NOTE PURCHASE AGREEMENT

Exhibit 99.6

 

 

NOTE PURCHASE AGREEMENT

 

among

 

HERCULES FUNDING TRUST I,

as Issuer

 

HERCULES FUNDING I LLC,

as Depositor

 

HERCULES TECHNOLOGY GROWTH CAPITAL, INC.,

as Originator

 

and

 

CITIGROUP GLOBAL MARKETS REALTY CORP.,

as Purchaser

 

Dated as of August 1, 2005

 

ASSET BACKED NOTES

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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NOTE PURCHASE AGREEMENT

 

NOTE PURCHASE AGREEMENT dated as of August 1 (as amended, supplemented and otherwise modified from time to time, the “ Note Purchase Agreement ”), among Hercules Funding Trust I (the “ Issuer ”), Hercules Funding I LLC (the “ Depositor ”), Hercules Technology Growth Capital, Inc. (“ Hercules ”) and Citigroup Global Markets Realty Corp. (“ Citigroup ,” and, together with its permitted successors and assigns in its capacity as Purchaser hereunder, the “ Purchaser ”).

 

The parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01. Certain Defined Terms . Capitalized terms used herein without definition shall have the meanings set forth in the Indenture and the Sale and Servicing Agreement (as defined below). Additionally, the following terms shall have the following meanings:

 

“ Closing ” shall have the meaning set forth in Section 2.01 .

 

“ Closing Date ” shall have the meaning set forth in Section 2.01 .

 

“ Commitment Fee ” shall have the meaning provided in the Fee Letter.

 

“ Confidential Information ” means all marketing information, financial information, terms sheets and other information concerning the transactions contemplated thereby, prepared by the Purchaser and its Affiliates.

 

“ Governmental Actions ” means any and all consents, approvals, permits, orders, authorizations, waivers, exceptions, variances, exemptions or licenses of, or registrations, declarations or filings with, any Governmental Authority required under any Governmental Rules.

 

“ Governmental Rules ” means any and all laws, statutes, codes, rules, regulations, ordinances, orders, writs, decrees and injunctions, of any Governmental Authority and any and all legally binding conditions, standards, prohibitions, requirements and judgments of any Governmental Authority.

 

“ Indemnified Party ” means the Purchaser and any of its officers, directors, employees, agents, representatives, assignees and Affiliates and any Person who controls the Purchaser or its Affiliates within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.

 

“ Sale and Servicing Agreement ” means the Sale and Servicing Agreement dated as of August 1, among the Issuer, the Depositor, the Originator, the Servicer, U.S. Bank National Association, as Indenture Trustee and Collateral Custodian and Lyon Financial services doing business as U.S. Bank Portfolio Services, as Backup Servicer, as the same may be amended, modified or supplemented from time to time.

 

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SECTION 1.02. Other Definitional Provisions .

 

(a) All terms defined in this Note Purchase Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

 

(b) As used herein and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in Section 1.01 , and accounting terms partially defined in Section 1.01 to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms herein are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained herein shall control.

 

(c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Note Purchase Agreement shall refer to this Note Purchase Agreement as a whole and not to any particular provision of this Note Purchase Agreement; and Section, subsection, Schedule and Exhibit references contained in this Note Purchase Agreement are references to Sections, subsections, and Exhibits in or to this Note Purchase Agreement unless otherwise specified.

 

ARTICLE II

 

CLOSING AND ADVANCES OF BORROWINGS

 

SECTION 2.01. Closing . The closing (the “ Closing ”) of the execution of the Basic Documents shall take place at 10:00 a.m. at the offices of Dechert LLP, Bank of America Corporate Center, 100 North Tryon Street, Suite 4000, Charlotte, NC 28202, on August 1, or if the conditions to closing set forth in Section 4.01 of this Note Purchase Agreement shall not have been satisfied or waived by such date, as soon as practicable after such conditions shall have been satisfied or waived, or at such other time, date and place as the parties shall agree upon (the date of the Closing being referred to herein as the “ Closing Date ”). On the Closing Date the Purchaser shall have received the Commitment Fee in immediately available funds, in accordance with the Purchaser’s wiring instructions.

