Item 1.01
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Entry into a Material Definitive Agreement.
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On June 28, 2016, TerraVia Holdings, Inc. (the
Company) entered into a loan and security agreement (the Agreement) with Silicon Valley Bank (the Bank) that provides for a $12.9 million letter of credit facility (the Facility) for letters of credit
denominated in U.S. dollars or a foreign currency. The Facility supports the standby letter of credit issued on April 29, 2016 by the Bank (the SVB SLOC), as previously disclosed in a Current Report on Form 8-K filed by the Company
on May 4, 2016, in favor of Itaú Unibanco S.A. (Itaú) to support a bank guarantee issued by Itaú (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 Solazyme Bunge Produtos Renováveis Ltda., the Companys joint venture with Bunge Global Innovation, LLC and certain of its affiliates.
In connection with the Facility, the Bank has a security interest in the Companys cash, deposit accounts, securities accounts and cash equivalents
maintained by the Company with the Bank unless (i) the Company breaches financial covenants that require the Company to maintain (x) available balances of not less than one hundred ten percent (110%) of the dollar equivalent of the
face amount of all outstanding letters of credit under the Facility in a designated deposit account with the Bank and (y) not less than twenty million dollars ($20,000,000) in an investment management account or a deposit account maintained
with the Bank, (ii) the obligations under the Facility fail to constitute senior indebtedness under any existing or future debt agreements of the Company, including, without limitation, the Indenture dated as of January 24,
2013 (the 2013 Indenture) by and between the Company and Wells Fargo Bank, National Association, as trustee and the Indenture dated as of April 1, 2014 (the 2014 Indenture, and together with the 2013 Indenture, the
Indenture) by and between the Company and Wells Fargo Bank, National Association as trustee, (iii) there is a payment default under any indebtedness of the Company, including, without limitation, the obligations under the Facility,
(iv) any draft is presented for payment under any letter of credit issued under the Facility, (v) if prior to the expiration and termination of the Agreement and the letters of credit issued under the Facility, the Indenture, replacement
notes or any other indebtedness of the Company in a principal amount greater than $4,000,000 will mature within 150 days or less or (vi) there occurs any bankruptcy or insolvency event relating to the Company or any event which permits the
holder of the Banco Nacional Guaranty to demand payment or accelerate the Companys obligations under the Banco National Guaranty, in which case the Bank will have a security interest in certain additional assets of the Company and proceeds
therefrom excluding certain excluded assets.
If a demand for payment is made under any letter of credit issued under the Facility, the principal amount
paid by the Bank shall accrue interest at a floating per annum rate equal to two percentage points (2.0%) above the Prime Rate (as defined in the Agreement), which interest shall be payable on demand. The Company will pay the Bank an annual fee
of two and one half percent (2.50%) per annum with respect to letters of credit issued. The maturity date of the Facility is July 19, 2019.
In
addition to the financial covenants and covenants related to the Indenture referenced above, the Company is subject to customary negative covenants under the Agreement, including covenants that place limitations on the disposition of assets; changes
in business, control or business locations; mergers and acquisitions; the incurrence of indebtedness; the creation of liens; the maintenance of collateral accounts; the payment of dividends; loans and investments; transactions with affiliates; and
certain payments under, or amendments to, the Companys subordinated indebtedness.
The 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 becomes insolvent.
The foregoing description is only a summary of certain terms
and conditions of the Agreement and is qualified in its entirety by reference to the 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, 2016.
Item 1.02
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Termination of a Material Definitive Agreement.
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On May 10, 2016, the letter of credit issued in
2013 by HSBC Bank, USA, National Association terminated.
On June 29, 2016, each of the Standby Letter of Credit Agreement and Bank Services Pledge
Agreement entered into between the Bank and the Company on April 29, 2016, as previously disclosed in a Current Report on Form 8-K filed by the Company on May 4, 2016, terminated and the approximately $12.6 million originally pledged
by the Company as collateral to secure the SVB SLOC issued on April 29, 2016 was released.