CREDIT LINE AGREEMENT
Exhibit
10.5
THIS CREDIT LINE AGREEMENT is
entered into as of May 28, , 2009, between SO ACT NETWORK, INC., a
Delaware corporation (“Borrower”), and Xxxx Xxxxxxx
(“Lender”).
Background
WHEREAS,
Borrower wish to obtain a revolving line of credit from Lender, and, upon the
terms and subject to the conditions set forth herein, Lender is willing to make
the line of credit available to Borrower.
NOW,
THEREFORE, Borrower and Lender, intending to be legally bound hereby, agree as
follows:
ARTICLE I CREDIT
LINE
1.1. Credit
Line. Absent an Event of Default and earlier termination,
Lender hereby establishes for the benefit of Borrower, subject to the terms and
conditions of this Agreement, a revolving line of credit (the “Credit Line”) in
the amount of $100,000 (the “Maximum Credit”) that will mature and expire on or
before the second (2nd)
anniversary of the date hereof (the “Maturity Date”). All requests
for advances under the Credit Line shall be directed to Lender pursuant to a
Notice of Borrowing in the form of Exhibit A attached
hereto, no more than one (1) Notice of Borrowing shall be issued within any 30
consecutive day period. Borrower’s unconditional obligation to repay all
advances under the Credit Line and to pay interest thereon shall be evidenced by
the Note of Borrower set forth on Exhibit A attached
hereto and representing the obligations of Borrower to pay Lender the
outstanding amount of the Credit Line plus interest accrued thereon, as set
forth herein. In no event shall the outstanding principal balance
under the Credit Line exceed the Maximum Credit.
1.2. Repayment of Credit
Line. Prior to
the Maturity Date, Borrower may borrow, prepay and reborrow under the Credit
Line. The outstanding balance of the Credit Line shall be due and
payable on or before the Maturity Date, subject to acceleration as herein
provided. Borrower shall pay principal balance, interest at the
prime rate as of the date of the delivery of the Notice of Borrowing, and all
other amounts payable hereunder without any deduction whatsoever, including, but
not limited to, any deduction for any setoff or counterclaim, all of which are
hereby waived. Any prepayment of principal shall be accompanied by
accrued and unpaid interest on the amount prepaid to the date of such
prepayment.
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1.3. Use of
Proceeds. Borrower shall apply the proceeds of loan advances
made by Lender to Borrower under the Credit Line (the “Advances”) to be sued for
working capital or general corporate purposes.
1.4. Payments and
Computations.
(a) Borrower
shall make each payment hereunder and under the Credit Line Note (the “Note”)
not later than 5:00 P.M. on the day when due. Any payment received
after 5:00 P.M. (including any payment in full of the Obligations) shall be
deemed received on the immediately following Business Day. All
prepayments of every kind on account of the Credit Line shall be first applied
to accrued and unpaid interest and then to the principal balance
thereof.
(b) Borrower
shall pay principal, interest and other amounts payable hereunder without any
deduction, setoff, recoupment or counterclaim.
(c) Lender’s
records of advances and payments under the Credit Line shall be deemed correct
and binding upon Borrower except for manifest error.
ARTICLE II CONDITIONS
PRECEDENT
The
obligation of Lender to extend the Credit Line shall be subject to the
satisfaction, on or prior to the date of the consummation of the making of the
Credit line available by Lender to Borrower under this Agreement (the “Closing
Date”), of the following conditions precedent (all agreements and documents from
Borrower or any other Person to be in form and substance acceptable to Lender,
in its sole discretion):
2.1 Executed Loan
Documents. Receipt by Lender of duly executed copies of this
Agreement and the Note (collectively, the “Loan Documents”).
2.2
Organizational
Documents. Receipt by Lender of the
following:
(a) Charter
Documents. Copies of certificates of incorporation or other
charter documents of Borrower and each Guarantor certified to be true and
complete as of a recent date by the appropriate governmental authority of the
state or other jurisdiction of its incorporation and certified by a secretary or
assistant secretary as of the Closing Date.
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(b) Bylaws. A
copy of the bylaws, as applicable, of Borrower certified by a secretary or
assistant secretary of Borrower to be true and correct as of the Closing
Date.
