TERM CREDIT AGREEMENT
THIS TERM CREDIT AGREEMENT (this "Agreement") is made and entered into
as of October 27, 2004 by and between STONEPATH HOLDINGS, (HONG KONG) LIMITED a
company incorporated under the laws of Hong Kong ("Borrower"), HONG KONG LEAGUE
CENTRAL CREDIT UNION, in its capacity as a lender hereunder ("Lender") and SBI
ADVISORS, LLC, a California limited liability company, in its capacity as agent
for Lender ("Agent"), with reference to the following:
WITNESSETH:
WHEREAS, Lender desire to make Term Loans to Borrower, and Borrower
desires to borrow from Lender the amount of such Term Loans, subject to and in
accordance with the terms and conditions set forth herein; and
WHEREAS, Lender desires to appoint Agent, and Agent desires to accept
such appointment, to act as agent for and on behalf of Lender, with respect to
the Term Loans, for the purposes described herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the delivery,
receipt, and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Advance Request" has the meaning assigned to such term in SECTION 6.
"Business Day" means a day (a) other than Saturday or Sunday, and (b) on
which commercial banks are open for business in New York, New York, and
Los Angeles, California.
"Closing Date" means the date each of the conditions precedent set forth
in SECTION 5 is fully satisfied.
"Collateral" has the meaning assigned to such term in the Security
Agreements.
"Dollars" and "$" means the lawful currency of the United States of
America.
"Event of Default" has the meaning set forth in SECTION 8.
"GAAP" means generally accepted accounting principles in the
United States of America as of the date of the applicable financial report or
calculation.
"Guarantor" shall mean Stonepath Group, Inc., a Delaware corporation.
"Guaranty" shall mean the Guaranty executed by Guarantor in favor of
Lender.
"Interest Rate" has the meaning set forth in SECTION 2(C).
"Lien" means any mortgage, deed of trust, pledge, security interest,
assignment, deposit arrangement, charge or encumbrance, lien (statutory or
other), or other preferential arrangement (including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing or any agreement to give any
security interest).
"Maturity Date" has the meaning set forth in SECTION 2(B).
"Note" has the meaning set forth in SECTION 2(D).
"Person" means an individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or any other
juridical entity.
"Permitted Lien" means as to each (i) statutory liens of landlords,
carriers, warehousemen, processors, mechanics, materialmen or suppliers incurred
in the ordinary course of business and securing amounts not yet due or declared
to be due by the claimant thereunder, (ii) liens or security interests in favor
of the lender, (iii) zoning restrictions and easements, licenses, covenants and
other restrictions affecting the use of real property that do not individually
or in the aggregate have a material adverse effect on the Borrower's ability to
use such real property for its intended purpose in connection with Borrower's
business, (iv) liens in connection with purchase money indebtedness and
capitalized leases; provided that such liens attach only to the assets the
purchase of which was financed by such purchase money indebtedness or which is
the subject of such capitalized leases and that such liens only secure such
purchase money indebtedness and capitalized leases, or (iv) as otherwise
specifically permitted by the Lender in writing.
"Secured Obligations" means the obligations of Borrower under this
Agreement and the Note and the obligations of the Subsidiaries and Guarantor
under the Security Agreements.
"Security Agreements" means, collectively, (i) the Guaranty; and (ii)
the floating charges by and between the applicable Subsidiary and Agent, for the
benefit of Lender, to be delivered pursuant to Section 4(e) under which the
Subsidiaries are granting to Agent a first floating charge on their receivables.
"Subsidiaries" means the subsidiaries of Borrower set forth on
Schedule 2 which are granting to Agent a first floating charge on their
receivables.
"Term Loans" has the meaning set forth in SECTION 2(A).
