Exhibit 10.1
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of August 11, 2014
(the “Effective Date”) between (a) SILICON VALLEY BANK, a California corporation
with its principal place of business at 3003 Tasman Drive, Santa Clara,
California 95054 and with a loan production office located at 275 Grove Street,
Suite 2-200, Newton, Massachusetts 02466 (“Bank”), and (b) ENERNOC, INC., a
Delaware corporation (“Borrower”), provides the terms on which Bank shall lend
to Borrower and Borrower shall repay Bank. The parties agree as follows:  
1
 
ACCOUNTING AND OTHER TERMS; AGENTED LOAN ARRANGEMENT.

Accounting terms not defined in this Agreement shall be construed following
GAAP. Calculations and determinations must be made following GAAP.
Notwithstanding the foregoing, all financial covenant calculations shall be
computed with respect to the Borrower only, and not on a consolidated basis.
Capitalized terms not otherwise defined in this Agreement shall have the
meanings set forth in Section 13. All other terms contained in this Agreement,
unless otherwise indicated, shall have the meaning provided by the Code to the
extent such terms are defined therein.
2
 
LOAN AND TERMS OF PAYMENT 

2.1 Promise to Pay. Borrower hereby unconditionally promises to pay Bank the
outstanding principal amount of all Credit Extensions and accrued and unpaid
interest thereon as and when due in accordance with this Agreement.
2.1.1 Revolving Advances.
(a) Availability. Subject to the terms and conditions of this Agreement, Bank
shall make Advances in an aggregate original principal amount not exceeding the
Availability Amount. Amounts borrowed under the Revolving Line may be repaid
and, prior to the Revolving Line Maturity Date, reborrowed, from time to time,
subject to the applicable terms and conditions precedent herein.
(b) Termination; Repayment. The Revolving Line terminates on the Revolving Line
Maturity Date, when the principal amount of all Advances, the accrued but unpaid
interest thereon, and all other Obligations relating to the Revolving Line shall
be immediately due and payable.
2.1.2 Letters of Credit.
(a) As part of the Revolving Line, Bank shall issue or have issued Letters of
Credit for Borrower’s account. Such aggregate amounts utilized hereunder shall
at all times reduce the amount otherwise available for Advances under the
Revolving Line. The face amount of outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit) may not exceed Thirty Million Dollars
($30,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.1.
(b) If, on the Revolving Line Maturity Date, (or the effective date of any
termination of this Agreement) there are any outstanding Letters of Credit, then
on such date Borrower shall provide to Bank cash collateral in an amount equal
to 105% of the face amount of all such Letters of Credit plus all interest,
fees, and costs due or to become due in connection therewith (as estimated by
Bank in its good faith business judgment), to secure all of the Obligations
relating to said Letters of Credit. All Letters of Credit shall be in form and
substance acceptable to Bank in its sole discretion and shall be subject to the
terms and conditions of Bank’s standard Application and Letter of Credit
Agreement (the “Letter of Credit Application”). Borrower agrees to execute any
further documentation in connection with the Letters of Credit as Bank may
reasonably request. Borrower further agrees to be bound by the regulations and
interpretations of the issuer of any Letters of Credit guaranteed 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 (other than gross
negligence or willful misconduct), 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.
(c) The obligation of Borrower to immediately reimburse Bank for drawings made
under Letters of Credit shall be absolute, unconditional, and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement, such
Letters of Credit, and the Letter of Credit Application.

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(d) Borrower may request that Bank issue a Letter of Credit payable in a Foreign
Currency. If a demand for payment is made under any such Letter of Credit, Bank
shall treat such demand as an Advance to Borrower of the amount thereof (plus
fees and charges in connection therewith such as wire, cable, SWIFT or similar
charges) at the then-prevailing rate of exchange in San Francisco, California,
for sales of the Foreign Currency for transfer to the country issuing such
Foreign Currency.
2.2 Overadvances. If, at any time, the sum of (a) the outstanding principal
amount of any Advances, plus (b) the face amount of any outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit) exceeds the lesser
of either the Revolving Line or the Borrowing Base, Borrower shall immediately
pay to Bank in cash the amount of such excess (such excess, the “Overadvance”).
Without limiting Borrower’s obligation to repay Bank any Overadvance, Borrower
agrees to pay Bank interest on the outstanding amount of any Overadvance, on
demand, at the Default Rate.
2.3 General Provisions Relating to the Credit Extensions. Each Credit Extension
shall, at Borrower’s option in accordance with the terms of this Agreement, be
either in the form of a Prime Rate Credit Extension or a LIBOR Credit Extension;
provided that in no event shall Borrower maintain at any time LIBOR Credit
Extension having more than five (5) different Interest Periods. Borrower shall
pay interest accrued on the Credit Extensions at the rates and in the manner set
forth in Section 2.4.
2.4 Payment of Interest on the Credit Extensions.
(a) Computation of Interest. Interest on the Credit Extensions and all fees
payable hereunder shall be computed on the basis of a 360-day year and the
actual number of days elapsed (except that, with respect to ABR Loans the rate
of interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed) in the period during which such interest
accrues. In computing interest on any Credit Extension, the date of the making
of such Credit Extension shall be included and the date of payment shall be
excluded; provided, however, that if any Credit Extension is repaid on the same
day on which it is made, such day shall be included in computing interest on
such Credit Extension.
(b) Credit Extensions. Each Credit Extension shall bear interest on the
outstanding principal amount thereof from the date when made, continued or
converted until paid in full at a rate per annum equal to the Prime Rate plus
the Prime Rate Margin or the LIBOR Rate plus the LIBOR Rate Margin, as the case
may be. On and after the expiration of any Interest Period applicable to any
LIBOR Credit Extension outstanding on the date of occurrence of an Event of
Default or acceleration of the Obligations, the Effective Amount of such LIBOR
Credit Extension shall, during the continuance of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Prime Rate plus two
percent (2.0%). Pursuant to the terms hereof, interest on each Credit Extension
shall be paid in arrears on each Interest Payment Date. Accrued but unpaid
Interest shall be paid on the date of any prepayment of any Credit Extension
pursuant to this Agreement for the portion of any Credit Extension so prepaid
and upon payment (including prepayment) in full thereof. All accrued but unpaid
interest on the Credit Extensions shall be due and payable on the Revolving Line
Maturity Date.
(c) Default Interest. Except as otherwise provided in Section 2.4(b), after
(i) any Event of Default under Section 8.1 or Section 8.5, or (ii) any other
Event of Default if requested by the Bank in its discretion, the outstanding
Obligations shall bear interest two percent (2.0%) above the rate effective
immediately before the Event of Default (the “Default Rate”). Payment or
acceptance of the increased interest provided in this Section 2.4(c) is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of Bank.
(d) Prime Rate Credit Extensions. Each change in the interest rate of the Prime
Rate Credit Extensions based on changes in the Prime Rate shall be effective on
the effective date of such change and to the extent of such change. Bank shall
use its best efforts to give Borrower prompt notice of any such change in the
Prime Rate; provided, however, that any failure by Bank to provide Borrower with
notice hereunder shall not affect Bank’s right to make changes in the interest
rate of the Prime Rate Credit Extensions based on changes in the Prime Rate.
(e) LIBOR Credit Extensions. The interest rate applicable to each LIBOR Credit
Extension shall be determined in accordance with Section 3.6(a) hereunder.
Subject to Sections 3.6 and 3.7, such rate shall apply during the entire
Interest Period applicable to such LIBOR Credit Extension, and interest
calculated thereon shall be payable on the Interest Payment Date applicable to
such LIBOR Credit Extension.
 

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(f) Debit of Accounts. Bank may debit the Designated Deposit Account for
principal and interest payments or any other amounts Borrower owes Bank
hereunder when due and owing hereunder. These debits shall not constitute a
set-off.
(g) Payments. All payments to be made by Borrower under any Loan Document shall
be made in immediately available funds in Dollars, without setoff or
counterclaim, before 1:00 p.m. Eastern time on the date when due. Unless
otherwise provided, interest is payable monthly in arrears on the first calendar
day of each month. Payments of principal and/or interest or any other payment
received after 1:00 p.m. 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.
2.5 Fees. Borrower shall pay to Bank:
(a) Commitment Fee. A fully earned, non-refundable commitment fee of
Seventy-Five Thousand Dollars ($75,000.00) on the Effective Date;
(b) Letter of Credit Fees. With respect to each outstanding Letter of Credit
issued for the account of (or at the request of) Borrower, (i) a fronting fee of
0.125% per annum on the drawable amount of such Letter of Credit to Bank (a
“Letter of Credit Fronting Fee”), and (ii) a fee of 1.50% of the drawable amount
of such Letter of Credit to Bank (“Letter of Credit Fee”), and (iii) Bank’s
standard and reasonable fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit issued for the account of (or at the request
of) Borrower or processing of drawings thereunder (the fees in this clause
(iii), collectively, the “L/C Fees”). The L/C Fees shall be paid when required
by Bank, and the Letter of Credit Fronting Fee and the Letter of Credit Fee
shall be payable quarterly in arrears on the last Business Day of March, June,
September and December of each year after the issuance date of such Letter of
Credit and on the Revolving Line Maturity Date. All fees pursuant to this
Section 2.5(b) shall be computed on the basis of the actual number of days
elapsed in a year of 360 days.
(c) Unused Revolving Line Facility Fee. A fee (the “Unused Revolving Line
Facility Fee”), payable quarterly, in arrears, on a calendar year basis, in an
amount equal to one-quarter of one percent (0.25%) per annum of the average
daily unused portion of the Revolving Line. Borrower shall not be entitled to
any credit, rebate or repayment of any Unused Revolving Line Facility Fee
previously earned by Bank pursuant to this Section notwithstanding any
termination of the Agreement or the suspension or termination of Bank’s
obligation to make loans and advances hereunder; and
(d) Bank Expenses. All Bank Expenses incurred through and after the Effective
Date and invoiced to Borrower, when due.
(e) Fees Fully Earned. Unless otherwise provided in this Agreement or in a
separate writing by Bank, Borrower shall not be entitled to any credit, rebate,
or repayment of any fees earned by Bank pursuant to this Agreement
notwithstanding any termination of this Agreement or the suspension or
termination of Bank’s obligation to make loans and advances hereunder. Bank may
deduct amounts owing by Borrower under the clauses of this Section 2.5 pursuant
to the terms of Section 2.4(g). Bank shall provide Borrower prior written notice
of deductions made from the Designated Deposit Account pursuant to the terms of
the clauses of this Section 2.5.
2.6 Withholding. Payments received by Bank from Borrower under this Agreement
will be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, duties, deductions, withholdings, assessments,
fees or other charges imposed by any Governmental Authority (including any
interest, additions to tax or penalties applicable thereto). Specifically,
however, if at any time any Governmental Authority, applicable law, regulation
or international agreement requires Borrower to make any withholding or
deduction from any such payment or other sum payable hereunder to Bank, Borrower
hereby covenants and agrees that the amount due from Borrower with respect to
such payment or other sum payable hereunder will be increased to the extent
necessary to ensure that, after the making of such required withholding or
deduction, Bank receives a net sum equal to the sum which it would have received
had no withholding or deduction been required, and Borrower shall pay the full
amount withheld or deducted to the relevant Governmental Authority. Borrower
will, upon request, furnish Bank with proof reasonably satisfactory to Bank
indicating that Borrower has made such withholding payment; provided, however,
that Borrower need not make any withholding payment if the amount or validity of
such withholding payment is contested in good faith by appropriate and timely
proceedings and as to which payment in full is bonded or reserved against by
Borrower. The agreements and obligations of Borrower contained in this
Section 2.6 shall survive the termination of this Agreement.
 

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3
 
CONDITIONS OF LOANS 

3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make
the initial Credit Extension is subject to the condition precedent that Bank
shall have received, in form and substance satisfactory to Bank, such documents,
and completion of such other matters, as Bank may reasonably request as being
necessary or appropriate, including, without limitation:
(a) duly executed original signatures to the Loan Documents dated prior to or as
of the Effective Date to which it is a party;
(b) duly executed original signatures to the Control Agreement(s);
(c) the Operating Documents and long-form good standing certificates of Borrower
and each Guarantor certified by the Secretary of State (or equivalent agency) of
Borrower’s and such Guarantor’s jurisdiction of organization or formation and
each jurisdiction in which Borrower and each Guarantor is qualified to conduct
business, each as of a date no earlier than thirty (30) days prior to the
Effective Date;
(d) duly executed original signatures to the completed Borrowing Resolutions for
Borrower;
(e) certified copies, dated as of a recent date, of financing statement
searches, as Bank shall reasonably request, accompanied by written evidence
(including any UCC termination statements) that the Liens indicated in any such
financing statements either constitute Permitted Liens or have been or, in
connection with the initial Credit Extension, will be terminated or released;
(f) [Reserved];
(g) a fully-executed bailee’s waiver with respect to Borrower’s leased location
at One Summer Street, Boston, Massachusetts 02110, in favor of Bank;
(h) the Perfection Certificate of Borrower and the Guarantors, together with the
duly executed original signatures thereto;
(i) a legal opinion of Borrower’s counsel dated as of the Effective Date
together with the duly executed original signatures thereto;
(j) evidence satisfactory to Bank that the insurance policies and endorsements
required by Section 6.5 hereof are in full force and effect, together with
appropriate evidence showing loss payable and/or additional insured clauses or
endorsements in favor of Bank; and
(k) payment of the fees and Bank Expenses then due and invoiced to Borrower as
specified in Section 2.5 hereof.
3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make
each Credit Extension, including the initial Credit Extension, is subject to the
following conditions precedent:
(a) timely receipt of a Notice of Borrowing;
(b) the representations and warranties in Section 5 shall be true and correct in
all material respects on the date of the Notice of Borrowing and on the
effective date of each Credit Extension; provided, however, that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true and correct in all material
respects as of such date, and no Event of Default shall have occurred and be
continuing or result from the Credit Extension. Each Credit Extension is
Borrower’s representation and warranty on that date that the representations and
warranties in Section 5 are true and correct in all material respects as of the
date thereof; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall have
been true and correct in all material respects as of such date; and

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(c) in Bank’s reasonable discretion, there has not been a Material Adverse
Change, or any material adverse deviation by Borrower from the most recent
business plan of Borrower presented to Bank.
 

3.3 Covenant to Deliver. Borrower agrees to deliver to Bank each item required
to be delivered to Bank under this Agreement as a condition to any Credit
Extension. Borrower expressly agrees that the extension of a Credit Extension
prior to the receipt by Bank of any such item shall not constitute a waiver by
Bank of Borrower’s obligation to deliver such item, and any such Credit
Extension in the absence of a required item shall be in Bank’s sole discretion.
3.4 Procedure for the Borrowing of Credit Extensions.
(a) Subject to the prior satisfaction of all other applicable conditions to the
making of a Credit Extension set forth in this Agreement, each Credit Extension
shall be made upon Borrower’s irrevocable written notice delivered to Bank in
the form of a Notice of Borrowing, each executed by a Responsible Officer of
Borrower or his or her designee or without instructions if the Credit Extensions
are necessary to meet Obligations which have become due. Bank may rely on any
telephone notice given by a person whom Bank reasonably believes is a
Responsible Officer or designee. Borrower will indemnify Bank for any loss Bank
suffers due to such reliance. Such Notice of Borrowing must be received by Bank
prior to 11:00 a.m. Pacific time, (i) at least three (3) Business Days prior to
the requested Funding Date, in the case of LIBOR Credit Extensions, and (ii) at
least one (1) Business Day prior to the requested Funding Date, in the case of
Prime Rate Credit Extensions, specifying:
(1) the amount of the Credit Extension, which, if a LIBOR Credit Extension is
requested, shall be in an aggregate minimum principal amount of $1,000,000 or in
any integral multiple of $100,000 in excess thereof;
(2) the requested Funding Date;
(3) whether the Credit Extension is to be comprised of LIBOR Credit Extensions
or Prime Rate Credit Extensions; and
(4) the duration of the Interest Period applicable to any such LIBOR Credit
Extensions included in such notice; provided that if the Notice of Borrowing
shall fail to specify the duration of the Interest Period for any Credit
Extension comprised of LIBOR Credit Extensions, such Interest Period shall be
one (1) month.
(b) The proceeds of all such Credit Extensions will then be made available to
Borrower on the Funding Date by Bank by transfer to the Designated Deposit
Account and, subsequently, by wire transfer to such other account as Borrower
may instruct in the Notice of Borrowing. No Credit Extensions shall be deemed
made to Borrower, and no interest shall accrue on any such Credit Extension,
until the related funds have been deposited in the Designated Deposit Account.
3.5 Conversion and Continuation Elections.
(a) So long as (i) no Event of Default or Default exists; (ii) Borrower shall
not have sent any notice of termination of this Agreement; and (iii) Borrower
shall have complied with such customary procedures as Bank has established from
time to time upon notice to Borrower for Borrower’s requests for LIBOR Credit
Extensions, Borrower may, upon irrevocable written notice to Bank:
(1) elect to convert on any Business Day, Prime Rate Credit Extensions in an
amount equal to One Million Dollars ($1,000,000.00) or any integral multiple of
One Hundred Thousand Dollars ($100,000.00) in excess thereof into LIBOR Credit
Extensions;
(2) elect to continue on any Interest Payment Date any LIBOR Credit Extensions
maturing on such Interest Payment Date (or any part thereof in an amount equal
to One Million Dollars ($1,000,000.00) or any integral multiple of One Hundred
Thousand Dollars ($100,000.00) in excess thereof); provided, that if the
aggregate amount of LIBOR Credit Extensions shall have been reduced, by payment,
prepayment, or conversion of part thereof, to be less than One Million Dollars
($1,000,000.00), such LIBOR Credit Extensions shall automatically convert into
Prime Rate Credit Extensions, and on and after such date the right of Borrower
to continue such Credit Extensions as, and convert such Credit Extensions into,
LIBOR Credit Extensions shall terminate; or

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(3) elect to convert on any Interest Payment Date any LIBOR Credit Extensions
maturing on such Interest Payment Date (or any part thereof in an amount equal
to One Million Dollars ($1,000,000.00) or any integral multiple of One Hundred
Thousand Dollars ($100,000.00) in excess thereof) into Prime Rate Credit
Extensions.
(b) Borrower shall deliver a Notice of Conversion/Continuation in accordance
with Section 10 to be received by Bank prior to 11:00 a.m. Pacific time at least
(i) three (3) Business Days in advance of the Conversion Date or Continuation
Date, if any Credit Extensions are to be converted into or continued as LIBOR
Credit Extensions; and (ii) one (1) Business Day in advance of the Conversion
Date, if any Credit Extensions are to be converted into Prime Rate Credit
Extensions, in each case specifying the:
(1) proposed Conversion Date or Continuation Date;
(2) aggregate amount of the Credit Extensions to be converted or continued
which, if any Credit Extensions are to be converted into or continued as LIBOR
Credit Extensions, shall be in an aggregate minimum principal amount of One
Million Dollars ($1,000,000.00) or in any integral multiple of One Hundred
Thousand Dollars ($100,000.00) in excess thereof;
(3) nature of the proposed conversion or continuation; and
(4) duration of the requested Interest Period, if applicable.
(c) If upon the expiration of any Interest Period applicable to any LIBOR Credit
Extensions, Borrower shall have failed to timely select a new Interest Period to
be applicable to such LIBOR Credit Extensions, Borrower shall be deemed to have
elected to convert such LIBOR Credit Extensions into Prime Rate Credit
Extensions.
(d) Any LIBOR Credit Extensions shall, at Bank’s option, convert into Prime Rate
Credit Extensions in the event that (i) an Event of Default or Default shall
exist, or (ii) the aggregate principal amount of the Prime Rate Credit
Extensions which have been previously converted to LIBOR Credit Extensions, or
the aggregate principal amount of existing LIBOR Credit Extensions continued, as
the case may be, at the beginning of an Interest Period shall at any time during
such Interest Period exceed the lesser of the Revolving Line and the Borrowing
Base. Borrower agrees to pay Bank, upon demand by Bank (or Bank may, at its
option, charge the Designated Deposit Account or any other account (other than
any payroll, trust, or escrow accounts) Borrower maintains with Bank) any
amounts required to compensate Bank for any loss (including loss of anticipated
profits), cost, or expense incurred by Bank, as a result of the conversion of
LIBOR Credit Extensions to Prime Rate Credit Extensions pursuant to this
Section 3.5(d).
(e) Notwithstanding anything to the contrary contained herein, Bank shall not be
required to purchase United States Dollar deposits in the London interbank
market or other applicable LIBOR market to fund any LIBOR Credit Extensions, but
the provisions hereof shall be deemed to apply as if Bank had purchased such
deposits to fund the LIBOR Credit Extensions.
3.6 Special Provisions Governing LIBOR Credit Extensions.
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to LIBOR Credit Extensions as to
the matters covered:
(a) Determination of Applicable Interest Rate. As soon as practicable on each
Interest Rate Determination Date, Bank shall determine (which determination
shall, absent manifest error in calculation, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the LIBOR Credit
Extensions for which an interest rate is then being determined for the
applicable Interest Period and shall promptly give notice thereof (in writing or
by telephone confirmed in writing) to Borrower.
 
