UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16
OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of January, 2015
Commission File Number: 000-55232
Sphere 3D Corporation
(Translation of registrant's name into English)
240 Matheson Blvd. East
Mississauga, Ontario L4Z 1X1
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
[ ] Form 20-F [ x ] Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
SUBMITTED HEREWITH
Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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SPHERE 3D CORPORATION |
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(Registrant) |
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Date: January 21, 2015 |
By: |
/s/ Kurt Kalbfleisch |
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Kurt Kalbfleisch |
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Title: |
Senior Vice President and Chief Financial Officer |
REVOLVING CREDIT AGREEMENT
THIS
REVOLVING CREDIT AGREEMENT, dated as of December 30, 2014, between SPHERE 3D
CORPORATION, a corporation incorporated under the laws of the Province of
Ontario, Canada (the Borrower), Overland Storage, Inc., a California
corporation (Overland), and FBC HOLDINGS S.À R.L., a company
incorporated under the laws of Luxembourg (the Lender). The parties
hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
1.1
Defined Terms.
(a) Defined
Terms. In addition to terms defined elsewhere in this Agreement, as used in
this Agreement, the following terms have the following meanings:
Affiliate:
As applied to any Person (the Specified Person), any other Person
directly or indirectly controlling, controlled by, or under common control with,
the Specified Person. For the purposes of this definition, control (including,
with correlative meanings, the terms controlling, controlled by and under
common control with), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of the Specified Person, whether through the ownership of voting
securities or by contract or otherwise.
Agreement:
This Revolving Credit Agreement, as amended, supplemented or modified from time
to time.
Bankruptcy
Laws means (i) Title 11 of the United States Code entitled Bankruptcy, as
now and hereafter in effect, or any successor statute, or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect and
any equivalent legislation in any applicable jurisdiction, or (ii) the
Bankruptcy and Insolvency Act (Canada), the Winding-Up Act
(Canada) or the Companies' Creditors Arrangement Act (Canada)..
Borrowers
Knowledge means the actual knowledge of the executive officers (as defined
in Rule 405 under the Securities Act) of the Borrower, after due inquiry.
Borrowing:
Each borrowing of a Loan under Section 2.1.
Business
Day: A day other than a Saturday, Sunday or a day on which commercial banks
in Luxembourg and New York City are authorized or required by Law to close.
Capital
Lease: As applied to any Person, any lease of any property (whether real,
personal or mixed) by that Person as lessee that, in conformity with GAAP, is or
is required to be accounted for as a capital lease on the balance sheet of that
Person.
Change
in Control: means the occurrence of any of (i) an acquisition by an
individual, legal entity or group (as described in Rule 13d-5(b)(1)
promulgated under the Exchange Act) of effective control (whether through legal
or beneficial ownership of capital stock of the Borrower, by contract or
otherwise) of in excess of 50% of the voting securities of the Borrower, (ii)
the Borrower merges into or consolidates with or enters into any share exchange
or other business combination transaction with any other Person, or any Person
merges into or consolidates with or enters into any share exchange or other
business combination transaction with the Borrower and, after giving effect to
such transaction, the shareholders of the Borrower immediately prior to such
transaction own less than 50% of the aggregate voting power of the Borrower or
the successor entity of such transaction, (iii) the Borrower sells or transfers
all or any substantial portion of its assets to another Person (other than a
Subsidiary or other Person who assumes the Obligations), (iv) a replacement at
one time or within a one year period of more than one-half of the members of the
board which is not approved by a majority of those individuals who are members
of the board on the date hereof (or by those individuals who are serving as
members of the board on any date whose nomination to the board was approved by a
majority of the members of the board who are members on the date hereof), or (v)
the execution by the Borrower of an agreement to which the Borrower is a party
or by which it is bound, providing for any of the events set forth in clauses
(i) through (iv) herein.
Closing Date: The date the initial Loan is made under
this Agreement.
Code: The Internal
Revenue Code of 1986, as amended, and any successor statute or provision
thereof.
Collateral: Any and all
properties, rights and assets of Overland described on Exhibit A.
Commitment or
Commitments: The commitment of the Lender to make Loans to the Borrower
pursuant to Article II in the amount or amounts referred to therein.
Default Rate: 5% above
the highest rate which would otherwise be applicable to the Loans pursuant to
Section 2.3.
Disputed Intellectual
Property: Intellectual Property of Overland that is subject to any pending
litigation specifically relating to such Intellectual Property as of the date
hereof.
Dollars and $: The lawful currency of the United
States of America.
Domestic Subsidiary
means a Subsidiary of the Borrower organized under the laws of the United
States, any state or territory thereof or the District of Columbia or the
Province of Ontario; provided that no Person that is a direct or indirect
Subsidiary of a Foreign Subsidiary shall be a Domestic Subsidiary.
Environmental Laws: Any
and all current or future Laws, or any other requirements of Governmental
Authorities relating to (a) environmental matters, or (b) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to the Borrower or any of its
Subsidiaries or any facility owned, leased or operated by the Borrower or any of
its Subsidiaries.
Equity Interests: With
respect to any Person, (a) all of the shares of capital stock of, or other
ownership or profit interests in, such Person, whether voting or non-voting, and
including any partnership, membership or trust interests, (b) all securities or
Debt convertible into or exchangeable for any of the foregoing, whether directly
or indirectly, and (c) all warrants, options and other rights to purchase or
acquire any of the foregoing, whether directly or indirectly.
Excluded Taxes means any
of the following Taxes imposed on or with respect to the Lender or required to
be withheld or deducted from a payment to the Lender, (a) Taxes imposed on or
measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of the Lender being
organized under the laws of, or having its principal office or its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) Canadian
federal withholding Taxes imposed on amounts payable to or for the account of
the Lender with respect to an applicable interest on the Loan pursuant to a law
in effect on the date on which (i) the Lender acquires such interest in the Loan
or (ii) the Lender changes its lending office, except in each case to the extent
that, pursuant to Section 2.4, amounts with respect to such Taxes were payable
either to the Lenders assignor immediately before the Lender became a party
hereto or to Lender immediately before it changed its lending office and (c)
Taxes attributable to the Lenders failure to comply with Section 2.4(iv).
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Foreign Subsidiary means a Subsidiary that is not a
Domestic Subsidiary.
GAAP: United States
generally accepted accounting principles applied on a consistent basis.
Global Debenture the
debenture entered into or to be entered into between the Borrower and the
Lender.
Governmental Approval:
Any approval, order, consent, authorization, certificate, license, permit or
validation of, or exemption or other action by, or filing, recording or
registration with, or notice to, any Governmental Authority.
Governmental Authority:
Any government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
Hedging Contract: Any
rate or currency swap, cap or collar agreement or any other agreement designed
to hedge risk with respect to interest rate or currency fluctuations, whether or
not pursuant to a Master Agreement.
IFRS: International
Financial Reporting Standards issued by the International Accounting Standards
Board.
Indebtedness: As applied
to any Person, (a) all indebtedness for borrowed money, (b) that portion of
obligations with respect to Capital Leases which is properly classified as a
liability on a balance sheet in conformity with GAAP (or prior to December 1,
2014 IFRS), (c) notes payable and drafts accepted representing extensions of
credit whether or not representing obligations for borrowed money, (d) any
obligation owed for all or any part of the deferred purchase price of property
or services (other than trade accounts payable arising in the ordinary course of
business for which payment is due and is made within 120 days or less), (e) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured has been assumed by that
Person or is nonrecourse to the credit of that Person, (f) obligations in
respect of letters of credit, (g) obligations under Hedging Contracts (the
amount of which shall be determined by reference to the termination cost on the
date of determination), and (h) guarantees of, or similar obligations with
respect to, any of the foregoing of any other Person.
Indemnified Liabilities: As defined in Section 9.5.
Indemnified Taxes means
(a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment
made by or on account of any obligation of the Borrower under any Loan Document
and (b) to the extent not otherwise described in (a), Other Taxes.
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Intellectual Property:
Any patent, copyright, service mark, trademark, trade name or other intellectual
property or rights therein or licenses thereof.
Interest Rate: 8% per annum.
Law: Any law (including
common law), constitution, statute, treaty, convention, regulation, rule,
ordinance, order, injunction, writ, decree or award of any Governmental
Authority.
Lien: Any lien,
mortgage, deed of trust, pledge, security interest, charge or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security interest).
Loan Documents: This
Agreement, the Revolving Notes, any Security Agreement and each additional
document, notice or certificate delivered to the Lender by or on behalf of a
Loan Party in connection with this Agreement, the credit extended hereunder.
Loan Party: The Borrower
and any other Person from time to time executing a Loan Document (other than the
Lender), and Loan Parties means all such Persons, collectively.