2. Amount and Terms of the Term Loans.
(a) Term Loan Advances. Subject to the terms and conditions
of this Agreement, Lender hereby agrees to make to Borrower on the Closing Date,
a term loan in the principal amount of Three Million Dollars ($3,000,000.00)
(the "Initial Term Loan"), and (ii) subsequent to the Closing Date upon the
satisfaction in full of the applicable conditions precedent set forth in
SECTION 6, additional loans, in the aggregate principal amount of
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Seven Million Dollars ($7,000,000.00) (the "Additional Term Loans" and
collectively with the Initial Term Loan, the "Term Loans"). The Term Loans may
be repaid at any time prior to the Maturity Date without premium or penalty, but
may not be reborrowed once repaid. At no time shall the aggregate principal
amount of the Term Loans exceed Ten Million Dollars ($10,000,000).
(b) Term. All unpaid principal and accrued but unpaid
interest of the Term Loans and any other amounts payable hereunder shall,
subject to Section 2(c) below, be payable in full on the first anniversary of
the Closing Date (the "Maturity Date").
(c) Interest Rate and Interest Payments. Borrower shall pay
interest on the unpaid principal amount of each Term Loan from the date made
until the Maturity Date, at a rate equal to fifteen percent (15.0%) per annum on
the basis of a 360 day year (the "Interest Rate"). Subject to SECTION 2(E) AND
2(G) below, interest on the outstanding principal amount of each Term Loan shall
be due and payable to Agent, for the benefit of Lender, monthly in arrears, on
the last Business Day of each month commencing October 2004, until the Maturity
Date for each Term Loan, at which time all accrued but unpaid interest with
respect to such Term Loan shall be due and payable.
(d) Promissory Note. The Term Loans shall be evidenced by a
promissory note (the "Note") in the form of Exhibit "A-l" attached hereto, duly
executed and delivered to Agent by Borrower.
(e) Interest on Event of Default. Upon the occurrence and
during the continuance of an Event of Default, Borrower agrees to pay interest
on the entire unpaid principal amount of the Term Loans, as well as on any
interest or other amount past due, from the date of such Event of Default until
the date the same is cured in full, payable on demand, at a rate per annum equal
to the Interest Rate plus three percent (3.0%).
(f) Manner of Payment. All payments of principal or interest
hereunder or under the Note shall be made in United States dollars and delivered
to Lender, in immediately available funds on the date due at such place as
provided in the Note.
(g) Limitation on Interest Rate. In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder and
charged or collected by Agent or Lender or any holder of the Note exceed the
highest rate permissible under any law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto. In the event that such
a court determines that Agent or Lender has charged or received interest
hereunder or under the Note in excess of the highest applicable rate, the rate
in effect hereunder and under the Note shall automatically be reduced to the
maximum rate permitted by applicable law and Agent and Lender shall apply all
interest paid in excess of the maximum lawful rate to the principal balance of
the amounts outstanding hereunder and under the Note. It is the intent of the
parties hereto that Borrower not pay or contract to pay, and that Agent and
Lender not receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by Borrower to Agent
and Lender under applicable law.
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3. Representations and Warranties. In order to induce Agent and
Lender to enter into this Agreement and to make the Term Loans contemplated
hereunder, Borrower hereby represents and warrants to Agent and Lender as
follows:
(a) Legal Status. Borrower is a corporation with limited
liability and validly existing under the laws of Hong Kong and has full power to
carry on its business as it is now being conducted. Guarantor and each
Subsidiary is a corporation duly organized, validly existing and on good
standing under the laws of its jurisdiction of organization. Borrower, the
Subsidiaries and Guarantor are qualified or licensed to do business, and are in
good standing as a foreign corporation in all jurisdictions in which such
qualification or licensing is required or in which the failure to so qualify or
to be so licensed could have a material adverse effect on Borrower, Guarantor or
such Subsidiaries, as the case may be.
(b) Authorization and Validity. This Agreement, the Security
Agreements and the Note have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof and thereof will constitute
legal, valid and binding agreements and obligations of Borrower, Guarantor or
the applicable Subsidiary, as the case may be, enforceable in accordance with
their respective terms.