(c) Resolutions. Copies
of resolutions or unanimous written consent of the board of directors or
members, as applicable, of Borrower approving and adopting the this Agreement
and the Note, the transactions contemplated therein and authorizing execution
and delivery thereof, certified by a secretary or assistant secretary of
Borrower to be true and correct and in force and effect as of the Closing
Date.
(d) Good
Standing. Copies of a certificate of good standing, existence
or its equivalent with respect to Borrower as of a recent date by the
appropriate governmental authorities of the state or other jurisdiction of
organization and each other jurisdiction in which the failure to so qualify and
be in good standing could reasonably be expected to have a Material Adverse
Effect.
(e) Financial
Statements. Receipt by Lender of Borrower’s Financial
Statements for the fiscal year ending December 31, 2008 and such other
information relating to Borrower as Lender may reasonably require.
(f) Consents. Receipt
by Lender of evidence that all governmental, shareholder, member and third party
consents and approvals required in connection with the transactions contemplated
hereby and expiration of all applicable waiting periods without any action being
taken by any authority that could restrain, prevent or impose any material
adverse conditions on such transactions or that could seek or threaten any of
the foregoing, and no law or regulation shall be applicable which in the
judgment of Lender could have such effect.
ARTICLE III REPRESENTATIONS
AND WARRANTIES OF BORROWER
In order
to induce Lender to enter into this Agreement and to make available the Loan
contemplated hereby, Borrower hereby represents and warrants to
Lender.
3.1. Organization and
Qualification. Borrower (i) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation or organization, (ii) has the power and authority to enter
into the Loan Documents, and (iii) is duly qualified and is authorized to
do business and is in good standing in every jurisdiction in which the failure
to be so qualified could reasonably be expected to have a Material Adverse
Effect.
3.2. No
Conflict. The execution and delivery by Borrower of the
Loan Documents executed and delivered in connection herewith and the performance
of the obligations of Borrower hereunder and thereunder and the consummation by
Borrower of the transactions contemplated hereby and thereby: (i) are within the
powers of Borrower; (ii) are duly authorized by the Board of Directors of
Borrower and, if necessary, its stockholders or members; (iii) are not in
contravention of the terms of the articles or certificate of incorporation or
bylaws of Borrower or of any contractual obligations; (iv) do not require
the consent, registration or approval of any governmental authority or any other
person; (v) do not contravene any statute, law, ordinance regulation, rule,
order or other governmental restriction applicable to or binding upon
Borrower.
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3.3. Enforceability. The
Agreement and all of the other Loan Documents are the legal, valid and binding
obligations of Borrower, and are enforceable against Borrower in accordance with
their terms.
3.4.
Financial Data.
Borrower shall have furnished to Lender and Lender the following Financial
Statements (the “Financials”): (i) the balance sheet of Borrower as of, and
statements of income, retained earnings and changes in financial position for
the fiscal year ended December 31, 2008, audited by independent certified public
accountants, and (ii) the unaudited balance sheet of Borrower as of, and
statement of income, and retained earnings for the fiscal quarter ended March
31, 2009, prepared by independent certified public accountant. The Financials
are in accordance with the books and records of Borrower and fairly present the
financial condition of Borrower at the dates thereof and the results of
operations for the periods indicated (subject, in the case of unaudited
Financial Statements, to normal year end adjustments), and such Financial
Statements have been prepared in conformity with GAAP consistently applied
throughout the periods involved. Since March 31, 2009, there have been no
changes in the condition, financial or otherwise, of Borrower as shown on the
respective balance sheets of Borrower described above, except (a) as
contemplated herein and (b) for changes which individually or in the aggregate
do not constitute a Material Adverse Change. For the purpose of this Agreement,
the “Material Adverse Change” shall mean a material adverse change in (i) the
business, operations, results of operations, assets, liabilities or conditions
(financial or otherwise) of the Borrower, (ii) Borrower’s ability to perform its
obligations under the Load Documents, or (iii) the validity, enforceability or
availability of rights and remedies of Lender hereunder, in each case as
determined by Lender in its sole but reasonable discretion.
