EXHIBIT 10.1
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "AGREEMENT") dated as of the
Effective Date between SILICON VALLEY BANK, a California corporation ("BANK"),
and COMMVAULT SYSTEMS, 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 TERM LOAN.
(a) Availability. Bank shall make one (1) term loan available on or
after the Effective Date but no later than the earlier of (i) five (5) Business
Days following Borrower closing on an initial public offering or (ii) July 31,
2006 to Borrower in an amount up to the Term Loan Amount, subject to the
satisfaction of the terms and conditions of this Agreement.
(b) Repayment. Commencing on June 1, 2006 and on the first (1st) day
of each quarter thereafter, Borrower shall repay the Term Loan in (i) equal
installments of principal, which would fully amortize the Term Loan over a
twenty-four (24) month period, plus (ii) accrued interest ((i) and (ii)
collectively, the "TERM LOAN PAYMENT"). Borrower's final Term Loan Payment, due
on the Term Loan Maturity Date, shall include all outstanding principal and
accrued and unpaid interest under the Term Loan.
2.2 GENERAL PROVISIONS RELATING TO THE CREDIT EXTENSION. Borrower shall pay
interest accrued on the Credit Extension at the rates and in the manner set
forth in Section 2.3(b).
2.3 PAYMENT OF INTEREST ON THE CREDIT EXTENSION.
(a) Computation of Interest. Interest on the Credit Extension and all
fees payable hereunder shall be computed on the basis of a 360-day year and the
actual number of days elapsed in the period during which such interest accrues.
In computing interest on any Credit Extension, the date of the making of such
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.
(b) The Term Loan. The Term Loan shall bear interest on the
outstanding principal amount thereof from the date when made, continued or
converted until paid in full at a rate per annum equal to the LIBOR Rate plus
the LIBOR Rate Margin.
(c) Default Interest. Except as otherwise provided in Section 2.3(b),
after an Event of Default or after acceleration of the Obligations, Obligations
shall bear interest at a rate per annum which is five percent (5.00%) above the
rate effective immediately before the Event of Default (the "DEFAULT RATE").
Payment or acceptance of the increased interest 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.
(d) Debit of Accounts. Bank may debit any of Borrower's deposit
accounts, including the Designated Deposit Account, for principal and interest
payments when due, or any other amounts Borrower owes Bank, when due. Bank shall
promptly notify Borrower after it debits Borrower's accounts. These debits shall
not constitute a set-off.
2.4 FEES. Borrower shall pay to Bank all Bank Expenses (including
reasonable attorneys' fees and expenses, plus expenses for documentation and
negotiation of this Agreement) incurred through and after the Effective Date,
immediately upon receipt of an invoice therefore.
3. CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO CREDIT EXTENSION. Bank's obligation to make the
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) Borrower shall have delivered duly executed original signatures to
the Loan Documents to which it is a party;
(b) Borrower shall have delivered duly executed original signatures to
the Control Agreement;
(c) Borrower shall have delivered its Operating Documents and a good
standing certificate of Borrower certified by the Secretary of State of the
State of Delaware and the Secretary of State of the State of New Jersey as of a
date no earlier than thirty (30) days prior to the Effective Date;
(d) Borrower shall have delivered duly executed original signatures to
the completed Borrowing Resolutions for Borrower;
(e) Bank shall have received certified copies, dated as of a recent
date, of financing statement searches, as Bank shall request, accompanied by
written evidence (including
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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 Credit Extension, will be terminated or released;
(f) Borrower shall have delivered the Perfection Certificate executed
by Borrower;
(g) Borrower shall have delivered the insurance policies and/or
endorsements required pursuant to Section 6.4 hereof evidence satisfactory to
Bank that the insurance policies required by Section 6.4 hereof are in full
force and effect, together with appropriate evidence showing loss payable and/or
additional insured clauses or endorsements in favor of Bank; and
(h) Borrower shall have paid the fees and Bank Expenses specified in
Section 2.4 hereof.
3.2 PROCEDURE FOR THE BORROWING OF CREDIT EXTENSIONS.
Subject to the prior satisfaction of all other applicable conditions to the
making of the Term Loan set forth in this Agreement, the Term Loan shall be made
upon Borrower's irrevocable written notice delivered to Bank in the form of a
Notice of Borrowing, executed by a Responsible Officer of Borrower 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. Borrower will indemnify Bank for
any loss Bank suffers due to such reliance. Such Notice of Borrowing must be
received by Bank prior to 11:00 a.m. Pacific time, at least three (3) Business
Days prior to the Funding Date specifying the requested Funding Date.
The proceeds of the Term Loan will then be made available to Borrower on
the Funding Date by Bank by transfer to the Designated Deposit Account and,
subsequently, by wire transfer to such other account as Borrower may instruct in
the Notice of Borrowing. No Credit Extensions shall be deemed made to Borrower,
and no interest shall accrue on the Term Loan, until the related funds have been
deposited in the Designated Deposit Account.
3.3 SPECIAL PROVISIONS GOVERNING THE TERM LOAN.
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to the Term Loan as to the
matters covered:
(a) Determination of Applicable Interest Rate. As soon as practicable
on each Interest Rate Determination Date, Bank shall determine (which
determination shall, absent manifest error in calculation, be final, conclusive
and binding upon all parties) the interest rate that shall apply to the Term
Loan and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to Borrower.
(b) Inability to Determine Applicable Interest Rate. In the event that
Bank shall have determined (which determination shall be final and conclusive
and binding upon all parties hereto) on any Interest Rate Determination Date
with respect to the Term Loan, that by reason of circumstances affecting the
London interbank market adequate and fair means do not
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exist for ascertaining the interest rate applicable to the Term Loan on the
basis provided for in the definition of LIBOR, Bank shall on such date give
notice (by facsimile or by telephone confirmed in writing) to Borrower of such
determination, whereupon the Term Loan shall bear interest on the outstanding
principal amount thereof at the Alternate Rate until such time as Bank
determines that such circumstances cease to exist.
(c) Compensation for Breakage or Non-Commencement of Interest Periods.
Borrower shall compensate Bank, upon written request by Bank (which request
shall set forth the manner and method of computing such compensation), for all
reasonable losses, expenses and liabilities, if any (including any interest paid
by Bank to lenders of funds borrowed by it to make or carry its Term Loan and
any loss, expense or liability incurred by Bank in connection with the
liquidation or re-employment of such funds), that Bank may incur: (i) if for any
reason (other than a default by Bank or due to any failure of Bank to fund a
Term Loan due to impracticability or illegality under Sections 3.4(d) and
3.4(e)) a borrowing does not occur on a date specified in a Notice of Borrowing,
or (ii) if any principal payment of any of its Term Loan occurs on a date prior
to the last day of an Interest Period.
(d) Assumptions Concerning Funding of the Term Loan. Calculation of
all amounts payable to Bank under this Section and under Section 3.4 shall be
made as though Bank had actually funded the Term Loan through the purchase of a
Eurodollar deposit bearing interest at LIBOR in an amount equal to the amount of
such Term Loan and having a maturity comparable to the relevant Interest Period;
provided, however, that Bank may fund the Term Loan in any manner it sees fit
and the foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this Section and under Section 3.4.
