Document:

Exhibit 10.1

 

 

Note: # 30278

 

LOAN AND SECURITY AGREEMENT

 

Between

 

BMO HARRIS EQUIPMENT FINANCE COMPANY, as Lender

 

And

 

ROCKFORD CORPORATION, as Borrower

Q3 CONTRACTING, INC.

ARB, INC.

STELLARIS LLC

as Co-Borrower(s)

 

Dated as of April 28, 2014

 

Confidential

 

 

BMO Harris Equipment Finance Company

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) is made as of the 28th day of April, 2014 by and between BMO Harris Equipment Finance Company, a Wisconsin corporation (“Lender”), and Rockford Corporation (“Borrower”) And Q3 Contracting, Inc., ARB, Inc., Stellaris LLC as (‘‘Co-Borrowers’’).

 

Borrower has requested a loan from Lender in order to finance the purchase of the equipment described on Schedule A hereto, and Lender has agreed to make such loan to Borrower on the terms and conditions set forth herein.

 

Capitalized terms used herein without definition shall have the meanings assigned to them in Schedule B attached hereto.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

 

SECTION 1.                                             ADVANCE OF LOAN.

 

Section 1.1.                                           Loan.  On the terms and conditions hereinafter set forth, the parties agree that Lender shall lend to Borrower the principal sum of $15,400,000.00 (the “Loan”).  The principal amount of the Loan shall be limited to 100.00% of Borrower’s cost of acquiring the Equipment and other related property with respect to which such Loan is to be made.  Amounts borrowed and repaid hereunder may not be redrawn.

 

Section 1.2.                                           Promissory Note.  The obligation to repay the Loan shall be evidenced by a promissory note payable by Borrower to the order of Lender in the form agreed to by Lender and executed and delivered by Borrower on the Closing Date (the “Promissory Note”).

 

Section 1.3.                                           Interest and Maturity; Rate Adjustment.  The Promissory Note shall bear interest, be payable and mature as set forth therein.  The annual interest rate on the Promissory Note shall be computed on an actual days elapsed/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding compounded on a monthly basis.  All interest payable under this Note is computed using this method.  If Borrower fails to fully execute and return the Loan Documents within 5 business days of the original date of this Agreement, Lender shall have the right to adjust the interest rate applicable to the Promissory Note to reflect any increase in the LIBOR Swap Rate as of the date Borrower does, in fact, execute the Loan Documents over the LIBOR Swap Rate originally used in setting the interest rate applicable to the Promissory Note.

 

SECTION 2.                                             PAYMENTS AND PREPAYMENTS.

 

Section 2.1.                                           Scheduled Payments Borrower shall make the scheduled payments on the dates (each a “Payment Date”) set forth in the Promissory Note.  Payments will be credited on the date actually received and applied as provided herein.  All principal, interest and other amounts due under the Promissory Note, this Agreement and the other Loan Documents which remain unpaid shall become due on the Maturity Date.

 

Section 2.2.                                           Optional Prepayments Borrower shall have the right on any Payment Date, upon ten (10) days’ prior written notice to Lender, to prepay the Loan (in whole or in part).  Such notice to Lender shall specify the Payment Date on which such prepayment shall occur and the amount to be prepaid.  If Borrower exercises its right of prepayment or the Loans become due and payable pursuant to Section 8, Borrower shall pay to Lender the specified principal amount, all accrued interest thereon to the date of prepayment, plus a prepayment premium equal to the applicable percentage of the principal amount prepaid set forth below (the “Prepayment Premium”):

 

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IF PREPAID DURING THE PERIOD:
    	
 
    	
PERCENTAGE OF PRINCIPAL
   AMOUNT PREPAID:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
From the date of the Promissory Note to the first   anniversary
    	
 
    	
2.00
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
After the first anniversary to the second   anniversary
    	
 
    	
1.00
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Anytime after the second anniversary of the   Promissory Note
    	
 
    	
0.00
    	
%
    

 

Section 2.3.                                           Payments upon Casualty.  Borrower shall promptly notify Lender of the theft, loss, destruction or irreparable damage of or to the Collateral or any material portion thereof.  Any amounts received by Borrower which constitute payment as a result of such theft, loss, destruction or irreparable damage of or to the Collateral, or other event or circumstance resulting in the payment of amounts with respect to the Collateral out of the ordinary course, shall, at the option of Lender in its sole and absolute discretion (i) be retained by Borrower to repair or replace the applicable Collateral, or (ii) be remitted to Lender for application to the prepayment (in whole or in part, as applicable) of the principal of the Promissory Note, and the remaining payments due under such Promissory Note shall be reduced pro rata to reflect any such partial prepayment.  For the avoidance of doubt, the theft, loss, destruction or irreparable damage of or to the Collateral shall not relieve Borrower from any Obligation under this Agreement or the Promissory Note, except as expressly provided for herein.  Borrower assumes and shall bear the entire risk of the theft, loss, destruction or damage to the Collateral from any cause, whether or not insured.

 

Section 2.4.                                           Application of Payments.

 

(a)                                            Payments in the Ordinary Course.  Provided that no Default or Event of Default has occurred and is continuing, the amounts from time to time received by Lender from Borrower with respect to the Promissory Note shall be applied: first, to any unpaid costs or expenses of Lender incurred pursuant to this Agreement; second, to unpaid late charges and Prepayment Charges due from Borrower; third, to interest then due and payable on such Promissory Note; fourth, to principal in accordance with the terms of such Promissory Note; fifth, to any other amounts then due and owing hereunder.

 

(b)                                            Payments Following an Event of Default.  If an Event of Default has occurred and is continuing, any amounts received by Lender from Borrower may, at Lender’s discretion, be applied: first, to the payment of all expenses and charges, including the expenses of any sale, lease or other disposition of the Collateral, attorneys’ fees, court costs and any other expenses incurred or advances made by Lender in the exercise of its rights and remedies; second, to the payment of the Obligations in such order as Lender shall determine in its sole discretion; and third, to the payment of any surplus thereafter remaining to Borrower or to whosoever may be entitled thereto.

 

SECTION 3.                                             SECURITY.

 

Section 3.1.                                           Grant of Security Interest.  To secure the prompt and complete payment of all indebtedness owing at any time by Borrower to Lender and the observance and performance of each covenant, condition or obligation of whatsoever nature to be performed or observed by Borrower under this Agreement, the Promissory Note and each of the other Loan Documents, including in respect of any and all loans or other financial accommodations made at any time by Lender (collectively, the “Obligations”), Borrower hereby grants Lender a first priority security interest in and to all right, title and interest of Borrower, whether now owned or existing or hereafter created, acquired or arising, and wherever located in the following (collectively, the “Collateral”):

 

(a)                                      the equipment as more specifically identified on Schedule A hereto, as amended from time to time, and all accessions, substitutions, attachments, accessories, tools, parts, supplies, replacements of and additions to each of such items described on said Schedule A, whether added now or later (collectively, the “Equipment”);

 

(b)                                      all products and produce of any of the Equipment described herein;

 

(c)                                       all accounts, chattel paper, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, consignment or other disposition of any of the Equipment described herein;

 

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(d)                                      all proceeds, cash and non-cash (including insurance proceeds), from the sale, destruction, loss, or other disposition of any of the Equipment described herein, and sums due from a third party who has damaged or destroyed the Equipment or from that party’s insurer, whether due to judgment, settlement or other process; and

 

(e)                                       all records and data, operating manuals, warranties and similar rights relating to any of the Equipment described herein, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of Borrower’s right, title, licenses and interests in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media.

 

Borrower agrees that this Agreement shall create a continuing security interest in the Collateral, which shall remain in effect until the indefeasible payment in full of the Promissory Note and payment and performance in full of all of the Obligations.  Borrower agrees to take whatever actions are requested by Lender to perfect and continue Lender’s security interest in the Collateral.  Borrower agrees that, with respect to the Collateral, Lender shall have all of the rights and remedies of a secured party under the applicable Uniform Commercial Code.  Borrower hereby authorizes Lender, without the consent or signature of Borrower, to amend Schedule A hereto in connection with any change in the Collateral and to file at any time and from time to time UCC financing statements and any amendments thereto describing the Collateral.

 

Section 3.2.                                           Right of Setoff.  To the extent permitted by Applicable Law, Lender reserves a right of setoff in all of Borrower’s accounts with Lender (whether checking, savings, or some other account).  This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future (excluding any IRA or Keogh accounts, or any trust accounts for which setoff is prohibited by law).  Borrower authorizes Lender, to the extent permitted by Applicable Law, to charge or setoff all sums owing on the Obligations against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph.  Borrower agrees that for purposes of this Section 3.2, the term “Lender” includes BMO Harris Bank N.A., its subsidiaries and Affiliates.

 

Section 3.3.                                           Notices to Lender.  Borrower will promptly notify Lender in writing at Lender’s address shown on the signature page hereof (or such other address as Lender may designate from time to time) prior to any (a) change in Borrower’s name; (b) change in Borrower’s assumed business name(s); (c) change in the management of the Borrower; (d) change in the authorized signer(s); (e) change in Borrower’s principal office address; (f) change in Borrower’s state of organization;  (g) conversion of Borrower to a new or different type of business entity; or (h) change in any other aspect of Borrower that directly or indirectly relates to any agreements between Borrower and Lender.  No change in Borrower’s name or state of organization will take effect until after Lender has received notice.

 

Section 3.4.                                           Enforceability of Collateral.  To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the applicable Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral.  At the time any account becomes subject to a security interest in favor of Lender, the account shall be a good and valid account representing an undisputed, bona fide indebtedness incurred by the account debtor, for merchandise held subject to delivery instructions or previously shipped or delivered pursuant to a contract of sale, or for services previously performed by Borrower with or for the account debtor.  So long as this Agreement remains in effect, Borrower shall not, without Lender’s prior written consent, compromise, settle, adjust, or extend payment under or with regard to any such accounts.  There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing.

 

Section 3.5.                                           Location of Collateral.  Except for vehicles, and except otherwise in the ordinary course of Borrower’s business, Borrower agrees to keep the Collateral (or to the extent the Collateral consists of intangible property such as accounts or general intangibles, the records concerning the Collateral) at Borrower’s address shown on the signature page hereof or at such other locations as are acceptable to Lender.  With respect to Collateral consisting of vehicles, Borrower will keep the Collateral at such address or other locations except for routine travel.  Upon Lender’s request, Borrower will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Borrower’s operations, including without limitation the following:  (a) all real property Borrower owns or is purchasing; (b) all real property Borrower is renting or leasing; (c) all storage facilities Borrower owns, rents, leases, or uses; and (d) all other properties where Collateral is or may be located.  Borrower is strictly prohibited from allowing any Collateral to cross the U.S./Mexican border into Mexico or be located in Mexico.

 

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Section 3.6.                                           Removal of Collateral.  Except in the ordinary course of Borrower’s business, Borrower shall not remove the Collateral from its existing location without Lender’s prior written consent.  To the extent the Collateral consists of vehicles or other titled property, Borrower shall not take or permit any action to re-title such vehicles or other titled property in any state or jurisdiction other than the state in which such vehicle or property was initially titled without Lender’s prior consent and without duly noting Lender’s lien on the certificate of title and making such filings, if any, prescribed by law to perfect Lender’s Lien.  Borrower shall, whenever requested, advise Lender of the exact location of the Collateral.

 

Section 3.7.                                           Transactions Involving Collateral.  Except for inventory sold or accounts collected in the ordinary course of Borrower’s business, or as otherwise provided for in this Agreement, Borrower shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral.  So long as no Event of Default has occurred under this Agreement, Grantor may sell inventory, but only in the ordinary course of its business and only to buyers who qualify as a buyer in the ordinary course of business.  A sale in the ordinary course of Borrower’s business does not include a transfer in partial or total satisfaction of a debt or any bulk sale.  Borrower shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in this Agreement, without the prior written consent of Lender.  This includes security interests even if junior in right to the security interests granted under this Agreement.  Unless waived by Lender, all proceeds (cash and non-cash) from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition.  Upon receipt, Borrower shall immediately deliver any such proceeds to Lender.

 

Section 3.8.                                           Fixtures.  Except as disclosed to Lender in writing, no portion of the Collateral is or will be attached to real estate in such a manner that the same may become a fixture as defined in the applicable Uniform Commercial Code.

 

Section 3.9.                                           Borrower’s Right to Possession and to Collect Accounts.  So long as no Event of Default has occurred and is continuing, the Borrower, and the Borrower only, may have possession and beneficial use of the Equipment and other tangible personal property constituting the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the other Loan Documents, provided that Borrower’s right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by Lender is required by law to perfect Lender’s security interest in such Collateral.  At any time and even though no Event of Default exists, Lender may, to the extent applicable, exercise its rights to collect the accounts and to notify account debtors to make payments directly to Lender for application to the Obligations.  If Lender at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that purpose as Borrower shall request or as Lender, in Lender’s sole discretion, shall deem appropriate under the circumstances, but failure to honor any request by Borrower shall not of itself be deemed to be a failure to exercise reasonable care.  Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties, nor to protect, preserve or maintain any security interest given to secure the Obligations.

 

Section 3.10.                                            Lender Expenditures.  If any action or proceeding is commenced that would materially affect Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this Agreement, the Promissory Note or any Loan Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate in order to protect the Collateral, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preserving the Collateral.  All such expenditures incurred or paid by Lender for such purposes will bear interest at the rate charged under the Promissory Note from the date incurred or paid by Lender to the date of repayment by Borrower.  All such expenses will become a part of the Obligations secured hereby and, at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Promissory Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Promissory Note; or (C) be treated as a balloon payment which will be due and payable at the Promissory Note’s maturity.  Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon the occurrence of an Event of Default.

 

SECTION 4.                                             CONDITIONS PRECEDENT.

 

Section 4.1.                                           Conditions to Making Loan.  The obligation of Lender to make the Loan as set forth in Section 1.1 hereof is expressly conditioned upon Borrower causing to be done or providing to Lender, in a manner satisfactory to Lender, the following on or prior to the date on which Lender is to advance the Loan hereunder:

 

(a)                                      resolutions of the board of directors or other governing body or validly authorized committee of Borrower, certified by the Secretary or an Assistant Secretary of Borrower, duly authorizing the borrowing of funds hereunder, the grant 

 

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of security, and the execution, delivery and performance of this Agreement, the Promissory Note and the other Loan Documents;

 

(b)                                      the Promissory Note in the amount of such Loan, duly executed on behalf of Borrower;

 

(c)                                       evidence satisfactory to Lender as to due compliance with the insurance provisions of Section 6.4 hereof;

 

(d)                                      UCC financing statements (as required), duly filed in the office of the Secretary of State of the appropriate state with respect to the Collateral;

 

(e)                                       to the extent requested by Lender, a landlord waiver or collateral access agreement in a form acceptable to Lender with respect to the real property where the Collateral is located allowing Lender access to the Collateral on such property; and

 

(f)                                        such other documents and instruments and other actions, and such filings to perfect a valid, first priority security interest granted by Borrower to Lender with respect to the Collateral, shall have been made and taken as may be reasonably required by Lender and its counsel.

 

SECTION 5.                                             REPRESENTATIONS AND WARRANTIES.

 

Borrower hereby represents and warrants that:

 

Section 5.1.                                           Business Status and Information.  Borrower has the form of business organization specified on the signature page hereof, and is duly organized, validly existing and in good standing under the laws of its state of formation and is duly qualified and authorized to transact business as a foreign person in good standing in each other state in which the failure to so qualify would have Material Adverse Effect.  The exact legal name, jurisdiction of organization, Federal Employer Identification Number and Organizational Number of Borrower specified on the signature page hereof are true and correct.

 

Section 5.2.                                           Power and Authority.  Borrower has the power and authority to enter into and perform its obligations under this Agreement and the other Loan Documents.  The acquisition of the Equipment, the borrowing hereunder and the execution, delivery and performance of this Agreement, the Promissory Note and the other Loan Documents (a) have been duly authorized by all necessary action on the part of Borrower; (b) do not require the approval or consent of any stockholder, partner, member, trustee or holder of any indebtedness or obligations of Borrower except such as have been duly obtained; (c) do not and will not contravene any law, governmental rule, regulation or order now binding on Borrower, or the organizational documents of Borrower, or contravene the provisions of, or constitute a default under, or result in the creation of any lien or encumbrance upon the property of Borrower under any material agreement for borrowed money to which Borrower is a party or by which it or its property is bound, and (d) do not and will not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any Federal, state or foreign governmental authority or agency by or with respect to Borrower, except as provided herein.

