Exhibit 10.2


 





 


(Accounts Receivable Line of Credit)


 


AMENDED AND RESTATED EXPORT-IMPORT BANK
LOAN AND SECURITY AGREEMENT


 


This AMENDED AND RESTATED EXPORT-IMPORT BANK  LOAN AND SECURITY AGREEMENT (this “Exim Agreement”) dated as
of October 20, 2008 (the “Effective Date”) is among (a) SILICON VALLEY BANK, a California corporation (“Bank”), with
its principal place of business at 3003 Tasman Drive, Santa Clara, California
95054 with a loan production office located at One Newton Executive Park, Suite 200,
2221 Washington Street, Newton, Massachusetts 02462 (FAX 617-969-5965), and (b) MICROFLUIDICS INTERNATIONAL CORPORATION, a
Delaware corporation, with its principal place of business at 30 Ossipee Road,
Newton, Massachusetts 02464 (FAX 617-965-1213) (“Microfluidics International”)
and MICROFLUIDICS CORPORATION, a
Delaware corporation, with its principal place of business at 30 Ossipee Road,
Newton, Massachusetts 02464 (FAX 617-965-1213) (“Microfluidics”) (individually
and collectively, jointly and severally, “Borrower”) and
provides the terms on which Bank shall lend to Borrower, and Borrower shall
repay Bank.  This Exim Agreement amends
and restates, in its entirety, that certain Export-Import Bank Loan and
Security Agreement dated as of July 2, 2008, among Borrower and Bank, as
amended from time to time.  The parties
agree as follows:


 


1                                         ACCOUNTING
AND OTHER TERMS


 


(a)                                  Borrower
and Bank are parties to that certain Amended and Restated Loan and Security
Agreement of even date herewith, as may be amended from time to time (as may be
amended, the “Domestic Agreement”), together with related documents executed in
conjunction therewith (the “Domestic Loan Documents”).


 


(b)                                 Borrower
and Bank desire in this Exim Agreement to set forth their agreement with
respect to a working capital facility to be guaranteed by the Exim Bank.


 


(c)                                  Accounting
terms not defined in this Exim Agreement shall be construed following
GAAP.  Calculations and determinations
must be made following GAAP.  The term “financial
statements” includes the notes and schedules. 
The terms “including” and “includes” always mean “including (or
includes) without limitation,” in this or any Loan Document.  Capitalized terms not otherwise defined in
this Exim Agreement shall have the meanings set forth in Section 13.  All other terms contained in this Exim
Agreement, unless otherwise indicated, shall have the meanings 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 unpaid principal amount of all
Advances hereunder with all interest, fees and finance charges due thereon as
and when due in accordance with this Exim Agreement.


 


2.1.1                     Financing
of Accounts.


 


(a)                                  Availability.


 


(i)                                     Subject
to the terms of this Exim Agreement and to the deduction of Reserves, Borrower
may request that Bank finance specific Eligible Foreign Accounts.  Bank may, in its sole discretion in each
instance, finance such Eligible Foreign Accounts by extending credit to
Borrower in an amount equal to the result of the Advance Rate multiplied by the
face amount of the Eligible Foreign Account. 
Bank may, in its sole discretion, change the percentage of the Advance
Rate for a particular Eligible Foreign Account on a case by case basis.


 

















 


(ii)                                  Subject
to the terms of this Exim Agreement and to the deduction of Reserves, Borrower
may request that Bank finance Exim Inventory Placeholder Invoices.  Bank may, in its sole discretion in each
instance, finance such Exim Inventory Placeholder Invoices by extending credit
to Borrower in an amount equal to the result of the Advance Rate multiplied by
the face amount of the Exim Inventory Placeholder Invoice.  Bank may, in its sole discretion, change the
percentage of the Advance Rate for a particular Exim Inventory Placeholder
Invoice on a case by case basis.


 


(iii)                               Any
Credit Extension made pursuant to the terms of subsection (i) or (ii) above
shall be hereinafter referred to as an “Advance”.  Any Advance made based upon an Eligible
Foreign Account shall be he hereinafter referred to as an “Eligible Foreign
Account Advance”.  Any Advance made based
upon an Exim Inventory Placeholder Invoice shall be he hereinafter referred to
as an “Exim Inventory Advance”.  When
Bank makes an Advance, the Eligible Foreign Account or Exim Inventory
Placeholder Invoice each become a “Financed Receivable”.


 


(b)                                 Maximum
Advances; Aggregate Cap; Maximum Exim Inventory Advances and Inventory Advances.


 


(i)                                     Maximum
Advances; Aggregate Cap.  The
aggregate face amount of all Financed Receivables outstanding at any time may
not exceed the Facility Amount.  In
addition, the aggregate amount of all Advances outstanding hereunder shall not
exceed One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) at any
time.


 


(ii)                                  Maximum
Exim Inventory Advances. 
Notwithstanding any terms in this Agreement to the contrary, the
aggregate amount of Exim Inventory Advances outstanding at any time may not
exceed the lesser of (A) Three Hundred Fifty Thousand Dollars ($350,000.00),
and (B) sixty percent (60.0%) of the aggregate Advances made pursuant to
this Agreement outstanding at such time. 
If, at any time, the aggregate amount of Exim Inventory Advances
outstanding at any time exceed the maximum amounts set forth in this provision,
Borrower shall immediately pay to Bank the excess and, in connection with same,
hereby irrevocably authorizes Bank to debit any account of Borrower maintained
by Borrower with Bank or any of Bank’s Affiliates for the amount of such
excess.


 


(c)                                  Borrowing
Procedure.  Borrower will deliver an
Invoice Transmittal and an Export Order for each Eligible Foreign Account or
Exim Inventory Placeholder Invoice it offers. 
Bank may rely on information set forth in or provided with the Invoice
Transmittal and Export Order.


 


(d)                                 Credit
Quality; Confirmations.  Bank may, at
its option, conduct a credit check of the Account Debtor for each Account
requested by Borrower for financing hereunder in order to approve any such
Account Debtor’s credit before agreeing to finance such Account.  Bank may also verify directly with the
respective Account Debtors the validity, amount and other matters relating to
the Accounts (including confirmations of Borrower’s representations in Section 5.3
and Section 5.4) by means of mail, telephone or otherwise, either in the
name of Borrower or Bank from time to time in its sole discretion.


 


(e)                                  Accounts
Notification/Collection.  Bank may
notify any Person owing Borrower money of Bank’s security interest in the funds
and verify and/or collect the amount of the Account.


 


(f)                                    Maturity.  This Exim Agreement shall terminate and all
Obligations outstanding hereunder shall be immediately due and payable on the
Maturity Date.


 


(g)                                 Bank’s Discretion. 
Notwithstanding anything to the contrary contained herein, this Exim
Agreement may be terminated by Borrower or Bank at any time, and Bank is not
obligated to finance any Eligible Foreign Accounts or Exim Inventory
Placeholder Invoices Bank and Borrower hereby acknowledge and agree that Bank’s
agreement to finance Eligible Accounts and Exim Inventory Placeholder Invoices
hereunder is discretionary in each instance. 
Accordingly, there shall not be any recourse to Bank, nor liability of
Bank, on account of any delay in Bank’s making of, and/or any decline by Bank
to make, any loan or advance requested hereunder.  If this Exim Agreement and the Domestic
Agreement are terminated by Bank or Borrower for any reason, Borrower shall 


 


2

















 


pay to Bank a termination fee in an amount equal to (i) for
a termination that occurs on or prior to the date that is six (6) months
after the Effective Date, Twenty Thousand Dollars ($20,000.00), (ii) for a
termination that occurs after the date that is six (6) months after the
Effective Date, Ten Thousand Dollars ($10,000.00) (the “Early Termination Fee”)
(the “Early Termination Fee”).  The Early
Termination Fee shall be due and payable on the effective date of such
termination and thereafter shall bear interest at a rate equal to the highest
rate applicable to any of the Obligations. 
Notwithstanding the foregoing, Bank agrees to waive the Early
Termination Fee if Bank agrees to refinance and redocument this Exim Agreement
under another division of Bank (in its sole and exclusive discretion) prior to
the Maturity Date.