3.5. Judgments or
Litigation. There is no material (a) judgment, order, writ or
decree outstanding against Borrower or (b) pending or, to the best of Borrower’s
knowledge, threatened litigation, contested claim, governmental, administrative
or regulatory investigation, arbitration, or governmental audit (for taxes or
otherwise) or proceeding by or against Borrower. No judgment, order,
writ, decree, pending or threatened litigation, contested claim, investigation,
arbitration and governmental proceeding pertaining to Borrower (individually or
in the aggregate) could reasonably be expected to have a Material Adverse
Effect.
3.6. Defaults. Borrower
is not in default under any Contractual Obligations which default could
reasonably be expected to have a Material Adverse Effect. For the purpose of
this Agreement, the “Contractual Obligation” shall mean with respect to any
person, any term or provision of any securities issued by such person, or any
indenture, mortgage, deed of trust, contract, undertaking, document, instrument
or other agreement to which such person is a party or by which it or any of its
properties is bound or to which it or any of its properties is
subject.
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3.7. Compliance with
Law. Borrower has not violated or failed to comply with any
statute, law, ordinance, regulation, rule or order of any foreign, federal,
state or local government, or any other governmental authority or any self
regulatory organization, or any judgment, decree or order of any court,
applicable to its business or operations which failure or violation could
reasonably be expected to have a Material Adverse Effect. Borrower
has not received any notice to the effect that, or otherwise been advised that,
it is not in compliance with, and Borrower has no reason to anticipate that any
currently existing circumstances are likely to result in the violation of any
such statute, law, ordinance, regulation, rule, judgment, decree or order which
failure or violation could reasonably be expected to have a Material Adverse
Effect. For the purpose of this Agreement, the “Material Adverse Effect” shall
mean a material adverse effect on (i) the business, operations, results of
operations, assets, liabilities or conditions (financial or otherwise) of
Borrower, (ii) Borrower’s ability to perform its obligations under the Load
Documents, or (iii0 the validity, enforceability or availability of rights and
remedies of Lender hereunder, in each case as determined by Lender in its sole
but reasonable discretion.
3.8. Compliance with
Environmental Laws. The operations of Borrower materially
comply with all applicable federal, state or local environmental, health and
safety statutes, regulations, directions, ordinances, criteria or guidelines;
and none of the operations of Borrower are the subject of any material judicial
or administrative proceeding alleging the violation of any federal, state or
local environmental, health or safety statute, regulation, direction, ordinance,
criteria or guidelines. None of the operations of Borrower are the
subject of any federal or state investigation evaluating whether Borrower
disposed any hazardous or toxic waste, substance or constituent or other
substance at any site that may require remedial action, or any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any hazardous or toxic waste, substance or constituent, or other
substance into the environment. Borrower has not filed or received
any notice under any federal or state law indicating past or present treatment,
storage or disposal of a hazardous waste or reporting a spill or release of a
hazardous or toxic waste, substance or constituent, or other substance into the
environment. Borrower has no contingent liability of which Borrower
have knowledge or reasonably should have knowledge in connection with any
release of any hazardous or toxic waste, substance or constituent, or other
substance into the environment, nor has Borrower received any notice, letter or
other indication of potential liability arising from the disposal of any
hazardous or toxic waste, substance or constituent or other substance into the
environment.
3.9. Intellectual
Property. As of the date hereof, Borrower has the valid right
to use all of the Intellecutal Property that is necessary for the conduct of
Borrower’s business as currently conducted. The “Intellectual Property” shall
mean patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, trade secrets, licenses, information and other
proprietary rights and processes.
3.10. Licenses and
Permits. Borrower has obtained and holds in full force and
effect all material franchises, licenses, leases, permits, certificates,
authorizations, qualifications, easements, rights of way and other rights and
approvals which are necessary or appropriate for the operation of its business
as presently conducted and as proposed to be conducted. Borrower is
not in violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval which in any such case could reasonably be expected to have a Material
Adverse Effect.
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3.11. Title to
Property. Borrower has (i) valid leasehold interests in all of
the real property it occupies as a tenant, and (ii) good, marketable and
exclusive title to all of the other Property it purports to
own (including without limitation, all real and personal property in
each case as reflected in the Financial Statements delivered to Lender
hereunder), other than, with respect to property described in clause (ii)
above, properties disposed of in the ordinary course of business or in any
manner otherwise permitted under this Agreement since the date of the most
recent audited balance sheet of Borrower, and in each case subject to
no claims, options, rights or interests of any other person. Borrower
enjoys peaceful and undisturbed possession of all its real property, and there
is no pending or, to the best of its knowledge, threatened condemnation
proceeding relating to any such real property. The leases with
respect to the leased property, together with any leases of real property
entered into by Borrower after the date hereof, are referred to collectively as
the “Leases”. None of the Leases contains provisions which have or
could reasonably be expected to have a Material Adverse Effect. No
material default exists under any Lease.
