EXHIBIT 10.11
LOAN AGREEMENT
By And Between
VOCUS, INC.,
A Delaware Corporation
Borrower
And
MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY,
A Maryland Banking and Trust Company
Lender
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$7,000,000.00 Secured Revolving Line Of Credit
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Effectively Dated As Of November 8, 2004
LOAN AGREEMENT
THIS LOAN AGREEMENT is effectively dated as of November 8, 2004 by and
between the following (collectively, "PARTIES"):
(a) VOCUS, INC., a Delaware corporation ("BORROWER"); and
(b) MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, a Maryland banking and
trust company ("LENDER").
RECITALS
The BORROWER has applied to the LENDER for the below-defined "LOAN." The
LENDER is willing to provide the requested credit facility to the BORROWER upon
the terms and conditions of this Loan Agreement.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the PARTIES hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Loan Agreement, the terms set forth in this Article I have
the meanings set forth below, unless the specific context of this Loan Agreement
clearly requires a different meaning. Terms defined in this Article 1 or
elsewhere in this Loan Agreement are in all capital letters throughout this Loan
Agreement. The singular use of any defined term includes the plural and the
plural use includes the singular.
Section 1.1. Agreement. The term "AGREEMENT" means this Loan Agreement, as
amended, extended, or modified from time to time by the PARTIES, as well as all
schedules, exhibits and attachments hereto.
Section 1.2. Call Agreement. The term "CALL AGREEMENT" means the Call
Agreement of even date herewith executed by each EQUITY HOLDER for the benefit
of the LENDER.
Section 1.3. Closing. The term "CLOSING" means the execution and delivery
of this AGREEMENT and the other LOAN DOCUMENTS, which is deemed to have taken
place on the effective date hereof.
Section 1.4. Commercial Account. The term "COMMERCIAL ACCOUNT" means the
commercial checking account to be established and maintained by the BORROWER
with the LENDER and to utilized as the means of advancing the proceeds of the
LOAN.
Section 1.5. Equity Holder. The term "EQUITY HOLDER" means, individually
or collectively as the context may require, LAZARD and STERLING.
Section 1.6. Event Of Default. The term "EVENT OF DEFAULT" means any of
the events set forth in Article 6 of this AGREEMENT, provided that any
requirement for the giving of notice, the lapse of time, or both, or any other
expressly stated condition, has been satisfied.
Section 1.7. G.A.A.P. The term "G.A.A.P." means, with respect to any date
of determination, generally accepted accounting principles as used by the
Financial Accounting Standards Board and/or the American Institute of Certified
Public Accountants consistently applied and maintained throughout the periods
indicated.
Section 1.8. Insolvency Proceedings. The term "INSOLVENCY PROCEEDINGS"
means, with respect to any PERSON, any proceeding commenced by or against such
PERSON, under any provision of the United States Bankruptcy Code, as amended, or
under any other bankruptcy or insolvency law, or any assignments for the benefit
of creditors.
Section 1.9. Laws. The term "LAWS" means all ordinances, statutes, rules,
regulations, orders, injunctions, writs or decrees of any government or
political subdivision or agency thereof, or any court or similar entity
established by any thereof.
Section 1.10. Lender Expenses. The term "LENDER EXPENSES" means all
reasonable out-of-pocket expenses or costs incurred by the LENDER for whatever
reason arising out of, pertaining to, or in any way connected with this
AGREEMENT, any of the other LOAN DOCUMENTS or the OBLIGATIONS, or any documents
executed in connection herewith or transactions hereunder, including but not
limited to: (a) all costs or expenses required to be paid by the BORROWER
pursuant to this AGREEMENT or as otherwise provided for in any of the LOAN
DOCUMENTS or as required by any other present or future agreement between the
BORROWER and the LENDER evidencing and/or securing the OBLIGATIONS which are
paid or advanced by the LENDER in accordance with the terms of this AGREEMENT;
(b) taxes and insurance premiums of every nature and kind of the BORROWER paid
by the LENDER in accordance with the terms of this AGREEMENT; and (c) all
reasonable and necessary -- (i) filing, recording, title insurance,
environmental and consulting fees, audit fees, search fees and other expenses
paid or incurred by the LENDER in connection with the LENDER's transactions with
the BORROWER, (ii) costs and expenses incurred by the LENDER to correct any
default or enforce any provision of this AGREEMENT in accordance with the terms
of this AGREEMENT, (iii) costs and expenses of litigation incurred by the
LENDER, or any participant of the LENDER in the LOAN, in enforcing or defending
this AGREEMENT or any portion hereof, provided that the LENDER is the prevailing
party in any such litigation, (iv) attorneys' fees and expenses incurred by the
LENDER in obtaining advice or the services of its attorneys with respect to the
structuring, drafting, negotiating, reviewing, amending, terminating, enforcing
or defending of this AGREEMENT or the other LOAN DOCUMENTS, or any portion
hereof or any agreement or matter related hereto, whether or not litigation is
instituted, provided that any attorneys' fees incurred by the LENDER in
connection with the structuring, drafting, negotiating, and/or reviewing this
AGREEMENT and/or the other LOAN
DOCUMENTS in excess of Seven Thousand Five Hundred Dollars ($7,500.00) shall not
be deemed to be "LENDER EXPENSES," and (v) travel expenses related to any of the
foregoing.
