Exhibit 10.27

LOAN AGREEMENT

Between

ZIONS FIRST NATIONAL BANK

Lender

and

INCONTACT, INC.

Borrower

SIEMENS ENTERPRISE COMMUNICATIONS, INC.

Guarantor

Effective Date: October 7, 2011

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TABLE OF CONTENTS

 

          Page  

1.

  

Definitions

     1      

1.1

   Definitions      1   

2.

  

Loan Description

     5      

2.1

   Amount of Loan      5      

2.2

   Nature and Duration of Loan      5      

2.3

   Promissory Note      5      

2.4

   Loan Fee      6   

3.

  

Security for Loan

     6      

3.1

   Collateral      6      

3.2

   Release of Lender as Condition to Lien Termination      6   

4.

  

Guarantee

     6      

4.1

   Guarantee      6      

4.2

   Guarantor Organization and Qualification      6      

4.3

   Guarantor Authorization      7      

4.4

   Guarantor Financial Statements and Reports      7      

4.5

   Accuracy of Guarantor Financial Statements      7   

5.

  

Conditions to Loan Disbursements

     8      

5.1

   Conditions to Loan Disbursements      8      

5.2

   No Default, Adverse Change, False or Misleading Statement      8   

6.

  

Representations and Warranties

     8      

6.1

   Organization and Qualification      8      

6.2

   Authorization      9      

6.3

   No Governmental Approval Necessary      9      

6.4

   Accuracy of Financial Statements      9      

6.5

   No Pending or Threatened Litigation      9      

6.6

   Full and Accurate Disclosure      10      

6.7

   Compliance with ERISA      10      

6.8

   Compliance with USA Patriot Act      11      

6.9

   Compliance with All Other Applicable Law      11      

6.10

   Environmental Representations and Warranties      11      

6.11

   Operation of Business      11   

 

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TABLE OF CONTENTS

 

            

Page

    6.12   Payment of Taxes      11    7.  

Borrower’s Covenants

     12      7.1   Use of Proceeds      12      7.2   Continued Compliance with
ERISA      12      7.3   Compliance with USA Patriot Act      12      7.4  
Continued Compliance with Applicable Law      12      7.5   Prior Consent for
Amendment or Change      13      7.6   Payment of Taxes and Obligations      13
     7.7   Financial Statements and Reports      13      7.8   Insurance      14
     7.9   Inspection      14      7.10   Operation of Business      14     
7.11   Maintenance of Records and Properties      14      7.12   Notice of
Claims      14      7.13   Environmental Covenants      14      7.14   Financial
Covenants      15      7.15   Negative Pledge      16      7.16   Restriction on
Debt      16      7.17   Mergers, Consolidations, and Purchase and Sale of
Assets      16      7.18   Dividends and Loans      17    8.  

Default

     17      8.1   Events of Default      17      8.2   Cure Periods      18   
  8.3   No Waiver of Event of Default      18    9.  

Remedies

     18      9.1   Remedies upon Event of Default      18      9.2   Rights and
Remedies Cumulative      19      9.3   No Waiver of Rights      19    10.  

General Provisions

     19      10.1   Governing Agreement      19      10.2   Borrower’s
Obligations Cumulative      19   

 

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TABLE OF CONTENTS

 

              Page    

10.3

   Payment of Expenses and Attorney’s Fees     
19
  
  10.4    Right to Perform for Borrower      20      10.5    Assignability     
20      10.6    Third Party Beneficiaries      20      10.7    Governing Law   
  20      10.8    Severability of Invalid Provisions      20      10.9   
Interpretation of Loan Agreement      21      10.10    Survival and Binding
Effect of Representations, Warranties, and Covenants      21      10.11   
Indemnification      21      10.12    Environmental Indemnification      21     
10.13    Interest on Expenses and Indemnification, Collateral, Order of
Application      22      10.14    Limitation of Consequential Damages      22   
  10.15    Waiver of Defenses and Release of Claims      22      10.16   
Revival Clause      23      10.17    Jury Trial Waiver, Arbitration, and Class
Action Waiver      23      10.18    Consent to Utah Jurisdiction and Exclusive
Jurisdiction of Utah Courts      25      10.19    Joint and Several Liability   
  25      10.20    Notices      25      10.21    Duplicate Originals;
Counterpart Execution      26      10.22    Disclosure of Financial and Other
Information      26      10.23    Integrated Agreement and Subsequent Amendment
     26    SCHEDULES    6.5  

Litigation

  

7.16

 

Existing Debt

  

 

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LOAN AGREEMENT

This Loan Agreement is made and entered into as of October 7, 2011 (the
“Effective Date”) by and between Zions First National Bank and inContact, Inc.

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

1. Definitions

1.1    Definitions

Terms defined in the singular shall have the same meaning when used in the
plural and vice versa. As used herein, the term:

“Accounting Standards” means (i) in the case of financial statements and
reports, conformity with generally accepted accounting principles and fully and
fairly representing the financial condition as of the date thereof and the
results of operations for the period or periods covered thereby, consistent with
other financial statements of that company previously delivered to Lender, and
(ii) in the case of calculations, definitions, and covenants, generally accepted
accounting principles consistent with those used in the preparation of financial
statements of Borrower, Guarantor or Guarantor’s Parent, as applicable,
previously delivered to Lender.

“Administrator” shall have the meaning set forth in Section 10.17 Jury, Trial,
Arbitration and Class Action Waiver.

“Arbitration Order” shall have the meaning set forth in Section 10.17 Jury,
Trial, Arbitration and Class Action Waiver.

“Banking Business Day” means any day not a Saturday, Sunday, legal holiday in
the State of Utah, or day on which national banks in the State of Utah are
authorized to close and, when used in reference to an Interest Period (as
defined in the Promissory Notes), a day on which dealings in dollar deposits are
also carried on in the London Interbank market and banks are open for business
in London.

“Borrower” means inContact, Inc., a corporation organized and existing under the
laws of the State of Delaware, its successors, and, if permitted, assigns.

“Collateral” shall have the meaning set forth in Section 3.1 Collateral.

“Debt” means (i) indebtedness or liability for borrowed money; (ii) obligations
evidenced by bonds, debentures, notes, or other similar instruments;
(iii) obligations for the deferred purchase price of property or services
(including trade obligations); (iv) obligations as lessee under capital leases;
(v) current liabilities in respect of unfunded vested benefits under Plans
covered by ERISA; (vi) obligations under letters of credit; (vii) obligations
under acceptance facilities; (viii) all guarantees, endorsements (other than for
collection or deposit in the ordinary course of business), and other contingent
obligations to purchase, to provide funds for payment, to supply funds to invest
in any person or entity, or otherwise to assure a creditor against loss; and
(ix) obligations secured by any mortgage, deed of trust, lien, pledge, or
security interest or other charge or encumbrance on property, whether or not the
obligations have been assumed.

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“Default Notice” shall have the meaning set forth in Section 8.2 Cure Periods.

“Dispute” shall have the meaning set forth in Section 10.17 Jury, Trial,
Arbitration and Class Action Waiver.

“EBITDA” means earnings (excluding extraordinary gains and losses realized other
than in the ordinary course of business and excluding the sale or writedown of
intangible or capital assets) before Interest Expense, Income Tax Expense,
depreciation, amortization, and other non-cash charges, determined in accordance
with Accounting Standards.

“Effective Date” shall mean the date the parties intend this Loan Agreement to
become binding and enforceable, which is the date stated at the introduction of
this Loan Agreement.

“Environmental Condition” shall mean any condition involving or relating to
Hazardous Materials and/or the environment affecting the Real Property, whether
or not yet discovered, which could or does result in any damage, loss, cost,
expense, claim, demand, order, or liability to or against Borrower or Lender by
any third party (including, without limitation, any government entity),
including, without limitation, any condition resulting from the operation of
Borrower’s business and/or operations in the vicinity of the Real Property
and/or any activity or operation formerly conducted by any person or entity on
or off the Real Property.

“Environmental Health and Safety Law” shall mean any legal requirement that
requires or relates to:

a. advising appropriate authorities, employees, or the public of intended or
actual releases of Hazardous Materials, violations of discharge limits or other
prohibitions, and of the commencement of activities, such as resource extraction
or construction, that do or could have significant impact on the environment;

b. preventing or reducing to acceptable levels the release of Hazardous
Materials;

c. reducing the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;

d. assuring that products are designed, formulated, packaged, and used so that
they do not present unreasonable risks to human health or the environment when
used or disposed of;

e. protecting resources, species, or ecological amenities;

f. use, storage, transportation, sale, or transfer of Hazardous Materials or
other potentially harmful substances;

g. cleaning up Hazardous Materials that have been released, preventing the
threat of release, and/or paying the costs of such clean up or prevention; or

 

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h. making responsible parties pay for damages done to the health of others or
the environment or permitting self-appointed representatives of the public
interest to recover for injuries done to public assets.

