Document:

Exhibit

CONSENT UNDER LOAN AND SECURITY AGREEMENT
THIS CONSENT under Loan and Security Agreement (this “Consent”) is entered into as of April 17, 2020, by and among INNOVATUS LIFE SCIENCES LENDING FUND I, LP, a Delaware limited partnership, as collateral agent (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”), and the Lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time, and CONFORMIS, INC., a Delaware corporation, IMATX, Inc., a California corporation and Conformis Cares LLC, a Delaware limited liability company (individually and collectively, jointly and severally, “Borrower”), provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders.
WHEREAS, Collateral Agent, Borrower and Lenders have entered into that certain Loan and Security Agreement, dated as of June 25, 2019 (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”) pursuant to which Lenders have provided to Borrower certain loans in accordance with the terms and conditions thereof; and
WHEREAS, Borrower desires to incur Indebtedness pursuant to, and enter into, the SBA PPP Loan (as defined herein) and in connection therewith has requested Collateral Agent and Required Lenders to consent to Borrower incurring such Indebtedness, and Collateral Agent and Lenders have agreed to such request.
NOW, THEREFORE, in consideration of the promises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower, Required Lenders and Collateral Agent hereby agree as follows:
		
	1.
	Capitalized terms used herein but not otherwise defined shall have the respective meanings given to them in the Loan Agreement.

		
	2.
	The following terms shall have the following meanings for the purposes of this Consent:

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act, and applicable rules and regulations.

“CARES Allowable Uses” means “allowable uses” of proceeds of an SBA PPP Loan as described in Section 1102 of the CARES Act.

“SBA” means the U.S. Small Business Administration.

“SBA PPP Loan” means a single unsecured loan incurred by the Borrower under 15 U.S.C. 636(a)(36) (as added to the Small Business Loan Act by Section 1102 of the CARES Act) in the aggregate principal amount of up to Four Million Seven Hundred Thousand Dollars ($4,700,000.00), upon such terms and conditions as are acceptable to Collateral Agent in its discretion.

“SBA PPP Loan Cure Amount” is equal to (i) the SBA PPP Loan Liability Amount if greater than 70% of the principal amount of the SBA PPP Loan is forgiven by the SBA and (ii) two times the SBA PPP Loan Liability Amount if the principal amount of the SBA PPP Loan forgiven by the SBA is 70% or less of the principal amount of the SBA PPP Loan.

“SBA PPP Loan Date” means the date on which the Borrower receives the proceeds of the SBA PPP Loan.

“SBA PPP Loan Liability Amount” is equal to the aggregate payments of principal and interest that Borrower becomes obligated to pay if the SBA decides not to forgive any portion of the SBA PPP Loan.

 
 
ACTIVE 46782026v2

“Small Business Loan Act” means the Small Business Act (15 U.S. Code Chapter 14A – Aid to Small Business).

		
	3.
	Subject to the terms and conditions set forth herein, Collateral Agent and Required Lenders hereby consent to Borrower’s entry into, and incurrence of Indebtedness under, the SBA PPP Loan.

		
	4.
	Reporting Obligations. 

		
	a.
	Borrower shall promptly (but no later than within two Business Days) notify Collateral Agent of execution, consummation, filing, delivery or receipt, of any agreement, instrument, application, document, amendment, modification, waiver, supplement, consent or notice with respect to the SBA PPP Loan (including, without limitation, forgiveness thereof), and with such notification provide to Collateral Agent a copy thereof; provided, further, if such notification is regarding any portion of the SBA PPP Loan not being forgiven, along, with such notification, Borrower shall also provide Collateral Agent with the amounts and scheduled dates of all payments of principal and interest that Borrower will be obligated to make with respect to the SBA PPP Loan.

		
	b.
	Along with the quarterly Compliance Certificate to be delivered pursuant to Section 6.2(b) of the Loan Agreement, Borrower shall deliver to each Lender and Collateral Agent a written summary stating (A) the amount of the SBA PPP Loan outstanding as of the end of the immediately preceding quarter, (B) the amount of the SBA PPP Loan used in the immediately preceding quarter by Borrower and (C) the purposes for which the SBA PPP Loan was used in the immediately preceding quarter.

		
	5.
	SBA PPP Loan.  Borrower shall, subject to the provisions of Section 6 below, (i) comply with all terms and conditions of the SBA PPP Loan and all requirements of the SBA and Small Business Act related thereto, (ii) use the proceeds of the SBA PPP Loan solely for CARES Allowable Uses, (iii) keep proper records in which full, true, timely and correct entries are made of all dealings and transactions related to the SBA PPP Loan and, upon Collateral Agent’s request, provide such records to Collateral Agent, (iv) not make any misrepresentations or omissions in its application (or any document related to such application) for the SBA PPP Loan and only draw the SBA PPP Loan if it fulfills the applicable eligibility requirements and (v) promptly following the SBA PPP Loan Date (but in any event no later than 45 days after the eight week period immediately following the SBA PPP Loan Date), apply for forgiveness of the maximum amount of SBA PPP Loan possible in accordance with Section 1106 of the CARES Act and provide notice of the status of and any documentation related to such application for forgiveness to Collateral Agent.