Section 1.11. Lazard. The term "LAZARD" means LAZARD TECHNOLOGY PARTNERS
II LP, a Delaware limited partnership.
Section 1.12. Loan. The term "LOAN" means the revolving credit facility
extended by the LENDER to the BORROWER in accordance with the terms set forth in
the PROMISSORY NOTE and this AGREEMENT, including but not limited to any and all
renewals thereof.
Section 1.13. Loan Documents. The term "LOAN DOCUMENTS" means all
agreements, instruments and documents, including but not limited to loan
agreements (including but not limited to this AGREEMENT), notes (including but
not limited to the PROMISSORY NOTE), equity call agreements (including but not
limited to the CALL AGREEMENT), guarantees, mortgages, deeds of trust,
subordination agreements, intercreditor agreements, pledges, affidavits, powers
of attorney, consents, assignments, landlord and mortgage waivers, collateral
assignments, reimbursement agreements, financing statements, pledges,
modification agreements, and all other written matter, whether heretofore, now
or hereafter executed by or on behalf of the BORROWER, the EQUITY HOLDER or by
any other PERSON in connection with the OBLIGATIONS or the LOAN.
Section 1.14. Maximum Loan Amount. The term "MAXIMUM LOAN AMOUNT" means
Seven Million Dollars ($7,000,000.00); provided, however, that if the LENDER
delivers the "CALL NOTICE" (as that term is defined in the CALL AGREEMENT) to
the EQUITY HOLDER pursuant to the CALL AGREEMENT, the "MAXIMUM LOAN AMOUNT"
shall automatically be reduced to Zero Dollars ($0.00).
Section 1.15. Obligations. The term "OBLIGATIONS" means the obligations of
the BORROWER to pay to the LENDER: (a) all sums due to the LENDER under the LOAN
or otherwise pursuant to the terms of the LOAN DOCUMENTS; (b) all LENDER
EXPENSES (subject to any limitations in this AGREEMENT with respect thereto);
and (c) any indebtedness or liability which may exist or arise as a result of
any payment made by or for the benefit of the BORROWER under the LOAN or
otherwise pursuant to the terms of the LOAN DOCUMENTS being avoided or set aside
as a preference under Sections 547 and 550 of the United States Bankruptcy Code,
as amended, or under any state law governing insolvency or creditors' rights.
Section 1.16. Promissory Note. The term "PROMISSORY NOTE" means the
Promissory Note of even date herewith from the BORROWER, as maker thereof,
payable to the order of the LENDER in the stated principal amount of Seven
Million Dollars ($7,000,000.00).
Section 1.17. Person. The term "PERSON" means any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture, court, or government or political subdivision or
agency thereof.
Section 1.18. Solvent. The term "SOLVENT" means, as to any PERSON, that
such PERSON at the time of determination: (a) owns assets whose fair saleable
aggregate value, together
with any deferred revenues attributable to such PERSON, is greater than the
amount required to pay all of its liabilities; (b) is able to pay all of its
liabilities as such liabilities mature; and (c) has paid in and unimpaired
capital sufficient to carry on its business and transactions and all business
and transactions in which it engages or is about to engage.
Section 1.19. Sterling. The term "STERLING" means, individually or
collectively as the context may require, STERLING VENTURE PARTNERS, L.P., a
Delaware limited partnership, and STERLING SVP EXECUTIVE FUND, L.P., a Delaware
limited partnership.
Section 1.20. Subsidiary. The term "SUBSIDIARY" means: (a) any corporation
of which the BORROWER, directly or indirectly, owns or controls at the time --
(i) at least a majority of the outstanding stock or equity having under ordinary
circumstances (not dependent upon the happening of a contingency) voting power
to elect a majority of the board of directors (in the case of a corporation
having directors), or (ii) a majority of the voting stock of any corporation not
having directors; and (b) any general or limited partnership, limited liability
company, or other entity of which more than fifty percent (50%) of the
outstanding partnership interests or ownership interests shall, at the time of
determination, be owned directly, or indirectly through one or more
intermediaries, by the BORROWER.
ARTICLE 2
TERMS AND PURPOSE OF THE LOAN
Section 2.1. Agreement To Lend. Subject to the terms and conditions of
this AGREEMENT and the other LOAN DOCUMENTS, the LENDER shall extend to the
BORROWER the LOAN.