3.4 ADDITIONAL REQUIREMENTS/PROVISIONS REGARDING THE TERM LOAN.
(a) If for any reason (including voluntary or mandatory prepayment or
acceleration), Bank receives all or part of the principal amount of the Term
Loan prior to the last day of the Interest Period, Borrower shall immediately
notify Borrower's account officer at Bank and, on demand by Bank, pay Bank the
amount (if any) by which (i) the additional interest which would have been
payable on the amount so received had it not been received until the last day of
such Interest Period exceeds (ii) the interest which would have been recoverable
by Bank by placing the amount so received on deposit in the certificate of
deposit markets, the offshore currency markets, or United States Treasury
investment products, as the case may be, for a period starting on the date on
which it was so received and ending on the last day of such Interest Period at
the interest rate determined by Bank in its reasonable discretion. Bank's
determination as to such amount shall be conclusive absent manifest error.
(b) Borrower shall pay Bank, upon demand by Bank, from time to time
such amounts as Bank may determine to be necessary to compensate it for any
costs incurred by Bank that Bank determines are attributable to its making or
maintaining of any amount receivable by Bank hereunder in respect of any Credit
Extensions relating thereto (such increases in costs and reductions in amounts
receivable being herein called "ADDITIONAL COSTS"), in each case resulting from
any Regulatory Change which:
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(i) changes the basis of taxation of any amounts payable to Bank
under this Agreement in respect of any Credit Extensions (other than changes
which affect taxes measured by or imposed on the overall net income of Bank by
the jurisdiction in which Bank has its principal office);
(ii) imposes or modifies any reserve, special deposit or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with, or other liabilities of Bank (including any Credit Extensions or
any deposits referred to in the definition of LIBOR); or
(iii) imposes any other condition affecting this Agreement (or
any of such extensions of credit or liabilities).
Bank will notify Borrower of any event occurring after the Effective Date
which will entitle Bank to compensation pursuant to this Section 3.4 as promptly
as practicable after it obtains knowledge thereof and determines to request such
compensation. Bank will furnish Borrower with a statement setting forth the
basis and amount of each request by Bank for compensation under this Section
3.4. Determinations and allocations by Bank for purposes of this Section 3.4 of
the effect of any Regulatory Change on its costs of maintaining its obligations
to make Credit Extensions, of making or maintaining Credit Extensions, or on
amounts receivable by it in respect of Credit Extensions, and of the additional
amounts required to compensate Bank in respect of any Additional Costs, shall be
conclusive absent manifest error.
(c) If Bank shall determine that the adoption or implementation of any
applicable law, rule, regulation, or treaty regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank (or its
applicable lending office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank, or comparable agency, has or would have the effect of reducing the rate of
return on capital of Bank or any Person controlling Bank (a "PARENT") as a
consequence of its obligations hereunder to a level below that which Bank (or
its Parent) could have achieved but for such adoption, change, or compliance
(taking into consideration policies with respect to capital adequacy) by an
amount deemed by Bank to be material, then from time to time, within fifteen
(15) days after demand by Bank, Borrower shall pay to Bank such additional
amount or amounts as will compensate Bank for such reduction. A statement of
Bank claiming compensation under this Section 3.4(c) and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive
absent manifest error.
(d) If, at any time, Bank, in its sole and absolute discretion,
determines that (i) the amount of the Term Loan for periods equal to the
corresponding Interest Periods are not available to Bank in the offshore
currency interbank markets, or (ii) LIBOR does not accurately reflect the cost
to Bank of lending the Term Loan, then Bank shall promptly give notice thereof
to Borrower. Upon the giving of such notice, the Term Loan shall bear interest
at the Alternate Rate until Bank determines that such circumstances have ceased
to exist.
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(e) If it shall become unlawful for Bank to maintain the Term Loan, or
to perform its obligations hereunder, upon demand by Bank, Borrower shall prepay
the Credit Extensions in full with accrued interest thereon and all other
amounts payable by Borrower hereunder (including, without limitation, any amount
payable in connection with such prepayment pursuant to Section 3.4(a)).
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.
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 (other than inchoate indemnity obligations) are
repaid in full in cash. Upon payment in full in cash of the 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.
4.2 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, by either
Borrower or any other Person, shall be deemed to violate the rights of Bank
under the Code.
5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
5.1 DUE ORGANIZATION AND AUTHORIZATION. Borrower and each of its
Subsidiaries are duly existing and in good standing as Registered Organizations
only in the State of Delaware and are qualified and licensed to do business and
are in good standing in any jurisdiction in which the conduct of their business
or their ownership of property requires that they 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 substantially in the form attached
hereto as Exhibit E 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
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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
state of formation, organizational structure or type, or any organizational
number assigned by its jurisdiction; and (f) all other information set forth on
the Perfection Certificate pertaining to Borrower and each of its Subsidiaries
is accurate and complete. 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 of the Loan Documents have been
duly authorized, and do not conflict with Borrower's organizational 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 it is
a party or by which it is bound in which the default could 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 (a) deposit accounts with Bank, (b) deposit
accounts, if any, described in the Perfection Certificate delivered to Bank in
connection herewith, and (c) deposit accounts with respect to which Borrower has
given Bank notice and to the extent required under this Agreement, taken such
actions as are necessary to give Bank a perfected security interest therein.
The Collateral is not in the possession of any third party bailee (such as
a warehouse) except as otherwise provided in the Perfection Certificate. None of
the components of the Collateral shall be maintained at locations other than as
provided in the Perfection Certificate or as Borrower has given Bank notice
pursuant to Section 7.2. In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a bailee,
then Borrower will first receive the written consent of Bank and such bailee
must execute and deliver a bailee agreement in form and substance satisfactory
to Bank in its sole discretion.
Borrower is the sole owner of its intellectual property, except for
non-exclusive licenses granted to its customers in the ordinary course of
business. Each patent is valid and enforceable, and no part of the intellectual
property has been judged invalid or unenforceable, in whole or in part, and to
the best of Borrower's knowledge, no claim has been made that any part of the
intellectual property violates the rights of any third party except to the
extent such claim could not reasonably be expected to have a material adverse
effect on Borrower's business. Except as noted on the Perfection Certificate,
Borrower is not a party to, or bound by, any material license or other agreement
with respect to which Borrower is the licensee that prohibits or otherwise
restricts Borrower from granting a security interest in Borrower's interest in
such license or agreement or any other property. Borrower shall provide written
notice to Bank within ten (10) days of entering or becoming bound by any such
license or agreement which is reasonably likely to have a material impact on
Borrower's business or financial condition (other than over-the-counter software
that is commercially available to the public). Borrower shall take such steps as
Bank requests to obtain the consent of, or waiver by, any Person whose consent
or waiver is necessary for all such licenses or contract rights to be deemed
"Collateral" and for Bank to have
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a security interest in it that might otherwise be restricted or prohibited by
law or by the terms of any such license or agreement (such consent or
authorization may include a licensor's agreement to a contingent assignment of
the license to Bank if Bank determines that is necessary in its good faith
judgment), whether now existing or entered into in the future.
