EXHIBIT 10.43
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VALUE AMERICA, INC
and
THE UNION LABOR LIFE INSURANCE COMPANY
Acting on Behalf of its Separate Account P
AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
Dated as of November 17, 1998
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LIST OF ANNEXES
Annex A Revolving Note
Annex B Loan Request
Annex 3.4 Schedule of Indebtedness for Borrowed Money
Annex 3.7 Compliance with Laws and Other Instruments
Annex 3.10 Brokers and Finders
Annex 3.11 Financial Statements
Annex 3.12 Schedule of Undisclosed Liabilities
Annex 3.13 Schedule of Changes
Annex 3.14 Schedule of Material Agreements
Annex 3.15 Employees
Annex 3.16 Taxes
Annex 3.17(d) Transfers of Patents and Other Intangible Assets
Annex 3.17(f) Exceptions to Ownership of Patents and Other Intangible Assets
Annex 3.18 Employment Benefit Plans
Annex 3.19 Title to Property and Encumbrances; Leases
Annex 3.22 Schedule of Litigation
Annex 3.24 Licenses
Annex 3.25 Schedule of Interested Party Transactions
Annex 3.27(a) Full Operational and Third-Party Software
Annex 3.27(b) Developing Software and Completion Schedule
Annex 3.28(c) List of Complaints
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Annex 3.28(d) List of Certain Vendors
Annex 4.3 Amended and Restated Security Agreement
Annex 7.1(f) Opinion of Company's Counsel
Annex 7.1(o) Amended and Restated Subordination Agreement
Annex 7.1(p) Form of Management Subordinated Notes
Annex 7.1(r) Pledged Account Agreement
Annex 7.1(t) Warrant Purchase Agreement
Annex 7.1(u) Registration Rights Agreement
Annex 7.1(v) Escrow Agreement
Annex 8.13 Use of Proceeds
Annex 8.17 Landlord's Consent and Subordination of Xxxx
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TABLE OF CONTENTS
Page
1. The Revolving Loans ............................................................................... 1
2. Restrictions on Transfer of Notes; Removal of Restrictions on Transfer of Notes ................... 2
2.1 Restrictions on Transfer ...................................................................... 2
2.2 Removal of Transfer Restrictions .............................................................. 4
3A. Representations and Warranties by the Company ..................................................... 4
3.1 Organization, Standing, etc ....................................................................... 4
3.2 Qualification...................................................................................... 4
3.3 Capital Stock...................................................................................... 4
3.4 Indebtedness for Borrowed Money ................................................................... 5
3.5 Shareholder List .................................................................................. 5
3.6 Corporate Acts and Proceedings .................................................................... 5
3.7 Compliance with Laws and Other Instruments ........................................................ 5
3.8 Binding Obligations ............................................................................... 6
3.9 Securities Laws ................................................................................... 6
3.10 No Brokers or Finders ............................................................................ 6
3.11 Financial Statements ............................................................................. 6
3.12 Absence of Undisclosed Liabilities ............................................................... 6
3.13 Changes .......................................................................................... 7
3.14 Material Agreements of the Company ............................................................... 7
3.15 Employees ........................................................................................ 8
3.16 Tax Returns and Audits ........................................................................... 9
3.17 Patents and Other Intangible Assets .............................................................. 9
3.18 Employment Benefit Plans--ERISA................................................................... 11
3.19 Title to Property and Encumbrances; Leases........................................................ 11
3.20 Condition of Properties........................................................................... 11
3.21 Insurance Coverage................................................................................ 12
3.22 Litigation........................................................................................ 12
3.23 Registration Rights............................................................................... 12
3.24 Licenses.......................................................................................... 12
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3.25 Interested Party Transactions......................................................................12
3.26 Minute books and Check Authorizations..............................................................13
3.27 Computer Software..................................................................................13
3.28 Value America Web Site and Systems.................................................................13
3.29 Year 2000..........................................................................................14
3.30 Registration Statement.............................................................................14
3.31 Disclosure.........................................................................................14
3.B. Representations and Warranties by Lender...........................................................14
4. Repayment of the Notes.............................................................................15
4.1 Principal and Interest.............................................................................15
4.2 Prepayment.........................................................................................15
4.3 Security for Notes.................................................................................15
5. Events of Default and Remedies.....................................................................15
5.1 Events of Default..................................................................................15
5.2 Suits for Enforcement..............................................................................18
5.3 Foreclosure of Security Interest...................................................................18
5.4 Remedies Cumulative................................................................................18
5.5 Remedies Not Waived................................................................................18
5.6 Waiver of Statute of Limitations...................................................................19
6. Interest Limitation................................................................................19
7. Conditions of Parties' Obligations.................................................................19
7.1 Conditions of Lender's Obligations to make the Initial Loan........................................19
7.2 Conditions of Company's Obligations................................................................22
7.3 Additional Conditions Precedent to Loans...........................................................22
8. Affirmative Covenants..............................................................................22
8.1 Maintain Corporate Rights and Facilities..........................................................22
8.2 Maintain Insurance................................................................................22
8.3 Pay Taxes and Other Liabilities...................................................................23
8.4 Records and Reports...............................................................................23
8.5 Preparation of Budget.............................................................................25
8.6 Notice of Litigation and Disputes.................................................................25
8.7 Conduct of Business...............................................................................25
8.8 Replacement of Instrument.........................................................................25
8.9 Compliance with Section 7.........................................................................25
8.10 Securities Law Filings............................................................................25
8.11 Compliance With Articles of Incorporation and Bylaws..............................................25
8.12 Internal Accounting Controls......................................................................25
8.13 Use of Proceeds..................................................................................26
8.14 Union Matters.....................................................................................26
8.15 Maintenance of Special Account; Application of Deposits...........................................26
8.16 Initial Public Offering...........................................................................27
9. Negative Covenants................................................................................27
9.1 Indebtedness and Liens............................................................................27
9.2 Changes in Type of Business.......................................................................28
9.3 Loans; Guarantees.................................................................................28
9.4 Restrictive Agreements............................................................................28
9.5 Overhead..........................................................................................29
9.6 Creation of Subsidiaries..........................................................................29
9.7 Restricted Payments...............................................................................29
9.8 Limitation on Employment..........................................................................29
9.9 Restriction on Sales, Mergers and Acquisitions....................................................29
9.10 Limitation on Outstanding Stock Options...........................................................29
10. Reserved..........................................................................................29
11. Definitions.......................................................................................29
12. Miscellaneous.....................................................................................34
12.1 Waivers and Amendments............................................................................34
12.2 Notices...........................................................................................35
12.3 Survival of Representations and Warranties, etc...................................................36
12.4 Severability......................................................................................36
12.5 Parties in Interest.................................................................................36
12.6 Headings............................................................................................36
12.7 Choice of Law.......................................................................................36
12.8 Expenses............................................................................................36
12.9 Counterparts........................................................................................37
12.10 Authorship..........................................................................................37
12.11 Entire Agreement....................................................................................37
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AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
THIS AMENDED AND RESTATED REVOLVING LOAN AGREEMENT ("Agreement") is
entered into as of November 17, 1998 between VALUE AMERICA, INC., a Virginia
corporation (the "Company"), and THE UNION LABOR LIFE INSURANCE COMPANY, acting
for and on behalf of its Separate Account P (the "Lender").
RECITALS
A. WHEREAS, the Company and the Lender have previously entered into a
Revolving Loan Agreement dated October 14, 1998 (the "Prior Loan Agreement"),
pursuant to which the Lender has made certain secured loans to the Company in
the aggregate amount of $10,000,000 (the "Prior Loan Commitment").
B. WHEREAS, the company and the Lender desire to amend the Prior Loan
Agreement to, among other things, extend the Commitment Termination Date.
NOW, THEREFORE, the parties hereby amend and restate the Prior Loan
Agreement, and hereby agree, as follows:
1. The Revolving Loans.
(a) Lender agrees, on the terms and subject to the conditions herein
contained, to make secured loans (each a "Loan" and collectively "Loans") to the
Company form time to time during the period from the Initial Loan Closing Date
(as hereinafter defined) to and including the Commitment Termination Date (as
hereinafter defined) in an aggregate principal amount not to exceed at any time
outstanding the Revolving Loan Commitment (as hereinafter defined). Each Loan
shall be in an aggregate amount of $500,000 or an integral multiple thereof. The
initial Loan shall be made by Lender by the delivery and surrender to the
Company of all outstanding Revolving Notes (as defined in the Prior Loan
Agreement) issued under the Prior Loan Agreement. Within the limits of the
Revolving Loan Commitment, the Company may borrow, prepay in accordance with
Section 1(d) and reborrow under this Section 1(a).
(b) Each Loan, including, without limitation, the initial Loan,
shall be evidenced by, and repaid with interest in accordance with the terms of
a secured negotiable revolving promissory note (the "Revolving Note")
substantially in the form attached hereto as Annex A and dated the date of the
Initial Loan Closing Date.
(c) Each request for a Loan shall be made on at least three Business
Days' notice from the Company to Lender specifying the date and amount thereof
and set forth in a Loan Request substantially in the form attached hereto as
Annex B. Upon its determination that the conditions to its obligation to make
the Loan have been satisfied, Lender shall promptly make such Loan by wire
transfer to an account specified in writing by the Company. The request for the
initial loan shall be made on the date hereof.
(d) the Company may repay each Revolving Note in whole at any time
and in part from time to time, without penalty or premium but with accrued
interest to the date of such prepayment on the amount prepaid, provided that
each partial prepayment shall be in the aggregate principal amount of $50,000 or
an integral multiple thereof. The Company shall prepay the Revolving Note in
accordance with Section 8.15(c) so long as the minimum prepayment of principal
is at least $50,000. Prepayments shall be accompanied by a written notice
specifying the principal amount being repaid and shall be applied first against,
and to the extent of, accrued and unpaid interest on the principal amount to be
repaid and the balance against unpaid principal. If there is more than one
Revolving Note outstanding at a time of prepayment, the prepayment shall be
applied to each Revolving Note, in the order of its delivery to Lender, until
the same has been paid in full.
(e) The "Revolving Loan Commitment" shall mean the greater of (i)
TEN MILLION TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS ($10,024,444)
(the "Original Commitment") or (ii) such greater amount as Lender may specify
from time to time in a notice to the Company increasing the amount thereof,
provided, that the Revolving Loan Commitment may not exceed TEN MILLION
TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS ($10,024,444). Each time
the Company requests a Loan in excess of the then outstanding Revolving
Commitment it shall deliver to Lender an additional secured negotiable revolving
promissory note in the amount of the increase in the Revolving Loan Commitment
substantially in the form of Annex A (also a "Revolving Note"). All Revolving
Notes are also sometimes collectively referred to herein as "Notes" and
sometimes individually as "Note."
(f) "Commitment Termination Date" means the earlier of (i) August
17, 1999, or (ii) the date of the termination of the Revolving Loan Commitment
in accordance with Section 5.1.
(g) If more than one Revolving Note is outstanding at a time that a
Loan is requested, such loan shall be applied against the Revolving Loan
Commitment reflected in the Revolving Notes, in the order in which such
Revolving Notes were delivered to Lender, to the extent but not in excess of
such Revolving Loan Commitment.
(h) If, as and when Lender increases its Revolving Loan Commitment
in accordance with Section 1(e), the Company shall promptly (but in any event
not more than two Business Days) pay to Lender a commitment fee equal to 1% of
the amount of such increase. If Lender provides loans or loan commitments for
the company from any third party, the Company shall promptly (but in any event
not less than two Business Days) pay Lender a fee equal to 1% of the greater of
such commitments or loans.
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2. Restrictions on Transfer of Notes: Removal of Restrictions on
Transfer of Notes.
2.1 Restrictions on Transfer.
(a) Lender understands and agrees that the Notes it will be
acquiring have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), and that accordingly the Notes will not be fully
transferable except as permitted under various exemptions contained in the
Securities Act or applicable state securities laws, or upon satisfaction of the
registration and prospectus delivery requirements of the Securities Act or
registration of qualification requirements under applicable state securities
laws. Lender acknowledges that it must bear the economic risk of its investment
in the Notes for an indefinite period of time since the Notes have not been
registered under the Securities Act and therefore cannot be sold unless the
Notes are subsequently registered or an exemption from registration is
available.
(b) Lender hereby represents and warrants to the Company that it (i)
is acquiring the Notes for investment purposes only, for its own account, and
not as nominee or agent for any other Person (as hereinafter defined), and not
with the view to, or for resale in connection with, any distribution thereof
within the meaning of the Securities Act, (ii) is an "accredited investor"
within the meaning of Rule 501(a) of the Commission (as hereinafter defined)
under the Securities Act, (iii) is a corporation, partnership or other entity
headquartered in Washington, D. C. and (iv) has had the opportunity to review
information provided to it by the Company and ask questions about and received
answers regarding the same. Notwithstanding the foregoing, Lender shall be
entitled to sell participations in any Note to one or more accredited investors
within the meaning of such Rule 501(a) so long as such sales are not accompanied
by any form of public solicitation.
(c) Lender hereby agrees with the company as follows:
(i) Subject to Section 2.2 hereof, the Notes and each instrument
issued in transfer thereof, will bear the following legend.
"The securities evidenced by this instrument have not been registered
under the Securities Act of 1933 and have been taken for investment
purposes only and not with a view to the distribution thereof, and, except
as stated in an agreement between the holder of this instrument, or its
predecessor in interest, and the issuer corporation, such securities may
not be sold or transferred unless there is an effective registration
statement under such Act covering such securities or the issuer
corporation receives an opinion of counsel (which may be counsel for the
issuer corporation) stating that such sale or transfer is exempt from the
registration and prospectus delivery requirements of such Act."
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(ii) The instrument representing the Notes, and each
instrument issued in transfer thereof, will also bear any legend
required under any applicable state securities law.
(iii) Absent an effective registration statement under the
Securities Act covering the disposition of the Notes, except as provided above,
Lender will not sell, transfer, assign, pledge, hypothecate or otherwise dispose
of any portion of or all of the Notes without first providing the Company with
an opinion of counsel (which may be counsel for the Company) to the effect that
such sale, transfer, assignment, pledge, hypothecation or other disposition will
be exempt from registration and the prospectus delivery requirements of the
Securities Act and the registration or qualification requirements of any
applicable state securities laws, except that no such registration or opinion
shall be required with respect to (A) a transfer not involving a change in
beneficial ownership, or (B) the distribution of the Notes by Lender to any of
its partners, or retired partners, or to the estate of any of its partners or
retired partners, (C) the distribution of the Notes by The Union Labor Life
Insurance Company to the participants in its Separate Account P, or (D) a sale
to be effected in accordance with Rule 144 or 144A of the Commission under the
Securities Act (or any comparable exemption).
(iv) Lender agrees to the Company's making a notation on its
records or giving instructions to any transfer agent of the Notes in order to
implement the restrictions on transfer of the Notes mentioned in this subsection
(c).
2.2 Removal of Transfer Restrictions. Any legend endorsed on an
instrument evidencing any of the Notes pursuant to Section 2.1(c)(i) hereof and
the stop transfer instructions and record notations with respect to such Note
shall be removed and the Company shall issue an instrument without such legend
to the holder of such Note (a) if such Note is registered under the Securities
Act, or (b) if such Note may be sold under Rule 144(k) of the Commission under
the Securities Act or (c) if such holder provides the Company with an opinion of
counsel (which may be counsel for the Company) reasonably acceptable to the
Company to the effect that a public sale or transfer of such Note may be made
without registration under the Securities Act.