Section 2.2. Advances Of Loan Proceeds. Subject to the continued
satisfaction of all conditions precedent to the making of advances set forth in
Article 4 hereunder, and the continued absence of any default or any event,
circumstance, act or omission which with the giving of notice, the passage of
time, or both would constitute an EVENT OF DEFAULT, the LENDER shall advance to
the BORROWER by depositing into the COMMERCIAL ACCOUNT from time to time such
sums as the BORROWER may request; provided that the aggregate outstanding
principal balance of the LOAN at any one time shall never exceed the MAXIMUM
LOAN AMOUNT. The BORROWER shall not request any advance under the LOAN which
would cause the aggregate amount of advances made to or for the BORROWER and
outstanding under the LOAN DOCUMENTS to exceed the limitations as to the maximum
amount of advances as herein set forth. Any termination of the LOAN by the
LENDER in accordance with the terms of this AGREEMENT shall relieve the LENDER
of the LENDER's obligation to lend money or to make financial accommodations to
or for the BORROWER and the BORROWER's account pursuant to the LOAN DOCUMENTS,
and shall in no way release, terminate, discharge or excuse the BORROWER from
its absolute duty to pay or perform the OBLIGATIONS.
Section 2.3. Interest And Repayment. All sums advanced under the LOAN
shall be evidenced by, and shall be repaid with interest in accordance with, the
provisions of the
PROMISSORY NOTE, the terms and conditions of which are incorporated herein by
reference. The date and amounts of each advance made by the LENDER and each
payment made by the BORROWER shall be recorded by the LENDER on the books and
records of the LENDER, but any failure to record such dates or amounts shall not
relieve the BORROWER of its OBLIGATIONS under the LOAN DOCUMENTS. All repayments
shall be credited to the balance due from the BORROWER pursuant to the normal
and customary practices of the LENDER. Interest accrued under the LOAN shall be
computed on outstanding balances as reflected on the LENDER's books and records.
Section 2.4. Term. All sums due under the LOAN shall be paid in full on or
before October 31, 2007. The BORROWER may borrow, repay and reborrow on or prior
to the termination of the LOAN, subject to the continued compliance by the
BORROWER with the terms and conditions of the LOAN DOCUMENTS.
Section 2.5. Purpose. The proceeds of the LOAN shall be used by the
BORROWER solely and exclusively: (a) in payment or reimbursement of any costs
and expenses incurred by the BORROWER in connection with acquisitions by the
BORROWER, from time to time, during the term of the LOAN, of other businesses,
companies or operations (whether any such acquisition is consummated by means of
a merger, consolidation, acquisition of stock or assets or otherwise); and (b)
for such other purposes that may be approved by the EQUITY HOLDERS in writing
from time to time.
Section 2.6. Requisition Procedure. Not less than two (2) banking days
prior to the date upon which an advance is to be made under the LOAN, the
BORROWER shall execute and deliver a fully completed requisition, in form and
substance acceptable to the LENDER, containing the specifics required therein
relating to the requested advance.
Section 2.7. Payments Are Provisional. All payments made by the BORROWER
to the LENDER on any of the OBLIGATIONS shall be provisional and shall not be
considered final unless and until such payment is not subject to avoidance under
any provision of the United States Bankruptcy Code, as amended, including
Sections 547 and 550, or any state law governing insolvency or creditors'
rights. If any payment is avoided or set aside under any provision of the United
States Bankruptcy Code, including Sections 547 and 550, or any state law
governing insolvency or creditors' rights, the payment shall be considered not
to have been made for all purposes of this AGREEMENT and the LENDER shall adjust
its records to reflect the fact that the avoided payment was not made and has
not been credited against the OBLIGATIONS.
Section 2.8. Commitment Fee. The BORROWER shall pay to the LENDER on or
before CLOSING a non-refundable and unconditional commitment fee equal the
product of twenty-five hundredths percent (0.25%) times the MAXIMUM LOAN AMOUNT,
which shall be the absolute property of the LENDER upon payment. The commitment
fee shall not be considered to be a payment of any of the LENDER'S EXPENSES
incurred in connection with the LOAN and shall be paid independent of the amount
of proceeds of the LOAN ultimately advanced to the BORROWER, even if that amount
is less than the stated MAXIMUM LOAN AMOUNT.
Section 2.9. Facility Fee. For each calendar quarter or portion thereof
during which the LOAN facility established hereunder is in existence and has not
been terminated, until the termination of the LOAN, the BORROWER shall pay to
the LENDER a facility fee equal to twenty-five hundredths percent (0.25%) per
annum on that sum obtained by subtracting the average daily disbursed principal
balance of the LOAN during such calendar quarter or portion thereof from the
stated face amount of principal set forth in the PROMISSORY NOTE. The facility
fee shall be payable quarterly, on the first day of each succeeding April, July,
October, and January, commencing with the first of such payments to be made on
January 1, 2005, or on the last day of a portion of a quarter. The facility fee
is not to be considered a fee being paid by the BORROWER to the LENDER as an
inducement to the LENDER to make advances, nor shall it be considered to modify
or limit the ability of the LENDER to terminate in accordance with the
provisions of this AGREEMENT the ability of the BORROWER to borrow under the
LOAN.