 


2.1.2                     Note.  To evidence the Advances, Borrower shall
execute and deliver to Bank on the date hereof a promissory note (the “Exim
Note”) in substantially the form attached hereto as Exhibit C.


 


2.2                               Collections,
Finance Charges, Remittances and Fees. 
The Obligations shall be subject to the following fees and Finance
Charges.  Unpaid fees and Finance Charges
may, in Bank’s discretion, accrue interest and fees as described in Section 9.2
hereof.


 


2.2.1                     Collections.  Collections will be credited to the Financed
Receivable Balance for such Financed Receivable, but if there is an Event of
Default, Bank may apply Collections to the Obligations in any order it chooses.  If Bank receives a payment for both a Financed
Receivable and a non-Financed Receivable, the funds will first be applied to
the Financed Receivable and, if there is no Event of Default then existing, the
excess will be remitted to Borrower, subject to Section 2.2.7.


 


2.2.2                     Facility
Fee.  A fully earned,
non-refundable facility fee of Twelve Thousand Five Hundred Dollars
($12,500.00) is due upon execution of this Exim Agreement (the “Facility Fee”).


 


2.2.3                     Finance
Charges.  In computing Finance
Charges on the Obligations under this Exim Agreement, all Collections received
by Bank shall be deemed applied by Bank on account of the Obligations three (3) Business
Days after  receipt of the Collections.  Borrower will pay a finance charge (the “Finance
Charge”) on the Financed Receivable Balance which is equal to the Applicable
Rate divided by 360 multiplied by the number of days each such
Financed Receivable is outstanding multiplied by the outstanding
Financed Receivable Balance.  The Finance
Charge is payable when the Advance made based on such Financed Receivable is
payable in accordance with Section 2.3 hereof.  After an Event of Default, the Applicable
Rate will increase an additional five percent (5.0%) per annum effective
immediately upon the occurrence of such Event of Default.  In the event that the aggregate
amount of Finance Charges and Collateral Handling Fees earned by Bank in any
fiscal quarter under this Exim Agreement and the Domestic Agreement is less
than the Minimum Finance Charge, Borrower shall pay to Bank an additional
Finance Charge equal to (i) the Minimum Finance Charge minus (ii) the
aggregate amount of all Finance Charges and Collateral Handling Fees earned by
Bank in such fiscal quarter.   Such
additional Finance Charge shall be payable on the first day of the next fiscal
quarter.


 


2.2.4                     Collateral Handling Fee.  Borrower will pay to Bank a
collateral handling fee equal to 0.50% per month of the Financed Receivable
Balance for each Financed Receivable outstanding based upon a 360 day year (the
“Collateral Handling Fee”).  This fee is charged
on a daily basis which is equal to the Collateral Handling Fee divided by 30,
multiplied by the number of days each such Financed Receivable is outstanding,
multiplied by the outstanding Financed Receivable Balance.  The Collateral Handling Fee is payable when
the Advance made based on such Financed Receivable is payable in accordance
with Section 2.3 hereof.  In
computing Collateral Handling Fees under this Exim Agreement, all Collections received by Bank
shall be deemed applied by Bank on account of Obligations three (3) Business
Days after receipt of the Collections. 
After an Event of Default, the Collateral Handling Fee will increase an
additional 0.50% effective immediately upon such Event of Default.


 


2.2.5                     Accounting.  After each Reconciliation Period, Bank will
provide an accounting of the transactions for that Reconciliation Period,
including the amount of all Financed Receivables, all Collections, Adjustments,
Finance Charges, Collateral Handling Fee, and the Facility Fee.  If Borrower does not object to the accounting
in writing within thirty (30) days it shall be considered accurate.  All Finance Charges and other interest and
fees are calculated on the basis of a 360 day year and actual days elapsed.


 


3

















 


2.2.6                     Deductions.  Bank may deduct fees, Finance Charges,
Advances which become due pursuant to Section 2.3, and other amounts due
pursuant to this Exim Agreement from any Advances made or Collections received
by Bank.


 


2.2.7                     Lockbox;
Account Collection Services.


 


(a)                                  As
and when directed by Bank from time to time, at Bank’s option and at the sole
and exclusive discretion of Bank (regardless of whether an Event of Default has
occurred), Borrower shall direct each Account Debtor (and each depository
institution where proceeds of Accounts are on deposit) to remit payments with
respect to the Accounts to a lockbox account established with Bank or to wire
transfer payments to a cash collateral account that Bank controls
(collectively, the “Lockbox”).  It will be considered an immediate Event of
Default if the Lockbox is not set-up and operational on the Effective Date.


 


(b)                                 For
any time at which such Lockbox is not established, the proceeds of the Accounts
shall be paid by the Account Debtors to an address consented to by Bank.  Upon receipt by Borrower of such proceeds,
Borrower shall immediately transfer and deliver same to Bank, along with a
detailed cash receipts journal.  Provided
no Event of Default exists or an event that with notice or lapse of time will
be an Event of Default, within three (3) days of receipt of such amounts
by Bank, Bank will turn over to Borrower the proceeds of the Accounts other
than Collections with respect to Financed Receivables and the amount of
Collections in excess of the amounts for which Bank has made an Advance to
Borrower, less any amounts due to Bank, such as the Finance Charge, the
Facility Fee, payments due to Bank, other fees and expenses, or otherwise;
provided, however, Bank may hold such excess amount with respect to Financed
Receivables as a reserve until the end of the applicable Reconciliation Period
if Bank, in its discretion, determines that other Financed Receivable(s) may
no longer qualify as an Eligible Foreign Account at any time prior to the end of
the subject Reconciliation Period.  This Section does
not impose any affirmative duty on Bank to perform any act other than as
specifically set forth herein.  All
Accounts and the proceeds thereof are Collateral and if an Event of Default
occurs, Bank may apply the proceeds of such Accounts to the Obligations.


 


2.2.8                     Bank
Expenses.  Borrower shall pay all
Bank Expenses (including reasonable attorneys’ fees and expenses, plus
expenses, for documentation and negotiation of this Exim Agreement) incurred
through and after the Effective Date, when due.


 


2.3                               Repayment
of Obligations; Adjustments.


 


2.3.1                     Repayment.


 


(a)                                  Borrower
will repay each Eligible Foreign Account Advance on the earliest of: (i) the
date on which payment is received of the Financed Receivable with respect to
which the Advance was made, (ii) the date on which the Financed Receivable
is no longer an Eligible Foreign Account, (iii) the date on which any
Adjustment is asserted to the Financed Receivable (but only to the extent of
the Adjustment if the Financed Receivable remains otherwise an Eligible Foreign
Account), (iv) the date on which there is a breach of any warranty or
representation set forth in Section 5.3, or a breach of any covenant in
this Exim Agreement, (v) the date on which the full amount of the Advances
must be repaid pursuant to Section 2.5, and (vi) the Maturity Date
(including any early termination).  Each
payment will also include all accrued Finance Charges and Collateral Handling
Fees  with respect to such Advance and all
other amounts then due and payable hereunder.


 


(b)                                 Borrower
will repay each Exim Inventory Advance on the earliest of: (i) the date on
which payment is received of the Financed Receivable with respect to which the
Exim Inventory Advance was made, (ii) upon Borrower’s issuance of an
invoice in respect of any purchase order, (iii) the date on which there is
a breach of any warranty or representation set forth in Section 5.4, (iv) the
date on which the Inventory subject to an Exim Inventory Advance is sold by Borrower,
(v) the date on which the full amount of the Advances must be repaid
pursuant to Section 2.5, or (vi) the Maturity Date (including any
early termination).  Each payment will
also include all accrued Finance Charges and Collateral Handling Fees with respect
to such Exim Inventory Advance and all other amounts then due and payable
hereunder.