3.12. Labor
Matters. Borrower is not engaged in any unfair labor
practice. There is (a) no material unfair labor practice complaint
pending against Borrower or, to the best knowledge of Borrower, threatened
against Borrower, before the National Labor Relations Board, and no grievance or
arbitration proceeding with any employee, or group or committee representing any
employees, or arising out of or under collective bargaining agreements that has
or could reasonably be expected to have a Material Adverse Effect is so pending
against Borrower or, to the best knowledge of Borrower, threatened against
Borrower, (b) no strike, labor dispute, slowdown or stoppage pending or, to the
best knowledge of Borrower, threatened against Borrower, and (c) no union
representation questions with respect to the employees of Borrower and no union
organizing activities.
3.13. Investment
Company. Borrower is not (a) an “investment company” or
a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, (b) a “holding company” or a
“subsidiary company” of a “holding company,” or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company,” within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (c) subject to
any other law which purports to regulate or restrict its ability to borrow money
or to consummate the transactions contemplated by this Agreement or the other
Loan Documents or to perform its obligations hereunder or
thereunder.
3.14. Taxes and Tax
Returns.
(a) Borrower
has timely filed (inclusive of any permitted extensions) with the appropriate
taxing authorities all returns (including, without limitation, information
returns and other material information) in respect of Taxes required to be filed
through the date hereof and will timely file (inclusive of any permitted
extensions) any such returns required to be filed on and after the date hereof
except where the failure to file could not reasonably be expected to have a
Material Adverse Effect. The information filed is complete and
accurate in all material respects.
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(b) (i)
All Taxes, in respect of periods beginning prior to the date hereof, have been
timely paid, or will be timely paid, or an adequate reserve has been established
therefore, as set forth in the Financial Statements, and (ii) Borrower has no
material liability for such Taxes for such periods in excess of the amounts so
paid or reserves so established. No material deficiencies for Taxes
have been claimed, proposed or assessed by any taxing or other governmental
authority against Borrower except those that are paid or contested within the
time limits designated by law or the applicable governmental authority and no
material tax Liens have been filed.
3.15. Material
Contracts. Schedule 3.15 sets
forth a true, correct and complete list of all the Material Contracts currently
in effect on the date hereof. None of the Material Contracts contains
provisions which have or could reasonably be expected to have a Material Adverse
Effect. All of the Material Contracts are in full force and effect,
and no material defaults currently exist thereunder.
3.16. Accuracy and Completeness of
Information. All factual information heretofore,
contemporaneously or hereafter furnished by or on behalf of Borrower in writing
to Lender for purposes of or in connection with this Agreement or any Loan
Documents, or any transaction contemplated hereby or thereby, is or 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 material fact
necessary to make such information not misleading at such time. There
is no fact now known to any officer of Borrower which has, or would have, a
Material Adverse Effect which fact has not been set forth herein, in the
Financials, or any certificate, opinion or other written statement made or
furnished by Borrower to Lender.
3.17. Solvency. After
giving effect to the transactions contemplated under this Agreement, Borrower is
able to pay its respective debts as they become due, and has capital sufficient
to carry on its respective business and all businesses in which it is about to
engage, and now owns property having a value both at fair valuation and at
present fair salable value greater than the amount required to pay Borrower’s
debts. Borrower will not be rendered insolvent by the execution and
delivery of this Agreement or any of the other Loan Documents executed in
connection with this Agreement or by the transactions contemplated hereunder or
thereunder..
3.18. Survival of
Representations. All representations made by Borrower in this
Agreement and in any other Loan Document shall survive the execution and
delivery hereof and thereof.
ARTICLE
IV REPRESENTATIONS AND WARRANTS OF LENDER
4.1. Evaluation of
Risks. Lender has such knowledge and experience in financial,
tax and business matters as to be capable of evaluating the merits and risks of,
and bearing the economic risks entailed by, an investment in Lender and of
protecting its interests in connection with this transaction. It
recognizes that its investment in Lender involves a high degree of
risk.
