Document:

Exhibit 10.6

 

TABULA RASA HEALTHCARE, INC., 
 CAREKINESIS, INC., 
 CAREVENTIONS, INC., 
 CAPSTONE PERFORMANCE SYSTEMS, LLC, 
 J. A.  ROBERTSON, INC.,
  AND 
 MEDLIANCE LLC

 

BRIDGE BANK, NATIONAL ASSOCIATION

 

 LOAN AND SECURITY AGREEMENT

 

 

This LOAN AND SECURITY AGREEMENT is entered into as of April 29, 2015, by and between BRIDGE BANK, NATIONAL ASSOCIATION (“Bank”) and CAREKINESIS, INC., a Delaware corporation (“CareKinesis”), TABULA RASA HEALTHCARE, INC., a Delaware corporation (“Parent”), CAREVENTIONS, INC., a Delaware corporation (“Careventions”), CAPSTONE PERFORMANCE SYSTEMS, LLC, a Delaware limited liability company (“Capstone”), J. A.  ROBERTSON, INC., a California corporation (“Robertson”) and MEDLIANCE LLC, an Arizona limited liability company (“Medliance”). Parent, CareKinesis, Careventions, Capstone, Robertson and Medliance are each referred to herein as a “Borrower”, and collectively, as the “Borrowers”.

 

RECITALS

 

Borrowers wish to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrowers.  This Agreement sets forth the terms on which Bank will advance credit to Borrowers, and Borrowers will repay the amounts owing to Bank.

 

AGREEMENT

 

The parties agree as follows:

 

1.                                      DEFINITIONS AND CONSTRUCTION.

 

1.1                               Definitions.  As used in this Agreement, the following terms shall have the following definitions:

 

“Accounts” means all presently existing and hereafter arising accounts, contract rights, payment intangibles, and all other forms of obligations owing to a Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other technology) or the rendering of services by a Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by a Borrower and such Borrower’s Books relating to any of the foregoing.

 

“Advance” or “Advances” means a cash advance or cash advances under the Revolving Facility.

 

“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors, and partners.

 

“Bank Expenses” means all:  reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents; Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.

 

“Borrower’s Books” means all of a Borrower’s books and records including:  ledgers; records concerning a Borrower’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information.

 

“Borrowing Base” means as of any date an amount equal to (a) Borrowers’ trailing three (3) months of Monthly Recurring Revenue from Eligible Recurring Revenue Contracts as of the last day of the most recently completed month multiplied by (b) the lesser of (i) one hundred percent (100%) or (ii) the MRR Retention Rate, as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrowers; provided however that (x) clause (a) of the Borrowing Base definition may include rebate accrual receivables from Medliance’s Contracts, provided that such receivables are aged less than 180 days and aggregate amount to be included in the Borrowing Base from such Contracts does not exceed $1,500,000; and (y) that the aggregate amount of Monthly Recurring Revenue included in the Borrowing Base from Eligible Recurring Revenue Contracts with customers outside the United States shall not exceed 10% without Bank’s prior written consent; and provided further that the

 

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Borrowing Base may be revised from time to time by Bank following each Collateral audit or as Bank deems necessary in Bank’s reasonable judgment and upon notification thereof to Borrowers.

 

“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of California are authorized or required to close.

 

“Cash Management Sublimit” means a sublimit for cash management transactions under the Revolving Line pursuant to Section 2.1(b).

 

“Change in Control” shall mean a transaction in which (i) any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of a Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of a Borrower, who did not have such power before such transaction, or (ii) Parent ceases to directly or indirectly own all of the outstanding capital stock of any other Borrower.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the California Uniform Commercial Code.

 

“Collateral” means the property described on Exhibit A attached hereto.

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person; and (iii) all obligations arising under any agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by Bank in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

 

“Contracts” means subscription license contracts, maintenance contracts and support contracts of a Borrower.

 

“Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof.

 

“Credit Extension” means each Advance, use of the Cash Management Sublimit, the International Sublimit, or any other extension of credit by Bank for the benefit of Borrowers hereunder.

 

“Daily Balance” means the amount of the Obligations owed at the end of a given day.

 

“EBITDA” means Borrowers’ earnings before interest, taxes, depreciation expense, amortization expense, and non-cash stock-compensation based expenses, determined in accordance with GAAP.

 

“Eligible Recurring Revenue Contracts” means Contracts yielding monthly recurring revenue in accordance with GAAP, provided that standards of eligibility may be fixed and revised from time to time by Bank in Bank’s reasonable judgment and upon notification thereof to Borrowers in accordance with the provisions hereof.  Unless otherwise agreed to by Bank, Eligible Recurring Revenue Contracts shall not include the following:

 

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(a)                                 Contracts for which the customer thereunder has failed to pay to the Borrowers any amounts due to Borrowers under any of such Contracts within ninety (90) days from the invoice date;

 

(b)                                 Contracts which the customer thereunder has elected to cancel or has failed to renew within the time period prescribed in such Contracts;

 

(c)                                  Contracts with respect to which the customer is subject to any Insolvency Proceeding, or becomes insolvent or goes out of business; or

 

(d)                                 Contracts with respect to which the customer is outside of the United States (unless otherwise approved in writing by Bank on a case by case basis).

 

“Equipment” means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments in which a Borrower has any interest.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.

 

“Event of Default” has the meaning assigned in Article 8.

 

“Foreign Exchange Reserve Percentage” is defined in Section 2.1(c)(ii) hereof.

 

“Founder Notes” means (i) unsecured Indebtedness in the aggregate principal amount of $800,000 owing to Calvin and Orsula Knowlton evidenced by that certain Amended Promissory Note dated as of May 9, 2013 and (ii) unsecured Indebtedness in the aggregate principal amount of $250,000 owing to John and Joanne Durham evidenced by that certain Promissory Note dated as of May 20, 2013.

 

“FX Amount” is defined in Section 2.1(c)(ii) hereof.

 

“FX Contracts” are defined in Section 2.1(c)(ii) hereof.

 

“GAAP” means generally accepted accounting principles as in effect from time to time.

 

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations and (d) all Contingent Obligations.

 

“Insolvency Proceeding” means any proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

 

“Intellectual Property Collateral” means all of a Borrower’s right, title, and interest in and to the following: Copyrights, Trademarks and Patents; all trade secrets, all design rights, claims for damages by way of past, present and future infringement of any of the rights included above, all licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties payable to a Borrower arising from such use to the extent permitted by such license or rights; all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and all proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.

 

“International Sublimit” means a sublimit for foreign exchange services and export, import, and standby letters of credit under the Revolving Line pursuant to Section 2.1(c).

 

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“Inventory” means all inventory in which a Borrower has or acquires any interest, including work in process and finished products intended for sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned by or in the custody or possession, actual or constructive, of a Borrower, including such inventory as is temporarily out of its custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and a Borrower’s Books relating to any of the foregoing.

 

“Investment” means any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance or capital contribution to any Person.

 

“Letter of Credit” or “Letters of Credit” is defined in Section 2.1(c)(ii) hereof.

 

“Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

 

“Loan Documents” means, collectively, this Agreement, any note or notes, and any other documents, instruments or agreements entered into by a Borrower or any guarantor or other third party in connection with this Agreement, all as amended or extended from time to time.

 

“Material Adverse Effect” means a material adverse effect on (i) the business operations or condition (financial or otherwise) of Parent and its Subsidiaries taken as a whole or (ii) the ability of Borrowers to repay the Obligations or otherwise perform their obligations under the Loan Documents or (iii) the value or priority of Bank’s security interests in the Collateral.

 

“Monthly Recurring Revenue” means with respect to any measurement period GAAP revenue recognized during such period from Contracts.

 

“MRR Retention Rate” means as of the last day of each month, the ratio, expressed as a percentage, of (a) (i) Monthly Recurring Revenue for the three (3) months ending on such date (the “Measurement Period”) minus (ii) Monthly Recurring Revenue for the Measurement Period derived from customers to Contracts that do not constitute an Eligible Recurring Revenue Contract to (b) Monthly Recurring Revenue for the Measurement Period for all Contracts; provided however that at no time shall the MRR Retention Rate be greater than one hundred percent (100%).

 

“Negotiable Collateral” means all letters of credit of which a Borrower is a beneficiary, notes, drafts, instruments, securities, documents of title, and chattel paper, and such each Borrower’s Books relating to any of the foregoing.

 

“Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrowers pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrowers to others that Bank may have obtained by assignment or otherwise.

 

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

 

“Periodic Payments” means all installments or similar recurring payments that Borrowers may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrowers and Bank.

 

“Permitted Indebtedness” means:

 

(a)                                 Indebtedness of Borrowers in favor of Bank arising under this Agreement or any other Loan Document;

 

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(b)                                 unsecured Indebtedness owing to trade creditors in the ordinary course of business;

 

(c)                                  Indebtedness existing on the Closing Date incurred solely for the purpose of financing the acquisition or leasing of equipment, along with any extension, renewal or refinancing of such Indebtedness, provided that the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

 

(d)                                 other Indebtedness existing on the Closing Date and disclosed in the Schedule;

 

(e)                                  Subordinated Debt;

 

(f)                                   Indebtedness arising under the Founder Notes;

 

(g)                                 Indebtedness arising after the Closing Date incurred solely for the purpose of financing the acquisition or leasing of equipment, including without limitation, capital lease obligations, provided that the aggregate principal amount of Indebtedness permitted by this clause (g) shall not exceed One Million Dollars ($1,000,000) at any time outstanding; and

 

(h)                                 other unsecured Indebtedness of Borrowers in an aggregate principal amount not to exceed One Hundred Thousand Dollars ($100,000).

 

“Permitted Investment” means:

 

(a)                                 Investments existing on the Closing Date disclosed in the Schedule;

 

(b)                                 Investments by any Borrower and its Subsidiaries in any Subsidiary that is a coborrower hereunder;

 

(c)                                  Investments by any Borrower and its Subsidiaries in any Subsidiary that is a not a coborrower hereunder, upon Bank’s prior written consent; and

 

(d)                                 (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one (1) year from the date of investment therein issued by Bank and (iv) Bank’s money market accounts.

 

“Permitted Liens” means the following:

 

(a)                                 Any Liens existing on the Closing Date and disclosed in the Schedule or arising under this Agreement or the other Loan Documents;

 

(b)                                 Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings, provided the same have no priority over any of Bank’s security interests;

 

(c)                                  Liens securing the Indebtedness described in clause (c) and clause (g) of the defined term “Permitted Liens” provided that the Lien is confined solely to the property so acquired or leased and improvements thereon, and the proceeds of such equipment;

 

(d)                                 Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that any extension,

 

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renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

 

“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.

 

“Prime Rate” means the greater of three and one quarter percent (3.25%) per year, or the variable rate of interest, per annum, most recently announced by Bank, as its “prime rate”, whether or not such announced rate is the lowest rate available from Bank.

 

“Responsible Officer” means each of the Chief Executive Officer, the President and the Chief Financial Officer of each Borrower.

 

“Revolving Facility” means the facility under which Borrowers may request Bank to issue Advances, as specified in Section 2.1(a) hereof.

 

“Revolving Line” means a credit extension of up to Fifteen Million Dollars ($15,000,000).

 

“Revolving Maturity Date” means the second anniversary of the Closing Date.

 

“Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any.

 

“Shares” is one hundred percent (100%) of the issued and outstanding capital stock, membership units or other securities owned or held of record by a Borrower or any Subsidiary of a Borrower, in any direct or indirect Subsidiary.

 

“Sublimit Amount” means an aggregate amount not to exceed One Million Dollars ($1,000,000) with respect to all services provided under the Cash Management Sublimit and the International Sublimit.

 

“Subordinated Debt” means any debt incurred by Borrowers that is subordinated to the debt owing by Borrowers to Bank on terms reasonably acceptable to Bank (and identified as being such by Borrowers and Bank), pursuant to a subordination agreement in form and substance reasonably satisfactory to Bank.

 

“Subsidiary” means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries (including any Affiliate), or both, by such Person.  Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of a Borrower.

 

“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrowers connected with and symbolized by such trademarks.

 

1.2                               Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all calculations made hereunder shall be made in accordance with GAAP.  When used herein, the terms “financial statements” shall include the notes and schedules thereto.  In the event that any change in GAAP shall occur and such change results in a change in the method of calculation of financial covenants, negative covenants, standards or terms in this Agreement, then Borrowers and Bank agree to enter into negotiations in order to amend such provisions of this Agreement so as to reflect equitably such changes in GAAP with the desired result that the criteria for evaluating Borrowers’ financial condition shall be the same after such changes in GAAP as if such changes had not been made.  Until such time as such an amendment shall have been executed and delivered by

 

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Borrowers and Bank, all financial covenants, negative covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such changes in GAAP had not occurred.

 

2.                                      LOAN AND TERMS OF PAYMENT.

 

2.1                               Credit Extensions.

 

Each Borrower promises to pay to the order of Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrowers hereunder.  Borrowers shall also pay interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof.

 

(a)                                 Revolving Advances.

 

(i)                                    Subject to and upon the terms and conditions of this Agreement, Borrowers may request Advances in an aggregate outstanding amount not to exceed the lesser of (i) the Revolving Line or (ii) the Borrowing Base, minus, in each case, the amount of services being provided under the Cash Management Sublimit and the aggregate amounts outstanding under the International Sublimit.  Subject to the terms and conditions of this Agreement, amounts borrowed pursuant to this Section 2.1(a) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(a) shall be immediately due and payable.  Borrowers may prepay any Advances without penalty or premium.

 

(ii)                                Whenever Borrowers desire an Advance, Borrowers will notify Bank no later than 3:00 p.m. Pacific time, on the Business Day that the Advance is to be made.  Each such notification shall be made (i) by telephone or in-person followed by written confirmation from Borrowers within 24 hours, (ii) by electronic mail or facsimile transmission, or (iii) by delivering to Bank a Revolving Advance Request Form in substantially the form of Exhibit B hereto.  Bank is authorized to make Advances under this Agreement, based upon instructions received from a Responsible Officer or a designee of a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to meet Obligations which have become due and remain unpaid.  Bank shall be entitled to rely on any notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrowers shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance.  Bank will credit the amount of Advances made under this Section 2.1(a) to a Borrower’s deposit account.

 

(b)                                 Cash Management Sublimit.  Subject to the terms and conditions of this Agreement and availability under the Revolving Line and the Borrowing Base, Borrowers may request cash management services which may include merchant services, business credit card, automated clearing house transactions, controlled disbursement accounts and check cashing services identified in various cash management services agreements related to such services (the “Cash Management Services”) by delivering to Bank such applications on Bank’s standard forms as requested by Bank; provided, however, that the total amount of the Cash Management Services shall not exceed the Sublimit Amount, and that availability under the Revolving Line shall be reduced by the entire amount of services provided under the Cash Management Sublimit.  In addition, Bank may, in its sole discretion, charge as Advances any amounts that become due or owing to Bank in connection with the Cash Management Services.  If at any time the Revolving Facility is terminated or otherwise ceases to exist, (i) Borrowers shall immediately secure to Bank’s satisfaction its obligations with respect to any Cash Management Services, and, effective as of such date, the balance in any deposit accounts held by Bank and the certificates of deposit issued by Bank in a Borrower’s name (and any interest paid thereon or proceeds thereof, including any amounts payable upon the maturity or liquidation of such certificates), shall automatically secure such obligations to the extent of the then outstanding Cash Management Services, and (ii) each Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any requests by a Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Cash Management Services continue.

 

(c)                                  International Sublimit.

 

(i)                                    Letters of Credit.  Subject to the terms and conditions of this Agreement, at any time prior to the Revolving Maturity Date, Bank agrees to issue letters of credit for the account of

 

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Borrowers (each, a “Letter of Credit” and collectively, the “Letters of Credit”), provided, however, the aggregate outstanding face amount of all Letters of Credit shall not exceed the Sublimit Amount, and for purposes of determining availability under the Revolving Line, the aggregate outstanding face amount of all Letters of Credit (whether drawn or undrawn) shall decrease, on a dollar-for-dollar basis, the amount available for other Advances.  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 form of standard application and letter of credit agreement (the “Application”), which Borrowers hereby agree to execute, including Bank’s standard fees.  On any drawn but unreimbursed Letter of Credit, the unreimbursed amount shall be deemed an Advance under Section 2.1(a).  The obligation of Borrowers to reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, the Application, and such Letters of Credit, under all circumstances whatsoever.  Each Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss, cost, expense or liability, including, without limitation, attorneys’ fees, arising out of or in connection with any Letters of Credit, except for expenses caused by Bank’s gross negligence or willful misconduct.

 

(ii)                                Foreign Exchange.  Subject to and upon the terms and conditions of this Agreement and any other agreement that Borrowers may enter into with Bank in connection with foreign exchange transactions (“FX Contracts”), Borrowers may request Bank to enter into FX Contracts with a Borrower due not later than the Revolving Maturity Date.  Borrowers shall pay any standard issuance and other fees that Bank notifies Borrowers will be charged for issuing and processing FX Contracts for Borrowers.  The FX Amount shall at all times be equal to or less than the Sublimit Amount, and availability under the Revolving Line shall be reduced by the FX Amount.  The “FX Amount” shall equal the amount determined by multiplying (A) the aggregate amount, in United States Dollars, of FX Contracts between a Borrower and Bank remaining outstanding as of any date of determination by (B) the applicable Foreign Exchange Reserve Percentage as of such date.  The “Foreign Exchange Reserve Percentage” shall be a percentage as determined by Bank, in its reasonable discretion from time to time.  The initial Foreign Exchange Reserve Percentage shall be ten percent (10%).

 

(iii)                            If at any time the Revolving Facility is terminated or otherwise ceases to exist, Borrowers shall immediately secure in cash all obligations under the International Sublimit on terms reasonably acceptable to Bank.

 

2.2                               Overadvances.  If the aggregate amount of the outstanding Advances plus the amount of services provided under the Cash Management Sublimit plus the aggregate amounts outstanding under the International Sublimit exceeds the lesser of the Revolving Line or the Borrowing Base at any time, Borrowers shall immediately pay to Bank, in cash, the amount of such excess.

 

2.3                               Interest Rates, Payments, and Calculations.

 

(a)                                 Interest Rates.

 

(i)                                    Advances.  Except as set forth in Section 2.3(b), the Advances shall bear interest, on the outstanding Daily Balance thereof, at a rate equal to one percent (1.0%) above the Prime Rate; provided however that on and after the completion of Parent’s underwritten initial public offering of its securities registered under the Securities Act of 1933, as amended, the Advances shall bear interest, on the outstanding Daily Balance thereof, at a rate equal to one half of one percent (0.5%) above the Prime Rate.