3. Representations and Warranties by the Company. In order to induce
Lender to enter into this Agreement and to make Loans, the Company hereby
covenants with and represents and warrants to Lender as follows:
3.1 Organization, Standing, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and has all requisite power and authority to carry on
its business, to own and hold its properties and assets, to enter into this
Agreement, the Notes, the Amended and Restated Security Agreement (as
hereinafter defined), the Warrant Purchase Agreement (as hereinafter defined),
the Registration Rights Agreement (as hereinafter defined), the Amended and
Restated Subordination Agreement (as hereinafter defined), the Pledged Account
Agreement (as hereinafter defined), the Escrow Agreement (as hereinafter
defined), and the Financing Statements (as hereinafter defined) and together
with the Notes, the Amended and Restated Security Agreement, the Warrant
Purchase Agreement,
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the Registration Rights Agreement, the Amended and Restated Subordination
Agreement, the Pledged Account Agreement and the Escrow Agreement, the "Related
Agreements," and each, individually, a "Related Agreement"), to borrow money and
issue the Notes in accordance with this Agreement and to carry out the
provisions hereof and thereof. The copies of the Articles of Incorporation and
Bylaws of the Company which have been delivered to Lender prior to the execution
of this Agreement are true and complete and have not been amended or repealed.
The Company has no Subsidiaries (as hereinafter defined) or direct indirect
interest (by way of stock ownership or otherwise) in any firm, partnership,
corporation, association or business enterprise.
3.2 Qualification. The Company is duly qualified, licensed or
domesticated as a foreign corporation in good standing in each jurisdiction
wherein the nature of its activities or its properties owned or leased makes
such qualification, licensing or domestication necessary.
3.3 Capital Stock. Reserved.
3.4 Indebtedness for Borrowed Money. The Company has no Indebtedness
for Borrowed Money, except as disclosed on the Balance Sheet (as hereinafter
defined) or on Annex 3.4 hereto.
3.5 Shareholder List. Reserved.
3.6 Corporate Acts and Proceedings. All corporate acts and
proceedings required for the authorization, execution and delivery of this
Agreement and the Related Agreements, the offer, issuance and delivery of the
Notes, the borrowing of money pursuant to this Agreement and the performance of
this Agreement and each Related Agreement have been lawfully and validly taken
or will have been so taken prior to the Initial Loan Closing.
3.7 Compliance with Laws and Other Instruments. The business and
operations of the Company have been and are being conducted in accordance with
all applicable federal, state and local laws, rules and regulations, except to
the extent that noncompliance with laws, rules and regulations would not,
individually or in the aggregate, have a Material Adverse Effect (as hereinafter
defined). The execution and delivery by the Company of this Agreement and the
Related Agreements, the borrowing of money pursuant to this Agreement and the
performance of this Agreement and the Related Agreements, (a) will not require
from the Board or stockholders of the Company any consent or approval that has
not been validly and lawfully obtained, (b) will not require any authorization,
consent, approval, license, exemption of or filing or registration with any
court or governmental department, commission, board, bureau, agency or
instrumentality of government, except such as shall have been lawfully and
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validly obtained prior to the Initial Loan Closing and except for the filing of
Form D under Regulation D with the Commission and other applicable state
securities commissions, which filing shall be completed within 15 days following
the Initial Loan Closing, (c) will not cause the Company to violate or
contravene (i) any provision of law, (ii) any rule or regulation of any agency
or government, domestic or foreign, (iii) any order, writ, judgment, injunction,
decree, determination or award, or (iv) any provision of the Articles of
Incorporation or Bylaws of the Company, (d) except as disclosed in Annex 3.7,
will not violate or be in conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under, any
indenture, loan or credit agreement, note agreement, promissory note, deed of
trust, mortgage, security agreement or other agreement, lease or instrument,
commitment or arrangement to which the Company is a party or by which the
Company or any of its properties, assets or rights is bound or affected, to the
extend that such violation, conflict, breach or default would (individually or
in the aggregate) have a Material Adverse Effect and (e) except as contemplated
by the Amended and Restated Security Agreement, will not result in the creation
or imposition of any Lien. Except as disclosed in Annex 3.7, the Company is not
in material violation of, or (with or without notice or lapse of time or both)
in default under, any term or provision of its Articles of Incorporation or
Bylaws or of any indenture, loan or credit agreement, note agreement, promissory
note, deed of trust, mortgage, security agreement or other agreement, lease or
other instrument, commitment or arrangement to which the Company is a party or
by which any of the Company's properties, assets or rights is bound or affected.
The Company is not subject to any restriction of any kind or character which has
or may have a Material Adverse Effect or which prohibits the Company from
entering into this Agreement or any Related Agreement or would prevent or make
burdensome its performance of or compliance with all or any part of this
Agreement or any Related Agreement or the consummation of the transactions
contemplated hereby or thereby.
3.8 Binding Obligations. This Agreement constitutes and when
executed and delivered by the Company to Lender, each Note and other Related
Agreement will constitute, the legal, valid and binding obligations of the
Company and are enforceable against the Company in accordance with their
respective terms, except as such enforcement is limited by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors' rights
generally.
3.9 Securities Laws. Subject to the accuracy of Lender's
representations and warranties in Section 2.1 (b), the offer, issue and sale of
the Notes are and will be exempt from the registration and prospectus delivery
requirements of the Securities Act, and have been registered or qualified (or
are exempt from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws. The
Company is not required to qualify this Agreement or the Notes as an indenture
under the Trust Indenture Act of 1939, as amended.
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3.10 No Brokers or Finders. Except as provided in Annex 3.10, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against the Company or Lender for any commission, fee
or other compensation as a finder or broker, or in any similar capacity.
3.11 Financial Statements. Attached hereto as Annex 3.11 are (a) the
Company's audited balance sheets as of December 31, 1997 and the audited
statements of operations, changes in shareholders' equity and cash flow for the
Company's twelve-month period then ended, together with the opinion of
PricewaterhouseCoopers LLP thereon, (b) the Company's audited balance sheet as
of June 30, 1998 and the audited statements of operations, changes in
shareholders' equity and cash flows for the six-month period then ended, and (c)
the Company's unaudited balance sheet (the "Balance Sheet") as of September 30,
1998 (the "Balance Sheet Date") and the unaudited statements of operations,
changes in shareholders' equity and cash flows for the three-month and
nine-month periods then ended, and no more current financial statements have
been prepared. These audited and unaudited financial statements (i) are in
accordance with the books and records of the Company, and (ii) fairly and
accurately present the financial condition of the Company at the respective
dates of the balance sheets and the results of its operations for the
twelve-month, six-month, nine-month and three-month periods therein specified.
Specifically, but not by way of limitation, the Balance Sheet discloses all of
the debts, liabilities and obligations of any nature (whether absolute, accrued,
contingent or otherwise and whether due or to become due) of the Company at the
Balance Sheet Date which must be disclosed on an accurate balance sheet prepared
in accordance with generally accepted accounting principles.
3.12 Absence of Undisclosed Liabilities. Except as disclosed on
Annex 3.12 hereto, the Company has no material obligation or liability (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become
due, whether or not known to the Company) arising out of any transaction entered
into at or prior to the Initial Loan Closing, or any act or omission to act at
or prior to the Initial Loan Closing, or any state of facts existing at or prior
to the Initial Loan Closing, including taxes with respect to or based upon the
transactions or events occurring at or prior to the Initial Loan Closing, and
including, without limitation, unfunded past service liabilities under any
pension, profit sharing or similar plan, except (a) to the extent set forth on
or reserved against in the Balance Sheet, and (b) current liabilities incurred
and obligations under agreements entered into, in the usual and ordinary course
of business, since the Balance Sheet Date, none of which (individually or in the
aggregate) has a Material Adverse Effect.
3.13 Changes. Since the Balance Sheet Date as to clauses (a) and (c)
below and since one year prior to the Balance Sheet Date as to the remaining
clauses of this Section 3.13, except as disclosed on Annex 3.13 hereto, the
Company has not (a) incurred any debts, obligations or liabilities, absolute,
accrued, contingent or otherwise, whether due or to become due, except current
liabilities incurred in the usual and ordinary course of business, none of which
(individually or in the aggregate) materially and adversely affects the
business, finances, properties or prospects of the Company, (b) made or suffered
any changes in its contingent obligations by way of guaranty, endorsement (other
than the endorsement of checks for deposit in the usual and ordinary course of
business), indemnity, warranty or otherwise, (c) discharged or satisfied any
Liens other than those securing, or paid any obligation or liability other than,
current liabilities shown on the Balance Sheet and current liabilities incurred
since the Balance Sheet Date, in each case in the usual and ordinary course of
business, (d) mortgaged, pledged or subjected to Lien any of its assets,
tangible or intangible, (e) sold, transferred or leased any of its assets except
in the usual and ordinary course of business, (f) canceled or compromised any
debt or claim, or waived or released any right, of material value, (g) suffered
any physical damage, destruction or loss (whether or not covered by insurance)
materially and adversely affecting the properties, business or prospects of the
Company, (h) entered into any transaction other than in the usual and ordinary
course of business except for this Agreement, (i) encountered any labor
difficulties or labor union organizing activities, (j) except in the usual and
ordinary course of business, made or granted any wage or salary increase or
entered into any employment agreement, (k) issued or sold any shares of capital
stock or other securities or granted any options with respect thereto, or
modified any Equity Security, (l) declared or paid any dividends on or made any
other distributions with respect to, or purchased or redeemed, any of its
outstanding Equity Securities, (m) suffered or experienced any change in, or
condition affecting, its condition (financial or otherwise), properties, assets,
liabilities, business operations, results of operations or prospects other than
changes, events or conditions in the usual and ordinary course of its business,
none of which (either by itself or in conjunction with all such other changes,
events and conditions) has been materially adverse, (n) made any change in the
accounting principles, methods or practices followed by it or depreciation or
amortization policies or rates theretofore adopted, or (o) entered into any
agreement, or otherwise obligated itself, to do any of the foregoing.
3.14 Material Agreements of the Company. Except as expressly set
forth in this Agreement, the Balance Sheet or as disclosed on Annex 3.14 hereto,
the Company is not a party to any written or oral agreement, instrument or
arrangement not made in the ordinary course of business that is material to the
Company, and the Company is not a party to any written or oral (a) agreement
with any labor union, (b) agreement for the purchase of fixed assets or for the
purchase of materials, supplies or equipment in excess of normal operating
requirements, (c) agreement for the employment of any officer, individual
employee or other Person on a full time basis or any agreement with any Person
for consulting services, (d) bonus, pension, profit sharing, retirement, stock
purchase, stock option, deferred compensation, medical, hospitalization or life
insurance (other than group medical, hospitalization or insurance plans
applicable to all employees in which benefit levels are not related to
compensation) or similar plan, contract or understanding with respect to any or
all of the employees of the Company or any other Person, (e) indenture, loan
or credit agreement, note agreement, deed of trust, mortgage, security
agreement, promissory note or other agreement or instrument relating to or
evidencing Indebtedness for Borrowed Money (as hereinafter defined) or
subjecting any asset or property of the Company to any Lien or evidencing any
Indebtedness (as hereinafter defined), (f) guaranty of any Indebtedness, (g)
lease or agreement under which the Company is lessee of or holds or operates
any property, real or personal, owned by any other Person under which payments
to such Person exceed $75,000 per annum, (h) lease or agreement under which the
Company is lessor or permits any Person to hold or operate any property, real or
personal, owned or controlled by the Company, (i) agreement granting any
preemptive right, right of first refusal or simimlar right to any Person, (j)
agreement or arrangement with any Affiliate (as hereinafter defined) or any
"associate" (as this term is defined in Rule 405 of the Commission under the
Securities Act) of the Company or any officer, director or shareholder of the
Company, (k) agreement obligating the Company to pay any royalty or similar
charge for the use or exploitation of any tangible or intangible property, (l)
agreement or license under which the Company has granted or transferred to any
Person, or under which any Person has granted or transferred to the Company, the
right to exploit or otherwise use any patent, trademark, service xxxx,
copyright, trade name, trade secret, software, intellectual property (as
hereinafter defined) or other intangible asset, (m) covenant not to compete or
other restriction on its ability to conduct a business or engage in any other
activity, (n) agreement to register securities under the Securities Act, or (o)
agreement, instrument or other commitment or arrangement with any Person
continuing for a period of more than three months from the Initial Loan Closing
Date which involves an expenditure or receipt by the Company in excess of
$75,000. For purposes of the next preceding sentence, "material" shall mean an
obligation which by its terms calls for aggregate payments by the Company in
excess of $75,000. The Company has furnished to Lender true and complete copies
of all agreements and other documents requested by Lender or its authorized
representatives. All parties having material contractual arrangements with the
Company are in substantial compliance therewith, and none is in default in any
material respect thereunder. The Company does not have outstanding any power of
attorney.
3.15 Employees. The following individuals (collectively, "Designated
Key Employees") are in the full-time employ of the Company: Xxxxx X. Xxxx,
Xxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxxx Page, and Xxxxx Xxxxx. To
the best of the Company's knowledge, no Designated Key Employee of the Company
has any plans to terminate his or her employment with the Company, and the
Company has no intention of terminating the employment of any Designated Key
Employee. To the best of the Company's knowledge after reasonable inquiry, no
Designated Key Employee or any other employee of the Company is a party to or is
otherwise bound by any agreement or arrangement (including, without limitation,
any license, covenant, or commitment of any nature), or subject to any judgment,
decree, or order of any court or administrative agency, (a) that would conflict
with such employee's obligation diligently to promote and further the interests
of the Company or (b) that would conflict with the Company's business as now
conducted or as proposed to be conducted. No Designated Key Employee has any
direct or indirect equity interest (by way of stock ownership or otherwise) in
any firm, partnership, corporation, association or business enterprise, other
than any such interest (i) in a corporation which is subject to the reporting
requirements of Section 13 or 15 (d) of the Exchange Act and (ii) which does
not, alone or in the aggregate with other such interests, exceed one percent
(1%) of the equity of such corporation. The Company has complied in all material
respects with all laws relating to the employment of labor, including provisions
relating to wages, hours, equal opportunity, collective bargaining and payment
of Social Security and other taxes, and the Company has encountered no material
labor difficulties. Except as disclosed on Annex 3.15 hereto or pursuant to
ordinary arrangements for employment compensation, the Company is not under any
obligation or liability to any officer, director, employee or Affiliate of the
Company.
3.16 Tax Returns and Audits. Except as disclosed on Annex 3.16, all
required federal, state and local tax returns of the Company have been
accurately prepared and duly and timely filed, and all federal, state and local
taxes required to be paid with respect to the periods covered by such returns
have been paid. Except as disclosed on Annex 3.16, the Company is not and has
not been delinquent in the payment of any tax, assessment or governmental
charge. The Company has never had any tax deficiency proposed or assessed
against it and has not executed any waiver of any statute of limitations on the
assessment or collection of any tax or governmental charge. None of the
Company's federal income tax returns nor any state income or franchise tax
returns has ever been audited by governmental authorities. Except as disclosed
on Annex 3.16, the reserves for taxes, assessments and governmental charges
reflected on the Balance Sheet are and will be sufficient for the payment of all
unpaid taxes, assessments and governmental charges payable by the Company with
respect to the period ended on the Balance Sheet Date. Except as disclosed on
Annex 3.16, since the Balance Sheet Date, the Company has made adequate
provisions on its books of account for all taxes, assessments and governmental
charges with respect to its business, properties and operations for such period.
The Company has withheld or collected from each payment made to each of its
employees, the amount of all taxes (including, but not limited to, federal
income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment
Tax Act taxes) required to be withheld or collected therefrom, and has paid the
same to the proper tax receiving officiers or authorized depositories.
3.17 Patents and Other Intangible Assets.
(a) The Company (i) owns or has the right to use, free and
clear of all Liens, claims and restrictions, all patents, trademarks, service
marks, trade names, copyrights, licenses and rights with respect to the
foregoing, used in or necessary for the conduct of its business as now conducted
or proposed to be conducted, (ii) is not infringing upon or otherwise acting
adversely to the right or claimed right of any Person under or with respect to
any patent, trademark, service xxxx, trade name, copyright or license with
respect thereto, and (iii) is not obligated or under any liability whatsoever to
make any payments by way of royalties, fees or otherwise to any owner or
licensee of, or other claimant to, any patent, trademark, service xxxx, trade
name, copyright or other intangible asset, with respect to the use thereof or in
connection with the conduct of its business or otherwise.