 

Section 5.3.                                           Enforceability.  This Agreement and the Promissory Note constitute, and all other Loan Documents when entered into will constitute, the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with the terms hereof and thereof, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting the enforcement of creditors’ rights generally.

 

Section 5.4.                                           No Actions.  There is no action or proceeding before any court, arbitrator, administrative agency or other governmental authority pending or threatened against or affecting Borrower that, if adversely determined, could have a Material Adverse Effect.

 

Section 5.5.                                           Title to Collateral.  Borrower holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the lien of this Agreement.  No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented.  Upon the filing in the appropriate public offices of a Uniform Commercial Code financing statement naming Borrower as debtor, and

 

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Lender as secured party, and describing the Collateral, Lender will have a valid, perfected first priority security interest in the Collateral.  Borrower shall defend Lender’s rights in the Collateral against the claims and demands of all other Persons.

 

Section 5.6.                                           Full Disclosure; No Material Adverse Effect.  No information contained in any Loan Document, the financial statements provided to Lender by Borrower or any other written statement furnished by or on behalf of Borrower under any Loan Document, or to induce Lender to execute the Loan Documents, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.  Since the date of the last financial statements delivered by Borrower to Lender no event has occurred which could have a Material Adverse Effect.  No Default or Event of Default has occurred and is continuing.

 

Section 5.7.                                           No Violation of Law.  Borrower is not in violation of any Applicable Law, and Borrower has obtained all licenses, permits, franchises or other governmental authorizations necessary for the ownership of its properties and the conduct of its business.

 

Section 5.8.                                           Environmental Compliance.  The Collateral has not been, and will not be so long as the Collateral remains subject to the lien of this Agreement, used in violation of any federal, state and local statutes, regulations, rules or ordinances relating to the protection of human health or the environment (“Environmental Laws”).

 

SECTION 6.                                             COVENANTS OF BORROWER.

 

Borrower covenants and agrees as follows:

 

Section 6.1.                                           Maintenance of Business.  Borrower shall preserve and keep in full force and effect its existence, rights (charter or statutory), franchises, and licenses necessary for the proper conduct of its business.

 

Section 6.2.                                           Maintenance of Properties.  Borrower shall, and shall cause others to, maintain, preserve and keep its property, plant and equipment (including the Equipment) in good repair, working order and condition (ordinary wear and tear excepted), eligible for manufacturer’s certification, as applicable, and shall from time to time make all needed and proper repairs, renewals, replacements and additions thereto so that at all times the efficiency thereof shall be fully preserved and maintained.

 

Section 6.3.                                           Liens.  Without the prior written consent of Lender, Borrower shall not permit or cause to exist against the Collateral any liens, encumbrances or claims (“Liens”) other than the Lien created by this Agreement and the other Loan Documents.  Borrower shall notify Lender immediately upon receipt by a responsible officer of Borrower of written notice of any lien, attachment or judicial proceeding affecting the Collateral in whole or in part.  If the Collateral is subjected to a lien which is not discharged within fifteen (15) days, Borrower shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, Borrower fees or other charges that could accrue as a result of foreclosure or sale of the Collateral.  In any contest Borrower shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral.  Borrower shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings.

 

Section 6.4                                        Insurance.  So long as any of the Obligations remain outstanding, Borrower shall at its own expense and in a form approved by Lender (a) obtain and maintain a Special Form, “all risks” policy of Property Insurance for the full replacement cost of the Collateral and as determined by Lender, said policy to identify Lender as an additional insured; (b) maintain Commercial General Liability Insurance, specifying Lender as a named additional insured (but without any responsibility to pay premiums)  including coverage for bodily injury, property damage, products/completed operations and broad form contractual liability for all obligations undertaken under this Agreement and insuring against all claims, demands or actions arising out of or in connection with the use, operation or maintenance of the Collateral and covering the full operation thereof, with the limits of such policy or policies to be in an amount not less than $2,000,000 per occurrence and $2,000,000 in the aggregate, unless other limits are agreed to in writing.  In the event that the Borrower has less than the above stated limits for Commercial General Liability Insurance, but has an umbrella policy covering the same risks and providing coverage in excess of the above stated limits either alone or in combination with the amount of coverage provided under Borrower’s Commercial General Liability Insurance policy, Borrower may, as an alternative, add Lender as a named additional insured on the umbrella policy; (c) if requested by Lender, procure and maintain such other insurance, including products liability insurance in such an amount as shall be required by Lender, and procure and maintain in full force and effect at all times worker’s compensation insurance which shall cover any and all Claims for injury to any worker, employee, or agent of Borrower arising out of use, operation or maintenance of the Collateral.  (d)  Additional insurance requirements: (i) each insurer 

 

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shall waive any right of set-off against Lender, and any rights of subrogation against Lender or any other deduction, whether by attachment or otherwise, in respect of any liability of Borrower; (ii) each insurer shall agree, by endorsement upon the policy or policies issued by it or by independent instrument furnished to Lender, that it will give Lender thirty (30) days’ written notice before the policy in question shall lapse or be altered or cancelled; (iii) Borrower shall furnish Lender with certificates or other satisfactory evidence of maintenance of the insurance required hereunder and with respect to any renewal policy or policies shall furnish certificates evidencing such renewal not less than 30 days prior to the expiration date of the original policy or renewal policies; (iv) as to Lender’s interest in such insurance, no act or omission of Borrower or any of its officers, agents, employees or representatives shall affect the obligations of the insurer to pay the full amount of any loss; (v)  Borrower hereby appoints Lender as Borrower’s attorney-in-fact to make claim for, receive payment of, and execute and endorse all documents, checks or drafts for loss or damage or returned or unearned premiums under any insurance policy relating to the Collateral.  (e)  The proceeds of insurance shall, at the option of Lender be applied: (i) toward the replacement, restoration or repair of the Collateral; or (ii) toward payment of the obligations of Borrower under this Agreement and the Promissory Note.  (f)  Lender’s Right to Procure Insurance: In case of failure of Borrower to procure or maintain insurance as herein specified, Lender shall have the right, but shall not be obligated, to effect such insurance, and in such event, the cost thereof shall be repaid to Lender with the next installment of principal and interest due under this Agreement, and failure to repay the same shall carry with it the same consequence, including the applicable late charge and Default Rate interest provided in the Promissory Note.

 

Section 6.5.                                           Further Assurance.  Borrower shall promptly execute and deliver to Lender such further documents, instruments and assurances and take such further action as Lender may from time to time reasonably request in order to carry out the intent and purpose of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of Lender hereunder; including, without limitation, the execution and delivery of any document reasonably required and payment of all necessary costs (including recording fees, title transfer fees, documentary or stamp taxes and all other costs or fees), to perfect and maintain the validity, effectiveness and priority of the Liens created or intended to be created by this Agreement and any Loan Document.  Borrower irrevocably appoints Lender to execute documents necessary to transfer title if there is an Event of Default.

 

Section 6.6.                                           Notices.  Borrower shall provide written notice to Lender, promptly, and in any event within five (5) days, after the occurrence of (a) any Default or Event of Default, and (b) any event or circumstance that could have a Material Adverse Effect.

 

Section 6.7.                                           Financial Statements.  Borrower agrees that for so long as the Loan is outstanding, Borrower shall deliver or cause to be delivered to Lender (a) as soon as practicable, and in any event within 45 days after the end of each quarterly period (other than the fourth quarterly period) for each fiscal year of Borrower, the balance sheet of Borrower as of the end of such quarterly period together with the related statements of income and expenses for such quarterly period, all in reasonable detail and prepared in accordance with generally accepted accounting principles consistently applied throughout the period involved, and certified by Borrower’s chief financial officer; and (b) as soon as practicable, and in any event within 90 days after the close of each fiscal year of Borrower, the balance sheet of Borrower as of the end of such fiscal year together with related statements of income and surplus for such fiscal year, all in reasonable detail and prepared in accordance with generally accepted accounting principles consistently applied throughout the period involved, and certified by Borrower’s chief financial officer; and (c) with reasonable promptness, such other data and information relating to the business, operations, affairs, assets or properties of Borrower or any of its subsidiaries or relating to the ability of Borrower to perform its obligations under this Agreement, the Promissory Note and the other Loan Documents as from time to time may be reasonably requested by Lender.

 

Section 6.8.                                           Books and Records; Inspection of Collateral.  Borrower will maintain proper books of record and account in conformity with GAAP (or, in the case of any interim financial statements, prepared substantially in accordance with GAAP subject to normal year end adjustments) and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Borrower.  Lender and Lender’s designated representatives and agents shall have the right at all reasonable times to enter into and upon the premises where the Equipment and other Collateral may be located for the purpose of inspecting the same or observing its use.  Lender will be granted access to Borrower’s records relating to the maintenance and use of the Equipment and other Collateral and shall have the right to inspect and make copies of the same.

 

Section 6.9.                                           Indemnification.  Borrower shall indemnify, defend and hold harmless Lender, its successors and assigns, and their respective directors, officers, employees, agents, accountants, attorneys and Affiliates (each, an “Indemnified Party”), from and against any and all claims, actions and suits of any kind, nature or description whatsoever, liabilities, losses and expenses, including (without limitation) court costs and reasonable attorneys’ fees and expenses, arising, directly or indirectly, in connection with this Agreement or any of the other Loan Documents or the enforcement thereof, or the Equipment or other Collateral, including the acquisition, ownership, manufacture, delivery, installation, acceptance, return, use, possession, control, operation, maintenance, 

 

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storage and condition of the Equipment or other Collateral, and any claims based in negligence, strict or absolute liability or liability in tort, environmental liability or infringement (except those determined by final decision of a court of competent jurisdiction to have been directly and primarily caused by the gross negligence or willful misconduct of such Indemnified Party).  The obligations of Borrower under this Section shall survive payment in full of the Promissory Note and expiration of this Agreement.

 

Section 6.10.                                            Taxes and Assessments.  Borrower will pay when due all Taxes, including, without limitation, Taxes and assessments upon the Equipment and other Collateral, its use or operation, upon this Agreement, upon the Promissory Note or upon any of the other Loan Documents.  Borrower may withhold any such payment or may elect to contest any such tax or assessment if Borrower is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender’s interest in the Collateral is not jeopardized in Lender’s sole opinion.  Borrower further agrees to furnish Lender with evidence that such Taxes, assessments, and governmental and other charges have been paid in full and in a timely manner.

 

Section 6.11.                                            Compliance with Law.  Borrower shall comply promptly with all Applicable Laws, including, without limitation, Environmental Laws and all laws, ordinances, rules and regulations of all Governmental Authorities, now or hereafter in effect, applicable to the ownership, manufacture, use or disposition of the Equipment and other Collateral.  Borrower hereby releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any Environmental Laws, and agrees to indemnify and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement.  The indemnity obligations of Borrower under this Section shall survive payment in full of the Promissory Note and expiration of this Agreement.

 

Section 6.12.                                            Use of Proceeds.  Borrower shall use the proceeds of the Loan solely to finance Borrower’s purchase of the Equipment.

 

Section 6.13.                                            Patriot Act Compliance.  Borrower agrees to promptly furnish to Lender all documentation and other information requested by Lender which may be required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.  Borrower is and will remain in full compliance with all such laws, including, without limitation, ensuring that no person who owns a controlling interest in or otherwise controls Borrower is or shall be (a) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation, or (b) a person designated under Section 1 of Executive Order No. 13,224 (September 24, 2001), any related enabling legislation or any other similar Executive Orders.

 

No financial covenants.

 

SECTION 7.                                             DEFAULT.

 

Section 7.1.                                           Events of Default.  The occurrence of any of the following shall constitute an “Event of Default” hereunder:

 

(a)                                      any payment of principal, interest or Prepayment Charge on the Promissory Note, or any payment of any other amount owing under this Agreement or any other Loan Document, in any case, that is not received by Lender within ten (10) days after such payment is due; or

 

(b)                                      any representation, warranty, certification or statement of fact made by Borrower in this Agreement or any other Loan Document is untrue, incorrect or misleading in any material respect when made; or

 

(c)                                       other than as set forth in clauses (a) or (b), any failure by Borrower to observe or perform any covenant to be observed or performed by Borrower under this Agreement, the Promissory Note or any other Loan Document, and such failure shall continue unremedied for ten (10) days after receipt by Borrower of a written notice thereof from Lender and demanding the same to be remedied; or

 

(d)                                      (i) commencement of any case or other proceeding seeking liquidation, reorganization or other relief with respect to Borrower or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect, or the appointment of a trustee, receiver, liquidator, custodian or other similar official of Borrower or any part of its property (unless, if involuntary, the proceeding is dismissed within 60 days), or (ii) an attachment shall be levied against any of Borrower’s property or a receiver shall be appointed for any of Borrower’s property, or (iii) Borrower shall admit in writing

 

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its inability to pay its debts generally as they come due, or (iv) Borrower shall make a general assignment for the benefit of creditors, or (v) Borrower shall suspend business, or (vi) Borrower shall take any corporate action to authorize any of the foregoing; or

 

(e)                                       (i) any transfer, sale or conveyance of the voting equity capital in Borrower or any guarantor occurs which results in a change in control of the Borrower or any guarantor or (ii) any transaction of merger or consolidation or sale of substantially all assets occurs which results in a change in control of the Borrower or any guarantor (for purposes hereof, “voting equity capital” shall mean equity or ownership interests of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors or Persons performing similar functions); or

 

(f)                                        any guarantor of the Obligations under this Agreement or the Promissory Note defaults on any obligation to Lender, or any of the Events of Default listed in clauses (d) or (e) occurs with respect to any such guarantor or any such guarantor disclaims or repudiates its obligations as guarantor hereunder; or

 

(g)                                       any of the Loan Documents shall for any reason not be or shall cease to be in full force and effect, or any of the Loan Documents is declared to be null and void, or for any reason the Equipment or any of the other Collateral shall fail to be subject to a valid and perfected first priority Lien in favor of Lender, except as expressly permitted by the terms thereof; or

 

(h)                                      any event occurs or condition exists which is specified as an event of default under any other note, lease, contract, borrowing or agreement to which Borrower or any guarantor is a party; or

 

(i)                                          any event occurs or condition exists which, in the sole judgment of Lender, could have a Material Adverse Effect, or if Lender believes the prospect of payment or performance by Borrower under this Agreement, the Promissory Note or any other Loan Document is impaired, or if Lender in good faith believes itself to be insecure.

 

SECTION 8.                                             REMEDIES.

 

Upon the occurrence of an Event of Default hereunder, Lender shall have all of the rights of a secured party under the applicable Uniform Commercial Code.  Lender may, at its option, declare this Agreement to be in default and at any time thereafter may do any one or more of the following, all of which are hereby authorized by Borrower:

 

Section 8.1.                                           Non-Bankruptcy Defaults.  When any Event of Default described in Section 7.1 has occurred and is continuing (other than an Event of Default described in subsection (d) of Section 7.1), Lender may, by notice to Borrower, (a) declare the entire principal of and the accrued interest on the Promissory Note to be immediately due and payable and thereupon the Promissory Note, including both principal and interest and all other Obligations payable under the Loan Documents, shall be and become immediately due and payable without further demand, presentment, protest or notice of any kind plus an amount equal to the Prepayment Charge together with such additional default interest, charges and fees as set forth in the Promissory Note, and (b) to the extent applicable, terminate any obligation of the Lender to extend further credit pursuant to any of the terms hereof.

 

Section 8.2.                                           Bankruptcy Defaults.  When any Event of Default described in subsection (d) of Section 7.1 has occurred and is continuing, then (a) the entire principal of and the accrued interest on the Promissory Note and all other Obligations payable under the Loan Documents shall immediately become due and payable without presentment, demand, protest or notice of any kind plus an amount equal to the Prepayment Charge together with such additional default interest charges and fees as set forth in the Promissory Note, and (b) to the extent applicable, any obligation of the Lender to extend further credit pursuant to any of the terms hereof shall immediately terminate.

 

Section 8.3.                                           Assemble Collateral.  Lender may require Borrower to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral.  Lender may require Borrower to assemble the Collateral and make it available to Lender at a place to be designated by Lender.  Lender also shall have full power to enter upon the property of Borrower to take possession of and remove the Collateral.  If the Collateral contains other goods not covered by this Agreement at the time of repossession, Borrower agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Borrower after repossession.