 


4

















 


2.3.2                     Repayment
on Event of Default.  When there
is an Event of Default, Borrower will, if Bank demands (or, upon the occurrence
of an Event of Default under Section 8.3, immediately without notice or
demand from Bank) repay all of the Advances. 
The demand may, at Bank’s option, include the Advance for each Financed
Receivable then outstanding and all accrued Finance Charges, the Early
Termination Fee, Collateral Handling Fee, attorneys’ and professional fees,
court costs and expenses, and any other Obligations.


 


2.3.3                     Debit
of Accounts.  Bank may debit any
of Borrower’s deposit accounts for payments or any amounts Borrower owes Bank
hereunder.  Bank shall promptly notify
Borrower when it debits Borrower’s accounts. 
These debits shall not constitute a set-off.


 


2.3.4                     Adjustments.  If, at any time during the term of this Exim
Agreement, any Account Debtor asserts an Adjustment, Borrower issues a credit
memorandum, or any of the representations and warranties in Sections 5.3 and
5.4 or covenants in this Exim Agreement are no longer true in all material
respects, Borrower will promptly advise Bank.


 


2.4                               Power
of Attorney.  Borrower
irrevocably appoints Bank and its successors and assigns as attorney-in-fact
and authorizes Bank, regardless of whether there has been an Event of Default,
to: (a) sell, assign, transfer, pledge, compromise, or discharge all or
any part of the Financed Receivables; (b) demand, collect, sue, and give
releases to any Account Debtor for monies due and compromise, prosecute, or
defend any action, claim, case or proceeding about the Financed Receivables,
including filing a claim or voting a claim in any bankruptcy case in Bank’s or
Borrower’s name, as Bank chooses; (c) prepare, file and sign Borrower’s
name on any notice, claim, assignment, demand, draft, or notice of or
satisfaction of lien or mechanics’ lien or similar document; (d) notify
all Account Debtors to pay Bank directly; (e) receive, open, and dispose
of mail addressed to Borrower; (f) endorse Borrower’s name on checks or
other instruments (to the extent necessary to pay amounts owed pursuant to this
Agreement); and (g) execute on Borrower’s behalf any instruments,
documents, financing statements to perfect Bank’s interests in the Financed
Receivables and Collateral and do all acts and things necessary or expedient,
as determined solely and exclusively by Bank, to protect, preserve, and otherwise
enforce Bank’s rights and remedies under this Exim Agreement, as directed by
Bank.


 


2.5                               Exim Guaranty.  To facilitate the financing of Eligible
Foreign Accounts, the Exim Bank has agreed to guarantee the Exim Loans made
under this Exim Agreement, pursuant to a Master Guarantee Agreement, Loan
Authorization Agreement and (to the extent applicable) Delegated Authority
Letter Agreement (collectively, the “Exim Guaranty”).  If, at any time after the Exim Guaranty has
been entered into by Bank, for any reason other than due to any action or
inaction of Borrower under the Exim Guaranty, (a) the Exim Guaranty shall
cease to be in full force and effect, or (b) if the Exim Bank declares the
Exim Guaranty void or revokes any obligations thereunder or denies liability
thereunder, Borrower shall immediately repay all outstanding Advances
hereunder, and Borrower shall cash collateralize all issued and undrawn letters
of credit issued by Bank, if any.  If, at
any time after the Exim Guaranty has been entered into by Bank, for any reason
other than as described in the foregoing sentence, (x) the Exim Guaranty
shall cease to be in full force and effect, or (y) the Exim Bank declares
the Exim Guaranty void or revokes any obligations thereunder or denies
liability thereunder, any such event shall constitute an Event of Default under
this Exim Agreement.  Nothing in any
confidentiality agreement, in this Exim Agreement or in any other agreement,
shall restrict Bank’s right to make disclosures and provide information to the
Exim Bank in connection with the Exim Guaranty.


 


2.6                               Exim Borrower
Agreement.  Borrower shall execute and deliver a Borrower
Agreement, in the form specified by the Exim Bank (attached hereto as Annex A), in favor of Bank and the Exim
Bank, together with an amendment thereto approved by the Exim Bank to conform
certain terms of such Borrower Agreement to the terms of this Exim Agreement
(as amended, the “Borrower Agreement”). 
When the Borrower Agreement is entered into by Borrower and the Exim
Bank and delivered to Bank, this Exim Agreement shall be subject to all of the
terms and conditions of the Borrower Agreement, all of which are hereby
incorporated herein by this reference. 
Borrower acknowledges and agrees that it has received a copy of the Loan
Authorization Agreement which is referred to in the Borrower Agreement.  If the Borrower Agreement is entered into by
Borrower and the Exim Bank and delivered to Bank, Borrower agrees to be bound
by the terms of the Loan Authorization Agreement, including, without
limitation, by any additions or revisions made prior to its execution on behalf
of Exim Bank.  Upon the execution of the
Loan Authorization Agreement by Exim Bank and Bank, it shall be deemed to be,
and shall become, an attachment to the Borrower Agreement, and shall be
incorporated herein by reference. 
Borrower shall reimburse Bank for all fees and all out of pocket costs
and expenses incurred by Bank with respect to the Exim Guaranty and 


 


5

















 


the Borrower
Agreement, including without limitation all facility fees and usage fees, and
Bank is authorized to debit any of Borrower’s deposit accounts with Bank for
such fees, costs and expenses when paid by Bank.


 


3                                         CONDITIONS
OF LOANS


 


3.1                               Conditions
Precedent to Initial Advance. 
Bank’s agreement to make the initial Advance 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 deem necessary or appropriate, including, without limitation:


 


(a)                           the
Domestic Agreement and all of the conditions precedent thereto;


 


(b)                          Borrower
Agreement;


 


(c)                           Exim
Note;


 


(d)                          Economic
Impact Certification;


 


(e)                           payment
of the fees and Bank Expenses then due and payable;


 


(f)                             such
other documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate.


 


3.2                               Conditions
Precedent to all Advances.  Bank’s
agreement to make each Advance, including the initial Advance, is subject to
the following:


 


(a)                           receipt
of the Invoice Transmittal and Export Order;


 


(b)                          Bank
shall have (at its option) conducted the confirmations and verifications as
described in Section 2.1.1(d);


 


(c)                           each
of the representations and warranties in Section 5 shall be true on the
date of the Invoice Transmittal and on the effective date of each Advance and
no Event of Default shall have occurred and be continuing, or result from the
Advance.  Each Advance is Borrower’s
representation and warranty on that date that the representations and
warranties in Section 5 remain true; and


 


(d)                          the
Exim Guarantee will be in full force and effect.


 


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 and the performance of each of Borrower’s duties under the Loan
Documents, 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 (subject to the security interest granted in the Domestic
Agreement) shall be a first priority security interest in the Collateral.  If Borrower shall at any time, acquire a
commercial tort claim, 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 Exim Agreement, with such writing to be in form and substance satisfactory
to Bank.


 


If this Exim Agreement is terminated, Bank’s Lien in
the Collateral shall continue until the Obligations (other than inchoate indemnity
obligations) are repaid in full in cash. 
Upon payment in full in cash of the Obligations and
at such time this Exim Agreement has been
terminated, Bank shall, at Borrower’s sole cost and expense, release its Liens
in the Collateral and all rights therein shall revert to Borrower.


 


Notwithstanding
the foregoing, it is expressly acknowledged and agreed that the security
interest created in this Exim Agreement in all of the Collateral (with the
exception of Export-Related Accounts Receivable, Export-


 


6

















 


Related
Inventory and Export-Related General Intangibles), is subject to and
subordinate to the security interest granted to Bank in the Domestic Agreement
with respect to the Collateral and the security interest created in the
Domestic Agreement with respect to Export-Related Accounts Receivable,
Export-Related Inventory and Export-Related General Intangibles is subject to
and subordinate to the security interest granted to Bank in this Exim Agreement
with respect to such Export-Related Accounts Receivable, Export-Related
Inventory and Export-Related General Intangibles.


 


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. 
Any 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.


