TERRAVIA HOLDINGS, INC. (NASDAQ:TVIA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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Entry into a Material Definitive Agreement.
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Forbearance Agreement
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On May 3, 2017, TerraVia Holdings, Inc. (the Company) entered
into a Forbearance Agreement (the Forbearance Agreement) with
certain beneficial owners and/or investment advisors or managers
of discretionary accounts for such beneficial owners (the
Holders) of approximately 69% in aggregate principal amount of
the Companys 5.00% convertible senior subordinated notes due 2019
(the 2019 Notes) (the Consenting Holders). The 2019 Notes were
issued to an Indenture, dated as of April 1, 2014 (the
Indenture), by and between the Company and Wells Fargo Bank,
National Association, as trustee (including its successor or
assign as trustee under the Indenture, the Trustee).
into a Forbearance Agreement (the Forbearance Agreement) with
certain beneficial owners and/or investment advisors or managers
of discretionary accounts for such beneficial owners (the
Holders) of approximately 69% in aggregate principal amount of
the Companys 5.00% convertible senior subordinated notes due 2019
(the 2019 Notes) (the Consenting Holders). The 2019 Notes were
issued to an Indenture, dated as of April 1, 2014 (the
Indenture), by and between the Company and Wells Fargo Bank,
National Association, as trustee (including its successor or
assign as trustee under the Indenture, the Trustee).
to the Forbearance Agreement, each Consenting Holder has agreed
that, during the Forbearance Period and subject to certain
termination events, it will not, among other things, (i) take any
action, enforce any of its rights or remedies or accelerate the
obligations under the Indenture, the 2019 Notes or otherwise, or
(ii) direct the Trustee to take any action, enforce any rights or
remedies or accelerate the obligations under the Indenture, the
2019 Notes or otherwise, against the Company, its affiliates or,
in each case, any assets thereof, in each case solely with
respect to the Companys failure to make the interest payment due
on April 3, 2017 on the 2019 Notes.
that, during the Forbearance Period and subject to certain
termination events, it will not, among other things, (i) take any
action, enforce any of its rights or remedies or accelerate the
obligations under the Indenture, the 2019 Notes or otherwise, or
(ii) direct the Trustee to take any action, enforce any rights or
remedies or accelerate the obligations under the Indenture, the
2019 Notes or otherwise, against the Company, its affiliates or,
in each case, any assets thereof, in each case solely with
respect to the Companys failure to make the interest payment due
on April 3, 2017 on the 2019 Notes.
As defined in the Forbearance Agreement, the Forbearance Period
ends on the earlier of June 28, 2017 and the occurrence of any of
the specified early termination events described therein, which
include (i) a further default or event of default under the
Indenture and (ii) acceleration of the principal of the 2019
Notes. The Forbearance Period may also be terminated by the
Consenting Holders upon the occurrence of certain specified
events described therein, which include, among other things, (i)
material payments, transactions or expenditures outside the
ordinary course of business, (ii) material payments to any
subsidiary or affiliate of the Company other than a direct or
indirect payment to or for the benefit of Solazyme Bunge Produtos
Renovaveis Ltda. (SB Oils), the Companys joint venture with Bunge
Global Innovation, LLC and certain of its affiliates, for the
purpose of funding the ordinary course operating-related expenses
of SB Oils, (iii) failure to take all reasonable efforts in good
faith to reduce expenditures, (iv) incurrence of any indebtedness
for borrowed money or any indebtedness that is secured by liens
senior in right of payment or priority to the 2019 Notes, (v) the
Company does not work diligently to advance both (a) the ongoing
marketing process to sell all or substantially all, or a portion
of, its business (the MA Process) and (b) to obtain an exit
financing facility to support a possible restructuring of the
Companys obligations under the 2019 Notes and the Companys 6.00%
Convertible Senior Subordinated Notes due 2018 (the Exit
Financing Search), (vi) failure to establish May 26, 2017 as a
firm deadline for the delivery of non-binding indications of
interest in the MA Process and non-binding financing proposals in
the Exit Financing Search or (vii) if, prior to May 26, 2017, the
Company and the Consenting Holders have not agreed to the
material terms of a potential restructuring.