 

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Section 8.4.                                           Sell Collateral.  Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral and proceeds (cash and non-cash) thereof in Lender’s own name or that of Borrower.  Lender may sell the Collateral at public auction or private sale.  Unless the Collateral threatens to rapidly decline in value or is of a type customarily sold on a recognized market, Lender will give Borrower, and other Persons as required by law, reasonable notice of the time and place of any public sale, or the time after which any private sale or any other disposition of the Collateral is to be made.  However, no notice need be provided to any Person who, after an Event of Default occurs, enters into and authenticates an agreement waiving that Person’s right to notification of sale.  The requirements of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition.  All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Obligations secured by this Agreement and shall be payable on demand, with interest at the Default Rate applicable to the Promissory Note from date of expenditure until repaid.

 

Section 8.5.                                           Appoint Receiver.  Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the payments, rents, income and revenues from the Collateral and apply such proceeds, over and above the cost of the receivership, against the Obligations or as the court may direct.  The receiver may serve without bond if permitted by law.  Lender’s right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral exceeds the Obligations by a substantial amount.  Employment by Lender shall not disqualify a person from serving as a receiver.

 

Section 8.6.                                           Collect Payments, Rents Income and Revenues.  Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from the Collateral.  Lender may at any time in Lender’s sole discretion transfer any Collateral into Lender’s own name or that of Lender’s nominee and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Promissory Note or apply it to payment of the Promissory Note in such order of preference as Lender may determine.  If and to the extent the Collateral consists of accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not the Obligations or Collateral is then due.  For these purposes, Lender may, on behalf of and in the name of Borrower, receive, open and dispose of mail addressed to Borrower; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to payment, shipment, or storage of any Collateral.  To facilitate collection, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender.

 

Section 8.7.                                           Obtain Deficiency.  If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Borrower for any deficiency remaining on the Obligations due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement.  Borrower shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper.

 

Section 8.8.                                           Election of Remedies.  Except as may be prohibited by Applicable Law, all of Lender’s rights and remedies, whether evidenced by this Agreement, the Promissory Notes, or by any other Loan Document or writing, shall be cumulative and may be exercised singularly or concurrently.  Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower under this Agreement, after Borrower’s failure to perform, shall not affect Lender’s right to declare an Event of Default and exercise its remedies.

 

Section 8.9.                                           No Duties.  The powers conferred upon the Lender hereunder are solely to protect its interest in the Collateral and shall not impose on it any duty to exercise such powers.  This Agreement constitutes an assignment of rights only and not an assignment of any duties or obligations of Borrower in any way related to the Collateral and the Lender shall have no duty or obligation to discharge any such duty or obligation.  The Lender shall have no responsibility for taking any necessary steps to preserve rights against any parties with respect to any Collateral or initiating any action to protect the Collateral against the possibility of a decline in market value.  Neither the Lender nor any party acting as agent or attorney for the Lender shall be liable for any acts or omissions or for any error of judgment or mistake of fact or law.

 

Section 8.10.                                           Other Rights and Remedies.  Lender may exercise any other right or remedy available to it under this Agreement, the Promissory Note, the other Loan Documents or Applicable Law, or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof or to rescind this Agreement in whole or in part.

 

Section 8.11.                                           Attorneys’ Fees; Expenses; No Remedy Exclusive.  Borrower agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement.  Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses 

 

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of such enforcement.  Costs and expenses include Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.  Borrower also shall pay all court costs and such additional fees as may be directed by the court Borrower hereby waives any and all existing or future claims to any offset against the sums due under this Agreement, the Promissory Note or the other Loan Documents and agrees to make the payments regardless of any offset or claim which may be asserted by Borrower or on its behalf in connection with this Agreement.

 

Section 8.12.                                           No Waiver.  The failure by Lender to exercise, or delay in the exercise of, the rights granted hereunder upon any Event of Default shall not constitute a waiver of any such right upon the continuation or recurrence of any such Event of Default.  Lender may take or release other security; may release any party primarily or secondarily liable for the Obligations; may grant extensions, renewals or indulgences with respect to the Obligations and may apply any other security therefor held by it to the satisfaction of the Obligations without prejudice to any of its rights hereunder.

 

SECTION 9.                                             NOTICES.

 

All notices hereunder shall be in writing, personally delivered, sent by overnight courier service, sent by facsimile transmission (with proof of completed transmission and followed by hardcopy delivery by overnight courier) or sent by certified mail, return receipt requested, addressed to the other party at its respective address stated below the signature of such parties or at such other addresses as such parties shall from time to time designate in writing to the other parties; and shall be effective on the date of receipt.  Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.

 

SECTION 10.                                      LENDER’S RIGHT TO PERFORM FOR BORROWER.

 

Section 10.1.                                            Right to Perform.  If Borrower fails to perform or comply with any of its agreements contained herein, Lender shall have the right, but shall not be obligated, to effect such performance or compliance, and the amount of any expenses of Lender thereby incurred, together with interest thereon at the Default Rate, shall be due and payable by Borrower upon demand.

 

Section 10.2.                                            Attorney-in-Fact.  Borrower hereby irrevocably appoints Lender as Borrower’s attorney-in-fact (which power shall be deemed coupled with an interest) to execute, endorse and deliver any deed, conveyance, assignment or other instrument in writing as may be reasonably necessary to vest in Lender any right, title, interest or power which by the terms hereof are expressed to be conveyed to or conferred upon Lender, including executing any documents necessary to perfect, amend, or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties.  Lender may at any time, and without further authorization from Borrower, file a carbon, photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement.  Borrower may file one or more financing statements disclosing its security interest in any or all of the Collateral without Borrower’s signature appearing thereon.  Borrower also hereby grants Lender a power of attorney to execute any such financing statements, or amendments and supplements to financing statements, and amendments and supplements to Schedule A thereto, on behalf of Borrower without notice thereof to Borrower.  Borrower hereby ratifies and approves all acts of any such attorney and agrees that neither Lender nor any such attorney will be liable for any acts or omissions nor for any error of judgment or mistake of fact or law.  The foregoing powers of attorney, being coupled with an interest, are irrevocable until the Indebtedness has been fully paid and satisfied and all agreements of Lender to extend credit to or for the account of Borrower have expired or otherwise have been terminated.  Borrower will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender’s security interest in the Collateral.

 

SECTION 11.                                      SUCCESSORS AND ASSIGNS.

 

This Agreement shall inure to the benefit of Lender, its successors and assigns, and shall be binding upon the successors of Borrower.  Neither the Collateral nor the rights and obligations of Borrower under this Agreement, the Promissory Note and the other Loan Documents may be transferred, sold, pledged, leased, encumbered, assigned or delegated without the prior written consent of Lender.  Lender may sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, Lender’s rights and obligations under this Agreement, the Promissory Note and the other Loan Documents, and in the Collateral.  In connection therewith, Lender may disclose all documents and information which Lender now or hereafter may have relating to the Loan, Borrower, or the business of Borrower.  Borrower agrees to fully cooperate with Lender and take all such actions as Lender from time to time may reasonably request in order to facilitate the sale, assignment, transfer, negotiation or sale of a participation interest in Lender’s interest hereunder.  Borrower agrees that any such assignee or participant may enforce all liens, rights and remedies of Lender under the 

 

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provisions of this Agreement, the Promissory Note or any other Loan Documents relating hereto or under Applicable Laws, in the same manner as if such assignee or participant were Lender and a direct creditor of Borrower.

 

SECTION 12.                                      WISCONSIN LAW GOVERNS.

 

Section 12.1.                                            Governing Law.  THIS AGREEMENT, THE PROMISSORY NOTE AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, IN ALL RESPECTS, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF WISCONSIN (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.  IN NO EVENT SHALL LENDER HAVE ANY LIABILITY TO BORROWER FOR INCIDENTAL, GENERAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES.

 

Section 12.2.                                            Jurisdiction.  The parties agree that any action or proceeding arising out of or relating to this Agreement, the Promissory Note or the other Loan Documents may be commenced in any state or federal court of competent jurisdiction in the State of Wisconsin, and each party submits to the jurisdiction of such court and agrees that a summons and complaint commencing an action or proceeding in any such court shall be properly served and shall confer personal jurisdiction if served personally or by certified mail to it at its address designated pursuant hereto, or as otherwise provided under the laws of the State of Wisconsin.

 

SECTION 13.                                      WAIVER OF JURY TRIAL.

 

BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER AND LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT, THE PROMISSORY NOTE OR THE OTHER LOAN DOCUMENTS.  BORROWER AUTHORIZES LENDER TO FILE THIS PROVISION WITH THE CLERK OR JUDGE OF ANY COURT HEARING SUCH CLAIM.  THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND BORROWER HEREBY ACKNOWLEDGES THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.  BORROWER FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT, THE PROMISSORY NOTE AND THE OTHER LOAN DOCUMENTS AND IN THE MAKING OF THIS WAIVER BY LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

SECTION 14.                                      MAXIMUM RATE OF INTEREST.

 

It is the intention of the parties hereto to comply with the applicable usury laws.  Accordingly, it is agreed that, notwithstanding any provisions to the contrary in this Agreement, the Promissory Note or any other Loan Document, in no event shall this Agreement, the Promissory Note or any other Loan Document require the payment or permit the collection of interest in excess of the maximum amount permitted by Applicable Law.  If any such excess interest is contracted for, charged or received under this Agreement, the Promissory Note or any other Loan Document, or in the event that all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Agreement, the Promissory Note or any other Loan Document on the principal balance shall exceed the maximum amount of interest permitted by Applicable Law, then in such event:  (a) the provisions of this Section 14 shall govern and control, (b) neither Borrower nor any other Person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by Applicable Law, (c) any such excess which may have been collected shall either be applied as a credit against the then unpaid principal balance or refunded to Borrower, at the option of Lender, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under the Applicable Law as now or hereafter construed by the courts having jurisdiction thereof.  It is further agreed that, without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Agreement, the Promissory Note and the other Loan Documents which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by Applicable Law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Borrower or otherwise by Lender in connection with such Obligations; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for Lender to receive a greater interest per annum rate than is presently allowed by law, Borrower agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest rate per annum allowed by the amended state law or the law of the United States of America (but not in excess of the interest rate provided for herein).

 

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SECTION 15.                                      MISCELLANEOUS.

 

Section 15.1.                                            Entire Agreement.  This Agreement, the Promissory Note and the other Loan Documents, collectively constitute the entire agreement between the parties with respect to the subject matter hereof and shall not be amended or altered in any manner except by a document in writing executed by both parties.

 

Section 15.2.                                            Survival.  All representations, warranties, and covenants of Borrower contained herein or made pursuant hereto shall survive closing and continue throughout the term hereof and until the Obligations are satisfied in full, except that any indemnifications provided herein also shall survive such full satisfaction.

 

Section 15.3.                                            Severability.  Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by Applicable Law, Borrower hereby waives any provision of law which renders any provision hereof or thereof prohibited or unenforceable in any respect.

 

Section 15.4.                                            Counterparts; Electronic Signature and Storage; Joint and Several Liability.  This Agreement and the other Loan Documents may be executed in counterparts.  Photocopies, facsimile transmissions, or electronic or digital transmissions of Adobe portable document format files (also known as “PDF” files) of signatures shall be deemed original signatures and shall be fully binding on the parties to the same extent as original signatures.  Lender and Borrower acknowledge and agree that:  (a) this Agreement, the other Loan Documents and all documents and information related thereto may be reproduced and stored in any electronic format, and the originals so reproduced destroyed; and (b) any such electronic copy shall be deemed an original, shall be admissible in any court or other proceeding, and shall be enforceable against the parties thereto, whether or not the original is in existence and whether or not such reproduction was made or preserved by Lender in the regular course of business.  IF MORE THAN ONE PARTY EXECUTES THIS AGREEMENT AS BORROWER, EACH SHALL BE JOINTLY AND SEVERALLY LIABLE HEREUNDER.

 

Section 15.5.                                            Expenses.  Borrower shall not be charged for the preparation, negotiation, execution, delivery and performance of the Loan Documents.  Borrower agrees to pay or reimburse Lender for all reasonable costs and expenses (including the reasonable fees and expenses of all counsel, advisors, consultants and auditors retained in connection therewith), incurred in connection with: (a) the and enforcement of the Loan Documents and the preservation of any rights thereunder (including, without limitation, filing or recording fees and taxes); (b) collection, including deficiency collections; (c) any advice in connection with the administration of the Loan or the rights thereunder; and (d) any litigation, dispute, suit, proceeding or action (whether instituted by or between any combination of Lender, Borrower or any other Person), and an appeal or review thereof, in any way relating to the Collateral, any Loan Document, or any action taken or any other agreements to be executed or delivered in connection therewith, whether as a party, witness or otherwise.

 

Section 15.6.                                            Time of the Essence.  Time is of the essence in the performance of this Agreement, the Promissory Note and the other Loan Documents.

 

Section 15.7.                                            Accounting Terms; UCC Terms.  All accounting terms used in this Agreement and the other Loan Documents which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, all computations made pursuant to this Agreement shall be made in accordance with GAAP, and all financial statements shall be prepared in accordance with GAAP.  All other undefined terms contained in this Agreement or the other Loan Documents shall, unless the context indicates otherwise, have the meanings provided for by the UCC.

 

Section 15.8.                                            Rules of Construction.  For purposes of this Agreement and the other Loan Documents, the following additional rules of construction shall apply, unless specifically indicated to the contrary: (a) wherever from the context it appears appropriate, each term stated in either the singular or plural shall include the singular and the plural; (b) the term “or” is not exclusive; (c) the term “including” (or any form thereof) shall not be limiting or exclusive; (d) all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations; (e) all references to any instruments or agreements, including references to any of the Loan Documents, shall include the exhibits and schedules thereto, and any and all amendments, modifications or supplements thereto; and (f) all references to Lender, Borrower or any other Person shall include their successors and permitted assigns.

 

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LOAN AND SECURITY AGREEMENT

 

IN WITNESS WHEREOF, the parties hereto have caused this Loan and Security Agreement to be duly executed as of the day and year first written.

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
Lender:  
    	
BMO   Harris Equipment Finance Company
    	
 
    	
Borrower:  
    	
Rockford   Corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:  
    	
/s/ Kristen Weber
    	
 
    	
By:  
    	
/s/   John M. Perisich
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:  
    	
Kristen Weber
    	
 
    	
Name:  
    	
John   M. Perisich
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:  
    	
Officer
    	
 
    	
Title:  
    	
EVP
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
250   East Wisconsin Ave
    	
 
    	
Form of Organization:
    	
Corporation
    
	
 
    	
Suite 1400
    	
 
    	
Jurisdiction of   Organization:
    	
 
    
	
 
    	
Milwaukee,   Wisconsin 53202
    	
 
    	
Organizational Number:
    	
 
    
	
 
    	
 
    	
FEIN:
    	
931021510
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Co-Borrower:  
    	
Q3   Contracting, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:  
    	
/s/ John M. Perisich
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:  
    	
John M. Perisich
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:  
    	
EVP
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Form of Organization:
    	
Corporation
    
	
 
    	
 
    	
 
    	
Jurisdiction of   Organization:
    	
 
    
	
 
    	
 
    	
 
    	
Organizational Number:
    	
 
    
	
 
    	
 
    	
FEIN:
    	
411718869
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Co-Borrower:  
    	
ARB, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:  
    	
/s/ A. Theeuwes
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:  
    	
A. Theeuwes
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:  
    	
CFO
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Form of Organization:
    	
Corporation
    
	
 
    	
 
    	
 
    	
Jurisdiction of   Organization:
    	
 
    
	
 
    	
 
    	
 
    	
Organizational Number:
    	
 
    
	
 
    	
 
    	
FEIN:
    	
952159777
    
							

 

15

 

	
 
    	
 
    	
Co-Borrower:  
    	
Stellaris   LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:  
    	
/s/ A. Theeuwes
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:  
    	
A. Theeuwes
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:  
    	
CFO
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Form of Organization:
    	
LLC
    
	
 
    	
 
    	
 
    	
Jurisdiction of   Organization:
    	
 
    
	
 
    	
 
    	
 
    	
Organizational Number:
    	
 
    
	
 
    	
 
    	
FEIN:
    	
421729818
    
						

 

16

 

SCHEDULE A

 

Attachment to a Loan and Security Agreement Note No. 30278 Between

BMO Harris Equipment Finance Company (“Lender”) And

Rockford Corporation (“Borrower”) And

 Q3 Contracting, Inc.,

 ARB, Inc.,

 Stellaris LLC,

As (“Co- Borrower (s)”)

 

Dated April 28, 2014

 

	
Description
    	
 
    	
Year
    	
 
    	
Serial Number
    	
 
    	
Location
    
	
F550   4x2 Reg 16’ F/B Bar
    	
 
    	
2009
    	
 
    	
1FDAF56R49EA28546
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
F550   4x2 Reg Cab Servic
    	
 
    	
2009
    	
 
    	
1FDAF56R29EA35866
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
F550   4x2 Reg 16’ F/B Bar
    	
 
    	
2009
    	
 
    	
1FDAF56R69EA28547
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
F550   4x2 Reg Cab Servic
    	
 
    	
2009
    	
 
    	
1FDAF56R79EA08937
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
F550   4x2 Reg Cab Servic
    	
 
    	
2009
    	
 
    	
1FDAF56R29EA08943
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
F550   4x2 Reg Cab Servic
    	
 
    	
2009
    	
 
    	
1FDAF56R19EA08951
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T270   S/A Reg Cab W/Ser
    	
 
    	
2014
    	
 
    	
2NKHHM6X0EM394289
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T370   S/A Contractor Dum
    	
 
    	
2014
    	
 
    	
2NKHHM7X2EM404044
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T800   TRI/A DUMP
    	
 
    	
2014
    	
 
    	
1NKDXPEX8EJ412551
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2028DL161285
    	
 
    	
633   Cecelia Drive, Pewaukee, WI 53072 (Waukesha County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT202XDL161286
    	
 
    	
633   Cecelia Drive, Pewaukee, WI 53072 (Waukesha County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT202XDL161269
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2026DL161270
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2026DL161267
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2028DL161268
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2027DL161391
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2029DL161392
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2020DL161393
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2022DL161394
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2024DL161395
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2026DL161396
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT2028DL161397
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2013
    	
 
    	
4KNFT202XDL161398
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
FT-14E   T/A Concrete For
    	
 
    	
2014
    	
 
    	
5FTEE1823E1000536
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
2013   T-20DD T/A Equipment Trlr-AR
    	
 
    	
2013
    	
 
    	
4KNFT2029DL161957
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
2013   T-20DD T/A Equipment Trlr-AR
    	
 
    	
2013
    	
 
    	
4KNFT2020DL161958
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
2013   T-20DD T/A Equipment Trlr-AR
    	
 
    	
2013
    	
 
    	
4KNFT2022DL161959
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
2013   T-20DD T/A Equipment Trlr-AR
    	
 
    	
2013
    	
 
    	
4KNFT2029DL161960
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    

 

	
 
    	
By initialing below, Borrower confirms that it has reviewed the   entirety of this 5   page Schedule A and agrees that the information set forth in such   Schedule is accurate and complete.
    
