Revolving Line of Credit Agreement - Michael Robertson and Lindows.com Inc.
REVOLVING LINE OF CREDIT AGREEMENT
This Revolving Line of Credit Agreement (the "AGREEMENT") is made and
entered into in this 29th day of July, 2002, by and between MICHAEL ROBERTSON
("LENDER"), and Lindows.com, Inc., a Delaware corporation ("BORROWER").
In consideration of the mutual covenants and agreements contained
herein, the parties agree as follows:
1. LINE OF CREDIT. Lender hereby establishes for a period
extending to December 31, 2003 (the "MATURITY DATE") a revolving line of credit
(the "CREDIT LINE") for Borrower in the principal amount of Five Hundred
Thousand Dollars ($500,000.00) (the "CREDIT LIMIT"). In connection herewith,
Borrower shall execute and deliver to Lender a Promissory Note in the amount of
the Credit Limit and in form and content satisfactory to Lender. All sums
advanced on the Credit Line or pursuant to the terms of this Agreement (each an
"ADVANCE") shall become part of the principal of said Promissory Note.
2. ADVANCES. Any request for an Advance may be made from time to
time and in such amounts as Borrower may choose; provided, however, any
requested Advance will not, when added to the outstanding principal balance of
all previous Advances, exceed the Credit Limit. Requests for Advances may be
made orally or in writing by such officer of Borrower authorized by it to
request such Advances. Until such time as Lender may be notified otherwise,
Borrower hereby authorizes its president or any vice president to request
Advances. Lender may deposit or credit the amount of any requested Advance to
Borrower's checking account with Lender. Lender may refuse to make any requested
Advance if an event of default has occurred and is continuing hereunder either
at the time the request is given or the date the Advance is to be made, or if an
event has occurred or condition exists which, with the giving of notice or
passing of time or both, would constitute an event of default hereunder as of
such dates.
The funds from the Advances will be used by the Borrower for operating
expenses in connection with the operations of the Borrower.
3. INTEREST. All sums advanced pursuant to this Agreement shall
bear interest from the date each Advance is made until paid in full at the rate
of ten percent (10%) per annum, simple interest (the "EFFECTIVE RATE").
4. REPAYMENT. Borrower shall pay accrued interest on the
outstanding principal balance on a monthly basis commencing on September 15,
2002, and continuing on the fifteenth day of each month thereafter. The entire
unpaid principal balance, together with any accrued interest and other unpaid
charges or fees hereunder, shall be due and payable on the Maturity Date. All
payments shall be made to Lender at such place as Lender may, from time to time,
designate. All payments received hereunder shall be applied, first, to any costs
or expenses incurred by Lender in collecting such payment or to any other unpaid
charges or expenses due hereunder; second, to accrued interest; and third, to
principal. Borrower may prepay principal at any time without penalty.
5. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to
enter into this Agreement and to make the advances provided for herein, Borrower
represents and warrants to Lender as follows:
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a. Borrower is a duly organized, validly existing, and
in good standing under the laws of the State of Utah with the power to own its
assets and to transact business in California, and in such other states where
its business is conducted.
b. Borrower has the authority and power to execute and
deliver any document required hereunder and to perform any condition or
obligation imposed under the terms of such documents.
c. The execution, delivery and performance of this
Agreement and each document incident hereto will not violate any provision of
any applicable law, regulation, order, judgment, decree, article of
incorporation, by-law, indenture, contract, agreement, or other undertaking to
which Borrower is a party, or which purports to be binding on Borrower or its
assets and will not result in the creation or imposition of a lien on any of its
assets.
d. There is no action, suit, investigation, or
proceeding pending or, to the knowledge of Borrower, threatened, against or
affecting Borrower or any of its assets which, if adversely determined, would
have a material adverse affect on the financial condition of Borrower or the
operation of its business.
6. EVENTS OF DEFAULT. An event of default will occur if any of
the following events occurs:
a. Failure to pay any principal or interest hereunder
within ten (10) days after the same becomes due.
b. Any representation or warranty made by Borrower in
this Agreement or in connection with any borrowing or request for an Advance
hereunder, or in any certificate, financial statement, or other statement
furnished by Borrower to Lender is untrue in any material respect at the time
when made.
c. Default by Borrower in the observance or performance
of any other covenant or agreement contained in this Agreement, other than a
default constituting a separate and distinct event of default under this
Paragraph 6.
d. Filing by Borrower of a voluntary petition in
bankruptcy seeking reorganization, arrangement or readjustment of debts, or any
other relief under the Bankruptcy Code as amended or under any other insolvency
act or law, state or federal, now or hereafter existing.
e. Filing of an involuntary petition against Borrower in
bankruptcy seeking reorganization, arrangement or readjustment of debts, or any
other relief under the Bankruptcy Code as amended, or under any other insolvency
act or law, state or federal, now or hereafter existing, and the continuance
thereof for sixty (60) days undismissed, unbonded, or undischarged.
