AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit 15
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of September
13, 2010 (the “Effective Date”) between SILICON VALLEY BANK, a California corporation (“Bank”),
and FUSION-IO, INC., a Delaware corporation (“Borrower”), provides the terms on which Bank shall
lend to Borrower and Borrower shall repay Bank. The parties agree as follows:
1 ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP. Capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in Section 13. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the
Code to the extent such terms are defined therein.
2 LOAN AND TERMS OF PAYMENT
2.1 Promise to Pay. Borrower hereby unconditionally promises to pay Bank the outstanding
principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due
in accordance with this Agreement.
2.1.1 Revolving Advances.
(a) Availability. Subject to the terms and conditions of this Agreement, Bank shall
make Advances not exceeding the Availability Amount. Amounts borrowed hereunder may be repaid and,
prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and
conditions precedent herein.
(b) Termination; Repayment. The Revolving Line terminates on the Revolving Line
Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all
other Obligations relating to the Revolving Line shall be immediately due and payable.
(c) Prepayment. So long as no Event of Default has occurred and is continuing,
Borrower shall have the option to prepay all, but not less than all, of the Advances advanced by
Bank under this Agreement, provided Borrower pays, on the date of such prepayment (A) all
outstanding principal plus accrued and unpaid interest, (B) the Prepayment Premium, and (C) all
other sums, if any, that shall have become due and payable, including interest at the Default Rate
with respect to any past due amounts.
2.1.2 Letters of Credit Sublimit.
(a) As part of the Revolving Line, Bank shall issue or have issued Letters of Credit
denominated in Dollars or a Foreign Currency for Borrower’s account. The aggregate Dollar
Equivalent amount utilized for the issuance of Letters of Credit shall at all times reduce the
amount otherwise available for Advances under the Revolving Line. The aggregate Dollar Equivalent
of the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit and any Letter of Credit Reserve) may not exceed the lesser of (A) Six Million Dollars
($6,000,000) minus (i) the sum of all amounts used for Cash Management Services, and minus (ii) the
FX Reduction Amount, or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the sum
of all outstanding principal amounts of any Advances (including any amounts used for Cash
Management Services), and minus (ii) the FX Reduction Amount.
(b) If, on the Revolving Line Maturity Date (or the effective date of any termination of this
Agreement), there are any outstanding Letters of Credit, then on such date Borrower shall provide
to Bank cash collateral in an amount equal to 105% of the Dollar Equivalent of the face amount of
all such Letters of Credit plus all interest, fees, and costs due or to become due in connection
therewith (as estimated by Bank in its good faith business judgment), to secure all of the
Obligations relating to such Letters of Credit. All Letters of Credit shall be in form and
substance acceptable to Bank in its sole discretion and shall be subject to the terms and
conditions of Bank’s standard Application and Letter of Credit Agreement (the “Letter of Credit
Application”). Borrower agrees to execute any further documentation in connection with the Letters
of Credit as Bank may reasonably request. Borrower further agrees to be bound by the regulations
and interpretations of the issuer of any Letters of Credit guarantied by Bank and opened for
Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for
Borrower’s account, and Borrower understands and agrees that Bank shall not be liable for any
error, negligence, or mistake, whether of omission or commission, in following Borrower’s
instructions or those contained in the Letters of Credit or any modifications, amendments, or
supplements thereto.
(c) The obligation of Borrower to immediately reimburse Bank for drawings made under Letters
of Credit shall be absolute, unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit
Application.
(d) Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If
a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an
Advance to Borrower of the Dollar Equivalent of the amount thereof (plus fees and charges in
connection therewith such as wire, cable, SWIFT or similar charges).
(e) To guard against fluctuations in currency exchange rates, upon the issuance of any Letter
of Credit payable in a Foreign Currency, Bank shall create a reserve (the “Letter of Credit
Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of
such Letter of Credit. The amount of the Letter of Credit Reserve may be adjusted by Bank from
time to time to account for fluctuations in the exchange rate. The availability of funds under the
Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such
Letter of Credit remains outstanding.
2.1.3 Foreign Exchange Sublimit. As part of the Revolving Line, Borrower may enter into
foreign exchange contracts with Bank under which Borrower commits to purchase from or sell to Bank
a specific amount of Foreign Currency (each, a “FX Forward Contract”) on a specified date (the
“Settlement Date”). FX Forward Contracts shall have a Settlement Date of at least one (1) FX
Business Day after the contract date and shall be subject to a reserve of ten percent (10%) of each
outstanding FX Forward Contract (the “FX Reserve”). The aggregate amount of FX Forward Contracts
at any one time may not exceed ten (10) times the lesser of (A) Six Million Dollars ($6,000,000)
minus (i) the sum of all amounts used for Cash Management Services, and minus (ii) the Dollar
Equivalent of the face amount of any outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit and any Letter of Credit Reserve or (B) the lesser of the Revolving
Line or the Borrowing Base, minus (i) the sum of all outstanding principal amounts of any Advances
(including any amounts used for Cash Management Services), and minus (ii) the Dollar Equivalent of
the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit and any Letter of Credit Reserve). The amount otherwise available for Credit Extensions
under the Revolving Line shall be reduced by an amount equal to ten percent (10%) of each
outstanding FX Forward Contract (the “FX Reduction Amount”). Any amounts needed to fully reimburse
Bank for any amounts not paid by Borrower in connection with FX Forward Contracts will be treated
as Advances under the Revolving Line and will accrue interest at the interest rate applicable to
Advances.
2.1.4 Cash Management Services Sublimit. Borrower may use the Revolving Line for Bank’s cash
management services, which may include merchant services, direct deposit of payroll, business
credit card, and check cashing services identified in Bank’s various cash management services
agreements (collectively, the “Cash Management Services”), in an aggregate amount not to exceed the
lesser of (A) Six Million Dollars ($6,000,000), minus (i) the Dollar Equivalent of the face amount
of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any
Letter of Credit Reserve), and minus (ii) the FX Reduction Amount, or (B) the lesser of Revolving
Line or the Borrowing Base, minus (i) the sum of all outstanding principal amounts of any Advances,
minus the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), and minus (iii) the FX
Reduction Amount. Any amounts Bank pays on behalf of Borrower for any Cash Management Services
will be treated as Advances under the Revolving Line and will accrue interest at the interest rate
applicable to Advances.
2.2 Overadvances. If, at any time, the sum of (a) the outstanding principal amount of any
Advances (including any amounts used for Cash Management Services), plus (b) the face amount of any
outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve), plus (c) the FX Reduction Amount exceeds the lesser of the Revolving Line or the
Borrowing Base, Borrower shall immediately pay to Bank in cash such excess.
2.3 Payment of Interest on the Credit Extensions.
(a) Interest Rate.
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(i) Advances. Subject to Section 2.3(b), the principal amount outstanding under the
Revolving Line shall accrue interest at a floating per annum rate equal to one-half of one
percentage point (0.50%) above the Prime Rate, which interest shall be payable monthly in
accordance with Section 2.3(e) below.
(ii) Default Rate. Immediately upon the occurrence and during the continuance of an
Event of Default, Obligations shall bear interest at a rate per annum which is two percentage
points (2.00%) above the rate that is otherwise applicable thereto (the “Default Rate”) unless Bank
otherwise elects from time to time in its sole discretion to impose a smaller increase. Fees and
expenses which are required to be paid by Borrower pursuant to the Loan Documents (including,
without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a
rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the
increased interest rate provided in this Section is not a permitted alternative to timely payment
and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Bank.
(b) Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension
based on changes to the Prime Rate shall be effective on the effective date of any change to the
Prime Rate and to the extent of any such change.
(c) Computation; 360-Day Year. In computing interest, the date of the making of any
Credit Extension shall be included and the date of payment shall be excluded; provided, however,
that if any Credit Extension is repaid on the same day on which it is made, such day shall be
included in computing interest on such Credit Extension. Interest shall be computed on the basis
of a 360-day year for the actual number of days elapsed.
(d) Debit of Accounts. Bank may debit any of Borrower’s deposit accounts, including
the Designated Deposit Account, for principal and interest payments or any other amounts Borrower
owes Bank when due. These debits shall not constitute a set-off.
(e) Interest Payment Date. Unless otherwise provided, interest is payable monthly on
the first calendar day of each month.
2.4 Fees. Borrower shall pay to Bank:
(a) Commitment Fee. A fully earned, non-refundable commitment fee of $62,500 per
annum, payable on the Effective Date and on the second anniversary thereof;
(b) Unused Commitment Fee. A fee equal to 0.375% of the difference between the
$25,000,000 and the average daily balance of Advances outstanding each quarter, which fee is due on
the last day of each such quarter (no part of such fee is refundable, and no credit is available
notwithstanding the suspension or termination of Bank’s obligation to make any Advances);
(c) Letter of Credit Fee. Bank’s customary fees and expenses for the issuance or
renewal of Letters of Credit, upon the issuance of such Letter of Credit, each anniversary of the
issuance during the term of such Letter of Credit, and upon the renewal of such Letter of Credit by
Bank;
(d) Prepayment Premium. The Prepayment Premium when due pursuant to the terms of
Section 2.1.1 (c); and
(e) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and
expenses for documentation and negotiation of this Agreement which fees for the documentation and
negotiation of this Agreement will not exceed $25,000 as of the Effective Date) incurred through
and after the Effective Date, when due.
2.5 Payments; Application of Payments.
(a) All payments (including prepayments) to be made by Borrower under any Loan Document shall
be made in immediately available funds in U.S. Dollars, without setoff or counterclaim, before
12:00 p.m. Pacific time on the date when due. Payments of principal and/or interest received after
12:00 p.m. Pacific time are considered received at the opening of business on the next Business
Day. When a payment is due
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on a day that is not a Business Day, the payment shall be due the next Business Day, and
additional fees or interest, as applicable, shall continue to accrue until paid.
(b) Bank shall apply the whole or any part of collected funds against the Revolving Line or
credit such collected funds to a depository account of Borrower with Bank (or an account maintained
by an Affiliate of Bank), the order and method of such application to be in the sole discretion of
Bank. Borrower shall have no right to specify the order or the accounts to which Bank shall
allocate or apply any payments required to be made by Borrower to Bank or otherwise received by
Bank under this Agreement when any such allocation or application is not specified elsewhere in
this Agreement.
3 CONDITIONS OF LOANS
3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial
Credit Extension is subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate, including, without limitation:
(a) duly executed original signatures to the Loan Documents;
(b) duly executed original signatures to the Control Agreement[s];
(c) Borrower’s Operating Documents and a good standing certificate of Borrower certified by
the Secretary of State of the State of Delaware as of a date no earlier than thirty (30) days prior
to the Effective Date;
(d) duly executed original signatures to the completed Borrowing Resolutions for Borrower;
(e) certified copies, dated as of a recent date, of financing statement searches, as Bank
shall request, accompanied by written evidence (including any UCC termination statements) that the
Liens indicated in any such financing statements either constitute Permitted Liens or have been or,
in connection with the initial Credit Extension, will be terminated or released;
(f) the Perfection Certificate of Borrower, together with the duly executed original
signatures thereto;
(g) the insurance policies and/or endorsements required pursuant to Section 6.5 hereof are in
full force and effect, together with appropriate evidence showing lender loss payable and/or
additional insured clauses or endorsements in favor of Bank; and
(h) payment of the fees and Bank Expenses then due as specified in Section 2.4 hereof.
3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit
Extension, including the initial Credit Extension, is subject to the following conditions
precedent:
(a) except as otherwise provided in Section 3.5(a), timely receipt of an executed
Payment/Advance Form;
(b) the representations and warranties in this Agreement shall be true, accurate, and complete
in all material respects on the date of the Payment/Advance Form and on the Funding Date of each
Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date, and no
Event of Default shall have occurred and be continuing or result from the Credit Extension. Each
Credit Extension is Borrower’s representation and warranty on that date that the representations
and warranties in this Agreement remain true, accurate, and complete in all material respects;
provided, however, that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by
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materiality in the text thereof; and provided, further that those representations and
warranties expressly referring to a specific date shall be true, accurate and complete in all
material respects as of such date; and
(c) in Bank’s reasonable discretion, there has not been a material adverse impairment in the
general affairs, management, results of operation, financial condition or the prospect of repayment
of the Obligations.