	
 
    	
 
    	
 
    
	
 
    	
Initial Here
    	
 
    
				

 

INCLUDING ALL ATTACHMENTS, APPURTENANCES, ACCESSIONS, ACCESSORIES AND SUBSTITUTIONS.

INSURANCE PROCEEDS ON ABOVE.

 

1

 

	
2013   LSP 3040 4” Stringing Trl
    	
 
    	
2013
    	
 
    	
1L9LS3029DG321066
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
2013   LCV 0406 Line Tamer
    	
 
    	
2013
    	
 
    	
1L9LC3024DG321067
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
2014   T-20DD T/A Equipment Trailer
    	
 
    	
2014
    	
 
    	
4KNFT2026EL160069
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2014
    	
 
    	
4KNFT2223EL160625
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2014
    	
 
    	
4KNFT2021EL160626
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2014
    	
 
    	
4KNFT2023EL160627
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2014
    	
 
    	
4KNFT2025EL160628
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2014
    	
 
    	
4KNFT2027EL160629
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T-20DD T/A Equipment T
    	
 
    	
2014
    	
 
    	
4KNFT2023EL160630
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Lane   LSP 3040 4” Stringin
    	
 
    	
2014
    	
 
    	
1L9LS3028EG321089
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA7DU449075
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA4DU449082
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA2DU449484
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA4DU450443
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA6DU450444
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA9DU450874
    	
 
    	
5112   North National Avenue, Sioux Falls, SD 57104 (Minnehaha County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA0DU450875
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA4DU450877
    	
 
    	
5112   North National Avenue, Sioux Falls, SD 57104 (Minnehaha County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAAXDU454478
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA1DU454479
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAAXDU454481
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA1DU454483
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA5DU454484
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA7DU454485
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA4DU454489
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA9DU454181
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA0DU454182
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ingersoll   Rand P185WJD
    	
 
    	
2013
    	
 
    	
4FVCABAA2DU454183
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
2010   PC206 Planer/Asphalt Mil SS Attach-Brkr/Rake
    	
 
    	
2010
    	
 
    	
DDG00946
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
CAT   H65DS Asphalt Brea
    	
 
    	
2013
    	
 
    	
0FTS01987
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
2013   TopCap 305 Breaker SS Attach-Brkr/Rake
    	
 
    	
2013
    	
 
    	
H673
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
2013   TopCap 305 Breaker SS Attach-Brkr/Rake
    	
 
    	
2013
    	
 
    	
H674
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Magnum   TopCap RHB30
    	
 
    	
2013
    	
 
    	
H697
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Magnum   TopCap RHB30
    	
 
    	
2013
    	
 
    	
H699
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
Magnum   TopCap RHB30
    	
 
    	
2013
    	
 
    	
H757
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Magnum   TopCap RHB30
    	
 
    	
2013
    	
 
    	
H758
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Magnum   TopCap RHB30
    	
 
    	
2013
    	
 
    	
H759
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Magnum   TopCap RHB30
    	
 
    	
2013
    	
 
    	
H760
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Magnum   TopCap RHB30
    	
 
    	
2013
    	
 
    	
H761
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Magnum   TopCap RHB30
    	
 
    	
2013
    	
 
    	
H787
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Polaris   800 Sportsman 6x
    	
 
    	
2013
    	
 
    	
4XACF76A5DB603113
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
Polaris   800 Sportsman 6x
    	
 
    	
2013
    	
 
    	
4XACF76A3DB615034
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXJDE245152
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXEDE245144
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXPDE246833
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    

 

2

 

	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXADE246841
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXPDE246864
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXEDE246973
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXJDE246978
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXCDE246982
    	
 
    	
5112   North National Avenue, Sioux Falls, SD 57104 (Minnehaha County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXLDE246985
    	
 
    	
5112   North National Avenue, Sioux Falls, SD 57104 (Minnehaha County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXEDE246987
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXCDE247087
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXCDE247090
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
John   Deere 310SK 4WD R
    	
 
    	
2013
    	
 
    	
1T0310SKEDE247089
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
John   Deere 310SK 4WD R
    	
 
    	
2013
    	
 
    	
1T0310SKPDE247100
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXADE246855
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXADE246919
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 310K 2WD R
    	
 
    	
2013
    	
 
    	
1T0310KXTDE249911
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
2008   Ditch Witch RT55 Plow
    	
 
    	
2008
    	
 
    	
CMWRT55HA80000443 / 5Y0161
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
2008   236B2 Rubber Skid Steer
    	
 
    	
2008
    	
 
    	
HEN09011
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
2008   236B2 Rubber Skid Steer
    	
 
    	
2008
    	
 
    	
HEN09079
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
2008   246C W/Hy-Flow Rubber Skid Steer
    	
 
    	
2008
    	
 
    	
JAY02339
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
2008   246C W/Hy-Flow Rubber Skid Steer
    	
 
    	
2008
    	
 
    	
CAT0246CKJAY02658
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
2008   236B2 Rubber Skid Steer
    	
 
    	
2008
    	
 
    	
HEN09184
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
2008   277C Multi-terrain Loader Skid Steer
    	
 
    	
2008
    	
 
    	
JWF01889
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
CAT   236B3
    	
 
    	
2013
    	
 
    	
CAT0236BEA9H04004
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
2013 CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035ECRKY01499
    	
 
    	
1613   Read Street, Omaha, NE 68112 (Douglas County)
    
	
2013 CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035ETRKY01500
    	
 
    	
1613   Read Street, Omaha, NE 68112 (Douglas County)
    
	
CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035EKRKY01659
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035ECRKY01849
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035EHRKY01850
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035EERKY01851
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035ECRKY01852
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035ETRKY01853
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035ECRKY01857
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
CAT 303.5E CR Mini-X
    	
 
    	
2013
    	
 
    	
CAT3035EVRKY01858
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
2013   Vermeer RTX1250 Trenchr
    	
 
    	
2013
    	
 
    	
1VR6110R6D1001410
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
Vermeer   24X40 Series 2
    	
 
    	
2009
    	
 
    	
1VRZ1903391000794
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Vermeer   D36X50 Series 2
    	
 
    	
2008
    	
 
    	
1VR4230D281000362
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Grundodrill   4X
    	
 
    	
2012
    	
 
    	
4X1244176
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Grundodrill   4X
    	
 
    	
2013
    	
 
    	
4X1307180
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Grundodrill   4X
    	
 
    	
2013
    	
 
    	
4X1307181
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Grundodrill   4X
    	
 
    	
2013
    	
 
    	
4X1308182
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
2009   PV-500D Evacuator on 110221
    	
 
    	
2009
    	
 
    	
9050301
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Pacific   Tek PV800 Evacua
    	
 
    	
2009
    	
 
    	
1J9BU14249L319285 / 9042801
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Pacific   Tek PV800 Evacua
    	
 
    	
2009
    	
 
    	
1J9BU14269L319286 / 9042802
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Pacific   Tek PV800 Evacua
    	
 
    	
2009
    	
 
    	
1J9BU14289L319287 / 9042803
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Ditch   Witch FX60 Evacua
    	
 
    	
2008
    	
 
    	
1DSB202S281702145 / CMWFX60XT80000283
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
Pacific   Tek PV800DHO
    	
 
    	
2013
    	
 
    	
4S9BU1424DL228219 / 3140205
    	
 
    	
1613   Read Street, Omaha, NE 68112 (Douglas County)
    

 

3

 

	
Pacific   Tek PV800DHO
    	
 
    	
2013
    	
 
    	
4S9BU1422DL228218 / 3140206
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
Pacific   Tek PV800DHO
    	
 
    	
2013
    	
 
    	
4S9BU1420DL228220 / 3140207
    	
 
    	
2351   East County Line, Des Moines, IA 50320 (Polk County)
    
	
Pacific   Tek PV100 - 11037
    	
 
    	
2013
    	
 
    	
3060201
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
McLaughlin   V800LEHD
    	
 
    	
2013
    	
 
    	
1M9FE1223DS284019 / V8H040513581
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
McLaughlin   V800LEHD
    	
 
    	
2013
    	
 
    	
1M9FE1223DS284022 / V8H040513579
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
McLaughlin   V800LEHD
    	
 
    	
2013
    	
 
    	
1M9FE1225DS284085 / V8H050213636
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Grundodrill   DS225/4X.1
    	
 
    	
2012
    	
 
    	
GS2251248682
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Grundodrill   DS225/4X.1
    	
 
    	
2013
    	
 
    	
GS2251307686
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Grundodrill   DS225/4X.1
    	
 
    	
2013
    	
 
    	
GS2251307687
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Grundodrill   DS225/4X.1
    	
 
    	
2013
    	
 
    	
GS2251308688
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
2013   PCMS-1210 Msg Brd/Modem
    	
 
    	
2013
    	
 
    	
2S9US4128DS132275
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
DIGITRACK   F2 LOCATO
    	
 
    	
2013
    	
 
    	
F2R30017265 / FBC3279 / FSD30017366
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
DIGITRACK   F2 LOCATO
    	
 
    	
2013
    	
 
    	
F2R30020177 / FBC4362 / FSD30019877
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
DIGITRACK   F2 LOCATO
    	
 
    	
2013
    	
 
    	
F2R30024320 / FBC3236 / FSD30023630
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
DIGITRACK   F2 LOCATO
    	
 
    	
2013
    	
 
    	
30024640 / 00004821 / 30023855
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
Digitrack   F2 Locator
    	
 
    	
2013
    	
 
    	
30016075 / 30017496 / 30024481
    	
 
    	
3066   Spruce Street, Little Canada, MN 55117 (Ramsey County)
    
	
Digitrack   F2 Locator
    	
 
    	
2013
    	
 
    	
30016243 / 30016259 / 30024491
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
2013   F2 LOCATOR
    	
 
    	
2013
    	
 
    	
30027093 / 30037002
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 27D Mini-X
    	
 
    	
2014
    	
 
    	
1FF027DXVDG258723
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 27D Mini-X
    	
 
    	
2014
    	
 
    	
1FF027DXLDG258725
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 27D Mini-X
    	
 
    	
2014
    	
 
    	
1FF027DXHDG258726
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 27D Mini-X
    	
 
    	
2014
    	
 
    	
1FF027DXHDG258810
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
John   Deere 27D Mini-X
    	
 
    	
2014
    	
 
    	
1FF027DXHDG258810
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T270   S/A Contractor Dum
    	
 
    	
2014
    	
 
    	
2NKHHM6X2EM392737
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
T370   S/A Contractor Dum
    	
 
    	
2014
    	
 
    	
2NKHHM7X1EM411034
    	
 
    	
5300   Colorado Blvd, Commerce City, CO 80022 (Adams County)
    
	
14   PETERBILT 367 TRACTOR
    	
 
    	
2014
    	
 
    	
1XPTP4TX6ED244016
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   PETERBILT 367 TRACTOR
    	
 
    	
2014
    	
 
    	
1XPTP4TX8ED244017
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   PETERBILT 367 TRACTOR
    	
 
    	
2014
    	
 
    	
1XPTP4TXXED244018
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   PETERBILT 367 TRACTOR
    	
 
    	
2014
    	
 
    	
1XPTP4TX1ED244019
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   PETERBILT 367 TRACTOR
    	
 
    	
2014
    	
 
    	
1XPTP4TX8ED244020
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   PETERBILT 367 TRACTOR
    	
 
    	
2014
    	
 
    	
1XPTP4TXXED244021
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   TRAILKING LOWBED TRAILER
    	
 
    	
2014
    	
 
    	
1TKJ05333EM123355
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   TRAILKING LOWBED TRAILER
    	
 
    	
2014
    	
 
    	
1TKJ0533XEM123353
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   TRAILKING LOWBED TRAILER
    	
 
    	
2014
    	
 
    	
1TKJ05336EM123351
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   TRAILKING LOWBED TRAILER
    	
 
    	
2014
    	
 
    	
1TKJ05338EM123349
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   TRAILKING LOWBED TRAILER
    	
 
    	
2014
    	
 
    	
1TKJ05330EM123345
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
14   TRAILKING LOWBED TRAILER
    	
 
    	
2014
    	
 
    	
1TKJ05334EM123347
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
11   CAT 966K WHEEL LOADER
    	
 
    	
2011
    	
 
    	
TFS00241
    	
 
    	
24740   Juniper Flats Rd. Homeland, CA
    
	
12   CAT 938K WHEEL LOADER
    	
 
    	
2012
    	
 
    	
SWL01101
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    
	
12   CAT 930K WHEEL LOADER
    	
 
    	
2012
    	
 
    	
RHN01147
    	
 
    	
3500   S, Pegasus Drive, Bakersfield, CA, 93308
    
	
13   CAT 450E BACKHOE LOADER
    	
 
    	
2013
    	
 
    	
RBA00348
    	
 
    	
20602   Indian Ocean Drive, Lake Forest, CA 92630
    
	
13   CAT 336EL HYD EXCAVATOR
    	
 
    	
2013
    	
 
    	
BZY02356
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    

 

4

 

	
12   CAT 930K WHEEL LOADER
    	
 
    	
2012
    	
 
    	
RHN01487
    	
 
    	
5740   Arbor Vitae, Los Angeles, CA 90045
    
	
13   CAT 450E BACKHOE LOADER
    	
 
    	
2013
    	
 
    	
RBA00350
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    
	
13   CAT 450E BACKHOE LOADER
    	
 
    	
2013
    	
 
    	
RBA00349
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    
	
13   CAT 321D LCR HYD EXCAVATOR
    	
 
    	
2013
    	
 
    	
MPG00520
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    
	
13   CAT 938K WHEEL LOADER
    	
 
    	
2013
    	
 
    	
SWL01322
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    
	
12   CAT 930K WHEEL LOADER
    	
 
    	
2012
    	
 
    	
RHN01151
    	
 
    	
3500   S, Pegasus Drive, Bakersfield, CA, 93308
    
	
13   CAT 450E BACKHOE LOADER
    	
 
    	
2013
    	
 
    	
RBA00347
    	
 
    	
20602   Indian Ocean Drive, Lake Forest, CA 92630
    
	
13   CAT 336EL HYD EXCAVATOR
    	
 
    	
2013
    	
 
    	
BZY02298
    	
 
    	
