Exhibit 10.46
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is entered into as of
September 28, 2001 among Phone 1, Inc. (the "Borrower"), a Florida Corporation,
having its business address at 000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 0000, Xxxxx,
Xxxxxxx, 00000; Globaltron Corporation ( the "Guarantor"), a Florida corporation
and a parent of the Borrower, having its principal office at 000 Xxxxx Xxxxxxxx
Xxxx, Xxxxx 0000, Xxxxx, Xxxxxxx, 00000 and GNB Bank Panama S.A. (the "Lender"),
a bank organized organized under the laws of the Republic of Panama, having its
principal offices at Xxxxx 00 x Xxxxxxxx xx xx Xxxxxxx, Torre Banco Continental,
Piso 30, Panama City, Republic of Panama (the "Office").
R E C I T A L S
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Lender is willing to make available to the Borrower certain
loaned money as provided for herein;
WHEREAS, as an inducement to the Lender, the Guarantor wishes
to guaranty Borrower's obligations hereunder, including but not limited to the
repayment of the Loan and its interest.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
(a) As used in this Agreement, the following defined terms
shall have the meanings indicated below:
"Agreement" means this Loan Agreement, the Exhibits and any
other documents or instruments delivered in accordance herewith, as the same may
be amended from time to time in accordance with the terms hereof.
"Borrower" has the meaning ascribed to it in the forepart of
this Agreement.
"Business Day" means any day other than a Saturday, Sunday or
any day on which State and Federal banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
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"Election Number" shall mean the Partial Amount divided by the
Total Amount.
"Event of Default" has the meaning ascribed to it in Article
III.
"Exchange Act" shall mean the Securities Exchange Act of 1934
or any successor statute thereof.
"Guarantor" has the meaning ascribed to it in the forepart of
this Agreement.
"Guaranteed Obligations" shall have the meaning set forth in
Section 7.1.
"Indebtedness" shall mean as to any Person (i) all
indebtedness (including principal, interest, fees and charges) of such Person
(x) evidenced by any notes, bonds, debentures or similar instruments made or
issued by such Person, (y) for borrowed money or (z) for the deferred purchase
price of property or services, (ii) the face amount of all letters of credit
issued for the account of such Person, (iii) all liabilities secured by any lien
on any property owned by such Person, (iii) all liabilities secured by any lien
on any property owned by such Person, whether or not such liabilities have been
assumed by such Person (provided, however, if such liability is non-recourse to
such Person, the amount of the Indebtedness attributed thereto shall not exceed
the greater of the fair market value of such property or the book value of such
property), (iv) the aggregate amount required to be capitalized in accordance
with GAAP under leases under which such Person is the lessee and (v) all
guarantees or other contingent obligations of such Person as to any of the
foregoing.
"Interest Rate" shall mean a 10% per annum interest rate.
"Lender" has the meaning attributed to it in the forepart of
this Agreement.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
any recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Loan" means the loan made by the Lender to the Borrower
pursuant to Section 2.1.
"Material Adverse Effect" shall mean (a) any material adverse
effect on the condition (financial or otherwise), business, operations, assets,
revenues, properties or prospects of the Borrower or the Guarantor, or (b) any
material adverse effect on the ability of the Borrower or the Guarantor to
perform any of their obligations under this Agreement or under the Note dated as
of this date executed among the Borrower, the Lender and the Guarantor.
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"Note" means the convertible Promissory Note due on the
Repayment Date of the Borrower issued pursuant to Section 2.2, in the form
attached as Exhibit 1 hereto and made a part hereto.
"Notice of Conversion" shall mean the notice by which the
Lender notifies the Borrower about its intention to exercise its conversion
rights.
"Office" shall have the meaning set forth in the forepart of
this Agreement.
"Partial Amount" means the principal amount and interest of
the Loan and the Note that the Lender elects to convert.
"Partial Election Percentage" means the percentage, on a fully
diluted basis, of the total issued and outstanding stock of the Borrower equal
to 7.5% multiplied by the Election Number.
"Person" or "Persons" shall mean any natural person,
corporation, limited liability company, general partnership, limited
partnership, limited liability partnership, proprietorship, joint venture, other
business organization, trust, union, association or governmental or regulatory
authority.
"Repayment Date" shall have the meaning set forth in Section
2.8.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor statute thereof.
"Total Amount" means the total outstanding principal and
interest of the Loan and the Note.
(b) Unless the context of this Agreement otherwise requires,
(i) words of any gender include each other gender; (ii) words using the singular
or plural number also include the plural or singular number, respectively; (iii)
the terms "hereof," "herein," "hereby" and derivative or similar words refer to
this entire Agreement; (iv) the terms "Article" or "Section" refer to the
specified Article or Section of this Agreement; and (v) the phrases "ordinary
course of business" and "ordinary course of business consistent with past
practice" refer to the business and practice of the Borrower.