3.3 Post-Closing Delivery. Within 90 days after the Effective Date, Bank shall have received,
in form and substance satisfactory to Bank, the completion of the Initial Audit with results
satisfactory to Bank in its sole and absolute discretion.
3.4 Covenant to Deliver. Except as otherwise provided in Section 3.3, Borrower agrees to
deliver to Bank each item required to be delivered to Bank under this Agreement as a condition
precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to
the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation
to deliver such item, and the making of any Credit Extension in the absence of a required item
shall be in Bank’s sole discretion.
3.5 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable
conditions to the making of an Advance set forth in this Agreement, to obtain an Advance (other
than Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be
irrevocable) by electronic mail, facsimile, or telephone by 12:00 p.m. Pacific time on the Funding
Date of the Advance. Together with any such electronic or facsimile notification, Borrower shall
deliver to Bank by electronic mail or facsimile a completed Payment/Advance Form executed by a
Responsible Officer or his or her designee. Bank may rely on any telephone notice given by a
person whom Bank believes is a Responsible Officer or designee. Bank shall credit Advances to the
Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from
a Responsible Officer or his or her designee or without instructions if the Advances are necessary
to meet Obligations which have become due.
4 CREATION OF SECURITY INTEREST
4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the payment
and performance in full of all of the Obligations, a continuing security interest in, and pledges
to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and
all proceeds and products thereof.
4.2 Priority of Security Interest. Borrower represents, warrants, and covenants that the
security interest granted herein is and shall at all times continue to be a first priority
perfected security interest in the Collateral (subject only to Permitted Liens that may have
superior priority to Bank’s Lien under this Agreement). If Borrower shall acquire a commercial
tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general
details thereof and grant to Bank in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank.
If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the
Obligations under the Loan Documents (other than inchoate indemnity obligations) are repaid in full
in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity
obligations) and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank
shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights
therein shall revert to Borrower.
4.3 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file
financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or
protect Bank’s interest or rights hereunder, including a notice that any disposition of the
Collateral out of the ordinary course of business, by either Borrower or any other Person, shall be
deemed to violate the rights of Bank under the Code. Such financing statements may indicate the
Collateral as “all assets of the Debtor” or words of similar effect, or as being of an equal or
lesser scope, or with greater detail, all in Bank’s discretion.
5 REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
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5.1 Due Organization, Authorization; Power and Authority. Borrower is duly existing and in
good standing as a Registered Organization in its jurisdiction of formation and is qualified and
licensed to do business and is in good standing in any jurisdiction in which the conduct of its
business or its ownership of property requires that it be qualified except where the failure to do
so could not reasonably be expected to have a material adverse effect on Borrower’s business. In
connection with this Agreement, Borrower has delivered to Bank a completed certificate signed by
Borrower, entitled “Perfection Certificate”. Borrower represents and warrants to Bank that (a)
Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature
page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set
forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth
Borrower’s organizational identification number or accurately states that Borrower has none; (d)
the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than
one, its chief executive office as well as Borrower’s mailing address (if different than its chief
executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years,
changed its jurisdiction of formation (except for reincorporating from the state of Nevada to the
state of Delaware), organizational structure or type, or any organizational number assigned by its
jurisdiction; and (f) as of the Effective Date, all other information set forth on the Perfection
Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being
understood and agreed that Borrower may from time to time update certain information in the
Perfection Certificate after the Effective Date to the extent permitted by one or more specific
provisions in this Agreement). If Borrower is not now a Registered Organization but later becomes
one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s
organizational identification number.
The execution, delivery and performance by Borrower of the Loan Documents to which it is a
party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational
documents, (ii) contravene, conflict with, constitute a default under or violate any material
Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority by which Borrower or any
of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any
action by, filing, registration, or qualification with, or Governmental Approval from, any
Governmental Authority (except such Governmental Approvals which have already been obtained and are
in full force and effect) or (v) constitute an event of default under any material agreement by
which Borrower is bound. Borrower is not in default under any agreement to which it is a party or
by which it is bound in which the default could reasonably be expected to have a material adverse
effect on Borrower’s business.
5.2 Collateral. Borrower has good title to, has rights in, and the power to transfer each
item of the Collateral upon which it purports to xxxxx x Xxxx hereunder, free and clear of any and
all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts
with Bank, the deposit accounts, if any, described in the Perfection Certificate delivered to Bank
in connection herewith, or of which Borrower has given Bank notice and taken such actions as are
necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing
obligations of the Account Debtors.
The Collateral is not in the possession of any third party bailee (such as a warehouse) except
(i) as otherwise provided in the Perfection Certificate and (ii) for raw materials located with
contract manufacturers (“Contract Manufacturers”) for the purpose of assembling final
products. Except as provided in the previous sentence, none of the components of the Collateral
shall be maintained at locations other than as provided in the Perfection Certificate or as
permitted pursuant to Section 7.2.
All Inventory is in all material respects of good and marketable quality, free from material
defects.
Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by,
any Restricted License.
5.3 Accounts Receivable; Inventory. For any Eligible Account in any Borrowing Base
Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and
other documents evidencing such Eligible Accounts are and shall be true and correct and all such
invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all
respects what they purport to be. If an Event of Default has occurred and is continuing, Bank may
notify any Account Debtor owing Borrower money of Bank’s security interest in such funds and verify
the amount of such Eligible Account. All sales and other transactions underlying or giving rise to
each Eligible Account shall comply in all material respects with all applicable laws and
governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency
Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Borrowing Base
Certificate. To the best of Borrower’s knowledge, all
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signatures and endorsements on all documents, instruments, and agreements relating to all
Eligible Accounts are genuine, and all such documents, instruments and agreements are legally
enforceable in accordance with their terms. For any item of Inventory consisting of “Eligible
Inventory” in any Borrowing Base Certificate, such Inventory (a) consists of finished goods, in
good, new, and salable condition, which is not perishable, returned, consigned, obsolete, not
sellable, damaged, or defective, and is not comprised of demonstrative or custom inventory, works
in progress, packaging or shipping materials, or supplies; (b) in all material respects meets all
applicable governmental standards; (c) has been manufactured in compliance with the Fair Labor
Standards Act; (d) is not subject to any Liens, except the first priority Liens granted or in favor
of Bank under this Agreement or any of the other Loan Documents; and (e) is located in the United
States at the locations identified by Borrower in the Perfection Certificate where it maintains
Inventory (or at any location permitted under Section 7.2), and in the case of Inventory in the
possession of another Person, Bank has received written acknowledgment from such Person in form
reasonably acceptable to Bank.
5.4 Litigation. Except as disclosed pursuant to Section 6.2(h), there are no actions or
proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or
against Borrower or any of its Subsidiaries involving a claim for $250,000 or more, or that could
reasonably be expected to have a material adverse effect upon Borrower’s business.
5.5 Financial Statements; Financial Condition. All consolidated financial statements for
Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects
Borrower’s consolidated financial condition and Borrower’s consolidated results of operations.
Except as disclosed to Bank in writing, there has not been any material deterioration in Borrower’s
consolidated financial condition since the date of the most recent financial statements submitted
to Bank.
5.6 Solvency. The fair salable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; Borrower is not left with
unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay
its debts (including trade debts) as they mature.
5.7 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled”
by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not
engaged as one of its important activities in extending credit for margin stock (under Regulations
X, T and U of the Federal Reserve Board of Governors). Borrower has complied in all material
respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of its Subsidiaries
is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a
“holding company” as each term is defined and used in the Public Utility Holding Company Act of
2005. Borrower has not violated any laws, ordinances or rules, the violation of which could
reasonably be expected to have a material adverse effect on its business. None of Borrower’s or
any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to
the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating,
or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries
have obtained all consents, approvals and authorizations of, made all declarations or filings with,
and given all notices to, all Government Authorities that are necessary to continue their
respective businesses as currently conducted, except where the failure to do so could not
reasonably be expected to result in a material adverse effect upon Borrower’s business.
5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other
equity securities except for Permitted Investments.
5.9 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required
material tax returns and reports, and Borrower has timely paid all material foreign, federal, state
and local taxes, assessments, deposits and contributions owed by Borrower. Borrower may defer
payment of any contested taxes, provided that Borrower (a) in good faith contests its obligation to
pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b)
notifies Bank in writing of the commencement of, and any material development in, the proceedings,
(c) posts bonds or takes any other steps required to prevent the governmental authority levying
such contested taxes from obtaining a Lien upon any of the Collateral that is other than a
“Permitted Lien”. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s
prior tax years which could result in additional taxes becoming due and payable by Borrower.
Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred
compensation plans in accordance with their terms, and Borrower has not withdrawn from
participation in, and has not permitted partial or complete termination of, or permitted the
occurrence of any other event with respect to, any such plan which could reasonably be expected to
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result in any liability of Borrower, including any liability to the Pension Benefit Guaranty
Corporation or its successors or any other governmental agency.
5.10 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as
working capital, and to fund its general business requirements and not for personal, family,
household or agricultural purposes.
5.11 Full Disclosure. No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Bank, as of the date such representation, warranty,
or other statement was made, taken together with all such written certificates and written
statements given to Bank, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained in the certificates or statements not
misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in
good faith and based upon reasonable assumptions are not viewed as facts and that actual results
during the period or periods covered by such projections and forecasts may differ from the
projected or forecasted results).
5.12 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation
or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or
with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable
investigation, of the Responsible Officers.
6 AFFIRMATIVE COVENANTS
Borrower shall do all of the following:
6.1 Government Compliance.
(a) Except as permitted in Section 7.3, maintain its and all its Subsidiaries’ legal existence
and good standing in their respective jurisdictions of formation and maintain qualification in each
jurisdiction in which the failure to so qualify would reasonably be expected to have a material
adverse effect on Borrower’s business or operations. Borrower shall comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is subject, noncompliance
with which could have a material adverse effect on Borrower’s business.
(b) Obtain all of the Governmental Approvals necessary for the performance by Borrower of its
obligations under the Loan Documents to which it is a party and the grant of a security interest to
Bank in all of the Collateral. Borrower shall promptly provide copies of any such obtained
Governmental Approvals to Bank.
6.2 Financial Statements, Reports, Certificates. Deliver to Bank:
(a) Borrowing Base Reports. Within thirty (30) days after the last day of each month
(after the Initial Public Offering, within thirty (30) days after the last day of the prior quarter
end), (i) aged listings of accounts receivable and accounts payable (by invoice date) and (ii)
perpetual inventory reports for the Inventory valued on a first-in, first-out basis at the lower of
cost or market (in accordance with GAAP) or such other inventory reports as are requested by Bank
in its good faith business judgment (the “Borrowing Base Reports”);
(b) Borrowing Base Certificate. Within thirty (30) days after the last day of each
month (after Initial Public Offering, within thirty (30) days after the last day of the prior
quarter end) and together with the Borrowing Base Reports, a duly completed Borrowing Base
Certificate signed by a Responsible Officer;
(c) Internally-Prepared Financial Statements. As soon as available, but no later than
forty-five (45) days after the last day of each month (after the Initial Public Offering, within
five (5) days of the quarterly filing with the SEC), a company prepared consolidated balance sheet
and income statement covering Borrower’s consolidated operations for such month or quarter, as
applicable, certified by a Responsible Officer and in a form acceptable to Bank;
(d) Annual Audited Financial Statements. As soon as available, but no later than one
hundred fifty (150) days after the last day of Borrower’s fiscal year (after the Initial Public
Offering, within five (5) days of filing with the SEC), audited consolidated financial statements
prepared under GAAP, consistently applied,
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together with an unqualified opinion on the financial statements from an independent certified
public accounting firm acceptable to Bank in its reasonable discretion;
(e) Compliance Certificates. Together with the financial statements delivered under
Section 6.2(c), a duly completed Compliance Certificate signed by a Responsible Officer, certifying
that as of the end of such period, Borrower was in full compliance with all of the terms and
conditions of this Agreement, and setting forth calculations showing compliance with the financial
covenants set forth in this Agreement and such other information as Bank shall reasonably request;
(f) Other Statements. Within five (5) days of delivery, copies of all statements,
reports and notices made available to holders of Subordinated Debt;
(g) SEC Filings. Within five (5) days of filing, copies of all periodic and other
reports, proxy statements and other materials filed by Borrower with the SEC, any Governmental
Authority succeeding to any or all of the functions of the SEC or with any national securities
exchange, or distributed to its shareholders, as the case may be. Documents required to be
delivered pursuant to the terms hereof (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date on which Borrower posts such documents, or provides a link
thereto, on Borrower’s website on the Internet at Borrower’s website address;
As to any information contained in the materials furnished pursuant to this clause (g),
Borrower shall not be required separately to furnish such information under clauses (d), (e) and
(f), but the foregoing shall not be in derogation of the obligation of Borrower to furnish the
information and materials described in such clauses (d), (e) and (f) at the times specified
therein; provided, that Borrower shall provide paper copies to Bank of the Compliance
Certificates required by Section 6.2(e).