7. REMEDIES. Upon the occurrence of an event of default as
defined above, Lender may declare the entire unpaid principal balance, together
with accrued interest thereon, to be immediately due and payable without
presentment, demand, protest, or other notice of any kind. Lender may suspend or
terminate any obligation it may have hereunder to make additional Advances. To
the extent permitted by law, Borrower waives any rights to presentment, demand,
protest, or notice of any kind in connection with this Agreement. No failure or
delay on the part of Lender in exercising any right, power, or privilege
hereunder will preclude any other or further exercise thereof or the exercise of
any other right, power, or privilege. The rights and remedies provided herein
are cumulative and not exclusive of any other rights
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or remedies provided at law or in equity. Borrower agrees to pay all costs of
collection incurred by reason of the default, including court costs and
reasonable attorney's fees.
8. NOTICE. Any written notice will be deemed effective on the
date such notice is placed, first class, postage prepaid, in the United States
mail, addressed to the party to which notice is being given as follows:
Lender: Michael Robertson
[***]
[***]
Borrower: Lindows.com, Inc.
Attn.: Kevin Carmony
9333 Genesee Ave. 3Ta Floor
San Diego, CA 92121
9. GENERAL PROVISIONS. All representations and warranties made in
this Agreement and the Promissory Note and in any certificate delivered pursuant
thereto shall survive the execution and delivery of this Agreement and the
making of any loans hereunder. This Agreement will be binding upon and inure to
the benefit of Borrower and Lender, their respective successors and assigns,
except that Borrower may not assign or transfer its rights or delegate its
duties hereunder without the prior written consent of Lender. This Agreement,
the Promissory Note, and all documents and instruments associated herewith will
be governed by and construed and interpreted in accordance with the laws of the
State of California. Time is of the essence hereof. This Agreement will be
deemed to express, embody, and supersede any previous understanding, agreements,
or commitments, whether written or oral, between the parties with respect to the
general subject matter hereof. This Agreement may not be amended or modified
except in writing signed by the parties.
EXECUTED on the day and year first written above.
Borrower: Lindows.com, Inc.
By: /s/ Kevin Carmony
------------------------------
Title: Pres/COO
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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1 Promissory Note
$500,000.00 San Diego, CA
July 29, 2002
This Promissory Note (the "NOTE") is made and executed as of the date
referred to above, by and between Lindows.com, Inc., a Delaware corporation (the
"BORROWER"), and Michael Robertson ("LENDER"). By this Note, the Borrower
promises and agrees to pay to the order of Lender, at [***] at such other place
as Lender may designate in writing, the principal sum of Five Hundred Thousand
and 00/100 Dollars ($500,000.00), or the aggregate unpaid principal amount of
all advances made by Lender to Borrower pursuant to the terms of a Revolving
Line of Credit Agreement (the "LOAN AGREEMENT") of even date herewith, whichever
is less, together with interest thereon from the date each advance is made until
paid in full, both before and after judgment, at the rate of 10 percent (10%)
per annum, simple interest.
Borrower shall pay accrued interest on the outstanding principal
balance under the Note on a monthly basis commencing on September 15, 2002, and
continuing on the fifteenth day of each month thereafter until paid in full. The
entire unpaid principal balance, together with any accrued interest and other
unpaid charges or fees hereunder, shall be due and payable on December 31, 2003
(the "MATURITY DATE").
Prepayment in whole or part may occur at any time hereunder without
penalty; provided that the Lender shall be provided with not less than ten (10)
days notice of the Borrower's intent to pre-pay; and provided further that any
such partial prepayment shall not operate to postpone or suspend the obligation
to make, and shall not have the effect of altering the time for payment of the
remaining balance of the Note as provided for above, unless and until the entire
obligation is paid in full. All payments received hereunder shall be applied,
first, to any costs or expenses incurred by Lender in collecting such payment or
to any other unpaid charges or expenses due hereunder; second, to accrued
interest; and third, to principal.