(b) Inability to Determine Applicable Interest Rate. In the event that Bank
shall have determined (which determination shall be final and conclusive and
binding upon all parties hereto), on any Interest Rate Determination Date with
respect to any LIBOR Credit Extension, that by reason of circumstances affecting
the London interbank market adequate and fair means do not exist for
ascertaining the interest rate applicable to such Credit Extension on the basis
provided for in the definition of LIBOR, Bank shall on such date give notice (by
facsimile or by telephone confirmed in writing) to Borrower of such
determination, whereupon (i) no Credit Extensions may be made as, or converted
to, LIBOR Credit Extensions until such time as Bank notifies Borrower that the
circumstances giving rise to such notice no longer

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exist, and (ii) any Notice of Borrowing or Notice of Conversion/Continuation
given by Borrower with respect to Credit Extensions in respect of which such
determination was made shall be deemed to be rescinded by Borrower.
(c) Compensation for Breakage or Non-Commencement of Interest Periods. Borrower
shall compensate Bank, upon written request by Bank (which request shall set
forth the manner and method of computing such compensation), for all reasonable
losses, expenses and liabilities, if any (including any interest paid by Bank to
lenders of funds borrowed by it to make or carry its LIBOR Credit Extensions and
any loss, expense or liability incurred by Bank in connection with the
liquidation or re-employment of such funds) such that Bank may incur: (i) if for
any reason (other than a default by Bank or due to any failure of Bank to fund
LIBOR Credit Extensions due to inability to determine the applicable interest
rate under Section 3.6(b) or impracticability or illegality under Sections
3.7(d) and 3.7(e)) a borrowing or a conversion to or continuation of any LIBOR
Credit Extension does not occur on a date specified in a Notice of Borrowing or
a Notice of Conversion/Continuation, as the case may be, or (ii) if any
principal payment or any conversion of any of its LIBOR Credit Extensions occurs
on a date prior to the last day of an Interest Period applicable to that Credit
Extension.
(d) Assumptions Concerning Funding of LIBOR Credit Extensions. Calculation of
all amounts payable to Bank under this Section 3.6 and under Section 3.4 shall
be made as though Bank had actually funded each of its relevant LIBOR Credit
Extensions through the purchase of a Eurodollar deposit bearing interest at the
rate obtained pursuant to the definition of LIBOR Rate in an amount equal to the
amount of such LIBOR Credit Extension and having a maturity comparable to the
relevant Interest Period; provided, however, that Bank may fund each of its
LIBOR Credit Extensions in any manner it sees fit and the foregoing assumptions
shall be utilized only for the purposes of calculating amounts payable under
this Section 3.6 and under Section 3.4.
(e) LIBOR Credit Extensions After Default. After the occurrence and during the
continuance of an Event of Default, (i) Borrower may not elect to have a Credit
Extension be made or continued as, or converted to, a LIBOR Credit Extension
after the expiration of any Interest Period then in effect for such Credit
Extension and (ii) subject to the provisions of Section 3.6(c), any Notice of
Conversion/Continuation given by Borrower with respect to a requested
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Borrower and be deemed a request to convert or continue Credit
Extensions referred to therein as Prime Rate Credit Extensions.
3.7 Additional Requirements/Provisions Regarding LIBOR Credit Extensions.
(a) If for any reason (including voluntary or mandatory prepayment or
acceleration), Borrower pays to Bank all or part of the principal amount of a
LIBOR Credit Extension prior to the last day of the Interest Period for such
Credit Extension, Borrower shall immediately notify Borrower’s account officer
at Bank and, on demand by Bank, pay Bank the amount (if any) by which (i) the
additional interest which would have been payable on the amount so received had
it not been received until the last day of such Interest Period exceeds (ii) the
interest which would have been recoverable by Bank by placing the amount so
received on deposit in the certificate of deposit markets, the offshore currency
markets, or United States Treasury investment products, as the case may be, for
a period starting on the date on which it was so received and ending on the last
day of such Interest Period at the interest rate determined by Bank in its
reasonable discretion. Bank’s determination as to such amount shall be
conclusive absent manifest error.
(b) Borrower shall pay Bank, upon demand by Bank, from time to time such amounts
as Bank may reasonably determine to be necessary to compensate it for any costs
incurred by Bank that Bank reasonably determines are attributable to its making
or maintaining of any amount receivable by Bank hereunder in respect of any
Credit Extensions relating thereto (such increases in costs and reductions in
amounts receivable being herein called “Additional Costs”), in each case
resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to Bank by Borrower
under this Agreement in respect of any Credit Extensions (other than changes
which affect taxes measured by or imposed on the overall net income or gross
receipts of Bank by any jurisdiction in which Bank has its principal office);
 
(ii) imposes or modifies any reserve, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any deposits with,
or other liabilities of Bank relating to Borrower or this Agreement (including
any Credit Extensions or any deposits referred to in the definition of LIBOR);
or
(iii) imposes any other condition affecting this Agreement (or any of such
extensions of credit or liabilities relating to Borrower).

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Bank will notify Borrower of any event occurring after the Effective Date which
will entitle Bank to compensation pursuant to this Section 3.7 as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation. Bank will furnish Borrower with a statement setting forth in
reasonable detail the basis and amount of each request by Bank for compensation
under this Section 3.7. Determinations and allocations by Bank for purposes of
this Section 3.7 of the effect of any Regulatory Change on its costs of
maintaining its obligations to make Credit Extensions, of making or maintaining
Credit Extensions, or on amounts receivable by it in respect of Credit
Extensions, and of the additional amounts required to compensate Bank in respect
of any Additional Costs, shall be conclusive absent manifest error.
(c) If Bank shall determine that the adoption or implementation of any
applicable law, rule, regulation, or treaty regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank (or its
applicable lending office) with any respect or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank, or comparable agency, has or would have the effect of reducing the rate of
return on capital of Bank or any person or entity controlling Bank (a “Parent”)
as a consequence of its obligations hereunder to a level below that which Bank
(or its Parent) could have achieved but for such adoption, change, or compliance
(taking into consideration policies with respect to capital adequacy) by an
amount deemed by Bank to be material, then from time to time, within thirty
(30) days after demand by Bank (made by Bank as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation), Borrower
shall pay to Bank such additional amount or amounts as will compensate Bank for
such reduction. A statement of Bank claiming compensation under this
Section 3.7(c) and setting forth in reasonable detail the additional amount or
amounts to be paid to it hereunder shall be conclusive absent manifest error.
(d) If, at any time, Bank, in its sole and absolute discretion, determines that
(i) the amount of LIBOR Credit Extensions for periods equal to the corresponding
Interest Periods are not available to Bank in the offshore currency interbank
markets, or (ii) LIBOR does not accurately reflect the cost to Bank of lending
the LIBOR Credit Extensions, then Bank shall promptly give notice thereof to
Borrower. Upon the giving of such notice, Bank’s obligation to make the LIBOR
Credit Extensions shall terminate; provided, however, Credit Extensions shall
not terminate if Bank and Borrower agree in writing to a different interest rate
applicable to LIBOR Credit Extensions.
(e) If it shall become unlawful for Bank to continue to fund or maintain any
LIBOR Credit Extensions, or to perform its obligations hereunder, upon demand by
Bank, Borrower shall either prepay the LIBOR Credit Extensions in full with
accrued interest thereon and all other amounts payable by Borrower hereunder
(including, without limitation, any amount payable in connection with such
prepayment pursuant to Section 3.7(a)) or convert such LIBOR Credit Extensions
to Prime Rate Credit Extensions. Notwithstanding the foregoing, to the extent a
determination by Bank as described above relates to a LIBOR Credit Extensions
then being requested by Borrower pursuant to a Notice of Borrowing or a Notice
of Conversion/Continuation, Borrower shall have the option, subject to the
provisions of Section 3.6(c), to (i) rescind such Notice of Borrowing or Notice
of Conversion/Continuation by giving notice (by facsimile or by telephone
confirmed in writing) to Bank of such rescission on the date on which Bank gives
notice of its determination as described above, or (ii) modify such Notice of
Borrowing or Notice of Conversion/Continuation to obtain a Prime Rate Credit
Extension or to have outstanding Credit Extensions converted into or continued
as Prime Rate Credit Extensions by giving notice (by facsimile or by telephone
confirmed in writing) to Bank of such modification on the date on which Bank
gives notice of its determination as described above.
 
(f) For purposes of this Agreement, (i) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines, or directives in
connection therewith are deemed to have gone into effect and been adopted after
the date of this Agreement, and (ii) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States regulatory authorities, in each case pursuant to Basel III, shall
in each case be deemed to be a change in any Requirement of Law, regardless of
the date enacted, adopted or issued.

 
4
 
CREATION OF SECURITY INTEREST

4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the
payment and performance in full of all of the Obligations, a continuing security
interest in, and pledges to Bank, the Collateral, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products thereof.
Borrower represents, warrants, and covenants that the security interest granted
herein is and shall at all times continue to be a first priority perfected
security interest in the Collateral (subject only to Permitted Liens that are
permitted by the terms of this Agreement to have

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superior priority to Bank’s Lien under this Agreement). If Borrower shall
acquire a commercial tort claim in excess of $250,000, Borrower shall promptly
notify Bank in a writing signed by Borrower of the general 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.
Borrower acknowledges that it previously has entered, and/or may in the future
enter, into Bank Services Agreements with Bank. Regardless of the terms of any
Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank
thereunder shall be deemed to be Obligations hereunder and that it is the intent
of Borrower and Bank to have all such Obligations secured by the first priority
perfected security interest in the Collateral granted herein (subject only to
Permitted Liens that are permitted pursuant to the terms of this Agreement to
have superior priority to Bank’s Lien in this Agreement).
If this Agreement is terminated, Bank’s Lien in the Collateral shall continue
until the Obligations (other than inchoate indemnity obligations or other
obligations which, by their terms, survive termination of this Agreement for
which no claim has been made) are repaid in full in cash. Upon payment in full
in cash of the Obligations (other than inchoate indemnity obligations or other
obligations which, by their terms, survive termination of this Agreement for
which no claim has been made) and at such time as Bank’s obligation to make
Credit Extensions has terminated, Bank shall, at the sole cost and expense of
Borrower, execute and deliver such documents as reasonably requested by Borrower
to evidence the termination and release of its Liens in the Collateral and all
rights therein shall revert to Borrower. In the event (x) all Obligations (other
than inchoate indemnity obligations or other obligations which, by their terms,
survive termination of this Agreement for which no claim has been made), except
for Bank Services, are satisfied in full, and (y) this Agreement is terminated,
Bank shall terminate the security interest granted herein upon Borrower
providing cash collateral acceptable to Bank in its good faith business judgment
for Bank Services, if any. In the event such Bank Services consist of
outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in
an amount equal to at least one hundred five percent (105.0%) of the face amount
of all such Letters of Credit plus all interest, fees, and costs due or to
become due in connection therewith (as estimated by Bank in its business
judgment), to secure all of the Obligations relating to such Letters of Credit.
4.2 Authorization to File Financing Statements. Borrower hereby authorizes Bank
to file financing statements, without notice to Borrower, with all appropriate
jurisdictions to perfect or protect Bank’s interest or rights hereunder,
including a notice that any disposition of the Collateral, by either Borrower or
any other Person, shall be deemed to violate the rights of Bank under the Code.
Such financing statements may indicate the Collateral as “all assets of the
Debtor” or words of similar effect, or as being of an equal or lesser scope, or
with greater detail, all in Bank’s discretion. Upon Borrower’s request, Bank
will provide Borrower with copies of all UCC financing statements filed by Bank
against Borrower.
 
5
 
REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as to itself and each of its Subsidiaries
(other than Immaterial Subsidiaries) as follows:
5.1 Due Organization, Authorization; Power and Authority. Borrower and each of
its Subsidiaries (other than Immaterial Subsidiaries) are duly existing and in
good standing as Registered Organizations in their jurisdiction of formation and
are qualified and licensed to do business and are in good standing in any
jurisdiction in which the conduct of their business or its ownership of property
requires that they be qualified except where the failure to do so could not
reasonably be expected to result in a Material Adverse Change. In connection
with this Agreement, Borrower has delivered to Bank a completed certificate
signed by Borrower on behalf of itself and each Guarantor (the “Perfection
Certificate”). Borrower represents and warrants to Bank that (a) Borrower’s
exact legal name is that indicated on the Perfection Certificate and on the
signature page hereof; (b) Borrower 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 Borrower’s and each Guarantor’s
organizational identification number or accurately states that Borrower or such
Guarantor has none; (d) the Perfection Certificate accurately sets forth
Borrower’s and each Guarantor’s place of business, or, if more than one, its
chief executive office as well as Borrower’s and each Guarantor’s mailing
address (if different than its chief executive office); (e) Borrower (and each
of its predecessors) and each Guarantor has not, in the past five (5) years,
changed its jurisdiction of formation, organizational structure or type, or any
organizational number assigned by its jurisdiction; and (f) all other
information set forth on the Perfection Certificate pertaining to Borrower and
each of its Subsidiaries is accurate and complete in all material respects taken
as a whole (it being understood and agreed that Borrower may from time to time
update certain information in the Perfection Certificate after the Effective
Date to the extent permitted by one

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or more specific provisions in this Agreement). If Borrower or any Guarantor is
not now a Registered Organization but later becomes one, Borrower shall promptly
notify Bank of such occurrence and provide Bank with Borrower’s or such
Guarantor’s organizational identification number.
The execution, delivery and performance by Borrower of the Loan Documents to
which it is a party have been duly authorized, and do not (i) conflict with any
of Borrower’s organizational documents, (ii) contravene, conflict with,
constitute a default under or violate in any material respect any material
Requirement of Law, (iii) contravene, conflict or violate any applicable order,
writ, judgment, injunction, decree, determination or award of any Governmental
Authority by which Borrower or any of its Subsidiaries or any of their property
or assets may be bound or affected, (iv) require any action by, filing,
registration, or qualification with, or Governmental Approval from, any
Governmental Authority (except such Governmental Approvals which have already
been obtained and are in full force and effect), or (v) constitute a material
event of default under any material agreement by which Borrower is bound.
Borrower is not in default under any agreement to which it is a party or by
which it is bound in which the default would reasonably be expected to result in
a Material Adverse Change.
5.2 Collateral. Borrower has good title to, has rights in, and the power to
transfer each item of the Collateral upon which it purports to grant a Lien
hereunder, free and clear of any and all Liens except Permitted Liens. Borrower
has no deposit accounts other than the deposit accounts with Bank, the deposit
accounts, if any, described in the Perfection Certificate delivered to Bank in
connection herewith, or of which Borrower has given Bank notice and taken such
actions as are necessary to give Bank a perfected security interest therein, to
the extent required by Section 6.6(b). The Accounts are bona fide, existing
obligations of the Account Debtors.
The Collateral is not in the possession of any third party bailee (such as a
warehouse) except as otherwise provided in the Perfection Certificate. Other
than mobile equipment in the possession of Borrower’s employees or agents, none
of the components of the Collateral shall be maintained at locations other than
as provided in the Perfection Certificate or as permitted pursuant to
Section 7.2. In the event that Borrower, after the date hereof, intends to store
or otherwise deliver any portion of the Collateral with an aggregate value in
excess of Five Hundred Thousand Dollars ($500,000.00) to a bailee, then Borrower
will use its commercially reasonable efforts to cause such bailee to execute and
deliver a bailee agreement in form and substance satisfactory to Bank in its
reasonable discretion. The forgoing is not intended to limit Borrower’s
obligations set forth in Section 6.13 hereof. With respect to such locations or
warehouse space leased or owned as of the Effective Date and thereafter, if Bank
has not received a landlord’s agreement or bailee letter as of the Effective
Date (or, if later, as of the date such location is acquired or leased), then
the Eligible Fixed Assets at that location shall, in Bank’s Permitted
Discretion, be excluded from the Borrowing Base or be subject to such Reserves
as may be established by Bank in its Permitted Discretion.
Except as noted on the Perfection Certificate, Borrower is not a party to, nor
is bound by, any material license or other agreement with respect to which
Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from
granting a security interest in Borrower’s interest in such license or agreement
or any other property, or (b) for which a default under or termination of could
interfere with the Bank’s right to sell any Collateral. Borrower shall provide
written notice to Bank within thirty (30) days of entering or becoming bound by
any such license or agreement (other than over-the-counter software that is
commercially available to the public). 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 (x) all such licenses or agreements 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, and (y) Bank
to have the ability in the event of a liquidation of any Collateral to dispose
of such Collateral in accordance with Bank’s rights and remedies under this
Agreement and the other Loan Documents.
5.3 Litigation. There are no actions or proceedings pending or, to the knowledge
of the Responsible Officers, threatened in writing by or against Borrower or any
of its Subsidiaries which, if adversely determined, would reasonably be expected
to result in a Material Adverse Change.
5.4 No Material Deterioration in Financial Statements. All consolidated
financial statements for Borrower and its Subsidiaries delivered to Bank fairly
present in all material respects Borrower’s consolidated financial condition and
Borrower’s consolidated results of operations as of the date thereof. There has
not been any material deterioration in Borrower’s consolidated financial
condition since the date of the most recent financial statements of Borrower
submitted to Bank by Borrower.

