the date hereof,
or a change or event shall have occurred which would materially
impair the ability of Debtor to perform its obligations hereunder
or under any of the other financing agreements to which it is a
party or of Secured Party to enforce the Indebtedness or realize
upon the collateral in accordance herewith.
(b) Acceleration. If Debtor is in default, the Secured Party, at its
option, may declare any or all of the Indebtedness to be immediately
due and payable, without demand or notice to Debtor or any Guarantor
(provided that if there is a default as a result of a bankruptcy or
insolvency all Indebtedness shall become immediately due and payable
without any action by Secured Party). The accelerated obligations and
liabilities shall bear interest (both before and after any judgment)
until paid in full at the Default Rate.
(c) Rights and Remedies. Secured Party shall have all of the rights and
remedies of a Secured Party under the Uniform Commercial Code, and
under any other applicable law. Without limiting the foregoing,
Secured Party shall have the right in accordance with applicable law
to (i) notify any account debtor of Debtor or any obligor on any
instrument which constitutes part of the Collateral to make payment to
the Secured Party, (ii) with or without legal process, peaceably enter
any premises where the Collateral may be and take possession of and
remove the Collateral from the premises or store it on the premises,
(iii) sell the Collateral at public or private sale, in whole or in
part, and have the right to bid and purchase at said sale, or (iv)
lease or otherwise dispose of all or part of the Collateral, applying
proceeds from such disposition to the obligations then in default. If
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requested by Secured Party, Debtor shall promptly assemble the
Collateral and make it available to Secured Party at a place to be
designated by Secured Party, which is reasonably convenient to both
parties. Secured Party may also render any or all of the Collateral
unusable at the Debtor's premises and may dispose of such Collateral
on such premises without liability to Debtor for rent or costs. Any
notice that Secured Party is required to give to Debtor under the
Uniform Commercial Code of the time and place of any public sale or
the time after which any private sale or other intended disposition of
the Collateral is to be made shall be deemed to constitute reasonable
notice if such notice is given to the last known address of Debtor at
least ten (10) days prior to such action. Upon the occurrence and
during the continuation of a default, Debtor hereby appoints Secured
Party as Debtor's attorney-in-fact, with full authority in Debtor's
place and stead and in Debtor's name or otherwise, from time to time
in Secured Party's sole discretion, to take any action and to execute
any instrument which Secured Party may deem necessary or advisable to
accomplish the purpose of this Agreement. Secured Party is granted a
non-exclusive royalty free license to use Debtor's Intellectual
Property in connection with Secured Party's disposition of Collateral
in the exercise of Secured Party's rights or remedies hereunder.
(d) Application of Proceeds. The proceeds and/or avails of the Collateral,
or any part thereof, and the proceeds and the avails of any remedy
hereunder (as well as any other amounts of any kind held by Secured
Party, at the time of or received by Secured Party after the
occurrence and during the continuance of a default hereunder) shall be
paid to and applied as follows:
a. First, to the payment of out-of-pocket costs and expenses,
including all amounts expended to preserve the value of the
Collateral, all costs of repossession, storage, and disposition
including without limitation attorneys', appraisers', and
auctioneers' fees, of foreclosure or suit, if any, and of such
sale and the exercise of any other rights or remedies, and of all
proper fees, expenses, liability and advances, including
reasonable legal expenses and attorneys' fees, incurred or made
hereunder by Secured Party, including without limitation, Secured
Party's Expenses;
b. Second to the payment to Secured Party of the amount then owing
or unpaid on the Loans for scheduled payments, any accrued and
unpaid interest, and all other Indebtedness (provided, however if
such proceeds shall be insufficient to pay in full the whole
amount so due, owing or unpaid upon the Loans, then to the unpaid
interest thereon, then to the outstanding principal amount of the
Loans, and then to the payment of other amounts then payable to
Secured Party under any of the Debt Documents or otherwise); and
c. Third, to the payment of the surplus, if any, to Debtor, its
successors and assigns, or to whomever may be lawfully entitled
to receive the same.