5.3 LITIGATION. 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 more than Two Hundred Fifty
Thousand Dollars ($250,000).
5.4 NO MATERIAL DEVIATION IN FINANCIAL STATEMENTS. 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 as of the dates
thereof. 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.
5.5 SOLVENCY. Borrower is not left with unreasonably small capital after
the transactions contemplated by this Agreement; and Borrower is able to pay its
debts (including trade debts) as they mature.
5.6 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 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 its business as
currently conducted.
5.7 SUBSIDIARIES; INVESTMENTS. Borrower does not own any stock, partnership
interest or other equity securities except for Permitted Investments.
5.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower 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. 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, and (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
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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
result in any liability of Borrower, including any liability to the Pension
Benefit Guaranty Corporation or its successors or any other governmental agency.
5.9 USE OF PROCEEDS. Borrower shall use the proceeds of the Credit
Extensions solely to finance a dividend to Borrower's preferred shareholders and
to fund its general business requirements and not for personal, family,
household or agricultural purposes.
5.10 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 representations, warranties, or other statements were 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).
6. AFFIRMATIVE COVENANTS
Borrower shall do all of the following:
6.1 GOVERNMENT COMPLIANCE. 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.
6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) DELIVER TO BANK: (i) so long as Borrower is not subject to the
reporting requirements under the Securities Exchange Act of 1934, as amended
(the "ACT"), as soon as available, but no later than thirty (30) days after the
last day of each month, a company prepared consolidated balance sheet and income
statement covering Borrower's and each of its Subsidiary's operations during the
period certified by a Responsible Officer and in a form acceptable to Bank; (ii)
so long as Borrower is not subject to the reporting requirements under the Act,
as soon as available, but no later than one hundred twenty (120) days after the
last day of Borrower's fiscal year, audited consolidated financial statements
prepared under GAAP, consistently applied, together with an unqualified opinion
on the financial statements from an independent certified public accounting firm
acceptable to Bank in its reasonable discretion; (iii) within five (5) days of
delivery, copies of all statements, reports and notices made available to
Borrower's security holders or to any holders of Subordinated Debt; (iv) in the
event that Borrower becomes subject to the reporting requirements under the Act,
within forty-five (45)
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days of filing, all reports on Form 10-Q and 8-K filed with the Securities and
Exchange Commission or a link thereto on Borrower's or another website on the
Internet; (v) in the event that Borrower becomes subject to the reporting
requirements under the Act, as amended, within one hundred twenty (120) days of
Borrower's fiscal year end, all reports on Form 10-K filed with the Securities
and Exchange Commission or a link thereto on Borrower's or another website on
the Internet; (vi) a prompt report of any legal actions pending or threatened
against Borrower or any of its Subsidiaries that could result in damages or
costs to Borrower or any of its Subsidiaries of Fifty Thousand Dollars ($50,000)
or more; (vii) prompt notice of an event that materially and adversely affects
the value of the intellectual property; (viii) as soon as available, but no
later than thirty (30) days after approval by Borrower's board of directors,
copies of all annual financial projections, commensurate in form, substance and
timing with those provided by Borrower to its venture capital and other
investors and (ix) budgets, sales projections, operating plans and other
financial information reasonably requested by Bank.
(b) Within (i) thirty (30) days after the last day of each month so
long as Borrower is not subject to the reporting requirements under the Act or
(ii) at all times that Borrower is subject to the reporting requirements of the
Act, Borrower shall deliver to Bank within forty-five (45) days after the last
day of each quarter, a duly completed Compliance Certificate signed by a
Responsible Officer setting forth calculations showing compliance with the
financial covenant set forth in this Agreement and as soon as available, but in
no event more than seven (7) days after each month end, a cash balance report in
form and detail satisfactory to Bank in all respects
(c) Allow Bank to audit Borrower's Collateral at Borrower's expense.
6.3 TAXES; PENSIONS. Make, and cause each of its Subsidiaries to make,
timely payment of all foreign, federal, state, and local taxes or assessments
(other than taxes and assessments which Borrower is contesting pursuant to the
terms of Section 5.8 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.
6.4 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 the sole 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 must 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 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 insurance policy up to Two Hundred
Fifty Thousand Dollars ($250,000), in the aggregate, toward the replacement or
repair of destroyed or damaged property; provided that any such replaced or
repaired property (i) shall be of equal or like value as the replaced or
repaired Collateral and (ii)
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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 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 6.4 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 6.4, and take any action under the policies Bank deems prudent.
6.5 OPERATING ACCOUNTS.
(a) Maintain its primary operating accounts with Bank.
(b) Provide Bank not less than five (5) days prior written notice
before establishing any Collateral Account at or with any bank or financial
institution other than Bank or its Affiliates. In addition, 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 hereof; provided,
however that no Control Agreement is required for any deposit account with an
amount on deposit the does not at any time exceed Two Hundred Fifty Thousand
Dollars ($250,000), so long as the aggregate amounts in such deposit accounts do
not exceed One Million Dollars ($1,000,000). The provisions of the previous
sentence which require a Control Agreement, shall not apply to 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.
6.6 FINANCIAL COVENANTS. Borrower shall maintain, at all times, to be
tested as of the last day of each month, unless otherwise noted, on a
consolidated basis with respect to Borrower and its Subsidiaries a ratio of
Quick Assets to Current Liabilities minus Deferred Revenue of at least 1.5 to
1.0 (the "ADJUSTED QUICK RATIO").
6.7 PROTECTION AND REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS. Borrower
shall:
(a) 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) not allow any intellectual property material to Borrower's
business to be abandoned, forfeited or dedicated to the public without Bank's
written consent. If Borrower decides to register any copyrights or mask works in
the United States Copyright Office, Borrower shall: (x) provide Bank with at
least fifteen (15) days prior written notice of its intent to register such
copyrights or mask works together with a copy of the application it intends to
file with the United States Copyright Office (excluding exhibits thereto); (y)
execute an intellectual property security agreement or such other documents as
Bank may reasonably request to maintain the perfection and priority of Bank's
security interest in the copyrights or mask works
11
intended to be registered with the United States Copyright Office; and (z)
record such intellectual property security agreement with the United States
Copyright Office contemporaneously with filing the copyright or mask work
application(s) with the United States Copyright Office. Borrower shall promptly
provide to Bank a copy of the application(s) filed with the United States
Copyright Office together with evidence of the recording of the intellectual
property security agreement necessary for Bank to maintain the perfection and
priority of its security interest in such copyrights or mask works. Borrower
shall provide written notice to Bank of any application filed by Borrower in the
United States Patent and Trademark Office for a patent or to register a
trademark or service xxxx within thirty (30) days after any such filing.
6.8 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.
6.9 FURTHER ASSURANCES. Borrower shall 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 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 Transfers (a) of Inventory
in the ordinary course of business; (b) of worn-out or obsolete Equipment; and
(c) in connection with Permitted Liens and Permitted Investments.
7.2 CHANGES IN BUSINESS OR BUSINESS LOCATIONS.
(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; or (b) liquidate or
dissolve. Borrower shall not, without at least thirty (30) days prior written
notice to Bank: (1) add any new offices or business locations, including
warehouses (unless such new offices or business locations contain less than One
Hundred Thousand Dollars ($100,000) in Borrower's assets or property), (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.
