EXHIBIT 2
LOAN ASSUMPTION AND FORBEARANCE AGREEMENT
THIS LOAN ASSUMPTION AND FORBEARANCE AGREEMENT (this
"Agreement") is made and entered into as of October 12, 2000 by
and between XXXXXXX XXXXXXX, an individual having an address at
000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Borrower") and JACKPOT ENTERPRISES, INC., a Nevada corporation
(the "Lender").
WITNESSETH:
___________
WHEREAS, Borrower is a party to a Loan Agreement, dated
October 13, 1999 (the "Loan Agreement), between Xxxxxxx Xxxxx
Xxxxxx Inc. ("SSB") and Borrower, pursuant to which SSB agreed to
loan (the "Loan") Xxxxxxx, on a demand basis, up to U.S.$14
million.
WHEREAS, as of the date hereof $12,445,500, remains
outstanding under the Loan.
WHEREAS, the Loan is presently secured by 4,270,406 shares
of common stock of InterWorld Corporation (the "Stock
Collateral") owned of record and beneficially by the Borrower,
which security interest has been perfected by SSB by virtue of
SSB's physical possession.
WHEREAS, subject to the terms and conditions hereof, the
Lender has agreed to assume the Loan from SSB and to not call a
demand under the Loan;
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements herein
contained, the sufficiency of which is hereby acknowledged, the
parties hereto represent and agree as follows:
1. Definitions.
For purposes of this Agreement the following capitalized
terms shall have the meanings set forth below:
1.1 "Additional Collateral" shall have the
meaning set forth in Section 3.2 of this Agreement.
1.2 "Business Day" shall mean any day on which
commercial banks are not authorized or required to close in New
York, New York.
1.3 "Collateral" shall mean the Stock Collateral
and the Additional Collateral.
1.4" Contractual Obligation" of any Person shall
mean, any indenture, note, security, deed of trust, mortgage,
security agreement, lease, guaranty, instrument, contract,
agreement or other form of obligation or undertaking to which
such Person is a party or by which such Person or any of its
property is bound.
1.5 "Default" shall mean any event or
circumstance not yet constituting an Event of Default but which,
with the giving of any notice or the lapse of any period of time
or both, would become an Event of Default.
1.6 "Event of Default" shall have the meaning set
forth in Section 7.1 of this Agreement.
1.7 "Governmental Authority" shall mean any
domestic or foreign national, state or local government, any
political subdivision thereof, any department, agency, authority
or bureau of any of the foregoing, or any other entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
1.8 "Governmental Rule" shall mean any law, rule,
regulation, ordinance, order, code interpretation, judgment,
decree, directive, guidelines, policy or similar form of decision
of any Governmental Authority.
1.9 "Indebtedness" of any Person shall mean and
include the aggregate amount of, without duplication (a) all
obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations of such Person
to pay the deferred purchase price of property or services (other
than accounts payable incurred in the ordinary course of business
determined in accordance with generally accepted accounting
principles), (d) all obligations under capital leases of such
Person, (e) all obligations or liabilities of others secured by
alien on any asset of such Person, whether or not such obligation
or liability is assumed, (f) all guaranties of such Person of the
obligations of another Person;(g) all obligations created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even
if the rights and remedies of the seller or lender under such
agreement upon an event of default are limited to repossession or
sale of such property), (h) net exposure under any interest rate
swap, currency swap, forward, cap, floor or other similar
contract that is not entered to in connection with a bona fide
hedging operation that provides offsetting benefits to such
Person, which agreements shall be marked to market on a current
basis, (i) all reimbursement and other payment obligations,
contingent or otherwise, in respect of letters of credit.
1.10 "Lien" shall mean, with respect to any
property, any security interest, mortgage, pledge, lien, claim,
charge or other encumbrance in, of, or on such property or the
income therefrom, including, without limitation, the interest of
a vendor or lessor under a conditional sale agreement, capital
lease or other title retention agreement, or any agreement to
provide any of the foregoing, and the filing of any financing
statement or similar instrument under the Uniform Commercial Code
or comparable law of any jurisdiction.
1.11 "Loan" shall have the meaning set forth in
the preamble of this Agreement.