Loans: The Revolving Loans as defined in Section
2.1(a).
Material Adverse Effect:
A material adverse effect on (i) the assets, liabilities, results of operations,
condition (financial or otherwise), or business of the Borrower and its
Subsidiaries taken as a whole, (ii) the legality, validity, enforceability or
binding effect of the Loan Documents, or (iii) the ability of the Borrower to
perform its obligations under the Loan Documents.
Maturity Date: January 31, 2016.
Obligations: All
obligations of every nature of the Loan Parties from time to time owed to the
Lender under the Loan Documents, whether for principal interest, fees, expenses,
indemnification or otherwise.
Officers Certificate: A
certificate signed by the Chief Financial Officer of the Borrower.
OSC: the Ontario Securities Commission.
Other Connection Taxes:
means, with respect to the Lender, Taxes imposed as a result of a present or
former connection between such Lender and the jurisdiction imposing such Tax
(other than connections arising from the Lender having executed, delivered,
become a party to, performed its obligations under, received payments under,
received or perfected a security interest under, engaged in any other
transaction pursuant to or enforced any Loan Document, or sold or assigned an
interest in any Loan Document or Revolving Note).
Other Taxes: means all
present or future stamp, court or documentary, intangible, recording, filing or
similar Taxes that arise from any payment made under, from the execution,
delivery, performance, enforcement or registration of, from the receipt or
perfection of a security interest under, or otherwise with respect to, any Loan
Document, except any such Taxes that are Other Connection Taxes imposed with
respect to an assignment (other than an assignment made pursuant to Section 2.6)
.
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Permitted Encumbrance: The following types of Liens:
(i) Liens granted to the Lender to secure the Obligations;
(ii) Liens granted to Silicon
Valley Bank to secure obligations of Borrower and its subsidiaries under the SVB
Credit Agreement and any extension, renewal or refinancing of such obligations;
(iii) Liens granted to a third party commercial lender in
connection with Sphere 3D entering into a credit facility with a third party
commercial lender;
(iv) Liens securing the Global Debenture and any extension,
renewal or refinancing of such obligations permitted hereunder;
(v) Liens existing on the Closing Date disclosed to the Lender;
(vi) Liens for taxes, fees, assessments or other government
charges or levies, either (a) not due and payable or (b) being contested in good
faith and for which the Borrower maintains adequate reserves on its books,
provided that no notice of any such Lien has been filed or recorded under the
Code;
(vii) purchase money Liens (a) on equipment acquired or held by
the Borrower or its Subsidiaries incurred for financing the acquisition of the
equipment securing no more than One Hundred Thousand ($100,000.00) in the
aggregate amount outstanding, or (b) existing on equipment when acquired, if the
Lien is confined to the property and improvements and the proceeds of the
equipment;
(viii) Liens of carriers, warehousemen, suppliers, or other
Persons that are possessory in nature arising in the ordinary course of business
so long as such Liens attach only to inventory, securing liabilities in the
aggregate amount not to exceed One Hundred Thousand Dollars ($100,000.00) and
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(ix) 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;
(x) Liens incurred in the extension, renewal or refinancing of
the indebtedness secured by Liens described in (i) through (viii), 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;
(xi) leases or subleases of real property granted in the
ordinary course of the Borrowers business (or, if referring to another Person,
in the ordinary course of such Persons business), and leases, subleases,
non-exclusive licenses or sublicenses of personal property (other than
intellectual property) granted in the ordinary course of the Borrowers business
(or, if referring to another Person, in the ordinary course of such Persons
business);
(xii) (a) non-exclusive licenses of intellectual property
granted to third parties in the ordinary course of business, and (b) exclusive
licenses of intellectual property in exchange for fair value as reasonably
determined by the Borrowers board of Directors;
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(xiii) Liens arising from
attachments or judgments, orders, or decrees in circumstances not constituting
an Event of Default under Section 8.1;
(xiv) Liens in favor of other financial institutions arising in
connection with the Borrowers deposit and/or securities accounts held at such
institutions;
(xv) deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases, government contracts,
statutory obligations, surety, stay, customs and appeal bonds, performance and
return of money bonds and other obligations of a like nature incurred in the
ordinary course of business;
(xvi) easements, rights-of-way, restrictions (including zoning
restrictions), covenants, licenses, encroachments, protrusions and other similar
charges or encumbrances or minor title deficiencies incurred in the ordinary
course of business that, in the aggregate, are not substantial in amount and
that do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary course of business;
(xvii) any interest or title of a lessor under any operating
lease entered into by the Borrower or any of its Subsidiaries in the ordinary
course of its business and covering only the assets so leased;
(xviii) deposits made in the ordinary course of business to
secure liability for premiums to insurance carriers;
(xix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of custom duties in connection with the
importation of goods;
(xx) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into in the
ordinary course of business;
(xxi) Liens on assets of foreign Subsidiaries securing
Indebtedness otherwise permitted under Section 7.1 pursuant to clause (x) of the
definition of Permitted Indebtedness;
(xxii) the filing of UCC financing statements solely as a
precautionary measure in connection with operating leases or consignment of
goods; and
(xxiii) Liens not otherwise permitted by Section 7.1 so long as
neither (a) the aggregate outstanding principal amount of the obligations
secured thereby nor (b) the aggregate fair market value (determined as of the
date such Lien is incurred) of the assets subject thereto exceeds Two Hundred
Thousand Dollars ($200,000) at any one time.
Permitted Indebtedness:
(i) the Obligations;
(ii) Indebtedness existing on the Closing Date disclosed to the
Lender in writing;
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(iii) the Senior Indebtedness
as such terms in defined in Section 2.4 of the Global Debenture, including,
without limitation, obligations of Overland under the SVB Credit Agreement and
any extension, renewal or refinancing of the obligations thereunder so long as
the aggregate principal amount under this clause (iii) is not increased to an
amount in excess of $8,000,000 (plus, for the avoidance of doubt, any amounts
incurred under clause (xv) below), the interest rate margin applicable thereto
is not increased by more than 200 basis points in excess of the maximum interest
rate margin permitted by the SVB Credit Agreement and the terms thereof are not
materially more burdensome to the Borrower or its Subsidiaries;
(iv) Indebtedness arising under the Global Debenture;
(v) subordinated Indebtedness to the extent consented to by the
Lender;
(vi) unsecured Indebtedness to trade creditors incurred in the
ordinary course of business;
(vii) Indebtedness incurred as a result of endorsing negotiable
instruments received in the ordinary course of business;
(viii) Indebtedness secured by Liens permitted under clauses
(iii) and (iv) of the definition of Permitted Encumbrance;
(ix) Indebtedness of the Borrower to any Subsidiary whose stock
is pledged to secure the Obligations;
(x) Indebtedness of any Person that is acquired or merged with
or into or consolidated with the Borrower or any of its Subsidiaries (and not
created in anticipation or contemplation thereof) and existing on the date of
such acquisition, merger or consolidation, provided that such Indebtedness shall
not exceed in the aggregate Two Hundred Thousand Dollars ($200,000.00) at any
time outstanding;
(xi) Indebtedness owing to sureties arising from bid,
performance or surety bonds or letters of credit supporting such bid,
performance or surety obligations issued on behalf of the Borrower as support
for, among other things, contracts with customers;
(xii) Indebtedness of Foreign Subsidiaries in an aggregate
principal amount not to exceed One Hundred Fifty Thousand Dollars ($150,000.00);
(xiii) Indebtedness of the Borrower and any of its Domestic
Subsidiaries in an aggregate principal amount not to exceed Two Hundred and
Fifty Thousand Dollars (US$250,000.00);
(xiv) extensions, refinancings, modifications, amendments and
restatements of any items of Permitted Indebtedness (i) through (xiii) above,
provided that the principal amount thereof is not increased or the terms thereof
are not modified to impose more burdensome terms upon the Borrower or its
Subsidiary, as the case may be; and
(xv) any future obligations of Sphere 3D in connection with the
issuance of a credit facility with a third party commercial lender on market
terms so long as the aggregate principal amount is not increased to an amount in
excess of $3,000,000.
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Person: An individual,
partnership, corporation, limited liability Borrower, business trust, joint
stock Borrower, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
Potential Event of
Default: A condition or event which, after the giving of notice or the
lapse of time or both, would constitute an Event of Default.
Revolving Commitment:
The commitment of the Lender to make Revolving Loans to the Borrower pursuant to
Section 2.
Revolving Note: As defined in 2.1(d).
SEC: The U.S. Securities and Exchange Commission.
Security Agreement any
document from time to time executed by any person by way of security for the
Obligations.
Sphere 3D Merger: The
merger between a wholly owned subsidiary of the Borrower and Overland, as more
particularly described in the Sphere 3D Merger Agreement.