1159   Jonata Park Rd., Buelton, CA 93427
    
	
13   CAT 321D LCR HYD EXCAVATOR
    	
 
    	
2013
    	
 
    	
MPG00501
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    
	
CAT   D7R XR DOZER WINCH
    	
 
    	
2007
    	
 
    	
AGN01545
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
CAT   D7R XR DOZER WINCH
    	
 
    	
2007
    	
 
    	
AGN01546
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
CAT   583T PIPELAYER
    	
 
    	
2007
    	
 
    	
CMX00183
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
CAT   583T PIPELAYER
    	
 
    	
2007
    	
 
    	
CMX00184
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
CAT   583T PIPELAYER
    	
 
    	
2007
    	
 
    	
CMX00189
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
CAT   583T PIPELAYER
    	
 
    	
2007
    	
 
    	
CMX00198
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
CAT   583T PIPELAYER
    	
 
    	
2007
    	
 
    	
CMX00199
    	
 
    	
599   Fm 793 Rd., Corsicana, Texas, 75109
    
	
CAT   587T PIPELAYER
    	
 
    	
2007
    	
 
    	
FAT00289
    	
 
    	
8782   N County Rd. 850 E., New Carlisle, IN 46552
    
	
CAT   587T PIPELAYER
    	
 
    	
2007
    	
 
    	
FAT00290
    	
 
    	
922   N County Rd. 200 E., Chesterton, IN 46304
    
	
CAT   561N PIPELAYER
    	
 
    	
2008
    	
 
    	
TAD00103
    	
 
    	
20602   Indian Ocean Drive, Lake Forest, CA 92630
    
	
CAT   561N PIPELAYER
    	
 
    	
2008
    	
 
    	
TAD00108
    	
 
    	
20602   Indian Ocean Drive, Lake Forest, CA 92630
    
	
CAT   561N PIPELAYER
    	
 
    	
2008
    	
 
    	
TAD00109
    	
 
    	
1875   Loveridge Rode, Pittsburg, CA 94565
    
	
CAT   561N PIPELAYER
    	
 
    	
2008
    	
 
    	
TAD00110
    	
 
    	
20602   Indian Ocean Drive, Lake Forest, CA 92630
    
	
CAT   561N PIPELAYER
    	
 
    	
2008
    	
 
    	
TAD00111
    	
 
    	
20602   Indian Ocean Drive, Lake Forest, CA 92630
    
	
CAT   561N PIPELAYER
    	
 
    	
2008
    	
 
    	
TAD00114
    	
 
    	
1875   Loveridge Rode, Pittsburg, CA 94565
    
	
CAT   572R II PIPELAYER
    	
 
    	
2008
    	
 
    	
DSC00387
    	
 
    	
1875   Loveridge Rode, Pittsburg, CA 94565
    
	
CAT   572R II PIPELAYER
    	
 
    	
2008
    	
 
    	
DSC00388
    	
 
    	
1159   Jonata Park Rd., Buelton, CA 93427
    
	
CAT   321D LCR EXCAVATOR
    	
 
    	
2008
    	
 
    	
NAS00322
    	
 
    	
4201   Technology Drive, Fremont, CA 94538
    
	
DEERE   710J BACKHOE
    	
 
    	
2008
    	
 
    	
T0710JX160749
    	
 
    	
20602   Indian Ocean Drive, Lake Forest, CA 92630
    
	
DEERE   710J BACKHOE
    	
 
    	
2008
    	
 
    	
T0710JX173475
    	
 
    	
5740   Arbor Vitae, Los Angeles, CA 90045
    
	
CAT   336DL EXCAVATOR
    	
 
    	
2009
    	
 
    	
W3K00636
    	
 
    	
11204   Mondon Ave., Santa Fe Springs, CA 90670
    
	
CAT   345DL EXCAVATOR
    	
 
    	
2009
    	
 
    	
EEH00596
    	
 
    	
4201   Technology Drive, Fremont, CA 94538
    
	
CAT   420E BACKHOE 4x4
    	
 
    	
2009
    	
 
    	
PRA00288
    	
 
    	
1875   Loveridge Rode, Pittsburg, CA 94565
    
	
CAT   420E BACKHOE 4x4
    	
 
    	
2009
    	
 
    	
PRA00296
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    
	
CAT   420E BACKHOE 4x4
    	
 
    	
2009
    	
 
    	
PRA00367
    	
 
    	
1501   18th Street, Los Osos, CA 93402
    
	
CAT   420E BACKHOE 4x4
    	
 
    	
2009
    	
 
    	
PRA00371
    	
 
    	
2500   E. Victoria St., Compton, CA 90220
    
	
CAT   336DL EXCAVATOR
    	
 
    	
2010
    	
 
    	
W3K01205
    	
 
    	
1322   Main St Route 20 Lumberport, West Virginia 26386
    
	
DEERE   710J BACKHOE
    	
 
    	
2010
    	
 
    	
T0710JX174259
    	
 
    	
28901   Fort Cady Rd., Newberry Springs, CA 92365
    

 

5

 

SCHEDULE B

 

DEFINITIONS

 

Capitalized terms used in this Agreement and the other Loan Documents shall have (unless otherwise provided elsewhere in this Agreement or in the Loan Documents) the following respective meanings:

 

“Affiliate” of any Person shall mean any other Person that directly or indirectly controls, or is controlled by, or is under common control with, such Person.  The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.

 

“Agreement” means this Loan and Security Agreement, as the same may be amended, modified or restated from time to time in accordance with the terms hereof, and including all appendices, exhibits and schedules attached or otherwise identified thereto.

 

“Applicable Law” means any Federal, state and local law, rule, regulation, ordinance, order, code, common law, interpretation, judgment, directive, decree, treaty, injunction, writ, determination, award, permit or similar norm or decision of any Governmental Authority applicable to Borrower or any of its properties.

 

“Borrower” means any Person or Persons identified as such in the preamble.

 

“Collateral” has the meaning assigned to it in Section 3.1.

 

“Collateral Schedule” means Schedule A to this Agreement.

 

“Default” means any event or condition the occurrence of which would, with the passage of time or the giving of notice, or both, constitute an Event of Default.

 

“Default Rate” has the meaning assigned to it in the Promissory Note.

 

“Environmental Laws” has the meaning assigned to it in Section 5.8.

 

“Equipment” has the meaning assigned to it in Section 3.1.

 

“Event of Default” has the meaning assigned to it in Section 7.1.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, consistently applied.

 

“Governmental Authority” means any federal, state, county, municipal, regional or other governmental authority, agency, board, body, instrumentality or court, in each case, whether domestic or foreign.

 

“Indemnified Party” has the meaning assigned to it in Section 6.9.

 

“Lender” means the Person identified as such in the preamble.

 

Liens” has the meaning assigned to it in Section 6.3.

 

“Loan” means the loan in the amount of the aggregate principal amount at any time outstanding under this Agreement and evidenced by the Promissory Note, and made to Borrower under the terms of this Agreement.

 

“Loan Documents” means this Agreement, the Promissory Note, and the other documents and instruments executed pursuant hereto, and all other documents, instruments, certificates and notices at any time delivered by any Person (other than Lender) in connection with any of the foregoing.

 

1

 

“Material Adverse Effect” means (a) a materially adverse effect on the business, condition (financial or otherwise), operations, performance or properties of Borrower or any guarantor, (b) a material impairment of the enforceability of, or the ability of Borrower or any guarantor to perform its obligations under or to remain in compliance with, the Loan Documents or (c) a material impairment of the perfection or priority of Lender’s security interest in any of the Collateral.

 

“Maturity Date” has the meaning assigned to it in the Promissory Note.

 

“Obligations” has the meaning assigned to it in Section 3.1, and includes all principal, interest (including interest accruing at the then applicable rate provided in this Agreement or the Promissory Note and interest accruing at the Default Rate provided in this Agreement or the Promissory Note after any Event of Default), fees, charges (including, without limitation, Prepayment Charges as provided in Section 2.2 of this Agreement and late charges as provided in the Promissory Note), expenses, attorneys’ fees and any other sums chargeable to Borrower under any of the Loan Documents.

 

“OFAC” has the meaning assigned to it in Section 6.13.

 

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56 and any legislation that amends, modifies or replaces this Act.

 

“Payment Date” has the meaning assigned to it in Section 2.1.

 

“Person” means any individual, corporation, partnership, joint venture, limited liability entity, or other legal entity or a Governmental Authority, whether employed, hired, affiliated, owned, contracted with, or otherwise related or unrelated to Borrower.

 

“Prepayment Charge” has the meaning assigned to it in Section 2.2.

 

“Prepayment Date” has the meaning assigned to it in Section 2.2.

 

“Promissory Note” has the meaning assigned to it in Section 1.2.

 

“Taxes” means taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on or measured by the net income of Lender.

 

“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in effect in the State of Wisconsin or in any applicable jurisdiction; and any reference to an article or section thereof shall mean the corresponding article or section of any such applicable version of the Uniform Commercial Code.

 

2

 

PROMISSORY NOTE

 

	
Principal Amount: $15,400,000.00
    	
 
    	
Interest   Rate: 1.9400%
    	
 
    	
Date   of Note: April 28, 2014
    	
 
    

 

FOR VALUE RECEIVED, the undersigned Rockford Corporation (“Borrower”) And Q3 Contracting, Inc., ARB, Inc., Stellaris LLC as (‘‘Co-Borrower(s)’’) of 22845 NW Bennett St Ste 150, Hillsboro, OR 97214 And 3066 Spruce Street, Little Canada, MN, 5511726000 Commercentre Drive, Lake Forest, CA, 9263026000 Commercecentre Drive, Lake Forest, CA, 926  promises to pay to the order of BMO Harris Equipment Finance Company (“Lender”) of 250 E. Wisconsin Ave., Milwaukee, WI 53202, in lawful money of the United States of America, the principal amount of $15,400,000.00, together with interest at the rate of 1.9400% per annum (the “Interest Rate”) on the unpaid principal balance from April 28, 2014, until paid in full.  This Promissory Note shall mature on April 28, 2019 (the “Maturity Date”).

 

LOAN AND SECURITY AGREEMENT.  This Promissory Note is issued pursuant to that certain Loan and Security Agreement dated as of April 28, 2014 between Borrower and Lender (the “Loan Agreement”), and Lender shall be entitled to all of the rights and remedies set forth therein.  This Promissory Note is secured by certain Collateral described in the Loan Agreement.  Capitalized terms not otherwise defined herein shall have the meanings set forth for such terms in the Loan Agreement.

 

PAYMENT.  Borrower will pay this loan in 60 consecutive arrears monthly payments of principal and interest, each in the amount of $269,720.52, payable monthly on the 28th day of each calendar month, beginning May 28, 2014. Borrower’s final payment will be due on the Maturity Date and will be for all principal, interest and other amounts due under the Promissory Note and Loan Agreement which remain unpaid.  Payments will be credited on the date actually received and applied as provided in the Loan Agreement.  Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.  This Promissory Note may be prepaid in whole or in part at the option of Borrower on the terms set forth in the Loan Agreement.  Any partial prepayment shall proportionately reduce each subsequent payment becoming due under this Promissory Note on and after the date of such prepayment.

 

INTEREST.  The annual Interest Rate for this Promissory Note is computed on an actual days/360 basis; that is, by applying the ratio of the annual Interest Rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding compounded on a monthly basis.  Upon an Event of Default, including failure to make any scheduled payment or to make any payment upon final maturity within ten (10) days after such payment is due, Lender, at its option, may increase the Interest Rate on this Promissory Note by 3.000 percentage points per annum (the “Default Rate”).  As more fully provided in the Loan Agreement, in no event shall this Promissory Note require the payment of interest in excess of the maximum amount permitted by applicable law.

 

LATE CHARGE.  If any payment of any amount owing under this Promissory Note or the Loan and Security Agreement is received by the Lender 10 or more days after said payment is due, Borrower will be obligated to pay an amount equal to 5.000% of the unpaid portion of such payment as a late charge.

 

REMEDIES UPON DEFAULT.  If an Event of Default occurs and is continuing, the principal of this Promissory Note may be declared or otherwise become due and payable in the manner, at the price and with the effect provided in the Loan Agreement and Lender shall be entitled to exercise the remedies set forth herein and in the Loan Agreement.  Such remedies shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of Lender, and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.  Borrower waives presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Promissory Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Promissory Note.

 

GOVERNING LAW.  This Promissory Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Wisconsin without regard to its conflicts of law provisions.  This Promissory Note has been accepted by Lender in the State of Wisconsin.

 

DISHONORED ITEM FEE.  Borrower will pay a fee to Lender of $50.00 if Borrower makes a payment on Borrower’s loan and the check or preauthorized charge with which Borrower pays is later dishonored.

 

1

 

RIGHT OF SETOFF.  To the extent permitted by Applicable Law, Lender reserves a right of setoff in all of Borrower’s accounts with Lender (whether checking, savings, or any other account).  This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future (excluding any IRA or Keogh accounts, or any trust accounts for which setoff is prohibited by law).  Borrower authorizes Lender, to the extent permitted by Applicable Law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph.  Borrower agrees that for purposes of this Right of Setoff, the term “Lender” includes BMO Harris Bank N.A., its subsidiaries and Affiliates.

 

PAYMENTS ABSOLUTE AND UNCONDITIONAL.  Borrower agrees that its obligation to make payments under this Promissory Note is absolute and unconditional and is not subject to setoff, counterclaim or abatement for any reason.

 

SUCCESSOR INTERESTS.  The terms of this Promissory Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors, and assigns, and shall inure to the benefit of Lender and its successors and assigns.

 

GENERAL PROVISIONS.  This Promissory Note benefits Lender and its successors and assigns, and binds Borrower and Borrower’s heirs, successors, assigns, and representatives.  If any part of this Promissory Note cannot be enforced, this factor will not affect the rest of the Promissory Note.  Lender may delay or forgo enforcing any of its rights or remedies under this Promissory Note without losing them.  Borrower and any other Person who signs, guarantees or endorses this Promissory Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor.  Upon any change in the terms of this Promissory Note, and unless otherwise expressly stated in writing, no party who signs this Promissory Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability.  All such parties agree that Lender, in its sole and absolute discretion, may renew or extend (repeatedly and for any length of time) this Promissory Note or release any party or guarantor or Collateral; or impair, fail to realize upon or perfect Lender’s security interest in the Collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone.  All such parties also agree that Lender may modify this Promissory Note without the consent of or notice to anyone other than the party with whom the modification is made.

 

AT THE REQUEST OF LENDER, BORROWER SHALL AUTHORIZE LENDER TO DEBIT A BANK ACCOUNT DESIGNATED BY BORROWER IN ORDER TO MAKE PAYMENTS OF PRINCIPAL, INTEREST, FEES AND OTHER AMOUNTS FROM TIME TO TIME DUE UNDER THE LOAN AGREEMENT AND THIS PROMISSORY NOTE.

 

[Remainder of page intentionally left blank]

 

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PRIOR TO SIGNING THIS PROMISSORY NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS PROMISSORY NOTE.  BORROWER AGREES TO THE TERMS OF THE PROMISSORY NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

IF MORE THAN ONE PARTY EXECUTES THIS PROMISSORY NOTE AS BORROWER, EACH SHALL BE JOINTLY AND SEVERALLY LIABLE HEREUNDER.

 

	
 
    	
 
    	
 
    	
 
    
	
 
    	
Borrower:
    	
 
    	
Rockford   Corporation
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ John M. Perisich
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
John M. Perisich
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
EVP
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Co-Borrower:
    	
 
    	
Q3   Contracting, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ John M. Perisich
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
John M. Perisich
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
EVP
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Co-Borrower:
    	
 
    	
ARB, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ A. Theeuwes
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
A. Theeuwes
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
CFO
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Co-Borrower:
    	
 
    	
Stellaris   LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    	
/s/ A. Theeuwes
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
A. Theeuwes
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
CFO
    

 

3Exhibit 10.1

 

MOMENTA PHARMACEUTICALS, INC.

 

Common Stock
 ($0.0001 par value per share)

 

AT-THE-MARKET EQUITY OFFERING SALES AGREEMENT

 

	
May 6,   2014
    

 

	
STIFEL,   NICOLAUS & COMPANY, INCORPORATED
    
	
One South Street,   15th Floor
    
	
Baltimore,   Maryland 21202
    

 

Ladies and Gentlemen:

 

Momenta Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell from time to time to or through Stifel, Nicolaus & Company, Incorporated (“Stifel Nicolaus”), as sales agent and/or principal (“Agent”), shares (the “Shares”) of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), having an aggregate offering price of up to $75,000,000 on the terms set forth in Section 2 of this At-the-Market Equity Offering Sales Agreement (the “Agreement”).  The Company agrees that whenever it determines to sell Shares directly to the Agent as principal, it will enter into a separate agreement (each, a “Terms Agreement”) in substantially the form of Annex I hereto, relating to such sale in accordance with Section 3 of this Agreement.