 

(b)                                 Late Fee; Default Rate.  If any payment is not made within ten (10) days after the date such payment is due, Borrowers shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law, not in any case to be less than $25.00.  All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to five (5) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default.

 

(c)                                  Payments.  Interest hereunder shall be due and payable on the tenth calendar day of each month during the term hereof.  Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts or against the Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then applicable hereunder.  Any interest not paid when due shall be

 

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compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder.  All payments shall be free and clear of any taxes, withholdings, duties, impositions or other charges, to the end that Bank will receive the entire amount of any Obligations payable hereunder, regardless of source of payment.

 

(d)                                 Computation.  In the event the Prime Rate is changed from time to time hereafter, the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate.  All interest chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed.

 

2.4                               Crediting Payments.  Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrowers specify.  After the occurrence of an Event of Default, the receipt by Bank of any wire transfer of funds, check, or other item of payment shall be immediately applied to conditionally reduce Obligations, but shall not be considered a payment on account unless such payment is of immediately available federal funds or unless and until such check or other item of payment is honored when presented for payment.  Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Bank after 12:00 noon Pacific time shall be deemed to have been received by Bank as of the opening of business on the immediately following Business Day.  Whenever any payment to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such extension.

 

2.5                               Fees.  Borrowers shall pay to Bank the following:

 

(a)                                 Facility Fees.  On the Closing Date and on the first anniversary of the Closing Date, a fee with respect to the Revolving Facility equal to $37,500; and

 

(b)                                 Bank Expenses.  On the Closing Date, all Bank Expenses incurred through the Closing Date, including attorneys’ fees and expenses and, after the Closing Date, all Bank Expenses, including attorneys’ fees and expenses, as and when they are incurred by Bank.

 

2.6                               Term.  This Agreement shall become effective on the Closing Date and, subject to Section 13.7, shall continue in full force and effect for so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement.  Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default.  Notwithstanding termination, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding.

 

2.7                               Extension of Maturity.  Notwithstanding anything contained herein to the contrary, Bank shall have the right, in its sole and absolute discretion, to extend the Revolving Maturity Date to the tenth day of the month next following the actual Revolving Maturity Date as stated in this Agreement.

 

3.                                      CONDITIONS OF LOANS.

 

3.1                               Conditions Precedent to Initial Credit Extension.  The obligation of Bank to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, the following:

 

(a)                                 this Agreement;

 

(b)                                 a certificate of the Secretary of each Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement;

 

(c)                                  UCC National Form Financing Statements;

 

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(d)                                 an intellectual property security agreement;

 

(e)                                  subordination agreement with Eastward Fund Management, LLC;

 

(f)                                   subordination agreement with Amerisourcebergen Drug Corporation/Bellco Drug Corp.;

 

(g)                                 subordination agreement(s) with Fred Smith III, Stephen F. Olds, and the Olds Family 2002 Trust;

 

(h)                                 payoff letter from Silicon Valley Bank;

 

(i)                                    agreement to provide insurance;

 

(j)                                    payment of the fees and Bank Expenses then due specified in Section 2.5 hereof;

 

(k)                                 current financial statements of Borrowers;

 

(l)                                    an audit of the Collateral, the results of which shall be satisfactory to Bank;

 

(m)                             a borrowing base certificate in substantially similar form as Exhibit C;

 

(n)                                 a compliance certificate in substantially similar form as Exhibit D; and

 

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

 

3.2                               Conditions Precedent to all Credit Extensions.  The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is further subject to the following conditions:

 

(a)                                 timely receipt by Bank of the Advance Request Form as provided in Section 2.1; and

 

(b)                                 the representations and warranties contained in Section 5 shall be true and correct in all material respects on and as of the date of such Advance Request Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit Extension.  The making of each Credit Extension shall be deemed to be a representation and warranty by a Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2.

 

4.                                      CREATION OF SECURITY INTEREST.

 

4.1                               Grant of Security Interest.  Each Borrower grants and pledges to Bank a continuing security interest in all presently existing and hereafter acquired or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance by such Borrower of each of its covenants and duties under the Loan Documents.  Such security interest constitutes a valid, first priority security interest in the presently existing Collateral, subject to Permitted Liens described in clause (c) of such defined term, and will constitute a valid, first priority security interest in Collateral, subject to Permitted Liens described in clause (c) of such defined term, acquired after the date hereof.

 

4.2                               Delivery of Additional Documentation Required.  Borrowers shall from time to time execute and deliver to Bank, at the request of Bank, all Negotiable Collateral, all financing statements and other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect and continue the perfection of Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents.  Borrowers from time to time may deposit with Bank specific time deposit accounts to secure

 

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specific Obligations. Each Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any request by a Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Obligations are outstanding.

 

4.3                               Right to Inspect.  Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during Borrowers’ usual business hours but no more than once a year (unless an Event of Default has occurred and is continuing), to inspect a Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral in order to verify each Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral.

 

4.4                               Pledge of Shares. Each Borrower hereby pledges, assigns and grants to Bank, a security interest in all the Shares (except that, in the case of all non-domestic Subsidiaries of a Borrower, such pledged Shares shall be limited to sixty-five percent (65%) of the Shares of first-tier non-domestic Subsidiaries), together with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security for the performance of the Obligations. To the extent Shares are not certificated as of the Closing Date, within ten (10) days of the certification of any Shares, the certificate or certificates for the Shares will be delivered to Bank, accompanied by an instrument of assignment duly executed in blank by Borrowers. To the extent required by the terms and conditions governing the Shares, Borrowers shall cause the books of each entity whose Shares are part of the Collateral and any transfer agent to reflect the pledge of the Shares. Upon the occurrence and during the continuance of an Event of Default hereunder, Bank may effect the transfer of any securities included in the Collateral (including but not limited to the Shares) into the name of Bank and cause new (as applicable) certificates representing such securities to be issued in the name of Bank or its transferee. Borrowers will execute and deliver such documents, and take or cause to be taken such actions, as Bank may reasonably request to perfect or continue the perfection of Bank’s security interest in the Shares. Unless an Event of Default shall have occurred and be continuing, Borrowers shall be entitled to exercise any voting rights with respect to the Shares and to give consents, waivers and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken which would be inconsistent with any of the terms of this Agreement or which would constitute or create any violation of any of such terms. All such rights to vote and give consents, waivers and ratifications shall terminate upon the occurrence and continuance of an Event of Default.

 

5.                                      REPRESENTATIONS AND WARRANTIES.

 

Each Borrower represents and warrants as follows:

 

5.1                               Due Organization and Qualification.  Each Borrower and each Subsidiary is a corporation duly existing under the laws of its state of incorporation and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified and where failure to so qualify could reasonably be expected to have a Material Adverse Effect.

 

5.2                               Due Authorization; No Conflict.  The execution, delivery, and performance of the Loan Documents are within each Borrower’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in a Borrower’s Certificate/Articles of Incorporation or Bylaws, or Certificate of Formation or Operating Agreement, as applicable, nor will they constitute an event of default under any material agreement to which a Borrower is a party or by which a Borrower is bound.  As of the date hereof, no Borrower is in default under any material agreement to which it is a party or by which it is bound.

 

5.3                               No Prior Encumbrances.  Each Borrower has good and marketable title to its property, free and clear of Liens, except for Permitted Liens.

 

5.4                               Bona Fide Eligible Recurring Revenue Contracts.  The Eligible Recurring Revenue Contracts are bona fide existing contracts.  Borrowers have not received notice of an actual or imminent Insolvency Proceeding commenced by or against any customer of either Borrower whose Contracts are included in any Borrowing Base Certificate as Eligible Recurring Revenue Contract..

 

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5.5                               Merchantable Inventory.  All Inventory is in all material respects of good and marketable quality, free from all material defects, except for Inventory for which adequate reserves have been made.

 

5.6                               Intellectual Property Collateral.  Each Borrower is the sole owner of the Intellectual Property Collateral, except for non-exclusive licenses granted by a Borrower to its customers in the ordinary course of business.  To Borrowers’ knowledge, each of the Patents owned by Borrowers as of the date hereof is valid and enforceable. No part of the Intellectual Property Collateral owned by Borrowers as of the date hereof has been judged invalid or unenforceable, in whole or in part, and no written claim has been made that any part of the Intellectual Property Collateral owned by Borrowers as of the date hereof violates the rights of any third party.  Except as set forth in the Schedule, each Borrower’s rights as a licensee of intellectual property do not give rise to more than five percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering or disposition of any product or service.  Except as set forth in the Schedule, no Borrower is a party to, or bound by, any agreement that restricts the grant by such Borrower of a security interest in such Borrower’s rights under such agreement.

 

5.7                               Name; Location of Chief Executive Office.  Except as disclosed in the Schedule, no Borrower has done business under any name other than that specified on the signature page hereof.  The chief executive office of each Borrower is located at the address indicated in Section 10 hereof.  All of Borrowers’ Inventory and Equipment is located only at the locations set forth in Section 10 hereof.

 

5.8                               Litigation.  Except as set forth in the Schedule, there are no actions or proceedings pending by or against a Borrower or any Subsidiary before any court or administrative agency that could reasonably be expected to have a Material Adverse Effect.

 

5.9                               No Material Adverse Change in Financial Statements.  All consolidated and consolidating financial statements related to Borrowers and any Subsidiary that Bank has received from Borrowers fairly present in all material respects Borrowers’ financial condition as of the date thereof and Borrowers’ consolidated and consolidating results of operations for the period then ended.  There has not been a material adverse change in the consolidated or the consolidating financial condition of Borrowers since the date of the most recent of such financial statements submitted to Bank.

 

5.10                        Solvency, Payment of Debts.  Each Borrower is solvent and able to pay its debts (including trade debts) as they mature.

 

5.11                        Regulatory Compliance.  Each Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA, and no event has occurred resulting from a Borrower’s failure to comply with ERISA that could result in Borrower’s incurring any material liability thereunder.  No Borrower is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940.  No Borrower is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System).  Each Borrower has complied with all the provisions of the Federal Fair Labor Standards Act.  No Borrower has violated any statutes, laws, ordinances or rules applicable to it, violation of which could reasonably be expected to have a Material Adverse Effect.

 

5.12                        Environmental Condition.  None of Borrowers’ or any Subsidiary’s properties or assets has ever been used by a Borrower or any Subsidiary or, to the best of Borrowers’ knowledge, by previous owners or operators, in the disposal of, or to produce, store, handle, treat, release, or transport, any hazardous waste or hazardous substance other than in accordance with applicable law; to the best of Borrowers’ knowledge, none of Borrowers’ properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a hazardous waste or hazardous substance disposal site, or a candidate for closure pursuant to any environmental protection statute; no lien arising under any environmental protection statute has attached to any revenues or to any real or personal property owned by a Borrower or any Subsidiary; and neither Borrower nor any Subsidiary has received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal, state or other governmental agency concerning any action or omission by a Borrower or any Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste or hazardous substances into the environment.

 

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5.13                        Taxes.  Each Borrower and each Subsidiary have filed or caused to be filed all federal and state tax income returns and any other material tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all taxes reflected therein.

 

5.14                        Subsidiaries.  Except as set forth on the Schedule, no Borrower owns any stock, partnership interest or other equity securities of any Person, except for Permitted Investments.

 

5.15                        Government Consents.  Each Borrower and each Subsidiary have obtained all material consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of such Borrower’s business as currently conducted.

 

5.16                        Accounts. On and after the 60th day following the Closing Date, none of a Borrower’s nor any Subsidiary’s operating, depository or investment accounts are maintained or invested with a Person other than Bank, except as permitted under Section 6.8.

 

5.17                        Shares.  Each Borrower has full power and authority to create a first lien on the Shares and no disability or contractual obligation exists that would prohibit such Borrower from pledging the Shares pursuant to this Agreement. To Borrowers’ knowledge, there are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable with respect to the Shares. The Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable. To Borrowers’ knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and no Borrower knows of any reasonable grounds for the institution of any such proceedings

 

5.18                        Full Disclosure.  No representation, warranty or other statement made by a Borrower in any certificate or written statement furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading.

 

6.                                      AFFIRMATIVE COVENANTS.

 

Each Borrower shall do all of the following:

 

6.1                               Good Standing.  Each Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which it is required under applicable law, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.  Each Borrower shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which could reasonably be expected to have a Material Adverse Effect.

 

6.2                               Government Compliance.  Each Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA.  Each Borrower shall comply, and shall cause each Subsidiary to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could reasonably be expected to have a Material Adverse Effect.

 

6.3                               Financial Statements, Reports, Certificates.  Borrowers shall deliver the following to Bank:  (a) as soon as available, but in any event within thirty (30) days after the last day of each month, a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C hereto, together with aged listings of accounts receivable and accounts payable by invoice date and a deferred revenue report; (b) as soon as available, but in any event within thirty (30) days after the end of each calendar month, a company prepared consolidated and consolidating balance sheet, income statement, and cash flow statement covering Borrowers’ operations during such period, prepared in accordance with GAAP, consistently applied, in a form acceptable to Bank and certified by a Responsible Officer, together with a Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit D hereto; (c) as soon as available, but in any event within one hundred eighty (180) days after the end of Borrowers’ fiscal year, audited consolidated financial statements of Borrowers prepared in

 

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accordance with GAAP, consistently applied, together with an unqualified opinion on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (d) as soon as available, but in any event no later than the earlier to occur of thirty (30) days following the beginning of each fiscal year or the date of approval by such Borrowers’ board of directors, an annual operating budget and financial projections (including income statements, balance sheets and cash flow statements) for such fiscal year, presented in a monthly format, approved by Borrowers’ board of directors, and in a form reasonably acceptable to Bank (each, a “Financial Plan”); (e) copies of all statements, reports and notices sent or made available generally by a Borrower to its security holders or to any holders of Subordinated Debt and, if applicable, all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (f) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against a Borrower or any Subsidiary that could reasonably be expected to result in damages or costs to a Borrower or any Subsidiary of Two Hundred Fifty Thousand Dollars ($250,000) or more; and (g) such budgets, sales projections, operating plans or other financial information as Bank may reasonably request from time to time.

 

6.4                               Audits. Bank shall have a right from time to time hereafter to audit a Borrower’s Accounts and appraise Collateral at such Borrowers’ expense, provided that such audits will be conducted no more often than every twelve (12) months unless an Event of Default has occurred and is continuing.

 

6.5                               Inventory; Returns.  Borrowers shall keep all Inventory in good and marketable condition and free from all material defects, except for Inventory for which adequate reserves have been made.  Returns and allowances, if any, as between Borrowers and its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrowers, as they exist at the time of the execution and delivery of this Agreement.  Borrowers shall promptly notify Bank of all returns and recoveries and of all disputes and claims, where the return, recovery, dispute or claim involves more than Two Hundred Fifty Thousand Dollars ($250,000).

 

6.6                               Taxes.  Borrowers shall make, and shall cause each Subsidiary to make, due and timely payment or deposit of all federal and state income taxes and all other material taxes, including local taxes, assessments, or contributions required of it by law, and will execute and deliver to Bank, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrowers will make, and will cause each Subsidiary to make, timely payment or deposit of all tax payments and withholding taxes required of it by applicable laws, including, but not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Bank with proof satisfactory to Bank indicating that such Borrower or a Subsidiary has made such payments or deposits; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrowers.

 

6.7                               Insurance.

 

(a)                                 Borrowers, at their expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where a Borrower’s business is conducted on the date hereof.  Borrowers shall also maintain insurance relating to Borrowers’ business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Borrowers’.

 

(b)                                 All such policies of insurance shall be in such form, with such companies, and in such amounts as are reasonably satisfactory to Bank.  All such policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional loss payee thereof, and all liability insurance policies shall show the Bank as an additional insured and shall specify that the insurer must give at least twenty (20) days’ notice to Bank before canceling its policy for any reason.  Upon Bank’s request, Borrowers shall deliver to Bank certified copies of such policies of insurance and evidence of the payments of all premiums therefor.  All proceeds payable under any such policy shall, at the option of Bank, be payable to Bank to be applied on account of the Obligations.

 

6.8                               Accounts.  Borrowers shall (i) maintain and shall cause each of their Subsidiaries to maintain its primary depository, operating, and investment accounts with Bank and (ii) endeavor to utilize and shall cause each of their Subsidiaries to endeavor to utilize Bank’s International Banking Division for any international banking services required by Borrowers, including, but not limited to, foreign currency wires, hedges, swaps, FX

 

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Contracts, and Letters of Credit.  For each deposit, operating, or investment account, other than Immaterial Accounts, that a Borrower maintains outside of Bank after the 60th day following the Closing Date, such Borrower shall cause the applicable bank or financial institution at or with which any such account is maintained to execute and deliver an account control agreement or other appropriate instrument in form and substance satisfactory to Bank. “Immaterial Accounts” shall mean operating, depository or investment accounts with a Person or institution other than Bank as long as the aggregate balance in such Immaterial Accounts does not exceed Ten Thousand Dollars ($10,000) at any time.

 

6.9                               Lockbox and Cash Collateral Account. All proceeds of Accounts shall be deposited into a lockbox or dominion account (the “Cash Collateral Account”) with Bank, pursuant to the terms of such lockbox agreements as Bank shall reasonably request from time to time (the “Lockbox Agreements”); and Borrowers shall use the Cash Collateral Account address as the remit to and payment address for all proceeds of Accounts.  If a Borrower receives any amount despite such instructions, Borrowers shall immediately deliver such payment to Bank in the form received, except for an endorsement to the order of Lender and, pending such delivery, shall hold such payment in trust for Bank. On the same day of clearance of any checks, Bank shall credit all amounts paid into the Cash Collateral Account to Borrowers’ operating account(s) maintained at Bank. Following an Event of Default that is continuing, Bank may, in its sole discretion, send requests for verification of Accounts or notify such Borrower’s account debtors of the assignment of such Accounts to Bank, and take such other actions as set forth in the Lockbox Agreements and credit any and all amounts paid into the Cash Collateral Account first, against any amounts outstanding pertaining to any Advances, and then, of any remaining balance of such amount to Borrowers’ operating account(s).

 

6.10                        Financial Covenants.

 

(a)                                 Minimum Cash. Borrowers shall maintain unrestricted cash balances in its accounts at Bank of at least $1,000,000 at all times through December 31, 2015, and at least $1,500,000 at all times thereafter.