		
	6.
	SBA PPP Loan Payment.

		
	a.
	Borrower shall not: (i) make or permit any payment of principal or interest on the SBA PPP Loan, until after Borrower has received the decision from SBA regarding the amount of the SBA PPP Loan that is not being forgiven and complied with its obligations set forth in Section 6(b) below, or (ii) amend any provision in any document relating to the SBA PPP Loan.

		
	b.
	If the Borrower becomes obligated to make any payment of principal or interest with respect to the SBA PPP Loan, Borrower shall promptly and no later than the earlier of (i) the date of the first such payment and (ii) the date that is at least sixty (60) days prior to the first scheduled or required date of such payment raise net cash proceeds from the sale and issuance of its equity securities and/or unsecured convertible Subordinated Debt equal to the SBA PPP Loan Cure Amount (such date, the “Equity Raise Date”). If the Borrower is unable to raise the net cash proceeds as specified in the preceding sentence on or prior to the Equity Raise Date, then the Borrower shall provide a written notice to the Collateral Agent stating the reason the Equity Raise Date for the delay and, upon delivery of such written notice, the Equity Raise Date shall be extended thirty (30) days (the 

2
 
 ACTIVE 46782026v2

“Extended Equity Raise Date”). If the Borrower is unable to raise the net cash proceeds as specified in the preceding sentence on the Extended Equity Raise Date, then prior to the Extended Equity Raise Date, the Borrower shall provide a written notice to the Collateral Agent stating the reason the Extended Equity Raise Date for the further delay and, upon delivery of such written notice, at the discretion of the Collateral Agent, the Extended Equity Raise Date may be further extended an additional number of days specified by the Collateral Agent.  If the SBA PPP Loan Cure Amount is twice the SBA PPP Loan Liability Amount, then Borrower shall promptly use half of the SBA PPP Loan Cure Amount to make a partial prepayment of the Term Loans outstanding along with payment of the applicable Prepayment Fee.

		
	7.
	The parties hereby agree that no portion of the proceeds of the SBA PPP Loan (other than such amount as has been forgiven by the SBA) shall be used for the purposes of Borrower’s compliance with its obligations under Section 6.13 of the Loan Agreement.  The parties hereby further agree that no portion of the SBA PPP Loan Cure Amount shall be used towards satisfying any other obligation of Borrower under the Loan Agreement with respect to raising capital.  Furthermore, no portion of the proceeds of the SBA PPP Loan may be used to satisfy any covenant with respect to the Revolving Line without the prior written consent of the Bank.

		
	8.
	The parties hereby agree that any one of the following shall constitute and immediate Event of Default for the purposes of the Loan Agreement: (i) any default by Borrower of its obligations hereunder; and (ii) any default under the SBA PPP Loan which allows any creditor party thereto a right, whether or not exercised, to accelerate the maturity of any Indebtedness under the SBA PPP Loan.

		
	9.
	Exhibit C-1 to the Loan Agreement is hereby amended and restated in its entirety as set forth on Exhibit A hereto.

		
	10.
	Limitation of Consent.

		
	a.
	The consents set forth above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right, remedy or obligation which Lenders or Borrower may now have or may have in the future under or in connection with any Loan Document, as amended hereby.

		
	b.
	This Consent constitutes a Loan Document and shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect.

		
	11.
	To induce Collateral Agent and Required Lenders to enter into this Consent, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows: 

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

		
	b.
	Borrower has the power and due authority to execute and deliver this Consent and to perform its obligations under the Loan Agreement, as amended by this Consent; 

		
	c.
	The organizational documents of Borrower delivered to Collateral Agent on the Effective Date, and updated pursuant to subsequent deliveries by or on behalf of the Borrower to the Collateral 

3
 
 ACTIVE 46782026v2

Agent, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;  

		
	d.
	The execution and delivery by Borrower of this Consent and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Consent, do not contravene (i) any material law or regulation binding on or affecting Borrower, (ii) any material contractual restriction with a Person binding on Borrower, (iii) any material order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;

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

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

		
	12.
	Except as expressly set forth herein, the Loan Agreement shall continue in full force and effect without alteration or amendment.  This Consent and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.

		
	13.
	The Borrower hereby remises, releases, acquits, satisfies and forever discharges the Lenders and Collateral Agent, their agents, employees, officers, directors, predecessors, attorneys and all others acting or purporting to act on behalf of or at the direction of the Lenders and Collateral Agent (“Releasees”), of and from any and all manner of actions, causes of action, suit, debts, accounts, covenants, contracts, controversies, agreements, variances, damages, judgments, claims and demands whatsoever, in law or in equity, which any of such parties ever had, now has or, to the extent arising from or in connection with any act, omission or state of facts taken or existing on or prior to the date hereof, may have after the date hereof against the Releasees, for, upon or by reason of any matter, cause or thing whatsoever relating to or arising out of the Loan Agreement or the other Loan Documents on or prior to the date hereof through the date hereof.  Without limiting the generality of the foregoing, the Borrower waives and affirmatively agrees not to allege or otherwise pursue any defenses, affirmative defenses, counterclaims, claims, causes of action, setoffs or other rights they do, shall or may have as of the date hereof, including the rights to contest: (a) the right of Collateral Agent and each Lender to exercise its rights and remedies described in the Loan Documents; (b) any provision of this Consent or the Loan Documents; or (c) any conduct of the Lenders or other Releasees relating to or arising out of the Loan Agreement or the other Loan Documents on or prior to the date hereof.

