EXHIBIT 10.39
LOAN AGREEMENT
STANFORD VENTURE CAPITAL HOLDINGS, INC.
U.S. $1,500,000.00 LOAN
TO
INTERCALLNET, INC.
AND
INTER-CALL-NET TELESERVICES, INC.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................................1
ARTICLE II THE LOAN..............................................................................................6
2.1 Interest and Term...................................................................................6
2.2 Use of Loan Funds...................................................................................7
ARTICLE III DISBURSEMENT AND ADVANCES OF LOAN PROCEEDS...........................................................8
3.1 Disbursement of Working Capital Proceeds............................................................8
3.2 Advance Requests....................................................................................8
3.3 Amount Disbursed....................................................................................9
3.4 Ratification........................................................................................9
3.5 Protective Advances.................................................................................9
3.6 Limitation..........................................................................................9
3.7 Prepayment.........................................................................................10
ARTICLE IV CONDITIONS PRECEDENT.................................................................................10
4.1 Conditions to First Disbursement and First Advance.................................................10
4.2 Conditions to Subsequent Disbursements and Advances................................................11
ARTICLE V REPRESENTATIONS AND WARRANTIES........................................................................11
5.1 Capacity; Binding Obligations......................................................................12
5.2 Authorization and Non-Contravention................................................................12
5.3 Equity Interests...................................................................................12
5.4 No Litigation......................................................................................12
5.5 No Other Defaults..................................................................................12
5.6 Approvals..........................................................................................13
5.7 Full Disclosure....................................................................................13
5.8 Statements.........................................................................................13
5.9 No Enforcement Event; Compliance...................................................................13
ARTICLE VI AFFIRMATIVE COVENANTS................................................................................13
6.1 Payments...........................................................................................13
6.2 Continued Existence of Collateral..................................................................13
6.3 Costs and Expenses.................................................................................13
6.4 Loan Funds.........................................................................................14
6.5 Financing Activities...............................................................................14
6.6 Liens..............................................................................................14
6.7 Records and Reports................................................................................14
6.8 Notice to Lender...................................................................................14
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6.9 Adverse Proceedings................................................................................14
6.10 Indemnity..........................................................................................15
6.11 Compliance.........................................................................................15
6.12 Payment of Taxes, Etc..............................................................................15
6.13 Maintenance of Properties, etc.....................................................................15
6.14 Transactions with Affiliates.......................................................................15
6.15 Further Assurances.................................................................................15
6.16 Performance of Material Contracts..................................................................16
6.17 Maintenance of Insurance...........................................................................16
6.18 Call Center Seats..................................................................................16
6.19 Call Center........................................................................................17
ARTICLE VII NEGATIVE COVENANTS..................................................................................17
7.1 No Property Transfers; No Further Encumbrances....................................................17
7.2 No Assignment of Loan..............................................................................17
7.3 No Adverse Actions.................................................................................17
7.4 Additional Debt....................................................................................17
7.5 Change in Nature of Business.......................................................................17
7.6 Mergers, etc.......................................................................................18
7.7 Sales, Etc., of Assets.............................................................................18
7.8 Amendments of Constitutive Documents...............................................................18
7.9 Accounting Changes.................................................................................18
7.10 Negative Pledge....................................................................................18
7.11 Creation of Subsidiaries...........................................................................18
ARTICLE VIII.....................................................................................................18
8.1 Reporting Requirements.............................................................................18
ARTICLE IX.......................................................................................................18
ARTICLE X DEFAULT AND REMEDIES..................................................................................19
10.1 Enforcement Events.................................................................................19
10.2 Remedies...........................................................................................21
ARTICLE XI ASSIGNMENT...........................................................................................22
11.1 Assignment by the Lender...........................................................................22
11.2 Disclosure.........................................................................................22
ARTICLE XII GENERAL CONDITIONS AND OTHER COVENANTS..............................................................23
12.1 Evidence of Disbursals; Previous Disbursals........................................................23
12.2 No Third-Party Beneficiaries.......................................................................23
12.3 Indemnity..........................................................................................23
12.4 Notices............................................................................................23
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12.5 Jurisdiction.......................................................................................24
12.6 Governing Law......................................................................................25
12.7 No Usury...........................................................................................25
12.8 Writing Required...................................................................................25
12.9 Partial Invalidity.................................................................................25
12.10 Interpretation.....................................................................................25
12.11 Assignment.........................................................................................25
12.12 Binding Effect.....................................................................................26
12.13 Loan Agreement Governs.............................................................................26
12.14 Counterparts.......................................................................................26
12.15 Time of Essence....................................................................................26
12.16 No Jury Trial......................................................................................26
12.17 Exchange Rate......................................................................................26
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EXHIBIT INDEX
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Exhibit A - Form of Disbursement Certificate
Exhibit B - Disbursement Schedule
Exhibit C - Advance Request
Exhibit D - Form of Note
Exhibit E - Form of Legal Opinion from Borrower's Counsel
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LOAN AGREEMENT
THIS LOAN AGREEMENT (the "AGREEMENT") is made as of June 13, 2002 by
and between INTERCALLNET, INC., a company organized under the laws of Florida
("INTERCALLNET"), INTER-CALL-NET TELESERVICES, INC., a corporation organized
under the laws of Florida ("INTERCALLNET TELESERVICES", and together with
Intercallnet, the "Borrower"), and STANFORD VENTURE CAPITAL HOLDINGS, INC., a
corporation duly incorporated under the laws of the State of Delaware (the
"LENDER").
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower has requested that Lender make available to the
Borrower a loan facility in a principal amount of up to one million five hundred
thousand dollars (US$1,500,000.00) for the purposes set forth in Section 2.2.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Lender and the
Borrower hereby agree as follows:
ARTICLE I
DEFINITIONS
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When used in this Agreement, the following capitalized terms shall have
the respective meanings indicated opposite each of them:
"ADVANCE" A portion of the Call Center Proceeds disbursed by the Lender
to or for the benefit of Borrower from time to time under this
Agreement.
"ADVANCE Each of Borrower's periodic requests for an Advance
REQUEST" of Call Center Proceeds.
"AFFILIATE" As to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common
control with such Person. For purposes of this definition, the
term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 15% or
more of any class of the voting interests of such Person or to
direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting
interests, by contract or otherwise. Notwithstanding the
foregoing, the term "Affiliate" shall not include any
shareholder, director or officer of the Borrower.
"BORROWER" As defined in the preamble to this Agreement.
"BORROWERS' Campo & Associates, 000 Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX
COUNSEL" 10022.
"BEST The actual knowledge, after Reasonable Inquiry, of the Person.
KNOWLEDGE" For purposes of this Agreement "Reasonable Inquiry" shall mean
that investigation a prudent businessperson would have made in
seeking to verify the applicable statement.
"COLLATERAL" As used in this Agreement, such term shall be as defined in
each of the Security Agreement and the Pledge Agreement and
shall be inclusive of all of the Collateral as so defined in
both agreements.
"CONSOLIDATED" Refers to the consolidation of accounts in accordance with
generally accepted accounting principles.
"DEBT" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such
Person for the deferred purchase price of property or
services, (c) all Obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any
conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession
or sale of such property), (e) all Obligations of such Person
as lessee under capitalized leases which have been , in
accordance with GAAP, recorded as capitalized lease
obligations, (f) all Obligations of such Person relative to
the face amount of an acceptance letter of credit (issued for
the account of such Person) or similar extensions of credit,
(g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of
any equity interests in such Person or any other Person or any
warrants, rights or options to acquire such capital stock, (h)
all contingent obligations relating to indebtedness of such
Person, (i) guarantees of such Person and (j) all indebtedness
and other payment Obligations referred to in clauses (a)
through (i) above of another Person secured by (or for which
the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become
liable for the payment of such indebtedness or other payment
Obligations.
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"DISBURSEMENT(S)" Each periodic disbursement by the Lender of Loan funds to the
Borrower in accordance with the Disbursement Schedule.
"DISBURSEMENT As defined in Section 3.1, in substantially the form attached
CERTIFICATE" as Exhibit "A" hereto.
"DISBURSEMENT The disbursement schedule attached as Exhibit "B" hereto,
SCHEDULE" indicating the amount of each Disbursement, and the date on
which the Lender shall disburse each Disbursement.
"ENVIRONMENTAL Any action, suit, demand, demand letter, claim, notice of
ACTION" non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal,
response, remedial, or other actions or damages and (b) by any
governmental or regulatory authority or third party for
damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"ENVIRONMENTAL Any Federal, state, local or foreign statute, law, ordinance,
LAW" rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the
environment, health, safety or natural resources, including,
without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"ENVIRONMENTAL Any permit, approval, identification number, license or other
PERMIT" authorization required under any Environmental Law.
"GAAP" Generally accepted accounting principles as in effect in the
United States from time to time, consistently applied during
the periods involved.
"ENFORCEMENT As defined in Section 10.1.
EVENT"
"FINANCIAL A certificate from a Responsible Officer of the Borrower
COVENANT certifying that (i) the Borrower is in compliance with the
COMPLIANCE financial covenants set forth in Section 9.1 and (ii) no
CERTIFICATE" Enforcement Event has occurred due to the Borrower's failure
to comply with the financial covenants set forth in Section
9.1.
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"FISCAL A fiscal quarter of the Borrower ending on March 31, June 30,
QUARTER" September 30, or December 31 (as applicable) in any Fiscal
Year.
"FISCAL YEAR" A fiscal year of the Borrower ending on December 31 in any
calendar year.
"HAZARDOUS (a) petroleum or petroleum products, by-products or breakdown
MATERIALS" products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any
other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.