 

(b)                                 Minimum MRR Retention Rate.  Borrowers shall maintain an MRR Retention Rate of at least ninety percent (90%), measured monthly.

 

(c)                                  Minimum EBITDA.  Borrowers’ EBITDA shall be at least (i) $2,000,000 for  the six (6) months’ ending June 30, 2015, (ii) $3,500,000 for  the six (6) months’ ending September 30, 2015 and (iii) $5,000,000 for  the nine (9) months’ ending December 31, 2015.  Borrowers’ minimum EBITDA, measured at the end of each quarter for 2016 and beyond shall be in such amounts as determined by Bank based on Borrowers’ Financial Plan for such year(s).

 

6.11                        Intellectual Property Rights.

 

(a)                                 Borrowers shall promptly give Bank written notice of any applications or registrations of intellectual property rights filed with the United States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any.  Borrowers shall (i) give Bank not less than 30 days prior written notice of the filing of any applications or registrations with the United States Copyright Office, including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations, and the date such applications or registrations will be filed, and (ii) prior to the filing of any such applications or registrations, shall execute such documents as Bank may reasonably request for Bank to maintain its perfection in such intellectual property rights to be registered by Borrowers, and upon the request of Bank, shall file such documents simultaneously with the filing of any such applications or registrations.  Upon filing any such applications or registrations with the United States Copyright Office, Borrowers shall promptly provide Bank with (i) a copy of such applications or registrations, without the exhibits, if any, thereto, (ii) evidence of the filing of any documents requested by Bank to be filed for Bank to maintain the perfection and priority of its security interest in such intellectual property rights, and (iii) the date of such filing.

 

(b)                                 Bank may audit Borrowers’ Intellectual Property Collateral to confirm compliance with this Section, provided such audit may not occur more often than once per year, unless an Event of Default has occurred and is continuing.  Bank shall have the right, but not the obligation, to take, at Borrowers’ sole expense, any actions that Borrowers are required under this Section to take but which Borrowers fail to take, after 15

 

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days’ notice to Borrowers.  Borrowers shall reimburse and indemnify Bank for all costs and expenses incurred in the exercise of its rights under this Section.

 

6.12                        Formation or Acquisition of Subsidiaries.  Notwithstanding and without limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the time that Borrower forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary, Borrowers shall (a) if such Subsidiary is a domestic company, cause such new Subsidiary to provide to Bank a joinder to this Agreement to cause such Subsidiary to become a co-borrower hereunder, together with such appropriate financing statements and/or control agreements, all in form and substance reasonably satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements, pledging all (or, as to any non-domestic Subsidiary, 65%) of the direct or beneficial ownership interest in such new Subsidiary, in form and substance reasonably satisfactory to Bank, and (c) provide to Bank all other documentation in form and substance reasonably satisfactory to Bank that in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above.

 

6.13                        Notices of Commercial Tort Claims; Event of Default.  Without limiting or contradicting any other more specific provision of this Agreement, promptly (and in any event within three (3) Business Days) upon a Borrower becoming aware of the existence of any Event of Default or event described in Section 8 which, with the giving of notice or passage of time, or both, would constitute an Event of Default, such Borrower shall give written notice to Bank of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default. If a Borrower shall acquire a commercial tort claim (as defined in the Code), such Borrower shall promptly notify Bank in writing of the general details thereof and grant to the Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Bank.

 

6.14                        Post Closing Covenants.  Within 60 days following the Closing Date, Borrowers shall deliver to Bank, each in form and substance reasonably satisfactory to Bank, (i) landlord waiver(s) with respect to certain of Borrowers’ leased locations identified by Bank prior to the Closing Date; and (ii) delivery of the share certificates representing the Shares held by a Borrower, if certificated, and duly executed stock powers.

 

6.15                        Further Assurances.  At any time and from time to time Borrowers shall execute and deliver such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement.

 

7.                                      NEGATIVE COVENANTS.

 

Borrowers will not do any of the following:

 

7.1                               Dispositions.  Convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, other than:  (i) Transfers of Inventory in the ordinary course of business; (ii) Transfers of non-exclusive licenses and similar arrangements for the use of the property of a Borrower or its Subsidiaries in the ordinary course of business; or (iii) Transfers of worn-out or obsolete Equipment.

 

7.2                               Change in Business or Executive Office.  Engage in any business, or permit any of its Subsidiaries to engage in any business, other than the businesses currently engaged in by Borrowers and any business substantially similar or related thereto (or incidental thereto); or cease to conduct business in the manner conducted by Borrowers as of the Closing Date; or without thirty (30) days prior written notification to Bank, relocate its chief executive office or state of incorporation or change its legal name; or without Bank’s prior written consent, change the date on which its fiscal year ends.

 

7.3                               Change in Control/Mergers or Acquisitions.  (i) Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person; or (ii) suffer or permit

 

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a Change in Control; provided however, only advance written notice to the Bank will be required for any action restricted by this Section 7.3 if all Obligations are paid in full in cash out of the proceeds of the initial closing of such action and such payment is listed as a condition to the consummation of such action.  Notwithstanding the foregoing, a Subsidiary may merge or consolidate with or into another Borrower with written notice to Bank.

 

7.4                               Indebtedness.  Create, incur, assume or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness.

 

7.5                               Encumbrances.  Create, incur, assume or suffer to exist any Lien with respect to any of its property (including without limitation, its Intellectual Property Collateral), or assign or otherwise convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or agree with any Person other than Bank not to grant a security interest in, or otherwise encumber, any of its property (including without limitation, its Intellectual Property Collateral), or permit any Subsidiary to do so.

 

7.6                               Distributions.  Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock, or permit any of its Subsidiaries to do so, except that (i) Parent may repurchase the stock of former employees pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase;  and (ii) Subsidiaries may pay any dividend or make any other distribution to its equityholders.

 

7.7                               Investments.  Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments; or maintain or invest any of its property with a Person other than Bank or permit any of its Subsidiaries to do so unless such Person has entered into an account control agreement with Bank in form and substance satisfactory to Bank; or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise distributing property to Borrowers.

 

7.8                               Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrowers except for transactions that are in the ordinary course of Borrowers’ business, upon fair and reasonable terms that are no less favorable to Borrowers than would be obtained in an arm’s length transaction with a non-affiliated Person.

 

7.9                               Subordinated Debt.  Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated Debt, other than any amendment reducing the interest rate of such Subordinated Debt or extending the time for any payment of principal or interest under such Subordinated Debt, without Bank’s prior written consent.

 

7.10                        Inventory and Equipment. Store the Inventory or the Equipment with a bailee, warehouseman, or other third party unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in pledge possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Store or maintain any Equipment or Inventory at a location other than the location set forth in Section 10 of this Agreement.

 

7.11                        Compliance.  Become an “investment company” or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose.  Fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur, fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which violation could have a Material Adverse Effect, or a material adverse effect on the Collateral or the priority of Bank’s Lien on the Collateral, or permit any of its Subsidiaries to do any of the foregoing.

 

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7.12                        Capital Expenditures.  Make or contract to make, without Bank’s prior written consent, capital expenditures, including leasehold improvements, in any fiscal year in excess of $1,000,000 or incur liability for rentals of property (including both real and personal property) in an amount which, together with capital expenditures, shall in any fiscal year exceed such sum.

 

8.                                      EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an Event of Default by Borrowers under this Agreement:

 

8.1                               Payment Default.  If Borrowers fail to pay, when due, any of the Obligations.

 

8.2                               Covenant Default.

 

(a)                                 If a Borrower fails to perform any obligation under Article 6 or violates any of the covenants contained in Article 7 of this Agreement; or

 

(b)                                 If a Borrower fails or neglects to perform or observe any other material term, provision, condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between a Borrower and Bank and as to any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default within ten days after a Borrower receives notice thereof or any officer of a Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the ten day period or cannot after diligent attempts by Borrowers be cured within such ten day period, and such default is likely to be cured within a reasonable time, then Borrowers shall have an additional reasonable period (which shall not in any case exceed 30 days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made.

 

8.3                               Material Adverse Effect.  If there occurs any circumstance or circumstances that could have a Material Adverse Effect.

 

8.4                               Attachment.  If any portion of a Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if a Borrower is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any portion of a Borrower’s assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of a Borrower’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within ten (10) days after a Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrowers (provided that no Credit Extensions will be required to be made during such cure period).

 

8.5                               Insolvency.  If a Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by a Borrower, or if an Insolvency Proceeding is commenced against a Borrower and is not dismissed or stayed within forty five (45) days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding).

 

8.6                               Other Agreements.  If there is a default or other failure to perform in any agreement to which a Borrower is a party or by which it is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or which could have a Material Adverse Effect.

 

8.7                               Judgments.  If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000) shall be rendered against

 

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a Borrower and shall remain unsatisfied and unstayed for a period of thirty (30) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment).

 

8.8                               Misrepresentations.  If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter into this Agreement or any other Loan Document.

 

8.9                               Guaranty.  If any guaranty of all or a portion of the Obligations (a “Guaranty”) ceases for any reason to be in full force and effect, or any guarantor fails to perform any obligation under any Guaranty or a security agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any event of default occurs under any Guaranty Document or any guarantor revokes or purports to revoke a Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any certificate delivered to Bank in connection with any Guaranty Document, or if any of the circumstances described in Sections 8.3 through 8.8 occur with respect to any guarantor or any guarantor dies or becomes subject to any criminal prosecution, or any circumstances arise causing Bank, in good faith, to become insecure as to the satisfaction of any of any guarantor’s obligations under the Guaranty Documents.

 

9.                                      BANK’S RIGHTS AND REMEDIES.

 

9.1                               Rights and Remedies.  Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrowers:

 

(a)                                 Declare all or any portion of Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5, all Obligations shall become immediately due and payable without any action by Bank);

 

(b)                                 Cease advancing money or extending credit to or for the benefit of Borrowers under this Agreement or under any other agreement between Borrowers and Bank;

 

(c)                                  Settle or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Bank reasonably considers advisable;

 

(d)                                 Make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral.  Borrowers agree to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate.  Each Borrower authorizes Bank to enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith.  With respect to any of a Borrower’s owned premises, each Borrower hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise;

 

(e)                                  Set off and apply to the Obligations any and all (i) balances and deposits of Borrowers held by Bank, or (ii) indebtedness at any time owing to or for the credit or the account of Borrowers held by Bank;

 

(f)                                   Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral.  Bank is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, a Borrower’s labels, Patents, Copyrights, rights of use of any name, trade secrets, trade names, Trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale, and

 

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selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrowers’ rights under all licenses and all franchise agreements shall inure to Bank’s benefit;

 

(g)                                 Dispose of the Collateral by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrowers’ premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank deems appropriate;

 

(h)                                 Bank may credit bid and purchase at any public sale; and

 

(i)                                    Any deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrowers.

 

9.2                               Power of Attorney.  Effective only upon the occurrence and during the continuance of an Event of Default, each Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as such Borrower’s true and lawful attorney to:  (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse such Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign such Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to such Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; and (g) to file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral.  The appointment of Bank as each Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions hereunder is terminated.

 

9.3                               Accounts Collection.  At any time after the occurrence and during the continuance of an Event of Default, Bank may notify any Person owing funds to Borrowers of Bank’s security interest in such funds and verify the amount of such Account.  Borrowers shall collect for Bank all amounts owing to Borrowers, receive in trust all such payments as Bank’s trustee, and immediately deliver such payments to Bank in their original form as received from the account debtor, with proper endorsements for deposit.

 

9.4                               Bank Expenses.  If Borrowers fail to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to Borrowers:  (a) make payment of the same or any part thereof; (b) set up such reserves under the a loan facility in Section 2.1 as Bank deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and maintain insurance policies of the type discussed in Section 6.7 of this Agreement, and take any action with respect to such policies as Bank deems prudent.  Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral.  Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement.

 

9.5                               Bank’s Liability for Collateral.  So long as Bank complies with reasonable banking practices, Bank shall not in any way or manner be liable or responsible for:  (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever.  All risk of loss, damage or destruction of the Collateral shall be borne by Borrowers.

 

9.6                               Shares.  Borrowers recognize that Bank may be unable to effect a public sale of any or all the Shares, by reason of certain prohibitions contained in federal securities laws and applicable state and provincial securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.  Borrowers  acknowledge and agree that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable

 

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manner.  Bank shall be under no obligation to delay a sale of any of the Shares for the period of time necessary to permit the issuer thereof to register such securities for public sale under federal securities laws or under applicable state and provincial securities laws, even if such issuer would agree to do so.  Upon the occurrence of an Event of Default which continues, Bank shall have the right to exercise all such rights as a secured party under the Code as it, in its sole judgment, shall deem necessary or appropriate, including without limitation the right to liquidate the Shares and apply the proceeds thereof to reduce the Obligations.  Effective only upon the occurrence and during the continuance of an Event of Default, each Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as such Borrower’s true and lawful attorney to enforce such Borrower’s rights against any Subsidiary, including the right to compel any Subsidiary to make to the Bank or a Borrower any payments or distributions respecting the Shares which are owing to such Borrower.

 

9.7                               Remedies Cumulative.  Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative.  Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity.  No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on a Borrower’s part shall be deemed a continuing waiver.  No delay by Bank shall constitute a waiver, election, or acquiescence by it.  No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given.

 

9.8                               Demand; Protest.  Each Borrower waives demand, protest, notice of protest, 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 at any time held by Bank on which Borrowers may in any way be liable.

 

10.                               NOTICES.

 

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

 

	
If to Borrowers:
    	
 
    	
Tabula Rasa Healthcare, Inc.
    
	
 
    	
 
    	
110 Marter Avenue, Suite 309
    
	
 
    	
 
    	
Moorestown, NJ 08057
    
	
 
    	
 
    	
Attn: Brian Adams, CFO
    
	
 
    	
 
    	
FAX: (856) 273-0254
    
	
 
    	
 
    	
EMAIL: badams@carekinesis.com
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Morgan, Lewis & Bockius
    
	
 
    	
 
    	
1701 Market Street
    
	
 
    	
 
    	
Philadelphia, PA 19103-2921
    
	
 
    	
 
    	
Attn: Jeffrey P. Bodle
    
	
 
    	
 
    	
FAX: (215) 963-5001
    
	
 
    	
 
    	
EMAIL: sgoodman@morganlewis.com
    
	
 
    	
 
    	
 
    
	
If to Bank:
    	
 
    	
Bridge Bank, National Association
    
	
 
    	
 
    	
55 Almaden Blvd.
    
	
 
    	
 
    	
San Jose, CA 95113
    
	
 
    	
 
    	
Attn: Note Department
    
	
 
    	
 
    	
FAX: (408) 282-1681
    
	
 
    	
 
    	
EMAIL: notedepartment@bridgebank.com
    

 

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and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Bridge Bank, National Association
    
	
 
    	
 
    	
12011 Sunset Hills Road, Suite 425
    
	
 
    	
 
    	
Reston, VA 20190
    
	
 
    	
 
    	
Attn: Blake Reid
    
	
 
    	
 
    	
FAX: (703) 964-1620
    
	
 
    	
 
    	
EMAIL: blake.reid@bridgebank.com
    

 

The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.

 

11.                               CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

This Agreement and all other Loan Documents (except as otherwise expressly provided in any of the Loan Documents) shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of conflicts of law.  Borrowers and Bank each hereby submits to the exclusive jurisdiction of the state and Federal courts located in the County of Santa Clara, State of California.  BORROWERS AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE 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.  EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT.  EACH PARTY 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.

 

12.                               JUDICIAL REFERENCE PROVISION.

 

12.1                        In the event the jury trial waiver set forth above is not enforceable, the parties elect to proceed under this judicial reference provision.

 

12.2                        With the exception of the items specified in Section 12.3, below, any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any other Loan Document, will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise appropriate under applicable law (the “Court”).

 

12.3                        The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This reference provision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this reference provision as provided herein.

 

12.4                        The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm

 

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would result if ex parte relief is not granted.  Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of the Court (or his or her representative).

 

12.5        The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision.

 

12.6        The referee will have power to expand or limit the amount and duration of discovery.  The referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever.  Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service.  All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.

 

12.7        Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding.  All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript.  The party making such a request shall have the obligation to arrange for and pay the court reporter.  Subject to the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.

 

12.8        The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California.  The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding.  The referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference.  Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive.  The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee.  The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.

 

12.9        If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration.  The arbitration will be conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time.  The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.

 

12.10      THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY.  AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

 

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13.          GENERAL PROVISIONS.

 

13.1        Successors and Assigns.  This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by a Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion.  Bank shall have the right without the consent of or notice to Borrowers to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder.

 

13.2        Indemnification.  Each Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against:  (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank as a result of or in any way arising out of, following, or consequential to transactions between Bank and a Borrower whether under this Agreement, or otherwise (including without limitation attorneys’ fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct.

 

13.3        Time of Essence.  Time is of the essence for the performance of all obligations set forth in this Agreement.

 

13.4        Severability of Provisions.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

13.5        Amendments in Writing, Integration.  Neither this Agreement nor the Loan Documents can be amended or terminated orally.  All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the Loan Documents, if any, are merged into this Agreement and the Loan Documents.

 

13.6        Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.

 

13.7        Survival.  All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions to Borrowers.  The obligations of each Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 13.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run.

 

13.8        Confidentiality.  In handling any confidential information Bank and all employees and agents of Bank, including but not limited to accountants, shall exercise the same degree of care that it exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure of such information may be made (i) to the subsidiaries or affiliates of Bank in connection with their present or prospective business relations with each Borrower, provided that such subsidiaries or affiliates agree to be bound by the confidentiality obligations contained herein; (ii) to prospective transferees or purchasers of any interest in the Credit Extensions, provided that such prospective transferees or purchasers agree to be bound by the confidentiality obligations contained herein; (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar order; (iv) as may be required in connection with the examination, audit or similar investigation of Bank; and (v) as Bank may determine in connection with the enforcement of any remedies hereunder.  Confidential information hereunder shall not include information that either:  (a) is in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank does not have actual knowledge that such third party is prohibited from disclosing such information.

 

13.9        Patriot Act Notice.  Bank hereby notifies Borrowers that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law on October 26, 2001) (the “Patriot Act”), it is required

 

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to obtain, verify and record information that identifies the Borrowers, which information includes names and addresses and other information that will allow Bank, as applicable, to identify the Borrowers in accordance with the Patriot Act.