		
	14.
	This Consent shall be deemed effective as of the date first set forth above upon the due execution and delivery to Collateral Agent of this Consent by each party hereto.

		
	15.
	This Consent may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.

		
	16.
	This Consent and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York.

4
 
 ACTIVE 46782026v2

[Balance of Page Intentionally Left Blank]

5
 
 ACTIVE 46782026v2

IN WITNESS WHEREOF, the parties hereto have caused this Consent under Loan and Security Agreement to be executed as of the date first set forth above.

	
			
	BORROWER:

	 

	CONFORMIS, INC.

	 

	 

	By:
	 
	/s/ Mark Augusti

	Name:
	 
	Mark Augusti

	Title:
	 
	President & Chief Executive Officer

	 
	 
	 

	
			
	BORROWER:

	 

	IMATX, INC.

	 

	 

	By:
	 
	/s/ Mark Augusti

	Name:
	 
	Mark Augusti

	Title:
	 
	President

 

	
			
	BORROWER:

	 

	CONFORMIS CARES LLC

	 

	 

	By:
	 
	/s/ Mark Augusti

	Name:
	 
	Mark Augusti

	Title:
	 
	President & Chief Financial Officer

	
				
	COLLATERAL AGENT AND REQUIRED LENDERS:

	 

	INNOVATUS LIFE SCIENCES LENDING FUND I, LP

	 
	 

	By: Innovatus Life Sciences GP, LP
	 

	Its: General Partner
	 

	 
	 

	 
	By:
	/s/ Andrew Hobson
	 

	 
	Name:
	Andrew Hobson
	 

	 
	Title:
	Authorized Signatory
	 

    

ACTIVE 46782026v2

EXHIBIT C-1 
 
Compliance Certificate
	
		
	TO:

	INNOVATUS LIFE SCIENCES LENDING FUND I, LP, as Collateral Agent and Lender 
EAST WEST BANK, as Lender

	FROM:

	CONFORMIS, INC., as Borrower

The undersigned authorized officer (“Officer”) of CONFORMIS, INC., hereby certifies on behalf of all Borrowers that in accordance with the terms and conditions of the Loan and Security Agreement dated as of [June [_], 2019,] by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;” capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),
(a)    Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below;
(b)    There are no Defaults or Events of Default, except as noted below;
(c)    Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material respects on this date and for the period described in (a), above; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date.
(d)    Borrower, and each of Borrower’s Subsidiaries, has timely filed all required tax returns and reports, Borrower, and each of Borrower’s Subsidiaries, has timely paid all foreign, federal, state, and material local taxes, assessments, deposits and contributions owed by Borrower, or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;
(e)    No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.

Attached are the required documents, if any, supporting our certification(s).  The Officer, on behalf of Borrower, further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject to year‐end audit adjustments as to the interim financial statements.

ACTIVE 46782026v2

Please indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under “Complies” column.
	
							
	 
	Reporting Covenant
	Requirement
	Actual
	Complies

	1)
	Financial statements

	Summary within 30 days of month end and Quarterly within 45 days
	 
	Yes
	No
	N/A

	2)
	Annual (CPA Audited) statements

	Within 120 days after FYE
	 
	Yes
	No
	N/A

	3)
	Annual Financial Projections/Budget (prepared on a monthly basis)

	Annually (within earlier 10 days of approval or 60 days of FYE), and when revised (no later than 10 business days of approval)
	 
	Yes
	No
	N/A

	4)
	8‐K, 10‐K and 10‐Q Filings

	If applicable, within 5 days of filing
	 
	Yes
	No
	N/A

	5)
	Month-end account statements

	Monthly within 30 days
	 
	Yes
	No
	N/A

	6)
	Compliance Certificate

	Quarterly within 45days
	 
	Yes
	No
	N/A

	7)
	IP Report

	When required
	 
	Yes
	No
	N/A

	8)
	Total amount of Borrower’s cash and cash equivalents at the last day of the measurement period

	 
	$________
	Yes
	No
	N/A

	9)
	Total amount of Borrower’s Subsidiaries’ cash and cash equivalents at the last day of the measurement period

	 
	$________
	Yes
	No
	N/A

	10)
	Loan confirmation submitted to the fund administrator for Innovatus Life Sciences Lending Fund I, LP (see Exhibit C-2 to the Loan Agreement)

	Quarterly within 45 days
	 
	Yes
	No
	N/A

	11)
	Borrowing Base Certificate
	Monthly within 30 days
	 
	Yes
	No
	N/A

	 
	 
	 
	 
	 
	 
	 

	12)
	A/R & A/P agings
	If applicable
	 
	Yes
	No
	N/A

	13)
	Material Agreements (§ 7.13)

	Yes
	No
	N/A
	13)
	Material Agreements (§ 7.13)