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ARTICLE II
THE LOAN
2.1 The Loan.
Subject to and upon the terms and conditions set forth herein,
Lender shall, on the date hereof, make a Loan to the Borrower in the principal
amount of US$6,000,000.
2.2 Note.
The Borrower's obligations to pay the principal of, and
interest on, the Loan made by the Lender are evidenced by the Note to be duly
executed and delivered by the Borrower, substantially in the form of Exhibit 1,
and delivered to the Lender.
2.3 Method, Place and date of Payment.
Except as otherwise specifically provided herein, all payments
under this Agreement or the Note shall be made to the Lender not later than
12:00 Noon (New York time) on the Repayment Date or on the date when due, in
accordance with the terms of this Agreement and shall be made in lawful money of
the United States of America in New York Clearing House funds, at the Office or
such other place as may be designated by the Lender in a written notice given to
the Borrower. Whenever any payment to be made hereunder or under the Note shall
be stated to be due on a day, which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day.
2.4 Prepayment.
The Note may not be prepaid without the express written
consent of the Lender, but in the event that $6,000,000 or more is invested in
the equity securities of the Borrower or the Guarantor and if elected by the
Lender, the Borrower shall have a mandatory obligation to prepay the outstanding
balance of the Note, together with accrued interest.
2.5 Interest.
(a) The Borrower shall pay, quarterly in arrears, interest in
respect of the unpaid principal amount of the Loan from the date hereof until
the Repayment Date (whether by acceleration or otherwise) at a rate per annum
which shall be equal to the Interest Rate.
(b) If principal or interest on the Loan is not paid when due,
thereafter the Borrower shall pay interest in respect of the unpaid principal
amount of the Loan at a rate per annum equal to 6% in excess of the Interest
Rate but not in excess of usury laws. Notwithstanding anything contained herein
to the contrary, an amount equal to the interest due on the outstanding balance
of the Loan shall be maintained by the Borrower in its account at a bank, within
or without the United States, designated by the Lender. The Borrower may not use
any of the funds in such accounts or permit a Lien thereon without the consent
of the Lender. Borrower specifically grants to the Lender the authority and
right to take amounts when due for interest hereunder from such account and
Borrower shall sign such authorizations or other documentation, which said bank
may require for the Lender to take such actions.
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(c) Accrued (and theretofore unpaid) interest in respect of
the Loan shall be payable (i) quarterly in arrears commencing on December 31,
2001; or (ii) in the occurrence of an Event of Default, on demand.
2.6 Net Payments.
All payments made by the Borrower hereunder or under the Note
will be made without setoff, counterclaim or other defense. All such payments
will be made free and clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein.
2.7 Compensation.
The Borrower shall compensate the Lender for all reasonable
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or re-employment of
deposits or other funds required by the Lender to fund the Loan) which the
Lender may sustain as a consequence of any default of the Borrower of its
obligation under this Agreement or the Note, including but not limited to the
repayment of the Loan.
2.8 Repayment.
The Loan and the interest shall be pay in full on the
Repayment Date which shall occur on the earliest of (i) 1 year from the date
hereof; or (ii) as provided in Section 2.4 hereof.
2.9 Conversion.
(a) By notice in writing to the Borrower, the Lender may elect
(either prior to the Repayment Date or after the Repayment Date, if the Loan and
the Note have not been fully paid) to convert the Loan and the Note in whole or
in part, as elected by the Lender (1) into either the shares described in
Subparagraphs (i) or (ii) below; or (2) part into the shares described in
Subparagraph (i) below and part into the shares described in Subparagraph (ii)
below:
(i) that number of shares of common stock or any other class
of securities issued by the Borrower, having privileges or rights
senior to the common stock, equal to the principal and interest accrued
thereon under the Note that the Lender elects to convert divided by:
a) if the Lender has elected to convert the Loan and
the Note in whole, such conversion price per share that
results in granting to the Lender such number of securities of
the Borrower representing 7.5%, on a fully diluted basis, of
the total issued and outstanding stock of the Borrower
immediately after the conversion; and
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b) if the Lender has elected to convert the Loan and
the Note in part, such conversion price per share that results
in granting to the Lender such number of securities of the
Borrower representing the Partial Election Percentage; or
(ii) that number of shares of common stock of the Guarantor
equal to the principal and interest accrued thereon under the Note that
the Lender elected to convert divided by 1.5.