(b) The Company owns and has the unrestricted right to use
all trade secrets, including know-how, negative know-how, formulas, patterns,
compilations, programs, devices methods, techniques, processes, inventions,
designs, technical data, computer software (in both source code and object code
forms and all documentation therefor, except for third-party licenses software
as shown as Annex 3.27A), including, without limitation, the Fully Operational
Software (as hereinafter defined), and all information that derives independent
economic value, actual or potential, from not being generally known or known by
competitors and which the Company has taken reasonable steps to maintain in
secret (all of the foregoing of which are collectively referred to herein as
"intellectual property") required for or incident to the conduct of the
Company's business, as it is presently conducted and as it is proposed to be
conducted, in each case free and clear of any right, Lien or claim of others,
including, without limitation, former employers of its employees.
(c) Since its organization, the Company has taken
reasonable security measures to protect the secrecy, confidentiality and value
of all intellectual property and all Inventions (as defined below). Since its
organization, each of the Company's employees and other Persons wo, either alone
or in concert with others, developed, invented, discovered, derived, programmed
or designed intellectual property or Inventions, or who has knowledge of or
access to information about intellectual property or Inventions, has entered
into a written agreement with the Company which provides that (i) this
intellectual property, other information and Inventions are proprietary to the
Company and are not to be divulged, misused or misappropriated, and (ii) tis
intellectual property, other information and Inventions are to be disclosed by
such employees and such Persons to the Company and transferred by them to the
Company, without any further consideration being given therefor by the Company,
together with all of such employee's or other Person's right, title and interest
in and to such intellectual property, other information and Inventions and all
patents, trademarks, service marks, trade names, copyrights, licenses and rights
with respect to such intellectual property, other information and Inventions.
As used herein, "Inventions" means all inventions, developments and discoveries
which during the period of an employee's or other Person's service to the
Company he or she makes or conceives of, either solely or jointly with others,
that relate to any subject matter with which his or her work for the Company may
be concerned, or relate to or are connected with the business, products,
services or projects of the Company, or relate to the actual or demonstrably
anticipated research or facilities or trade secret information.
(d) Except as disclosed on Annex 3.17(d), the Company has not
sold, transferred, assigned, licensed or subjected to any Lien, any intellectual
property, trade secret, know-how, invention, design, process, computer software
or technical data, or any interest therein, necessary or useful for the
development, manufacture, use, operation or sale of any product or service
presently under development or manufactured, sold or rendered by the Company.
(e) Except as disclosed on Annex 3.17(f), no director, officer,
employee, agent or shareholder of the Company owns or has any right in the
intellectual property of the Company, or any patents, trademarks, service marks,
trade names, copyrights, licenses or rights with respect to the foregoing, or
any inventions, developments or discoveries used in or necessary for the conduct
of the Company's business a now conducted or as proposed to be conducted.
(f) The Company has not received any communication alleging or
stating that the Company or any Designated Key Employee has violated or
infringed, or by conducting business as proposed, would violate or infringe, any
patent, trademark, service xxxx, trade name, copyright, trade secret,
proprietary rigt, process or other intellectual property of any other Person.
3.18 Employment Benefit Plans--ERISA. Except as set forth on Annex
3.18, the Company does not maintain or make contributions to any pension, profit
sharing or other employee retirement benefit plan. The Company has no material
liability with respect to any such plan (including, without limitation, any
unfunded liability or any accumulated funding deficiency) or any material
liability to the Pension Benefit Guaranty Corporation or under Title IV of the
Employee Retirement Income Security Act of 1974, as amended, with respect to
a multi-employer pension benefit plan, nor would the Company have any such
liability if any such plan were terminated or if the Company withdrew, in whole
or in part, from any multi-employer plan.
3.19 Title to Property and Encumbrances: Leases. The Company has
good and marketable title to all of its properties and assets, including,
without limitation, the properties and assets reflected in the Balance Sheet
and the properties and assets used in the conduct of its business, except for
properties disposed of in the ordinary course of business since the Balance
Sheet Date and except and which are not in default, in each case subject to no
Lien, except those which are shown and described on the Balance Sheet and except
for Permitted Liens (as hereinafter defined) and except for Liens disclosed on
Annex 3.19. All material leases under which the Company is a lessee of any real
or personal property are valid, enforceable and effective in accordance with
their terms (subject to the laws of bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors' rights generally); there is not
under any such lease any existing or claimed default by the Company or event or
condition which with notice or lapse of time or both would constitute a default
by the Company.
3.20 Condition of Properties. All facilities, machinery, equipment,
fixtures, vehicles and other properties owned, leased or used by the Company
are in good operating condition and repair and are adequate and sufficient for
the Company's business.
3.21 Insurance Coverage. The Company has in full force and effect
insurance coverage issued by insurers of recognized responsibility insuring it
and its properties and business against such losses and risks, and in such
amounts, as are customary in the case of corporations of established reputation
engaged in the same or a similar business, including, without limitation,
policies of term life insurance issued by issuers of recognized reponsibility,
as follows: (a) in the amount of $10 million on the life of Xxxxx X. Xxxx,
(b) in the amount of $3 million on the life of Xxxxxx Xxxxxxx, (c) in the
amount of $2 million on the life of Xxxx X. Xxxxxxx and (d) $1 million each on
the lives of Xxx Xxxxxxx, Xxxxxx Page and Xxxxx Xxxxx; in each case with the
Company as the sole beneficiary and so long as they are employees of the
Company. The Company has not been refused any insurance coverage sought or
applied for, and the Company has no reason to believe that it will be unable to
renew its existing insurance coverage as and when the same shall expire upon
terms at least as favorable as those presently in effect, other than possible
increases in premiums that do not result from any act or omission of the
Company.
3.22 Litigation. Except as disclosed on Annex 3.22 hereto, there
is no legal action, suit, arbitration or other legal, administrative or other
governmental investigation, inquiry or proceeding (whether federal, state, local
or foreign) pending or threatened against or affecting (a) the Company or its
properties, assets or business (existing or contemplated), or (b) any Designated
Key Employee, before any court or governmental department, commission, board,
bureau, agency or instrumentality or any arbitrator. After reasonable
investigation, except as disclosed in Annex 3.22, neither the Company nor any
Designated Key Employee of nor attorney for the Company is aware of any fact
which might result in or form the basis for any such action, suit, arbitration,
investigation, inquiry or other proceeding. Neither the Company nor any
Designated Key Employee is in default with respect to any order, writ,
judgement, injunction, decree, determination or award of any court or of any
governmental agency or insutrmentality (whether federal, state, local or
foreign).
3.23 Registration Rights. Reserved.
3.24 Licenses. Except as disclosed on Annex 3.24, the Company
possesses from the appropriate agency, commission, board and governmental
body and authority, whether state, local or federal, all material licenses,
permits, authorizations, approvals, franchises and rights which are necessary
for the Company to engage in the business currently conducted by it and
proposed to be conducted, including, without limitation, the development,
manufacture, use, sale and marketing of its existing and proposed products and
services; and all such certificates, licenses, permits, authorizations and
rights are in full force and effect, and, to the best of the Company's
knowledge, will not be revoked, canceled, withdrawn, terminated or suspended.
3.25 Interested Part Transactions. Except as disclosed on Annex
3.25 hereto, no officer, director or shareholder of the Company of any
Affiliate or "associate" (as this term is defined in Rule 405 of the
Commission under the Securities Act) of any such Person or the Company has or
has had, either directly or indirectly, (a) an interest in any Person which
(i)furnishes or sells services or products which are furnished or sold or are
proposed to be furnished or sold by the Company, or (ii) purchases from or
sells or furnishes to the Company any goods or services, or (b) a beneficial
interest in any transaction, contract or agreement to which the Company is a
party or by which it may be bound or affected.
3.26 Minute Books and Check Authorizations. The minute books of
the Company provided to, or, if not so provided, made available to, Lender,
contain all resolutions adopted by directors and shareholders since the
incorporation of the Company and fairly and accurately reflect, in all matters
and transactions referred to in such minutes. The Board has adopted, and there
is in full force and effect, a policy which prohibits the issuance of any
check or draft by the Company in any amount in excess of $10,000 on any deposit
account of the Company unless the same has been signed by two officers of the
Company who have been so authorized by action of the Board.
3.27 Computer Software.
(a) Attached as Annex 3.27A hereto is a true and complete list of
all material computed software used by the Company in the conduct of its
business as presently conducted or as proposed to be conducted (the "Fully
Operational Software"), together with a brief description of each principal
function thereof. All Fully Operational Software is fully functional,
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complete and operational, has been fully Company's possession and control, and,
except for third-party software, no Person outside the Company has possession of
or access to the source code for any Fully Operational Software.
(b) Attached as Annex 3.27B hereto is a true and complete list of
all computer software that the Company can reasonably foresee it will need to
conduct its business as conducted and as proposed to be conducted that is not
Fully Operational Software (the "Developing Software"), together with a brief
description of the principal intended functions thereof. Annex 3.27B also
contains a schedule to complete the development of each category of Developing
Software (the "Completion Schedule"), and each principal system or element
within each such category as well as the name of each employee and consultant
of the Company who is responsible for writing, documenting and completing each
identified category, system and element. The Company and each Designated
Employee has carefully examined the Completion Schedule for each category,
system and element of the Developing Software and believes, after conducting a
reasonable investigation sufficient to reach an informed view, that the Company
will be able to achieve completion of the Developing Software by the scheduled
completion dates appearing in the Completion Schedule and without the Company
being required to incur any material expense beyond that shown in the most
recent projections delivered to Lender prior to the Initial Loan Closing.
3.28 Value America Web Site and Systems
(a) The Company owns and has the unrestricted right to
communicate and publish its "Value America" Internet product offering (the "Web
Site") and conduct business on the World Wide Web at the Internet address
xxxxxxxxxxxx.xxx" and in connection therewith to use the registered service xxxx
and trade name "Value America" and in so doing is not acting in conflict with
any patent, trademark, service xxxx, trade name, copyright, trade secret,
license or other proprietary right with respect thereto.
(b) Except as disclosed on Annex 3.28(d), the Company has not
received any communication from any Person that the Web Site or the conduct of
the Company's business is in violation of any law, rule or regulation or in
conflict with any patent, trademark, service xxxx, trade name,
copyright, trade secret, license or other proprietary right with respect
thereto.
(c) Annex 3.28(c) attached hereto contains a true and complete list
of all complaints received by the Company from persons who have ordered products
using the Web Site.
(d) Except as disclosed on Annex 3.28(d) attached hereto, no Person
whose product or products have been offered for sale on the Web Site has
terminated or materially modified (or communicated an intention to terminate or
materially modify) its relationship with the Company.
3.29 Year 2000. The computer systems and software owned or
licensed by the Company are able to accurately process date data, including, but
not limited to, calculating, comparing, and sequencing from, into and between
the twentieth century (through year 1999), the year 2000 and the twenty-first
century, including leap year calculations.
3.30 Registration Statement. On September 23, 1998, the Company
withdrew its Registration Statement on Form S-1 filed with the Commission on
July 2, 1998 (and thereafter amended). On September 1, 1998, the Prospectus
(as hereinafter defined) did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or herein or
necessary to make the statements therein or herein not misleading.
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3.31 Disclosure. There is no fact which the Company has not
disclosed to Lender in writing which materially and adversely affects nor,
insofar as the Company can now foresee, will materially and adversely affect,
the properties, business, prospects, results of operation or condition
(financial or other) of the Company or the ability of the Company to perform its
obligations under this Agreement or under any Related Agreement. The information
contained in this Agreement and in any writing furnished pursuant hereto or in
connection herewith is true, complete and correct, and such information does not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or herein or necessary to make the statements
therein or herein not misleading.
3.B. Representations and Warranties by Lender. Lender hereby represents
and warrants to the Company as follows: (a) Lender is an entity duly formed,
validly existing and in good standing of the laws of its state of formation and
has all requisite power and authority to enter into this Agreement and the
Related Agreements, to purchase the Notes and carry out the provisions of this
Agreement and the Related Agreements; (b) all corporate acts and proceedings
required for the authorization, execution and delivery of this Agreement and the
Related Agreements and the making of Loans by Lender have been lawfully and
validly taken or will have been so taken prior to the Initial Loan Closing; (c)
this Agreement and the Related Agreements are the legal, valid and binding
obligations of Lender and are enforceable against Lender in accordance with
their respective terms, except as such enforcement is limited by bankruptcy,
insolvency and other similar laws effecting the enforcement of creditors' rights
generally.
4. Repayment of the Notes.
4.1 Principal and Interest. On August 17, 1999 ("Stated Maturity"),
the Company shall pay in full the outstanding principal balance and interest
accrued thereon under all of the Notes.
4.2 Prepayment.
(a) Each Note may be prepaid at the option of the Company at
the principal amount outstanding under such Note, plus interest accrued and
unpaid on the Note to the date of such prepayment at any time in whole or from
time to time in part, without premium or penalty. Any prepayment under the Note
shall be credited first upon interest accrued and the remainder, if any, upon
the outstanding principal amount of the Note.
(b) The Company shall repay the Note from time to time in
accordance with Section 8.15(c).
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4.3 Security for Notes. The Company's obligation to pay principal
and interest under the Notes and other obligations of the Company to Lender
shall be secured by a security interest granted by the Company to Lender in
certain assets of the Company pursuant to an Amended and Restated Security
Agreement substantially in the form of Annex 4.3 attached hereto (the "Amended
and Restated Security Agreement").