(h) Legal Action Notice. A prompt report of any legal actions pending or threatened
in writing against Borrower or any of its Subsidiaries that could reasonably be expected to result
in damages of $250,000 or more or have a material adverse effect upon Borrower’s business; and
(i) Other Financial Information. Budgets, sales projections, operating plans and
other financial information reasonably requested by Bank.
6.3 Inventory; Returns. Keep all Inventory in good and marketable condition, free from
material defects. Returns and allowances between Borrower and its Account Debtors shall follow
Borrower’s customary practices as they exist at the Effective Date. Borrower must promptly notify
Bank of all returns, recoveries, disputes and claims that involve more than One Million Dollars
($1,000,000), provided that Borrower shall not be required to notify Bank of any returns of
Inventory that involve exchanges or replacements.
6.4 Taxes; Pensions. Timely file all required material tax returns and reports and timely pay
all material foreign, federal, state and local taxes, assessments, deposits and contributions owed
by Borrower, except for deferred payment of any taxes contested pursuant to the terms of Section
5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such
payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred
compensation plans in accordance with their terms.
6.5 Insurance. Keep its business and the Collateral insured for risks and in amounts standard
for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance
policies shall be in a form, with companies, and in amounts that are satisfactory to Bank. All
property policies shall have a lender’s loss payable endorsement showing Bank as a lender loss
payee and waive subrogation against Bank, and all liability policies shall show, or have
endorsements showing, Bank as an additional insured. All policies (or the loss payable and
additional insured endorsements) shall provide that the insurer shall endeavor to give Bank at
least twenty (20) days notice before canceling, amending, or declining to renew its policy. At
Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium
payments. Proceeds payable with respect to any Collateral under any policy shall, at Bank’s
option, be payable to Bank on account of the Obligations. Notwithstanding the foregoing, (a) so
long as no Event of Default has occurred and is continuing, Borrower shall have the option of
applying the proceeds of any casualty policy up to Five Hundred Thousand Dollars ($500,000) with
respect to any loss, but not exceeding Seven Hundred Fifty Thousand Dollars ($750,000) in the
aggregate for all losses under all casualty policies in any one year, toward the replacement or
repair of destroyed or damaged property; provided that
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any such replaced or repaired property (i) shall be of equal or like value as the replaced or
repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first
priority security interest, and (b) after the occurrence and during the continuance of an Event of
Default, all proceeds payable with respect to any Collateral under such casualty policy shall, at
the option of Bank, be payable to Bank on account of the Obligations. If Borrower fails to obtain
insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of
payment to third persons and Bank, Bank may make all or part of such payment or obtain such
insurance policies required in this Section 6.5, and take any action under the policies Bank deems
prudent.
6.6 Operating Accounts.
(a) Maintain all of its primary banking relationship with Bank, including substantially all of
Borrower’s operating and deposit accounts with Bank, and a portion of Borrower’s excess cash
invested in investment accounts with Bank and Bank’s Affiliates.
(b) Provide Bank five (5) days prior written notice before establishing any Collateral Account
at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each
Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or
financial institution (other than Bank) at or with which any Collateral Account is maintained to
execute and deliver a Control Agreement or other appropriate instrument with respect to such
Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms
hereunder which Control Agreement may not be terminated without the prior written consent of Bank.
The provisions of the previous sentence shall not apply to (i) deposit accounts exclusively used
for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of
Borrower’s employees and identified to Bank by Borrower as such, (ii) Borrower’s deposit account
(account number 0000000) (“BofAF Account”) maintained at Bank of American Fork, provided
that the principal balance of such deposit account shall not exceed $60,000, and (iii) accounts
maintained by any Subsidiaries in the ordinary course of business outside the United States.
6.7 Financial Covenants. Maintain as of the last day of each month (as of the last day of
each quarter, after the Initial Public Offering), unless otherwise noted, on a consolidated basis
with respect to Borrower and Subsidiaries:
(a) Adjusted Current Ratio. A ratio of Current Assets to Current Liabilities plus,
without duplication, any Obligations of Borrower to Bank, of at least 1.25 to 1.00.
(b) Tangible Net Worth. A Tangible Net Worth of at least $25,000,000, plus, after the
initial Credit Extension, 25% of the net proceeds received by Borrower from the sale or issuance of
its equity or Subordinated Debt, such increase to be measured as of the last day of the quarter in
which Borrower received such proceeds.
6.8 Protection of Intellectual Property Rights. (a) Use commercially reasonable efforts to
protect, defend and maintain the validity and enforceability of its Intellectual Property; (b)
promptly advise Bank in writing of material infringements of its Intellectual Property; and (c) use
commercially reasonable efforts not allow any Intellectual Property material to Borrower’s business
to be abandoned, forfeited or dedicated to the public without Bank’s written consent.
6.9 Litigation Cooperation. From the date hereof and continuing through the termination of
this Agreement, make available to Bank, without expense to Bank, Borrower and its officers,
employees and agents and Borrower’s books and records, to the extent that Bank may deem them
reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or
against Bank with respect to any Collateral or relating to Borrower.
6.10 Designated Senior Indebtedness. Borrower shall designate all principal of, interest
(including all interest accruing after the commencement of any bankruptcy or similar proceeding,
whether or not a claim for post-petition interest is allowable as a claim in any such proceeding),
and all fees, costs, expenses and other amounts accrued or due under this Agreement as “Designated
Senior Indebtedness”, or such similar term, in any future Subordinated Debt incurred by Borrower
after the date hereof, if such Subordinated Debt contains such term or similar term and if the
effect of such designation is to grant to Bank the rights of the most senior holders of Borrower’s
outstanding Indebtedness.
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6.11 Access to Collateral; Books and Records. Allow Bank, or its agents, to inspect the
Collateral and audit and copy Borrower’s Books at Borrower’s expense. Such inspections or audits
shall be conducted no more often than once every twelve (12) months unless an Event of Default has
occurred and is continuing.
6.12 Formation or Acquisition of Subsidiaries. Within 30 days after the date that Borrower
forms any direct or indirect Domestic Subsidiary or acquires any direct or indirect Domestic
Subsidiary after the Effective Date, Borrower shall (a) cause such new Domestic Subsidiary to
provide to Bank a joinder to this Agreement to cause such Subsidiary to become a co-borrower
hereunder together with such appropriate financing statements and/or Control Agreements, all in
form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority
Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Domestic
Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements,
pledging all of the direct or beneficial ownership interest in such new Domestic Subsidiary, in
form and substance satisfactory to Bank, and (c) provide to Bank all other documentation in form
and substance satisfactory to Bank.
6.13 Further Assurances. Execute any further instruments and take further action as Bank
reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes
of this Agreement.
7 NEGATIVE COVENANTS
Borrower shall not do any of the following without Bank’s prior written consent:
7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of
(collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its
business or property, except for:
(a) Transfers of property (other than Accounts) in the ordinary course of business for
reasonably equivalent consideration;
(b) Transfers to Borrower or any of its Subsidiaries from Borrower or any of its Subsidiaries;
(c) Transfers of property in connection with sale-leaseback transactions;
(d) Transfers constituting non-exclusive licenses and similar arrangements for the use of the
property of Borrower or its Subsidiaries in the ordinary course of business and other non-perpetual
licenses that could not result in a legal transfer of title of the licensed property but that may
be exclusive in respects other than territory and that may be exclusive as to discreet geographical
areas;
(e) Transfers otherwise permitted by the Loan Documents;
(f) Transfers associated with the making or disposition of a Permitted Investment;
(g) Transfers in connection with a permitted acquisition of a portion of the assets or rights
acquired for reasonably equivalent consideration; and
(h) Other transfers of assets (other than Accounts) not otherwise permitted in this Section
7.1, of up to $100,000 per year.
7.2 Changes in Business; Change in Control; Jurisdiction of Formation. (a) Engage in or
permit any of its Subsidiaries to engage in any business other than the businesses currently
engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b)
liquidate or dissolve; or (c) (i) have a change in Borrower’s chief executive officer, unless the
Board replaces such chief executive officer within 90 days of such change, or permit or suffer any
Change in Control. Borrower shall not, without prior written notice to Bank: (1) add any new
offices or business locations (excluding Contract Manufacturers), including warehouses (unless such
new offices or business locations contain less than One Hundred Thousand Dollars ($100,000) in
Borrower’s assets or property) or deliver any portion of the Collateral valued, individually or in
the aggregate, in excess of One Hundred Thousand Dollars ($100,000) to a bailee at a location other
than to a bailee and at a location already disclosed in the Perfection Certificate and other than
Contract Manufacturers, (2) change its jurisdiction of organization, (3) change its organizational
structure or type, (4) change its legal name, or (5) change any organizational number (if any)
assigned by its jurisdiction of organization. If Borrower intends to deliver any portion of the
Collateral valued, individually or in the aggregate, in excess of One Hundred Thousand Dollars
($100,000) to a bailee at a location
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other than as provided in the Perfection Certificate and other than any Contract
Manufacturers, Borrower will first receive the written consent of Bank, and such bailee shall
execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole
discretion.
7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge
or consolidate, with any Person, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of a Person, except where no Event of Default
has occurred and is continuing or would result from such action during the term of this Agreement:
(a) any Subsidiary may merge or consolidate with (i) Borrower provided that Borrower is the
surviving entity, and (ii) one or more other Subsidiaries;
(b) Borrower or any Subsidiary may acquire, all or substantially all of the capital stock or
property of another Subsidiary;
(c) such merger, consolidation or acquisition is a Transfer otherwise permitted pursuant to
Section 7.1; or
(d) Borrower or any Subsidiary may acquire, all or substantially all of the capital stock or
property of another Person (whether by merger, consolidation or acquisition of all or substantially
all of the assets of such Person), provided that (a) the cash consideration paid to consummate such
transaction is equal to or less than 50% of Borrower’s cash and Cash Equivalents as calculated for
the month (quarter, at any time after the Initial Public Offering) covered by the most recent
Financial Reports delivered to Bank prior to the consummation of such transaction, AND (b) either
(i) the total consideration paid in such transaction is less than $5,000,000, or (ii) the ratio of
Borrower’s Funded Debt to EBITDA for the previous three months (quarter, at any time after the
Initial Public Offering) based upon the most recent Financial Reports delivered to Bank preceding
the closing of such transaction is not greater than 1.5:1.0, where “and
7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.
7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign
or convey any right to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the
first priority security interest granted herein,or enter into any agreement, document, instrument
or other arrangement (except with or in favor of Bank) with any Person which directly or indirectly
prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging,
pledging, granting a security interest in or upon, or encumbering any of Borrower’s Intellectual
Property, except (i) as is otherwise permitted in Section 7.1 hereof, (ii) in connection with
transactions that otherwise constitute “Permitted Liens” herein and (iii) covenants with such
restrictions in agreements, provided that such covenants do not prohibit or restrict Borrower from
granting a security interest in Borrower’s property including its Intellectual Property in favor of
Bank, and provided further that the counter parties to such covenants are not permitted to receive
a security interest in Borrower’s property including its Intellectual Property.
7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to
the terms of Section 6.6(b) hereof.
7.7 Distributions; Investments. (a) Pay any dividends or make any distribution or payment or
redeem, retire or purchase any capital stock other than Permitted Distributions; or (b) directly or
indirectly acquire or own any Person, or make any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so.