 

Section 1.  Representations and Warranties.  Except as disclosed in the Registration Statement (as defined below), Prospectus (as defined below) or General Disclosure Package (as defined below), the Company represents and warrants to the Agent that as of the date of this Agreement and as of each Applicable Time (as defined in Section 1(a) below):

 

(a)                                 Compliance with Registration Requirements.  The Company has filed with the Securities and Exchange Commission (the “Commission”) an “automatic shelf registration statement” as defined under Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”), on Form S-3 (File No. 333-188227), in respect of the Company’s Common Stock (including the Shares) (collectively, the “Securities”) not earlier than three years prior to the date hereof; such registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been initiated or, to the knowledge of the Company, threatened by the Commission, and no notice of objection of the Commission to the use of such form of registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act has been received by the Company (the base prospectus filed as part of such registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, is hereinafter called the “Basic Prospectus”; the various parts of such registration statement, including all exhibits thereto and any prospectus supplement relating to the Shares that is filed with the Commission and deemed by virtue of Rule 430B under the 1933 Act to be part of such registration statement, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the “Registration Statement”; the prospectus supplement specifically relating to the Shares prepared and filed with the Commission pursuant to Rule 424(b) under the 1933 Act is hereinafter called the “Prospectus Supplement”; the Basic Prospectus, as amended and supplemented by the Prospectus Supplement, is hereinafter called the “Prospectus”; any reference herein to the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act; any reference to any amendment or supplement to the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer to and include any post-effective amendment to the Registration Statement, any prospectus supplement or prospectus relating to the Shares filed with the Commission pursuant to Rule 424(b) under the 1933 Act and any documents filed under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and incorporated therein, in each case after the date of the Basic

 

 

Prospectus, the Prospectus Supplement or the Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the 1934 Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 433 under the 1933 Act relating to the Shares is hereinafter called an “Issuer Free Writing Prospectus”.

 

No order preventing or suspending the use of the Basic Prospectus, the Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and the Basic Prospectus and the Prospectus Supplement, at the time of filing thereof, conformed in all material respects to the requirements of the 1933 Act and the rules and regulations of the Commission thereunder (the “1933 Act Regulations”) and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

For the purposes of this Agreement, “Applicable Time” means, with respect to any Shares, the time of sale of such Shares pursuant to this Agreement; the Prospectus and the applicable Issuer Free Writing Prospectus(es) issued at or prior to such Applicable Time, taken together (collectively, and, with respect to any Shares, together with the public offering price of such Shares, the “General Disclosure Package”) as of each Applicable Time and each Settlement Date, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each applicable Issuer Free Writing Prospectus will not conflict with the information contained in the Registration Statement, the Prospectus Supplement or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the General Disclosure Package as of such Applicable Time, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(b)                                 Incorporation of Documents by Reference.  The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or were filed with the Commission, as the case may be, complied in all material respects with the applicable requirements of the 1934 Act and the rules and regulations of the Commission thereunder, and, when read together with the other information in the Prospectus, (a) at the time the Registration Statement became effective, (b) at the time the Prospectus was issued and (c) on the date of this Agreement, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(c)                                  Independent Accountants.  The accountants who certified the financial statements and supporting schedules included in the Registration Statement are independent public accountants within the applicable rules and regulations adopted by the Commission and as required by the 1933 Act .

 

(d)                                 Financial Statements.  The financial statements included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly, in all material respects, the financial position of the Company and its consolidated Subsidiaries (as defined below) at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated Subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods involved except as may be set forth in the notes included or incorporated by reference and except that unaudited financial statements may not contain footnotes required by GAAP.  The supporting schedules, if any, present fairly, in all material respects, in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly, in all material respects, the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included or incorporated by reference in the Registration Statement.

 

(e)                                  No Material Adverse Change in Business.  Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus (A) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change,  in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the

 

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Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there have been no transactions entered into by the Company or any of its Subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its Subsidiaries considered as one enterprise, and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on  any class of its capital stock.

 

(f)                                   Good Standing of the Company.  The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its organization and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.

 

(g)                                  Good Standing of Subsidiaries.  Each subsidiary listed on Schedule 1 hereto (each a “Subsidiary” and, collectively, the “Subsidiaries”) has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; except as would not result in a Material Adverse Effect, all of the issued and outstanding capital stock of each such Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, or adverse claim; none of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary except where such failure would not result in a Material Adverse Effect.  The only subsidiary, direct and indirect, of the Company is  the subsidiary listed on Schedule 1 hereto.

 

(h)                                 Capitalization.  The shares of issued and outstanding Common Stock have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of capital stock was issued in violation of the preemptive or other similar rights of any securityholder of the Company.  The Company’s Common Stock has been registered pursuant to Section 12(b) of the 1934 Act and is listed on the Nasdaq Global Market (“Nasdaq”), and the Company has not received any notification that the Commission or the Nasdaq is contemplating terminating such registration or listing.

 

(i)                                     Authorization of Agreements.  This Agreement and any Terms Agreement have been duly authorized by the Company.  This Agreement has been, and any Terms Agreement will be, executed and delivered by the Company.

 

(j)                                    Authorization and Description of Shares.  The Shares have been duly authorized and reserved for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement or any Terms Agreement, against payment of the consideration set forth herein or therein, will be validly issued and fully paid and non-assessable; the Common Stock conforms to all statements relating thereto contained in the Prospectus and such description conforms to the rights set forth in the instruments defining the same; no holder of the Shares will be subject to personal liability by reason of being such a holder; and the issuance of the Shares is not subject to the preemptive or other similar rights of any securityholder of the Company.

 

(k)                                 Absence of Defaults and Conflicts.  (a) Neither the Company nor any of its Subsidiaries is in violation of its charter or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any Subsidiary is subject (collectively, “Agreements and Instruments”)  except for such violations and defaults as would not have a Material Adverse Effect; (b)(i) and the execution, delivery and performance of this Agreement or of any Terms Agreement and the consummation of the transactions contemplated herein or in any Terms Agreement and in the Registration Statement (including the issuance and sale of the Shares and the use of the proceeds from the sale of the Shares as

 

3

 

described in the Prospectus under the caption “Use of Proceeds”) and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to, the Agreements and Instruments, (ii) nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any Subsidiary, (iii) nor will such action result in any violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any Subsidiary or any of their assets, properties or operations.  As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any Subsidiary.

 

(l)                                     Absence of Labor Dispute.  Except where the failure thereof would not result in a Material Adverse Effect, no labor dispute with the employees of the Company or any Subsidiary exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any Subsidiary’s principal suppliers, manufacturers, customers or contractors.

 

(m)                             Absence of Proceedings.  There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any Subsidiary, which would reasonably be expected to result in a Material Adverse Effect, or which might materially and adversely affect the consummation of the transactions contemplated in this Agreement or any Terms Agreement or the performance by the Company of its obligations hereunder or thereunder.

 

(n)                                 Accuracy of Exhibits.  There are no contracts or documents which are required to be described in the Registration Statement or the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required.

 

(o)                                 Possession of Intellectual Property.  Except where the failure thereof would not reasonably be expected to result in a Material Adverse Effect,  (i) the Company and its Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, and (ii) neither the Company nor any of its Subsidiaries has received any notice of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property.

 

(p)                                 Absence of Further Requirements.  Except  where the absence thereof would not result in a Material Adverse Effect, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Shares hereunder or the consummation of the transactions contemplated by this Agreement or any Terms Agreement, except such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws or by the rules of the Nasdaq or the Financial Industry Regulatory Authority, Inc. (“FINRA”).

 

(q)                                 Absence of Manipulation.   Neither the Company nor to the Company’s knowledge, any affiliate (as defined in Rule 405 of the 1933 Act Regulations) of the Company has taken, nor will the Company take, directly or indirectly, any action which is designed to or  that might be reasonably expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.

 

(r)                                    Possession of Licenses and Permits. The Company and each of its Subsidiaries have made all filings, applications, declarations and submissions required by, and own or possess all approvals, licenses, certificates, clearances, consents, exemptions, marks, notifications, orders, authorizations and permits issued by the appropriate local, state, federal or foreign regulatory agencies or bodies, including all such registrations, approvals, certificates, authorizations and permits required by the United States  Food and Drug Administration (the “FDA”) which are required for the ownership of their respective properties or the conduct of their current respective

 

4

 

businesses as described in the Registration Statement, General Disclosure Package and the Prospectus (each, a “Governmental License”) except where any failures to possess or any noncompliance would not, singly or in the aggregate, have a Material Adverse Effect and neither the Company nor any of its Subsidiaries has received any  notice of any revocation, modification or cancellation of, any such Governmental License, which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to result in a Material Adverse Effect. Where required by applicable laws and regulations of the FDA, the Company has submitted to the FDA an Investigational New Drug Application or amendment or supplement thereto for each clinical trial it has conducted or sponsored or is conducting or sponsoring, except where such failure would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect; all such submissions were in material compliance with applicable laws and rules and regulations when submitted and no material deficiencies have been asserted by the FDA with respect to any such submissions, except any deficiencies which could not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(s)                                   Title to Property.  Except where the failure thereof would result in a  Material Adverse Effect, to the Company’s knowledge, (i)  the Company and its Subsidiaries have good and marketable title to all real property owned by the Company and its Subsidiaries and good title to all other properties owned by it that are material to the business of the Company, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as do not, singly or in the aggregate, affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries; and (ii) all of the leases and subleases material to the business of the Company and its Subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.

 

(t)                                    Investment Company Act.  The Company is not required, and upon the issuance and sale of the Shares as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be required, to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(u)                                 Environmental Laws.  Except as would not reasonably be expected to, singly or in the aggregate, result in a Material Adverse Effect: (A) neither the Company nor any of  its Subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products(collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Company and its Subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or, to the Company’s knowledge threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its Subsidiaries and (D) there are no events or circumstances of which the Company is aware that would reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its Subsidiaries relating to Hazardous Materials or any Environmental Laws.

 

(v)                                 Registration Rights.  There are no persons with registrations rights or other similar rights to have any securities registered pursuant to the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as have been duly waived.

 

(w)                               Accounting Controls and Disclosure Controls.  The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions

 

5

 

are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  Since the end of the Company’s most recent audited fiscal year, the Company is not aware of any(1) material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

The Company and its consolidated Subsidiaries employ disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure.

 

(x)                                 No Commissions.  Neither the Company nor any of its Subsidiaries is a party to any contract, agreement or understanding with any person (other than as contemplated by this Agreement or any Terms Agreement) that would give rise to a valid claim against the Company or any of its Subsidiaries or the Agent for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.

 

(y)                                 Actively-Traded Security.  The Common Stock is an “actively-traded security” exempted from the requirements of Rule 101 of Regulation M under the 1934 Act by subsection (c)(1) of such rule.

 

(z)                                  Deemed Representation.  Any certificate signed by any officer of the Company delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement or any Terms Agreement shall be deemed a representation and warranty by the Company to the Agent as to the matters covered thereby as of the date or dates indicated in such certificate.

 

(aa)                          Compliance with the Sarbanes-Oxley Act.  The Company is in compliance in all material respects with all provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.

 

(bb)                          Payment of Taxes.  All United States federal income tax returns of the Company and its Subsidiaries required by law to be filed have been filed and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided and except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.  The United States federal income tax returns of the Company through the fiscal year ended December 31, 2012 have been settled and no assessment in connection therewith has been made against the Company. The Company and its Subsidiaries have filed all other tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company and its Subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided and except where the failure to do so would reasonably be expected to have a Material Adverse Effect.

 

(cc)                            Insurance.  The Company and its Subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable  institutions with policies, in such amounts and covering such risks as the Company considers adequate, and all such insurance is in full force and effect.  The Company has no reason to believe that it or any Subsidiary will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect.  During the past three years, neither of the Company nor any Subsidiary has been denied any insurance coverage material to the Company which it has sought or for which it has applied.

 

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(dd)                          Statistical and Market-Related Data.  Any statistical and market-related data included in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and, where required, the Company’s good faith estimates that are made on the basis of such data from such sources.

 

(ee)                            Foreign Corrupt Practices Act.  Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(ff)                              Money Laundering Laws.  The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the applicable rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(gg)                            OFAC.  Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person whom the Company has knowledge is currently subject to any U.S. sanctions administered by OFAC.

 

(hh)                          Tests and Preclinical and Clinical Studies. The Company has operated and currently is in compliance with the United States Federal Food, Drug, and Cosmetic Act, all applicable rules and regulations of the FDA and other federal, state,  local and foreign governmental bodies exercising comparable authority, except where the failure to so operate or be in compliance would not reasonably be expected to have a Material Adverse Effect.  The preclinical and clinical studies conducted by or, to the Company’s knowledge, on behalf of the Company that are described in the Registration Statement and the Prospectus were, and if still pending, are being, conducted in all material respects in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional and scientific standards for products or product candidates comparable to those being developed by the Company; the descriptions of the tests and preclinical and clinical studies, and results thereof, conducted by or, to the Company’s knowledge on the behalf of the Company contained in the Registration Statement, the General Disclosure Package and the Prospectus are accurate and complete in all material respects; the Company is not aware of any trials or studies not described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus, the results of which reasonably call into question the results described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus; the Company is not in receipt of any notices or correspondence from the FDA or any foreign, state or local governmental body exercising comparable authority that reasonably call into question results of the trials or studies described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus; and the Company has not received any notice or correspondence from the FDA or any foreign, state or local governmental body exercising comparable authority requiring the termination, suspension, or clinical hold of any tests or preclinical or clinical studies, or such notice or correspondence from any Institutional Review Board or comparable authority requiring the termination or suspension of a clinical study, conducted by or on behalf of the Company, which termination, suspension, or clinical hold would reasonably be expected to have a Material Adverse Effect.

 

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Section 2.  Sale and Delivery of Shares.

 

(a)                                 Subject to the terms and conditions set forth herein, the Company agrees to issue and sell exclusively through the Agent acting as sales agent or directly to the Agent acting as principal from time to time, and the Agent agrees to use its commercially reasonable efforts to sell as sales agent for the Company, the Shares.  Sales of the Shares, if any, through the Agent acting as sales agent or directly to the Agent acting as principal will be made by means of ordinary brokers’ transactions on the Nasdaq, in negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.  Anything to the contrary notwithstanding in this Agreement, without the Company’s prior written consent (which may include explicit authorization in a Terms Agreement), the Agent may not place shares  by any method other than those deemed to be an “at the market offering” as defined in Rule 415 of the 1933 Act, including without limitation sales made through Nasdaq, on any other existing trading market for the Common Stock or to or through a market maker .  The Agent shall effect any sales of Shares in accordance with applicable state and federal laws, rules and regulations and the rules of Nasdaq and otherwise in accordance with the terms of the applicable Terms Agreement.  Nothing contained herein restricts, nor may be deemed to restrict, the Company from undertaking another offering of its securities pursuant to a separate registration under the 1933 Act (or any exemption from such registration), or another offering under the Registration Statement, provided the Company complies with Section 3(p).

 

(b)                                 Subject to the applicable Terms Agreement or instructions to sell shares delivered pursuant to this Section 2(b), the Shares to be sold pursuant to this Agreement are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the Agent on that trading day (other than a day on which the Nasdaq is scheduled to close prior to its regular weekday closing time, each, a “Trading Day”) that the Company has satisfied its obligations under Section 6 of this Agreement and that the Company has instructed the Agent to make such sales.  For the avoidance of doubt, the foregoing limitation shall not apply to sales solely to employees or security holders of the Company or its Subsidiaries, or to a trustee or other person acquiring such securities for the accounts of such persons in which Stifel Nicolaus is acting for the Company in a capacity other than as Agent under this Agreement.  On any Trading Day, the Company may instruct the Agent by telephone (confirmed promptly by telecopy or email, which confirmation will be promptly acknowledged by the Agent) as to the maximum aggregate dollar value or number of Shares to be sold by the Agent on such day (in any event not in excess of the number available for issuance under the Prospectus and the currently effective Registration Statement) and the minimum price per Share at which such Shares may be sold.  Subject to the terms and conditions hereof, the Agent shall use its commercially reasonable efforts to sell as sales agent all of the Shares so designated by the Company and in the manner and on the terms so designated in writing by the Company.  The Company and the Agent each acknowledge and agree that (A) there can be no assurance that the Agent will be successful in selling the Shares, (B) the Agent will incur no liability or obligation to the Company or any other person or entity if they do not sell Shares for any reason other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Shares as required by this Agreement, and (C) the Agent shall be under no obligation to purchase Shares on a principal basis except as otherwise specifically agreed by each of the Agent and the Company pursuant to a Terms Agreement.  In the event of a conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms of such Terms Agreement will control.