 

SECTION 2.02. Requests for Advances of Borrowings; Reductions in Note Principal Balance . (a) At any time during the Revolving Period, no later than 12:00 p.m. New York time at least two Business Days prior to a proposed Borrowing Date, and subject to the terms and conditions hereof and in accordance with the other Basic Documents, the Servicer on behalf of the Issuer may deliver a Borrowing Notice requesting that the Purchaser advance additional Borrowings, in an amount up to the Availability as of the proposed Borrowing Date. In addition, in connection with such Borrowing Notice the Servicer on behalf of the Issuer shall deliver or cause the delivery of (i) a Borrowing Base Certificate in the form attached as Exhibit F to the Sale and Servicing Agreement, (ii) if any Purchased Assets will be acquired by the Issuer under the Sale and Servicing Agreement with the proceeds of the applicable Borrowing, a copy of the executed LSA Assignment delivered pursuant to the Loan Sale Agreement and a copy of the executed S&SA Assignment delivered pursuant to the Sale and Servicing Agreement, together, in each case, with the related Loan Schedule and (iii) such additional information as may be reasonably requested by the Purchaser.

 

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(b) On the related Borrowing Date, the Purchaser may (in the exercise of its sole and absolute discretion) advance the Borrowing requested in the Borrowing Notice, subject to the terms and conditions and in reliance upon the covenants, representations and warranties set forth herein and in the other Basic Documents. The amount of any Borrowing shall be at least equal to $1,000,000.

 

ARTICLE III

 

CLOSING DATE BORROWINGS; BORROWING DATES

 

SECTION 3.01. Borrowing Dates .

 

(a) Subject to the conditions and terms set forth herein and in Section 2.06 (in the case of a Borrowing to be made on the Closing Date) and Section 2.07 (in the case of all Borrowings) of the Sale and Servicing Agreement with respect to the Closing Date and each Borrowing Date, the Purchaser’s providing advances of Borrowings shall be subject to the satisfaction, as of the Closing Date or any Borrowing Date, as applicable, of each of the following additional conditions:

 

(i) Each document required to be provided pursuant to Section 2.02 hereof shall have been provided to the Purchaser;

 

(ii) Each condition set forth in Section 2.06 and Section 2.07 of the Sale and Servicing Agreement, as applicable, (other than any condition therein requiring the conditions set forth in this Section 3.01 to be satisfied) shall have been satisfied;

 

(iii) Each of the representations and warranties of the Issuer, the Servicer, the Originator and the Depositor made in the Basic Documents shall be true and correct as of such date (except to the extent they expressly relate to an earlier or later time);

 

(iv) The Issuer, the Servicer, the Originator and the Depositor shall be in compliance with all of their respective covenants contained in the Basic Documents and the Notes; and

 

(v) No Event of Default shall have occurred and be continuing.

 

(b) The Purchaser shall determine in its reasonable discretion whether each of the above conditions have been met and its determination shall be binding on the parties hereto.

 

(c) The price paid by the Purchaser on such Closing Date or Borrowing Date for the Note Principal Balance advanced on such Closing Date or Borrowing Date, respectively, shall be equal to the amount of such Note Principal Balance, and shall be remitted not later than 5:00 p.m. New York City time on the Closing Date or Borrowing Date, as applicable, by wire transfer of immediately available funds to or at the direction of the Originator on behalf of the Issuer.