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5.5 Solvency. The fair salable value of Borrower’s assets (including goodwill
minus disposition costs) exceeds the fair value of its liabilities; Borrower is
not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
mature.
5.6 Regulatory Compliance. Borrower is not an “investment company” or a company
“controlled” by an “investment company” under the Investment Company Act of
1940, as amended. Borrower is not engaged as one of its important activities in
extending credit for margin stock (under Regulations X, T and U of the Federal
Reserve Board of Governors). Borrower (a) has complied in all material respects
with all Requirements of Law and (b) has not violated any Requirements of Law,
the violation of which could reasonably be expected to result in a Material
Adverse Change. None of Borrower’s or any of its Subsidiaries’ properties or
assets has been used by Borrower or any Subsidiary or, to Borrower’s knowledge,
by previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous substance other than legally. Borrower and each of its
Subsidiaries have obtained all consents, approvals and authorizations of, made
all declarations or filings with, and given all notices to, all Government
Authorities that are necessary to continue their respective businesses as
currently conducted except where the failure to do so would not reasonably be
expected to result in a Material Adverse Change.
5.7 Subsidiaries; Investments. Borrower does not own any stock, partnership
interest or other equity securities except for Permitted Investments.
5.8 Tax Returns and Payments; Pension Contributions. Borrower has timely filed
all required tax returns and reports, and Borrower and its Subsidiaries have
timely paid all foreign, federal, state and local taxes, assessments, deposits
and contributions owed by Borrower. Borrower may defer payment of any contested
taxes, provided that Borrower (a) in good faith contests its obligation to pay
the taxes by appropriate proceedings promptly and diligently instituted and
conducted, (b) notifies Bank in writing of the commencement of, and any material
development in, the proceedings, (c) posts bonds or takes any other steps
required to prevent the governmental authority levying such contested taxes from
obtaining a Lien upon any of the Collateral that is other than a “Permitted
Lien”. Borrower is unaware of any claims or adjustments proposed for any of
Borrower’s prior tax years which could result in additional taxes becoming due
and payable by Borrower. Borrower has paid all amounts necessary to fund all
present pension, profit sharing and deferred compensation plans in accordance
with their terms, and Borrower has not withdrawn from participation in, and has
not permitted partial or complete termination of, or permitted the occurrence of
any other event with respect to, any such plan which could reasonably be
expected to result in any liability of Borrower, including any material
liability to the Pension Benefit Guaranty Corporation or its successors or any
other governmental agency.
5.9 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions
solely as working capital and to fund its general business requirements and not
for personal, family, household or agricultural purposes.
5.10 Full Disclosure. No written representation, warranty or other statement of
Borrower in any certificate or written statement given to Bank in connection
with the Loan Documents, as of the date such representation, warranty, or other
statement was made, taken together with all such written certificates and
written statements given to Bank in connection with the Loan Documents, contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained in the certificates or statements, in
light of the circumstances in which they were made, not misleading in light of
the circumstances under which they were made (it being recognized by Bank that
the projections and forecasts provided by Borrower in good faith and based upon
reasonable assumptions are not viewed as facts and that actual results during
the period or periods covered by such projections and forecasts may differ
materially from the projected or forecasted results).
5.11 Accounts Receivable.
(a) For any Eligible Account in any Borrowing Base Certificate, all statements
made and all unpaid balances appearing in all invoices, instruments and other
documents evidencing such Eligible Accounts are and shall be true and correct
and all such invoices, instruments and other documents, and all of Borrower’s
Books are genuine and in all respects what they purport to be.
(b) All sales and other transactions underlying or giving rise to each Eligible
Account shall comply in all material respects with all applicable laws and
governmental rules and regulations. Borrower has no knowledge of any actual or
imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible
Accounts in any Borrowing Base Certificate. To Borrower’s knowledge, all
signatures and endorsements on all documents, instruments, and agreements
relating to all Eligible Accounts are genuine, and all such documents,
instruments and agreements are legally enforceable in accordance with their
terms.

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6
 
AFFIRMATIVE COVENANTS 

Borrower shall do all of the following:
6.1 Government Compliance.
(a) Except as permitted by Section 7.3, maintain its and all its Subsidiaries’
legal existence and good standing in their respective jurisdictions of formation
and maintain qualification in each jurisdiction in which the failure to so
qualify would reasonably be expected to have a material adverse effect. Borrower
shall comply, and have each Subsidiary comply, with all laws, ordinances and
regulations to which it is subject, the noncompliance with which would
reasonably be expected to result in a Material Adverse Change.
(b) Obtain all of the Governmental Approvals necessary for the performance by
Borrower of its obligations under the Loan Documents to which it is a party and
the grant of a security interest to Bank in all of the Collateral. Borrower
shall promptly provide copies of any such obtained Governmental Approvals to
Bank.
6.2 Financial Statements, Reports, Certificates.
(a) Borrowing Base Reports. Within forty-five (45) days after the last day of
each month at the end of which Borrower’s Unrestricted Cash is less than
$40,000,000, (i) aged listings of accounts receivable (US domestic) and accounts
payable (by invoice date) and (ii) cash reports of Borrower showing the cash
balances of Borrower’s cash and Cash Equivalents at all institutions in a form
reasonably acceptable to Bank (the “Borrowing Base Reports”);
(b) Borrowing Base Certificate. Within forty-five (45) days after the last day
of each month at the end of which Borrower’s Unrestricted Cash is less than
$40,000,000, a duly completed Borrowing Base Certificate signed by a Responsible
Officer;
(c) Monthly Financial Statements. As soon as available, but no later than
forty-five (45) days after the last day of each month (other than the last month
of each fiscal year), a company prepared consolidated balance sheet and income
statement covering Borrower’s consolidated United States operations for such
month certified by a Responsible Officer and in a form acceptable to Bank (the
“Monthly Financial Statements”);
(d) Annual Audited Financial Statements. As soon as available, but no later than
ninety (90) days after the last day of Borrower’s fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion on the financial statements from Ernst &
Young LLP, any “Big Four” accounting firm, or any other independent certified
public accounting firm reasonably acceptable to Bank (the “Annual Financial
Statements”);
 
(e) Compliance Certificate. Within forty-five (45) days after the last day of
each month (other than the last month of each fiscal year) and together with the
Monthly Financial Statements and the Annual Financial Statements, a duly
completed Compliance Certificate signed by a Responsible Officer, substantially
in the form of Exhibit B;
(f) Other Reports. (i) Within five (5) days of delivery, copies of all
statements, reports and notices made available to Borrower’s security holders or
to any holders of Subordinated Debt; (ii) within five (5) days after filing, all
reports on form 8-K, 10-K and 10-Q filed with the Securities and Exchange
Commission; (iii) a prompt report of any legal actions pending or threatened in
writing against Borrower or any of its Subsidiaries that, if adversely
determined, would reasonably be expected to result in a Material Adverse Change;
(iv) as soon as available, but no later than sixty (60) days after the last day
of Borrower’s fiscal years, and contemporaneously with any updates thereto,
Borrower’s board-approved projections for the subsequent fiscal year; and
(v) budgets, sales projections, operating plans and other financial information
of Borrower reasonably requested by Bank.
(g) Audits. Allow Bank to audit Borrower’s Collateral at Borrower’s expense.
Such audits shall be conducted no more often than once every twelve (12) months
unless an Event of Default has occurred and is continuing.
Borrower’s 10-K, 10-Q, and 8-K reports required to be delivered pursuant to
Section 6.2(f) shall be deemed to have been delivered on the date on which
Borrower posts such report or provides a link thereto on Borrower’s or another
website on the internet. In the event that Borrower’s Unrestricted Cash
decreases to an amount less than $40,000,000, Borrower shall

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deliver a completed Borrowing Base Report and Borrowing Base Certificate within
ten (10) days of the date on which Borrower’s Unrestricted Cash decreases to an
amount less than $40,000,000.
6.3 Intentionally omitted.
6.4 Taxes; Pensions. Timely file, and require each of its Subsidiaries to timely
file, all required tax returns and reports and timely pay, and require each of
its Subsidiaries to timely file, all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower and each of its
Subsidiaries, except for deferred payment of any taxes contested pursuant to the
terms of Section 5.8 hereof, and shall deliver to Bank, on its reasonable
request, appropriate certificates attesting to such payments, and pay all
amounts necessary to fund all present pension, profit sharing and deferred
compensation plans in accordance with their terms.
6.5 Insurance. Keep its business and the Collateral insured for risks and in
amounts customary for companies in Borrower’s industry and location and as Bank
may reasonably request. Insurance policies shall be in a form, with companies,
and in amounts that are reasonably satisfactory to Bank, it being agreed that
the insurance maintained by Borrower as of the Effective Date is satisfactory to
Bank as of the Effective Date. All property policies shall have a lender’s loss
payable endorsement showing Bank as lender loss payee and waive subrogation
against Bank, and all liability policies shall show, or have endorsements
showing, Bank as an additional insured. All policies (or the loss payable and
additional insured endorsements) shall provide that the insurer or its agent
will endeavor to give Bank at least twenty (20) days’ notice before canceling
its policy. At Bank’s reasonable request, Borrower shall deliver copies of
policies and evidence of all premium payments. Proceeds payable under any policy
shall, at Bank’s option, be payable to Bank on account of the Obligations then
due. Notwithstanding the foregoing, (a) so long as no Event of Default has
occurred and is continuing, Borrower shall have the option of applying the
proceeds of any casualty policy toward the replacement or repair of destroyed or
damaged property; provided that any such replaced or repaired property (i) shall
be of equal or like value as the replaced or repaired Collateral and (ii) shall
be deemed Collateral in which Bank has been granted a first priority security
interest (subject to Permitted Liens that have priority by operation of law),
and (b) after the occurrence and during the continuance of an Event of Default,
all proceeds payable under such casualty policy shall, at the option of Bank, be
payable to Bank on account of the Obligations. If Borrower fails to obtain
insurance as required under this Section 6.5 or to pay any amount or furnish any
required proof of payment to third persons and Bank, Bank may upon notice to
Borrower make all or part of such payment or obtain such insurance policies
required in this Section 6.5, and take any action under the policies Bank deems
prudent.
6.6 Operating Accounts.
(a) Maintain its and its Subsidiaries’ primary domestic operating and depository
accounts with Bank (other than Excluded Accounts), which accounts shall at all
times have aggregate deposits of Unrestricted Cash of at least $40,000,000
($18,000,000 after the occurrence of a Liquidity Event).
 
(b) Provide Bank five (5) days prior written notice before establishing any
Collateral Account at or with any bank or financial institution other than Bank
or its Affiliates. In addition, for each Collateral Account that Borrower or any
Guarantor at any time maintains, Borrower shall cause the applicable bank or
financial institution (other than Bank) at or with which any Collateral Account
is maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Bank’s Lien in
such Collateral Account in accordance with the terms hereunder, which Control
Agreement may not be terminated without the prior written consent of Bank. The
provisions of the previous sentence shall not apply to Excluded Accounts.
6.7 Financial Covenants.
Borrower shall maintain at all times, to be tested as of the last day of each
month, unless otherwise noted:
(a) Quick Ratio. A Quick Ratio of at least 1.85 to 1.0 (1.25:1.00 for the months
ending May 31 and June 30).
(b) Minimum Unrestricted Cash. Unrestricted Cash at all times of at least
$40,000,000 ($18,000,000 after the occurrence of a Liquidity Event).
6.8 Protection of Intellectual Property Rights. Borrower shall: (a) protect,
defend and maintain the validity and enforceability of the intellectual property
owned or licensed by Borrower or any of its Subsidiaries that is material to
Borrower’s business; (b) promptly advise Bank in writing of material
infringements of any material intellectual property owned or licensed by
Borrower or any of its Subsidiaries or any other event that could reasonably be
expected to

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materially and adversely affect the value of any material intellectual property
owned or licensed by Borrower or any of its Subsidiaries; and (c) not allow any
intellectual property owned or licensed by Borrower or any of its Subsidiaries
that is material to Borrower’s business to be abandoned, forfeited or dedicated
to the public without Bank’s written consent, unless Borrower deems such
abandonment, forfeiture, or dedication to be necessary or appropriate in its
reasonable business judgment.
6.9 Litigation Cooperation. From the date hereof and continuing through the
termination of this Agreement, make available to Bank during regular business
hours upon reasonable prior notice (provided that such limitations shall not
apply after the occurrence and continuance of an Event of Default), without
expense to Bank, Borrower and its officers, employees and agents and Borrower’s
books and records, to the extent that Bank may deem them reasonably necessary to
prosecute or defend any third-party suit or proceeding instituted by or against
Bank with respect to any Collateral or relating to Borrower.
6.10 Access to Collateral; Books and Records. Allow Bank, or its agents, at
reasonable times during normal business hours, on one (1) Business Day’s notice
(provided no notice is required if an Event of Default has occurred and is
continuing), to inspect the Collateral and audit and copy Borrower’s Books. Such
inspections or audits shall be conducted no more often than once every twelve
(12) months unless an Event of Default has occurred and is continuing in which
case such inspections and audits shall occur as often as Bank shall determine is
necessary. The foregoing inspections and audits shall be at Borrower’s expense,
and the charge therefor shall be $850 per person per day (or such higher amount
as shall represent Bank’s then-current standard charge for the same), plus
reasonable documented out-of-pocket expenses.
6.11 Formation or Acquisition of Subsidiaries. Notwithstanding and without
limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the
time that Borrower or any Guarantor forms any direct or indirect Domestic
Subsidiary or acquires any direct or indirect Domestic Subsidiary after the
Effective Date, Borrower and such Guarantor shall (a) cause such new Domestic
Subsidiary to provide to Bank a joinder to the Loan Agreement or the Guaranty to
cause such Domestic Subsidiary to become a co-borrower hereunder or a Guarantor
under the Guaranty, together with such appropriate financing statements and/or
Control Agreements, all in form and substance reasonably satisfactory to Bank
(including being sufficient to grant Bank a first priority Lien (subject to
Permitted Liens) in and to the assets of such newly formed or acquired Domestic
Subsidiary), (b) provide to Bank appropriate certificates and powers and
financing statements, pledging all of the direct or beneficial ownership
interest in such new Subsidiary, in form and substance reasonably satisfactory
to Bank, and (c) provide to Bank all other documentation in form and substance
reasonably satisfactory to Bank which in its opinion is appropriate with
respect to the execution and delivery of the applicable documentation referred
to above. Any document, agreement, or instrument executed or issued pursuant to
this Section 6.11 shall be a Loan Document. The provisions of this Section 6.11
shall not apply to any Immaterial Subsidiary.
6.12 Further Assurances. Execute any further instruments and take further action
as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral
or to effect the purposes of this Agreement. Deliver to Bank, within five
(5) days after the same are sent or received, copies of all correspondence,
reports, documents and other filings with any Governmental Authority regarding
compliance with or maintenance of Governmental Approvals or Requirements of Law
or that could reasonably be expected to have a material effect on any of the
Governmental Approvals or otherwise on the operations of Borrower or any of its
Subsidiaries.
6.13 Post-Closing Obligations. Deliver to Bank within sixty (60) days of the
Closing Date a fully executed landlord’s consent with respect to Borrower’s
leased location at One Marina Park Drive, Suite 400, Boston, Massachusetts
02110, in favor of Bank.

7
 
NEGATIVE COVENANTS 

Borrower shall not do any of the following without Bank’s prior written consent:
7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of
(collectively “Transfer”), or permit any of its Subsidiaries to Transfer, all or
any part of its business or property, except for:
(a) Transfers in the ordinary course of business for reasonably equivalent
consideration;
(b) Transfers of property in connection with sale-leaseback transactions;

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(c) Transfers of property to the extent such property is exchanged for credit
against, or proceeds are promptly applied to, the purchase price of other
property used or useful in the business of Borrower or its Subsidiaries;
(d) Transfers constituting licenses and similar arrangements for the use of the
property of Borrower or its Subsidiaries in the ordinary course of business;
provided that Borrower and its Subsidiaries shall not make any exclusive license
or Transfer of intellectual property that is material to Borrower’s business to
any Person (other than to a Guarantor or a Subsidiary of Borrower);
(e) Transfers otherwise permitted by the Loan Documents;
(f) sales or discounting of delinquent accounts in the ordinary course of
business;
(g) Transfers associated with the making or disposition of Permitted
Investments;
(h) Transfers in connection with a permitted acquisition of a portion of the
assets or rights acquired;
(i) the Disposition of obsolete, worn out, or surplus property in the ordinary
course of business;
(j) sale of Inventory in the ordinary course of business;
(k) subject to Section 7.2, the sale or issuance of Borrower’s Capital Stock;
(l) subject to Section 6.8, Transfers of non-core intellectual property in the
ordinary course of business;
(m) Other Transfers (other than the licensing or Transfer of intellectual
property which is covered by clause (d) above), provided that before and after
giving effect to such Transfer, no Event of Default has occurred and is
continuing and Borrower is in compliance with the covenants set forth in
Section 6.7 hereof.
 
7.2 Changes in Business; Change in Control; Jurisdiction of Formation. Engage in
any material line of business other than those lines of business conducted by
Borrower and its Subsidiaries on the date hereof and any businesses reasonably
related, complementary or incidental thereto or reasonable extensions thereof;
permit or suffer any Change in Control. Borrower will not, without prior written
notice, change its jurisdiction of formation.
7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any Person, or acquire, or permit any
of its Subsidiaries to acquire, all or substantially all of the capital stock or
property of any Person; provided that (i) a Subsidiary may merge or consolidate
into another Subsidiary or into Borrower and (ii) Borrower and its Subsidiaries
may make Permitted Investments provided that before and after giving effect to
any such Permitted Investment, no Event of Default has occurred and is
continuing and Borrower is in compliance with the financial covenants set forth
in Section 6.7 hereof.
7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or
permit any Subsidiary to do so, other than Permitted Indebtedness; provided that
before and after giving effect to the incurrence of any such Permitted
Indebtedness, no Event of Default has occurred and is continuing and Borrower is
in compliance with the financial covenants set forth in Section 6.7 hereof.
7.5 Encumbrance. Create, incur, or allow any Lien on any of its property, or
assign or convey any right to receive income, including the sale of any
Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, or permit any Collateral not to be subject to the first priority security
interest granted herein (subject to Permitted Liens that have priority by
operation of law), or enter into any agreement, document, instrument or other
arrangement (except with or in favor of Bank) with any Person which directly or
indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary
from assigning, mortgaging, pledging, granting a security interest in or upon,
or encumbering any of Borrower’s or any Subsidiary’s intellectual property,
except as is otherwise permitted in Section 7.1 hereof and the definition of
“Permitted Liens” herein.
7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except
pursuant to the terms of Section 6.6(b) hereof.
7.7 Distributions; Investments. (a) Pay any dividends on or make any
distribution or payment in respect of, or redeem, retire or purchase, any
capital stock, other than Permitted Distributions; provided that before and
after giving

--------------------------------------------------------------------------------

effect to any such Permitted Distribution, no Event of Default has occurred and
is continuing and Borrower is in compliance with the financial covenants set
forth in Section 6.7 hereof. or (b) directly or indirectly acquire or own any
Person, or make any Investment in any Person, other than Permitted Investments
provided that before and after giving effect to any such Permitted Investment,
no Event of Default has occurred and is continuing and Borrower is in compliance
with the financial covenants set forth in Section 6.7 hereof.
7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any material transaction with any Affiliate of Borrower except for
(a) transactions that are in the ordinary course of Borrower’s business, upon
fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated Person, and
(b) reasonable and customary director, officer, and employee compensation
(including bonuses) and other benefits (including retirement, health, stock
option, and other benefit plans) and indemnification arrangements approved by
the relevant board of directors, board of managers, or equivalent corporate
body.
7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt,
except under the terms of the subordination, intercreditor, or other similar
agreement to which such Subordinated Debt is subject, or (b) amend any provision
in any document relating to the Subordinated Debt which would adversely affect
the subordination thereof to Obligations owed to Bank.
7.10 Compliance. Become an “investment company” or a company controlled by an
“investment company”, under the Investment Company Act of 1940, as amended, or
undertake as one of its important activities extending credit to purchase or
carry margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System), or use the proceeds of any Credit Extension for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with applicable provisions of the Federal Fair Labor Standards Act or
violate any other law or regulation, if the violation would reasonably be
expected to result in a Material Adverse Change, or permit any of its
Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from
participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any present pension, profit
sharing and deferred compensation plan which would reasonably be expected to
result in any material liability of Borrower, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other governmental
agency.