7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any
material transaction with any Affiliate of Borrower, except for (a) transactions that are in the
ordinary course of Borrower’s business, upon fair and reasonable terms (when viewed in the context
of any series of transactions of which it may be a part, if applicable); (b) transactions among
Borrower and its Subsidiaries and among Borrower’s Subsidiaries so long as no Event of Default
exists or could result therefrom; and (c) transaction (other than the sale of Inventory) approved
by a majority of the disinterested members of the board of directors.
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7.9 Subordinated Debt. Make or permit any payment on or amendments of any Subordinated Debt,
except (a) payments pursuant to the terms of the Subordinated Debt; (b) payments made with
Borrower’s capital stock or other Subordinated Debt; and (c) amendments to Subordinated Debt so
long as such Subordinated Debt remains subordinated in right of payment to this Agreement and any
Liens securing such Subordinated Debt remain subordinate in priority to Bank’s Lien hereunder to
the same extent as originally contemplated by Bank.
7.10 Compliance. Become an “investment company” or a company controlled by an “investment
company”, under the Investment Company Act of 1940, as amended, or undertake as one of its
important activities extending credit to purchase or carry margin stock (as defined in Regulation U
of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit
Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could
reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of
its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in,
permit partial or complete termination of, or permit the occurrence of any other event with respect
to, any present pension, profit sharing and deferred compensation plan which could reasonably be
expected to result in any liability of Borrower, including any liability to the Pension Benefit
Guaranty Corporation or its successors or any other governmental agency.
8 EVENTS OF DEFAULT
Any one of the following shall constitute an event of default (an “Event of Default”) under
this Agreement:
8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any
Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days
after such Obligations are due and payable (which three (3) Business Day cure period shall not
apply to payments due on the Revolving Line Maturity Date). During the cure period, the failure to
make or pay any payment specified under clause (a) or (b) hereunder is not an Event of Default (but
no Credit Extension will be made during the cure period);
8.2 Covenant Default.
(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.3, 6.5, 6.6, or
6.7 or violates any covenant in Section 7; or
(b) Borrower fails or neglects to perform, keep, or observe any other term, provision,
condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any
default (other than those specified in this Section 8) under such other term, provision, condition,
covenant or agreement that can be cured, has failed to cure the default within ten (10) days after
the earlier of (i) a Responsible Officer of Borrower becomes aware of such default or (ii) receipt
by Borrower of notice from Bank of such default; provided, however, that if the default cannot by
its nature be cured within the thirty (30) day period or cannot after diligent attempts by Borrower
be cured within such ten (10) day period, and such default is likely to be cured within a
reasonable time, then Borrower shall have an additional period (which shall not in any case exceed
thirty (30) days) to attempt to cure such default, and within such reasonable time period the
failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall
be made during such cure period). Cure periods provided under this section shall not apply, among
other things, to financial covenants or any other covenants set forth in clause (a) above;
8.3 Attachment; Levy; Restraint on Business.
(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of
Borrower or of any entity under the control of Borrower (including a Subsidiary) on deposit or
otherwise maintained with Bank or any Bank Affiliate, or (ii) a notice of lien or levy is filed
against any material portion of Borrower’s assets by any government agency, and the same under
subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof,
discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no
Credit Extensions shall be made during any ten (10) day cure period; or
(b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents
Borrower from conducting any material part of its business;
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8.4 Insolvency (a) Borrower is unable to pay its debts generally (including trade debts) as
they become due; (b) Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is
begun against Borrower and not dismissed or stayed within thirty (30) days (but no Credit
Extensions shall be made while of any of the conditions described in clause (a) exist and/or until
any Insolvency Proceeding is dismissed);
8.5 Other Agreements. If (a) Borrower fails to (i) make any payment that is due and payable
with respect to any Material Indebtedness and such failure continues after the applicable grace or
notice period, if any, specified in the agreement or instrument relating thereto, or (ii) perform
or observe any other condition or covenant, or any other event shall occur or condition exist under
any agreement or instrument relating to any Material Indebtedness, and such failure continues after
the applicable grace or notice period, if any, specified in the agreement or instrument relating
thereto and the effect of such failure, event or condition is to cause, or to permit (whether or
not exercised), the holder or holders of such Material Indebtedness to accelerate the maturity of
such Material Indebtedness or cause, or permit (whether or not exercised), the mandatory repurchase
of any Material Indebtedness or (b) there is a default in any agreement that has resulted in a
material adverse effect on Borrower’s business;
8.6 Judgments. One or more final judgments, orders, or decrees for the payment of money in an
amount, individually or in the aggregate, of at least Five Hundred Thousand Dollars ($500,000) (not
covered by independent third-party insurance as to which liability has been accepted by such
insurance carrier) shall be rendered against Borrower and the same are not, within ten (10) days
after the entry thereof, discharged or execution thereof stayed or bonded pending appeal, or such
judgments are not discharged prior to the expiration of any such stay (provided that no Credit
Extensions will be made prior to the discharge, stay, or bonding of such judgment, order, or
decree);
8.7 Misrepresentations. Borrower or any Person acting for Borrower makes any representation,
warranty, or other statement now or later in this Agreement, any Loan Document or in any writing
delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement is incorrect in any material respect when made;
8.8 Subordinated Debt. Any document, instrument, or agreement evidencing any Subordinated
Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and
effect, any Person shall be in breach thereof or contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation thereunder, or the
Obligations shall for any reason be subordinated or shall not have the priority contemplated by
this Agreement.
9 BANK’S RIGHTS AND REMEDIES
9.1 Rights and Remedies. While an Event of Default occurs and continues Bank may, without
notice or demand, do any or all of the following:
(a) declare all Obligations immediately due and payable (but if an Event of Default described
in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);
(b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or
under any other agreement between Borrower and Bank;
(c) demand that Borrower (i) deposit cash with Bank in an amount equal to 105% of the Dollar
Equivalent of the aggregate face amount of all Letters of Credit remaining undrawn (plus all
interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its
good faith business judgment)), to secure all of the Obligations relating to such Letters of
Credit, as collateral security for the repayment of any future drawings under such Letters of
Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all
letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of
Credit;
(d) terminate any FX Forward Contracts;
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(e) settle or adjust disputes and claims directly with Account Debtors for amounts on terms
and in any order that Bank considers advisable, notify any Person owing Borrower money of Bank’s
security interest in such funds, and verify the amount of such account;
(f) make any payments and do any acts it considers necessary or reasonable to protect the
Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral
if Bank requests and make it available as Bank designates. Bank may enter premises where the
Collateral is located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of
its premises, without charge, to exercise any of Bank’s rights or remedies;
(g) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any
amount held by Bank owing to or for the credit or the account of Borrower;
(h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell the Collateral. Bank is hereby granted a non-exclusive, royalty-free license or
other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of
use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar
property as it pertains to the Collateral, in completing production of, advertising for sale, and
selling any Collateral and, in connection with Bank’s exercise of its rights under this Section,
Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit;
(i) place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive
control, any entitlement order, or other directions or instructions pursuant to any Control
Agreement or similar agreements providing control of any Collateral;
(j) demand and receive possession of Borrower’s Books; and
(k) exercise all rights and remedies available to Bank under the Loan Documents or at law or
equity, including all remedies provided under the Code (including disposal of the Collateral
pursuant to the terms thereof).
9.2 Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful
attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of
Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b)
sign Borrower’s name on any invoice or xxxx of lading for any Account or drafts against Account
Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account
Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all
claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the
Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints
Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect
or continue the perfection of Bank’s security interest in the Collateral regardless of whether an
Event of Default has occurred until all Obligations have been satisfied in full and Bank is under
no further obligation to make Credit Extensions hereunder. Bank’s foregoing appointment as
Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are
irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully
repaid and performed and Bank’s obligation to provide Credit Extensions terminates.
9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5
or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to
pay under this Agreement or any other Loan Document, Bank may obtain such insurance or make such
payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing
interest at the then highest rate applicable to the Obligations, and secured by the Collateral.
Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance
at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed
an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.
9.4 Application of Payments and Proceeds Upon Default. If an Event of Default has occurred
and is continuing, Bank may apply any funds in its possession, whether from Borrower account
balances, payments,
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proceeds realized as the result of any collection of Accounts or other disposition of the
Collateral, or otherwise, to the Obligations in such order as Bank shall determine in its sole
discretion. Any surplus shall be paid to Borrower or other Persons legally entitled thereto;
Borrower shall remain liable to Bank for any deficiency. If Bank, in its good faith business
judgment, directly or indirectly enters into a deferred payment or other credit transaction with
any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of
either reducing the Obligations by the principal amount of the purchase price or deferring the
reduction of the Obligations until the actual receipt by Bank of cash therefor.
9.5 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking
practices regarding the safekeeping of the Collateral in the possession or under the control of
Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act
or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss,
damage or destruction of the Collateral.
9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict
performance by Borrower of any provision of this Agreement or any other Loan Document shall not
waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance
herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting
the waiver and then is only effective for the specific instance and purpose for which it is given.
Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative. Bank
has all rights and remedies provided under the Code, by law, or in equity. Bank’s exercise of one
right or remedy is not an election and shall not preclude Bank from exercising any other remedy
under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event
of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver,
election, or acquiescence.
9.7 Demand Waiver. Except as expressly set forth in this Agreement, Borrower waives demand,
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 held by Bank on which Borrower is liable.
10 NOTICES
All notices, consents, requests, approvals, demands, or other communication by any party to
this Agreement or any other Loan Document must be in writing and shall be deemed to have been
validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business
Days after deposit in the U.S. mail, first class, registered or certified mail return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or
facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier
with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall
be addressed to the party to be notified and sent to the address, facsimile number, or email
address indicated below. Bank or Borrower may change its mailing or electronic mail address or
facsimile number by giving the other party written notice thereof in accordance with the terms of
this Section 10.
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| If to Borrower: | Fusion-io, Inc. 0000 X 0000 X Xxxxx 000 Xxxx Xxxx Xxxx, XX 00000 Attn: Xxxxxx X. Xxxx, Chief Financial Officer Fax: 000-000-0000 Email: XXxxx@xxxxxxxx.xxx |
With a copy to (which copy shall not constitute notice hereunder):
| Fusion-io, Inc. 0000 X 0000 X Xxxxx 000 Xxxx Xxxx Xxxx, XX 00000x Attn: Xxxxx Xxxxxxxxx, Chief Legal Officer Fax: 000-000-0000 Email: XXxxxxxxxx@xxxxxxxx.xxx |
| If to Bank: | Silicon Valley Bank 0000 Xxxx 0000 Xxxxx, Xxxxx 000 Xxxx Xxxx Xxxx, XX 00000 Attn: Xxxx Xxxxxxx Fax: (000) 000-0000 Email: xxxxxxxx@xxx.xxx |
11
CHOICE OF LAW, VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE
California law governs the Loan Documents without regard to principles of conflicts of law.
Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in
Santa Xxxxx County, California; provided, however, that nothing in this Agreement shall be deemed
to operate to preclude Bank from bringing suit or taking other legal action in any other
jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce
a judgment or other court order in favor of Bank. Borrower expressly submits and consents in
advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby
waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or
forum non conveniens and hereby consents to the granting of such legal or equitable relief as is
deemed appropriate by such court. Borrower hereby waives personal service of the summons,
complaints, and other process issued in such action or suit and agrees that service of such
summons, complaints, and other process may be made by registered or certified mail addressed to
Borrower at the address set forth in, or subsequently provided by Borrower in accordance with,
Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to
occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails,
proper postage prepaid.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN
DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH
PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT
TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the
parties hereto agree that any and all disputes or controversies of any nature between them arising
at any time shall be decided by a reference to a private judge, mutually selected by the parties
(or, if they cannot agree, by the Presiding Judge of the Santa Xxxxx County, California Superior
Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to
comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the
federal courts), sitting without a jury, in Santa Xxxxx County, California; and the parties hereby
submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to
and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1,
inclusive. The private judge shall have the power, among others, to grant provisional relief,
including without limitation, entering temporary restraining orders, issuing preliminary and
permanent injunctions and appointing receivers. All such proceedings shall be closed to the public
and confidential and all records relating thereto shall be permanently sealed. If during the
course of any dispute, a party desires to seek provisional relief, but a judge has not been
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appointed at that point pursuant to the judicial reference procedures, then such party may
apply to the Santa Xxxxx County, California Superior Court for such relief. The proceeding before
the private judge shall be conducted in the same manner as it would be before a court under the
rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery
which shall be conducted in the same manner as it would be before a court under the rules of
discovery applicable to judicial proceedings. The private judge shall oversee discovery and may
enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a
trial court judge. The parties agree that the selected or appointed private judge shall have the
power to decide all issues in the action or proceeding, whether of fact or of law, and shall report
a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a). Nothing
in this paragraph shall limit the right of any party at any time to exercise self-help remedies,
foreclose against collateral, or obtain provisional remedies. The private judge shall also
determine all issues relating to the applicability, interpretation, and enforceability of this
paragraph.
