WARRANT PARTICIPATION AGREEMENT
Exhibit F.11
EXECUTION COPY
THIS
WARRANT PARTICIPATION AGREEMENT (this “Agreement”) is made as
of the 1 day of August, 2005, by and between Hercules Technology Growth
Capital, Inc., a Maryland corporation (“Hercules”) and Citigroup Global
Markets Realty Corp., a New York corporation (the “Participant”).
RECITALS
WHEREAS, Hercules Funding Trust I, a Delaware statutory trust, as
the Issuer (in such capacity, the “Issuer”), Hercules Funding I LLC, a
Delaware limited liability company, as the Depositor (in such capacity,
the “Depositor”), Hercules, as the Originator (in such capacity, the
“Originator”) and as Servicer (in such capacity, the “Servicer”) and U.S.
Bank National Association, a national banking association, as the
Indenture Trustee on behalf of the Secured Party (in such capacity, the
“Indenture Trustee”), as the Backup Servicer (in such capacity, the
“Backup Servicer”) and as Collateral Custodian (in such capacity, the
“Collateral Custodian”) have entered into the Sale and Servicing
Agreement, dated as of August 1, 2005 (as amended, modified, waived,
supplemented or restated form time to time, the “Sale and Servicing
Agreement”);
WHEREAS, pursuant to the Sale and Servicing Agreement and the Loan
Sale Agreement (as defined in the Sale and Servicing Agreement), Hercules
and its affiliates have entered into a securitization transaction (the
“Securitization Transaction”) pursuant to which Hercules will sell or
otherwise transfer to the Depositor certain loans and related security
(“Securitization Assets”) and pursuant to which the Depositor shall
further transfer the Securitization Assets to the Issuer, which will in
turn sell notes to the Participant.
WHEREAS, as a fee and incentive to the Participant for the
extension of credit to the Issuer under the Securitization Transaction,
and in consideration of the benefits which Hercules will receive as the
indirect 100% owner of the Issuer, Hercules has agreed to grant to the
Participant a 10% participation interest in all Warrants, subject to the
terms set forth herein.
WHEREAS, as security for the payment obligations of Hercules under
this Agreement, Hercules has agreed to pledge 10% of each of the Warrants
to the Participant pursuant to the terms of that certain Warrant Pledge
and Security Agreement dated as of August 1, 2005 (the “Warrant Pledge
Agreement”).
WHEREAS, Hercules desires to grant to the Participant, and the
Participant desires to accept from Hercules, on the terms set forth
herein, the Participation Interest (as hereafter defined).
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall
have the meanings provided in the Sale and Servicing Agreement. As used in
this Agreement, the following terms have the meanings set forth below:
“10% Warrant” and “10% Warrants” shall have the meaning set forth
in Section 13(a)(i) hereof.
“Act” shall have the meaning set forth in Section 25 hereof.
“Amount Realized” shall mean any amount (net of the related
exercise price, taxes and expenses) received by Hercules on account of
any Warrants upon a Realization Event. To the extent Hercules receives
securities upon a Realization Event, the Amount Realized shall include
the Fair Market Value of such securities (net of the related exercise
price, taxes and expenses) as of the Realization Date.
“Event of Default” shall have the meaning set forth in Section 12
hereof.
“Fair Market Value” If such securities are sold in an arm’s length
transaction within five (5) Business Days after the date of
determination, the fair market value of such securities on the date of
determination shall be the net sales price. If such securities are not
sold in an arm’s length transaction within five (5) Business Days after
the date of determination, the fair market value of such securities shall
be calculated as set forth in each respective Warrant Agreement or, if
greater, the fair market value as determined by the board of directors of
Hercules.
“First Amortization Date” shall mean the date that occurs 364 days
after the date of this Agreement (or if such date is not a Business Day,
the preceding Business Day).
“Hercules” shall have the meaning set forth in the recitals hereof.
“Initial Grant Date Value” shall mean with respect to each Warrant,
the value of the Warrant on the date the Warrant was or is granted by the
respective Issuer to Hercules, as determined by the board of directors of
Hercules. The Initial Grant Date Value of each Warrant is set forth on
Exhibit A hereto.
“Issuer” and “Issuers” shall mean the issuer of each Warrant and
collectively, the issuers of all the Warrants.