Sphere 3D Merger
Agreement: That certain Agreement and Plan of Merger dated as of May 15,
2014, as amended on October 13, 2014, by and among Overland, the Borrower and
S3D Acquisition Company.
Sphere 3D Merger
Closing: The Closing, as defined in the Sphere 3D Merger Agreement.
Standard Notice: An
irrevocable written notice provided to the Lender not less than three Business
Days (or such shorted period as the Lender may allow) prior to the borrowing or
prepayment of a Loan. A Standard Notice must be provided no later than 12 noon,
New York time., on the last day permitted for such notice.
Subsidiary: A
corporation, partnership, trust, limited liability Borrower or other business
entity of which more than 50% of the shares of stock or other ownership
interests having ordinary voting power (without regard to the occurrence of any
contingency) to elect a majority of the board of directors or other managers of
such entity are at the time owned, directly, or indirectly through one or more
Subsidiaries, or both, by the Borrower.
SVB Credit Agreement:
means that certain Amended and Restated Loan and Security Agreement dated as of
March 19, 2014, between Silicon Valley Bank and Overland, as amended, restated,
modified or supplemented from time to time.
Taxes: means all present
or future taxes, levies, imposts, duties, deductions, withholdings (including
backup withholding), assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
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1.2 Other Definitional Provisions.
(a) Accounting Principles.
As used herein and in any certificate or other document made or delivered
pursuant hereto, accounting terms not defined in Section 1.1, and accounting
terms partly defined in Section 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP. If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in
any Loan Document, and the Borrower or Lender shall so request, the Lender and
the Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP;
provided that, until so amended, such ratio or requirement shall continue
to be computed in accordance with GAAP prior to such change therein.
(b) Subsidiaries. So long
as the Borrower does not have any Subsidiaries, references to a Subsidiary or
Subsidiaries in this Agreement shall be deemed to be deleted.
ARTICLE II
THE LOANS, INTERST AND TAX
2.1 The Revolving Loans.
(a) The Revolving
Commitment. The Lender agrees, on the terms and conditions hereinafter set
forth, to make loans (Revolving Loans) to the Borrower from time to
time during the period from the date hereof to but excluding the Maturity Date
in an aggregate amount not to exceed the amount set opposite the Lenders name
on the signature pages hereof, as such amount may be increased pursuant to
Section 2.1(c). Within the foregoing limits, the Borrower may borrow, repay,
and reborrow under this Section.
(b) Making the Revolving
Loans. The Borrower may borrow under the Revolving Commitment on any
Business Day, by providing Standard Notice to the Lender, specifying (A) the
amount of the proposed Borrowing and (B) the requested date of the Borrowing.
Upon satisfaction of the applicable conditions set forth in Article V, the
Lender will make available the proceeds of all such Loans to the Borrower by
crediting the account of the Borrower on the books of the Lender. The Lenders
failure to receive Standard Notice of a particular Borrowing shall not relieve
the Borrower of its obligations to repay the Borrowing and to pay interest
thereon.
(c) Increase of the Revolving
Commitment. The Borrower shall have the right at any time to request in
writing that the Revolving Commitment is increased by up to US$3,000,000 for a
total Revolving Commitment of US$5,000,000 in aggregate (a Revolving
Commitment Increase Request). The Lender may agree to a Revolving
Commitment Increase Request in its sole discretion. If the Lender does agree to
a Revolving Commitment Increase Request such increase shall be effective on the
date on which the Lender specifies to the Borrower in writing. The Borrower may
make multiple Revolving Commitment Increase Requests but may not receive more
than one Revolving Commitment increase in any three consecutive calendar month
period.
(d) Revolving Note. The
Revolving Loans made by the Lender pursuant hereto shall be evidenced by a
promissory note of the Borrower, in form and substance satisfactory to the
Lender (as amended, modified, refinanced or restated from time to time, the
Revolving Note), payable to the order of the Lender and representing
the obligation of the Borrower to pay the aggregate unpaid principal amount of
all Revolving Loans made by the Lender, with interest thereon as prescribed in
Section 2.3.
(e) Loan Fee. On the
Maturity Date, the Borrower shall pay to the Lender a non-refundable loan fee in
the amount of $100,000.
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(f) Commitment Fee. The
Borrower agrees to pay to the Lender a commitment fee on the monthly average
daily unused portion of the available Revolving Commitment (without, for the
avoidance of doubt, giving effect to any potential increase to the Revolving
Commitment unless and until any such increase has been requested by Borrower and
agreed to by the Lender pursuant to Section 2.1(c)) from the date hereof until
the Maturity Date at the rate of 2.5 percent (2.5%) per annum, to accrue and be
payable in full on the Maturity Date.
2.2 Repayment. The
aggregate principal amount of the Revolving Loans outstanding on the Maturity
Date, together with accrued interest thereon, shall be due and payable in full
on the Maturity Date.
2.3 Interest. The unpaid
principal amount of the Loans shall bear interest for each day until due at the
Interest Rate. Interest shall be payable in cash semiannually in arrears on the
last day of June and December of each year and on the Maturity Date.
2.4 Taxes.
(i) Payments Free of
Taxes. Any and all payments by or on account of any obligation of the
Borrower under any Loan Document shall be made without deduction or withholding
for any Taxes, except as required by applicable law. If any applicable law (as
determined in the good faith discretion of the Borrower) requires the deduction
or withholding of any Tax from any such payment by the Borrower, then the
Borrower shall be entitled to make such deduction or withholding and shall
timely pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with applicable law and, if such Tax is an Indemnified
Tax, then the sum payable by the Borrower shall be increased as necessary so
that after such deduction or withholding has been made (including such
deductions and withholdings applicable to additional sums payable under this
Section) the Lender receives an amount equal to the sum it would have received
had no such deduction or withholding been made.
(ii) Payment of Other Taxes by
the Borrower. The Borrower shall timely pay to the relevant Governmental
Authority in accordance with applicable law any Other Taxes.
(iii) Indemnification by the
Borrower. The Borrower shall indemnify the Lender, within ten (10) days
after demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section) payable or paid by the Lender or required to be withheld or
deducted from a payment to the Lender and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered by the
Borrower to the Lender shall be conclusive absent any manifest error.
(v) Evidence of Payments.
As soon as practicable after any payment of Taxes by the Borrower to a
Governmental Authority pursuant to this Section 2.4, the Borrower shall deliver
to the Lender the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Lender.
(iv) Status of Lender. If
the Lender is entitled to an exemption from or reduction of withholding Tax with
respect to payments made under any Loan Document, the Lender shall deliver to
the Borrower, at the time or times reasonably requested by the Borrower, such
properly completed and executed documentation reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, the Lender, if reasonably requested by
the Borrower, shall deliver such other documentation prescribed by applicable
law or reasonably requested by the Borrower as will enable the Borrower to
determine whether or not the Lender is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation shall not be required if in the Lenders reasonable judgment such
completion, execution or submission would subject the Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of the Lender.
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(v) Treatment of Certain
Refunds. If any party determines, in its sole discretion exercised in good
faith, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this Section 2.4 (including by the payment of additional
amounts pursuant to this Section 2.4), it shall pay to the indemnifying party an
amount equal to such refund (but only to the extent of indemnity payments made
under this Section with respect to the Taxes giving rise to such refund), net of
all out-of-pocket expenses (including Taxes) of such indemnified party and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund). Such indemnifying party, upon the
request of such indemnified party, shall repay to such indemnified party the
amount paid over pursuant to this paragraph (v) (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) in the event that
such indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this paragraph (vii), in
no event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (v) the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid. This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.
(vi) Survival. Each
partys obligations under this Section 2.4 shall survive the assignment of
rights by, or the replacement of, the Lender and the repayment, satisfaction or
discharge of all Obligations.
ARTICLE III
GENERAL PROVISIONS CONCERNING THE
LOANS
3.1 Use of Proceeds. The
proceeds of the Loans hereunder shall be used by the Borrower for working
capital and general corporate purposes.
3.2 Transactional Amounts.
Except as otherwise set forth in this Agreement, every payment or prepayment of
a Loan shall be in a principal amount of at least $100,000 or a higher integral
multiple of $100,000 or, if less, the remaining principal amount of the Loan
outstanding.
3.3 Default Interest.
Notwithstanding anything to the contrary contained in Section 2.3, if an Event
of Default has occurred and is continuing, the unpaid principal amount of the
Loans and, to the extent permitted by law, interest accrued thereon and any
fees, indemnity or other amounts due hereunder shall bear interest at the
Default Rate.
3.4 Computation of Interest and Fees; Determinations by
Lender.
(a) Calculations. Interest
and other fees shall be calculated on the basis of a 360 day year for the actual
days elapsed.