 

14.          CO-BORROWERS.

 

14.1        Co-Borrowers.  Borrowers are jointly and severally liable for the Obligations and Bank may proceed against one Borrower to enforce the Obligations without waiving its right to proceed against any other Borrower.  This Agreement and the Loan Documents are a primary and original obligation of each Borrower and shall remain in effect notwithstanding future changes in conditions, including any change of law or any invalidity or irregularity in the creation or acquisition of any Obligations or in the execution or delivery of any agreement between Bank and any Borrower.  Each Borrower shall be liable for existing and future Obligations as fully as if all of the Credit Extensions were advanced to such Borrower.  Bank may rely on any certificate or representation made by any Borrower as made on behalf of, and binding on, all Borrowers, including without limitation advance request forms and compliance certificates.  Each Borrower appoints each other Borrower as its agent with all necessary power and authority to give and receive notices, certificates or demands for and on behalf of all Borrowers, to act as disbursing agent for receipt of any Credit Extensions on behalf of each Borrower and to apply to Bank on behalf of each Borrower for any Credit Extension, any waivers and any consents.  This authorization cannot be revoked, and Bank need not inquire as to one Borrower’s authority to act for or on behalf of another Borrower.

 

14.2        Subrogation and Similar Rights.  Notwithstanding any other provision of this Agreement or any other Loan Document, each Borrower irrevocably waives, until all Obligations are paid in full and Bank has no further obligation to make Credit Extensions to Borrowers, all rights that it may have at law or in equity (including, without limitation, any law subrogating a Borrower to the rights of Bank under the Loan Documents) 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 a Borrower with respect to the Obligations in connection with the Loan Documents 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 a Borrower with respect to the Obligations in connection with the Loan Documents 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.

 

14.3        Waivers of Notice.  Each Borrower waives, to the extent permitted by law, notice of acceptance hereof; notice of the existence, creation or acquisition of any of the Obligations; notice of an Event of Default except as set forth herein; notice of the amount of the Obligations outstanding at any time; notice of any adverse change in the financial condition of any other Borrower or of any other fact that might increase a Borrower’s risk; presentment for payment; demand; protest and notice thereof as to any instrument; and all other notices and demands to which a Borrower would otherwise be entitled by virtue of being a co-borrower or a surety.  Each Borrower waives any defense arising from any defense of any other Borrower, or by reason of the cessation from any cause whatsoever of the liability of any other Borrower.  Bank’s failure at any time to require strict performance by any Borrower of any provision of the Loan Documents shall not waive, alter or diminish any right of Bank thereafter to demand strict compliance and performance therewith.  Each Borrower also waives any defense arising from any act or omission of Bank that changes the scope of a Borrower’s risks hereunder.  Each Borrower hereby waives any right to assert against Bank any defense (legal or equitable), setoff, counterclaim, or claims that such Borrower individually may now or hereafter have against another Borrower or any other Person liable to Bank with respect to the Obligations in any manner or whatsoever.

 

14.4        Subrogation Defenses.  Until all Obligations are paid in full and Bank has no further obligation to make Credit Extensions to Borrowers, each Borrower hereby waives any defense based on impairment or destruction of its subrogation or other rights against any other Borrower and waives all benefits which might otherwise be available to it under California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580a, 580b, 580d and 726, as those statutory provisions are now in effect and hereafter amended, and under any other similar statutes now and hereafter in effect.

 

25

 

14.5        Right to Settle, Release.

 

(a)           The liability of Borrowers hereunder shall not be diminished by (i) any agreement, understanding or representation that any of the Obligations is or was to be guaranteed by another Person or secured by other property, or (ii) any release or unenforceability, whether partial or total, of rights, if any, which Bank may now or hereafter have against any other Person, including another Borrower, or property with respect to any of the Obligations.

 

(b)           Without notice to any given Borrowers and without affecting the liability of any given Borrowers hereunder, Bank may (i) compromise, settle, renew, extend the time for payment, change the manner or terms of payment, discharge the performance of, decline to enforce, or release all or any of the Obligations with respect to any other Borrower by written agreement with such other Borrower, (ii) grant other indulgences to another Borrower in respect of the Obligations, (iii) modify in any manner any documents relating to the Obligations with respect to any other Borrower by written agreement with such other Borrower, (iv) release, surrender or exchange any deposits or other property securing the Obligations, whether pledged by a Borrower or any other Person, or (v) compromise, settle, renew, or extend the time for payment, discharge the performance of, decline to enforce, or release all or any obligations of any guarantor, endorser or other Person who is now or may hereafter be liable with respect to any of the Obligations.

 

14.6        Subordination.  All indebtedness of a Borrower now or hereafter arising held by another Borrower is subordinated to the Obligations and a Borrower holding the indebtedness shall take all actions reasonably requested by Bank to effect, to enforce and to give notice of such subordination.

 

15.          NOTICE OF FINAL AGREEMENT. NOTICE OF FINAL AGREEMENT. BY SIGNING THIS AGREEMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

[SIGNATURE PAGE FOLLOWS]

 

26

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
TABULA RASA   HEALTHCARE, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CAREKINESIS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CAREVENTIONS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CAPSTONE PERFORMANCE   SYSTEMS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
J. A.   ROBERTSON, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
MEDLIANCE LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Name: 
    	
Brian W. Adams
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief Financial Officer
    

 

 

	
 
    	
IN WITNESS WHEREOF, the   parties hereto have caused this Agreement to be executed as of the date first   above written.
    
	
 
    	
 
    	
 
    
	
 
    	
BANK:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BRIDGE   BANK, NATIONAL ASSOCIATION
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ illegible 
    
	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
Vice President
    

 

 

EXHIBIT A

 

DEBTORS:                              TABULA RASA HEALTHCARE, INC., CAREKINESIS, INC., CAREVENTIONS, INC., CAPSTONE PERFORMANCE SYSTEMS, LLC, J. A.  ROBERTSON, INC. and MEDLIANCE LLC

 

SECURED PARTY:           BRIDGE BANK, NATIONAL ASSOCIATION

 

COLLATERAL DESCRIPTION ATTACHMENT 
 TO LOAN AND SECURITY AGREEMENT

 

All personal property of each Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to:

 

(a)           all accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), commercial tort claims, deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general intangibles (including payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records; and

 

(b)           any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment.  All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time.

 

 

EXHIBIT B

 

ADVANCE REQUEST FORM

(To be submitted no later than 3:00 PM to be considered for same day processing)

 

	
To:
    	
Bridge Bank, National   Association
    	
 
    
	
 
    	
 
    	
 
    
	
Fax:
    	
(408) 282-1681
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
From:
    	
Tabula Rasa   Healthcare, Inc., 
    	
 
    
	
 
    	
on behalf of all   Borrowers
    	
 
    
	
 
    	
Borrower’s Name
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Authorized Signature
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Authorized Signer’s   Name (please print)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Phone Number
    	
 
    
	
 
    	
 
    	
 
    
	
To   Account #
    	
 
    	
 
    
				

 

Borrowers hereby request funding of an Advance in the amount of $         in accordance with the Revolving Facility as defined in the Loan and Security Agreement dated April 29, 2015 and as amended from time to time.

 

Borrowers hereby authorize Bank to rely on facsimile stamp signatures and treat them as authorized by Borrowers for the purpose of requesting the above advance.

 

All representations and warranties of Borrowers stated in the Loan and Security Agreement are true, correct and complete in all material respects as of the date of this Advance Request; provided that those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of such date.

 

Capitalized terms used herein and not otherwise defined have the meanings set forth in the Loan and Security Agreement.

 

 

EXHIBIT C

BORROWING BASE CERTIFICATE

 

BORROWERS: TABULA RASA HEALTHCARE, INC., CAREKINESIS, INC., CAREVENTIONS, INC., CAPSTONE PERFORMANCE SYSTEMS, LLC, J. A.  ROBERTSON, INC. and MEDLIANCE LLC

 

	
Monthly   Recurring Revenue Borrowing Base Calculation
    	
 
    	
 
    	
 
    	
As of Date:          
    
	
1
    	
 
    	
GAAP Revenue recognized during the trailing three   months from Contracts
    	
 
    	
$              
    	
 
    	
 
    
	
2.
    	
 
    	
Less: GAAP Revenue from Contracts that are not   Eligible Recurring Revenue Contracts (i.e. customer (i) has elected to   cancel or not renew its license or maintenance contract, or (ii) ceases   conducting business, goes out of business or is insolvent, (iii) has   failed to pay in full within ninety (90) days of invoice date or   (iv) with foreign customers) for such trailing three months
    	
 
    	
$               
    	
 
    	
 
    
	
3.
    	
 
    	
Eligible Monthly Recurring Revenue (#1 minus #2)
    	
 
    	
 
    	
 
    	
$              
    
	
4.
    	
 
    	
MRR Retention Rate lesser #3 divided by #1, or 100%
    	
 
    	
 
    	
 
    	
        %
    
	
5.
    	
 
    	
Borrowing Base Amount (#3 x #4)
    	
 
    	
 
    	
 
    	
$              
    
	
6.
    	
 
    	
Maximum Loan Amount
    	
 
    	
 
    	
 
    	
$15,000,000
    
	
7.
    	
 
    	
Total Funds Available (Lesser of #5 or #6)
    	
 
    	
 
    	
 
    	
$              
    
	
8.
    	
 
    	
Less: Outstanding Advances
    	
 
    	
 
    	
 
    	
$              
    
	
9.
    	
 
    	
Less: Outstanding Cash Management Services
    	
 
    	
 
    	
 
    	
$              
    
	
10.
    	
 
    	
Less: Outstanding International Sublimit Amounts
    	
 
    	
 
    	
 
    	
$              
    
	
11.
    	
 
    	
Available for Drawdown/Need to Pay
    	
 
    	
 
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
If line   #11 is a negative number, this amount must be remitted to the Bank   immediately to bring loan balance into compliance. By signing this form   Borrowers authorize the bank to deduct any advance amounts directly from any   Borrower’s account(s) at Bridge Bank, National Association in the event   there is an overadvance.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
The undersigned represents   and warrants that the foregoing is true, complete and correct, and that the   information reflected in this Borrowing Base Certificate complies with the   representations and warranties set forth in the Loan and Security Agreement   between the undersigned and Bridge Bank, National Association.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
Prepared By: 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
Bank Reviewed: 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
											

 

 

EXHIBIT D
 COMPLIANCE CERTIFICATE

 

TO:                                                                           BRIDGE BANK, NATIONAL ASSOCIATION

 

FROM:                                                       TABULA RASA HEALTHCARE, INC., CAREKINESIS, INC., CAPSTONE PERFORMANCE SYSTEMS, LLC, J. A.  ROBERTSON, INC. CAREVENTIONS, INC., AND MEDLIANCE LLC

 

The undersigned authorized officer of Tabula Rasa Healthcare, Inc., on behalf of itself and all other Borrowers, hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrowers and Bank (the “Agreement”), (i) each Borrower is in complete compliance for the period ending                 with all required covenants except as noted below and (ii) all representations and warranties of Borrowers stated in the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these 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.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

	
Reporting Covenant
    	
 
    	
Required
    	
 
    	
 
    	
 
    	
Complies
    
	
A/R & A/P   Agings
    	
 
    	
Monthly within 30 days
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    
	
Deferred Revenue Report
    	
 
    	
Monthly within 30 days
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    
	
Borrowing Base Certificate
    	
 
    	
Monthly within 30 days
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    
	
Monthly financial statements
    	
 
    	
Monthly within 30 days
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    
	
Compliance Certificate
    	
 
    	
Monthly within 30 days
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    
	
Annual audited financial statements
    	
 
    	
FYE within 180 days
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    
	
Annual operating budget, sales projections and   operating plans approved by board of directors
    	
 
    	
Annually no later than 30 days after to the   beginning of each fiscal year or Board approval
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    
	
A/R Audit
    	
 
    	
Initial and Annual
    	
 
    	
 
    	
 
    	
Yes
    	
 
    	
No
    
	
Deposit balances with Bank
    	
 
    	
$                   
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Deposit balance outside Bank
    	
 
    	
$                   
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Financial Covenant
    	
 
    	
Required
    	
 
    	
Actual
    	
 
    	
Complies
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Minimum Unrestricted Cash at Bank through 12/31/15
    	
 
    	
$1,000,000
    	
 
    	
$            
    	
 
    	
Yes
    	
 
    	
No
    
	
Minimum Unrestricted Cash at Bank on and after   1/1/16
    	
 
    	
$1,500,000
    	
 
    	
$            
    	
 
    	
Yes
    	
 
    	
No
    
	
Minimum MRR Retention Rate
    	
 
    	
90%
    	
 
    	
        %
    	
 
    	
Yes
    	
 
    	
No
    
	
Minimum EBITDA for the following periods:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
six months   ending 6/30/15:
    	
 
    	
$2,000,000
    	
 
    	
$            
    	
 
    	
Yes
    	
 
    	
No
    
	
six months   ending 9/30/15:
    	
 
    	
$3,500,000
    	
 
    	
$            
    	
 
    	
Yes
    	
 
    	
No
    
	
nine months   ending 12/31/15:
    	
 
    	
$5,000,000
    	
 
    	
$            
    	
 
    	
Yes
    	
 
    	
No
    
	
2016 and beyond
    	
 
    	
TBD
    	
 
    	
$            
    	
 
    	
Yes
    	
 
    	
No
    

 

	
Comments   Regarding Exceptions: See Attached.
    	
 
    	
BANK USE ONLY
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Received by:
    	
 
    
	
 
    	
 
    	
 
    	
AUTHORIZED SIGNER
    
	
Sincerely,
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Verified:
    	
 
    
	
SIGNATURE
    	
 
    	
 
    	
AUTHORIZED SIGNER
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
TITLE
    	
 
    	
 
    
	
 
    	
 
    	
Compliance Status
    	
Yes             No
    
	
 
    	
 
    	
 
    	
 
    
	
DATE
    	
 
    	
 
    	
 
    
							

 

 

SCHEDULE OF EXCEPTIONS

 

Permitted Indebtedness (Section 1.1)

 

Permitted Investments (Section 1.1)

 

Permitted Liens (Section 1.1)

 

Inbound Licenses (Section 5.6)

 

Prior Names (Section 5.7)

 

Litigation (Section 5.8)

 

Subsidiaries (Section 5.14)Exhibit 10.7

 

MASTER LEASE AGREEMENT

(the “Master Lease”)

 

	
Dated as of   December 31, 2014
    	
Master Lease No.    628
    

 

LESSOR:

 

Eastward Fund Management, LLC

432 Cherry Street

West Newton, MA 02465

 

CO-LESSEE:

 

CareKinesis, Inc. (“CareKinesis”)

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

	
Attention:   Brian W. Adams
    	
Phone   No.: (866) 648-2767
    

State of Organization:  Delaware

State of Organization Identification No. (state if none):  4674249

 

J. A. Robertson, Inc. (“JA Robertson”)

2166 Hayes Street, Suite 100

San Francisco, CA 94117

	
Attention:   Brian W. Adams
    	
Phone   No.: (866) 648-2767
    

State of Organization:  California

State of Organization Identification No. (state if none):  C1087925

 

Capstone Performance Systems, LLC (“Capstone”)

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

	
Attention:   Brian W. Adams
    	
Phone   No.: (866) 648-2767
    

State of Organization:  Delaware

State of Organization Identification No. (state if none):  5514716

 

CareVention, Inc.

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

	
Attention:   Brian W. Adams
    	
Phone   No.: (866) 648-2767
    

State of Organization:  Delaware

State of Organization Identification No. (state if none):  5111014

 

Tabula Rasa Healthcare, Inc. (“Tabula Rasa”)

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

	
Attention:   Brian W. Adams
    	
Phone   No.: (866) 648-2767
    

State of Organization:  Delaware

State of Organization Identification No. (state if none):  5537973

 

Medliance LLC (“Medliance”)

1839 S. Alma School Rd., Suite 230

Mesa, AZ 85210

	
Attention:   Brian W. Adams
    	
Phone   No.: (866) 648-2767
    

State of Organization:  Arizona

State of Organization Identification No. (state if none):  L-1090376-4

 

1

 

Each of the above Co-Lessees, jointly and severally (individually, a “Co-Lessee” and collectively, the “Lessee”).

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter expressed and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

 

1.                                      DEFINITIONS AND RULES OF CONSTRUCTION.  Unless the context shall otherwise require, capitalized terms used herein, but not otherwise defined herein, shall have the respective meanings specified in Section 22 hereof.

 

2.                                      LEASE.

 

(a)                     Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, under this Master Lease and any applicable Rental Schedule, Equipment with an aggregate Total Equipment Cost of up to Twelve Million Dollars ($12,000,000) (the “Facility Amount”) on or prior to December 31, 2014 (the “Facility Expiration Date”).  Lessor shall fund the entire Facility Amount on the date of this Master Lease.  The lease of Equipment shall be subject to the terms and conditions contained in this Master Lease and in any Rental Schedule thereto, under which Lessee agrees to lease from Lessor the Equipment described therein.  Lessor and Lessee agree that the Facility Amount will be used only to consummate the transaction described in that certain Membership Interest Purchase Agreement dated as of the date hereof by and between Tabula Rasa as the Purchaser and Fred Smith III, Olds Family 2002 Trust, created under declaration of trust dated June 3, 2002, as amended, and Stephen F. Olds as Sellers, and, solely for the limited purposes set forth therein, Thomas Olds, Jr. (the “Acquisition Transaction”).

 

(b)                     This Master Lease is a master lease which sets forth the terms and conditions that govern the lease by Lessor to Lessee of items of Equipment specified on Rental Schedules executed and delivered by Lessor and Lessee from time to time, the form of which is attached hereto as Exhibit 1.  Each Rental Schedule constitutes a separate and independent lease that incorporates by reference this Master Lease and specifies the Term, the amount of Interim Term Rent and Basic Rent, the payment dates on which such Interim Term Rent and Basic Rent are due, and such other information and provisions as Lessor and Lessee may agree.  In the event of a conflict between the provisions of a Rental Schedule and any of the provisions of this Master Lease, the provisions of the Rental Schedule shall govern, but only with respect to the leasing of the items of Equipment listed on such Rental Schedule. References to “the Lease” or “this Lease” shall mean one or more applicable Rental Schedules, as the case may be, incorporating by reference this Master Lease.  The original executed counterpart of a Rental Schedule shall be “chattel paper” for purposes of the Uniform Commercial Code.