ends on the earlier of June 28, 2017 and the occurrence of any of
the specified early termination events described therein, which
include (i) a further default or event of default under the
Indenture and (ii) acceleration of the principal of the 2019
Notes. The Forbearance Period may also be terminated by the
Consenting Holders upon the occurrence of certain specified
events described therein, which include, among other things, (i)
material payments, transactions or expenditures outside the
ordinary course of business, (ii) material payments to any
subsidiary or affiliate of the Company other than a direct or
indirect payment to or for the benefit of Solazyme Bunge Produtos
Renovaveis Ltda. (SB Oils), the Companys joint venture with Bunge
Global Innovation, LLC and certain of its affiliates, for the
purpose of funding the ordinary course operating-related expenses
of SB Oils, (iii) failure to take all reasonable efforts in good
faith to reduce expenditures, (iv) incurrence of any indebtedness
for borrowed money or any indebtedness that is secured by liens
senior in right of payment or priority to the 2019 Notes, (v) the
Company does not work diligently to advance both (a) the ongoing
marketing process to sell all or substantially all, or a portion
of, its business (the MA Process) and (b) to obtain an exit
financing facility to support a possible restructuring of the
Companys obligations under the 2019 Notes and the Companys 6.00%
Convertible Senior Subordinated Notes due 2018 (the Exit
Financing Search), (vi) failure to establish May 26, 2017 as a
firm deadline for the delivery of non-binding indications of
interest in the MA Process and non-binding financing proposals in
the Exit Financing Search or (vii) if, prior to May 26, 2017, the
Company and the Consenting Holders have not agreed to the
material terms of a potential restructuring.
In furtherance of the foregoing, during the Forbearance Period,
the Company has agreed to provide the Consenting Holders (or, in
the event that such information is or may be non-public or
otherwise restricting, the Consenting Holders legal and financial
advisors) with (i) information relating to (a) any action or
development that has or reasonably could have a material adverse
effect on the Company or the Consenting Holders and (b) any
action or development that constitutes or reasonably could
constitute an event that could terminate the Forbearance Period,
(ii) any information reasonably requested by the Consenting
Holders legal and financial advisors, (iii) weekly updates on the
Companys ongoing sale and financing processes, and (iv) beginning
no later than May 12, 2017, a 13-week cash flow forecast and,
thereafter, weekly updates thereto. The Companys failure to
provide any of information set forth in the foregoing clauses (i)
through (iv) allows the Consenting Holders to terminate the
Forbearance Period if such failure is not cured within three (3)
days thereof.
the Company has agreed to provide the Consenting Holders (or, in
the event that such information is or may be non-public or
otherwise restricting, the Consenting Holders legal and financial
advisors) with (i) information relating to (a) any action or
development that has or reasonably could have a material adverse
effect on the Company or the Consenting Holders and (b) any
action or development that constitutes or reasonably could
constitute an event that could terminate the Forbearance Period,
(ii) any information reasonably requested by the Consenting
Holders legal and financial advisors, (iii) weekly updates on the
Companys ongoing sale and financing processes, and (iv) beginning
no later than May 12, 2017, a 13-week cash flow forecast and,
thereafter, weekly updates thereto. The Companys failure to
provide any of information set forth in the foregoing clauses (i)
through (iv) allows the Consenting Holders to terminate the
Forbearance Period if such failure is not cured within three (3)
days thereof.
In addition, and notwithstanding anything in the Forbearance
Agreement or in the Indenture to the contrary, solely during the
Forbearance Period, the occurrence of any indebtedness that is
secured by liens senior in right of payment or priority to the
2019 Notes (with respect to indebtedness greater than $10 million
incurred outside of the ordinary course by the Company or any of
its subsidiaries other than SB Oils) is prohibited by the
Forbearance Agreement and upon such prohibited action occurring,
50% of the 2019 Obligations shall become and shall automatically
be immediately due and payable, without notice to the Company or
any other action by any Consenting Holder. Notwithstanding the
preceding sentence, the Company and any of its subsidiaries may
incur senior and/or secured indebtedness during the Forbearance
Period without triggering any such acceleration so long as the
Consenting Holders are provided written notice of the terms of
any such proposed financing and given seven days in which to
match in writing such terms in their entirety (subject to
definitive documentation consistent with such terms).
Agreement or in the Indenture to the contrary, solely during the
Forbearance Period, the occurrence of any indebtedness that is
secured by liens senior in right of payment or priority to the
2019 Notes (with respect to indebtedness greater than $10 million
incurred outside of the ordinary course by the Company or any of
its subsidiaries other than SB Oils) is prohibited by the
Forbearance Agreement and upon such prohibited action occurring,
50% of the 2019 Obligations shall become and shall automatically
be immediately due and payable, without notice to the Company or
any other action by any Consenting Holder. Notwithstanding the
preceding sentence, the Company and any of its subsidiaries may
incur senior and/or secured indebtedness during the Forbearance
Period without triggering any such acceleration so long as the
Consenting Holders are provided written notice of the terms of
any such proposed financing and given seven days in which to
match in writing such terms in their entirety (subject to
definitive documentation consistent with such terms).
