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Exhibit 2.1
SALE AND ASSIGNMENT OF LOAN AGREEMENT
(The March 27, 2000 Xxxxxxx Communications, Inc. Loan)
THIS SALE AND ASSIGNMENT OF LOAN AGREEMENT (the "Agreement") is made
and dated as of April 12, 2001, by and between VENTURE BANKING GROUP, a division
of Cupertino National Bank ("Seller") and XXXXXXX XXXXXX COMSTREAM, INC., a
Delaware corporation ("Purchaser").
RECITALS
A. Seller is the owner and holder of loan and security documents,
evidencing and securing a loan in the original principal amount of $4,500,000.00
(the "Loan") pursuant to that certain Loan and Security Agreement (as amended
from time to time the "Loan Agreement") dated as of March 27, 2000 between
Seller and XXXXXXX COMMUNICATIONS, INC., a California corporation ("Borrower").
The purpose of the Loan was to provide Borrower with an operating line of credit
and a line of credit for the acquisition of equipment by Borrower. The Loan is
evidenced and secured by the following documents: (i) the Loan Agreement dated
as of March 27, 2000; (ii) the Revolving Promissory Note in the maximum
principal amount of $3,000,000.00 dated as of March 27, 2000 (as amended from
time to time the "Revolving Note"); (iii) the Equipment Promissory Note in the
maximum principal amount of $1,500,000.00 dated as of March 27, 2000 (the
"Equipment Note"); (iv) Promissory Note in the maximum principal amount of
$3,000,000 dated as June 21, 2000 (as amended from time to time "Guaranteed
Note"); (v) three Warrants to Purchase Stock dated as of March 27, 2000, June 2,
2000, October 19, 2000, respectively; (vi) the Intellectual Property Security
Agreement dated as of March 27, 2001 ("IP Security Agreement"); (vii) UCC-1
Financing Statement filed with the office of the California Secretary of State
on April 24, 2000; Filing No. 0012360282; (viii) the Unconditional Guaranty by
Guarantor dated as of June 21, 2001 (the "Guaranty"); and (ix) a Participation
Agreement dated as of February 14, 2001 (the "Participation Agreement"). The
Revolving Note, Equipment Note and the Guaranteed Notes are collectively and
individually referred to herein as the "Note"). All the loan documents described
above, and all other documents or instruments executed, delivered or required by
Lender in connection with the Loan or that secure payment of the Loan are
hereinafter severally and collectively referred to as the "Loan and Security
Documents."
B. The Loan is secured by, among other things, Seller's first priority
security interest subject only to all of the equipment financing identified in
Exhibit 1 hereto in all the assets of Borrower, including those assets
identified or described in (i) Exhibit "A" to the Loan Agreement and the UCC-1
Financing Statement and (ii) the IP Security Agreement (the "Collateral").
C. Borrower is in default under the terms of the Loan and Security
Documents by, among other things, Borrower's failure to: (i) remit the monthly
payments due and payable under the Loan; (ii) pay interest accruing on the
unpaid balance of the Loan at the default rate stated in the Loan and Security
Documents until paid in full; (iii) maintain required financial covenants; and
(iv) make the required payments under the Loan pursuant to Section 2.2 of the
Loan
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Agreement as a result of the Loan being over advanced due to Borrower's failure,
among other things, to maintain the necessary inventory and accounts receivable
levels.
D. Seller has declared a default under the Loan and has a present right
to exercise all of its collection and enforcement rights and remedies under the
Loan and Security Documents and federal and state law.
E. Seller desires to sell and assign to Purchaser and Purchaser desires
to purchase and accept from Seller the Loan and the Loan and Security Documents,
expressly excluding the Participation Agreement and any claims, rights, remedies
or obligations arising out of that Participation Agreement, but including
without limitation, any claims rights and remedies that Seller may have against
the Collateral, Borrower or Guarantor arising out of the Loan and the Loan and
Security Documents (the "Loan Package"). Purchaser and Seller desire to enter
into this Agreement setting forth the terms and conditions governing such
assignment and sale.
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants contained herein, and for adequate consideration the receipt of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
SALE AND ASSIGNMENT OF LOAN
1.1 Purchase Price and Date. Seller shall be deemed to have assigned
and sold to Purchaser, and Purchaser shall be deemed to have purchased and
accepted all right, title and interest of Seller in the Loan Package for a
purchase price of $3,900,000.00 (the "Purchase Price") as of the date of this
Agreement.
1.2 Delivery of Loan and Security Documents.
(a) Seller shall deliver to Purchaser all original Loan and
Security Documents within its possession or control relating to the
Loan.
(b) Seller shall endorse each original Note as follows:
"Pay to the order of XXXXXXX XXXXXX COMSTREAM, INC. without
recourse.
