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EXHIBIT 10.33
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS (A) SUCH TRANSFER IS PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (B) THE
BORROWER HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE
HOLDER THAT SUCH TRANSFER IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT,
THE RULES AND REGULATIONS IN EFFECT THEREUNDER AND ANY APPLICABLE STATE
SECURITIES LAWS.
LOAN AGREEMENT
THIS LOAN AGREEMENT is entered into as of October 29, 1998 (this "Loan
Agreement") between METRICOM, INC., a Delaware corporation (herein called
"Borrower"), and VULCAN VENTURES INCORPORATED (herein called "Lender"). 1.
COMMITMENT.
A. COMMITMENT. Subject to all the terms and conditions of this Loan
Agreement and prior to the termination of its commitment as hereinafter
provided, Lender hereby agrees to make loans (each a "Loan") to Borrower, in
such amounts as Borrower shall request pursuant to this SECTION 1.A, at any time
from the date hereof through the Business Day next preceding the second
anniversary hereof (the "Commitment Maturity Date"), in an aggregate principal
amount up to $30,000,000 (the "Commitment"). If at any time or for any reason,
the outstanding principal amount of the Loan Account (as hereinafter defined) is
greater than the Commitment, Borrower shall immediately pay to Lender, in cash,
the amount of such excess. Any commitment of Lender, pursuant to the terms of
this Loan Agreement, to make Loans shall expire on the Commitment Maturity Date.
Provided that no Event of Default or event which with the giving of notice or
passage of time, or both, would result in an Event of Default has occurred and
is continuing, Borrower may borrow amounts available hereunder in accordance
with the terms hereof. Amounts borrowed and repaid may not be re-borrowed.
Borrower promises to pay to Lender the entire outstanding principal balance (and
all accrued unpaid interest thereon) of the Loan Account on the Commitment
Maturity Date.
(1) LOANS. The amount of each Loan made by Lender to Borrower
hereunder shall be debited to the loan ledger account of Borrower maintained by
Lender for the Commitment (herein called the "Loan Account"). When Borrower
desires to obtain a Loan, Borrower shall notify Lender (which notice shall be
signed by an officer of Borrower or an officer's designee and shall be
irrevocable) in accordance with SECTION 2 hereof, to be received no later than
11:00 a.m. Pacific time on the Business Day next preceding the Business Day on
which the Loan is to be made as set forth in such notice.
(2) INTEREST PAYMENTS ON LOANS. Borrower further promises to pay
to Lender on the last Business Day of each calendar quarter, interest on the
unpaid principal balance of the Loan Account outstanding during the calendar
quarter then ended at a rate of interest equal to the Prime Rate. Interest shall
be computed at the above rate on the basis of the actual number of days during
which the principal balance of the Loan Account is outstanding divided by 365.
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2. LOAN REQUESTS. Requests for Loans hereunder shall be in writing duly
executed by Borrower in a form reasonably satisfactory to Lender and shall
contain a certification setting forth the matters referred to in SECTION 1
including, without limitation, the absence of any Event of Default or event
which with passage of time, giving of notice, or both, would result in an Event
of Default.
3. DELIVERY OF PAYMENTS. Payment to Lender of all amounts due hereunder
shall be made to Lender's account number _________________________ at
__________________________ or at such other place as may be designated in
writing by Lender from time to time, and must be made prior to 11:00 a.m.
Pacific time on the date made to avoid interest thereon for the date of such
payment. If any payment date falls on a day that is not a Business Day, the
payment due date shall be extended to the next Business Day. All payments shall
be applied first to accrued interest then payable and second to reduce any
unpaid principal due under the applicable Loan Account.
4. DEFINITIONS. As used in this Loan Agreement and unless otherwise
defined herein, all initially capitalized terms shall have the meanings set
forth on EXHIBIT A attached hereto and incorporated herein by this reference.
5. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
Lender that: (a) Borrower is a corporation, duly organized and validly existing
in the state of its incorporation and is qualified to do business in each
jurisdiction where it does business, except where failure to so qualify would
not reasonably be expected to result in a Material Adverse Effect, and the
execution, delivery and performance of the Loan Agreement is within Borrower's
corporate powers, have been duly authorized and are not in conflict with law or
the terms of any charter, by-law or other incorporation papers, or of any
indenture, agreement or undertaking to which Borrower is a party or by which
Borrower is bound or affected; (b) any and all financial information submitted
by Borrower to Lender, whether previously or in the future, is and will be true,
correct and complete in all material respects as of the date made and in
accordance with GAAP consistently applied for all comparable periods (except for
the lack of footnotes in interim financial statements, and subject to
adjustments made in connection with the annual audit); (c) there is no
litigation or other proceeding pending or threatened against or affecting
Borrower which, if adversely determined, would be reasonably likely to result in
a Material Adverse Effect, and Borrower is not in default with respect to any
order, writ, injunction, decree or demand of any court or other governmental or
regulatory authority except such as would not be reasonably likely to result in
a Material Adverse Effect; (d) Borrower has no liability for any delinquent
local, state or federal taxes except such as is subject to a bona fide dispute
and where sufficient amounts for the payment thereof have been reserved in
accordance with GAAP; and (e) Borrower, as of the date hereof, possesses all
necessary trademarks, trade names, copyrights, patents, patent rights, and
licenses to conduct its business as now operated, without any known conflict
with valid trademarks, trade names, copyrights, patents, patent rights and
license rights of others except for conflicts which would not be reasonably
likely to result in a Material Adverse Effect.