(e) Fees and Costs. Debtor agrees to pay all reasonable attorneys' fees
and other costs incurred by Secured Party in connection with the
enforcement, assertion, defense or preservation of Secured Party's
rights and remedies under this
12
Agreement, or if prohibited by law, such lesser sum as may be
permitted. Debtor further agrees that such fees and costs shall
constitute Indebtedness.
(f) Remedies Cumulative. Secured Party's rights and remedies under this
Agreement or otherwise arising are cumulative and may be exercised
singularly or concurrently. Neither the failure nor any delay on the
part of the Secured Party to exercise any right, power or privilege
under this Agreement shall operate as a waiver, nor shall any single
or partial exercise of any right, power or privilege preclude any
other or further exercise of that or any other right, power or
privilege. SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS
RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT
OR PAPER SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING
AND SIGNED BY SECURED PARTY. A waiver on any one occasion shall not be
construed as a bar to or waiver of any right or remedy on any future
occasion.
(g) WAIVER OF JURY TRIAL. DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE
THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER DEBT
DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS
BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT MATTER OF
THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP
THAT IS BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE.
THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR 1N WRITING. THE
WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS
A WRITTEN CONSENT TO A TRIAL BY THE COURT.
8. MISCELLANEOUS.
(a) Assignment. This Agreement and/or any of the other Debt Documents may
be assigned, in whole or in part, by Secured Party upon notice to the
Debtor, and Debtor agrees not to assert against any such assignee, or
assignee's assigns, any defense, set-off, recoupment claim or
counterclaim which Debtor has or may at any time have against Secured
Party for any reason whatsoever. Debtor agrees that if Debtor receives
written notice of an assignment from Secured Party, Debtor will pay
all amounts payable under any assigned Debt Documents to such assignee
or as instructed by Secured Party. Debtor also agrees to confirm in
writing receipt of the notice of assignment as may be reasonably
requested by Secured Party or assignee.
13
(b) Notices. All notices to be given in connection with this Agreement
shall be in writing, shall be addressed to the parties at their
respective addresses set forth in this Agreement (unless and until a
different address may be specified in a written notice to the other
party), and shall be deemed given (i) on the date of receipt if
delivered in hand or by facsimile transmission, (ii) on the next
business day after being sent by express mail or overnight delivery
service, and (iii) on the fourth business day after being sent by
regular, registered or certified mail. As used herein, the term
"business day" shall mean and include any day other than Saturdays,
Sundays, or other days on which commercial banks in New York, New York
are required or authorized to be closed.
(c) Correction of Errors. Secured Party may correct patent errors and fill
in all blanks in this Agreement, any Collateral Schedule or in any
Note consistent with the agreement of the parties.
(d) Time is of the Essence. Time is of the essence of this Agreement. This
Agreement shall be binding, jointly and severally, upon all parties
described as the "Debtor" and their respective heirs, executors,
representatives, successors and assigns, and shall inure to the
benefit of Secured Party, its successors and assigns.
(e) Entire Agreement. This Agreement and the Debt Documents constitute the
entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior understandings
(whether written, verbal or implied) with respect to such subject
matter. NEITHER THIS AGREEMENT NOR ANY OF THE DEBT DOCUMENTS SHALL BE
CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT ONLY BY A
WRITING SIGNED BY BOTH PARTIES. Section headings contained in this
Agreement have been included for convenience only, and shall not
affect the construction or interpretation of this Agreement. This
Agreement is the result of negotiations between and has been reviewed
by each of Debtor and Secured Party executing this Agreement as of the
date hereof and their respective counsel; accordingly, this Agreement
shall be deemed to be the product of the parties hereto, and no
ambiguity shall be construed in favor of or against Debtor or Secured
Party.
(f) Termination of Agreement. This Agreement shall continue in full force
and effect until all of the Indebtedness has been indefeasibly paid in
full to Secured Party or its assignee; provided, that Debtor's
indemnity obligations set forth in Section 6(c) shall survive until
all applicable statute of limitations periods with respect to actions
that may be brought against Secured Party have run. The surrender,
upon payment or otherwise, of any Note or any of the other documents
evidencing any of the Indebtedness shall not affect the right of
Secured Party to retain the Collateral for such other Indebtedness as
may then exist or as it may be reasonably contemplated will exist in
the future. This Agreement shall automatically be reinstated if
Secured Party is ever required to return or restore the payment of all
or any portion of the Indebtedness (all as though such payment had
never been made). Secured Party shall, at Debtor's sole cost and
expense,
14
execute such further documents and take such further actions as may be
reasonably necessary to effect the release of its security interests
contemplated by this paragraph, including duly executing and
delivering termination statements for filing in all relevant
jurisdictions under the Code.