1.12 "Obligations" shall mean and include all
loans, advances, debts, liabilities, and obligations, owed by
Borrower to Lender of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the
payment of money), now existing or hereafter arising under or
pursuant to the terms of this Agreement or the other Operative
Documents, including, without limitation, all interest, fees,
charges, expenses, attorneys' fees and costs and accountants'
fees and costs chargeable to and payable by Debtor hereunder and
thereunder, in each case, whether direct or indirect, absolute or
contingent, due or to become due, and whether or not arising
after the commencement of a proceeding under Title 11 of the
United States Code (11 U.S.C. Section 101 et seq.), as amended
from time to time (including post-petition interest) and whether
or not allowed or allowable as a claim in any such proceeding.
1.13 "Operative Documents" shall mean,
collectively, this Agreement and the other documents executed in
connection herewith.
1.14 "Permitted Liens" shall mean and include:
(a) Liens for taxes or other Governmental Charges not at the time
delinquent or thereafter payable without penalty or being
contested in good faith, provided provision is made to the
reasonable satisfaction of Lender for the eventual payment
thereof if subsequently found payable; (b) Liens of carriers,
warehousemen, mechanics, material men, vendors, and landlords
incurred in the ordinary course of business for sums not overdue
or being contested in good faith, provided provision is made to
the reasonable satisfaction of Lender for the eventual payment
thereof if subsequently found payable; and (c) Liens in favor of
Lender.
1.15 "Person" shall mean and include an
individual, a partnership, a corporation (including a business
trust), a joint stock company, a limited liability company, an
unincorporated association, a joint venture or other entity or a
Governmental Authority.
1.16 "Requirement of Law" applicable to any
Person shall mean (a) the articles or certificate of
incorporation, bylaws or other governing documents of such
Person, (b) any Governmental Rule applicable to such Person, (c)
any license, permit, approval or other authorization granted by
any Governmental Authority to or for the benefit of such Person
and (d) any judgment, decision or determination of any
Governmental Authority or arbitrator, in each case applicable to
or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
2. Loans; Interest. Lender will assume the Loan from SSB
and pay SSB an amount equal to the amount outstanding under the
Loan on the date hereof. Lender and Borrower hereby agree that
the Loan Agreement is amended and restated in its entirety as
provided herein. Interest on the Loan shall accrue at an annual
rate equal to 8%, from the date of this Agreement, and be added
to the outstanding principal amount at the end of each calendar
quarter commencing December 31, 2000 (an "Interest Accrual
Date").
3. Security Interests.
3.1 Continued Security Interest. Borrower
acknowledges that Lender shall succeed to SSB's security interest
under the Loan Agreement with respect to the Stock Collateral.
Borrower further acknowledges that Lender shall undertake to make
all necessary filings with state and federal agencies in order to
protect such security interest.
3.2 Grant of Additional Security Interest. As
additional collateral security for the Obligations, Borrower
hereby grants to Lender a continuing security interest in and to
the real property of the Borrower listed on Schedule I (the
"Additional Collateral"). Borrower shall promptly execute an
appropriate mortgage with respect to the Additional Collateral
and shall pay the expenses for the filing of such. Borrower
agrees to execute any other document reasonable requested by the
Lender to perfect its security interest in the collateral.
Borrower shall not incur additional indebtedness or further
encumber the real property set forth on Schedule II. Nothing
contained in this section, however shall give rise to any
obligation, or create any security interest, that would
constitute a default, or a basis for default, under any existing
mortgage or loan to which Borrower is directly or indirectly a
party. To the extent that the grant of any additional security
interest hereunder requires the Borrower to obtain the consents
of any lender, the Borrower shall not be obligated to grant such
additional security interest unless and until such consent is
obtained. Borrower shall use reasonable efforts to obtain such
consents.
3.3 Liabilities Unconditional. Borrower is and
shall remain absolutely and unconditionally liable for the
performance of its obligations under the Operative Documents,
including without limitation any deficiency by reason of the
failure of the Collateral to satisfy all amounts due Lender under
the Loan or pursuant to any other Operative Document.
4. Representations and Agreements of Borrower. Borrower
represents to Lender as follows, and Borrower agrees that the
following representations will continue to be true, and that
Borrower will comply with all of the following agreements
throughout the term of this Agreement:
4.1 Enforceability. Each Operative Document
executed, or to be executed, by Borrower has been, or will be,
duly executed and delivered by Borrower and constitutes, or will
constitute, a legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms.
