1
EXHIBIT 10.9
LOAN AND SECURITY AGREEMENT
Agreement No._____________ Dated as of November 9, 1999
by and among
MMC/GATX PARTNERSHIP NO. I
as agent and a lender
SILICON VALLEY BANK
as payment agent and a lender
VENTURE LENDING & LEASING II, INC.
TRANSAMERICA BUSINESS CREDIT CORPORATION
and
LIGHTHOUSE CAPITAL PARTNERS
as lenders
And
▇▇▇▇.▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
as borrower
CREDIT AMOUNT: $17,000,000
Commitment Amount Commitment Percentage
----------------- ---------------------
MMC/GATX Partnership No. I $5,000,000 29.4%
Venture Lending & Leasing II, Inc. $5,000,000 29.4%
Transamerica Business Credit $3,000,000 17.6%
Corporation
Silicon Valley Bank $2,000,000 11.8%
Lighthouse Capital Partners $2,000,000 11.8%
Repayment Period: 42 months Treasury Note Maturity: 42 months
Final Payment Percentage: 10% Loan Margin: 393 basis points
Commitment Termination Date: December 31, 2001
Eligible Equipment: Eligible Equipment at Borrower's Financed Equipment
Locations.
The terms and information set forth on this cover page are a part of the
attached Loan and Security Agreement, dated as of the date first written above
(this "Agreement"), entered into by and among MMC/GATX Partnership No. I
("MMC/GATX"), in its individual capacity, Silicon Valley Bank ("SVB"), in its
individual capacity, Venture Lending & Leasing II, Inc. ("VLL"), Transamerica
Business Credit Corporation ("IBC") and Lighthouse Capital Partners
("Lighthouse") (each individually a "Lender" and collectively, "Lenders"),
MMC/GATX as agent, not individually, SVB as payment agent, not individually, and
▇▇▇▇.▇▇▇ ("Borrower"). The terms and conditions of this Agreement agreed to
between the parties hereto are as follows:
2
AGREEMENT
1. Definitions and Construction.
1.1 Definitions. As used in this Agreement, the following terms shall
have the following definitions:
"Affiliate" means any Person that owns or controls directly or
indirectly ten percent or more of the stock of another entity, any Person that
controls or is controlled by or is under common control with such Persons or any
Affiliate of such Persons or each of such Person's officers, directors, joint
venturers or partners.
"Agent" means MMC/GATX, not in its individual capacity, but solely in
its capacity as agent on behalf of and for the benefit of Lenders and any
successor agent.
"Agent's Expenses" means all reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, documentation, administration, funding, and
enforcement of the Loan Documents; and Agent's reasonable attorneys' fees and
expenses incurred in amending, enforcing or defending the Loan Documents,
(including fees and expenses of appeal or review, or those incurred in any
insolvency proceeding) whether or not suit is brought.
"Agreement" shall mean this Loan and Security Agreement, as the same may
from time to time be amended or supplemented.
"All-In Rate" shall be the per annum rate of interest at which the Basic
Rate and the Final Payment amortize the Loan.
"Applicable Premium" shall mean an amount equal to: (i) 10% of the
Current Principal Balance on or before twelve (12) months after the Funding
Date, (ii) 8% of the Current Principal Balance more than twelve (12) months
after, but on or before eighteen (18) months after the Funding Date, (iii) 6% of
the Current Principal Balance more than eighteen (18) months after, but on or
before twenty-four (24) months after the Funding Date, (iv) 4% of the Current
Principal Balance more than Twenty-four (24) months after, but on or before
thirty (30) months after the Funding Date, (v) 3% of the Current Principal
Balance more than thirty (30) months after, but on or before thirty-six (36)
months after the Funding Date, or (vi) 2% of the Current Principal Balance more
than thirty-six (36) months after the Funding Date.
"Basic Rate" means, as of the relevant Funding Date, the per annum rate
of interest (based on a year of twelve 30-day months) equal to the sum of (a)
the U.S. Treasury note yield to maturity for a term equal to the Treasury Note
Maturity as quoted in the Western edition of The Wall Street Journal on the date
the Loan Agreement Supplement is prepared, plus (b) the Loan Margin.
Notwithstanding the foregoing, the Basic Rate shall not exceed the highest rate
permitted by applicable law to be charged on commercial loans.
"Borrower" shall have the meaning set forth on the cover page hereof.
1
3
"Business Day" means any day that is not a Saturday, Sunday, or other
day on which banking institutions are authorized or required to close in
California.
"Closing Date" means the date that each of the conditions precedent
listed in Section 3.1 has been satisfied or waived in writing by Lenders.
"Code" means the Uniform Commercial Code as adopted and in effect in the
State of California, as amended from time to time.
"Collateral" has the meaning given that term in Section 4.1, including,
without limitation, all Financed Equipment listed in any Loan Agreement
Supplement executed from time to time pursuant to Section 4.2.
"Collateral Assignment Agreement" means an agreement substantially in
the form of Exhibit F or such form as Requisite Lenders may accept.
"Commitment Fee" has the meaning given that term in Section 2.7.
"Commitment Termination Date" means the date following such term on the
cover page of this Agreement.
"Commitment" or "Commitment Amount" means with respect to each Lender
the amount set forth following such term on the cover page of this Agreement
under the column titled "Commitment Amount" and "Commitments" means all such
amounts collectively.
"Commitment Percentage" means with respect to each Lender, the
percentage set forth on the cover page of this Agreement under the column titled
"Commitment Percentage."
"Credit Amount" means the amount set forth following such term on the
cover page of this Agreement.
"Current Principal Balance" shall be the outstanding principal balance
of the Loan as of the date of prepayment calculated from an amortization
schedule using the All-In Rate.
"Default" means any event which with the passing of time or the giving
of notice or both would become an Event of Default hereunder.
"Default Rate" means the per annum rate of interest equal to 5% over the
rate at which the Basic Rate and the Final Payment amortize the Loan, but such
rate shall in no event be more than the highest rate permitted by applicable law
to be charged on commercial loans.
"Eligible Equipment" shall mean, to the extent reasonably acceptable to
Lenders, New Equipment; provided that Other Equipment having an aggregate Stated
Cost of not more than 50% of the aggregate Loans outstanding at any time may
also constitute Eligible Equipment.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal
2
4
injury (including sickness, disease or death), property damage, natural
resources damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from Property, whether or not owned by Borrower, or (b) any other
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means all foreign, federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act and the Emergency Planning and
Community Right-to-Know Act.
"Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants, options and other rights to acquire
any of the foregoing.
"Event of Default" has the meaning given to such term in Section 8.
"Event of Loss" has the meaning given to that term in Section 6.10.
"Final Payment" means, with respect to each Loan, a payment (in addition
to and not in substitution for the regular monthly payments of principal and
accrued interest) due on the Maturity Date for such Loan equal to the Loan
Amount for such Loan at such time multiplied by the Final Payment Percentage.
"Final Payment Percentage" means the percentage set forth following such
term on the cover page of this Agreement.
"Financed Equipment" has the meaning given to that term in Exhibit A to
any Loan Agreement Supplement, as amended or supplemented from time to time.
"Finance Equipment Locations" means the locations of Borrower's
facilities in the United States specified in Exhibit A.
"Funding Date" means any date on which a Loan is made to or on account
of Borrower under this Agreement.
"Governmental Authority" means (a) any federal, state, county, municipal
or foreign government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body,
3
5
(c) any court or administrative tribunal or (d) with respect to any Person, any
arbitration tribunal or other non-governmental authority to whose jurisdiction
that Person has consented.
"Hazardous Materials" means all those substances which are regulated by,
or which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"Intellectual Property" shall mean all of Borrowers right, title and
interest in and to patents, patent rights (and applications and registrations
therefor), trademarks and service marks (and applications and registrations
therefor), inventions, copyrights, mask works (and applications and
registrations therefor), trade names, trade styles, software and computer
programs, trade secrets, methods, processes, know how, drawings, specifications,
descriptions, and all memoranda, notes, and records with respect to any research
and development, all whether now owned or subsequently acquired or developed by
Borrower and whether in tangible or intangible form or contained on magnetic
media readable by machine together with all such magnetic media
"Interim Payment" means, with respect to each Loan, an amount equal to
the initial Loan Amount multiplied by the percentage equal to the product of (i)
the quotient derived from dividing the initial Loan Factor with respect to such
Loan by 30, and (ii) the number of days from (and including) the Funding Date of
such Loan to (but not including) the first Payment Date with respect to such
Loan.
"Landlord Agreement" means an agreement substantially in the form of
Exhibit E or such other form as Requisite Lenders may agree to accept.
"Lenders" shall have the meaning set forth on the cover page hereof.
"Lenders' Expenses" means all reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, documentation, administration, funding, and
enforcement of the Loan Documents; and Lenders' reasonable attorneys' fees and
expenses incurred in amending, modifying, enforcing or defending the Loan
Documents, including the exercise of any rights or remedies afforded hereunder
or under applicable law, whether or not suit is brought.
"Lien" means any pledge, bailment, lease, mortgage, hypothecation,
conditional sales and title retention agreement, encumbrance or other lien with
respect to the Property in favor of any Person.
"Lighthouse" means Lighthouse Capital Partners.
"Loan" means each advance of credit by Lenders to Borrower under this
Agreement in accordance with their Commitment Percentage.
"Loan Agreement Supplement" means a supplement to this Agreement in
substantially the form of Exhibit C.
4
6
"Loan Amount" means, with respect to each Loan, as of any date, the
original principal amount of such Loan less prepayments of such Loan paid prior
to such date.
"Loan Documents" means, collectively, this Agreement, each Loan
Agreement Supplement, the warrants, the Landlord Agreements, the Collateral
Assignment Agreements and all other documents, instruments and agreements
entered into in connection with this Agreement, all as amended or extended from
time to time.
"Loan Factor" means, with respect to each Loan, the amount set forth as
a percentage in the Loan Terms Schedule with respect to such Loan, calculated
using the Basic Rate applicable to such Loan.
"Loan Margin" means the number of basis points set forth following such
term on the cover page of this Agreement.
"Loan Terms Schedule" means, with respect to each Loan, Annex B to the
Loan Agreement Supplement prepared by Lenders in connection with such Loan.
"Maturity Date" means, with respect to each Loan, the last day of the
Repayment Period for such Loan, or if earlier, the date of acceleration of such
Loan by Lenders following an Event of Default.
"Minimum Funding Amount" means $50,000.
"MMC/GATX" means MMC/GATX PARTNERSHIP NO. I.
"New Equipment" means Financed Equipment delivered to Borrower by the
manufacturer or vendor not more than ninety (90) days prior to the Funding Date
of the Loan relating to such Financed Equipment.
"Obligations" means all debt, principal, interest, fees, charges,
expenses and attorneys' fees and costs and other amounts, obligations,
covenants, and duties owing by Borrower to Lenders or Agent of any kind and
description (whether pursuant to or evidenced by the Loan Documents, or by any
other agreement among Agent, Lenders and Borrower, and whether or not for the
payment of money), whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, including the principal, interest
and Final Payment due with respect to the Loans, and further including all
Lenders' Expenses and Agent's Expenses that Borrower is required to pay or
reimburse by the Loan Documents, by law, or otherwise; provided. however,
"Obligations" shall expressly exclude any obligations of Borrower pursuant to
its standby letter of credit facility with SVB.
"Other Equipment" means tenant improvements and buildout costs,
software, tooling, equipment specially manufactured for Borrower, equipment
delivered to Borrower by the manufacturer or vendor more than ninety (90) days
prior to the Funding Date of the Loan, and other soft costs; all of the
foregoing in place, or located, at one of the Financed Equipment Locations.
5
7
"Payment Agent" means SVB, not in its individual capacity but solely in
its capacity as payment agent.
"Payment Date" has the meaning given to that term in Section 2.2(a).
"Permitted Liens" means the following:
(a) The Lien created by this Agreement;
(b) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings and as to which full payment is bonded or adequate
reserves are maintained on Borrower's books in accordance with GAAP, provided
the same have no priority over any of Agent's security interests;
(c) Liens of materialmen, mechanics, warehousemen, carriers, or
other similar liens accruing after the date hereof and in the ordinary course of
business or by operation of law or regulation and securing obligations not yet
due;
(d) Easements, reservations, rights-of-way, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances
affecting real property not constituting a material adverse effect;
(e) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payments of customs duties in connection with the
importation of goods;
(f) Liens that are not prior to the Lien of Agent which
constitute rights of set-off of a customary nature or banker's Liens with
respect to amounts on deposit, whether arising by operation of law or by
contract, in connection with arrangement entered in to with banks in the
ordinary course of business;
(g) Liens to secure payment of worker's compensation, employment
insurance, old age pensions or other social security obligations of Borrower in
the ordinary course of business of Borrower; and
(h) Liens on any of Borrower's Property which does not constitute
"Collateral."