VENTURE GROUP, VENTURE BANKING GROUP,
a division of Cupertino National Bank
By:
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Name:
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Title: "
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(c) A UCC-2 financing statement, duly executed by Seller,
assigning to Purchaser the rights of Seller as "Secured Party" under
the UCC-1 Financing Statement; and
(d) Such other documents, instruments or assignments that may
be reasonably required by Purchaser to complete the transfer of the
Loan Package to Purchaser pursuant to the terms and conditions of this
Agreement.
1.3 Non-Recourse Sale. It is agreed by the parties hereto that the sale
and assignment of the Loan Package hereunder is without recourse to and without
representation or warranty, express or implied by Seller except as for those
representations and warranties of Seller expressly set forth in this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
2.1 Seller Representations and Warranties. To induce Purchaser to enter
into this Agreement, Seller represents and warrants to Purchaser that:
(a) Legal Status. Seller holds all necessary federal and state
certificates and licenses to do business as a bank in California
(b) Authority and Enforceability. The execution, delivery and
performance of this Agreement by Seller have been duly authorized by
all necessary corporate action on the part of Seller.
(c) Ownership. Seller owns the Loan Package free and clear of
all liens, security interests and encumbrances in favor of any third
party.
(d) Validity and Priority of Security Interest. Seller holds a
valid, enforceable, and properly perfected first priority lien upon and
in the Collateral and such lien is not subject to any senior liens or
encumbrances except as set forth in Exhibit 1 hereto.
(e) Validity and Enforceability of Loan and Security
Documents. The Loan and Loan Package are valid and legal obligations of
Borrower and enforceable against Borrower.
(f) No Claims or Defenses of Borrower. To the best of Seller's
knowledge there are no defenses, counterclaims, setoffs, recoupments,
or other adverse claims or causes of action of any kind existing
against Seller with respect to the Loan Package, including, without
limitation, claims regarding the validity, perfection, priority and
enforceability of the lien interests held by Seller pursuant to the
Loan Package.
(g) Amount of Indebtedness. The following amounts are due and
owing to Seller under the Loan as of April 11, 2001: (i) unpaid
principal of $4,578,012.21; and (ii) accrued and unpaid interest on the
principal balance equal to $92,410.16 (at the
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non-default rate); and (iii) any other late charges, fees, costs and
expenses that may otherwise be due under the Loan.
2.2 Exclusive Representations and Warranties. The representations and
warranties set forth in this Article 2 are the sole and exclusive
representations and warranties made by Seller, its representatives, agents,
officers, directors and other employees, with respect to the Loan Package, the
sale thereof to Purchaser hereunder or otherwise. Without limiting the
generality of the foregoing, it is expressly acknowledged and agreed by
Purchaser that no covenant, agreement, representation or warranty made by Seller
or any such other person, herein or otherwise, shall be construed as a warranty,
representation, guaranty or other agreement or acknowledgement as to, nor does
Seller or any such other person assume any responsibility for: (a) the
creditworthiness of the Borrower or the collectibility of the Note by reason of
the Borrower's ability to make payments with respect thereto; or (b) the
condition or value of the Collateral.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1 Purchaser Representations and Warranties. To induce Seller to enter
into this Agreement, Purchaser represents and warrants to Seller that:
(a) Legal Status. Purchaser is a Delaware corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and authorized to do business in California.
(b) Capacity. Purchaser has full power, authority and legal
right to execute and deliver, and to perform and observe the provisions
of this Agreement and to carry out the transactions contemplated
hereby, including, without limitation, to purchase the Loan Package
from Seller.
(c) Authority and Enforceability. The execution, delivery and
performance of this Agreement by Purchaser have been duly authorized by
all necessary action.
3.2 No Reliance. Except with respect to its reliance on the express
representations and warranties of Seller, Purchaser has, independently and
without reliance upon Seller or any of Seller's officers, directors, employees,
agents or affiliates, and based upon such documents and information as Purchaser
has deemed appropriate, made its own appraisal of and investigation into
Borrower, the Collateral and the Loan Package and made its decision to enter
into this Agreement and to purchase the Loan Package pursuant hereto.
ARTICLE 4
MISCELLANEOUS
4.1 Survival. The representations and warranties, covenants and
agreements of Seller and Purchaser hereunder shall survive the sale and
assignment of the Loan Package as set forth herein.
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4.2 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
term, provision or condition, or of any other term, provision or condition of
this Agreement.
4.3 Captions. Section, paragraph or other headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
4.4 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with regard to the subject matter hereof, and there
are no prior agreements, understandings, restrictions, warranties, or
representations between the parties with regard thereto.
4.5 Expenses. Each party shall bear its own costs and expenses relating
to the negotiation, drafting, execution and consummation of this Agreement.
4.6 Assignment. Agreement shall be binding upon and inure to the
benefit of Seller, Purchaser and their respective successors and assigns.
4.7 Amendment and Waiver. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, except by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
4.8 Counterparts. This Agreement may be executed in counterparts and
such counterparts shall, when taken together, constitute one and the same
agreement.