Lender represents and warrants that it is not acquiring the securities
represented by this Agreement with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act of 1933, as
amended.
6. COVENANTS. Borrower covenants that so long as any loans, obligations
or liabilities remain outstanding or unpaid to Lender or the commitment of
Lender hereunder is in effect:
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A. It will furnish Lender from time to time the financial
statements set forth in its reports on Forms 10Q and 10K and such other
information as Lender may reasonably request, and will promptly inform Lender in
writing of the occurrence of any event which would, with reasonable likelihood,
result in a Material Adverse Effect or an Event of Default;
B. In the event the unpaid principal balance of the Loan Account
shall exceed the Commitment, Borrower shall immediately pay to Lender for credit
to the Loan Account the amount of such excess;
C. Borrower shall maintain and preserve all rights, franchises
and other authority adequate and necessary for the conduct of its business and
maintain and preserve its existence in the state of its incorporation and any
other state(s) in which Borrower conducts its business, except with respect to
such other state(s), where the failure to do so would not be reasonably likely
to have a Material Adverse Effect;
D. Borrower shall maintain public liability, property damage and
workers compensation insurance and insurance on all its insurable property
against fire and other hazards with responsible insurance carriers to at least
the extent maintained by a preponderance of comparable businesses similarly
situated;
E. Borrower shall pay and discharge as and when due and in any
event before the same becomes delinquent, all taxes, assessments and
governmental charges upon or against it or any of its properties, and any of its
other liabilities at any time existing, except to the extent and so long as: (1)
the same are being contested in good faith and by appropriate proceedings in
such manner as would not, with reasonable likelihood, result in a Material
Adverse Effect; and (2) it shall have set aside on its books reserves which are
adequate in accordance with GAAP;
F. Borrower shall maintain a standard and modern system of
accounting in accordance with GAAP on a basis consistently applied; and
G. Borrower shall maintain its properties, equipment and
facilities in good order and repair, ordinary wear and tear excepted.
7. DEFAULT AND REMEDIES. The occurrence of any one or more of the
following shall constitute an "Event of Default:" (a) failure to pay all
principal, interest and other obligations owed by Borrower to Lender under the
Loan Agreement on the Commitment Maturity Date, and the failure of Borrower to
pay to Lender the interest due from time to time on any other date within 5 days
of the date such interest is due; (b) except for any failure to pay as described
in clause (a) above, the breach of any promise, term or condition contained
herein if the same is otherwise curable and shall not have been cured to the
reasonable satisfaction of Lender within thirty (30) days after Borrower shall
have become aware thereof, whether by written notice from Lender, or otherwise;
(c) any representation or warranty set forth in SECTION 5 is false in any
material respect; (d) Borrower defaults in the repayment of any principal of or
the payment of any interest on any Indebtedness exceeding in the aggregate
principal amount $5,000,000, or breaches or violates any term or provision of
any promissory note, loan agreement, mortgage, indenture or other evidence of
such Indebtedness pursuant to which amounts outstanding in the aggregate exceed
$5,000,000 if the effect of such breach is to permit the acceleration of such
Indebtedness, whether or not waived by the note holder or obligee; (e) Borrower
becomes
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insolvent or makes an assignment for the benefit of creditors; (f) any
proceeding is commenced by Borrower under any Bankruptcy, reorganization,
arrangement, readjustment of debt or moratorium law or statute or Borrower
consents to an order of relief in any such proceeding, or any such proceeding is
commenced against Borrower and is not dismissed or stayed within sixty (60)
days; (g) any money judgment or writ of attachment to the extent such amount is
not covered by insurance in an amount in excess of $5,000,000 is entered against
Borrower or issued against any of Borrower's property and remains unvacated,
unbonded, unstayed or unpaid or undischarged for more than sixty (60) days, or
if any assessment for taxes in excess of $5,000,000 against Borrower is made by
the federal or state government or any department thereof; or (h) the occurrence
of a Material Adverse Effect. Upon the occurrence and during the continuance of
an Event of Default, Lender may, at its option and without demand first made and
without notice to Borrower, do any one or more of the following: (i) terminate
its obligation to make loans to Borrower as provided in SECTION 1 hereof; or
(ii) declare all sums owing by Borrower to Lender hereunder to be immediately
due and payable . The foregoing notwithstanding, all obligations owing hereunder
shall immediately and automatically become due and payable upon the occurrence
of any of the Events of Default described in clause (f) of this SECTION 7.