"Person" means and includes any individual, any partnership, any
corporation, any business trust, any joint stock company, any limited liability
company, any unincorporated association or any other entity and any domestic or
foreign national, state or local government, any political subdivision thereof,
and any department, agency, authority or bureau of any of the foregoing.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.
6
8
"Repayment Period" means the period beginning on the first Payment Date
and continuing for the number of calendar months set forth following such term
on the cover page of this Agreement.
"Requisite Lenders" means at any time, Lenders then holding at least
seventy-one percent (71%) of the then aggregate unpaid principal amount of the
Loans then outstanding or, if no Loans are then outstanding, Lenders then having
at least seventy-one (71%) of the aggregate Commitments.
"Scheduled Payments" has the meaning given to such term in Section
2.2(a).
"Stated Cost" means (i) with respect to New Equipment, the original cost
to Borrower of the item of New Equipment excluding any and all freight,
installation, taxes and outer soft costs or (ii) with respect to Used Equipment,
the Agent's appraised value of such item of Used Equipment at the time of the
making of the Loan financing such item of Used Equipment.
"Stipulated Loan Value" means, with respect to each Loan, the percentage
set forth with respect to such Loan in the Loan Terms Schedule for such Loan,
determined as of the Payment Date on which payment of such amount is to be made,
or if such date is not a Payment Date, on the Payment Date immediately
succeeding such date.
"Subsidiary" means any corporation of which a majority of the
outstanding capital stock entitled to vote for the election of directors
(otherwise than as the result of a default) is owned by Borrower directly or
indirectly through Subsidiaries.
"SVB" means Silicon Valley Bank.
"TBC" means Transamerica Business Credit Corporation.
"Term" means the period from and after the date hereof until the payment
in full of all amounts and liabilities payable under this Agreement and the
other Loan Documents, including principal and interest on the Loans and the
Final Payment with respect to each Loan.
"Treasury Note Maturity" means the period of months set forth following
such term on the cover page of this Agreement.
"Used Equipment" means all Financed Equipment which is not New
Equipment.
"VLL" means Venture Lending & Leasing II, Inc.
"Warrants" means separate warrants in favor of each of the Lenders to
purchase securities of Borrower substantially in the form of Exhibit B.
1.2 Other Interpretive Provisions. References in this Agreement
to "Articles," "Sections," "Exhibits, "schedules" and "Annexes" are to recitals,
articles, sections, exhibits, schedules and annexes herein and hereto unless
otherwise indicated. References in this Agreement and each of the other Loan
Documents to any document, instrument or agreement shall include (a) all
exhibits, schedules, annexes and other attachments thereto, (b) all
7
9
documents, instruments or agreements issued or executed in replacement thereof,
and (c) such document, instrument or agreement, or replacement or predecessor
thereto, as amended, modified and supplemented from time to time and in effect
at any given time. The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement or any other Loan Document shall
refer to this Agreement or such other Loan Document, as the case may be, as a
whole and not to any particular provision of this Agreement or such other Loan
Document, as the case may be. The words "include" and "including" and words or
similar import when used in this Agreement or any other Loan Document shall not
be construed to be limiting or exclusive. Unless otherwise indicated in this
Agreement or any other Loan Document, all accounting terms used in this
Agreement or any other Loan Document shall be construed, and all accounting and
financial computations hereunder or thereunder shall be computed, in accordance
with generally accepted accounting principles as in effect in the United States
of America from time to time.
2. Loans; Repayment.
2.1 Commitment.
(a) The Credit Amount. Subject to the terms and conditions
of this Agreement and relying upon the representations and warranties herein set
forth as and when made or deemed to be made, Lenders agree to lend to Borrower,
severally and not jointly, from time to time prior to the Commitment Termination
Date, the Loans according to each Lender's pro rata share of the Credit Amount
(based upon the respective Commitment of each Lender); provided that the
aggregate principal amount of the Loans shall not exceed the Credit Amount at
such time. Loans may not be prepaid except in accordance with Section 2.5;
provided further that the aggregate principal amount of Loans relating to Other
Equipment shall not exceed fifty percent (50%) of the then outstanding balance
of the Loans.
(b) Promissory Note. Each Loan Terms Schedule shall be
considered a promissory note evidencing the amounts due hereunder for all
purposes.
(c) Use of Proceeds. The proceeds of the Loans shall be
used solely for the purchase of Eligible Equipment or reimbursement to Borrower
of the Stated Cost of Eligible Equipment; provided that all such Eligible
Equipment remains located at all times at one of the Financed Equipment
Locations as provided by this Agreement.
2.2 Scheduled Payments; Payment of Interest; Final Payment; Loan
Fee.
(a) Scheduled Payments. Borrower shall make payments of
principal and accrued interest in advance for each Loan (collectively,
"Scheduled Payments") as set forth in the Loan Terms Schedule, commencing on the
date set forth on the Loan Term Schedule applicable to such Loan and continuing
thereafter during the Repayment Period on the first Business Day of each
calendar month (each a "Payment Date"), in an amount equal to the Loan Factor
multiplied by the Loan Amount for such Loan as of such Payment Date. In any
event, all unpaid principal and accrued interest shall be due and payable in
full on the last Payment Date with respect to such Loan.
8
10
(b) Interim Payment. Unless the Funding Date for a Loan is
a Payment Date, Borrower shall pay the Interim Payment payable with respect to
such Loan on the Funding Date, as specified in the Loan Term Schedule applicable
to such Loan.
(c) Payment of Interest. Borrower shall pay interest on
each Loan at a per annum rate of interest equal to the Basic Rate specified in
the applicable Loan Agreement Supplement for such Loan. All computations of
interest on Loans shall be based on a year of twelve 30-day months.
Notwithstanding any other provision hereof, the amount of interest payable
hereunder shall not in any event exceed the maximum amount permitted by the law
applicable to interest charged on commercial loans.
(d) Final Payment. Unless a Loan is prepaid in full, on
the Maturity Date with respect to such Loan, Borrower shall pay, in addition to
any unpaid principal and accrued interest and all other amounts due on such date
with respect to such Loan, an amount equal to the Final Payment with respect to
such Loan.
(e) Termination of Commitment to Lend. Notwithstanding
anything in the Loan Documents, each Lender's obligation to lend the undisbursed
portion of the such Lender's Commitment to Borrower hereunder shall terminate on
the earlier of (i) at the Requisite Lenders' sole election, the occurrence and
continuance of any Default or Event of Default hereunder, and (ii) the
Commitment Termination Date. Notwithstanding the foregoing, each Lender's
obligation to lend the undisbursed portion of such Lender's Commitment to
Borrower shall terminate if, in Requisite Lenders' sole judgment, there has been
a material adverse change in the general affairs, management, results of
operations, condition (financial or otherwise) or prospects of Borrower, whether
or not arising from transactions in the ordinary course of business, or there
has been any material adverse deviation by Borrower from the business plan of
Borrower presented to and not disapproved by Requisite Lenders, since the date
of this Agreement.
2.3 Other Payment Terms.
(a) Place and Manner. Borrower shall make all payments due
to Agent or Lenders in lawful money of the United States. All payments of
principal, interest, fees and other amounts payable by Borrower hereunder shall
be made, in immediately available funds, by debit to any account of Borrower
with Payment Agent not later than 10:00 a.m. California time, on the date on
which such payment is made. Borrower authorizes and directs SVB, as Payment
Agent, to debit the amount of each such payment to any account of Borrower, and
to disburse to each Lender its respective share of such payment on each Payment
Date. Payment Agent shall disburse payments to the other Lenders as follows:
MMC/GATX Payment
GATX Capital Corporation
Bank Name: Bank of America
Bank Address: ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Account No.: 3750878673
ABA Routing No.: 111-000012
9
11
Reference: ▇▇▇▇.▇▇▇ Invoice #
VLL Payment
Venture Lending & Leasing II, Inc.
Bank Name: Investors Bank & Trust Co.
Account No.: 8421183
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
ABA Routing No.: ▇▇▇▇▇▇▇▇▇
F/C Client Funds #56930395
Reference: Venture Lending & Leasing II, Inc.
TBC Payment
Transamerica Business Credit
Corporation
Bank Name: Bank One, NA
Bank Address: ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Account No.: 55-75427
ABA Routing No.: ▇▇▇-▇▇▇-▇▇▇
Reference: ▇▇▇▇.▇▇▇
Lighthouse Payment
Lighthouse Capital Partners
Bank Name: Imperial Bank
Bank Address: Santa ▇▇▇▇▇ Valley Regional Office
Account No.: ▇▇-▇▇▇-▇▇▇
ABA Routing No.: ▇▇▇▇▇▇▇▇▇
Reference: ▇▇▇▇.▇▇▇
Any payment received by Agent, Payment Agent or any Lender for the account of
another Lender shall be paid promptly to such Lender, in like funds, for the
Loan in respect of which such payment is made.
(b) Date. Whenever any payment due hereunder shall fall
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in the
computation of interest or fees, as the case may be.
10
12
(c) Default Rate. If either (i) any amounts required to be
paid by Borrower under this Agreement or the other Loan Documents (including
principal, interest, the Final Payment payable with respect to any Loan, and any
fees or other amounts) remain unpaid after such amounts are due, or (ii) an
Event of Default has occurred and is continuing, Borrower shall pay interest on
the aggregate, outstanding balance hereunder from the date due or from the date
of the Event of Default, as applicable, until such past due amounts are paid in
full or until all Events of Default are cured, as applicable, at a per annum
rate equal to the Default Rate. All computations of such interest shall be based
on a year of twelve 30-day months.
2.4 Procedure for Making Loans.
(a) Notice. Whenever Borrower desires that Lenders make a
Loan, Borrower is responsible for providing Agent with a list of equipment
proposed to be financed with such Loan together with such additional information
with respect to the Loan and the Eligible Equipment as Agent shall reasonably
request. Following the receipt by Agent of such information in form and
substance reasonably satisfactory to it, Agent shall notify Borrower that the
condition set forth in Section 3.2(b) has been met and Borrower may then notify
Agent in writing (or by telephone with prompt confirmation in writing) of the
date on which it desires Lenders to make such Loan. Such notice shall (i) be
made at least five (5) Business Days in advance of the desired Funding Date,
(ii) be irrevocable and (iii) request that Agent prepare a Loan Terms Schedule
for such Loan. Within two (2) Business Days following receipt of such notice,
Agent shall notify each Lender by telephone or facsimile of the principal amount
(including such Lender's Commitment Percentage thereof) and Funding Date of the
Loan being requested by Borrower. Borrower's request for a Loan shall be deemed
to be a representation and warranty by Borrower that no Default or Event of
Default has occurred and is continuing, and that the representations and
warranties set forth in Section 5 are true and correct as of the time of such
notice as if made at such time. Subject to the terms and conditions of this
Agreement, as soon as practicable prior to 11:00 a.m. California Time on the
Funding Date specified in the Loan Terms Schedule, each Lender shall transfer an
amount equal to its Commitment Percentage multiplied by the amount of the Loan
to the account specified in Section 2.4(c) in immediately available funds. Each
Lender's obligation to make its Commitment Percentage of the Loan shall be
expressly subject to the satisfaction of the conditions set forth in Sections
3.1 and 3.2.
(b) Loan Factor and Stipulated Loan Value Calculation.
Prior to each Funding Date, Agent, on behalf of Lenders, shall establish the
Basic Rate, the Loan Factor and Stipulated Loan Value with respect to such Loan.
The Loan Factor shall be calculated in a manner to fully amortize the Loan over
the Repayment Period applicable to such Loan in equal periodic installments of
principal and interest. The Loan Factor and Stipulated Loan Value applicable to
each Loan shall be set forth in the Loan Agreement Supplement to be executed by
Borrower with respect to each Loan and shall be conclusive in the absence of a
manifest error.
(c) Disbursement. Each Lender shall disburse its pro rata
portion of such Loan by wire transfer to Borrower at Silicon Valley Bank, Name:
SIL VLY BK SJ, Account No. 3300172656, ABA Routing No. ▇▇▇▇▇▇▇▇▇, Account Name:
▇▇▇▇.▇▇▇. Notwithstanding anything stated herein to the contrary, no Lender
shall have any obligation to advance funds on behalf of any other Lender.
11
13
2.5 Prepayments.
(a) Prepayment Upon an Event of Loss. if any Financed
Equipment is subject to an Event of Loss and Borrower is required to or elects
to prepay the Loan with respect to such Financed Equipment, then such Loan shall
be prepaid to the extent and in the manner provided hereunder.