A copy of the Forbearance Agreement is filed as Exhibit 10.1
hereto and is incorporated herein by reference. The foregoing
description is only a summary of certain terms and conditions
of the Forbearance Agreement and is qualified in its entirety
by the full text of such exhibit.
hereto and is incorporated herein by reference. The foregoing
description is only a summary of certain terms and conditions
of the Forbearance Agreement and is qualified in its entirety
by the full text of such exhibit.
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Silicon Valley Bank
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On June 28, 2016, the Company entered into a loan and security
agreement (the SVB Agreement) with Silicon Valley Bank (the
Bank) that provides for a $12.9 million letter of credit
facility (the Facility). The Facility supports the standby
letter of credit issued on April 29, 2016 by the Bank (the SVB
SLOC) in favor of Ita Unibanco S.A. (Ita) to support a bank
guarantee issued by Ita (the Banco Nacional Guaranty) on behalf
of the Company to the Brazilian Development Bank in connection
with the loan agreement entered into in 2013 between the
Brazilian Development Bank and SB Oils.
agreement (the SVB Agreement) with Silicon Valley Bank (the
Bank) that provides for a $12.9 million letter of credit
facility (the Facility). The Facility supports the standby
letter of credit issued on April 29, 2016 by the Bank (the SVB
SLOC) in favor of Ita Unibanco S.A. (Ita) to support a bank
guarantee issued by Ita (the Banco Nacional Guaranty) on behalf
of the Company to the Brazilian Development Bank in connection
with the loan agreement entered into in 2013 between the
Brazilian Development Bank and SB Oils.
On May 2, 2017 the Company amended and restated the SVB
Agreement (the Amended SVB Agreement). The Amended SVB
Agreement, and related Bank Services Pledge Agreement, set up a
restricted collateral account with the Bank that will contain
not less than 110% of the dollar equivalent of the face amount
of all outstanding letters of credit under the Facility (the
Restricted Cash). The initial balance in the restricted
collateral account is $12.2 million. The Amended SVB Agreement
also provides that the Company will keep not less than $5
million in a separate account at the Bank that will also be
part of the collateral package but is not restricted cash (the
Designated Deposit Account). The Company is subject to
customary negative covenants under the Amended SVB Agreement,
including a covenant that places limitations on change in
control transactions. The Amended SVB Agreement contains
certain customary representations and warranties, affirmative
covenants and provisions relating to events of default. If an
event of default occurs and continues, the Bank may declare all
outstanding obligations under the Facility immediately due and
payable, with all obligations being immediately due and payable
without any action by the Bank if the Company (i) fails to be
solvent (as defined in the Amended SVB Agreement), or (ii)
begins an insolvency proceeding or an insolvency proceeding is
begun against the Company that is not dismissed or stayed
within 45 days. If an event of default occurs and continues,
the Bank may also transfer into the restricted collateral
account funds from the Designated Deposit Account such that the
total balance in the restricted collateral account equals 125%
of the dollar equivalent of the face amount of all outstanding
letters of credit under the Facility. If a demand for payment
is made under any letter of credit issued under the Facility
the principal amount paid by Bank shall accrue interest at a
floating per annum rate equal to 2.0% above the prime rate,
which interest shall be payable on demand. The Company will pay
the Bank an annual fee of 1.00% per annum with respect to
letters of credit issued.
Agreement (the Amended SVB Agreement). The Amended SVB
Agreement, and related Bank Services Pledge Agreement, set up a
restricted collateral account with the Bank that will contain
not less than 110% of the dollar equivalent of the face amount
of all outstanding letters of credit under the Facility (the
Restricted Cash). The initial balance in the restricted
collateral account is $12.2 million. The Amended SVB Agreement
also provides that the Company will keep not less than $5
million in a separate account at the Bank that will also be
part of the collateral package but is not restricted cash (the
Designated Deposit Account). The Company is subject to
customary negative covenants under the Amended SVB Agreement,
including a covenant that places limitations on change in
control transactions. The Amended SVB Agreement contains
certain customary representations and warranties, affirmative
covenants and provisions relating to events of default. If an
event of default occurs and continues, the Bank may declare all
outstanding obligations under the Facility immediately due and
payable, with all obligations being immediately due and payable
without any action by the Bank if the Company (i) fails to be
solvent (as defined in the Amended SVB Agreement), or (ii)
begins an insolvency proceeding or an insolvency proceeding is
begun against the Company that is not dismissed or stayed
within 45 days. If an event of default occurs and continues,
the Bank may also transfer into the restricted collateral
account funds from the Designated Deposit Account such that the
total balance in the restricted collateral account equals 125%
of the dollar equivalent of the face amount of all outstanding
letters of credit under the Facility. If a demand for payment
is made under any letter of credit issued under the Facility
the principal amount paid by Bank shall accrue interest at a
floating per annum rate equal to 2.0% above the prime rate,
which interest shall be payable on demand. The Company will pay
the Bank an annual fee of 1.00% per annum with respect to
letters of credit issued.