5. Events of Default and Remedies.
5.1 Events of Default. If any of the following events (herein called
"Events of Default") shall occur:
(a) If default shall be made in the due and punctual payment of any
principal of or premium (if any) on, any Note when and as the same shall become
due and payable, whether at maturity or a date fixed for prepayment or by
declaration or otherwise, which default is not cured within five (5) days; or
(b) If default shall be made in the due and punctual payment of any
interest of any Note when and as such interest shall become due and payable, and
such default shall have continued for a period of five days; or
(c) If default shall be made in the due and punctual performance of
any covenant or agreement in any promissory note, bond, indenture, loan
agreement, note agreement, mortgage, security agreement or other instrument
evidencing or related to Indebtedness of the Company or any Subsidiary (other
than the Related Agreements and this Agreement), and such default shall continue
for more than the period of notice and/or grace, if any, therein specified and
shall not have been waived; or
(d) If any representation or warranty made or deemed to be made by
or on behalf of the Company in this Agreement or any Related Agreement or in any
certificate, statement, report or other instrument delivered under or pursuant
to any term hereof shall prove to have been untrue or incorrect in any material
respect as of the date of this Agreement or as of the Initial Loan Closing Date,
or if any statement, report, certificate, financial statement or financial
schedule or other writing or instrument prepared or purporting to be prepared by
the Company or any officer of the Company that is hereafter furnished or
delivered in connection with or under or pursuant to or contemplated by this
Agreement to Lender shall prove to be untrue or incorrect in any material
respect as of the date it was made, furnished or delivered; or
(e) If default shall be made in the due and punctual performance or
observance of any term, covenant, agreement or condition contained in (i)
Sections 4, 5, 8 or 9 of this Agreement, including, without limitation, Section
8.14 of this Agreement, or (ii) any Related Agreement (other than the Notes); or
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(f) If the validity or enforceability of this Agreement or any
Related Agreement shall be contested by either the Company or any security
holder of the Company or any action, suit or proceeding is commenced that
alleges or contends that this Agreement or any of the Related Agreements is no
longer in full force or effect or is null and void or the Company denies that it
has any further liability or obligation under this Agreement or any of the
Related Agreements; or
(g) If default shall be made in the due and punctual performance or
observance of any term, covenant, agreement or condition contained in this
Agreement, other than those referred to above in this Section 5.1, and such
default shall have continued for a period of 10 days; or
(h) If the Company or any Subsidiary shall (i) file a petition
seeking relief for itself under Title II of the United States Code, as now
constituted or hereafter amended, or file an answer consenting to, admitting the
material allegations of, or otherwise not controverting, or fail timely to
controvert, a petition filed against it seeking relief under Title II of the
United States Code, as now constituted or hereafter amended, or (ii) file such a
petition or answer with respect to relief under the provisions of any other now
existing or future applicable bankruptcy, insolvency, or other similar law of
the United States of America, or State thereof, or of any other country or
jurisdiction providing for the reorganization, winding-up or liquidation of
corporations or an arrangement, composition, extension or adjustment with its
creditors; or
(i) If an order for relief shall be entered against the Company or
any Subsidiary under Title II of the United States Code, as now constituted or
hereafter amended, which order is not stayed; or upon the entry of an order,
judgment or decree by operation of law, or by a court having jurisdiction in the
premises which is not stayed, adjudging it a bankrupt or insolvent under, or
ordering relief against it under, or approving as properly filed a petition
seeking relief against it under, the provisions of any other now existing or
future applicable bankruptcy, insolvency or other similar law of the United
States of America or any State thereof, or of any other country or jurisdiction
providing for the reorganization, winding-up or liquidation of corporations or
any arrangement, composition, extension or adjustment with creditors, or
appointing a receiver, liquidator, assignee, sequestrator, trustee or custodian
of the Company or any Subsidiary or any substantial part of its property, or
ordering the reorganization, winding-up or liquidation of its affairs or upon
the expiration of thirty (30) days after the filing of any involuntary petition
against it seeking any of the relief specified in paragraph (h) or this
paragraph (i) of Section 5.1 hereof without the petition being dismissed prior
to that time; or
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(j) If the Company or any Subsidiary shall (i) make a general
assignment for the benefit of its creditors, (ii) consent to the appointment of
or taking possession by a receiver, liquidator, assignee, sequestrator, trustee
or custodian of the Company or any Subsidiary of all or a substantial part of
its property, or (iii) admit its insolvency or inability to pay its debts
generally as such debts become due, or (iv) fail generally to pay its debts as
such debts become due, or (v) take any action (or if such action is taken by its
directors or stockholders) looking to the dissolution or liquidation of the
Company or any Subsidiary; or
(k) If a final judgment for the payment of money in excess of
$100,000 shall be rendered by a court of record against the Company or any
Subsidiary and the Company or such Subsidiary shall not (i) within 30 days from
the date of entry thereof, discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution thereof, and (ii) if
execution of such judgment shall be stayed, within such period of 30 days or
such longer period during which the execution of such judgment shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed during
such appeal, or, after the expiration of any such stay or the denial of such
appeal, forthwith discharge the same or provide for its discharge;
then, (x) except in the case of an Event of Default described in Section 5.1(h)
or 5.1(i), unless such Event of Default shall be expressly waived in the manner
provided in Section 12.1 hereof, at the option of Lender exercised by written
notice to the Company, (1) Lender's obligation to make Loans shall forthwith
terminate, and (2) the unpaid principal amount of each Note, together with the
interest accrued thereon, shall forthwith become due and payable without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by the Company anything herein or in any Note to the contrary
notwithstanding, and the Company will forthwith pay to the holders of such Note
the entire outstanding principal of, and interest accrued on, such Note, and (y)
in the case of an Event of Default described in Section 5.1(h) or 5.1(i), in
each such case (1) Lender's obligation to make Loans shall forthwith terminate,
and (2) the principal amount of and all accrued interest on each Note shall
automatically become immediately due and payable without presentment, demand, or
notice of any kind, all of which are hereby expressly waived by the Company.
5.2 Suits for Enforcement. In case any one or more Events of Default
shall have occurred, unless such Events of Default shall have been waived in the
manner provided in Section 12.1 hereof, the holder of any Note may proceed to
protect and enforce its rights by suit in equity or action at law, whether for
the specific performance of any term contained in this Agreement or in any Note
or other Related Agreement or for an injunction against any breach of any such
term or in aid of the exercise of any power granted in this Agreement or in any
Note or other Related Agreement, or may proceed to enforce the performance of
any such Note or Related Agreement (including the payment of any Note: or to
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enforce any other legal or equitable right of the holder of any such Note, or
may take any one or more of such actions. In the event Lender brings such an
action against the Company, Lender shall be entitled to recover from the Company
all fees, costs and expenses of enforcing any right of Lender under or with
respect to this Agreement or any Related Agreement, including, without
limitation, such reasonable fees and expenses of attorneys, advisors,
accountants and expert witnesses, which shall include, without limitation, all
fees, costs and expenses of appeals; provided, however, that Lender shall be
required to pay the reasonable out-of-pocket expenses of defense of the Company
(including, without limitation, such reasonable fees and expenses
of attorneys, advisors, accountants and expert witnesses, including, without
limitation, the fees, costs and expenses of appeals) if the Company is the
prevailing party in such actions, and in such case, Lender shall not be entitled
to receive its litigation expenses from the Company.
5.3 Foreclosure of Security Interest. Without limiting any other
rights a holder of a Note may have under this Agreement or any Related
Agreement, upon the occurrence of any Event of Default any holder of any Note
may enforce its rights under the Amended and Restated Security Agreement or
under the UCC (as defined in the Amended and Restated Security Agreement).
5.4 Remedies Cumulative. No right, power or remedy conferred upon any
holder of any Note shall be exclusive, and each such right, power or remedy
shall be cumulative and in addition to every other right, power or remedy,
whether conferred hereby or by any Note or now or hereafter available at law or
in equity or by statute or otherwise.
5.5 Remedies Not Waived. No course of dealing between the
Company and Lender or the holder of any Note, and no delay in exercising any
right, power or remedy conferred hereby or by any Note or now or hereafter
existing at law or in equity or by statute or otherwise, shall operate as a
waiver of or otherwise prejudice any such right, power or remedy.
5.6 Waiver of Statute of Limitations. To the extent permitted by law,
the Company hereby waives and agrees not to assert or take advantage of any and
all applicable statutes of limitations on its obligations under this agreement,
any Note or any other Related Agreement.
6. Interest Limitation. Anything in this Agreement, any Note or any of
the other Related Agreement to the contrary notwithstanding, in no event
whatsoever, whether by reason of advancement of any Loan, acceleration of the
maturity of the unpaid principal of any Note or otherwise, shall the interest
and other charges agreed to be paid to Lender for the use of the Loans exceed
the maximum amounts collectible under applicable laws in effect from time to
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time. It is understood and agreed by the parties that, if for any reason
whatsoever the interest or other charges paid or contracted to be paid by the
Company to Lender in respect of the Indebtedness evidenced by any Note shall
exceed the maximum amounts collectible under applicable laws in effect from time
to time, then ipso facto, the
obligation to pay such interest and/or other charges shall be reduced to the
maximum amounts collectible under applicable laws in effect from time to time,
and any amounts collected by Lender that exceed such maximum amounts shall be
applied to the reduction of the unpaid principal amount of the Notes and/or
refunded to the Company so that at no time shall the interest or other charges
paid or payable in respect to the Indebtedness evidenced by the Notes exceed the
maximum amounts permitted from time to time by applicable law.
7. Conditions of Parties' Obligations.
7.1 Conditions of Lender's Obligations to make the Initial Loan. The
obligation of Lender to make the initial Loan is subject to the fulfillment
prior to or on the date of the initial Loan (the "Initial Loan Closing Date") of
the following conditions, any of which may be waived in whole or in part by
Lender. The "Initial Loan Closing" shall mean the delivery of all documentation
and satisfaction of all conditions required by this Section 7.1 and the making
of the initial Loan.
(a) No Erros, etc. The representations and warranties of the
Company under this Agreement shall be deemed to have been made again on the
Initial Loan Closing Date and shall then be true and correct.
(b) Compliance with Agreement. The Company shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by it on or before the Initial Loan
Closing Date.
(c) No Default. There shall not exist on the Initial Loan
Closing Date any Event of Default or any event or condition which, with the
giving of notice or lapse of time or both, would constitute an Event of Default.
(d) Certificate of Officers. The Company shall have delivered
to Lender a certificate dated the Initial Loan Closing Date, executed by its
Chairman and Chief Financial Officer, certifying the satisfaction of the
conditions specified in subsections (a), (b) and (c) of Section 7.1.
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(e) Certificate of Principal Shareholders. The Company shall have
delivered to Lender a certificate dated the Initial Loan Closing Date, executed
by Xxxxx Xxxx and Xxx Xxxxxxx, certifying upon having made a reasonable
investigation sufficient to express an informed view, the satisfaction of the
conditions specified in subsections (a), (b) and (c) of this Section 7.1.
(f) Opinion of the Company's Counsel. Lender shall have received
from XxXxxxx Xxxx, A Professional Corporation, counsel for the Company, an
opinion dated the Initial Loan Closing Date substantially in the form of
Annex 7.1(f) hereto.
(g) Qualification Under State Securities Laws. All registrations,
qualifications, permits and approvals required under applicable state securities
laws (except for any notices of sale required to be filed with the Commission
under Regulation D of the Securities Act) shall have been obtained for the
lawful execution, delivery and performance of this Agreement and each Related
Agreement, including, without limitation, the offer, sale, issue and delivery of
the Notes.
(h) Supporting Documents. Lender shall have received the
following:
(1) Copies of resolutions of the Board, certified by the
Secretary of the Company, authorizing and approving the offer, issuance and sale
of the Notes, the execution, delivery and performance of this Agreement and the
Related Agreements, and all other documents and instruments to be delivered
pursuant hereto and thereto and the borrowing of money pursuant to this
Agreement;
(2) A certificate of incumbency executed by the Secretary of the
Company certifying the names, titles and signatures of the officers authorized
to execute the documents referred to in subparagraph (1) above and further
certifying that the Articles of Incorporation and Bylaws of the Company
delivered to Lender at the time of the execution of this Agreement have been
validly adopted and have not been amended or modified; and
(3) Such additional supporting documentation and other
information with respect to the transactions contemplated hereby as Lender or
its counsel may reasonably request.
(i) Amended and Restated Security Agreement. The Company and Lender
shall have entered into the Amended and Restated Security Agreement and all
exhibits thereto requiring execution and delivery by such parties.
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(j) Proceedings and Documents. All corporate and other proceedings
and actions taken in connection with the transactions contemplated hereby and
all certificates, opinions, agreements, instruments and documents mentioned
herein or incident to any such transactions, shall be satisfactory in form and
substance to Lender and its counsel.
(k) Purchase Fee. The Company shall have paid to Lender in full all
commitment fees required by Section 1 (h) of the Prior Loan Agreement.
(l) Establishment of Special Account. The Company shall have
established the special Account (as hereinafter defined) to the reasonable
satisfaction of Lender.
(m) Delivery of Revolving Note. The Company shall have duly executed
and delivered to Lender a Revolving Note in a principal amount equal to the
Original Commitment dated the date of the Initial Loan Closing Date.
(n) Liens. The Company shall have delivered to Lender such
evidence as Lender may request to establish that there are no financing
statements filed against the property of the Company other than set forth on
Annex 3.19 or other than with respect to Permitted Liens.
(o) Amended and Restated Subordination Agreement. Each of the
Company, Xxxxx X. Xxxx, Xxx Xxxxxxx and Lender shall have entered into an
Amended and Restated Subordination Agreement, substantially in the form of Annex
7.1(o) hereto (the "Amended and Restated Subordination Agreement").
(p) Sale of Management Subordinated Notes. The Company shall have
received a minimum of $2,500,000 from management employees of the Company and
close associates of the Company in exchange for promissory notes issued by the
Company, substantially in the form of Annex 7.1(p) hereto (the "Management
Subordinated Notes").
(q) Reserved.
(r) Special Account. The Company shall have entered into a
Pledged Account Agreement, substantially in the form attached hereto as Annex
7.1(r) (the "Pledged Account Agreement"), with First Union National Bank and
Lender.
(s) Reserved.
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(t) Warrant Purchase Agreement. The Company and the Lender shall
have entered into a Warrant Purchase Agreement (the "Warrant Purchase
Agreement") substantially in the form attached hereto as Annex 7.1(t).
(u)Registration Rights Agreement. The Company and the Lender shall
have entered into a Registration Rights Agreement (the "Registration Rights
Agreement") substantially in the form attached hereto as Annex 7.1(u).
(v) Escrow Agreement. The Company, Lender and an escrow agent shall
have entered into an Escrow Agreement, substantially in the form attached hereto
as Annex 7.1(v) (the "Escrow Agreement").
(w) Sirrom Consent. The Company shall have received the consent of
Sirrom under that certain Loan Agreement dated as of October 9, 1998 by and
among the Company and Sirrom to the authorization, execution, delivery and
performance by the Company of this Agreement, including, without limitation,
the Revolving Loan Commitment and the Loans.
7.2 Conditons of Company's Obligations. The Company's obligation to
obtain Loans is subject to the fulfillment prior to or at the Initial Loan
Closing Date of the conditions precedent specified in paragraph (g) of Section
7.1 hereof.
7.3 Additional Conditions Precedent to Loans. The obligation of
Lender to make each Loan after the initial Loan shall be subject to the further
conditions precedent that (a) if the amount of the Loan exceeds the principal
amount of the outstanding Revolving Note or, if more than one, Revolving Notes
and the Revolving Loan Commitment, in accordance with this Agreement, has been
increased beyond the aggregate principal amount of the outstanding Revolving
Note or, if more than one, Revolving Notes, the Company shall have duly executed
and delivered to Lender an additional Revolving Note in a principal amount equal
to the amount by which the then Revolving Loan Commitment exceeds the principal
amount of the outstanding Revolving Note or, if more than one, Revolving Notes,
and (b) on the date of each such Loan the following statements shall be true and
complete and shall be deemed made by the Company by virtue of its request for,
and acceptance of, Loans:
(a) Representations and Warranties. The representations and
warranties contained in this Agreement are true and correct on and as of the
date of such Loan as if made on and as of such date (with the modification that
all references therein to "Initial Loan Closing" and "Initial Loan Closing Date"
shall instead refer to the applicable Subsequent Loan Closing and Subsequent
Loan Closing Date).
-24-
(b) No Events of Default. No event or condition has occurred and is
continuing or would result from such Loan, which constitutes an Event of
Default or would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
"Subsequent Loan Closing" means the advance of any Loan other than the initial
Loan by Lender to the Company in response to a request therefor by the Company,
"Subsequent Loan Closing Date" means the date of such advance.
8. Affirmative Convenants. The Company agrees that unless Lender
otherwise agrees in writing, so long as any principal or interest under any Note
remains unpaid or Lender has any Revolving Loan Commitment, the Company (and
each of its Subsidiaries unless the context otherwise requires) will do the
following:
8.1 Maintain Corporate Rights and Facilities. Maintain and preserve
its corporate existence and all rights, franchises and other authority adequate
for the conduct of its business; maintain its properties, equipment and
facilities in good order and repair; and conduct its business in an orderly
manner without voluntary interruption.
8.2 Maintain Insurance. Maintain in full force and effect a policy or
policies of insurance issued by insurers of recognized responsibility, insuring
it and its properties and business against such losses and risks, and in such
amounts, as are customary in the case of corporations of established reputation
engaged in the same or a similar business and similarly situated; maintain in
full force and effect policies of term life insurance issued by issuers of
recognized responsibility, as follows: (a) in the amount of $10 million on the
life of Xxxxx X. Xxxx, (b) in the amount of $3 million on the life of Xxxxxx
Xxxxxxx, (c) in the amount of $2 million on the life of Xxxx X. Xxxxxxx and
(d) $1 million each on the lives of Xxx Xxxxxxx, Xxxxxx Page and Xxxxx Xxxxx; in
each case with the Company as the sole beneficiary and so long as they are
employees of the Company.