"INTANGIBLE Shall have the meaning ascribed thereto in GAAP.
ASSETS"
"LIEN" Any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security
title of a conditional vendor and any easement, right of way
or other encumbrance on title to real property.
"LOAN" The U.S.$1,500,000.00 credit facility made available to the
Borrower by the Lender, which is evidenced by the Note,
governed by this Agreement, and secured by the Pledge
Agreement, the Security Agreement and other Security
Documents.
"LOAN This Agreement, the Note, the Pledge Agreement, the Security
DOCUMENTS" Agreement, the other Security Documents, and all other
instruments or documents pertaining to the Loan executed from
time to time in favor of Lender by the Borrower or any other
Obligor.
"MATERIAL A material adverse effect on, as applicable, (a) the business,
ADVERSE EFFECT" condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or its Affiliates, (b)
the rights and remedies of Lender under any Loan Document or
(c) the ability of the Borrower to perform its obligations
under any Loan Document to which it is or is to be a party.
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"MATERIAL Each contract to which such Person is a party involving
CONTRACT" aggregate consideration payable to or by such Person of
U.S.$50,000 or more in any year or otherwise material to the
business, condition (financial or otherwise), operations,
performance, properties or prospects of such Person.
"MATURITY DATE" December 31, 2005.
"NET WORTH" The Borrower's total assets less total liabilities, as
reported by the Borrower pursuant to its normal financial
reporting procedures, as required by GAAP.
"NOTE" The Master Note in the form of, and subject to the terms and
conditions set forth in, the Master Note executed by each of
the Borrower in favor of the Lender in the principal amount of
US$1,500,000.00, together with any renewals, replacements,
substitutions or amendments thereof made from time to time, a
copy of the Master Note being attached hereto as Exhibit "D".
"OBLIGATION" With respect to any Person, any payment, performance or other
obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable,
secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding.
Without limiting the generality of the foregoing, the
Obligations of the Borrower under the Loan Documents include
(a) the obligation to pay principal, interest, letter of
credit commissions, charges, expenses, fees, reasonable
attorneys' fees and disbursements, indemnities and other
amounts payable by the Borrower under any Loan Document and
(b) the obligation of the Borrower to reimburse any amount in
respect of any of the foregoing that Lender, in its sole
discretion, may elect to pay or advance on behalf of the
Borrower.
"OBLIGOR(S)" The Borrower and any other person giving security for the
Loan, and any other person liable or to become liable for the
Loan from time to time.
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"PARTIES" Collectively, the Lender and the Borrower.
"PERSON" An individual, partnership, corporation, business trust,
governmental authority, joint venture or other entity of
whatever nature.
"PLEDGE The Pledge Agreement of even date herewith executed by the
AGREEMENT" Borrower in favor of Lender, pursuant to which Intercallnet
pledges as security for the Loan, among other things, all of
the capital stock of the Intercallnet Teleservices.
"RESPONSIBLE Any President, Vice President, Chief Financial Officer or
OFFICER" similar level officer of any Person.
"SECURITY The Security Agreement of even date herewith executed by
AGREEMENT" Intercallnet and Inter-Call-Net Teleservices in favor of the
Lender.
"SECURITY The Pledge Agreement, the Security Agreement, and any
DOCUMENTS" registered xxxx of sale, collateral assignment, pledge
agreement, Lien, charge, hypothecation, security agreement or
other instruments or documents executed from time to time in
favor of the Lender by the Borrower with respect to any of the
collateral securing the Loan.
"TANGIBLE The difference between (i) the Borrower's Net Worth and (ii)
NET WORTH" the Borrower's Intangible Assets.
"TOTAL Any interest payable on, and amortization of debt discount in
INTEREST" respect of, all Debt for borrowed money, in each case, of or
by the Borrower and its Affiliates.
ARTICLE II
THE LOAN
--------
Subject to all applicable terms and conditions of the Loan Documents,
Lender agrees to make the Loan to the Borrower and the Borrower agrees to accept
the Loan from Lender.
2.1 INTEREST AND TERM.
------------------
(a) The outstanding principal balance of the Loan from time to time shall bear
interest at the rate of eight percent (8%) per annum, and calculated in the
manner set forth in Section 1 of the Note. The Borrower shall pay interest and
principal to the Lender subject to the terms and conditions set forth in Section
1 of the Note.
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(b) Notwithstanding the ordinary annual interest rate set forth in subsection
(a) above and in the Note, the entire outstanding principal balance of the Loan
shall at the Lender's option bear interest at the rate of eighteen percent (18%)
(the "DEFAULT RATE") during the existence of any Enforcement Event, commencing
on the date that Borrower knew or should have known of the existence of the
subject Enforcement Event; provided, however, that (x) if the Enforcement Event
consists solely of the Borrower's failure to pay any installment of principal or
interest on the Loan on the date when such installment is due, then (i) the
Lender shall not impose the Default Rate unless the installment payment is
delinquent more than ten (10) days, (ii) if the installment payment is
delinquent more than ten (10) days, the Lender may in its sole discretion impose
the Default Rate on the entire outstanding balance of the Loan retroactively
from the date the delinquent installment was due until the installment is paid
in full, and (iii) the Lender's option to impose the Default Rate is independent
of, and may be exercised in addition to, the Lender's option to impose the late
payment charge described in subsection (c) below or any other right the Lender
may have hereunder, under any other Loan Document or pursuant to any law, rule
or regulation, (y) if the subject Enforcement Event provides for a cure period
and the Borrower cures the Enforcement Event within the subject cure period,
then the Lender shall not be entitled to apply the Default Rate during the
existence of the subject Enforcement Event, and (z) if the subject Enforcement
Event provides for a cure period and the Borrower does not cure the Enforcement
Event within the subject cure period, then the Lender may elect to apply the
Default Rate retroactively to the first day that Borrower knew or should have
known of the existence of the subject Enforcement Event. The ten (10) day grace
period described in the clause (x) of the preceding sentence for imposition of
the Default Rate does not apply to any failure by the Borrower to pay the Loan
upon its stated Maturity Date or upon acceleration of maturity as provided in
this Agreement, nor does this grace period apply to any other Enforcement Event
other than non-payment of an installment of principal or interest.
(c) If any installment payment of principal or interest is not made by the
Borrower to the Lender within five (5) days after such payment is due, then for
each such delinquent installment the Borrower shall pay to the Lender a late
payment charge equal to five percent (5%) of the amount of the delinquent
installment, as liquidated damages to cover the extra expenses to the Lender of
handling such late payment. The Borrower acknowledges and agrees that the exact
amount of such extra expenses incurred by the Lender is difficult to determine
in advance and that said late payment charge constitutes a reasonable good faith
estimate of such expenses and is not a penalty or interest. The Lender's option
to impose a late payment charge is independent of, and may be exercised in
addition to, the Lender's option to impose the Default Rate described in
subsection (b) above or any other right the Lender may have hereunder, or under
any other Loan Document or pursuant to any law, rule or regulation.
2.2 USE OF LOAN FUNDS.
-----------------
(a) US$900,000 of the Loan proceeds (the "WORKING CAPITAL PROCEEDS") shall be
used by the Borrower solely for one or more of the following purposes: (i) to
repay all of the Borrower's current outstanding Obligations, and (ii) to make
expenditures for working capital and other lawful general corporate purposes.
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(b) US$600,000 of the Loan proceeds (the "CALL CENTER PROCEEDS") shall be used
by the Borrower solely for the purposes of constructing, equipping and operating
a call center (the "CALL CENTER") in Antigua, which shall initially consist of
approximately 200 seats.
2.3 NET PAYMENTS All amounts payable under this Agreement by the Borrower shall
be made in immediately available U.S. dollar denominated funds and without
set-off or counterclaim and clear of and without deduction for any and all
present and future taxes, levies, imports, deductions, charges, withholdings,
contributions, services, surcharges, exchange commissions, penalties and all
liabilities with respect thereto imposed by any governmental or taxing
authority.
ARTICLE III
DISBURSEMENT AND ADVANCES OF LOAN PROCEEDS
------------------------------------------
3.1 DISBURSEMENT OF WORKING CAPITAL PROCEEDS. Subject to compliance with all of
the conditions of this Agreement and the remaining Loan Documents, and provided
that an Enforcement Event has not occurred, Lender will lend from time to time,
during the term of this Agreement, such sums from the Working Capital Proceeds
as set forth in the Disbursement Schedule attached as Exhibit "B" hereto. Each
disbursement of Loan funds from the Working Capital Proceeds pursuant to the
Disbursement Schedule shall be subject to Lender receipt of a "DISBURSEMENT
CERTIFICATE" substantially in the form of the Disbursement Certificate attached
hereto as Exhibit "A", and must be signed by a properly authorized official of
the Borrower. Prior evidence of such authority, satisfactory to Lender in its
sole discretion, must be made available to Lender. In addition, each
Disbursement Certificate (i) shall contain instructions for the subject
Disbursement, (ii) shall attach such supporting documentation as is reasonably
requested by Lender from time to time, and (iii) shall certify that the Borrower
shall use the funds to be disbursed to it by Lender exclusively for the purposes
set forth in Section 2.2(a) of this Agreement. Furthermore, each Disbursement
Certificate shall be delivered to Lender by telecopier or telex, confirmed
immediately in writing by courier.