ACTIVE 46782026v2

Negative Covenant Compliance
	
					
	 
	Negative Covenant
	Complies

	1)
	Dispositions (§ 7.1)

	Yes
	No
	N/A

	2)
	Changes in Business, Management, Ownership, or Business Locations (§ 7.2)

	Yes
	No
	N/A

	3)
	Mergers or Acquisitions (§ 7.3)

	Yes
	No
	N/A

	4)
	Indebtedness (§ 7.4)

	Yes
	No
	N/A

	5)
	Encumbrance (§ 7.5)

	Yes
	No
	N/A

	6)
	Maintenance of Collateral Accounts (§ 7.6)

	Yes
	No
	N/A

	7)
	Restricted Payments (§ 7.7)

	Yes
	No
	N/A

	8)
	Investments (§ 7.8)

	Yes
	No
	N/A

	9)
	Transactions with Affiliates (§ 7.9)

	Yes
	No
	N/A

	10)
	Subordinated Debt (§ 7.10)

	Yes
	No
	N/A

	11)
	Compliance (§ 7.11)

	Yes
	No
	N/A

	12)
	Compliance with Anti-Terrorism Laws (§ 7.12)

	Yes
	No
	N/A

Please attach supporting documentation and calculations for the below financial covenants.
	
							
	 
	Financial Covenant
	Requirement
	Actual
	Complies

	1)
	Minimum TTM Revenue
	T6M Product Revenue (Section 6.12)
	$______
	Yes
	No
	N/A

	

2)
	

Minimum Cash Balance
	

Set forth in Section 6.13
	

$______
	

Yes
	

No
	

N/A

	3)
	Minimum Cash Balance
	Set forth in Section 6.14
	$
	

Yes
	

No
	

N/A

Deposit and Securities Accounts 
(Please list all accounts since last Compliance Certificate; attach separate sheet if additional space needed)

ACTIVE 46782026v2

	
							
	 
	Institution Name
	Account Number
	New Account?
	Account Control Agreement in place?

	1)
	 
	 
	Yes
	No
	Yes
	No

	2)
	 
	 
	Yes
	No
	Yes
	No

	3)
	 
	 
	Yes
	No
	Yes
	No

	4)
	 
	 
	Yes
	No
	Yes
	No

Other Matters
	
				
	1)
	Have there been any changes in any Key Person since the last Compliance Certificate?
	Yes
	No

	 
	 
	 
	 

	2)
	Have there been any transfers/sales/disposals/retirement of Collateral or IP prohibited by the Loan Agreement?
	Yes
	No

	 
	 
	 
	 

	3)
	Have there been any new or pending claims or causes of action by or against Borrower required to be disclosed under Section 5.3?
	Yes
	No

	 
	 
	 
	 

	4)
	Have there been any amendments of or other changes to the Operating Documents of Borrower or any of its Subsidiaries?  If yes, provide copies of any such amendments or changes with the Compliance Certificate.
	Yes
	No

	 
	 
	 
	 

	 
	 
	 
	 

	5)
	Has Borrower provided the Collateral Agent with all notices required to be delivered under Sections 6.2(a) and 6.2(b) of the Loan Agreement?
	Yes
	No

	 
	 
	 
	 

	6)
	Has Borrower or any Subsidiary terminated any Material Agreement? If yes, please explain and provide a copy of the Material Agreement(s) and/or amendment(s).
	Yes
	No

	 
	 
	 
	 

	7)
	Have there been any material updates to the contents of the Perfection Certificate last delivered?  If yes, please explain.
	Yes
	No

	 
	 
	 
	 

	8)
	Since the last Compliance Certificate, do you anticipate any impending product shortages or supply chain disruptions?  If yes, please explain.
	Yes
	No

	 
	 
	 
	 

	9)
	Are there major components from suppliers that are single sourced?  If yes, please explain.
	Yes
	No

	 
	 
	 
	 

	10)
	Does the Borrower’s Business Continuity Plan address potential business interruptions and provide a plan to resume business operations?
	Yes
	No

	 
	 
	 
	 

	11)
	Have there been any changes to insurance policies providing coverage for business interruption since the last Compliance Certificate? If yes, please explain.
	Yes
	No

	 
	 
	 
	 

ACTIVE 46782026v2

Exceptions
Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.”  Attach separate sheet if additional space needed.)
	
		
	CONFORMIS, INC., on behalf of all Borrowers

	By:  
	 

	Name:
	 

	Title:  
	 

	 
	 

	Date:
	 

	
					
	COLLATERAL AGENT USE ONLY

	 
	 
	 
	 
	 

	Received by:
	 
	 
	Date:
	 

	 
	 
	 
	 
	 

	Verified by:
	 
	 
	Date:
	 

	 
	 
	 
	 
	 

	Compliance Status:   Yes      No   
	 
	 

ACTIVE 46782026v2rnet-ex102_368.htm

Exhibit 10.2

 