8.3 Pay Taxes and Other Liabilities. Pay and discharge, before the
same become delinquent and before penalties accrue thereon, all taxes,
assessments and governmental charges upon or against it or any of its
properties, and all its other material liabilities at any time existing, except
to the extent and so long as (a) the same are being contested in good faith and
by appropriate proceedings in such manner as not to cause any materially adverse
effect upon its financial condition or the loss of any right or redemption from
any sale thereunder, and (b) it shall have set aside on its books reserves
(segregated to the extent required by generally accepted accounting principles)
deemed by it adequate with respect thereto.
-25-
8.4 Records and Reports. Accurately and fairly maintain its books of
account in accordance with generally accepted accounting principles, as approved
from time to time by a majority of the Board and its independent certified
public accountants; employ a firm of independent certified public accountants,
which firm is either one of the five largest national accounting firms or which
is approved by Lender, to make annual audits of its accounts in accordance with
generally accepted auditing standards; permit Lender and its representatives to
have access to and to examine its properties, books and records (and to copy and
make extracts therefrom) at such reasonable times and intervals as Lender may
request and to discuss its affairs, finances and accounts with its officers and
auditors, all to such reasonable extent and at such reasonable times and
intervals as Lender may request; and the Company shall also furnish Lender:
(a) As soon as available, and in any event within thirty (30) days
after the close of each monthly accounting period, financial statements prepared
on a consolidated basis (together with consolidating statements in support
thereof) consisting of a balance sheet of the Company as of the end of such
monthly accounting period and statements of income, shareholders' equity and
cash flow for such monthly accounting period, and for the portion of the
Company's fiscal year ending with the last day of such monthly accounting
period, setting forth in comparative form (i) the figures for such period,
figures for the corresponding periods of the previous fiscal year and the
budgeted figures for such periods prepared and submitted pursuant to Section 8.5
hereof, and (ii) as of the end of each fiscal quarter, the figures for such
quarter, the figures for the corresponding quarter of the preceding fiscal year
and the budgeted figures for such current quarter prepared and submitted
pursuant to Section 8.5 hereof, all in reasonable detail, prepared and certified
by the chief executive officer or the chief financial officer of the Company as
fairly presenting the financial condition as of the balance sheet date and
results of operations and cash flows for the period then ended in accordance
with generally accepted accounting principles consistently applied, subject to
normal year end adjustments which in the aggregate shall not be material;
(b) As soon as available, and in any event within ninety (90)
days after the close of each fiscal year of the Company (commencing from the
date hereof), financial statements prepared on a consolidated basis (together
with consolidating statements in support thereof) consisting of a balance sheet
of the Company, as of the end of such fiscal year, together with statements of
income, shareholders' equity and cash flow for such fiscal year, setting forth
in comparative form the figures for such fiscal year and for the previous fiscal
year, all in reasonable detail, and duly certified by an opinion unqualified as
to scope of a firm of independent certified public accountants, which firm is
one of the five largest national accounting firms;
-26-
(c) So long as any Note remains outstanding or Lender has any
Revolving Loan Commitment, concurrently with the delivery of each of the
financial statements referred to in paragraphs (a) and (b) of this Section 8.4,
a certificate signed by the chief executive officer or chief financial officer
of the Company to the effect that there exists no Event of Default or event or
condition which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, or, if any such Event of Default or other event
or condition exists a statement of the nature and period of existence thereof
and what steps are being taken to remedy or cure the same;
(d) Promptly upon learning of the occurrence of an Event of Default
or a condition or event which with the giving of notice or the lapse of time, or
both, would constitute an Event of Default, a certificate signed by the chief
executive officer or chief financial officer of the Company describing such
Event of Default or condition or event and stating what steps are being taken to
remedy or cure the same;
(e) Promptly upon the receipt thereof by the Company or the Board,
copies of all reports, all management letters and other detailed information
submitted to the Company or the Board by independent accountants in connection
with each annual or interim audit or review of the accounts or affairs of the
Company made by such accountants;
(f) Promptly after the same are available, copies of all such proxy
statements, financial statements and reports as the Company shall send to its
stockholders, and promptly upon the transmission thereof copies of all
registration statements, notifications, proxy statements, reports and other
documents and writings which the Company may file with or furnish to the
Commission or any governmental authority at any time substituted therefor; and
(g) With reasonable promptness, such other information relating to
the finances, properties, business and affairs of the Company and each
Subsidiary, as Lender reasonably may request from time to time.
8.5 Preparation of Budget. Within thirty (30) days after the Initial
Loan Closing Date, for the Company's partial fiscal year ending after the
Initial Loan Closing Date, and at least thirty (30) days prior to the beginning
of the subsequent fiscal year, prepare and submit to the Board, and furnish to
Lender a copy of, an annual plan for such year which shall include monthly
capital and operating expense budgets, cash flow statements and profit and loss
and quarterly balance sheet projections, itemized in such detail as the Board
may request. A majority of the members of the Board shall approve such budgets,
-27-
statements and projections. Each annual plan shall be modified as often as
necessary, but in any event every six (6) months, to reflect material changes
required as a result of operating results and other events that occur, or may be
reasonably expected to occur, during the year covered by the annual plan, and
copies of these modifications shall be submitted to and approved by the Board
and furnished to Lender. The Company may dispense with any six-month
modification if the Board reasonably determines that no material change is
required in the budget for that six-month fiscal period.
8.6 Notice of Litigation and Disputes. Promptly notify Lender of each
legal action, suit, arbitration or other administrative or governmental
investigation or proceeding (whether federal, state, local or foreign)
instituted or threatened against the Company which could materially and
adversely affect its condition (financial or otherwise), properties, assets,
liabilities, business, operations or prospects, or of any occurrence or dispute
which involves a reasonable likelihood of any such action, suit, arbitration,
investigation or proceeding being instituted.
8.7 Conduct of Business. Conduct its business in accordance with all
applicable provisions of federal, state, local and foreign law.
8.8 Replacement of Instrument. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Note, issue a new instrument representing such Note in lieu of such lost,
stolen, destroyed, or mutilated instrument.
8.9 Compliance with Section 7. Use its best efforts to cause the
conditions specified in Sections 7.1, 7.2 and 7.3 hereof to be met by the
Initial Loan Closing Date or the Subsequent Loan Closing Date, as the case may
be.
8.10 Securities Law Filings. Make all filings necessary to perfect in
a timely fashion exemptions from (a) the registration and prospectus delivery
requirements of the Securities Act and (b) the registration or qualification
requirements of all applicable securities or blue sky laws of any state or other
jurisdiction, for the issuance of the Notes to Lender.
8.11 Compliance With Articles of Incorporation and Bylaws. Perform
and observe all requirements of the Company's Bylaws and Articles of
Incorporation.
8.12 Internal Accounting Controls. Devise and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
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specific authorization, (b) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles of any other criteria applicable to such statements, and
to maintain accountability for assets, (c) access to assets is permitted only in
accordance with management's general or specific authorization, and (d) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
8.13 Use of Proceeds. Use the proceeds from the Loans substantially
as set forth in Annex 8.13 hereof. Notwithstanding the foregoing, the proceeds
from the initial Loan shall be used to repay in full all outstanding
Indebtedness of the Company owed to Lender, including, without limitation, the
principal amounts and interest accrued thereon of all notes issued, under the
Prior Loan Agreement.
8.14 Union Matters.
(a) In the event of any attempt by any union to organize or seek to
represent employees of the Company or any of its Affiliates, the Company will
recognize the union as the representative of its workers upon a showing of
majority support through a formal gathering of cards for the union in an
appropriate unit.
(b) In connection with any organizing done by a union, the Company
recognizes the right of its employees to choose their bargaining representative
without interference from their employer (the Company or its Affiliates).
Accordingly, the Company and its officers, directors, employees and agents shall
refrain, and shall cause its Affiliates to refrain, from its or their support of
or opposition to the union and from actively campaigning in opposition to the
designation of such union as the representative of such employees.
(c) The Company will cause all merchandise ordered by its
customers to be shipped by shippers that have recognized one or more unions as
collective bargaining representatives of some or all of its workers, with
preference among such shippers given to those shippers having the largest
percentage of its workers represented by one or more unions recognized by such
shipper; provided, however, that exceptions to this requirement will be
permitted if installation of purchased items requires set up and it is
impracticable to obtain union labor for on-site installation and set-up or there
is no viable union transportation option available.
-29-
8.15 Maintenance of Special Account: Application of Deposits.
(a) Pursuant to the Pledged Account Agreement, the Company shall
maintain a bank account with First Union National Bank under the terms of
which no amounts can be withdrawn (or checks or drafts written or charged)
without the joint signature of the Company and Lender (the "Special Account").
(b) Immediately upon receipt of any payment received by the
Company from any Special Vendor (as hereinafter defined) or Presentation
Customer (as hereinafter defined), the Company shall cause such payment to be
deposited in the Special Account.
(c) All amounts deposited in the Special Account shall be used
promptly (but in any event no more than five Business Days after deposit) to
prepay the principal of and interest on the outstanding Notes.
8.16 Initial Public Offering. The Company shall file and complete the
Company's initial public offering as soon as market conditions allow, and the
Company shall be prepared to file a registration statement under the Securities
Act for an underwritten initial public offering no later than December 31, 1998
and to raise at least $70 million in such offering.
8.17 Landlord's Consent. Within seven (7) days following the Initial
Loan Closing, the Company shall have delivered to Lender a Landlord's Consent
and Subordination of Lien, substantially in the form of Annex 8.17 from the
lesser of each of the offices and other premises leased or occupied by the
Company.
8.18 Sirrom Lien. Within thirty (30) days following the Initial Loan
Closing, the Company shall pay in full all outstanding Sirrom Indebtedness and
immediately thereafter shall file or cause to be filed termination statements in
all appropriate jurisdictions with respect to the termination and release of the
Sirrom Lien.
8.19 Warrant Purchase Agreement. The Company shall perform and
discharge of its obligations as provided under the Warrant Purchase Agreement.
9. Negative Covenants. The Company agrees that unless Lender otherwise
agree in writing, so long as any principal or interest under any Note remains
unpaid or Lender shall have any Revolving Loan Commitment, the Company (and each
of its Subsidiaries unless the context otherwise requires) will not do any of
the following:
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9.1 Indebtedness and Liens.
(a) Assume, create, incur or suffer to exist
(1) Any Indebtedness for Borrowed Money that is prior or senior
in right or time of payment to the Indebtedness represented by any Note; or
(2) Any Indebtedness other than:
(i) Indebtedness evidenced by any Note;
(ii) Indebtedness evidenced by the Management Subordinated
Notes;
(iii) Indebtedness for Borrowed Money set forth on Annex 3.4;
(iv) Indebtedness representing trade payables and expense
accruals incurred and made in the usual and ordinary
course of the Company's business; and
(v) the Sirrom Indebtedness.
(b) Assume, create, incur or suffer to exist any Lien on any of its
properties and assets other than:
(1) Permitted Liens;
(2) Liens described on Annex 3.19;
(3) The security interest created by the Amended and
Restated Security Agreement; and
(4) The security interest created by that certain Security
Agreement dated October 9, 1998 by and between the Company
and Sirrom.
9.2 Changes in Type of Business. Make any substantial change in
the character of its business.
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9.3 Loans: Guarantees. Except for a loan by the Company to Xxxxxx
Xxxxxxx in the principal amount not to exceed $250,000, pursuant to a
contemplated employment agreement between the Company and Xx. Xxxxxxx, make any
loan or advance to any Person, including, without limitation, any employee or
director of the Company or any Subsidiary, except advances for travel and
entertainment expenses and similar expenditures in the ordinary course of
business or under the terms of a stock option plan or stock purchase agreement
approved by the Compensation Committee of the Board; or guarantee, directly or
indirectly, any Indebtedness except for trade accounts of the Company or any
Subsidiary arising in the ordinary course of business.
9.4 Restrictive Agreements. Enter into or become a party to any
agreement or instrument which by its terms would violate or be in conflict with
or restrict the Company's performance of, its obligations under this Agreement
or any Related Agreement.
9.5 Overhead. Permit overhead costs of the Company to exceed
$1,800,000 per month, except for variable costs which increase as a function of
increased Web Site visits. Notwithstanding any provision to the contrary
contained herein, the Company shall no longer be obligated to comply with the
requirements of this Section 9.5 upon the consummation of a financing
transaction (the "FDX/Vulcan Financing") between the Company and Vulcan
Ventures, Inc. or FDX Corporation, the gross proceeds to the Company of which
equal or exceed $50,000,000.
9.6 Creation of Subsidiaries. Organize or create, or transfer or
lend any funds, property or asset to, any Subsidiary.
9.7 Restricted Payments. Declare or pay any dividend on any class of
its capital stock (other than the Series A Preferred Stock and the Series B
Preferred Stock in accordance with the Company's Articles of Incorporation as
presently in effect or as amended with the express written consent of Lender) or
purchase or redeem any shares of any class of its capital stock.
9.8 Limitation on Employment. Allow the total number of full-time
equivalent employees at any time to exceed 185; provided, however, that the
Company may employ up to an additional 25 full-time equivalent telesales
specialists (collective, the "Additional Employees"), provided that the total
cost (including wage and all benefit costs) of such Additional Employees is
offset by an equal reduction in advertising expenditures of the Company;
provided, further, that the Company may employ additional telesales specialists
(collectively, the "Extra Employees") in excess of such Additional Employees,
provided that (a) the Company proves to the reasonable
-32-
satisfaction of Lender that the total cost (including wage and all benefit
costs) of such Extra Employees as a percentage of the revenue generated by such
Extra Employees is less than the total cost of traditional advertising as a
percentage of the revenue generated by traditional advertising, and (b) overhead
costs of the Company do not exceed $1,800,000 per month. Notwithstanding any
provision to the contrary contained herein, the Company shall no longer be
obligated to comply with the requirements of this Section 9.8 upon the
consummation of the FDX/Vulcan Financing.
9.9 Restriction on Sales, Mergers and Acquisitions. Sell, transfer,
assign, license or hypothecate any of its properties or assets or rights thereto
other than in the usual and ordinary course of its business; merge with or
without or consolidate with any other Person; acquire the capital stock or
securities or business assets of any Person; or enter into a joint venture with
any Person; or enter into any agreement to do any of the foregoing.
9.10 Limitation on Outstanding Stock Options. Grant any option or
options to purchase, in the aggregate, more than 100,000 shares of Common Stock
of the Company; provided, however, that such limit on the number of shares of
Common Stock subject to options may be increased, from time to time, by
unanimous action of the Compensation Committee of the Board. Notwithstanding any
provision to the contrary contained herein, the Company shall no longer be
obligated to comply with the requirements of this Section 9.10, upon the
consummation of the FSX/Vulcan Financing.
10. Reserved.
11. Definitions Unless the context otherwise requires, the terms
defined in this Section 11 shall have the meanings herein specified for all
purposes of this Agreement, applicable to both the singular and plural forms of
any of the terms herein defined. All accounting terms defined in this Section 11
and those accounting terms used in this Agreement not defined in this Section 11
shall, except as otherwise provided for herein, be construed in accordance with
those generally accepted accounting principles that the Company is required to
employ by the terms of this Agreement. If and so long as the Company has any
Subsidiary, the accounting terms defined in this Section 11 and those accounting
terms appearing in this Agreement but not defined in this Section 11 shall be
determined on a consolidated basis for the Company and each of its Subsidiaries,
and the financial statements and other financial information to be furnished by
the Company pursuant to this Agreement shall be consolidated and presented with
consolidating financial statements of the Company and each of its Subsidiaries.
"Additional Employees" shall have the meaning assigned to it in
Section 9.8 hereof.
"Affiliate" shall mean any Person which directly or indirectly
controls, is controlled by, or is under common control with, the indicated
Person.
"Agreement" shall mean this Agreement, as the same may be
amended, modified or restated from time to time.
"Amended and Restated Security Agreement" shall have the meaning
assigned to this term in Section 4.3 hereof.