“Maximum Participation Limit” shall mean the greater of (a) the
product of (i) 10% and (ii) seven times the sum of the Initial Grant Date
Value of all Warrants and (b) $3 million.
“Maximum Limit Date” shall have the meaning set forth in Section
14 hereof.
“Participant” shall have the meaning set forth in the
recitals hereof.
“Participation
Certificate” shall have the
meaning set forth in Section 2 hereof.
“Participation Interest” shall mean the right to receive payments
equal to 10% of any Amount Realized in accordance with the payment
procedures set forth in Section 5 hereof, not to exceed in the aggregate
the Maximum Participation Limit.
“Realization Date” shall mean (A) with respect to any Amount
Realized consisting of immediately available funds, the date Hercules
receives such immediately available funds and
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(B) with respect to any Amount Realized consisting of securities, (i) if
Hercules determines in its sole discretion to make the payment pursuant
to Section 5 hereunder by direct transfer of securities, the date on
which such securities are freely transferable; (ii) if Hercules
determines in its sole discretion to sell such securities to make the
payment pursuant to Section 5 hereunder in immediately available funds,
the date on which Hercules receives immediately available funds from the
sale of such securities; or (iii) if Hercules determines in its sole
discretion to make such payment pursuant to Section 5 hereunder in
immediately available funds without the sale of such securities, the date
on which such securities are freely transferable.
“Realization Event” shall mean the exercise, redemption,
conversion, retirement or sale of any Warrant.
“Securitization Transaction” shall have the meaning set forth in
the recitals hereof.
“Securitization Assets” shall have the meaning
set forth in the recitals hereof.
“Termination Date” shall have the
meaning set forth in Section 14 hereof.
“Warrant” and “Warrants” shall mean all warrants or similar rights
convertible into or exchangeable or exercisable for any equity interests
received by Hercules as an “equity kicker” from the Obligor in connection
with any Transferred Loan sold or granted by Hercules to the Depositor
under the Loan Sale Agreement prior to the Collection Date, including any
additional amounts of interests that a holder thereof may became entitled
to by operation of any anti-dilution or other adjustment rights which
may result in, for example, a subdivision or combination thereof in
accordance with the related Warrant Agreement as listed on Exhibit A
attached hereto.
For the avoidance of doubt, the term Warrant shall in no event
include the right of Hercules to participate as an investor in future
equity financings by an Obligor and to the extent a Transferred Loan
represents a percentage of a Loan made by Hercules to an Obligor, the
Warrants shall include only the pro rata percentage of the warrants (or
other comparable equity interest described above) issued to Hercules by
the Obligor in connection with such Loan, such ratable portion to be
determined by reference to a fraction, the numerator of which is the
outstanding principal amount of the Transferred Loan, and the denominator
of which is the aggregate outstanding principal amount of such Loan.
“Warrant Agreement” shall mean with respect to each Warrant, the
respective warrant agreement between Hercules and an Issuer that governs
the Warrant.
“Warrant Pledge Agreement” shall have the meaning set forth in the
recitals hereof.
All exhibits attached hereto are incorporated herein by reference.
2. Grant of Participation Interest. Hercules does hereby grant,
transfer and convey to the Participant, and the Participant does hereby
accept from Hercules, the Participation Interest. Hercules shall issue on
the date hereof to the Participant a participation certificate in
substantially the form of Exhibit B attached hereto (the “Participation
Certificate”), which Participation Certificate shall evidence the
Participation Interest of the Participant.
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3. Additional Warrants. In addition to the Warrants listed on
Exhibit A on the date hereof, the Participation Interest includes (i)
Warrants related to Transferred Loans sold or granted by Hercules to the
Depositor under the Loan Sale Agreement subsequent to the date of this
Agreement, but prior to the Collection Date and (ii) any subdivision or
combination of Warrants pursuant to any relevant anti-dilution provisions
of the Warrant Agreements. Each time Hercules sells or grants Transferred
Loans to the Depositor under the Loan Sale Agreement prior to the
Collection Date or receives Warrants pursuant to anti-dilution provisions
of the Warrant Agreements, Hercules shall deliver to the Participant a
revised Exhibit A which shall include all existing Warrants and all
additional Warrants related to such Transferred Loans. Once a Warrant is
included in Exhibit A and thereby made subject to this Agreement, it
shall not be removed from Exhibit A without the consent of the
Participant. Upon delivery of such revised Exhibit A to the Participant,
Exhibit A hereto shall be deemed to be automatically updated and amended
to include all Warrants identified on the revised Exhibit A.