(b) In the event that the Lender exercises its conversion
right with respect to only a portion of the outstanding principal amount and/or
accrued interest under the Loan and the Note, that portion of the principal
amount not so converted shall continue to accrue interest and shall be repayable
by the Borrower in accordance with the terms hereof and the Borrower shall issue
a new promissory note to the Lender in substantially the form of the surrendered
Note, in an aggregate principal amount equal to the remaining unpaid principal
balance of the surrendered Note.
ARTICLE III
EVENTS OF DEFAULT
It shall be an Event of Default if any of the conditions or
events described in Sections 3.1 through 3.7 ("Events of Default") shall occur
and be continuing:
3.1 Failure To Make Payments When Due.
The Borrower shall (i) default in the payment when due of the
principal amount or the interest on the Loan or (ii) default, and such default
shall continue unremedied for two or more Business Days, in the payment when due
of any interest on the Loan or the Note or any other amounts owed by Borrower
hereunder or under the Note;
3.2 Breach of Agreements.
Failure of the Borrower to perform or comply with any of its
obligations contained in this Agreement;
3.3 Representations, etc.
Any representation, warranty, covenant or statement made by or
on behalf of the Borrower in this Agreement or in the Note or in any certificate
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delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made;
3.4 Involuntary Bankruptcy. Appointment of Receiver, Etc.
(i) A court shall enter a decree or order for relief in
respect of the Borrower or the Guarantor in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted and remain unstayed under any applicable federal or state law; or
(ii) an involuntary case is commenced against the Borrower or the Guarantor
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; 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, the
Guarantor or over all or a substantial part of any of its assets and properties,
shall have been entered; or an interim receiver, trustee or other custodian of
the Borrower, the Guarantor for all or a substantial part of its assets and
properties is involuntarily appointed; or a warrant of attachment, execution or
similar process is issued against any substantial part of the assets and
properties of the Borrower or the Guarantor and the continuance of any such
events in this clause (ii) for thirty (30) days unless dismissed, bonded,
stayed, vacated or discharged; or
3.5 Voluntary Bankruptcy; Appointment of Receiver, Etc.
The Borrower or the Guarantor shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, 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 making
possession by a receiver, trustee or other custodian for all or a possession by
a receiver, trustee or other custodian for all or a substantial part of its
assets and properties; the making by the Borrower or the Guarantor of any
assignment for the benefit of creditors; the admission by the Borrower or the
Guarantor in writing of their inability to pay their debts as such debts become
due; or the board of directors of the Borrower or the Guarantor, when
applicable, (or any committee thereof) adopts any resolution or otherwise
authorizes any action to approve any of the foregoing.
3.6 Default Under Other Agreements.
If either the Borrower, the Guarantor or any of its
subsidiaries shall (i) default in any prepayment of all or any portion of any
Indebtedness other than the Note or (ii) default in the observance or
performance of any agreement, covenant or condition relating to any Indebtedness
other than the Note, or contained in any instrument or agreement evidencing,
securing or relating thereto and, in the case of clauses (i) and (ii), and such
default shall continue without having been duly cured, waived or consented to,
beyond the period of grace, if any, specified in the agreement or instrument
relating thereto.
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3.7 Judgments or Liens.
One or more judgments or decrees shall be entered against the
Borrower or the Guarantor or any of its subsidiaries involving in the aggregate
for them a liability of the equivalent of $500,000 or more, and all such
judgments or decrees shall not have been vacated, discharged or stayed or
bounded pending appeal within 30 days after the entry thereof or a Lien is
imposed on the assets or properties of the Borrower in an amount of in excess,
together with other Liens, of $500,000 exclusive of Liens to equipment vendors
in the ordinary course of business.
3.8 Change in Condition.
Any material adverse change in the condition (financial or
otherwise), operations, assets, liabilities or prospects of the Borrower or any
of its subsidiaries.
3.9 Remedies.
Upon the occurrence of any Event of Default described in this
Article III, the unpaid principal amount of and accrued interest on the Loan
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by the Borrower, and the obligations of the Lender hereunder
shall thereupon terminate.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
In order to induce the Lender to enter into this Agreement and
to make the Loan, the Borrower and the Guarantor, when applicable, make the
following representations, warranties and agreements as of the date hereof,
jointly and severally, which shall survive the execution and delivery of this
Agreement and the Note and the making of the Loan:
4.1 Legal Status.
The Borrower, the Guarantor and each of its subsidiaries (i)
is a duly organized and validly existing corporation in good standing under the
laws of the jurisdiction of its incorporation, (ii) has the power and authority
and possesses all franchises, permits, authorizations and approvals necessary to
carry on their business as now being conducted and to own its property and
assets, and (iii) has good and marketable title to its assets free and clear of
any Lien, except for Liens that do not cause a Material Adverse Effect in the
condition of the Borrower, the Guarantor and its subsidiaries and except as set
forth in filings with the United States Securities and Exchange Commission
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("SEC") under the Securities Act or the Exchange Act ("SEC Filings"). The
Borrower, the Guarantor and each of its subsidiaries are in good standing in
each jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification.