 

(c)  Notwithstanding the foregoing, the Company shall not authorize the issuance and sale of, and the Agent as sales agent shall not be obligated to use its commercially reasonable efforts to sell, any Shares (i) at a price lower than the minimum price therefor authorized from time to time, or (ii) in a number in excess of the number or maximum aggregate dollar value of Shares, in each case, authorized from time to time by the Company’s board of directors, or a duly authorized committee thereof, and notified to the Agent in writing.  In addition, the Company may, upon notice to the Agent, suspend the offering of the Shares or the Agent may, upon notice to the Company, suspend the offering of the Shares with respect to which the Agent is acting as sales agent for any reason and at any time if receipt of such notice is actually acknowledged by any of the individuals to whom the notice is sent; provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the giving of such notice.  Any notice given pursuant to the preceding sentence may be given by telephone (confirmed promptly by telecopy or email, which confirmation will be promptly acknowledged).

 

(d)  The gross sales price of any Shares sold pursuant to this Agreement by the Agent acting as sales agent of the Company shall be the market price prevailing at the time of sale for shares of the Company’s

 

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Common Stock sold by the Agent on the Nasdaq or otherwise, at prices relating to prevailing market prices or at negotiated prices.  The compensation payable to the Agent for sales of Shares with respect to which the Agent acts as sales agent shall be equal to 2.0% of the gross sales price of the Shares for amounts of Shares sold pursuant to this Agreement.  The Company may sell Shares to the Agent, acting as principal, at a price agreed upon with the Agent at the relevant Applicable Time and pursuant to a separate Terms Agreement.  The remaining proceeds, after further deduction for any transaction fees imposed by any governmental, regulatory or self-regulatory organization in respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”).  The Agent shall notify the Company as promptly as practicable if any deduction referenced in the preceding sentence will be required.

 

(e)  If acting as a sales agent hereunder, the Agent shall provide written confirmation to the Company promptly following the close of trading on the Nasdaq, each day in which Shares are sold under this Agreement setting forth the number of Shares sold on such day, the aggregate gross sales proceeds of the Shares, the Net Proceeds to the Company and the compensation payable by the Company to such Agent with respect to such sales.

 

(f)  Under no circumstances shall the aggregate offering price or number, as the case may be, of Shares sold pursuant to this Agreement and any Terms Agreement exceed the aggregate offering price or number, as the case may be, of shares of Common Stock (i) set forth in the preamble paragraph of this Agreement, (ii) available for issuance under the Prospectus and the then currently effective Registration Statement or (iii) authorized from time to time to be issued and sold under this Agreement or any Terms Agreement by the Company’s board of directors, or a duly authorized committee thereof, and notified to the Agent in writing. In addition, under no circumstances shall any Shares with respect to which the Agent acts as sales agent be sold at a price lower than the minimum price therefor authorized from time to time by the Company’s board of directors, or a duly authorized committee thereof, and notified to the Agent in writing.

 

(g)                                  If either the Company or the Agent believes that the exemptive provisions set forth in Rule 101(c)(1) of Regulation M under the 1934 Act (applicable to securities with an average daily trading volume of $1,000,000 that are issued by an issuer whose common equity securities have a public float value of at least $150,000,000) are not satisfied with respect to the Company or the Shares, such party shall promptly notify the other parties and sales of Shares under this Agreement and any Terms Agreement shall be suspended until that or other exemptive provisions have been satisfied in the judgment of each party.

 

(h)                                 Settlement for sales of Shares pursuant to this Section 2 will occur on the third business day that is also a Trading Day following the trade date on which such sales are made, unless another date shall be agreed to by the Company and the Agent (each such day, a “Settlement Date”).  On each Settlement Date, the Shares sold through the Agent for settlement on such date shall be delivered by the Company to the Agent against payment of the Net Proceeds from the sale of such Shares.  Settlement for all Shares shall be effected by book-entry delivery of Shares to the Agent’s account at The Depository Trust Company against payments by the Agent of the Net Proceeds from the sale of such Shares in same day funds delivered to an account designated by the Company.  If the Company shall default on its obligation to deliver Shares on any Settlement Date, the Company shall , in addition to any indemnification obligation pursuant to Section 7, pay the Agent any commission to which it would otherwise be entitled absent such default.

 

(i)                                     Notwithstanding any other provision of this Agreement, the Company and the Agent agree that no sales of Shares shall take place, and the Company shall not request the sale of any Shares that would be sold, and the Agent shall not be obligated to sell, during any period in which the Company is, or would reasonably be deemed to be, in possession of material non-public information.

 

(j)                                    Any obligation of the Agent to use its commercially reasonable efforts to sell the Shares on behalf of the Company as sales agent shall be subject to the continuing accuracy of the representations and warranties of the Company herein, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions specified in Section 6 of this Agreement.

 

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Section 3.  Covenants.   The Company agrees with the Agent:

 

(a)                                 During any period when the delivery of a prospectus is required in connection with the offering or sale of Shares (whether physically or through compliance with Rule 153 or 172, or in lieu thereof, a notice referred to in Rule 173(a) under the 1933 Act), (i) to make no further amendment or any supplement to the Registration Statement or the Basic Prospectus (other than an amendment or supplement relating to an offering of the Company’s securities which is unrelated to the offering of the Shares hereunder) prior to any Settlement Date which shall be disapproved by the Agent promptly after reasonable notice thereof and to advise the Agent, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Basic Prospectus (other than an amendment or supplement relating to an offering of the Company’s securities which is unrelated to the offering of the Shares hereunder) has been filed and to furnish the Agent with copies thereof, (ii) to file promptly all other material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the 1933 Act, (iii) to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act, (iv) to advise the Agent, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Prospectus or other prospectus in respect of the Shares, of any notice of objection of the Commission to the use of the form of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the form of the Registration Statement or the Prospectus or for additional information, and (v) in the event of the issuance of any such stop order or of any such order preventing or suspending the use of the Prospectus in respect of the Shares or suspending any such qualification, to promptly use its commercially reasonable efforts to obtain the withdrawal of such order; and in the event of any such issuance of a notice of objection, promptly to take such reasonable steps as may be necessary to permit offers and sales of the Shares by the Agent, which may include, without limitation, amending the Registration Statement or filing a new registration statement, at the Company’s expense (references herein to the Registration Statement shall include any such amendment or new registration statement). The Company shall not amend or supplement the Prospectus Supplement in a manner disapproved by the Agent at any time after the Agent has provided written notice of such disapproval, which notice of disapproval shall be given, if at all, promptly after notice of such proposed amendment or supplement.  Notwithstanding the foregoing, the Company shall not be obligated to furnish copies of any report or statement filed with the Commission to the extent it is available on the Commission’s Electronic Data-Gathering, Analysis, and Retrieval System (“EDGAR”).

 

(b)                                 Promptly from time to time to take such action as the Agent may reasonably request to qualify the Shares for offering and sale under the securities laws of such jurisdictions as the Agent may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the sale of the Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; and to promptly advise the Agent of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.

 

(c)                                  During any period when the delivery of a prospectus is required (whether physically or through compliance with Rules 153 or 172, or in lieu thereof, a notice referred to in Rule 173(a) under the 1933 Act) in connection with the offering or sale of Shares, the Company will make available to the Agent, as soon as practicable after the execution of this Agreement, and thereafter from time to time furnish to the Agent, copies of the most recent Prospectus in such quantities and at such locations as the Agent may reasonably request for the purposes contemplated by the 1933 Act.  During any period when the delivery of a prospectus is required (whether physically or through compliance with Rules 153 or 172, or in lieu thereof, a notice referred to in Rule 173(a) under the 1933 Act) in connection with the offering or sale of Shares, and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the 1934 Act any document incorporated by reference in the Prospectus in order to comply with the 1933 Act or the 1934 Act, to notify the Agent and to file such document and to prepare and furnish without charge to the Agent as many written and electronic copies as the Agent may from time to time reasonably request of an amended Prospectus or a

 

10

 

supplement to the Prospectus which will correct such statement or omission or effect such compliance. Notwithstanding the foregoing, the Company shall not be required to furnish any document to the extent such document is available on EDGAR.

 

(d)                                 To make generally available to its securityholders as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the 1933 Act), an earnings statement of the Company and its Subsidiaries (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158).

 

(e)                                  To pay the required Commission filing fees relating to the Shares within the time required by Rule 456(b)(1) under the 1933 Act and otherwise in accordance with Rules 456(b) and 457(r) under the 1933 Act.

 

(f)                                   To use the Net Proceeds received by it from the sale of the Shares pursuant to this Agreement and any Terms Agreement in the manner specified in the General Disclosure Package.

 

(g)                                  In connection with the offering and sale of the Shares, the Company will file with the Nasdaq all documents and notices, and make all certifications, required by the Nasdaq of companies that have securities that are listed for quotation on the Nasdaq and will maintain such listing.

 

(h)                                 To not take, directly or indirectly, and to use commercially reasonable efforts to cause its affiliates (as defined in Rule 405 of the 1933 Act Regulations) to refrain from taking, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, under the 1934 Act or otherwise, the stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Shares.

 

(i)                                     In each Annual Report on Form 10-K or Quarterly Report on Form 10-Q filed by the Company in respect of any quarter in which sales of Shares were made by or through the Agent under this Agreement or any Terms Agreement (each date on which any such document is filed, and any date on which an amendment to any such document is filed, a “Company Periodic Report Date”), the Company shall set forth with regard to such quarter the approximate number of Shares sold through the Agent under this Agreement or any Terms Agreement and the Net Proceeds received by the Company with respect to sales of Shares pursuant to this Agreement or any Terms Agreement.

 

(j)                                    On the date the Company first files the Prospectus relating to the offer and sale of the Shares pursuant to this Agreement (the “Commencement Date”) and each time the Shares are delivered to the Agent as principal on a Settlement Date and promptly after each (i) date the Registration Statement or the Prospectus shall be amended or supplemented (other than (1) by an amendment or supplement providing solely for the determination of the terms of the Shares, (2) in connection with the filing of a prospectus supplement that contains solely the information set forth in Section 3(i), (3) in connection with the filing of any current reports on Form 8-K (other than any current reports on Form 8-K which contain financial statements, supporting schedules or other financial data, including any current report on Form 8-K under Item 2.02 of such form that is considered “filed” under the 1934 Act) or (4) by a prospectus supplement relating to the offering of other securities (including, without limitation, other shares of Common Stock)) (each such date, a “Registration Statement Amendment Date”) and (ii) Company Periodic Report Date, the Company will furnish or cause to be furnished forthwith to the Agent a certificate dated the date of effectiveness of such amendment or the date of filing with the Commission of such supplement or other document, as the case may be, in a form reasonably satisfactory to the Agent to the effect that the statements contained in the certificate referred to in Section 6(e) of this Agreement which were last furnished to the Agent are true and correct at the time of such amendment, supplement or filing, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement, the General Disclosure Package and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 6(e), but modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented, or to the document incorporated by reference into the Prospectus, to the time of delivery of such certificate. As used in this paragraph, to the extent there shall be an Applicable Time on or following the date referred to in clause (i) or (ii) above, promptly shall be deemed to be on or prior to the next succeeding Applicable Time. Notwithstanding the forgoing, the Company shall not be

 

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required to deliver any such certificate if it has notified the Agent that it does not then presently intend to make sales of Shares under this Agreement; provided, however, that such a certificate shall then be required to be delivered to the Agent prior to any further sales of Shares under this Agreement covering the period which would most recently have been required but for such notice.

 

(k)                                 On the Commencement Date and each time the Shares are delivered to the Agent as principal on a Settlement Date pursuant to a Terms Agreement, and promptly after each (i) Registration Statement Amendment Date and (ii) filing by the Company of a Company Periodic Report, the Company will furnish or cause to be furnished to the Agent and to counsel to the Agent the written opinion and letter of each Company Counsel (as defined below) or other counsel reasonably satisfactory to the Agent, dated the date of effectiveness of such amendment or the date of filing with the Commission of such supplement or other document, as the case may be, in a form and substance reasonably satisfactory to the Agent and its counsel, of the same tenor as the opinions and letters referred to in Section 6(c) of this Agreement, but modified as necessary to relate to the Registration Statement, the General Disclosure Package and the Prospectus as amended and supplemented, or to the document incorporated by reference into the Prospectus, to the time of delivery of such opinion and letter or, in lieu of such opinion and letter, counsel last furnishing such letter to the Agent shall furnish such Agent with a letter substantially to the effect that the Agent may rely on such last opinion and letter to the same extent as though each were dated the date of such letter authorizing reliance (except that statements in such last letter shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance). As used in this paragraph, to the extent there shall be an Applicable Time on or following the date referred to in clause (i) or (ii) above, promptly shall be deemed to be on or prior to the next succeeding Applicable Time.  Notwithstanding the forgoing, the Company shall not be required to furnish or cause to be furnished any such opinion or letter if it has notified the Agent that it does not then presently intend to make sales of Shares under this Agreement; provided, however, that such an opinion or letter shall then be required to be furnished to the Agent prior to any further sales of Shares under this Agreement covering the period which would most recently have been required but for such notice.

 

(l)                                     On the Commencement Date and each time the Shares are delivered to the Agent as principal on a Settlement Date pursuant to a Terms Agreement, and promptly after each (i) Registration Statement Amendment Date and (ii) filing by the Company of a Company Periodic Report, the Company will cause Ernst & Young LLP, or other independent accountants reasonably satisfactory to the Agent, to furnish to the Agent a letter, dated the date of effectiveness of such amendment or the date of filing of such supplement or other document with the Commission, as the case may be, in form reasonably satisfactory to the Agent and its counsel, of the same tenor as the letter referred to in Section 6(d) hereof, but modified as necessary to relate to the Registration Statement, the General Disclosure Package and the Prospectus, as amended and supplemented, or to the document incorporated by reference into the Prospectus, to the date of such letter. As used in this paragraph, to the extent there shall be an Applicable Time on or following the date referred to in clause (i) or (ii) above, promptly shall be deemed to be on or prior to the next succeeding Applicable Time. Notwithstanding the forgoing, the Company shall not be required to furnish or cause to be furnished any such opinion or letter if it has notified the Agent that it does not then presently intend to make sales of Shares under this Agreement; provided, however, that such an opinion or letter shall then be required to be furnished to the Agent prior to any further sales of Shares under this Agreement covering the period which would most recently have been required but for such notice.

 

(m)                             The Company consents to the Agent trading in the Company’s Common Stock for the Agent’s own account and for the account of its clients at the same time as sales of Shares occur pursuant to this Agreement or any Terms Agreement, provided that at all times the Agent is in compliance with Regulation M under the 1934 Act with respect to the Common Stock and provided that in no event shall the Agent trade the Common Stock for its or its affiliates’ proprietary accounts.

 

(n)                                 [Intentionally Omitted]

 

(o)                                 The Company will cooperate timely with any reasonable due diligence review conducted by the Agent or its counsel from time to time in connection with the transactions contemplated hereby or in any Terms Agreement, including, without limitation, and upon reasonable notice providing information and making available documents and appropriate corporate officers, during regular business hours and at the Company’s principal offices, as the Agent may reasonably request.

 

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(p)                                 During the time any instruction to sell shares delivered pursuant to Section 2(b) hereof or any Terms Agreement is in effect, the Company will not, without giving the Agent at least three business days’ prior written notice specifying the nature of the proposed sale and the date of such proposed sale and the Agent suspending activity under this program for such period of time as requested by the Company, (A) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or securities convertible into or exchangeable or exercisable for or repayable with Common Stock, or file any registration statement under the 1933 Act with respect to any of the foregoing (other than a shelf registration statement under Rule 415 under the 1933 Act, a registration statement on Form S-8 or post-effective amendment to the Registration Statement) or (B) enter into any swap or other agreement or any transaction that transfers in whole or in part, directly or indirectly, any of the economic consequence of ownership of the Common Stock, or any securities convertible into or exchangeable or exercisable for or repayable with Common Stock, whether any such swap or transaction described in clause (A) or (B) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (x) any securities issuable upon the exercise or conversion of warrants, options, convertible securities or other rights either in existence prior to the date of this Agreement or issued thereafter in compliance with this Section 3(p), (y) the Shares to be offered and sold through the Agent pursuant to this Agreement or any Terms Agreement and (z) equity incentive awards approved by the board of directors of the Company or the compensation committee thereof or the issuance of Common Stock upon exercise thereof.

