Subordinated Bridge Loan Agreement

EXHIBIT 10.14


EXECUTION COPY


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SUBORDINATED BRIDGE LOAN AGREEMENT


BY AND AMONG


DALEEN TECHNOLOGIES, INC., AS BORROWER


AND


BEHRMAN CAPITAL II, L.P.


AND


STRATEGIC ENTREPRENEUR FUND II, L.P.,


AS LENDERS


DATED AS OF MAY 7, 2004


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TABLE OF CONTENTS


Page
---- 1. The Transaction........................................................................ 1
1.1. Issuance of Notes............................................................. 1
1.2. Note Terms.................................................................... 1
1.3. Warrants...................................................................... 2


2. Closing................................................................................ 3


3. Use of Proceeds........................................................................ 3


4. Future Issuances of Preferred Stock.................................................... 4


5. Representations and Warranties of the Borrower......................................... 4
5.1. Organization.................................................................. 4
5.2. Power and Authority........................................................... 4
5.3. Capitalization................................................................ 4
5.4. SEC Filings................................................................... 4
5.5. Financial Statements.......................................................... 5
5.6. No Directed Selling Efforts or General Solicitation........................... 5
5.7. Brokers....................................................................... 5


6. Representations and Warranties of the Lenders.......................................... 5
6.1. Investment Representations.................................................... 5
6.2. Organization; Authority; Enforceability....................................... 5


7. Conditions to Closing.................................................................. 6
7.1. Conditions to Each Lender's Obligations....................................... 6
7.2. Conditions to Borrower's Obligations.......................................... 6


8. Post-Closing Covenants of the Borrower................................................. 7
8.1. No Conflicting Agreements..................................................... 7
8.2. Compliance with Laws.......................................................... 7


9. Survival of Representations, Warranties and Covenants; Indemnification................. 7
9.1. Survival...................................................................... 7
9.2. Indemnification............................................................... 7


10. Miscellaneous.......................................................................... 8
10.1. Definitions................................................................... 8


10.2. Construction.................................................................. 8
10.3. Entire Agreement; No Third-Party Beneficiaries................................ 8
10.4. Notices....................................................................... 8
10.5. Amendment..................................................................... 9
10.6. Counterparts.................................................................. 9
10.7. Governing Law; Severability................................................... 9
10.8. Assignment.................................................................... 9
10.9. Waiver of Jury Trial.......................................................... 9
10.10. Submission to Jurisdiction.................................................... 10
10.11. Certain Understandings........................................................ 10
10.12. Attorneys' Fees............................................................... 10


EXHIBITS


Exhibit A Promissory Note Exhibit B Form of Compliance Certificate Exhibit C Form of Subordination Agreement


TABLE OF SCHEDULES


Schedule 5.2 Power and Authority Schedule 5.3 Capitalization


SUBORDINATED BRIDGE LOAN AGREEMENT


AS OF MAY 7, 2004


The parties to this SUBORDINATED BRIDGE LOAN AGREEMENT (this "Agreement") are DALEEN TECHNOLOGIES, INC., a Delaware corporation (the "Borrower"), and Behrman Capital II, L.P., a Delaware limited partnership ("Behrman") and Strategic Entrepreneur Fund II, L.P., a Delaware limited partnership ("SEF") (each of Behrman and SEF, a "Lender" and, collectively, the "Lenders").


The Borrower is seeking to obtain a loan from the Lenders for the purposes described in Section 3 hereof. The Borrower wishes to issue to the Lenders Revolving Promissory Notes in substantially the form attached hereto as Exhibit A (each, a "Note" and, collectively, the "Notes") in an aggregate principal amount of up to $5.1 million, and each Lender wishes to hold its Note, all on the terms and subject to the conditions set forth in this Agreement.


Accordingly, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, the parties, intending to be legally bound, agree as follows:


1. The Transaction.


1.1. Issuance of Notes. (a) Subject to the other provisions of this Agreement, the Borrower shall issue to the Lenders the Notes in the aggregate maximum principal amount of $5.1 million, with the maximum principal amount of each Lender's Note to be as set forth beneath their respective signature to this Agreement. An initial draw of $1,600,000 shall be funded by wire transfer of immediately available funds to Borrower at closing (the "Initial Closing"), which shall occur on the Initial Closing Date (as hereinafter defined). Additional loans under this Agreement and the Note, the principal amounts of which shall aggregate with the then outstanding principal amount to not more than the aggregate maximum principal amount of the Notes, shall be made within two business days of delivery of written notice by Daleen of a request for funding of the same, accompanied by a certificate executed by an authorized officer of Daleen in the form of Exhibit B hereto, provided that such further drawings shall be in increments of not less than $100,000, and, provided further, that no such additional loan may be drawn hereunder in the absence of such a certificate. Such notice shall specify the purposes for which Borrower proposes to use the proceeds of such funds. To the extent such purposes are other than those stated in clause (a) of Section 3 of this Agreement, then, in addition to any other conditions and requirements that must be satisfied prior to the funding of such loan, the funding of such loan shall also be subject to the prior written consent of the Lenders. No additional loans may be drawn under this Agreement or the Note on or after May 25, 2005. The Lenders may, by written notice delivered to the Borrower, require the Borrower to draw the maximum permitted principal amount under this Agreement on or up to two business days prior to the scheduled Effective Time under the Agreement and Plan of Merger and Share Exchange, of even date herewith, by and among the Borrower, Daleen Holdings, Inc., Parallel Acquisition, Inc., and the Lenders.