Lender shall have the right to enforce one or more remedies hereunder
successively or concurrently, and any such action shall not estop or prevent
Lender from pursuing any further remedy which it may have hereunder or under
applicable law.
8. GOVERNING LAW. This Agreement shall be deemed to have been made in
the State of California and the validity, construction, interpretation, and
enforcement hereof, and the rights of the parties hereto, shall be determined
under, governed by, and construed in accordance with the internal laws of the
State of California, without regard to principles of conflicts of law.
9. CONDITION TO EFFECTIVENESS. The obligation of Lender to make the
first Loan under this Loan Agreement is subject to, among other conditions
required to be satisfied as set forth herein, the condition precedent that the
board of directors of Borrower shall have duly approved, and Borrower shall have
delivered to Lender, a business plan reasonably satisfactory to Lender.
10. MISCELLANEOUS PROVISIONS.
A. No failure or delay on the part of Lender, in the exercise of
any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof.
B. All rights and remedies existing under this Loan Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
C. All headings and captions in this Loan Agreement and any
related documents are for convenience only and shall not have any substantive
effect.
D. This Loan Agreement may be executed in any number of
counterparts, each of which when so delivered shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. Each
such agreement shall become effective upon the execution of a counterpart hereof
or thereof by each of the parties hereto and telephonic notification that such
executed counterparts has been received by Borrower and Lender.
E. In addition to amounts owing hereunder, Lender shall be
entitled to payment for all costs of enforcement and collection of Borrower's
obligations hereunder including, without
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limitation, attorneys' fees and costs regardless whether any action is commenced
in connection with any such enforcement and/or collection efforts.
LENDER: BORROWER:
VULCAN VENTURES INCORPORATED, METRICOM, INC.,
a _Washington_ corporation a Delaware corporation
By: _____/s/ XXXXXXX X. XXXXX By:_______/s/ XXXXXXX X. XXXXXXXXX
Name: _______William X. Xxxxx Name: _____Timothy X. Xxxxxxxxx
Title: _________Vice President Title: ______CEO
LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A: Definitions
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EXHIBIT A
DEFINITIONS
"BUSINESS DAY" means any day on which banks in the State of California
are not required or permitted to close under the law of the State of California.
"COMMITMENT MATURITY DATE" has the meaning set forth in SECTION 1.A.
"COMMITMENT" has the meaning set forth in Section 1.A.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 7.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other Person as may be approved by the significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"INDEBTEDNESS" means, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money, including, without limitation,
all of such indebtedness outstanding under this Loan Agreement, (b) all capital
lease obligations of such Person, (c) to the extent of the outstanding
indebtedness thereunder, any obligation of such Person representing an extension
of credit to such Person, whether or not for borrowed money, (d) any obligation
of such Person for the deferred purchase price of property or services (other
than (i) trade or other accounts payable in the ordinary course of business in
accordance with customary industry terms and (ii) deferred franchise fees), (e)
any obligation of such Person of the nature described in clauses (a), (b), (c)
or (d) above, that is secured by a Lien on assets of such Person and which is
non-recourse to the credit of such Person, but only to the extent of the fair
market value of the assets so subject to the Lien, (g) obligations of such
Person arising under acceptance facilities or under facilities for the discount
of accounts receivable of such Person, (h) any obligation of such Person to
reimburse the issuer of any letter of credit issued for the account of such
Person upon which a draw has been made, and (i) any lease having the effect of
indebtedness, whether or not the same shall be treated as such on the balance
sheet of Borrower under GAAP.
"LIEN" means any mortgage, pledge, security interest, lien or other
charge or encumbrance, including the lien or retained security title of a
conditional vendor, upon or with respect to any property or assets.
"LOAN ACCOUNT" has the meaning set forth in SECTION 1.A(1).
"LOANS" means individually and collectively each of the loans advanced
from time to time pursuant to SECTION 1.
"MATERIAL ADVERSE EFFECT" means any set of circumstances or events which
(a) has or would reasonably be expected to have any material adverse effect upon
the validity or enforceability of any material provision of the Loan Agreement,
(b) is or would reasonably be expected to be material and adverse to the
condition or prospects (financial or otherwise) or business operations of
Borrower, (c) materially impairs or would reasonably be expected to materially
impair the ability of Borrower, to perform its obligations under the Agreement,
or (d) materially impairs or would reasonably be expected to materially impair
the ability of Lender to enforce any of its legal remedies pursuant to the Loan
Agreement.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, firm, joint stock
company, estate, entity or governmental agency.
"PRIME RATE" means the "Prime Rate" as set forth in the Western edition
of the Wall Street Journal on the first date of each month on which such
newspaper is published.