3.2 ADVANCE REQUESTS. Subject to compliance with all of the conditions of this
Agreement and the remaining Loan Documents, Lender shall, at its sole and
absolute discretion, make Advances of Loan funds from the Call Center Proceeds
to Borrower as requested by Borrower in accordance with the provisions of this
Agreement. Borrower may require the disbursement of all or any part of the
amount of the Call Center Proceeds at any time before the Maturity Date unless
an Enforcement Event has occurred. Each Advance Request must be made pursuant to
an Advance Request form substantially in the form of the Advance Request form
attached hereto as Exhibit "C", and must be signed by a properly authorized
official of the Borrower. Prior evidence of such authority, satisfactory to
Lender in its sole discretion, must be made available to Lender. In addition,
each Advance Request (i) shall specify the amount of the Advance requested and
contain instructions for its disbursement, (ii) shall attach such supporting
documentation as is reasonably requested by Lender from time to time, and (iii)
shall certify that Borrower shall use the funds to be disbursed to it by Lender
exclusively for the purposes set forth in Section 2.2(b) of this Agreement.
Furthermore, each Advance Request shall be irrevocable and binding on Borrower
and shall be delivered to Lender by telecopier or telex, confirmed immediately
in writing by courier. Lender shall not be required to disburse Advances during
the existence of any Enforcement Event, and shall not be required to approve any
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Advance Request for an amount less than US$50,000. All Advance Requests must be
supported by a certificate from Borrower stating that the amounts requested have
been spent or incurred, accompanied by paid invoices, canceled checks, receipts
or other proof of payment satisfactory to Lender with respect to all costs
covered by the previous Advance Requests, and any other document that Lender may
reasonably request.
3.3 AMOUNT DISBURSED. If all applicable conditions precedent have been
satisfied, then Lender shall disburse the Disbursements of the Working Capital
Proceeds as set forth in the Disbursement Schedule, or, at Lender's sole and
absolute discretion, advance the Advances of Call Center Proceeds as set forth
herein.
3.4 RATIFICATION. Except as otherwise previously or concurrently disclosed to
the Lender in writing, each Disbursement Certificate or Advance Request (as
applicable) by or on behalf of the Borrower shall be deemed to ratify and
confirm that all representations and warranties of the Borrower in this
Agreement and the other Loan Documents remain true and correct as of the date of
the Disbursement Certificate or the Advance Request (as applicable). Unless the
Lender is notified to the contrary before disbursing the Disbursement or
advancing the Advance (as applicable), the Borrower's acceptance and use of the
Disbursement or the Advance (as applicable) shall be deemed to ratify and
confirm that all such representations and warranties remain true and correct on
the date of the Disbursement or the Advance (as applicable).
3.5 PROTECTIVE ADVANCES. Notwithstanding the face amount of the Note, Lender
shall at all times have the right (but not the obligation) to advance any
additional funds which Lender may in its sole discretion deem necessary or
appropriate from time to time in order to preserve or protect the Collateral for
the Loan, or to enforce any of Lender's rights or remedies, or for any other
reason permitted or provided under this Agreement or any other Loan Document.
All such additional Advances shall bear interest at the Default Rate, shall be
payable on demand of Lender, and shall be secured as protective Advances under
the Pledge Agreement and the other Security Documents.
3.6 DISBURSING LENDER. At the Lender's option, some or all of the Disbursements
or the Advances (as applicable) may be disbursed through the Lender's inspector
or Lender's local counsel or other disbursing agent approved by the Lender. For
interest computation purposes, Loan funds shall be considered "disbursed" or
"advanced" (as applicable) to the Borrower on the day the funds leave the
Lender's office (if transferred by wire) or are otherwise paid or credited
(whether by check, bookkeeping entry or otherwise) by the Lender to the
Borrower, any disbursing agent or other recipient.
3.6 LIMITATION. No Disbursement or Advance (as applicable) shall constitute a
waiver by the Lender of any conditions precedent to any subsequent Disbursement
or Advance (as applicable). The Lender shall not be obligated to approve any
Disbursement or Advance (as applicable) for purposes other than those
contemplated in this Agreement. The Lender shall neither be required to
segregate specific funds in any manner for the purposes of this Agreement nor to
supervise the proper application or distribution of funds to third parties; the
sole obligation of the Lender shall be to advance the Loan funds as directed by
the Borrower, upon the Borrower's compliance with and subject to all of the
applicable terms of the Loan Documents.
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3.7 PREPAYMENT. The Loan may be prepaid by the Borrower, in whole or in part,
without incurring any prepayment penalty. Payments shall be applied first to any
fees or charges incurred in connection with this Loan, and then to accrued and
unpaid interest with the balance, if any, to the principal of the Loan.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
Lender shall not be required to make any Disbursement of Working
Capital Proceeds or Advance of Call Center Proceeds unless the applicable
conditions precedent set forth in this Article have been satisfied.
4.1 CONDITIONS TO FIRST DISBURSEMENT AND FIRST ADVANCE. The following conditions
precedent shall apply to the first Disbursement of Working Capital Proceeds and
the first Advance of Call Center Proceeds:
(a) The Borrower shall have executed and delivered to the Lender the Note, the
Security Agreement, the Pledge Agreement, this Agreement and all other Loan
Documents required by Lender, all in form and content reasonably satisfactory to
Lender. In addition, the Borrower shall have executed or caused to be executed
(as may be appropriate) and delivered to Lender any other instruments or
documents which the Lender or the Lender's counsel may reasonably consider
necessary or appropriate in connection with the Loan;
(b) In addition, the Lender shall have received evidence satisfactory to it in
its sole discretion that all Collateral securing the Loan is and remains in
place, and that the Lender's security interest in such Collateral remains
perfected;
(c) The Lender shall have received a certified copy of the resolutions from the
Borrower's board of directors authorizing the Borrower to borrow the Loan, and
authorizing the Borrower to enter into this Agreement and the other Loan
Documents and specifying the person or persons authorized to sign this Agreement
and the other Loan Documents on behalf of the Borrower;
(d) The Lender shall have received a legal opinion from the Borrower' counsel,
in form and content reasonably satisfactory to Lender, addressing the matters
set forth in Exhibit "E";
(e) No Enforcement Event shall exist under this Agreement or any other Loan
Document, and no act shall have been committed or event occurred or be then
occurring which with the passage of time and/or the giving of notice would
constitute any such Enforcement Event;
(f) The representations and warranties made by the Borrower in this Agreement
and all other Loan Documents shall be true and correct on and as of the date of
the Disbursement or the Advance (as applicable) with the same effect as if the
Borrower had made them on such date;
(g) The Borrower shall have paid the Lender for all charges and fees incurred by
the Lender in connection with any of the Loan Documents, including any legal
fees incurred in the preparation of any of the Loan Documents, up to a maximum
of US$25,000; and
10
(h) No litigation or proceedings shall be pending or threatened (including any
bankruptcy, insolvency or similar proceedings) against the Borrower which
litigation or proceedings, in the Lender's exclusive judgment, is likely to have
any adverse effect on the Loan or any Collateral securing the Loan.
(i) Intercallnet shall have delivered to Lender the certificates evidencing all
the shares of capital stock of Intercallnet Teleservices held by Intercallnet.
(j) Notwithstanding the foregoing, any Advance of Call Center Proceeds hereunder
shall be subject to Lender's sole and absolute discretion.
4.2 CONDITIONS TO SUBSEQUENT DISBURSEMENTS AND ADVANCES. The following
conditions precedent shall apply with respect to each subsequent Disbursement of
Working Capital Proceeds under the Disbursement Schedule and Advances of Call
Center Proceeds after the initial Disbursement of Working Capital Proceeds or
initial Advance of Call Center Proceeds:
(a) All conditions precedent to the first Disbursement or the first Advance (as
applicable) set forth in Section 4.1 shall have been satisfied;
(b) No Enforcement Event shall exist under this Agreement or any other Loan
Document, and no act shall have been committed or event occurred or be then
occurring which with the passage of time and/or the giving of notice would
constitute any such Enforcement Event;
(c) The representations and warranties made by the Borrower in this Agreement
and all other Loan Documents shall be true and correct on and as of the date of
the Disbursement or the Advance (as applicable) with the same effect as if the
Borrower had made them on such date;
(d) No litigation or proceedings shall be pending or threatened (including any
bankruptcy, insolvency or similar proceedings) against the Borrower which
litigation or proceedings, in the Lender's exclusive judgment, is likely to have
any adverse effect on the Loan or any Collateral securing the Loan; and
(e) The Lender shall have received any original Loan Documents that were
required to be recorded in order to make them effective under applicable law or
to perfect the Lien described therein.
(f) Notwithstanding the foregoing, any Advance of Call Center Proceeds hereunder
shall be subject to Lender's sole and absolute discretion.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Lender to make the Loan and to perform the
covenants herein contained, the Borrower makes the following representations and
warranties to the Lender, each of which shall survive the execution and delivery
of this Agreement and all other Loan Documents:
11
5.1 CAPACITY; BINDING OBLIGATIONS. The Borrower has good and marketable title to
the Collateral as their respective interests may be therein and has all
corporate power and authority required to own the Collateral and to pledge the
Collateral pledged by the Borrower as collateral for the Loan, to execute and
deliver this Agreement and each other Loan Document and to perform and observe
all of its obligations thereunder. The Note, the Pledge Agreement, the Security
Agreement, this Agreement and all other Loan Documents executed by the Borrower
(assuming, in each case, the due and valid authorization, execution and delivery
thereof by the Lender) constitute valid and binding obligations of the Borrower,
enforceable against them in accordance with the respective terms thereof, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by limitations under equitable principles
governing the availability of equitable remedies.