12 GENERAL PROVISIONS
12.1 Successors and Assigns. This Agreement binds and is for the benefit of the successors
and permitted assigns of each party. Borrower may not assign this Agreement or any rights or
obligations under it without Bank’s prior written consent (which may be granted or withheld in
Bank’s discretion). Bank has the right, without the consent of or notice to Borrower, to sell,
transfer, assign, negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents.
12.2 Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors,
officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank
(each, an “Indemnified Person”) harmless against: (a) all obligations, demands, claims, and
liabilities (collectively, “Claims”) claimed or asserted by any other party in connection with the
transactions contemplated by the Loan Documents; and (b) all losses or expenses (including Bank
Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of,
following from, consequential to, or arising from transactions between Bank and Borrower (including
reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such
Indemnified Person’s gross negligence or willful misconduct.
12.3 Time of Essence. Time is of the essence for the performance of all Obligations in this
Agreement.
12.4 Severability of Provisions. Each provision of this Agreement is severable from every
other provision in determining the enforceability of any provision.
12.5 Correction of Loan Documents. Bank may correct patent errors and fill in any blanks in
the Loan Documents consistent with the agreement of the parties.
12.6 Amendments in Writing; Waiver; Integration. This Agreement amends and restates and
supersedes, without novation, all of the terms of the Loan and Security Agreement dated as of
September 10, 2008, as amended from time to time. Any financing statement filed in connection
therewith shall remain in effect. The Control Agreement with Xxxxxx Xxxxxxx Xxxxx Xxxxxx dated
February 2010 remains in effect. No purported amendment or modification of any Loan Document, or
waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable or
admissible unless, and only to the extent, expressly set forth in a writing signed by the party
against which enforcement or admission is sought. Without limiting the generality of the
foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require
performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver
or have any other effect on any Loan Document. Any waiver granted shall be limited to the specific
circumstance expressly described in it, and shall not apply to any subsequent or other
circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or
commitment to grant any further waiver. The Loan Documents represent the entire agreement about
this subject matter and supersede prior negotiations or agreements.
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, is an
original, and all taken together, constitute one Agreement.
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12.8 Survival. All covenants, representations and warranties made in this Agreement continue
in full force until this Agreement has terminated pursuant to its terms and all Obligations (other
than inchoate indemnity obligations and any other obligations which, by their terms, are to survive
the termination of this Agreement) have been paid in full and satisfied. The obligation of
Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with
respect to such claim or cause of action shall have run.
12.9 Confidentiality. In handling any confidential information, Bank shall exercise the same
degree of care that it exercises for its own proprietary information, but disclosure of information
may be made: (a) to Bank’s Subsidiaries or Affiliates, provided that such Subsidiaries and
Affiliates are subject to the terms of this Section 12.9; (b) to prospective transferees or
purchasers of any interest in the Credit Extensions (provided, however, Bank shall use its best
efforts to obtain any prospective transferee’s or purchaser’s agreement to the terms of this
provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators
or as otherwise required in connection with Bank’s examination or audit; (e) as Bank considers
appropriate in exercising remedies under the Loan Documents; and (f) to third-party service
providers of Bank so long as such service providers have executed a confidentiality agreement with
Bank with terms no less restrictive than those contained herein. Confidential information does not
include information that is either: (i) in the public domain or in Bank’s possession when disclosed
to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank; or
(ii) disclosed to Bank by a third party if Bank does not know that the third party is prohibited
from disclosing the information. Bank may use confidential information for the development of
databases, reporting purposes, and market analysis so long as such confidential information is
aggregated and anonymized prior to distribution unless otherwise expressly permitted by Borrower.
The provisions of the immediately preceding sentence shall survive the termination of this
Agreement.
12.10 Attorneys’ Fees, Costs and Expenses. In any action or proceeding between Borrower and
Bank arising out of or relating to the Loan Documents, the prevailing party shall be entitled to
recover its reasonable attorneys’ fees and other costs and expenses incurred, in addition to any
other relief to which it may be entitled.
12.11 Electronic Execution of Documents. The words “execution,” “signed,” “signature” and
words of like import in any Loan Document shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal effect, validity
and enforceability as a manually executed signature or the use of a paper-based recordkeeping
systems, as the case may be, to the extent and as provided for in any applicable law, including,
without limitation, any state law based on the Uniform Electronic Transactions Act.
12.12 Captions. The headings used in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement.
12.13 Construction of Agreement. The parties mutually acknowledge that they and their
attorneys have participated in the preparation and negotiation of this Agreement. In cases of
uncertainty this Agreement shall be construed without regard to which of the parties caused the
uncertainty to exist.
12.14 Relationship. The relationship of the parties to this Agreement is determined solely by
the provisions of this Agreement. The parties do not intend to create any agency, partnership,
joint venture, trust, fiduciary or other relationship with duties or incidents different from those
of parties to an arm’s-length contract.
12.15 Third Parties. Nothing in this Agreement, whether express or implied, is intended to:
(a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons
other than the express parties to it and their respective permitted successors and assigns; (b)
relieve or discharge the obligation or liability of any person not an express party to this
Agreement; or (c) give any person not an express party to this Agreement any right of subrogation
or action against any party to this Agreement.
12.16 Termination. At such time as the principal and interest on the Advances is paid in
full and all commitments to make Credit Extensions hereunder have terminated by their terms, and
all other Obligations arising under the Loan Documents have been paid in full and/or have been cash
collateralized pursuant to the terms of this Agreement, then the Loan Documents shall terminate
(other than any inchoate indemnity obligations under Section 12.2) and the security interests
granted to secure such Obligations shall be released.
13 DEFINITIONS
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13.1 Definitions. As used in the Loan Documents, the word “shall” is mandatory, the word
“may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not
limiting, the singular includes the plural, and numbers denoting amounts that are set off in
brackets are negative. As used in this Agreement, the following capitalized terms have the
following meanings:
“Account” is any “account” as defined in the Code with such additions to such term as may
hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to Borrower.
“Account Debtor” is any “account debtor” as defined in the Code with such additions to such
term as may hereafter be made.
“Advance” or “Advances” means an advance (or advances) under the Revolving Line.
“Affiliate” is, with respect to any Person, each other Person that owns or controls directly
or indirectly more than ten percent (10%) of the outstanding capital stock of the Person, any
Person that controls or is controlled by or is under common control with the Person, and each of
that Person’s senior executive officers, directors, partners and, for any Person that is a limited
liability company, that Person’s managers and members.
“Agreement” is defined in the preamble hereof.
“Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available
under the Borrowing Base minus (b) the Dollar Equivalent amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit) plus an amount equal to the Letter of
Credit Reserve, minus (c) the FX Reduction Amount, minus (d) any amounts used for Cash Management
Services, and minus (e) the outstanding principal balance of any Advances.
“Bank” is defined in the preamble hereof.
“Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable
attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and
enforcing the Loan Documents (including, without limitation, those incurred in connection with
appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.
“Bankruptcy-Related Defaults” is defined in Section 9.1.
“Borrower” is defined in the preamble hereof.
“Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state
tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any equipment containing
such information.
“Borrowing Base” is (a) 80% of Eligible Accounts plus (b) 80% of Eligible Exim Accounts (not
to exceed $5,000,000 or the lesser of 25% of the sum of Eligible Accounts and Eligible Foreign
Accounts), plus (c) 75% of the value of Borrower’s Eligible Inventory (valued at the lower of cost
or wholesale fair market value), in all cases as determined by Bank from Borrower’s most recent
Borrowing Base Certificate; provided, however, that Bank may decrease the foregoing percentages in
its good faith business judgment based on events, conditions, contingencies, or risks which, as
determined by Bank, may adversely affect Collateral.
“Borrowing Base Certificate” is that certain certificate in the form attached hereto as
Exhibit C.
“Borrowing Base Report” is defined in Section 6.2(a).
“Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such
Person’s Board of Directors and delivered by such Person to Bank approving the Loan Documents to
which such Person is a party and the transactions contemplated thereby, together with a certificate
executed by its Secretary related thereto.
“Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.
“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally
guaranteed by the United States or any agency or any State thereof having maturities of not more
than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1)
year after its creation and having the highest rating
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from either Standard & Poor’s Ratings Group or Xxxxx’x Investors Service, Inc.; (c) Bank’s
certificates of deposit issued maturing no more than one (1) year after issue; and (d) money market
funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the
kinds described in clauses (a) through (c) of this definition.
“Cash Management Services” is defined in Section 2.1.4.
“Change in Control” means any event, transaction, or occurrence as a result of which (a) any
“person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than
a trustee or other fiduciary holding securities under an employee benefit plan of Borrower, is or
becomes a beneficial owner (within the meaning Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of Borrower, representing fifty percent (50%) or more of the
combined voting power of Borrower’s then outstanding securities; or (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such period constituted the Board
of Directors of Borrower (together with any new directors whose election by the Board of Directors
of Borrower was approved by a vote of not less than two-thirds of the directors then still in
office who either were directions at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office.
“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in
effect in the State of California; provided, that, to the extent that the Code is used to define
any term herein or in any Loan Document and such term is defined differently in different Articles
or Divisions of the Code, the definition of such term contained in Article or Division 9 shall
govern; provided further, that in the event that, by reason of mandatory provisions of law, any or
all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any
Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the
State of California, the term “Code” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions thereof relating to such
attachment, perfection, priority, or remedies and for purposes of definitions relating to such
provisions.
“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit
A.
“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.
“Commodity Account” is any “commodity account” as defined in the Code with such additions to
such term as may hereafter be made.
“Compliance Certificate” is that certain certificate in the form attached hereto as
Exhibit D.
“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or
not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation
of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed,
co-made, discounted or sold with recourse by that Person, or for which that Person is directly or
indirectly liable; (b) any obligations for undrawn letters of credit for the account of that
Person; and (c) all obligations from any interest rate, currency or commodity swap agreement,
interest rate cap or collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or commodity prices; but
“Contingent Obligation” does not include endorsements in the ordinary course of business. The
amount of a Contingent Obligation is the stated or determined amount of the primary obligation for
which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may not exceed the maximum
of the obligations under any guarantee or other support arrangement.
“Control Agreement” is any control agreement entered into among the depository institution at
which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary
at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank
pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account,
Securities Account, or Commodity Account.
“Copyrights” are any and all copyright rights, copyright applications, copyright registrations
and like protections in each work or authorship and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade secret.
“Credit Extension” is any Advance, Letter of Credit, FX Forward Contract, amount utilized for
Cash Management Services, or any other extension of credit by Bank for Borrower’s benefit.
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“Current Assets” is, on any date, the sum of Borrower’s and its Subsidiaries (a) unrestricted
cash and Cash Equivalents maintained with Bank or invested through Bank’s Affiliates or other
financial institution(s) under control agreements acceptable to Bank, (b) net billed accounts
receivable, and (c) the value of net inventory.
“Current Liabilities” are all obligations and liabilities of Borrower and its Subsidiaries
obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated
balance sheet, that mature in one (1) year.
“Default Rate” is defined in Section 2.3.
“Deposit Account” is any “deposit account” as defined in the Code with such additions to such
term as may hereafter be made.
“Designated Deposit Account” is Borrower’s deposit account, account number 3300617410,
maintained with Bank.
“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and
not any other currency, regardless of whether that currency uses the “$” sign to denote its
currency or may be readily converted into lawful money of the United States.
“Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars,
such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent
amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing
rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to
the country issuing such Foreign Currency.
“Domestic Subsidiary” means any Subsidiary incorporated or organized in a jurisdiction within
the United States.
“EBITDA” means (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted in
the calculation of Net Income, depreciation expense and amortization expense, plus (d) income tax
expense, plus (e) non-cash losses, charges or expenses, including stock based compensation, plus
(f) impairment of goodwill, intangible and tangible assets.
“Effective Date” is defined in the preamble hereof.
“Eligible Accounts” means Accounts which arise in the ordinary course of Borrower’s business
that meet all Borrower’s representations and warranties in Section 5.3. Bank reserves the right at
any time after the Effective Date to adjust any of the criteria set forth below and to establish
new criteria in its good faith business judgment. Unless Bank otherwise agrees in writing,
Eligible Accounts shall not include:
(a) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date
regardless of invoice payment period terms;
(b) Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have
not been paid within ninety (90) days of invoice date;
(c) Accounts owing from an Account Debtor that does not have its principal place of business
in the United States or Canada other than Eligible Foreign Accounts and Exim Eligible Accounts;
(d) Accounts billed and/or payable outside of the United States;
(e) Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated
in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise — sometimes called
“contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of
customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business;
(f) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;
(g) Accounts with credit balances over ninety (90) days from invoice date;
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(h) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to
Borrower exceed twenty-five percent (25%) of all Accounts for the amounts that exceed that
percentage, provided (i) the concentration limit for any investment grade Account Debtor shall be
fifty percent (50%), and (ii) the concentration limit for Facebook, Inc. for the fiscal quarters
ending September 30, 2010 through March 31, 2011 shall be seventy-five percent (75%), except as
Bank otherwise approves in writing;
(i) Accounts owing from an Account Debtor which is a United States government entity or any
department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to
Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940,
as amended;
(j) Accounts for demonstration or promotional equipment, or in which goods are consigned, or
sold on a “sale guaranteed”, “sale or return”, “sale on approval”, or other terms if Account
Debtor’s payment may be conditional;
(k) Accounts owing from an Account Debtor that has not been invoiced or where goods or
services have not yet been rendered to the Account Debtor (sometimes called memo xxxxxxxx or
pre-xxxxxxxx);
(l) Accounts subject to contractual arrangements between Borrower and an Account Debtor where
payments shall be scheduled or due according to completion or fulfillment requirements where the
Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to
perform in accordance with the contract (sometimes called contracts accounts receivable, progress
xxxxxxxx, milestone xxxxxxxx, or fulfillment contracts);
(m) Accounts owing from an Account Debtor the amount of which may be subject to withholding
based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the
extent of the amount withheld; sometimes called retainage xxxxxxxx);
(n) Accounts subject to trust provisions, subrogation rights of a bonding company, or a
statutory trust;
(o) Accounts owing from an Account Debtor that has been invoiced for goods that have not been
shipped to the Account Debtor unless Bank, Borrower, and the Account Debtor have entered into an
agreement acceptable to Bank in its sole discretion wherein the Account Debtor acknowledges that
(i) it has title to and has ownership of the goods wherever located, (ii) a bona fide sale of the
goods has occurred, and (iii) it owes payment for such goods in accordance with invoices from
Borrower (sometimes called “xxxx and hold” accounts);
(p) Accounts for which the Account Debtor has not been invoiced;
(q) Accounts that represent non-trade receivables or that are derived by means other than in
the ordinary course of Borrower’s business;
(r) Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond 90
days;
(s) Accounts subject to chargebacks or others payment deductions taken by an Account Debtor
(but only to the extent the chargeback is determined invalid and subsequently collected by
Borrower);
(t) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to
the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding,
or becomes insolvent, or goes out of business; and
(u) Accounts for which Bank in its good faith business judgment determines collection to be
doubtful.
“Eligible Exim Account” means an Account that otherwise would be an Eligible Account but for
the account debtor’s principal place of business being outside the United States or Canada that is
owing by an account debtor whose principal place of business is in a country as to which The
Export-Import Bank of the United States is willing to issue guaranties, provided Eligible Exim
Accounts shall not include any Eligible Foreign Account.
“Eligible Foreign Account” means an Account that otherwise would be an Eligible Accounts but
for the account debtor’s principal place of business being outside the United States or Canada,
provided such Account is (i) covered in full by credit insurance satisfactory to Bank, less any
deductible, (ii) supported by letter(s) of credit
-23-
acceptable to Bank, (iii) is owing by a subsidiary of Dell, Hewlett Packard or IBM, or (iv)
that Bank otherwise approves of in writing, provided an Eligible Foreign Accounts shall not include
any Exim Eligible Account.
“Eligible Inventory” means Inventory located in the United States that meets all of Borrower’s
representations and warranties in Section 5.3 and is otherwise acceptable to Bank in all respects.
“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.
“Event of Default” is defined in Section 8.
“Exchange Act” is the Securities Exchange Act of 1934, as amended.
“Foreign Currency” means lawful money of a country other than the United States.
“Funded Debt” is Indebtedness for borrowed money.
“Funding Date” is any date on which a Credit Extension is made to or for the account of
Borrower which shall be a Business Day.
“FX Business Day” is any day when (a) Bank’s Foreign Exchange Department is conducting its
normal business and (b) the Foreign Currency being purchased or sold by Borrower is available to
Bank from the entity from which Bank shall buy or sell such Foreign Currency.
“FX Forward Contract” is defined in Section 2.1.3.
“FX Reduction Amount” is defined in Section 2.1.3.
“FX Reserve” is defined in Section 2.1.3.
“GAAP” is 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 a significant segment of the
accounting profession, which are applicable to the circumstances as of the date of determination.
“General Intangibles” is all “general intangibles” as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without
limitation, all Intellectual Property, claims, income and other tax refunds, security and other
deposits, payment intangibles, contract rights, options to purchase or sell real or personal
property, rights in all litigation presently or hereafter pending (whether in contract, tort or
otherwise), insurance policies (including without limitation key man, property damage, and business
interruption insurance), payments of insurance and rights to payment of any kind.
“Governmental Approval” is any consent, authorization, approval, order, license, franchise,
permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or
other act by or in respect of, any Governmental Authority.
“Governmental Authority” is any nation or government, any state or other political subdivision
thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions
of or pertaining to government, any securities exchange and any self-regulatory organization.
“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and letters of credit, (b)
obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease
obligations, and (d) Contingent Obligations.
“Indemnified Person” is defined in Section 12.2.
“Initial Audit” is Bank’s inspection of the Collateral.
“Initial Public Offering” is the sale by Borrower of its equity securities in an underwritten
offering pursuant to a registration statement filed under the Securities Act of 1933, as amended.
-24-
“Insolvency Proceeding” is any proceeding by or against any Person under the United States
Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit
of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.
“Intellectual Property” means all of Borrower’s right, title, and interest in and to the
following, whether now owned or hereafter acquired:
(a) Copyrights, Trademarks and Patents;
(b) any and all trade secrets and trade secret rights, including, without limitation, any
rights to unpatented inventions, know-how, operating manuals and confidential information;
(c) any and all source code and object code;
(d) any and all design rights which may be available to a Borrower;
(e) any and all claims for damages by way of past, present and future infringement of any of
the foregoing, with the right, but not the obligation, to xxx for and collect such damages for said
use or infringement of the Intellectual Property rights identified above;
(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents;
and
(g) any and all license rights and agreements with respect to any of the foregoing.
“Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash)
determined in accordance with GAAP for the relevant period ending on such date, including, in any
event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower and
its Subsidiaries, including, without limitation or duplication, all commissions, discounts, or
related amortization and other fees and charges with respect to letters of credit and bankers’
acceptance financing and the net costs associated with interest rate swap, cap, and similar
arrangements, and the interest portion of any deferred payment obligation (including leases of all
types).
“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation all merchandise,
raw materials, parts, supplies, packing and shipping materials, work in process and finished
products, including without limitation such inventory as is temporarily out of Borrower’s custody
or possession or in transit and including any returned goods and any documents of title
representing any of the above.
“Investment” is any beneficial ownership interest in any Person (including stock, partnership
interest or other securities), and any loan, advance or capital contribution to any Person.
“Letter of Credit” means a standby letter of credit issued by Bank or another institution
based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set
forth in Section 2.1.2.
“Letter of Credit Application” is defined in Section 2.1.2(b).
“Letter of Credit Reserve” has the meaning set forth in Section 2.1.2(e).
“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other
encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise
against any property.
“Loan Documents” are, collectively, this Agreement, the Perfection Certificate, any note, or
notes or guaranties executed by Borrower, and any other present or future agreement between
Borrower and/or for the benefit of Bank in connection with this Agreement, all as amended,
restated, or otherwise modified.
“Material Indebtedness” is any Indebtedness the principal amount of which, individually or in
the aggregate, is equal to or greater than $500,000.
“Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries
for any period as at any date of determination, the net profit (or loss), after provision for
taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.
-25-
“Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, Bank
Expenses and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan
Documents, or otherwise, including, without limitation, all obligations relating to letters of
credit (including reimbursement obligations for drawn and undrawn letters of credit), cash
management services, and foreign exchange contracts, if any, and including interest accruing after
Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank,
and to perform Borrower’s duties under the Loan Documents.
“Operating Documents” are, for any Person, such Person’s formation documents, as certified
with the Secretary of State of such Person’s state of formation on a date that is no earlier than
30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in
current form, (b) if such Person is a limited liability company, its limited liability company
agreement (or similar agreement), and (c) if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current amendments or
modifications thereto.
“Patents” means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.
“Payment/Advance Form” is that certain form attached hereto as Exhibit B.
“Perfection Certificate” is defined in Section 5.1.
“Permitted Distributions” are:
(a) purchases of capital stock from former employees, consultants and directors pursuant to
repurchase agreements or other similar agreements in an aggregate amount not to exceed $1,000,000
in any fiscal year, provided that at the time of such purchase, and after giving effect to such
purchases, no Event of Default has occurred and is continuing;
(b) distributions or dividends consisting solely of Borrower’s capital stock;
(c) purchases for value of any rights distributed in connection with any stockholder rights
plan;
(d) purchases of capital stock or options to acquire such capital stock with the proceeds
received from a substantially concurrent issuance of capital stock or convertible securities;
(e) purchases of capital stock pledged as collateral for loans to employees;
(f) purchases of capital stock in connection with the exercise of stock options or stock
appreciation rights by way of cashless exercise or in connection with the satisfaction of
withholding tax obligations;
(g) purchases of fractional shares of capital stock arising out of stock dividends, splits or
combinations or business combinations; and
(h) purchases of capital stock from Borrower’s stockholders, provided that (i) such purchases
are approved by a majority of the disinterested members of the Borrower’s board of directors, (ii)
at the time of such purchases and after giving effect to such purchases, no Event of Default has
occurred and is continuing and (iii) the aggregate amount of such purchases does not exceed
$5,000,000 in any fiscal year.
“Permitted Indebtedness” is:
(a) Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;
(b) any Indebtedness existing on the Effective Date and shown on the Perfection Certificate
and any extensions, refinancings, provided that the principal amount of such Indebtedness is not
increased;
(c) Subordinated Debt;
(d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;
-26-
(e) guaranties of Permitted Indebtedness;
(f) Indebtedness incurred as a result of endorsing negotiable instruments received in the
ordinary course of business;
(g) Indebtedness consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements entered into in the ordinary course of business and
designated to protect Borrower or its Subsidiaries against fluctuations in interest rates, currency
exchange rates, or commodity prices;
(h) Indebtedness between Borrower and any of its Subsidiaries or among any of Borrower’s
Subsidiaries;
(i) Indebtedness with respect to letters of credit;
(j) capitalized leases and purchase money Indebtedness not to exceed $1,000,000 in the
aggregate in any fiscal year secured by Liens permitted under clause (c) of the definition of
“Permitted Liens”;
(k) extensions, renewals and refinancings of Permitted Indebtedness, provided that the amount
of such Indebtedness is not increased except by an amount equal to a reasonable premium or other
reasonable amount paid in connection with such refinancing and by an amount equal to any existing,
but unutilized, commitment thereunder; and
(l) Indebtedness of Persons acquired in connection with any transaction permitted by Section
7.3, provided that such Indebtedness was not created in contemplation of such transaction;
(m) earn-out obligations or deferred payments of consideration in connection with any
transaction permitted by Section 7.3; and
(n) other Indebtedness, if, on the date of incurring any Indebtedness pursuant to this clause
(m), the outstanding aggregate amount of all Indebtedness incurred pursuant to this clause (m) does
not exceed $500,000.