(c) No Conflict. The execution, delivery, and performance by
Borrower of this Agreements and the Note and by Guarantor and the Subsidiaries
of the Security Agreements do not and will not conflict with the terms of the
charter documents of Borrower, Guarantor or the Subsidiaries, as the case may
be; violate any provision of any judgment, decree or order of any court or
governmental authority by which Borrower, Guarantor or the Subsidiaries, as the
case may be, are bound, or any provision of any law or regulation applicable to
Borrower, Guarantor or the Subsidiaries, as the case may be; or result in a
breach of or constitute a default under any material contract, obligation,
indenture, or other instrument to which Borrower, Guarantor or any of the
Subsidiaries, as the case may be, are a party or by which Borrower, Guarantor or
the Subsidiaries, as the case may be, may be bound.
(d) No Consents. The execution, delivery, and performance by
Borrower of this Agreement and the Note and by Guarantor and the Subsidiaries of
the Security Agreements do not and will not require any authorization, approval,
or other action by, or notice to or filing with, any governmental authority,
regulatory body, or any other person or entity.
(e) Use of Proceeds. No proceeds of the Term Loans will be
used to acquire any equity security of a class that is registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended.
(f) Margin Stock. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of the Term Loans will be used to purchase or
carry any margin stock or extend credit to others for the purpose of purchasing
or carrying any margin stock, or be used for any purpose which violates or is
inconsistent with the provisions of Regulation X of said Board of Governors.
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(g) Filings. Except as otherwise provided by Guarantor on
Form 8-K filed September 21, 2004, from January 1, 2003, Guarantor has made all
of the filings required by the Securities Exchange Act of 1934, as amended, to
be made and no such filing contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements made, not
misleading.
(h) Subsidiaries. Schedule 2 contains a true and correct
statement of the interest in Borrower in each of the Subsidiaries.
4. Covenants. Borrower hereby covenants that until all amounts
outstanding hereunder and under the Notes have been indefeasibly paid in full,
it shall:
(a) Punctual Payments. Punctually pay the interest and
principal with respect to the Term Loans as provided herein and in the Note.
(b) Existence. Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its existence and comply
with the provisions of all documents pursuant to which it is organized and/or
which govern its continued existence; maintain all licenses, permits,
governmental approvals, rights, privileges, and franchises (if any) necessary
for the conduct of its business; and conduct its business in an orderly and
regular manner and in accordance with all applicable laws, rules, regulations,
and orders of any governmental authority having jurisdiction over it or its
business.
(c) Books and Records. Maintain adequate books and records
in accordance with US GAAP consistently applied, and permit any representative
of Agent or any Lender, at any reasonable time, to inspect, audit and examine
such books and records of Borrower and the Subsidiaries, to make copies of the
same, and to inspect their assets and properties.
(d) Underwriting Fees; Lender Expenses. Borrower authorizes
Agent to deduct from each Term Loan advanced pursuant to SECTION 2 (i) an amount
equal to one percent (1.0%) of the principal amount of such Term Loan, which
amount shall be paid on behalf of Borrower to Lender, as an underwriting fee in
consideration of their agreeing to make the Term Loans. The foregoing
underwriting fees shall be non-refundable and deemed fully earned upon receipt.
In addition, Borrower agrees to reimburse Lender from the proceeds of the
initial Term Loan (i) all attorneys' fees and costs incurred by Lender in
connection with this Agreement, the Security Agreements, the Note, and any other
documents and agreements delivered pursuant to the terms thereof, and (ii) any
costs associated with any lien, background, or other searches conducted by
Agent, and any other due diligence expenses relating to the transactions set
forth herein (collectively, the "Transaction Fees"); provided, however, that the
Transaction Fees shall not exceed $50,000 in the aggregate.
5. Conditions Precedent to Initial Term Loan. The obligation of
Lender to make the Initial Term Loan shall be subject to the condition precedent
that Agent shall have received each of the following, each in form and substance
satisfactory to Agent:
(a) This Agreement, duly executed by all of the parties
hereto;
(b) The Note, duly executed by Borrower;
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(c) The Guaranty, duly executed by Guarantor;
(d) Opinions of counsel to Borrower and Guarantor in form
and substance satisfactory to Agent;
(e) Security Agreements providing a first priority security
interest in accounts receivable of the Subsidiaries with an aggregate value of
Four Million Dollars ($4,000,000) as of the date of the Closing; and
(f) Such additional supporting documents as Agent or its
counsel, or any Lender or its counsel, may reasonably request.