 

(q)                                 If immediately prior to the third anniversary (the “Renewal Deadline”) of the initial effective date of the Registration Statement, any of the Shares remain unsold, the Company will, prior to the Renewal Deadline file, if it has not already done so and is eligible to do so, an “automatic shelf registration statement” (as defined in Rule 405 under the 1933 Act) relating to the Shares, in a form reasonably satisfactory to the Agent.  If the Company is not eligible to file an automatic shelf registration statement, the Company will, prior to the Renewal Deadline, if it has not already done so, file a new shelf registration statement relating to the Shares, in a form reasonably satisfactory to the Agent, and will use its commercially reasonable efforts to cause such registration statement to be declared effective within 60 days after the Renewal Deadline.  The Company will use commercially reasonable efforts to take all other action necessary or appropriate to permit the issuance and sale of the Shares to continue as contemplated in the expired registration statement relating to the Shares.  References herein to the Registration Statement shall include such new automatic shelf registration statement or such new shelf registration statement, as the case may be.

 

Section 4.  Free Writing Prospectus.

 

(a)                                 (i)                                     The Company represents and agrees that without the prior consent of the Agent (which consent may not be unreasonably withheld, delayed or conditioned), it has not made and will not make any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the 1933 Act; and

 

(ii)                                  the Agent represents and agrees that, without the prior consent of the Company (which consent may not be unreasonably withheld, delayed or conditioned), it  has not made and will not make any offer relating to the Shares that would constitute a free writing prospectus required to be filed with the Commission.

 

(b)                                 The Company has complied and will comply with the requirements of Rule 433 under the 1933 Act applicable to any Issuer Free Writing Prospectus (including any free writing prospectus identified in Section 4(a) hereof), including timely filing with the Commission or retention where required and legending.

 

Section 5.  Payment of Expenses.  The Company covenants and agrees with the Agent that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Shares under the 1933 Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, the Basic Prospectus, Prospectus Supplement, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Agent; (ii) the cost of printing or producing this Agreement or

 

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any Terms Agreement, any Blue Sky and Legal Investment Memoranda, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 3(b) hereof, including the reasonable fees and disbursements of counsel for the Agent in connection with such qualification and in connection with the Blue Sky and Legal Investment Surveys; (iv) any filing fees incident to, and the reasonable fees and disbursements of counsel for the Agent in connection with, any required review by FINRA of the terms of the sale of the Shares; (v) all fees and expenses in connection with listing or quoting the Shares on the Nasdaq; (vi) the cost of preparing the Shares; (vii) the costs and charges of any transfer agent or registrar or any dividend distribution agent; (viii) the reasonable fees and disbursements of counsel to the Agent in an aggregate amount not to exceed $50,000 (which amount shall include all fees and disbursements of such counsel described in clauses (iii) and (iv) above); and (ix) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Section 7 hereof, the Agent will pay all of its own costs and expenses, including the fees of its counsel, transfer taxes on resale of any of the Shares by it, and any advertising expenses connected with any offers it may make.

 

Section 6.  Conditions of Agent’s Obligation.  The obligations of the Agent hereunder shall be subject, in its discretion, to the condition that all representations and warranties and other statements of the Company herein or in certificates of any officer of the Company delivered pursuant to the provisions hereof are true and correct as of the time of the execution of this Agreement, the date of any executed Terms Agreement and as of each Registration Statement Amendment Date, Company Periodic Report Date, Applicable Time and Settlement Date, to the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

 

(a)                                 The Prospectus Supplement shall have been filed with the Commission pursuant to Rule 424(b) under the 1933 Act on or prior to the date hereof and in accordance with Section 3(a) hereof, any other material required to be filed by the Company pursuant to Rule 433(d) under the 1933 Act shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission and no notice of objection of the Commission to the use of the form of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act shall have been received; no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of the Agent.

 

(b)                                 On every date specified in Section 3(k) hereof and on such other dates as reasonably requested by Agent, LeClairRyan, A Professional Corporation, counsel for the Agent, shall have furnished to the Agent such written opinion or opinions, dated as of such date, with respect to such matters as the Agent may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters.

 

(c)                                  On every date specified in Section 3(k) hereof, Latham & Watkins LLP, counsel for the Company, or other counsel reasonably satisfactory to the Agent, shall have furnished to the Agent written opinion or opinions, dated as of such date, in form and substance reasonably satisfactory to the Agent (it being understood and agreed that, other than on the Commencement Date, such opinions shall consist of a customary “negative assurance” letter).

 

(d)                                 At the dates specified in Section 3(l) hereof, the independent accountants of the Company who have certified the financial statements of the Company and its Subsidiaries included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus shall have furnished to the Agent a letter dated as of the date of delivery thereof and addressed to the Agent in form and substance reasonably satisfactory to the Agent and its counsel, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements of the Company and its Subsidiaries included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus.

 

14

 

(e)                                  On each date specified in Section 3(j), the Agent shall have received (1) a certificate of executive officers of the Company, one of whom shall be the Chief Financial Officer, Chief Accounting Officer, Treasurer, or Executive Vice President in the area of capital markets and investments, dated as of the date thereof, to the effect that (A) there has been no Material Adverse Effect since the date as of which information is given in the General Disclosure Package and the Prospectus as then amended or supplemented, (B) the representations and warranties in Section 1 hereof are true and correct as of such date and (C) the Company has complied with all of the agreements entered into in connection with the transaction contemplated herein and satisfied all conditions on its part to be performed or satisfied hereunder.  On the Commencement Date, the Company will furnish or cause to furnished promptly to the Agent a certificate of the Company signed by the secretary of the Company, dated as of the date thereof, to the effect that (A) each of the charter and bylaws of the Company (as the same may be amended and/or restated) is true and complete, has not been modified and is in full force and effect,  and (B) the resolutions of the Company’s board of directors relating to the sales of Shares pursuant to this Agreement are in full force and effect and have not been modified.

 

(f)                                   The Company shall have complied with the provisions of Section 3(c) hereof with respect to the timely furnishing of prospectuses.

 

(g)                                  On such dates as reasonably requested by the Agent, the Company shall have conducted due diligence sessions, in form and substance reasonably satisfactory to the Agent.

 

(h)                                 All filings with the Commission required by Rule 424 under the 1933 Act to have been filed by each Applicable Time or related Settlement Date shall have been made within the applicable time period prescribed for such filing by Rule 424 (without reliance on Rule 424(b)(8)).

 

(i)                                     The Shares shall have received approval for listing on the Nasdaq prior to the first Settlement Date.

 

(j)                                    Prior to any Settlement Date, the Company shall have furnished to the Agent such further information, documents or certificates as the Agent may reasonably request.

 

Section 7.  Indemnification.

 

(a)                                 The Company will indemnify and hold harmless the Agent against any losses, third party claims, damages or liabilities, joint or several, to which the Agent may become subject, under the 1933 Act or otherwise, to the extent  that such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the 1933 Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Agent for any legal or other expenses reasonably incurred by the Agent in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by the Agent expressly for use therein.

 

(b)                                 The Agent will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was

 

15

 

made in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus, or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in strict conformity with written information furnished to the Company by the Agent expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

 

(c)                                  Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection except and then only to the extent such indemnifying party is materially prejudiced thereby. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 7 for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

 

(d)                                 If the indemnification provided for in this Section 7 is unavailable to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on the other from the offering of the Shares to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Agent on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total commissions received by the Agent.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Agent on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Agent agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this subsection (d), the Agent shall not be required to contribute any amount in excess of the amount by which the total compensation received by the Agent with respect to sales of the Shares sold by it to the public exceeds the amount of any damages which the Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

16

 

(e)                                  The obligations of the Company under this Section 7 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to the directors, officers, employees, attorneys and agents of the Agent and to each person, if any, who controls the Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each broker dealer affiliate of the Agent; and the obligations of the Agent under this Section 7 shall be in addition to any liability which the Agent may otherwise have and shall extend, upon the same terms and conditions, to each director, officer, employee, attorney and agent of the Company and to each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act.

 

Section 8.  Representations, Warranties and Agreements to Survive Delivery.  The respective indemnities, agreements, representations, warranties and other statements of the Company and the Agent, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Agent or any controlling person of the Agent, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Shares.

 

Section 9.  No Advisory or Fiduciary Relationship.  The Company acknowledges and agrees that (i) the Agent is acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the offering of Shares contemplated hereby (including in connection with determining the terms of such offering) and (ii) the Agent has not assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether the Agent has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iii) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Agent has rendered advisory services of any nature or respect, or owe a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

 

Section 10. Termination.

 

(a)                                 This Agreement shall terminate (i) automatically upon  the sale of all the Shares as provided in this Agreement, (ii) automatically at the close of business on December 15, 2015; provided however, that this Agreement may be extended for successive one-year periods without limitation upon the mutual written agreement of the parties made prior to such date or the anniversary thereof, as applicable, or (iii) upon termination of the Agreement pursuant to 10(b), (c) or (d) below.

 

(b)                                 The Company shall have the right, by giving written notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time.  Any such termination shall be without liability of any party to any other party, except that (i) with respect to any pending sale through the Agent for the Company, the obligations of the Company, including in respect of compensation of the Agent, shall remain in full force and effect notwithstanding such termination; and (ii) the provisions of Section 1, Section 5(b), Section 7 and Section 8 of this Agreement shall remain in full force and effect notwithstanding such termination.

 

(c)                                  The Agent shall have the right, by giving written notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time.  Any such termination shall be without liability of any party to any other party, except that  (i) with respect to any pending sale through the Agent for the Company, the obligations of the Agent shall remain in full force and effect through completion of the sale notwithstanding such termination; and (ii) the provisions of Section 1, Section 5(b), Section 7 and Section 8 of this Agreement shall remain in full force and effect notwithstanding such termination.

 

(d)                                 This Agreement shall remain in full force and effect until and unless terminated pursuant to Section 10(a) or (b) above or otherwise by mutual agreement of the parties; provided that any such termination by mutual agreement or pursuant to this clause (c) shall in all cases be deemed to provide that Section 1, Section 5(b), Section 7 and Section 8 of this Agreement shall remain in full force and effect.

 

(e)                                  Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided that such termination shall not be effective until the close of business on the date of receipt of

 

17

 

such notice by the Agent or the Company, as the case may be.  If such termination shall occur prior to the Settlement Date for any sale of Shares, such sale shall settle in accordance with the provisions of Section 2(h) hereof.

 

(f)                                   In the case of any purchase by the Agent pursuant to a Terms Agreement, the Agent may terminate this Agreement, at any time at or prior to the Settlement Date of such purchase (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the General Disclosure Package or the Prospectus, any Material Adverse Effect, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Shares or to enforce contracts for the sale of Shares, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the Nasdaq, or if trading generally on the Nasdaq or the New York Stock Exchange has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, FINRA or any other governmental authority, or (iv) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, or (v) if a banking moratorium has been declared by either Federal or New York authorities.

 

Section 11.  Notices.  All statements, requests, notices and agreements hereunder shall be in writing, and if to Stifel Nicolaus shall be delivered or sent by mail, electronic mail, telex or facsimile transmission to:

 

	
Stifel,   Nicolaus & Company, Incorporated
    
	
One South Street,   15th Floor
    
	
Baltimore,   Maryland 21202
    
	
Fax No.    (443) 224-1273
    
	
Attention:   Syndicate Department
    
	
 
    
	
and if to the   Company to:
    
	
 
    
	
Momenta   Pharmaceuticals, Inc.
    
	
675 West Kendall   Street
    
	
Cambridge,   Massachusetts 02142
    
	
Fax No.  (614) 621-3014
    
	
Attention: Bruce   Leicher, General Counsel
    

 

Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

 

Section 12.  Parties.  This Agreement shall be binding upon, and inure solely to the benefit of, the Agent and the Company and, to the extent provided in Sections 7 and 8 hereof, the officers, directors, employees, attorneys and agents of the Company and the Agent and each person who controls the Company or the Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement.  No purchaser of Shares through the Agent shall be deemed a successor or assign by reason merely of such purchase.

 

Section 13.  Time of the Essence.  Time shall be of the essence of this Agreement.  As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

 

Section 14.  Waiver of Jury Trial.  The Company and the Agent hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

Section 15.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

18

 

Section 16.  Counterparts.  This Agreement and any Terms Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.  This Agreement and any Terms Agreement may be delivered by any party by facsimile or other electronic transmission.

 

Section 17.   Severability.  The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof.  If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

[Signature Page Follows]

 

19

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Agent and the Company in accordance with its terms.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
MOMENTA   PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Craig A.   Wheeler
    
	
 
    	
 
    	
Name: Craig A.   Wheeler
    
	
 
    	
 
    	
Title: President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted as of the   date hereof:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
STIFEL,   NICOLAUS & COMPANY, INCORPORATED
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Marc Grasso
    	
 
    	
 
    
	
 
    	
Name: Marc Grasso
    	
 
    	
 
    
	
 
    	
Title: Managing   Director
    	
 
    	
 
    

 

 

Schedule 1

 

Subsidiaries

 

Momenta Pharmaceuticals Securities Corporation

 

 

Annex 1

 

MOMENTA PHARMACEUTICALS, INC.

 

Common Stock
 ($0.0001 par value per share)

 

TERMS AGREEMENT

 

STIFEL, NICOLAUS & COMPANY, INCORPORATED

One South Street, 15th Floor

Baltimore, MD 21202

Attn: Syndicate Department

 

Ladies and Gentlemen:

 

Momenta Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein and in the At-the-Market Equity Offering Sales Agreement, dated May 6, 2014 (the “Sales Agreement”), between the Company and Stifel, Nicolaus & Company, Incorporated (the “Agent”), to issue and sell to the Agent the securities specified in the Schedule hereto (the “Purchased Securities”) [, and solely for the purpose of covering over-allotments, to grant to the Agent the option to purchase the additional securities specified in the Schedule hereto (the “Additional Securities”)]*.

 

[The Agent shall have the right to purchase from the Company all or a portion of the Additional Securities as may be necessary to cover over-allotments made in connection with the offering of the Purchased Securities, at the same purchase price per share to be paid by the Agent to the Company for the Purchased Securities.  This option may be exercised by the Agent at any time (but not more than once) on or before the thirtieth day following the date hereof, by written notice to the Company. Such notice shall set forth the aggregate number of shares of Additional Securities as to which the option is being exercised, and the date and time when the Additional Securities are to be delivered (such date and time being herein referred to as the “Option Closing Date”); provided, however, that the Option Closing Date shall not be earlier than the Time of Delivery (as set forth in the Schedule hereto) nor earlier than the second business day after the date on which the option shall have been exercised nor later than the fifth business day after the date on which the option shall have been exercised. Payment of the purchase price for the Additional Securities shall be made at the Option Closing Date in the same manner and at the same office as the payment for the Purchased Securities.]*

 

Each of the provisions of the Sales Agreement not specifically related to the solicitation by the Agent, as agent of the Company, of offers to purchase securities is incorporated herein by reference in its entirety, and shall be deemed to be part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Terms Agreement [and] [,] the Applicable Time [and any Option Closing Date]*, except that each representation and warranty in Section 1 of the Sales Agreement which makes reference to the Prospectus (as therein defined) shall be deemed to be a representation and warranty as of the date of the Sales Agreement in relation to the Prospectus, and also a representation and warranty as of the date of this Terms Agreement [and] [,] the Settlement Date [and any Option Closing Date]* in relation to the Prospectus as amended and supplemented to relate to the Purchased Securities.

 

An amendment to the Registration Statement (as defined in the Sales Agreement), or a supplement to the Prospectus, as the case may be, relating to the Purchased Securities [and the Additional Securities]*, in the form heretofore delivered to the Agent is now proposed to be filed with the Securities and Exchange Commission.

 

Subject to the terms and conditions set forth herein and in the Sales Agreement which are incorporated

 

 

herein by reference, the Company agrees to issue and sell to the Agent and the latter agrees to purchase from the Company the number of shares of the Purchased Securities at the time and place and at the purchase price set forth in the Schedule hereto.

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Agent and the Company in accordance with its terms.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
MOMENTA   PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted   as of the date hereof:
    	
 
    
	
 
    	
 
    
	
STIFEL,   NICOLAUS & COMPANY, INCORPORATED
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

*                                         Include only if the Agent has an over-allotment option.

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