4.2 Subsidiaries.
The only subsidiaries of the Guarantor are set forth in the
SEC Filings. The Borrower does not have any subsidiaries.
4.3 Power and Authority.
(i) The Borrower and the Guarantor have the power and
authority to execute, deliver and perform the terms and provisions of this
Agreement and the Note and have taken, as the case may be, all necessary
corporate action to authorize the execution, delivery and performance by it of
this Agreement; (ii) the Borrower and the Guarantor have duly executed and
delivered this Agreement and the Note which constitutes their legal, valid and
binding obligation enforceable in accordance with their terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or other similar laws relating to or limiting
creditors' rights generally or by general equity principles.
4.4 No Violation.
Neither the execution, delivery or performance by the Borrower
and the Guarantor of this Agreement, nor compliance by them with the terms and
provisions thereof, nor the use of the proceeds of the Loan (i) will contravene
any provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality binding on the
Borrower or any of its subsidiaries, (ii) will conflict or be inconsistent with
or result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default in respect of the terms of any indenture, mortgage,
deed or trust, credit agreement, loan agreement or any other agreement, contract
or instrument to which the Borrower or any of its subsidiaries is a party or by
which its respective properties or assets is bound or to which it may be
subject.
4.5 SEC Filings, Financial Statements.
Guarantor has filed all reports required to be filed by it
with the SEC since its incorporation (collectively, the "Guarantor SEC
Reports"). As of the respective dates they became effective, the Guarantor SEC
Reports filed pursuant to the Securities Act, and as of the respective dates of
filing of the last applicable amendment thereto the Guarantor SEC Reports which
were filed pursuant to the Exchange Act, did not contain any untrue statement of
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Borrower and those of Guarantor
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included in the Guarantor SEC Reports complied as to form in all material
respects with the applicable published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
as otherwise noted in those reports) and fairly present the consolidated
financial position of Borrower and the Guarantor and its consolidated
subsidiaries as at the dates thereof and the consolidated results of operations
and cash flows for the periods then ended, except that in the case of the
unaudited consolidated financial statement included in any form 10-Q, the
presentation and disclosure conform with the applicable rules of the Exchange
Act and are subject to year-end adjustments.
4.6 Litigation.
Except as set forth in the SEC Filings, there is no claim,
counterclaim, action, suit, order, proceeding or investigation pending or, to
the knowledge of the Borrower and the Guarantor, threatened against or affecting
any of them with respect to or affecting the Borrower, the Guarantor or any of
its subsidiaries, or their assets, properties or rights, or relating to the
transactions contemplated hereby, before any court, agency, regulatory,
administrative or other governmental body or officer of before any arbitrator.
4.7 Undisclosed Liabilities.
Except as set forth in the SEC Filings, the Borrower, the
Guarantor and its subsidiaries have no liabilities or obligations of any nature
(whether accrued, absolute, contingent, un-asserted or otherwise), including any
liabilities or obligations the Borrower, the Guarantor and its subsidiaries may
incur for product liability, misrepresentation, fraud or comparable claims
arising out of the conduct of the business of the Borrower, the Guarantor and
its subsidiaries prior to the date hereof, except (i) as set forth on the SEC
Reports, (ii) for purchase contracts and orders for inventory, equipment and
supplies in the ordinary course of business consistent with past practice, and
not in violation of this Agreement.
4.8 True and Complete Disclosure.
All factual information (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of the Borrower and the Guarantor in
writing to the Lender for purposes of or in connection with this Agreement or
any transaction contemplated herein or in the Note is, and all other such
factual information (taken as a whole) hereafter furnished by or on behalf of
the Borrower and the Guarantor in writing to any Lender will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading at such time in light of
the circumstances under which such information was provided. There is no fact or
circumstances which has, or is reasonably likely to have, a Material Adverse
Effect on the Borrower or the Guarantor or taken as a whole which has not been
disclosed herein or in such other documents, certified and statements furnished
to the Lender for use in connection with the transactions contemplated hereby.
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4.9 Tax Returns and Payments.
Except as provided in Schedule 4.6, the Borrower and the
Guarantor have filed all tax returns required to be filed by them and have paid
all taxes payable by them which have become due pursuant to such tax returns and
all other taxes and assessments payable by them which have become due, other
than those not yet delinquent and except for those contested in good faith and
for which adequate reserves have been established.