4.2 Non-Contravention. To the best of Borrower's
knowledge and belief, the execution and delivery by Borrower of
the Operative Documents executed by Borrower and the performance
and consummation of the transactions contemplated thereby do not
and will not (i) violate any Requirement of Law applicable to
Borrower; (ii) violate any provision of, or result in the breach
or the acceleration of, or entitle any other Person to accelerate
(whether after the giving of notice or lapse of time or both),
any Contractual Obligation of Borrower; or (iii) result in the
creation or imposition of any Lien upon any property, asset or
revenue of Borrower (except such Liens as may be created in favor
of Lender pursuant to this Agreement or the other Operative
Documents).
4.3 Approvals. Broker knows of no consent,
approval, order or authorization of, or registration, declaration
or filing with, any Governmental Authority or other Person
(including, without limitation, the shareholders of any Person)
required in connection with the execution and delivery of the
Operative Documents executed by Borrower and the performance and
consummation of the transactions contemplated thereby, other than
those which may be required by existing lenders..
4.4 Name: Places of Residence The name of
Borrower set forth in this Agreement is his correct name. The
addresses set forth on Schedule II are all of each of the
Borrowers residential addresses. Borrower will give Lender at
least 15 days prior written notice before locating any of the
Additional Collateral at any other location.
4.5 Litigation. No actions (including, without
limitation, derivative actions), suits, proceedings or
investigations are pending or, to the knowledge of Borrower,
threatened against Borrower or Borrower's Subsidiaries at law or
in equity in any court or before any other Governmental Authority
which if adversely determined (i) could reasonably be expected
(alone or in the aggregate) to result in a judgement of $100,000
or more or (ii) seeks to enjoin, either directly or indirectly,
the execution, delivery or performance by Borrower of the
Operative Documents or the transactions contemplated thereby.
4.6 Title. Borrower has good and marketable title
to all Collateral, free and clear of all Liens, other than
Permitted Liens. Each item of Additional Collateral constitutes
real property.
4.7 Collateral. Lender has and will at all times
continue to have a first-priority perfected security interest in
all of the Collateral. Borrower will immediately advise Lender in
writing of any material loss or damage to any of the Additional
Collateral listed on Schedule I hereto.
4.8 Taxes: Compliance with Law. Borrower has
filed, and will file, when due, all tax returns and reports
required by applicable law, and Borrower has paid, and will pay,
when due, all taxes, assessments, deposits and contributions now
or in the future owed by Borrower. Borrower has complied, and
will comply, in all material respects, with all applicable tax
laws, rules and regulations.
4.9 Insurance. Borrower will at all times
adequately insure all of the Additional Collateral and name
Lender as an additional insured thereon.
4.10 Indebtedness. Borrower has set forth all of
his indebtedness in excess of $50,000 on Schedule III hereto.
5. No Call on Demand Note; Prepayment Obligations.
Except as set for in this Section 5, or unless an Event of
Default has occurred the Lender will not demand payment under the
Loan until October 11, 2003; which date shall be reduced to
October 11, 2001; if on or before April 11, 2001 InterWorld
Corporation does not effect a merger transaction with Lender.
Notwithstanding the foregoing, and only for so long as any
balance shall remain outstanding on the Loan, Borrower shall be
required to make the following payments of principal under the
Note in order to reduce any outstanding balance remaining under
the Loan: (a) Upon the sale of any of the Stock Collateral (which
sale or sales the Borrower may effectuate at his sole
discretion), all Net Proceeds (defined below) shall be paid to
Lender (b) Upon the sale of any of the Additional Collateral,
all Net Proceeds shall be paid to Lender; other than payment due
to any taxing authority. Commencing October 11, 2001 the Borrower
shall make principal payments of at least $500,000 on or before
the date of each interest Accrual Date commencing December 31,
2001. If for any period of ten (10) consecutive trading days the
closing price of the Stock Collateral is greater than $20.00
(subject to adjustment for stock splits, stock dividends or the
like), then the Borrower shall make principal payments of
$4,000,000 on or before the date of each Interest Accrual Date
thereafter. "Net Proceeds" shall mean the gross amount received
from such sale less any sales commissions less any income taxes
applicable to such sales.
6. Call Agreement. As consideration for the purchase of
the Loan and the forbearance described herein, Borrower shall
enter into a call agreement with the Lender in the form attached
hereto as Exhibit A.