(b) Mandatory Prepayment Upon an Acceleration. If the
Loans are accelerated following the occurrence of an Event of Default or
otherwise (other than following an Event of Loss), then Borrower shall
immediately pay to Lenders (i) all unpaid Scheduled Payments with respect to
each Loan due prior to the date of prepayment, (ii) the Stipulated Loan Value
with respect to each Loan multiplied by the Loan Amount of such Loan, and (iii)
all other sums, if any, that shall have become due and payable hereunder.
(c) Optional Prepayment By, Or Replacement Of, Financed
Equipment Location. In the event Borrower desires to prepay all, but not less
than all, of the Loans made as to a particular financed Equipment Location,
Borrower shall provide a written notice to each Lender of (i) the Financed
Equipment Location as to which Borrower wishes to prepay all of its Loans, (ii)
the locations of Borrower's facilities in the United States which are not either
Financed Equipment Locations or subject to another lender's equipment loans or
security interests ("Alternative Locations"). Requisite Lenders shall determine
either that (i) Borrower may prepay all, but not less than all, of the Loans
made as to such particular Financed Equipment Location, or (ii) Borrower may
replace such Financed Equipment Location with Requisite Lenders' selection of
one of the Alternative Locations. Borrower shall provide Lenders with such
information regarding any of the Alternative Locations and assets located
thereat as Lenders may reasonably request in order for Requisite Lenders to make
such determination. Lenders shall have ten (10) Business Days after receipt of
Borrower's written notice and information requested by Lenders regarding the
Alternative Locations to make such determination, and Agent shall provide
Borrower with written notice of such determination ("Determination Notice"). If
Requisite Lenders determine to replace such Finance Equipment Locations with an
Alternative Location, Borrower at its expense, shall cooperate and execute such
further agreements and security documentation, substantially on the terms and
conditions of this Agreement, to secure such Loans and the, Alternative
Location, and release such Financed Equipment Location. If Requisite Lenders
determine to allow Borrower to prepay all of the Loans as to such Finance
Equipment Location, Borrower shall prepay, within five (5) Business Days of
Lenders' Determination Notice, all such Loans in full at a prepayment price with
respect to each Loan equal to the Current Principal Balance of the Loan, plus
interest accrued on the Loan through and including the date of such prepayment,
plus a premium on the Loan equal to the Applicable Premium. Borrower may
exercise the prepayment right of this section only as to a total of one (1)
Financed Equipment Location. If Requisite Lenders cannot agree, the
determination shall be a prepay.
(d) No Other Prepayment. Borrower may not prepay any Loan
except (1) upon the occurrence of an event described in Section 2.5(a), (b) or
(c) above in which event the prepayment shall be made as described in such
sections, or (2) in connection with Lenders' refusal to consent under Sections
7.5(iv) or 7.7, in which case, Borrower shall prepay all, but not less than all,
of the Loans in full at a prepayment price with respect to each Loan equal to
the
12
14
Current Principal Balance of the Loan plus interest accrued on the Loan through
and including the date of such prepayment, plus a premium equal to the
Applicable Premium.
2.6 Minimum Funding Amount; Maximum Number of Fundings. Except
with the prior consent of Requisite Lenders, in Requisite Lenders' sole
discretion, (i) the amount of each requested Loan shall not be less than the
Minimum Funding Amount, (ii) there shall not be more than one funding of Loans
in any one calendar month, (iii) each Loan (and the Financed Equipment
thereunder) shall be applicable to a separate Financed Equipment Location, and
(iv) more than one Financed Equipment Location may be financed at a time so
long as each Loan meets the requirements of clauses (i), (ii) and (iii) and
this Agreement.
2.7 Commitment Fee; Expenses. Borrower has paid a commitment fee
in the amount of Twenty-Five Thousand Dollars ($25,000) (the "Commitment Fee").
The Commitment Fee, less an amount to pay Lenders' Expenses and Agent's Expenses
in connection with due diligence and the negotiation and documentation
(including filing and recording fees) of the Loan Documents, will be applied to
the first payment due by Borrower after Agent's determination of such expenses.
If such expenses exceed the Commitment Fee, Borrower agrees to pay such expenses
within thirty (30) days of invoice.
3. Conditions of Loans.
3.1 Conditions Precedent to Closing. At the time of the execution
and delivery of this Agreement, the Lenders shall have received, in form and
substance reasonably satisfactory to Lenders, all of the following:
(a) This Agreement duly executed by Borrower and each of
the Lenders.
(b) The separate Warrants to be issued to each Lender,
each duly executed by Borrower.
(c) The separate Warrant to be issued to MMC/GATX or the
Person designated by it, in connection with its fee, duly executed by Borrower.
(d) The intercreditor agreement, in form and substance
satisfactory to Lenders, and duly executed by each of the Lenders.
(e) A certificate of the secretary or assistant secretary
of Borrower with copies of the following documents attached: (i) the articles of
incorporation and bylaws of Borrower certified by Borrower as being in full
force and effect on the Closing Date, (ii) incumbency and representative
signatures, and (iii) resolutions authorizing the execution and delivery of this
Agreement and each of the other Loan Documents.
(f) A good standing certificate from Borrower's state of
incorporation and the state in which Borrower's principal place of business is
located, together with certificates of the applicable governmental authorities
stating that Borrower is in compliance with the franchise tax laws of each such
state, each dated as of a recent date.
13
15
(g) Evidence of the insurance coverage required by Section
6.9 of this Agreement.
(h) All necessary consents of shareholders and other third
parties with respect to the execution, delivery and performance of this
Agreement, the Warrants and the other Loan Documents.
(i) A legal opinion of Borrower's counsel covering the
matters set forth in Exhibit D hereto.
(j) Such other documents, and completion of such other
matters, as Lenders may deem necessary or appropriate.
3.2 Conditions Precedent to all Loans. The obligation of Lenders
to make each Loan, including the initial Loan, is further subject to the
following conditions:
(a) No Default or Event of Default shall have occurred and
be continuing.
(b) Borrower shall have provided to Agent, with respect to
the Eligible Equipment which is requested to be financed with the proceeds of
the Loan to be made on such Funding Date, such invoices, purchase orders, bills
of sale, serial numbers, agreements, canceled checks, and other documents as
Lenders shall reasonably request to evidence the ownership by Borrower of, the
payment in full of the purchase price of such Eligible Equipment, each in form
and substance reasonably satisfactory to Lenders.
(e) Each Loan shall be for Financed Equipment at one
Financed Equipment Location and Borrower shall have provided Agent with the
location of each item of Financed Equipment and a Collateral Assignment
Agreement and a Landlord Agreement for such Financed Equipment Location, which
have been duly executed by each of the parties thereto.
(d) Borrower, Agent and Lenders shall have executed a Loan
Agreement Supplement, including a Loan Terms Schedule and a list of Financed
Equipment with respect to the proposed Loan.
(e) Agent shall have received such documents, instruments
and agreements, including UCC financing statements or amendments to UCC
financing statements, as Agent shall reasonably request to evidence the
perfection and priority of the security interests granted to Agent, on behalf of
and for the benefit of Lenders, pursuant to Section 4.
(f) Borrower shall have delivered to Agent, on behalf of
Lenders, a release, or estoppel letter, as appropriate, from any Person having
an existing Lien superior to the Lien of Lenders on any item of Eligible
Equipment which is requested to be financed.
(g) Such other documents, and completion of such other
matters, as Agent may deem necessary or appropriate.
14
16
3.3 Covenant to Deliver. Borrower agrees (not as a condition but
as a covenant) to deliver to Agent each item required to be delivered to Agent
and/or Lenders as a condition to each Loan, if such Loan is advanced. Borrower
expressly agrees that the extension of such Loan prior to the receipt by Agent
or Lenders of any such item shall not constitute a waiver by Agent or Lenders of
Borrower's obligation to deliver such item, and any such extension in the
absence of a required item shall be in Lenders' sole discretion.
4. Creation of Security Interest.
4.1 Grant of Security Interest. Borrower grants to Agent on
behalf and for the benefit of Lenders, a valid, first priority, continuing
security interest in all presently existing and hereafter acquired or arising
Collateral in order to secure prompt, full and complete payment of any and all
Obligations and in order to secure prompt, full and complete performance by
Borrower of each of its covenants and duties under each of the Loan Documents.
The "Collateral" shall mean and include all right, title, interest, claims and
demands of Borrower in and to the following:
(a) All goods and equipment now owned or hereafter
acquired, including, without limitation, all laboratory equipment, computer
equipment, office equipment, machinery, fixtures, vehicles (including motor
vehicles and trailers), and any interest in any of the foregoing, and all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing, which are now or at any time hereafter
located on any of the Financed Equipment Locations;
(b) All inventory now owned or hereafter acquired,
including, without limitation, all merchandise, raw materials, parts, supplies,
packing and shipping materials, work in process and finished products which is
now or at any time hereafter located on any of the Financed Equipment Locations,
including such inventory therefrom as is temporarily out of Borrower's custody
or possession or in transit and including any returns upon any accounts or other
proceeds, including insurance proceeds, resulting from the sale or disposition
of any of the foregoing and any documents of title representing any of the
above, and Borrower's books relating to any of the foregoing;
(c) All contract rights and general intangibles (including
Intellectual Property), including, without limitation, goodwill, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
disks, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind, royalties,
license rights and any and all credit insurance, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by Borrower, now
or at any time hereafter owned or acquired by Borrower or in which Borrower now
or at any time hereafter has any rights, relating to any Financed Equipment
Location, and Borrower's books relating to the foregoing;
(d) All now existing and hereafter arising accounts and
all other forms of obligations owing to Borrower arising out of the sale or
lease of space, the licensing of technology or the rendering of services by
Borrower (subject, in each case, to the contractual rights of third parties to
require funds received by Borrower to be expended in a particular
15
17
manner) now or at any time hereafter produced or generated by, or derived from,
the ownership or operation of any of the Financed Equipment Locations
(collectively, "Receivables"); provided that any portion of any Receivables
which have been fully earned by performance by Borrower (collectively, "Earned
Receivables") shall be excluded as Collateral hereunder;
(e) All deposit accounts, now existing or hereafter
arising, maintained at SVB or with any other Lender (Borrower's execution and
delivery of this Agreement to Lender shall constitute notice under the Code that
Borrower has granted a security interest in such account or accounts in favor of
Agent, for the benefit of the Lenders), and any and all monies, securities and
other Property of Borrower, and the proceeds thereof, now or hereafter held by
any of the Lenders or Agent, whether for safekeeping, custody, pledge,
transmission, collection or otherwise;
(f) All documents, cash, deposit accounts, letters of
credit, certificates of deposit, instruments, chattel paper and investment
property, including, without limitation, all securities, whether certificated or
uncertificated, security entitlements, securities accounts, commodity contracts
and commodity accounts, and all financial assets held in any securities account
or otherwise, wherever located, now or at any time hereafter produced or
generated by, or derived from, any of the Financed Equipment Locations;
(g) Any and all claims, rights and interests in any of the
above and all substitutions for, additions and accessions to and proceeds
thereof, including, without limitation, insurance, condemnation, requisition or
similar payments; and
(h) Any and all of the following equipment collateral
(collectively, "Equipment Collateral"):
All right, title, interest, claims and demands of Borrower in
and to each and every item of equipment, fixtures or personal property,
whether now owned or hereafter acquired, together with all
substitutions, renewals or replacements of and additions, improvements,
accessions, replacement parts and accumulations to any and all of such
equipment, fixtures or personal property (collectively, the
"Equipment"), together with all proceeds thereof, including, without
limitation, insurance, condemnation, requisition or similar payments,
and all proceeds from sales, renewals, releases or other dispositions
thereof, which is financed with or is designated as collateral for the
Obligations on and after the date of this Agreement by designating such
equipment, fixtures and personal property on a UCC financing statement
listing Borrower as "debtor" and Lender as "secured party."
(i) But expressly excluding any certificates of deposit
now or hereafter maintained by SVB which secure any obligations of Borrower now
or hereafter arising pursuant to Borrower's standby letter of credit facility
with SVB, including without limitation. certificate of deposit account numbers
8800049728, 8800049741, ▇▇▇▇▇▇▇▇▇▇, 8800049829 and 8800050632 (collectively, the
"SVB Collateral").
16
18
4.2 After-Acquired Property. All Financed Equipment which is
financed through Loans and any and all other Property generally described or
referred to as Collateral which is hereafter acquired by Borrower shall ipso
facto, and without any further conveyance, assignment or act on the part of
Borrower or Lenders, become and be subject to the security interest herein
granted as fully and completely as though specifically described herein. The
list of Financed Equipment shall be amended and supplemented on each Funding
Date by a Loan Agreement Supplement to incorporate all Financed Equipment
financed with the Loan advanced on such Funding Date; provided, however, the
failure to so amend and supplement the list of Financed Equipment shall not
affect the grant by Borrower to Lender of the security interest in such Financed
Equipment pursuant to this Section 4. This Agreement and the other documents in
connection herewith may be otherwise supplemented and amended from time to time,
as required by Lender, to reflect additional Collateral to be subject to the
security interest granted pursuant to this Section 4.