 

3.                                      TERM AND RENT; OBLIGATIONS UNCONDITIONAL.

 

(a)                     The Equipment is leased for the Term, unless and until the Term of this Lease shall sooner terminate pursuant to the terms hereof.  The Term shall commence on the date of acceptance of such Equipment as set forth on the applicable Rental Schedule and shall expire at midnight on the date set forth on the applicable Rental Schedule as the “Primary Term Expiration Date.”

 

(b)                     Lessee shall pay to Lessor or an agent or any Transferee designated by Lessor in writing, in lawful money of the United States of America, (i) on each Interim Term Rent Payment Date as fixed rent for the Equipment during the Interim Term, the Interim Term Rent; (ii) if the closing date of any Rental Schedule occurs on any date prior to the first day of a month, on the Interim Term Commencement Date, the Interim Term Rent set forth in such Rental Schedule for the period prior to such date calculated at the daily rate set forth in (i) herein; and (iii) on each Basic Rent Payment Date as fixed rent for the Equipment during the Primary Term, the Basic Rent Per Month, in each case electronically by automatic debit through Automated Clearing House (ACH) payment (and Lessee hereby agrees to complete Lessor’s form of electronic funds transfer/automatic debit authorization form in connection therewith), or to such address or to such other Person as Lessor, from time to time, may designate in writing.

 

2

 

(c)                      Lessee shall also pay to Lessor or an agent or any Transferee designated by Lessor in writing, in lawful money of the United States of America, all Supplemental Rent.  Supplemental Rent shall be paid electronically by ACH payment, or to such address or to such other Person as Lessor, from time to time, may designate in writing, when due or within 30 days following Lessor’s demand therefor if there is no due date therefor.  Lessee shall also pay to Lessor the Excess Use Fee on all overdue Rent or any other amount payable under this Lease from the due date thereof until paid. Lessee shall perform all of its obligations under this Lease at its sole cost and expense, and shall pay all Rent when due, without further notice or demand.

 

(d)                     Except as otherwise expressly provided herein, this Lease is a net lease and Lessee acknowledges and agrees that Lessee’s obligation to pay all Rent and other sums payable hereunder, and the rights of Lessor in and to such payments, shall be absolute and unconditional and shall not be subject to any abatement, reduction, setoff, defense, counterclaim, recovery or recoupment due to or alleged to be due to, or by reason of, any past, present or future claims that Lessee may have against Lessor, any Transferee, the manufacturer or Supplier of the Equipment or any Person for any reason whatsoever.

 

(e)                      All Rent and other amounts payable under this Lease shall be payable in all events and in the manner and at the times herein provided, without notice or demand, unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Lease.  The obligation to pay Rent and all other amounts under this Lease is a full recourse obligation of Lessee.

 

4.                                      PERSONAL PROPERTY; SECURITY INTEREST AND LIENS.  Lessee covenants and agrees that:

 

(a)                     The Equipment is, and shall at all times be and remain, personal or movable property.  If requested by Lessor, Lessee shall use good faith efforts to obtain prior to delivery of any item of Equipment or at any other time reasonably requested by Lessor, a certificate in form reasonably satisfactory to Lessor from all parties with a real property interest in the premises where the Equipment may be located waiving any claim with respect to the Equipment.

 

(b)                     During the Term of this Lease, an interest in the Equipment shall at all times remain in Lessor.  To the extent that this Lease is deemed not to be a “true lease” under Applicable Law (including Section 1-201(37) of the UCC), Lessee hereby grants Lessor a security interest in the Equipment leased hereunder to secure the prompt payment and performance when due of all of Lessee’s obligations under this Lease.  Lessee may not dispose of any of the Equipment except to the extent expressly provided herein.

 

(c)                      Lessee shall not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to any of the Equipment, title thereto or any interest therein, except Permitted Liens.  Lessee shall notify Lessor immediately in writing upon receipt of notice of any Lien affecting the Equipment in whole or in part (other than a Permitted Lien), and shall, at its own cost and expense, defend Lessor’s interest therein against all Persons (other than Lessor) holding or claiming to hold such a Lien on the Equipment (other than a Permitted Lien); and any losses, expenses or costs suffered by Lessor as a result thereof shall be covered by the Lessee’s indemnity in Section 18 hereof.

 

(d)                     Lessee shall not move any item of Equipment from the address set forth in any applicable Rental Schedule without prior written notice to Lessor.  Lessee shall not move any item of Equipment outside of the United States of America without the prior written consent of Lessor and hereby represents that since the time that Lessee took possession of the Equipment from the Supplier or manufacturers thereof, the Equipment has never been located anywhere other than the address set forth in the applicable Rental Schedule.

 

(e)                      Lessee hereby grants to Lessor a security interest in the collateral as set forth on Exhibit 2 attached hereto (the “Collateral”), which security interest shall remain in full force and effect until all of the Lessee’s obligations under this Master Lease and all Rental Schedules are fully paid and satisfied. Lessee represents and warrants that the security interest granted herein shall be a first priority security interest in

 

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the Collateral (exclusive of Permitted Liens).  Notwithstanding anything contained in this subsection (e) to the contrary, Lessor acknowledges and agrees that (i) CareKinesis currently has a Credit Agreement with AmeriSourceBergen Drug Co. (“AmeriSourceBergen”), in an amount not exceeding $3,875,000 (the “AmeriSourceBergen Facility”), and CareKinesis’s obligations to AmeriSourceBergen under the AmericSourceBergen Facility are secured by a lien on all property and assets of CareKinesis and which lien is a Permitted Lien hereunder, and (ii) CareKinesis, JA Robertson, Capstone and Tabula Rasa currently have a formula-based monthly recurring revenue credit facility, in an amount not exceeding $7,000,000 (the “SVB Facility”; each of the SVB Facility and the AmeriSourceBergen Facility, a “Senior Facility” and collectively, the “Senior Facilities”), from Silicon Valley Bank (“SVB” each of SVB and AmeriSourceBergen, a “Senior Lender” and collectively, the “Senior Lender”), and CareKinesis’s, JA Robertson’s, Capstone’s and Tabula Rasa’s obligations to SVB under the SVB Facility are secured by a lien on all property and assets of such parties and which lien is a Permitted Lien hereunder.  Lessor acknowledges and agrees that the security interest in the Collateral granted to Lessor hereunder is subject and subordinate to the security interests of the Senior Lenders. Lessor agrees to execute and deliver such agreements and documents as may be reasonably requested by Lessee from time to time which set forth the subordination described in this subsection (e) upon terms reasonably required by each of the Senior Lenders and are reasonably acceptable to Lessor (the “Subordination Agreement(s)”).  Lessee hereby irrevocably authorizes Lessor at any time and from time to time to file in any Uniform Commercial Code jurisdiction any Financing Statements and amendments thereto as Lessor deems necessary in its sole discretion in order to perfect Lessor’s security interest in the Collateral.

 

5.                                      INSTALLATION, MAINTENANCE AND REPAIR.

 

(a)                     Maintenance.  At all times during the Term of this Lease, Lessee shall be solely responsible, at its own expense, for the delivery, installation, use, possession, operation, storage, de-installation, and drayage of the Equipment by a party reasonably acceptable to Lessor.  Additionally, Lessee agrees, at its own cost and expense, to be responsible for the performance of all repair, replacement and maintenance required in the ordinary course of Lessee’s business and operations to keep, repair, maintain and preserve the Equipment in good order and operating condition (ordinary wear and tear excepted), and in compliance with such maintenance and repair standards and procedures as are set forth in the manufacturer’s manuals pertaining to the Equipment, and as otherwise may be required to enforce warranty claims against each vendor and manufacturer of each item of Equipment, and in compliance with the maintenance and repair standards of Lessee for similar equipment and in compliance in all material respects with prudent national industry standards and with all requirements of law applicable to the maintenance and condition of the Equipment.  Lessee shall keep accurate, complete and current records of all repair, replacement and maintenance performed or provided on any item of Equipment and shall provide copies thereof to Lessor promptly upon demand.

 

(b)                     Alterations, Modifications.  If any item of Equipment is required to be altered or modified in order to comply with Applicable Laws, Lessee is obligated to make or cause to be made such alterations or modifications.  Lessee may make any other improvement or addition to the Equipment so long as no reduction in the value of the Equipment results therefrom.  All repairs, alterations, modifications, improvements and additions to the Equipment shall immediately become part of the Equipment subject to the terms of this Lease.  Lessee shall keep accurate, complete and current records of all alterations or modifications (whether required or permitted) made with respect to the Equipment and shall provide copies thereof to Lessor promptly upon demand.

 

(c)                      Inspection.  Lessor shall be entitled to visit the business premises of Lessee and its subsidiaries and other properties and inspect the Equipment at the location thereof during normal business hours.

 

6.                                      USE.   Lessee shall use the Equipment for business purposes only and in a careful and proper manner and shall comply with and conform to all Applicable Laws, insurance requirements and the operating and maintenance instructions of the manufacturer or Supplier thereof.

 

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7.                                      QUIET ENJOYMENT.  So long as no Event of Default has occurred and is continuing hereunder and subject to Section 6 hereof, Lessor warrants peaceful and quiet use and enjoyment of the Equipment by Lessee against acts of Lessor, its agents, and anyone else acting by or on Lessor’s behalf.

 

8.                                      ACCEPTANCE, WARRANTIES, LIMITATION OF LIABILITY.

 

(a) EXCEPT AS SPECIFICALLY OTHERWISE PROVIDED FOR IN THIS MASTER LEASE, LESSEE HEREBY ACKNOWLEDGES AND AGREES THAT: THE EQUIPMENT, AND THE RIGHTS, TITLE AND/OR INTEREST BEING CONVEYED HEREIN WITH RESPECT THERETO, ARE BEING CONVEYED AND DELIVERED TO LESSEE “AS IS” AND “WHERE IS” WITHOUT ANY RECOURSE TO LESSOR AND LESSOR HAS NOT MADE, AND HEREBY DISCLAIMS, LIABILITY FOR, AND LESSEE HEREBY WAIVES ALL RIGHTS AGAINST LESSOR RELATING TO, ANY AND ALL WARRANTIES, GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF ANY KIND WITH RESPECT THERETO, EITHER EXPRESS OR IMPLIED OR ARISING BY APPLICABLE LAW OR OTHERWISE, INCLUDING (A) ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, REPRESENTATIONS OR OBLIGATIONS OF, ARISING FROM OR IN (1) MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, (2) COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (3) QUALITY OF WORKMANSHIP OR THE PROVISIONS OF ANY SUPPLY CONTRACT WITH SUPPLIER OR (4) TORT OR UNDER THE UCC OR OTHER APPLICABLE LAW WITH RESPECT TO THE EQUIPMENT, INCLUDING ANY WARRANTY OF TITLE THERETO,  FREEDOM FROM TRADEMARK, PATENT OR COPYRIGHT INFRINGEMENT, LATENT DEFECTS (WHETHER OR NOT DISCOVERABLE), CONDITIONS, MANUFACTURE, DESIGN, SERVICING OR COMPLIANCE WITH APPLICABLE LAW AND (B) ALL OBLIGATIONS, LIABILITY, RIGHTS AND REMEDIES, HOWSOEVER ARISING UNDER ANY APPLICABLE LAW WITH RESPECT TO THE MATTERS WAIVED AND DISCLAIMED, INCLUDING FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO THE EQUIPMENT, OR ANY LIABILITY OF LESSEE OR LESSOR TO ANY THIRD PARTY, OR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (AS SUCH TERMS ARE USED IN SECTION 2-719(3) OF THE UCC, OR OTHER APPLICABLE LAW); all such risks, as between Lessor and Lessee, are to be borne by Lessee; Lessee acknowledges and agrees that the Equipment has been selected by Lessee on the basis of its own judgment, and Lessee has not asked for, been given or relied upon the skill or opinion of, or any statements, representations, guaranties or warranties by, Lessor or its agents or representatives in relation thereto.  Lessee understands and acknowledges that Lessor is not in the business of manufacturing, assembling or supplying Equipment or otherwise in the business of being a vendor.

 

(b) Lessee agrees that the only representations, warranties, guaranties or indemnities made with respect to the Equipment are those made by the Supplier and/or manufacturer thereof.  Provided that no Default or Event of Default has occurred and is continuing hereunder, Lessor: (i) shall cooperate fully with Lessee with respect to the resolution of any claims by Lessee against Supplier with respect to an item of Equipment, in good faith and by appropriate proceedings at Lessee’s expense, (ii) subject to the initial proviso of this sentence, hereby assigns to Lessee, for and during the Term of this Lease, any applicable warranties, indemnities or other rights under any Supply Contracts (excluding any refunds or other similar payments reflecting a decrease in the value of any such Equipment, which amount shall be received by and paid to Lessor, and applied by Lessor to reduce Lessee’s obligations to pay Rent for such Equipment), and (iii) hereby authorizes Lessee to obtain all services, warranties or amounts from the Supplier of such Equipment to be used to repair such Equipment (and such amounts shall be used by Lessee to repair such Equipment).  Lessee understands, acknowledges and agrees that neither Supplier nor its salesmen or agents is an agent of Lessor or authorized to waive, alter or add to any provision of this Lease.

 

9.                                      REPRESENTATION AND WARRANTIES.  Lessee represents and warrants for the benefit of Lessor as of the date of acceptance of any item of Equipment for lease under this Lease:

 

(a)                     Each Co-Lessee’s exact legal name is that indicated in the Perfection Certificate and on the cover and signature pages and in the Definitions section hereof.  Each Co-Lessee is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction

 

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indicated on the cover page hereof and is duly qualified to do business and is in good standing in that jurisdiction and in every jurisdiction where the failure to so qualify would materially and adversely affect such Co-Lessee; each Co-Lessee has adequate corporate or limited liability company power, as applicable, and authority to enter into and perform this Lease.  The cover page hereof accurately sets forth each Co-Lessee’s organizational identification number issued by the state of its incorporation or organization, as applicable, or accurately states that such Co-Lessee has no such number.

 

(b)                     The Lease Documents have been duly authorized, executed and delivered by Lessee and constitute valid, legal and binding agreements of Lessee enforceable in accordance with their terms.

 

(c)                      The entering into and performance of the Lease Documents by Lessee shall not violate any Applicable Law or any provision of Lessee’s charter, bylaws or operating agreement, as applicable, or result in any breach of, or constitute a default under, or result in the creation of any Lien (other than Permitted Liens) upon any assets of Lessee leased hereunder or on the Equipment or Collateral pursuant to any instrument or Applicable Law to which Lessee is a party or by which it or its assets may be bound.

 

(d)                     There are no pending or threatened actions or proceedings to which Lessee is a party, or otherwise affecting Lessee, before any Governmental Authority, which if determined against Lessee, either individually or in the aggregate, would materially adversely affect the financial condition of Lessee, or the ability of Lessee to perform its obligations under, or comply with the terms of the Lease Documents.

 

(e)                      Lessee is not in default under any obligation for the payment of borrowed money, for the deferred purchase price of property or for the payment of any rent under any lease agreement which, either individually or in the aggregate, would materially adversely affect the financial condition of Lessee, or the ability of Lessee to perform its obligations under, or comply with the terms of the Lease Documents.

 

(f)                       No consent, approval or other authorization of or by any Governmental Authority is required in connection with the consummation by Lessee of the transactions contemplated by the Lease Documents.

 

(g)                      With respect to the Equipment, under the Applicable Law of the state(s) in which such Equipment is to be located, such Equipment consists solely of personal property and not fixtures.

 

(h)                     The financial statements of Lessee that have been provided to Lessor have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the absence of footnotes and except for year-end adjustments), and fairly present in all material respects Lessee’s financial condition and the results of its operations as of the date of and for the period covered by such statements, and since the date of such statements there has been no material adverse change in such conditions or operations.

 

(i)                         The address of Lessee as set forth on the cover page hereof and in the Perfection Certificate is Lessee’s place of business or, if more than one, its chief executive office (which terms shall have the meanings ascribed therefor in Article 9 of the UCC).

 

(j)                        With respect to the Equipment, no filing, recordation or registration of any document or instrument was or is necessary in order to cause Lessor to have good, valid and enforceable title and/or interest with respect thereto, except for the filing of any required Financing Statement(s) under the Uniform Commercial Code.

 

(k)                     Lessee has obtained all Permits necessary to possess and use the Equipment in compliance with and as contemplated by this Lease.

 

(l)                         The Collateral is located at the addresses set forth on the Perfection Certificate.

 

(m)                 Lessee has the right in or the power to transfer the Collateral and it has good and marketable title to the Collateral, subject to no Liens except for Permitted Liens.  The security interest

 

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granted in Section 4(e) of this Master Lease constitutes a valid and enforceable first priority Lien in the Collateral subject to Permitted Liens.

 

(n)                     No written representation, warranty or other statement of Lessee in any certificate or written statement given to Lessor taken together with all such written certificates and statements given to Lessor contains any untrue statement of material fact or omits to state a material fact necessary to make the statements contained in the certificates and statements not misleading in any material respect at the time when made.

 

10.                               CONDITIONS PRECEDENT.

 

(a)                     Lessor’s agreement to enter into this Master Lease shall be subject to the condition precedent that Lessor shall have received all of the following, in form and substance satisfactory to Lessor:

 

(i)                                     A certificate of each Co-Lessee’s Secretary or Assistant Secretary certifying (i) the resolutions of the board of directors or board of managers, as applicable, authorizing the execution, delivery and performance of this Master Lease, and any related documents, (ii) such Co-Lessee’s bylaws or operating agreement, as applicable, (iii) such Co-Lessee’s certificate or articles of incorporation or certificate of formation, as applicable, and (iv) the signatures of the officers or agents of such Co-Lessee authorized to execute and deliver this Master Lease and other instruments, agreements and certificates on behalf of such Co-Lessee;

 

(ii)                                 A Co-Investment Agreement;

 

(iii)                             A Warrant agreement (the “Warrant”) issued by Tabula Rasa to Lessor to purchase up to $1,440,000 of Series B Convertible Preferred Stock, par value $0.0001 per share;

 

(iv)                              Confirmation from Bank of America, N.A. (“BANA”) that all obligations of Medliance to BANA have been satisfied and all of BANA’s liens on Medliance’s assets have been released, in form and substance reasonably satisfactory to Lessor;

 

(v)                                 An opinion of counsel;

 

(vi)                              The Perfection Certificate;

 

(vii)                         Payment of the Facility Fee and all expenses of closing (subject to the caps described in Section 21 hereof; and

 

(viii)                        Such other documents or items reasonably required by Lessor.