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(b) Determination by
Lender. Each determination of an interest rate, fee, cost, indemnification
or other amount by the Lender pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower in the absence of manifest error.
3.5 Payments. The Borrower
shall make each payment of principal, interest, fees, indemnity, expenses or
other amount hereunder or under any Loan Document, without setoff or
counterclaim, not later than 12:00 noon, New York time, on the day when due in
Dollars to the Lender at the office of the Lender designated from time to time,
in immediately available funds, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived, and an action therefor
shall immediately accrue, and without setoff, counterclaim, withholding or other
deduction of any kind. Any payment received by the Lender after 12:00 noon, New
York time, on any day shall be deemed to have been received on the next
succeeding Business Day.
3.6 Payment on Non-Business
Days. Whenever any payment to be made hereunder or under the Revolving Notes
shall be stated to be due on a day which is not a Business Day, such payment may
be made on the next succeeding Business Day, and such extension of time shall be
included in computing interest or fees, if any, in connection with such payment.
3.7 Increased Cost and Reduced Return; Capital
Adequacy.
(a) Costs and Returns. If
the Lender determines that as a result of the introduction of or any change in,
or in the interpretation of, any Law, or the Lenders compliance therewith,
there shall be any increase in the cost to the Lender of agreeing to make or
making, funding or maintaining a Loan or a reduction in the amount received or
receivable by the Lender in connection with any of the foregoing (excluding any
such increased costs or reduction in amount resulting from changes in the basis
of taxation of overall net income or overall gross income by the United States
or any foreign jurisdiction or any political subdivision of either thereof under
the Laws of which the Lender is organized or has its principal lending office)
then from time to time upon demand of the Lender, the Borrower shall pay to the
Lender such additional amounts as will compensate the Lender for such increased
cost or reduction.
(b) Capital Adequacy. If
the Lender determines that the introduction of any Law regarding capital
adequacy or any change therein or in the interpretation thereof, or compliance
by the Lender (or its principal lending office) therewith, has the effect of
reducing the rate of return on the capital of the Lender or any corporation
controlling the Lender as a consequence of the Lenders obligations hereunder
(taking into consideration its policies with respect to capital adequacy and the
Lenders desired return on capital), then from time to time upon demand of the
Lender, the Borrower shall pay to the Lender such additional amounts as will
compensate the Lender for such reduction.
3.8 Creation of Security Interest.
(a) To secure the prompt payment
and performance in full of all of the Obligations of the Borrower, each of the
Borrower and Overland grants the Lender a continuing security interest in, and
pledges to the Lender, the Collateral, wherever located, whether now owned or
hereafter acquired or arising, and all proceeds and products thereof. The
Collateral shall include all proceeds of all Intellectual Property of the
Borrower and Overland (whether acquired upon the sale, lease, license, exchange
or other disposition of such Intellectual Property) and all other rights arising
out of such Intellectual Property. The Lenders Lien in the Collateral shall
continue until the Obligations (other than inchoate indemnity obligations) are
satisfied in full, and at such time, the Lender shall, at the Borrower or
Overlands sole cost and expense, terminate its security interest in the
Collateral and all rights therein shall revert to the Borrower or Overland (as
applicable).
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(b) Each of the Borrower and
Overland represents, warrants, and covenants that the security interest granted
herein, or in any other Loan Document, is and shall at all times continue to be
a perfected security interest in the Collateral; provided that (i) unless
otherwise required by the Lender following the date hereof, each of the Borrower
and Overland shall not be required to establish the Lenders control over any
deposit accounts or securities accounts of the Borrower and Overland, (ii) so
long as any obligations are outstanding under the SVB Credit Agreement, neither
the Borrower or Overland shall not be required to deliver to the Lender any
Collateral in the possession of Silicon Valley Bank and (iii) subject to clause
(c) below, Overland shall not be required to execute or deliver any stock pledge
or security agreements governed by the local law of the jurisdiction of
formation of Overlands Foreign Subsidiaries. If the Borrower or Overland shall
acquire a commercial tort claim, Overland shall promptly notify the Lender in a
writing signed by the Borrower and Overland of the general details thereof and
grant to the Lender 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 the Lender. Upon the sale or
other disposition of any Collateral to any Person that is not prohibited by this
Agreement, for which the Borrower ot Overland desires to obtain a security
interest release, the Lender shall, at the Borrower or Overlands expense,
execute and deliver such releases of its security interest in such Collateral as
reasonably requested by the Borrower or Overland.
(c) Each of the Borrower and
Overland covenants that it will not grant any Liens on the equity interests of
its Foreign Subsidiaries without the prior written consent of the Lender, other
than any Liens on such equity interests which secure the obligations under the
Global Debenture.
(d) Each of the Borrower and
Overland hereby authorizes the Lender to file financing statements and register
the particulars of the security interest created in respect of the Collateral
with any regulatory authority, without notice to Overland, with all appropriate
jurisdictions to perfect or protect the Lenders interest or rights hereunder,
including a notice that any disposition of the Collateral, by the Borrower,
Overland or any other Person, shall be deemed to violate the rights of the
Lender under the Code. Such financing statements may indicate the Collateral
pledged by Overland as all assets of the Debtor or words of similar effect, or
as being of an equal or lesser scope, or with greater detail, all in the
Lenders discretion.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
4.1 Organization.
The Borrower is a corporation duly incorporated and validly existing under the
laws of the Province of Ontario. Overland is a corporation duly incorporated and
validly existing under the laws of the state of California. The Borrower is duly
qualified, registered or licensed in all jurisdictions where such qualification,
registration or licensing is required for the Borrower to carry on its business.
Each of the Borrower and Overland has all requisite capacity, power and
authority to own, hold under licence or lease its properties, to carry on its
business and to otherwise enter into, and carry out the transactions
contemplated hereby except to the extent the lack thereof would not reasonably
be expected to have a Material Adverse Effect.
4.2 Authorization. All
necessary action, corporate or otherwise, has been taken to authorize the
execution, delivery and performance by the Borrower and Overland of this
agreement. Each of the Borrower and Overland has duly executed and delivered
this agreement. This agreement constitutes legal, valid and binding obligations
of the Borrower and Overland enforceable against the Borrower and Overland by
the Lender in accordance with its terms, except to the extent that the
enforceability thereof may be limited by (i) applicable bankruptcy, insolvency,
moratorium, reorganization and other laws of general application limiting the
enforcement of creditors rights generally and (ii) the fact that the courts may
deny the granting or enforcement of equitable rights.
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4.3 No Conflict. The
execution, delivery and performance by each of the Borrower and Overland of this
Agreement, and the consummation of the transactions contemplated hereby, do not
and will not conflict with, result in any breach or violation of, or constitute
a default under the terms, conditions or provisions of the articles of
incorporation or by-laws of the Borrower or Overland (as applicable), any
applicable law or any material agreement, lease, licence, permit or other
instrument to which the Borrower or Overland is a party or is otherwise bound or
by which the Borrower or Overland benefits or to which its property is subject
and do not require the consent or approval of any stock exchange, securities
regulatory or any other person or governmental authority.
4.4 Material Adverse Change
(a) Since completion of the Sphere 3D Merger, there has not
been:
(i) any change in the
consolidated assets, liabilities, financial condition or operating results of
the Borrower from that reflected in the financial statements of the Borrower and
its Subsidiaries as at September 30, 2014 as furnished to the Lender, except for
changes in the ordinary course of business which have not had and could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate;
(ii) any material damage, destruction or loss, whether or not
covered by insurance to any assets or properties of the Borrower or its
Subsidiaries;
(iii) any waiver, not in the ordinary course of business, by
the Borrower or any Subsidiary of a material right or of a material debt owed to
it;
(iv) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Borrower or a Subsidiary, except
in the ordinary course of business and which is not material to the assets,
properties, financial condition, operating results or business of the Borrower
and its Subsidiaries taken as a whole (as such business is presently conducted
and as it is proposed to be conducted);
(v) any change or amendment to the Articles of Incorporation
(other than in connection with the transactions contemplated hereby) or Bylaws,
or material change to any material contract or arrangement by which the Borrower
or any Subsidiary is bound or to which any of their respective assets or
properties is subject; (vi) any material labor difficulties or labor union
organizing activities with respect to employees of the Borrower or any
Subsidiary;
(vii) other than the Sphere 3D Merger, any material transaction
entered into by the Borrower or a Subsidiary other than in the ordinary course
of business;
(viii) the loss of the services of any key employee (other than
certain changes to directors and officers that were announced in connection with
the Sphere 3D Merger Closing), or material change in the composition or duties
of the senior management of the Borrower or any Subsidiary;
(ix) the loss or, to the Borrowers Knowledge, threatened loss
of any customer which has had or could reasonably be expected to have a Material
Adverse Effect; or
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(x) any other event or condition
of any character that has had or could reasonably be expected to have a Material
Adverse Effect.