4.3 Duration of Security Interest. Agent's security interest in
the Collateral shall continue until the payment in full and the satisfaction of
all Obligations, whereupon such security interest shall terminate; provided,
however, if any item of Financed Equipment is subject to an Event of Loss, then
following the prepayment of the Loan with respect to such item pursuant to
Section 2.5, Agent shall release its security interest in such item of Financed
Equipment. Agent shall, at Borrower's sole cost and expense, execute such
further documents and take such further actions as may be reasonably necessary
to effect the release contemplated by this Section 4.3, including duly executing
and delivering termination statements for filing in all relevant jurisdictions
under the Code.
4.4 Location and Possession of Collateral. The Equipment
Collateral is and shall remain in the possession of Borrower at one of the
Financed Equipment Locations. Notwithstanding the foregoing, Borrower may, not
more than once per quarter, elect to move part of the Equipment Collateral from
one Financed Equipment Location (the "Released Equipment"); provided (1)
Borrower gives Lenders thirty (30) days' written notice of its request,
including the description and value of the Released Equipment and the
description and value of the equipment which will replace the Released Equipment
at the Financed Equipment Location (the "Substitute Equipment"), (2) the
Substitute Equipment must be of a greater or equal value than the Released
Equipment in Requisite Lenders' judgment, (3) the Substitute Equipment must
become "Equipment Collateral" under this Agreement, subject to Lenders' first
priority security interest, (4) the Released Equipment does not consist of more
than ten percent (10%) of the aggregate of all of the New Equipment as to the
Loans made for that Financed Equipment Location, (5) the Substitute Equipment
must be delivered to Borrower by the manufacturer or vendor not more than ninety
(90) days prior to the Released Equipment being moved to another location, and
(6) there is no Event of Default or Default existing or occurring. Borrower
shall remain in full possession, enjoyment and control of the Collateral (except
only as may be otherwise required by Agent for perfection of its security
interest therein) and so long as no Event of Default has occurred and is
continuing, shall be entitled to manage, operate and use the same and each part
thereof with the rights and franchises appertaining thereto; provided, however,
that the possession enjoyment, control and use of the Collateral shall at all
time be subject to the observance and performance of the terms of this
Agreement.
17
19
4.5 Markings On the Collateral. At Agent's request at any time
during the Tern of the Loan (including any extension thereof), Borrower shall
place in a conspicuous location on each item of Financed Equipment a plaque or
outer marking to be supplied by Lenders which reads substantially as follows;
MMC/GATX PARTNERSHIP NO. I, as Agent for Lenders, Lienholder.
Such plaque or other marking shall not be removed (or if removed or
damaged such plaque or other marking shall be replaced) until the security
interest in favor of Agent in such item of Collateral is terminated pursuant to
this Agreement.
4.6 Delivery of Additional Documentation Required. Borrower shall
from time to time execute and deliver to Agent on behalf of Lenders, at the
request of Agent, all financing statements and other documents Agent may
reasonably request, in form satisfactory to Agent, to perfect and continue
Agent's perfected security interests in the Collateral and in order to
consummate fully all of the transactions contemplated under the Loan Documents.
4.7 Right to Inspect. Each Lender (through any of its officers,
employees, or agents) shall have the right, upon reasonable prior notice, from
time to time during Borrower's usual business hours, to inspect Borrower's books
and records and to make copies thereof and to inspect, test, and appraise the
Collateral in order to verify Borrower's financial condition or the amount,
condition of, or any other matter relating to, the Collateral.
4.8 Intentionally omitted.
4.9 Real Property Collateral.
(a) Documents. In connection with each Financed Equipment
Location, Borrower shall duly execute and deliver to Lenders, in form and
substance satisfactory to Lenders a Collateral Assignment Agreement, and a
Landlord Agreement duly executed by the applicable landlord. A form of the
Landlord Agreement is attached as Exhibits E, but the parties recognize that
there will be variations in these agreements between the Financed Equipment
Locations, although all such agreements must be satisfactory to Lenders.
Borrower agrees that Lenders or Agent may retain local counsel in connection
with the negotiation, documentation and enforcement of these agreements and such
attorneys' fees and costs shall be either Lenders' Expenses or Agent's Expenses,
reimbursable by Borrower hereunder.
5. Representations and Warranties. Borrower represents, warrants and
covenants as follows:
5.1 Due Organization and Qualification. Borrower is a corporation
duly organized and validly existing and in good standing under the laws of its
state of incorporation and qualified and licensed to do business in, and is in
good standing in, any state in which (i) the conduct of its business or its
ownership of Property requires that it be so qualified or in which the
Collateral is located, except for such states as to which any failure to so
qualify would not have a material adverse effect on Borrower, and (ii) a
Financed Equipment Location is located.
18
20
5.2 Authority. Borrower has all necessary power and authority to
execute, deliver, and perform in accordance with the terms thereof, the Loan
Documents to which it is a party. Borrower has all requisite power and authority
to own and operate its properties and to carry on its businesses as now
conducted.
5.3 Conflict with Other Instruments, etc. Neither the execution
and delivery of any Loan Document to which Borrower is a party nor the
consummation of the transactions therein contemplated nor compliance with the
terms, conditions and provisions thereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the articles of
incorporation and the by-laws, or other organizational documents of Borrower or
any law or any regulation, order, writ, injunction or decree of any court or
governmental instrumentality or any material agreement or instrument to which
Borrower is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject, or constitute a default thereunder or
result in the creation or imposition of any Lien, other than Permitted Liens.
5.4 Authorization; Enforceability. The execution and delivery of
this Agreement, the granting of the security interest in the Collateral, the
incurring of the Loans, the execution and delivery of the other Loan Documents
to which Borrower is a party and the consummation of the transactions herein and
therein contemplated have each been duly authorized by all necessary action on
the part of Borrower. The Loan Documents have been duly executed and delivered
and constitute legal, valid and binding obligations of Borrower, enforceable in
accordance with their respective terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency or other similar laws of general
application relating to or affecting the enforcement of creditors' rights or by
general principles of equity.
5.5 No Prior Encumbrances. Borrower has good and marketable title
to the Collateral, free and clear of Liens except for Permitted Liens.
5.6 Name; Location of Chief Executive Office, Principal Place of
Business and Collateral. Except as disclosed in Schedule 1, Borrower has not
done business under any name other than that specified on the signature page
hereof. The chief executive office, principal place of business, and the place
where Borrower maintains its records concerning the Collateral are presently
located at the addresses set forth on the cover page of this Agreement. The
Equipment Collateral is presently located at one of the Financed Equipment
Locations, as set forth in a Loan Agreement Supplement which is approved by
Agent. The Collateral (other than the Equipment Collateral) is presently located
at the address set forth on the cover page to this Agreement.
5.7 Litigation. There are no actions or proceedings pending by or
against Borrower before any court or administrative agency in which an adverse
decision could have a material adverse effect on Borrower or the aggregate value
of the Collateral. Borrower does not have knowledge of any such pending or
threatened actions or proceedings. Borrower will promptly notify Lenders in
writing if any action, proceeding or governmental investigation involving
Borrower is commenced that is reasonably expected to result in damages or costs
to Borrower of Fifty Thousand Dollars ($50,000) or more.
5.8 Financial Statements. All financial statements relating to
Borrower or any Affiliate that have been or may hereafter be delivered by
Borrower to each Lender present fairly
19
21
in all material respects Borrower's financial condition as of the date thereof
and Borrower's results of operations for the period then ended.
5.9 Security Interest. Assuming the proper filing of one or more
financing statement(s) identifying the Collateral with the proper state and/or
local authorities and the appropriate recordings and/or filings with respect to
Collateral constituting Intellectual Property or real property with the proper
federal, state or county authorities, the security interests in the Collateral
granted to Agent pursuant to this Agreement (i) constitute and will continue to
constitute first priority security interests (except to the extent any Permitted
Liens may have a superior priority to Agent's Lien under this Agreement) and
(ii) are and will continue to be superior and prior to the rights of all other
creditors of Borrower (except to the extent of such Permitted Liens).
5.10 Full Disclosure. No representation, warranty or other
statement made by Borrower in any Loan Document, certificate or written
statement furnished to Lenders or either of them contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained in such certificates or statements not misleading.
There is no fact known to Borrower which materially adversely affects, or which
could in the future be reasonably expected to materially adversely affect, its
ability to perform its obligations under this Agreement.
6. Affirmative Covenants. Borrower covenants and agrees that, until the
full and complete payment of the Obligations and the termination of the
Commitments, Borrower shall do all of the following:
6.1 Good Standing. Borrower shall maintain its corporate
existence and its good standing in its jurisdiction of incorporation and
maintain qualification in each jurisdiction in which (i) the failure to so
qualify could reasonably be expected to have a material adverse effect on the
financial condition, operations or business of Borrower, and (ii) a Financed
Equipment Location is located. Borrower shall maintain in force all licenses,
approvals and agreements, the loss of which could reasonably be expected to have
a material adverse effect on its financial condition, operations or business.
6.2 Government Compliance. Borrower shall comply with all
statutes, laws, ordinances and government rules and regulations to which it is
subject, noncompliance with which could reasonably be expected to materially
adversely affect the financial condition, operations or business of Borrower.
6.3 Financial Statements, Reports, Certificates. Borrower shall
deliver to each Lender: (a) as soon as available, but in any event within thirty
(30) days after the end of each month, a company prepared balance sheet, income
statement and cash flow statement covering Borrower's operations during such
period, certified by a Responsible Officer; (b) as soon as available, but in any
event within ninety (90) days after the end of Borrower's fiscal year, audited
financial statements of Borrower prepared in accordance with generally accepted
accounting principles, consistently applied, together with an unqualified
opinion on such financial statements of a nationally recognized or other
independent public accounting firm reasonably acceptable to Agent; and (c) such
other financial information as Lender may
20
22
reasonably request from time to time. From and after such time as Borrower
becomes a publicly reporting company, promptly as they are available and in any
event: (x) at the time of filing of Borrower's Form 10-K with the Securities end
Exchange Commission after the end of each fiscal year of Borrower, the financial
statements of Borrower filed with such Form 10-K; and (y) at the time of filing
of Borrower's Form 10-Q with the Securities and Exchange Commission after the
end of each of the first three fiscal quarters of Borrower, the financial
statements of Borrower filed with such Form 10-Q. In addition, Borrower shall
deliver to each Lender (i) promptly upon becoming available, copies of all
statements, reports and notices sent or made available generally by Borrower to
its security holders; (ii) immediately upon receipt of notice thereof, a report
of any material legal actions pending or threatened against Borrower; and (iii)
such other financial information as Lenders may reasonably request from time to
time.
6.4 Certificates of Compliance. Each time financial statements are
furnished pursuant to Section 6.3 above, there shall be delivered to each
Lender, a certificate signed by a Responsible Officer (each, an "Officer's
Certificate") with respect to such financial reports to the effect that: (i) no
Event of Default or Default has occurred and is continuing hereunder since the
date of this Agreement or, if later, since the date of the prior Officer's
Certificate or, if such an event or condition has occurred and is continuing,
the nature and extent thereof and the action Borrower proposes to take with
respect thereto, and (ii) Borrower is in compliance with the provisions of
Sections 6 and 7.
6.5 Notice of Event of Loss. As soon as possible, and in any event
within ten (10) days after Borrower has knowledge thereof, Borrower shall notify
Agent in writing in reasonable detail of any Event of Loss.
6.6 Notice of Defaults. As soon as possible, and in any event within
five (5) days after the discovery of a Default or an Event of Default provide
Agent, with an Officer's Certificate of Borrower setting forth the facts
relating to or giving rise to such Default or Event of Default and the action
which Borrower proposes to take with respect thereto.
6.7 Taxes. Borrower shall make due and timely payment or deposit of
all federal, state, and local taxes, assessments, or contributions required of
it by law or imposed upon any properties belonging to it, including the Financed
Equipment, and will execute and deliver to Agent, on demand, appropriate
certificates attesting to the payment or deposit thereof; and Borrower will make
timely payment or deposit of all tax payments and withholding taxes required of
it by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent and Requisite Lenders indicating
that Borrower has made such payments or deposits; provided that Borrower need
nut make any payment if the amount or validity of such payment is contested in
good faith by appropriate proceedings and as to which payment in full is bonded
or is adequately reserved against by Borrower.