“Equipment Line” means one or more equipment finance or lease facilities between
Borrower and Zions Credit Corporation outstanding from time to time.

“ERISA” shall have the meaning set forth in Section 6.7 Compliance with ERISA.

“ERISA Affiliate” shall have the meaning set forth in Section 6.7 Compliance
with ERISA.

“Event of Default” shall have the meaning set forth in Section 8.1 Events of
Default.

“Guarantee” means each guarantee described in Section 4.1 Guarantee, and any and
all amendments, modifications, addendums, and replacements.

“Guarantor” means Siemens Enterprise Communications, Inc., a Delaware
corporation, its successors and assigns.

“Guarantor’s Parent” means Enterprise Networks Holdings B.V., its successors and
assigns.

“Hazardous Materials” means (i) “hazardous waste” as defined by the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901 et. seq.), including any future amendments thereto, and
regulations promulgated thereunder, and as the term may be defined by any
contemporary state counterpart to such act; (ii) “hazardous substance” as
defined by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. Section 9601 et. seq.), including any future amendments
thereto, and regulations promulgated thereunder, and as the term may be defined
by any contemporary state counterpart of such act; (iii) asbestos;
(iv) polychlorinated biphenyls; (v) underground or above ground storage tanks,
whether empty or filled or partially filled with any substance; (vi) any
substance the presence of which is or becomes prohibited by any federal, state,
or local law, ordinance, rule, or regulation; and (vii) any substance which
under any federal, state, or local law, ordinance, rule or regulation requires
special handling or notification in its collection, storage, treatment,
transportation, use or disposal.

“Income Tax Expense” means expenditures for federal and state income taxes
determined in accordance with Accounting Standards.

“Indebtedness” means all liabilities, obligations, and indebtedness of Borrower
arising under the Loan Documents, including the Promissory Note and including
all costs and expenses, including reasonable attorneys fees and legal expenses,
for which Borrower is liable under the Loan Documents.

“Interest Expense” means expenditures for interest determined in accordance with
Accounting Standards.

“Lender” means Zions First National Bank, its successors, and assigns.

 

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“Loan” means the loan to be made pursuant to Section 2 Loan Description.

“Loan Agreement” means this agreement, together with any exhibits, amendments,
addendums, and modifications.

“Loan Documents” means the Loan Agreement, Promissory Note, Guarantee, Security
Documents, all other agreements and documents contemplated by any of the
aforesaid documents, and all amendments, modifications, addendums, and
replacements, whether presently existing or created in the future.

“Material Adverse Effect” means a material adverse effect on Borrower’s or any
Guarantor’s financial condition, conduct of its business, or ability to perform
its obligations under the Loan Documents.

“Minimum Liquidity Position” shall have the meaning set forth in Section 7.14a
Minimum Liquidity Position and Minimum Quarterly EBITDA.

“Organizational Documents” means, in the case of a corporation, its Articles or
Certificate of Incorporation and By-Laws; in the case of a general partnership,
its Articles or Certificate of Partnership; in the case of a limited
partnership, its Articles or Certificate of Limited Partnership; in the case of
a limited liability company, its Articles of Organization or Certificate of
Formation and Operating Agreement, Limited Liability Company Agreement, Member
Control Agreement or Bylaws, if any; in the case of a limited liability
partnership, its Articles of Limited Liability Partnership; and all similar
formation or governing documents and all amendments, modifications, and changes
to any of the foregoing which are currently in effect.

“PBGC” shall have the meaning set forth in Section 6.7 Compliance with ERISA.

“Person” means any natural person, any unincorporated association, any
corporation, any partnership, any joint venture, any limited liability company,
any trust, any other legal entity, or any governmental authority.

“Promissory Note” means the promissory note to be executed by Borrower pursuant
to Section 2.3 Promissory Note and any and all renewals, extensions,
modifications, and replacements thereof.

“Real Property” means any and all real property or improvements thereon owned or
leased by Borrower or in which Borrower has any other interest of any nature
whatsoever.

“Reseller Agreement” means that certain Master Reseller Agreement between
Guarantor and Borrower dated June 14, 2011.

“RLOC Loan Agreement” means that certain Loan Agreement dated July 16, 2009,
between Borrower and Lender, and any and all amendments, modifications, and
replacements thereof.

“RLOC Loan Documents” means the RLOC Loan Agreement, RLOC Note, Security
Agreement, any other Security Documents related to the RLOC Loan Agreement, all
other agreements and documents contemplated by any of the aforesaid documents,
and all amendments, modifications, addendums, and replacements, whether
presently existing or created in the future, including, without limitation, any
which extend the maturity date or increase the principal under the RLOC Note.

 

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“RLOC Note” means that certain Promissory Note (Revolving Line of Credit) dated
July 16, 2009, as amended by that certain Note Modification Agreement and
Allonge dated August 3, 2010, and that certain Second Note Modification
Agreement and Allonge dated March 1, 2011, each executed by Borrower in favor of
Lender, including any and all renewals, extensions, modifications and
replacements thereof, including, without limitation, any which extend the
maturity or increase the principal amount thereof.

“Security Agreement” means that certain Security Agreement (All Assets) dated
July 16, 2009 between Borrower and Lender, and any and all amendments,
modifications, and replacements thereof.

“Security Documents” means all security agreements, assignments, pledges,
financing statements, deeds of trust, mortgages, and other documents which
create or evidence any security interest, assignment, lien or other encumbrance
in favor of Lender to secure any or all of the obligations created or
contemplated by any of the Loan Documents, and all amendments, modifications,
addendums, and replacements, whether presently existing or created in the
future.

“Security Transfer Agreement” means that certain Security Transfer Agreement
between inContact, Ltd., a limited liability company organized under the laws of
England and Wales, which is a wholly owned subsidiary of Borrower, and
Guarantor, dated as of October 7, 2011.

“Working Capital” means all total current assets less total current liabilities.
Current liabilities include, without limitation, (i) all obligations payable on
demand or within one year after the date on which the determination is made, and
(ii) final maturities and sinking fund payments required to be made within one
year after the date on which the determination is made, but excluding all such
liabilities or obligations which are renewable or extendable at the option of
Borrower to a date more than one year from the date of determination.

 

2. Loan Description

2.1    Amount of Loan

Upon fulfillment of all conditions precedent set forth in this Loan Agreement,
and so long as no Event of Default exists, which has not been waived or timely
cured, and no other breach has occurred under the Loan Documents, which has not
been waived or timely cured, Lender agrees to loan Borrower up to the maximum
principal amount of $2,500,000.00.

2.2    Nature and Duration of Loan

The Loan shall be a term loan payable in full upon the date and upon the terms
and conditions provided in the Promissory Note.

2.3    Promissory Note

 

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The Loan shall be evidenced by the Promissory Note. The Promissory Note shall be
executed and delivered to Lender upon execution and delivery of this Loan
Agreement. Proceeds of the Promissory Note may be disbursed by Lender by wire
transfer.

2.4    Loan Fee

Upon execution and delivery of this Loan Agreement, Borrower shall pay to Lender
a loan fee of $25,000. No portion of such fee shall be refunded in the event of
early termination of this Loan Agreement or any termination or reduction of the
right of Borrower to request advances under this Loan Agreement.

 

3. Security for Loan

3.1    Collateral

The Loan, Promissory Note, and all obligations of Borrower under the Loan
Documents shall be secured by such collateral as is provided in the Security
Documents (the “Collateral”), which shall include, without limitation, a
security interest in all assets of Borrower, as more particularly described in
the Security Documents, including, without limitation, the Security Agreement,
except that equipment purchased by Borrower to fulfill its obligations under the
Reseller Agreement (limited to the equipment listed on Schedule 2 of the
Security Transfer Agreement) is expressly excluded from Lender’s Collateral.

3.2    Release of Lender as Condition to Lien Termination

In recognition of Lender’s right to have all its attorneys fees and expenses
incurred in connection with this Loan Agreement secured by the Collateral,
notwithstanding payment in full of the Loan and all other obligations secured by
the Collateral, Lender shall not be required to release, reconvey, or terminate
any Security Document unless and until Borrower and all Guarantors have executed
and delivered to Lender general releases in form and substance satisfactory to
Lender.