7. Voting. For so long as the Loan shall be
outstanding, Borrower agrees that due to the highly leveraged
nature of the Loan, prior to any vote of the stockholders of
Interworld Corporation he shall consult with Lender and obtain
Lender's view with respect to such vote. In the event the Board
of Directors of InterWorld Corporation approves a merger of the
Lender with InterWorld Corporation on or before April 10, 2001,
Borrower will execute an appropriate voting agreement pursuant to
which he will agree to vote his stock in favor of such merger.
8. Events of Default
8.1 Events of Default and Remedies. The
occurrence of any of the following events shall constitute an
"Event of Default" under this Agreement: (a) Any material
representation, statement, report or certificate given to Lender
by Borrower, now or in the future, is untrue or misleading in a
material respect; or (b) Borrower fails to comply with the
payments due under Section 2 above; or (c) Borrower fails to pay
when due any Loan or any interest thereon or any other monetary
Obligation; or (d) appointment of a receiver, trustee or
custodian, for all or any part of the property of, assignment for
the benefit of creditors by, or the commencement of any
proceeding by or against Borrower under any reorganization,
bankruptcy, insolvency, law or statute of any jurisdiction, now
or in the future in effect; or (e) Borrower leaves his position
with InterWorld Corporation for any reason; or (f) the for any
period of ten (10) consecutive trading days the closing price of
the Stock Collateral is less than $2.00 (subject to adjustment
for stock splits, stock dividends or the like); or Borrower fails
to vote his shares of the Stock Collateral in compliance with
Section 7 herein. If an Event of Default occurs, Lender, shall
have the right to accelerate and declare all of the Obligations
to be immediately due and payable and exercise all rights and
remedies recorded by applicable law, except in the case of (f)
wherein no acceleration may be made until the expiration of a ten
(10) Business Day grace period, and except further in the case of
(a) of (c) Lender must give Borrower written notice of any such
Event of Default whereupon Borrower shall have ten (10) Business
Days to cure such Event of Default.
8.2 Rights of Lender upon Default. Upon the
occurrence or existence of any Event of Default for which notice
has been provided and no timely cure made, and at any time
thereafter during the continuance of such Event of Default,
Lender may, by written notice to Borrower, declare all
outstanding Obligations payable by Borrower hereunder to be
immediately due and payable without presentment, demand, protest
or any other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the Notes to
the contrary notwithstanding. Upon the occurrence or existence of
any uncured Event of Default described in Section 8.1,
immediately and without further notice, all outstanding
Obligations payable by Borrower hereunder shall automatically
become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the Notes to
the contrary notwithstanding.
8.3 Rights Regarding Collateral. Borrower agrees that
when any uncured Event of Default has occurred and is continuing
after any applicable cure or grace period, Lender shall have the
rights, options, duties and remedies of a secured party as
permitted by law and, in addition to and without limiting the
foregoing, Lender may exercise any one or more or all, and in any
order, of the remedies herein set forth, including the following:
(a) Lender, personally or by agents or attorneys, shall have the
right (subject to compliance with any applicable mandatory legal
requirements) to require Borrower to assemble the Additional
Collateral and make it available to Lender at a place to be
designated by Lender located within the State of New York, or to
take immediate possession of the Additional Collateral, or any
portion thereof, and for that purpose may pursue the same
wherever it may be found, and may enter any premises of Borrower,
with or without notice, demand, process of law or legal
procedure, to the extent permitted by applicable law, and search
for, take possession of, remove, keep and store the same, or use
and operate or lease the same until sold; (b) Lender may, if at
the time such action may be lawful and always subject to
compliance with any mandatory legal requirements, either with or
without taking possession and either before or after taking
possession, without instituting any legal proceedings whatsoever,
having first given notice of such sale by registered or certified
mail to Borrower once at least ten (10) days prior to the date of
such sale, and having first given any other notice which may be
required by law, sell and dispose of the Additional Collateral,
or any part thereof, at a private sale or at public auction, to
the highest bidder, in one lot as an entirety or in separate
lots, and either for cash or on credit and on such terms as
Lender may determine, and at any place (whether or not it be the
location of the Additional Collateral or any part thereof)
designated in the notice referred to above. To the extent
permitted by applicable law, any such sale or sales may be
adjourned from time to time by announcement at the time and place
appointed for such sale or sales, or for any such adjourned sale
or sales, without further published notice, and Borrower, Lender
or the holder or holders of the Note, or of any interest therein,
may bid and become the purchaser at any such sale; and (c) Lender
may proceed to protect and enforce this Agreement and the other
Operative Documents by suit or suits or proceedings in equity, at
law or in bankruptcy, and whether for the specific performance of
any covenant or agreement herein contained or in execution or aid
of any power herein granted; or for foreclosure hereunder, or for
the appointment of a receiver or receivers for any real property
security or any part thereof, or for the recovery of judgment for
the Obligations or for the enforcement of any other proper, legal
or equitable remedy available under applicable law.