6.8 Use: Maintenance.
(a) Borrower, at its expense, shall make all necessary site
preparations and cause the Collateral to be operated in accordance with any
applicable manufacturer's manuals or instructions. So long as no Default or
Event of Default has occurred and is continuing, Borrower
21
23
shall have the right to quietly possess and use the Collateral as provided
herein without interference by Agent or Lenders.
(b) Borrower, at its expense, shall maintain the Collateral in
good condition, reasonable wear and tear excepted, and will comply in all
material respects with all laws, rules and regulations to which the use and
operation of the Collateral may be or become subject. Such obligation shall
extend to repair and replacement of any partial loss or damage to the Collateral
which does not constitute an Event of Loss, regardless of the cause. If
maintenance is mandated by manufacturer, Borrower shall obtain and keep in
effect, at all times during the Term maintenance service contracts with
suppliers approved by Agent and Requisite Lenders, such approval not to be
unreasonably withheld. All parts furnished in connection with such maintenance
or repair shall immediately become part of the Collateral. All such maintenance,
repair and replacement services shall be immediately paid for and discharged by
Borrower with the result that no Lien will attach to the Collateral.
6.9 Insurance. Borrower shall, obtain and maintain for the Term, at
its own expense:
(a) "All risk" insurance against loss or damage to the
Collateral and the Financed Equipment Locations. The coverage limit shall be the
greater of the replacement cost of the Equipment or the Stipulated Loan Value of
the Loan Amount applicable to each Loan. The deductible shall not exceed
$25,000. The policy shall name Agent, on behalf of Lenders, as sole loss payee
with respect to the Equipment, shall not be invalidated by any action of or
breach of warranty by Borrower of any provision thereof and waive subrogation
against Agent, on behalf of Lenders.
(b) Commercial general liability insurance (including
contractual liability, products liability and completed operations coverages)
reasonably satisfactory to Lenders. The limit of liability shall be at least
$2,000,000 per occurrence. The policy shall be without deductible, except for
products liability coverage which may have a deductible up to $25,000. The
policy(ies) shall name Agent, on behalf of Lenders, as additional insured in the
full amount of Borrower's liability coverage limits (or the coverage limits of
any successor to Borrower or such successor's parent which is providing
coverage), be primary and without contribution as respects any insurance carried
by Agent or Lenders, and contain cross liability and severability of interest
clauses.
(c) Such other insurance against risks of loss and with terms as
shall be reasonably required by Agent and Requisite Lenders.
All policies of insurance shall be placed with financially sound,
commercial insurers reasonably satisfactory to Agent and Requisite Lenders. All
policies of insurance shall provide that Agent, on behalf of Lenders, shall be
given 30 days notice of cancellation of coverage. This notice provision shall
be without qualification. On or prior to the first Funding Date and prior to
each policy renewal, Borrower shall furnish to Agent, on behalf of Lenders,
certificates of insurance or other evidence satisfactory to Agent that insurance
complying with all of the above requirements is in effect.
22
24
6.10 Loss; Damage; Destruction and Seizure.
(a) Borrower shall bear the risk of the Financed Equipment being
lost, stolen, destroyed, damaged beyond repair, rendered permanently unfit for
use, or seized by a governmental authority for any reason whatsoever at any time
until the expiration or termination of the Term.
(b) If during the Term any item of Financed Equipment is lost,
stolen, destroyed, damaged beyond repair, rendered permanently unfit for use, or
seized by a governmental authority for any reason whatsoever for a period equal
to at least the remainder of the Term (an "Event of Loss"), then in each case
Agent, on behalf of Lenders, shall receive from the proceeds of insurance
maintained pursuant to Section 6.9, from any award paid by the seizing
governmental authority or, to the extent not received from the proceeds of
insurance or award or both, from Borrower, on or before the Payment Date next
succeeding such Event of Loss, an amount equal to the sum of (i) all accrued and
unpaid Scheduled Payments with respect to such Loan due prior to the next such
Payment Date, (ii) a prepayment in an amount equal to the Stipulated Loan Value
with respect to such Loan multiplied by the Stated Cost of each affected item of
Financed Equipment provided that the sum of (i) and (ii) shall not exceed the
principal amount of each such Loan and all accrued interest and (iii) all other
sums, if any, that shall have become due and payable hereunder with respect to
such Loan, including interest at the Default Rate with respect to any past due
amounts. On the date of receipt by Agent, on behalf of Lenders, of the amount
specified above with respect to each such item of Financed Equipment subject to
an Event of Loss, this Agreement shall terminate as to such Financed Equipment.
Except as provided in Section 6.10(c), any proceeds of insurance maintained by
Borrower pursuant to Section 6.9 and received by Borrower shall be paid to
Agent, on behalf of Lenders, promptly upon their receipt by Borrower. If any
proceeds of insurance or awards received from governmental authorities are in
excess of the amount owed under this Section 6.10, Agent shall promptly remit to
Borrower the amount in excess of the amount owed to Lenders.
(c) So long as no Event of Default has occurred and is
continuing, any proceeds of insurance maintained pursuant to Section 6.9
received by Lenders or Borrower with respect to an item of Financed Equipment,
the repair of which is practicable, shall, at the election of Borrower, be
applied either to the repair or replacement of such Financed Equipment or, upon
Agent's receipt, on behalf of Lenders, of evidence of the repair or replacement
of the Financed Equipment reasonably satisfactory to Lenders, to the
reimbursement of Borrower for the cost of such repair or replacement. All
replacement parts and equipment acquired by Borrower in replacement of Financed
Equipment pursuant to this Section 6.10(c) shall immediately become part of the
Financed Equipment upon acquisition by Borrower. Borrower shall take such
actions and provide such documentation as may be reasonably requested by Agent,
on behalf of Lenders, to protect and preserve their first priority security
interest and otherwise to avoid any impairment of Agent's and Lenders' rights
under the Loan Documents in connection with such repair or replacement.
6.11 Further Assurances. At any time and from time to time Borrower
shall execute and deliver such further instruments and take such further action
as may reasonably be requested by Lenders to effect the purposes of this
Agreement.
23
25
7. Negative Covenants. Borrower covenants and agrees that until the full
and complete payment of the Obligations and termination of the Commitments,
Borrower will not do any of the following:
7.1 Chief Executive Office. During the continuance of this
Agreement, change its chief executive office or principal place of business
without thirty (30) days prior written notice to Lenders.
7.2 Collateral Control. Subject to its rights under Section 4, (i)
terminate, waive or release any material right with respect to any Collateral,
(ii) remove any Equipment Collateral from a Financed Equipment Location to a
location which is not a Financed Equipment Location, (iii) except upon thirty
days' prior written notice to Lenders, remove any Equipment Collateral from one
Financed Equipment Location to another Financed Equipment Location, (iv) except
upon thirty days' prior written notice to Lenders, remove any items of
Collateral (other than Equipment Collateral) from a Financed Equipment Location
or Borrower's facility located at the address set forth on the cover page hereof
or such other address agreed to in writing by Lenders, or (v) affix or attach or
permit to be affixed or attached to any item of Collateral any other item of
property owned by Borrower or any other lender, lessor or financing party which
is not readily identifiable or separable without any damage to such item of
Collateral, without each Lender's prior written consent.
7.3 Liens. Create, incur, assume or suffer to exist any Lien of any
kind upon any Collateral, whether now owned or hereafter acquired, except
Permitted Liens.
7.4 Other Dispositions of Collateral. Convey, sell, lease or
otherwise dispose of all or any part of the Collateral to any Person except for
Financed Equipment in which Lenders shall have released their security interest
pursuant to Section 4.3.
7.5 Extraordinary Transaction; Restructure. (i) Dispose of any
assets not in the ordinary and usual course of Borrower's business, (ii) change
Borrower's name without prior written notice to Agent and Lenders, (iii) make or
suffer any material adverse change in Borrower's financial condition or any
material adverse change in Borrower's operations, (iv) cause, permit, or suffer
any material change in Borrower's ownership by merger or otherwise, (v) engage
in any business other than the business currently engaged in by Borrower or
reasonably related thereto, or (vi) suspend operation of Borrower's business;
provided that in the event Borrower requests Lenders' consent to a clause (iv)
event and Lenders do not consent (Lenders' decision whether to consent is at
Lenders' sole discretion), Borrower may prepay the Obligations with the
Applicable Premium.
7.6 Distributions. (i) Pay any dividends or make any distributions
on its Equity Securities; (ii) purchase, redeem, retire, defease or otherwise
acquire for value any of its Equity Securities (other than repurchases by
cancellation of indebtedness pursuant to the terms of employee stock purchase
plans, employee restricted stock agreements or similar arrangements (1) in an
aggregate amount not to exceed $100,000, or (2) where Borrower may repurchase
shares previously issued to employee(s) of Borrower pursuant to Borrower's stock
option plans using the proceeds from such issuance); (iii) return any capital to
any holder of its Equity Securities as such; (iv) make any distribution of
assets, Equity Securities, obligations or
24
26
securities to any holder of its Equity Securities as such; or (v) set apart any
sum for any such purpose; provided, however, that Borrower may pay dividends
payable solely in common stock; provided, further, however, once an IPO (as
defined in the Warrants) occurs, and only upon the written consent of Requisite
Lenders (which consent shall be at Requisite Lenders' sole discretion) Borrower
may purchase, redeem, retire, defease or otherwise acquire for value any of its
Equity Securities.
7.7 Mergers or Acquisitions. Acquire all or substantially all of the
capital stock or assets of another Person which is not in Borrower's "ordinary
course of business" or merge or consolidate with or into any other Person;
provided that in the event Borrower requests Lenders' consent to such a
transaction and Lenders do not consent (Lenders' decision whether to consent is
at Lenders' sole discretion), Borrower may prepay the Obligations with the
Applicable Premium. Borrower may acquire all or substantially all of the capital
stock or assets of another Person in the "ordinary course of business." For the
purposes of this Section, such an acquisition shall be in Borrower's "ordinary
course of business" if it is an acquisition (a) to obtain one or more
co-location facilities or similar facilities which Borrower intends to convert
into one or more co-location facilities, (b) consistent with Borrower's
"Business Plan," and (c) as to which the total acquisition cost thereof directly
reduces Borrower's build-out costs on a dollar-for-dollar basis if Borrower were
to build out similarly located co-location facilities without the acquisition.
For the purposes of this Section, "Business Plan" shall mean Borrower's business
plan presented to Lenders on or before the date of this Agreement and such
amendments thereto as may be approved by Requisite Lenders.
7.8 Transactions With Affiliates. Enter into any contractual
obligation with any affiliate or engage in any other transaction with any
affiliate except upon terms at least as favorable to Borrower as an arms-length
transaction with unaffiliated Persons.
7.9 Indebtedness Payments. Repay any notes to officers, directors or
shareholders, prior to all Obligations to Lenders being fully satisfied except
for repayments made solely in the Company's Equity Securities.
8. Events of Default. Any one or more of the following events shall
constitute an Event of Default by Borrower under this Agreement:
8.1 If Borrower fails to pay when due and payable or when declared
due and payable in accordance with the Loan Documents, any portion of the
Obligations.
8.2 If Borrower fails to perform any obligation under Sections 6.8,
6.9 and 6.10 or violates any of the covenants contained in Section 7 of this
Agreement.
8.3 If Borrower fails or neglects to perform, keep, or observe any
other material term, provision, condition, covenant, or agreement contained in
this Agreement (other than as set forth in Sections 8.1 or 8.2), in any of the
other Loan Documents, or in any other present or future agreement between
Borrower and Lenders and as to any default under such other term, provision,
condition, covenant or agreement that can be cured, has failed to cure such
default within fifteen (15) days after the occurrence of such default.
25
27
8.4 If there occurs a material adverse change in Borrower's
business, or if there is a material impairment of the prospect of repayment of
any portion of the Obligations owing to Lenders or a material impairment of the
value or priority of Agent's security interest in the Collateral.
8.5 If any material portion of Borrower's assets is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any trustee, receiver or Person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within thirty (30) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within thirty (30)
days after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contesting by Borrower.
8.6 (i) If there is any default in any agreement which could
reasonably be expected to have a material adverse effect on the financial
condition, operations or business of Borrower, or (ii) if there is a payment
default in any agreement to which Borrower is a party which is not cured within
the applicable cure period thereunder resulting in a right by the other party or
parties to such agreement, whether or not exercised, to accelerate the maturity
of any indebtedness unless Borrower disputes such default in good faith and for
which full payment is bonded or adequate reserves are maintained on Borrower's
books in accordance with GAAP provided that such default does not result in any
Lien.
8.7 If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least Fifty Thousand Dollars
($50,000) shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of thirty (30) days.