Promissory Note

	
Date
	
Loan Amount
	
Interest Rate after Deferment Period
	
Deferment Period

	
May 01, 2020
	
$6,787,492.00
	
1.00% fixed per annum
	
6 months

This Promissory Note (“Note”) sets forth and confirms the terms and conditions of a term loan to Rignet Inc (whether one or more than one, “Borrower”) from Bank of America, NA, a national banking association having an address of P.O. Box 15220, Wilmington, DE 19886-5220 (together with its agents, affiliates, successors and assigns, the “Bank”) for the Loan Amount and at the Interest Rate stated above (the “Loan”). The Loan is made pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The funding of the Loan is conditioned upon approval of Borrower’s application for the Loan and Bank’s receiving confirmation from the SBA that Bank may proceed with the Loan. The date on which the funding of the Loan takes place is referred to as the “Funding Date”. If the Funding Date is later than the date of this Note, the Deferment Period commences on the Funding Date and ends six months from the Funding Date. After sixty (60) days from the date the Loan is funded, but not more than ninety (90) days from the date the Loan is funded, Borrower shall apply to Bank for loan forgiveness. If the SBA confirms full and complete forgiveness of the unpaid balance of the Loan, and reimburses Bank for the total outstanding balance, principal and interest, Borrower’s obligations under the Loan will be deemed fully satisfied and paid in full. If the SBA does not confirm forgiveness of the Loan, or only partly confirms forgiveness of the Loan, or Borrower fails to apply for loan forgiveness, Borrower will be obligated to repay to the Bank the total outstanding balance remaining due under the Loan, including principal and interest (the “Loan Balance”), and in such case, Bank will establish the terms for repayment of the Loan Balance in a separate letter to be provided to Borrower, which letter will set forth the Loan Balance, the amount of each monthly payment, the interest rate (not in excess of a fixed rate of one per cent (1.00%) per annum), the term of the Loan, and the maturity date of two (2) years from the funding date of the Loan. No principal or interest payments will be due prior to the end of the Deferment Period. Borrower promises, covenants and agrees with Bank to repay the Loan in accordance with the terms for repayment as set forth in that letter (the “Repayment Letter”). Payments greater than the monthly payment or additional payments may be made at any time without a prepayment penalty but shall not relieve Borrower of its obligations to pay the next succeeding monthly payment.

 

In consideration of the Loan received by Borrower from Bank, Borrower agrees as follows:

 

	
 
	
1.
	
DEPOSIT ACCOUNT/USE OF LOAN PROCEEDS: Borrower is required to maintain a deposit account with Bank of America, N.A. (the “Deposit Account”) until the Loan is either forgiven in full or the Loan is fully paid by Borrower. Borrower acknowledges and agrees that the proceeds of the Loan shall be deposited by Bank into the Deposit Account. The Loan proceeds are to not be used by Borrower for any illegal purpose and Borrower represents to the Bank that it will derive material benefit, directly and indirectly, from the making of the Loan.
	
 

 

	
 
	
2.
	
DIRECT DEBIT. If the Loan is not forgiven and a Loan Balance remains, Borrower agrees that on the due date of any amount due as set forth in the Repayment Letter, Bank will debit the amount due from the Deposit Account established by Borrower in connection with this Loan. Should there be insufficient funds in the Deposit Account to pay all such sums when due, the full amount of such deficiency be shall be immediately due and payable by Borrower.
	
 

 

	
 
	
3.
	
INTEREST RATE: Bank shall charge interest on the unpaid principal balance of the Loan at the interest rate set forth above under “Interest Rate” from the date the Loan was funded until the Loan is paid in full.
	
 

 

	
 
	
4.
	
REPRESENTATIONS, WARRANTIES AND COVENANTS. (1) Borrower represents and warrants to Bank, and covenants and agrees with Bank, that: (i) Borrower has read the statements included in the Application, including the Statements Required by Law and Executive Orders, and Borrower understands them. (ii) Borrower was and remains eligible to receive a loan under the rules in effect at the time Borrower submitted to Bank its Paycheck Protection Program Application Form (the “Application”) that have been issued by the SBA implementing the Paycheck Protection Program under Division A, Title I of the CARES Act (the “Paycheck Protection Program Rule”). (iii) Borrower (a) is an independent contractor, eligible self-employed individual, or sole proprietor or (b) employs no more than the greater of 500 employees or, if applicable, the size standard in number of employees established by the SBA in 13 C.F.R. 121.201 for Borrower’s industry. (iv) Borrower will comply whenever applicable, with the civil rights and other limitations in the Application. (v) All proceeds of the Loan will be used only for business-related purposes as specified in the Application and consistent with the Paycheck Protection Program Rule. (vi) To the extent feasible, Borrower will purchase only American-made equipment and products. (vii) Borrower is not engaged in any activity that is illegal under federal, state or local law. (viii) Borrower certifies that any loan received by Borrower under Section 7(b)(2) of the Small Business Act between January 31, 2020 and April 3, 2020 that will remain outstanding after funding of this Loan was for a purpose other than paying payroll costs and other allowable uses loans under the Paycheck Protection Program Rule. (ix) Borrower was in operation on February 15, 2020 and had employees for whom Borrower paid salaries and payroll taxes or paid independent contractors (as reported on Form(s) 1099-MISC). (x) The current economic uncertainty makes the request for the Loan necessary to support the ongoing operations of Borrower. (xi) All proceeds of the Loan will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule and Borrower acknowledges that if the funds are knowingly used for unauthorized purposes, the federal government may hold Borrower and/or Borrower’s authorized representative legally liable, such as for charges of fraud. (xii) Borrower has provided Bank true, correct and complete information demonstrating that Borrower had employees for whom Borrower paid salaries and payroll taxes on or around February 15, 2020. (xiii) Borrower has provided to Bank all documentation available to Borrower on a reasonable basis verifying the dollar amounts of average monthly payroll costs for the calendar year 2019, which documentation shall include, as applicable, copies of payroll processor records, payroll tax filings and/or Form 1099-MISC. (xiv) Borrower will promptly provide to Bank (a) any additional documentation that Bank requests in order to verify payroll costs and (b) documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight week period following the Loan. (xv) Borrower acknowledges that (a) loan forgiveness will be provided by the SBA for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities, and not more than 25% of the Forgivable Amount may be for non-payroll costs (xvi) During the period 
	