7.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person. A Subsidiary may merge or
consolidate with or into another Subsidiary or into Borrower.
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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, or allow 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 or any Subsidiary's
intellectual property, except as is otherwise permitted in Section 7.1 hereof
and the definition of "Permitted Lien" herein.
7.6 MAINTENANCE OF COLLATERAL ACCOUNTS. Maintain any Collateral Account
except pursuant to the terms of Section 6.5(b) hereof.
7.7 INVESTMENTS; DISTRIBUTIONS.
(a) Directly or indirectly make any Investment other than Permitted
Investments, or permit any of its Subsidiaries to do so; or (b) pay any
dividends or make any distribution or payment or redeem, retire or purchase any
capital stock provided that (i) Borrower may convert any of its convertible
securities into other securities pursuant to the terms of such convertible
securities or otherwise in exchange thereof, (ii) Borrower may pay dividends
solely in common stock, and (iii) Borrower may repurchase the stock of former
employees or consultants pursuant to stock repurchase agreements so long as an
Event of Default does not exist at the time of such repurchase and would not
exist after giving effect to such repurchase, provided such repurchase does not
exceed in the aggregate of Fifty Thousand Dollars ($50,000) per fiscal year.
7.8 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 non-affiliated Person.
7.9 SUBORDINATED DEBT.
(a) Make or permit any payment on any Subordinated Debt, except under
the terms of the subordination, intercreditor, or other similar agreement to
which such Subordinated Debt is subject, or
(b) Amend any provision in any document relating to the Subordinated
Debt which would increase the amount thereof or adversely affect the
subordination thereof to Obligations owed to Bank.
7.10 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 (as defined in Regulation
13
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 or permit any Subsidiary to 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; 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. During the cure period, the failure to cure the payment default 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, 6.5, 6.5, 6.6 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,
any Loan Document, and as to any default (other than those specified in Section
8.8 below) 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
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 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). Grace periods provided under this Section shall not
apply, among other things, to financial covenants or any other covenants set
forth in subsection (a) above;
8.3 MATERIAL ADVERSE CHANGE. A Material Adverse Change occurs;
14
8.4 ATTACHMENT. (a) 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 ten (10) days; (b) the service of
process upon Bank seeking to attach, by trustee or similar process, any funds of
Borrower, or of any entity under control of Borrower (including a Subsidiary) on
deposit with Bank; (c) Borrower is enjoined, restrained, or prevented by court
order from conducting a material part of its business; (d) a judgment or other
claim in excess of Fifty Thousand Dollars ($50,000) becomes a Lien on any of
Borrower's assets; or (e) a notice of lien, levy, or assessment is filed against
any of Borrower's assets by any government agency and not paid within ten (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
shall be made during the cure period);
8.5 INSOLVENCY. (a) Borrower is unable to pay its debts (including trade
debts) as they become due or otherwise becomes insolvent; (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);
8.6 OTHER AGREEMENTS. There is a default in any agreement to which Borrower
is a party with a third party or parties resulting in a right by such third
party or parties, whether or not exercised, to accelerate the maturity of any
Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars
($250,000) or that could have a material adverse effect on Borrower's business;
8.7 JUDGMENTS. A judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand
Dollars ($250,000) (not covered by independent third-party insurance) shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a period
of ten (10) days after the entry thereof (provided that no Credit Extensions
will be made prior to the satisfaction or stay of such judgment);
8.8 MISREPRESENTATIONS. Borrower or any Person acting for Borrower makes
any representation, warranty, or other statement now or later in this Agreement,
in any other 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; or
8.9 SUBORDINATED DEBT. A default or breach occurs under any agreement
between Borrower and any creditor of Borrower that signed a subordination,
intercreditor, or other similar agreement with Bank, or any creditor that has
signed such an agreement with Bank breaches any terms of such 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:
15
(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) 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;
(d) 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;
(e) 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;
(f) 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, service marks, 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;
(g) 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;
(h) demand and receive possession of Borrower's Books; and
(i) 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
16
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 any security
interest 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 have been fully repaid and performed and
Bank's obligation to provide Credit Extensions terminates.
9.3 ACCOUNTS VERIFICATION; COLLECTION. Whether or not an Event of Default
has occurred and is continuing, Bank may notify any Person owing Borrower money
of Bank's security interest in such funds and verify the amount of such account.
After the occurrence of an Event of Default, any amounts received by Borrower
shall be held in trust by Borrower for Bank, and, if requested by Bank, Borrower
shall immediately deliver such receipts to Bank in the form received from the
Account Debtor, with proper endorsements for deposit.
9.4 PROTECTIVE PAYMENTS. If Borrower fails to obtain the insurance called
for by Section 6.4 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 applicable rate, 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.
9.5 APPLICATION OF PAYMENTS AND PROCEEDS. Unless an Event of Default has
occurred and is continuing, Bank shall apply any funds in its possession,
whether from Borrower account balances, payments, or proceeds realized as the
result of any collection of Accounts or other disposition of the Collateral,
first, to Bank Expenses, including without limitation, the reasonable costs,
expenses, liabilities, obligations and attorneys' fees incurred by Bank in the
exercise of its rights under this Agreement; second, to the interest due upon
any of the Obligations; and third, to the principal of the Obligations and any
applicable fees and other charges, 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 an
Event of Default has occurred and is continuing, Bank may apply any funds in its
possession, whether from Borrower account balances, payments, 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
17
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.
9.6 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.
9.7 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 Bank 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 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.
9.8 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.
10. NOTICES
All notices, consents, requests, approvals, demands, or other communication
(collectively, "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 address or facsimile number by giving the other party written notice thereof
in accordance with the terms of this Section 10.
If to Borrower: Commvault Systems, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attn: Xxx Xxxxxx, Chief Financial Officer
Fax: (000) 000-0000
Email: xxxxxxx@xxxxxxxxx.xxx
18
If to Bank: Silicon Valley Bank
5 Radnor Corporate Center, Xxxxx 000
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Fax: (000) 000-0000
Email: xxxxxx@xxxxxx.xxx
11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER AND JUDICIAL REFERENCE
Pennsylvania 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 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.
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 Sections 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
19
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 Section 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,
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 harmless against: (a) all obligations,
demands, claims, and liabilities (collectively, "CLAIMS") 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 arising from transactions between Bank and Borrower (including reasonable
attorneys' fees and expenses), except for Claims and/or losses directly caused
by Bank's gross negligence or willful misconduct.
12.3 LIMITATION OF ACTIONS. Any claim or cause of action by Borrower
against Bank, its directors, officers, employees, agents, accountants,
attorneys, or any other Person affiliated with or representing Bank based upon,
arising from, or relating to this Loan Agreement or any other Loan Document, or
any other transaction contemplated hereby or thereby or relating hereto or
thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted
or suffered to be done by Bank, its directors, officers, employees, agents,
accountants or attorneys, shall be barred unless asserted by Borrower by the
commencement of an action or proceeding in a court of competent jurisdiction by
(a) the filing of a complaint within one year from the earlier of (i) the date
any of Borrower's officers or directors had knowledge of the first act, the
occurrence or omission upon which such claim or cause of action, or any part
thereof, is based, or (ii) the date this Agreement is terminated, and (b) the
service of a summons and complaint on an officer of Bank, or on any other Person
authorized to accept service on behalf of Bank, within thirty (30)
20
days thereafter. Borrower agrees that such one-year period is a reasonable and
sufficient time for Borrower to investigate and act upon any such claim or cause
of action. The one-year period provided herein shall not be waived, tolled, or
extended except by the written consent of Bank in its sole discretion. This
provision shall survive any termination of this Loan Agreement or any other Loan
Document.