 

(d) The Purchaser shall record on the schedule attached to the Notes, the date and amount of any Note Principal Balance purchased by it; provided , that failure to make such recordation on such schedule or any error in such schedule shall not adversely affect the

 

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Purchaser’s rights with respect to its Note Principal Balance and its right to receive interest payments in respect of the Note Principal Balance actually held. Absent manifest error, the Note Principal Balance of the Notes as set forth in the Purchaser’s records shall be binding upon the parties hereto, notwithstanding any notation or record made or kept by any other party hereto.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

SECTION 4.01. Closing Subject to Conditions Precedent . The Closing of the Basic Documents is subject to the satisfaction at the time of the Closing of the following conditions (any or all of which may be waived by the Purchaser in its sole discretion):

 

(a) Performance by the Issuer, the Depositor, the Servicer and the Originator . All the terms, covenants, agreements and conditions of the Basic Documents to be complied with and performed by the Issuer, the Depositor, the Servicer and the Originator on or before the Closing Date shall have been complied with and performed in all material respects.

 

(b) Representations and Warranties . Each of the representations and warranties of the Issuer, the Depositor, the Servicer and the Originator made in the Basic Documents shall be true and correct in all material respects as of the Closing Date (except to the extent they expressly relate to an earlier or later time).

 

(c) Officer’s Certificate . The Purchaser shall have received in form and substance reasonably satisfactory to the Purchaser an Officer’s Certificate from the Originator, the Depositor and the Servicer and a certificate of a Responsible Officer of the Issuer, dated the Closing Date, certifying to the satisfaction of the conditions set forth in the preceding paragraphs (a) and (b).

 

(d) Opinions of Counsel to the Issuer, the Originator, the Servicer and the Depositor . Counsel to the Issuer, the Originator, the Servicer and the Depositor shall have delivered to the Purchaser opinions, dated as of the Closing Date and reasonably satisfactory in form and substance to the Purchaser and its counsel.

 

(e) Opinions of Counsel to the Indenture Trustee . Counsel to the Indenture Trustee shall have delivered to the Purchaser a favorable opinion, dated as of the Closing Date and reasonably satisfactory in form and substance to the Purchaser and its counsel.

 

(f) Opinions of Counsel to the Owner Trustee . Delaware counsel to the Owner Trustee of the Issuer shall have delivered to the Purchaser favorable opinions regarding the formation, existence and standing of the Issuer and of the Issuer’s execution, authorization and delivery of each of the Basic Documents to which it is a party and such other matters as the Purchaser may reasonably request, dated as of the Closing Date and reasonably satisfactory in form and substance to the Purchaser and its counsel.

 

(g) Filings and Recordations . On or prior to the Closing Date and, if a Borrowing will be consummated in connection with any Transfer, on or prior to the applicable Transfer Date, the Purchaser shall have received evidence reasonably satisfactory to it of (i) the completion of all recordings, registrations, and filings as may be necessary or, in the reasonable opinion of the Purchaser, desirable to perfect or evidence the assignment by the Originator to the

 

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Depositor of the Originator’s ownership interest in the Assigned Assets including, without limitation, the Transferred Loans conveyed pursuant to the Loan Sale Agreement and the proceeds thereof, (ii) the completion of all recordings, registrations and filings as may be necessary or, in the reasonable opinion of the Purchaser, desirable to perfect or evidence the assignment by the Depositor to the Issuer of the Depositor’s ownership interest in the Purchased Assets including, without limitation, the Transferred Loans conveyed pursuant to the Sale and Servicing Agreement and the proceeds thereof, and (iii) the completion of all recordings, registrations, and filings as may be necessary or, in the reasonable opinion of the Purchaser, desirable to perfect or evidence the grant of a first priority perfected security interest in the Issuer’s ownership interest in the Collateral, including, without limitation, the Transferred Loans and the proceeds thereof, in favor of the Indenture Trustee, subject to no Liens prior to the Lien of the Indenture.

 

(h) Documents . The Purchaser shall have received a duly executed counterpart of each of the Basic Documents, in form acceptable to the Purchaser, the Notes and each and every document or certification delivered by any party in connection with any of the Basic Documents or the Notes, and each such document shall be in full force and effect.

 

(i) Actions or Proceedings . No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by the Basic Documents, the Notes and the documents related thereto in any material respect.

