LOAN AGREEMENT JH PARTNERS EVERGREEN FUND, L.P.
TABLE OF CONTENTS
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1 |
ACCOUNTING AND OTHER TERMS |
1 |
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2 |
LOAN AND TERMS OF PAYMENT |
1 |
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2.1 |
Promise to Pay |
1 |
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2.2 |
Interest Rate, Payments |
1 |
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2.3 |
Fees |
2 |
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3 |
CONDITIONS OF CREDIT EXTENSIONS |
2 |
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3.1 |
Conditions Precedent to Initial Credit Extension |
2 |
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3.2 |
Conditions Precedent to all Credit Extensions |
2 |
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4 |
REPRESENTATIONS AND WARRANTIES |
2 |
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4.1 |
Due Organization and Authorization |
2 |
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4.2 |
Litigation |
3 |
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4.3 |
No Material Adverse Change in Financial Statements |
3 |
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4.4 |
Solvency |
3 |
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4.5 |
Regulatory Compliance |
3 |
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4.6 |
Full Disclosure |
3 |
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4.7 |
Capital Contributions |
3 |
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5 |
AFFIRMATIVE COVENANTS |
4 |
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5.1 |
Government Compliance |
4 |
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5.2 |
Financial Statements, Reports, Certificates |
4 |
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5.3 |
Taxes |
4 |
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5.4 |
Insurance |
4 |
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5.5 |
Primary Accounts |
4 |
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5.6 |
Partnership Agreement, Capital Contribution |
4 |
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5.7 |
Further Assurances |
4 |
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6 |
NEGATIVE COVENANTS |
5 |
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6.1 |
Dispositions |
5 |
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6.2 |
Changes in Business, Ownership, Management or Locations of Collateral |
5 |
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6.3 |
Mergers or Acquisitions |
5 |
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6.4 |
Indebtedness |
5 |
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6.5 |
Encumbrance |
5 |
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6.6 |
Distributions; Investments |
5 |
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6.7 |
Transactions with Affiliates |
5 |
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6.8 |
Subordinated Debt |
5 |
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6.9 |
Compliance |
6 |
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6.10 |
Partnership |
6 |
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7 |
EVENTS OF DEFAULT |
6 |
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7.1 |
Payment Default |
6 |
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7.2 |
Covenant Default |
6 |
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7.3 |
Material Adverse Change |
6 |
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7.4 |
Attachment |
7 |
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7.5 |
Insolvency |
7 |
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7.6 |
Other Agreements |
7 |
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7.7 |
Judgments |
7 |
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7.8 |
Misrepresentations |
7 |
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7.9 |
Failure to Receive Capital Contributions |
7 |
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8 |
BANK’S RIGHTS AND REMEDIES |
8 |
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8.1 |
Rights and Remedies |
8 |
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8.2 |
Remedies Cumulative |
8 |
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8.3 |
Demand Waiver |
8 |
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9 |
NOTICES |
8 |
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10 |
CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER |
8 |
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11 |
GENERAL PROVISIONS |
9 |
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11.1 |
Successors and Assigns |
9 |
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11.2 |
Indemnification |
9 |
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11.3 |
Time of Essence |
9 |
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11.4 |
Severability of Provision |
9 |
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11.5 |
Amendments in Writing, Integration |
10 |
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11.6 |
Counterparts |
10 |
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11.7 |
Survival |
10 |
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11.8 |
Confidentiality |
10 |
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11.9 |
Attorneys’ Fees, Costs and Expenses |
10 |
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12 |
DEFINITIONS |
10 |
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12.1 |
Definitions |
10 |
This LOAN AGREEMENT (“Agreement”) dated as of the Effective Date, between SILICON VALLEY BANK (“Bank”), whose address is 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 with a loan production office located at 0000 Xxxx Xxxx Xx., Xxx. 000, Xxxx. 0, Xxxxx Xxxx, Xxxxxxxxxx 00000 and JH PARTNERS EVERGREEN FUND, L.P. (“Borrower”), whose address is 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000 provides the terms on which Bank will lend to Borrower and Borrower will repay Bank. The parties agree as follows:
1 ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement will be construed following GAAP. Calculations and determinations must be made following GAAP. The term “financial statements” includes the notes and schedules. The terms “including” and “includes” always mean “including (or includes) without limitation,” in this or any Loan Document.