4.5 Insurance. The
Borrower and each Subsidiary maintains in full force and effect insurance
coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Borrower and each
Subsidiary.
4.6 Litigation. There are
no pending actions, suits or proceedings against or affecting the Borrower, its
Subsidiaries or any of its or their properties; and to the Borrowers Knowledge,
no such actions, suits or proceedings are threatened, except any such
proceeding, which if resolved adversely to the Borrower or any Subsidiary, could
not reasonably be expected to have a Material Adverse Effect, individually or in
the aggregate. Neither the Borrower nor any Subsidiary, nor any director or
officer thereof, is or since September 30, 2014 has been the subject of any
action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been, and
to the Borrowers Knowledge, there is not pending or contemplated, any
investigation by the OSC or SEC involving the Borrower or any current or former
director or officer of the Borrower. Neither the OSC or the SEC has issued any
stop order or other order suspending the effectiveness of any registration
statement filed by the Borrower or any Subsidiary under the Securities Act and
Exchange Act or the Securities Act (Ontario), as applicable.
4.7 Environmental Matters.
To the Borrowers Knowledge, neither the Borrower nor any Subsidiary is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, Environmental Laws), owns or operates any real
property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or is subject to any claim relating to any Environmental
Laws, which violation, contamination, liability or claim has had or could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate; and there is no pending or, to the Borrowers Knowledge, threatened
investigation that might lead to such a claim.
4.8 Title to Properties;
Liens. Except as disclosed in the public filings of the Borrower or its
Subsidiaries, the Borrower and its Subsidiaries have (a) good, sufficient and
legal title to (in the case of fee interests in real property), (b) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or (c) good title to (in the case of all other personal property),
all of their respective properties and assets reflected in the financial
statements referred to in Section 4.6 or in the most recent financial statements
delivered to the Lender, in each case except for assets disposed of since the
date of such financial statements in the ordinary course of business. All such
properties and assets are free and clear of Liens, other than Permitted
Encumbrances.
4.9 Payment of Taxes. The
Borrower and each Subsidiary has prepared and filed (or filed applicable
extensions therefore) all tax returns required to have been filed by the
Borrower or such Subsidiary with all appropriate governmental agencies and paid
all taxes shown thereon or otherwise owed by it, other than any such taxes which
the Borrower or any Subsidiary are contesting in good faith and for which
adequate reserves have been provided and reflected in the Borrowers financial
statements. The charges, accruals and reserves on the books of the Borrower in
respect of taxes for all fiscal periods are adequate in all material respects,
and there are no material unpaid assessments against the Borrower or any
Subsidiary nor, to the Borrowers Knowledge, any basis for the assessment of any
additional taxes, penalties or interest for any fiscal period or audits by any
federal, state or local taxing authority except for any assessment which is not
material to the Borrower and its Subsidiaries, taken as a whole. All taxes and
other assessments and levies that the Borrower or any Subsidiary is required to
withhold or to collect for payment have been duly withheld and collected and
paid to the proper governmental entity or third party when due, other than any
such taxes which the Borrower or any Subsidiary are contesting in good faith and
for which adequate reserves have been provided and reflected in the Borrowers
financial statements. There are no tax liens or claims pending or, to the
Borrowers Knowledge, threatened in writing against the Borrower or any
Subsidiary or any of their respective assets or property. There are no
outstanding tax sharing agreements or other such arrangements between the
Borrower and any Subsidiary or other corporation or entity.
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4.10 Intellectual Property
The Borrower and the Subsidiaries own, or have obtained valid and
enforceable licenses for, or other rights to use, the Intellectual Property
necessary for the conduct of the business of the Borrower and the Subsidiaries
as currently conducted, except where the failure to own, license or have such
rights could not reasonably be expected to result in a Material Adverse Effect,
individually or in the aggregate. Except as disclosed in the public filings of
the Borrower or its Subsidiaries, to the Borrowers Knowledge, there are no
third parties who have or will be able to establish rights to any Intellectual
Property, except for the ownership rights of the owners of the Intellectual
Property which is licensed to the Borrower as disclosed to the Lender prior to
the date of this Agreement or where such rights could not reasonably be expected
to result in a Material Adverse Effect, individually or in the aggregate; (ii)
there is no pending or, to the Borrowers Knowledge, threat of any, action,
suit, proceeding or claim by others challenging the Borrower or any Subsidiarys
rights in or to, or the validity, enforceability, or scope of, any Intellectual
Property owned by or licensed to the Borrower or any Subsidiary or claiming that
the use of any Intellectual Property by the Borrower or any Subsidiary in their
respective businesses as currently conducted infringes, violates or otherwise
conflicts with the intellectual property rights of any third party; and (iii) to
the Borrowers Knowledge, the use by the Borrower or any Subsidiary of any
Intellectual Property by the Borrower or any Subsidiary in their respective
businesses as currently conducted does not infringe, violate or otherwise
conflict with the intellectual property rights of any third party.
4.11 Labor Disputes and Casualties.
(a) The Borrower is not a party
to or bound by any collective bargaining agreements or other agreements with
labor organizations. The Borrower has not violated in any material respect any
laws, regulations, orders or contract terms, affecting the collective bargaining
rights of employees, labor organizations or any laws, regulations or orders
affecting employment discrimination, equal opportunity employment, or employees
health, safety, welfare, wages and hours.
(b) (i) There are no labor
disputes existing, or to the Borrowers Knowledge, threatened, involving
strikes, slow-downs, work stoppages, job actions, disputes, lockouts or any
other disruptions of or by the Borrowers employees, (ii) there are no unfair
labor practices or petitions for election pending or, to the Borrowers
Knowledge, threatened before the applicable national regulatory body or any
other federal, state or local labor commission relating to the Borrowers
employees, (iii) no demand for recognition or certification heretofore made by
any labor organization or group of employees is pending with respect to the
Borrower and (iv) to the Borrowers Knowledge, the Borrower enjoys good labor
and employee relations with its employees and labor organizations.
(c) The Borrower is, and at all
times has been, in compliance with all applicable laws respecting employment
(including laws relating to classification of employees and independent
contractors) and employment practices, terms and conditions of employment, wages
and hours, and immigration and naturalization, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate. There are no claims pending against the
Borrower before the Equal Employment Opportunity Commission or any other
administrative body or in any court asserting any violation of Title VII of the
Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981
or 1983 or any other federal, state or local law, statute or ordinance barring
discrimination in employment or under any equivalent law in any applicable
jurisdiction.
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(d) To the Borrowers Knowledge,
the Borrower has no liability for the improper classification by the Borrower of
its employees as independent contractors or leased employees prior to the
Closing Date.
4.12 Compliance. The
Borrower and each of its Subsidiaries is in compliance in all material respects
with all requirements imposed by law, regulation or rule, whether foreign,
federal, state or local, that are applicable to it, its operations, or its
properties and assets.
4.13 Solvency. Neither the Borrower nor Overland has:
(i) admitted its inability to pay
its debts generally as they become due or failed to pay its debts generally as
they become due;
(ii) in respect of itself, filed an assignment or petition in
bankruptcy or a petition to take advantage of any insolvency statute;
(iii) made an assignment for the benefit of its creditors;
(iv) consented to the appointment of a receiver, receiver and
manager, monitor, custodian or official with similar powers been appointed by
court order or privately of the whole or any substantial part of its assets;
(v) filed a petition or answer seeking a reorganization,
arrangement, adjustment or composition in respect of itself under applicable
bankruptcy laws or any other applicable law or statute of Canada or any
subdivision thereof; or
(vi) been adjudged by a court having jurisdiction a bankrupt or
insolvent, nor has a decree or order of a court having jurisdiction been entered
for the appointment of a receiver, liquidator, trustee or assignee in bankruptcy
of the Borrower with such decree or order having remained in force and
undischarged or unstayed for a period of thirty days.
4.14 Disclosure. No
representation or warranty of the Borrower or any of its Subsidiaries contained
in any Loan Document and none of the statements contained in any other document,
certificate, report, financial statement or written statement furnished to the
Lender by or on behalf of the Borrower or any of its Subsidiaries pursuant to
this Agreement contains any untrue statement of a material fact or omits to
state a material fact (known to Borrower, in the case of any document not
furnished by it) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by the
Borrower to be reasonable at the time made.
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ARTICLE V
CONDITIONS OF LENDING
5.1 Conditions Precedent to
Initial Loans. The obligation of the Lender to make the initial Loan is
subject to the following conditions precedent:
(a) Loan Documents. The Lender shall have received the
following, in form and substance satisfactory to the Lender:
(i) The Revolving Note executed by the Borrower; and
(ii) Copies of all Loan Documents (not otherwise specifically
identified in this Section 5.1) executed by the relevant Loan Party.