4. Limitation on Rights. It is the intent and purpose of the
parties that Hercules shall exercise all rights, powers and privileges of
the warrantholder of the Warrants, and generally shall be responsible for
the administration of the Warrants. The Participant shall not be entitled
to receive any cash or securities payable to or received by Hercules
pursuant to the Warrants except as set forth in Section 5 hereof, nor
shall the Participant have, by reason of this Agreement any rights with
respect to the Warrants, except such rights the Participant may obtain
upon the occurrence of an Event of Default. Instead, any and all cash or
securities owing under the Warrants shall be made by the Issuers to
Hercules and Hercules shall be required to deliver such payments owed to
the Participant in accordance with Section 5 hereof.
5. Payments Procedures.
(a) Within two (2) Business Days after any Realization Date,
Hercules shall make a payment (in the manner forth in subsection
5(b)) to
the Participant equal to 10% of the Amount Realized, provided
that, in the
event that a payment to the Participant of 10% of the Amount Realized
would cause the aggregate value of all payments made to the Participant
pursuant to this Agreement to exceed the Maximum Participation Limit,
Hercules shall make a payment to the Participant only in such amount that
would cause the aggregate of all amounts paid to the Participant pursuant
to this Agreement to equal the Maximum Participation Limit.
(b) Any payments made by Hercules to the Participant pursuant
to subsection 5(a) above, shall be made in the following manner:
(i) For any Amount Realized that consists of cash,
Hercules shall make such payment by wire transfer of
immediately available funds to the account listed on the
signature page hereof or to such other account as the
Participant shall have specified in writing to Hercules not
less than three (3) Business Days prior thereto.
(ii) For any Amount Realized that consists of
securities, Hercules, in its sole discretion, shall make such
payment in any of the following manners: (1) direct transfer
of securities that were received (provided that, for purposes of
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determining compliance with the two (2) Business Days
requirement set forth in Section 5(a), the date Hercules
initiates such transfer to the Participant shall be considered
the date on which Hercules made such payment); or (2) payment
of cash based upon the Fair Market Value of such securities on
the Realization Date, by wire transfer of immediately
available funds to the account listed on the signature page
hereof or to such other account as the Participant shall have
specified in writing to Hercules not less than three (3)
Business Days prior thereto.
6. Limitations of Liability. Hercules will exercise the same care
in administering the Warrants as it exercises with respect to similar
transactions entered into entirely for its own account, but Hercules
shall not be liable to the Participant for any action taken or omitted to
be taken by it hereunder or pursuant hereto, except for (i) a breach of
its express obligations under this Agreement, (ii) the failure to pay
(after receipt of an Amount Realized) to the Participant such payment as
is required to be remitted to the Participant pursuant to this Agreement,
or (iii) the negligence or willful misconduct of Hercules.
7. Costs. Hercules shall pay any out-of-pocket costs and expenses
incurred by Hercules in connection with action taken by Hercules with
respect to the Warrants, including in connection with the collection of
amounts owed under the Warrants, court costs and attorneys’ fees. Any
such out-of-pocket costs and expenses shall be considered expenses
related to the Warrants and shall reduce any associated Amount Realized.
8. Refunds to Hercules.
(a) If Hercules shall pay any amount to the Participant
pursuant hereto under the belief or expectation that a related payment or
equity issuance has been or will be received or collected in connection
with any Warrants and such related payment or equity issuance is not
received or collected by Hercules, then the Participant will promptly
(and in any event on within two (2) Business Days) upon receipt of a
demand for repayment by Hercules, return such amount to Hercules. If any
amount or securities received or collected by Hercules in respect of the
Warrants must be returned to the Issuers or paid to any other Person
pursuant to any federal or state insolvency law, then notwithstanding any
other provision of this Agreement, Hercules shall not be required to make
any payment to the Participant, and the Participant will promptly (but in
any event within two (2) Business Days) upon receipt of a demand for
repayment by Hercules, repay any portion of the payment that Hercules
paid to the Participant. If the Participant receives payments that in the
aggregate exceeds the Maximum Participation Limit, the Participant will
promptly (and in any event on within two (2) Business Days) upon receipt
of a demand for repayment by Hercules, return such amount in excess of
the Maximum Participation Limit to Hercules.