4.9 Further Assurances and Cooperation. Seller and Purchaser shall
cooperate with the other and shall take such actions as may be reasonably
requested (and which actions are consistent with the provisions of this
Agreement) to obtain for the requesting party the benefit of the transaction
contemplated hereby.
4.10 CHOICE OF LAW. THIS AGREEMENT AND THE OTHER DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER WILL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF CALIFORNIA AND THE PARTIES AGREE
THAT PROPER VENUE FOR ANY DISPUTE ARISING OUT OF OR RELATED TO THIS AGREEMENT
SHALL BE SAN DIEGO, CALIFORNIA.
4.11 JURY WAIVER. THE PARTIES HEREBY VOLUNTARILY, KNOWINGLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN
ANY OF THEM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR ANY OTHER
DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT OF EACH PARTY TO ENTER INTO
THIS AGREEMENT.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
"SELLER"
VENTURE BANKING GROUP, a division of Cupertino Bank
By:
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Name:
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Title:
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"PURCHASER"
XXXXXXX XXXXXX COMSTREAM, INC., a Delaware corporation
By:
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Name:
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Title:
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CONSENT OF BORROWER AND GUARANTOR
The undersigned, XXXXXXX COMMUNICATIONS, INC., a California corporation
("Borrower") and WESTAR CAPITAL II, LLC, A Delaware limited liability company
("Guarantor") hereby acknowledge and consent to the terms and conditions of that
certain SALE AND ASSIGNMENT OF LOAN AGREEMENT (the "Agreement") dated as of
April 12, 2001, by and between VENTURE BANKING GROUP, a division of Cupertino
National Bank ("Seller") and XXXXXXX XXXXXX COMSTREAM, INC., a Delaware
corporation ("Purchaser").
Borrower and Guarantor further acknowledges, consents, represents and
warrants as follows:
1. Each consents the Assignment;
2. Each acknowledges the accuracy of the outstanding indebtedness under
the Loan as set forth in the Agreement;
3. The Loan Package, including without limitation, the Loan and the
Loan and Security Documents, are hereby ratified and affirmed by Borrower and
Guarantor and shall remain in full force and effect;
4. Neither Borrower nor Guarantor have any claims, counterclaims,
defenses, or setoffs with respect to the Loan Package, including without
limitation, the Loan and the Loan and Security Documents;
5. The Loan and Security Documents to which Borrower, (and Guarantor as
applicable) is a party continue to be legal, valid, and binding obligations of
Borrower (and Guarantor as applicable), enforceable against Borrower by Assignee
in accordance with their terms;
6. Each continues to be validly existing under the laws of the State of
its formation or organization and has the requisite power and authority to
execute and deliver this Consent and to perform the Loan and Security Documents
to which either or both is party. The execution and delivery of this Consent and
the performance of the Loan and Security Documents have been duty authorized by
all requisite action by or on behalf of Borrower (and Guarantor as applicable);
7. Each shall execute, deliver, and provide to Seller and Purchaser
such additional agreements, documents, and instruments as reasonably required to
effectuate the intent of the Assignment and this Consent;
8. Each fully, finally, and forever releases and discharges Seller and
its successors, assigns, directors, officers, employees, agents, and
representatives from any and all actions, causes of action, claims, debts,
demands, liabilities, obligations, damages, injuries, losses, and suits, of
whatever kind or nature, in law or equity, arising out of or in relation to the
Agreement and the Loan Package, including without limitation, the Loan and the
Loan and
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Security Documents, or any action or omission of Seller with respect thereto
which arose prior to, or was the result of any events which occurred prior to
the effective date of the Agreement. It is the intention of both Guarantor and
Borrower that the above release shall be effective as a full and final release
of each and every matter specifically and generally referred to in this
paragraph. Borrower and Guarantor each acknowledges and represents that it has
been advised by independent legal counsel with respect to the agreements
contained herein and with respect to the provisions of California Civil Code
Section 1542, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR."
Borrower and Guarantor, each being aware of said code section, expressly waives
any and all rights it may have thereunder, as well as any other statute or
common law principle of similar effect, with respect to any of the matters
released therein. This Consent shall act as a release of all included claims,
rights and causes of action, whether such claims are currently known, unknown,
foreseen or unforeseen and regardless of any present lack of knowledge as to
such claims. Borrower and Guarantor each understands and acknowledges the
significance and consequence of this waiver of California Civil Code Section
1542, and hereby assumes full responsibility for any injuries, damages, losses
or liabilities released herein.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Consent as of
the day and year first above written in the Agreement.
"BORROWER"
XXXXXXX COMMUNICATIONS, INC., a California corporation
By:
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Name:
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Title:
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By:
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Name:
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Title:
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"GUARANTOR"
WESTAR CAPITAL II, LLC,
a Delaware limited liability company
By: Westar Capital Associates II, LLC,
its manager
By:
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Name:
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Title:
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