 


5                                         REPRESENTATIONS
AND WARRANTIES


 


Borrower
represents and warrants as follows:


 


5.1                               Domestic
Loan Documents.  The
representations and warranties contained in the Domestic Loan Documents, which
are incorporated by reference into this Exim Agreement, are true and correct.


 


5.2                               Borrower
Agreement.  The representations
and warranties contained in the Borrower Agreement, which are incorporated by
reference into this Exim Agreement, are true and correct.


 


5.3                               Financed
Receivables.  Borrower represents
and warrants for each Financed Receivable (other than Financed Receivables
based upon Exim Inventory Placeholder Invoices):


 


(a)                                  Such
Financed Receivable is an Eligible Foreign Account;


 


(b)                                 Borrower
is the owner of and has the legal right to sell, transfer, assign and encumber
such Financed Receivable;


 


(c)                                  The
correct amount is on the Invoice Transmittal and is not disputed;


 


(d)                                 Payment
is not contingent on any obligation or contract and Borrower has fulfilled all
its obligations as of the Invoice Transmittal date;


 


(e)                                  Such
Financed Receivable is based on an actual sale and delivery of goods and/or
services rendered, is due to Borrower, is not past due or in default, has not
been previously sold, assigned, transferred, or pledged and is free of any
liens, security interests and encumbrances other than Permitted Liens;


 


(f)                                    There
are no defenses, offsets, counterclaims or agreements for which the Account
Debtor may claim any deduction or discount;


 


(g)                                 Borrower
reasonably believes no Account Debtor is insolvent or subject to any Insolvency
Proceedings;


 


(h)                                 Borrower
has not filed or had filed against it Insolvency Proceedings and does not
anticipate any filing;


 


(i)                                     Bank
has the right to endorse and/ or require Borrower to endorse all payments
received on Financed Receivables and all proceeds of Collateral;


 


(j)                                     No
representation, warranty or other statement of Borrower in any certificate or
written statement given to Bank contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement
contained in the certificates or statement not misleading. All statements made
and all unpaid balances appearing in all invoices, instruments and other
documents evidencing the Financed Receivable are and 


 


7

















 


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;


 


(k)                                  All
sales and other transactions underlying or giving rise to each Financed
Receivable shall comply in all material respects with all applicable laws and
governmental rules and regulations; and


 


(l)                                     To
the best of Borrower’s knowledge, all signatures and endorsements on all
documents, instruments, and agreements relating to each Financed Receivable are
genuine, and all such documents, instruments and agreements are legally
enforceable in accordance with their terms.


 


5.4                               Representations regarding Exim Inventory
Placeholder Invoices. 
With respect to Exim Inventory Placeholder Invoices, Borrower represents
and warrants that all of Borrower’s Inventory which is the subject of any Exim
Inventory Placeholder Invoice is and will continue to be Eligible
Export-Related Inventory.


 


5.5                               Use
of Proceeds.  Borrower will use
the proceeds of the Advances only for the purposes specified in the Borrower
Agreement.  Borrower will not use the
proceeds of the Advances for any purpose prohibited by the Borrower Agreement.


 


6                                         AFFIRMATIVE
COVENANTS


 


Borrower
shall do all of the following:


 


6.1                               Domestic
Loan Documents.  Borrower shall
comply in all respects with the terms and provisions of the Domestic Loan
Documents, which terms and provisions are incorporated into this Exim Agreement
and shall survive the termination of Domestic Agreement, which shall include,
without limitation, compliance with the financial reporting requirements set
forth in the Domestic Agreement and the financial covenants set forth in the
Domestic Agreement.


 


6.2                               Borrower
Agreement.  Borrower shall comply
with all of the terms of the Borrower Agreement, including without limitation,
the delivery of any and all notices required pursuant to Sections 2.18 and/or
2.24 of the Borrower Agreement.  In the
event of any conflict or inconsistency between any provision contained in the
Borrower Agreement with any provision contained in this Exim Agreement, the
more strict provision, with respect to Borrower, shall control.


 


6.3                               Notice
in Event of Filing of Action for Debtor’s Relief.  Borrower shall notify Bank in writing within
five (5) days of the occurrence of any of the following: (1) Borrower
begins or consents in any manner to any proceeding or arrangement for its
liquidation in whole or in part or to any other proceeding or arrangement
whereby any of its assets are subject generally to the payment of its
liabilities or whereby any receiver, trustee, liquidator or the like is
appointed for it or any substantial part of its assets (including without
limitation the filing by Borrower of a petition for appointment as
debtor-in-possession under Title 11 of the U.S. Code); (2) Borrower fails
to obtain the dismissal or stay on appeal within forty-five (45) calendar days
of the commencement of any proceeding arrangement referred to in (1) above;
(3) Borrower begins any other procedure for the relief of financially
distressed or insolvent debtors, or such procedure has been commenced against
it, whether voluntarily or involuntarily, and such procedure has not been
effectively terminated, dismissed or stayed within forty-five (45) calendar
days after the commencement thereof; or (4) Borrower begins any procedure
for its dissolution, or a procedure therefor has been commenced against it.


 


6.4                               Reporting
Requirements.


 


(a)                                  Inventory
Reports.  Borrower shall deliver to
Bank, as soon as available, but no later than thirty (30) days following the
last day of each month, a listing of Borrower’s Eligible Export-Related
Inventor, or such other inventory reports as are requested by Bank.


 


(b)                                 Compliance
Certificates.  Borrower shall deliver
to Bank, with each Invoice Transmittal and together with the Compliance
Certificate as and when required pursuant to the Domestic Agreement, a
Compliance Certificate in the form of Exhibit B
hereto.


 


8
















 


(c)                              Other
Reporting Requirements.  Borrower
shall deliver all reports, certificates and other documents to Bank as provided
in the Borrower Agreement and as Bank and Exim Bank may reasonably
request.  In addition, Borrower shall
comply with the reporting requirements set forth in the Domestic Loan
Documents.


 


6.5                               Exim
Insurance.  If required by Bank,
Borrower will obtain, and pay when due all premiums with respect to, and
maintain uninterrupted foreign credit insurance.  In addition, Borrower will execute in favor
of Bank an assignment of proceeds of any insurance policy obtained by Borrower
and issued by Exim Bank insuring against comprehensive commercial and political
risk (the “Exim Bank Policy”).  The
insurance proceeds from the Exim Bank Policy assigned or paid to Bank will be
applied to the balance outstanding under this Exim Agreement. Borrower will
immediately notify Bank and Exim Bank in writing upon submission of any claim
under the Exim Bank Policy.


 


6.6                               Further
Assurances.  Borrower shall
execute any further instruments and take further action as Bank reasonably
requests to perfect or continue Bank’s security interest in the Collateral or
to effect the purposes of this Exim Agreement.


 


7                                         NEGATIVE
COVENANTS


 


Borrower
shall not do any of the following without Bank’s prior written consent.


 


7.1                               Domestic
Loan Documents.  Violate or
otherwise fail to comply with any provisions of the Domestic Loan Documents,
which provisions are incorporated into this Exim Agreement.


 


7.2                               Borrower
Agreement.  Violate or otherwise
fail to comply with any provision of the Borrower Agreement, including, without
limitation, the negative covenants set forth in Section 2.22.


 


7.3                               Exim
Guarantee.  Take any action, or
permit any action to be taken, that causes or, with the passage of time, could
reasonably be expected to cause, the Exim Guarantee to cease to be in full
force and effect.


 


8                                         EVENTS
OF DEFAULT


 


Any
one of the following shall constitute an event of default (an “Event of Default”)
under this Exim Agreement:


 


8.1                               Payment
Default.  Borrower fails to pay
any of the Obligations when due;


 


8.2                               Covenant
Default.  Borrower
fails or neglects to perform any obligation in Section 6 or violates any
covenant in Section 7 or fails or neglects to perform, keep, or observe
any other material term, provision, condition, 
covenant or agreement contained in this Agreement, any Loan Documents,
or in any present or future agreement between Borrower and Bank;


 


8.3                               Insolvency.  (a) Borrower is unable to pay its debts
(including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower
begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun
against Borrower and not dismissed or stayed within forty-five (45) days (but
no Advances shall be made while of any of the conditions described in clause (a) exist
and/or until any Insolvency Proceeding is dismissed);


 


8.4                               Exim
Guarantee.  If the Exim Guarantee
ceases for any reason to be in full force and effect, or if the Exim Bank
declares the Exim Guarantee void or revokes any obligations under the Exim
Guarantee.