8
 
EVENTS OF DEFAULT 

Any one of the following shall constitute an event of default (an “Event of
Default”) under this Agreement:
8.1 Payment Default. Borrower fails to (a) make any payment of principal or
interest on any Credit Extension on its due date, or (b) pay any other
Obligations within three (3) Business Days after such Obligations are due and
payable (which three (3) Business Day grace period shall not apply to payments
due on the Revolving Line Maturity Date). During the cure period, the failure to
cure the payment default is not an Event of Default (but no Credit Extension
will be made during the cure period);
8.2 Covenant Default.
(a) Borrower fails or neglects to perform any obligation in Sections 6.2 (other
than Section 6.2(e)), 6.6, 6.7, or 6.10, or violates any covenant in Section 7;
(b) Borrower fails or neglects to perform any obligation in Section 6.2(e) and
has failed to cure the default within ten (10) days after the occurrence
thereof; or
(c) Borrower fails or neglects to perform, keep, or observe any other term,
provision, condition, covenant or agreement contained in this Agreement or any
Loan Documents, and as to any default (other than those specified in this
Section 8) under such other term, provision, condition, covenant or agreement
that can be cured, has failed to cure the default within thirty (30) days and
within such time period the failure to cure the default shall not be deemed an
Event of Default (but no Credit Extensions shall be made during such cure
period). Grace periods provided under this Section 8.2 shall not apply, among
other things, to financial covenants or any other covenants set forth in
subsection (a) above;
8.3 [Reserved].
8.4 Attachment; Levy; Restraint on Business.

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(a) (i) The service of process seeking to attach, by trustee or similar process,
any funds of Borrower or of any entity under control of Borrower (including a
Subsidiary) on deposit with Bank or any Bank Affiliate, or (ii) a notice of
lien, levy, or assessment is filed against any of Borrower’s assets by any
government agency, and the same under subclauses (i) and (ii) hereof are not,
within ten (10) days after the occurrence thereof, discharged or stayed (whether
through the posting of a bond or otherwise); provided, however, no Credit
Extensions shall be made during any ten (10) day cure period; and
(b) (i) any material portion of Borrower’s assets is attached, seized, levied
on, or comes into possession of a trustee or receiver, or (ii) any court order
enjoins, restrains, or prevents Borrower from conducting any part of its
business;
8.5 Insolvency. (a) Borrower or any of its Subsidiaries is unable to pay its
debts (including trade debts) as they become due or otherwise becomes insolvent;
(b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or
(c) an Insolvency Proceeding is begun against Borrower or any of its
Subsidiaries and not dismissed or stayed within forty-five (45) days (but no
Credit Extensions shall be made while of any of the conditions described in
clause (a) exist and/or until any Insolvency Proceeding is dismissed);
8.6 Other Agreements. If there is a default in any agreement to which Borrower
or any Guarantor is a party with a third party or parties resulting in a right
by such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of Five Hundred Thousand
Dollars ($500,000.00) or that could reasonably be expected to result in a
Material Adverse Change.
8.7 Judgments. One or more fines, penalties or final judgments, orders, or
decrees for the payment of money in an amount, individually or in the aggregate,
of at least Five Hundred Thousand Dollars ($500,000.00) (not covered by
independent third-party insurance as to which liability has not been denied by
such insurance carrier)
 shall be rendered against Borrower or any Guarantor and the same are not,
within ten (10) days after the entry, assessment or issuance thereof,
discharged, satisfied, or paid, or after execution thereof, stayed or bonded
pending appeal, or such judgments are not discharged prior to the expiration of
any such stay (provided that no Credit Extensions will be made prior to the
satisfaction, payment, discharge, stay, or bonding of such fine, penalty,
judgment, order or decree);
8.8 Misrepresentations. Borrower, any Guarantor or any Person acting for
Borrower or any Guarantor makes any representation, warranty, or other statement
in this Agreement, any Loan Document or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement is incorrect in any material
respect when made;
8.9 Subordinated Debt. A default or breach occurs under any agreement between
Borrower and any creditor of Borrower that signed a subordination,
intercreditor, or other similar agreement with Bank, or any creditor that has
signed such an agreement with Bank breaches any terms of such agreement or
contests in any manner the validity or enforceability thereof or denies that it
has any further liability or obligation thereunder, or the subordinated
obligations shall cease for any reason to be subordinated the Obligations;
8.10 Guaranty. Any Guaranty of any Obligations terminates or ceases for any
reason (other than termination, discharge, or release by Bank) to be in full
force and effect; or
8.11 Governmental Approvals. Any required Governmental Approval shall have been
(a) revoked, rescinded, suspended, modified in a material adverse manner or not
renewed in the ordinary course for a full term or (b) subject to any decision by
a Governmental Authority that designates a hearing with respect to any
applications for renewal of any of such Governmental Approval or that could
result in the Governmental Authority taking any of the actions described in
clause (a) above, and such decision or such revocation, rescission, suspension,
modification or non-renewal (i) has, or could reasonably be expected to have, a
Material Adverse Change, or (ii) adversely affects the legal qualifications of
Borrower or any of its Subsidiaries to hold such Governmental Approval in any
applicable jurisdiction and such revocation, rescission, suspension,
modification or non-renewal could reasonably be expected to materially adversely
affect the status of or legal qualifications of Borrower or any of its
Subsidiaries to hold any required Governmental Approval in any other
jurisdiction.
9
 
BANK’S RIGHTS AND REMEDIES 

9.1 Rights and Remedies. While an Event of Default occurs and continues Bank
may, without notice or demand, do any or all of the following, to the extent not
prohibited by applicable law:

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(a) declare all Obligations immediately due and payable (but if an Event of
Default described in Section 8.5 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
Agreement or under any other agreement between Borrower and Bank;
(c) demand that Borrower (i) deposits cash with Bank in an amount equal to the
aggregate amount of any Letters of Credit remaining undrawn, as collateral
security for the repayment of any future drawings under such Letters of Credit,
and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in
advance all Letter of Credit fees scheduled to be paid or payable over the
remaining term of any Letters of Credit;
(d) terminate any foreign exchange forward contracts;
(e) verify the amount of, demand payment of and performance under, and collect
any Accounts and General Intangibles, settle or adjust disputes and claims
directly with Account Debtors for amounts on terms and in any order that Bank
considers advisable, and notify any Person owing Borrower money of Bank’s
security interest in such funds;
(f) make any payments and do any acts it considers necessary or reasonable to
protect the Collateral and/or its security interest in the Collateral. Borrower
shall assemble the Collateral if Bank requests and make it available as Bank
designates that is reasonably convenient to Bank and Borrower. Bank may
peaceably 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 by Borrower, to exercise any of
Bank’s rights or remedies;
 
(g) apply to the Obligations then due 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;
(h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell the Collateral. Bank is hereby 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;
(i) place a “hold” on any account (other than Excluded Accounts) maintained with
Bank and/or deliver a notice of exclusive control, any entitlement order, or
other directions or instructions pursuant to any Control Agreement or similar
agreements providing control of any Collateral;
(j) demand and receive possession of Borrower’s Books; and
(k) exercise all rights and remedies available to Bank under the Loan Documents
or at law or equity, including all remedies provided under the Code (including
disposal of the Collateral pursuant to the terms thereof).
9.2 Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful
attorney-in-fact, exercisable solely upon the occurrence and during the
continuance of an Event of Default, to: (a) endorse Borrower’s name on any
checks or other forms of payment or security; (b) sign Borrower’s name on any
invoice or bill of lading for any Account or drafts against Account Debtors;
(c) settle and adjust disputes and claims about the Accounts directly with
Account Debtors, for amounts and on terms Bank determines reasonable; (d) make,
settle, and adjust all claims under Borrower’s insurance policies; (e) pay,
contest or settle any Lien, charge, encumbrance, security interest, and adverse
claim in or to the Collateral, or any judgment based thereon, or otherwise take
any action to terminate or discharge the same; and (f) transfer the Collateral
into the name of Bank or a third party as the Code permits. Borrower hereby
appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any
documents necessary to perfect or continue the perfection of Bank’s security
interest in the Collateral regardless of whether an Event of Default has
occurred until all Obligations (other than inchoate indemnity obligations or
other obligations which, by their terms, survive termination of this Agreement
for which no claim has been made) have been satisfied in full and Bank is under
no further obligation to make Credit Extensions 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 (other than
inchoate indemnification or other obligations which, by their terms, survive
this Agreement for which no claim has been made) have been fully repaid and
performed and Bank’s obligation to provide Credit Extensions terminates.

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9.3 Protective Payments. If Borrower fails to obtain the insurance called for by
Section 6.5 or fails to pay any premium thereon or fails to timely pay any other
amount which Borrower is obligated to timely pay under this Agreement or any
other Loan Document, Bank may obtain such insurance or make such payment, and
all amounts so paid by Bank are Bank Expenses and immediately due and payable,
bearing interest at the then highest applicable rate charged by Bank, and
secured by the Collateral. Bank will make reasonable efforts to provide Borrower
with notice of Bank obtaining such insurance at the time it is obtained or
within a reasonable time thereafter. No payments by Bank are deemed an agreement
to make similar payments in the future or Bank’s waiver of any Event of Default.
9.4 Application of Payments and Proceeds. Bank has the exclusive right to
determine the order and manner in which all payments with respect to the
Obligations may be applied. Borrower shall have no right to specify the order or
the accounts to which Bank shall allocate or apply any payments required to be
made by Borrower to Bank or otherwise received by Bank under this Agreement when
any such allocation or application is not specified elsewhere in this Agreement.
If an Event of Default has occurred and is continuing, Bank may apply any funds
in its possession, whether from Borrower account balances (other than from
deposit accounts exclusively used for payroll, payroll taxes, and other
employee, wage, and benefit payments of Borrower’s or any of its Subsidiaries’
employees), payments, proceeds realized as the result of any collection of
Accounts or other disposition of the Collateral, or otherwise, to the
Obligations in such order as Bank shall determine in its sole discretion. Any
surplus shall be paid to Borrower or other Persons legally entitled thereto;
Borrower shall remain liable to Bank for any deficiency. If Bank, in its good
faith business judgment, directly or indirectly enters into a deferred payment
or other credit transaction with any purchaser at any sale of Collateral
pursuant to Section 9.1, Bank shall have the option, exercisable at any time, of
either reducing the Obligations by the principal amount of the purchase price or
deferring the reduction of the Obligations until the actual receipt by Bank of
cash therefor.
9.5 Bank’s Liability for Collateral. So long as Bank complies with applicable
law and reasonable banking practices regarding the safekeeping of the Collateral
in the possession or under the control of Bank, 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. Borrower
bears all risk of loss, damage or destruction of the Collateral.
9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to
require strict performance by Borrower of any provision of this Agreement or any
other Loan Document shall not waive, affect, or diminish any right of Bank
thereafter to demand strict performance and compliance herewith or therewith. No
waiver hereunder shall be effective unless signed by Bank and then is only
effective for the specific instance and purpose for which it is given. Bank’s
rights and remedies under this Agreement and the other Loan Documents are
cumulative. Bank has all rights and remedies provided under the Code, by law, or
in equity. Bank’s exercise of one right or remedy is not an election and shall
not preclude Bank from exercising any other remedy under this Agreement or other
remedy available at law or in equity, and Bank’s waiver of any Event of Default
is not a continuing waiver. Bank’s delay in exercising any remedy is not a
waiver, election, or acquiescence.
9.7 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.

10
 
NOTICES 

All notices, consents, requests, approvals, demands, or other communication
(collectively, “Communication”) by any party to this Agreement or any other Loan
Document must be in writing and shall be deemed to have been validly served,
given, or delivered: (a) upon the earlier of actual receipt and three
(3) Business Days after deposit in the U.S. mail, first class, registered or
certified mail return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by electronic mail or facsimile transmission; (c) one
(1) Business Day after deposit with a reputable overnight courier with all
charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the address,
facsimile number, or email address indicated below. Bank or Borrower may change
its mailing or electronic mail address or facsimile number by giving the other
party written notice thereof in accordance with the terms of this Section 10.
 

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If to Borrower:
 
EnerNOC, Inc.
 
 
One Marina Park Drive, Suite 400
 
 
Boston, Massachusetts 02210
 
 
Attention: Michael J. Berdik
 
 
Facsimile No.: (617) 224-9910
 
 
E-mail: mberdik@enernoc.com
 
 
with a copy to:
 
Goodwin Procter LLP
 
 
53 State Street
Boston, Massachusetts 02109
 
 
Attn:
 
Mark D. Smith
 
 
Fax:
 
(617) 523-1231
 
 
Email:
 
marksmith@goodwinprocter.com
 
 
If to Bank:
 
Silicon Valley Bank
 
 
275 Grove Street, Suite 2-200
 
 
Newton, Massachusetts 02466
 
 
Attn: Mr. Jack Gaziano
 
 
Fax: (617) 969-5478
 
 
Email: Jgaziano@svb.com

 
 
 
 
with a copy to:
 
Riemer & Braunstein LLP
 
 
Three Center Plaza
Boston, Massachusetts 02108
 
 
Attn: David A. Ephraim, Esquire
 
 
Fax: (617) 880-3456
 
 
Email: DEphraim@riemerlaw.com

11
 
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 nothing
in this Agreement shall be deemed to operate to preclude Bank from bringing suit
or taking other legal action in any other jurisdiction to realize on the
Collateral or any other security for the Obligations, or to enforce a judgment
or other court order in favor of Bank. Borrower expressly submits and consents
in advance to such jurisdiction in any action or suit commenced in any such
court, and Borrower hereby waives any objection that it may have based upon lack
of personal jurisdiction, improper venue, or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is deemed
appropriate by such court. Borrower hereby waives personal service of the
summons, complaints, and other process issued in such action or suit and agrees
that service of such summons, complaints, and other process may be made by
registered or certified mail addressed to Borrower at the address set forth in
Section 10 of this Agreement and that service so made shall be deemed completed
upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days
after deposit in the U.S. mails, proper postage prepaid.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, 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 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 AGREEMENT. EACH PARTY
HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

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12
 
GENERAL PROVISIONS 

12.1 Successors and Assigns. This Agreement binds and is for the benefit of the
successors and permitted assigns of each party. Borrower may not assign this
Agreement or any rights or obligations under it without Bank’s prior written
consent (which may be granted or withheld in Bank’s discretion). Bank has the
right, without the consent of or notice to Borrower, to sell, transfer, assign,
negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights, and benefits under this Agreement and the other Loan
Documents.
12.2 Indemnification. Borrower agrees to indemnify, defend and hold Bank and its
directors, officers, employees, agents, attorneys, or any other Person
affiliated with or representing Bank (each, an “Indemnified Person”) harmless
against: (i) all obligations, demands, claims, and liabilities (collectively,
“Claims”) claimed or asserted by any other party in connection with the
transactions contemplated by the Loan Documents; and (ii) all losses or expenses
(including Bank Expenses) in any way suffered, incurred, or paid by such
Indemnified Person as a result of, following from, consequential to, or arising
from transactions between Bank and Borrower (including reasonable attorneys’
fees and expenses), except for Claims and/or losses directly caused by such
Indemnified Person’s gross negligence or willful misconduct. This Section 12.2
shall survive until all statutes of limitation with respect to the Claims,
losses, and expenses for which indemnity is given shall have run.
12.3 Time of Essence. Time is of the essence for the performance of all
Obligations in this Agreement.
12.4 Severability of Provisions. Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.
 
12.5 Correction of Loan Documents. Bank may correct patent errors and fill in
any blanks in this Agreement and the other Loan Documents consistent with the
agreement of the parties, and Bank shall deliver to Borrower copies of all Loan
Documents so modified.
12.6 Amendments in Writing; Waiver; Integration. All amendments to this
Agreement must be in writing signed by both Bank and Borrower. No purported
amendment or modification of any Loan Document, or waiver, discharge or
termination of any obligation under any Loan Document, shall be enforceable or
admissible unless, and only to the extent, expressly set forth in a writing
signed by the party against which enforcement or admission is sought. Without
limiting the generality of the foregoing, no oral promise or statement, nor any
action, inaction, delay, failure to require performance or course of conduct
shall operate as, or evidence, an amendment, supplement or waiver or have any
other effect on any Loan Document. Any waiver granted shall be limited to the
specific circumstance expressly described in it, and shall not apply to any
subsequent or other circumstance, whether similar or dissimilar, or give rise
to, or evidence, any obligation or commitment to grant any further waiver. The
Loan Documents represent the entire agreement about this subject matter and
supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of the Loan Documents merge into the Loan
Documents.
12.7 Counterparts. This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, are an original, and all taken together, constitute one
Agreement.
12.8 [Reserved].
12.9 Survival. All covenants, representations and warranties made in this
Agreement continue in full force until this Agreement has terminated pursuant to
its terms and all Obligations (other than inchoate indemnity obligations and any
other obligations which, by their terms, are to survive the termination of this
Agreement for which no claim has been made) have been satisfied. 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.
12.10 Confidentiality. In handling any financial statements of Borrower or other
confidential information, Bank shall exercise the same degree of care that it
exercises for its own proprietary information, but disclosure of information may
be made: (a) to Bank’s Subsidiaries or Affiliates; (b) to prospective
transferees or purchasers of any interest in the Credit Extensions (provided,
however, Bank shall use commercially reasonable efforts to obtain such
prospective transferee’s or purchaser’s agreement to the terms of this
provision); (c) as required by law, regulation, subpoena, or other order; (d) to
Bank’s regulators or as otherwise required in connection with Bank’s examination
or audit; (e) as Bank considers appropriate in exercising remedies under the
Loan Documents; and (f) to third-party service providers of Bank so long as such
service providers have executed a confidentiality agreement with Bank with terms
no less restrictive than

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those contained herein. Confidential information does not include information
that either: (i) is in the public domain or in Bank’s possession when disclosed
to Bank, or becomes part of the public domain after disclosure to Bank; or
(ii) is disclosed to Bank by a third party, if Bank does not know that the third
party is prohibited from disclosing the information.
Bank may use confidential information for the development of client databases,
reporting purposes, and market analysis, so long as Bank does not disclose
Borrower’s identity or the identity of any person associated with Borrower
unless otherwise expressly permitted by this Agreement. The provisions of the
immediately preceding sentence shall survive the termination of this Agreement.
12.11 Right of Set Off. Borrower hereby grants to Bank, a lien, security
interest and right of set off 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 Bank
(including a Bank subsidiary) 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 Obligation of Borrower then due regardless of the adequacy of any other
collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.
 