(b) In the event that the Participant is required to
surrender or return any amounts pursuant to Section 8(a) that were
previously paid to it pursuant to this Agreement, the amount of such
repayment shall be deducted from aggregate amounts paid under this
Agreement for purposes of determining whether the Maximum Participation
Limit has been attained or exceeded.
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9. Status of Parties. The relationship between the Participant and
Hercules is and shall be that of a purchaser and seller of a property
interest and not a creditor-debtor relationship, and Hercules does not
assume and shall not have any liability to the Participant for the
payment to the Participant of any amount of the Participation Interest if
such amount is not received by Hercules. The Participant acknowledges
that it has been provided the opportunity to make an independent,
informed judgment with respect to the creditworthiness of the Issuers,
the value of the Warrants and the adequacy of the remedies contained
therein, and the desirability of receiving the Participation Interest.
The Participant accepts the full risk of nonpayment of the Participation
Interest if any amount payable or securities deliverable with respect to
the Warrants is not received by Hercules and agrees that Hercules shall
not be responsible for the performance or observance by the Issuers or
any third party obligor of any of the terms, covenants or conditions of
the Warrants. The Participant further acknowledges that Hercules shall
not be responsible in any fashion or at any time for any fluctuations in
the value of the Warrants or any Amount Realized consisting of
securities. The Participant acknowledges that Hercules has made no
representation or warranty (except as hereinafter provided) with respect
to the Issuers, the Warrants or any other documents or agreements
relating thereto or with respect to the creditworthiness of the Issuers,
the value of the Warrants, or the validity, enforceability or correctness
of any statements or certificates signed, executed or made by the Issuers
or any other party to the Warrants.
10. Hercules’s Representations and Certain Agreements. Hercules
hereby represents and warrants to, and agrees with, the Participant with
respect to the Warrants as follows:
(a) As of the date that the Participant receives the
Participation Interest, and with respect to Warrants added on and after
such date, the date such additional Warrants are added, (i) the Warrants
shall be owned by Hercules free and clear of all security interests and
liens, (ii) the Warrants are not pledged as collateral for any loan or
other purpose, (iii) the Participation Interest is free and clear of all
security interests and liens, other than security interests and liens, if
any, created by or through the Participant, and (iv) Hercules has the
right to sell the Participation Interest to the Participant.
(b) Hercules has deposited the originals of the Warrants with
U.S. Bank National Association. Hercules has provided to the Participant
a true, correct and complete copy of the Warrants as in effect as of the
date that the Participant receives the Participation Interest, and with
respect to Warrants which may become subject to this Agreement and be
added to Exhibit A after such date, the date such additional Warrants
are added to Exhibit A.
(c) Hercules is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland,
and has all corporate power and all governmental licenses,
authorizations, consents, and approvals required to carry on its business
in each jurisdiction in which its business is now conducted.
(d) The execution, delivery, and performance by Hercules of
this Agreement are within Hercules’s corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and
do not contravene or constitute a default under (i) any provision of
applicable law or regulation, (ii) the Certificate of Incorporation or
By-laws of Hercules, or (iii) any agreement,
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judgment, injunction, order,
decree, or other instrument binding upon Hercules or result in the
creation or imposition of any lien on assets of Hercules.
(e) This Agreement constitutes the legal, valid, and binding
obligation of Hercules.
(f) No consents, approvals, filings or notices are required to
be given, made or obtained in connection with the (i) sale of the
Participation Interest pursuant to this Agreement, (ii) the pledge of the
Warrants to the Participant, or (iii) the other transactions contemplated
by this Agreement, except for those which have been obtained or which do
not have a material adverse affect on any of the transactions
contemplated by this Agreement.
11. The Participant’s Warranties. The Participant hereby warrants
and represents to Hercules, and acknowledges and agrees, as follows:
(a) The Participant is a corporation duly organized, validly
existing, and in good standing under the laws of the State of New York,
and has all corporate power and all governmental licenses,
authorizations, consents, and approvals required to carry on its business
in each jurisdiction in which its business is now conducted.
(b) The execution, delivery, and performance by the
Participant of this Agreement are within the Participant’s corporate
powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental
body, agency or official and do not contravene or constitute a default
under (i) any provision of applicable law or regulation, (ii) the
Certificate of Incorporation or By-laws of the Participant, or (iii) any
agreement, judgment, injunction, order, decree, or other instrument
binding upon the Participant or result in the creation or imposition of
any lien on assets of the Participant.