 


8.5                               Domestic Default.  The occurrence of an Event of Default (as
defined in the Domestic Agreement) under the Domestic Agreement.


 


9                                         BANK’S
RIGHTS AND REMEDIES


 


9.1                               Rights
and Remedies.  When an Event of
Default occurs and continues Bank may, without notice or demand, do any or all
of the following:


 


9

















 


(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 Exim
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)                                 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 and verify the
amount of such account.  Borrower shall
collect all payments in trust for Bank and, if requested by Bank, immediately deliver
the payments to Bank in the form received from the Account Debtor, with proper
endorsements for deposit;


 


(e)                                  make
any payments and do any acts it considers necessary or reasonable to protect
its security interest in the Collateral. 
Borrower shall assemble the Collateral if Bank requests and make it
available as Bank designates.  Bank may
enter premises where the Collateral is located, take and maintain possession of
any part of the Collateral, and pay, purchase, contest, or compromise any Lien
which appears to be prior or superior to its security interest and pay all
expenses incurred.  Borrower grants Bank
a license to enter and occupy any of its premises, without charge, to exercise
any of Bank’s rights or remedies;


 


(f)                                    apply
to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any
amount held by Bank owing to or for the credit or the account of Borrower;


 


(g)                                 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;


 


(h)                                 place
a “hold” on any account 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;


 


(i)                                     demand
and receive possession of Borrower’s Books; and


 


(j)                                     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                               Protective
Payments.  If Borrower fails to
obtain insurance called for by Section 6.4 or fails to pay any premium
thereon or fails to pay any other amount which Borrower is obligated to pay
under this Exim Agreement or by 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, and secured by the Collateral. 
Bank will make reasonable effort 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.


 


9.3                               Bank’s
Liability for Collateral.  So
long as Bank complies with reasonable banking practices regarding the
safekeeping of Collateral in 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 


 


10

















 


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.


 


9.4                               Remedies
Cumulative.  Bank’s failure, at
any time or times, to require strict performance by Borrower of any provision
of this Exim 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 Exim
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 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.


 


9.5                               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 by any
party to this Exim 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 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 or facsimile number provided
at the beginning of this Exim Agreement. 
Bank or Borrower may change its address or facsimile number by giving
the other party written notice thereof in accordance with the terms of this Section 10.


 


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 if for any reason Bank cannot avail itself of such
courts in the Commonwealth of Massachusetts, Borrower accepts jurisdiction of
the courts and venue in Santa Clara County, California.  Notwithstanding the foregoing, nothing in
this Exim 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 Exim 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.


 


 BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
EXIM AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING
CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL
INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS EXIM AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS
COUNSEL.


 


12                                  GENERAL
PROVISIONS


 


12.1                        Successors
and Assigns.  This Exim Agreement
binds and is for the benefit of the successors and permitted assigns of each
party.  Borrower may not assign this Exim
Agreement or any rights or obligations under it 


 


11

















 


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, negotiate, or grant
participation in all or any part of, or any interest in, Bank’s obligations,
rights and benefits under this Exim Agreement, the Loan Documents or any
related agreement.


 


12.2                        Indemnification.  Borrower agrees to indemnify, defend, and
hold Bank and its officers, directors, employees, agents, attorneys or any
other Person affiliated with or representing Bank (each, an “Indemnified Person”)
harmless against:  (a) all
obligations, demands, claims, and liabilities (collectively, “Claims”) asserted
by any other party in connection with the transactions contemplated by the Loan
Documents; and (b) all losses or Bank Expenses incurred, or paid by such
Indemnified Person from, following, 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.


 


12.3                        Right
of Set-Off.   Borrower hereby
grants to Bank, a lien, security interest and right of setoff as security for
all Obligations to Bank, whether now existing or hereafter arising upon and
against all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of Bank or any entity under the
control of 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
liability or obligation of Borrower even though unmatured and 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.


 


12.4                        Time
of Essence.  Time is of the
essence for the performance of all Obligations in this Exim Agreement.


 


12.5                        Severability
of Provisions.  Each provision of
this Exim Agreement is severable from every other provision in determining the
enforceability of any provision.


 


12.6                        Correction
of Loan Documents.  Bank may
correct patent errors and fill in any blanks in this Exim Agreement and the
other Loan Documents consistent with the agreement of the parties.


 


12.7                        Amendments
in Writing; Integration.  All
amendments to this Exim Agreement must be in writing signed by both Bank and
Borrower.  This Exim Agreement and the
Loan Documents represent the entire agreement about this subject matter, and
supersede prior negotiations or agreements. 
All prior agreements, understandings, representations, warranties, and
negotiations between the parties about the subject matter of this Exim Agreement
and the Loan Documents merge into this Exim Agreement and the Loan Documents.


 


12.7                        Counterparts.  This Exim Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, are an original, and all taken together,
constitute one Exim Agreement.


 


12.8                        Survival.  All covenants, representations and warranties
made in this Exim Agreement continue in full force until this Exim 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 Exim Agreement) 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.


 


12.9                        Confidentiality.  In handling any 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 Advances (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 


 


12

















 


long as such
service providers have executed a confidentiality agreement with Bank with
terms no less restrictive than 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 any purpose, including, without limitation, 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 Exim Agreement.  The provisions of the immediately preceding
sentence shall survive the termination of this Exim Agreement.


 


12.10                 Borrower
Agreement; Cross-Collateralization; Cross-Default; Conflicts.  Both
this Exim Agreement and the Borrower Agreement shall continue in full force and
effect, and all rights and remedies under this Exim Agreement and the Borrower
Agreement are cumulative.  The term “Obligations”
as used in this Exim Agreement and in the Borrower Agreement shall include
without limitation the obligation to pay when due all loans made pursuant to
the Borrower Agreement (the “Exim Loans”) and all interest thereon and the
obligation to pay when due all Advances made pursuant to the terms of this Exim
Agreement and all interest thereon. 
Without limiting the generality of the foregoing, the security interest
granted herein covering all “Collateral” as defined in this Exim Agreement and
as defined in the Borrower Agreement shall secure all Exim Loans and all
Advances and all interest thereon, and all other Obligations.  Any Event of Default under this Exim
Agreement shall also constitute an Event of Default under the Borrower
Agreement, and any Event of Default under the Borrower Agreement shall also
constitute an Event of Default under this Exim Agreement.  In the event Bank assigns its rights under
this Exim Agreement and/or under any note evidencing Exim Loans and/or its
rights under the Borrower Agreement and/or under any note evidencing Advances,
to any third party, including, without limitation, the Exim Bank, whether before
or after the occurrence of any Event of Default, Bank shall have the right (but
not any obligation), in its sole discretion, to allocate and apportion
Collateral to the Borrower Agreement and/or note assigned and to specify the
priorities of the respective security interests in such Collateral between
itself and the assignee, all without notice to or consent of the Borrower.  Should any term of the Exim Agreement
conflict with any term of the Borrower Agreement, the more restrictive term in
either agreement shall govern Borrower.