(g) CHOICE OF LAW. DEBTOR AGREES THAT SECURED PARTY AND/OR ITS SUCCESSORS
AND ASSIGNS SHALL HAVE THE OPTION BY WHICH STATE LAWS THIS AGREEMENT
SHALL BE GOVERNED AND CONSTRUED: (A) THE LAWS OF THE COMMONWEALTH OF
VIRGINIA; OR (B) IF COLLATERAL HAS BEEN PLEDGED TO SECURE THE
LIABILITIES, THEN BY THE LAWS OF THE STATE OR STATES WHERE THE
COLLATERAL IS LOCATED, AT SECURED PARTY'S OPTION. THIS CHOICE OF STATE
LAWS IS EXCLUSIVE TO THE SECURED PARTY. DEBTOR SHALL NOT HAVE ANY
OPTION TO CHOOSE THE LAWS BY WHICH THIS AGREEMENT SHALL BE GOVERNED.
DEBTOR ACKNOWLEDGES THAT THIS AGREEMENT IS BEING SIGNED BY THE SECURED
PARTY IN PARTIAL CONSIDERATION OF SECURED PARTY'S RIGHT TO ENFORCE IN
THE JURISDICTION STATED ABOVE. DEBTOR CONSENTS TO JURISDICTION IN THE
COMMONWEALTH OF VIRGINIA OR THE STATE IN WHICH ANY COLLATERAL [S
LOCATED AND VENUE IN ANY FEDERAL OR STATE COURT IN THE COMMONWEALTH OF
VIRGINIA OR THE STATE IN WHICH COLLATERAL IS LOCATED FOR SUCH PURPOSES
AND WAIVES ANY AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE
AND ANY OBJECTION THAT SAID COUNTY IS NOT CONVENIENT. DEBTOR WAIVES
ANY RIGHTS TO COMMENCE ANY ACTION AGAINST SECURED PARTY IN ANY
JURISDICTION EXCEPT VIRGINIA, OR IF SECURED PARTY CHOOSES TO LITIGATE
IN A STATE WHERE COLLATERAL IS LOCATED THEN IN SUCH COUNTY AND STATE.
(h) Power of Attorney. To facilitate direct collection, the Debtor hereby
appoints the Secured Party and any officer or employee of the Secured
Party, as the Secured Party may from time to time designate, as
attorney-in-fact for the Debtor to (a) endorse the name of the Debtor
in favor of the Secured Party upon any and all checks, drafts, money
orders, notes, acceptances or other evidences of payment or Collateral
that may come into the Secured Party's possession; (b) do all acts and
things necessary to carry out this Agreement and the transactions
contemplated hereby, including signing the name of the Debtor on any
instruments required by law in connection with the transactions
contemplated hereby and on financing statements as permitted by the
Virginia Uniform Commercial Code. Neither the Secured Party nor any
other such attorney-in-fact shall be liable for any acts of commission
or omission, or for any error of judgment or mistake of fact or law of
any such attorney-in-fact. This power, being coupled with an interest,
is irrevocable so long as the Loan remains unsatisfied, or any Debt
Document remains effective. Secured Party shall not exercise such
power to act as Debtor's attorney-in-fact unless Debtor is in default
hereunder.
15
(i) Loss, Depreciation or Other Damage. The Secured Party shall not be
liable for or prejudiced by any loss, depreciation or other damage to
Collateral unless caused by the Secured Party's willful and malicious
act, and the Secured Party shall have no duty to take any action to
preserve or collect any Collateral.
(j) Demand; Protest. Debtor waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment,
notice of any default, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of accounts, documents, instruments,
chattel paper, and guarantees at any time held by Secured Party on
which Debtor may in any way be liable.