(b) Corporate Action. The
Lender shall have received the following, each dated the Closing Date:
(i) Copies of the Articles of Incorporation or other
organizational document of the Borrower and Overland, certified as of a recent
date by the Secretary of State of its state of organization and a good standing
certificate (or equivalent) from such state;
(ii) Copies of (A) the bylaws or similar governing documents,
if any, of the Borrower and Overland, and (B) resolutions of the board of
directors or other authorizing documents of the Borrower and Overland, in form
and substance satisfactory to the Lender, approving the Loan Documents and the
Borrowings hereunder, certified by the Secretary or an Assistant Secretary of
the Borrower and Overland (as applicable);
(iii) An incumbency certificate executed by the Secretary or an
Assistant Secretary of the Borrower and Overland, certifying the names and
signatures of the officers of the Borrower and Overland authorized to sign the
Loan Documents; and
(iv) An Officers Certificate certifying as to the matters set
forth in Section 5.1(a) and (b).
(d) Other. The Lender
shall have received a use of proceeds schedule which is satisfactory to the
Lender in form and substance.
(e) Fees, Expenses, etc.
All fees, expenses and other compensation required to be paid to the Lender
pursuant hereto or pursuant to any other written agreement on or prior to the
Closing Date shall have been paid or received.
(f) General. All corporate
and legal proceedings and all instruments and documents in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory in
content, form and substance to the Lender and its counsel, and the Lender and
the Lenders counsel shall have received any and all further information and
documents which the Lender or such counsel may reasonably have requested in
connection therewith.
(g) Representations. The
representations and warranties contained in Article IV or any other Loan
Document are correct in all respects when made and on and as of the date of such
Borrowing as though made on and as of such date.
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5.2 Conditions Precedent to
Each Borrowing. The obligation of the Lender to make any Loan (including the
initial Borrowing) shall be subject to the following additional conditions
precedent:
(a) Representations. The representations and warranties
contained in Article IV or any other Loan Document are correct in all material
respects when made and on and as of the date of such Borrowing as though made on
and as of such date except to the extent any such representation or warranty
expressly relates to an earlier date (in which case, such representation and
warranty was true and correct in all material respects as of such earlier date).
(b) No Default. No event
or condition has occurred and is continuing, or would result from such
Borrowing, which constitutes an Event of Default or Potential Event of
Default.
(c) Material Adverse
Effect. Since the date on which the most up to date audited financial
statements of the Borrower were furnished to the Lender, there shall not have
occurred, or been threatened, any Material Adverse Effect.
(d) Standard Notice.
Standard Notice of such Borrowing shall have been delivered to the Lender at
least 3 Business Days prior to the date of the proposed Loan (or such earlier
date as the Lender may agree).
Each request for a Loan submitted by the Borrower, under this
Agreement shall be deemed to be a representation and warranty that the foregoing
conditions have been satisfied on and as of the date of the Borrowing.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Obligation shall
remain unpaid or the Lender shall have any Commitment hereunder, the Borrower
will, unless the Lender shall otherwise consent in writing:
6.1 Reports. The Borrower will furnish to the Lender
and/or its assignees such information relating to the Borrower and its
Subsidiaries as from time to time may reasonably be requested by the Lender
and/or its assignees; provided, however, that the Borrower shall not disclose
material nonpublic information to the Lender, or to advisors to or
representatives of the Lender, unless prior to disclosure of such information
the Borrower identifies such information as being material nonpublic information
and provides the Lender, such advisors and representatives with the opportunity
to accept or refuse to accept such material nonpublic information for review and
if the Lender wishes to obtain such information, it enters into an appropriate
confidentiality agreement with the Borrower with respect thereto.
6.2 No Conflicting Agreements.
Neither the Borrower nor Overland will take any action, enter into
any agreement or make any commitment that would conflict or interfere in any
material respect with its obligations to the Lender under the Loan Documents.
6.3 Compliance with Laws.
The Borrower and Overland will comply in all material respects with all
applicable laws, rules, regulations, orders and decrees of all governmental
authorities.
6.4 Payment of
Obligations. Pay and discharge as the same shall become due and payable, all
its obligations and liabilities, including (a) all tax liabilities, assessments
and governmental charges or levies upon it or its properties or assets, unless
the same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP (or prior to December 1,
2014 IFRS) are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by Law become a Lien upon its property
other than Permitted Encumbrances; and (c) all Obligations, as and when due and
payable subject to any applicable grace or cure periods.
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6.5 Maintenance of
Properties. Maintain or cause to be maintained in good repair, working order
and condition (ordinary wear and tear excepted) all material properties used or
useful in the business of the Borrower and its Subsidiaries and from time to
time will make or cause to be made all appropriate repairs, renewals and
replacements thereof.
6.6 Insurance. The
Borrower shall keep its business for risks and in amounts standard for companies
in the Borrower s industry and location. Insurance policies shall be in a form,
with companies, and in amounts that are reasonably satisfactory to the Lender.
As of the date hereof, the Lender agrees that the insurance policies of the
Borrower are in forms, with companies, and in amounts that are reasonably
satisfactory to the Lender. No later than fifteen (15) days after the Funding
Date, (i) all property policies of the Borrower shall have a lenders loss
payable endorsement showing Lender as a lender loss payee and waive subrogation
against the Lender; (ii) all liability policies of the Borrower shall show, or
have endorsements showing, the Lender as an additional insured; and (iii) all
policies of the Borrower (or their respective endorsements) shall provide that
the insurer shall give the Lender at least thirty (30) days notice before
canceling, amending, or declining to renew its policy. At the Lenders request,
the Borrower shall deliver certified copies of policies and evidence of all
premium payments. Notwithstanding the foregoing, (a) so long as no Event of
Default, the Borrower shall have the right to retain the proceeds under all
policies, 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
the Lender, be payable to the Lender on account of the Obligations. If the
Borrower fails to obtain insurance as required under this Section 6.6 or to pay
any amount or furnish any required proof of payment to third persons and the
Lender, the Lender may upon concurrent notice to the Lender make all or part of
such payment or obtain such insurance policies required in this Section 6.6, and
take any action under the policies the Lender deems prudent.
6.7 Inspection. Permit any
authorized representatives designated by the Lender and at the expense of the
Lender to visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, including its and their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss its and their affairs,
finances and accounts with its and their officers, members, employees,
representatives and independent public accountants, all at such reasonable times
during normal business hours and as often as may be reasonably requested;
provided, that when an Event of Default exists, the foregoing shall be at
the expense of the Borrower.
6.8 Books and Records.
Maintain proper records and accounts in which full, true and correct entries in
conformity with GAAP (or prior to December 1, 2014, IFRS), consistently applied
shall be made of all financial transactions and matters involving the assets and
business of the Borrower and its Subsidiaries.
6.9 Formation or Acquisition of Subsidiaries.
(i) At the time that the Borrower
or any guarantor of the Obligations that is a Domestic Subsidiary forms any
direct or indirect Domestic Subsidiary or acquires any direct or indirect
domestic Subsidiary after the date hereof, the Borrower shall (a) cause such new
Domestic Subsidiary to become a guarantor of the Obligations hereunder, together
with such appropriate financing statements, in form and substance reasonably
satisfactory to the Lender, (b) pledge all of the direct or beneficial ownership
interest in such new Domestic Subsidiary, in form and substance satisfactory to
the Lender, (c) and (d) to the extent requested by the Lender, provide to the
Lender all other documentation in form and substance reasonably satisfactory to
the Lender, including one or more opinions of counsel reasonably satisfactory to
the Lender, which in its opinion is customary with respect to the execution and
delivery of the applicable documentation referred to above. Any document,
agreement, or instrument executed or issued pursuant to this Section 6.9 shall
be a Loan Document.
20
(ii) At the time that the
Borrower forms any direct Foreign Subsidiary or acquires any direct Foreign
Subsidiary after the date hereof, the Borrower shall provide to the Lender
certificates and powers and financing statements, pledging 65% of the direct or
beneficial ownership interest in such new direct Foreign Subsidiary, in form and
substance reasonably satisfactory to the Lender, and if requested by the Lender,
a stock pledge agreement governed by the local law of the jurisdiction of
formation of such Foreign Subsidiary in a form reasonably satisfactory to the
Lender.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Obligation shall
remain unpaid or the Lender shall have any Commitment hereunder, the Borrower
will not, without the written consent of the Lender:
7.1 Liens, Etc. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, except
Permitted Encumbrances.
7.2 Indebtedness. Create
or suffer to exist, or permit any of its Subsidiaries to create or suffer to
exist, any Indebtedness, other than Permitted Indebtedness.