 


12.11                 Borrower Liability.  Either Borrower may, acting singly, request
Advances hereunder.  Each Borrower hereby
appoints the other as agent for the other for all purposes hereunder, including
with respect to requesting Advances hereunder. Each Borrower hereunder shall be
obligated to repay all Advances made hereunder, regardless of which Borrower
actually receives said Advance, as if each Borrower hereunder directly received
all Advances.  Notwithstanding any
other provision of this Exim Agreement or other related document, each Borrower
irrevocably waives all rights that it may have at law or in equity (including,
without limitation, any law subrogating Borrower to the rights of Bank under
this Exim Agreement) to seek contribution, indemnification or any other form of
reimbursement from any other Borrower, or any other Person now or hereafter
primarily or secondarily liable for any of the Obligations, for any payment
made by Borrower with respect to the Obligations in connection with this Exim
Agreement or otherwise and all rights that it might have to benefit from, or to
participate in, any security for the Obligations as a result of any payment
made by Borrower with respect to the Obligations in connection with this Exim
Agreement or otherwise.  Any agreement
providing for indemnification, reimbursement or any other arrangement
prohibited under this Section shall be null and void.  If any payment is made to a Borrower in
contravention of this Section, such Borrower shall hold such payment in trust
for Bank and such payment shall be promptly delivered to Bank for application
to the Obligations, whether matured or unmatured.


 


Each
Borrower waives any suretyship defenses available to it under the Code or any
other applicable law.  Each Borrower waives any right to require Bank to: (a) proceed
against any Borrower or any other person; (b) proceed against or exhaust
any security; or (c) pursue any other remedy.  Bank may exercise or
not exercise any right or remedy it has against any Borrower or any security it
holds (including the right to foreclose by judicial or non-judicial sale)
without affecting any Borrower’s liability.


 


13                                  DEFINITIONS


 


13.1                        Definitions.  In this Exim Agreement:


 


 “Advance” is
defined in Section 2.1.1.


 


13

















 


“Advance Rate”  is (a) with
respect to Eligible Foreign Accounts, eighty percent (80.0%), net of any
offsets related to each specific Account Debtor, including, without limitation,
Deferred Revenue, or such other percentage as Bank establishes under Section 2.1.1,
and (b) with respect to Exim Inventory Placeholder Invoices, fifty percent
(50.0%), net of any offsets related to each specific Account Debtor, including,
without limitation, Deferred Revenue, or such other percentage as Bank
establishes under Section 2.1.1


 


 “Applicable Rate”
is a per annum rate equal to the greater of (a) the Prime Rate plus two
percent (2.0%), and (b) six percent (6.0%).


 


“Borrower Agreement” is defined in Section 2.6.


 


 “Claims” are
defined in Section 12.2.


 


“Collateral” is any and all properties, rights and assets of
Borrower described on Exhibit A.


 


“Collateral Handling Fee”  is defined in Section 2.2.4.


 


“Compliance Certificate” is attached as Exhibit B.


 


“Domestic Agreement” is defined in Section 1(a).


 


“Domestic Loan Documents” is defined in Section 1(a).


 


“Early Termination Fee” is defined in Section 2.1.1.


 


“Effective Date” is defined in the preamble of this Exim
Agreement.


 


“Eligible Export-Related Inventory”  is
defined in the Borrower Agreement.


 


“Eligible Foreign Account Advance” is defined in Section 2.1.1.


 


“Eligible Foreign Accounts” are billed Accounts in the
ordinary course of Borrower’s business that meet all Borrower’s representations
and warranties in Section 5.3, conform in all respects to the Borrower
Agreement, have been, at the option of Bank, confirmed in accordance with Section 2.1.1(d),
and are due and owing from Account Debtors deemed creditworthy by Bank in its
sole discretion and that arise in the ordinary course of Borrower’s business
and are derived from exports originating in the United States and (i) with
respect to which the Account Debtor is not located in the United States, (ii) with
respect to which are payable and collected by Borrower in the United States, (iii) conform
in all respects to the provisions of the Borrower Agreement, (iv) are “Eligible
Accounts” (as defined in the Domestic Agreement) pursuant to the Domestic
Agreement, (v) that have been validly assigned or pledged to Bank in a
manner satisfactory to Bank giving Bank a first priority perfected security
interest, or its equivalent, in such Accounts, (vi) comply with all of
Borrower’s representations and warranties to Bank, and (vii) that either (A) Bank
approves on a case by case basis (which shall be required with respect to
foreign Accounts on open account terms), or (B) are supported by letter(s) of
credit acceptable to Bank.  Standards of
eligibility may be fixed or revised from time to time by Bank in Bank’s
reasonable judgment and upon notification thereof to the Borrower in accordance
with the provisions hereof.  In addition,
Eligible Foreign Accounts shall not include the following:


 


(a)                                              Accounts
that the Account Debtor has not paid within one hundred eighty (180) days of
invoice date;


 


(b)                                             Accounts
for an Account Debtor, fifty percent (50%) or more of whose Accounts have not
been paid within ninety (90) days of invoice date;


 


(c)                                              Accounts
that the Account Debtor has failed to pay within sixty (60) days of the
original due date of the invoice unless such accounts are insured through Exim
Bank export credit insurance for comprehensive commercial and political risk,
in which case ninety (90) calendar days shall apply;


 


14

















 


(d)                                             Accounts
with credit balances over sixty (60) days past original invoice due date;


 


(e)                                              Accounts
which represent progress billings, or be due under a fulfillment or
requirements contract with the Account Debtor;


 


(f)                                                Accounts
which are subject to any contingencies (including Accounts arising from sales
on consignment, guaranteed sale or other terms pursuant to which payment by the
Account Debtor may be conditional);


 


(g)                                             Accounts
which are owing from a Non-U.S. Account Debtor with whom Borrower has any
dispute (whether or not relating to the particular Account);


 


(h)                                             Accounts
which are owing from an Account Debtor which is an Affiliate, officer,
director, employee or agent of Borrower;


 


(i)                                                 Accounts
which are owing from a Non-U.S. Account Debtor which is subject to any
insolvency or bankruptcy proceeding, or whose financial condition is not
acceptable to Bank, or which, fails or goes out of a material portion of its
business;


 


(j)                                                 Accounts
which are owing from a Non-U.S. Account Debtor affiliated with any military
organization or arise from the sale or licensing of goods or provision of
services related to the defense industry;


 


(k)                                              Accounts
which are owing from a Non-U.S. Account Debtor located in countries where the
EXIM Bank is legally prohibited from doing business or in which EXIM Bank
coverage is not available (as designated by the EXIM Bank’s most recent Country
Limitation Schedule);


 


(l)                                                 Accounts
which are billed in currencies other than in U.S. Dollars, unless otherwise
approved by the EXIM Bank;


 


(m)                                           Accounts
with respect to which an invoice has not been sent;


 


(n)                                             Accounts
billed and/or payable outside of the United States;


 


(o)                                             Accounts
from military buyers or generated by defense articles or services;


 


(p)                                             Accounts,
if any, generated by sales of inventory which constitutes defense articles or
defense services;


 


(q)                                             Accounts
which are backed by letters of credit that are (i) unacceptable to Bank in
its sole discretion or (ii) not negotiated by Bank;


 


(r)                                                Accounts
which are backed by a letter of credit but where the goods covered have not yet
been shipped or where the services covered have not yet been provided;


 


(s)                                              Accounts
for which Borrower owes the Account Debtor, but only up to the amount owed
(sometimes called “contra” accounts, accounts payable, customer deposits or credit
accounts);


 


(t)                                                Accounts
in respect of unfulfilled contractual billings of Borrower (including, without
limitation, pre-bill and milestone billings);


 


(u)                                             Accounts
for demonstration or promotional equipment, or in which goods are consigned,
sales guaranteed, sale or return, sale on approval, bill and hold, or other
terms if the Account Debtor’s payment may be conditional;


 


(v)                                             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;


 


15

















 


(w)                                           Accounts
which are owing from a Non-U.S. Account Debtor to whom Borrower is or may be liable
for goods purchased from such Non-U.S. Account Debtor or otherwise (but, in
such case, the Account will be deemed not eligible only to the extent of any
amounts owed by Borrower to such Non-U.S. Account Debtor).


