Exhibit 10.1
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of April 20, 2006
(the "Effective Date") between SILICON VALLEY BANK, a California corporation and
with a loan production office located at One Newton Executive Park, Suite 200,
2221 Washington Street, Newton, Massachusetts
02462 ("Bank"), and DATAWATCH
CORPORATION, a Delaware corporation, and DATAWATCH TECHNOLOGIES CORPORATION, a
Delaware corporation (individually, collectively, jointly and severally,
"Borrower"), provides the terms on which Bank shall lend to Borrower and
Borrower shall repay Bank.
The parties agree as follows:
1
ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement shall be construed following
GAAP.
Calculations and determinations must be made following GAAP.
Capitalized
terms not otherwise defined in this Agreement shall have the meanings set forth
in Section 13.
All other terms contained in this Agreement, unless otherwise
indicated, shall have the meaning provided by the Code to the extent such terms
are defined therein.
2
LOAN AND TERMS OF PAYMENT
2.1
PROMISE TO PAY.
BORROWER HEREBY UNCONDITIONALLY PROMISES TO PAY
BANK THE OUTSTANDING PRINCIPAL AMOUNT OF ALL CREDIT EXTENSIONS AND ACCRUED AND
UNPAID INTEREST THEREON AS AND WHEN DUE IN ACCORDANCE WITH THIS AGREEMENT.
2.1.1
REVOLVING ADVANCES.
(A)
AVAILABILITY.
SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, BANK SHALL MAKE ADVANCES NOT EXCEEDING THE AVAILABILITY AMOUNT.
AMOUNTS BORROWED UNDER THE REVOLVING LINE MAY BE REPAID AND, PRIOR TO THE
MATURITY DATE, REBORROWED, SUBJECT TO THE APPLICABLE TERMS AND CONDITIONS
PRECEDENT HEREIN.
(B)
TERMINATION; REPAYMENT.
THE REVOLVING LINE TERMINATES ON THE
MATURITY DATE, WHEN THE PRINCIPAL AMOUNT OF ALL ADVANCES, THE UNPAID INTEREST
THEREON, AND ALL OTHER OBLIGATIONS RELATING TO THE REVOLVING LINE SHALL BE
IMMEDIATELY DUE AND PAYABLE.
2.1.2
LETTERS OF CREDIT SUBLIMIT.
(A)
AS PART OF THE FORMULA LINE, BANK SHALL ISSUE OR HAVE ISSUED
LETTERS OF CREDIT FOR BORROWER'S ACCOUNT.
THE FACE AMOUNT OF OUTSTANDING
LETTERS OF CREDIT (INCLUDING DRAWN BUT UNREIMBURSED LETTERS OF CREDIT AND ANY
LETTER OF CREDIT RESERVE) MAY NOT EXCEED $1,000,000.00, INCLUSIVE OF CREDIT
EXTENSIONS RELATING TO SECTIONS 2.1.1, 2.1.3 AND 2.1.4.
SUCH AGGREGATE AMOUNTS
UTILIZED HEREUNDER SHALL AT ALL TIMES REDUCE THE AMOUNT OTHERWISE AVAILABLE FOR
ADVANCES UNDER THE FORMULA LINE.
IF, ON THE MATURITY DATE, THERE ARE ANY
OUTSTANDING LETTERS OF CREDIT, THEN ON SUCH DATE BORROWER SHALL PROVIDE TO BANK
CASH COLLATERAL IN AN AMOUNT EQUAL TO 105% OF THE FACE AMOUNT OF ALL SUCH
LETTERS OF CREDIT PLUS ALL INTEREST, FEES, AND COSTS DUE OR TO BECOME DUE IN
CONNECTION THEREWITH (AS ESTIMATED BY BANK IN ITS GOOD FAITH BUSINESS JUDGMENT),
TO SECURE ALL OF THE OBLIGATIONS RELATING TO SAID LETTERS OF CREDIT.
ALL
LETTERS OF CREDIT SHALL BE IN FORM AND SUBSTANCE ACCEPTABLE TO BANK IN ITS SOLE
DISCRETION AND SHALL BE SUBJECT TO THE TERMS AND CONDITIONS OF BANK'S STANDARD
APPLICATION AND LETTER OF CREDIT AGREEMENT (THE "LETTER OF CREDIT
APPLICATION").
BORROWER AGREES TO EXECUTE ANY FURTHER DOCUMENTATION IN
CONNECTION WITH THE LETTERS OF CREDIT AS BANK MAY REASONABLY REQUEST.
BORROWER
FURTHER AGREES TO