 

4. Guarantee

4.1    Guarantee

Upon execution and delivery of this Loan Agreement, Guarantor shall execute and
deliver to Lender a Guarantee in a form acceptable to Lender.

4.2    Guarantor Organization and Qualification

Guarantor represents and warrants to Lender as follows:

a. Guarantor is a corporation duly organized and existing in good standing under
the laws of the State of Delaware. Guarantor is duly qualified to do business in
each jurisdiction where the conduct of its business requires qualification.

b. Guarantor has the full power and authority to own its properties and to
conduct the business in which it engages and to enter into and perform its
obligations under the Loan Documents. Guarantor has delivered to Lender or
Lender’s counsel accurate and complete copies of Guarantor’s Organizational
Documents which are operative and in effect as of the Effective Date.

 

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4.3    Guarantor Authorization

Guarantor represents and warrants to Lender that the execution, delivery, and
performance by Guarantor of the Loan Documents have been duly authorized by all
necessary action on the part of Guarantor and are not inconsistent with
Guarantor’s Organizational Documents or any resolution of the Board of Directors
of Guarantor, do not and will not contravene any provision of, or constitute a
default under, any indenture, mortgage, contract, or other instrument to which
Guarantor is a party or by which it is bound, and that upon execution and
delivery hereof and thereof, the Loan Documents will constitute legal, valid,
and binding agreements and obligations of Guarantor, enforceable in accordance
with their respective terms.

4.4    Guarantor Financial Statements and Reports

Until requested otherwise by Lender, Guarantor shall provide the following
financial statements and reports to Lender:

a. Semi-annual and annual financial statements for each such fiscal period of
Guarantor which are consistent with other financial statements previously
delivered to Lender subject to providing a proforma statement of Guarantor’s
standard internal reporting information with reasonable adjustments made in good
faith by Guarantor for financial statements dated as of March 31, to be
delivered to Lender within 120 days of March 31 and September 30 of each year.

b. Semi-annual and annual financial statements for each such fiscal period of
Guarantor’s Parent, to be delivered to Lender within 120 days of March 31 and
September 30 of each year. The financial statements delivered for the fiscal
year end shall include a certification by the chief executive officer and chief
financial officer of Guarantor’s Parent certifying that the financial statements
fully and fairly represent Guarantor’s Parent’s financial condition as of the
date thereof and the results of operations for the period covered thereby and
are consistent with other financial statements previously delivered to Lender.

4.5    Accuracy of Guarantor Financial Statements

All of Guarantor’s and Guarantor’s Parent’s audited financial statements
heretofore delivered to Lender, if any, have been prepared in accordance with
Accounting Standards and fully and fairly represent Guarantor’s and Guarantor’s
Parent’s financial condition as of the date thereof and the results of
Guarantor’s and Guarantor’s Parent’s operations for the period or periods
covered thereby.

All of Guarantor’s and Guarantor’s Parent’s unaudited financial statements
heretofore delivered to Lender fully and fairly represent Guarantor’s and
Guarantor’s Parent’s financial condition as of the date thereof and the results
of Guarantor’s and Guarantor’s Parent’s operations for the period or periods
covered thereby and are consistent with other financial statements previously
delivered to Lender.

 

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Since the date of such financial statements, there has been no change in
Guarantor’s and Guarantor’s Parent’s financial condition which could have a
Material Adverse Effect.

 

5. Conditions to Loan Disbursements

5.1    Conditions to Loan Disbursements

Lender’s obligation to disburse any of the Loan is expressly subject to, and
shall not arise until all of the conditions set forth below have been satisfied.
All of the documents referred to below must be in a form and substance
acceptable to Lender.

a. All of the Loan Documents and all other documents contemplated to be
delivered to Lender prior to funding have been fully executed and delivered to
Lender.

b. All of the documents contemplated by the Loan Documents which require filing
or recording have been properly filed and recorded so that all of the liens and
security interests granted to Lender in connection with the Loan will be
properly created and perfected, and Lender shall have a first priority security
interest on all assets of Borrower except as set forth in Section 3.1 Collateral
hereto.

c. All other conditions precedent provided in or contemplated by the Loan
Documents or any other agreement or document have been performed.

d. As of the date of disbursement of all or any portion of the Loan, the
following shall be true and correct: (i) all representations and warranties made
by Borrower and Guarantor in the Loan Documents are true and correct in all
material respects as of the date of such disbursement; and (ii) no Event of
Default has occurred which has not been waived or timely cured, and no
conditions exist and no event has occurred, which, with the passage of time or
the giving of notice, or both, would constitute an Event of Default.

All conditions precedent set forth in this Loan Agreement and any of the Loan
Documents are for the sole benefit of Lender and may be waived unilaterally by
Lender.

5.2    No Default, Adverse Change, False or Misleading Statement

Lender’s obligation to advance any funds at any time pursuant to this Loan
Agreement and the Promissory Note shall, at Lender’s sole discretion, terminate
upon the occurrence of any Event of Default, any event which could have a
Material Adverse Effect, or upon the determination by Lender that any of
Borrower’s or Guarantor’s representations made in any of the Loan Documents were
false or materially misleading when made. Upon the exercise of such discretion,
Lender shall be relieved of all further obligations under the Loan Documents.

 

6. Representations and Warranties

Borrower represents and warrants to Lender as follows:

6.1    Organization and Qualification

 

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Borrower is a corporation duly organized and existing in good standing under the
laws of the State of Delaware, and Borrower is qualified and in good standing as
a foreign corporation in the State of Utah. Borrower is duly qualified to do
business in each jurisdiction where the conduct of its business requires
qualification.

Borrower has the full power and authority to own its property and to conduct the
business in which it engages and to enter into and perform its obligations under
the Loan Documents. Borrower has delivered to Lender or Lender’s counsel
accurate and complete copies of Borrower’s Organizational Documents which are
operative and in effect as of the Effective Date.

6.2    Authorization

The execution, delivery, and performance by Borrower of the Loan Documents has
been duly authorized by all necessary action on the part of Borrower and are not
inconsistent with Borrower’s Organizational Documents or any resolution of the
Board of Directors of Borrower, do not and will not contravene any provision of,
or constitute a default under, any indenture, mortgage, contract, or other
instrument to which Borrower is a party or by which it is bound, and that upon
execution and delivery thereof, the Loan Documents will constitute legal, valid,
and binding agreements and obligations of Borrower, enforceable in accordance
with their respective terms.

6.3    No Governmental Approval Necessary

No consent by, approval of, giving of notice to, registration with, or taking of
any other action with respect to or by any federal, state, or local governmental
authority or organization is required for Borrower’s execution, delivery, or
performance of the Loan Documents.

6.4    Accuracy of Financial Statements

All of Borrower’s audited financial statements heretofore delivered to Lender
have been prepared in accordance with Accounting Standards.

All of Borrowers unaudited financial statements heretofore delivered to Lender
fully and fairly represent Borrower’s financial condition as of the date thereof
and the results of Borrower’s operations for the period or periods covered
thereby and are consistent with other financial statements previously delivered
to Lender.

Since the dates of the most recent audited and unaudited financial statements
delivered to Lender, there has been no event which would have a Material Adverse
Effect on its financial condition.

All of Borrower’s pro forma financial statements heretofore delivered to Lender
have been prepared consistently with Borrower’s actual financial statements and
fully and fairly represent Borrower’s anticipated financial condition and the
anticipated results of Borrower’s operation for the period or periods covered
thereby.

6.5    No Pending or Threatened Litigation

 

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Except as set forth on Schedule 6.5 attached hereto, there are no actions,
suits, or proceedings pending or, to Borrower’s knowledge, threatened against or
affecting Borrower in any court or before any governmental commission, board, or
authority which, if adversely determined, would have a Material Adverse Effect.

6.6    Full and Accurate Disclosure

This Loan Agreement, the financial statements referred to herein, any loan
application submitted to Lender, and all other statements furnished by Borrower
to Lender in connection herewith contain no untrue statement of a material fact
and omit no material fact necessary to make the statements contained therein or
herein not misleading. Borrower represents and warrants that it has not failed
to disclose in writing to Lender any fact that would have a Material Adverse
Effect.