12.12 Termination Prior to Revolving Line Maturity Date; Survival. All
covenants, representations and warranties made in this Agreement continue in
full force until this Agreement has terminated pursuant to its terms and all
Obligations (other than inchoate indemnity obligations and any other obligations
which, by their terms, are to survive the termination of this Agreement for
which no claim has been made) have been satisfied. So long as Borrower has
satisfied the Obligations (other than inchoate indemnity obligations, any other
obligations which, by their terms, are to survive the termination of this
Agreement, and any Obligations under Bank Services Agreements that are cash
collateralized in accordance with Section 4.1 of this Agreement), this Agreement
may be terminated prior to the Revolving Line Maturity Date by Borrower,
effective three (3) Business Days after written notice of termination is given
to Bank. Those obligations that are expressly specified in this Agreement as
surviving this Agreement’s termination shall continue to survive notwithstanding
this Agreement’s termination.

13
 
DEFINITIONS 

13.1 Definitions. As used in this Agreement, the following terms have the
following meanings:
“Account” is any “account” as defined in the Code with such additions to such
term as may hereafter be made, and includes, without limitation, all accounts
receivable and other sums owing to Borrower.
“Account Debtor” is any “account debtor” as defined in the Code with such
additions to such term as may hereafter be made.
“Additional Costs” is defined in Section 3.7(b).
“Advance” or “Advances” means an advance (or advances) under the Revolving Line,
including any Overadvance.
“Affiliate” of any 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.
“Agreement” is defined in the preamble hereof.
“Annual Financial Statements” is defined in Section 6.2(d).
“Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the
amount available under the Borrowing Base minus (b) the outstanding principal
balance of any Advances minus (c) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit).

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“Bank” is defined in the preamble hereof.
“Bank Expenses” are all reasonable documented out-of-pocket audit fees and
expenses, and reasonable documented out-of-pocket costs, and expenses (including
reasonable documented out-of-pocket attorneys’ fees and expenses for one outside
counsel) for preparing, amending, negotiating, administering, defending and
enforcing the Loan Documents (including, without limitation, those incurred in
connection with appeals or Insolvency Proceedings) or otherwise incurred with
respect to Borrower.
“Bank Services” are any products, credit services, and/or financial
accommodations previously, now, or hereafter provided to Borrower or any of its
Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any
letters of credit, cash management services (including, without limitation,
merchant services, direct deposit of payroll, business credit cards, and check
cashing services), interest rate swap arrangements, and foreign exchange
services as any such products or services may be identified in Bank’s various
agreements related thereto (each, a “Bank Services Agreement”).
“Borrower” is defined in the preamble hereof.
 
“Borrower’s Books” are all Borrower’s books and records including ledgers,
federal and state tax returns, records regarding Borrower’s assets or
liabilities, the Collateral, business operations or financial condition, and all
computer programs or storage or any equipment containing such information.
“Borrowing Base” is (a) 80% of Eligible Accounts plus (b) 15% of Eligible Fixed
Assets valued at the lower of cost or market, plus (c) 15% of Eligible Unbilled
Accounts as of such date plus (d) 100% of Unrestricted Cash, as determined by
Bank from Borrower’s most recent Borrowing Base Certificate; provided, however,
that Bank has the right to decrease the foregoing percentages in its good faith
business judgment to mitigate the impact of events, conditions, contingencies,
or risks which may adversely affect the Collateral or its value.
“Borrowing Base Certificate” is that certain certificate in the form attached
hereto as Exhibit D.
“Borrowing Base Report” is defined in Section 6.2(b).
“Borrowing Resolutions” are, with respect to any Person, those resolutions
adopted by such Person’s Board of Directors and delivered by such Person to Bank
approving the Loan Documents to which such Person is a party and the
transactions contemplated thereby, together with a certificate executed by its
secretary on behalf of such Person certifying that (a) such Person has the
authority to execute, deliver, and perform its obligations under each of the
Loan Documents to which it is a party, (b) that attached as Exhibit A to such
certificate is a true, correct, and complete copy of the resolutions then in
full force and effect authorizing and ratifying the execution, delivery, and
performance by such Person of the Loan Documents to which it is a party, (c) the
name(s) of the Person(s) authorized to execute the Loan Documents on behalf of
such Person, together with a sample of the true signature(s) of such Person(s),
and (d) that Bank may conclusively rely on such certificate unless and until
such Person shall have delivered to Bank a further certificate canceling or
amending such prior certificate.
“Business Day” is any day other than a Saturday, Sunday or other day on which
banking institutions in the State of California or Commonwealth of Massachusetts
are authorized or required by law or other governmental action to close, except
that if any determination of a “Business Day” shall relate to a LIBOR Credit
Extension, the term “Business Day” shall also mean a day on which dealings are
carried on in the London interbank market.
“Cash Equivalents” are (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $250,000,000; (c) commercial paper of an issuer rated
at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than thirty (30) days, with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or

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taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s; (f) securities with maturities of six
(6) months or less from the date of acquisition backed by standby letters of
credit issued by any Lender or any commercial bank satisfying the requirements
of clause (b) of this definition; (g) money market mutual or similar funds that
invest exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition; or (h) money market funds that (i) comply with the
criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as
amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.
“Change in Control” means any event, transaction, or occurrence as a result of
which (a) any “person” (as such term is defined in Sections 3(a)(9) and 13(d)(3)
of the Securities Exchange Act of 1934, as an amended (the “Exchange Act”)),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of Borrower, is or becomes a beneficial owner (within the meaning
Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of
securities of Borrower, representing fifty percent (50.0%) or more of the
combined voting power of Borrower’s then outstanding securities; or (b) during
any period of twelve consecutive calendar months, individuals who at the
beginning of such period constituted the Board of Directors of Borrower
(together with any new directors whose election by the Board of Directors of
Borrower was approved by a vote of at least a majority of the directors then
still in office who either were directions at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason other than death or disability to constitute a majority of the
directors then in office.
“Claims” are defined in Section 12.2.
“Code” is the Uniform Commercial Code, as the same may, from time to time, be
enacted and in effect in the Commonwealth of Massachusetts; provided, that, to
the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, or priority of, or
remedies with respect to, Bank’s Lien on any Collateral is governed by the
Uniform Commercial Code in effect in a jurisdiction other than the Commonwealth
of Massachusetts, the term “Code” shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes on the
provisions thereof relating to such attachment, perfection, priority, or
remedies and for purposes of definitions relating to such provisions.
“Collateral” is any and all properties, rights and assets of Borrower described
on Exhibit A.
“Collateral Account” is any Deposit Account, Securities Account, or Commodity
Account.
“Commodity Account” is any “commodity account” as defined in the Code with such
additions to such term as may hereafter be made.
“Communication” is defined in Section 10.
“Compliance Certificate” is that certain certificate in the form attached hereto
as Exhibit B.
“Contingent Obligation” is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any indebtedness, lease, dividend,
letter of credit or other obligation of another such as an obligation directly
or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by
that Person, or for which that Person is directly or indirectly liable; (b) any
obligations for undrawn letters of credit for the account of that Person; and
(c) all obligations from any interest rate, currency or commodity swap
agreement, interest rate cap or collar agreement, or other agreement or
arrangement designated to protect a Person against fluctuation in interest
rates, currency exchange rates or commodity prices; but “Contingent Obligation”
does not include endorsements in the ordinary course of business. The amount of
a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable,
the maximum reasonably anticipated liability for it determined by the Person in
good faith; but the amount may not exceed the maximum of the obligations under
any guarantee or other support arrangement.
“Continuation Date” means any date on which Borrower elects to continue a LIBOR
Credit Extension into another Interest Period.

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“Control Agreement” is any control agreement entered into among the depository
institution at which Borrower maintains a Deposit Account or the securities
intermediary or commodity intermediary at which Borrower maintains a Securities
Account or a Commodity Account, Borrower, and Bank pursuant to which Bank
obtains control (within the meaning of the Code) over such Deposit Account,
Securities Account, or Commodity Account.
“Conversion Date” means any date on which Borrower elects to convert a Prime
Rate Credit Extension to a LIBOR Credit Extension or a LIBOR Credit Extension to
a Prime Rate Credit Extension.
“Convertible Notes” means those certain convertible senior notes due 2019, to be
sold by the Borrower to the initial purchasers pursuant to that certain Purchase
Agreement by and between the Borrower and Morgan Stanley & Co. LLC.
“Credit Extension” is any Advance, Letter of Credit, or any other extension of
credit by Bank for Borrower’s benefit.
“Default Rate” is defined in Section 2.4(c).
 
“Deposit Account” is any “deposit account” as defined in the Code with such
additions to such term as may hereafter be made.
“Designated Deposit Account” is Borrower’s primary deposit account maintained
with Bank.
“Dollars,” “dollars” and “$” each mean lawful money of the United States.
“Domestic Subsidiary” means a Subsidiary organized under the laws of the United
States or any state or territory thereof or the District of Columbia.
“Effective Amount” means with respect to any Credit Extension on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowing and prepayments or repayments thereof occurring on such date.
“Effective Date” is defined in the preamble of this Agreement.
“Eligible Accounts” means Accounts which arise in the ordinary course of
Borrower’s business that meet all Borrower’s representations and warranties in
Section 5.11. Bank shall have the right, at any time and from time to time after
the Effective Date, in its Permitted Discretion to establish, modify or
eliminate Reserves against Eligible Accounts, or, acting in its commercially
reasonable good faith business judgment, to adjust or supplement any of the
criteria set forth below, to establish new criteria, and to adjust advance rates
with respect to Eligible Accounts, to reflect changes in the collectability or
realization values of such Accounts arising or discovered by Bank after the
Effective Date. Unless Bank otherwise agrees in writing, Eligible Accounts shall
not include:
(a) Accounts for which the Account Debtor is Borrower’s Affiliate, officer,
employee, or agent;
(b) Accounts that the Account Debtor has not paid within ninety (90) days of
invoice date regardless of invoice payment period terms;
(c) Accounts with credit balances over ninety (90) days from invoice date;
(d) Accounts owing from an Account Debtor if fifty percent (50%) or more of the
Accounts owing from such Account Debtor have not been paid within ninety
(90) days of invoice date;
(e) Accounts owing from an Account Debtor which does not have its principal
place of business in the United States, unless otherwise approved by Bank on a
case-by-case basis in its good faith business discretion, or;
(f) Accounts billed from and/or payable to Borrower outside of the United States
(sometimes called foreign invoiced accounts), unless otherwise approved by Bank
on a case-by-case basis in its good faith business discretion;
(g) Accounts owing from an Account Debtor to the extent that Borrower is
indebted or obligated in any manner to the Account Debtor (as creditor, lessor,
supplier or otherwise - sometimes called “contra” accounts, accounts payable,
customer deposits or credit accounts);

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(h) Accounts owing from an Account Debtor which is a United States government
entity or any department, agency, or instrumentality thereof unless Borrower has
assigned its payment rights to Bank and the assignment has been acknowledged
under the Federal Assignment of Claims Act of 1940, as amended;
(i) Accounts for demonstration or promotional equipment, or in which goods are
consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on approval”,
or other terms if Account Debtor’s payment may be conditional;
(j) Accounts owing from an Account Debtor where goods or services have not yet
been rendered to the Account Debtor (sometimes called memo billings or
pre-billings);
 
(k) Accounts subject to contractual arrangements between Borrower and an Account
Debtor where payments shall be scheduled or due according to completion or
fulfillment requirements where the Account Debtor has a right of offset for
damages suffered as a result of Borrower’s failure to perform in accordance with
the contract (sometimes called contracts accounts receivable, progress billings,
milestone billings, or fulfillment contracts);
(l) Accounts owing from an Account Debtor the amount of which may be subject to
withholding based on the Account Debtor’s satisfaction of Borrower’s complete
performance (but only to the extent of the amount withheld; sometimes called
retainage billings);
(m) Accounts subject to trust provisions, subrogation rights of a bonding
company, or a statutory trust;
(n) Accounts owing from an Account Debtor that has been invoiced for goods that
have not been shipped to the Account Debtor unless Bank, Borrower, and the
Account Debtor have entered into an agreement acceptable to Bank in its good
faith business discretion wherein the Account Debtor acknowledges that (i) it
has title to and has ownership of the goods wherever located, (ii) a bona fide
sale of the goods has occurred, and (iii) it owes payment for such goods in
accordance with invoices from Borrower (sometimes called “bill and hold”
accounts);
(o) Accounts for which the Account Debtor has not been invoiced other than
Accounts from grid operators or utilities where services have been rendered and
amounts are due where invoices are not submitted;
(p) Accounts that represent non-trade receivables or that are derived by means
other than in the ordinary course of Borrower’s business;
(q) Accounts for which Borrower has permitted Account Debtor’s payment to extend
beyond 90 days;
(r) Accounts arising from chargebacks, debit memos or other payment deductions
taken by an Account Debtor;
(s) Accounts arising from product returns and/or exchanges (sometimes called
“warranty” or “RMA” accounts);
(t) Accounts in which the Account Debtor disputes liability or makes any claim
(but only up to the disputed or claimed amount), or if the Account Debtor is
subject to an Insolvency Proceeding, or becomes insolvent, or goes out of
business;
(u) Accounts owing from an Account Debtor with respect to which Borrower has
received Deferred Revenue (but only to the extent of such Deferred Revenue);
(v) Accounts owing from an Account Debtor, whose total obligations to Borrower
exceed twenty-five percent (25%) of all Accounts (excluding Accounts from PJM
Interconection), for the amounts that exceed that percentage, unless Bank
approves in writing; and
(w) Accounts for which Bank in its good faith business judgment determines
collection to be doubtful upon notice to Borrower, including, without
limitation, accounts represented by “refreshed” or “recycled” invoices.
“Eligible Fixed Assets” is the net book value of fixed assets of the Borrower
and its Subsidiaries as determined under GAAP and reflected in the Borrower’s
consolidated financial statements.

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“Eligible Unbilled Accounts” are Accounts owned by Borrower and the Guarantors
and reflected in the most recent Borrowing Base Certificate delivered by the
Borrower to Bank that meet all of the criteria of an “Eligible Account” except
such accounts (i) are not due and payable and (ii) have not been invoiced as
required by the criteria set forth in clause (o) of the definition of “Eligible
Accounts”, but in respect of which the Borrower is recognizing income in
accordance with GAAP. Bank shall have the right, at any time and from time to
time after the Effective Date, in its Permitted Discretion to establish, modify
or eliminate Reserves against Eligible Unbilled Accounts, or, acting in its
commercially reasonable good faith business judgment, to adjust or supplement
any of the criteria set forth above, to establish new criteria, and to adjust
advance rates with respect to Eligible Unbilled Accounts, to reflect changes in
the collectability or realization values of such Accounts arising or discovered
by Bank after the Effective Date.
“EnerNOC” is defined in the preamble of this Agreement.
“Equipment” is all “equipment” as defined in the Code with such additions to
such term as may hereafter be made, and includes without limitation all
machinery, fixtures, goods, vehicles (including motor vehicles and trailers),
and any interest in any of the foregoing.
“ERISA” is the Employee Retirement Income Security Act of 1974, and its
regulations.
“Event of Default” is defined in Section 8.
“Excluded Accounts” are (a) Deposit Accounts used exclusively for payroll,
payroll taxes, and other employee wage and benefit payments to or for the
benefit of the Grantors’ employees; (b) withholding tax and fiduciary accounts;
(c) any trust or escrow accounts; (d) zero balance accounts; (e) accounts
maintained with institutions in jurisdictions outside of the United States of
America, (f) deposit accounts owned by EnTech US, (g) the account at PNC Bank
provided that amounts therein do not exceed $300,000 at any time, and (h) the
account at Blackrock provided that amounts therein do not exceed $300,000 at any
time.
“Foreign Currency” means lawful money of a country other than the United States.
“Funding Date” is any date on which a Credit Extension is made to or on account
of Borrower which shall be a Business Day.
“GAAP” is generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other Person as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.
“General Intangibles” is all “general intangibles” as defined in the Code in
effect on the date hereof with such additions to such term as may hereafter be
made, and includes without limitation, all copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents,
trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights,
including any rights to unpatented inventions, payment intangibles, royalties,
contract rights, goodwill, franchise agreements, purchase orders, customer
lists, route lists, telephone numbers, domain names, claims, income and other
tax refunds, security and other deposits, options to purchase or sell real or
personal property, rights in all litigation presently or hereafter pending
(whether in contract, tort or otherwise), insurance policies (including without
limitation key man, property damage, and business interruption insurance),
payments of insurance and rights to payment of any kind.
“Governmental Approval” is any consent, authorization, approval, order, license,
franchise, permit, certificate, accreditation, registration, filing or notice,
of, issued by, from or to, or other act by or in respect of, any Governmental
Authority.
“Governmental Authority” is any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
“Guarantor” is any present or future guarantor of the Obligations.

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“Guaranty” is any guarantee of all or any part of the Obligations, as the same
may from time to time be amended, restated, modified or otherwise supplemented.
“Hostile Acquisition” the acquisition of the capital stock or other equity
interests of a Person through a tender offer or similar solicitation of the
owners of such capital stock or other equity interests which has not been
approved (prior to such acquisition) by resolutions of the Board of Directors of
such Person or by similar action if such Person is not a corporation, or as to
which such approval has been withdrawn.
 