The foregoing description is only a summary of certain terms
and conditions of the Amended SVB Agreement and is qualified in
its entirety by reference to the Amended SVB Agreement, a copy
of which will be filed as an exhibit to the Companys quarterly
report on Form 10-Q for the quarter ended June 30, 2017.
and conditions of the Amended SVB Agreement and is qualified in
its entirety by reference to the Amended SVB Agreement, a copy
of which will be filed as an exhibit to the Companys quarterly
report on Form 10-Q for the quarter ended June 30, 2017.
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Item 2.02
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Results of Operations and Financial Condition.
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On May 3, 2017, the Company issued a press release announcing
the Companys financial results for the quarter ended March 31,
2017 and certain corporate highlights. A copy of this press
release is furnished as Exhibit 99.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
the Companys financial results for the quarter ended March 31,
2017 and certain corporate highlights. A copy of this press
release is furnished as Exhibit 99.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
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Item 7.01
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Regulation FD Disclosure.
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As previously reported on April 3, 2017, the Company decided
not to pay the interest payment due April 3, 2017 on the 2019
Notes and, as provided for in the Indenture, entered into the
30-day grace period to make such payment. The Company did not
make such interest payment on May 3, 2017, which is the last
day of such 30-day grace period. The Companys failure to pay
this interest payment on May 3, 2017 results in an event of
default under the Indenture governing the 2019 Notes. While the
event of default is continuing under the Indenture, the Trustee
or holders of at least 25% in aggregate principal amount of the
2019 Notes may, among other things, accelerate 50% of the
principal of, and accrued and unpaid interest on, the 2019
Notes to be due and payable immediately upon such acceleration
and seek immediate repayment in full of such amounts. As a
result of the Forbearance Agreement described in Item 1.01
above, however, Holders of approximately 69% in aggregate
principal amount of the 2019 Notes have agreed, among other
things, not to take any such action under the Indenture, the
2019 Notes or otherwise with respect to such event of default
as described above.
not to pay the interest payment due April 3, 2017 on the 2019
Notes and, as provided for in the Indenture, entered into the
30-day grace period to make such payment. The Company did not
make such interest payment on May 3, 2017, which is the last
day of such 30-day grace period. The Companys failure to pay
this interest payment on May 3, 2017 results in an event of
default under the Indenture governing the 2019 Notes. While the
event of default is continuing under the Indenture, the Trustee
or holders of at least 25% in aggregate principal amount of the
2019 Notes may, among other things, accelerate 50% of the
principal of, and accrued and unpaid interest on, the 2019
Notes to be due and payable immediately upon such acceleration
and seek immediate repayment in full of such amounts. As a
result of the Forbearance Agreement described in Item 1.01
above, however, Holders of approximately 69% in aggregate
principal amount of the 2019 Notes have agreed, among other
things, not to take any such action under the Indenture, the
2019 Notes or otherwise with respect to such event of default
as described above.
With the support of the Consenting Holders, the Company is
engaged in a process to sell all, substantially all, or a
portion of the Company by or before the conclusion of the
Forbearance Period. The Company is also concurrently in
negotiations with its noteholders to restructure or equitize
their debt if the sales process is not ultimately successful on
this time frame.
engaged in a process to sell all, substantially all, or a
portion of the Company by or before the conclusion of the
Forbearance Period. The Company is also concurrently in
negotiations with its noteholders to restructure or equitize
their debt if the sales process is not ultimately successful on
this time frame.