9. DEFINITIONS.
As used herein, the following terms, when initial capital letters are used,
shall have the respective meanings set forth below. In addition, all terms
defined in the Code shall have the meanings given therein unless otherwise
defined herein.
Defined Terms. As used in this Agreement, the following terms shall have the
following meanings, unless the context otherwise requires:
"Additional Indebtedness" means, with respect to Debtor or any of its
subsidiaries , the aggregate amount of, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(c) all obligations of such Person to pay the deferred purchase price of
property or services (excluding trade payables aged less than one hundred
eighty (180) days), (d) all capital lease obligations of such Person, (e)
all obligations or liabilities of others secured by a Lien on any asset of
such Person, whether or not such obligation or liability is assumed, (f)
all obligations or liabilities of others guaranteed by such Person, and (g)
any other obligations or liabilities which are required by GAAP to be shown
as debt on the balance sheet of such Person. Unless otherwise indicated,
the term "Additional Indebtedness" shall include all Indebtedness of Debtor
and all of its subsidiaries.
"Affiliate" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is
under common control with the Person, and each of that Person's senior
executive officers, directors, partners and, for any Person that is a
limited liability company, that Person's managers and members.
"Code" means the Virginia Uniform Commercial Code (including revised
Article 9 thereof). "Collateral" has the meaning given such capitalized
term in Section 1.
"Collateral Schedule" has the meaning given such capitalized term in
Section 1.
"Debt Documents" has the meaning given such capitalized term in Section
2(b).
"Default Rate" is the lower of eighteen percent (18%) per annum or the
maximum rate not prohibited by applicable law.
16
"Indebtedness" has the meaning given such capitalized term in Section I.
"Intellectual Property" shall mean (a) all of the Debtor's right, title and
interest, whether now owned or existing or hereafter acquired or arising,
in and to all domestic and foreign copyrights, copyright registrations and
copyright applications, whether or not registered or filed with any
governmental authority, together with (i) all renewals thereof, (ii) all
present and future rights of the Debtor under all present and future
license agreements relating thereto, whether the Debtor is licensee or
licensor thereunder, (iii) all income, royalties, damages and payments now
or hereafter due and/or payable to the Debtor thereunder or with respect
thereto, including, without limitation, damages and payments for past,
present or future infringements thereof, (iv) all of the Debtor's present
and future claims, causes of action and rights to xxx for past, present or
future infringements thereof, and (v) all rights corresponding thereto
throughout the world (collectively "Copyright Rights"); (I)) all of the
Debtor's right, title and interest, whether now owned or existing or
hereafter acquired or arising, in and to all United States and foreign
patents, and pending and abandoned United States and foreign patent
applications, including, without limitation, the inventions and
improvements described or claimed therein, together with(i) any reissues,
divisions, continuations, certificates of re-examination, extensions and
continuations-in-part thereof, (ii) all present and future rights of the
Debtor under all present and future license agreements relating thereto,
whether the Debtor is licensee or licensor thereunder, (iii) all income,
royalties, damages and payments now or hereafter due and/or payable to the
Debtor thereunder or with respect thereto, including, without limitation,
damages and payments for past, present or future infringements thereof,
(iv) all of the Debtor's present and future claims, causes of action and
rights to xxx for past, present or future infringements thereof, and (v)
all rights corresponding thereto throughout the world (collectively "Patent
Rights"); (c) all of the Debtor's right, title and interest, whether now
owned or existing or hereafter acquired or arising, in and to all domestic
and foreign trademarks, trademark registrations, trademark applications and
trade names, whether or not registered or filed with any governmental
authority, together with (i) all renewals thereof, (ii) all present and
future rights of the Debtor under all present and future license agreements
relating thereto, whether the Debtor is licensee or licensor thereunder,
(iii) all income, royalties, damages and payments now or hereafter due
and/or payable to the Debtor thereunder or with respect thereto, including,
without limitation, damages and payments for past, present or future
infringements thereof, (iv) all of the Debtor's present and future claims,
causes of action and rights to xxx for past, present or future
infringements thereof, and (v) all rights corresponding thereto throughout
the world (collectively "Trademark Rights"); (d) all present and future
licenses and license agreements of the Debtor, and all rights of the Debtor
under or in connection therewith, whether the Debtor is licensee or
licensor thereunder, including, without limitation, any present or future
franchise agreements under which the Debtor is franchisee or franchisor,
together with (i) all renewals thereof, (ii) all income, royalties, damages
and payments now or hereafter due and/or payable to the Debtor thereunder
or with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, (iii) all
claims, causes of action and rights to xxx for past, present or future
infringements thereof, and (iv) all rights corresponding thereto throughout
the world (collectively "License Rights"); (e) all present and future trade
17
secrets of the Debtor; and (f) all other present and future intellectual
property of the Debtor.