4.10 Capitalization.
(a) As of the date hereof, the authorized capital stock of the
Borrower consists of [ ] shares of common stock, $.001 par value per share, of
which [ ] shares are issued and outstanding and [ ] shares of preferred stock,
$.001 par value per share, none of which is issued and outstanding. All the
outstanding shares have been duly and validly issued, are fully paid and
non-assessable.
4.11 Compliance with Laws, etc.
The Borrower, the Guarantor and all of its subsidiaries are in
compliance in all material respects with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls).
4.12 Labor Relations.
To the Borrower's and the Guarantor's knowledge there is (i)
no significant unfair labor practice complaint pending or threatened against
either the Borrower, the Guarantor or any of its subsidiaries, or before any
governmental body or agency and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its subsidiaries,
threatened against the Borrower, the Guarantor or any of its subsidiaries or,
(ii) no significant strike, labor dispute, slowdown or stoppage pending against
the Borrower, the Guarantor or any of its subsidiaries or, threatened against
the Borrower, the Guarantor or any of its subsidiaries, (iii), no union
representation question existing with respect to the employees of the Borrower,
the Guarantor or any of its subsidiaries.
4.13 Properties.
Except as set forth in the SEC Filings, the Borrower and the
Guarantor have good and marketable title, without regard to defects of title,
which do not have a Material Adverse Effect, to all properties owned by them,
free and clear of all Liens. With respect to any lease or rental agreement to
which the Borrower or the Guarantor are a party, (i) such lease or rental
agreement is in full force and effect, (ii) the Borrower and/or the Guarantor
have complied in all material respects with all of the terms of such lease or
rental agreement.
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4.14 Assets other than Real Property.
The Borrower, the Guarantor and its subsidiaries has good
title to all tangible assets owned by them reflected in the SEC Reports and
financial information, free and clear of all Liens that individually or in the
aggregate would not have a Material Adverse Effect on the Borrower, the
Guarantor or its subsidiaries. The Borrower, the Guarantor and its subsidiaries
own, or lease all the intangible personal property currently used in the conduct
of its business as presently conducted. All the intangible personal property
owned by the Borrower, the Guarantor or its subsidiaries is in all material
respects in good operating condition and repair, ordinary wear and tear
excepted, and all personal property leased by the Borrower or the Guarantor is
in all material respects in the condition required of such property by the terms
of the lease applicable thereto.
4.15 Patents, Licenses, Franchises and Formulas.
The Borrower and the Guarantor own all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and have
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of their business, without any known conflict
with the rights of others which, or the failure to obtain which, as the case may
be, would result in a Material Adverse Effect on the Borrower or the Guarantor.
4.16 Intellectual Property.
(a) The Borrower and the Guarantor own and posses all right,
title and interest in and to, or have a valid license to use, all of the
Proprietary Rights (as defined below) used in the operation of its business as
presently conducted and none of such Proprietary Rights have been abandoned;
(b) the Borrower or the Guarantor have not received any notice
of any reasonable basis for an allegation of, any infringement or
misappropriation by, or conflict with, any third party with respect to such
Proprietary Rights; and
(c) neither the Borrower nor the Guarantor or any of its
subsidiaries has infringed, misappropriated or otherwise violated any material
Proprietary Rights of any third parties, and neither the Borrower nor the
Guarantor has knowledge of any infringement, misappropriation or conflict which
will occur as a result of the continued operation of the Borrower and the
Guarantor as presently operated.
As used herein, the term "Proprietary Rights" means all
proprietary information of the Borrower and Guarantor, including all patents,
patent applications, patents rights and inventions, trademarks, service marks,
trade names, copyrights and trade secrets.
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4.17 Insurance.
The Borrower, the Guarantor and its subsidiaries presently
maintains and have maintained in effect since their formation all the insurance
policies required by applicable law or reasonably appropriate in connection with
the operation of its business as presently conducted.
4.18 No Misrepresentation.
The representations and warranties contained in this Article
IV and any Exhibits contained attached hereto, do not contain any untrue
statement or a material fact or omit to state any material fact necessary in
order to make the statements and information contained in this Section 4 and on
such Exhibits not misleading.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower and the Guarantor covenant and agree that on and
after the date hereof and until the Note, together with all accrued interest,
fees and all other obligations incurred hereunder and thereunder, are paid in
full:
5.1 Information Covenants.
The Borrower and the Guarantor will furnish or cause to be
furnished to the Lender:
(a) Promptly, copies of all financial information, proxy
materials and material filings, reports and information which either of the
Borrower and the Guarantor shall file or be required to file with any agency,
regulatory authority or instrumentality of the Government.
(b) Other Information. From time to time, such other
information or documents (financial or otherwise) as any Lender may reasonably
request.