6.7    Compliance with ERISA

Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as
amended, and the regulations and published interpretations thereunder. Neither a
Reportable Event as set forth in Section 4043 of ERISA or the regulations
thereunder (“Reportable Event”) nor a prohibited transaction as set forth in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended, has occurred and is continuing with respect to any employee benefit
plan established, maintained, or to which contributions have been made by
Borrower or any trade or business (whether or not incorporated) which together
with Borrower would be treated as a single employer under Section 4001 of ERISA
(“ERISA Affiliate”) for its employees which is covered by Title I or Title IV of
ERISA (“Plan”); no notice of intent to terminate a Plan has been filed nor has
any Plan been terminated which is subject to Title IV of ERISA; no circumstances
exist that constitute grounds under Section 4042 of ERISA entitling the Pension
Benefit Guaranty Corporation (“PBGC”) to institute proceedings to terminate, or
appoint a trustee to administer a Plan, nor has the PBGC instituted any such
proceedings; neither Borrower nor any ERISA Affiliate has completely or
partially withdrawn under Section 4201 or 4204 of ERISA from any Plan described
in Section 4001(a)(3) of ERISA which covers employees of Borrower or any ERISA
Affiliate (“Multi-employer Plan”); Borrower and each ERISA Affiliate has met its
minimum funding requirements under ERISA with respect to all of its Plans and
the present fair market value of all Plan assets equals or exceeds the present
value of all vested benefits under or all claims reasonably anticipated against
each Plan, as determined on the most recent valuation date of the Plan and in
accordance with the provisions of ERISA and the regulations thereunder and the
applicable statements of the Financial Accounting Standards Board (“FASB”) for
calculating the potential liability of Borrower or any ERISA Affiliate under any
Plan; neither Borrower nor any ERISA Affiliate has incurred any liability to the
PBGC (except payment of premiums, which is current) under ERISA.

Borrower, each ERISA Affiliate and each group health plan (as defined in ERISA
Section 733) sponsored by Borrower and each ERISA Affiliate, or in which
Borrower or any ERISA Affiliate is a participating employer, are in compliance
with, have satisfied and continue to satisfy (to the extent applicable) all
requirements for continuation of group health coverage under Section 4980B of
the Internal Revenue Code and Sections 601 et seq. of ERISA, and are in
compliance with, have satisfied and continue to satisfy Part 7 of ERISA and all
corresponding and similar state laws relating to portability, access and
renewability of group health benefits and other requirements included in Part 7.

 

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6.8    Compliance with USA Patriot Act

Borrower is not subject to any law, regulation, or list of any government agency
(including, without limitation, the U.S. Office of Foreign Asset Control list)
that prohibits or limits Lender from making any advance or extension of credit
to Borrower or from otherwise conducting business with Borrower.

6.9    Compliance with All Other Applicable Law

Borrower has complied in all material respects with all applicable statutes,
rules, regulations, orders, and restrictions of any domestic or foreign
government, or any instrumentality or agency thereof having jurisdiction over
the conduct of Borrower’s business or the ownership of its properties, which may
have a Material Adverse Effect.

6.10    Environmental Representations and Warranties

Except as Lender has been otherwise previously advised by Borrower to Borrower’s
knowledge after due inquiry and investigation, no Hazardous Materials are now
located on, in, or under the Real Property, nor to Borrower’s knowledge after
due inquiry and investigation is there any Environmental Condition on, in, or
under the Real Property and neither Borrower nor, to Borrower’s knowledge, after
due inquiry and investigation, any other person has ever caused or permitted any
Hazardous Materials to be placed, held, used, stored, released, generated,
located or disposed of on, in or under the Real Property, or any part thereof,
nor caused or allowed an Environmental Condition to exist on, in or under the
Real Property, except in the ordinary course of Borrower’s business under
conditions that are generally recognized to be appropriate and safe and that are
in compliance with all applicable Environmental Health and Safety Laws. Borrower
further represents and warrants that to Borrower’s knowledge after due inquiry
and investigation no investigation, administrative order, consent order and
agreement, litigation or settlement with respect to Hazardous Materials and/or
an Environmental Condition is proposed, threatened, anticipated or in existence
with respect to the Real Property.

6.11    Operation of Business

Borrower possesses all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, to conduct its business
substantially as now conducted and as presently proposed to be conducted, and
Borrower is not in violation of any valid rights of others with respect to any
of the foregoing.

6.12    Payment of Taxes

Borrower has filed all tax returns (federal, state, and local) required to be
filed, or has filed timely return extensions and has paid all taxes,
assessments, and governmental charges and levies, including interest and
penalties, on Borrower’s assets, business and income, except such as are being
contested in good faith by proper proceedings and as to which adequate reserves
are maintained.

 

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7. Borrower’s Covenants

Borrower makes the following agreements and covenants, which shall continue so
long as this Loan Agreement is in effect and so long as Borrower is indebted to
Lender for obligations arising out of, identified in, or contemplated by this
Loan Agreement.

7.1    Use of Proceeds

Borrower shall use the proceeds of the Loan solely for the purposes identified
to Lender in applying for the Loan.

Borrower shall not, directly or indirectly, use any of the proceeds of the Loan
for the purpose of purchasing or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, or to
extend credit to any person or entity for the purpose of purchasing or carrying
any such margin stock or for any purpose which violates, or is inconsistent
with, Regulation X of said Board of Governors, or for any other purpose not
permitted by Section 7 of the Securities Exchange Act of 1934, as amended, or by
any of the rules and regulations respecting the extension of credit promulgated
thereunder.

7.2    Continued Compliance with ERISA

Borrower covenants that, with respect to all Plans (as defined in Section 6.7
Compliance with ERISA) which Borrower or any ERISA Affiliate currently maintains
or to which Borrower or any ERISA Affiliate is a sponsoring or participating
employer, fiduciary, party in interest or disqualified person or which Borrower
or any ERISA Affiliate may hereafter adopt, Borrower and each ERISA Affiliate
shall continue to comply with all applicable provisions of the Internal Revenue
Code and ERISA and with all representations made in Section 6.7 Compliance with
ERISA, including, without limitation, conformance with all notice and reporting
requirements, funding standards, prohibited transaction rules, multi-employer
plan rules, necessary reserve requirements, and health care continuation,
coverage and portability requirements.

7.3    Compliance with USA Patriot Act

Borrower shall (a) not be or become subject at any time to any law, regulation,
or list of any government agency (including, without limitation, the U.S. Office
of Foreign Asset Control list) that prohibits or limits Lender from making any
advance or extension of credit to Borrower or from otherwise conducting business
with Borrower, and (b) provide documentary and other evidence of Borrower’s
identity as may be requested by Lender at any time to enable Lender to verify
Borrower’s identity or to comply with any applicable law or regulation,
including, without limitation, Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318.

7.4    Continued Compliance with Applicable Law

Borrower shall conduct its business in a lawful manner and in material
compliance with all applicable federal, state, and local laws, ordinances,
rules, regulations, and orders; shall maintain in good standing all licenses and
organizational or other qualifications reasonably necessary to its business and
existence; and shall not engage in any business not authorized by and not in
accordance with its Organizational Documents and other governing documents.

 

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7.5    Prior Consent for Amendment or Change

Borrower shall not modify, amend, waive, or otherwise alter, or fail to enforce,
its Organizational Documents or other governing documents without Lender’s prior
written consent.

7.6    Payment of Taxes and Obligations

Borrower shall pay when due all taxes, assessments, and governmental charges and
levies on Borrower’s assets, business, and income, and all material obligations
of Borrower of whatever nature, except such as are being contested in good faith
by proper proceedings and as to which adequate reserves are maintained.

7.7    Financial Statements and Reports

Borrower shall provide Lender with such financial statements and reports as
Lender may reasonably request. Audited financial statements and reports shall be
prepared in accordance with Accounting Standards. Unaudited financial statements
and reports shall fully and fairly represent Borrower’s financial condition as
of the date thereof and the results of Borrower’s operations for the period or
periods covered thereby and shall be consistent with other financial statements
previously delivered to Lender.