ARTICLE 3
SECURITY FOR THE LOAN
Section 3.1. Call Agreement. The repayment of the LOAN, the satisfaction
of the OBLIGATIONS, and the full, complete and absolute performance by the
BORROWER of each of the terms and conditions of the LOAN DOCUMENTS shall be
secured by the CALL AGREEMENT. Each EQUITY HOLDER shall execute and deliver, on
the date hereof, the CALL AGREEMENT in form and substance acceptable to the
LENDER. The amount of the respective "CALL CAP" (as that term is defined in the
CALL AGREEMENT) as to each respective EQUITY HOLDER shall be: (a) an amount
equal to sixty percent (60%) of the MAXIMUM LOAN AMOUNT as to LAZARD; and (b) an
amount equal to forty percent (40%) of the MAXIMUM LOAN AMOUNT as to STERLING.
The CALL AGREEMENT shall secure the payment and performance by the BORROWER of
the OBLIGATIONS; subject to the respective amounts of the CALL CAP.
Section 3.2. Future Advances. The CALL AGREEMENT shall secure all current
and all future advances under the LOAN made by the LENDER to the BORROWER, or
for the account or benefit of the BORROWER, and the LENDER may advance or
readvance upon repayment by the BORROWER all or any portion of the sums loaned
to the BORROWER with respect to the LOAN and any such advance or readvance shall
be fully secured by the CALL AGREEMENT.
ARTICLE 4
CONDITIONS PRECEDENT
All duties and obligations of the LENDER under this AGREEMENT, both at the
time of CLOSING and at all times during the term of the LOAN, are specifically
subject to the full and continued satisfaction by the BORROWER of the conditions
precedent set forth in this Article 4.
Section 4.1. Required Documents. The BORROWER shall deliver to the LENDER
at or prior to CLOSING (unless the LENDER consents in writing to receipt after
CLOSING): (a) duly
executed and acknowledged (where applicable) LOAN DOCUMENTS; and (b) such
certificates, lien searches, corporate documentation, opinions, documents,
submissions, insurance policies and other matters as may reasonably be required
by the LENDER or its counsel.
Section 4.2. Periodic Reports. The LENDER's obligation to make advances
from time to time under the LOAN shall be conditioned upon the following:
(a) As soon as available and in any event by no later than May 31st
of each calendar year, the BORROWER shall submit to the LENDER a consolidated
and consolidating balance sheet of the BORROWER and its SUBSIDIARIES as of the
end of the preceding FISCAL YEAR and a consolidated and consolidating statement
of income and retained earnings of the BORROWER and its SUBSIDIARIES for such
FISCAL YEAR, and a consolidated and consolidating statement of cash flow of the
BORROWER and its SUBSIDIARIES for such FISCAL YEAR, all in reasonable detail and
stating in comparative form the respective consolidated and consolidating
figures for the corresponding date and period in the prior FISCAL YEAR and all
prepared in accordance with G.A.A.P. and accompanied by an audited opinion
thereon by independent accountants selected by the BORROWER and reasonably
acceptable to the LENDER (it being agreed by the LENDER that any "big four"
accounting firm shall be acceptable to the LENDER for such purposes).
(b) Promptly after receipt thereof, the BORROWER shall submit to the
LENDER copies of any reports submitted to the BORROWER or any SUBSIDIARY by
independent certified public accountants in connection with the examination of
the financial statements of the BORROWER or any SUBSIDIARY made by such
accountants.
(c) The BORROWER shall notify the LENDER immediately of any changes
in the personnel holding the positions with the BORROWER of President, Chief
Executive Officer, and Chief Financial Officer.
(d) In addition to the items set forth in paragraphs (a) through (c)
above: (I) the BORROWER shall submit to the LENDER such other information
respecting the condition or operations, financial or otherwise, of the BORROWER
or any SUBSIDIARY of the BORROWER as the LENDER may reasonably request from time
to time; (II) the BORROWER shall submit to the LENDER all other financial
statements, financial information and financial disclosures required to be
submitted by the BORROWER pursuant to the terms of the other LOAN DOCUMENTS; and
(III) the BORROWER shall otherwise comply with all other reporting,
verification, inspection and other administrative requirements of the LENDER as
reasonably requested by the LENDER from time to time.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
To induce the LENDER to make the LOAN and to enter into this AGREEMENT,
the BORROWER makes the representations and warranties set forth in this Article
5. The BORROWER acknowledges that the LENDER is relying upon these
representations and warranties.
Section 5.1. Accuracy Of Information. No representation, warranty or other
statement of the BORROWER in any certificate or written statement given to the
LENDER pursuant to this AGREEMENT contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained in the certificate or written statement not misleading.
Section 5.2. No Defaults. The execution and performance of this AGREEMENT
and the LOAN DOCUMENTS will not immediately, or with the passage of time, the
giving of notice, or both: (a) violate the certificate of incorporation,
by-laws, or any other organizational documents of the BORROWER; (b) to the
BORROWER's knowledge, violate any material LAWS that are binding upon the
BORROWER; (c) result in a material default under any contract, agreement, or
instrument to which the BORROWER is a party or by which the BORROWER or its
property is bound; or (d) result in the creation or imposition of any security
interest in, or lien or encumbrance upon, any of the assets of the BORROWER,
except in favor of the LENDER.