5.2 Books, Records and Inspections.
The Borrower, the Guarantor and each of its subsidiaries will
keep proper books of record and account in which full, true and correct entries
in conformity with generally accepted accounting principles in the United States
consistently applied in the jurisdiction of each corporation and all
requirements of applicable law shall be made of all dealings and transactions in
relation to its business and activities.
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5.3 Maintenance of Property, Insurance.
The Borrower, the Guarantor and each of its subsidiaries will
(i) keep all property useful and necessary in its business in good working order
and condition (ordinary wear and tear excepted), (ii) maintain with financially
sound and reputable insurance companies insurance on all its property in at
least such amounts and against at least such risks as are customary and in
accordance with industry standards for the business in which it is engaged.
5.4 Corporate Franchises.
The Borrower, the Guarantor and each of its subsidiaries will
do or cause to be done, all things reasonably necessary to preserve and keep in
full force and effect its existence and its material rights, franchises,
licenses and other intellectual property.
5.5 Compliance with Statutes, etc.
The Borrower, the Guarantor and each of its subsidiaries will
comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property, except where the failure to so comply would not have a Material
Adverse Effect on the Borrower, the Guarantor or any of its subsidiaries.
5.6 Performance of Obligations.
The Borrower, the Guarantor and each of its subsidiaries
will: (i) perform all of its obligations under (a) this Agreement, and (b) the
terms of each other mortgage, indenture, security agreement, and other debt
instrument by which it is bound, except where the failure to so perform would
not have a Material Adverse Effect on the Borrower, the Guarantor or any of its
subsidiaries.
5.7 Taxes.
The Borrower, the Guarantor and each of its subsidiaries will
pay and discharge or cause to be paid and discharged all applicable federal,
state, local and other material taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any of its
property, real, personal or mixed or upon any part thereof, when due, as well as
all lawful claims for labor, materials and supplies which, if unpaid might by
law become a lien upon such property.
5.8 Compliance.
The Borrower, the Guarantor and each of its subsidiaries will
maintain all material authorizations, qualifications, licenses and permits
necessary for the operation of their respective business and the ownership of
their respective property.
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ARTICLE VI
NEGATIVE COVENANTS
The Borrower and the Guarantor, when applicable, covenant and
agree that on and after the date hereof and until the Loan and the Note,
together with interest, fees and all other obligations incurred hereunder and
thereunder, are paid in full:
6.1 Liens.
The Borrower, the Guarantor and each of its subsidiaries will
not, create, incur, assume or suffer to exist any Lien upon or with respect to
any property or assets (real or personal, tangible or intangible) of each of
them, whether now owned or hereafter acquired.
6.2 Consolidation, Merger, Sale of Assets, etc.
The Borrower, the Guarantor and each of its subsidiaries will
not wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing, at any future time) all or any part of its
property or assets, or purchase or otherwise acquire (in one or a series of
related transactions) any part of the property or assets (other than purchases
or other acquisitions of inventory, materials and equipment in the ordinary
course of business) of any Person.
6.3 Dividends and Redemptions.
(a) The Borrower, the Guarantor and each of its subsidiaries
will not declare or pay any dividends, or return any capital, to its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for any consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any options or
warrants issued by the Borrower or the Guarantor with respect to its capital
stock), or set aside any funds for any of the foregoing purposes; and (b) the
Borrower or the Guarantor will not redeem any common stock of either the
Borrower or the Guarantor.
6.4 Indebtedness.
Except hereunder, the Borrower and the Guarantor will not, and
will not permit any of its subsidiaries to, contract, create, incur, assume or
suffer to exist any Indebtedness, except (i) certain vendor financing as
described in the SEC Filings and (ii) charges payable incurred in the ordinary
course of business.
6.5 Advances, Investments and Loans.
The Borrower and the Guarantor will not, and will not permit
any of its subsidiaries to, lend money or credit or make advances to any Person,
or purchase or acquire any stock, obligations or securities of, or any other
interest in, or make any capital contribution to, any other Person, except that
the following shall be permitted: (i) advances, investments and loans to
15
wholly-owned subsidiaries of the Borrower or upstream advances, investments and
loans to the Guarantor; (ii) loans made in the ordinary course of business to
employees; (iii) extensions of credit made in the ordinary course of business in
accordance with customary trade practices; (iv) capital expenditures and (v)
presently outstanding loans and investments if any, as disclosed in the
Guarantor SEC Filings.
6.6 Transactions with Affiliates.
Neither the Borrower nor the Guarantor will enter into any
transaction or series of related transactions, whether or not in the ordinary
course of business, with any affiliate other than on terms and conditions
substantially as favorable to, as the case may be, the Borrower or any such
subsidiary as would be obtainable by the Borrower or the Guarantor at the time
in a comparable arm's-length transaction with a Person other than an affiliate.