Until requested otherwise by Lender, Borrower shall provide the following
financial statements and reports to Lender:

a. Annual consolidated audited financial statements for each fiscal year of
Borrower in a form acceptable to Lender, to be delivered to Lender within 120
days of the end of the fiscal year. The annual financial statements shall
include a certification by the chief financial officer and chief executive
officer of Borrower that the annual financial statements fully and fairly
represent Borrower’s financial condition as of the date thereof and the results
of operations for the period covered thereby and are consistent with other
financial statements previously delivered to Lender.

b. Borrower’s annual forecast in a form acceptable to Lender to be delivered to
Lender within 60 days of the end of the fiscal year.

c. Quarterly financial statements for each fiscal quarter of Borrower in a form
acceptable to Lender, to be delivered to Lender within 45 days of the end of the
fiscal quarter. The quarterly financial statements shall include a certification
by the chief financial officer or chief executive officer of Borrower that the
quarterly financial statements fully and fairly represent Borrower’s financial
condition as of the date thereof and the results of operations for the period
covered thereby and are consistent with other financial statements previously
delivered to Lender.

d. Together with the delivery of each financial statement delivered in respect
of a period ending as of the end of a fiscal quarter, a consolidated compliance
certificate certifying that Borrower is in compliance with all terms and
conditions of this Loan Agreement, including compliance with the financial
covenants provided in Section 7.14 Financial Covenants. The compliance
certificate shall include the data and calculations supporting all financial
covenants, whether in compliance or not, and shall be signed by the chief
executive officer or chief financial officer of Borrower

 

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7.8    Insurance

Borrower shall maintain insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as are usually
carried by companies engaged in the same or a similar business and similarly
situated, which insurance may provide for reasonable deductibility from coverage
thereof.

7.9    Inspection

Borrower shall at any reasonable time and from time to time permit Lender or any
representative of Lender to examine and make copies of and abstracts from the
records and books of account of, and visit and inspect the properties and assets
of, Borrower, and to discuss the affairs, finances, and accounts of Borrower
with any of Borrower’s officers and directors and with Borrower’s independent
accountants.

7.10    Operation of Business

Borrower shall maintain all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, necessary or advisable to
conduct its business and Borrower shall not violate any valid rights of others
with respect to any of the foregoing. Borrower shall continue to engage in a
business of the same general type as now conducted.

7.11    Maintenance of Records and Properties

Borrower shall keep adequate records and books of account in which complete
entries will be made in accordance with Accounting Standards. Borrower shall
maintain, keep and preserve all of its properties (tangible and intangible)
necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear and tear excepted.

7.12    Notice of Claims

Borrower shall promptly notify Lender in writing of all actions, suits or
proceedings filed or threatened against or affecting Borrower in any court or
before any governmental commission, board, or authority which, if adversely
determined, would have a Material Adverse Effect.

7.13    Environmental Covenants

Borrower covenants that it will:

a. Not permit the presence, use, disposal, storage or release of any Hazardous
Materials on, in, or under the Real Property, except in the ordinary course of
Borrower’s business under conditions that are generally recognized to be
appropriate and safe and that are in compliance with all applicable
Environmental Health and Safety Laws.

b. Not permit any substance, activity or Environmental Condition on, in, under
or affecting the Real Property which is in violation of any Environmental Health
and Safety Laws.

 

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c. Comply in all material respects with the provisions of all Environmental
Health and Safety Laws.

d. Notify Lender promptly of any discharge of Hazardous Materials, Environmental
Condition, or environmental complaint or notice received from any governmental
agency or any other party.

e. Upon any discharge of Hazardous Materials or upon the occurrence of any
Environmental Condition, immediately contain and remediate the same in
compliance with all Environmental Health and Safety Laws, promptly pay any fine
or penalty assessed in connection therewith, and immediately notify Lender of
such events.

f. Permit Lender with reasonable time and notice to inspect the Real Property
for Hazardous Materials and Environmental Conditions, to conduct tests thereon,
and to inspect all books, correspondence, and records pertaining thereto.

g. From time to time upon Lender’s request, and at Borrower’s expense, provide a
report (including all validated and unvalidated data generated for such reports)
of a qualified independent environmental engineer acceptable to Lender,
satisfactory to Lender in scope, form, and content, and provide to Lender such
other and further assurances reasonably satisfactory to Lender, that Borrower is
in compliance with these covenants concerning Hazardous Materials and
Environmental Conditions, and that any past violation thereof has been corrected
in compliance with all applicable Environmental Health and Safety Laws.

h. Immediately advise Lender of any additional, supplemental, new, or other
information concerning any Hazardous Materials or Environmental Conditions
relating to the Real Property.

7.14    Financial Covenants

Except as otherwise provided herein, each of the accounting terms used in this
Section 7.14 shall have the meanings used in accordance with Accounting
Standards.

a. Minimum Liquidity Position and Minimum Quarterly EBITDA. Borrower shall at
all times maintain cash, cash equivalents, and marketable securities having an
aggregate value, as determined in accordance with Accounting Standards and as
reasonably acceptable to Lender, of not less than the outstanding balance on the
revolving line of credit loan described in the RLOC Loan Documents plus
$2,500,000 (“Minimum Liquidity Position”). If the aggregate value of Borrower’s
cash, cash equivalents, and marketable securities is at any time less than the
Minimum Liquidity Position, Borrower shall maintain a minimum quarterly EBITDA
of not less than $1,100,000, measured as of the last day of each quarter.

b. Minimum Working Capital. Borrower shall at all times maintain minimum Working
Capital of not less than $1,000,000.00, measured as of the last day of each
quarter.

 

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7.15    Negative Pledge

Borrower will not create, incur, assume, or suffer to exist any mortgage, deed
of trust, pledge, lien, security interest, hypothecation, assignment, deposit
arrangement, or other preferential arrangement, charge, or encumbrance
(including, without limitation, any conditional sale, other title retention
agreement, or finance lease) of any nature, upon or with respect to any of its
properties or assets, now owned or hereafter acquired, or sign or file, under
the Uniform Commercial Code of any jurisdiction, a financing statement under
which Borrower appears as debtor, or sign any security agreement authorizing any
secured party thereunder to file such financing statement, except (a) those
contemplated by this Loan Agreement and the RLOC Loan Agreement; (b) liens
arising in the ordinary course of business (such as liens of carriers,
warehousemen, mechanics, and materialmen) and other similar liens imposed by law
for sums not yet due and payable or, if due and payable, those being contested
in good faith by appropriate proceedings and for which appropriate reserves are
maintained in accordance with Accounting Standards; (c) easements, rights of
way, restrictions, minor defects or irregularities in title or other similar
liens which alone or in the aggregate do not interfere in any material way with
the ordinary conduct of the business of Borrower; (d) liens for taxes and
assessments not yet due and payable or, if due and payable, those being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained in accordance with Accounting Standards;
(e) anti-assignment provisions included in any Qualified Account, Chattel Paper,
General Intangible or promissory note in which Borrower has any right, title or
interest; (f) the Equipment Line; and (g) liens arising under the Security
Transfer Agreement.

7.16    Restriction on Debt

Borrower shall not create, incur, assume, or suffer to exist any debt except as
permitted by this Section 7.16.

Permitted exceptions to this covenant are: (i) Debt contemplated by this Loan
Agreement and the RLOC Loan Agreement; (ii) accounts payable to trade creditors
for goods or services which are not aged more than ninety (90) days from the
billing date and current operating liabilities (other than for borrowed money)
which are not more than ninety (90) days past due, in each case incurred in the
ordinary course of business, as presently conducted, and paid within the
specified time, unless contested in good faith and by appropriate proceedings;
(iii) Debt incurred under the Equipment Line; (iv) Debt due not to exceed an
outstanding principal amount of two hundred thousand dollars ($200,000.00) per
debt and not to exceed an aggregate, outstanding principal amount of five
hundred thousand dollars ($500,000.00); (v) Debt existing on the Effective Date
and set forth on Schedule 7.16 hereto; (vi) Debt secured by liens described in
clause (f) of the definition of Permitted Encumbrances in the Security
Agreement; (vii) extensions, refinancings, modifications, amendments and
restatements of any items of the foregoing clauses, provided that the principal
amount thereof is not increased and the terms thereof are not modified or impose
more burdensome terms upon Borrower; (viii) subordinated Debt, which is approved
in advance in writing by Lender; and (ix) recourse of Guarantor against Borrower
pursuant to the Security Transfer Agreement.

7.17    Mergers, Consolidations, and Purchase and Sale of Assets

Borrower shall not wind up, liquidate, or dissolve itself, reorganize, merge, or
consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise
dispose of (whether in one

 

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transaction or a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to any person or entity, or acquire
all or substantially all of the assets or the business of any person or entity.