 

1

 

	
 
		
beginning on February 15, 2020 and ending on December 31, 2020, Borrower has not and will not receive any other loan under the Paycheck Protection Program. (xvii) Borrower certifies that the information provided in the Application and the information that Borrower provided in all supporting documents and forms is true and accurate in all material respects. Borrower acknowledges that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a Federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000. (xviii) Borrower understands, acknowledges and agrees that Bank can share any tax information received from Borrower or any Owner with SBA's authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews. (xix) Neither Borrower nor any Owner, is presently suspended, debarred, proposed for debarment, declared ineligible, voluntarily excluded from participation in this transaction by any Federal department or agency, or presently involved in any bankruptcy. (xx) Neither Borrower, nor any Owner, nor any business owned or controlled by any of them, ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted in the last 7 years and caused a loss to the government. (xxi) Neither Borrower, nor any Owner, is an owner of any other business or has common management with any other business, except as disclosed to the Bank in connection with the Borrower’s Application. (xxii) Borrower did not receive an SBA Economic Injury Disaster Loan between January 31, 2020 and April 3, 2020, except as disclosed to the Bank in connection with the Borrower’s Application. (xxiii) Neither Borrower (if an individual), nor any individual owning 20% or more of the equity of Borrower (each, an “Owner”), is subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction, or presently incarcerated, on probation or parole. (xxiv) Neither Borrower (if an individual), nor any Owner, has within the last 5 years been convicted; pleaded guilty; pleaded nolo contendere; been placed on pretrial diversion; or been placed on any form of parole or probation (including probation before judgment) for any felony. (xxv) The United States is the principal place of residence for all employees of Borrower included in Borrower’s payroll calculation included in the Application. (xxvi)  The Borrower correctly indicated on its Application whether it is a franchise that is listed in the SBA’s franchise directory. (xxvii) If Borrower is claiming an exemption from all SBA affiliation rules applicable to Paycheck Protection Program loan eligibility under the religious exemption to the affiliation rules, Borrower has made a reasonable, good faith determination that it qualifies for such religious exemption under 13 C.F.R. 121.103(b)(10), which provides that “[t]he relationship of a faith- based organization to another organization is not considered an affiliation with the other organization...if the relationship is based on a religious teaching or belief or otherwise constitutes a part of the exercise of religion.” (2) At all times during the term the of the Loan, Borrower represents and warrants to the Bank, that (i) if Borrower is anything other than a natural person, it is duly formed and existing under the laws of the state or other jurisdiction where organized; (ii) this Note, and any instrument or agreement required under this Note, are within Borrower's powers, have been duly authorized, and do not conflict with any of its organizational papers; (iii) the information included in the Beneficial Ownership Certification most recently provided to the Bank, if applicable, is true and correct in all respects; and (iv) in each state in which Borrower does business, it is properly licensed, in good standing, and, where required, in compliance with fictitious name (e.g. trade name or d/b/a) statutes. IF THE FUNDING DATE IS AFTER THE DATE OF THIS NOTE, BORROWER AGREES THAT BORROWER SHALL BE DEEMED TO HAVE REPEATED AND REISSUED, IMMEDIATELY PRIOR TO THE FUNDING ON THE FUNDING DATE, THE REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS SET FORTH ABOVE IN THIS PARAGRAPH
	
 

 

	
 
	
5.
	