5.2 AUTHORIZATION AND NON-CONTRAVENTION. The Borrower has obtained approval of
the Loan in accordance with applicable law. The execution, delivery and
performance of this Agreement, the Note, the Pledge Agreement, the Security
Agreement, and all other Loan Documents by the Borrower have been duly
authorized by all necessary governmental, corporate and legal actions and do not
and shall not conflict with or constitute a default under any material law,
by-law, ordinance, regulation, indenture, agreement or instrument to which the
Borrower is a party or by which the Borrower or its assets may be bound or
affected. The pledge of the Collateral is lawful and enforceable in all
respects, and does not conflict with or contravene any constitutional provision
or any other law, by-law, regulation or ordinance.
5.3 EQUITY INTERESTS. Except for Intercallnet's equity interests in Intercallnet
Teleservices, Intercallnet does not own, directly or indirectly, any capital
stock, partnership interest or joint venture interest in, or any security or
equity issued by, any other Person. Intercallnet Teleservices does not own,
directly or indirectly, any capital stock, partnership interest or joint venture
interest in, or any security or equity issued by, any other Person. The capital
stock of Intercallnet Teleservices owned and pledged to Lender under the Pledge
Agreement represents 100% of the total outstanding capital stock of Intercallnet
Teleservices.
5.4 NO LITIGATION. Except as otherwise previously or concurrently disclosed to
and approved by the Lender in writing, there are no actions, suits or
proceedings pending or (to the best knowledge of the Borrower) threatened
against or affecting the Borrower, or its Affiliates, or any Collateral securing
the Loan or involving the validity or enforceability of the pledge of the
Collateral or any Loan Document before any court of law or equity or any
administrative board or tribunal or before or by any governmental authority,
which, if adversely decided, would have a Material Adverse Effect on the
Borrower, the Loan or the Collateral.
5.5 NO OTHER DEFAULTS. Except as otherwise previously or concurrently disclosed
to and approved by the Lender in writing, the Borrower, and its Affiliates, are
not in default under (i) any material indenture, agreement or instrument to
which it is a party or by which the Borrower or any of the Collateral may be
bound, nor (ii) any regulation, order, writ, judgment, injunction, decree or
demand of any court or tribunal or governmental authority, which default in
either case would have any Material Adverse Effect on the Borrower, the Loan or
the Collateral.
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5.6 APPROVALS. The Borrower has duly obtained all material permits, licenses,
approvals and consents from, and made all filings with, any governmental
authority (and the same have not lapsed nor been rescinded or revoked) which are
necessary in connection with the execution and delivery of any Loan Document,
the performance of its obligations thereunder, and the enforcement of any Loan
Document.
5.7 FULL DISCLOSURE. There is no fact that the Borrower is aware of as of the
date hereof and has not disclosed to the Lender in writing that could have a
Material Adverse Affect on the Borrower, the Loan, the Collateral, or any other
collateral securing the Loan, or the ability of the Borrower to perform its
obligations under any of the Loan Documents.
5.8 STATEMENTS. This Agreement and all financial statements, budgets, schedules,
opinions, certificates, confirmations, statements, applications, affidavits,
reports, agreements and other materials submitted to the Lender in connection
with or in furtherance of this Agreement by or on behalf of the Borrower are
complete and present fairly the matters with which they purport to deal, and
neither misstate any material fact nor, separately or in the aggregate, fail to
state any material fact necessary to make the statements made therein not
misleading.
5.9 NO ENFORCEMENT EVENT; COMPLIANCE. No Enforcement Event exists under this
Agreement or any other Loan Document, and no act has been committed or event has
occurred or is occurring which, with the passage of time and/or the giving of
notice, would constitute an Enforcement Event. The Borrower is in full
compliance with all material covenants, terms and conditions contained in this
Agreement or any other Loan Document.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
So long as any amount remains payable with respect to the Loan or
otherwise pursuant to any Loan Document, the Borrower hereby covenants and
agrees with the Lender as follows:
6.1 PAYMENTS. The Borrower shall pay when due and owing all sums payable to the
Lender under the Note, this Agreement, the Pledge Agreement, the Security
Agreement and any other Loan Document.
6.2 CONTINUED EXISTENCE OF COLLATERAL. The Borrower shall do or cause to be done
all things necessary to maintain the value of the Collateral, and the Borrower
shall not do or cause to be done anything which would materially reduce the
value of the Collateral, excluding ordinary wear and tear and any reduction
caused by market conditions and/or depreciation in value.
6.3 COSTS AND EXPENSES. The Borrower shall pay, and shall hold the Lender
harmless against, all out-of-pocket costs incurred by the Lender in connection
with the Loan, including without limitation any and all taxes (excluding income
taxes), duties, recording costs, fees, commissions, premiums, fees and costs of
the Lender's counsel, and out-of-pocket administrative expenses of the Lender.
In addition, the Borrower shall pay or reimburse the Lender for all its
out-of-pocket expenses incurred in connection with the initial consummation of
this transaction, including fees and disbursements of counsel to the Lender, in
an amount not to exceed U.S.$25,000.
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6.4 LOAN FUNDS. The Borrower shall use the Loan funds only for the specific
purposes set forth in Section 2.2.
6.5 FINANCING ACTIVITIES. The Borrower shall maintain adequate books and records
with respect to all revenues collected, revenues earned by the Borrower, and
expenses incurred. All such books, records and information shall, upon the
Lender's request, be made available by the Borrower to the Lender at the offices
of the Borrower. The Borrower shall keep the Lender apprised of all events,
actions or activities which affect or may affect the financial circumstances of
the Borrower. The Borrower shall provide the Lender semi-annual reports
regarding (a) budget performance; (b) sales of any assets for an amount
exceeding U.S.$50,000; (d) investments by the Borrower in any Person, including
the purchase of equity or debt securities or the acquisition of an interest in
any other venture; (e) projected monthly cash balances of the Borrower; (f)
proposed procurements of goods and services by the Borrower in an amount,
individually or in the aggregate, exceeding US$50,000 and proposed procurements
of goods and services by the Borrower outside of the Borrower's ordinary course
of business or practice; and (g) any other information that may be reasonably
requested and deemed by the Lender to be material in determining the financial
stability of the Borrower. Notwithstanding the foregoing, the Borrower's full
compliance with the reporting requirements of the Securities Act of 1933 and the
Securities Exchange Act of 1934 shall be deemed compliance with the reporting
requirements required under this Section 6.5.
6.6 LIENS. Neither the Borrower nor its Affiliates shall commit or permit or
suffer to occur any act or omission whereby any collateral for the Loan shall be
impaired or threatened or whereby any interest therein shall become subject to
any Lien, attachment, judgment, charge or other encumbrance whatsoever. Neither
the Borrower nor its Affiliates shall directly or indirectly do anything or take
any action which might prejudice any of the right, title or interest of the
Lender in or to any of the Collateral securing the Loan or impose or create any
direct or indirect obligation or liability on the part of the Lender with
respect thereto.
6.7 RECORDS AND REPORTS. The Borrower shall maintain adequate books and records
with respect to the Collateral. The Lender shall be entitled to inspect such
books and records at all reasonable times at the offices of the Borrower, and
shall provide such other financial information as the Lender may reasonably
request from time to time, all of which must be satisfactory to the Lender and
be prepared in accordance with GAAP.
6.8 NOTICE TO LENDER. The Borrower shall promptly advise the Lender of (a) any
default by the Borrower in the payment of any other Debt owed by the Borrower or
its Affiliates to any Person; (b) any notice of any actual or purported default
received by the Borrower in respect of any other Debt owed by the Borrower or
its Affiliates to any Person; (c) any lawsuits pending against the Borrower
claiming an amount in excess of the sum of U.S.$50,000 or which could have
adversely affect the Collateral; and (d) the existence of any Enforcement Event,
or the commission of any act or occurrence of any event which, with the passage
of time and/or the giving of notice, would constitute an Enforcement Event or a
default in respect of any other Debt of the Borrower to any person.
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6.9 ADVERSE PROCEEDINGS. Each of the Borrower and its Affiliates shall use its
best efforts to oppose and defend any actions or proceedings that are filed or
are threatened to be filed seeking to (i) enjoin or otherwise prevent or declare
invalid or unlawful or adversely affect the validity or priority of the Liens
and security interests granted to the Lender under the Loan Documents; (ii)
adversely affect the financial condition of the Borrower, or its Affiliates, or
the ability of the Borrower to fulfill any of its obligations under the Loan
Documents. Without limiting the generality of the foregoing, each of the
Borrower and its Affiliates (as applicable) shall resist the entry of any
temporary or permanent injunction and shall seek the stay of any such injunction
that may be entered, and each of the Borrower and its Affiliates shall use its
best efforts to bring about a favorable and speedy disposition of such
proceedings.
6.10 INDEMNITY. If the Lender is named as a party to any lawsuit brought at any
time against the Borrower or any of its Affiliates or with respect to the Loan,
the Collateral or other assets and property securing the Loan, then the Borrower
or its Affiliates (as applicable) shall defend, indemnify and hold the Lender
harmless from any and all claims, demands, damages, liabilities, judgments,
losses, costs, expenses and reasonable attorneys' fees arising out of or
resulting from any such lawsuit or any related appeal; provided, however, that
notwithstanding the foregoing, the Borrower shall not indemnify the Lender in
connection with any lawsuit and/or appeal that relates directly to the gross
negligence or willful misconduct of the Lender.
6.11 COMPLIANCE. The Borrower shall comply at all times with the terms and
conditions of this Agreement and all other Loan Documents, including all
restrictive covenants affecting the Collateral securing the Loan. The Borrower
shall also comply with all applicable laws, rules, regulations, ordinances and
other requirements of any governmental authorities.