The foregoing contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995 about the Company, including statements that
involve risks and uncertainties concerning: ongoing activities
to sell all or a significant portion of the Company; ongoing
activities to equitize the debt of the Companys noteholders;
the prospects of the sales and/or equitization activities being
successful; the impact of failure to sell all or a significant
portion of the Company and/or equitize the Companys debt; and
the impact of the Indenture event of default on other Company
obligations. When used herein, the words will, expects, intends
and other similar expressions and any other statements that are
not historical facts are intended to identify those assertions
as forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any such statement
may be influenced by a variety of factors, many of which are
beyond the control of the Company, that could cause actual
outcomes and results to be materially different from those
projected, described, expressed or implied herein due to a
number of risks and uncertainties. Potential risks and
uncertainties include, among others: the Companys ability to
obtain interest on acceptable terms in the sale and/or
equitization activities; early termination of the Forbearance
Period; adverse responses from customers, partners and
investors to the Indenture event of default, sales process or
equitization process; and the impact of the Indenture event of
default on the ability of the Company to recapitalize or
restructure its debt or raise additional capital. Accordingly,
no assurances can be given that any of the events anticipated
by the forward-looking statements will transpire or occur, or
if any of them do so, what impact they will have on the results
of operations or financial condition of the Company. In
addition, please refer to the documents that the Company files
with the Securities and Exchange Commission, including its
Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K,
each as updated from time to time, for a discussion of other
factors that could cause the Companys results to vary from
expectations. You are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date of
this Current Report on Form 8-K. The Company is not under any
duty to update any of the information herein.
within the meaning of the Private Securities Litigation Reform
Act of 1995 about the Company, including statements that
involve risks and uncertainties concerning: ongoing activities
to sell all or a significant portion of the Company; ongoing
activities to equitize the debt of the Companys noteholders;
the prospects of the sales and/or equitization activities being
successful; the impact of failure to sell all or a significant
portion of the Company and/or equitize the Companys debt; and
the impact of the Indenture event of default on other Company
obligations. When used herein, the words will, expects, intends
and other similar expressions and any other statements that are
not historical facts are intended to identify those assertions
as forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any such statement
may be influenced by a variety of factors, many of which are
beyond the control of the Company, that could cause actual
outcomes and results to be materially different from those
projected, described, expressed or implied herein due to a
number of risks and uncertainties. Potential risks and
uncertainties include, among others: the Companys ability to
obtain interest on acceptable terms in the sale and/or
equitization activities; early termination of the Forbearance
Period; adverse responses from customers, partners and
investors to the Indenture event of default, sales process or
equitization process; and the impact of the Indenture event of
default on the ability of the Company to recapitalize or
restructure its debt or raise additional capital. Accordingly,
no assurances can be given that any of the events anticipated
by the forward-looking statements will transpire or occur, or
if any of them do so, what impact they will have on the results
of operations or financial condition of the Company. In
addition, please refer to the documents that the Company files
with the Securities and Exchange Commission, including its
Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K,
each as updated from time to time, for a discussion of other
factors that could cause the Companys results to vary from
expectations. You are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date of
this Current Report on Form 8-K. The Company is not under any
duty to update any of the information herein.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits
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The following exhibits are furnished herewith:
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Exhibit No.
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Description
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10.1
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Forbearance Agreement dated May 3, 2017 among the
Company and certain Holders of the 2019 Notes. |
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99.1
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Press Release, dated May 3, 2017, entitled TerraVia
Reports First Quarter 2017 Results. |
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The information contained in Item 2.02, in Item 9.01 with
respect to Exhibit 99.1, and in the accompanying Exhibit 99.1
shall not be incorporated by reference into any filing of the
Company, whether made before or after the date hereof,
regardless of any general incorporation language in such
filing, unless expressly incorporated by specific reference to
such filing. The information in Item 2.02 and Item 9.01, with
respect to Exhibit 99.1, of this report, including the
accompanying Exhibit 99.1, shall not be deemed to be filed for
purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, or otherwise subject to the liabilities of that
section.
respect to Exhibit 99.1, and in the accompanying Exhibit 99.1
shall not be incorporated by reference into any filing of the
Company, whether made before or after the date hereof,
regardless of any general incorporation language in such
filing, unless expressly incorporated by specific reference to
such filing. The information in Item 2.02 and Item 9.01, with
respect to Exhibit 99.1, of this report, including the
accompanying Exhibit 99.1, shall not be deemed to be filed for
purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, or otherwise subject to the liabilities of that
section.
TERRAVIA HOLDINGS, INC. (NASDAQ:TVIA) Recent Trading Information
TERRAVIA HOLDINGS, INC. (NASDAQ:TVIA) closed its last trading session down -0.012 at 0.484 with 363,946 shares trading hands.