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4.2. No Legal Advice From
Borrower. Lender acknowledges that it had the opportunity to
review this Agreement and the transactions contemplated by this Agreement with
his or its own legal counsel and investment and tax advisors. Lender is relying
solely on such counsel and advisors and not on any statements or representations
of Borrower or any of its representatives or agents for legal, tax or investment
advice with respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.
4.3 Information. Lender
and his advisors (and his counsel), if any, have been furnished with all
materials relating to the business, finances and operations of Borrower and
information it deemed material to making an informed investment
decision. Lender and his advisors, if any, have been afforded the
opportunity to ask questions of Borrower and its management. Neither
such inquiries nor any other due diligence investigations conducted by such
Investor or its advisors, if any, or its representatives shall modify, amend or
affect the Investor’s right to rely on Borrower’s representations and warranties
contained in this Agreement. Lender understands that its investment
involves a high degree of risk. Lender is in a position regarding Borrower,
which, based upon employment, family relationship or economic bargaining power,
enabled and enables such Investor to obtain information from Borrower in order
to evaluate the merits and risks of this investment. Lender has sought such
accounting, legal and tax advice, as it has considered necessary to make an
informed investment decision with respect to this transaction.
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ARTICLE V COVENANTS
Until
termination of this Agreement and the payment and satisfaction of all
obligations, Borrower covenants and agrees as follows:
5.1. Financial
Information Borrower will furnish to Lender
the following information within the following time periods:
(a) within
120 days after the close of each fiscal year of Borrower, the audited balance
sheets and statements of income and retained earnings and of changes in cash
flow of Borrower, for such year, each in reasonable detail, each setting forth
in comparative form the corresponding figures for the preceding year, prepared
in accordance with GAAP, and accompanied by a report and unqualified opinion of
an independent accountant selected by Borrower and acceptable to Lender and
concurrently with the delivery of such financial statements, an unaudited
balance sheet of Borrower for such year, in reasonable detail, setting forth in
comparative form the corresponding figures from the preceding year, prepared in
accordance with GAAP;
(b) within
45 days after the end of each fiscal quarter of Borrower, unaudited Financial
Statements similar to those required by clause (a) above as of the end of such
period and for such period then ended and for the period from the beginning of
the current fiscal year to the end of such period, setting forth in comparative
form the corresponding figures for the comparable period in the preceding fiscal
year, prepared in accordance with GAAP (except that such quarterly statements
need not include footnotes) and certified by an Authorized Person described in
paragraph (c) below; and
(c) at
the time of submission of the quarterly Financial Statements (for the first
three fiscal quarters in any fiscal year) and the annual Financial Statement of
Borrower, a certificate executed by an authorized person, certifying that,
following a review of the Agreement, no Event of Default is outstanding and
demonstrating compliance with the financial covenants by calculation thereof as
of the end of each such fiscal quarter.
(d) Such
other reports, certificates, schedules, documents, data or information
concerning Borrower’s finances and Property as Lender may reasonably request
from time to time.
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5.2. Existence. Borrower
(a) will maintain its corporate existence, (b) will maintain in full force and
effect all material licenses, bonds, franchise, leases, trademarks and
qualifications to do business, (c) will obtain or maintain patents, contracts
and other rights necessary or desirable to the profitable conduct of its
business, (d) will continue in, and limit its operations to, the same general
lines of business as that presently conducted by it and (e) will comply with all
applicable laws, rules and regulations of any federal, state or local
Governmental Authority, except in the case of (b), (c) and (e) where
noncompliance could not reasonably be expected to have a Material Adverse
Effect.