EVENTS OF DEFAULT: If the Loan is not forgiven and a Loan Balance remains, then from the date the Repayment Letter is sent to Borrower until the Loan Balance is fully paid, the occurrence and continuation of any of the following events shall constitute a default hereunder: (i) insolvency, bankruptcy, dissolution, issuance of an attachment or garnishment against Borrower; (ii) failure to make any payment when due under the Loan or any or all other loans made by Bank to Borrower, and such failure continues for ten (10) days after it first became due; (iii) failure to provide current financial information promptly upon request by Bank; (iv) the making of any false or materially misleading statement on any application or any financial statement for the Loan or for any or all other loans made by Bank to Borrower; (v) Bank in good faith believes the prospect of payment under the Loan or any or all other loans made by Bank to Borrower is impaired; (vi) Borrower under or in connection with the Loan or any or all other loans made by Bank to Borrower fails to timely and properly observe, keep or perform any term, covenant, agreement, or condition therein; (vii) default shall be made with respect to any other indebtedness for borrowed money of Borrower, if the default is a failure to pay at maturity or if the effect of such default is to accelerate the maturity of such indebtedness for borrowed money or to permit the holder or obligee thereof or other party thereto to cause any such indebtedness for borrowed money to become due prior to its stated maturity; (viii) the Bank in its sole discretion determines in good faith that an event has occurred that materially and adversely affects Borrower; (ix) any change shall occur in the ownership of the Borrower; (x) permanent cessation of Borrower’s business operations; (xi) Borrower, if an individual, dies, or becomes disabled, and such disability prevents the Borrower from continuing to operate its business; (xii) Bank receives notification or is otherwise made aware that Borrower, or any affiliate of Borrower, is listed as or appears on any lists of known or suspected terrorists or terrorist organizations provided to Bank by the U.S. government under the USA Patriot Act of 2001; and (xiii) Borrower fails to maintain the Deposit Account with the Bank.
	
 

 

	
 
	
6.
	
REMEDIES: If the Loan is not forgiven and a Loan Balance remains, then from the date the Repayment Letter is sent to Borrower, upon the occurrence of a default, all or any portion of the entire amount owing on the Loan, and any and all other loans made by Bank to Borrower, shall, at Bank’s option, become immediately due and payable without demand or notice. Upon a default, Bank may exercise any other right or remedy available to it at law or in equity. All persons included in the term “Borrower” are jointly and severally liable for repayment, regardless of to whom any advance of credit was made. Borrower shall pay any costs Bank may incur including without limitation reasonable attorney’s fees and court costs should the Loan and/or any and all other loans made by Bank to Borrower be referred to an attorney for collection to the extent permitted under applicable state law. EACH PERSON INCLUDED IN THE TERM BORROWER WAIVES ALL SURETYSHIP AND OTHER SIMILAR DEFENSES TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW.
	
 

 

	
 
	
7.
	
CREDIT INVESTIGATION: If the Loan is not forgiven and a Loan Balance remains, then from the date the Repayment Letter is sent to Borrower until the Loan Balance is fully paid, Borrower authorizes Bank and any of its affiliates at any time to make whatever credit investigation Bank deems is proper to evaluate Borrower’s credit, financial standing and employment and Borrower authorizes Bank to exchange Borrower’s credit experience with credit bureaus and other creditors Bank reasonably believes are doing business with Borrower. Borrower also agrees to furnish Bank with any financial statements Bank may request at any time and in such detail as Bank may require.
	
 

 

2

 

	
 
	
8.
	
NOTICES: Borrower’s request for Loan forgiveness, and the documentation that must accompany that request, shall be submitted to Bank by transmitting the communication to the electronic address, website, or other electronic transmission portal provided by Bank to Borrower. Otherwise, all notices required under this Note shall be personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the addresses on the signature page of this Note, or sent by facsimile to the fax number(s) listed on the signature page, or to such other addresses as the Bank and the Borrower may specify from time to time in writing (any such notice a “Written Notice”). Written Notices shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or otherwise (including telegram, lettergram or mailgram), when delivered. In lieu of a Written Notice, notices and/or communications from the Bank to the Borrower may, to the extent permitted by law, be delivered electronically (i) by transmitting the communication to the electronic address provided by the Borrower or to such other electronic address as the Borrower may specify from time to time in writing, or (ii) by posting the communication on a website and sending the Borrower a notice to the Borrower’s postal address or electronic address telling the Borrower that the communication has been posted, its location, and providing instructions on how to view it (any such notice, an “Electronic Notice”). Electronic Notices shall be effective when presented to the Borrower, or is sent to the Borrower’s electronic address or is posted to the Bank’s website. To retain a copy for your records, please download and print or save a copy to your device.
	
 

 

	
 
	
9.
	
CHOICE OF LAW; JURISDICTION; VENUE. (1) At all times that Bank is the holder of this Note, except to the extent that any law of the United States may apply, this Note shall be governed and interpreted according to the internal laws of the state of Borrower’s principal place of business (the “Governing Law State”), without regard to any choice of law, rules or principles to the contrary. However, the charging and calculating of interest on the obligations under this Note shall be governed by, construed and enforced in accordance with the laws of the state of North Carolina and applicable federal law. Nothing in this paragraph shall be construed to limit or otherwise affect any rights or remedies of Bank under federal law. Borrower and Bank agree and consent to be subject to the personal jurisdiction of any state or federal court located in the Governing Law State so that trial shall only be conducted by a court in that state. (2) Notwithstanding the foregoing, when SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law.
	
 

 

	
 
	
10.
	
MISCELLANEOUS. The Loan may be sold or assigned by Bank without notice to Borrower. Borrower may not assign the Loan or its rights hereunder to anyone without Bank’s prior written consent. If any provision of this Note is contrary to applicable law or is found unenforceable, such provision shall be severed from this Note without invalidating the other provisions thereof. Bank may delay enforcing any of its rights under this Note without losing them, and no failure or delay on the part of Bank in exercising any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or future exercise thereof or the exercise of any other right, power or privilege. Bank, by its acceptance hereof, and the making of the Loan and Borrower understand and agree that this Note constitutes the complete understanding between them. This Note shall be binding upon Borrower, and its successors and assigns, and inure to the benefit of Bank and its successors and assigns.
	