“Permitted Investments” are:
(a) Investments (including, without limitation, Subsidiaries) existing on the Effective Date;
(b) Investments consisting of (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agencies or any State maturing within 1 year from its
acquisition, (ii) commercial paper maturing no more than 2 years after its creation and having the
highest rating from either Standard & Poor’s Ratings Group or Xxxxx’x Investors Service, Inc., and
(iii) certificates of deposit maturing no more than 2 years after issue; and (d) money market funds
at least ninety-five percent (95%) of the assets of which constitute Investments of the kinds
described in clauses (i) through (iii) of this definition;
(c) Investments approved by Borrower’s Board of Directors or otherwise pursuant to a
Board-approved investment policy;
(d) Investments (i) by Borrower in Subsidiaries not to exceed $100,000 in the aggregate in any
fiscal year and (ii) by Subsidiaries in other Subsidiaries not to exceed $100,000 in the aggregate
in any fiscal year or in Borrower;
(e) Investments consisting of Collateral Accounts in the name of Borrower or any Subsidiary so
long as Bank has (if required pursuant to Section 6.6) a first priority, perfected security
interest in such Collateral Accounts;
(f) Investments consisting of extensions of credit to Borrower’s or its Subsidiaries’
customers in the nature of accounts receivable, prepaid royalties or notes receivable in the
ordinary course of business arising from the sale or lease of goods, provision of services or
licensing activities of Borrower;
-27-
(g) Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers arising in the ordinary course of business;
(h) Investments consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements entered into in the ordinary course of business and
designated to protect a Person against fluctuations in interest rates, currency exchange rates, or
commodity prices;
(i) Investments consisting of (i) travel advances and employee relocation loans and other
employee loans and advances in the ordinary course of business, and (ii) loans to employees
relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee
stock purchase plans or agreements approved by Borrower’s Board of in an aggregate amount
outstanding at any time not to exceed $50,000;
(j) Investments permitted by Section 7.3, including the creation of Subsidiaries in
contemplation of transactions permitted by Section 7.3;
(k) other Investments, if, on the date of incurring any Investments pursuant to this clause
(k), the outstanding aggregate amount of all Investments incurred pursuant to this clause (k) does
not exceed $500,000.
“Permitted Liens” are:
(a) Liens arising under this Agreement and the other Loan Documents and Liens in favor of Bank
and Liens securing Permitted Indebtedness described in clause (b) of the definition of “Permitted
Indebtedness;
(b) Liens for taxes, fees, assessments or other government charges or levies, either (i) not
due and payable or (ii) being contested in good faith and for which Borrower maintains adequate
reserves on its Books, provided that no notice of any such Lien has been filed or recorded
under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted
thereunder;
(c) Liens (including with respect to capital leases) (i) on property (including accessions,
additions, parts, replacements, fixtures, improvements and attachments thereto, and the proceeds
thereof) acquired or held by Borrower or its Subsidiaries incurred for financing such property
(including accessions, additions, parts, replacements, fixtures, improvements and attachments
thereto, and the proceeds thereof) other than Accounts and Inventory, or (ii) existing on property
(and accessions, additions, parts, replacements, fixtures, improvements and attachments thereto,
and the proceeds thereof) when acquired other than Accounts and Inventory, if the Lien is confined
to such property (including accessions, additions, parts, replacements, fixtures, improvements and
attachments thereto, and the proceeds thereof);
(d) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described in (a) through (c), but any extension, renewal or replacement Lien must be
limited to the property encumbered by the existing Lien and the principal amount of the
indebtedness it secures may not increase;
(e) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature
arising in the ordinary course of business and which are not delinquent or remain payable without
penalty or which are being contested in good faith and by appropriate proceedings which proceedings
have the effect of preventing the forfeiture or sale of the property subject thereto;
(f) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions,
social security and other like obligations incurred in the ordinary course of business (other than
Liens imposed by ERISA);
(g) leases or subleases of real property granted in the ordinary course of Borrower’s business
(or, if referring to another Person, in the ordinary course of such Person’s business), and leases,
subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual
Property) granted in the ordinary course of Borrower’s business (or, if referring to another
Person, in the ordinary course of such Person’s business), if the leases, subleases,
licenses and sublicenses do not prohibit granting Bank a security interest therein;
-28-
(h) non-exclusive license of Intellectual Property granted to third parties in the ordinary
course of business, and licenses of Intellectual Property that could not result in a legal transfer
of title of the licensed property that may be exclusive in respects other than territory and that
may be exclusive as to discreet geographical areas;
(i) Liens in favor of custom and revenue authorities arising as a matter of law to secure the
payment of custom duties in connection with the importation of goods;
(j) customary Liens granted in favor of a trustee to secure fees and other amounts owing to
such trustee under an indenture or other similar agreement;
(k) Liens on assets acquired in mergers and acquisitions not prohibited by Section 7 of this
Agreement;
(l) Liens consisting of pledges of cash, cash equivalents or government securities to secure
swap or foreign exchange contracts or letters of credit, provided that the amount of all such Liens
does not exceed $100,000;
(m) Liens arising from attachments or judgments, orders, or decrees in circumstances not
constituting an Event of Default under Sections 8.4 and 8.7;
(n) Liens on insurance proceeds in favor of insurance companies granted solely to secure
financed insurance premiums;
(o) Liens in favor of other financial institutions arising in connection with Borrower’s
deposit and/or securities accounts held at such institutions, provided that Bank has (if required
pursuant to Section 6.6) a perfected security interest in the amounts held in such deposit and/or
securities accounts; and
(p) deposits to secure the performance of bids, trade contracts (other than for borrowed
money), contracts for the purchase of property, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in each case, incurred in the
ordinary course of business and not representing an obligation for borrowed money.
“Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or government agency.
“Prepayment Premium” is an amount equal to $250,000 if the prepayment is made on or before the
first anniversary of the date hereof.
“Prime Rate” means the variable rate of interest, per annum, that appears in The Wall
Street Journal on the date of measurement, whether or not such announced rate is the lowest
rate available from Bank.
“Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made.
“Requirement of Law” is as to any Person, the organizational or governing documents of such
Person, and any law (statutory or common), treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its property is subject.
“Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial
Officer, Vice President of Finance and Controller of Borrower.
“Restricted License” is any material license agreement with respect to which Borrower is the
licensee for which a default under or termination of could reasonably be expected to result in a
material adverse effect upon Borrower’s business.
“Revolving Line” is an Advance or Advances in an amount equal to Twenty-Five Million Dollars
($25,000,000.00).
“Revolving Line Maturity Date” is two years from the Effective Date.
-29-
“SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any
analogous Governmental Authority.
“Securities Account” is any “securities account” as defined in the Code with such additions to
such term as may hereafter be made.
“Settlement Date” is defined in Section 2.1.3.
“Subordinated Debt” (a) Indebtedness incurred by Borrower subordinated to Borrower’s
Indebtedness owed to Bank and which is reflected in a written agreement in a manner and form
reasonably acceptable to Bank and approved by Bank in writing, and (b) to the extent the terms of
subordination do not change adversely to Bank, refinancings, refundings, renewals, amendments or
extensions of any of the foregoing.
“Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or
other entity of which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such
Person. Unless the context otherwise requires, each reference to a Subsidiary herein shall be a
reference to a Subsidiary of Borrower.
“Tangible Net Worth” is, on any date, the total equity of Borrower plus Subordinated Debt
minus (a) any amounts attributable to (i) goodwill, (ii) intangible items including unamortized
debt discount and expense, Patents, Trademarks, Copyrights, and capitalized research and
development expenses except prepaid expenses, (iii) notes, accounts receivable and other
obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves not already
deducted from assets.
“Trademarks” means any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and the entire
goodwill of the business of Borrower connected with and symbolized by such trademarks.
“Transfer” is defined in Section 7.1.
[Signature page follows.]
-30-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
Effective Date.
| BORROWER: | ||||
| FUSION-IO, INC. | ||||
By Name: |
/s/ Xxxxx Xxxxxxx
|
|||
Title:
|
VP Finance | |||
| BANK: | ||||
| SILICON VALLEY BANK | ||||
By
|
/s/ Xxxx Xxxxxxx
|
|||
Name:
|
Xxxx Xxxxxxx | |||
Title:
|
Relationship Manager | |||
1
EXHIBIT A — COLLATERAL DESCRIPTION
The Collateral consists of all of Borrower’s right, title and interest in and to the following
personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles (except as provided below), commercial tort claims, documents, instruments (including
any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts,
fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing),
securities, and all other investment property, supporting obligations, and financial assets,
whether now owned or hereafter acquired, wherever located; and
all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests
in any of the above and all substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.
Notwithstanding the foregoing, the Collateral does not include (i) any Intellectual Property;
provided, however, the Collateral shall include all Accounts and all proceeds of Intellectual
Property. If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security
interest in the underlying Intellectual Property is necessary to have a security interest in such
Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall
automatically, and effective as of the Effective Date, include the Intellectual Property to the
extent necessary to permit perfection of Bank’s security interest in such Accounts and such other
property of Borrower that are proceeds of the Intellectual Property, (ii) more than 65% of the
voting securities of any Subsidiary that is not organized under the laws of the United States or
any of its states, (iii) any property subject to a lien described in clauses (a) or (c) of the
definition of Permitted Lien if the granting of a lien in such property is prohibited by or would
constitute a default under any agreement or document governing such property (but only to the
extent such prohibition is enforceable under applicable law), provided that upon the termination or
lapsing of any such prohibition, such property shall automatically be part of the Collateral and
(iv) BofAF Account.
Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed,
subject to certain exceptions, not to encumber any of its Intellectual Property without Bank’s
prior written consent.
1
EXHIBIT B — LOAN PAYMENT/ADVANCE REQUEST FORM
Deadline for same day processing is Noon Pacific Time
Fax To:
|
Date: _____________________ |
Loan Payment:
From
Account #
|
To Account # | ||||||
Principal
|
$ | and/or Interest | $ | ||||
Authorized Signature:
|
Phone Number: | |||||||||
Print Name/Title:
|
||||||||||
Loan Advance:
Complete Outgoing Wire Request section below if all or a portion of the funds from this loan
advance are for an outgoing wire.
From Account #
|
To Account # | ||||||
Amount of Advance |
$ | ||||||
All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct
and complete in all material respects on the date of the request for an advance; provided, however,
that such materiality qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and provided, further that
those representations and warranties expressly referring to a specific date shall be true, accurate
and complete in all material respects as of such date:
Authorized Signature:
|
Phone Number: | |||||||||
Print Name/Title: |
||||||||||
Outgoing Wire Request:
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, Pacific Time
Complete only if all or a portion of funds from the loan advance above is to be wired.
Deadline for same day processing is noon, Pacific Time
Beneficiary Name:
|
Amount of Wire: | $ | ||||||||
Beneficiary Bank:
|
Account Number: | |||||||||
City and State:
|
||||||||||
Beneficiary Bank Transit (ABA) #:
|
Beneficiary Bank Code (Swift, Sort, Chip, etc.): | |||||||||
| (For International Wire Only) |
Intermediary Bank:
|
Transit (ABA) #: | |||||||||
For Further Credit to:
|
||||||||||
Special Instruction: |
||||||||||
By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be
processed in accordance with and subject to the terms and conditions set forth in the agreements(s)
covering funds transfer service(s), which agreements(s) were previously received and executed by me
(us).