An event of default will occur if any of the following events occurs:
(a) failure to pay any principal or interest hereunder within ten (10) days
after the same becomes due; (b) if any representation or warranty made by
Borrower in the Loan Agreement or in connection with any borrowing or request
for an advance thereunder, or in any certificate, financial statement, or other
statement furnished by Borrower to Lender is untrue in any material respect at
the time when made; (c) default by Borrower in the observance or performance of
any other covenant or agreement contained in the Loan Agreement, other than a
default constituting a separate and distinct event of default under Paragraph 7
of the Loan Agreement; (d) filing by Borrower of a voluntary petition in
bankruptcy seeking reorganization, arrangement or readjustment of debts, or any
other relief under the Bankruptcy Code as amended or under any other insolvency
act or law, state or federal, now or hereafter existing; or (e) filing of an
involuntary petition against Borrower in bankruptcy seeking reorganization,
arrangement or readjustment of debts, or any other relief under the Bankruptcy
Code as amended, or under any other insolvency act or law, state or federal, now
or hereafter existing, and the continuance thereof for sixty (60) days
undismissed, unbonded, or undischarged.
Any notice or demand to be given to the parties hereunder shall be
deemed to have been given to and received by them and shall be effective when
personally delivered or when deposited in the U.S. mail, certified or registered
mail, return receipt requested, postage prepaid, and addressed to the party at
his or
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its last known address, or at such other address as the one of the parties may
hereafter designate in writing to the other party.
The Borrower hereof waives presentment for payment, protest, demand,
notice of protest, notice of dishonor, and notice of nonpayment, and expressly
agrees that this Note, or any payment hereunder, may be extended from time to
time by the Lender without in any way affecting its liability hereunder.
In the event any payment under this Note is not made at the time and in
the manner required, the Borrower agrees to pay any and all costs and expenses
which may be incurred by the Lender hereof in connection with the enforcement of
any of its rights under this Note or under any such other instrument, including
court costs and reasonable attorneys' fees.
This Note shall be governed by and construed and enforced in accordance
with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
------------------------------
Title: Pres/COO
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Addendum to the Revolving Line of Credit Agreement
$500,000.00 San Diego, CA
September 11, 2002
This Addendum to the Revolving Line of Credit Agreement by and between
Lindows.com, Inc., a Delaware Corporation (the "BORROWER") and Michael Robertson
("LENDER") is made and executed as of the date referred to above. An additional
principal sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) has been
added to the Revolving Line of Credit Agreement (the "LOAN AGREEMENT") bringing
the Loan Agreement to a total sum of One Million and 00/100 Dollars
($1,000,000.00).
This Addendum shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
---------------------------
President
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Addendum to the Revolving Line of Credit Agreement
$1,000,000.00 San Diego, CA
December 6, 2002
This Addendum to the Revolving Line of Credit Agreement by and between
Lindows.com, Inc., a Delaware Corporation (the "BORROWER") and Michael Robertson
("LENDER") is made and executed as of the date referred to above. An additional
principal sum of One Million and 00/100 Dollars ($1,000,000.00) has been added
to the Revolving Line of Credit Agreement (the "LOAN AGREEMENT") bringing the
Loan Agreement to a total sum of Two Million and 00/100 Dollars ($2,000,000.00).
This Addendum shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
---------------------------
President
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Addendum to the Revolving Line of Credit Agreement
$1,000,000.00 San Diego, CA
February 7, 2003
This Addendum to the Revolving Line of Credit Agreement by and between
Lindows.com, Inc., a Delaware Corporation (the "BORROWER") and Michael Robertson
("LENDER") is made and executed as of the date referred to above. An additional
principal sum of One Million and 00/100 Dollars ($1,000,000.00) has been added
to the Revolving Line of Credit Agreement (the "LOAN AGREEMENT") bringing the
Loan Agreement to a total sum of Three Million and 00/100 Dollars
($3,000,000.00).
This Addendum shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
---------------------------
President
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Addendum to the Revolving Line of Credit Agreement
$500,000.00 San Diego, CA
September 17, 2003
This Addendum to the Revolving Line of Credit Agreement by and between
Lindows.com, Inc., a Delaware Corporation (the "BORROWER") and Michael Robertson
("LENDER") is made and executed as of the date referred to above. An additional
principal sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) has been
added to the Revolving Line of Credit Agreement (the "LOAN AGREEMENT") bringing
the Loan Agreement to a total sum of Three Million, Five Hundred Thousand and
00/100 Dollars ($3,500,000.00).