“Immaterial Subsidiary” is each of Borrower’s Domestic Subsidiaries listed on
Schedule 1.1 hereto as such Schedule may be revised or supplemented from time to
time with the consent of Bank, provided that each such Domestic Subsidiary does
not individually (a) at any time have total assets (excluding intangible assets
(other than patents, patent licenses, copyrights, copyright licenses,
trademarks, and trademark licenses) and goodwill) with a book value equal to or
in excess of $20,000,000 tested as of the last day of the fiscal quarter then
most recently ended for the trailing twelve (12) months ended on such date, in
each case as determined in accordance with GAAP, (b) have a month-end cash
balance in excess of $5,000,000, or (c) own any material intellectual property
or any application therefor.”
“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of
property or services, such as reimbursement and other obligations for surety
bonds and letters of credit (to the extent not cash collateralized),
(b) obligations evidenced by notes, bonds, debentures or similar instruments,
(c) capital lease obligations, and (d) Contingent Obligations.
“Indemnified Person” is defined in Section 12.2.
“Insolvency Proceeding” is any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
“Interest Expense” means for any fiscal period, interest expense (whether cash
or non-cash) determined in accordance with GAAP for the relevant period ending
on such date, including, in any event, interest expense with respect to any
Credit Extension and other Indebtedness of Borrower, including, without
limitation or duplication, all commissions, discounts, or related amortization
and other fees and charges with respect to letters of credit and bankers’
acceptance financing and the net costs associated with interest rate swap, cap,
and similar arrangements, and the interest portion of any deferred payment
obligation (including leases of all types).
“Interest Payment Date” means, (a) with respect to any LIBOR Credit Extension
having an Interest Period of three months or less, the last Business Day of such
Interest Period, (b) with respect to any LIBOR Credit Extension having an
Interest Period longer than three months, each day that is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period, and, (c) with respect to Prime Rate Credit
Extensions, the first (1st) calendar day of each month (or, if the first
(1st) day of the month does not fall on a Business Day, then on the first
Business Day following such date), and each date a Prime Rate Credit Extension
is converted into a LIBOR Credit Extension to the extent of the amount converted
to a LIBOR Credit Extension.
“Interest Period” means, as to any LIBOR Credit Extension, the period commencing
on the date of such LIBOR Credit Extension, or on the conversion/continuation
date on which the LIBOR Credit Extension is converted into or continued as a
LIBOR Credit Extension, and ending on the date that is one (1), two (2), three
(3), or six (6) months thereafter, in each case as Borrower may elect in the
applicable Notice of Borrowing or Notice of Conversion/Continuation; provided,
however, that (a) no Interest Period with respect to any LIBOR Credit Extension
shall end later than the Revolving Line Maturity Date, (b) the last day of an
Interest Period shall be determined in accordance with the practices of the
LIBOR interbank market as from time to time in effect, (c) if any Interest
Period would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the following Business Day unless, in the case of a
LIBOR Credit Extension, the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest Period
shall end on the preceding Business Day, (d) any Interest Period pertaining to a
LIBOR Credit Extension that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period, and (e) interest shall
accrue from and include the first Business Day of an Interest Period but exclude
the last Business Day of such Interest Period.

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“Interest Rate Determination Date” means each date for calculating the LIBOR for
purposes of determining the interest rate in respect of an Interest Period. The
Interest Rate Determination Date shall be the second Business Day prior to the
first day of the related Interest Period for a LIBOR Credit Extension.
“Inventory” is all “inventory” as defined in the Code in effect on the date
hereof with such additions to such term as may hereafter be made, and includes
without limitation all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products, including without
limitation such inventory as is temporarily out of Borrower’s custody or
possession or in transit and including any returned goods and any documents of
title representing any of the above.
 
“Investment” is any beneficial ownership interest in any Person (including
stock, partnership interest or other securities), and any loan, advance or
capital contribution to any Person.
“Letter of Credit” means a standby letter of credit issued by Bank or another
institution based upon an application, guarantee, indemnity or similar agreement
on the part of Bank as set forth in Section 2.1.2, including any existing letter
of credit specified on Schedule 1.1A hereto.
“Letter of Credit Application” is defined in Section 2.1.2(a).
“LIBOR” means, for any Interest Rate Determination Date with respect to an
Interest Period for any Credit Extension to be made, continued as or converted
into a LIBOR Credit Extension, the rate of interest per annum determined by Bank
to be the per annum rate of interest at which deposits in United States Dollars
are offered to Bank in the London interbank market (rounded upward, if
necessary, to the nearest 1/100th of one percent (0.01%)) in which Bank
customarily participates at 11:00 a.m. (local time in such interbank market) two
(2) Business Days prior to the first day of such Interest Period for a period
approximately equal to such Interest Period and in an amount approximately equal
to the amount of such Credit Extension.
“LIBOR Credit Extension” means a Credit Extension that bears interest based at
the LIBOR Rate plus the LIBOR Rate Margin.
“LIBOR Rate” means, for each Interest Period in respect of LIBOR Credit
Extensions comprising part of the same Credit Extensions, an interest rate per
annum (rounded upward to the nearest 1/16th of one percent (0.0625%)) equal to
LIBOR for such Interest Period divided by one (1) minus the Reserve Requirement
for such Interest Period.
“LIBOR Rate Margin” is two percent (2.00%).
“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security
interest or other encumbrance of any kind, whether voluntarily incurred or
arising by operation of law or otherwise against any property.
“Liquidity Event” is the receipt by Borrower after the Effective Date of
unrestricted net cash proceeds from the issuance and sale of equity securities
or convertible debt of not less than Seventy Five Million Dollars ($75,000,000).
“Loan Documents” are, collectively, this Agreement and any schedules, exhibits,
certificates, notices, and any other documents related to this Agreement, the
Perfection Certificate, any subordination agreement, any Bank Services
Agreement, any note, or notes or guaranties executed by Borrower or any
Guarantor, and any other present or future agreement by Borrower and/or any
Guarantor with or for the benefit of Bank in connection with this Agreement or
Bank Services, all as amended, restated, or otherwise modified.
“Material Adverse Change” is (a) a material adverse change in, or a material
adverse effect on, the operations, business, assets, properties, liabilities
(actual or contingent), or condition (financial or otherwise) of the Borrower
and its Subsidiaries, taken as a whole; (b) a material impairment of the rights
and remedies of the Bank under any Loan Document, or of the ability of the
Borrower or any Guarantor to perform its obligations under any Loan Document to
which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Borrower or any Guarantor
of any Loan Documents to which it is a party.
“Monthly Financial Statements” is defined in Section 6.2(c).
“Notice of Borrowing” means a notice given by Borrower to Bank in accordance
with Section 3.2(a), substantially in the form of Exhibit C, with appropriate
insertions.

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“Notice of Conversion/Continuation” means a notice given by Borrower to Bank in
accordance with Section 3.5, substantially in the form of Exhibit D, with
appropriate insertions.
 
“Obligations” are Borrower’s obligation to pay when due any debts, principal,
interest, fees, Bank Expenses and other amounts Borrower owes Bank now or later,
whether under this Agreement or the Loan Documents, including, without
limitation, all obligations relating to letters of credit (including
reimbursement obligations for drawn and undrawn letters of credit), cash
management services, and foreign exchange contracts, if any, and including
interest accruing after Insolvency Proceedings begin, and the performance of
Borrower’s duties under the Loan Documents.
“Operating Documents” are, for any Person, such Person’s formation documents, as
certified by the Secretary of State (or equivalent agency) of such Person’s
jurisdiction of organization on a date that is no earlier than thirty (30) days
prior to the Effective Date, and, (a) if such Person is a corporation, its
bylaws in current form, (b) if such Person is a limited liability company, its
limited liability company agreement (or similar agreement), and (c) if such
Person is a partnership, its partnership agreement (or similar agreement), each
of the foregoing with all current amendments or modifications thereto.
“Overadvance” is defined in Section 2.2.
“Perfection Certificate” is defined in Section 5.1.
“Permitted Discretion”: means a determination made by Bank in good faith and in
the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment, upon notice to and after consultation with the
Borrower with respect thereto.
“Permitted Distributions” means:
(a) purchases of capital stock from former employees, consultants and directors
pursuant to repurchase agreements or other similar agreements in an aggregate
amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in any
fiscal year provided that at the time of such purchase no Default or Event of
Default has occurred and is continuing;
(b) distributions or dividends consisting solely of Borrower’s capital stock;
(c) purchases for value of any rights distributed in connection with any
stockholder rights plan;
(d) purchases of capital stock or options to acquire such capital stock with the
proceeds received from a substantially concurrent issuance of capital stock or
convertible securities;
(e) purchases of capital stock pledged as collateral for loans to employees;
(f) purchases and redemptions of capital stock (1) in connection with the
exercise of stock options or stock appreciation rights by way of cashless
exercise or in connection with the satisfaction of withholding tax obligations,
and (2) held by Borrower’s public stockholders, provided that, at the time of
such repurchase no Default or Event of Default has occurred and is continuing,
and Borrower is in compliance with the financial covenants set forth in
Section 6.7 hereof;
(g) purchases of fractional shares of capital stock arising out of stock
dividends, splits or combinations or business combinations;
(h) the settlement or performance of such Person’s obligations under any equity
derivative transaction, option contract or similar transaction or combination of
transactions;
(i) conversions of Borrower’s convertible securities into other securities
pursuant to the terms of such convertible securities or otherwise in exchange
thereof; and
(j) repurchases of the Borrower’s capital stock concurrently with, and using the
proceeds from, the issuance of the Convertible Notes.
 
“Permitted Indebtedness” is:
(a) Borrower’s Indebtedness to Bank under this Agreement and the other Loan
Documents;

--------------------------------------------------------------------------------

(b) Indebtedness existing on the Effective Date and shown on the Perfection
Certificate;
(c) Subordinated Debt;
(d) (i) unsecured Indebtedness to trade creditors incurred in the ordinary
course of business and (ii) other unsecured Indebtedness provided that such
other unsecured Indebtedness has a maturity date no earlier than six (6) months
after the Revolving Line Maturity Date;
(e) Indebtedness incurred as a result of endorsing negotiable instruments
received in the ordinary course of business;
(f) Indebtedness in an aggregate principal amount not to exceed Five Hundred
Thousand Dollars ($500,000.00) secured by Permitted Liens;
(g) Indebtedness of Borrower to any Subsidiary and Contingent Obligations of any
Subsidiary with respect to obligations of Borrower (provided that the primary
obligations are not prohibited hereby), and Indebtedness of any Subsidiary to
Borrower or any other Subsidiary and Contingent Obligations of any Subsidiary
with respect to obligations of any other Subsidiary (provided that the primary
obligations are not prohibited hereby);
(h) Indebtedness (contingent or otherwise) owing to sureties arising from surety
bonds issued on behalf of the Borrower and its Subsidiaries as support for,
among other things ,their contracts with customers, whether such indebtedness is
owing directly or indirectly by the Borrower and its Subsidiaries;
(i) Indebtedness consisting of interest rate, currency or commodity swap
agreements, interest rate cap or collar agreements or arrangements entered into
in the ordinary course of business and designed to protect Borrower or its
Subsidiaries against fluctuations in interest rates, currency exchange rates or
commodity prices;
(j) Indebtedness that otherwise constitutes a Permitted Investment;
(k) Indebtedness in the form of purchase price adjustments, earn-outs, deferred
compensation, or other arrangements representing acquisition consideration or
deferred payments of a similar nature incurred in connection with any Permitted
Investment;
(l) to the extent constituting Indebtedness obligations, Indebtedness incurred
in connection with the financing of insurance premiums in the ordinary course of
business;
(m) to the extent constituting Indebtedness obligations, Indebtedness in respect
of netting services or overdraft protection or otherwise in connection with
deposit or securities account in the ordinary course of business;
(n) Indebtedness in respect of the Convertible Notes provided that such
Convertible Notes are unsecured and have a maturity date that is no earlier than
six (6) months after the Revolving Line Maturity Date;
(o) Other unsecured Indebtedness not otherwise permitted hereunder provided that
(i) at the time such indebtedness is incurred no Default or Event of Default has
occurred and is continuing and Borrower is in compliance with the financial
covenants set forth in Section 6.7 hereof and (ii) such unsecured Indebtedness
has a maturity date that is no earlier than six (6) months after the Revolving
Line Maturity Date; and
(p) extensions, refinancings, modifications, amendments and restatements of any
items of Permitted Indebtedness (a) through (g) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose more burdensome terms upon Borrower or its Subsidiary, as the case may
be.

“Permitted Investments” are:
(a) Investments shown on the Perfection Certificate and existing on the
Effective Date;
(b) Investments consisting of Cash Equivalents;

--------------------------------------------------------------------------------

(c) Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
Borrower;
 
(d) Investments consisting of deposit accounts with Bank or in which Bank has a
first priority perfected security interest;
(e) Investments accepted in connection with Transfers permitted by Section 7.1;
(f) (i) Investments of a Subsidiary that is not Borrower hereunder in or to
other Subsidiaries or Borrower, and (ii) Investments of Borrower or any
Guarantor in any Subsidiary;
(g) Investments consisting of (i) travel advances and employee relocation loans
and other employee loans and advances in the ordinary course of business, and
(ii) loans to employees, officers or directors relating to the purchase of
equity securities of Borrower or its Subsidiaries pursuant to employee stock
purchase plans or agreements approved by Borrower’s Board of Directors;
(h) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of business;
(i) Investments consisting of notes receivable of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not Affiliates, in
the ordinary course of business; provided that this paragraph (i) shall not
apply to Investments of Borrower in any Subsidiary;
(j) Investments consisting of the acquisition of all or substantially all of the
capital stock or property of any Person provided that any such Investment (i) is
of a Person or ongoing business engaged in business activities in which Borrower
is permitted to engage pursuant to Section 7.2 and (ii) is not a Hostile
Acquisition;
(k) extensions of trade credit in the ordinary course of business;
(l) Investments by the Borrower in Japan in the form of a joint venture with
Marubeni Corporation, provided that the aggregate amount of such Investments
shall not exceed $5,000,000; and
(m) Other Investments not otherwise permitted hereunder provided that (i) at the
time such Investment is made no Default or Event of Default has occurred and is
continuing and Borrower is in compliance with the financial covenants set forth
in Section 6.7 hereof and (ii) any such Investment (A) is of a Person or ongoing
business engaged in business activities in which Borrower is permitted to engage
pursuant to Section 7.2 and (B) is not a Hostile Acquisition.
“Permitted Liens” are:
(a) Liens existing on the Effective Date and shown on the Perfection Certificate
or arising under this Agreement and the other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or levies,
either not delinquent or being contested in good faith and for which Borrower
maintains adequate reserves on Borrower’s Books, provided that no notice of any
such Lien has been filed or recorded under the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations adopted thereunder;
(c) purchase money Liens (i) on Equipment acquired or held by Borrower incurred
for financing the acquisition of the Equipment securing no more than Five
Hundred Thousand Dollars ($500,000.00) in the aggregate amount outstanding, or
(ii) existing on Equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the Equipment;
(d) Liens of carriers, warehousemen, suppliers, or other Persons that are
possessory in nature arising in the ordinary course of business, securing
liabilities in the aggregate amount not to exceed One Hundred Thousand Dollars
($100,000.00) and which are not delinquent or remain payable without penalty or
which are being contested in good faith and by appropriate proceedings which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;

--------------------------------------------------------------------------------

(e) carriers’, warehousemen’s, landlord’s, mechanics’, materialmen’s,
repairmen’s or other like Liens (other than Liens imposed by ERISA) arising in
the ordinary course of business that are not overdue for a period of more than
thirty (30) days or that are being contested in good faith by appropriate
proceedings;
 
(f) Liens incurred in the extension, renewal or refinancing of the indebtedness
secured by Liens described in (a) through (c), but any extension, renewal or
replacement Lien must be limited to the property encumbered by the existing Lien
and the principal amount of the indebtedness may not increase;
(g) leases or subleases of real property granted in the ordinary course of
business, and leases, subleases, non-exclusive licenses or sublicenses of
property (other than real property or intellectual property) granted in the
ordinary course of Borrower’s business, if the leases, subleases, non-exclusive
licenses and sublicenses do not prohibit granting Bank a security interest;
(h) licenses of intellectual property permitted by Section 7.1(d);
(i) Liens arising from attachments or judgments, orders, or decrees in
circumstances not constituting an Event of Default under Sections 8.4 and 8.7;
(j) Liens in favor of other financial institutions arising in connection with
Borrower’s deposit and/or securities accounts held at such institutions,
provided that Bank has a first priority perfected security interest in the
amounts held in such deposit and/or securities accounts;
(k) pledges or deposits in connection with worker’s compensation, unemployment
insurance or other social security legislation;
(m) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business that, in the aggregate, are not
substantial in amount and that do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or its Subsidiaries;
(n) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business (other than for indebtedness or any Liens arising
under ERISA);
(o) any interest or title of a lessor under any lease entered into by the
Borrower or any Subsidiary in the ordinary course of its business and covering
only the assets so leased;
(p) precautionary financing statements filed in connection with operating leases
permitted by this Agreement;
(q) Liens on insurance proceeds in favor of insurance companies granted solely
to secure financial insurance premiums; and
(r) Liens not otherwise permitted hereunder securing Indebtedness not to exceed
Five Hundred Thousand Dollars ($500,000) at any time outstanding.
“Person” is any individual, sole proprietorship, partnership, limited liability
company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.
“Prime Rate” is the rate of interest per annum from time to time published in
the money rates section of The Wall Street Journal or any successor publication
thereto as the “prime rate” then in effect; provided that if such rate of
interest, as set forth from time to time in the money rates section of The Wall
Street Journal, becomes unavailable for any reason as determined by Bank, the
“Prime Rate” shall mean the rate of interest per annum announced by Bank as its
prime rate in effect at its principal office in the State of California (such
Bank announced Prime Rate not being intended to be the lowest rate of interest
charged by Bank in connection with extensions of credit to debtors).
“Prime Rate Credit Extension” means a Credit Extension that bears interest based
at the Prime Rate plus the Prime Rate Margin.

--------------------------------------------------------------------------------

“Prime Rate Margin” is one percent (1.00%).
 
“Quick Assets”: on any date, the sum of (i) Unrestricted Cash, (ii) marketable
securities in the United States that are immediately available for sale, and
(iii) billed accounts receivable with respect to obligor located in the United
States, in each case, of Borrower and its Subsidiaries.
“Quick Ratio” is a ratio of (a) Quick Assets, to (b) the sum of all of the
liabilities and Obligations of the Borrower under this Agreement and the other
Loan Documents (including Obligations in respect of drawn and undrawn Letters of
Credit) and (ii) obligations of the Borrower for Bank Services that are not
secured by cash.
“Registered Organization” is any “registered organization” as defined in the
Code with such additions to such term as may hereafter be made.
“Regulatory Change” means, with respect to Bank, any change on or after the date
of this Agreement in United States federal, state, or foreign laws or
regulations, including Regulation D, or the adoption or making on or after such
date of any interpretations, directives, or requests applying to a class of
lenders including Bank, of or under any United States federal or state, or any
foreign laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
“Requirement of Law” is as to any Person, the organizational or governing
documents of such Person, and any law (statutory or common), treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
“Reserve Requirement” means, for any Interest Period, the average maximum rate
at which reserves (including any marginal, supplemental, or emergency reserves)
are required to be maintained during such Interest Period under Regulation D
against “Eurocurrency liabilities” (as such term is used in Regulation D) by
member banks of the Federal Reserve System. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves required to
be maintained by Bank by reason of any Regulatory Change against (a) any
category of liabilities which includes deposits by reference to which the LIBOR
Rate is to be determined as provided in the definition of LIBOR or (b) any
category of extensions of credit or other assets which include Credit
Extensions.
“Reserves”: with respect to the Borrowing Base, reserves against Eligible
Accounts, Eligible Fixed Assets, and/or Eligible Unbilled Accounts that Bank
may, in its Permitted Discretion, establish from time to time.
“Responsible Officer” is any of the Chief Executive Officer, President, Chief
Financial Officer, Chief Operating Officer, General Counsel, Deputy General
Counsel, Senior Vice President of Finance, Vice President of Finance, and
Controller of Borrower.
“Revolving Line” is an Advance or Advances in an aggregate amount of up to
Thirty Million Dollars ($30,000,000.00) outstanding at any time.
“Revolving Line Maturity Date” is August 11, 2015.
“Securities Account” is any “securities account” as defined in the Code with
such additions to such term as may hereafter be made.
“Subordinated Debt” is Indebtedness incurred by Borrower which (a) is
subordinated to Borrower’s Indebtedness owed to Bank under the Loan Documents
and which is reflected in a written agreement in a manner and form reasonably
acceptable to Bank and approved by Bank in writing, and (b) has a maturity date
no earlier than six (6) months after the Revolving Line Maturity Date, and to
the extent the terms of subordination do not change adversely to Bank,
refinancings, refundings, renewals, amendments or extensions of the foregoing.
“Subsidiary” is, with respect to any Person, any Person of which more than fifty
percent (50.0%) of the voting stock or other equity interests (in the case of
Persons other than corporations) is owned or controlled, directly or indirectly,
by such Person or one or more Affiliates of such Person.