7.18    Dividends and Loans

Borrower shall not (i) declare or pay any dividends, (ii) purchase, redeem,
retire or otherwise acquire for value any of its capital stock or equity
interests now or hereafter outstanding, (iii) make any distribution of assets to
its stockholders, investors, or equity holders, whether in cash, assets, or in
obligations of Borrower, (iv) allocate or otherwise set apart any sum for the
payment of any dividend or distribution on, or for the purchase, redemption, or
retirement of any shares of its capital stock or equity interests, or (v) make
any other distribution by reduction of capital or otherwise in respect of any
shares of its capital stock or equity interests.

Borrower shall not make any loans or pay any advances of any nature whatsoever
to any person or entity, except advances in the ordinary course of business to
vendors, suppliers, and contractors.

 

8. Default

8.1    Events of Default

Time is of the essence of this Loan Agreement. The occurrence of any of the
following events shall constitute a default under this Loan Agreement and under
the Loan Documents and shall be termed an “Event of Default”:

a. Borrower fails in the payment or performance of any obligation, covenant,
agreement, or liability created by any of the Loan Documents.

b. Any representation, warranty, or financial statement made by or on behalf of
Borrower in any of the Loan Documents, or any document contemplated by the Loan
Documents, is materially false or materially misleading.

c. Default occurs or Borrower fails to comply with any term in any of the Loan
Documents.

d. Any indebtedness of Borrower under any note, indenture, contract, agreement,
or undertaking is accelerated.

e. Default or an event which, with the passage of time or the giving of notice
or both, would constitute a default, by Borrower, occurs on any note, indenture,
contract, agreement, or undertaking.

f. Borrower is dissolved or substantially ceases business operations.

g. A receiver, trustee, or custodian is appointed for any part of Borrower’s
property, or any part of Borrower’s property is assigned for the benefit of
creditors.

 

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h. Any proceeding is commenced or petition filed under any bankruptcy or
insolvency law by or against Borrower.

i. Any judgment or regulatory fine is entered against Borrower which may
materially affect Borrower.

j. Borrower becomes insolvent or fails to pay its debts as they mature.

k. Any change occurs in Borrower’s condition or any event occurs which may have
a Material Adverse Effect.

l. Any default under the Equipment Line.

m. Any default occurs under the Reseller Agreement or the Security Transfer
Agreement.

n. Any default occurs under the RLOC Loan Documents.

8.2    Cure Periods

For any Event of Default other than an Event of Default arising from the failure
of Borrower to make a payment to Lender when due, Borrower may cure such default
within 10 Banking Business Days of the receipt of written notice from Lender of
such default (a “Default Notice”), or if it is commercially unreasonable to cure
such default within 10 Banking Business Days and with Lender’s consent, within
such longer period of time as is reasonably necessary to accomplish the cure,
provided (i) Borrower promptly commences such cure upon receipt of the Default
Notice, (ii) such cure period does not exceed 90 days under any circumstances,
and (iii) Borrower shall pay to Lender all of Lender’s reasonable costs to
confirm that the Event of Default has been cured. If an Event of Default is
cured, provided Borrower immediately pays all of Lenders reasonable enforcement
costs, including attorneys’ fees, through the date Lender received notice of the
cure, Lender shall cease its enforcement actions and remedies, including any
acceleration remedy provided herein or elsewhere in the Loan Documents, and the
parties shall proceed under the Loan Documents as if no default has occurred.
Notwithstanding Lender’s obligation to terminate its remedies upon a cure as set
forth above, Lender shall have no obligation to suspend or delay its enforcement
of its rights and remedies under the Loan Documents and at law during any
applicable cure period. In no event shall Borrower have the right to cure Events
of Default more than three (3) times during the term of this Agreement.

8.3    No Waiver of Event of Default

No course of dealing or delay or failure to assert any Event of Default shall
constitute a waiver of that Event of Default or of any prior or subsequent Event
of Default.

 

9. Remedies

9.1    Remedies upon Event of Default

Upon the occurrence of an Event of Default, and at any time thereafter, all or
any portion of the obligations due or to become due from Borrower to Lender,
whether arising under this

 

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Loan Agreement, the Promissory Note, the Security Documents or otherwise, at the
option of Lender and without notice to Borrower of the exercise of such option,
shall accelerate and become at once due and payable in full, and Lender shall
have all rights and remedies created by or arising from the Loan Documents, and
all other rights and remedies existing at law, in equity, or by statute.

Additionally, Lender shall have the right, immediately and without prior notice
or demand, to set off against Borrower’s obligations to Lender, whether or not
due, all money and other amounts owed by Lender in any capacity to Borrower,
including, without limitation, checking accounts, savings accounts, and other
depository accounts, and Lender shall be deemed to have exercised such right of
setoff and to have made a charge against any such money or amounts immediately
upon occurrence of an Event of Default, even though such charge is entered on
Lender’s books subsequently thereto.

9.2    Rights and Remedies Cumulative

The rights and remedies herein conferred are cumulative and not exclusive of any
other rights or remedies and shall be in addition to every other right, power,
and remedy that Lender may have, whether specifically granted herein or
hereafter existing at law, in equity, or by statute. Any and all such rights and
remedies may be exercised from time to time and as often and in such order as
Lender may deem expedient.

9.3    No Waiver of Rights

No delay or omission in the exercise or pursuance by Lender of any right, power,
or remedy shall impair any such right, power, or remedy or shall be construed to
be a waiver thereof.

 

10. General Provisions

10.1    Governing Agreement

In the event of conflict or inconsistency between this Loan Agreement and the
other Loan Documents, excluding the Promissory Note, the terms, provisions and
intent of this Loan Agreement shall govern.

10.2    Borrower’s Obligations Cumulative

Every obligation, covenant, condition, provision, warranty, agreement,
liability, and undertaking of Borrower contained in the Loan Documents shall be
deemed cumulative and not in derogation or substitution of any of the other
obligations, covenants, conditions, provisions, warranties, agreements,
liabilities, or undertakings of Borrower contained herein or therein.

10.3    Payment of Expenses and Attorney’s Fees

Borrower shall pay all reasonable expenses of Lender relating to the
negotiation, drafting of documents, documentation of the Loan, and
administration and supervision of the Loan, including, without limitation,
appraisal fees, environmental inspection fees, field examination expenses, title
insurance, recording fees, filing fees, and reasonable attorneys fees and legal
expenses, whether incurred in making the Loan, in future amendments or
modifications to the Loan Documents, or in ongoing administration and
supervision of the Loan.

 

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Upon occurrence of an Event of Default, Borrower agrees to pay all costs, and
expenses, including reasonable attorney fees and legal expenses, incurred by
Lender in enforcing, or exercising any remedies under, the Loan Documents, and
any other rights and remedies.

Borrower agrees to pay all expenses, including reasonable attorney fees and
legal expenses, incurred by Lender in any bankruptcy proceedings of any type
involving Borrower, Guarantor, the Loan Documents, or the Collateral, including,
without limitation, expenses incurred in modifying or lifting the automatic
stay, determining adequate protection, use of cash collateral or relating to any
plan of reorganization.

10.4    Right to Perform for Borrower

Lender may, in its sole discretion and without any duty to do so, elect to
discharge taxes, tax liens, security interests, or any other encumbrance upon
the Collateral or any other property or asset of Borrower, to pay any filing,
recording, or other charges payable by Borrower, or to perform any other
obligation of Borrower under this Loan Agreement or under the Security
Documents.

10.5    Assignability

Borrower may not assign or transfer any of the Loan Documents and any such
purported assignment or transfer is void.

Lender may assign or transfer any of the Loan Documents. Funding of this Loan
may be provided by an affiliate of Lender.

10.6    Third Party Beneficiaries

The Loan Documents are made for the sole and exclusive benefit of Borrower,
Guarantor and Lender and are not intended to benefit any other third party. No
third party may claim any right or benefit or seek to enforce any term or
provision of the Loan Documents.

10.7    Governing Law

The Loan Documents shall be governed by and construed in accordance with the
laws of the State of Utah, except to the extent that any such document expressly
provides otherwise.

10.8    Severability of Invalid Provisions

Any provision of this Loan Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction only, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

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10.9    Interpretation of Loan Agreement

The article and section headings in this Loan Agreement are inserted for
convenience only and shall not be considered part of the Loan Agreement nor be
used in its interpretation.

All references in this Loan Agreement to the singular shall be deemed to include
the plural when the context so requires, and vice versa. References in the
collective or conjunctive shall also include the disjunctive unless the context
otherwise clearly requires a different interpretation.