6. Conditions Precedent to Additional Term Loans. The obligation of
Lender to make Additional Term Loans shall be subject to the following
conditions precedent.
(a) With respect to each Term Loan:
(i) No Event of Default shall have occurred or be
continuing.
(ii) Agent shall have received from an authorized
officer of Borrower, (x) a duly executed advance request in the form of
Exhibit D attached hereto (the "Advance Request") and (y) a certificate to the
effect that no material adverse change has occurred between the Closing and the
date of the requested Term Loan with respect to the Borrower, Guarantor or any
of the Subsidiaries.
(iii) The Security Agreements delivered at the Closing
and any additional Security Agreements delivered in connection with the
Additional Term Loans shall provide a first priority security interest in
accounts receivable of the Subsidiaries having an aggregate value of such amount
as the parties may agree, acting reasonably.
7. Survival of Representations and Warranties. Borrower covenants,
warrants and represents to Agent and Lender that all representations and
warranties of Borrower contained in this Agreement, or the Note shall be true at
the time of Borrower's execution of this Agreement and the Note, and shall
survive the execution, delivery and acceptance thereof by Agent and the parties
thereto and the closing of the transactions described therein or related
thereto.
8. Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" and shall (except with respect to clause (d)),
at the option of Lender, require immediate payment in full of all sums then
remaining unpaid hereunder and under the Notes:
(a) Failure to Pay the Note. The failure of Borrower to pay
any principal, interest or other amount due under the Note within five (5) days
after such amount is due and payable.
(b) Breach of Covenant, Representation or Warranty. (i) The
failure of Borrower to perform or observe any covenant, condition or agreement
contained in this Agreement (other than the payment obligations, the breach of
which shall be governed by subsection (a) above) where such failure is not cured
within fifteen (15) Business Days after
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receipt of written notice thereof from Agent (except that no notice shall be
required in the case of Borrower's obligations pursuant to Section 4(e)), or any
representation or warranty made or deemed made by Borrower under or in
connection with this Agreement shall prove to have been false or misleading in
any material respect when made; or (ii) the failure of Guarantor to perform or
observe any covenant, condition or agreement contained in the Guaranty or the
applicable Subsidiary under the Security Agreements, where such failure is not
cured within fifteen (15) Business Days after receipt of written notice thereof
from Agent, or any representation or warranty made or deemed made by Guarantor
under or in connection with the Guaranty or the applicable Subsidiary under the
Security Agreements, shall prove to have been false or misleading in any
material respect when made.
(c) Liens. (i) Borrower creates, incurs, assumes or suffers
to exist any Lien upon or with respect to any of its properties or assets
whether now owned or hereafter acquired, including, without limitation, any
governmental, tax, or judgment Lien, other than Permitted Liens, and fails to
have the same removed or released within five (5) Business Days after the
creation thereof; or (ii) Any Subsidiary creates, incurs, assumes or suffers to
exist any Lien upon or with respect to the Collateral, including, without
limitation, any governmental, tax, or judgment Lien, other than Permitted Liens,
and fails to have the same removed or released within five (5) Business Days
after the creation thereof.
(d) Insolvency. Borrower, Guarantor or any Subsidiary shall
become insolvent; admit in writing their inability to pay their debts as they
mature; make an assignment for the benefit of creditors; or if bankruptcy
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against either of them and,
if instituted against either of them, the same is not dismissed within
thirty (30) days of the filing thereof.
(e) Dissolution. Any order, judgment, or decree shall be
entered against Borrower decreeing its involuntary dissolution or split up and
such order shall remain undischarged and unstayed for a period in excess of
thirty (30) days; or Borrower shall otherwise dissolve or cease to exist.