2 LOAN AND TERMS OF PAYMENT
2.1 Promise to Pay.
Borrower promises to pay Bank the unpaid principal amount of all Credit Extensions and interest on the unpaid principal amount of the Credit Extensions.
2.1.1 Advances.
(a) Bank will make Advances not exceeding the Committed Line. Amounts borrowed under this Section may not be repaid or reborrowed during the term of this Agreement.
(b) To obtain an Advance, Borrower must notify Bank by facsimile or telephone by 12:00 p.m. Pacific time on the Business Day the Advance is to be made. Bank will credit Advances to Borrower’s 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. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Borrower will indemnify Bank for any loss Bank suffers due to such reliance.
(c) Each request by Borrower for a Credit Extension shall constitute a representation and warranty by Borrower to Bank that (i) such Credit Extension plus all outstanding Obligations is not more than 75% of the aggregate Subscription Amount, and (ii) as to said Credit Extension, Borrower has the right, which it has exercised under the Partnership Agreement, to request Subscription Amounts from the partners of Borrower, in an aggregate amount equal to or greater than 100% of the amount of the particular requested Credit Extension.
(d) The Committed Line terminates on the Maturity Date, when all Advances are immediately payable.
2.2 Interest Rate, Payments.
(a) Interest Rate. Advances accrue interest on the outstanding principal balance at a per annum rate equal to 0.50% plus the Prime Rate; provided the interest rate will not be less than 4.50% per annum. After an Event of Default, Obligations accrue interest at 5 percent above the rate effective immediately before the Event of Default. The interest rate increases or decreases when the Prime Rate changes. Interest is computed on a 360 day year for the actual number of days elapsed.
(b) Payments. Interest due on the Advances is payable on the day of each month. Borrower will repay the initial Advance on January 31, 2009, and each subsequent
Advance on the earlier of the day that is 90 days after the date of that Advance or the Maturity Date. On the Maturity Date, Borrower shall repay the entire principal balance of all outstanding Advances, plus accrued but unpaid interest. Bank may debit any of Borrower’s deposit accounts including Account Number for payments owing or any amounts Borrower owes Bank. Bank will promptly notify Borrower when it debits Borrower’s accounts. These debits are not a set-off. Payments received after 12:00 noon Pacific time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest accrue.
2.3 Fees.
Borrower will pay:
(a) Facility Fee. A fully earned, non-refundable Facility Fee of $25,000 due on the Effective Date; and
(b) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees) incurred through and after the date of this Agreement, are payable when due.
3 CONDITIONS OF CREDIT EXTENSIONS
3.1 Conditions Precedent to Initial Credit Extension.
Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that it receive the agreements, documents and fees it requires.
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:
(a) timely receipt of any Payment/Advance Form; and
(b) the representations and warranties in Section 4 must be materially true on the date of the Payment/Advance Form and on the effective date of each Credit Extension and no Event of Default may 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 of Section 4 remain true.
4 REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
4.1 Due Organization and Authorization.
Borrower is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standing in, any state 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 cause a Material Adverse Change. Borrower has not changed its state of formation or its organizational structure or type or any organizational number (if any) assigned by its jurisdiction of formation.
The execution, delivery and performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s formation documents, nor constitute an event of
default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which or by which it is bound in which the default could reasonably be expected to cause a Material Adverse Change.
4.2 Litigation.
Except as shown in the Schedule, There are no actions or proceedings pending or, to the knowledge of Borrower’s Responsible Officers, threatened by or against Borrower in which a likely adverse decision could reasonably be expected to cause a Material Adverse Change.
4.3 No Material Adverse Change in Financial Statements.
All financial statements for Borrower delivered to Bank fairly present in all material respects Borrower’s financial condition and Borrower’s results of operations. There has not been any material deterioration in Borrower’s financial condition since the date of the most recent financial statements submitted to Bank.
4.4 Solvency.
Borrower is able to pay its debts (including trade debts) as they mature.
4.5 Regulatory Compliance.
Borrower is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations T and U of the Federal Reserve Board of Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to cause a Material Adverse Change. None of Borrower’s properties or assets has been used by Borrower 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 has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP. Borrower has 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 its business as currently conducted, except where the failure to do so could not reasonably be expected to cause a Material Adverse Change.
4.6 Full Disclosure.
No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank (taken together with all such written certificates and written statements 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 and forecasted results.
4.7 Capital Contributions.
All Capital Contributions have been made as of the Effective Date.