"Lien(s)" shall mean any voluntary or involuntary mortgage, pledge, deed of
trust, assignment, security interest, encumbrance, hypothecation, lien, or
charge of any kind (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give,
any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction).
"Loan" means an advance of credit by Secured Party to Debtor.
"Note" has the meaning given such capitalized term in Section 1.
"Permitted Indebtedness" means and includes: (i) Indebtedness of Debtor to
Secured Party, (ii) Additional Indebtedness arising from the endorsement of
instruments in the ordinary course of business, (iii) Additional
Indebtedness existing on the date hereof and set forth in Schedule B and
any extension, renewal or refinancing thereof, and further subject to the
limitations set forth in clause (vi) below, (iv) Subordinated Indebtedness,
(v) Additional Indebtedness secured by Liens permitted under clause (vi) of
the definition of Permitted Liens, (vi) Debtor's revolving credit facility
with Silicon Valley Bank that is the subject of that certain Loan and
Security Agreement ("SVB Revolver Agreement") dated as of August 20, 2002,
as amended between Debtor and Silicon Valley Bank or any refinancing
thereof with another lender, but only to the extent that the principal
amount outstanding under the SVB Revolver Agreement does not at any time
exceed $15,000,000, and (vii) any future debt obligations incurred by
Debtors' subsidiary, Athena Net India Private Limited, but only to the
extent that the principal amount outstanding does not exceed US$500,000.
"Permitted Liens" means: (i) liens in favor of Secured Party, (ii) liens
for taxes not yet due or for taxes being contested in good faith and which
do not involve, in the judgment of Secured Party, any risk of the sale,
forfeiture or loss of any of the Collateral, (iii) inchoate material men's,
mechanic's, repairmen's and similar liens arising by operation of law in
the normal course of business for amounts which are not delinquent, [and
(iv) Liens existing on the date hereof and set forth in Schedule B and any
continuations or assignments thereof, (v) non-exclusive licenses of
Intellectual Property in the ordinary course of business, and (vi) Liens
upon any Equipment acquired by Debtor after the date hereof to secure (i)
the purchase price of such equipment or other personal property, or (ii)
lease obligations or indebtedness incurred solely for the purpose of
financing the acquisition of such Equipment; provided that (A) such Liens
are confined solely to the Equipment so acquired and the amount secured
does not exceed the acquisition price thereof, and (B) no such Lien shall
be created, incurred, assumed or suffered to exist in favor of Debtor's
officers, directors or shareholders holding five percent (5%) or more of
Debtor's equity securities.
"Person" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust,
unincorporated organization, association,
18
corporation, institution, public benefit corporation, firm, joint stock
company, estate, entity or government agency.
"Primary Operating Account" has the meaning given such capitalized term in
Section 2(w).
"Secured Party's Expenses" means all reasonable documented costs or
expenses (including reasonable documented attorneys' fees and expenses)
incurred in connection with the preparation, negotiation, documentation,
administration and funding of the Debt Documents; and Secured Party's
reasonable documented attorneys' fees, costs and expenses incurred in
amending, modifying, enforcing or defending the Debt Documents (including
fees and expenses of appeal or review), including the exercise of any
rights or remedies afforded hereunder or under applicable law, whether or
not suit is brought, whether before or after bankruptcy or insolvency,
including without limitation all fees and costs reasonably incurred by
Secured Party in connection with Secured Party's enforcement of its rights
in a bankruptcy or insolvency proceeding filed by or against Debtor or its
property.