"Amended and Restated Subordination Agreement" shall have the
meaning assigned to it in Section 7.1(o) hereof.
"Balance Sheet" and "Balance Sheet Date" shall have the meanings
assigned to these terms in Section 3.11 hereof.
"Board" shall mean the Board of Directors of the Company.
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"Common Stock" shall mean Common Stock, without par value, of
the Company.
"Commission" shall mean the Securities and Exchange Commission.
"Commitment Termination Date" shall have the meaning assigned to
it in Section 1(f).
"Company" shall have the meaning assigned to this term in
introductory paragraph of this Agreement.
"Developing Software" shall have the meaning assigned to it in Section
3.27(b).
"Equity Security" shall mean any stock or similar security of the Company
or any security (whether stock or Indebtedness for Borrowed Money) convertible
or exchangeable, with or without consideration, into or for any stock or similar
security, or any security (whether stock or Indebtedness for Borrowed Money)
carrying any warrant or right to subscribe to or purchase any stock or similar
security, or any such warrant or right.
"Escrow Agreement" shall have the meaning assigned to it in Section 7.1(v)
hereof.
"Event of Default" shall have the meaning assigned to it in Section 5.1
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Extra Employees" shall have the meaning assigned to it in Section 9.8
hereof.
"FDX/Vulcan Financing" shall have the meaning assigned to it in Section 9.5
hereof.
"Financing Statement" shall mean those certain UCC-1 Financing
Statements, naming the Lender as secured party and the Company as debtor, filed
pursuant to the Prior Loan Agreement and that certain Security Agreement dated
October 14, 1998 by and between the Company and the Lender.
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"Fully Operating Software" shall have the meaning assigned to it
in Section 3.27(a) hereof.
"Indebtedness" shall mean any obligation of the Company or any
Subsidiary which under generally accepted accounting principles is required to
be shown on the balance sheet of the Company or such Subsidiary as a liability.
Any obligation secured by a Lien on, or payable out of the proceeds of
production from, property of the Company or any Subsidiary shall be deemed to be
"Indebtedness" even though such obligation is not assumed by the Company or
Subsidiary. "Indebtedness" shall also include any obligation of the Company or
any Subsidiary in respect of any letter of credit issued for such Person's
account, whether or not any amount has been drawn on such letter of credit, for
which such Person is obligated to the issuer of such letter of credit.
"Indebtedness for Borrowed Money" shall mean (a) all Indebtedness
in respect of money borrowed including, without limitation, Indebtedness which
represents the unpaid amount of the purchase price of any property and is
incurred in lieu of borrowing money or using available funds to pay such amounts
and not constituting an account payable or expense accrual incurred or assumed
in the ordinary course of business of the Company or any Subsidiary, (b) all
Indebtedness evidenced by a promissory note, bond or similar written obligation
to pay money, (c) any obligation of the Company or any Subsidiary in respect of
any letter of credit issued for such Person's account, whether or not any amount
has been drawn on such letter of credit, for which such Person is obligated to
the issuer of such letters of credit, and (d) all Indebtedness of the type
referred to in the preceding clauses (a) through (c), inclusive, guaranteed by
the Company or any Subsidiary or for which the Company or any Subsidiary is
otherwise contingently liable.
"Initial Loan Closing" and "Initial Loan Closing Date" shall have
the meaning assigned to them in Section 7.1.
"Lender" shall have the meaning assigned to this term in the
introductory paragraph of this Agreement.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind, including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof and the filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction and including any lien or charge
arising by statute or other law.
"Loan" and "Loans" shall have the meaning assigned to them in
Section 1(a).
"Management Subordinated Notes" shall have the meaning assigned
to it in Section 7.1(p) hereof.
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"Material Adverse Effect" shall mean a material adverse effect,
or any condition, situation or set of circumstances that could reasonably be
expected to have a material adverse effect, on the Company and its Subsidiaries,
taken as a whole, or the business, assets, properties, condition (financial and
other), operations or prospects of the Company and its Subsidiaries taken as a
whole.
"Maturity" shall mean the date on which the principal amount of
the Note becomes due and payable as provided therein, whether at the Stated
Maturity or by acceleration or otherwise.
"Note" shall have the meaning assigned to this term in Section
1(e) hereof.
"Permitted Liens" shall mean (a) Liens for taxes and assessments
or governmental charges or levies not at the time due or in respect of which the
validity thereof shall currently be contested in good faith by appropriate
proceedings; (b) Liens in respect of pledges or deposits under workers'
compensation laws or similar legislation, carriers', warehousemen's, mechanics',
laborers' and materialmen's and similar Liens, if the obligations secured by
such Liens are not then delinquent or are being contested in good faith by
appropriate proceedings; and (c) Liens incidental to the conduct of the business
of the Company or any Subsidiary which were not incurred in connection with the
borrowing of money or the obtaining of advances or credits and which do not in
the aggregate materially detract from the value of its property or materially
impair the use thereof in the operation of its business.
"Person" shall include any natural person, corporation, trust,
association, limited liability company, partnership, joint venture and other
entity and any government, governmental agency, instrumentality or political
subdivision.
"Pledged Account Agreement" shall have the meaning assigned to it
in Section 7.1(r) hereof.
"Presentation Customer" means a Person for whom the Company
prepares or assists in the preparation of presentations, exhibits and displays
for appearance on the Web Site to promote products for sale on the Web Site.
"Prior Loan Agreement" shall have the meaning assigned to it in
the Recitals of this Agreement.
"Prior Loan Commitment" shall have the meaning assigned to it in
the Recitals of this Agreement.
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"Prospectus" shall mean the preliminary prospectus of the Company
dated September 1, 1998 that was included in the Company's registration
statement filed under the Securities Act (Registration Number 333-58469).
"Registration Rights Agreement" shall have the meaning assigned
to it in Section 7.1(u) hereof.
"Related Agreements" shall mean, collectively, each of the Notes,
the Amended and Restated Security Agreement, the Warrant Purchase Agreement, the
Registration Rights Agreement, the Amended and Restated Subordination Agreement,
the Pledged Account Agreement, the Escrow Agreement and the Financing
Statements; each, individually, a "Related Agreement".
"Revolving Loan Commitment" shall have the meaning assigned to it
in Section 1(e).
"Revolving Note" shall have the meaning assigned to it in
Section 1(b) and 1(e).
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Series A Preferred Stock" shall mean the Series A Preferred
Stock, without par value, of the Company.
"Series B Preferred Stock" shall mean the Series B Preferred
Stock, without par value, of the Company.
"Sirrom" means Sirrom Capital Corporation.
"Sirrom Indebtedness" shall mean a loan in the aggregate
principal amount of $5,000,000 made to the Company by pursuant to that certain
Loan Agreement dated as of October 9, 1998 between the Company and Sirrom.
"Sirrom Lien" shall mean all Liens in favor of Sirrom, as secured
party, relating to the Sirrom Indebtedness.
"Special Account" shall have the meaning assigned to it in
Section 8.15.
"Special Vendor" shall mean any provider of product to the
Company with which the Company has an express or implied agreement, either on
the date hereof or thereafter, to provide the Company with funds for cooperative
advertising of such products.
"Stated Maturity" shall have the meaning assigned to it in
Section 4.1(a) hereof.
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"Subsequent Loan Closing" and "Subsequent Loan Closing Date"
shall have the meanings assigned to it in Section 7.3.
"Subsidiary" shall mean any corporation, association or other
business entity at least 50% of the outstanding voting stock of which is at the
time owned or controlled directly or indirectly by the Company or by one or more
of such subsidiary entities or both, where "voting stock" means any shares of
stock or other equity securities having general voting power in electing the
board of directors (irrespective of whether or not at the time stock of any
other class or classes has or might have voting power by reason of any
contingency), general partners or managers.
"Warrant Purchase Agreement" shall have the meaning assigned to
it in Section 7.1(t) hereof.
"Web Site" shall have the meaning assigned to it in Section
3.28(a).
12. Miscellaneous.
12.1 Waivers and Amendments. With the written consent of Lender, the
obligations of the Company and the rights of Lender under this Agreement may be
waived (either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely), and
with the same consent the company, when authorized by resolution of its Board,
may enter into a supplementary agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of any supplemental agreement or modifying in any manner the
rights and obligations hereunder of Lender. With the written consent of the
Company, the rights of the Company and the obligations of Lender under this
Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely). Neither this Agreement, any Related Agreement, nor any provision
hereof or thereof, may be amended, waived, discharged or terminated orally or by
course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this Section 12.1. Specifically, but
without limiting the generality of the foregoing, the failure of Lender at any
time or times to require performance of any provision hereof or of any Note by
the Company shall in no manner affect the rights of Lender at a later time to
enforce the same. No waiver by any party of the breach of any term or provision
contained in this Agreement or any Related Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such breach, or a waiver of the breach of any other term or
covenant contained in the Agreement or any Related Agreement.
-35-
12.2 Notices. All notices, requests, consents and other
communications required or permitted hereunder shall be in writing (including
telecopy or similar writing) and shall be given,
if to the Company to:
Value America, Inc.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxx,
Chairman and Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxx X. XxXxxxx, Esq.
XxXxxxx Xxxx, A Professional Corporation
000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Telecopier: (000) 000-0000
if to Lender:
The Union Labor Life Insurance Company
000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xx. Xxxxxxx Xxxxx,
Senior Vice President, Investments
Telecopier: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx-Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
or to such other address or telecopier number as such party may specify for the
purpose by notice to the other party or parties to this Agreement, as the case
may be. Any notice, request, consent or other communication hereunder shall be
deemed to have been given and received on the day on which it is delivered (by
any means including
-36-
personal delivery, overnight air courier, United States mail) or telecopied (or,
if such day is not a business day or if the notice, request, consent or
communication is not telecopied during business hours of the intended recipient,
at the place of receipt, on the next following business day).
12.3 Survival of Representations and Warranties, etc. All
representations and warranties made in, pursuant to or in connection with this
Agreement shall survive the execution and delivery of this Agreement, any
investigation at any time made by or on behalf of Lender, and the sale and
purchase of the Note and payment therefor. All statements contained in any
certificate, instrument or other writing delivered by or on behalf of the
Company pursuant hereto or in connection with or contemplation of the
transactions herein contemplated shall constitute representations and warranties
by the Company hereunder. Any claim against the Company based upon any
inaccuracy in any of the representations or breach of any of the warranties
hereunder must be asserted against the Company, either by written notice given
to the Company specifying with reasonable particularity the claimed inaccuracy
or breach or by institution of an action at law or suit in equity against the
Company and the serving of the process and complaint with respect thereto upon
the Company, within thirty (30) months from the applicable Loan Closing Date.
12.4 Severability. Should any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
shall be given effect separately from the provision or provisions determined to
be illegal or unenforceable and shall not be affected thereby.
12.5 Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto, whether so
expressed or not and, in particular, shall inure to the benefit of and be
enforceable by any holder at any time of any Note. Subject to the immediately
preceding sentence, this Agreement shall not run to the benefit of or be
enforceable by any Person other than a party to this Agreement and its
successors and assigns.
12.6 Headings. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
12.7 Choice of Law. It is the intention of the parties that the
internal substantive laws, and not the laws of conflicts, of the Commonwealth of
Virginia should govern the enforceability and validity of this Agreement, the
construction of its terms and the interpretation of the rights and duties of the
parties.
-37-
12.8 Expenses. The Company agrees, whether or not the transactions
contemplated hereby are consummated, to pay, and hold Lender harmless from
liability for the payment of, (a) the fees and expenses of their special counsel
arising in connection with the negotiation and execution of this Agreement, all
agreements and documents described in Section 7.1 and the Notes, creating,
perfecting and establishing the desired priority of the security interests to be
created by the Amended and Restated Security Agreement and consummation of the
transactions contemplated hereby and thereby, (b) the fees and expenses incurred
with respect to any amendments to this Agreement or any Note or any other
Related Agreement proposed by the Company (whether or not the same become
effective), (c) if Lender desires to sell or otherwise transfer any portion of
or all of any Note held by it and counsel for the Company declines to render a
legal opinion to Lender, without cost or expense to Lender, whether or not
registration under the Securities Act will be required for such sale or
transfer, the fees and expenses of counsel for Lender in rendering such an
opinion, (d) the fees and expenses of Lender in creating, perfecting and
establishing the desired priority of the security interests to be created by the
Amended and Restated Security Agreement and administering the Collateral (as
defined in the Amended and Restated Security Agreement) (e) the fees and
expenses incurred in connection with any requested waiver of the right of Lender
to contemplated acts of the Company not otherwise permissible by the terms of
this Agreement or any Related Agreement, (f) stamp and other taxes, excluding
income taxes, which may be payable with respect to the execution and delivery of
this Agreement or the issuance, delivery or acquisition of any Note, (g) the
fees and expenses incurred in respect of the enforcement of the rights granted
under this Agreement or any Related Agreement, and (h) all costs of the
Company's performance of and compliance with this Agreement and the Related
Agreements.
12.9 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
12.10 Authorship. This Agreement shall not be construed for or
against any party by reason of the authorship or claimed authorship of any
provision of this Agreement or by reason of the status of the respective
parties.
12.11 Entire Agreement. This Agreement and any agreement, document
or instrument referred to herein constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and thereof, and
supersede all other prior agreements or undertakings with respect thereto, both
written and oral.
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[SIGNATURE PAGE OF
AMENDED AND RESTATED REVOLVING LOAN AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective duly authorized officers as of the day and year
first above written.
VALUE AMERICA, INC.
By: /s/ Xxxxx X. Xxxx
________________________________
Xxxxx X. Xxxx, Chairman and
Chief Executive Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: ________________________________________
An Authorized Officer
[SIGNATURE PAGE OF
AMENDED AND RESTATED REVOLVING LOAN AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective duly authorized officers as of the day and year
first above written.
VALUE AMERICA, INC.
By: ________________________________________
Xxxxx X. Xxxx, Chairman and
Chief Executive Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ Xxxxxx X. Xxxxx
________________________________________
An Authorized Officer
FIRST AMENDMENT TO AMENDED
AND RESTATED REVOLVING LOAN AGREEMENT
This FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
dated as of December ___, 1998 (this "Amendment") is hereby entered into by and
between Value America, Inc., a Virginia corporation (the "Company"), and The
Union Labor Life Insurance Company, acting on behalf of its Separate Account P
(the "Lender").
RECITALS
A. WHEREAS, the Company and the Lender have executed and
delivered that certain Amended and Restated Revolving Loan Agreement dated as of
November 17, 1998 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement");
B. WHEREAS, the Company desires that the Lender, among
other things, increase the Revolving Loan Commitment from up to Ten Million
Twenty-Four Thousand Four Hundred forty-four Dollars ($10,024,444) in the
aggregate to up to Seventeen Million Five Hundred Twenty-Four Thousand Four
Hundred forty-four Dollars ($17,524,444) in the aggregate, and the Lender is
willing to make certain secured loans to the Company of up to such amount upon
the terms and conditions set forth herein and therein; and
C. WHEREAS, on and subject to the terms and conditions set
forth herein, the parties hereto have agreed to amend the provisions of the Loan
Agreement, and the Lender has agreed to increase the Revolving Loan Commitment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Lender do hereby
agree as follows:
1. Relation to Loan Agreement; Definitions.
1.1 Relation to Loan Agreement. This Amendment constitutes an integral part
of the Loan Agreement. Each reference contained in the Loan Agreement to
the "Loan Agreement," any section or provision contained in the Loan
Agreement, or any of the following or similar terms "this Agreement,"
"herein" or "hereof" shall be deemed to be a reference to such "Loan
Agreement," section or provision or term as hereby amended and as the
same may be further amended, restated supplemented or otherwise modified
and in effect from time to time hereafter.
1.2 Capitalized Terms. For all purposes of this
Amendment, capitalized terms used herein without definition shall have the
meanings specified in the Loan Agreement, as said agreement shall be in effect
on the Effective Date after giving effect to this Agreement.