5.3. Environmental
Matters. Borrower will conduct its business so as to comply in
all material respects with all environmental laws, regulations, directions,
ordinances, criteria and guidelines in all jurisdictions in which any of them is
or may at any time be doing business including, without limitation,
environmental land use, occupational safety or health laws, regulations,
directions, ordinances, criteria, guidelines, requirements or permits in all
jurisdictions in which it is or may at any time be doing business, except to the
extent that Borrower is contesting, in good faith by appropriate legal
proceedings, any such law, regulation, direction, ordinance, criteria,
guideline, or interpretation thereof or application thereof; provided, further,
that Borrower will comply with the order of any court or other governmental body
of the applicable jurisdiction relating to such laws unless Borrower shall
currently be prosecuting an appeal or proceedings for review and shall have
secured a stay of enforcement or execution or other arrangement postponing
enforcement or execution pending such appeal or proceedings for
review. If Borrower shall (a) receive notice that any violation of
any federal, state or local environmental law, regulation, direction, ordinance,
criteria or guideline may have been committed or is about to be committed by
Borrower, (b) receive notice that any administrative or judicial complaint or
order has been filed or is about to be filed against Borrower alleging
violations of any federal, state or local environmental law, regulation,
direction, ordinance, criteria or guideline or requiring Borrower to take any
action in connection with the release of toxic or hazardous substances into the
environment or (c) receive any notice from a federal, state, or local
governmental agency or private party alleging that Borrower may be liable or
responsible for costs associated with a response to or cleanup of a release of a
toxic or hazardous substance into the environment or any damages caused thereby,
Borrower will provide Lender with a copy of such notice within 5 days after the
receipt thereof.
5.4. Taxes. Borrower
will pay, when due and in any event prior to delinquency, all Taxes lawfully
levied or assessed against Borrower; provided, however, that unless
such Taxes have become a federal tax or ERISA Lien on any of the assets of
Borrower, no such Tax need be paid if the same is being contested in good faith,
by appropriate proceedings promptly instituted and diligently conducted and if
an adequate reserve or other appropriate provision shall have been made
therefore as required in order to be in conformity with GAAP.
5.5. Compliance With
Laws. Borrower will comply with all acts, rules, regulations,
orders, directions and ordinances of any legislative, administrative or judicial
body or official applicable to the Collateral or any part thereof, and to the
operation of its business except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
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5.6. Maintenance of
Property. Borrower will keep all property useful and necessary
to its business in good working order and condition (ordinary wear and tear
excepted) in accordance with its past operating practices and not to commit or
suffer any waste with respect to any of its properties, except for properties
which either individually or in the aggregate are not material.
ARTICLE VI EVENTS
OF DEFAULT AND REMEDIES
6.1. Events of
Default. The occurrence of any of the following events shall
constitute an “Event of Default” hereunder:
(a) failure
of Borrower to pay (i) any interest or fees when due hereunder, whether at state
maturity, by acceleration or otherwise, or (ii) any principal outstanding under
the Credit Line when due, whether at stated maturity, by acceleration or
otherwise.
(b) any
representation or warranty, contained in this Agreement, the other Loan
Documents or any other agreement, document, instrument or certificate between
Borrower and Lender or executed by Borrower in favor of Lender shall prove
untrue in any material respect on or as of the date it was made or was deemed to
have been made;
(c) failure
of Borrower to comply with any other covenant contained in this Agreement, the
other Loan Documents or any other agreement, document, instrument or certificate
between Borrower and Lender or executed by Borrower in favor of Lender and, in
the event such breach or failure to comply is capable of cure, such breach or
failure to comply is not cured within 10 days of its occurrence;
(d) dissolution,
liquidation, winding up or cessation of the business (or any material portion of
the business) of Borrower, or the failure of Borrower to meet its debts
generally as they mature, or the calling of a meeting of Borrower’s creditors
for purposes of compromising Borrower’s debts;
(e) the
commencement by or against Borrower of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings with respect to it under any
federal or state law and, in the event any such proceeding is commenced against
Borrower, such proceeding is not dismissed within 60 days;
(f) any
party (other than Lender) to any Loan Document shall deny or disaffirm its
obligations under any of the Loan Documents, or an Event of Default shall have
occurred or a Default shall occurred and not been cured within any
contractual cure period under any other Loan Document, or any Loan Document
shall be canceled, terminated, revoked or rescinded without the express prior
written consent of Lender, or any action or proceeding shall have been commenced
by any person (other than Lender) seeking to invalidate, declare unenforceable,
cancel, revoke, rescind or disaffirm the obligations of any party to any Loan
Document;
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(g) one
or more judgments or decrees shall be entered against Borrower involving a
liability of $25,000 or more individually or in the aggregate (to the extent not
paid or covered by insurance (i) provided by a carrier who has acknowledged
coverage and has the ability to perform or (ii) as determined by Lender in
its reasonable discretion) and any such judgments or decrees shall not have been
vacated, satisfied, discharged or stayed or bonded pending appeal within 30 days
from the entry thereof;
(h) a
Material Adverse Change occurs; or
(i) Borrower
is indicted or convicted of the commission of a crime or any proceeding of any
kind is pending or threatened which would reasonably be likely to result in the
forfeiture of any material portion of the property of borrower to any
governmental authority.