6.12 PAYMENT OF TAXES, ETC. The Borrower shall pay and discharge before the same
shall become delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property, and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property; provided, however, that
the Borrower shall not be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
6.13 MAINTENANCE OF PROPERTIES, ETC. The Borrower shall maintain and preserve
all of its properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
6.14 TRANSACTIONS WITH AFFILIATES. The Borrower shall conduct all transactions
otherwise permitted under the Loan Documents with any of its Affiliates on terms
that are fair and reasonable and no less favorable to the Borrower than it would
obtain in a comparable arm's-length transaction with a person not an Affiliate.
6.15 FURTHER ASSURANCES.
-------------------
(a) Promptly upon request by the Lender, the Borrower shall correct any material
defect or error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof.
(b) Promptly upon request by the Lender, the Borrower shall do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and re-register
any and all such further acts, deeds, conveyances, pledge agreements, mortgages,
15
deeds of trust, trust deeds, assignments, financing statements and continuations
thereof, termination statements, direct agreements, notices of assignment,
transfers, certificates, assurances and other instruments as Lender may
reasonably require from time to time in order to (A) carry out more effectively
the purposes of the Loan Documents, (B) to the fullest extent permitted by
applicable law, subject the Borrower's properties, assets, rights or interests
now or hereafter intended to be covered by any of the Security Documents, (C)
perfect and maintain the validity, effectiveness and priority of any of the
Security Documents and any of the Liens intended to be created thereunder and
(D) assure, convey, grant, assign, transfer, preserve, protect and confirm more
effectively unto the Lender the rights granted now or hereafter intended to be
granted to the Lender under any Loan Document or under any other instrument
executed in connection with any Loan Document to which the Borrower is or is to
be a party.
6.16 PERFORMANCE OF MATERIAL CONTRACTS. Unless to do so would have a Material
Adverse Effect on the Borrower, (i) the Borrower shall perform and observe all
the material terms and provisions of each Material Contract to be performed or
observed by it, (ii) maintain each such Material Contract in full force, (iii)
enforce each such Material Contract in accordance with its terms, and (iv) take
all such action to such end as may be from time to time reasonably requested by
the Lender.
6.17 MAINTENANCE OF INSURANCE. The Borrower shall procure at its own expense and
maintain in full force and effect at all times, and cause each of its Affiliates
to procure at its own expense and maintain in full force and effect at all
times, insurance policies with insurance companies that have, or have directly
reinsured such policies with reinsurers that have, an A.M. Best claims paying
ability rating of at least "A" (or the then equivalent grade) or otherwise are
approved by the Lender, against such casualties and contingencies, of such
types, on such terms and in such amounts (including deductibles and co-insurance
requirements) as required by the Lender and as are otherwise required under any
applicable law. In the event that the Borrower or any of its Affiliates shall
fail to maintain all of the insurance coverage required under this Section 6.17,
the Lender, upon at least sixty (60) days' prior notice to the Borrower of any
such failure (unless the aforementioned insurance would lapse within such
period, in which event notice should be given as soon as reasonably
practicable), may (but shall not be obligated to) take out the required policies
of insurance and to pay all amounts owing from time to time thereunder. All
amounts so advanced by the Lender shall become additional Obligations of the
Borrower under the Loan Documents, and the Borrower shall forthwith pay such
amounts to the Lender, together with interest thereon at rate set forth in the
Note.
6.18 CALL CENTER SEATS. Borrower covenants and agrees to maintain and operate
the following: (i) no less than 50 seats in the Call Center by December 31,
2002; (ii) no less than 100 seats in the Call Center by March 31, 2003; and no
less than 200 seats in the Call Center thereafter until the Note has been paid
in full; provided, however, that Lender shall have advanced the Call Center
Proceeds as requested by Borrower. In the event that Borrower fails to maintain
the seats as described in the preceding sentence on or prior to the dates set
forth in this Section, Borrower shall promptly issue to Lender additional
warrants to purchase 300,000 shares of Borrower's common stock at an initial
exercise price of US$0.76 per share and subject to the same or similar terms and
conditions set forth in the Series A Convertible Preferred and Common Stock
Warrant Purchase Agreement, by and between Lender and Borrower dated February
28, 2002 (the "PURCHASE AGREEMENT").
16
6.19 CALL CENTER. Intercallnet hereby covenants and agrees that it will
establish, no later than 120 days after the date of this Agreement, a
wholly-owned subsidiary (the "ANTIGUAN SUBSIDIARY"), and Intercallnet shall
cause such Antiguan Subsidiary to continue all of Borrower's efforts relating to
the construction and equipping of the Call Center as described in Section 6.18;
provided, however, that Lender shall have advanced the Call Center Proceeds as
requested by Borrower. Upon the creation of the Antiguan Subsidiary, Borrower
shall cause such Antiguan Subsidiary to execute and deliver an amendment to this
Agreement, which shall (i) join the Antiguan Subsidiary as a borrower to the
Loan Documents, and (ii) provide that the Antiguan Subsidiary shall be jointly
and severally liable for the obligations of the Borrower hereunder. In addition,
Borrower shall cause the Antiguan Subsidiary to execute and deliver (i) a
security agreement that is satisfactory in form and substance to Lender,
pursuant to which the Antiguan Subsidiary shall grant to Lender a security
interest in all of the Antiguan Subsidiary's assets (whether tangible or
intangible), and (ii) a pledge agreement that is satisfactory in form and
substance to Lender, pursuant to which Intercallnet shall pledge all of the
outstanding capital stock of the Antiguan Subsidiary for the benefit of Lender.
ARTICLE VII
NEGATIVE COVENANTS
------------------
So long as any amount remains payable with respect to the Loan or
otherwise pursuant to any Loan Document, the Borrower covenants and agrees that
without the prior written consent of the Lender, which the Lender may grant or
withhold in its sole discretion:
7.1 NO PROPERTY TRANSFERS; NO FURTHER ENCUMBRANCES. The Borrower shall not sell,
transfer, lease or convey all or any part of the Collateral. The Borrower shall
also not further encumber all or any of the Collateral.
7.2 NO ASSIGNMENT OF LOAN. The Borrower shall not assign or transfer any of its
rights under any Loan Document or in or to any proceeds of the Loan.
7.3 NO ADVERSE ACTIONS. The Borrower shall not take any actions, or cause any
actions to be taken by any other Person, including, without limitation, any of
the Borrower' Affiliates, that (i) would or could adversely affect the
Collateral, or (ii) would or could adversely affect the Lender's interest
hereunder or under any other Loan Document.
7.4 ADDITIONAL DEBT. The Borrower shall not incur any additional Debt, or make
any agreement, arrangement, commitment or undertaking to incur any additional
Debt, without the prior written consent of the Lender. Notwithstanding the
foregoing, the Borrower shall be entitled to finance its accounts receivables
with a third party financial institution ("A/R FINANCING") and the Lender
acknowledges and agrees that the Loan funds relating to Working Capital Proceeds
shall rank junior to the Borrower's A/R Financing.
7.5 CHANGE IN NATURE OF BUSINESS. The Borrower shall not make any material
change in the nature of their business as carried on at the date hereof or as
contemplated to be carried on at the date hereof.
17
7.6 MERGERS, ETC. The Borrower and its Affiliates shall not merge into or
consolidate with any Person or permit any Person to merge into it, if an
Enforcement Event then exists or would exist after giving effect to such merger.
7.7 SALES, ETC., OF ASSETS. The Borrower and its Affiliates shall not sell,
lease, transfer or otherwise dispose of assets except (i) sales, leases,
transfers, or other dispositions of assets in the ordinary course of business,
and (ii) sales, leases, transfers or other dispositions of assets for cash and
for fair value in an aggregate amount which do not exceed U.S.$50,000.
7.8 AMENDMENTS OF CONSTITUTIVE DOCUMENTS. The Borrower shall not amend its
certificate of incorporation or bylaws or other constitutive documents, except
for amendments or changes that do not affect in any way the Borrower's rights
and obligations to enter into and perform any of the Loan Documents to which it
is a party and to pay all of the obligations hereunder to the Lender and that do
not otherwise have a Material Adverse Effect on the Borrower.
7.9 ACCOUNTING CHANGES. The Borrower shall not make or permit any change in
accounting policies or reporting practices, except as required by GAAP or as may
be required by the United States Securities Exchange Commission.
7.10 NEGATIVE PLEDGE. The Borrower shall not enter into or suffer to exist any
agreement prohibiting or conditioning the creation or assumption of any Lien
upon any of their respective property or assets.
7.11 CREATION OF SUBSIDIARIES. Until the Loan is paid in full, subject to
Section 6.19, the Borrower shall not own, directly or indirectly, any capital
stock, partnership interest or joint venture interest in, or any security issued
by, any other Person, without first obtaining the prior written consent of the
Lender.
ARTICLE VIII
REPORTING REQUIREMENTS
----------------------
8.1 REPORTING REQUIREMENTS. So long as any Disbursement, Advance or any other
Obligation of the Borrower under any Loan Document shall remain unpaid, the
Borrower shall furnish to the Lender:
(a) Default Notice. As soon as possible and in any event
within two (2) days after the occurrence of each Enforcement Event or
any event, development or occurrence reasonably likely to have a
Material Adverse Effect continuing on the date of such statement, a
statement of the chief financial officer of the Borrower setting forth
details of such Enforcement Event and the action that the Borrower has
taken and proposes to take with respect thereto.
(b) Litigation. Promptly after obtaining knowledge thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower or its Affiliates.