8.4 Waiver by Borrower. Upon the occurrence of an
uncured Event of Default, to the extent permitted by law,
Borrower covenants that it will not at any time insist upon or
plead, or in any manner whatsoever claim or take any benefit or
advantage of, any stay or extension law now or at any time
hereafter in force, nor claim, take nor insist upon any benefit
or advantage of or from any law now or hereafter in force
providing for the valuation or appraisement of the Additional
Collateral or any part thereof prior to any sale or sales thereof
to be made pursuant to any provision herein contained, or to the
decree, judgment or order of any court of competent jurisdiction;
nor, after such sale or sales, claim or exercise any right under
any statute now or hereafter made or enacted by any state or
otherwise to redeem the property so sold or any part thereof,
and, to the full extent legally permitted, except as to rights
expressly provided herein, hereby expressly waives for itself and
on behalf of each and every Person, except decree or judgment
creditors of Borrower, acquiring any interest in or title to the
Additional Collateral or any part thereof subsequent to the date
of this Agreement, all benefit and advantage of any such law or
laws, and covenants that it will not invoke or utilize any such
law or laws or otherwise hinder, delay or impede the execution of
any power herein granted and delegated to Lender, but will suffer
and permit the execution of every such power as though no such
power, law or laws had been made or enacted.
8.5 Effect of Sale. Any sale, whether under any
power of sale available to Lender or by virtue of judicial
proceedings, shall operate to divest all right, title, interest,
claim and demand whatsoever, either at law or in equity, of
Borrower in and to the property sold, and shall be a perpetual
bar, both at law and in equity, against Borrower, its successors
and assigns, and against any and all persons claiming the
property sold or any part thereof under, by or through Borrower,
its successors or assigns.
8.6 Application of Collateral Proceeds. The
proceeds and/or avails of the Additional Collateral, or any part
thereof, and the proceeds and the avails of any remedy hereunder
(as well as any other amounts of any kind held by Lender at the
time of, or received by Lender after, the occurrence of an
uncured Event of Default hereunder) shall be paid to and applied
as follows: (a) First, to the payment of reasonable costs and
expenses, including all amounts expended to preserve the value of
the Additional Collateral, of foreclosure or suit, if any, and of
such sale and the exercise of any other rights or remedies, and
of all proper fees, expenses, liability and advances, including
reasonable legal expenses and attorneys' fees, incurred or made
hereunder by Lender; (b) Second, to the payment to Lender of the
amount then owing or unpaid on the Note, and in case such
proceeds shall be insufficient to pay in full the whole amount so
due, owing or unpaid upon the Note, then first, to the unpaid
interest thereon, and second, to unpaid principal thereof; such
application to be made upon presentation of the Note, and the
notation thereon of the payment, if partially paid, or the
surrender and cancellation thereof, if fully paid; (c) Third, to
the payment of other amounts then payable to Lender under any of
the Operative Documents; and (d) Fourth, to the payment of the
surplus, if any, to Borrower, his successors and assigns, or to
whomsoever may be lawfully entitled to receive the same.
8.7 Reinstatement of Rights. If Lender shall have
proceeded to enforce any right under this Agreement or any other
Operative Document by foreclosure, sale, entry or otherwise, and
such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then and in
every such case (unless otherwise ordered by a court of competent
jurisdiction), Lender shall be restored to its former position
and rights hereunder with respect to the property subject to the
security interest created under this Agreement.
9. Preservation of Additional Collateral by Lender.
Should Borrower fail or refuse to make any payment, perform or
observe any other covenant, condition or obligation, or take any
other action which Borrower is obligated under any Operative
Document to make, perform, observe, take or do at the time or in
the manner provided in any Operative Document, then at Lender's
sole and absolute discretion, without notice to or demand upon
Borrower and without releasing Borrower from any obligation,
covenant or condition in any Operative Document, Lender may make,
perform, observe, take or do the same in such manner and to such
extent as Lender may deem necessary to protect its security
interest in or the value of the Additional Collateral, and
Borrower shall be liable to Lender for all costs and expenses
incurred by Lender in connection therewith.