Section 5.3. Status. The BORROWER: (a) is validly incorporated as a
corporation under the LAWS of the State of Delaware; and (b) has the power to
own its properties, conduct its business and affairs, and enter into the LOAN
and perform the OBLIGATIONS. The BORROWER's entry into the LOAN with the LENDER
has been validly and effectively approved by its board of directors, as may be
required by its certificate of incorporation, by-laws, other governing
documents, and applicable LAWS. All copies of the respective certificate of
incorporation, by-laws, operating agreements, and other governing documents of
the BORROWER that have been submitted to the LENDER are true, accurate, and
complete and no action has been taken in diminution or abrogation thereof.
Section 5.4. Valid, Binding and Enforceable. The LOAN DOCUMENTS executed
by the BORROWER are the valid and binding obligations of the BORROWER and are
enforceable against the BORROWER in accordance with their terms; subject only,
however, to -- (i) the application of the Federal Bankruptcy Code and to state
insolvency laws and other similar laws generally affecting creditors' rights,
(ii) the availability of equitable remedies or relief (or equitable defenses, if
applicable), (iii) the discretion of the court before which any enforcement
proceedings may be brought, and (iv) the rights of taxing authorities or other
entities which may by law have priority over the rights of a secured party.
Section 5.5. No Events Of Default. There is not currently existing any
action, event, or condition which presently constitutes an EVENT OF DEFAULT, or
which with notice, the passage of time, or both would constitute an EVENT OF
DEFAULT.
Section 5.6 Solvency. The BORROWER will be SOLVENT both before and after
CLOSING, after giving full effect to the LOAN and all of the BORROWER's
indebtedness. The BORROWER knows of no reason which is likely to cause it to be
unable to maintain such
SOLVENT financial condition, giving full effect to the OBLIGATIONS, as long as
any of the OBLIGATIONS remain unsatisfied.
ARTICLE 6
EVENTS OF DEFAULT
Subject to the notice and cure provisions set forth in the last Section of
this Article, the occurrence of any of the following events shall constitute
EVENTS OF DEFAULT and shall entitle the LENDER to exercise the LENDER's rights
and remedies under Article 7 of this AGREEMENT.
Section 6.1. Failure To Pay Or Perform. The failure by the BORROWER to pay
or perform any of the OBLIGATIONS, including but not limited to a default under
the PROMISSORY NOTE which is not cured within the applicable cure period.
Section 6.2. Violation Of Covenants; Failure Of Conditions Precedent. The
failure by the BORROWER or the EQUITY HOLDER to perform or a violation of any of
the covenants or agreements provided in this AGREEMENT or in any of the other
LOAN DOCUMENTS.
Section 6.3. Representation Or Warranty. The failure of any representation
or warranty made by the BORROWER or the EQUITY HOLDER in any of the LOAN
DOCUMENTS to be true in any material respect, as of the date made.
Section 6.4. Default Under Loan Documents. A breach of or default by the
BORROWER or the EQUITY HOLDER under the terms, covenants, and conditions set
forth in the PROMISSORY NOTE, the CALL AGREEMENT, or any of the other LOAN
DOCUMENTS (other than this AGREEMENT), and such breach or default is not cured
within the applicable cure period set forth in such other LOAN DOCUMENTS.
Section 6.5. [INTENTIONALLY DELETED]
Section 6.6. Involuntary Insolvency Proceedings. The institution of
involuntary INSOLVENCY PROCEEDINGS against the BORROWER or the EQUITY HOLDER and
the failure of any such INSOLVENCY PROCEEDINGS to be dismissed within sixty (60)
days of the institution thereof.
Section 6.7. Voluntary Insolvency Proceedings. The commencement by the
BORROWER or the EQUITY HOLDER of INSOLVENCY PROCEEDINGS.
Section 6.8. Default Under Call Agreement. The occurrence of a default
under the CALL AGREEMENT, and such default is not cured prior to the expiration
of any applicable cure period.
Section 6.9. Injunction. If the BORROWER is enjoined, restrained or in any
way prevented by court order from continuing to conduct all or any material part
of its business affairs for a period in excess of thirty (30) days.
Section 6.10. Notice And Cure Rights. Notwithstanding any provision to the
contrary set forth in this Article 6 or in any of the other LOAN DOCUMENTS, an
"EVENT OF DEFAULT" shall not be deemed to have occurred with respect to: (a) the
failure to pay a monetary amount due to the LENDER pursuant to the terms of the
PROMISSORY NOTE or any of the other LOAN DOCUMENTS unless the BORROWER fails to
cure such default within ten (10) calendar days after such payment's due date;
and (b) the violation of any other covenant, agreement, condition precedent or
other requirement of the LOAN DOCUMENTS, excepting the specific provisions of
this AGREEMENT that are described in the next sentence, unless the BORROWER
fails to correct such violation within thirty (30) calendar days after the date
upon which notice of such failure is delivered by the LENDER to the BORROWER.