2. AMENDMENTS TO THE LOAN AGREEMENT.
2.1 Amendment to Section 1(e) of the Loan Agreement. Section 1(e) of the
Loan Agreement is amended by deleting it in its entirety and replacing it with
the following:
(e) The "Revolving Loan Commitment" shall mean the greater of (i)
TEN MILLION TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS
($10,024,444) (the "Original Commitment") or (ii) such greater
amount at Lender may specify from time to time in a notice to the
Company increasing the amount thereof, provided that the Revolving
Loan Commitment may not exceed SEVENTEEN MILLION FIVE HUNDRED
TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS ($17,524,444).
Each time the Company requests a Loan in excess of the then
outstanding Revolving Loan Commitment it shall deliver to Lender an
additional secured negotiable revolving promissory note in the
amount of the increase in the Revolving Loan Commitment
substantially in the form of Annex A (also a "Revolving Note"). All
Revolving Notes are also sometimes collectively referred to herein
as "Notes" and sometimes individually as "Note."
2.2 Amendment to Section 3.1 of the Loan Agreement. Section 3.1 of the
Loan Agreement is amended by deleting it in its entirely and replacing it with
the following:
3.1 Organization, Standing, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of
the Commonwealth of Virginia, and has all requisite power and
authority to carry on its business, to own and hold its properties
and assets, to enter into this Agreement, the Notes, the Amended and
Restated Security Agreement (as hereinafter defined), the Warrant
Purchase Agreement (as hereinafter defined), the Second Warrant
Purchase Agreement (as hereinafter defined), the Registration Rights
Agreement (as hereinafter defined), the Amended and Restated
Subordination Agreement (as hereinafter defined), the Pledged
Account Agreement
(as hereinafter defined), the Escrow Agreement (as hereinafter defined) and the
Financing Statements (as hereinafter defined and together with the Notes, the
Amended and Restated Security Agreement, the Warrant Purchase Agreement, the
Second Warrant Purchase Agreement, the Registration Rights Agreement, the
Amended and Restated Subordination Agreement, the Pledged Account Agreement and
the Escrow Agreement, the "Related Agreements," and each individually, a
"Related Agreement"), to borrow money and issue the Notes in accordance with
this Agreement and to carry out the provisions hereof and thereof. The copies of
the Articles of Incorporation and Bylaws of the Company which have been
delivered to Lender prior to the execution of this Agreement are true and
complete and have not been amended or repealed. The company has no Subsidiaries
(as hereinafter defined) or direct or indirect interest (by way of stock
ownership or otherwise) in any firm, partnership, corporation, association or
business enterprise.
2.3 Amendment to Section 8 of the Loan Agreement. Section 8 of the Loan
Agreement is amended to add the following new Section 8.20 to follow after
Section 8.19 of the Loan Agreement:
8.20 Second Warrant Purchase Agreement. The Company shall perform and
discharge all of its obligations as provided under the Second Warrant Purchase
Agreement.
2.4 Amendment to Section 11 of the Loan Agreement.
(a) Section 11 of the Loan Agreement is amended to add the following
definition in alphabetical order:
"Second Warrant Purchase Agreement" shall mean that
certain Warrant Purchase Agreement dated as of December 14, 1998 by and
between the Company and Lender.
(b) Section 11 of the Loan Agreement is amended by deleting the
definition of "Related Agreements" in its entirety and replacing it with the
following: "Related Agreements" shall have the meaning assigned to it in Section
3.1 hereof.
3. Representations and Warranties of the Company.
3.1 Representations and Warranties. To induce the Lender to execute and
deliver this Amendment (which representations shall survive the execution and
deliver of this Amendment), the Company represents and warrants to the Lender
that:
(a) Authority. This Amendment has been duly authorized, executed and
delivered by it and this Amendment constitutes the legal, valid and binding
obligation, contract and agreement of the Company enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally.
(b) Validity of Amendment. The Loan Agreement and the Related
Agreements, as amended by this Amendment, constitute the legal, valid and
binding obligations, contracts and agreements of the company enforceable against
it in accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally.
(c) Authorization: No Violation. The execution, delivery and
performance by the Company of this Amendment (i) will not require form the Board
or stockholders of the Company any consent or approval that has been validly and
lawfully obtained, (ii) will not require any authorization, consent, approval,
license, exemption of or filing or registration with any court or governmental
department, commission, board, bureau, agency or instrumentality of government,
(iii) will not cause the Company to violate or contravene (A) any provision of
law, (B) any rule or regulation of any agency or government, domestic or
foreign, (C) any order, writ, judgment, injunction, decree, determination or
award, or (D) any provision of the Articles of Incorporation or Bylaws of the
Company, (iv) except as disclosed in Annex 3.1, will not violate or be in
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under, any indenture, loan or credit agreement,
note agreement, promissory note, deed of trust, mortgage, security agreement or
other agreement, lease or instrument, commitment or arrangement to which the
Company is a party or by which the Company or any of its properties, assets or
rights is bound or affected, to the extent that such violation, conflict, breach
or default would (individually or in the aggregate) have a Material Adverse
Effect and (e) except as contemplated by the Amended and Restated Security
Agreement, will not result in the creation or imposition of any Lien. Except as
disclosed in Annex 3.1, the Company is not in material violation of, or (with or
without notice or lapse of time or both) in default under, any term or provision
of its Articles of Incorporation or Bylaws or of any indenture, loan or credit
agreement, note agreement, promissory note, deed of trust, mortgage,
security
agreement or other agreement, lease or other instrument, commitment or
arrangement to which the Company is a party or by which any of the Company's
properties, assets or rights is bound or affected. The Company is not subject to
any restriction of any kind or character which has or may have a Material
Adverse Effect or which prohibits the Company from entering into this Amendment
or would prevent or make burdensome its performance of or compliance with all or
any part of this Amendment or the consummation of the transactions contemplated
hereby.
(d) No Event of Default. As of the date hereof and after giving effect
to this Amendment, no Event of Default has occurred which is continuing.
(e) All other Representations and Warranties. All the representations
and warranties contained in Section 3 of the Loan Agreement are true and correct
in all materials respects with the same force and effect as if made by the
Company on and as of the date hereof (except as to the extent that any such
representations or warranties relate to a specific prior date or period).
4. Conditions to Effectiveness of this amendment.
4.1 Effective Date. This Amendment shall not become
effective until, and shall become effective when, each and every one of the
following conditions shall have been satisfied or waived by the Lender (the
"Effective Date").
(a) Execution of Counterparts. Counterparts of this Amendment shall
have been executed and delivered by each of the Company and the Lender.
(b) Ratification and Confirmation of Loan Agreement: No Event of
Default. The Loan Agreement and all Related Agreements and all representations,
warranties, terms and conditions therein remain in full force and effect, and
the Company hereby confirms and ratifies each of the provisions of the Loan
Agreement and the Related Agreements. After giving effect to the Amendment, no
event has occurred and no condition exists which constitutes an Event of Default
under the Loan Agreement or the Related Agreements.
(c) No Material Effect on Collateral. There has not been and there
will not be any adverse effect on the Lien created by the Loan Agreement or the
Related Agreements or the priority of such Lien in connection with or as a
result of the consummation of this Amendment.
(d) Consents. All necessary consents, waivers, approvals,
authorizations, registrations, filings and notifications in connection with the
authorization, execution and delivery of this Amendment shall have been obtained
or made and are in full force and effect, [including, without limitation, the
consent of Sirrom under that certain Loan Agreement dated as of October 9, 1998
(as the same may be amended, restated, supplemented or otherwise modified from
time to time) by and between the Company and Sirrom].
(e) Proceedings, Instruments, etc. All proceedings and actions taken
on or prior to the Effective Date in connection which the transactions
contemplated by this Amendment and all instruments incident thereto shall be in
form and substance satisfactory to the Lender and its special counsel, and the
Lender and its special counsel shall have received copies of all documents that
it or they may request in connection with such proceedings, actions and
Transactions (including, without limitation, copies of court documents,
certifications, and evidence of the correctness of the representations and
warranties contained herein and certifications and evidence of the compliance
with the terms and the fulfillment of the conditions of this Amendment) in the
form and substance satisfactory to the Lender and its special counsel.
(f) Second Warrant Purchase Agreement. The Company and Lender shall
have entered into the Second Warrant Purchase Agreement substantially in the
form attached hereto as Exhibit A.
5. Miscellaneous
5.1 Cross-References. References in this Amendment to any Section are,
unless otherwise specified, to such Section of this Amendment.
5.2 Instrument Pursuant to Existing Loan Agreement; Limited Amendment.
This Amendment is executed pursuant to Section 12.1 of the Loan Agreement and
shall (unless otherwise expressly indicated herein) be construed, administered,
and applied in accordance with all of the terms and provisions of the Loan
Agreement, including Section 12.1 thereof. Except as expressly amended, any
conditions of the Loan Agreement shall remain unamended and unwaived. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be a waiver
of, amendment of, consent to or modification of any other term or provision of
any other document or of any transaction or further action on the part of the
Company which would require the consent of the Lender under the Loan Agreement.
5.3 Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
5.4 Counterparts. This Amendment may be executed simultaneously in two or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute together but one and the same instrument.
5.5 Governing Law. This Amendment and the notes shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia.
5.6 Expenses. The Company agrees to pay all expenses of the Lender in
connection with the transactions contemplated by this Amendment (including,
without limitation, the reasonable fees and expenses of counsel for the Lender).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
VALUE AMERICA, INC.
By: /s/ XXXX X. XXXXXXX
___________________________________
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: ____________________________________
An Authorized Officer
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
VALUE AMERICA, INC.
By:
___________________________________
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ XXXXXX X. XXXXX
____________________________________
An Authorized Officer
SECOND AMENDMENT TO AMENDED
AND RESTATED REVOLVING LOAN AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
dated as of December 23, 1998 (this "Amendment") is hereby entered into by and
between Value America, Inc., a Virginia corporation (the "Company"), and The
Union Labor Life Insurance Company, acting on behalf of its Separate Account P
(the "Lender").
RECITALS
A. WHEREAS, the Company and the Lender have executed and delivered that
certain Amended and Restated Revolving Loan Agreement dated as of November 17,
1998 (as amended by that certain First Amendment to Amended and Restated
Revolving Loan Agreement dated December 14, 1998 and as the same may be further
amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement");
B. WHEREAS, the Company desires that the Lender, among other things,
increase the Revolving Loan Commitment from up to Seventeen Million Five Hundred
Twenty-Four Thousand Four Hundred Forty-Four Dollars ($17,524,444) in the
aggregate to up to Twenty-One Million Five Hundred Twenty-Four Thousand Four
Hundred Forty-Four Dollars ($21,524,444) in the aggregate, and the Lender is
willing to make certain secured loans to the Company of up to such amount upon
the terms and conditions set forth herein and therein; and
C. WHEREAS, on and subject to the terms and conditions set forth herein,
the parties hereto have agreed to amend the provisions of the Loan Agreement,
and the Lender has agreed to increase the Revolving Loan Commitment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Lender do hereby
agree as follows:
1. Relation to Loan Agreement: Definitions.
1.1 Relation to Loan Agreement. This Amendment constitutes an
integral part of the Loan Agreement. Each reference contained in the Loan
Agreement to the "Loan Agreement," any section or provision contained in the
Loan Agreement, or any of the following or similar terms "this Agreement,"
"herein" or "hereof" shall be deemed to be a reference to such "Loan Agreement,"
section or provision or term as hereby amended and as the same may be further
amended, restated supplemented or otherwise modified and in effect from time to
time hereafter.
1.2 Capitalized Terms. For all purposes of this Amendment,
capitalized terms used herein without definition shall have the meanings
specified in the Loan Agreement, as said agreement shall be in effect on the
Effective Date after giving effect to this Agreement.
2. AMENDMENTS TO THE LOAN AGREEMENT.
2.1 Amendment to Section 1(e) of the Loan Agreement. Section 1(e) of
the Loan Agreement is amended by deleting it in its entirety and replacing it
with the following:
(e) The "Revolving Loan Commitment" shall mean the greater of
(i) TEN MILLION TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS
($10,024,444) (the "Original Commitment") or (ii) such greater amount as Lender
may specify from time to time in a notice to the Company increasing the amount
thereof, provided, that the Revolving Loan commitment may not exceed TWENTY-ONE
MILLION FIVE HUNDRED TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS
($21,524,444). Each time the Company requests a Loan in excess of the then
outstanding Revolving Loan Commitment it shall deliver to Lender an additional
secured negotiable revolving promissory note in the amount of the increase in
the Revolving Loan Commitment substantially in the form of Annex A (also a
"Revolving Note"). All Revolving Notes are also sometimes collectively referred
to herein as "Notes" and sometimes individually as "Note."
2.2 Amendment to Section 3.1 of the Loan Agreement. Section 3.1 of
the Loan Agreement is amended by deleting it in its entirety and replacing it
with the following:
3.1 Organization, Standing, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and has all requisite power and authority to carry on
its business, to own and hold its properties and assets, to enter into this
Agreement, the Notes, the Amended and Restated Security Agreement (as
hereinafter defined), the Warrant Purchase Agreement (as hereinafter defined),
the Second Warrant Purchase Agreement (as hereinafter defined), the Third
Warrant Purchase Agreement (as hereinafter defined), the Registration Rights
Agreement (as hereinafter defined), the Amended and Restated Subordination
Agreement (as hereinafter defined), the Pledged Account Agreement (as
hereinafter defined), the Escrow Agreement (as hereinafter defined) and the
Financing Statements (as hereinafter defined and together with the Notes, the
Amended and Restated Security Agreement, the Warrant Purchase Agreement, the
Registration Rights Agreement, the Amended and Restated Subordination Agreement,
the Pledged Account Agreement and the Escrow Agreement, the "Related
Agreements," and each, individually, a "Related Agreement"), to borrow money and
issue the Notes in accordance with this Agreement and to carry out the
provisions hereof and thereof. The copies of the Articles of Incorporation and
Bylaws of the Company which have been delivered to Lender prior to the execution
of this Agreement are true and complete and have not been amended or repealed.
The Company has no subsidiaries (as hereinafter defined) or direct or indirect
interest (by way of stock ownership or otherwise) in any firm, partnership,
corporation, association or business enterprise.
2.3 Amendment to Section 8 of the Loan Agreement. Section 8 of the
Loan Agreement is amended to add the following new Section 8.20 to follow after
section 8.19 of the Loan Agreement:
8.20 Second and Third Warrant Purchase Agreement. The Company
shall perform and discharge all of its obligations as
provided under each of the Second Warrant purchase
Agreement and the Third Warrant Purchase Agreement.
2.4 Amendment to Section 11 of the Loan Agreement.
(a) Section 11 of the Loan Agreement is amended to add the
following definitions in alphabetical order:
"Second Warrant Purchase Agreement" shall mean that certain
Warrant Purchase Agreement dated as of December 14, 1998 by and
between the Company and Lender.
"Third Warrant Purchase Agreement" shall mean that certain
Warrant Purchase Agreement dated as of December 14, 1998 by and between
the Company and the Lender.
(b) Section 11 of the Loan Agreement is amended by deleting the
definition of "Related Agreements" in its entirety and replacing it with the
following:
"Related Agreements" shall have the meaning assigned to it in
Section 3.1 hereof.
3. Representations and Warranties of the Company.
3.1 Representations and Warranties. To induce the Lender to execute
and deliver this Amendment (which representations shall survive the execution
and deliver of this Amendment), the Company represents and warrants to the
Lender that:
(a) Authority. This Amendment has been duly authorized, executed
and delivered by it and this Amendment constitutes the legal, valid and binding
obligation, contract and agreement of the Company enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally.
(b) Validity of Amendment. The Loan Agreement and the Related
Agreements, as amended by this Amendment, constitute the legal, valid and
binding obligations, contracts and agreements of the Company enforceable against
it in accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally.