10. Miscellaneous.
10.1 Modifications, Amendments or Waivers. The
provisions of any Operative Document may be modified, amended or
waived only by a written instrument signed by the parties
thereto.
10.2 No Implied Waivers; Cumulative Remedies;
Writing Required. No delay or failure of Lender in exercising any
right, power or remedy hereunder shall affect or operate as a
waiver thereof; nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a
right, power or remedy preclude any further exercise thereof or
of any other right, power or remedy. The rights and remedies
hereunder of Lender are cumulative and not exclusive of any
rights or remedies which it would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part
of Lender of any breach or default under this Agreement or any
such waiver of any provision or condition of this Agreement must
be in writing and shall be effective only in the specified
instance and to the extent specifically set forth in such
writing.
10.3 Expenses; Indemnification. Borrower agrees
upon demand to pay or reimburse Lender for all liabilities,
obligations and out-of-pocket expenses, including reasonable fees
and expenses of counsel for Lender, from time to time arising in
connection with the enforcement or collection of sums due under
the Operative Documents. Borrower shall indemnify, reimburse and
hold Lender and its permitted assigns, each of Lender's or its
permitted assigns' partners, and each of their respective
successors, assigns, agents, officers, directors, shareholders,
servants, agents and employees harmless from and against all
liabilities, losses, damages, actions, suits, demands, claims of
any kind and nature (including claims relating to environmental
discharge, cleanup or compliance), all costs and expenses
whatsoever to the extent they may be incurred or suffered by such
indemnified party in connection therewith(including reasonable
attorneys' fees and expenses), fines, penalties (and other
charges of applicable governmental authorities), licensing fees
relating to any item of Collateral, damage to or loss of use of
property (including consequential or special damages to third
parties or damages to Borrower's property), or bodily injury to
or death of any person (including any agent or employee of
Borrower) (each, a "Claim"), directly or indirectly relating to
or arising out of the use of the proceeds of the Loan, including
acquisition, use, ownership, operation, possession, control,
storage, return or condition of any item of Equipment
constituting Collateral (regardless of whether such item of
Equipment is at the time in the possession of Borrower), the
falsity of any representation or warranty of Borrower or
Borrower's failure to comply with the terms of this Agreement or
any other Operative Document during the Term. The foregoing
indemnity shall cover, without limitation, (i) any Claim in
connection with a design or other defect (latent or patent) in
any item of Equipment constituting Collateral, (ii) any Claim for
infringement of any patent, copyright, trademark or other
intellectual property right, (iii) any Claim resulting from the
presence on or under or the escape, seepage, leakage, spillage,
discharge, emission or release of any Hazardous Materials from
any item of Equipment financed by a Loan or constituting
Collateral, including any Claims asserted or arising under any
Environmental Law, or (iv) any Claim for negligence or strict or
absolute liability in tort; provided, however, that Borrower
shall not indemnify Lender for any liability incurred by Lender
as a direct and sole result of Lender's gross negligence or
willful misconduct. Such indemnities shall continue in full force
and effect, notwithstanding the expiration or termination of this
Agreement. Upon Lender's written demand, Borrower shall assume
and diligently conduct, at its sole cost and expense, the entire
defense of Lender and its permitted assigns, each of Lender's or
its permitted assigns' partners, and each of their respective
successors, assigns, agents, officers, directors, shareholders,
servants, agents and employees against any indemnified Claim
described in this Section 9.3. Borrower shall not settle or
compromise any Claim against or involving Lender without first
obtaining Lender's written consent thereto, which consent shall
not be unreasonably withheld.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT OR ANYWHERE ELSE, BORROWER AGREES THAT IT SHALL NOT
SEEK FROM LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY
THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES.
10.4 Notices; Payments. All notices and other
communications given to or made upon any party hereto in
connection with this Agreement shall be in writing (including
telexed, telecopied or telegraphic communication) and mailed (by
certified or registered mail), telexed, telegraphed, telecopied
or delivered to the respective parties, as follows: Borrower: 000
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, with a copy
to Xxxx & Xxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx XxxXxxxxx; Lender c/o J Net Partners LLC: 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxxxx, with a copy to Xxxxxxxxx Traurig, LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Annex, Esq. or in
accordance with any subsequent written direction from either
party to the other. All such notices and other communications
shall, except as otherwise expressly herein provided, be
effective when received; or in the case of delivery by messenger
or overnight delivery service, when left at the appropriate
address.