Notwithstanding the terms of the preceding sentence to the contrary: (i) the
otherwise applicable thirty (30) calendar day cure period described in the
preceding clause (b) of this Section may be extended for up to an additional
sixty (60) calendar days if the LENDER, in its reasonable discretion, determines
that the BORROWER is diligently pursuing a cure for such failure; and (ii) a
violation of any of the following Sections of this AGREEMENT shall immediately
constitute an EVENT OF DEFAULT without the BORROWER having any notice or cure
rights -- Sections 5.1, 5.4 and 5.6.
ARTICLE 7
RIGHTS AND REMEDIES ON THE OCCURRENCE
OF AN EVENT OF DEFAULT
Section 7.1. Lender's Specific Rights And Remedies. In addition to all
other rights and remedies provided by LAW and the LOAN DOCUMENTS, the LENDER, on
the occurrence and during the continuance of any EVENT OF DEFAULT, may:
a. Accelerate and call due the unpaid principal balances of any or
all -- (i) of the LOAN, (ii) the PROMISSORY NOTE or the CALL AGREEMENT, and/or
(iii) accrued interest and other sums due as of the date of default;
b. Impose the default rate of interest provided in the PROMISSORY
NOTE, with or without acceleration of the PROMISSORY NOTE;
c. Foreclose or enforce all or any security interests, mortgage
interests, deed of trusts, liens, assignments, or pledges created by any LOAN
DOCUMENT;
d. Confess judgment or file suit against the BORROWER on the
PROMISSORY NOTE or the EQUITY HOLDER on the CALL AGREEMENT;
e. File suit against the BORROWER or the EQUITY HOLDER on this
AGREEMENT, the CALL AGREEMENT, or on any of the other LOAN DOCUMENTS;
f. Seek specific performance or injunctive relief to enforce
performance of the undertakings, duties, and agreements provided in the LOAN
DOCUMENTS, whether or not a remedy at law exists or is adequate; and
g. Set-off any amounts in any account or represented by any
certificate with the LENDER in the name of the BORROWER or in which the BORROWER
has an interest.
Section 7.2. Automatic Acceleration. If there occurs an event which would,
with the giving of notice, the passage of time, or both, constitute an EVENT OF
DEFAULT hereunder and if a voluntary or involuntary petition under the United
States Bankruptcy Code thereafter is filed by or against the BORROWER while such
event remains uncured, the LOAN shall be automatically accelerated and due and
payable and the default rates of interest provided for in the PROMISSORY NOTE
shall automatically apply as of the date of the first occurrence of the event
which would, with the giving of notice, the passage of time or both constitute
an EVENT OF DEFAULT, without any notice, demand or action of any type on the
part of the LENDER (including any action evidencing the acceleration or
imposition of the default rate of interest). The fact that the LENDER has, prior
to the filing of the voluntary or involuntary petition under the United States
Bankruptcy Code, acted in a manner which is inconsistent with the acceleration
and imposition of the default rate of interest provided for in the PROMISSORY
NOTE shall not constitute a waiver of this section or estop the LENDER from
asserting or enforcing the LENDER's rights hereunder.
Section 7.3. Remedies Cumulative. The rights and remedies provided in this
AGREEMENT and in the other LOAN DOCUMENTS or otherwise under applicable LAWS
shall be cumulative and the exercise of any particular right or remedy shall not
preclude the exercise of any other rights or remedies in addition to, or as an
alternative of, such right or remedy.
Section 7.4. Proof Of Sums Due On Loan. In any action or proceeding
brought by the LENDER to collect the sums owed on the LOAN, a certificate signed
by an officer of the LENDER setting forth the unpaid balances of principal, and
any accrued interest, default interest, legal fees, and late charges owed on the
LOAN shall be presumed correct and shall be admissible in evidence for the
purpose of establishing the truth of what it asserts. If the BORROWER wishes to
contest the accuracy of the figures set forth in any such certificate, the
BORROWER shall have the burden of proving that the certificate is inaccurate or
incorrect.
Section 7.5. Obligations Are Unconditional. The payment and performance of
the OBLIGATIONS shall be the absolute and unconditional duty and obligation of
the BORROWER, and shall be independent of any defense or any rights of set-off,
recoupment or counterclaim which the BORROWER might otherwise have against the
LENDER, and the BORROWER shall pay absolutely during the terms of the LOAN the
payments of the principal and interest to be made on account of the LOAN and all
other payments required hereunder, free of any deductions and without abatement,
diminution or set-off other than those herein expressly provided. Until such
time as the OBLIGATIONS have been fully paid and performed, the BORROWER: (a)
shall not suspend or discontinue any payments provided for herein and in the
PROMISSORY NOTE; (b) shall perform and observe all of the BORROWER's other
covenants and agreements contained in the LOAN
DOCUMENTS, including but not limited to making all payments required to be made
to the LENDER; and (c) shall not terminate or attempt to terminate the LOAN
DOCUMENTS for any cause.
ARTICLE 8
GENERAL TERMS
Section 8.1. Lender Expenses. The PARTIES intend that all reasonable
LENDER EXPENSES shall be paid by the BORROWER, whether incurred prior to or
after CLOSING, subject to any limitations contained in this AGREEMENT.