1.2. Note Terms.


(a) Each Note issued shall be a non-negotiable promissory note.


(b) Each Note shall be payable on such further terms and conditions as are set forth on Exhibit A attached hereto. A Note may not be assigned by a Lender without the prior written consent of the Borrower.


(c) Each Note is acknowledged to be subject to a Note Purchase Agreement, of even date herewith, by and among the Lenders and Daleen Holdings, Inc., a Delaware corporation (the "Note Purchase Agreement").


(d) Borrower grants to Lenders a continuing security interest in all presently existing and later acquired assets (whether tangible or intangible) of the Borrower and its subsidiaries to secure all obligations and performance of each of Borrower's duties under this Agreement and the Note. Any security interest will be subordinated to the security interests and other rights of the Bank and Exim pursuant to the Subordination Agreement, as described in Section 4 below. The Borrow covenants and agrees to deliver such security agreements, documents and other instruments as may be reasonably requested by Lenders in order to give effect to the foregoing security interest.


1.3. Release and Covenant Not to Sue. (a) When capitalized in this Agreement, the following terms shall have the following meanings:


"Affiliate" shall mean, with respect to persons or any entity or person, as applicable, that entity's or person's past, present and future predecessors, successors, assigns, officers, directors and shareholders, partners, limited partners, agents, employees, attorneys and other representatives, divisions, subsidiaries, parent corporations and other affiliates. The term "Affiliate" includes the officers, directors, shareholders, partners, limited partners and employees of any person or entity qualifying as an Affiliate under the immediately preceding sentence.


"Claims" shall mean any claims, counterclaims, cross-claims, actions, causes of action, rights, disputes, controversies, judgments, debts, agreements, contracts, covenants, promises, representations, misrepresentations, allegations, demands, obligations, duties, suits, rights of contribution and indemnity, liens, expenses, assessments, penalties, charges, injuries, losses, costs (including, without limitation, attorneys fees and costs incurred), damages (including, without limitation, compensatory, consequential, bad faith or punitive damages), sanctions, and liabilities, direct or indirect, of any and every kind, character, nature and manner whatsoever, in law or in equity, civil or criminal, administrative or judicial, contract, tort (including, without limitation, bad faith, fraud and negligence of any kind) or otherwise, whether now known or unknown, claimed or unclaimed, asserted or unasserted, suspected or unsuspected, claimed or concealed, discovered or undiscovered, accrued or unaccrued, anticipated or unanticipated, fixed or contingent, liquidated or unliquidated, state or federal, under common law, statute or regulation.


(b) In consideration for the entry of the Lenders into this Agreement and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, and except for Claims arising under the specific terms of this Agreement, the Borrower and its respective Affiliates, unconditionally and without reservation, hereby RELEASES, ACQUITS AND FOREVER DISCHARGES each of the Lenders and its Affiliates, jointly and severally, from any and all manner of Claims, without regard to the date of occurrence, which the Borrower or any of its respective Affiliates ever had, now has, ever may have or claim to have in the future against the Lenders or any of their Affiliates, for, upon, or by reason of any act, matter, cause or thing whatsoever from the beginning of time to and including the date of the Initial Closing, resulting from, based upon, related to or connected with, in any way, directly or indirectly, the Asset Purchase Agreement, dated as of October 7, 2002, by and among the Borrower, Daleen Solutions, Inc., a Delaware corporation, and Abiliti Solutions, Inc., a Missouri Corporation (the "Asset Purchase Agreement").


(c) The releases set forth in paragraph (b) above shall constitute an accord and satisfaction in substitution of all of the Claims the Borrower and its Affiliates ever had, now have, ever may have or claim to have in the future against any Lender or its Affiliates, for, upon, or by reason of any act, matter, cause or thing whatsoever from the beginning of time to and including the date of the Initial Closing, arising out of, resulting from, based upon, related to or connected with, in any way, directly or indirectly, the Asset Purchase Agreem ...