10.10     Survival and Binding Effect of Representations, Warranties, and
Covenants

All agreements, representations, warranties, and covenants made herein by
Borrower shall survive the execution and delivery of this Loan Agreement and
shall continue in effect so long as any obligation to Lender contemplated by
this Loan Agreement is outstanding and unpaid, notwithstanding any termination
of this Loan Agreement. All agreements, representations, warranties, and
covenants made herein by Borrower shall survive any bankruptcy proceedings
involving Borrower. All agreements, representations, warranties, and covenants
in this Loan Agreement shall bind the party making the same, its successors and,
in Lender’s case, assigns, and all rights and remedies in this Loan Agreement
shall inure to the benefit of and be enforceable by each party for whom made,
their respective successors and, in Lender’s case, assigns.

10.11     Indemnification

Borrower hereby agrees to indemnify Lender for all liabilities and damages
(including contract, tort and equitable claims) which may be awarded against
Lender, and for all reasonable attorneys fees, legal expenses and other expenses
incurred in defending such claims, arising from or relating in any manner to the
negotiation, execution or performance by Lender of the Loan Documents (including
all reasonable attorneys fees, legal expenses and other expenses incurred in
defending any such claims brought by Borrower if Borrower does not prevail in
such actions), excluding only breach of contract by Lender under such
circumstances that such breach amounts to gross negligence or willful
misconduct. Lender shall have sole and complete control of the defense of any
such claims and is hereby given authority to settle or otherwise compromise any
such claims as Lender in good faith determines shall be in its best interests.

10.12     Environmental Indemnification

Borrower shall indemnify Lender for any and all claims and liabilities, and for
damages which may be awarded or incurred by Lender, and for all reasonable
attorney fees, legal expenses, and other out-of-pocket expenses arising from or
related in any manner, directly or indirectly, to (i) Hazardous Materials
located on, in, or under the Real Property; (ii) any Environmental Condition on,
in, or under the Real Property; (iii) violation of or non compliance with any
Environmental Health and Safety Law; (iv) any breach or violation of
Section 6.10 Environmental Representations and Warranties and/or Section 7.13
Environmental Covenants; and/or (v) any activity or omission, whether occurring
on or off the Real Property, whether prior to or during the term of the loans
secured hereby, and whether by Borrower or any other person or entity, relating
to Hazardous Materials or an Environmental Condition. The indemnification
obligations of Borrower under this Section shall survive any reconveyance,
release, or foreclosure of the Real Property, any transfer in lieu of
foreclosure, and satisfaction of the obligations secured hereby.

 

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Lender shall have the sole and complete control of the defense of any such
claims. Lender is hereby authorized to settle or otherwise compromise any such
claims as Lender in good faith determines shall be in its best interests.

10.13    Interest on Expenses and Indemnification, Collateral, Order of
Application

All expenses, out-of-pocket costs, attorneys fees and legal expenses, amounts
advanced in performance of obligations of Borrower, and indemnification amounts
owing by Borrower to Lender under or pursuant to this Loan Agreement, the
Promissory Note, and/or any Security Documents shall be due and payable upon
demand. If not paid upon demand, all such obligations shall bear interest at the
default rate provided in the Promissory Note from the date of disbursement until
paid to Lender, both before and after judgment. Lender is authorized to disburse
funds under the Promissory Note for payment of all such obligations.

Payment of all such obligations shall be secured by the Collateral and by the
Security Documents.

All payments and recoveries shall be applied to payment of the foregoing
obligations, the Promissory Note, and all other amounts owing to Lender by
Borrower in such order and priority as determined by Lender. Unless provided
otherwise in the Promissory Note, payments on the Promissory Note shall be
applied first to accrued interest and the remainder, if any, to principal.

10.14    Limitation of Consequential Damages

Lender and its officers, directors, employees, representatives, agents, and
attorneys, shall not be liable to Borrower or any Guarantor for consequential
damages arising from or relating to any breach of contract, tort, or other wrong
in connection with the negotiation, documentation, administration or collection
of the Loan.

10.15    Waiver of Defenses and Release of Claims

Borrower hereby (i) represents that neither the Borrower nor any affiliate or
principal of Borrower has any defenses to or setoffs against any obligations
owing by Borrower, or by Borrower’s affiliates or principals, to Lender or
Lender’s affiliates, nor any claims against Lender or Lender’s affiliates for
any matter whatsoever, related or unrelated to any obligations, and
(ii) releases Lender and Lender’s affiliates, officers, directors, employees,
representatives and agents from all claims, causes of action, and costs, in law
or equity, known or unknown, whether or not matured or contingent, existing as
of the date hereof that Borrower has or may have by reason of any matter of any
conceivable kind or character whatsoever, related or unrelated to the Loan,
including the subject matter of the Loan Documents. The foregoing release does
not apply, however, to claims for future performance of express contractual
obligations that mature after the date hereof that are owing to Borrower by
Lender or Lender’s affiliates. Borrower acknowledges that Lender has been
induced to enter into or continue the obligations by, among other things, the
waivers and releases in this paragraph.

 

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10.16    Revival Clause

If the incurring of any debt by Borrower or the payment of any money or transfer
of property to Lender by or on behalf of Borrower or Guarantor should for any
reason subsequently be determined to be “voidable” or “avoidable” in whole or in
part within the meaning of any state or federal law (collectively “voidable
transfers”), including, without limitation, fraudulent conveyances or
preferential transfers under the United States Bankruptcy Code or any other
federal or state law, and Lender is required to repay or restore any voidable
transfers or the amount or any portion thereof, or upon the advice of Lender’s
counsel is advised to do so, then, as to any such amount or property repaid or
restored, including all reasonable costs, expenses, and attorneys fees of Lender
related thereto, the liability of Borrower and Guarantor, and each of them,
shall automatically be revived, reinstated and restored and shall exist as
though the voidable transfers had never been made.

10.17    Jury Trial Waiver, Arbitration, and Class Action Waiver

This Section contains a jury waiver, arbitration clause, and a class action
waiver. READ IT CAREFULLY.

a. Jury Trial Waiver. As permitted by applicable law, Borrower, Guarantor and
Lender each waive their respective rights to a trial before a jury in connection
with any Dispute (as “Dispute” is hereinafter defined), and Disputes shall be
resolved by a judge sitting without a jury. If a court determines that this
provision is not enforceable for any reason and at any time prior to trial of
the Dispute, but not later than 30 days after entry of the order determining
this provision is unenforceable, any party shall be entitled to move the court
for an order compelling arbitration and staying or dismissing such litigation
pending arbitration (“Arbitration Order”).

b. Arbitration. If a claim, dispute, or controversy arises between Borrower,
Guarantor and Lender with respect to this Agreement, related agreements, or any
other agreement or business relationship between Borrower, Guarantor, and Lender
whether or not related to the subject matter of this Agreement (all of the
foregoing, a “Dispute”), and only if a jury trial waiver is not permitted by
applicable law or ruling by a court, any of the parties may require that the
Dispute be resolved by binding arbitration before a single arbitrator at the
request of any party. By agreeing to arbitrate a Dispute, Borrower and Guarantor
give up any right they may have to a jury trial, as well as other rights it
would have in court that are not available or are more limited in arbitration,
such as the rights to discovery and to appeal.

Arbitration shall be commenced by filing a petition with, and in accordance with
the applicable arbitration rules of, JAMS or National Arbitration Forum
(“Administrator”) as selected by the initiating party. If the parties agree,
arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an
Administrator. Disputes include matters relating to a deposit account,
application for or denial of credit, enforcement of any of the obligations the
parties have to each other, compliance with applicable laws and/or regulations,
performance or services provided under any agreement by any party, including but
not limited to the validity, enforceability, meaning, or scope of this

 

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arbitration provision, and including a dispute based on or arising from an
alleged tort or matters involving either of Borrower’s, Guarantor’s or Lender’s
employees, agents, affiliates, or assigns of a party. However, Disputes do not
include the validity, enforceability, meaning, or scope of this arbitration
provision and such matters may be determined only by a court. If a third party
is a party to a Dispute, Borrower, Guarantor and Lender each will consent to
including the third party in the arbitration proceeding for resolving the
Dispute with the third party. Venue for the arbitration proceeding shall be at a
location determined by mutual agreement of the parties or, if there is no
agreement, in Salt Lake City, Utah.