6.7 Limitation on Issuance of Common Stock or other
Securities.
The Borrower and the Guarantor will not, and will not permit
any of its subsidiaries to, issue any common stock or other securities
(including by way of sales of treasury stock) or any options or warrants to
purchase, or securities convertible into, common stock, except for (i) transfers
and replacements of then outstanding shares of common stock, (ii) stock splits,
stock dividends and similar issuances which do not decrease the percentage
ownership of the Guarantor in any class of the common stock of the any of the
subsidiaries of the Borrower.
6.8 Business.
Neither the Borrower nor the Guarantor will engage (directly
or indirectly) in any business other than the business in which they are engaged
on the date hereof.
ARTICLE VII
GUARANTY
7.1 The Guarantor irrevocably and unconditionally, guarantee
the full and prompt payment when due of the principal amount of and interest on
the Note issued under this Agreement and of all other obligations and
liabilities of the Borrower now existing or hereafter incurred under, arising
out of or in connection with this Agreement and the Note and the due performance
and compliance with the terms of this Agreement and the Note by the Borrower
("Guaranteed Obligations"). The Guarantor understands, agrees and confirms that
the Lender may enforce this guaranty obligation up to the full amount of the
Guaranteed Obligations against it without proceeding against the Borrower. The
Guarantor irrevocably and unconditionally promises to pay such Guaranteed
Obligations to the Lender, or order, on demand, in lawful money of the United
States of America. The guaranty provided herein shall constitute a guarantee of
payment and not of collection.
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7.2 The Guarantor hereby waives notice of acceptance of this
guaranty obligation and notice of any liability to which it may apply, and
waives presentment, demand of payment, protest, notice of dishonor or nonpayment
of any such liability, suit or taking of other action by the Lender against, and
any other notice to, any party liable thereon (including the Guarantor).
7.3 The obligations of the Guarantor under this agreement are
absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever.
ARTICLE VIII
MISCELLANEOUS
8.1 Notices.
All notices, requests and other communications hereunder must
be in writing and delivered personally against written receipt, by facsimile
transmission with answer back confirmation or mailed by prepaid first class
certified mail (air mail, if faster delivery), return receipt requested, or
mailed by overnight (or in the case of notices being sent or delivered outside
the United States, second day) courier prepaid, to the parties at the following
addresses or facsimile numbers:
If to Borrower, to:
Phone 1, Inc.
000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxx, Xxxxxxx, 00000
Attn: Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to the Guarantor, to:
Globaltron Corporation
000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxx, Xxxxxxx, 00000
Attn: Xxxx Xxxxx
Fax: (000) 000-0000
17
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
If to Lender, to:
GNB Bank Panama X.X
Xxxxx 50 y Xxxxxxxx de la Guardia,
Torre Banco Continental, Piso 00
Xxxxxx xx Xxxxxx, Xxxxxx.
Attn: Xxxxx Xxxxxxxxx
Fax: (000-000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxxxx
Fax: (000-000) 000-0000
All such notices, requests and other communications will (i)
if delivered personally to the address as provided in this Section, be deemed
given upon delivery, (ii) if delivered by facsimile transmission to the
applicable facsimile number as provided in this Section, be deemed given upon
receipt, (iii) if delivered by United States mail in the manner described above
to the address as provided in this Section, be deemed given on the earlier of
the tenth Business Day following mailing or upon receipt and (iv) if delivered
by courier to the address as provided in this Section, be deemed given on the
earlier of the first Business Day (second Business Day in the case of notices
given or sent outside the United States) following the date sent by such courier
or upon receipt (in each case regardless of whether such notice, request or
other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section). Any party from time to time
may change its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other party
hereto at least ten (10) Business Days prior to the effective date of such
notice.
8.2 Entire Agreement.
This Agreement and the Note supersede all prior discussions
and agreements between the parties with respect to the subject matter hereof and
thereof and contain the sole and entire agreement between the parties hereto
with respect to the subject matter hereof and thereof.
8.3 Independence of Representations, Warranties and Covenants.
All representations, warranties and covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another representation,
warranty or covenant shall not avoid the occurrence of an Event of Default if
such action is taken or condition exists.
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8.4 No Third Party Beneficiary.
The terms and provisions of this Agreement are intended solely
for the benefit of each party hereto and their respective successors or
permitted assigns, and it is not the intention of the parties to confer
third-party beneficiary rights.
8.5 Assignment; Binding Effect.
This Agreement, all the rights, interest or obligation
hereunder may be assigned by the other party with the prior written consent of
the other party. This Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective permitted successors and
assigns.
