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EXHIBIT 10.13
PROMISSORY NOTE
Borrower: INTERNATIONAL INTEGRATION INCORPORATED
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Lender: SILICON VALLEY BANK a California-chartered bank
doing business in Massachusetts as Silicon Valley East
Wellesley Office Park
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
================================================================================
Principal Amount: $500,000.00
Initial Rate: 9.250%
Date of Note: July 31, 1997
PROMISE TO PAY. INTERNATIONAL INTEGRATION INCORPORATED ("Borrower") promises to
pay to SILICON VALLEY BANK, a California-chartered bank, A California bank with
a loan production office in Wellesley, Massachusetts ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Five
Hundred Thousand & 00/100 Dollars ($500,000.00) or so much as may be
outstanding, together with interest on the unpaid outstanding principal balance
of each advance. Interest shall be calculated from the date of each advance
until repayment of each advance.
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:
The draw period shall begin as of this date and will end on January 30,
1998 (the "Draw Period"). During the Draw Period, Borrower will pay
regular monthly payments of all accrued unpaid interest beginning on
August 30, 1997, and all subsequent interest payments will be due on the
last day of each month thereafter. The outstanding principal balance on
January 30, 1998 will be payable in thirty-six (36) even payments of
principal plus interest, beginning February 28, 1998, and all subsequent
payments of principal plus interest will be due on the last day of each
month thereafter. The final payment, due on January 31, 2001, will be for
all outstanding principal plus all accrued interest not yet paid.
Interest on this Note is computed on a 365/360 simple interest basis; that is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at 0000
Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000. Unless otherwise agreed or required
by applicable law, payments will be applied first to accrued unpaid interest,
then to principal, and any remaining amount to any unpaid collection costs and
late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an Index which is Lender's Prime Rate (the
"Index"). This is the rate Lender charges, or would charge, on 90-day unsecured
loans to the most creditworthy corporate customers. This rate may or may not be
the lowest rate available from Lender at any given time. Lender will tell
Borrower the current Index rate upon Borrower's request. Borrower understands
that Lender may make loans based on other rates as well. The interest rate
change will not occur more often than each time the prime rate is adjusted by
Silicon Valley Bank. The Index currently is 8.500% per annum. The Interest rate
to be applied to the unpaid principal balance of this Note will be at a rate of
0.750 percentage points over the Index, resulting in an initial rate of 9.250%
per annum. Upon Borrower's completion of a successful Initial Public Offering
("IPO"), the interest rate to be applied to the unpaid principal balance of the
Note shall decrease to Lender's current Index then in effect. Such interest
rate change shall be effective as of the first day of the month following
Lender's receipt of evidence indicating Borrower has met the above described
criteria. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued unpaid interest.
Rather, they will reduce the principal balance due.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Any representation or statement made or furnished to Lender
by Borrower or on Borrower's behalf is false or misleading in any material
respect either now or at the time made or furnished. (d) Borrower becomes
insolvent, a receiver is appointed for any part of Borrower's property, Borrower
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or insolvency laws.
(e) Any creditor tries to take any of Borrower's property on or in which Lender
has a lien or security interest. This includes a garnishment of any of
Borrower's accounts with Lender. (f) Any guarantor dies or any of the other
events described in this default section occurs with respect to any guarantor of
this Note. (g) A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 5.000
percentage points over
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7/31/97 PROMISSORY NOTE Page 2
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the otherwise effective interest rate. The interest rate will not exceed the
maximum rate permitted by applicable law. Lender may hire or pay someone else to
help collect this Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses whether or not there is a lawsuit,
including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. This Note has been delivered to
Lender and accepted by Lender in the Commonwealth of Massachusetts. If there is
a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction
of the courts of Suffolk or Norfolk County, the Commonwealth of Massachusetts.
Lender and Borrower hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower against the
other. This Note shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note, as well as directions for payment from Borrower's accounts, may be
requested orally or in writing by Borrower or by an authorized person. Lender
may, but need not, require that all oral requests be confirmed in writing.
Borrower agrees to be liable for all sums either: (a) advanced in accordance
with the instructions of an authorized person or (b) credited to any of
Borrower's accounts with Lender. The unpaid principal balance owing on this Note
at any time may be evidenced by endorsements on this Note or by Lender's
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or any guarantor is
in default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (b) Borrower or any guarantor ceases doing business or is
insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
Lender; or (d) Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender.
ADVANCE RATE. At any time from the date hereof through the end of the Draw
Period, Borrower may request advances (each an "Advance" and collectively the
"Advances") from Lender in an aggregate amount not to exceed the maximum
principal amount of this Note. To eveidence the Advances, Borrower shall deliver
to Lender, at the time of each Advance request, an invoice for eligible fixed
assets purchased or to be purchased, since January 1, 1997. The Advances shall
only be used for fixed assets purchased and shall not exceed ninety percent
(90%) of the invoice amount approved by Lender from time to time, excluding
taxes, freight, and installation expense. Software may, however, comprise up to
twenty five percent (25%) of the total amount financed.
PAYMENT OF LOAN FEE. Borrower shall pay to Lender a fee in the amount of One
Thousand and 00/100 Dollars ($1,000.00) plus all out of pocket expenses.
LETTER AGREEMENT. Unless otherwise provided herein to the contrary, this Note is
subject to and shall be governed by all the terms and conditions of that certain
Letter Agreement between Borrower and Lender dated August 8, 1995, as may be
amended from time to time, which Letter Agreement is incorporated herein by this
reference.
REQUEST TO DEBIT ACCOUNTS. Borrower will regularly deposit funds received from
its business activities in accounts maintained with Silicon Valley Bank.
Borrower hereby requests and authorizes Lender to debit any accounts with
Lender, including, without limitation, Account Number _________________ for
payments of principal and interest owing on the loan and any other obligations
owing by Borrower to Lender. Lender will notify Borrower of all debits which
Lender makes against Borrower's accounts. Any such debits against Borrower's
accounts shall in no way be deemed a set-off.
JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the jurisdiction of the courts of Norfolk or
Suffolk County in the Commonwealth of Massachusetts in any action, suit, or
proceeding of any kind, against it which arises out of or by reason of this
Note; provided, however, that if for any reason Lender is prohibited from
availing itself of the courts of the Commonwealth of Massachusetts, then the
venue shall lie in Santa Xxxxx County, California.
WAIVERS AND GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive presentment, demand for payment, protest and notice of dishonor. Upon
any change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. To the extent
permitted by applicable law, all such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan, or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made.
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PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. THIS NOTE IS
EXECUTED UNDER SEAL. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES
RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
INTERNATIONAL INTEGRATION INCORPORATED
By: /s/ XXXXXXXX X. XXXXXX
-----------------------------------------
Name: XXXXXXXX X. XXXXXX
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Title: CFO
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