(c) This Agreement constitutes the legal, valid, and binding
obligation of the Participant.
(d) No consents, approvals, filings or notices are required
to be given, made or obtained by the Participant in connection with
receipt of the Participation Interest pursuant to this Agreement, except
for those which have been obtained or which do not have a material
adverse affect on any of the transactions contemplated by this Agreement.
(e) The execution of this Agreement on its behalf and its
participation in the transaction specified herein is in its ordinary
course of business.
(f) It understands that the conveyance of the Participation
Interest, to the extent it may involve the sale of a security, is subject
to restrictions on transferability and resale except as permitted under
the Act and applicable state securities laws and it is acquiring the
Participation Interest solely for its own account, for investment, and not
with a view to resale, provided, however, that (i) to the extent required
by law, the disposition of its assets by the Participant shall remain
within its control, and (ii) the Participant may transfer portions of its
Participation Interest within its affiliated corporate group.
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(g) It has independently and without reliance upon Hercules
conducted its own credit evaluation, reviewed such information as it has
deemed adequate and appropriate and made its own analysis of the
Warrants.
(h) It has not relied upon any investigation or analysis
conducted by, advice or communication from, nor any warranty or
representation by, Hercules, any affiliate of Hercules or any agent,
employee or representative of Hercules or any affiliate of Hercules,
express or implied, concerning the financial condition of the Issuers or
the Warrants, or the tax or economic benefits of an investment in the
Participation Interest.
(i) It or its authorized representatives acting on its behalf
have such knowledge and experience in business and financial matters
necessary to evaluate the merits and risks of an investment in the
Participation Interest. The Participant further represents that it is
experienced in making investments in transactions of this type and that
it is financially able to undertake the risks involved in such an
investment.
(j) Any costs incurred by the Participant resulting from this
transaction (other than costs arising out of Hercules’s breach of its
obligations hereunder) shall be solely at the Participant’s expense and
without right of setoff against Hercules.
12. Events of Default.
(a) Each of the following events shall be an “Event of
Default” hereunder:
(i) Any representation or warranty made by Hercules in
this Agreement shall not be true and correct in all respects
as of the date as of which made, which is not remedied within
thirty (30) days after written notice from the Participant
provided, however, that for purposes of this paragraph, such
representation or warranty shall be deemed to be true and
correct in all respects unless the failure of such
representation or warranty to be so true and correct, without
giving effect to any qualification as to materiality or
material adverse effect set forth in such representation or
warranty, will have a material adverse effect on Hercules or
the Participant;
(ii) Hercules shall fail within two (2) Business Days to
pay any amount due to the Participant under this Agreement; or
(iii) Hercules shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by
or against Hercules seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of
it or debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any
substantial part of its property.
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(b) Hercules shall, as soon as possible, and in any event
within five ( 5 ) Business Days after becoming aware of the occurrence of
an Event of Default or an event which, with notice or lapse of time or
both, could constitute an Event of Default, deliver to the Participant a
statement setting forth details of such Event of Default.
13. Remedies.
(a) If any Event of Default shall occur and be continuing,
the Participant may at its option:
(i) immediately, upon giving notice to Hercules,
cause 10% of each Warrant (each as separated, a “10%
Warrant,” and collectively, the ‘‘10% Warrants”) to be
separated from the remaining 90% of each Warrant;
(ii) immediately, upon giving notice to Hercules,
cause the 10% Warrants to be registered in its name or the
name of its nominee, including causing the Issuers to re-issue
to the Participant in its name or the name of its nominee any
certificates or other documentation required by the terms of
each respective Warrant Agreement to evidence the
Participant’s rights in the Warrant;
(iii) receive all distributions of any kind whatsoever
on the 10% Warrants and exercise any and all rights, powers
and privileges of the warrantholder of the 10% Warrants;
(iv) exercise any other remedy specifically granted
under the Pledge Agreement or now or hereafter existing in
equity, at law, by virtue of statute or otherwise.
(b) If a Realization Event shall occur after an Event of
Default shall occur and be continuing, Hercules and the Participant agree
that:
(i) The Participant shall apply any Amount Received
towards the obligation of Hercules to make payments on the
Participation Interest hereunder.