12.4 TIME OF ESSENCE. Time is of the essence for the performance of all
Obligations in this Agreement.
12.5 SEVERABILITY OF PROVISIONS. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
12.6 AMENDMENTS IN WRITING; INTEGRATION. All amendments to this Agreement
must be in writing and signed by both Bank and Borrower. This Agreement and the
Loan Documents represent the entire agreement about this subject matter and
supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement and the Loan Documents merge
into this Agreement and the Loan Documents.
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, are an original, and all taken together, constitute
one Agreement.
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 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; (b) to prospective transferees or purchasers of any
interest in the Credit Extensions (provided, however, Bank shall use
commercially reasonable efforts to obtain such 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; and (e) as Bank
considers appropriate in exercising remedies under this Agreement. Confidential
information does not include information that either: (i) 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 (ii) is disclosed to Bank by a third
party, if Bank does not know that the third party is prohibited from disclosing
the information.
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.
21
12.11 RIGHT OF SETOFF. Borrower hereby grants to Bank a Lien and a right of
setoff as security for all Obligations to Bank, whether now existing or
hereafter arising upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
Bank or any entity under the control of Bank (including a subsidiary of Bank) or
in transit to any of them. At any time after the occurrence and during the
continuance of an Event of Default, without demand or notice, Bank may setoff
the same or any part thereof and apply the same to any liability or Obligation
of Borrower even though unmatured and regardless of the adequacy of any other
collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.
13. DEFINITIONS
13.1 DEFINITIONS. As used in this Agreement, the following 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.
"ACT" is defined in Section 6.2(a).
"AFFILIATE" of any Person is (a) a Person that owns or controls directly or
indirectly the Person, (b) any Person that controls or is controlled by or is
under common control with the Person, and (c) 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 (such officers, directors,
managers and members being called "Non Natural Affiliates").
"AGREEMENT" is defined in the preamble hereof.
"ALTERNATE RATE" is a floating rate equal to Prime Rate, minus one percent
(1.0%) per annum.
"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, 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.
"BORROWER" is defined in the preamble hereof.
22
"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 RESOLUTIONS" are, with respect to any Person, those resolutions
substantially in the form attached hereto as Exhibit D.
"BUSINESS DAY" is any day other than a Saturday, Sunday or other day on
which banking institutions in the State of California are authorized or required
by law or other governmental action to close, except that if any determination
of a "Business Day" shall relate to the Term Loan, the term "Business Day" shall
also mean a day on which dealings are carried on in the London interbank market.
"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 from either Standard & Poor's Ratings
Group or Xxxxx'x Investors Service, Inc.; and (c) Bank's certificates of deposit
issued maturing no more than one (1) year after issue.
"CODE" is the Uniform Commercial Code, as the same may, from time to time,
be enacted and in effect in the Commonwealth of Pennsylvania; 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 on 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.
"COMMUNICATION" is defined in Section 10.
"COMPLIANCE CERTIFICATE" is that certain certificate in the form attached
hereto as Exhibit C.
23
"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
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 a control agreement substantially in the form of
Exhibit F.
"CREDIT EXTENSION" is any Term Loan or any other extension of credit by
Bank for Borrower's benefit.
"CURRENT LIABILITIES" are all obligations and liabilities of Borrower to
Bank that mature within one (1) year.
"DEFAULT" means any event which with notice or passage of time or both,
would constitute an Event of Default.
"DEFAULT RATE" is defined in Section 2.3(c).
"DEFERRED REVENUE" is all amounts received or invoiced in advance of
performance under contracts and not yet recognized as revenue.
"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
_____________, maintained with Bank.
"DOLLARS," "DOLLARS" and "$" each mean lawful money of the United States.
"EFFECTIVE DATE" is the date Bank executes this Agreement and as indicated
on the signature page hereof.
"EQUIPMENT" is all "equipment" as defined in the Code with such additions
to such term as may hereafter be made, and includes without limitation all
machinery, fixtures, goods, vehicles (including motor vehicles and trailers),
and any interest in any of the foregoing.
"ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations.
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"EVENT OF DEFAULT" is defined in Section 8.
"FUNDING DATE" is the date on which the Term Loan is made to or on account
of Borrower which shall be a Business Day.
"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 copyright rights, copyright
applications, copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, any patents,
trademarks, service marks and, to the extent permitted under applicable law, any
applications therefor, whether registered or not, any trade secret rights,
including any rights to unpatented inventions, payment intangibles, royalties,
contract rights, goodwill, franchise agreements, purchase orders, customer
lists, route lists, telephone numbers, domain names, claims, income and other
tax refunds, security and other deposits, 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.
"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" 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.
"INTEREST PERIOD" means the period commencing on the Funding Date and
ending on the date that is one (1) month after the Funding Date, and each
successive one (1) month period until the Term Loan Maturity Date; provided,
however, that (a) no Interest Period shall end later than the Term Loan Maturity
Date, (b) the last day of an Interest Period shall be determined in accordance
with the practices of the LIBOR interbank market as from time to time in effect,
(c) if any Interest Period would otherwise end on a day that is not a Business
Day, that Interest Period shall be extended to the following Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day, (d) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period, and (e)
interest shall accrue from and include
25
the first Business Day of an Interest Period but exclude the last Business Day
of such Interest Period.
"INTEREST RATE DETERMINATION DATE" means each date for calculating the
LIBOR for purposes of determining the interest rate in respect of an Interest
Period. The Interest Rate Determination Date shall be the second Business Day
prior to the first day of the related Interest Period for the Term Loan.
"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.
"IP AGREEMENT" is that certain Intellectual Property Security Agreement
executed and delivered by Borrower to Bank dated as of the Effective Date.
"LIBOR" means, for any Interest Rate Determination Date, the rate of
interest per annum determined by Bank to be the per annum rate of interest at
which deposits in Dollars are offered to Bank in the London interbank market
(rounded upward, if necessary, to the nearest 1/1000th of one percent (0.001%))
in which Bank customarily participates at 11:00 a.m. (local time in such
interbank market) two (2) Business Days prior to the first day of such Interest
Period for a period approximately equal to such Interest Period and in an amount
approximately equal to the amount of the applicable Credit Extension.
"LIBOR RATE" means, for each Interest Period, an interest rate per annum
(rounded upward to the nearest 1/1000th of one percent (0.001%)) equal to LIBOR
for such Interest Period divided by one (1) minus the Reserve Requirement for
such Interest Period.
"LIBOR RATE MARGIN" is one and one half of one percent (1.50%).
"LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
"LOAN DOCUMENTS" are, collectively, this Agreement, the Perfection
Certificate, the IP Agreement, any note or guaranty, executed by Borrower or any
other Person and any other present or future agreement for the benefit of Bank
in connection with this Agreement, all as amended, restated, or otherwise
modified.
"MATERIAL ADVERSE CHANGE" is (a) a material impairment in the perfection or
priority of Bank's Lien in the Collateral or in the value of such Collateral;
(b) a material adverse change in
26
the business, operations, or condition (financial or otherwise) of Borrower; or
(c) a material impairment of the prospect of repayment of any portion of the
Obligations.
"NOTICE OF BORROWING" means a notice given by Borrower to Bank
substantially in the form of Exhibit B, with appropriate insertions.
"OBLIGATIONS" are Borrower's obligation 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,
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 the performance of 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.
"PERFECTION CERTIFICATE" is defined in Section 5.1.
"PERMITTED INDEBTEDNESS" is:
(a) Borrower's Indebtedness to Bank under this Agreement and the other Loan
Documents;
(b) Indebtedness existing on the Effective Date and shown on the Perfection
Certificate;
(c) Subordinated Debt;
(d) unsecured Indebtedness to trade creditors incurred in the ordinary
course of business;
(e) Indebtedness incurred as a result of endorsing negotiable instruments
received in the ordinary course of business;
(f) Indebtedness in an aggregate principal amount not to exceed One Million
Dollars ($1,000,000) secured by Permitted Liens; and
(g) extensions, refinancings, modifications, amendments and restatements of
any items of Permitted Indebtedness (a) through (f) above, provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose more burdensome terms upon Borrower or its Subsidiary, as the case may
be.
27
"PERMITTED INVESTMENTS" are:
(a) Investments shown on the Perfection Certificate and existing on the
Effective Date;
(b) Cash Equivalents;
(c) Investments consisting of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
Borrower;
(d) Investments consisting of deposit accounts in which Bank has a
perfected security interest;
(e) Investments accepted in connection with Transfers permitted by Section
7.1;
(f) Investments of Subsidiaries in or to other Subsidiaries or Borrower and
Investments by Borrower in Subsidiaries not to exceed One Million Dollars
($1,000,000);
(g) 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, officers or directors 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 Directors;
(h) 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; and
(i) Investments consisting of notes receivable of, or prepaid royalties and
other credit extensions, to customers and suppliers who are not Affiliates, in
the ordinary course of business; provided that this paragraph (i) shall not
apply to Investments of Borrower in any Subsidiary.
"PERMITTED LIENS" are:
(a) Liens existing on the Effective Date and shown on the Perfection
Certificate or arising under this Agreement and the 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 Borrower's Books, if they have no
priority over any of Bank's Liens;
(c) purchase money Liens (i) on Equipment acquired or held by Borrower
incurred for financing the acquisition of the Equipment securing no more than
Five Hundred Thousand Dollars ($500,000) in the aggregate amount outstanding, or
(ii) existing on Equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the Equipment;
28
(d) statutory Liens securing claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other Persons imposed without action of
such parties, provided the aggregate amount of such Liens does not at any time
exceed Fifty Thousand Dollars ($50,000);
(e) 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, provided, they have no priority over any of Bank's
Liens and the aggregate amount of the Indebtedness secured by such Liens does
not at any time exceed Fifty Thousand Dollars ($50,000);
(f) 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;
(g) leases or subleases of real property granted in the ordinary course of
business, and leases, subleases, non-exclusive licenses or sublicenses of
property (other than real property or intellectual property) granted in the
ordinary course of Borrower's business, if the leases, subleases, licenses and
sublicenses do not prohibit granting Bank a security interest;
(h) non-exclusive license of intellectual property granted to third parties
in the ordinary course of business;
(i) Liens arising from judgments, decrees or attachments in circumstances
not constituting an Event of Default under Section 8.4 or 8.7; and
(j) 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 a perfected security interest in the amounts held in such
securities accounts.
"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.
"PRIME RATE" is Bank's most recently announced "prime rate," even if it is
not Bank's lowest rate.
"QUICK ASSETS" is, on any date, Borrower's unrestricted cash, Cash
Equivalents, net billed accounts receivable and investments with maturities of
fewer than twelve (12) months determined according to GAAP.
"REGISTERED ORGANIZATION" is any "registered organization" as defined in
the Code with such additions to such term as may hereafter be made
"REGULATORY CHANGE" means, with respect to Bank, any change on or after the
date of this Agreement in United States federal, state, or foreign laws or
regulations, including Regulation D, or the adoption or making on or after such
date of any interpretations, directives, or requests applying to a class of
lenders including Bank, of or under any United States federal or
29
state, or any foreign, laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"RESPONSIBLE OFFICER" is any of the Chief Executive Officer, President,
Chief Financial Officer and Controller of Borrower.
"RESERVE REQUIREMENT" means, for any Interest Period, the average maximum
rate at which reserves (including any marginal, supplemental, or emergency
reserves) are required to be maintained during such Interest Period under
Regulation D against "Eurocurrency liabilities" (as such term is used in
Regulation D) by member banks of the Federal Reserve System. Without limiting
the effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by Bank by reason of any Regulatory Change
against (a) any category of liabilities which includes deposits by reference to
which the LIBOR Rate is to be determined as provided in the definition of LIBOR
or (b) any category of extensions of credit or other assets which include Credit
Extensions.
"SECURITIES ACCOUNT" is any "securities account" as defined in the Code
with such additions to such term as may hereafter be made.
"SUBORDINATED DEBT" is indebtedness incurred by Borrower subordinated to
all of Borrower's now or hereafter indebtedness to Bank (pursuant to a
subordination, intercreditor, or other similar agreement in form and substance
satisfactory to Bank entered into between Bank and the other creditor), on terms
acceptable to Bank.
"SUBSIDIARY" means, with respect to any Person, any Person of which more
than 50% of the voting stock or other equity interests is owned or controlled,
directly or indirectly, by such Person or one or more Affiliates of such Person
(other than Credit Suisse, or any Non-Natural Affiliates).
"TERM LOAN" is a loan made by Bank pursuant to the terms of Section 2.1.1
hereof.
"TERM LOAN AMOUNT" is an aggregate amount equal to Twenty Million Dollars
($20,000,000) outstanding at any time.
"TERM LOAN MATURITY DATE" is the day which is twenty-four (24) months after
the Funding Date, but in no event later than March 31, 2008.
"TERM LOAN PAYMENT" is defined in Section 2.1.1(b).
"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:
COMMVAULT SYSTEMS, INC.
By /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: CFO
BANK:
SILICON VALLEY BANK
By /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Relationship Manager
Effective Date: May 2, 2006
[Signature page to Loan and Security Agreement]
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EXHIBIT A
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, 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.
All other terms contained in this Exhibit, unless otherwise indicated,
shall have the meanings provided by the Code (as defined herein), to the extent
such terms are defined in the Code. For purposes hereof, the following terms
shall have the following meanings:
"ACCOUNTS" are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of
goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing, as such definition may be amended from time to time according to the
Code.
"BORROWER'S BOOKS" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or discs or any
equipment containing the information.