 

 

	
 
	
11.
	
BORROWING AUTHORIZED. The signer for Borrower represents, covenants and warrants to Bank that he or she is certified to borrow for the Borrower and is signing this Note as the duly authorized sole proprietor, owner, sole shareholder, officer, member, managing member, partner, trustee, principal, agent or representative of Borrower, and further acknowledges and confirms to Bank that by said signature he or she has read and understands all of the terms and provisions contained in this Note and agrees and consents to be bound by them. This Note and any instrument or agreement required herein, are within the Borrower's powers, have been duly authorized, and do not conflict with any of its organizational papers. The individuals signing this Agreement on behalf of each Borrower are authorized to sign such documents on behalf of such entities. For purposes of this Note only, the Bank may rely upon and accept the authority of only one signer on behalf of the Borrower, and for this Note, this resolution supersedes and replaces any prior and existing contrary resolution provided by Borrower to Bank.
	
 

 

	
 
	
12.
	
ELECTRONIC COMMUNICATIONS AND SIGNATURES. This Note and any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Note (each a “Communication”), including Communications required to be in writing, may, if agreed by the Bank, be in the form of an Electronic Record and may be executed using Electronic Signatures, including, without limitation, facsimile and/or .pdf. The Borrower agrees that any Electronic Signature (including, without limitation, facsimile or .pdf) on or associated with any Communication shall be valid and binding on the Borrower to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature, will constitute the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with the terms thereof to the same extent as if a manually executed original signature was delivered to the Bank. Any Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Bank of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format), or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. The Bank may, at its option, create one or more copies of any Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of the Bank’s business, and destroy the original paper document. All Communications in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding anything contained herein to the contrary, the Bank is under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Bank pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the Bank has agreed to accept such Electronic Signature, the Bank shall be entitled to rely on any such Electronic Signature without further verification and (b) upon the request of the Bank any Electronic Signature shall be promptly followed by a manually executed, original counterpart. For purposes hereof, “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.
	
 

 

	
 
	
13.
	
CONVERSION TO PAPER ORIGINAL.  At the Bank’s discretion the authoritative electronic copy of this Note ("Authoritative Copy") may  be converted to paper and marked as the original by the Bank (the "Paper Original"). Unless and until the Bank creates a Paper Original, the 
	
 

3

 

	
 
		
Authoritative Copy of this Agreement: (1) shall at all times reside in a document management system designated by the Bank for the storage of authoritative copies of electronic records, and (2) is held in the ordinary course of business. In the event the Authoritative Copy is converted to a Paper Original, the parties hereto acknowledge and agree that: (1) the electronic signing of this Agreement also constitutes issuance and delivery of the Paper Original, (2) the electronic signature(s) associated with this Agreement, when affixed to the Paper Original, constitutes legally valid and binding signatures on the Paper Original, and (3) the Borrower’s obligations will be evidenced by the Paper Original after such conversion.
	
 

 

	
 
	
14.
	
BORROWER ATTESTATION. Borrower attests and certifies to Bank that it has not provided false or misleading information or statements to the Bank in its application for the Loan, and that the certifications, representations, warranties, and covenants made to the Bank in this Note and elsewhere relating to the Loan are true, accurate, and correct. Borrower further attests and certifies to Bank that it is has read, understands, and acknowledges that the Loan is being made under the CARES Act, and any use of the proceeds of the Loan other than as permitted by the CARES Act, or any false or misleading information or statements provided to the Bank in its application for the Loan or in this Note may subject the Borrower to criminal and civil liability under applicable state and federal laws and regulations, including but not limited to, the False Claims Act, 31 U.S.C. Section 3729, et. seq. Borrower further acknowledges and understands that this Note is not valid and effective until and unless Borrower’s application for the Loan is approved and Bank’s receiving confirmation from the SBA that Bank may proceed with the Loan.
	
 

 

 

IN WITNESS WHEREOF, I, the authorized representative of the Borrower, hereto have caused this Promissory Note to be duly executed as of the date set forth below.

 

 

	
	
BORROWER: Rignet Inc

 

 

 

/s/ LEE AHLSTROM

	
Signature of Authorized Representative of Borrower

	
Lee Ahlstrom

	
Print Name

	
Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

	
Title

	
 

STREET ADDRESS: 15115 Park Row Ste 300

	
CITY/STATE/ZIP CODE: Houston, TX, 77084-5075

 

	
	
 

BORROWER: Rignet Inc

 

 

 

/s/ STEVEN E. PICKETT

	
Signature of Authorized Representative of Borrower

	
Steven E. Pickett

	
Print Name

	
Chief Executive Officer and President

	
Title

	
 

STREET ADDRESS: 15115 Park Row Ste 300

	
CITY/STATE/ZIP CODE: Houston, TX, 77084-5075

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00309-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00309-of-00352.parquet"}]]