 


(x)                                               Accounts
as to which any covenant, representation or warranty contained in the Loan
Documents with respect to such Account has been breached;


 


(y)                                             Accounts
that arise from the sale of items that do not meet fifty percent (50%) U.S.
consent requirements;


 


(z)                                               Accounts
as to which Bank does not have a valid, perfected first priority lien;


 


(aa)                                        Accounts
for which the items giving rise to such Account have not been shipped and
delivered to the Account Debtor or the services giving rise to such Account
have not been performed by Borrower or the Account does not represent a final
sale of goods or services;


 


(bb)                                      Accounts
for which Borrower has made any agreement with the Account Debtor for any
deduction therefrom except for discounts or allowances made in the ordinary
course of business for prompt payment, all of which discounts or allowances are
reflected in the calculation of the face value of each respective invoice
related thereto;


 


(cc)                                        Accounts
for which any of the items giving rise to such Accounts have been returned,
rejected or repossessed;


 


(dd)                                      Accounts
which are not “Eligible Export-Related Accounts Receivable”, as such term is
defined in the Borrower Agreement;


 


(ee)                                        Accounts
which are not otherwise “Eligible Accounts”, as such term is defined in the
Domestic Agreement; and


 


(ff)                                            Accounts
for which Bank reasonably determines collection to be doubtful or any Accounts
which are unacceptable to Bank for any reason.


 


“Events of Default” are set forth in Article 8.


 


“Exim Bank” means Export-Import Bank of the United States.


 


“Exim Guaranty” is defined in Section 2.5.


 


“Exim Inventory Advance” is defined in Section 2.1.1.


 


“Exim Inventory Placeholder Invoice” is the estimated value
(as reasonably calculated by Borrower, subject to Section 5.4) of Borrower’s
Eligible Export-Related Inventory.


 


“Exim Loans” is defined in Section 12.10.


 


“Export Order” is defined in the Borrower Agreement.


 


“Export-Related Accounts Receivable” is defined in the
Borrower Agreement.


 


“Export-Related General Intangibles” is defined in the
Borrower Agreement.


 


“Export-Related Inventory” is defined in the Borrower
Agreement.


 


“Facility Amount” is One Million Five Hundred Sixty Two
Thousand Five Hundred Dollars ($1,562,500.00).


 


16
















 


“Facility Fee” is defined in Section 2.2.2.


 


“Finance Charges” is defined in Section 2.2.3.


 


“Financed
Receivables” are all those Eligible Foreign Accounts and Exim
Inventory Placeholder Invoices, including their proceeds which Bank finances
and makes an Advance, as set forth in Section 2.1.1.  A Financed Receivable stops being a Financed
Receivable (but remains Collateral) when the Advance made for the Financed
Receivable has been fully paid.


 


 “Invoice Transmittal” shows
Eligible Foreign Accounts and Inventory Placeholder Invoices which Bank may
finance and (a) for each such Eligible Foreign Account, includes the
Account Debtor’s, name, address, invoice amount, invoice date and invoice
number, and (b) for each such Exim Inventory Placeholder Invoice, a listing
of all Inventory which Borrower proposed to be the subject of an Exim Inventory
Placeholder Invoice.


 


“Loan Documents” are, collectively, this Exim Agreement, the
Domestic Agreement, the Perfection Certificate, any subordination agreement,
the IP Agreement, any note, or notes or guaranties executed by Borrower or any
Guarantor, and any other present or future agreement between Borrower any
Guarantor and/or for the benefit of Bank in connection with this Exim
Agreement, all as amended, restated, or otherwise modified.


 


“Lockbox”  is defined in Section 2.2.7.


 


“Maturity
Date” is 364 days from the Effective Date.


 


“Minimum Finance
Charge”  is an
amount equal to the Finance Charges and Collateral Handling Fees Bank would
have earned during a particular fiscal quarter if the Financed Receivable
Balance pursuant to the Domestic Agreement during such fiscal quarter was an
amount equal to thirty percent (30.0%) of the Facility Amount at all times.


 


“Obligations” are Borrower’s obligation to pay when due any
debts, principal, interest, Bank Expenses, and other amounts Borrower owes Bank
now or later, whether under this Exim Agreement, the Domestic Agreement, the
Loan Documents, or otherwise, including, without limitation, any interest
accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank, and the performance of Borrower’s
duties under the Loan Documents.


 


“Reserves” means, as of any date of determination, such
amounts as Bank may from time to time establish and revise which reduce the
amount of the Advances, and other financial accommodations which would
otherwise be available to Borrower under the lending formula(s) provided
herein: (a) for accrued interest; (b) to reflect events, conditions,
contingencies or risks which, as determined by Bank, do or may adversely affect
(i) the Collateral or any other property which is security for the
Obligations or its value (including without limitation any increase in
delinquencies of Accounts), (ii) the assets, business or prospects of
Borrower, or (iii) the security interests and other rights of Bank in the
Collateral (including the enforceability, perfection and priority thereof); (c) to
reflect Bank’s good faith belief that any collateral report or financial
information furnished by or on behalf of Borrower to Bank is or may have been
incomplete, inaccurate or misleading in any material respect; or (d) in
respect of any state of facts which Bank determines is reasonably likely to
constitute an Event of Default or default.


 


[signature page follows]


 


17

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Exim Agreement to be
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the Effective Date.


 


BORROWER:


 


MICROFLUIDICS INTERNATIONAL
CORPORATION


 


	
  By:

  	
  /s/ Brian E.
  LeClair

  	
   

  
	
  Name:

  	
  Brian E. LeClair

  	
   

  
	
  Title:

  	
  Exec. VP
  & CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MICROFLUIDICS CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian E.
  LeClair

  	
   

  
	
  Name:

  	
  Brian E. LeClair

  	
   

  
	
  Title:

  	
  Exec. VP
  & CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BANK:

  	
   

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kate Leland

  	
   

  
	
  Name:

  	
  Kate Leland

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
					



 


18

















 


EXHIBIT A


 


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


 


All
goods, equipment, inventory, contract rights or rights to payment of money,
leases, license agreements, franchise agreements, general intangibles
(including payment intangibles) accounts (including health-care receivables),
documents, instruments (including any promissory notes), chattel paper (whether
tangible or electronic), cash, deposit accounts, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing),
commercial tort claims, securities, and all other investment property,
supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and any copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished, now owned or later acquired;
any patents, trademarks, service marks and applications therefor; trade styles,
trade names, any trade secret rights, including any rights to unpatented
inventions, know-how, operating manuals, license rights and agreements and
confidential information, now owned or hereafter acquired; or any claims for
damages by way of any past, present and future infringement of any of the
foregoing; 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.


 


1

















 


EXHIBIT B


 





 


SPECIALTY FINANCE DIVISION


 


Compliance Certificate


 


 


I, an
authorized officer of MICROFLUIDICS
INTERNATIONAL CORPORATION and MICROFLUIDICS
CORPORATION (individually and collectively, jointly and
severally, “Borrower”) certify under the Amended and Restated Export-Import
Bank Loan and Security Agreement (as amended, the “Exim Agreement”) between
Borrower and Silicon Valley Bank (“Bank”) as follows (all capitalized terms
used herein shall have the meaning set forth in the Agreement):


 


Borrower represents and warrants for each Financed Receivable other than Financed
Receivables based upon Exim Inventory Placeholder Invoices):


 


Each Financed Receivable is an Eligible Foreign Account.


 


Borrower is the owner with legal right to sell, transfer, assign and
encumber such Financed Receivable;


 


The correct amount is on the Invoice Transmittal and is not disputed;


 


Payment is not contingent on any obligation or contract and Borrower
has fulfilled all its obligations as of the Invoice Transmittal date;


 


Each Financed Receivable is based on an actual sale and delivery of
goods and/or services rendered, is due to Borrower,  is not past due or in default, has not been
previously sold, assigned, transferred, or pledged and is free of any liens,
security interests and encumbrances other than Permitted Liens;


 


There are no defenses, offsets, counterclaims or agreements for which
the Account Debtor may claim any deduction or discount;


 


It reasonably believes no Account Debtor is insolvent or subject to any
Insolvency Proceedings;


 


It has not filed or had filed against it Insolvency Proceedings and
does not anticipate any filing;


 


Bank
has the right to endorse and/ or require Borrower to endorse all payments
received on Financed Receivables and all proceeds of Collateral.