--------------------------------------------------------------------------------

“Total Liabilities” is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower’s consolidated balance sheet, including
all Indebtedness, and current portion of Subordinated Debt permitted by Bank to
be paid by Borrower, but excluding all other Subordinated Debt.
 
“Transfer” is defined in Section 7.1.
“United States Dollars” is the lawful currency of the United States of America.
“Unrestricted Cash”: all of the cash and Cash Equivalents of Borrower on deposit
in the United States at Bank or one of Bank’s Affiliates and, in each case,
which is subject to first priority Lien in favor of Bank that is perfected by
means of a Control Agreement.
“Unused Revolving Line Facility Fee” is defined in Section 2.5(c).
[Signature page follows]
 

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 Effective Date.
 

--------------------------------------------------------------------------------

 
 
 
BORROWER:
 
ENERNOC, INC.
 
 
By:
 
/s/ Neil Moses
Name:
 
Neil Moses
Title:
 
Chief Financial Officer and Treasurer
 
 
BANK:
 
 
 
SILICON VALLEY BANK
 
 
By:
 
/s/ Russell Follansbee
Name:
 
Russell Follansbee
Title:
 
Vice President

[Signature page to Loan and Security Agreement]

EXHIBIT A
The Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:

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All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles (except as provided below), commercial
tort claims, documents, instruments (including any promissory notes), chattel
paper (whether tangible or electronic), cash, deposit accounts, certificates of
deposit, fixtures, letters of credit rights (whether or not the letter of credit
is evidenced by a writing), securities, and all other investment property,
supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and all Borrower’s Books relating to the foregoing,
and any and all claims, rights and interests in any of the above and all
substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of
any or all of the foregoing.
Notwithstanding the foregoing, the Collateral does not include any of the
following, whether now owned or hereafter acquired any copyright rights,
copyright applications, copyright registrations and like protections in each
work of authorship and derivative work, whether published or unpublished, any
patents, patent applications and like protections, including improvements,
divisions, continuations, renewals, reissues, extensions, and
continuations-in-part of the same, trademarks, service marks and, to the extent
permitted under applicable law, any applications therefor, whether registered or
not, and the goodwill of the business of Borrower connected with and symbolized
thereby, know-how, operating manuals, trade secret rights, rights to unpatented
inventions, and any claims for damage by way of any past, present, or future
infringement of any of the foregoing; provided, however, the Collateral shall
include all Accounts, license and royalty fees and other revenues, proceeds, or
income arising out of or relating to any of the foregoing; (b) any property to
the extent that such grant of a security interest is prohibited by any
Requirement of Law of a Governmental Authority or constitutes a breach or
default under or results in the termination of or requires any consent not
obtained under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property, except to the extent that such
Requirement of Law or the term in such contract, license, agreement, instrument
or other document providing for such prohibition, breach, default or termination
or requiring such consent is ineffective under Section 9-406, 9-407, 9-408 or
9-409 of the New York UCC (or any successor provision or provisions) of any
relevant jurisdiction or any other applicable law (including the Bankruptcy
Code) or principles of equity; provided, however, that such security interest
shall attach immediately at such time as such Requirement of Law is not
effective or applicable, or such prohibition, breach, default or termination is
no longer applicable or is waived, and to the extent severable, shall attach
immediately to any portion of the Collateral that does not result in such
consequences; (c), (A) the voting Capital Stock of any Immaterial Subsidiaries
(that are not Loan Parties) or (B) more than 65% of the total outstanding voting
Capital Stock of any of its Excluded Foreign Subsidiaries; and (d) Excluded
Accounts.
Pursuant to the terms of a certain negative pledge arrangement with Bank,
Borrower has agreed not to encumber any of its copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents,
patent applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the
same, trademarks, service marks and, to the extent permitted under applicable
law, any applications therefor, whether registered or not, and the goodwill of
the business of Borrower connected with and symbolized thereby, know-how,
operating manuals, trade secret rights, rights to unpatented inventions, and any
claims for damage by way of any past, present, or future infringement of any of
the foregoing, without Bank’s prior written consent.
 

EXHIBIT B

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COMPLIANCE CERTIFICATE
TO:
 
SILICON VALLEY BANK
 
 
 
Date:
 
 
FROM:
 
ENERNOC, INC.
 
 
 
 
 
 

The undersigned authorized officer of ENERNOC, INC. (“Borrower”) certifies that
under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (as amended, the “Agreement”), (1) Borrower is in compliance
for the period ending with all required covenants except as noted below,
(2) there are no Events of Default existing, (3) all representations and
warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed
all required tax returns and reports, and Borrower has timely paid all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
Borrower except as otherwise permitted pursuant to the terms of Section 5.8 of
the Agreement, and (5) no Liens have been levied or claims made against Borrower
or any of its Subsidiaries relating to unpaid employee payroll or benefits of
which Borrower has not previously provided written notification to Bank.
Attached are the required documents supporting the certification. The
undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next (other than in the case of
unaudited financial statements, for the absence of footnotes and subject to
year-end audit adjustments) except as explained in an accompanying letter or
footnotes. The undersigned acknowledges that no borrowings may be requested at
any time or date of determination that Borrower is not in compliance with any of
the terms of the Agreement, and that compliance is determined not just at the
date this certificate is delivered. Capitalized terms used but not otherwise
defined herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column.
 
 
 
 
 
Reporting Covenant
 
Required
 
Complies
 
 
 
Monthly Financial Statements
 
Monthly within 45 days
 
Yes     No
 
 
 
Monthly Compliance Certificate
 
Monthly within 45 days
 
Yes     No
Borrowing Base Reports
 
Monthly within 45 days
 
Yes     No    
N/A*
Borrowing Base Certificate
 
Monthly within 45 days
 
N/A*
Annual financial statements (CPA Audited) on 10-K together with an unqualified
audited opinion
 
FYE within 90 days
 
Yes     No
8-K, 10-Q and 10-K filings
 
Within 5 days after SEC filing
 
Yes     No
A/R and A/P agings and statement of account balances
 
Monthly within 45 days
 
Yes     No    
N/A*
 
 
 
Board projections
 
60 days after FYE
 
Yes     No

 
*
N/A if Unresticted Cash is in excess of $40,000,000

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Contracts entered into during month by Borrower restricting grant of security
interest to Bank pursuant to Section 5.2 of the Agreement:
 
 
 
 
 
 
 
 
Financial Covenant
 
Required
 
Actual
 
Complies
 
 
 
 
Quick Ratio (monthly)
 
1.85:1.0 (1.25:1.00 at 5/31 and 6/30)
 
    :1.0
 
Yes     No
Minimum Unrestricted Cash (monthly)
 
$40,000,000 ($18,000,000 after the occurrence of a Liquidity Event)
 
$
 
Yes     No

 

The following financial covenant analyses and information set forth in Schedule
1 attached hereto are true and accurate as of the date of this Certificate.
The following are the exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions to note.”)
 
 

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--------------------------------------------------------------------------------

  
 

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
 
 
 
 
 
ENERNOC, INC.
 
 
 
BANK USE ONLY
 
 
 
 
 
By:
 
 
 
 
 
Received by:
 
 
Name:
 
 
 
 
 
 
 
AUTHORIZED SIGNER
Title:
 
 
 
 
 
Date:
 
 
 
 
 
 
 
 
Verified:
 
 
 
 
 
 
 
 
 
 
AUTHORIZED SIGNER
 
 
 
 
 
 
Date:
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compliance Status:
 
Yes
 
No

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Schedule 1 to Compliance Certificate
Financial Covenants of Borrower
Dated:                     
In the event of a conflict between this Schedule and the Loan Agreement, the
terms of the Loan Agreement shall control.
 
 
 
 
 
 
 
 
I.
 
Quick Ratio (Section 6.7(a))
 
 
 
 
Required:
 
1.85
 
:
 
1.00
 
 
 
 
Actual:
 
 
 
:
 
1.00

 
 
 
 
 
 
 
A.
 
Aggregate value of the unrestricted cash of Borrower
 
$
 
 
 
B.
 
Aggregate value of the net accounts receivable of Borrower
 
$
 
 
 
C.
 
Marketable securities that are immediately available for sale
 
$
 
 
 
D.
 
Quick Assets (the sum of lines A, B and C)
 
$
 
 
 
E.
 
Aggregate value of obligations and liabilities of Borrower to Bank
 
$
 
 
 
F.
 
Quick Ratio (line D divided by line E)
 
 

Is line F equal to or greater than 1.85 : 1.00?
 
 
 
 
 
 
 
 
 
 
No, not in compliance
 
 
 
Yes, in compliance

II. MINIMUM UNRESTRICTED CASH (Section 6.7(b))
 
 
 
 
Required:
 
$40,000,000 ($18,000,000 after the occurrence of a Liquidity Event) (see
Section 6.7(b))
 
 
Actual:
 
$

Is Minimum Unrestricted Cash at least $40,000,000 ($18,000,000 after the
occurrence of a Liquidity Event) (see Section 6.7(b))?
 
 
 
 
 
 
 
 
 
 
No, not in compliance
 
 
 
Yes, in compliance

 

--------------------------------------------------------------------------------

EXHIBIT C
FORM OF NOTICE OF BORROWING
ENERNOC, INC.
 
 
 
 
 
Date:
 
 
 
TO:
 
SILICON VALLEY BANK
 
 
 
 
3003 Tasman Drive
 
 
 
 
Santa Clara, CA 95054
 
 
 
 
Attention: Corporate Services Department
 
 
 
 
RE:
 
Loan and Security Agreement dated as of                  , 2014 (as amended,
modified, supplemented or restated from time to time, the “Loan Agreement”), by
and between (a) EnerNOC, Inc. (“Borrower”) and (b) Silicon Valley Bank (the
“Bank”)

Ladies and Gentlemen:
The undersigned refers to the Loan Agreement, the terms defined therein and used
herein as so defined, and hereby gives you notice irrevocably, pursuant to
Section 3.4(a) of the Loan Agreement, of the borrowing of a Credit Extension.
1. The Funding Date, which shall be a Business Day, of the requested borrowing
is                     .
2. The aggregate amount of the requested borrowing is $        .
3. The requested Credit Extension shall consist of $         of Prime Rate
Credit Extensions and $         of LIBOR Credit Extensions.
4. The duration of the Interest Period for the LIBOR Credit Extensions included
in the requested Credit Extension shall be              months.
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed Credit Extension
before and after giving effect thereto, and to the application of the proceeds
therefrom, as applicable:
(a) all representations and warranties of Borrower contained in the Loan
Agreement are true and correct in all material respects as of the date hereof;
provided, however, that such materiality qualifier shall not be applicable to
any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true and correct in all material respects as of such date;
(b) no Event of Default has occurred and is continuing, or would result from
such proposed Credit Extension; and
(c) the requested Credit Extension will not cause the aggregate principal amount
of the outstanding Credit Extensions to exceed, as of the designated Funding
Date, the Revolving Line.
 

 
 
 
 
 
 
 
BORROWER
 
 
 
ENERNOC, INC.
 
 
 
 
 
 
 
 
By:
 
 
 
 
 
 
 
 
 
 
Name:
 
 
 
 
 
 
 
 
 
 
Title:
 
 

--------------------------------------------------------------------------------

For internal Bank use only
 
 
 
 
 
 
 
 
 
 
LIBOR Pricing Date
 
LIBOR
 
LIBOR Variance
 
 
Revolving Line Maturity
Date
 
 
 
 
 
 
%
 
 

 

EXHIBIT D
FORM OF NOTICE OF CONVERSION/CONTINUATION
ENERNOC, INC.
 
 
 
 
 
 
 
 
 
 
Date:
 
 
 
TO:
 
SILICON VALLEY BANK
 
 
 
 
3003 Tasman Drive
 
 
 
 
Santa Clara, CA 95054
 
 
 
 
Attention:
 
 
 
 
RE:
 
Loan and Security Agreement dated as of                  , 2014 (as amended,
modified, supplemented or restated from time to time, the “Loan Agreement”), by
and between (a) EnerNOC, Inc. (“Borrower”) and (b) Silicon Valley Bank (the
“Bank”)

Ladies and Gentlemen:
The undersigned refers to the Loan Agreement, the terms defined therein being
used herein as therein defined, and hereby gives you notice irrevocably,
pursuant to Section 3.5 of the Loan Agreement, of the [conversion]
[continuation] of the Credit Extensions specified herein, that:
1. The date of the [conversion] [continuation] is             , 20    .
2. The aggregate amount of the proposed Credit Extensions to be [converted] is
$         or [continued] is $        .
3. The Credit Extensions are to be [converted into] [continued as] [LIBOR]
[Prime Rate] Credit Extensions.
4. The duration of the Interest Period for the LIBOR Credit Extensions included
in the [conversion] [continuation] shall be              months.
The undersigned, on behalf of Borrower, hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
proposed [conversion] [continuation], before and after giving effect thereto and
to the application of the proceeds therefrom:
(a) all representations and warranties of Borrower stated in the Loan Agreement
are true and correct in all material respects as of the date hereof; provided,
however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true and correct in all material respects as of such date; and
(b) no Event of Default has occurred and is continuing, or would result from
such proposed [conversion] [continuation].
[Signature page follows.]
 

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
BORROWER
 
 
 
ENERNOC, INC.
 
 
 
 
 
 
 
 
By:
 
 
 
 
 
 
 
 
 
 
Name:
 
 
 
 
 
 
 
 
 
 
Title:
 
 

For internal Bank use only
 
 
 
 
 
 
 
 
 
 
LIBOR Pricing Date
 
LIBOR
 
LIBOR Variance
 
 
Revolving Line Maturity
Date
 
 
 
 
 
 
%
 
 

 

--------------------------------------------------------------------------------

SCHEDULE 1.1
Immaterial Subsidiaries
 
1.
Celerity Energy Partners San Diego LLC

 
2.
ENOC Securities Corporation

 
3.
Mdenergy, LLC

 
4.
Pinpoint Power DR LLC

 
5.
South River Consulting, LLC

 
6.
EnTech Utility Service Bureau, Inc.

 

--------------------------------------------------------------------------------

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

This First Amendment to Loan and Security Agreement (this “Amendment”) dated and
effective as of October 23, 2014, by and among between (a) SILICON VALLEY BANK,
a California corporation with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 and with a loan production office located
at 275 Grove Street, Suite 2- 200, Newton, Massachusetts 02466 (“Bank”), and (b)
ENERNOC, INC., a Delaware corporation (“Borrower”).
W I T N E S S E T H:
WHEREAS, the parties hereto are party to that certain Loan and Security
Agreement dated as of August 11, 2014 (as amended, modified, supplemented or
restated and in effect from time to time, the “Loan Agreement”); and

WHEREAS, the parties hereto have agreed to modify and amend certain terms and
conditions of the Loan Agreement, subject to the terms and conditions contained
herein.

    NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Capitalized Terms. All capitalized terms used herein and not otherwise
defined shall have the same meaning herein as in the Loan Agreement.
2. Amendment to Section 13.1 of the Loan Agreement. The Loan Agreement is hereby
amended by amending and restating clause (h) of the definition of “Excluded
Accounts”
in Section 13.1 of the Loan Agreement to read as follows:
“(h) the account at Blackrock referenced in the Perfection Certificate provided
that amounts therein do not exceed $1,000,000 at any time.”
3. Conditions Precedent to Effectiveness. This Amendment shall not be effective
until each of the following conditions precedent have been fulfilled to the
satisfaction of Bank:
(a) This Amendment shall have been duly executed and delivered by the respective
parties hereto. Bank shall have received a fully executed copy hereof and of
each other document required hereunder.
(b) All necessary consents and approvals to this Amendment shall have been
obtained.
(c) After giving effect to this Amendment, no Event of Default shall have
occurred and be continuing.
(d) After giving effect to this Amendment, the representations and warranties in
the Loan Agreement and the other Loan Documents shall be true and correct in all
respects on and as of the date hereof, as though made on such date (except to
the extent that such representations and warranties relate solely to an earlier
date)
(e) All other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to Bank, in its sole discretion.
4. [Reserved].
5. Release by Borrower. The Borrower hereby acknowledges and agrees that as of
the date hereof to the knowledge of the Borrower, the Borrower has no offsets,
defenses, claims, or counterclaims against Bank with respect to the Obligations,
or otherwise, and that if the Borrower now has, or ever did have, any offsets,
defenses, claims, or counterclaims against Bank, whether known or unknown, at
law or in equity, all of them are hereby expressly WAIVED and Borrower hereby
RELEASES Bank from any liability thereunder.
6. Choice of Law. This Amendment and the rights of the parties hereunder, shall
be determined under, governed by, and construed in accordance with the laws of
the State of New York.
7. Counterpart Execution. This Amendment may be executed in any number of
    counterparts, all of which when taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Amendment by
signing any such counterpart. Delivery of an executed counterpart of this
Amendment by telefacsimile or other electronic
method of transmission shall be equally as effective as delivery of an original
executed counterpart of this Amendment. Any party delivering an executed
counterpart of this Amendment by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Amendment, but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Amendment.
8. Effect on Loan Documents.
(a) The Loan Agreement, as amended hereby, and each of the other Loan Documents
shall be and remain in full force and effect in accordance with their respective
terms and hereby are ratified and confirmed in all respects. The execution,
delivery, and performance of this Amendment shall not operate, except as
expressly set forth herein, as a modification or waiver of any right, power, or
remedy of Bank under the Loan Agreement