(f) Guaranty. If the Guaranty is, for any reason, no longer
in full force and effect.
9. Remedies. If an Event of Default shall occur, (a) all amounts
outstanding hereunder or under the Note, notwithstanding any term of this
Agreement, the Security Agreements or the Note to the contrary, shall at Agent's
option (or, if the Event of Default is under clause (d) of Section 8,
automatically) and without notice to Borrower become immediately due and
payable, without presentment, demand, protest or notice of dishonor, all of
which are hereby expressly waived by Borrower, and (b) Agent shall have all
rights, powers and remedies available hereunder, under the Security Agreements,
or accorded by law, including without limitation the right to resort to any or
all security for the Secured Obligations and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights,
powers and remedies of Agent in connection with this Agreement, the Security
Agreements, and the Note may be exercised at any time by Agent and from time to
time after the
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occurrence of an Event of Default, are cumulative and not exclusive, and shall
be in addition to any other rights, powers or remedies provided by law or
equity.
10. Agent.
(a) Appointment and Authorization. Lender, for itself and
its successors and assigns, hereby irrevocably appoints Agent as its agent (and
Agent hereby accepts such appointment) to take such actions on its behalf and to
exercise such powers under this Agreement, the Note, and the Security Agreements
as are herein or therein delegated to Agent or are, in the judgment of Agent,
reasonably incidental to the rights and powers so delegated. Agent shall not by
reason of this Agreement have any fiduciary relationship to any Lender, but
shall act solely as an agent for Lender; nor shall Agent have any agency or
fiduciary relationship to Borrower. The provisions of this Section 10 are solely
for the benefit of Agent and Lender, and Borrower shall have no right as a third
party beneficiary hereof.
(b) Approval of Lender. In performing its functions under
this Agreement and the Security Agreements, except as otherwise expressly
provided herein, Agent shall have the authority (but not the obligation), on
behalf of Lender, to make any decision, to take any action or refrain from
taking any action and to give any consent or waiver that it may deem advisable;
provided, however, that the written approval of Lender shall be required for any
amendment, modification, termination or waiver of any provision of this
Agreement, the Security Agreements, or the Note, any release of Borrower of any
of the Collateral, or any action or assertion of rights (or any rescission of
any such action or assertion of rights) against Borrower or the Collateral upon
the occurrence of an Event of Default.
(c) No Implied Duties; Agents Exercise of Discretion. The
only duties and obligations of Agent under this Agreement, the Note, and the
Security Agreements are those which are expressly set forth herein or therein.
Agent shall be entitled to use its discretion in exercising or refraining from
exercising any rights which may be so vested in it, or in taking or refraining
from taking any action which it may be so empowered to take, unless the matter
is one as to which Agent may not act or refrain from acting without the prior
written approval of Lender pursuant to Section 10(b) above. Notwithstanding the
foregoing, Agent shall not be required to act or not act in accordance with
Lender's instructions if to do so would result, in the reasonable judgment of
Agent, in a substantial risk of liability to Agent or would be contrary to this
Agreement, the Note, the Security Agreements, or applicable law.
(d) Indemnification. Lender, shall indemnify, defend and
hold harmless Agent and its shareholders, directors, officers, employees,
agents, attorneys and Affiliates and their respective successors and assigns
(the "Agent's Parties"), from and against any and all liabilities, obligations,
demands, losses, damages, penalties, actions, judgments, suits, claims, costs,
expenses (including, without limitation, attorneys' fees and expenses and court
costs, whether or not suit is filed) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against Agent's
Parties in any way relating to or arising out of this Agreement, the Note or the
Security Agreements, or any action taken or omitted to be taken by Agent's
Parties in connection with this Agreement, the Note, or the Security Agreements,
except that Lender shall not be liable to Agent's Parties for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs,
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expenses or disbursements resulting from the gross negligence or willful
misconduct of any of Agent's Parties. Further, Lender shall reimburse Agent upon
demand for Lender's share of any costs or expenses incurred by Agent in
connection with the amendment, consent, waiver, refinancing, restructuring
(including a restructuring incident to a bankruptcy reorganization) or
enforcement of this Agreement, the Note, or the Security Agreements, to the
extent that Borrower is required to pay such costs or expenses but fails to do
so upon demand.