 

(b)                                 Lessor’s agreement to enter into a Rental Schedule with Lessee and to lease the Equipment thereunder, shall be subject to the condition precedent that Lessor shall have received all of the following, each in form and substance satisfactory to Lessor:

 

(i)                                     The Rental Schedule, properly executed on behalf of Lessee, and each of the schedules thereto properly completed;

 

(ii)                                 Certificates of insurance required hereunder;

 

(iii)                             Any Financing Statement(s) required to be filed in order to create, in favor of the Lessor a first priority perfected security interest in the Collateral, subject only to the Permitted Liens, shall have been properly filed in each office in each jurisdiction required in order to create in favor of the Lessor a perfected lien on

 

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the Collateral;

 

(iv)                              A true and correct copy of any and all purchase and sale or other agreements pursuant to which Lessee is acquiring the Equipment; and

 

(v)                                 Such other documents or items reasonably required by Lessor.

 

11.                               COVENANTS OF LESSEE.  Lessee covenants and agrees as follows:

 

(a) Lessee shall furnish Lessor (as to itself and its subsidiaries) (i) within one hundred fifty (150) days after the end of each fiscal year of Lessee, a balance sheet of Lessee as at the end of such year, and the related statements of income and retained earnings and cash flows of Lessee for such fiscal year, prepared in accordance with GAAP, all in reasonable detail and audited by independent certified public accountants of recognized standing selected by Lessee; (ii) within thirty (30) days after the end of each quarter of Lessee’s fiscal year a balance sheet of Lessee as at the end of such quarter, and the related statement of income and retained earnings and cash flows of Lessee for such quarter, prepared in accordance with GAAP (subject to the absence of footnotes and year-end adjustments); (iii) as soon as available, but no later than forty-five (45) days after completion, any 409A valuation report prepared by or at the direction of Lessee, (iv) within thirty (30) days after the end of each month of Lessee’s fiscal year, monthly financial information of Lessee, consisting of a balance sheet of Lessee as at the end of such month, and the related statement of income and retained earnings and cash flows of Lessee, (v) other financial information and reports which are provided by Lessee to its board of directors, at the same time that such information is so provided to Lessee’s board of directors; (vi) Tabula Rasa’s capitalization table promptly after the end of each fiscal year of Tabula Rasa, and promptly after any New Issuance (as defined in the Co-Investment Agreement), (vii) with regard to the each Senior Facility, copies of the borrowing base certificates and compliance certificates furnished to the Senior Lender, within thirty (30) days of the closing of each month, (viii) promptly upon receipt, statements of accounts from Lessee’s primary banking institutions and investment accounts managers; and (ix) such other financial information, operating reports and budgets as Lessor may reasonably require.  Lessee shall furnish the information described in this Section 11(a) until Lessee has paid in full all amounts due to Lessor hereunder.  Lessee may discharge its obligations under clauses (i) and (ii) of this Section 11(a) by furnishing to Lessor within ten (10) days after the date on which they are filed, all regular periodic reports, forms and other filings required to be made by Lessee and including its financial statements to any governmental agency or instrumentality under Applicable Law.

 

(b)                     Upon Lessor’s request, Lessee shall promptly execute and deliver to Lessor consents to assignments, certificates of no default and such other documents, instruments and assurances reasonably requested by Lessor to establish and protect its rights and/or interest in the Equipment and the Collateral and to assure that the Lease Documents remain in full force and effect.

 

(c)                      Lessee shall provide written notice to Lessor: (i) within thirty (30) days prior to any change in its name or its place of business or, if more than one, its chief executive office, or its mailing address or organizational number if it has one and, if Lessee does not have such a number and later obtains one, Lessee shall forthwith notify Lessor of such organizational identification number of Lessee; (ii) promptly upon Lessee becoming aware of the occurrence of any Default or Event of Default; (iii) promptly upon Lessee becoming aware of the commencement or overt threat of any action or proceeding against or affecting Lessee or the Collateral with an amount in controversy equal to or exceeding $1,000,000; (iv) of the commencement of proceedings under Federal bankruptcy laws, or any other insolvency laws (as now or hereafter in effect) involving Lessee or any Person (other than Lessor) holding an interest in the Equipment or Collateral or related property as the debtor; (v) promptly upon Lessee becoming aware of (1) any alleged material violation of Applicable Law by Lessee, or (2) any threatened or actual suspension, revocation or rescission of any Permit necessary for Lessee to be in compliance with the terms hereof; and (vi) promptly after any of the Equipment becomes lost, stolen, destroyed, materially damaged or worn out.

 

(d)                     Lessee will not change its type of organization, jurisdiction of organization or other legal structure.

 

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(e)                      Lessee shall not attach or incorporate the Equipment to or in any other item of equipment or any realty in such a manner that the Equipment may be deemed to have become an accession to or a part of such other item of equipment or realty.

 

(f)                       Lessee shall cause each principal item of the Equipment to be marked at all times, in a plain, distinct and legible manner, with the name of Lessor or its designee followed by the words “Lessor and Secured Party,” or other appropriate words designated by Lessor on labels furnished by Lessor.

 

(g)                      Lessee will (i) refrain from withholding, from payments made by Lessee to Lessor or any Transferee under any Lease Document, any Federal income tax under any section of the Code (including, without limitation; Section 1442) provided that Lessee receives from any Transferee that is a foreign person (and from Lessor, if Lessor is a foreign person), a valid IRS Form W-8 BEN (and any successor form) or such other form or documentation as may be required to qualify payments hereunder for the “portfolio interest” exemption under Code Section 871(h) or 881(c), and (ii) timely file all required information and other returns required under Federal income tax regulations implementing and interpreting Section 871(h) and 881(c) of the Code.

 

(h)                     Lessee shall not convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”) all or any part of its business or property, except for Transfers of (i) obsolete equipment; (ii) inventory in the ordinary course of business, or (iii) non-exclusive licenses and similar arrangements for the use of property of Lessee in the ordinary course of business.

 

(i)                         If Lessee prepays all or substantially all of its Indebtedness owing to a third party, whether or not such prepayment is voluntarily or involuntarily made by Lessee before or after any default or acceleration of such obligations, Lessee shall pay, at Lessor’s option and immediately upon notice from Lessor, all or any part of Lessee’s obligations owing to Lessor hereunder.  For the avoidance of doubt, if Lessee pays or prepays the Indebtedness described in subsection (l) of the definition of Permitted Indebtedness, Lessee shall provide prior written notice to Lessor of such payment or prepayment and Lessee shall pay, at Lessor’s option and immediately upon notice from Lessor, Lessee’s obligations owing to Lessor hereunder, such amount calculated as under Section 19 hereof.

 

(j)                        Lessee agrees to grant Lessor the management rights described below (as to itself and its current and future direct and indirect subsidiaries) and further agrees that it (and its current and future direct and indirect subsidiaries) will give due consideration to such input as may be provided by Lessor.  In the event Lessor reasonably demonstrates such rights do not satisfy the requirement of the management rights for the purpose of qualifying Lessor’s interest in Lessee and its direct and indirect subsidiaries as a venture capital investment for the purposes of the United States Department of Labor “plan assets” regulation, 29 C.F.R. §2510.3-101, Lessee and Lessor shall reasonably cooperate in good faith to agree upon mutually satisfactory consultation rights that satisfy such regulation, including with respect to Lessee’s direct and indirect subsidiaries.  Lessor will be entitled to the following rights:  (i) to discuss, and provide advice with respect to, the business operations, properties and financial and other conditions of Lessee and its subsidiaries with their respective officers, employees and directors and the right to consult with and advise their respective senior management (the “Senior Management”) on matters materially affecting the business and affairs of Lessee and its subsidiaries; (ii) to submit business proposals or suggestions to Senior Management from time to time with the requirement that one or more members of Senior Management discuss such proposals or suggestions with Lessor within a reasonable period after such submission and the right to call a meeting with Senior Management in order to discuss such proposals or suggestions; and (iii) (a) to examine the books and records of Lessee and its subsidiaries, and (b) to request such other information at reasonable times and intervals in light of the normal business operations of Lessee and its subsidiaries concerning the general status of the business, financial condition and operations of Lessee and its subsidiaries but only to the extent such information is reasonably available to Lessee and its subsidiaries and in a format consistent with how Lessee and its subsidiaries maintain such information.

 

(k)                     Lessee shall not create, incur, assume or be liable for any Indebtedness, other than Permitted Indebtedness.

 

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The covenants set forth in this Section 11 shall automatically terminate, without further action by any party, immediately upon the payment in full by Lessee of all amounts due to Lessor hereunder.  Further, the security interest granted to the Lessor in the Collateral shall automatically, without further action by any party, terminate upon the payment in full by Lessee of all amounts due to Lessor hereunder.

 

12.                               ASSIGNMENT AND TRANSFER.

 

(a)                     WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, LESSEE SHALL NOT ASSIGN ANY OF ITS RIGHTS NOR DELEGATE ANY OF ITS OBLIGATIONS HEREUNDER, SUBLEASE THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR REMAIN IN THE POSSESSION OF, ANY PERSON BUT LESSEE, provided, however, so long as no Event of Default has occurred and is continuing, Lessee may upon written consent of Lessor, which consent shall not be unreasonably withheld, assign its rights and obligations hereunder to an entity wholly owned by it; and provided, further, that each controlled on-site access medication storage cabinet that constitutes Collateral may be operated by a Program of All-Inclusive Care for the Elderly (“PACE”) or similar Managed Care site in connection with an active contract between Lessee and PACE/Managed Care Provider in accordance with the contract between Lessee and the applicable PACE/Managed Care Provider.  No assignment or sublease, whether authorized in this Section 12 or in violation of the terms hereof, shall relieve Lessee of its obligations hereunder and Lessee shall remain primarily liable hereunder.

 

(b)                     Lessor may transfer its rights and/or interest in the Equipment and the Lease Documents to one or more Transferees as collateral security or otherwise.  Lessee hereby acknowledges and agrees that in the event Lessor or such other Transferee has transferred its interest herein (i) no Transferee(s) shall be obligated to perform any duty, covenant or condition required to be performed by Lessor under the terms of this Lease, and (ii) all notices or other communications shall be given to, and made by, Lessor or its designee.

 

(c)                      Lessee shall maintain this Lease in registered form within the meaning of Section 881(c)(2)(B)(i) of the Code and will establish a book entry system to record the ownership and Transfers of any interests herein.  Payments under this Lease by Lessee shall only be made to the registered holder reflected in such book entry system.  Lessor shall be the initial registered holder.  Upon written notice from Lessor of a Transfer of an interest herein, Lessee shall promptly record such Transfer in its books and records, including such book entry system, including the name(s) and address(es) of the Transferee(s) and Lessee agrees to deliver all consents, certificates and other documents Lessor may reasonably request in connection with such Transfer.  Lessee acknowledges and agrees that Lessor’s obligations to any Transferee(s) may be secured by Lessor’s interest in the Lease Documents and the Equipment.

 

(d)                     PROVIDED TRANSFEREE IS NOT IN VIOLATION OF ITS OBLIGATIONS UNDER SECTION 7 HEREOF, LESSEE HEREBY WAIVES AS AGAINST ANY SUCH TRANSFEREE(S) OF LESSOR, ITS SUCCESSORS AND ASSIGNS, ANY CLAIM OR DEFENSE THAT LESSEE MAY NOW OR HEREAFTER HAVE AS AGAINST LESSOR, WHETHER FOR BREACH OF THIS LEASE, BREACH OF WARRANTY OR OTHERWISE; PROVIDED, HOWEVER THAT ANY SUCH CLAIM OR DEFENSE IS RETAINED AS AGAINST LESSOR.

 

13.                               INSURANCE.  At all times during the Term of this Lease, Lessee shall keep the Equipment and Collateral insured against all risks for its replacement value, and shall maintain public liability insurance against such risks and for such amounts as is customary and in accordance with industry practices, with insurer(s) of nationally-recognized standing.  All such insurance policies shall name Lessor and its successors and Transferees as loss payee and additional insured and state that such policies may not be invalidated by any act or omission of Lessee or any other person or canceled or altered without at least thirty (30) days prior written notice to Lessor or its successors and Transferees.  Lessee shall furnish Lessor with certificates or other satisfactory evidence of the maintenance of the insurance required hereunder within thirty (30) days of any material change in the information set forth in such certificate and promptly upon Lessor’s request.

 

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14.                               LOSS AND DAMAGE.  In the event of any condemnation, confiscation, theft or seizure of, or requisition of title to or use of, or loss or damage to (any such occurrence, a “Loss”), any item of Equipment or Collateral shall occur, Lessee shall give prompt written notice thereof to Lessor.  Lessee acknowledges and agrees that all insurance and other payments resulting from or becoming due in connection with a Loss are for Lessor’s account and if any such payments are received by Lessee, such payments shall be held in trust for Lessor and remitted to Lessor immediately upon receipt thereof.  In the event of a loss not constituting a Loss, subject to the requirements of any Senior Facility, any insurance and other payments resulting from or becoming due in connection with such Loss shall be held by Lessor and applied in reduction of future Basic Rent payments in the inverse order of maturity, provided however, that Lessor and Lessee may agree to use any such proceeds for the repair, restoration or replacement of the item(s) of Equipment or Collateral subject to such Loss.

 

15.                               TAXES AND FEES.

 

(a) Taxes.  Lessee shall file any necessary reports and returns for, shall pay promptly when due, shall otherwise be liable to reimburse Lessor for, and agrees to indemnify and hold Lessor harmless from, any fees, taxes, assessments, charges or withholdings of any nature (together with any penalties or fines thereon) arising at any time upon or relating to the ownership, delivery, acquisition, use, operation or leasing of the Equipment or to the Lease Documents, or upon the Rent payable thereunder (“Taxes”), whether the same be assessed to Lessor (or any Transferee) or Lessee.  Promptly upon Lessor’s request, Lessee shall furnish Lessor satisfactory evidence of the filing of such reports and returns and the payment of Taxes.  If any report, return or property listing relating to any Taxes is, by Law, required to be filed by, assessed or billed to or paid by, Lessor, Lessee shall do all things required to be done by Lessor (to the extent permitted by Law) in connection therewith and is hereby authorized by Lessor to act on behalf of Lessor in all respects in relation thereto, including the contest or protest, in good faith and by appropriate proceedings, of the validity of any Taxes, or the amount thereof; provided, however, that Lessor hereby unconditionally reserves the right to revoke such authorization and such revocation shall not affect Lessee’s indemnity or other obligations under this Lease, including, without limitation, this Section 15 and Section 18 hereof.  Lessor agrees fully to cooperate with Lessee in any such contest, and Lessee agrees promptly to indemnify Lessor for all reasonable expenses incurred by Lessor in the course of such cooperation.  Taxes or claim therefor shall be paid by Lessee, subject to refund proceedings, if failure to pay would adversely affect the rights, title and/or interest of Lessor in the Equipment or otherwise hereunder.  Provided that no Default or Event of Default has occurred and is then continuing, if Lessor obtains a refund of any Taxes that have been paid (by Lessee, or by Lessor and for which Lessor has been fully reimbursed by Lessee), Lessor shall promptly pay to Lessee the amount of such refund actually received.

 

(b) The provisions of this Section 15 shall not apply to any Taxes that Lessee is contesting in good faith, by appropriate proceedings and as otherwise permitted pursuant to the provisions of this Lease until the conclusion of such contest; except that Lessee’s right to contest any Taxes is conditioned upon the existence of such Taxes during any such contest not causing any material danger, as determined by Lessor in its reasonable discretion, of the sale, forfeiture or loss of the Equipment.

 

16.                               LESSEE’S FAILURE TO PAY TAXES, INSURANCE, ETC.  Should Lessee fail to make any tax, insurance or other payment or do any act required to be performed by Lessee as herein provided, except any Taxes being contested in accordance with Section 15(b) hereof, Lessor shall have the right, but not the obligation and without releasing Lessee from any obligation hereunder, to make or do the same, and to pay, purchase, contest or compromise any Taxes that in the reasonable judgment of Lessor affects the Equipment, and, in exercising any such rights, incur any liability and expend whatever amounts in its reasonable discretion Lessor may deem necessary therefor.  All sums so incurred or expended by Lessor and a reasonable fee for incurring or expending such sum (including any penalty incurred as a result of Lessee’s failure to perform such obligation or make such payment) shall be due and payable by Lessee within 30 days of Lessor’s demand therefor and shall be payable as Supplemental Rent.

 

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17.                               DEFAULT AND REMEDIES.

 

(a)                     The occurrences of any of the following events shall constitute an Event of Default hereunder, and shall permit Lessor to exercise the remedies provided in Section 17(b) below, including the termination of Lessee’s right to possession of the Equipment and Collateral:

 

(i)                         The non-payment when due, of any installment of Rent or any other sum required hereunder to be paid by Lessee;

 

(ii)                      The failure by Lessee to perform any other material term, obligation, covenant or condition under any of the Lease Documents that is not cured within twenty (20) days after such failure;

 

(iii)                   The non-payment by Lessee when due or default in the performance of any other indebtedness or obligation to Lessor or any parent, subsidiary or affiliated company of Lessor (subject to any applicable cure periods).

 

(iv)               The subjection of a substantial part of Lessee’s property or any part of the Equipment or Collateral to any Lien other than a Permitted Lien;

 

(v)                     Lessee shall be in default under the terms of any contract with any Person requiring the payment of money by Lessee in an amount greater than or equal to $75,000;

 

(vi)                  In the event that (A) Lessee shall (1) authorize or agree to the commencement of a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency, receivership or other similar Law now or hereafter in effect that authorizes the reorganization or liquidation of such party or its debt or the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, (2) make a general assignment for the benefit of its creditors, (3) fail generally or admit in writing its inability to pay its debts as they become due, (4) take any corporate action to authorize any of the foregoing or (5) have an involuntary or other proceeding commenced against it seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Law now or hereafter in effect, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period exceeding 60 days; or (B) an order for relief pursuant to such applicable debtor/creditor law shall have been entered against Lessee;

 

(vii)               If any representation or warranty made by Lessee herein, or made by Lessee in any statement or certificate furnished by the Lessee in connection with the execution of this Lease or the delivery of any items of Equipment hereunder or furnished by the Lessee pursuant hereto, proves untrue in any material respect as of the date of the issuance or making thereof;

 

(viii)            The issuance of any writ or order of attachment or execution or other legal process against any Equipment or any Collateral which is not discharged, stayed, or satisfied within fifteen (15) days;

 

(ix)                  The occurrence of any event or condition described in subsections (iv), (v), (vi), or (vii) hereof with respect to any other party liable, in whole or in part, for performance of any of Lessee’s obligations under this Lease; and

 

(x)                     One or more final judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Fifty Thousand Dollars ($150,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Lessee and the same are not, within fifteen (15) days after the entry thereof, discharged or execution thereof stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay.