"CODE" is the Uniform Commercial Code as adopted in Pennsylvania as amended
and in effect from time to time.
"COPYRIGHTS" are all copyright rights, applications or registrations and
like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.
"EQUIPMENT" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.
Exhibit A Page 1
"INTELLECTUAL PROPERTY" is:
(a) Copyrights, Trademarks, Mask Works and Patents including
amendments, renewals, extensions, and all licenses or other rights to use and
all license fees and royalties from the use;
(b) Any trade secrets and any intellectual property rights in computer
software, chip design, chip mask works and computer software products now or
later existing, created, acquired or held;
(c) All design rights, including chips, masks and associated software
which may be available to Borrower now or later created, acquired or held;
(d) Any claims for damages (past, present or future) for infringement
of any of the rights above, with the right, but not the obligation, to xxx and
collect damages for use or infringement of the intellectual property rights
above;
(e) All Proceeds and products of the foregoing, including all
insurance, indemnity or warranty payments.
"INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.
"LETTER-OF-CREDIT RIGHT" means a right to payment or performance under a
letter of credit, whether or not the beneficiary has demanded or is at the time
entitled to demand payment or performance.
"MASK WORKS" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.
"PATENTS" are patents, patent applications and like protections, including
improvements, divisions, continuations, renewals, reissues, extensions and
continuations in part of the same.
"PROCEEDS" has the meaning described in the Code as in effect from time to
time.
"SUPPORTING OBLIGATION" means a letter-of-credit right, secondary
obligation or obligation of a secondary obligor or that supports the payment or
performance of an account, chattel paper, a document, a general intangible, an
instrument or investment property.
"TRADEMARKS" are trademark and service xxxx rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Borrower connected with the trademarks.
Exhibit A Page 2
EXHIBIT B
FORM OF NOTICE OF BORROWING
COMMVAULT SYSTEMS, INC.
Date: ______________
TO: SILICON VALLEY BANK
0000 Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: Corporate Services Department
RE: Loan and Security Agreement dated as of March __, 2006 (as amended,
modified, supplemented or restated from time to time, the "Loan
Agreement"), by and between Commvault Systems, Inc. ("Borrower"), and
Silicon Valley Bank ("Bank")
Ladies and Gentlemen:
The undersigned refers to the Loan Agreement, the terms defined therein and
used herein as so defined, and hereby gives you notice irrevocably, pursuant to
Section 3.2 of the Loan Agreement, of the borrowing of an Advance.
1. The Funding Date, which shall be a Business Day, of the requested
borrowing is _______________.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Advance before and
after giving effect thereto, and to the application of the proceeds therefrom,
as applicable:
(a) all representations and warranties of Borrower contained in the
Loan Agreement are true, accurate and complete in all material respects as
of the date hereof;
(b) no Default or Event of Default has occurred and is continuing, or
would result from such proposed Credit Extension; and
(c) the requested Credit Extension will not exceed the Term Loan
Amount.
BORROWER COMMVAULT SYSTEMS, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Exhibit B Page 1
For internal Bank use only
LIBOR Pricing Date LIBOR LIBOR Variance Maturity Date
------------------ ----- -------------- -------------
____%
Exhibit B Page 2
EXHIBIT C
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK Date: ______________
FROM: COMMVAULT SYSTEMS, INC.
The undersigned authorized officer of COMMVAULT SYSTEMS, 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 complete
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 5.8of the Agreement, and (5) no Liens
have been levied or claims made against Borrower or any of its Subsidiaries
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 as explained in an accompanying letter or footnotes. 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
------------------ -------- --------
PRE-IPO
Monthly financial statements with
Compliance Certificate Monthly within 30 days Yes No
Annual financial statement (CPA Audited) + XX XXX within 120 days Yes No
Annual Board Projections Board Approval plus 30 days Yes No
POST-IPO
Monthly Cash Balance Report Monthly within 7 days Yes No
Compliance Certificate Quarterly within 45 days Yes No
10-Q and 8-K Quarterly within 45 days Yes No
10-K FYE plus 120 days Yes No
Annual Board Projections Board Approval plus 30 days Yes No
Exhibit C Page 1
The following Intellectual Property was registered after the Effective Date (if
no registrations, state "None")
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ ---------- --------- --------
Maintain on a Monthly Basis:
Minimum Quick Ratio ___1.5:1.0 _____:1.0 Yes No
The financial covenant analysis and information set forth in Schedule 1
attached hereto is 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.")
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMVAULT SYSTEMS, INC. BANK USE ONLY
By: Received by:
--------------------------------- ---------------------------
Name: AUTHORIZED SIGNER
------------------------------- Date:
Title: ----------------------------------
------------------------------ Verified:
------------------------------
AUTHORIZED SIGNER
Date:
----------------------------------
Compliance Status: Yes No
Exhibit C Page 2
SCHEDULE 1 TO COMPLIANCE CERTIFICATE
FINANCIAL COVENANTS OF BORROWER
Dated: ____________________
I. ADJUSTED QUICK RATIO (Section 6.6)
Required: 1.5:1.0
Actual:
A. Value of Line I.D. (Quick Assets) $________
B. Value of Line I.G. (Current Liabilities) $________
C. Aggregate value of all amounts received or invoiced by
Borrower in advance of performance under contracts and
not yet recognized as revenue $________
D. Line B minus line C $________
E. Adjusted Quick Ratio (line A divided by line C) ________
Is line E equal to or greater than 1.5:1:0?
_____ No, not in compliance _____ Yes, in compliance
Schedule 1 to Compliance Certificate Page 1
EXHIBIT D
BORROWING RESOLUTIONS
Exhibit D Page 1
EXHIBIT E
PERFECTION CERTIFICATE
TO: SILICON VALLEY BANK
The undersigned, the of COMMVAULT SYSTEMS, INC. (the "Company"), hereby
represents and warrants to you on behalf of the Company as follows:
1. NAMES OF THE COMPANY
a. The name of the Company as it appears in its current Articles or
Certificate of Incorporation is:
b. The federal employer identification number of the Company is:
c. The Company is formed under the laws of the State Delaware.
d. The organizational identification number of the Company is:
e. The Company transacts business in the following jurisdictions (list
jurisdictions other than jurisdiction of formation):
f. The Company is duly qualified to transact business as a foreign entity
in the following jurisdictions (list jurisdictions other than jurisdiction of
formation):
g. The following is a list of all other names (including fictitious names,
d/b/a's, trade names or similar names) currently used by the Company or used
within the past five years:
Name Period of Use
---- -------------
Exhibit E Page 1
h. The following are the names of all entities which have been merged into
the Company during the past five years:
Name of Merged Entity Year of Merger
--------------------- --------------
i. The following are the names and addresses of all entities from whom the
Company has acquired any personal property in a transaction not in the ordinary
course of business during the past five years, together with the date of such
acquisition and the type of personal property acquired (e.g., equipment,
inventory, etc.):
Name Address Date of Acquisition Type of Property
---- ------- ------------------- ----------------
2. PARENT/SUBSIDIARIES OF THE COMPANY.
a. The legal name of each subsidiary and parent of the Company is as
follows. (A "parent" is an entity owning more than 50% of the outstanding
capital stock of the Company. A "subsidiary" is an entity, 50% or more of the
outstanding capital stock of which is owned by the Company.)