Section 8.2. Authorization To Obtain Financial Information. The BORROWER
hereby authorizes its accounting firm to provide the LENDER from time to time
with such information as may be requested by the LENDER, and hereby authorizes
the LENDER to contact directly its accounting firm in order to obtain such
information.
Section 8.3. Incorporation; Inconsistent Provisions. The terms and
conditions of the LOAN DOCUMENTS are incorporated by reference and made a part
hereof, as if fully set forth herein. In the event of any inconsistency between
this AGREEMENT and any of the other LOAN DOCUMENTS, such inconsistency shall be
construed, interpreted, and resolved so as to benefit the LENDER, independent of
whether this AGREEMENT or another LOAN DOCUMENT controls, and the LENDER's
election of which interpretation or construction is for the LENDER's benefit
shall govern.
Section 8.4. Waivers. The LENDER at any time or from time to time may
waive all or any rights under this AGREEMENT or any of the other LOAN DOCUMENTS,
but any waiver or indulgence by the LENDER at any time or from time to time
shall not constitute a future waiver of performance or exact performance by the
BORROWER.
Section 8.5. Continuing Obligation Of Obligor. The terms, conditions, and
covenants set forth herein and on the LOAN DOCUMENTS shall survive CLOSING and
shall constitute a continuing obligation of the BORROWER during the course of
the transactions contemplated herein. The OBLIGATIONS of the BORROWER under this
AGREEMENT shall remain in effect so long as any OBLIGATION is outstanding,
unpaid or unsatisfied between the BORROWER and the LENDER.
Section 8.6. Binding Obligation. This AGREEMENT shall be binding upon and
inure to the benefit of the PARTIES and their respective successors and assigns.
Section 8.7. Final Agreement. This AGREEMENT and the LOAN DOCUMENTS
contain the final and entire agreement and understanding of the PARTIES, and any
terms and conditions not set forth in this AGREEMENT or the LOAN DOCUMENTS are
not a part of this AGREEMENT and the understanding of the PARTIES.
Section 8.8. Amendment. This AGREEMENT may be amended or altered only in
writing signed by the LENDER and such other PARTIES to be bound by the change or
alteration.
Section 8.9. Time. Time is of the essence of this AGREEMENT.
Section 8.10. Choice Of Law. The laws of the State of Maryland (excluding,
however, conflict of law principles) shall govern and be applied to determine
all issues relating to this AGREEMENT and the rights and obligations of the
PARTIES, including the validity, construction, interpretation, and
enforceability of this AGREEMENT and its various provisions and the consequences
and legal effect of all transactions and events which resulted in the execution
of this AGREEMENT or which occurred or were to occur as a direct or indirect
result of this AGREEMENT having been executed.
Section 8.11. Consent To Jurisdiction; Agreement As To Venue. The BORROWER
and the LENDER: (a) irrevocably consent to the non-exclusive jurisdiction of the
courts of the State of Maryland and of the United States District Court for the
District of Maryland, if a basis for federal jurisdiction exists; (b) agree that
venue shall be proper in any circuit court of the State of Maryland or in the
United States District Court for the District of Maryland if a basis for federal
jurisdiction exists; and (c) waive any right to object to the maintenance of a
suit in any of the state or federal courts of the State of Maryland on the basis
of improper venue or of inconvenience of forum. Notwithstanding the terms of
this Section or any of the other LOAN DOCUMENTS to the contrary, the LENDER may
bring an action against the BORROWER in a court located outside of the State of
Maryland if the LENDER deems it necessary and appropriate to use such
non-Maryland court in order to protect, preserve, collect or otherwise take an
action with respect to COLLATERAL located outside of the State of Maryland.
Section 8.12. Actions Against Lender Or Borrower. Any action brought by
the BORROWER or the LENDER against the other party hereto which is based,
directly or indirectly, on this AGREEMENT or any matter in or related to this
AGREEMENT, including but not limited to the making of the LOAN or the
administration or collection thereof, shall be brought only in the courts of the
State of Maryland. Neither party may file a counterclaim against the other party
in a suit brought by such party unless under the rules of procedure of the court
in which the action was brought or the counterclaim is mandatory, and not merely
permissive. Each party agrees that any forum other than the State of Maryland is
an inconvenient forum and that a suit brought by either party against the other
party in a court of any state other than the State of Maryland should be
forthwith dismissed or transferred to a court located in the State of Maryland
by that court.
Section 8.13. Number, Gender, And Captions. As used herein, the singular
includes the plural and the plural includes the singular. The use of any gender
applies to all genders. The captions contained herein are for purposes of
convenience only and are not a part of this AGREEMENT.
Section 8.14. Photocopies Sufficient. A carbon, photographic, photocopy or
other reproduction of a security agreement or financing statement shall be
sufficient as a financing statement.