(ii) In the event the Participant receives securities
upon a Realization Event, the Participant shall determine, in
its sole discretion, whether to (1) sell the securities and
recognize the sale price or (2) receive the securities and
recognize the Fair Market Value as determined in the
respective Warrant Agreement.
(iii) in the event the Participant decides to sell
securities received upon a Realization Event, the Participant
shall only sell those securities necessary to reach the
Maximum Participation Limit.
(iv) The Participant agrees to make any sales or
redemptions of the 10% Warrants or sale of securities received
upon a Realization Event in a manner that is the most tax
advantageous to Hercules.
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(c) Hercules hereby agrees to take any and all actions
reasonably requested by the Participant to effect any and all of the
foregoing provisions of this Section 13.
14. Termination.
(a) When the aggregate value of all payments made to the
Participant pursuant to this Agreement (including payments made directly
to the Participant after an Event of Default) equals or exceeds the
Maximum Participation Limit, the Participant will have no further rights
to future payments pursuant to this Agreement or the Participation
Interest, unless the Maximum Participation Limit is increased due to the
addition of Warrants as described in Section 3 hereof, prior to the
Collection Date or unless the Participant is required to repay any
payments in accordance with Section 8 hereunder, to the extent such
repayment is deducted from aggregate amounts paid under this Agreement
for purposes of determining whether the Maximum Participation Limit has
been attained or exceeded.
(b) At any time, regardless of the occurrence of a
Realization Event or an Event of Default, Hercules may, in its sole
discretion, pay to the Participant such amount that would cause the
aggregate of all amounts paid to the Participant pursuant to this
Agreement to equal the Maximum Participation Limit.
(c) The participant will have no further rights to future
payments pursuant to this Agreement or the Participation Interest on and
after the first day after the Collection Date when the aggregate value of
all payments made to the Participant pursuant to this Agreement
(including payments made directly to the Participant after an Event of
Default) equals or exceeds the Maximum Participation Limit (the “Maximum
Limit Date”). Within five (5) Business Days of the Maximum Limit Date,
the Participant shall cause to be transferred to Hercules any unexercised
Warrants, unexercised 10% Warrants held by the Participant and any unsold
securities or cash held by the Participant in excess of the Maximum
Participation Limit, and thereupon, this Agreement shall be terminated
(the “Termination Date”). The Participant and Hercules agree to take all
action to terminate the Warrant Pledge Agreement on the Termination Date.
Upon the Termination Date, any repayment obligations under
Section 8
hereunder shall cease.
15. Definition of Warrants. The Participant and Hercules
acknowledge and agree that in connection with any extension of the
Amortization Date beyond the First Amortization Date, at the request of
Hercules, the parties will meet in good faith (telephonically or in
person) to reconsider whether Warrants received by Hercules in connection
with Transferred Loans sold or granted by Hercules to the Depositor under
the Loan Sale Agreement after the First Amortization Date shall continue
to be included in the definition of “Warrant” or “Warrants” hereunder.
16. Notices. All notices and other communications hereunder shall
be in writing, personally delivered or sent by facsimile, reliable
overnight courier or certified mail, return receipt requested, addressed
to the other party at its respective address stated below the signature of
such party or at such other address as such party shall from time to time
designate in writing to the other party; and shall be effective on the
date sent, if by facsimile, or on the next Business Day, if sent by
overnight courier or certified mail.
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17. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
18. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof
and shall not be amended or altered in any manner except by a document in
writing executed by both parties.
19. Titles. Section titles are for convenience of reference only
and shall not be of any legal effect.
20. Further Assurances. The parties further covenant and agree to
do, execute and deliver, or cause to be done, executed and delivered, and
covenant and agree to use their best efforts to cause their successors
and assigns to do, execute and deliver, or cause to be done, executed and
delivered, all such further acts, transfers and assurances, for
implementing the intention of the parties under this Agreement, as the
parties reasonably shall request.
21. Waiver of Jury Trial. THE PARTIES HEREBY UNCONDITIONALLY WAIVE
THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE
WARRANTS, ANY DEALINGS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER
HEREOF OR THEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN THE PARTIES. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
(INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER
IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
22. Assignment. Neither Hercules nor the Participant may assign this
Agreement without the prior written consent of the other party. The
Participant may not sell, assign or transfer the Participation Interest
(or any part thereof), without the prior written consent of Hercules.