 

(b)                     Upon the continuance and during the continuance of any of the above Events of Default,  (i) all obligations hereunder shall bear interest at a rate per month which is one and one-half percent (1.5%) (or the highest rate permitted by law, whichever is lower) (“Default Rate”), and (ii) Lessor may demand, by

 

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written notice to Lessee (provided that upon the occurrence of an Event of Default described in Section 17(a)(vi), no such written notice shall be required), that Lessee pay to Lessor an amount equal to the outstanding principal balance due hereunder plus the Default Rate plus all other sums then payable by Lessee hereunder.

 

(c)                      Upon the occurrence and during the continuance of an Event of Default to the extent requested by Lessor, and subject to the requirements of any Senior Facility, Lessee shall deliver the Equipment to Lessor, in good repair, condition and working order, ordinary wear and tear resulting from permitted use thereof under the terms of this Lease alone excepted, to a location within or outside the continental United States of America specified by Lessor.  Such Equipment shall be carefully crated and shipped, freight, drayage and re-assembly costs prepaid and properly insured, by Lessee, and Lessee shall bear all risk of loss until the Equipment are delivered to Lessor or its designee.  Lessor shall be entitled to sell the Equipment at private or public sale within or without the United States of America, in bulk or in parcels with or without notice, without having the Equipment present at the place of sale, with the privilege of becoming the purchaser thereof.  Lessor shall be entitled to lease, otherwise dispose of or keep idle all or any part of the Equipment.  Lessor shall also be entitled to draw on any letter of credit or take any deposit, in either case theretofore provided by Lessee to secure its obligations hereunder.

 

(d)                     Upon the occurrence and during the continuance of an Event of Default, Lessor shall be entitled to (i) require the Lessee to assemble the Collateral and make it available at the principal place of business or other places of business of the Lessee to allow the Lessor to take possession or dispose of the Collateral, (ii) subrogate to all of the Lessee’s interests, rights and remedies in respect to the Collateral, including the right to stop delivery, and (upon notice from the Lessee that the account debtor has returned, rejected, revoked acceptance of or failed to return the goods or that the goods have been reconsigned or diverted) the right to take possession of and to sell or dispose of the goods, (iii) make any payments or do any acts it considers necessary or reasonable to protect its security interest in the Collateral, and/or (iv) take and maintain possession of and sell or otherwise dispose of any or all of the Collateral at public or private sale, and if notice of such sale or of other action by the Lessor is required by Applicable Law, ten (10) day notice after the date of any public sale or the date after which Lessor enters into any private sale shall constitute sufficient notice of Lessor’s disposition of the Collateral, and further provided, (A) the Lessor has no obligation to refurbish or otherwise prepare the Collateral for sale, (B) the Lessor may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral, (C) the Lessor may specifically disclaim any warranties of title or the like, and (D) in the event the Lessor sells any Collateral upon credit, the Lessee will be credited only with the principal portion of payments actually made by the purchaser, received by Lessor and applied to the purchase of the Collateral.

 

(e)                      Lessee grants Lessor the right to enter and occupy any of its premises, without charge, to exercise any of Lessor’s rights or remedies.  The proceeds of sale, lease or other disposition of the Equipment and Collateral, if any, or the proceeds of any letter of credit or deposit, if any, shall be applied (1) to all of Lessor’s costs, charges and expenses incurred in taking, removing, holding, repairing and selling, leasing or otherwise disposing of the Equipment and Collateral (including, without limitation, reasonable attorneys’ fees, costs and disbursements); then, (2) to the extent not previously paid by Lessee, to pay Lessor the amount required under Section 17(b); then, (3) any remaining amounts to the Lessee.  Lessee shall pay any deficiency for amounts described in clauses (1) and (2) above forthwith.  The exercise of any of the foregoing remedies by Lessor shall not constitute a termination of this Lease unless Lessor so notifies Lessee in writing.

 

(f)                       Power of Attorney.  Lessee irrevocably appoints Lessor as its lawful attorney-in-fact, to be effective upon the occurrence and during the continuance of an Event of Default, to:  (i) endorse Lessee’s name on any checks or other forms of payment or security; (ii) sign Lessee’s name on any invoice or bill of lading for any account or drafts against account debtors; (iii) settle and adjust disputes and claims about the accounts directly with account debtors, for amounts and on terms Lessor determines reasonable; (iv) make, settle and adjust all claims of Lessee’s insurance policies; and (v) transfer the Collateral into the name of the Lessor or any third party as Applicable Law permits.  Lessee hereby appoints Lessor as its lawful attorney-in-fact to sign Lessee’s name on any document necessary to perfect or to continue the perfection

 

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of any security interest regardless of whether an Event of Default has occurred until all obligations under the Lease Documents have been satisfied in full.  Lessor’s foregoing appointment as Lessee’s attorney-in-fact, and all of Lessor’s rights and powers, coupled with an interest, are irrevocable until all obligations under the Lease Documents have been fully repaid and performed.

 

(g)                      Remedies Cumulative.  No remedy referred to in this Section 17 is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity.

 

(h)                     Waiver of Notices.  Notice of default and presentment, demand, protest and notice of dishonor as to any provision of any of the Lease Documents or any other agreement or instrument, notice of acceptance of Lease Document, notice of Leases made, Equipment or Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description is hereby waived by the Lessee, except as may be otherwise specifically provided in this Master Lease.

 

18.                               INDEMNITY.  Lessee agrees to indemnify, defend, and hold harmless Lessor and any Transferee and their respective officers, directors, partners, agents and employees, from and against any and all liabilities, claims, suits, actions, demands or judgments or other obligations (“Claims”) (other than such as may directly result from the gross negligence or willful misconduct of Lessor, Transferee or their respective, agents or employees), by paying (on an after-tax basis) or otherwise discharging same, when any such Claims shall become due, including, without limitation, Claims arising on account of (a) this Lease or any other Lease Documents, or (b) the Equipment, the Collateral, or any item or part thereof, including, without limitation, the selection, ordering, acquisition, delivery, installation, return, rejection, abandonment or other disposition of any item of Equipment or Collateral, the possession, maintenance, leasing, use, condition, ownership, operation or control of any item of Equipment or Collateral by whosoever owned, used or operated during the Term of this Lease or the existence of latent and other defects (whether or not discoverable or discovered by Lessor or Lessee).  Lessor shall give Lessee prompt notice of any Claim or liability hereby indemnified against and Lessee shall be entitled to control the defense thereof. Notwithstanding anything to the contrary in this Master Lease, the foregoing indemnity requirements shall survive the termination of this Master Lease and the Rental Schedules.

 

19.                               EARLY TERMINATION.  Provided that there is no default hereunder, Lessee may terminate this Master Lease at any time upon ninety (90) days’ prior written notice to Lessor by paying to Lessor the Present Value of all amounts remaining due to Lessor under the Master Lease and all Rental Schedules hereto (the “Early Termination Amount”).

 

20.                               CHANGE IN OWNERSHIP.  If Lessee shall (a) consolidate with or merge into any other corporation, person or entity (other than a wholly-owned subsidiary of Lessee) in which Lessee is not the surviving entity; or (b) convey, sell, transfer, lease or dispose of all or substantially all of its assets to any corporation, person or entity; or (c) engage in any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of Lessee is disposed of, or (d) close any initial public offering of Lessee’s common stock, then Lessor shall have the right but not the obligation to demand the Lessee to terminate all Rental Schedule(s) hereto by paying to Lessor the Early Termination Amount.

 

21.                               MISCELLANEOUS.

 

(a)                     Lessee has paid a proposal fee in the amount of Fifteen Thousand Dollars ($15,000) which shall be applied towards Lessor’s transaction, legal and due diligence expenses, not to exceed such amount; provided, however, the foregoing expense limitation shall not include Lessor’s reasonable lien search and lien filing costs which will be paid by Lessee.  In addition, Lessee shall pay the Facility Fee at the time Lessor funds the Facility Amount (to be netted from the proceeds of the funding of the Facility Amount).

 

(b)                     Lessor may (i) publish, for the sole purpose of its own advertising and promotion, via print and/or electronic media, Lessee’s name and logo; (ii) issue a press release announcing the lease funding; and (iii) link to Lessee’s Web site.  Lessee agrees to reasonably cooperate with Lessor in this regard.

 

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(c)                      Any notice required or permitted to be given by the provisions hereof shall be conclusively deemed to have been received by a party hereto on the day it is delivered by hand or by facsimile transmission to such party at the address as set forth on the cover page hereof (or at such other address as such party shall specify to the other party in writing), express overnight courier service, or, if sent by registered or certified mail, on the date on which mailed, addressed to such party at the address set forth above, postage prepaid.

 

(d)                     No delay or omission to exercise any right or remedy accruing to Lessor upon any breach or default of Lessee shall impair any such right to remedy or be construed to be a waiver of any such breach or default; nor shall any waiver of any single breach or default be construed to be a waiver of any such breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval on the part of Lessor of any breach or default under this Lease or, of any provision or condition hereof, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies, either under this Lease or by Law or otherwise afforded to Lessor, shall be cumulative and not exclusive.

 

(e)                      Lessee agrees to reimburse Lessor on demand for any and all reasonable costs and expenses incurred by Lessor in the enforcement of the Lease Documents, including without limitation, reasonable attorneys’ fees (including, without limitation, those of in-house counsel) and costs of repossession, storage, insuring, releasing and selling of all Equipment and Collateral together with the Excess Use Fee with respect to all such amounts from Lessor’s payment thereof until its receipt of reimbursement from Lessee.

 

(f)                       THIS MASTER LEASE MAY NOT BE TERMINATED EXCEPT AS EXPRESSLY PROVIDED HEREIN.  This Lease may be modified only by a written agreement duly signed by Persons authorized to sign agreements on behalf of Lessor and Lessee, and any variance from the terms and conditions of this Lease in any order or other notification from Lessee, written or oral, shall be of no effect.  LESSEE ACKNOWLEDGES THAT IT HAS READ THIS MASTER LEASE, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS.  FURTHER, LESSEE AGREES THAT THIS MASTER LEASE IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE LEASE BETWEEN THE PARTIES, WHICH SUPERSEDES ALL PROPOSALS OR PRIOR AGREEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS MASTER LEASE.

 

(g)                      This Lease and the covenants and agreements contained herein shall be binding upon, and inure to the benefit of, Lessor and its successors and assigns and Lessee and its successors and permitted assigns.

 

(h)                     The headings of the sections hereof are for convenience of reference only, are not a part of this Master Lease and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

 

(i)                         THIS MASTER LEASE AND THE TRANSACTION CONTEMPLATED HEREBY SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.  LESSOR AND LESSEE HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE MASSACHUSETTS STATE AND FEDERAL COURTS LOCATED IN MIDDLESEX COUNTY, MASSACHUSETTS, FOR ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE OVERALL TRANSACTION EVIDENCED BY THE LEASE DOCUMENTS, LESSOR AND LESSEE HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDINGS MAY BE HEARD AND DETERMINED IN SUCH MASSACHUSETTS STATE COURTS, OR TO THE EXTENT PERMITTED BY LAW, SUCH FEDERAL COURTS.  LESSOR AND LESSEE HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE DEFENSE OF ANY INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING, LESSOR AND LESSEE HEREBY WAIVE ANY RIGHTS EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN ACTIONS OR PROCEEDINGS BROUGHT IN RESPECT OF THE LEASE DOCUMENTS.

 

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(j)                        It is the express intent of the parties hereto not to violate any applicable usury laws or to exceed the maximum amounts permitted to be charged or collected under applicable law, and any such excess payment will be applied to payments due hereunder in the inverse order of maturity and any remaining excess shall be returned to Lessee.  Should any Section or any part of a Section within this Master Lease be rendered void, invalid or unenforceable by any court or Law for any reason, such invalidity or unenforceability shall not void or render invalid or unenforceable any other Section or part of a Section in this Master Lease.

 

(k)                     Lessee agrees to execute such documents and take such further actions as Lessor may reasonably request in order to assure Lessor the full benefit of the rights granted Lessor hereunder.

 

22.                               DEFINITIONS AND RULES OF CONSTRUCTION.

 

(a)                     The following terms when capitalized as below, have the following meanings:

 

“Applicable Law”:  any Law that may apply to (i) Lessee or its properties and operations, (ii) the operations, modification, maintenance, ownership, leasing or use of the Equipment and Collateral, or (iii) any transaction contemplated under any Lease Document, including in each case any environmental Law, federal or state securities Law, commercial Law (pertaining to the rights and obligations of sellers, purchasers, debtors, secured parties, or to any other pertinent matter), zoning, sanitation, site or building Law, energy, occupational safety and health practices Law or the Employee Retirement Income Security Act of 1974, as amended, and any regulations promulgated thereunder.

 

“Basic Rent”: the rental installments due from Lessee pursuant to Section 3(b) hereof for the Primary Term in the amounts and on the dates as provided in the applicable Rental Schedule, which amount shall be equal to 3.8364% of Total Equipment Cost for the period of time from the Primary Term Commencement Date to the Primary Term Expiration Date.

 

“Basic Rent Payment Date”: as set forth in a Rental Schedule with respect to the items of Equipment set forth therein.

 

“Basic Rent Per Month”: as set forth on a Rental Schedule with respect to the items of Equipment set forth therein.

 

“Business Day”: any day, other than a Saturday, Sunday or legal holiday for commercial banks under the laws of the Commonwealth of Massachusetts (or such other jurisdictions in the United States as Lessor specifies to Lessee by at least thirty (30) days’ prior written notice).

 

“Claims”: as set forth in Section 18 of this Master Lease.

 

“Co-Investment Agreement”:  the Co-Investment Agreement dated as of the date hereof between Lessor and Tabula Rasa, as the same may be amended, supplemented or modified from time to time.

 

“Code”: the United States Internal Revenue Code of 1986, as amended.

 

“Collateral”: as defined in Section 4(e) of this Master Lease.

 

“Default”: except when inconsistent with the context of any provision hereof, an event that, but for the lapse of time or the giving of notice or both, would constitute an Event of Default.

 

“Dollars” or “$”: United States of America dollars.

 

“Equipment”: with respect to each Rental Schedule, the property described therein, which shall in any event be acceptable to Lessor, together with all appurtenances, parts, instruments,

 

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accessories and furnishings that are from time to time incorporated in the Equipment, or having been so incorporated, are later removed therefrom, unless title and/or interest thereto is expressly released by Lessor, and all replacements of, and additions, improvements and accessions to any and all of the foregoing, and all books, records, maintenance logs and general intangibles (including all patents, copyrights and trade secrets) relating thereto; and, when used in the context of Lessor’s title and/or interest in the Equipment (whether relating to the creation, grant, perfection, release, priority, enforcement or application of proceeds thereof), shall also include all other property in which Lessor is granted a security interest hereunder or under the Rental Schedule.

 

“Event of Default”: any event of default as specified in Section 17(a) of the Master Lease.

 

“Excess Use Fee”: the fee payable by Lessee for the continued use or possession of the Equipment by the Lessee, which is payable if Lessee has not paid Rent when due and which shall equal 1-1/2% per month, or the highest rate permitted by law, whichever is lower, on all overdue Rent from the due date thereof until paid.

 

“Facility Fee”: shall mean one percent (1.0%) of the Facility Amount.

 

“Federal”: the Federal government of the United States of America.

 

“Financing Statement”: a Uniform Commercial Code financing statement on Form UCC-1 pursuant to the UCC.

 

“GAAP”: United States generally accepted accounting principles, applied consistently.

 

“Governmental Authority”: any federal, state, provincial, county, municipal, regional or other governmental authority, agency board, body, instrumentality or court, in each case of the United States of America, Canada or some other country.

 

“Indebtedness”: shall mean (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds, guarantees and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, and (c) capital or operating lease obligations (except for operating lease agreements for real property).

 

“Intellectual Property”: shall mean any of the following, whether now owned or hereafter acquired and wherever located:

 

(a)                                 Any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, including source code and object code now or hereafter existing, created, acquired or held (collectively, the “Copyrights”);

 

(b)                                 Any and all trade secrets, know-how, and any and all intellectual property rights in computer software and computer software products, including source code and object code, in development or embodied in products, now or hereafter existing, created, acquired or held;

 

(c)                                  Any and all design rights which may be available to Lessee now or hereafter existing, created, acquired or held;

 

(d)                                 All patents, patent applications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same (collectively, the “Patents”) and all inventions and innovation, regardless of whether patentable or unpatentable;

 

(e)                                  Any trademark and service mark rights, slogans, trade dress, and

 

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tradenames, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Lessee connected with and symbolized by such trademarks (collectively, the “Trademarks”);

 

(f)                                   All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired (collectively, the “Mask Works”); and

 

(g)                                  All amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works.

 

“Interim Term”: the period from and including the Interim Term Commencement Date to but not including the Primary Term Commencement Date.

 

“Interim Term Commencement Date”: the date on which Lessee accepts the Equipment as set forth in a Rental Schedule.

 

“Interim Term Rent”: as set forth in a Rental Schedule, which amount shall be equal to interest at 12.0% per annum on the Total Equipment Cost for the period of time from and including the Interim Term Commencement Date to but excluding the Primary Term Commencement Date.

 

“Interim Term Rent Payment Date”: as set forth in a Rental Schedule with respect to the items of Equipment set forth therein.

 

“Law”: any law, rule, regulation, ordinance, order, code, common law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, Permit or similar norm or decision of any Governmental Authority.

 

“Lease”: this Master Lease Agreement as incorporated by reference by an applicable Rental Schedule.

 

“Lease Documents”: collectively, the Master Lease, the Co-Investment Agreement, the Rental Schedule(s), the Warrant and any and all instruments, documents, certificates and agreements delivered pursuant hereto.

 

“Lessee”:  collectively, CareKinesis, Inc., a Delaware corporation, J. A. Robertson, Inc., a California corporation, Capstone Performance Systems, LLC a Delaware limited liability company, CareVention, Inc., a Delaware corporation, Tabula Rasa Healthcare, Inc., a Delaware corporation, and Medliance LLC, an Arizona limited liability company, and their successors and permitted assigns.

 

“Lessor”:  Eastward Fund Management, LLC, a Delaware limited liability company, its successors and assigns.

 

“Lien”: any mortgage, pledge, lease, sublease, security interest, attachment, charge, encumbrance or right or claim of others whatsoever (including any conditional sale or other retention agreement).