Name Subsidiary/Parent Fed. Employer ID No.
---- ----------------- --------------------
Sub [ ] Parent [ ]
Sub [ ] Parent [ ]
Sub [ ] Parent [ ]
b. The following is a list of the respective jurisdictions and dates of
formation of the parent and each subsidiary of the Company:
Name Jurisdiction Date of Formation
---- ------------ -----------------
c. The following is a list of all other names (including fictitious names,
d/b/a's, trade names or similar names) currently used by each subsidiary of the
Company or used during the past five years:
Name Subsidiary
---- ----------
Exhibit E Page 2
d. The following are the names of all corporations which have been merged
into a subsidiary of the Company during the five years:
Name Subsidiary
---- ----------
e. The following are the names and addresses of all entities from whom each
subsidiary of the Company has acquired any personal property in a transaction
not in the ordinary course of business during the past five years, together with
the date of such acquisition and the type of personal property acquired (e.g.,
equipment, inventory, etc.):
Date of Type of
Name Address Acquisition Property Subsidiary
---- ------- ----------- -------- ----------
LOCATIONS OF Company AND ITS SUBSIDIARIES
a. The chief executive offices of the Company and its subsidiaries are
presently located at the following addresses:
Complete Street and Mailing Address,
including County and Zip Code Company/Subsidiary
------------------------------------ ------------------
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
b. The Company's books and records and those of its subsidiaries are
located at the following additional addresses (if different from the above):
Exhibit E Page 0
Xxxxxxxx Xxxxxx and Mailing Address,
including County and Zip Code Company/Subsidiary
------------------------------------ ------------------
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
c. The following are all the locations where the Company and its
subsidiaries own, lease, or occupy any real property:
Complete Street and Mailing Address,
including County and Zip Code Company/Subsidiary
------------------------------------ ------------------
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
d. The following are all of the locations where the Company and its
subsidiaries maintain any inventory, equipment, or other property:
Complete Address Company/Subsidiary
---------------- ------------------
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Exhibit E Page 4
e. The following are the names and addresses of all warehousemen, bailees,
or other third parties who have possession of any of the Company's inventory or
equipment or any of the inventory or equipment of its subsidiaries:
Complete Street and Mailing Address,
Name including County and Zip Code Company/Subsidiary
---- ------------------------------------ ------------------
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
4. SPECIAL TYPES OF COLLATERAL
a. The Company and its subsidiaries own the following kinds of assets. (If
the answer is "Yes" to any of the following questions, please attach a schedule
describing each such asset owned by the Company or its subsidiaries and
identifying which party owns the asset.)
Copyrights or copyright applications registered with the U.S. Copyright Office Yes [ ] No [ ]
Software registered with the U.S. Copyright Office Yes [ ] No [ ]
Software not registered with the U.S. Copyright Office Yes [ ] No [ ]
Patents and patent applications Yes [ ] No [ ]
Trademarks or trademark applications (including any service marks,
collective marks and certification marks) Yes [ ] No [ ]
Licenses to use trademarks, patents and copyrights of others Yes [ ] No [ ]
Licenses, permits (including environmental), authorizations, or
certifications issued by federal, state, or local governments issued
to the Company and/or its subsidiaries or with respect to their assets,
properties, or businesses Yes [ ] No [ ]
Stocks, bonds or other securities Yes [ ] No [ ]
Promissory notes, or other instruments or evidence of indebtedness Yes [ ] No [ ]
Leases of equipment, security agreements naming such person as secured party
or other chattel paper Yes [ ] No [ ]
Aircraft Yes [ ] No [ ]
Vessels, Boats or Ships Yes [ ] No [ ]
Railroad Rolling Stock Yes [ ] No [ ]
Motor Vehicles Yes [ ] No [ ]
Exhibit E Page 5
b. The following is a list of material contracts to which the Company is a
party (include any equipment leases) or in which the Company has an interest
(including whether such contract has a nonassignability provision which would
require the other party's or another person's consent to the granting of a
security interest in such contract):
Nonassignability Clause
Consent
Other Party Title/Date Asset Sale Security Obtained
to Contract of Contract (Y/N) (Y/N) Interest (Y/N)
----------- ----------- ---------- -------- -------- --------
c. The following are all banks or savings institutions at which the Company
and its subsidiaries maintain deposit accounts:
Bank Name Account Number Branch Address Company/Subsidiary
--------- -------------- -------------- ------------------
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
d. Does or is it contemplated that the Company will regularly receive
letters of credit from customers or other third parties to secure payments of
sums owed to the Company? The following is a list of letters of credit naming
the Company as "beneficiary" thereunder:
LC Number Name of LC Issuer LC Applicant
--------- ----------------- ------------
Exhibit E Page 6
5. ENCUMBRANCES
The Company's and its subsidiaries' property are subject to the following
liens or encumbrances:
Name of Holder of
Lien/Encumbrance Description of Property Encumbered Company/Subsidiary
----------------- ---------------------------------- ------------------
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
6. LITIGATION
a. The following is a complete list of pending and threatened litigation or
claims involving amounts claimed against the Company in an indefinite amount or
in excess of $50,000 in each case:
b. The following are the only claims which the Company has against others
(other than claims on accounts receivable), which the Company is asserting or
intends to assert, and in which the potential recovery exceeds $50,000:
7. TAXES
The following tax assessments are currently outstanding and unpaid:
Assessing Authority Amount and Description
------------------- ----------------------
8. INSURANCE BROKER
The following broker handles the Company's property insurance:
BROKER CONTACT TELEPHONE FAX EMAIL
------ ------- --------- --- -----
9. OFFICERS OF THE COMPANY AND ITS SUBSIDIARIES
The following are the names and titles of the officers of the Company and
its subsidiaries.
Office/Title Name of Officer Company/Subsidiary
------------ --------------- ------------------
Company [ ] OR
Name of Sub
Exhibit E Page 7
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
Company [ ] OR
Name of Sub
10. IRS FORM W9
The Company's completed and executed IRS Form W9 is attached hereto as
Exhibit A.
11. LEGAL COUNSEL
The following attorney will represent the Company in connection with the
loan documents:
ATTORNEY LAW FIRM TELEPHONE FAX EMAIL
-------- -------- --------- --- -----
The Company agrees to advise you of any change or modification to any of
the foregoing information or any supplemental information provided on any
continuation pages attached hereto, and, until such notice is received by you,
you shall be entitled to rely upon such information and presume it is correct.
The Company acknowledges that your acceptance of this Perfection Certificate and
any continuation pages does not imply any commitment on your part to enter into
a loan transaction with the Company, and that any such commitment may only be
made by an express written loan commitment, signed by one of your authorized
officers.
Date:
-------------------------------
COMMVAULT SYSTEMS, INC.
By:
------------------------------------
Its:
-----------------------------------
Email:
---------------------------------
Phone:
---------------------------------
Fax:
-----------------------------------
Exhibit E Page 8
EXHIBIT F
ACCOUNT CONTROL AGREEMENT
Exhibit F Page 1