11. Miscellaneous.
(a) Failure or Indulgence Not Waiver. No failure or delay on
the part of Agent, Lender, or any holder of a Note in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof or of any other right, power or privilege.
(b) Modification. No modification, amendment or waiver of
any provision of this Agreement, the Security Agreements, or the Note, nor the
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall have been approved by Agent and Lender and shall be in
writing signed by Agent and Lender and, with respect to any amendment, Borrower.
Such waiver or consent shall then be effective only in the specific instance and
for the purpose for which it is given. No notice to or demand on Borrower in any
case shall entitle Borrower to any other or further notice or demand in the
same, similar or other circumstances.
(c) Notices. Except as otherwise expressly provided herein,
any notice herein required or permitted to be given shall be in writing and
shall be deemed effective when personally delivered, mailed, telecopied (with a
confirming copy sent by mail) or delivered by telex to the appropriate party at
the address set forth below (or at such other address as may be designated by
either party in a written notice sent in accordance with this Section):
If to Borrower: Stonepath Holdings (Hong Kong) Limited
Xxxx 0000, 00xx Xxxxx, Xxxxxxx Xxxxx
000 Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx
Xxxx Xxxx
with a copy to: Stonepath Group, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Telecopy No.: 000-000-0000
If to Lender: Hong Kong League Central Credit Union
Party Room 1-2, G/F Xxx Xxx Xxxxx
Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxx Xxxx
Telecopy No: 852 3101 0332
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with a copy to: SBI Advisors, LLC
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopy No.: 000-000-0000
If to Agent: SBI Advisors, LLC
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopy No.: 000-000-0000
(d) Severability. In case any provision in this Agreement,
the Security Agreements, or the Note shall be invalid, illegal or unenforceable,
such provision shall be severable from the remainder of such contract and the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
(e) Applicable Law. This Agreement, the Security Agreements,
and the Note, and the rights and obligations of the parties thereto, shall be
governed by the laws of Hong Kong, exclusive of its conflicts of laws and choice
of laws rules that would or may cause the application of the laws of any
jurisdiction other than Hong Kong.
(f) Assignability. Borrower shall not assign its rights or
obligations hereunder, under the Security Agreements, or under the Note to any
other Person without the prior written consent of Agent and Lender, and any
attempted assignment in violation hereof shall be null and void ab initio. Agent
and Lender shall have the right to assign their rights and obligations hereunder
and no consent or approval from Borrower is required in connection with any such
assignment.
(g) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(h) Section Headings. The various headings used in this
Agreement are inserted for convenience only and shall not affect the meaning or
interpretations of this Agreement or any provision hereof.
(i) Attorneys' Fees. In the event any party institutes any
action or proceeding to enforce the terms and conditions of this Agreement, the
Security Agreements, or the Note, the prevailing party shall be entitled to
reasonable attorneys' fees and costs.
(j) WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON
THIS AGREEMENT, THE NOTES, OR THE SECURITY AGREEMENT, THE SUBJECT MATTER HEREOF
AND THEREOF OR ANY DOCUMENT RELATING HERETO OR THERETO, IN EACH CASE WHETHER NOW
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EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT, TORT OR OTHERWISE.
(k) Integration. This Agreement, the Security Agreements and
the Note reflect the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, whether before or after the date hereof.
(l) Payment of Costs. Borrower shall promptly pay to Agent
Agent's reasonable costs in connection with any amendment, waiver, consent,
refinancing or enforcement of this Agreement, the Note or the Security
Agreements.
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IN WITNESS WHEREOF, the parties hereto do execute this Agreement as of
the date first above written.