6.2. Rights and Remedies upon a
Default or an Event of Default. Upon the occurrence of any Event of
Default, any obligation of Lender to make loan advances under the Credit Line
shall terminate and Lender may take any or all of the following actions: declare
all obligations to be immediately due and payable (except with respect to any
Event of Default in which case all obligations shall automatically become
immediately due and payable without the necessity of any action, decision,
notice or demand) without presentment, demand, protest or any other action or
obligation of Lender.
ARTICLE VII TERMINATION
All
Advances made hereunder shall automatically become due and payable in full on
the Maturity Date. All of Lender’s rights, liens and security
interests in and to Borrower’s Property shall continue after any termination
until (a) all obligations have been indefeasibly paid and satisfied in full
unless otherwise prohibited under any applicable federal or state law,
(b) Lender shall have received a written agreement (in form and substance
acceptable to Lender in its sole and absolute discretion) executed by Borrower
and by a Person whose loans or advances to Borrower are used in whole or in part
to satisfy the Obligations, indemnifying Lender from any loss or damage, or (c)
Lender shall have retained such monetary reserves necessary to pay in full all
obligations for such period of time, in its reasonable discretion.
ARTICLE VIII MISCELLANEOUS
8.1. JURY
TRIAL. TO THE EXTENT ANY DISPUTE IS NOT SUBJECT TO
ARBITRATION, LENDER AND BORROWER EACH HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT, THE LOAN DOCUMENTS OR
ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
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8.2 GOVERNING LAW; SUBMISSION TO
JURISDICTION; VENUE. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER, AND ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO, SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELEWARE. Any legal action or proceeding
with respect to this Agreement or any other Loan Document shall be brought in
the courts of the State of Delaware or of the United States District Court for
the District of Delaware, and, by execution and delivery of this
Agreement, Borrower, and Lender hereby irrevocably accept for
themselves and in respect of their property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Borrower further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail return receipt requested, postage prepaid, or by
nationally recognized overnight courier to it at the address set out for notices
pursuant to Section
8.3, such service to
become effective 3 days (or 1 day if sent by such courier) after such
mailing. Nothing herein shall affect the right of any party hereto to
serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against a party hereto in any other
jurisdiction.
8.3. Notices. Except
as otherwise provided herein, all notices and correspondences hereunder shall be
in writing and sent by certified or registered mail return receipt requested, by
overnight delivery service, with all charges prepaid, or by facsimile (with
transmission certification), if to Lender or Borrower to the addresses or by
facsimile transmission set forth on the signature hereto. All such
notices and correspondence shall be deemed given (i) if sent by certified or
registered mail, 3 Business Days after being postmarked, (ii) if sent by
overnight delivery service, when received at the above stated addresses or when
delivery is refused and (iii) if sent by facsimile transmission, when receipt of
such transmission is acknowledged; provided that all notices to Lender shall not
be effective until actually received.
8.4. Assignability. Borrower
shall not have the right to assign or delegate their obligations and duties
under this Agreement or any other Loan Documents or any interest therein except
with the prior written consent of Lender.