 

(j) Approvals and Consents . All Governmental Actions of all Governmental Authorities required with respect to the transactions contemplated by the Basic Documents, the Notes and the documents related thereto shall have been obtained or made.

 

(k) Accounts . The Purchaser shall have received evidence reasonably satisfactory to it that each Trust Account has each been established in accordance with the terms of the Sale and Servicing Agreement.

 

(l) Other Documents . The Issuer, the Originator, the Depositor and the Servicer shall have furnished to the Purchaser such other opinions, information, certificates and documents as the Purchaser may reasonably request.

 

(m) Proceedings in Contemplation of Sale of Notes . All actions and proceedings undertaken by the Issuer, the Originator, the Depositor and the Servicer in connection with the issuance and sale of the Notes as herein contemplated shall be satisfactory in all respects to the Purchaser and its counsel.

 

(n) Financial Covenants . The Originator shall be in compliance with the financial covenants set forth in Section 7.01 of the Sale and Servicing Agreement.

 

If any condition specified in this Section 4.01 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Purchaser by notice to the Originator at any time at or prior to the Closing Date, and the Purchaser shall incur no liability as a result of such termination.

 

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ARTICLE V

 

REPRESENTATIONS AND WARRANTIES OF

THE ISSUER AND THE DEPOSITOR

 

SECTION 5.01. Representations and Warranties . The Issuer and the Depositor hereby jointly and severally make the following representations and warranties to the Purchaser, as of the Closing Date, and as of each Borrowing Date, the Purchaser shall be deemed to have relied on such representations and warranties in providing advances of Borrowings on each Borrowing Date:

 

(a) The Issuer has been duly organized and is validly existing and in good standing as a statutory trust under the laws of the State of Delaware, with requisite trust power and authority to own its properties and to transact the business in which it is now engaged, and is duly qualified to do business and is in good standing (or is exempt from such requirements) in each State of the United States where the nature of its business requires it to be so qualified and the failure to be so qualified and in good standing would reasonably be expected to have a material adverse effect on the Issuer or any adverse effect on the interests of the Purchaser.

 

(b) The issuance, sale, assignment and conveyance of the Notes and the advance of any Borrowings, the performance of the Issuer’s obligations under each Basic Document to which it is a party and the consummation of the transactions therein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than any Lien created by the Basic Documents), charge or encumbrance upon any of the property or assets of the Issuer or any of its Affiliates pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it or any of its Affiliates is bound or to which any of its property or assets is subject, nor will such action result in any violation of the provisions of its organizational documents or any Governmental Rule applicable to the Issuer, in each case which could reasonably be expected to have a material adverse effect on the transactions contemplated therein.

 

(c) No Governmental Action which has not been obtained is required by or with respect to the Issuer in connection with the execution and delivery to the Purchaser of the Notes. No Governmental Action which has not been obtained is required by or with respect to the Issuer in connection with the execution and delivery of any of the Basic Documents to which the Issuer is a party or the consummation by the Issuer of the transactions contemplated thereby except for any requirements under state securities or “blue sky” laws in connection with any transfer of the Notes.

 

(d) The Issuer possesses all material licenses, certificates, authorities or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the business now operated by it, and has not received any notice of proceedings relating to the revocation or modification of any such license, certificate, authority or permit which, singly or in the aggregate, would reasonably be expected to materially and adversely affect its condition, financial or otherwise, or its earnings, business affairs or business prospects.

 

(e) Each of the Basic Documents to which the Issuer is a party has been duly authorized, executed and delivered by the Issuer and is a valid and legally binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other

 

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similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

 

(f) The execution, delivery and performance by the Issuer of each of its obligations under each of the Basic Documents to which it is a party will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any agreement or instrument to which the Issuer is a party or by which the Issuer is bound or to which any of its properties are subject or of any statute, order or regulation applicable to the Issuer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Issuer or any of its properties, in each case which could reasonably be expected to have a material adverse effect on any of the transactions contemplated therein.

 

(g) The Issuer is not in violation of its