After entry of an Arbitration Order, the non-moving party shall commence
arbitration. The moving party shall, at its discretion, also be entitled to
commence arbitration but is under no obligation to do so, and the moving party
shall not in any way be adversely prejudiced by electing not to commence
arbitration. The arbitrator will (i) hear and rule on appropriate dispositive
motions for judgment on the pleadings, for failure to state a claim, or for full
or partial summary judgment, (ii) will render a decision and any award applying
applicable law, (iii) give effect to any limitations period in determining any
Dispute or defense, (iv) enforce the doctrines of compulsory counterclaim, res
judicata, and collateral estoppel, if applicable, (v) with regard to motions and
the arbitration hearing, apply rules of evidence governing civil cases, and
(vi) apply the law of the state specified in the agreement giving rise to the
Dispute. Filing of a petition for arbitration shall not prevent any party from
(i) seeking and obtaining from a court of competent jurisdiction
(notwithstanding ongoing arbitration) provisional or ancillary remedies
including but not limited to injunctive relief, property preservation orders,
foreclosure, eviction, attachment, replevin, garnishment, and/or the appointment
of a receiver, (ii) pursuing non-judicial foreclosure, or (iii) availing itself
of any self-help remedies such as setoff and repossession. The exercise of such
rights shall not constitute a waiver of the right to submit any Dispute to
arbitration.

Judgment upon an arbitration award may be entered in any court having
jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three
arbitrators. To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney’s fees and costs) exceeds $4,000,000, the arbitrator
will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute. A request for de novo
appeal must be filed with the arbitrator within 30 days following the date of
the arbitration award; if such a request is not made within that time period,
the arbitration decision shall become final and binding. On appeal, the
arbitrators shall review the award de novo, meaning that they shall reach their
own findings of fact and conclusions of law rather than deferring in any manner
to the original arbitrator. Appeal of an arbitration award shall be pursuant to
the rules of the Administrator or, if Administrator has no such rules, then the
JAMS arbitration appellate rules shall apply.

Arbitration under this provision concerns a transaction involving interstate
commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
seq. The provisions of this arbitration provision shall survive any termination,
amendment, or expiration of this Agreement. If the terms of this provision vary
from the Administrator’s rules, this arbitration provision shall control.

 

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c. Class Action Waiver. BORROWER, GUARANTOR AND LENDER EACH WAIVE THE RIGHT TO
LITIGATE IN COURT OR ARBITRATE ANY CLAIM OR DISPUTE AS A CLASS ACTION, EITHER AS
A MEMBER OF A CLASS OR AS A REPRESENTATIVE, OR TO ACT AS A PRIVATE ATTORNEY
GENERAL.

d. Reliance. Each party (i) certifies that no one has represented to such party
that the other party would not seek to enforce jury and class action waivers in
the event of suit, and (ii) acknowledges that it and the other party have been
induced to enter into this Agreement by, among other things, the mutual waivers,
agreements, and certifications in this section.

10.18    Consent to Utah Jurisdiction and Exclusive Jurisdiction of Utah Courts

Borrower and Guarantor acknowledge that by execution and delivery of the Loan
Documents Borrower and Guarantor have transacted business in the State of Utah
and Borrower and Guarantor voluntarily submit to, consent to, and waive any
defense to the jurisdiction of courts located in the State of Utah as to all
matters relating to or arising from the Loan Documents and/or the transactions
contemplated thereby. EXCEPT AS EXPRESSLY AGREED IN WRITING BY LENDER AND EXCEPT
AS PROVIDED IN THE ARBITRATION PROVISIONS ABOVE, THE STATE AND FEDERAL COURTS
LOCATED IN THE STATE OF UTAH SHALL HAVE SOLE AND EXCLUSIVE JURISDICTION OF ANY
AND ALL CLAIMS, DISPUTES, AND CONTROVERSIES, ARISING UNDER OR RELATING TO THE
LOAN DOCUMENTS AND/OR THE TRANSACTIONS CONTEMPLATED THEREBY. NO LAWSUIT,
PROCEEDING, OR ANY OTHER ACTION RELATING TO OR ARISING UNDER THE LOAN DOCUMENTS
AND/OR THE TRANSACTIONS CONTEMPLATED THEREBY MAY BE COMMENCED OR PROSECUTED IN
ANY OTHER FORUM EXCEPT AS EXPRESSLY AGREED IN WRITING BY LENDER.

10.19    Joint and Several Liability

Borrower and Guarantor shall each be jointly and severally liable for all
obligations and liabilities relating to payment of Indebtedness.

10.20    Notices

All notices or demands by any party to this Loan Agreement shall, except as
otherwise provided herein, be in writing and may be sent by certified mail,
return receipt requested. Notices so mailed shall be deemed received when
deposited in a United States post office box, postage prepaid, properly
addressed to Borrower or Lender at the mailing addresses stated herein or to
such other addresses as Borrower or Lender may from time to time specify in
writing. Any notice so addressed and otherwise delivered shall be deemed to be
given when actually received by the addressee.

Mailing addresses:

Lender:

Zions First National Bank

 

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Corporate Banking Group

One South Main Street, Suite 200

Salt Lake City, Utah 84111

Attention: Thomas C. Etzel, Sr. Vice President

With a copy to:

Scott R. Irwin

Holland & Hart LLP

222 South Main Street, Suite 2200

Salt Lake City, Utah 84101

Borrower:

inContact, Inc.

7730 South Union Park Avenue, Suite 500

Salt Lake City, Utah 84047

Attention: Greg Ayers

Guarantor:

Siemens Enterprise Communications, Inc.

1881 Campus Commons Drive, Suite 501

Reston, VA 20191

Attention: General Counsel

10.21    Duplicate Originals; Counterpart Execution

Two or more duplicate originals of the Loan Documents may be signed by the
parties, each duplicate of which shall be an original but all of which together
shall constitute one and the same instrument. Any Loan Documents may be executed
in several counterparts, without the requirement that all parties sign each
counterpart. Each of such counterparts shall be an original, but all
counterparts together shall constitute one and the same instrument.

10.22    Disclosure of Financial and Other Information

Borrower and Guarantor hereby consent to Lender disclosing to any other lender
who may participate in the Loan any and all information, knowledge, reports, and
records, including, without limitation, financial statements, relating in any
manner whatsoever to the Loan, Borrower and Guarantor, provided such other
lender shall enter into a confidentiality and non-disclosure agreement limiting
its use and all such information and data relating to Guarantor only for
purposes of such participation in the Loan.

10.23    Integrated Agreement and Subsequent Amendment

The Loan Documents constitute the entire agreement between Lender, Borrower, and
Guarantor, and may not be altered or amended except by written agreement signed
by Lender, Borrower, and, if applicable, Guarantor. PURSUANT TO UTAH CODE
SECTION 25-5-4, BORROWER AND GUARANTOR ARE NOTIFIED THAT THESE AGREEMENTS ARE A

 

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FINAL EXPRESSION OF THE AGREEMENT BETWEEN LENDER, BORROWER AND GUARANTOR, AND
THESE AGREEMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED ORAL
AGREEMENT.

All prior and contemporaneous agreements, arrangements and understandings
between the parties hereto as to the subject matter hereof are, except as
otherwise expressly provided herein, rescinded.

[Signature Page(s) Follow]

 

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IN WITNESS WHEREOF, this Loan Agreement has been executed and becomes effective
as of the Effective Date.

 

Lender: Zions First National Bank By:  

 

  Thomas C. Etzel   Senior Vice President Borrower: inContact, Inc. By:  

 

Name:  

 

Title:  

 

Each undersigned Guarantor hereby acknowledges and consents to the foregoing
Loan Agreement, makes the representations, warranties and covenants set forth in
Section 4 Guarantee, and agrees to the provisions of Section 10.14 Limitation of
Consequential Damages, Section 10.17 Jury Trial Waiver, Arbitration, and Class
Action Waiver, Section 10.18 Consent to Utah Jurisdiction and Exclusive
Jurisdiction of Utah Courts, Section 10.19 Joint and Several Liability, and
Section 10.22 Disclosure of Financial and Other Information.

 

Guarantor: Siemens Enterprise Communications, Inc. By:  

 

  Stephen Juge   Sr. Vice President and General Counsel

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SCHEDULE 6.5

LITIGATION DISCLOSURE

California College, Inc., et al v. UCN, Inc., et al, Third Judicial District
Court in and for Salt Lake County, State of Utah, Case No. 090907053.

 

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SCHEDULE 7.16

EXISTING DEBT

 

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