8.8 If any material misrepresentation or material misstatement
exists now or hereafter in any warranty, representation, statement, or report
made to Lenders or either of them by Borrower or any officer, employee, agent,
or director of Borrower.
8.9 If Borrower shall breach any term of the Warrants.
8.10 If any Loan Document shall in any material respect cease to be,
or Borrower shall assert that any Loan Document is not, a legal, valid and
binding obligation of Borrower enforceable in accordance with its terms.
8.11 If a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
Borrower in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee (or similar official) of
Borrower or for any substantial part of its property, or for the winding-up or
liquidation of its
26
28
affairs, and such proceeding shall remain undismissed or unstayed and in effect
for a period of thirty (30) consecutive days or such court shall enter a decree
or order granting the relief sought in such proceeding.
8.12 If Borrower shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian (or other similar
official) of Borrower or for any substantial part of its property, or shall make
a general assignment for the benefit of creditors, or shall fail generally to
pay its debts as they become due, or shall take any corporate action in
furtherance of any of the foregoing.
9. Agent's and Lenders' Rights and Remedies.
9.1 Rights and Remedies. Upon the occurrence and during the
continuance of any Default or Event of Default, neither Agent nor Lenders shall
have any further obligation to advance money or extend credit to or for the
benefit of Borrower. In addition, upon the occurrence and during the continuance
of an Event Of Default, Lenders or Agent on behalf of Lenders, shall have the
rights, options, duties and remedies of a secured party as permitted by law and,
in addition to and without limitation of the foregoing, Lenders may, at the
election of Requisite Lenders, without notice of election and without demand, do
any one or more of the following, all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, including the
Stipulated Loan Value of the Loan Amount of each Loan, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.11 or 8.12 all Obligations shall become immediately due and payable
without any action by Lenders);
(b) Make such payments and do such acts as Agent or Lenders
consider necessary or reasonable to protect Agent's security interest in the
Collateral. Borrower agrees to assemble the Collateral if Agent, on behalf of
Lenders, so requires, and to make the Collateral available to Agent as Agent may
designate. Borrower authorizes Agent to enter the premises where the Collateral
is located, to take and maintain possession of the Collateral, or any part of
it, and to pay, purchase, contest, or compromise any encumbrance, charge, or
lien which in Requisite Lenders' determination appears to be prior or superior
to their security interest and to pay all expenses incurred in connection
therewith. With respect to any of Borrower's owned premises, Borrower hereby
grants Agent, on behalf of Lenders, a license to enter into possession of such
premises and to occupy the same, without charge, for up to one hundred twenty
(120) days in order to exercise any of Agent's or Lenders' rights or remedies
provided herein, at law, in equity, or otherwise;
c) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral. Lenders and their agents and any purchasers at or after
foreclosure are hereby granted an irrevocable, perpetual, fully paid,
royalty-free license or other right, solely pursuant to the provisions of this
Section 9.1, to use, without charge, Borrower's Intellectual Property, including
without limitation, labels,
27
29
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any Property of a similar
nature, now or at arty time hereafter owned or acquired by Borrower or in which
Borrower now or at any time hereafter has any rights, relating to the ownership,
operation, management, maintenance or repair or the development or construction
of any Financed Equipment Location, in completing production of, advertising for
sale, and selling any Collateral and in operating, maintaining, foreclosing or
selling any Financed Equipment Location and, in connection with Lenders'
exercise of their rights under this Section 9.1, Borrower's rights under all
licenses and all franchise agreements shall inure to Lenders' benefit;
(d) Sell the Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including Borrower's premises) as Lenders
determine are commercially reasonable;
(e) Agent or any Lender may credit bid and purchase at any
public sale; and
(f) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower.
9.2 Set Off Right. During the occurrence and continuance of an Event
of Default arising out of Borrower's failure to comply with Section 8.1, Lenders
may set off and apply to the Obligations any and all indebtedness at any time
owing to or for the credit or the account of Borrower.
9.3 Effect of Sale. Any sale, whether under any power of sale hereby
given or by virtue of judicial proceedings, shall operate to divest all right,
title, interest, claim and demand whatsoever, either at law or in equity, of
Borrower in and to the Property sold, and shall be a perpetual bar, both at law
and in equity, against Borrower, its successors and assigns, and against any and
all Persons claiming the Property sold or any part thereof under, by or through
Borrower, its successors or assigns.
9.4 Power of Attorney in Respect of the Collateral. Borrower does
hereby irrevocably appoint Agent on behalf of Lenders (which appointment is
coupled with an interest), the true and lawful attorney in fact of Borrower with
full power of substitution, for it and in its name to file any notices of
security interests, financing statements and continuations and amendments
thereof pursuant to the Uniform Commercial Code or federal law, as may be
necessary to perfect, or to continue the perfection of Agent's security
interests in the Collateral. Borrower does hereby irrevocably appoint Agent on
behalf of Lenders (which appointment is coupled with an interest) on the
occurrence and during the continuance of an Event of Default, the true and
lawful attorney in fact of Borrower with full power of substitution, for it and
in its name: (a) to ask, demand, collect, receive, receipt for, ▇▇▇ for,
compound and give acquittance for any and all rents, issues, profits, avails,
distributions, income, payment draws and other sums in which a security
interest is granted under Section a with full power to settle, adjust or
compromise any claim thereunder as fully as if Agent were a Borrower itself, (b)
to receive payment of and to endorse the name of Borrower to any items of
Collateral (including checks, drafts and other orders for the payment of money)
that come into Agent's possession or under
28
30
Agent's control, (e) to make all demands, consents and waivers, or take any
other action with respect to, the Collateral, (d) in Agent's discretion to file
any claim or take any other action or proceedings, either in their own names or
in the name of Borrower or otherwise, which Agent or Requisite Lenders may
reasonably deem necessary or appropriate to protect and preserve the right,
title and interest of Agent, on behalf of Lenders, in and to the Collateral, or
(e) to otherwise act with respect thereto as though Agent, on behalf of Lenders,
were the outright owner of the Collateral.
9.5 Agent's Expenses. If Borrower fails to pay any amounts or
furnish any required proof of payment due to third persons or entities, as
required under the terms of this Agreement, then Agent may do any or all of the
following: (a) make payment of the same or any part thereof; or (b) obtain and
maintain insurance policies of the type discussed in Section 6.9 of this
Agreement, and take any action with respect to such policies as Agent deems
prudent. Any amounts paid or deposited by Agent shall constitute Agent's
Expenses, shall be immediately due and payable, and shall bear interest at the
then applicable rate hereinabove provided. and shall be secured by the
Collateral. Any payments made by Agent shall not constitute an agreement by
Agent to make similar payments in the future or a waiver by Agent or any Lender
of any Event of Default under this Agreement.
9.6 Remedies Cumulative. Agent's and Lenders' rights and remedies
under this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Agent and Lenders shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by Agent or any Lender of one right or remedy shall be deemed an
election, and no waiver by Lenders of any Event of Default on Borrower's part
shall be deemed a continuing waiver. No delay by Agent or any Lender shall
constitute a waiver, election, or acquiescence by it or either of them.
9.7 Application of Collateral Proceeds. The proceeds and/or avails
of the Collateral, or any part thereof, and the proceeds and the avails of any
remedy hereunder (as well as any other amounts of any kind held by Agent, on
behalf of Lenders, at the time of or received by Agent, on behalf of Lenders,
after, the occurrence of an Event of Default hereunder) shall be paid to and
applied as follows:
(a) First, to the payment of out-of-pocket costs and expenses,
including all amounts expended to preserve the value of the Collateral, of
foreclosure or suit, if any, and of such sale and the exercise of any other
rights or remedies, and of all proper fees, expenses, liability and advances,
including reasonable legal expenses and attorneys' fees, incurred or made
hereunder by Agent or any Lender, including without limitation, Agent's Expenses
and Lenders' Expenses;
(b) Second, to the payment to Lenders of the amount then owing
or unpaid on the Loans for Scheduled Payments, the Stipulated Loan Value of the
Loan Amount, and all other Obligations with respect to all Loans, provided,
however, that if such proceeds shall be insufficient to pay in full the whole
amount so due, owing or unpaid upon the Loans, then to the unpaid interest
thereon, then to unpaid principal thereof, then to the Stipulated Loan Value of
the Loan Amount with respect to all Loans, and then to the payment of other
amounts then payable to Lenders under any of the Loan Documents; and
29
31
(c) Third, to the payment of the surplus, if any, to Borrower,
its successors and assigns, or to whomsoever may be lawfully entitled to receive
the same.
9.8 Reinstatement of Rights. If Agent or Lenders shall have
proceeded to enforce any right under this Agreement or any other Loan Document
by foreclosure, sale, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely, then and in every such case (unless otherwise ordered by a court of
competent jurisdiction), Agent and Lenders shall be restored to their former
position and rights hereunder with respect to the Property subject to the
security interest created under this Agreement.
10. Waivers; Indemnification.
10.1 Demand; Protest. Except for notices and demands otherwise
required by the terms of this Agreement, Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Agent on which Borrower may in any way be liable.
10.2 Agent's Liability for Collateral. So long as Agent complies
with its obligations, if any, under the Code, Lenders shall not in any way or
manner be liable or responsible for: (a) the safekeeping of the Collateral; (b)
any loss or damage thereto occurring or arising in any manner or fashion from
any cause other than Lender's gross negligence or willful misconduct; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person whomsoever. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower.
10.3 Indemnification and Waiver. Whether or not the transactions
contemplated hereby shall be consummated:
(a) General Indemnity. Borrower shall pay, indemnify, and hold
Agent and each Lender and each of their respective officers, directors,
employees, counsel, partners, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses or disbursements (including Agent's Expenses, Lenders'
Expenses and reasonable attorney's fees and the allocated cost of in-house
counsel) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Loan Documents, or the transactions contemplated hereby and thereby, and
with respect to any investigation, litigation or proceeding (including any case,
action or proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, dissolution or relief of
debtors or any appellate proceeding) related to this Agreement or the Loans or
the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that Borrower shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities arising from the gross negligence
or willful misconduct of such Indemnified Person.
30
32
(b) Environmental Indemnity. Borrower hereby agrees to
indemnify, defend and hold harmless each Indemnified Person, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including
reasonable attorneys' fees and the allocated cost of in-house counsel and
internal environmental audit or review services), which may be incurred by or
asserted against such Indemnified Person in connection with or arising out of
any pending or threatened investigation, litigation or proceeding, or any action
taken by any Person, with respect to any Environmental Claim arising out of or
related to any Property owned, leased or operated by Borrower. No action taken
by legal counsel chosen by any Lender or Agent in defending against any such
investigation, litigation or proceeding or requested remedial, removal or
response action (except for actions which constitute fraud, willful misconduct,
gross negligence or material violations of law) shall vitiate or in any way
impair Borrower's obligation and duty hereunder to indemnify and hold harmless
each Lender and Agent. Lenders and Agent agree to use reasonable efforts to
cooperate with Borrower respecting the defense of any matter indemnified
hereunder, except insofar as and to the extent that their respective interests
may be adverse to Borrower's, in each Lenders' reasonable discretion.
(c) Waivers. (i) Borrower shall give Lenders written notice
within one hundred eighty (180) days of obtaining knowledge of the occurrence of
any claim or cause of action it believes it has, or may seek to assert to allege
against Lenders whether such claim is based in law or equity, arising under or
related to this Agreement or any of the other Loan Documents or to the
transactions contemplated hereby or thereby, or any act or omission to act by
Lenders with respect hereto or thereto, and that if it shall fail to give such
notice to Lenders with regard to any such claim or cause of action, Borrower
shall be deemed to have waived, and shall be forever barred from bringing or
asserting such claim or cause of action in any suit, action or proceeding in any
court or before any governmental agency or authority or any arbitrator. (ii)
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE
ELSE, BORROWER AGREES THAT IT SHALL NOT SEEK FROM LENDERS UNDER ANY THEORY OF
LIABILITY (INCLUDING ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL
OR PUNITIVE DAMAGES.
(d) Survival: Defense. The obligations in this Section 10.3
shall survive payment of all other Obligations pursuant to Section 12.8 of this
Agreement. At the election of any Indemnified Person, Borrower shall defend such
Indemnified Person using legal counsel satisfactory to such Indemnified Person
in such Person's reasonable discretion, at the sole cost and expense of
Borrower. All amounts owing under this Section 10.3 shall be paid within thirty
(30) days after written demand.