5 AFFIRMATIVE COVENANTS
Borrower will do all of the following:
5.1 Government Compliance.
Borrower will maintain its legal existence and good standing in its jurisdiction of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to cause a material adverse effect on Borrower’s business or operations. Borrower will 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 or operations or would reasonably be expected to cause a Material Adverse Change.
5.2 Financial Statements, Reports, Certificates.
Borrower will deliver to Bank: (i) as soon as available, but no later than 45 days after the last day of each quarter beginning with the first quarter of 2009, (except the 4th quarter), a company prepared balance sheet and income statement covering Borrower’s operations during the period and in a form acceptable to Bank, along with a Compliance Certificate in the form of Exhibit B attached hereto signed by a Responsible Officer; (ii) as soon as available, but no later than 180 days after the last day of Borrower’s fiscal year beginning with fiscal year ending December 31, 2009, audited financial statements prepared under GAAP, consistently applied, prepared by an independent certified public accounting firm reasonably acceptable to Bank, together with an unqualified opinion thereon, along with a Compliance Certificate in the form of Exhibit B attached hereto signed by a Responsible Officer; (iii) a prompt report of any legal actions pending or threatened against Borrower that could result in damages or costs to Borrower of $100,000 or more; and (iv) budgets, sales projections, operating plans or other financial information Bank reasonably requests.
5.3 Taxes.
Borrower will make timely payment of all material federal, state, and local taxes or assessments and will deliver to Bank, on demand, appropriate certificates attesting to the payment.
5.4 Insurance.
Borrower will keep its business insured for risks and in amounts, as Bank may reasonably request.
5.5 True and correct copy of the Partnership Agreement.
The Partnership Agreement given to Bank as of the Effective date is a true and correct copy of the Borrower’s partnership agreement.
5.6 Primary Accounts.
Borrower and each of its Affiliates will maintain their primary operating and depository accounts with Bank.
5.7 Partnership Agreement, Capital Contribution.
Borrower shall enforce all of its rights under the Partnership Agreement in accordance with its past business practice and in the exercise of its business judgment and will not amend the
Partnership Agreement in any way affecting Capital Contributions or its Obligations under this Agreement without prior written consent of Bank.
5.8 Further Assurances.
Borrower will execute any further instruments and take further action as Bank reasonably requests to effect the purposes of this Agreement.
6 NEGATIVE COVENANTS
Borrower shall not do any of the following:
6.1 Dispositions.
Convey, sell, lease, transfer or otherwise dispose of (collectively “Transfer”) all or any part of its business or property outside the ordinary course of business of Borrower.
6.2 Changes in Business, Ownership, Management or Locations of Collateral.
Engage in any business other than the businesses currently engaged in by Borrower or reasonably related thereto or have a material change in its ownership or management, or the ownership or management of its General Partner of greater than 25%. Borrower shall notify Bank of any transfer of a Limited Partner’s interest(s) within thirty (30) days of such transfer.
6.3 Mergers or Acquisitions.
Merge or consolidate with any other Person, or acquire all or substantially all of the capital stock or property of another Person.
6.4 Indebtedness.
Create, incur, assume, or be liable for any Indebtedness other than Permitted Indebtedness.
6.5 Encumbrance.
Create, incur, or allow any Lien on any of its property, or assign or convey any right to receive income, except for Permitted Liens.
6.6 Distributions; Investments.
Except as authorized by the Partnership Agreement, directly or indirectly acquire or own any Person, or make any Investment in any Person, other than Permitted Investments. Pay any dividends or make any distribution or payment to its Partners except pursuant to and in accordance with the Partnership Agreement.
6.7 Transactions with Affiliates.
Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a nonaffiliated Person.
6.8 Subordinated Debt.
Make or permit any payment on any Subordinated Debt, except under the terms of the Subordinated Debt, or amend any provision in any document relating to the Subordinated Debt without Bank’s prior written consent.
6.9 Compliance.
Become an “investment company” or a company controlled by an “investment company,” under the Investment Company Act of 1940 or undertake as one of its important activities extending credit to purchase or carry margin stock, 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 operations or would reasonably be expected to cause a Material Adverse Change.
6.10 Partnership.
Amend, modify or waive any provision in the Partnership Agreement; pledge, grant or otherwise permit a security interest or Lien to affect any property of Borrower, including, but not limited to, Capital Commitments; except as authorized by the Partnership Agreement, permit or make any withdrawals by or distributions to any Partner, including General Partners or Limited Partners, of the partnership; permit the Borrower’s dissolution or liquidation. Borrower shall notify Bank of any capital contribution that is delinquent for a period of thirty (30) days or more.