7.3 Fundamental Changes.
(a) Change its corporate structure; (b) consolidate with or merge into any other
corporation or entity, except that a Subsidiary may merge with and into any
other Subsidiary or the Borrower; (c) acquire a substantial portion of the
assets, business or Equity Interests of another Person except (i) where (x)
total consideration including cash and the value of any non-cash consideration
for such transaction does not exceed Two Million Dollars ($2,000,000.00) in the
aggregate in any fiscal year of Borrower, (y) no Event of Default has occurred
and is continuing or would exist immediately after giving effect to any such
transaction, and (z) in the case of a merger, Borrower or such Subsidiary, as
the case may be, is the surviving legal entity; and (ii) as permitted under
clause (b); (d) liquidate, windup or dissolve; or (d) create any Subsidiary
except to the extent Section 6.9 is satisfied.
7.4 Asset Sales. Convey,
sell, lease, transfer or otherwise dispose of, or permit any Subsidiary to
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its or its Subsidiarys business,
properties or assets outside the ordinary course of business (including
Equity Interests of a Subsidiary), whether now owned or hereafter acquired
except for transfers (a) of worn-out or obsolete equipment; (b) in connection
with Permitted Encumbrances, investments, and any dividends or distributions not
prohibited by this Agreement; (c) of non-exclusive licenses for the use of the
property of Borrower or its Subsidiaries in the ordinary course of business; (d)
involving exclusive licenses of intellectual property in exchange for fair value
as reasonably determined by Borrowers board of directors or other managers; (e)
of intellectual property not material to the business of Borrower either alone
or in the aggregate in exchange for fair value as reasonably determined by
Borrowers board of directors or other managers; (f) of cash or cash equivalents
in a manner that is not prohibited by the terms of this Agreement; (g) permitted
in accordance with Section 7.3 (h) involving leases of real or personal property
in the ordinary course of business; and (i) of other property sold at fair
market value not to exceed Five Hundred Thousand Dollars ($500,000.00) in the
aggregate in any fiscal year of Borrower.
21
7.5 Transactions with
Affiliates. Enter into or permit to exist, or permit any of its Subsidiaries
to enter into or permit to exist, any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Borrower on terms that are less favorable to Borrower or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such an Affiliate.
7.6 Conduct of Business.
Engage in any business, or permit any of its Subsidiaries to engage in any
business, other than the businesses engaged in by the Borrower and its
Subsidiaries on the date hereof and similar or directly related businesses.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Events of Default. If
any of the following events (Events of Default) shall occur and be
continuing:
(a) Failure to Pay. Failure by the Borrower to pay: (i) any
portion of the principal of the Loan when due and payable or when declared due
and payable in accordance with this Agreement, or (ii) any accrued interest or
other amount payable by the Borrower under this Agreement within five (5) days
after the date when due and payable or when declared due and payable in
accordance with this Agreement; or
(b) Certain Covenant Defaults. Default
by any Loan Party in the performance of or compliance with any term contained in
any Loan Document, other than any such term referred to in any other subsection
of this Section 8, and such default shall not have been remedied or waived
within thirty (30) days after the receipt by the Borrower of notice from the
Lender of such default.
(c) Involuntary Bankruptcy; Appointment of Receiver,
etc.
(i) A court having jurisdiction
shall enter a decree or order for relief in respect of the Borrower or any of
its Subsidiaries in an involuntary case under Bankruptcy Laws, which decree or
order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or
(ii) An involuntary case shall be commenced against the
Borrower or any of its Subsidiaries under the Bankruptcy Laws; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the Borrower or any of its Subsidiaries, or over all or a
substantial part of their property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of the Borrower or any of its Subsidiaries for all or a substantial
part of its property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of the
Borrower, and any such event described in this clause (ii) shall continue for 60
days unless dismissed, bonded or discharged; or
(d) Voluntary Bankruptcy; Appointment of Receiver, etc.
22
(i) The Borrower or any of its
Subsidiaries shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Laws, or shall consent to the
entry of an order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, or shall consent to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; or the Borrower or any
of its Subsidiaries shall make any assignment for the benefit of creditors; or
(ii) The Borrower or Overland shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the board (or any committee thereof or similar governing
body of any Subsidiary) shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to in clause (i) above or this
clause (ii); or
(e) Dissolution. Any order, judgment or decree shall be
entered against the Borrower or any of its Subsidiaries decreeing the
dissolution or split up of the Borrower or any of its Subsidiaries and such
order shall remain undischarged or unstayed for a period in excess of 30 days;
or
(f) Representations and Warranties. Any representation,
warranty, certification or other statement made by the Borrower or any of its
Subsidiaries in any Loan Document or in any statement or certificate at any time
given by the Borrower or any of its Subsidiaries in pursuant hereto or thereto
or in connection herewith or therewith shall have been false in any material
respect on the date as of which made; or
(g) Judgments. Any money judgment, writ or warrant of
attachment or similar process involving (i) in any individual case an amount in
excess of $1,000,000 over the amount covered by independent third-party
insurance as to which liability has been accepted by the applicable insurance
carrier or (ii) in the aggregate at any time an amount in excess of $1,000,000
over the amount covered by independent third-party insurance as to which
liability has been accepted by the applicable insurance carrier, shall be
entered or filed against the Borrower or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
(h) Cross-Default.
(i) The Borrower or any of its
Subsidiaries shall fail to pay when due any principal of or interest on or any
other amount payable in respect of (a) the SVB Credit Agreement, (b) the Global
Debenture or (c) one or more items of Indebtedness in an individual principal
amount of $500,000 or more or with an aggregate principal amount of $500,000 or
more; or
(ii) The breach or default by the Borrower or any of its
Subsidiaries with respect to any other term of (a) one or more items of
Indebtedness in the individual or aggregate principal amounts referred to in
clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness, if the effect of such breach
or default is to cause, or to permit the holder or holders of that Indebtedness
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
to become or be declared due and payable prior to its stated maturity or the
stated maturity of any underlying obligation, as the case may be (upon the
giving or receiving of notice, lapse of time, both, or otherwise);
THEN, (i) upon the occurrence of any Event of Default described
in clause (c), (d) or (e) above, the Commitments shall immediately terminate and
all Loans hereunder with accrued interest thereon, and all other Obligations
under this Agreement, the Revolving Notes and the other Loan Documents shall
automatically become due and payable; (ii) upon the occurrence of any other
Event of Default, the Lender may, by notice to the Borrower, declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate, and/or, by notice to the Borrower, declare the Loans
hereunder, together with accrued interest thereon, and all other Obligations
under this Agreement, the Revolving Notes and the other Loan Documents to be due
and payable forthwith, whereupon the same shall immediately become due and
payable and (iii) upon the occurrence of any Event of Default, exercise the
remedies available to it under the other Loan Documents, and at law or in
equity.
23
8.2 Application of Funds.
After exercise of remedies under Section 8.1, any amounts received on account of
Obligations shall be applied by the Lender in such order as it elects in its
sole discretion.
ARTICLE IX
MISCELLANEOUS
9.1 Amendments, Etc. No
amendment to or waiver of any provision of this Agreement, and no consent to any
departure by the Borrower herefrom, shall in any event be effective unless in a
writing manually signed by or on behalf of the Lender. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
9.2 No Implied Waiver;
Remedies Cumulative. No delay or failure of the Lender in exercising any
right or remedy under this Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right or remedy preclude any
other or further exercise thereof or the exercise of any other right or remedy.
The rights and remedies of the Lender under this Agreement are cumulative and
not exclusive of any other rights or remedies available hereunder, under any
other agreement, at law, or otherwise.
9.3 Notices. All notices
and other communications (collectively, notices) under this Agreement shall be
in writing (including facsimile transmission) and shall be sent by first-class
mail, by nationally-recognized overnight courier, by personal delivery, by
facsimile transmission, or by e-mail, in all cases with charges prepaid. All
notices shall be sent to a party at its address specified on the signature page
hereof, or to such other address as shall have been designated by the applicable
party by notice to the other party hereto. Any properly given notice shall be
deemed given or made upon the earliest of: (i) if delivered by hand or by
courier, when signed for by or on behalf of the relevant party ; (ii) if
delivered by mail, four Business Days after deposit in the mails, or (iii) if
delivered by facsimile or e-mail, when sent and receipt has been confirmed by
telephone; provided, that notices to the Lender pursuant to Article II
shall not be effective until actually received by the Lender. The Lender may
rely on any notice, including any notice of Borrowing (whether or not made in a
manner contemplated by this Agreement), purportedly made by or on behalf of the
Borrower, and the Lender shall have no duty to verify the identity or authority
of the Person giving such notice.