Authorized Signature:
|
2nd Signature (if required): | |||
Print Name/Title:
|
Print Name/Title: | |||
Telephone #:
|
Telephone #: | |||
EXHIBIT C — BORROWING BASE CERTIFICATE
ACCOUNTS RECEIVABLE |
||||
1. Accounts Receivable (invoiced) Book Value as of |
$ | |||
2. Additions (please explain on reverse) |
$ | |||
3. TOTAL ACCOUNTS RECEIVABLE |
$ | |||
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication) |
||||
4. 90 Days Past Invoice Date |
$ | |||
5. Balance of 50% over 90 Day Accounts |
$ | |||
6. Foreign Account Debtor Accounts |
$ | |||
7. Foreign Invoiced Accounts |
$ | |||
8. Contra/Customer Deposit Accounts |
$ | |||
9. Intercompany/Employee Accounts |
$ | |||
10. Credit Balances over 90 Days |
$ | |||
11. Concentration Limits |
$ | |||
12. U.S. Governmental Accounts |
$ | |||
13. Promotion or Demo Accounts; Guaranteed Sale or Consignment Sale Accounts |
$ | |||
14. Accounts with Progress/Milestone/Pre-xxxxxxxx; Contract Accounts |
$ | |||
15. Accounts for Retainage Xxxxxxxx |
$ | |||
16. Trust Accounts |
$ | |||
17. Xxxx and Hold Accounts |
$ | |||
18. Unbilled Accounts |
$ | |||
19. Non-Trade Accounts |
$ | |||
20. Accounts with Extended Term Invoices |
$ | |||
21. Accounts Subject to Chargebacks |
$ | |||
22. Disputed Accounts |
$ | |||
23. Other (please explain on reverse) |
$ | |||
24. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS |
$ | |||
25. Eligible Accounts (#3 minus #24) |
$ | |||
26. ELIGIBLE AMOUNT OF ACCOUNTS ( 80% of #25) |
$ | |||
ELIGIBLE FOREIGN ACCOUNTS |
||||
27. Dell, HP, IBM as of _ |
$ | |||
28. Other pre-approved by Bank |
$ | |||
29. Total Eligible Foreign Accounts |
$ | |||
30. ELIGIBLE AMOUNT OF FOREIGN ACCOUNTS ( 80% of #29) |
$ | |||
ELIGIBLE EXIM ACCOUNTS |
||||
31. Amount of Eligible Exim Accounts as of |
$ | |||
32. Eligible Amount (80% of #27) |
$ | |||
33. Total Eligibility (Lowest of $5,000,000 or #32 or 25% of (#26 plus #30) |
$ | |||
ELIGIBLE INVENTORY |
||||
34. Eligible Inventory Value as of |
$ | |||
35. ELIGIBLE AMOUNT OF INVENTORY ( 75% of #34) |
$ | |||
BALANCES |
||||
36. Maximum Loan Amount |
$ | 25,000,000 | ||
37. Total Funds Available [Lesser of #36 or (#26 plus #30 plus #33 plus
#35)] |
$ | |||
38. Present balance owing on Line of Credit |
$ | |||
39. Outstanding under Sublimits |
$ | |||
40. RESERVE POSITION (#37 minus #38 and #39) |
$ | |||
[Continued on following page.]
The undersigned represents and warrants that this is true, complete and correct in all material
respects, and that the information in this Borrowing Base Certificate complies with the
representations and warranties in the Loan and Security Agreement between the undersigned and
Silicon Valley Bank.
| BANK USE ONLY | ||
Received by: |
||
| authorized signer |
Date:
Verified: |
||
| authorized signer |
Date:
Compliance Status:
|
Yes | No |
EXHIBIT D
COMPLIANCE CERTIFICATE
| TO: SILICON VALLEY BANK | Date: | |
| FROM: FUSION-IO, INC. |
The undersigned authorized officer of FUSION-IO, INC. (“Borrower”) certifies that under the
terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
“Agreement”):
(1) Borrower is in compliance for the period ending _______________ with all required
covenants except as noted below; (2) there are no Events of Default; (3) all representations and
warranties in the Agreement are true and correct in all material respects on this date except as
noted below; provided, however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a
specific date shall be true, accurate and complete in all material respects as of such date; (4)
Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and
Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and
contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9
of the Agreement; and (5) no Liens have been levied or claims made against Borrower relating to
unpaid employee payroll or benefits of which Borrower has not previously provided written
notification to Bank.
Attached are the required documents supporting the certification. The undersigned certifies
that these are prepared in accordance with GAAP consistently applied from one period to the next
except (i) as explained in an accompanying letter or footnotes and (ii) for the absence of
footnotes and subject to year end adjustments with respect to unaudited financial statements. The
undersigned acknowledges that no borrowings may be requested at any time or date of determination
that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is
determined not just at the date this certificate is delivered. Capitalized terms used but not
otherwise defined herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column.
| Reporting Covenant | Required | Complies | ||
Before Initial Public Offering |
||||
Monthly Financial Statements |
Monthly within 45 days | Yes No | ||
Compliance Certificate |
||||
Annual Financial Statement (CPA Audited) |
FYE within 150 days | Yes No | ||
Borrowing Base Certificate A/R & A/P Agings, Perpetual Inventory Reports |
Monthly within 30 days | Yes No | ||
After Initial Public Offering |
||||
Quarterly Financial Statements |
within 5 days after filing with SEC | Yes No | ||
Annual Financial Statements |
within 5 days after filing with SEC | Yes No | ||
BBC; A/R, A/P Agings |
Quarterly within 30 days | Yes No | ||
Compliance Certificate |
Delivered with financial statements | Yes No |
| Financial Covenant | Required | Actual | Complies | |||
Maintain on a Monthly/(Quarterly after IPO) Basis: |
||||||
Minimum Adjusted Current Ratio |
1.25:1.00 | _____:1.00 | Yes No | |||
Minimum Tangible Net Worth |
$25,000,000* | $_______ | Yes No |
| * | plus 25% of the net proceeds Borrower receives from the sale or issuance of its equity or Subordinated Debt securities |
The following financial covenant analys[is][es] and information set forth in
Schedule 1 attached hereto are true and accurate as of the date of this Certificate.
The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)
| FUSION-IO, INC. | BANK USE ONLY | |||||||||
| Received by: | ||||||||||
By:
|
authorized signer | |||||||||
Name:
|
Date: | |||||||||
Title:
|
||||||||||
| Verified: | ||||||||||
| authorized signer | ||||||||||
| Date: | ||||||||||
| Compliance Status: Yes No | ||||||||||
Schedule 1 to Compliance Certificate
Financial Covenants of Borrower
In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan
Agreement shall govern.
Dated: ____________________
I. Adjusted Current Ratio (Section 6.7(a))
Required: 1.25:1.00
Actual:
| A. | Aggregate value of the unrestricted cash and cash equivalents of Borrower at Bank
or other institutions under account control agreements with Bank |
$______ | ||
| B. | Aggregate value of the net billed accounts receivable of Borrower |
$______ | ||
| C. | Aggregate value of the Investments with maturities of fewer than 12 months
of Borrower at Bank or other institutions under account control agreements with Bank |
$______ | ||
| D. | Aggregate value of net Inventory |
$______ | ||
| E. | Current Assets (the sum of lines A through C) |
$______ | ||
| F. | Aggregate value of Obligations to Bank |
$______ | ||
| G. | Aggregate value of liabilities that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all Indebtedness,
and not otherwise reflected in line E above that matures within one (1) year |
$______ | ||
| H. | Current Liabilities (the sum of lines E and F) |
$______ | ||
| I. | Value of Line E. (Current Assets) |
$______ | ||
| J. | Value of Line H. (Current Liabilities) |
$______ | ||
| K. | Adjusted Current Ratio (line I divided by line J) |
_______ |
Is line K equal to or greater than 1.25:1:00?
| ______ No, not in compliance | ______ Yes, in compliance |
II. Tangible Net Worth (Section 6.7(b))
Required: $25,000,000
Actual: $___________
| A. | Total equity of Borrower |
$_____ | ||
| B. | Aggregate value of Subordinated Debt |
$_____ | ||
| C. | line A plus line B |
$_____ | ||
| D. | Aggregate value good will of Borrower |
$_____ | ||
| E. | Aggregate value of intangible items including unamortized debt
discount and expense, Patents, Trademarks, Copyrights, and
capitalized research and development expenses except prepaid
expenses of Borrower |
$_____ | ||
| F. | Aggregate value of notes, accounts receivable and other
obligations owing to Borrower from its officers or other
Affiliates |
$_____ | ||
| G. | Aggregate value of any reserves not already deducted from assets |
$_____ | ||
| H. | (line D plus line E plus line F plus line G) |
$_____ | ||
| I. | line C minus line H |
|||
| J. | Aggregate net proceeds received by Borrower from the sale or
issuance of its equity or Subordinated Debt since the Effective
Date |
$_____ | ||
| K. | Required Tangible Net Worth (line I, plus 25% line J) |
$_____ |
Is line I equal to or greater than line K?
| _____ No, not in compliance | _____ Yes, in compliance |
CORPORATE BORROWING CERTIFICATE
| Borrower: FUSION-IO, INC. | Date: September 13, 2010 |
Bank: Silicon Valley Bank
I hereby certify as follows, as of the date set forth above:
1. I am the Secretary, Assistant Secretary or other officer of the Borrower. My title is as set
forth below.
2. Borrower’s exact legal name is set forth above. Borrower is a corporation existing under the
laws of the State of
Delaware.
3. Attached hereto are true, correct and complete copies of Borrower’s Certificate of Incorporation
(including amendments), as filed with the Secretary of State of the state in which Borrower is
incorporated as set forth in paragraph 2 above. Such Certificate of Incorporation have not been
amended, annulled, rescinded, revoked or supplemented, and remain in full force and effect as of
the date hereof.
4. The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a
duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized
corporate action). Such resolutions are in full force and effect as of the date hereof and have
not been in any way modified, repealed, rescinded, amended or revoked, and Bank may rely on them
until Bank receives written notice of revocation from Borrower.
Resolved, that any one of the following officers or employees of Borrower, whose names,
titles and signatures are below, may act on behalf of Borrower:
| Authorized to | ||||||
| Add or Remove | ||||||
| Name | Title | Signature | Signatories | |||
Xxxxx X. Xxxxx
|
Chief Executive Officer and President | o | ||||
Xxxxxx X. Xxxx
|
Chief Financial Officer and Senior Vice President | o | ||||
Xxxxx X. Xxxxxxx
|
Vice President, Finance | o | ||||
| o | ||||||
| o |
Resolved Further, that any one of the persons designated above with a checked box
beside his or her name may, from time to time, add or remove any individuals to and from the
above list of persons authorized to act on behalf of Borrower.
Resolved Further, that such individuals may, on behalf of Borrower:
Borrow Money. Borrow money from Silicon Valley Bank (“Bank”).
Execute Loan Documents. Execute any loan documents Bank requires.
Letters of Credit, FX. Request Bank to issue Letters of Credit and enter into Foreign
Exchange Agreements.
Grant Security. Grant Bank a security interest in any of Borrower’s assets.
Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or
other indebtedness in which Borrower has an interest and receive cash or otherwise use the
proceeds.
Further Acts. Designate other individuals to request advances, pay fees and costs and
execute other documents or agreements (including documents or agreement that waive Borrowers
right to a jury trial) they believe to be necessary to effectuate such resolutions.
Resolved Further, that all acts authorized by the above resolutions and any prior acts
relating thereto are ratified.
5. The persons listed above are Borrower’s officers or employees with their titles and signatures
shown next to their names.
| By: | |||||
| Name: | |||||
| Title: | |||||
| *** | If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower. |
I, the __________________________ of Borrower, hereby certify as to paragraphs 1 through 5
above, as of the date set forth above.
[print title]
| By: | |||||
| Name: | |||||
| Title: | |||||
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: |
FUSION-IO, INC. | |||||||||||
LOAN OFFICER: |
XXXX XXXXXXX | |||||||||||
DATE: |
September 13, 2010 | |||||||||||
| Loan Fee | $ | 62,500 | ||||||||||
| Legal Fees | $ | |||||||||||
| TOTAL FEE DUE | $ | |||||||||||
Please indicate the method of payment:
{ } A check for the total amount is attached.
{ } Debit DDA # __________________ for the total amount.
{ } Loan proceeds
Borrower:
By: |
||||
| Silicon Valley Bank | (Date) | ||||
| Account Officer’s Signature | |||||