7 EVENTS OF DEFAULT
Any one of the following is an Event of Default:
7.1 Payment Default.
If Borrower fails to pay any of the Obligations within 3 days after their due date, however, during such period no Credit Extensions will be made;
7.2 Covenant Default.
(a) If Borrower fails to perform any obligation under Sections 5.2 or 5.7 or violates any of the covenants contained in Section 6 of this Agreement, or
(b) If Borrower fails or neglects to perform, keep, or observe any other material term, provision, condition, covenant, or agreement contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure such default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) 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 reasonable 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 have cured such default shall not be deemed an Event of Default (provided that no Credit Extensions will be made during such cure period);
7.3 Material Adverse Change.
If there (i) occurs a material adverse change in the business, operations, or condition (financial or otherwise) of the Borrower, or (ii) is a material impairment of the prospect of repayment of any portion of the Obligations (the foregoing being defined as a “Material Adverse Change”).
7.4 Attachment.
If any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver and the attachment, seizure or levy is not removed in 10 days, or if Borrower is enjoined, restrained, or prevented by court order from conducting a material part of its business or if a judgment or other claim becomes a Lien on a material portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed against any of Borrower’s assets by any government agency and not paid within 10 days after Borrower receives notice. These are not Events of Default if stayed or if a bond is posted pending contest by Borrower (but no Credit Extensions will be made during the cure period);
7.5 Insolvency.
If Borrower becomes insolvent or if Borrower begins an Insolvency Proceeding or an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within 30 days (but no Credit Extensions will be made before any Insolvency Proceeding is dismissed);
7.6 Other Agreements.
If there is a default in any agreement between Borrower and a third party that gives the third party the right to accelerate any Indebtedness exceeding $100,000 or that could cause a Material Adverse Change;
7.7 Judgments.
If a money judgment(s) in the aggregate of at least $50,000 is rendered against Borrower and is unsatisfied and unstayed for 10 days (but no Credit Extensions will be made before the judgment is stayed or satisfied); or
7.8 Misrepresentations.
If Borrower or any Person acting for Borrower makes any material misrepresentation or material misstatement now or later in any warranty or representation in this Agreement or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document.
7.9 Failure to Receive Capital Contributions.
If Borrower fails to receive 95% of its Capital Contributions within the time allowed under the Partnership Agreement from any General Partner or Limited Partner, provided, however, Capital Contributions may be purchased from defaulting Limited Partners by another General Partner or Limited Partner and no Event of Default shall be deemed to have occurred if such purchases are made during such period and the purchasing General Partner or Limited Partner, as applicable, makes the defaulting Limited Partner’s Capital Contribution during such period.
8 BANK’S RIGHTS AND REMEDIES
8.1 Rights and Remedies.
When 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 7.5 occurs all Obligations are immediately due and payable without any action by Bank); and
(b) Stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank.
8.2 Remedies Cumulative.
Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements are cumulative. Bank has all rights and remedies provided by law, or in equity. Bank’s exercise of one right or remedy is not an election, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay is not a waiver, election, or acquiescence. No waiver is effective unless signed by Bank and then is only effective for the specific instance and purpose for which it was given.
8.3 Demand Waiver.
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.
9 NOTICES
All notices or demands by any party about this Agreement or any other related agreement must be in writing and be personally delivered or sent by an overnight delivery service, by certified mail, postage prepaid, return receipt requested, or by telefacsimile to the addresses set forth at the beginning of this Agreement. A party may change its notice address by giving the other party written notice.
10 CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER
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.
BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF 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 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 order 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 the 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.
11 GENERAL PROVISIONS
11.1 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 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, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits under this Agreement.
11.2 Indemnification.
Borrower will indemnify, defend and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank from, following, or consequential to transactions between Bank and Borrower (including reasonable attorneys fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct.
11.3 Time of Essence.
Time is of the essence for the performance of all obligations in this Agreement.
11.4 Severability of Provision.
Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.
11.5 Amendments in Writing, Integration.
All amendments to this Agreement must be in writing and signed by Borrower and Bank. This Agreement represents the entire agreement about this subject matter, and supersedes prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement merge into this Agreement and the Loan Documents.
11.6 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, are an original, and all taken together, constitute one Agreement.