9.4 Expenses. The Borrower
agrees to pay upon demand all costs and expenses (including fees and expenses of
counsel and a reasonable estimate of the allocated cost of in-house counsel and
staff, auditors, appraisers and other professional, accounting and consulting
costs and costs associated with recording, filing, searching liens and all
post-judgment collection costs and expenses) which the Lender may incur from
time to time in connection with the preparation, amendment, modification,
enforcement or restructuring or preservation of rights or remedies under, this
Agreement.
9.5 Indemnity. The
Borrower agrees to defend, indemnify, pay and hold the Lender, and the
shareholders, officers, directors, employees and agents of the Lender, harmless
from and against any and all claims, liabilities, losses, damages, costs and
expenses (whether or not any of the foregoing Persons is a party to any
litigation), and costs of investigation, document production, attendance at a
deposition, or other discovery, with respect to or arising out of this Agreement
or the Loan Documents or any use of proceeds hereunder, or any exercise by the
Lender of its rights and remedies under this Agreement and the other Loan
Documents or any claim, demand, action or cause of action being asserted against
the Borrower or any of its Subsidiaries, including without limitation any
violation of any Environmental Law or other Law or any environmental claim based
upon the management, use, control, ownership or operation of property of the
Borrower (or any other Loan Party) (collectively, the Indemnified
Liabilities), provided that the Borrower shall have no obligation
hereunder with respect to Indemnified Liabilities arising from the gross
negligence or willful misconduct of an indemnified party. This covenant shall
survive termination of this Agreement and payment of the outstanding Revolving
Notes.
24
9.6 Successors and
Assigns. The Lender may not assign or otherwise transfer any of its
rights or obligations hereunder except pursuant to the terms of this Agreement
(and any other attempted assignment or transfer by any party hereto shall be
null and void). This Agreement may not be assigned by a party hereto without the
prior written consent of the Borrower or the Lender, as applicable, provided,
however, that the Lender may assign its rights and delegate its duties hereunder
in whole or in part to an Affiliate or to a third party acquiring some or all of
the Lenders existing debt without the prior written consent of the Borrower,
provided that the parties to each assignment shall execute and deliver to the
Borrower an assignment and assumption agreement. The provisions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Without limiting the generality
of the foregoing, in the event that the Borrower is a party to a merger,
consolidation, share exchange or similar business combination transaction in
which the Common Stock is converted into the equity securities of another
Person, from and after the effective time of such transaction, such Person
shall, by virtue of such transaction, be deemed to have assumed the obligations
of the Borrower hereunder, the term Borrower shall be deemed to refer to such
Person and the term Common Stock shall be deemed to refer to the securities
received by the Lender in connection with such transaction. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. The Borrower shall maintain at
one of its offices located in the Province of Ontario a register for the
recordation of the names and addresses of the Lender, and the principal amounts
(and stated interest thereon) owing to the Lender pursuant to the terms hereof
from time to time (the Register). Absent demonstrable error, the
entries in the Register shall be conclusive, and the Borrower and the Lender
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as the Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by any Holder, at any reasonable time and from time to time upon
reasonable prior notice.
9.7 Entire Agreement. This
Agreement, together with the Exhibits and the Schedules hereto, and the other
Loan Documents, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
9.8 Survival. All
representations and warranties of the Borrower contained in or made in
connection with this Agreement or in any other Loan Documents shall survive, and
shall not be waived by, the execution and delivery of this Agreement, any
investigation by or knowledge of the Lender, any extension of credit, or any
other event or circumstance whatever.
9.9 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, and all such counterparts shall constitute but one and the
same agreement.
25
9.10 Severability. In case
any one or more of the provisions contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be in any
way be affected or impaired thereby.
9.11 Headings. Section
headings in this Agreement are included for convenience of reference only and
shall not be given any substantive effect.
9.12 Disclosure of Information
to Affiliates. The Lender may disclose information relating to the Borrower
and its Subsidiaries or any of their respective businesses, including
information regarding the financial condition and property, and the amount of
Debt owed to the Lender and the terms, conditions and other provisions
applicable thereto to its Affiliates and to any of its partners, directors,
officers, employees, agents, trustees, advisors and representatives or to any
other Persons as the Lender shall deem advisable for the conduct of its
business.
9.13 Binding Effect. This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lender and their respective successors and permitted assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lender.
9.14 Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial. This Agreement and the Revolving Notes
shall be governed by, and construed in accordance with, the internal laws of the
State of New York applicable to agreements made and to be performed entirely
within the State of New York. Each of the parties hereto irrevocably submits to
the exclusive jurisdiction of the courts of the State of New York located in New
York County and the United States District Court for the Southern District of
New York for the purpose of any suit, action, proceeding or judgment relating to
or arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. TO THE EXTENT ALLOWABLE UNDER APPLICABLE LAW,
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND THE NOTES AND REPRESENTS THAT
COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
26
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
SPHERE 3D CORPORATION
|
By: |
Kurt Kalbfleisch |
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Name: |
Kurt
Kalbfleisch |
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Title: |
SVP
& CFO |
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Address: |
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9112 Spectrum Center Boulevard |
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San Diego, CA 92123 USA |
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|
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Attention: Kurt Kalbfleisch, CFO
|
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Fax. (858) 495-4267 |
|
E-mail:
kkalbfleisch@overlandstorage.com |
|
|
|
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OVERLAND STORAGE, INC. |
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By: |
Kurt Kalbfleisch |
|
Name: |
Kurt Kalbfleisch |
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Title: |
SVP
& CFO |
|
|
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|
|
|
|
Address: |
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9112 Spectrum Center Boulevard |
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San Diego, CA 92123 USA |
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|
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Attention: Kurt Kalbfleisch, CFO
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Fax. (858) 495-4267 |
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E-mail:
kkalbfleisch@overlandstorage.com |
27
REVOLVING COMMITMENT: |
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FBC HOLDINGS S.À R.L. |
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$2,000,000 increasing up to US$5,000,000 if the the
Lender agrees to such increase in accordance with Section 2.1(c) |
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By: A.S.O. for Manacor
(Luxembourg) SA |
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Name: Manacor (Luxembourg) SA |
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Title: Manager A |
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By:
Thomas Stamatelos |
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Name: Cyrus Capital Partners, LP |
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Title: Manager B |
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Address: |
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FBC Holdings S.à r.l. |
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c/o Cyrus Capital Partners, LP |
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399 Park Avenue |
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New York, New York 10022 |
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Attention: David Collins |
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Fax: (212) 380-5801 |
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E-Mail: ops@cyruscapital.com
|
28
EXHIBIT A
Collateral Description
The Collateral consists of all of
the Borrower and Overlands right, title and interest in and to the following
personal property, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof:
All Accounts, cash, chattel paper
(whether tangible or electronic), contract rights or rights to payment of money,
Deposit Accounts, documents, Equipment, Fixtures, franchise agreements, General
Intangibles, goods, instruments (including any promissory notes), Inventory,
leases, 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 of the Borrowers and
Overlands 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.
License and royalty fees and
other revenues, proceeds, or income arising out of or relating to any of the
foregoing.
Notwithstanding the foregoing,
the Collateral shall not be deemed to include (a) more than 65% of the capital
stock of any direct Foreign Subsidiary or the capital stock of any indirect
Foreign Subsidiary; (b) any Disputed Intellectual Property whether registered or
not, except that the Collateral shall include all Accounts, General Intangibles,
instruments, and chattel paper that consist of other rights to payment and
proceeds from the sale, licensing or disposition of any part, or rights in, the
Intellectual Property (the Rights to Payment); (c) intent-to-use trademarks;
or (d) any rights or interests in or under, any license, contract, permit,
Instrument, Security or franchise to which Overland or the Borrower (as
applicable) is a party or any of its rights or interests thereunder to the
extent, but only to the extent, that such a grant would, under the terms of such
license, contract, permit, Instrument, Security or franchise, result in a breach
of the terms of, or constitute a default under, such license, contract, permit,
Instrument, Security or franchise (other than to the extent that any such term
would be rendered ineffective pursuant to the UCC or any other applicable law or
principles of equity), provided, that immediately upon the ineffectiveness,
lapse or termination of any such provision the Collateral shall include, and
Overland and the Borrower (as applicable) shall be deemed to have granted a
security interest in, all such rights and interests as if such provision had
never been in effect. Notwithstanding the foregoing, if a judicial authority
(including a U.S. Bankruptcy Court) holds that a security interest in the
underlying Disputed Intellectual Property is necessary to have a security
interest in the Rights to Payments, then the Collateral shall automatically, and
effect as of the date of this Agreement, include the Disputed Intellectual
Property.
Capitalized terms used in this
Exhibit A and not otherwise defined in the Agreement shall have the meanings
given to such terms in the Uniform Commercial Code, as the same may, from time
to time, be enacted and in effect in the State of New York.
29
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