"BORROWER"
STONEPATH HOLDINGS
(HONG KONG) LIMITED
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: XXXXX XXXXX
Its: Chief Executive Officer
"AGENT"
SBI ADVISORS, LLC, solely in its
capacity as Agent hereunder
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
"LENDER"
HONG KONG LEAGUE CENTRAL CREDIT
UNION
By:
-----------------------------------
Name:
---------------------------------
Its:
----------------------------------
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EXHIBIT A-1
TO THE TERM CREDIT AGREEMENT
FORM OF TERM NOTE
TERM NOTE
Hong Kong
U.S.$10,000,000 (or less) October ___, 2004
FOR VALUE RECEIVED, the undersigned, STONEPATH HOLDINGS (HONG KONG)
LIMITED, a Hong Kong corporation (the "Borrower"), HEREBY UNCONDITIONALLY
PROMISES TO PAY to the order of HONG KONG LEAGUE CREDIT UNION (the "Lender"),
without offset or counterclaim, the principal sum of United States Dollars Ten
Million Dollars (U.S.$10,000,000) or, if less, the aggregate outstanding
principal amount of the Term Loans made by Lender to the Borrower pursuant to
the Credit Agreement referred to below, on or before the Maturity Date (as such
term is defined in the Credit Agreement). The Borrower further promises to pay
interest on the Term Loans outstanding hereunder from time to time at the
interest rates, and payable on the dates, set forth in the Credit Agreement.
This Promissory Note may be prepaid at any time prior to the Maturity Date
without premium or penalty.
1. Payment. Both principal and interest are payable in lawful money
of the United States of America and in immediately available funds to the Lender
at ___________________________, Hong Kong, or such other place as the Lender may
designate in writing to the Borrower from time to time.
2. Record Keeping. The Lender shall record the amount of principal
and interest due and payable from time to time hereunder, each payment thereof
and the resulting unpaid principal balance hereof, in the Lender's internal
records, and any such recordation shall be rebuttable presumptive evidence of
the accuracy of the information so recorded; provided, however, that the
Lender's failure so to record shall not limit or otherwise affect the
obligations of the Borrower hereunder and under the Credit Agreement to repay
the principal of and interest on the Term Loans.
3. Credit Agreement. This Promissory Note is subject to and
entitled to the benefits of, that certain Term Credit Agreement, dated of even
date herewith (as amended, modified, renewed or extended from time to time, the
"Credit Agreement") between the Borrower, the Lender, and certain other parties
thereto. Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings assigned to them in the Credit Agreement. The
Credit Agreement provides, among other things, for acceleration (which in
certain cases shall be automatic) of the maturity hereof upon the occurrence of
certain stated events, in each case without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived. This
Promissory Note is secured by certain Collateral more specifically described in
the Security Agreements.
4. Limitation on Interest Rate. In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder or under
the Credit Agreement and charged or collected by the Lender or any holder of
this Promissory Note exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that the Lender has charged or
received interest hereunder or under the Credit Agreement in excess of the
highest applicable rate, the rate in effect hereunder and under the Credit
Agreement shall automatically be reduced to the maximum rate permitted by
applicable law and the Lender shall apply all interest paid in excess of the
maximum lawful rate to reduce the principal balance of the amounts outstanding
hereunder and under the Credit Agreement. It is the intent of the parties hereto
that the Borrower not pay or contract to pay, and that the Lender not receive or
contract to receive, directly or indirectly in any manner whatsoever, interest
in excess of the maximum rate of interest that may be paid by the Borrower to
the Lender under applicable law.
5. Governing Law. THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF HONG KONG, EXCLUSIVE OF ITS CONFLICTS
OF LAWS AND CHOICE OF LAWS RULES THAT WOULD OR MAY CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN HONG KONG.
STONEPATH HOLDINGS (HONG KONG) LIMITED
By:
-----------------------------------
Name:
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Its:
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2
SCHEDULE 1
TO TERM CREDIT AGREEMENT
SPECIFIC PERMITTED LIENS
None
3
SCHEDULE 2
TO TERM CREDIT AGREEMENT
INTEREST OF BORROWER IN EACH SUBSIDIARY
4