This Addendum shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
---------------------------
President
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Addendum to the Revolving Line of Credit Agreement
$100,000.00 San Diego, CA
November 11, 2003
This Addendum to the Revolving Line of Credit Agreement by and between
Lindows.com, Inc., a Delaware Corporation (the "BORROWER") and Michael Robertson
("LENDER") is made and executed as of the date referred to above. An additional
principal sum of One Hundred Thousand and 00/100 Dollars ($100,000.00) has been
added to the Revolving Line of Credit Agreement (the "LOAN AGREEMENT") bringing
the Loan Agreement to a total sum of Three Million, Six Hundred Thousand and
00/100 Dollars ($3,600,000.00).
This Addendum shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
---------------------------
President
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Addendum to the Revolving Line of Credit Agreement
$500,000.00 San Diego, CA
November 14, 2003
This Addendum to the Revolving Line of Credit Agreement by and between
Lindows.com, Inc., a Delaware Corporation (the "BORROWER") and Michael Robertson
("LENDER") is made and executed as of the date referred to above. An additional
principal sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) has been
added to the Revolving Line of Credit Agreement (the "LOAN AGREEMENT") bringing
the Loan Agreement to a total sum of Four Million, One Hundred Thousand and
00/100 Dollars ($4,100,000.00).
This Addendum shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
---------------------------
President
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Addendum to the Revolving Line of Credit Agreement
$900,000.00 San Diego, CA
December 23, 2003
This Addendum to the Revolving Line of Credit Agreement by and between
Lindows.com, Inc., a Delaware Corporation (the "BORROWER") and Michael Robertson
("LENDER") is made and executed as of the date referred to above. An additional
principal sum of Nine Hundred Thousand and 00/100 Dollars ($900,000.00) has been
added to the Revolving Line of Credit Agreement (the "LOAN AGREEMENT") bringing
the Loan Agreement to a total sum of Five Million and 00/100 Dollars
($5,000,000.00).
This Addendum shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
---------------------------
President
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Addendum to the Revolving Line of Credit Agreement
$5,000,000.00 San Diego, CA
February 12, 2004
This Addendum to the Revolving Line of Credit Agreement by and between
Lindows.com, Inc., a Delaware Corporation (the "BORROWER") and Michael Robertson
("LENDER") is made and executed as of the date referred to above. An additional
principal sum of Five Million and 00/100 Dollars ($5,000,000.00) has been added
to the Revolving Line of Credit Agreement (the "LOAN AGREEMENT") bringing the
Loan Agreement to a total sum of Ten Million and 00/100 Dollars
($10,000,000.00).
This Addendum shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware corporation
By: /s/ Kevin Carmony
---------------------------
President
Lender: /s/ Michael Robertson
------------------------------
Michael Robertson
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Amendment to the Revolving Line of Credit Agreement and Promissory Note
San Diego, CA
February 12, 2004
This Amendment to the Revolving Line of Credit Agreement and Promissory
Note by and between Lindows.com, Inc., a Delaware Corporation (the "BORROWER"),
and Michael Robertson ("LENDER") is made and executed as of the date referred to
above.
An additional principal sum of Five Million and 00/100 Dollars
($5,000,000.00) has been added to the Revolving Line of Credit Agreement dated
July 29, 2002 (the "LOAN AGREEMENT") and Promissory Note dated July 29, 2002
(the "NOTE") bringing the total principal amount available under the Loan
Agreement and Note to a total sum of Ten Million and 00/100 Dollars
($10,000,000.00).
Borrowings currently outstanding under the Loan Agreement are Five Million
and 00/100 Dollars ($5,000,000).
The Credit Limit as set forth in the Loan Agreement is hereby increased to
the principal amount of Ten Million and 00/100 Dollars ($10,000,000.00).
The Maturity Date as set forth in the Loan Agreement and Note is hereby
extended to June 30, 2005.
The first sentence of Section 4 of the Loan Agreement and the first
sentence of the second paragraph of the Note are hereby deleted such that no
interest shall be due and payable prior to the Maturity Date.
Lender hereby waives any and all defaults that may have occurred under the
Loan Agreement and/or Note prior to the date of this Amendment.
Except as provided above in this Amendment and in all prior addendums, all
terms, covenants and conditions in the Loan Agreement and Note shall remain in
full force and effect and shall not be affected by this Amendment.
This Amendment shall be governed by and construed and enforced in
accordance with the laws of California.
The Borrower: Lindows.com, Inc., a Delaware Corporation
By /s/ Kevin Carmomy
---------------------------------------
President
Lender: /s/ Michael Robertson
-----------------------------------------
Michael Robertson