8.5. Indemnification. Borrower
shall indemnify, defend and hold harmless Lender,
its representatives, agents, accountants, counsel, successors and
assigns, and their respective affiliates from and against
(a) any and all losses, claims, damages, liabilities, deficiencies,
judgments or expenses incurred by any of them (except to the extent that it is
finally judicially determined to have resulted from their own gross negligence
or willful misconduct) arising out of or by reason of any litigation,
investigation, claim or proceeding which arises out of or is in any way related
to (i) this Agreement, the other Loan Documents, or the transactions
contemplated thereby, (ii) any actual or proposed use by Borrower of the
proceeds of the Credit Line, (iii) Lender entering into, performing under or
enforcing this Agreement, the other Loan Documents or any other agreements and
documents relating hereto, including, without limitation, amounts paid in
settlement, court costs and the fees and disbursements of counsel incurred in
connection with any such litigation, investigation, claim or proceeding or any
advice rendered in connection with any of the foregoing, or (iv) the breach
by Borrower of any warranty, undertaking or covenant made at any time hereunder
or under any other Loan Document and (b) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred in connection with any
remedial or other action taken by Borrower or Lender in connection with
compliance by Borrower with any federal, state or local environmental laws,
acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines. If and to the extent that the obligations of Borrower
hereunder are unenforceable for any reason, Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. Borrower’s obligations under
this Section
6.5 shall survive any termination of this Agreement and the other Loan
Documents and the payment in full of the Obligations, and are in addition to,
and not in substitution of, any other of their Obligations set forth in this
Agreement.
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8.6. Entire Agreement, Successors
and Assigns. This Agreement along with the other Loan
Documents constitutes the entire agreement between Borrower and Lender regarding
the subject matter hereof, supersedes any prior agreements among them, and shall
bind and benefit Borrower and Lender and their respective successors and
permitted assigns. No rights are intended to be created hereunder or
under any other Loan Documents for the benefit of any person not a signatory
hereto or thereto.
8.7. Amendments. Neither
the amendment or waiver of any provision of this Agreement or any other Loan
Document, nor the consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by Lender and
each such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
8.8. Non-Agency of
Lender. The relationship between Borrower on the one hand and
Lender on the other hand shall be solely that of Borrower and
Lender. Lender shall not have any fiduciary responsibilities to
Borrower or be deemed to have entered into any partnership or joint venture with
Borrower. Lender shall not undertake any responsibility to Borrower
to review, evaluate or inform Borrower of any matter in connection with any
phase of Borrower’s business or operations.
8.9. Counterparts. This
Agreement may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument. Signature by facsimile shall bind the
parties hereto.
8.10. Effectiveness. This
Agreement shall become effective on the date on which all of the conditions to
effectiveness contained herein have been satisfied (as determined by Lender in
its sole and absolute discretion) and all of the parties have signed a copy
hereof (whether the same or different copies) and Lender shall have received
executed originals of this Agreement and the other Loan Documents.
8.11. Severability. In
case any provision in or obligation under this Agreement or the Note or the
other Loan Documents shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
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8.12. Headings
Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this
Agreement.
8.13. Information. At
Borrower’s written request, Lender agrees to keep confidential any information
furnished or made available to it by Borrower pursuant to this Agreement;
provided that nothing herein shall prevent Lender from disclosing such
information (a) to any other person if reasonably incidental to the
administration of the credit facility provided herein, (b) as required by
any law, rule, or regulation, (c) upon the order of any court or
administrative agency; provided, however, if allowed by applicable law, rule,
regulation or order, Lender shall use commercially reasonable efforts to notify
Borrower of such order to allow Borrower to seek court relief to block or limit
such disclosure, (d) upon the request or demand of any regulatory agency or
authority; provided, however, if allowed by applicable law, rule, regulation or
order, Lender shall use commercially reasonable efforts to notify Borrower of
such order to allow Borrower to seek court relief to block or limit such
disclosure, (e) that is or becomes available to the public or that is or
becomes available to Lender other than as a result of a disclosure by Lender
prohibited by this Agreement, (f) in connection with any litigation to
which Lender or any of its Affiliates may be a party relating to this Agreement
or the transactions contemplated hereunder, (g) to the extent necessary in
connection with the exercise of any remedy under this Agreement or any other
Loan Document, and (h) any information with respect to the U.S. federal income
tax treatment and U.S. federal income tax structure of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to Lender relating to such tax treatment and tax
structure.
[THE
REMAINING PAGE LEFT BLANK INTENTIONALLY]
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[SIGNATURE
PAGE TO THIS AGREEMENT]
IN WITNESS WHEREOF, the
parties hereto have caused this Credit Line Agreement to be executed by the
undersigned, thereunto duly authorized, as of the date first set forth
above.
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By: /s/ Xxxx
Xxxxxxx
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Name: Xxxx
Xxxxxxx
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Title:
President
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Xxxx
Xxxxxxx
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| /s/ Xxxx Xxxxxxx | |
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