11.7 Survival.
All covenants, representations and warranties made in this Agreement continue in full force while any Obligations remain outstanding. The obligations of Borrower in Section 11.2 to indemnify Bank will survive until all statutes of limitations for actions that may be brought against Bank have run.
11.8 Confidentiality.
In handling any confidential information, Bank will exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made (i) to Bank’s subsidiaries or affiliates in connection with their business with Borrower, (ii) to prospective transferees or purchasers of any interest in the loans (provided, however, Bank shall use commercially reasonable efforts in obtaining such prospective transferee or purchasers agreement of the terms of this provision), (iii) as required by law, regulation, subpoena, or other order, (iv) as required in connection with Bank’s examination or audit and (v) as Bank considers appropriate exercising remedies under this Agreement. Confidential information does not include information that either: (a) is in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank; or (b) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information.
11.9 Attorneys’ Fees, Costs and Expenses.
In any action or proceeding between Borrower and Bank arising out of the Loan Documents, the prevailing party will be entitled to recover its reasonable attorneys’ fees and other reasonable costs and expenses incurred, in addition to any other relief to which it may be entitled.
12 DEFINITIONS
12.1 Definitions.
In this Agreement:
“Advance” or “Advances” is a loan advance (or advances) under the Committed Line.
“Affiliate” of a Person is a Person that owns or controls directly or indirectly 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, and partners and, for any Person that is a limited liability company, that Person’s managers and members.
“Bank Expenses” are all audit fees and expenses and reasonable costs and expenses (including reasonable attorneys’ fees and expenses) for preparing, negotiating, administering, defending and enforcing the Loan Documents (including appeals or Insolvency Proceedings).
“Borrowing Base” is, as of the date an Advance is requested, 100% of the value of anticipated Capital Contributions as of the date of such request, not to exceed 75% of Subscription Amount.
“Business Day” is any day that is not a Saturday, Sunday or a day on which the Bank is closed.
“Capital Commitment(s)” means for any Limited Partner and General Partner the total amount of cash and/or property committed by such Partner and required to be contributed by such Partner to the capital of the partnership, as described in the Partnership Agreement, and all proceeds, and all rights to payment from Borrower’s Partners, including General Partners and Limited Partners and any other payments not specifically identified in the Partnership Agreement as contribution to the capital of the partnership.
“Capital Contribution(s)” means for any Limited Partners and General Partners, the sum of the cash and other property required to be contributed to Borrower’s partnership in connection with a capital call, when requested.
“Committed Line” means $10,000,000.
“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (i) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation 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; (ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) 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 the guarantee or other support arrangement.
“Credit Extension” is each Advance or any other extension of credit by Bank for Borrower’s benefit.
“Effective Date” is the date Bank executes this Agreement.
“ERISA” is the Employment Retirement Income Security Act of 1974, and its regulations.
“GAAP” is generally accepted accounting principles.
“General Partner(s)” means those individuals or entities denominated General Partners of Borrower under or by reason of the Partnership Agreement.
“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.
“Insolvency Proceeding” are proceedings 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.
“Investment” is any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance or capital contribution to any Person.
“Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.
“Limited Partner(s)” means those individuals or entities denominated limited partners of the Borrower under or by reason of the Partnership Agreement.
“Loan Documents” are, collectively, this Agreement, 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, extended or restated.
“Material Adverse Change” is defined in Section 7.3.
“Maturity Date” is 364 days after the Effective Date.
“Obligations” are debts, principal, interest, Bank Expenses and other amounts Borrower owes Bank now or later, including cash management services, letters of credit and foreign exchange contracts, if any and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank.
“Partner” means any General Partner or Limited Partner.
“Partnership Agreement” means the Limited Partnership Agreement of Borrower dated as of , 2008, delivered to Bank as of the Effective Date.
“Permitted Indebtedness” is:
(a) Borrower’s indebtedness to Bank under this Agreement or any other Loan Document;
(b) Indebtedness existing on the Effective Date and shown on the Schedule;
(c) Subordinated Debt;
(d) Indebtedness to trade creditors incurred in the ordinary course of business; and
(e) Indebtedness secured by Permitted Liens.
“Permitted Investments” are:
(a) Investments shown on the Schedule and existing on the Effective Date; and
(b) (i) marketable direct obligations issued or unconditionally guaranteed by the United States or its agency or any State maturing within 1 year from its acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor’s Corporation or Xxxxx’x Investors Service, Inc., and (iii) Bank’s certificates of deposit issued maturing no more than 1 year after issue.