 

“Master Lease”: This Master Lease Agreement.

 

“Perfection Certificate”:  the Perfection Certificate dated as of the date hereof delivered by Lessee to Lessor.

 

“Permit”: any action, approval, certificate of occupancy, consent, waiver, exemption, variance, franchise, order, permit, authorization, right or license, or other form of legally required permission, of or from a Governmental Authority.

 

“Permitted Indebtedness”: shall mean

 

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(a)                                 Lessee’s obligations under this Master Lease;

 

(b)                                 Indebtedness in the form of purchase money financing existing on the date hereof and shown on the Perfection Certificate to (i) Boston Financial & Equity Corporation, provided that such Indebtedness does not exceed $591,000; and (ii) Liberty Bell Bank, provided that such Indebtedness does not exceed $385,000;

 

(c)                                  Indebtedness to (i) Lessor’s affiliate Eastward Capital Partners V, L.P. pursuant to that certain Master Lease Agreement No. 531 dated as of March 23, 2012, and (ii) Lessor pursuant to that certain Master Lease Agreement No. 628 dated as of April 22, 2014;

 

(d)                                 Indebtedness existing on the date hereof and shown on the Perfection Certificate to (i) Calvin Knowlton & Orsula Knowlton; and (ii) John Durham and Joanne Durham; provided that such Indebtedness is subordinated to Lessee’s obligations hereunder pursuant to a subordination agreement executed by each of such parties in a form reasonably acceptable to Lessor;

 

(e)                                  Indebtedness to AmeriSourceBergen pursuant to the AmeriSourceBergen Facility provided that such Indebtedness does not exceed $3,875,000 at any time;

 

(f)                                   Indebtedness to SVB pursuant to the SVB Facility provided that such Indebtedness does not exceed $7,000,000 at any time;

 

(g)                                  Other Indebtedness existing on the date hereof and shown on the Perfection Certificate;

 

(h)                                 Indebtedness subordinated to Lessee’s obligations hereunder (in the case of such indebtedness incurred after the date hereof, pursuant to a subordination agreement executed by the creditor of such subordinated indebtedness, in a form acceptable to Lessor) (“Subordinated Debt”);

 

(i)                                     Indebtedness in respect of capital lease obligations and purchase money obligations for fixed or capital assets not included in subsection (h) above, provided that the aggregate original principal amount of such Indebtedness that may be incurred by the Lessee during any calendar year is limited to $1,000,000;

 

(j)                                    Indebtedness to trade creditors in the ordinary course of business;

 

(k)                                 Indebtedness secured by Permitted Liens;

 

(l)                                     Indebtedness to each of Fred Smith III, Olds Family 2002 Trust, created under declaration of trust dated June 3, 2002, as amended, and Stephen F. Olds (the “Interest Sellers”) pursuant to a Subordinated Convertible Promissory Note to each such party, not to exceed $17,000,000 in the aggregate entered into by Tabula Rasa in connection with the Acquisition Transaction; provided that such Indebtedness is subordinated to Lessee’s obligations hereunder pursuant to a subordination agreement executed by each of such parties in a form reasonably acceptable to Lessor; and

 

19

 

(m)                             Extensions, refinancings, modifications, and amendments and restatements of any items of Permitted Indebtedness in (a) through (l) above; provided that the principal amount of such Permitted Indebtedness is not increased from the amount existing on the date of this Master Lease, and any Lien related to such Permitted Indebtedness does not attach to any property that was not subject to a Lien in favor of the holder thereof prior to the extension, refinancing, modification or amendment and restatement, except in either case as to the Indebtedness described in (a) above.

 

“Permitted Lien”: (a) Lessor’s and Lessee’s respective rights, titles and/or interests in the Equipment and Collateral, (b) Liens securing Permitted Indebtedness other than Permitted Indebtedness described in clauses (d), (j) and (l) above, (c) Liens for the benefit of mechanics, material men, laborers, employees or suppliers and similar Liens arising by operation of Law and incurred by Lessee in the ordinary course of business for sums that are not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings that suspend the collection and enforcement thereof (provided that the existence of such Lien while such negotiations or proceedings are pending does not involve any substantial risk (as determined by Lessor in its discretion) of the sale, forfeiture or loss of the Equipment, any Collateral or any interest therein, and for which adequate reserves have been provided in accordance with GAAP), (d) Liens arising out of any judgments or awards against Lessee that have been adequately bonded to protect Lessor’s interest or with respect to which a stay of execution has been granted pending an appeal or a proceeding for review; (e) Liens for taxes so long as Lessee is challenging such taxes in good faith, and (f) Sellers’ liens on the intellectual property of Medliance granted in connection with the Acquisition Transaction.

 

“Person”: any individual, corporation, partnership, joint venture, or other legal entity or a Governmental Authority.

 

“Present Value”:  with respect to any prepayment of rent under this Lease, shall mean the aggregate amount obtained by discounting all remaining scheduled payments of Rent under each Rental Schedule from their respective scheduled Payment Dates to the date on which such prepayment is to be made (the “Prepayment Date”), in accordance with accepted financial practice, and at a discount rate of seven percent (7%).

 

“Primary Term”: as set forth in the Rental Schedule.

 

“Primary Term Commencement Date”: as set forth in the Rental Schedule.

 

“Primary Term Expiration Date”: as set forth in the Rental Schedule.

 

“Rent”: collectively, the Interim Term Rent, Basic Rent, and the Supplemental Rent.

 

“Rental Schedule”: a document in the form of Exhibit 1 hereto evidencing the agreement by Lessor and Lessee to lease the Equipment listed thereon pursuant to the Rent, terms and conditions set forth thereon and incorporating this Agreement by reference.

 

“Supplemental Rent”: all amounts, liabilities and obligations (other than Basic Rent and Interim Term Rent) that Lessee assumes or agrees to pay to Lessor, including, without limitation, payments constituting indemnities, reimbursements, expenses, Excess Use Fee and other charges payable pursuant to the terms of this Lease.

 

“Supplier”: the Person from whom Lessor is purchasing or has purchased the Equipment.

 

“Supply Contract”: any written contract from the Supplier of the Equipment or any item thereof, pursuant to which Lessor has purchased such Equipment (or item thereof) for lease to Lessee under a Rental Schedule.

 

20

 

“Term”: the period for which Equipment is leased under the Lease, including the Interim Term and the Primary Term.

 

“Total Equipment Cost”: the actual amount funded under the Facility Amount as set forth in the Rental Schedule for the Equipment subject to such Rental Schedule.

 

“Transfer”: any transfer or other agreement pursuant to which Lessor or Transferee has transferred or agreed to pay any Person the Rent, or a portion thereof, received from Lessee pursuant to the Lease, which obligation may be secured by Lessor’s interest in the Lease and the Equipment.

 

“Transferee”: any Person to whom Lessor or any subsequent transferee thereof has assigned any or all of its rights, obligation, title and/or interest under the Lease.

 

“Uniform Commercial Code” or “UCC”: the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts or in any other pertinent jurisdiction; and any reference to an article or section thereof shall mean the corresponding article or section (however named) of any such other applicable version of the Uniform Commercial Code.

 

(b)                                 Any defined term used in the singular preceded by “any” indicates any number of the members of the relevant class.  Any Lease Document or other agreement or instrument referred to herein means such agreement or instrument as supplemented and amended from time to time.  Any reference to Lessor or Lessee shall include their permitted successors and assigns.  Any reference to a Law or Permit shall also mean such Law or Permit as amended, superseded or replaced from time to time.  Unless otherwise expressly provided to the contrary herein, all actions that Lessee takes or is required to take under this Master Lease or any other Lease Document shall be taken at Lessee’s sole cost and expense.

 

23.                               CO-LESSEE ASPECTS.  Each Co-Lessee shall be jointly and severally liable to Lessor for each and every representation, warranty, and covenant of Lessee or any other Co-Lessee made in or pursuant to this Master Lease.  Insofar as Lessor is concerned, the act of any Co-Lessee shall bind all other Co-Lessees, and Lessor (and Lessee’s and each Co-Lessee’s rights and duties to Lessor) shall not be affected by any notice or action to the contrary.  Lessor shall be fully protected, as to Lessee and all Co-Lessees, in dealing with any Co-Lessee.  A Co-Lessee’s obligations under this Master Lease shall not be affected by any action taken or not taken by Lessor, by any lack of prior enforcement or retention of any rights against Lessee or any other Co-Lessee, by any illegality, unenforceability, or invalidity of any other Co-Lessee’s obligations, or by any circumstance or condition, including, without limitation, (i) any termination, amendment, or modification of, or supplement to this Master Lease or any action by any other Co-Lessee with respect to the Equipment or the Collateral, (ii) any failure or delay to confirm or comply with any term of this Master Lease, (iii) any waiver, consent, extension, indulgence, compromise, settlement, release, or other action or inaction under or in respect of this Master Lease, or any exercise or non-exercise of any right, remedy, power, or privilege under or in respect of this Master Lease; (iv) any voluntary or involuntary bankruptcy, insolvency, or similar proceeding with respect to any other Co-Lessee, (v) any limitation on the liability or obligations of Lessor or any other Co-Lessee, or any discharge, termination, cancellation, frustration, invalidity or unenforceability of this Master Lease, (vi) any defect in title to or condition of the Equipment or the Collateral, (vii) any merger or consolidation of any other Co-Lessee into or with any other corporation; and (viii) any other condition or circumstance which might otherwise constitute a legal or equitable discharge, release, defense, or limitation arising out of any laws of the United States of America or any state thereof.  Each Co-Lessee agrees that Lessor shall not be required to file suit or proceed to obtain or assert against any other Co-Lessee or its assets, either before or as a condition to enforcing such first Co-Lessee’s liability under this Master Lease.  Nothing in this section shall limit any Co-Lessee’s rights against any other Co-Lessee as to contribution, reimbursement, use of the Equipment or the Collateral, or otherwise.  Lessor shall have no duty to see any allocation of use or benefits of the Equipment or Collateral, regardless of any notice or request from any Co-Lessee, all relations between or among Co-Lessees being an internal matter for them and not for Lessor.

 

21

 

24.                               ADDITIONAL PROVISIONS.  The schedules and exhibits attached hereto and any riders signed by the parties hereto and attached hereto are hereby incorporated by reference.

 

This space intentionally left blank

 

22

 

IN WITNESS WHEREOF, Lessor and Lessee have caused this Master Lease Agreement to be duly executed, all as of the date first above written.

 

	
 
    	
LESSOR:
    
	
 
    	
 
    
	
 
    	
Eastward   Fund Management, LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ illegible
    
	
 
    	
 
    	
Authorized Person
    
	
 
    	
 
    
	
 
    	
CO-LESSEES:
    
	
 
    	
 
    
	
 
    	
CareKinesis, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Adams
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
J. A.   Robertson, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Adams
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Capstone   Performance Systems, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Adams
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
CareVention, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Adams
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Tabula   Rasa Healthcare, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Adams
    
	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Medliance   LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Adams
    
	
 
    	
Title:
    	
Chief Financial Officer
    
				

 

[Signature Page to Master Lease]

 

23

 

Exhibit 1

 

RENTAL SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 628-01

(the “Rental Schedule”)

 

DATED AS OF December    , 2014 TO MASTER LEASE AGREEMENT NO. 628

DATED AS OF December     , 2014 (the “Master Lease”)

 

	
LESSOR:
    	
Eastward Fund   Management, LLC
    	
LESSEE:
    	
CareKinesis, Inc.
    
	
 
    	
432 Cherry Street
    	
 
    	
J.A.   Robertson, Inc.
    
	
 
    	
West Newton, MA 02465
    	
 
    	
Capstone Performance Systems, LLC
    
	
 
    	
 
    	
 
    	
CareVention, Inc.
    
	
 
    	
 
    	
 
    	
Tabula Rasa   Healthcare, Inc.
    
	
 
    	
 
    	
 
    	
Medliance LLC
    
	
 
    	
 
    	
 
    	
100 Marter Ave., Ste.   309
    
	
 
    	
 
    	
 
    	
Moorestown, NJ 08057
    

 

1.                                      LEASE TERM, PAYMENT DATES

 

This Rental Schedule, between Lessor and Lessee incorporates by reference the terms and conditions of the Master Lease.  Lessor hereby leases to Lessee and Lessee hereby leases from Lessor those items of Equipment described in Section 2 of this Rental Schedule for the Term and at the Basic Rent payable on the Payments Dates hereinafter set forth in Section 3 of this Rental Schedule, on the terms and conditions set forth herein and in the Master Lease.

 

2.                                      EQUIPMENT DESCRIPTION

 

See attached Schedule A.

 

The Total Equipment Cost is $12,000,000

 

3.                                      BASIC RENT

 

Interim Term Rent Per Month for Interim Term Months 1 through and including 12:  $120,000 [12.0% per annum on the Total Equipment Cost]

 

Basic Rent Per Month for Primary Term Months 13 through and including 42:            $460,373.62 [3.8364% of Total Equipment Cost]

 

The first payment of Interim Term Rent is due and payable on January 1, 2015 and is payable monthly in advance thereafter on the first Business Day of each month during the Interim Term (each, an “Interim Term Rent Payment Date”) to and including the Interim Term Rent Payment Date of December 1, 2015 [12 months].  Lessor and Lessee agree that if the closing date occurs on any day prior to the first day of a month, the Interim Term Rent that is payable on January 1, 2015 shall also include an additional Interim Term Rent payment for the period prior to such date calculated at the daily rate set forth above in the amount of $          .  The first payment of Basic Rent is due and payable on January 1, 2016 and is payable monthly in advance thereafter on the first Business Day of each month during the Primary Term (each, a “Basic Rent Payment Date”) to and including the Basic Rent Payment Date June 1, 2018 [30 months].

 

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4.                                      TERM COMMENCEMENT

 

Interim Term:  12 months.

 

Primary Term: 30 months.

 

The Interim Term Commencement Date of this Rental Schedule is December     , 2014.  The Primary Term Commencement Date of this Rental Schedule is January 1, 2016.  The Primary Term Expiration Date is June 30, 2018.

 

5.                                      ACCEPTANCE CERTIFICATE

 

Lessee hereby represents, warrants and certifies (a) that the Equipment described herein has been delivered to and inspected by Lessee, is in good order, repair and condition, and is of a size, design, capacity and manufacturer acceptable and satisfactory to Lessee and is unconditionally and irrevocably accepted for lease by Lessee under this Rental Schedule and the Master Lease as incorporated herein by reference, as of the Interim Term Commencement Date set forth above; and (b) the representations and warranties of Lessee set forth in the Master Lease are true and correct as of the date hereof.

 

6.                                      ENTIRE AGREEMENT, MODIFICATION AND WAIVERS, EXECUTION IN COUNTERPARTS.

 

Capitalized terms not defined herein shall have the meanings assigned to them in the Master Lease.  To the extent any of the terms and conditions set forth in this Rental Schedule conflict with or are inconsistent with the Master Lease, this Rental Schedule shall govern and control.  No amendment, modification or waiver of this Rental Schedule or the Master Lease will be effective unless evidenced by a writing signed by the party to be charged.  This Rental Schedule may be executed in counterparts, all of which together shall constitute one and the same instrument.

 

25

 

IN WITNESS WHEREOF the parties hereto have caused this Rental Schedule and Acceptance Certificate 617-01 to be executed and delivered by their duly authorized representatives as of the date first above written.

 

	
LESSOR
    	
 
    	
LESSEE
    
	
 
    	
 
    	
 
    
	
Eastward Fund Management, LLC
    	
 
    	
CareKinesis, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Title:
    	
Authorized Person
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
J.A.   Robertson, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Capstone   Performance Systems, LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
CareVention, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Tabula   Rasa Healthcare, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Medliance   LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    

 

26

 

Exhibit 2

 

Collateral

 

For purposes of the Master Lease, “Collateral” means all of Lessee’s right, title and interest in and to and upon all Lessee’s tangible and intangible assets, now owned or hereafter acquired and wherever located, including, without limitation, all of the following property and interests in property of Lessee:

 

(a)                                 all of Lessee’s tangible personal property, including without limitation all present and future goods, inventory and equipment (including items of equipment which are or become fixtures), computer hardware and software, now owned or hereafter acquired and all of Lessee’s real property, including leasehold interests, now owned or hereafter acquired;

 

(b)                                 all of Lessee’s intangible personal property, including, without limitation, all present and future accounts, securities, contract rights, permits, general intangibles, chattel paper, investment property, documents, instruments, deposit accounts, letter-of-credit rights, rights to the payment of money or other forms of consideration of any kind, tax refunds, insurance proceeds (including, without limitation, proceeds of any life insurance policy), now owned or hereafter acquired, and all intangible and tangible personal property relating to or arising out of any of the foregoing, but in each case, including Intellectual Property (as defined below);

 

(c)                                  all of Lessee’s present and future government contracts and rights thereunder and the related government accounts and proceeds thereof, now or hereafter owned or acquired by Lessee; provided, however, that Lessor shall not have a security interest in any rights under any government contract of Lessee or in the related government account where the taking of such security interest would be a violation of an express prohibition contained in such government contract (for purposes of this limitation, the fact that a government contract is subject to, or otherwise refers to, Title 31, § 203 or Title 41, § 15 of the United States Code shall not be deemed an express prohibition against assignment thereof) or is prohibited by Applicable Law; and

 

(d)                                 any and all additions to any of the foregoing, and any and all replacements, products and proceeds (including insurance proceeds) of any of the foregoing.

 

“Intellectual Property” means:

 

(a)                                 Any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, including source code and object code, now or hereafter existing, created, acquired or held (collectively, the “Copyrights”);

 

(b)                                 Any and all trade secrets, know-how, and any and all intellectual property rights in computer software and computer software products, including source code and object code, in development or embodied in products, now or hereafter existing, created, acquired or held;

 

(c)                                  Any and all design rights which may be available to Lessee now or hereafter existing, created, acquired or held;

 

(d)                                 All patents, patent applications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same (collectively, the “Patents”), and all inventions and innovation, regardless of whether patentable or unpatentable;

 

(e)                                  Any trademark and service mark rights, slogans, trade dress, and tradenames, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of the Lessee connected with and symbolized by such trademarks (collectively, the

 

27

 

“Trademarks”);

 

(f)                                   All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired (collectively, the “Mask Works”);

 

(g)                                  All amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works; and

 

(h)                                 any and all additions to any of the foregoing, and any and all replacements, products and proceeds (including insurance proceeds) of any of the foregoing.

 

28

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