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(c) Agreement Notices. Promptly upon receipt thereof, copies
of all notices, requests and other documents received by the Borrower
under or pursuant to any Loan Document or Material Contract or
instrument, indenture, loan or credit or similar agreement relating to
events which are reasonably likely to have a Material Adverse Effect
and, from time to time upon request by the Lender, such information and
reports regarding the Material Contracts and such instruments,
indentures and loan and credit and similar agreements as the Lender may
reasonably request.
(d) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of
any noncompliance by the Borrower with any Environmental Law or
Environmental Permit that could reasonably be expected to have a
Material Adverse Effect.
(e) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower as the Lender may from time to
time reasonably request.
ARTICLE IX
FINANCIAL COVENANTS
-------------------
9.1 FINANCIAL COVENANTS. So long as any Disbursement or Advance shall remain
unpaid or the Lender shall have any commitment hereunder, Borrower will:
(a) Tangible Net Worth. Maintain a Tangible Net Worth of no less than U.S.$0.
(b) Testing of Financial Covenants. The Borrower shall calculate the Borrower's
Tangible Net Worth, at the end of each Fiscal Quarter, commencing June 30, 2002,
and continuing thereafter for each succeeding quarter. Such calculations shall
be delivered to the Lender together with the financial statements to be
delivered to the Lender.
ARTICLE X
DEFAULT AND REMEDIES
--------------------
10.1 ENFORCEMENT EVENTS. The occurrence of any of the following events after the
date of this Agreement shall constitute an "ENFORCEMENT EVENT" under this
Agreement:
(a) Any failure by the Borrower to pay any sum when due under the Note, this
Agreement or any other Loan Document (and the continuation of such failure
beyond the expiration of the grace period, if any, provided therein for such
payment); or
(b) Any failure by the Borrower, or its Affiliates, to observe any of the
affirmative and negative covenants set forth in Articles VI, VII and IX,
respectively, which if caused or occasioned or permitted voluntarily by the
Borrower or any of its Affiliates (as applicable) would breach any affirmative
or negative covenant set forth in Article VI, VII or IX, as applicable, which
failure remains uncured for a period of thirty (30) calendar days following the
first date of such failure or omission; or
(c) Any representation, warranty, affidavit, material certificate or statement
made or delivered to Lender by or on behalf of the Borrower from time to time in
connection with the Loan, this Agreement or any other Loan Document shall prove
false, incorrect or misleading in any respect deemed material by the Lender; or
19
(d) Any failure to obtain, assign, deliver or keep in force the policies of
insurance required by this Agreement or any other Loan Document, if any, which
failure remains uncured for a period of thirty (30) calendar days following the
first date of such failure or omission; or
(e) The Borrower's failure to remove any involuntary Lien against any of the
Collateral securing the Loan or any part thereof within forty-five (45) days
after its filing or the filing of any suit against any of the Collateral
securing the Loan giving rise to such Lien; or
(f) Any modification, amendment, repeal or rescission of any law, regulation,
code, statute, order, ordinance or legislation of any kind that would have a
material adverse affect on the Collateral, or otherwise would have a material
adverse affect on the Borrower in any way which material adverse effect remains
uncured for a period of thirty (30) calendar days following the effective date
of such modification, amendment, repeal or rescission; or
(g) Any failure by the Borrower to comply within thirty (30) days with any
notice of violation of any restrictive covenant affecting any of the Collateral
securing the Loan or from any party entitled to enforce such covenant (or, in
the case of a curable noncompliance requiring longer than thirty (30) days for
its cure, its failure to commence to comply within said period and thereafter to
pursue such cure diligently to completion); or
(h) Any failure by the Borrower to comply within ten (10) days with a
requirement, order or notice of violation of a law, ordinance, or regulation
issued or promulgated by any governmental authority claiming jurisdiction over
any of the Collateral securing the Loan (or within such longer time period as
may be provided by the terms of such order or notice), or, in the case of a
curable noncompliance requiring longer than the applicable time period for its
cure, its failure to commence to comply with said order or notice within said
period or failure thereafter to pursue such cure diligently to completion; or
(i) Any default by Borrower in the payment of any other Debt (whether direct or
contingent and whether matured or accelerated) to Lender, or any of Lender's
Affiliates or subsidiaries, or if the Borrower shall become unable to pay its
debts as the same become due and such default or failure remains uncured for a
period of thirty (30) days, or if a moratorium or any other restriction shall be
declared or imposed by the Borrower (or any authority asserting or exercising de
jure or de facto government, legislative, or police powers in the State of
Florida (as applicable), on the repayment of the Borrower's Debts; or
(j) The anticipatory repudiation by the Borrower of its obligations under any
Loan Document or under any other document pursuant to which it is indebted to
the Lender, or any of the Lender's Affiliates or subsidiaries, or any
declaration by the Borrower of its intention not to perform any such obligations
as and when the same become due; or
(k) The issuance or filing of any levy, Lien, attachment, charging order,
garnishment or other process against any of the Collateral securing the Loan,
including the funds held in any account of the Borrower held on behalf of, or
secured by, the Lender in connection with the Loan, and the Borrower's failure
to remove any such levy, Lien, attachment, charging order, garnishment or other
process within forty-five (45) days after its issuance or filing; or
20
(l) The failure of Borrower to obtain any permit, license, approval or consent
required of it from, or to make any filing with, any governmental authority (or
the lapse or revocation or rescission thereof once obtained or made) which is
necessary for the Borrower to obtain or make in connection with the Loan, any
Loan Document or the enforcement thereof, and which failure remains uncured for
a period of thirty (30) calendar days following the first date of such failure
or omission, or if it shall become unlawful for the Lender to make or maintain
the Loan or for the Borrower to perform any of its obligations under any Loan
Document; or
(m) Any failure by the Borrower to observe or perform any other covenant or
agreement made by it in any Loan Document, including this Agreement, or in any
other document related to any other Debt of the Borrower with the Lender, or any
of the Lender's Affiliates or subsidiaries, or the occurrence of any other
default under the terms of any Loan Document, including this Agreement, or in
any other document related to any other Debt of the Borrower with the Lender, or
any of the Lender's Affiliates or subsidiaries, and the continuation of such
failure or default beyond the expiration of the grace period, if any, provided
therein for the cure of such failure or default; or
(n) Borrower's failure to cure, within thirty (30) days after notice thereof
from Lender, any failure by the Borrower to observe or perform any other
material covenant, condition or obligation contained in (i) the Purchase
Agreement, (ii) that certain Registration Rights Agreement, dated as of February
28, 2002, by and between the Borrower and the Lender, (iii) that certain
Shareholders' Agreement, dated as of February 28, 2002, by and among the
Borrower, the Lender and Xxxxx Xxxxxxx, (iv) that certain Consulting Agreement
dated as of February 28, 2002, by and between the Lender and the Borrower, and
(v) the Articles of Incorporation of the Borrower, as amended.
10.2 REMEDIES. Any Enforcement Event under this Agreement and any default by the
Borrower under any other agreement with the Lender or any of the Lender's
Affiliates or subsidiaries, relating to any other Debt of the Borrower with the
Lender or any of the Lender's Affiliates or subsidiaries, shall also constitute
a default under the Note, the Security Documents and all other Loan Documents,
which shall entitle the Lender, at its option and at any time, to demand
repayment of the Loan in full, to accelerate the maturity of the Loan and/or to
exercise any and all rights and remedies provided in any Loan Document,
including this Agreement, or under applicable law, and all such remedies shall
be deemed cumulative and not mutually exclusive. The applicable grace period (if
any) for each default is included by definition in the term "ENFORCEMENT EVENT",
and in no event shall any provision of this Agreement or any other Loan Document
be construed to permit "tacked" or cumulative grace periods. No waiver by the
Lender of any such default, nor of any term or condition in any Loan Document,
shall be deemed a waiver of any subsequent default of the same or any other kind
nor a waiver of any other term or condition in any Loan Document. No such waiver
shall be effective or deemed to exist unless evidenced by a writing duly
executed by the Lender, and then only to the extent expressly stated in such
writing.
21
10.3 DIRECT DISBURSEMENTS. During the existence of any Enforcement Event, Lender
may, at its option, disburse Call Center Proceeds directly to third parties
rendering labor and/or services to Borrower and this Section constitutes
Borrower's irrevocable direction and authorization to Lender so to disburse the
funds, as Lender may deem appropriate, with the same effect as though disbursed
to Borrower. No further direction or authorization from Borrower shall be
necessary to warrant such direct disbursements, which shall satisfy the
obligations of Lender hereunder to the extent so made, shall bear interest as
provided in the Note, and shall be secured by the Loan Documents as fully as if
made directly to Borrower regardless of how the recipient(s) of such funds may
dispose of them.
ARTICLE XI
ASSIGNMENT
----------
11.1 ASSIGNMENT BY THE LENDER. As the initial lending party to this Agreement,
the Lender may assign to an Affiliate of the Lender, and only to an Affiliate of
the Lender, all or any portion of the Loan without the consent of the Borrower,
provided, however, the Lender shall provide the Borrower ten (10) days prior
notice of such assignment. Except as expressly permitted by the immediately
preceding sentence, the Lender shall not have the right to assign all or any
portion of the Loan to any other party without the prior written consent of the
Borrower. Notwithstanding any such assignment, the Borrower shall not be
required to deal directly with any other lender, but only with the Lender as
agent for such assignee. The Borrower shall cooperate with the Lender and any
future assignee in effectuating any assignment permitted by this Section.