10.5 Severability. If any provision of any
Operative Document is held invalid or unenforceable to any extent
or in any application, the remainder of such Operative Document
and all other Operative Documents, or the application of such
provision to different Persons or circumstances or in different
jurisdictions, shall not be affected thereby.
10.6 Survival. All representations, warranties,
covenants and agreements of Borrower contained herein or made in
writing in connection herewith shall survive the execution and
delivery of the Operative Documents and the granting of security.
10.7 Governing Law. This Agreement, the other
Operative Documents and the rights and obligations of the parties
hereto and thereto together with matters arising in connection
therewith, shall be governed by and construed and enforced in
accordance with the laws of the State of New York. Any action to
enforce this Agreement against Borrower may be brought in New
York or, with regard to Collateral, may also be brought wherever
such Collateral is located.
10.8 Successors and Assigns. This Agreement and
the other Operative Documents shall be binding upon and inure to
the benefit of Lender, all future holders of the Note, Borrower
and their respective successors and permitted assigns, except
that Borrower may not assign or transfer its rights hereunder or
thereunder or any interest herein or therein without the prior
written consent of Lender.
10.9 Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto on
separate counterparts, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall
together constitute one and the same instrument.
10.10 Further Assurances. Borrower will, at its
own expense, from time to time do, execute, acknowledge and
deliver all and every further acts, deeds, conveyances, transfers
and assurances, and all financing and continuation statements and
similar notices, reasonably necessary or proper for the
perfection of the security interest being herein provided for in
the Collateral, whether now owned or hereafter acquired.
10.11 Power of Attorney in Respect of the
Collateral. Borrower does hereby irrevocably appoint Lender
(which appointment is coupled with an interest), the true and
lawful attorney-in-fact of Borrower with full power of
substitution, for it and in its name (a) to perform (but Lender
shall not be obligated to and shall incur no liability to
Borrower or any third party for failure to perform)any act which
Borrower is obligated by this Agreement to perform, (b) to ask,
demand, collect, receive, receipt for, xxx for, compound and give
acquittance for any and all rents, issues, profits, avails,
distributions, income, payment draws and other sums in which a
security interest is granted under Section 3.1with full power to
settle, adjust or compromise any claim thereunder as fully as if
Lender were Borrower itself, (c) to receive payment of and to
endorse the name of Borrower to any items of Additional
Collateral (including checks, drafts and other orders for the
payment of money) that come into Lender's possession or under
Lender's control, (d) to make all demands, consents and waivers,
or take any other action with respect to, the Additional
Collateral, (e) in Lender's discretion, to file any claim or take
any other action or institute proceedings, either in its own name
or in the name of Borrower or otherwise, which Lender may
reasonably deem necessary or appropriate to protect and preserve
the right, title and interest of Lender in and to the Additional
Collateral, and (f) to otherwise act with respect thereto as
though Lender were the outright owner of the Additional
Collateral; provided, however, that the power of attorney herein
granted shall be exercisable only upon the occurrence and during
the continuation of an Event of Default unless in Lender's
reasonable opinion immediate action is necessary to preserve or
protect the Additional Collateral. Borrower agrees to reimburse
Lender upon demand for all reasonable costs and expenses,
including attorneys' fees and expenses, which Lender may incur
while acting as Borrower's attorney in fact hereunder, all of
which costs and expenses are included within the Obligations.
10.12 Entire Agreement. This Agreement and each of
the other Operative Documents, taken together, constitute and
contain the entire agreement of Borrower and Lender and supersede
any and all prior agreements, negotiations, correspondence,
understandings and communications among the parties, whether
written or oral, respecting the subject matter hereof.
Borrower:
________________________________
XXXXXXX X. XXXXXXX
Lender:
JACKPOT ENTERPRISES, INC.
By:_________________________________
Name: Xxxx X. Xxxxx
Title: President
SCHEDULE I
Farm
00000 Xxxxx 00xx Xxxxx
Xxxxxxxxxx, XX 00000
SCHEDULE II
Home
0000 Xxxxx Xxxx Xxx
Xxxx Xxxxx, XX 00000
SCHEDULE III
1999 Tax
$2 million
2000 Tax
$1 million
5 million - Bank of America
2.8 million - Citibank