Section 8.15. Notices. Any notice required or permitted by or in
connection with this AGREEMENT shall be in writing and shall be made by
facsimile (confirmed on the date the facsimile is sent by one of the other
methods of giving notice provided for in this Section) or by hand delivery, by
Federal Express, or other similar overnight delivery service, or by certified
mail, unrestricted delivery, return receipt requested, postage prepaid,
addressed to the LENDER or the BORROWER at the appropriate address set forth
below or to such other address as may be hereafter specified by written notice
by the LENDER or the BORROWER. Notice shall be considered given as of the date
of the facsimile or the receipt (or refusal to accept receipt) of hand delivery,
one (1) calendar day after delivery to Federal Express or similar overnight
delivery service, or three (3) calendar days after the date of mailing,
independent of the date of actual delivery or whether delivery is ever in fact
made, as the case may be, provided the giver of notice can establish the fact
that notice was given as provided herein. If notice is tendered pursuant to the
provisions of this Section and is refused by the intended recipient thereof, the
notice, nevertheless, shall be considered to have been given and shall be
effective as of the date herein provided.
If to the LENDER:
MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the BORROWER:
VOCUS, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a courtesy copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
The failure of the LENDER to send the above courtesy copy shall not impair the
effectiveness of notice given to the BORROWER in the manner provided herein.
Section 8.16. Participations. The LENDER reserves the absolute right to
assign all or any portion of its interests in any or all of the LOAN or the LOAN
DOCUMENTS or to participate with
other lending institutions in the LOAN and the LOAN DOCUMENTS on such terms and
at such times as the LENDER may determine from time to time, all without any
consent thereto or notice thereof to the BORROWER. The BORROWER hereby grants to
each participating lending institution, to the full extent of the LOAN, the
right to set off deposit accounts maintained by the BORROWER with such
institution (provided that the BORROWER shall have received prior notice of the
assignment to such institution), and the BORROWER agrees to pay the LENDER
EXPENSES of any such participating lending institution which arise or are
incurred as a result of the occurrence of an EVENT OF DEFAULT.
Section 8.17. Effective Date. This AGREEMENT shall be effective as of the
date first above written, independent of the date of execution or delivery
hereof.
Section 10.18. Confidentiality. In handling any confidential information
of BORROWER or any of its SUBSIDIARIES, the LENDER and all employees and agents
of the LENDER shall exercise not less than the same degree of care that the
LENDER exercises with respect to its own proprietary information to maintain the
confidentiality of any non-public information thereby received or received
pursuant to this AGREEMENT or any of the other LOAN DOCUMENTS; except that
disclosure of such information may be made: (a) to prospective participants,
transferees or purchasers of any interest in the LOAN; (b) as required by LAW or
subpoena, judicial order or similar order; and (c) as the LENDER may reasonably
determine to be necessary in connection with the enforcement of any of its
remedies hereunder. Confidential information hereunder shall not include
information that either -- (i) is in the public domain, or becomes part of the
public domain after disclosure to the LENDER through no fault of the LENDER or
any of its employees or agents, or (ii) is disclosed to the LENDER by a third
party that is not under any obligation of confidentiality to the BORROWER.
Section 10.19. Termination. This AGREEMENT shall terminate upon the
earlier to occur of: (a) October 31, 2007; and (b) such date as may be specified
in a written notice from the BORROWER to the LENDER electing to terminate this
AGREEMENT, provided that no OBLIGATIONS are outstanding as of such specified
date of termination. Upon the termination of this AGREEMENT, the LENDER will
promptly send the BORROWER: (i) for each jurisdiction in which a UCC financing
statement is on file to perfect the security interests granted to the LENDER
hereunder, a termination statement to the effect that the LENDER no longer
claims a security interest in such financing statement; and (ii) such other
documents necessary or appropriate to terminate the security interests granted
to the LENDER hereunder as may be reasonably requested by the BORROWER.
Section 10.20. Waiver Of Trial By Jury. Each party to this AGREEMENT
agrees that any suit, action, or proceeding, whether claim or counterclaim,
brought or instituted by either party hereto or any successor or assign of any
party on or with respect to this AGREEMENT or any of the other LOAN DOCUMENTS or
which in any way relates, directly or indirectly, to the LOAN or any event,
transaction, or occurrence arising out of or in any way connected with the LOAN,
or the dealings of the PARTIES with respect thereto, shall be tried only by a
court and not by a jury. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING. The BORROWER acknowledges and
agrees that this
Section is a specific and material aspect of this AGREEMENT between the PARTIES
and that the LENDER would not extend the LOAN to the BORROWER if this waiver of
jury trial Section were not a part of this AGREEMENT.
[Signatures begin on the next page.]
IN WITNESS WHEREOF, the PARTIES have duly executed this AGREEMENT under
seal as of the date first above written (notwithstanding the actual date of
execution and delivery hereof). This AGREEMENT may be executed in counterparts
and delivered via facsimile transmission.
WITNESS/ATTEST: THE BORROWER:
VOCUS, INC.,
A Delaware Corporation
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------ ------------------------(SEAL)
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: CFO
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THE LENDER:
MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY,
A Maryland Banking and Trust Company
/s/ [ILLEGIBLE] By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------ ------------------------(SEAL)
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: SVP
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