“Permitted Liens” are:
(a) Liens existing on the Effective Date and shown on the Schedule or arising under this Agreement or other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for which Borrower maintains adequate reserves on its Books, if they have no priority over any of Bank’s security interests;
(c) Licenses or sublicenses granted in the ordinary course of Borrower’s business and any interest or title of a licensor or under any license or sublicense, if the licenses and sublicenses permit granting Bank a security interest;
(d) Leases or subleases granted in the ordinary course of Borrower’s business, including in connection with Borrower’s leased premises or leased property; and
(e) 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 may not increase.
“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company association, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.
“Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate.
“Responsible Officer” is each of the General Partners of Borrower.
“Schedule” is any attached schedule of exceptions.
“Subordinated Debt” is debt incurred by Borrower subordinated to Borrower’s indebtedness owed to Bank and which is reflected in a written agreement in a manner and form acceptable to Bank and approved by Bank in writing.
“Subscription Amount” is the portion of the Capital Commitment of each Partner, individually, and the Partners collectively, not yet contributed to Borrower, net of any other obligations of Borrower.
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BORROWER: |
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JH PARTNERS EVERGREEN FUND, L.P. |
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Its General Partner |
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Name: |
/s/ Xxxx Xxxxxx |
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Title: |
Managing Member |
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BANK: |
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SILICON VALLEY BANK |
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By: |
/s/ Xxxxxxx Xxxxxx |
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Title: |
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Effective Date: December 24, 2008 |
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EXHIBIT A
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LOAN PAYMENT/ADVANCE REQUEST FORM |
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DEADLINE FOR SAME DAY PROCESSING IS 12:00 PACIFIC TIME |
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Fax To: 000-000-0000 |
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Date: |
· LOAN PAYMENT:
JH PARTNERS EVERGREEN FUND, L.P. (Borrower)
From Account # To Account #
(Deposit Account #) (Loan Account #)
Principal $ and/or Interest $
All Borrower’s representation and warranties in the Loan Agreement are true, correct and complete in all material respects up to and including the date of the transfer request for a loan payment, but those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of that date:
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Authorized Signature: |
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Phone Number: |
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· LOAN ADVANCE:
From Account # To Account #
(Loan Account #) (Deposit Account #)
Amount of Advance $
All Borrower’s representation and warranties in the Loan Agreement are true, correct and complete in all material respects up to and including the date of the transfer request for an advance, but those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects as of that date [all Capital Contributions have been made to date]:
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Authorized Signature: |
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Phone Number: |
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EXHIBIT B
COMPLIANCE CERTIFICATE
TO: Silicon Valley Bank
FROM: JH PARTNERS EVERGREEN FUND, L.P.
The undersigned authorized officer (the “Officer”) JH PARTNERS EVERGREEN FUND, L.P. ( “Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending with all required covenants except as noted below and (ii) all representations and warranties in the Agreement are true and correct in all material respects on this date. In addition, the Officer certifies that Borrower has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP.
Please indicate compliance status by circling Yes or No under the “Complies” column.
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REPORTING COVENANT |
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REQUIRED |
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COMPLIES |
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Compliance Certificate |
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Quarterly within 45 days |
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Yes |
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No |
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Quarterly Financial Statements* |
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Quarterly within 45 days |
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Yes |
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No |
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Annual Financial Statements (Audited)** with Compliance Certificate |
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FYE within 180 days |
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Yes |
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No |
*beginning with the first quarter of 2009
**beginning with the fiscal year ending December 31, 2009
Please fill out the section below.
As of the date of this Compliance Certificate:
Amount of capital called is: $ .
Remaining callable capital is: $ .
Last capital call date was: .
Last capital call amount was: $ .
Limited partner defaults? Yes/ No
If Yes, which Limited Partner(s): . Status .
Delinquent contributions from last capital call date? Yes/No
If Yes, which Limited Partner and amount delinquent: .
Transfers of Limited Partners commitments and date of transfer? Yes/No
If Yes, which Limited Partner, Amount of Commitment, Name of New Limited Partner:
Due Date of Last Capital Call:
Outstanding LP commitments from Previous Capital Calls:
Remaining Callable Capital:
Use of Proceeds:
Sincerely,
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JH PARTNERS EVERGREEN FUND, L.P. |
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Its General Partner |
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By: |
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Name: |
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