11.2 DISCLOSURE. The Lender agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information identified
as "confidential" or "secret" by the Borrower and provided to it by the Borrower
under this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents, except to the extent
such information (a) was or becomes generally available to the public other than
as a result of disclosure by the Lender, or (b) was or becomes available on a
non-confidential basis from a source other than the Borrower, provided that such
source is not bound by a confidentiality agreement with the Borrower known to
the Lender; provided, however, that the Lender may disclose such information (i)
at the request or pursuant to any requirement of any governmental authority to
which the Lender is subject or in connection with an examination of the Lender
by any such authority; (ii) pursuant to subpoena or other court process; (iii)
when required to do so in accordance with the provisions of any applicable
requirement of law; (iv) to the extent reasonably required in connection with
any litigation or proceeding to which the Lender or its Affiliates may be party;
(v) to the extent reasonably required in connection with the exercise of any
remedy hereunder or under any other Loan Document; (vi) to the Lender's
independent auditors and other professional advisors; (vii) to any participant
or assignee, actual or potential, provided that such person agrees in writing to
keep such information confidential to the same extent required of the Lender
hereunder; and (viii) as to the Lender, as expressly permitted under the terms
of any other document or agreement regarding confidentiality to which the
Borrower is party or is deemed a party with the Lender.
22
ARTICLE XII
GENERAL CONDITIONS AND OTHER COVENANTS
--------------------------------------
Borrower and Lender further covenant and agree as follows:
12.1 EVIDENCE OF DISBURSALS; PREVIOUS DISBURSALS. The Borrower hereby
acknowledges and agrees that written documentation in the Lender's possession
evidencing Disbursements or Advances (as applicable) under the Loan from the
Lender to the Borrower shall be prima facie evidence that such Disbursements or
Advances (as applicable) were made by the Lender on the dates indicated in such
documentation.
12.2 NO THIRD-PARTY BENEFICIARIES. The Lender's inspection, review or approval
of matters pertaining to the Loan Documents and the Loan has no purpose other
than to determine investment quality from the Lender's point of view and is not
done for the benefit of anyone other than the Lender. Under no circumstances
shall any person whomsoever (other than the parties to this Agreement and their
respective permitted successors and assigns) be deemed a beneficiary of the
terms, conditions covenants and agreements contained in this Agreement or any
other Loan Document.
12.3 INDEMNITY. (a) Each party hereto will indemnify and hold harmless the other
against and in respect of any claim for brokerage or other commissions relative
to this Agreement or to the transactions contemplated hereby, based in any way
on agreements, arrangements or understandings made or claimed to have been made
by such party with any third party.
(b) The Borrower shall indemnify the Lender, and hold the Lender harmless of and
from any and all: (a) claims of brokers arising by reason of the Loan; (b)
documentary stamp taxes or intangible taxes or excise taxes or other taxes
(excluding income taxes), and any interest or penalties in connection therewith,
which may be assessed against or deemed applicable to the Loan or any Loan
Documents whatsoever; (c) claims or demands of any parties whatsoever arising
from or growing out of, in any manner, the Loan; (d) litigation related to any
of the foregoing; and (e) costs or expenses incurred by the Lender in connection
with any such claims, demands, taxes (excluding income taxes), interest,
penalties or litigation (including reasonable attorney's fees and appellate
attorney's fees) related to any of the foregoing. In the event that the Lender
is made a party to any suit at law or equity or made to defend any counterclaim
or any administrative proceeding related to any of the foregoing, the Borrower
shall provide the Lender with counsel of the Lender's choosing and shall pay the
reasonable fees and costs of such counsel. Notwithstanding the foregoing, the
Borrower shall not indemnify the Lender for claims that relate directly to the
gross negligence or willful misconduct of the Lender.
12.4 NOTICES. Unless specifically provided otherwise, any notice for purposes of
this Agreement shall be in writing and shall be given personally or by prepaid
certified mail (return receipt requested), or overnight courier, in which latter
case notice shall be deemed effectively made when the receipt is signed or when
the attempted initial delivery is refused or cannot be made because of a change
of address of which the sending party has not been notified. Until the
designated addresses are changed by notice given in accordance with this
Section, any notices between the Borrower on the one hand and the Lender on the
other shall be sent to the respective addresses set forth below:
23
Borrower: INTERCALLNET, INC.
--------
0000 XX 0xx Xxx
Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
With a copy to: Campo & Associates
-------------- 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxx, Esq.
Lender: Stanford Venture Capital Holdings, Inc.
------
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
With a copy to: Stanford Financial Group
--------------- 0000 Xxxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Office of the General Counsel
And a copy to: Hunton & Xxxxxxxx
-------------- Barclays Financial Center
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
12.5 JURISDICTION.
(a) Each of the parties irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of any Florida court or Federal
court of the United States of America sitting in Miami-Dade County, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
Florida State court or, to the fullest extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the parties irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any of the other Loan Documents to which
it is a party in any Florida State or Federal court sitting in Miami-Dade
County. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
24
12.6 GOVERNING LAW. This Agreement and the other Loan Documents shall be
governed by, and construed in accordance with, the laws of the State of Florida,
without regard to conflict or choice of law principles.
12.7 NO USURY. In no event shall any agreed or actual exaction charged, reserved
or taken as an advance or forbearance by the Lender as consideration for the
Loan exceed the limits (if any) imposed or provided by the law applicable from
time to time to the Loan for the use or detention of money or for forbearance in
seeking its collection; the Lender hereby waives any right to demand such
excess. In the event that the interest provisions of any Loan Documents or any
exactions provided for therein shall result at any time or for any reason in an
effective rate of interest that transcends the maximum interest rate permitted
by applicable law (if any), then without further agreement or notice the
obligation to be fulfilled shall be automatically reduced to such limit and all
sums received by the Lender in excess of those lawfully collectible as interest
shall be applied against the principal of the Loan immediately upon receipt
thereof, with the same force and effect as though the payor had specifically
designated such extra sums to be so applied to principal and the Lender had
agreed to accept such extra payment(s) as a premium-free prepayment or
prepayments.
12.8 WRITING REQUIRED. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated except by the written agreement of the
party against whom is sought enforcement of the change, waiver, discharge or
termination.
12.9 PARTIAL INVALIDITY. Any provision of this Agreement, the Note or the other
Loan Documents which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction only, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
12.10 INTERPRETATION. The term "LENDER" shall be deemed to include any
subsequent Lenders to which all or any portion of the Loan may hereafter be
transferred as provided herein or otherwise. Whenever the context of any
provisions hereof shall require it, words in the singular shall include the
plural, words in the plural shall include the singular, and pronouns of any
gender shall include the other genders. Captions and headings in this Agreement
are for convenience only and shall not affect its construction. All references
in this Agreement to Schedules, Exhibits, Sections, subsections, paragraphs and
subparagraphs refer to the respective subdivisions of this Agreement, unless
such reference specifically identifies another documents. All references in this
Agreement to sums denominated in dollars or with the symbol "$" refer to the
lawful currency of the United States of America, unless such reference
specifically identifies another currency.
12.11 ASSIGNMENT. Except as expressly provided elsewhere in this Agreement,
neither party shall have the right to assign its rights or delegate its rights
under any Loan Document without the prior written consent of the other party,
which the other party may grant or withhold in its sole discretion.
25
12.12 BINDING EFFECT. All of the covenants, agreements, provisions and
conditions in this Agreement shall be binding upon the parties hereto and their
respective successors and assigns, and shall inure to the benefit of the Lender
and its respective successors and assigns, and to the benefit of the Borrower
and its permitted successors and assigns; no other person shall be deemed a
benefited party hereunder under any circumstances.
12.13 LOAN AGREEMENT GOVERNS. The Loan is governed only by the Loan Documents
and there are no other agreements or understandings with respect to the Loan,
whether oral or written, in effect between the Lender on the one hand and the
Borrower on the other hand. In the event of any conflict between the terms of
this Agreement and any terms of any other Loan Document, the terms of this
Agreement shall govern.
12.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one instrument. The Lender shall have the right
unilaterally to correct patent errors or omissions in this Agreement or any
other Loan Document.
12.15 TIME OF ESSENCE. Time shall be of the essence of this Agreement.
12.16 NO JURY TRIAL. EACH OF THE BORROWER AND THE LENDER HEREBY SEVERALLY,
VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT, THE NOTE OR
ANY OTHER LOAN DOCUMENT OR CONCERNING THE LOAN AND/OR SECURITY THEREFOR OR
PERTAINING TO ANY TRANSACTION RELATED TO OR CONTEMPLATED IN ANY LOAN DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS, REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING CONCERNS
ANY CONTRACTUAL OR TORTIOUS OR OTHER CLAIM. THE BORROWER ACKNOWLEDGES THAT THIS
WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE LENDER IN EXTENDING THE
CREDIT DESCRIBED HEREIN, THAT THE LENDER WOULD NOT HAVE EXTENDED SUCH CREDIT
WITHOUT THIS JURY TRIAL WAIVER, AND THAT THE BORROWER HAS BEEN REPRESENTED BY AN
ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION
WITH THIS AGREEMENT OR ANY RELATED AGREEMENT AND UNDERSTANDS THE LEGAL EFFECT OF
THIS JURY TRIAL WAIVER.
12.17 EXCHANGE RATE. If for the purpose of obtaining payment or in obtaining or
enforcing a judgment against Borrower in any court it becomes necessary to
convert a sum owing to Lender in U.S. dollars into another currency, then the
rate of exchange used shall be that at which Lender could purchase U.S. dollars
in New York, New York, U.S.A. with the other currency in accordance with normal
banking procedures on the business day preceding the day on which final judgment
is obtained. Notwithstanding any judgment in such other currency, the
obligations of Borrower with respect to the Loan shall be discharged only to the
extent that (i) Lender can purchase U.S. dollars with the other currency in
accordance with normal banking procedures on the business day following Lender's
receipt of any such sum adjudged to be due in the other currency, and (ii)
Lender can remit the purchased U.S. dollars to its office at the address set
forth in this Agreement. If the U.S. dollars so purchased and remitted are less
than the sum owing in U.S. dollars, then Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify Lender on demand
against such loss. During any time that the Note bears interest at the maximum
lawful rate, interest shall be calculated on the basis of the actual number of
days in the respective calendar year rather than an assumed year of 360 days.