"Subordinated Indebtedness" means Additional Indebtedness subordinated to
the Indebtedness of Debtor to Secured Party on terms and conditions
acceptable to Secured Party in its sole discretion.
"Subsequent Financing" has the meaning given such capitalized term in
Section 2(x).
19
IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally bound
hereby, have duly executed this Agreement in one or more counterparts, each of
which shall be deemed to be an original, as of the day and year first aforesaid.
SECURED PARTY: DEBTOR:
OXFORD FINANCE CORPORATION ATHENAHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx By: /s/ Xxxxxxxx Xxxx
--------------------------------- ------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx Name: Xxxxxxxx Xxxx
Title: Chief Financial Officer Title: CEO
20
SCHEDULE A
FORM OF
COMPLIANCE CERTIFICATE
Oxford Finance Corporation
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: (Debtor)
Gentlemen:
Reference is made to the Master Security Agreement dated as of _________________
200__ (as the same have been and may be amended from time to time in writing,
the "LOAN AGREEMENT", the capitalized terms used herein as defined therein),
between Oxford Finance Corporation and (Debtor) (the "COMPANY").
The undersigned authorized representative of the Company hereby certifies
that in accordance with the terms and conditions of the Loan Agreement, the
Company is in complete compliance for the financial reporting period ending
____________________ with all required financial reporting under the Loan
Agreement, except as noted below. Attached herewith are the required documents
supporting the foregoing certification. The undersigned further certifies that
the accompanying financial statements have been prepared in accordance with
Generally Accepted Accounting Principles, and are consistent from one period to
the next, except as explained below.
Indicate compliance status by circling Yes/No under "Complies"
REPORTING REQUIREMENT REQUIRED COMPLIES
--------------------- -------- --------
Interim Financial Statements Quarterly within 45 days YES / NO
Monthly Financial Statements Monthly within 30 days
Audited Financial Statements FYE within 180 days
Date of most recent Board-approved
budget/plan
Submitted with Borrowing Request YES / NO
Any change in budget/plan since YES / NO
prior Borrowing Request
EXPLANATIONS
Very truly yours,
athenahealth, Inc.
By:
------------------------------------
Name:
----------------------------------
Title:*
--------------------------------
----------
* Must be executed by Debtor's Chief Financial Officer.
21
[SCHEDULE B]
Listing of Additional Indebtedness
AMOUNT OF
TYPE OF INDEBTEDNESS
PAYEE INDEBTEDNESS AS OF 2/28/06 PAYMENT TERMS
--------------------------- ----------------- -------------- -------------------------
Silicon Valley Bank Line of credit $ 5,580,374.60 - Final payment is due
upon expiration of
agreement on August
17, 2006
Orix Venture Finance (to be Equipment Line $ 2,741,505.01 - Each draw is payable
assigned to Bank of America in 33 equal monthly
4/06) installments, with
the first payment
starting the 1st day
after the 4th month
of the draw down.
- Final payment on all
draws will be made
12/1/2008.
Orix Venture Finance Subordinate Debt $12,000,000.00 - Payments of $400,000
begin on February 1,
2008 and end on July
1, 2010.
Presidents & Fellows of Rent Loan $ 1,108,501.65 - Loan provided by the
Harvard Company's new
Landlord to pay the
remaining rent of
the old
headquarters.
- Payments start
January 1, 2006 and
continue through
June 1, 2015.
Presidents & Fellows of Construction Loan $ 3,837,916.78 - Each draw down is
Harvard payable in equal
monthly installments
over the life of the
lease, which ends
June 1, 2015.
GE Equipment Line $ 998,615.40 - Each draw down is
payable in 36 equal
monthly
installments.
- Final payment on all
draws will be made
March 2008
Pentech Equipment Line $ 97,082.09 - Each draw down is
payable in 36 equal
monthly
installments.
- Final payment on all
draws will be made
July 2006.