11. Notices.
(a) Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by certified mail,
postage prepaid, return receipt requested, or by prepaid facsimile to Borrower
Or to Lenders, as the case may be, at their respective addresses set forth
below:
31
33
If to Borrower: ▇▇▇▇.▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PH: (▇▇▇) ▇▇▇-▇▇▇▇
If to MMC/GATX: MMC/GATX Partnership No. I
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company
▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇-▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Contract Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PH: (▇▇▇) ▇▇▇-▇▇▇▇
If to SVB: Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PH: (▇▇▇) ▇▇▇-▇▇▇▇
If to VLL: Venture Lending & Leasing II, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: CFO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PH: (▇▇▇) ▇▇▇-▇▇▇▇
If to TBC: Transamerica Business Credit Corporation
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. Attorney
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PH: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lighthouse: Lighthouse Capital Partners
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PH: (▇▇▇) ▇▇▇-▇▇▇▇
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
12. General Provisions.
32
34
12.1 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower without each Lender's prior written consent, which
consent may be granted or withheld in Lenders' sole discretion. Each Lender
shall have the right without the consent of or notice to Borrower to sell,
transfer, negotiate, or grant participation's in all or any part of, or any
interest in such Lender's rights and benefits hereunder. Agent shall have the
right to resign as Agent hereunder without Borrower's consent and pursuant to
the terms of a separate intercreditor agreement entered into between the
Lenders.
12.2 Time of Essence. Time is of the essence for the performance of
all obligations set forth in this Agreement.
12.3 Severability of Provisions. Each provision of this Agreement
shall be several from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
12.4 Entire Agreement; Construction; Amendments and Waivers.
(a) This Agreement and each of the other Loan Documents dated as
of the date hereof, taken together, constitute and contain the entire agreement
among Borrower, Agent and Lenders and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications between the
parties, whether written or oral, respecting the subject matter hereof. Borrower
acknowledges that it is not relying on any representation or agreement made by
any Lender or Agent or any employee, attorney or agent thereof, other than the
specific agreements set forth in this Agreement and the Loan Documents.
(b) This Agreement is the result of negotiations between and has
been reviewed by each of Borrower and Lenders executing this Agreement as of the
date hereof and their respective counsel; accordingly, this Agreement shall be
deemed to be the product of the parties hereto, and no ambiguity shall be
construed in favor of or against Borrower, Agent or Lenders. Borrower, Agent and
Lenders agree that they intend the literal words of this Agreement and the other
Loan Documents and that no parol evidence shall be necessary or appropriate to
establish Borrower's, Agent's or any Lender's actual intentions.
(c) Any and all amendments, modifications, discharges or waivers
of, or consents to any departures from any provision of this Agreement or of any
of the other Loan Documents shall not be effective without the written consent
of each Agent and Requisite Lenders. Notwithstanding the foregoing, in all
cases, any material change of maturity dates, any interest rate reduction, or
any release of any Collateral or any guarantor, or any forbearances or waiver of
rights under the Loan Documents shall require the written consent of each
Lender. Any waiver or consent with respect to any provision of the Loan
Documents shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Borrower in any case
shall entitle Borrower to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, waiver or consent effected in
accordance with this Section 12.4 shall be binding upon Agent, each Lender and
on Borrower.
33
35
12.5 Reliance by Agent and Lenders. All covenants, agreements,
representations and warranties made herein by Borrower shall be deemed to be
material to and to have been relied upon by Lenders, notwithstanding any
investigation by Lenders.
12.6 No Set-Offs by Borrower. All sums payable by Borrower pursuant
to this Agreement or any of the other Loan Documents shall be payable without
notice or demand and shall be payable in United States Dollars without set-off
or reduction of any manner whatsoever.
12.7 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
12.8 Survival, All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Lenders
with respect to the expenses, damages, losses, costs and liabilities described
in Section 10.3 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Lenders have run.
13. Relationship of Parties. Borrower, Agent and each Lender
acknowledge, understand and agree that the relationship between the Borrower, on
the one hand, and Agent and Lenders, on the other, is, and at all time shall
remain solely that of a borrower and lenders. Neither Agent nor any Lender shall
under any circumstances be construed to be partners or joint venturers of
Borrower or any of its Affiliates; nor shall Agent or any Lender under any
circumstances be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Borrower or any of its Affiliates, or to owe any
fiduciary duty to Borrower or any of its Affiliates. Neither Agent nor any
Lender undertakes or assumes any responsibility or duty to Borrower or any of
its Affiliates to select, review, inspect, supervise, pass judgment upon or
otherwise inform Borrower or any of its Affiliates of any matter in connection
with its or their Property, any Collateral held by Agent or the operations of
Borrower or any of its Affiliates. Borrower and each of its Affiliates shall
rely entirely on their own judgment with respect to such matters, and any
review, inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by Agent or any Lender in connection with such matters is
solely for the protection Agent or such Lender and neither Borrower nor any
Affiliate is entitled to rely thereon.
14. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF BORROWER,
AGENT AND LENDERS HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS LOCATED IN THE NORTHERN DISTRICT OF CALIFORNIA. BORROWER, AGENT
AND LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF
THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
34
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
BORROWER:
▇▇▇▇.▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: CFO
------------------------------
AGENT:
MMC/GATX PARTNERSHIP NO. I
By: GATX Capital Corporation,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: VP
------------------------------
PAYMENT AGENT:
SILICON VALLEY ▇▇▇▇
By: /s/ unreadable
---------------------------------
Title: SVP
------------------------------
LENDERS:
MMC/GATX PARTNERSHIP NO. I
By: GATX Capital Corporation,
its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: VP
------------------------------
SILICON VALLEY BANK
By: /s/ unreadable
---------------------------------
Title: SVP
------------------------------
35
37
VENTURE LENDING & LEASING II, INC.
By: /s/ unreadable
---------------------------------
Title: President
------------------------------
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ unreadable
---------------------------------
Title: EVP
------------------------------
LIGHTHOUSE CAPITAL PARTNERS III, L.P.
By: Lighthouse Management
Partners III, L.L.C.
Its General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ II
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ II
------------------------------
Title: Managing Member
------------------------------
36
38
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Financed Equipment Locations
Exhibit B Form of Warrant
Exhibit C Form of Loan Agreement Supplement
Exhibit D Form of Legal Opinion
Exhibit E Form of Landlord Agreement
Exhibit F Form of Collateral Assignment Agreement
Schedule 1 Borrower's Trade Names
Schedule 2 Reserved
39
EXHIBIT A
FINANCED EQUIPMENT LOCATIONS
1. ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
40
EXHIBIT
WARRANT
41
EXHIBIT C
FORM OF LOAN AGREEMENT SUPPLEMENT
LOAN AGREEMENT SUPPLEMENT No. [ ]
LOAN AGREEMENT SUPPLEMENT No. [ ], dated __, 199_ ("Supplement"), to the
Loan and Security Agreement dated as of [Date] (the "Loan Agreement") by and
among ▇▇▇▇.▇▇▇, a California corporation ("Borrower."), MMC/GATX Partnership No.
I, Venture Lending & Leasing II, Inc., Transamerica Business Credit Corporation,
Silicon Valley Bank, and Lighthouse Capital Partners (collectively, "Lenders")
and Agent.
Unless otherwise defined herein, capitalized terms have the meanings
given to such terms in the Loan Agreement.
1. To secure the prompt payment by Borrower of the principal of and
interest on, and all other amounts from time to time outstanding under the Loan
Agreement, and the performance and observance by Borrower of all the agreements,
covenants and provisions contained in the Loan Agreement, Borrower does hereby
grant unto Agent, on behalf of Lenders, their respective successors and assigns,
a first priority security interest in all of Borrower's right, title and
interest in each item of equipment and other property described in Annex A
hereto, which equipment and other property shall be deemed to be additional
"Financed Equipment." The list of Financed Equipment in Annex A hereto shall be
construed as a supplement to, and deemed part of, the Equipment Collateral
listed in Section 4.1 of the Loan Agreement and shall form a part thereof and
the Loan Agreement is hereby incorporated by reference herein and is hereby
ratified, approved and confirmed.
2. Attached as Annex B hereto is the Loan Terms Schedule with respect to
the Loan the proceeds of which will be used to finance the Financed Equipment
listed in Annex A hereto.
3. The Financed Equipment shall be located at the following Financed
Equipment Location: _____________________
4. The proceeds of the Loan should be transferred to Borrower's account
as set forth in Section 2.4(c) of the Loan Agreement.
5. Borrower hereby certifies that (a) the foregoing information is true
and correct and authorizes Lenders to endorse in their respective books and
records, the Basic Rate applicable to the Funding Date of the Loan contemplated
in this Loan Agreement Supplement and the principal amount set forth in the Loan
Terms Schedule; (b) the representations and warranties made by Borrower in
Section 5 of the Loan Agreement and in the other Loan Documents are true and
correct on the date hereof and will be true and correct on such Funding Date;
(c) Borrower has met or will by such Funding Date meet all conditions set forth
in Section 3 of the Loan Agreement; (d) Borrower is now, and on such Funding
Date will be, in compliance with the covenants and the requirements contained in
Sections 6 and 7 of the Loan Agreement; and (e) no Default or Event of Default
has occurred and is continuing under the Loan Agreement.
42
6. This Supplement is being delivered in the State of California.
7. This Supplement may be executed by Borrower, Agent and Lenders in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
[Remainder of page intentionally left blank.]
43
IN WITNESS WHEREOF, Borrower, Agent and Lenders have caused this
Supplement to be duly executed and delivered as of this day and year first above
written.
▇▇▇▇.▇▇▇
By:_____________________________________
Title:__________________________________
AGENT:
MMC/GATX PARTNERSHIP NO. I
By: GATX Capital Corporation,
its General Partner
By:_____________________________________
Title:__________________________________
44
LENDERS: MMC/GATX PARTNERSHIP NO. I
By: GATX Capital Corporation,
its General Partner
By:_____________________________________
Title:__________________________________
SILICON VALLEY BANK
By:_____________________________________
Title:__________________________________
VENTURE LENDING & LEASING II, INC.
By:_____________________________________
Title:__________________________________
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By:_____________________________________
Title:__________________________________
LIGHTHOUSE CAPITAL PARTNERS
By:_____________________________________
Title:__________________________________
45
Annex A - Description of Financed Equipment
Annex B - Loan Terms Schedule
46
ANNEX A
to
EXHIBIT C
The Financed Equipment being financed with the Loan for which this Loan
Agreement Supplement is being executed is listed below. Upon the funding of such
Loan, this Schedule automatically shall be deemed to be a part of the Equipment
Collateral listed in Section 4.1 of the Loan Agreement.
FINANCED EQUIPMENT
See Attached Pages.
47
ANNEX B
LOAN TERMS SCHEDULE
Loan Funding Date: _____________, 199__
Original Loan Amount: $______________
Basic Rate _____%
Loan Factor: _____%
Original Scheduled Payment Amount*: $______________
Date of First Scheduled Payment: $______________
To MMC/GATX: $______________
To VLL: $______________
To TBC: $______________
To SVB: $______________
To Lighthouse: $______________
Maturity Date: $______________
Final Payment: An additional amount equal to the Final Payment Percentage
multiplied by the original Loan Amount then in effect, shall be paid on the
Maturity Date with respect to such Loan.
Stipulated Loan Value:
Payment No. Payment Date Stipulated Loan Value**
----------- ------------ ---------------------
1
2
...
[41]
[42]
*/The amount of each Scheduled Payment will change as the Loan Amount changes.
48
**/Each Stipulated Loan Value amount assumes payment of all Scheduled Payments
due on or before the indicated Payment Date.
49
EXHIBIT D
ITEMS TO BE COVERED BY OPINION OF BORROWER'S COUNSEL
The opinions hereafter expressed are subject to the following
qualifications:
(a) We assume the genuineness of all signatures on original documents,
the authenticity and completeness of all documents submitted to us as originals,
the conformity to original documents of all copies submitted to us and the due
execution and delivery of all documents (except as to due execution and delivery
by the Company) where due execution and delivery are a prerequisite to the
effectiveness thereof;
(b) We express no opinion as to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar federal or state laws
affecting the rights of creditors;
(c) We express no opinion as to the effect of rules of law governing
specific performance, injunctive relief or other equitable remedies (regardless
of whether any such remedy is considered in a proceeding at law or in equity).
Based on and subject to the foregoing, we are of the opinion that:
1. Borrower is a corporation, duly organized, validly existing and in
good standing under the laws of the State of [_________], and is duly qualified
and authorized to do business in the state of California.
2. Borrower has the full corporate power, authority and legal right,
and has obtained all necessary approvals, consents and given all notices to
execute and deliver the Loan Documents and perform the terms thereof.
3. The Loan Documents have been duly authorized, executed and delivered
by Borrower and constitute valid, legal and binding agreements.