 


No
representation, warranty or other statement of Borrower in any certificate or
written statement given to Bank contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement
contained in the certificates or statement not misleading. All statements made
and all unpaid balances appearing in all invoices, instruments and other
documents evidencing the Financed Receivable 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.


 


All
sales and other transactions underlying or giving rise to each Financed
Receivable shall comply in all material respects with all applicable laws and
governmental rules and regulations.


 


To
the best of Borrower’s knowledge, all signatures and endorsements on all
documents, instruments, and agreements relating to each Financed Receivable are
genuine, and all such documents, instruments and agreements are legally
enforceable in accordance with their terms.


 


1

















 


Additionally, Borrower represents and warrants as follows:


 


Borrower and each Subsidiary is duly existing and in good standing in
its state of formation and qualified and licensed to do business in, and in
good standing in, any state in which the conduct of its business or its
ownership of property requires that it be qualified except where the failure to
do so could not reasonably be expected to cause a Material Adverse Change.  The execution, delivery and performance of
the Loan Documents have been duly authorized, and do not conflict with Borrower’s
organizational documents, nor constitute an event of default under any material
agreement by which Borrower is bound. 
Borrower is not in default under any agreement to which or by which it
is bound in which the default could reasonably be expected to cause a Material
Adverse Change.


 


Borrower has good title to the Collateral, free of Liens except
Permitted Liens.  All inventory is in all
material respects of good and marketable quality, free from material defects.


 


Borrower is not an “investment company” or a
company “controlled” by an “investment company” under the Investment Company
Act of 1940, as amended.  Neither
Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate”
of a “holding company” or a “subsidiary company” of a “holding company” as each
term is defined and used in the Public Utility Holding Company Act of
2005.  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 has complied in all material
respects with the Federal Fair Labor Standards Act.  Borrower has not violated any laws,
ordinances or rules, the violation of which could reasonably be expected to
cause a Material Adverse Change.  None of
Borrower’s or any Subsidiary’s properties or assets has been used by Borrower
or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons,
in disposing, producing, storing, treating, or transporting any hazardous
substance other than legally.  Borrower
and each Subsidiary has timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes, except those being contested in
good faith with adequate reserves under GAAP. 
Borrower and each Subsidiary has 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 its business as
currently conducted except where the failure to obtain or make such consents,
declarations, notices or filings would not reasonably be expected to cause a
Material Adverse Change.


 


With respect to Exim Inventory Placeholder
Invoices, Borrower represents and warrants that all of Borrower’s Inventory
which is the subject of any Exim Inventory Placeholder Invoice is and will
continue to be Eligible Export-Related Inventory.


 


The undersigned represents and warrants that
as of the date hereof the foregoing is true, complete and correct, that the
information reflected in this Compliance Certificate complies with the
representations and warranties set forth in the Exim Agreement and the Borrower
Agreement each dated
                            ,
2008, as may be amended from time to time, as if all representations and
warranties were made as of the date hereof, and that Borrower is, and shall
remain, in full compliance with its agreements, covenants, and obligations
under such agreements.  Such
representations and warranties include, without limitation, the following:  Borrower is using disbursements only for the
purpose of enabling Borrower to finance the cost of manufacturing, purchasing
or selling items intended for export. 
Borrower is not using disbursements for the purpose of: (a) servicing
any of Borrower’s unrelated pre-existing or future indebtedness; (b) acquiring
fixed assets or capital goods for the use of Borrower’s business; (c) acquiring,
equipping, or renting commercial space outside the United States; or (d) paying
salaries of non-U.S. citizens or non-U.S. permanent residents who are located
in the offices of the United States. 
Additionally, disbursements are not being used to finance the
manufacture, purchase or sale of all of the following:  (a)  Items to be sold to a buyer located
in a country in which the Export Import Bank of the United States is legally
prohibited from doing business; (b) that part of the cost of the items
which is not U.S. Content unless such part is not greater than fifty percent
(50%) of the cost of the items and is incorporated into the items in the United
States; (c) defense articles or defense services or items directly or
indirectly destined for use by military organizations designed primarily for
military use (regardless of the nature or actual use of the items); or (d) any
items to be used in the construction, alteration, operation or maintenance of
nuclear power, enrichment, reprocessing, research or heavy water production
facilities.


 


All representations and warranties in the Exim Agreement are true and
correct in all material respects on this date, and Borrower represents that
there is no existing Event of Default.


 


2

















 


	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date

  	
   

  



 


3

















 


Exhibit C


 


PROMISSORY NOTE


 


	
  $1,250,000.00

  	
  , 2008

  



 


FOR
VALUE RECEIVED, the undersigned (the “Borrower”), promises to pay to the order
of Silicon Valley Bank (“Bank”), at such place as the holder hereof may
designate, in lawful money of the United States of America, the aggregate
unpaid principal amount of all advances (“Advances”) made by Bank to Borrower,
up to a maximum principal amount of One Million Two Hundred Fifty Thousand
Dollars ($1,250,000.00), plus interest, fees and finance charges on the
aggregate unpaid principal amount of such Advances, at the rates and in
accordance with the terms of the Amended and Restated Export-Import Bank Loan
and Security Agreement between Borrower and Bank of even date herewith, as
amended from time to time (the “Loan Agreement”).  The entire principal amount and all accrued
interest shall be due and payable on
                            ,
2009 [364 DAYS FROM DATE OF THIS NOTE], or on such earlier date, as provided
for in the Loan Agreement.


 


Borrower
irrevocably waives the right to direct the application of any and all payments
at any time hereafter received by Bank from or on behalf of Borrower, and
Borrower irrevocably agrees that Bank shall have the continuing exclusive right
to apply any and all such payments against the then due and owing obligations
of Borrower as Bank may deem advisable. 
In the absence of a specific determination by Bank with respect thereto,
all payments shall be applied in the following order: (a) then due and
payable fees and expenses; (b) then due and payable interest payments and
mandatory prepayments; and (c) then due and payable principal payments and
optional prepayments.


 


Bank
is hereby authorized by Borrower to endorse on Bank’s books and records each
Advance made by Bank under this Promissory Note and the amount of each payment
or prepayment of principal of each such Advance received by Bank; it being
understood, however, that failure to make any such endorsement (or any errors
in notation) shall not affect the obligations of Borrower with respect to
Advances made hereunder, and payments of principal by Borrower shall be
credited to Borrower notwithstanding the failure to make a notation (or any
errors in notation) thereof on such books and records.


 


Borrower
promises to pay Bank all reasonable costs and reasonable expenses including all
reasonable attorneys’ fees, incurred in such collection or in any suit or
action to collect this Promissory Note or in any appeal thereof, unless a final
court of competent jurisdiction finds that the Bank acted with gross negligence
or willful misconduct.  Borrower waives
presentment, demand, protest, notice of protest, notice of dishonor, notice of
nonpayment, and any and all other notices and demands in connection with the
delivery, acceptance, performance, default or enforcement of this Promissory
Note, as well as any applicable statute of limitations.  No delay by Bank in exercising any power or
right hereunder shall operate as a waiver of any power or right.  Time is of the essence as to all obligations
hereunder.


 


This
Promissory Note is issued pursuant to the Loan Agreement, which shall govern
the rights and obligations of Borrower with respect to all obligations
hereunder.


 


The
law of the Commonwealth of Massachusetts shall apply to this Agreement.  BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE COMMONWEALTH OF
MASSACHUSETTS IN ANY ACTION, SUIT, OR PROCEEDING OF ANY KIND, AGAINST IT WHICH
ARISES OUT OF OR BY REASON OF THIS NOTE OR THE LOAN AGREEMENT; PROVIDED,
HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF OF THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS, BORROWER ACCEPTS JURISDICTION OF THE COURTS AND
VENUE IN SANTA CLARA COUNTY, CALIFORNIA.


 


4

















 


BORROWER
WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE EXIM LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  BORROWER RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT.  BORROWER REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.


 


5

















 


	
   

  	
  BORROWER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


6