22
COLLATERAL MIX RIDER
TO
MASTER SECURITY AGREEMENT NO. 608111
DATED March 31, 2006
BETWEEN
OXFORD FINANCE CORPORATION (the "SECURED PARTY")
AND
athenahealth, Inc. (the "DEBTOR")
Debtor shall cause the composition and mix of Equipment to conform to and meet
the following concentration requirements (hereinafter "Concentration
Requirement") for each class of Equipment (hereinafter "Equipment Class") as
identified and set forth below. Debtor herein represents and warrants that it
shall maintain each such Equipment Class and its respective Concentration
Requirement at all times during the funding period of January 2007 through
December 31, 2007, except where Secured Party (at its sole and absolute
discretion) authorizes any variance from the Concentration Requirement
("Concentration Variance"). If Secured Party authorizes the Concentration
Variance then, within 120 days of the date such Concentration Variance occurs,
Debtor will do one of the following (a "Concentration Correction"):
1. Grant to Secured Party a security interest in additional equipment
satisfactory to Secured Party, not previously subject to Secured
Party's security interest (collectively, the "Additional Equipment"),
in sufficient type and amount so that the Concentration Requirement
set forth below is met and the Concentration Variance is eliminated.
The Additional Equipment shall be subject to all of the terms and
conditions of the Master Security Agreement, including without
limitation, Debtor's representations, warranties, and covenants, which
shall be deemed remade by Debtor upon its grant of a security interest
in the Additional Equipment.
2. Pay Secured Party cash in an amount equal to the Concentration
Variance to hold as cash collateral until the Note is fully repaid.
Debtor hereby grants Secured Party a security interest in such cash
collateral and all proceeds and products thereof. Debtor agrees that
such cash collateral held by Secured Party: (a) shall not bear
interest, (b) may be commingled with other funds of Secured Party, and
(c) may be applied by Secured Party to amounts owing by Debtor upon
the occurrence and during the continuance of any Event of Default
under the Master Security Agreement or the Note.
The failure of Debtor to do a Concentration Correction within the 120-day
time period shall constitute a Default under the Note and the Master
Security Agreement.
EQUIPMENT CLASS CONCENTRATION REQUIREMENT
--------------- -------------------------
Laboratory Equipment Minimum of 65%
Soft Maximum of 35%
Dated as of: March 19, 2007.
OXFORD FINANCE CORPORATION athenahealth, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx By: /s/ Xxxx Xxxxx
--------------------------------- ------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx Name: Xxxx Xxxxx
Title: Chief Financial Officer Title: CFO
COLLATERAL SCHEDULE NO. 05
(36 MONTH AMORTIZATION)
THIS COLLATERAL SCHEDULE NO. 05 is annexed to and made a part of that certain
Master Security Agreement No. 6081111 dated as of March 31, 2006 ("Agreement")
between Oxford Finance Corporation, together with its successors and assigns, if
any, as Secured Party and athenahealth, Inc. as Debtor and describes collateral
in which Debtor has granted Secured Party a security interest in connection with
the Indebtedness (as defined in the Security Agreement) including without
limitation that certain Promissory Note dated March __, 2007, in the original
principal amount of $400,677.25 ("Note").
Debtor hereby reaffirms all of the representations, warranties, and covenants
contained in the Agreement and the Note as of the date hereof and further
represents and warrants to Secured Party that no default has occurred and is
continuing as of the date hereof.
Debtor further affirms that none of the Collateral for this Schedule has been
pledged as Collateral on previous Schedules under the Agreement.
SEE ATTACHED EXHIBIT A FOR LIST OF COLLATERAL, all of which Collateral for this
Schedule is located at the following address(es). If more than one address,
Exhibit A contains a column with an indication of the location of each item:
Address 1: 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000
Address 2: Savvis 000 Xxxxxx Xx., Xxxxxxx, XX 00000
Address 3: 000 X Xxxxxx, Xxxxxxxxx, XX 00000
Address 4: 0000 X Xxxxxx Xxxx, Xxxxxx, XX 00000
SECURED PARTY: DEBTOR:
OXFORD FINANCE CORPORATION ATHENAHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx By: /s/ Xxxx Xxxxx
--------------------------------- ------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx Name: Xxxx Xxxxx
Title: Chief Financial Officer Title: CFO
Date: 3/19/07 Date: 3/16/07