26
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
INTERCALLNET, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
27
INTER-CALL-NET TELESERVICES, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
28
STANFORD VENTURE CAPITAL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: President
29
EXHIBIT A
[FORM OF DISBURSEMENT REQUEST]
------------------------------
[SEE ATTACHED]
30
EXHIBIT B
DISBURSEMENT SCHEDULE
---------------------
------------------------------------------------------------ ---------------------------------------------------------
DATE OF DISBURSEMENT AMOUNT OF DISBURSEMENT
------------------------------------------------------------ ---------------------------------------------------------
June ___, 2002* US$350,000
------------------------------------------------------------ ---------------------------------------------------------
July 15, 2002 US$250,000
------------------------------------------------------------ ---------------------------------------------------------
August 15, 2002 US$150,000
------------------------------------------------------------ ---------------------------------------------------------
September 15, 2002 US$150,000
------------------------------------------------------------ ---------------------------------------------------------
* First Disbursement shall occur within three (3) business days after Closing.
31
EXHIBIT C
[FORM OF ADVANCE REQUEST]
-------------------------
Dated: _______________, 2002
To: Stanford Venture Capital Holdings, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
From: Intercallnet, Inc. and Inter-Call-Net Teleservices, Inc.
Reference is hereby made to that certain Loan Agreement (the "LOAN
AGREEMENT") dated as of June ___, 2002, by and between Stanford Venture Capital
Holdings, Inc., as lender (the "LENDER"), and Intercallnet, Inc. and
Inter-Call-Net Teleservices, Inc. (collectively, the "BORROWER"), with regard to
a loan from the Lender to the Borrower in the amount of up to U.S.$1,500,000
(the "LOAN"). All capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.
The Borrower hereby requests that the Bank make a Loan disbursal to the
Borrower in the amount of U.S.$_________________ (the "CALL CENTER PROCEEDS").
The Call Center Proceeds are to be deposited into the following account of the
Borrower: ____________________________________.
The Borrower certifies to the Lender that (i) since the date of its
execution of the Loan Agreement, there has occurred no Enforcement Event, no act
has been committed or event has occurred or is occurring which event which the
passage of time and/or the giving of notice would constitute any such
Enforcement Event, under the Note, Loan Agreement, the Pledge Agreement, the
Security Agreement, or any other Loan Document; (ii) all of its representations
and warranties contained in the Loan Agreement, the Pledge Agreement, the
Security Agreement and the other Loan Documents are true and correct as of the
date first written above; and (iii) the Call Center Proceeds shall be used
exclusively by the Borrower for the purposes set forth in Section 2.2 of the
Loan Agreement.
Sincerely,
INTERCALLNET, INC. INTERCALLNET TELESERVICES, INC.
By: By:
------------------------------ ---------------------------------
Name: Name:
---------------------------- -------------------------------
Title: Title:
--------------------------- ------------------------------
32
EXHIBIT D
FORM OF NOTE
------------
[SEE ATTACHED]
33
EXHIBIT E
FORM OF LEGAL OPINION FROM BORROWER'S COUNSEL
---------------------------------------------
[LETTERHEAD OF BORROWER'S COUNSEL]
[Date]
Stanford Venture Capital Holdings, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: ________________________
RE: LOAN TO INTERCALLNET, INC. AND INTER-CALL-NET TELESERVICES, INC. IN
THE AMOUNT OF US$1,500,000
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.1 of
the Loan Agreement dated as of _______ __, 2002 (the "Loan Agreement"), by and
between Intercallnet, Inc. ("Intercallnet"), Inter-call-net Teleservices, Inc.
("Intercallnet Teleservices", and together with Intercallnet, the "Borrower")
and Stanford Venture Capital Holdings, Inc. (the "Lender"). Terms defined in the
Loan Agreement referred to therein are used herein as therein defined.
We have acted as counsel to the Borrower in connection with
the preparation, execution and delivery of the Loan Documents.
In that connection, we have examined executed original or
copies certified or otherwise identified to our satisfaction of each of the
following documents:
(1) the Loan Agreement executed by the Borrower;
(2) the Master Note (the "Note") executed and delivered by the
Borrower on the date hereof;
(3) the Security Agreement executed and delivered by the
Borrower;
(4) the Pledge Agreement executed and delivered by the
Borrower;
(4) the UCC-1 financing statements (the "FINANCING
STATEMENTS") to be filed with the Secretary of State, State of Florida (the
"FILING OFFICE"); and
(5) such other documents, agreements and instruments, and such
treaties, laws, rules, regulations, orders, decrees and the like, as we have
deemed necessary as a basis for the opinions hereinafter expressed.
34
In our examination of the documents referred to above, we have
assumed (i) the due execution and delivery, pursuant to due authorization, of
each of the documents referred to above by all parties thereto other than the
Borrower, (ii) the authenticity of all such documents submitted to us as
originals and (iii) the conformity to originals of all such documents submitted
to us as copies.
We are qualified to practice law in the State of Florida and
we do not purport to be experts on any laws other than the laws of the State of
Florida and the Federal laws of the United States.
Based upon the foregoing and upon such investigation as we
have deemed necessary, we are of the following opinion:
1. The Borrower has all requisite power and authority to
execute, deliver and perform each of the Loan Documents and to carry
out and perform its obligations under, and to consummate the
transactions contemplated by, each of the Loan Documents.
2. The execution, delivery and performance by the Borrower of
each Loan Document to which it is a party, and the consummation of the
transactions contemplated thereby do not (a) violate any Florida State
or United States law, rule or regulation applicable to the Borrower,
(b) conflict with or result in the breach of, or constitute a default
or require any payment to be made under, any agreement or instrument
binding on or affecting the Borrower or any of its Affiliates or any of
their respective properties, or (c) except for Liens created under the
Loan Documents, result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of the Borrower or
any of its Affiliates.
3. Other than the proper filing of the Financing Statements
referred in paragraph 9 below, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority
or regulatory body, is required for (a) the due execution, delivery,
recordation, filing or performance by the Borrower of the Loan
Agreement, the Note, the Pledge Agreement, the Security Agreement or
any other Loan Document to which it is a party, or the other
transactions contemplated thereby, (b) the grant by the Borrower of the
security interest granted by it pursuant to the Security Agreement and
the Pledge Agreement (as applicable), (c) the perfection or maintenance
of the security interest created by each of the Security Agreement and
the Pledge Agreement (including the first priority nature thereof), or
(d) the exercise by the Lender of its rights under the Loan Documents
or the remedies in respect of the Collateral (as such term is defined
in each of the Security Agreement and the Pledge Agreement).
4. Each of the Loan Documents has been duly executed and
delivered by the Borrower. Each of the Loan Documents is the legal,
valid and binding obligation of the Borrower thereto, enforceable
against the Borrower in accordance with its terms.
5. To our knowledge, there is no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its
Affiliates pending or threatened before any court, governmental agency
or arbitrator that (a) could be reasonably likely to have a Material
Adverse Effect or (b) purports to affect the legality, validity or
enforceability of any Loan Document or the consummation of the
transactions contemplated by the Loan Documents.
35
6. The provisions of the Loan Documents (without regard for
any provisions thereof limiting the payment of interest or any other
sums thereunder to the highest rate permitted by applicable law) do not
violate any applicable law of the State of Florida relating to usury.
7. The Borrower has (i) validly submitted to the nonexclusive
jurisdiction of any Florida State court or federal court of the United
States of America sitting in Miami-Dade County, and any appellate court
from any thereof, in any action arising out of or relating to the Loan
Documents to which it is a party, (ii) validly waived any right to
immunity that the Borrower may have, (iii) validly waived any objection
to the venue of a proceeding in any such court, and (iv) validly waived
its right to a trial by jury.
8. Assuming the terms and conditions of the Security Agreement
are complied with, the Security Agreement is effective to create in
favor of the Lender, a valid and perfected security interest in the
Collateral (as such term is defined in the Security Agreement) that is
prior to any other security interest in the Collateral (as such term is
defined in the Security Agreement).
9. Assuming the terms and conditions of the Pledge Agreement
are complied with, the Pledge Agreement is effective to create in favor
of the Lender, a valid and perfected security interest in the
Collateral (as such term is defined in the Pledge Agreement) that is
prior to any other security interest in the Collateral (as such term is
defined in the Pledge Agreement).
10. To the extent that the Collateral (as such term is defined
in the Security Agreement)consists of the type of property in which a
security interest may be perfected by filing a financing statement
under the Florida Uniform Commercial Code, the Financing Statements are
in appropriate form for filing and upon the filing of such Financing
Statements in the Filing Office, assuming that the representations made
by the Borrower in the Security Agreement with respect to the location
of the Collateral and the location of its chief executive office are
and remain true and correct, all filings, registrations and recordings
necessary or appropriate to create, maintain, preserve, protect and
perfect the security interests granted by the Borrower to the Lender
under the Security Agreement in respect of the Collateral (as such term
is defined in the Security Agreement)will have been accomplished in
accordance with Florida law, and such security interests in the
Collateral (as such term is defined in the Security Agreement) will be
prior to any other security interest in the Collateral.
Very truly yours,
36