4. To our knowledge, there is no action, suit, audit, investigation,
proceeding or patent claim pending or threatened against Borrower in any court
or before any governmental commission, agency, board or authority which might
have a material adverse effect on the business, condition or operations of
Borrower or the ability of Borrower to perform its obligations under the Loan
Documents.
5. The Shares issuable pursuant to exercise or conversion of the
Warrants have been duly authorized and reserved for issuance by Borrower and,
when issued in accordance with the terms thereof, will be validly issued, fully
paid and nonassessable.
6. The shares of Common Stock issuable upon conversion of the Shares
have been duly authorized and reserved and, when issued in accordance with the
terms of Borrower's [Articles/Certificate] of Incorporation, as amended, will be
validly issued, fully paid and nonassessable.
9
50
7. The rights, preferences, privileges and restrictions granted to or
imposed upon Borrower's Series [ ] Preferred Stock and the holders thereof are
as set forth in Borrower's [Articles/Certificate] of Incorporation, as amended
to the Date of Grant, a true and complete copy of which has been delivered to
Lenders.
8. The execution and delivery of the Warrants are not, and the issuance
of the Shares upon exercise of the Warrants in accordance with the terms thereof
will not be, inconsistent with Borrower's [Articles/Certificate] of
Incorporation, as amended, or Bylaws, do not and will not contravene any law,
governmental rule or regulation, judgment or order applicable to Borrower, and
do not and will not conflict with or contravene any provision of, or constitute
a default under, any indenture, mortgage, contract or other agreement or
instrument of which Borrower is a party or by which it is bound or require the
consent or approval of, the giving of notice to, the registration or filing with
or the taking of any action in respect of or by, any federal, state or local
government authority or agency or other person, except for the filing of notices
pursuant to federal and state securities laws, which filings will be effected by
the time required thereby.
10
51
EXHIBIT E
LANDLORD AGREEMENT
THIS LANDLORD AGREEMENT (this "Agreement") is dated as of ____________,
1999 and made by and between MMC/GATX PARTNERSHIP NO. I, as Agent for the
Lenders ), ("Landlord").
RECITALS:
A. ▇▇▇▇.▇▇▇ ("Lessee"), as borrower, has entered into a Loan and
Security Agreement with MMC/GATX Partnership No. I, Venture Lending & Leasing
II, Inc., Transamerica Business Credit Corporation, Silicon Valley Bank and
Lighthouse Capital Partners (collectively, "Lenders") and Agent dated as of
November __, 1999 (as amended and supplemented from time to time, the "Loan
Agreement").
B. Landlord is the lessor under that certain lease agreement dated as
of _______________, 19__, by and between Landlord and Lessee, a true and correct
copy of which is attached hereto as Exhibit A (the "Lease"), which demises
approximately _____ rentable square feet (the "Leasehold Premises") located on
that certain real property in the County of ____________________, State of
_________________ commonly known as [address], with the full legal description
thereof set forth in Exhibit B (the "Real Property").
C. Lessee has executed in favor of Agent, for the benefit of Lenders, a
Collateral Assignment of Leases, Rents and Income (the "Assignment"), securing,
among other things, Lessee's interest in the Lease. A copy of the Assignment has
been delivered to Landlord. Lenders, as a condition to funding under the
Loan Agreement, require the execution of this Agreement. Agent shall also be
deemed to include any successor to Agent and any Lender or third party who
subsequently executes this agreement and subsequently acquires Lessee's interest
under the Lease directly or indirectly through the Assignment.
NOW, THEREFORE, for good and sufficient consideration, receipt of which
is hereby acknowledged, the parties agree as follows:
1. Landlord consents to Borrower's execution and delivery to Agent of
the Assignment.
2. Whether or not Agent exercises rights under the Assignment, Landlord
consents to the removal by Agent or Lenders of the equipment, fixtures and other
personal property assets situated in the Leased Premises ("Equipment") from the
Real Property, no matter how it is affixed thereto. Landlord waives and releases
each and every right which Landlord now has, under laws of the State of
[California] or by virtue of the Lease now in effect, to levy or distrain upon
for rent, in arrears, in advance or both, or to claim or assert title to the
Equipment that is already on, said Real Property, or may hereafter be delivered
or installed thereon.
11
52
3. The Equipment shall be considered to be personal property and shall
not be considered part of the Real Property regardless of whether or by what
means it is or may become attached or affixed to the Real Property.
4. Landlord will permit Lenders or Agent, or their agent or
representative, to enter upon the Real Property for the purpose of exercising
any right they may have under the terms of the Assignment, including, without
limitation, the right to remove the Equipment; provided, however, that if
Lenders or Agent, in removing the Equipment damage any improvements of the
undersigned on the Real Property, Lenders will, at their expense, cause same to
be repaired.
5. If Agent subsequently acquires Lessee's interest as lessee under the
Lease directly or indirectly through the Assignment, Landlord agrees to
recognize Agent as lessee under the Lease and Agent agrees to attorn as lessee
to Landlord under the Lease, and the terms of the Lease shall not be terminated,
disturbed, or adversely affected; provided that Agent or Tenders shall not be
obligated to cure any defaults of Lessee which occurred prior to the time Agent
or Leaders purchased, exercised their rights under the Assignment or otherwise
acquired their interest under the Lease unless Landlord has given Agent the
corresponding written notice of default set forth in Section 6 at least ten (10)
days prior to the time Agent or Lenders acquired their interest under the Lease,
and Agent or Lenders shall not be liable for any other act or omission of
Lessee.
6. Landlord agrees to give Agent copies of any notices of default under
the Lease, and allow Agent to cure said defaults, if Agent so elects, within
thirty (30) days of Agent's receipt of said notice. As of the date hereof,
Landlord acknowledges that there is no default under the Lease.
7. Notices to Agent and Landlord shall be in writing and addressed and
sent by personal or overnight delivery, or US postage pre-paid mail:
To Landlord: ____________________
____________________
____________________
____________________
To Agent: MMC/GATX Partnership No. I
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company
▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Contract Administration
8. Nothing in this Agreement shall be deemed to change in any manner
the provisions of the Assignment or waive any right that Agent may now have or
later acquire against Lessee by reason of the Assignment.
12
53
9. This agreement shall be binding upon the heirs, successors and
assigns of Landlord and shall inure to the benefit of each Lender, Agent and its
respective successors and assigns. This Agreement shall be governed by, and
construed in accordance with, the laws of California. This Agreement may be
executed in counterparts. This Agreement contains the entire agreement of the
parties and supercedes any and all prior agreements and understandings. This
Agreement may not be amended or modified unless in writing executed by all of
the parties.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
MMC/GATX PARTNERSHIP NO. I, as Agent _________________________________
By: GATX Capital Corporation,
its general partner OWNER/LESSOR
By:_____________________________ By:______________________________
Title:__________________________ Title:___________________________
The foregoing Agreement must be acknowledged before a Notary Public.
13
54
STATE OF )
) ss
COUNTY OF )
On the _____ day of _____________, 1999 before me,____________________,
Notary Public, personally appeared ____________________________________
to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), ' and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal
_____________________________________________
SIGNATURE OF NOTARY PUBLIC
(SEAL)
14
55
Exhibit A to Landlord Agreement
LEASE
15
56
Exhibit B to Landlord Agreement
LEGAL DESCRIPTION
16
57
. EXHIBIT F
COLLATERAL ASSIGNMENT OF
LEASES, RENTS AND INCOME
THIS COLLATERAL ASSIGNMENT OF LEASES, RENTS AND INCOME (the
"ASSIGNMENT") is made as of _______________, 1999, between MMC/GATX Partnership
No. I, as Agent for the Lenders (the "AGENT"), and ▇▇▇▇.▇▇▇ (the "BORROWER"),
with reference to the following Recitals:
RECITALS
A. Borrower is a tenant under certain leases more particularly
described in Exhibit A hereto (the "LEASES"), and is entitled to the payment of
certain fees, charges and rentals under various license/rental/customer
agreements as they pertain to the Financed Equipment Locations (the "OCCUPANCY
AGREEMENTS") entered into by Borrower, as ___________________, with parties
occupying space located in the premises demised to Borrower, as tenant, under
the Leases (the "RENTS AND INCOME"). The Leases and Occupancy Agreements are
referred to herein collectively as the "COLLATERAL DOCUMENTS."
A. Borrower, has entered into a Loan and Security Agreement with
MMC/GATX Partnership No. I, Venture Lending & Leasing II, Inc., Transamerica
Business Credit Corporation, Silicon Valley Bank and Lighthouse Capital Partners
(collectively, "LENDERS") and Agent dated as of November __, 1999 (as amended
and supplemented from time to time, the "LOAN AGREEMENT"), pursuant to which
Borrower has granted to Bank a security interest in certain property of
Borrower. Unless otherwise defined herein, capitalized terms have the meanings
given such terms in the Loan Agreement.
C. Borrower has agreed to assign as security to the Agent, for the
benefit of the Lenders, all of the right, title and interest of Borrower in and
under the Collateral Documents, and to grant to the Agent, for the benefit of
the Lenders, a security interest in the Rents and Income, upon the terms and
subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing Recitals, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1. The parties hereby acknowledge and agree that the Collateral
Documents and the Rents and Income constitute "COLLATERAL" under and subject to
the terms of the Loan Agreement.
17
58
2. All cash proceeds from the Collateral Documents, including without
limitation the Rents and income, are "COLLATERAL" as that term is defined in the
Loan Agreement and shall be payable by Borrower to the Lenders in accordance
with the terms thereof and the terms of this Assignment.
3. This assignment is intended by Borrower to create and shall be
construed to create an immediate assignment as security to Agent, for the
benefit of the Lenders, of all of Borrower's right, title and interest in the
Collateral Documents and the Rents and Income. By its acceptance of this
Assignment, and so long as an Event of Default shall not have occurred and be
continuing under the Credit Agreement, Agent hereby grants to Borrower a
revocable license to enforce the Collateral Documents, to collect the Rents and
Income, to apply the Rents and Income to the payment of the costs and expenses
incurred in connection with the business operation of Borrower as may be
permitted by the terms of the Loan Agreement. Upon occurrence of an Event of
Default and at any time thereafter during the continuance thereof, Agent shall
have the right to revoke the license granted to Borrower hereby by giving
written notice of such revocation to Borrower. Upon such revocation, Borrower
shall promptly deliver to the Agent, for the benefit of the Lenders, all Rents
and Income then held by Borrower, and Agent, for the benefit of the Lenders,
shall thereafter be entitled to collect and receive, without deduction or
offset, all Rents and Income and apply such Rents and Income as provided in the
Loan Agreement, and to enforce and exercise the rights of Borrower under the
Collateral Documents.
4. (a) Borrower agrees to execute such additional documentation as may
be requested by the Lenders to effectuate the assignment as security to the
Agent hereunder of Borrower's right, title and interest under the Leases and to
obtain the agreement of the landlords thereunder to recognize Agent and any
successor or assignee of Agent as the tenant under the Leases upon exercise by
Agent of its rights under this Assignment.
(b) From and after the date hereof, Borrower shall not enter into or
consent to any amendment, modification or termination of any of the Leases
without the prior written consent of Requisite Lenders (as defined in the Loan
Agreement).
(c) Borrower represents and warrants that it has delivered true and
correct copies of the Leases to Agent.
5. Borrower shall execute such further documentation (including, without
limitation, a UCC-1 Financing Statement) and do such further acts as may be
necessary to perfect the Agent's security interest in the Collateral Documents
and the Rents and Income. Borrower agrees that Agent may record this Assignment
in the applicable county recording office.
6. This Assignment may be executed in any number of counterparts; each
such counterpart bearing the signature of a party hereto shall be deemed to be
an original document, and any set of counterparts bearing the signatures of all
parties hereto when taken together shall constitute a fully-executed Assignment.
18
59
7. Borrower represents and warrants to the Lenders that Borrower has
full right, title and interest in and to the Collateral Documents, and the
Collateral Documents are not subject to any security interest, lien or
encumbrance of any kind except in favor of Agent, for the benefit of the
Lenders.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
as of the date first above written.
▇▇▇▇.▇▇▇
By: ____________________________________
Its: _______________________________
MMC/GATX PARTNERSHIP NO. I, AS
AGENT FOR THE LENDERS
By: GATX CAPITAL CORPORATION,
ITS GENERAL PARTNER
By: ____________________________________
Its: _______________________________
The foregoing Agreement must be acknowledged before a Notary Public.
19
60
STATE OF )
) ss
COUNTY OF )
On the _______ day of _____________, 1999 before me, _______________
Notary Public, personally appeared _________________________________
to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal
________________________________________
SIGNATURE OF NOTARY PUBLIC
(S E A L)
61
SCHEDULE 1
BORROWER'S TRADE NAMES
Colomotion