8.6 Headings.
The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
8.7 Invalid Provisions.
If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future Law, and if the rights or
obligations of any party hereto under this Agreement will not be materially and
adversely affected thereby, (i) such provision will be fully severable, (ii)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance here from and (iv) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
8.8 Governing Law.
THIS AGREEMENT, HAVING BEEN SIGNED IN THE STATE OF NEW YORK,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW
PROVISION OR RULE.
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8.9 Computations.
All computations of interest hereunder shall be made on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
are payable.
8.10 Counterparts.
This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
8.11 Independent Advice.
Lender confirms that he fully understands his rights and
obligations hereunder and that he has had an opportunity to consult with such
independent advisors, including counsel, as he deemed necessary or appropriate.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officer of each party hereto as of the date first above
written.
PHONE 1, INC.
By: _________________________
Name: _______________________
Title: _______________________
GLOBALTRON CORPORATION
By: _________________________
Name: ______________________
Title: _______________________
GNB BANK PANAMA S.A.
By: __________________________
Name: _______________________
Title: _______________________
21
THIS NOTE MAY NOT BE TRANSFERRED, SOLD, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
IN ACCORDANCE WITH ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
NOTE
----
$6,000,000
New York, NY
September 28, 2001
FOR VALUE RECEIVED, Phone 1 Inc., a Florida corporation (the
"Borrower"), having a principal office at 000 Xxxxx Xxxxxxxx Xxxx, Xxxxx 0000,
Xxxxx, Xxxxxxx 00000 hereby promises to pay to the order of GNB Bank Panama S.A.
("Lender") on the Repayment Date, at Xxxxx 00 x Xxxxxxxx xx xx Xxxxxxx, Torre
Banco Continental, Piso 30, Panama City, Republic of Panama, or such other place
(the "Office"), as may be designated by the Lender in a written notice given to
the Borrower, in lawful money of the United Sates of America in New York
Clearing House funds, the principal sum of Six Million ($6,000,000.00) United
States Dollars (the "Principal Amount").
The Borrower promises also to pay, quarterly in arrears, interest on
the unpaid Principal Amount in like money at said Office from the date hereof
until paid at Interest Rate.
Capitalized terms used herein but not defined shall have the meanings
ascribed to them in the Loan Agreement, dated as of the date hereof, between the
Borrower, the Lender and Globaltron Corporation as the guarantor.
Any interest due under this Note may be offset by the Lender as against
any funds of the Borrower on deposit at the Lender, if any.
By notice in writing to the Borrower, the Lender may elect (either
prior to the Repayment Date or after the Repayment Date, if this Note has not
been fully paid) to convert this Note in whole or in part, as elected by the
Lender (1) into either the shares described in Subparagraphs (i) or (ii) below;
or (2) part into the shares described in Subparagraph (i) below and part into
the shares described in Subparagraph (ii) below:
(i) that number of shares of common stock or any other class
of securities issued by the Borrower, having privileges or rights
senior to the common stock, equal to the principal and interest accrued
thereon under the Note that the Lender elects to convert divided by:
a) if the Lender has elected to convert the Loan and
the Note in whole, such conversion price per share that
results in granting to the Lender such number of securities of
the Borrower representing 7.5%, on a fully diluted basis, of
the total issued and outstanding stock of the Borrower
immediately after the conversion; and
b) if the Lender has elected to convert the Loan and
the Note in part, such conversion price per share that results
in granting to the Lender such number of securities of the
Borrower representing the Partial Election Percentage; or
(ii) that number of shares of common stock of the Guarantor
equal to the principal and interest accrued thereon under the Note that
the Lender elected to convert divided by 1.5.
In the event that the Lender exercises its conversion right with
respect to only a portion of the outstanding principal amount and/or accrued
interest under this Note, that portion of the principal amount not so converted
shall continue to accrue interest and shall be repayable by the Borrower in
accordance with the terms hereof and the Borrower shall issue a new promissory
note to the Lender in substantially the form of the surrendered Note, in an
aggregate principal amount equal to the remaining unpaid principal balance of
the surrendered Note.
The Borrower shall pay on demand all losses, costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Note.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
No failure on the part of Lender to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
This Note, having been signed in the State of New York, shall be
governed by and construed in accordance with the laws of the State of New York,
United States of America, without regard to conflict of law principles.
Any proceedings with respect to the interpretation of this Note or the
rights and obligations of the undersigned shall be exclusively brought in the
United States District Court for the Southern District of New York or, if such
court lacks subject matter jurisdiction, in the Supreme Court of the State of
New York, County of New York and the undersigned waives the right to object to
the jurisdiction or venue of either such Court or to claim it is inconvenient
forum.
PHONE 1 INC.
By:
-----------------------------
Name:
----------------------------
Title:
---------------------------