23. Agreement for Benefit of Certain Parties Only. Nothing herein,
whether express or implied, shall be construed to give any person other
than Hercules, the Participant, and their successors and assigns, any
legal or equitable right, remedy or claim under or in respect of this
Agreement; but this Agreement shall be held to be for the sole and
exclusive benefit of Hercules, the Participant, and their successors and
permitted assigns.
24. Not a Partnership, etc. Neither the execution of this Agreement
nor the sharing in the Warrants is intended to be or to create, and the
foregoing shall be construed not to be or to create, any partnership,
joint venture, or other joint enterprise between; and neither the
execution of this Agreement, nor the management and administration of the
Warrants, nor any other right,
11
duty or obligation of Hercules under or
pursuant to this Agreement is intended to be or create any express,
implied or constructive trust or other fiduciary relationship between
Hercules and the Participant.
25. Securities Act. The Participant and Hercules hereby acknowledge
that the conveyance of the Participation Interest, to the extent it may
involve the sale of a security, is being offered and sold without
registration under the Securities Act of 1933 (as amended, the “Act”) and
applicable state securities laws in reliance upon an exemption from the
registration requirements of the Act and applicable state securities laws.
[signature page follows]
12
IN WITNESS WHEREOF, Hercules and the Participant have caused this Agreement to
be duly executed under seal by their duly authorized officers as of the date first above written.
| HERCULES TECHNOLOGY GROWTH CAPITAL, INC. | ||||||
| By: | /s/ Xxxxxx Xxxxxxxxx | |||||
| Name: | Xxxxxx Xxxxxxxxx | |||||
| Title: | Chairman & COO | |||||
Notice Address:
| 000 Xxxxxxxxxx Xxxxxx Xxxxx 000 Xxxx Xxxx, Xxxxxxxxxx 00000 Attention: Xxxxxx Xxxxxxxxx |
||||
| CITIGROUP GLOBAL MARKETS REALTY CORP. |
||||||
| By: | /s/ Hantz Xxxxxx | |||||
| Name: | Xxxx Xxxxxx | |||||
| Title: | Vice President | |||||
Notice Address:
| 000 Xxxxxxxxx Xxxxxx 0xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxx Xxxxxxx |
||||
Wire Transfer Instructions for Participant:
Bank: Chase Manhattan Bank
Account Name: Citigroup Global Markets Realty Corp.
ABA No.: 000-000-000
Account No. 066-612187
Reference: Hercules Funding Trust I
Attention: Xxxxx Xxxxxx (212-615-7725)
Account Name: Citigroup Global Markets Realty Corp.
ABA No.: 000-000-000
Account No. 066-612187
Reference: Hercules Funding Trust I
Attention: Xxxxx Xxxxxx (212-615-7725)
EXHIBIT A
TO
List of Warrants
| Title of Warrant | Initial Grant Date Value | |
Total Grant Date Value of all Warrants:
|
||||
Exhibit B
NON-NEGOTIABLE WARRANT PARTICIPATION CERTIFICATE
Hercules Technology Growth Capital, Inc. (“Hercules”) hereby certifies that Citigroup Global
Markets Realty Corp. (the “Participant”) has acquired and is the owner of a participation in
certain Warrants held by Hercules referred to in the Warrant Participation Agreement dated as of
August 1, 2005, by and among Hercules and the Participant (as amended, restated,
modified and supplemented from time to time, the “Participation Agreement”), the terms and
conditions of such Participation Agreement are incorporated herein and made a part hereof by
reference. Capitalized terms defined in the Participation Agreement and not otherwise defined
herein are used herein with the meanings so defined.
The participation interest entitles the Participant to 10% of any Amount Realized
on each Warrant, not to exceed in the aggregate the Maximum Participation Limit, subject to the
terms and conditions set forth in the Participation Agreement.
Acceptance by the Participant of this Non-Negotiable Warrant Participation Certificate shall
evidence the Participant’s agreement to the terms and conditions of the referenced
Participation Agreement. In the event of any conflict between the terms set forth herein and those
set forth in the Participation Agreement, the terms of the Participation Agreement shall govern.
| HERCULES TECHNOLOGY GROWTH CAPITAL, INC. |
||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| Accepted | ||||||
| CITIGROUP GLOBAL MARKETS REALTY CORP. |
||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
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