--------------------------------------------------------------------------------

or any other Loan Document. The consents, modifications and other agreements
herein are limited to the specifics hereof (including facts or occurrences on
which the same are based), shall not apply with respect to any facts or
occurrences other than those on which the same are based, shall not excuse any
noncompliance with the Loan Documents, and shall not operate as a consent or
waiver to any matter under the Loan Documents. Except for the amendments to the
Loan Agreement expressly set forth herein, the Loan Agreement and other Loan
Documents shall remain unchanged and in full force and effect. The execution,
delivery and performance of this Amendment shall not operate as a waiver of or,
except as expressly set forth herein, as an amendment of, any right, power or
remedy of Bank in effect prior to the date hereof. The amendments, consents,
modifications and other agreements set forth herein are limited to the specifics
hereof, shall not apply with respect to any facts or occurrences other than
those on which the same are based, and except as expressly set forth herein,
shall neither excuse any future non-compliance with the Loan Agreement, nor
operate as a waiver of any Event of Default. To the extent any terms or
provisions of this Amendment conflict with those of the Loan Agreement or other
Loan Documents, the terms and provisions of this Amendment shall control.
(b) Upon and after the date hereof, each reference in the Loan Agreement to
“this Agreement”, “hereunder”, “herein”, “hereof” or words of like import
referring to the Loan Agreement, and each reference in the other Loan Documents
to “the Loan Agreement”, “thereunder”, “therein”, “thereof” or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Loan Agreement as modified and amended hereby.
(c) To the extent that any terms and conditions in any of the Loan Documents
shall contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement as modified or amended hereby.
(d) This Amendment is a Loan Document.
(e) Unless the context of this Amendment clearly requires otherwise, references
to the plural include the singular, references to the singular include the
plural, the terms “includes” and “including” are not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or”.
9. Entire Agreement. This Amendment, and terms and provisions hereof, the Loan
Agreement and the other Loan Documents constitute the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any and all prior or contemporaneous amendments or understandings
with respect to the subject matter hereof, whether express or implied, oral or
written.
10. Integration. This Amendment, together with the other Loan Documents,
incorporates all negotiations of the parties hereto with respect to the subject
matter hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.
11. Reaffirmation of Obligations. The Borrower hereby reaffirms its obligations
under each Loan Document to which it is a party. The Borrower hereby further
ratifies and reaffirms the validity and enforceability of all of the Liens
heretofore granted, pursuant to and in connection with the Loan Documents to
Bank, as collateral security for the obligations under the Loan Documents in
accordance with their respective terms, and acknowledges that all of such Liens,
and all collateral heretofore pledged as security for such obligations,
continues to be and remain collateral for such obligations from and after the
date hereof.
12. Severability. In case any provision in this Amendment shall be invalid,
illegal or unenforceable, such provision shall be severable from the remainder
of this Amendment and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

[SIGNATURE PAGE FOLLOWS]

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SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

This Second Amendment to Loan and Security Agreement (this “Amendment”) dated
and effective as of August, 11, 2015, by and among between (a) SILICON VALLEY
BANK, a California corporation with its principal place of business at 3003
Tasman Drive, Santa Clara, California 95054 and with a loan production office
located at 275 Grove Street, Suite 2-200, Newton, Massachusetts 02466 (“Bank”),
and (b) ENERNOC, INC., a Delaware corporation (“Borrower”).
W I T N E S S E T H:
WHEREAS, the parties hereto are party to that certain Loan and Security
Agreement dated as of August 11, 2014 as amended by a certain First Amendment to
Loan and Security Agreement dated as of October 23, 2014 (as further amended,
modified, supplemented or restated and in effect from time to time, the “Loan
Agreement”); and

WHEREAS, the parties hereto have agreed to modify and amend certain terms and
conditions of the Loan Agreement, subject to the terms and conditions contained
herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. Capitalized Terms. All capitalized terms used herein and not otherwise
defined shall have the same meaning herein as in the Loan Agreement.
2. Amendment to Section 13.1 of the Loan Agreement. The Loan Agreement is hereby
amended by amending and restating clause (h) of the definition of “Excluded
Accounts” and "Revolving Line Maturity Date" in Section 13.1 of the Loan
Agreement to read as follows:
""Excluded Accounts" are (a) Deposit Accounts used exclusively for payroll,
payroll taxes, and other employee wage and benefit payments to or for the
benefit of the Grantors' employees; (b) withholding tax and fiduciary accounts;
(c) any trust or escrow accounts; (d) zero balance accounts; (e) accounts
maintained with institutions in jurisdictions outside of the United States of
America, and (f) other Deposit Accounts and Securities Accounts located in the
United States at institutions other than Bank and Affiliates provided that
aggregate amount in all such Deposit Accounts and Securities Accounts does not
exceed $10,000,000 at any time.
"Revolving Line Maturity Date" is August 9, 2016."    
3. Conditions Precedent to Effectiveness. This Amendment shall not be effective
until each of the following conditions precedent have been fulfilled to the
satisfaction of Bank:
(a) This Amendment shall have been duly executed and delivered by the respective
parties hereto. Bank shall have received a fully executed copy hereof and of
each other document required hereunder.
(b) All necessary consents and approvals to this Amendment shall have been
obtained.
(c) Before and after giving effect to this Amendment, no Event of Default shall
have occurred and be continuing.
(d) After giving effect to this Amendment, the representations and warranties in
the Loan Agreement and the other Loan Documents shall be true and correct in all
respects on and as of the date hereof, as though made on such date (except to
the extent that such representations and warranties relate solely to an earlier
date)
(e) Receipt by Bank of a Secretary's certificate of Borrower with respect to
specimen signatures and board minutes authorizing the execution and delivery of
this Amendment;
(f) All other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to Bank, in its sole discretion.
(g) Borrower's payment of (i) a commitment/amendment fee in an amount equal to
$75,000.00, and (ii) Bank's legal fees and expenses incurred in connection with
this Amendment.
4. Representations and Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:
(a) Immediately after giving effect to this Amendment (a) the representations
and warranties contained in the Loan Documents are true, accurate and complete
in all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
trye and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

--------------------------------------------------------------------------------

(b) Borrower and each Guarantor has the power and authority to execute and
deliver this Amendment and to perform its obligations under the Loan Agreement
(as amended by this Amendment) and each of the other Loan Documents;
(c) The organizational documents of Borrower and each Guarantor previously
delivered to Bank remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;
(d) The execution and delivery by Borrower and each Guarantor of this Amendment
and the performance by Borrower and each Guarantor of its respective obligations
under the Loan Agreement (as amended by this Amendment) and the other Loan
Documents have been duly authorized;
(e) The execution and delivery by Borrower and each Guarantor of this Amendment
and the performance by Borrower and each Guarantor of its respective obligations
under the Loan Agreement (as amended by this Amendment) and the other Loan
Documents do not and will not contravene (a) any law or regulation binding on or
affecting Borrower or any Guarantor, (b) any contractual restriction with a
Person binding on Borrower or any Guarantor, (c) any order, judgment or decree
of any court or other governmental or public body or authority, or subdivision
thereof, binding on Borrower or any Guarantor, or (d) the organizational
documents of Borrower or any Guarantor;
(f) The execution and deliver by Borrower and each Guarantor of this Amendment
and the performance by Borrower and each Guarantor of its respective obligations
under the Loan Agreement (as amended by this Amendment) and the other Loan
Documents do not require any order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
Borrower or any Guarantor, except as already has been obtained or made; and
(g) This Amendment has been duly executed and delivered by Borrower and each
Guarantor and is the binding obligation of Borrower and each Guarantor,
enforceable against Borrower and each Guarantor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors' rights.
5. Ratification of Perfection Certificates. Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and disclosures contained in those
certain Perfection Certificates dated as of August 11, 2014 and December 30,
2014 delivered by Borrower to Bank, and acknowledges, confirms and agrees the
disclosures and information Borrower provided to Bank in said Perfection
Certificates have not changed, as of the date hereof.
6. Release by Borrower. The Borrower hereby acknowledges and agrees that as of
the date hereof to the knowledge of the Borrower, the Borrower has no offsets,
defenses, claims, or counterclaims against Bank with respect to the Obligations,
or otherwise, and that if the Borrower now has, or ever did have, any offsets,
defenses, claims, or counterclaims against Bank, whether known or unknown, at
law or in equity, all of them are hereby expressly WAIVED and Borrower hereby
RELEASES Bank from any liability thereunder.
7. Choice of Law. This Amendment and the rights of the parties hereunder, shall
be determined under, governed by, and construed in accordance with the laws of
the State of New York.
8. Counterpart Execution. This Amendment may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of this Amendment by
telefacsimile or other electronic
method of transmission shall be equally as effective as delivery of an original
executed counterpart of this Amendment. Any party delivering an executed
counterpart of this Amendment by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Amendment, but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Amendment.
9. Effect on Loan Documents.
(a) The Loan Agreement, as amended hereby, and each of the other Loan Documents
shall be and remain in full force and effect in accordance with their respective
terms and hereby are ratified and confirmed in all respects. The execution,
delivery, and performance of this Amendment shall not operate, except as
expressly set forth herein, as a modification or waiver of any right, power, or
remedy of Bank under the Loan Agreement or any other Loan Document. The
consents, modifications and other agreements herein are limited to the specifics
hereof (including facts or occurrences on which the same are based), shall not
apply with respect to any facts or occurrences other than those on which the
same are based, shall not excuse any noncompliance with the Loan Documents, and
shall not operate as a consent or waiver to any matter under the Loan Documents.
Except for the amendments to the Loan Agreement expressly set forth herein, the
Loan Agreement and other Loan Documents shall remain unchanged and in full force
and effect. The execution, delivery and

--------------------------------------------------------------------------------

performance of this Amendment shall not operate as a waiver of or, except as
expressly set forth herein, as an amendment of, any right, power or remedy of
Bank in effect prior to the date hereof. The amendments, consents, modifications
and other agreements set forth herein are limited to the specifics hereof, shall
not apply with respect to any facts or occurrences other than those on which the
same are based, and except as expressly set forth herein, shall neither excuse
any future non-compliance with the Loan Agreement, nor operate as a waiver of
any Event of Default. To the extent any terms or provisions of this Amendment
conflict with those of the Loan Agreement or other Loan Documents, the terms and
provisions of this Amendment shall control.
(b) Upon and after the date hereof, each reference in the Loan Agreement to
“this Agreement”, “hereunder”, “herein”, “hereof” or words of like import
referring to the Loan Agreement, and each reference in the other Loan Documents
to “the Loan Agreement”, “thereunder”, “therein”, “thereof” or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Loan Agreement as modified and amended hereby.
(c) To the extent that any terms and conditions in any of the Loan Documents
shall contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement as modified or amended hereby.
(d) This Amendment is a Loan Document.
(e) Unless the context of this Amendment clearly requires otherwise, references
to the plural include the singular, references to the singular include the
plural, the terms “includes” and “including” are not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or”.
10. Entire Agreement. This Amendment, and terms and provisions hereof, the Loan
Agreement and the other Loan Documents constitute the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any and all prior or contemporaneous amendments or understandings
with respect to the subject matter hereof, whether express or implied, oral or
written.
11. Integration. This Amendment, together with the other Loan Documents,
incorporates all negotiations of the parties hereto with respect to the subject
matter hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.
12. Reaffirmation of Obligations. The Borrower hereby reaffirms its obligations
under each Loan Document to which it is a party. The Borrower hereby further
ratifies and reaffirms the validity and enforceability of all of the Liens
heretofore granted, pursuant to and in connection with the Loan Documents to
Bank, as collateral security for the obligations under the Loan Documents in
accordance with their respective terms, and acknowledges that all of such Liens,
and all collateral heretofore pledged as security for such obligations,
continues to be and remain collateral for such obligations from and after the
date hereof.
13. Severability. In case any provision in this Amendment shall be invalid,
illegal or unenforceable, such provision shall be severable from the remainder
of this Amendment and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

[SIGNATURE PAGE FOLLOWS]

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THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Third Amendment to Loan and Security Agreement (this “Amendment”) dated
August 3, 2016 and effective as of August 9, 2016 by and among between (a)
SILICON VALLEY BANK, a California corporation with its principal place of
business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office located at 275 Grove Street, Suite 2-200, Newton,
Massachusetts 02466 (“Bank”), and (b) ENERNOC, INC., a Delaware corporation
(“Borrower”).
W I T N E S S E T H:
WHEREAS, the parties hereto are party to that certain Loan and Security
Agreement dated as of August 11, 2014 as amended by a certain First Amendment to
Loan and Security Agreement dated as of October 23, 2014 and a certain Second
Amendment to Loan and Security Agreement dated as of August 11, 2015 (as further
amended, modified, supplemented or restated and in effect from time to time, the
“Loan Agreement”); and
WHEREAS, the parties hereto have agreed to modify and amend certain terms and
conditions of the Loan Agreement, subject to the terms and conditions contained
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1.Capitalized Terms. All capitalized terms used herein and not otherwise defined
shall have the same meaning herein as in the Loan Agreement.
2.Amendment to Section 13.1 of the Loan Agreement. The Loan Agreement is hereby
amended by amending and restating the definition of “Revolving Line Maturity
Date” in Section 13.1 of the Loan Agreement to read as follows:
“Revolving Line Maturity Date” is August 8, 2017.”
3. Conditions Precedent to Effectiveness. This Amendment shall not be effective
until each of the following conditions precedent have been fulfilled to the
satisfaction of Bank:
(a)
This Amendment shall have been duly executed and delivered by the respective
parties hereto. Bank shall have received a fully executed copy hereof and of
each other document required hereunder.

(b)
All necessary consents and approvals to this Amendment shall have been obtained.

(c)
Before and after giving effect to this Amendment, no Event of Default shall have
occurred and be continuing.

(d)
After giving effect to this Amendment, the representations and warranties in the
Loan Agreement and the other Loan Documents shall be true and correct in all
respects on and as of the date hereof, as though made on such date (except to
the extent that such representations and warranties relate solely to an earlier
date).

(e)
Receipt by Bank of a secretary’s certificate of Borrower with respect to
specimen signatures and board minutes authorizing the execution and delivery of
this Amendment;

(f)
All other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to Bank, in its sole discretion.

(g)
Borrower’s payment of (i) a commitment/amendment fee in an amount equal to
$75,000.00, and (ii) Bank’s legal fees and expenses incurred in connection with
this Amendment.

4.Representations and Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:

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(a)
Immediately after giving effect to this Amendment (a) the representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

(b)
Borrower and each Guarantor has the power and authority to execute and deliver
this Amendment and to perform its obligations under the Loan Agreement (as
amended by this Amendment) and each of the other Loan Documents;

(c)
The organizational documents of Borrower and each Guarantor previously delivered
to Bank remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;

(d)
The execution and delivery by Borrower and each Guarantor of this Amendment and
the performance by Borrower and each Guarantor of its respective obligations
under the Loan Agreement (as amended by this Amendment) and the other Loan
Documents have been duly authorized;

(e)
The execution and delivery by Borrower and each Guarantor of this Amendment and
the performance by Borrower and each Guarantor of its respective obligations
under the Loan Agreement (as amended by this Amendment) and the other Loan
Documents do not and will not contravene (a) any law or regulation binding on or
affecting Borrower or any Guarantor, (b) any contractual restriction with a
Person binding on Borrower or any Guarantor, (c) any order, judgment or decree
of any court or other governmental or public body or authority, or subdivision
thereof, binding on Borrower or any Guarantor, or (d) the organizational
documents of Borrower or any Guarantor;

(f)
The execution and delivery by Borrower and each Guarantor of this Amendment and
the performance by Borrower and each Guarantor of its respective obligations
under the Loan Agreement (as amended by this Amendment) and the other Loan
Documents do not require any order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
Borrower or any Guarantor, except as already has been obtained or made; and

(g)
This Amendment has been duly executed and delivered by Borrower and each
Guarantor and is the binding obligation of Borrower and each Guarantor,
enforceable against Borrower and each Guarantor in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’ rights.

5.Ratification of Perfection Certificates. Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and disclosures contained in that
certain Perfection Certificate dated as of August __, 2016 delivered by Borrower
to Bank, and acknowledges, confirms and agrees the disclosures and information
Borrower provided to Bank in said Perfection Certificate have not changed, as of
the date hereof.
6.Release by Borrower. The Borrower hereby acknowledges and agrees that as of
the date hereof to the knowledge of the Borrower, the Borrower has no offsets,
defenses, claims, or counterclaims against Bank with respect to the Obligations,
or otherwise, and that if the Borrower now has, or ever did have, any offsets,
defenses, claims, or counterclaims against Bank, whether known or unknown, at
law or in equity, all of them are hereby expressly WAIVED and Borrower hereby
RELEASES Bank from any liability thereunder.
7.Choice of Law. This Amendment and the rights of the parties hereunder, shall
be determined under, governed by, and construed in accordance with the laws of
the State of New York.

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8.Counterpart Execution. This Amendment may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of this Amendment by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Amendment. Any
party delivering an executed counterpart of this Amendment by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Amendment, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.
9.Effect on Loan Documents.
(a)The Loan Agreement, as amended hereby, and each of the other Loan Documents
shall be and remain in full force and effect in accordance with their respective
terms and hereby are ratified and confirmed in all respects. The execution,
delivery, and performance of this Amendment shall not operate, except as
expressly set forth herein, as a modification or waiver of any right, power, or
remedy of Bank under the Loan Agreement or any other Loan Document. The
consents, modifications and other agreements herein are limited to the specifics
hereof (including facts or occurrences on which the same are based), shall not
apply with respect to any facts or occurrences other than those on which the
same are based, shall not excuse any non-compliance with the Loan Documents, and
shall not operate as a consent or waiver to any matter under the Loan Documents.
Except for the amendments to the Loan Agreement expressly set forth herein, the
Loan Agreement and other Loan Documents shall remain unchanged and in full force
and effect. The execution, delivery and performance of this Amendment shall not
operate as a waiver of or, except as expressly set forth herein, as an amendment
of, any right, power or remedy of Bank in effect prior to the date hereof. The
amendments, consents, modifications and other agreements set forth herein are
limited to the specifics hereof, shall not apply with respect to any facts or
occurrences other than those on which the same are based, and except as
expressly set forth herein, shall neither excuse any future non-compliance with
the Loan Agreement, nor operate as a waiver of any Event of Default. To the
extent any terms or provisions of this Amendment conflict with those of the Loan
Agreement or other Loan Documents, the terms and provisions of this Amendment
shall control.
(b)Upon and after the date hereof, each reference in the Loan Agreement to “this
Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to
the Loan Agreement, and each reference in the other Loan Documents to “the Loan
Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring
to the Loan Agreement, shall mean and be a reference to the Loan Agreement as
modified and amended hereby.
(c)To the extent that any terms and conditions in any of the Loan Documents
shall contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement as modified or amended hereby.
(d)This Amendment is a Loan Document.
(e)Unless the context of this Amendment clearly requires otherwise, references
to the plural include the singular, references to the singular include the
plural, the terms “includes” and “including” are not limiting, and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or”.

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10.Entire Agreement. This Amendment, and terms and provisions hereof, the Loan
Agreement and the other Loan Documents constitute the entire understanding and
agreement between the parties hereto with respect to the subject matter hereof
and supersedes any and all prior or contemporaneous amendments or understandings
with respect to the subject matter hereof, whether express or implied, oral or
written.
11.Integration. This Amendment, together with the other Loan Documents,
incorporates all negotiations of the parties hereto with respect to the subject
matter hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.
12.Reaffirmation of Obligations. The Borrower hereby reaffirms its obligations
under each Loan Document to which it is a party. The Borrower hereby further
ratifies and reaffirms the validity and enforceability of all of the Liens
heretofore granted, pursuant to and in connection with the Loan Documents to
Bank, as collateral security for the obligations under the Loan Documents in
accordance with their respective terms, and acknowledges that all of such Liens,
and all collateral heretofore pledged as security for such obligations,
continues to be and remain collateral for such obligations from and after the
date hereof.
13.Severability. In case any provision in this Amendment shall be invalid,
illegal or unenforceable, such provision shall be severable from the remainder
of this Amendment and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]

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[Signature Page to Third Amendment to Loan Agreement]

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[Signature Page to Third Amendment to Loan Agreement]

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[Signature Page to Third Amendment to Loan Agreement]