(c) Authorization: No Violation. The execution, delivery and
performance by the Company of this Amendment (i) will not require from the board
or stockholders of the Company any consent or approval that has not been validly
and lawfully obtained, (ii) will not require any authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality of
government, (iii) will not cause the Company to violate or contravene (A) any
provision of law, (B) any rule or regulation of any agency or government,
domestic or foreign, (C) any order, writ, judgment, injunction, decree,
determination or award, or (D) any provision of the articles of Incorporation or
Bylaws of the Company, (iv) except as disclosed in Annex 3.1, will not violate
or be in conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under, any indenture, loan or credit
agreement, note agreement, promissory note, deed of trust, mortgage, security
agreement or other agreement, lease or instrument, commitment or arrangement to
which the Company is a party or by which the Company or any of its properties,
assets or rights is bound or affected, to the extent that such violation,
conflict, breach or default would (individually or in the aggregate) have a
Material Adverse Effect and (e) except as contemplated by the Amended and
Restated Security Agreement, will not result in the creation or imposition of
any Lien. Except as disclosed in Annex 3.1, the Company is not in material
violation of, or (with or without notice or lapse of time or both) in default
under, any term or provision of its Articles of Incorporation or Bylaws or of
any indenture, loan or credit agreement, note agreement, promissory note, deed
of trust, mortgage, security agreementor other agreement, lease or other
instrument commitment or arrangement to which the company is a party or by which
any of the company" properties, assets or rights is bound or affected. The
company is not subject to any restriction of any kind or character which has or
may have a Material Adverse Effect or which prohibits the company from entering
into this Amendment or would prevent or make burdensome its performance of or
compliance with all or any part of this Amendment or the consummation of the
transactions contemplated hereby.
(d) No Event of Default. As of the date hereof and after giving
effect to this amendment, no Event of Default has occurred
which is continuing.
(e) All Other Representations and Warranties. All the
representations and warranties contained in Section 3 of the
Loan Agreement are true and correct in all materials respects
with the same force and effect as if made by the Company on
and as of the date hereof (except as to the extent that any
such representations or warranties relate to a specific prior
date or period).
4.Conditions to Effectiveness of this Amendment.
4.1 Effective Date. This Amendment shall not become effective until, and
shall become effective when, each and every one of the following conditions
shall have been satisfied or waived by the Lender (the "Effective Date").
(a) Execution of Counterparts. Counterparts of this Amendment shall
have been executed and delivered by each of the Company and the Lender.
(b) Ratification and Confirmation of Loan Agreement: No Event of
Default. The Loan Agreement and all Related Agreements and all representations,
warranties, terms and conditions therein remain in full force and effect, and
the Company here by confirms and ratifies each of the provisions of the Loan
Agreement and the Related Agreements. After giving effect to the Amendment, no
event has occurred and no condition exists which constitutes an Event of Default
under the Loan Agreement or the Related Agreements.
(c) No Material Effect on Collateral. There has not been and there
will not be any adverse effect on the Lien created by the Loan Agreement or the
Related Agreements or the priority of such Lien in connection with or as a
result of the consummation of this Amendment.
(d) Consents. All necessary consents, waivers, approvals,
authorizations, registrations, filings and notifications in connection with the
authorization, execution and delivery of this Amendment shall have been obtained
or made and are in full force and effect, [including, without limitation, the
consent of Sirrom under that certain Loan Agreement dated as of October 9, 1998
(as the same may be amended, restated, supplemented or otherwise modified from
time to time) by and between the Company and Sirrom].
(e) Proceedings, Instruments, etc. All proceedings and actions taken
on or prior to the Effective Date in connection with the transactions
contemplated by this Amendment and all instruments incident thereto shall be in
form and substance satisfactory to the Lender and its special counsel, and the
Lender and its special counsel shall have received copies of all documents that
it or they may request in connection with such proceedings, actions and
transactions (including, without limitation, copies of court documents,
certifications, and evidence of the correctness of the representations and
warranties contained herein and certifications and evidence of the compliance
with the terms and the fulfillment of the conditions of this Amendment) in the
form and substance satisfactory to the Lender and its special counsel.
(f) Third Warrant Purchase Agreement. The Company and Lender shall
have entered into the Third Warrant Purchase Agreement substantially in the form
attached hereto as Exhibit A.
5. Miscellaneous
5.1 Cross-References. References in this Amendment to any Section are,
unless otherwise specified, to such Section of this Amendment.
5.2 Instrument Pursuant to Existing Loan Agreement: Limited Amendment.
This Amendment is executed pursuant to Section 12.1 of the Loan Agreement and
shall (unless otherwise expressly indicated herein) be construed, administered,
and applied in accordance with all of the terms and provisions of the Loan
Agreement, including Section 12.1 thereof. Except as expressly amended, any
conditions of the Loan Agreement shall remain unamended and unwaived. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be a waiver
of, amendment of, consent to or modification of any other term or provision of
any other document or of any transaction or further action on the part of the
Company which would require the consent of the Lender under the Loan Agreement.
5.3 Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
5.4 Counterparts. This Amendment may be executed simultaneously in two or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute together but one and the same instrument.
5.5 Governing Law. This Amendment and the notes shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia.
5.6 Expenses. The Company agrees to pay all expenses of the Lender in
connection with the transactions contemplated by this Amendment (including,
without limitation, the reasonable fees and expenses of counsel for the Lender).
IN WITNES WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
VALUE AMERICA, Inc.
By:
_______________________________________
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ XXXXXX X. XXXXX
________________________________________
An Authorized Officer
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
VALUE AMERICA, INC.
By: /s/ XXXX X. XXXXXXX
__________________________________
Xxxx X. Xxxxxxx,
Executive Vice President
and Chief Financial Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: ____________________________________
An Authorized Officer
THIRD AMENDMENT TO AMENDED
AND RESTATED REVOLVING LOAN AGREEMENT
This THIRD AMENDMENT TO AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
dated as of December 31, 1998 (this "Amendment") is hereby entered into by and
between Value America, Inc., a Virginia corporation (the "Company"), and The
Union Labor Life Insurance Company, acting on behalf of its Separate Account P
(the "Lender").
RECITALS
A. WHEREAS, the Company and the Lender have executed and delivered that
certain Amended and Restated Revolving Loan Agreement dated as of November 17,
1998 (as amended by that certain First Amendment to Amended and Restated
Revolving Loan Agreement dated as of December 14, 1998 and that certain Second
Amendment to Amended and Restated Revolving Loan Agreement dated as of December
23, 1998 and as the same may be further amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement");
B. WHEREAS, the Company desires that the Lender, among other things,
increase the Revolving Loan Commitment from up to Twenty-One Million Five
Hundred Twenty-Four Thousand Four Hundred Forty-Four Dollars ($21,524,444) in
the aggregate to up to Twenty-Nine Million Twenty-Four Thousand Four Hundred
Forty-Four Dollars ($29,024,444) in the aggregate, and the Lender is willing to
make certain secured loans to the Company of up to such amount upon the terms
and conditions set forth herein and therein; and
C. WHEREAS, on and subject to the terms and conditions set forth herein,
the parties hereto have agreed to amend provisions of the Loan Agreement, and
the Lender has agreed to increase the Revolving Loan Commitment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Lender to hereby
agree as follows:
1. Relation to Loan Agreement: Definitions.
1.1 Relation to Loan Agreement. This Amendment constitutes an
integral part of the Loan Agreement. Each reference contained in the Loan
Agreement to the "Loan Agreement," any section or provision contained in the
Loan Agreement, or any of the following or similar terms "this Agreement,"
"herein" or "hereof" shall be deemed to be a reference to such "Loan Agreement,"
section or provision or term as hereby amended and as the same may be further
amended, restated supplemented or otherwise modified and in effect from time to
time hereafter.
1.2 Capitalized Terms. For all purposes of this Amendment,
capitalized terms used herein without definition shall have the meanings
specified in the Loan Agreement, as said agreement shall be in effect on the
Effective Date after giving effect to this Agreement.
2. AMENDMENTS TO THE LOAN AGREEMENT
2.1 Amendment to Section 1(e) of the Loan Agreement. Section
1(e) of the Loan Agreement is amended by deleting it in its entirety and
replacing it with the following:
(e) The "Revolving Loan Commitment" shall mean the greater
of (i) TEN MILLION TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS
($10,024,444) (the "Original Commitment") or (ii) such greater amount as Lender
may specify from time to time in a notice to the Company increasing the amount
thereof, provided that the Revolving Loan Commitment may not exceed TWENTY-NINE
MILLION TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS ($29,024,444). Each
time the Company requests a Loan in excess of the then outstanding Revolving
Loan Commitment it shall deliver to Lender an additional secured negotiable
revolving promissory note in the amount of the increase in the Revolving Loan
Commitment substantially in the form of Annex A (also a "Revolving Note"). All
Revolving Notes are also sometimes collectively referred to herein as "Notes"
and sometimes individually as "Note."
2.2 Amendment to Section 3.1 of the Loan Agreement. Section 3.1
of the Loan Agreement is amended by deleting it in its entirety and replacing it
with the following.
3.1 Organization, Standing, etc. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and has all requisite power and authority to carry on
its business, to own and hold its properties and assets, to enter into this
Agreement, the Notes, the Amended and Restated Security Agreement (as
hereinafter defined), the Warrant Purchase Agreement (as hereinafter defined),
the Second Warrant Purchase Agreement (as hereinafter defined), the Third
Warrant Purchase Agreement (as hereinafter defined), the Fourth Warrant Purchase
Agreement (as hereinafter defined), the Registration Rights Agreement (as
hereinafter defined), the Amended and Restated Subordination Agreement (as
hereinafter defined), the Pledged Account Agreement (as hereinafter defined),
the Escrow Agreement (as hereinafter defined) and the Financing Statements (as
hereinafter defined and together with the Notes, the Amended and Restated
Security Agreement, the Warrant Purchase Agreement, the Second Warrant Purchase
Agreement, the Third Warrant Purchase Agreement, the Fourth Warrant Purchase
Agreement, the Registration Rights Agreement, the Amended and Restated
Subordination Agreement, the Pledged Account Agreement and the Escrow Agreement,
the "Related Agreements," and each, individually, a "Related Agreement"), to
borrow money and issue the Notes in accordance with this Agreement and to carry
out the provisions hereof and thereof. The copies of the Articles of
Incorporation and Bylaws of the Company which have been delivered to Lender
prior to the execution of this Agreement are true and complete and have not been
amended or repealed. The Company has no Subsidiaries (as hereinafter defined) or
direct or indirect interest (by way of stock ownership or otherwise) in any
firm, partnership, corporation, association or business enterprise.
2.3 Amendment to Section 8 of the Loan Agreement. Section 8 of
the Loan Agreement is amended to add the following new Section 8.20 to follow
after Section 8.19 of the Loan Agreement:
8.20 First, Second, Third and Fourth Warrant Purchase
Agreement. The Company shall perform and discharge all of its
obligations as provided under each of the Warrant Purchase Agreement,
the Second Warrant Purchase Agreement, the Third Warrant Purchase
Agreement, and the Fourth Warrant Purchase Agreement.
2.4 Amendment to Section 11 of the Loan Agreement. Section 11 of
the Loan Agreement is amended to add the following definition in alphabetical
order:
"Fourth Warrant Purchase Agreement" shall mean that
certain Warrant Purchase Agreement dated as of December 31, 1998 by and
between the Company and Lender.
3. Representations and Warranties of the Company.
3.1 Representations and Warranties. To induce the Lender to
execute and deliver this Amendment (which representations shall survive the
execution and deliver of the Amendment), the Company represents and warrants to
the Lender that:
(a) Authority. This Amendment has been duly authorized,
executed and delivered by it and this Amendment constitutes the legal, valid and
binding obligation, contract and agreement of the Company enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relation to or limiting creditors' rights generally.
(b) Validity of Amendment. The Loan Agreement and the
Related Agreements, as amended by this Amendment, constitute the legal, valid
and binding obligations, contracts and agreements of the Company enforceable
against it in accordance with their respective terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or limiting creditors' rights generally.
(c) Authorization: No Violation. The execution, delivery and
performance by the Company of this Amendment (i) will not require from the Board
or stockholders of the Company any consent or approval that has not been validly
and lawfully obtained, (ii) will not require any authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality of
government, (iii) will not cause the Company to violate or contravene (A) any
provision of law, (B) any rule or regulation of any agency or government,
domestic or foreign, (C) any order, writ, judgment, injunction, decree,
determination or award, or (D) any provision of the Articles of Incorporation or
Bylaws of the Company, (iv) except as disclosed in Annex 3.1, will not violate
or be in conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under, any indenture, loan or credit
agreement, note agreement, promissory note, deed of trust, mortgage, security
agreement or other agreement, lease or instrument, commitment or arrangement to
which the Company is a party or by which the Company or any of its properties,
assets or rights is bound or affected, to the extent that such violation,
conflict, breach or default would (individually or in the aggregate) have a
Material Adverse Effect and (e) except as contemplated by the Amended and
Restated Security Agreement, will not result in the creation or imposition of
any Lien. Except as disclosed in Annex 3.1, the Company is not in material
violation of, or (with or without notice or lapse of time or both) in default
under, any term or provision of its Articles of Incorporation or Bylaws or of
any indenture, loan or credit agreement, note agreement, promissory note, deed
of trust, mortgage, security agreement, or other agreement, lease or other
instrument, commitment or arrangement to which the Company is a party or by
which any of the Company's properties, assets or rights is bound or affected.
The Company is not subject to any restriction of any kind or character which has
or may have a Material Adverse Effect or which prohibits the Company from
entering into this Amendment or would prevent or make burdensome its performance
of or compliance with all or any part of this Amendment or the consummation of
the transactions contemplated hereby.
(d) No Event of Default. As of the date hereof and after
giving effect to this Amendment, no Event of Default has occurred which is
continuing.
(e) All Other Representations and Warranties. All the
representations and warranties contained in Section 3 of the Loan Agreement are
true and correct in all material respects with the same force and effect as if
made by the Company on and as of the date hereof (except as to the extent that
any such representations or warranties relate to a specific prior date or
period).
4. Conditions to Effectiveness of this Amendment.
4.1 Effective Date. This Amendment shall not become effective
until, and shall become effective when, each and every one of the following
conditions shall have been satisfied or waived by the Lender (the "Effective
Date").
(a) Execution of Counterparts. Counterparts of this
Amendment shall have been executed and delivered by each of the Company and the
Lender.
(b) Ratification and Confirmation of Loan Agreement: No
Event of Default. The Loan Agreement and all Related Agreements and all
representations, warranties, terms and conditions therein remain in full force
and effect, and the Company hereby confirms and ratifies each of the provisions
of the Loan Agreement and the Related Agreements. After giving effect to the
Amendment, no event has occurred and no condition exists which constitutes an
Event of Default under the Loan Agreement or the Related Agreements.
(c) No Material Effect on Collateral. There has not been and
there will not be any adverse effect on the Lien created by the Loan Agreement
or the Related Agreements or the priority of such Lien in connection with or as
a result of the consummation of this Amendment.
(d) Consents. All necessary consents, waivers, approvals,
authorizations, registrations, filings and notifications in connection with the
authorization, execution and delivery of this Amendment shall have been obtained
or made and are in full force and effect.
(e) Proceedings, Instruments, etc. All proceedings and
actions taken on or prior to the Effective Date in connection with the
transactions contemplated by this Amendment and all instruments incident thereto
shall be in form and substance satisfactory tot he Lender and its special
counsel, and the Lender and its special counsel shall have received copies of
all documents that it or they may request in connection with such proceedings,
actions and transactions (including, without limitation, copies of court
documents, certifications, and evidence of the correctness of the
representations and warranties contained herein and certifications and evidence
of the representations and warranties contained herein and certifications and
evidence of the compliance with the terms and the fulfillment of the conditions
of this Amendment) in the form and substance satisfactory to the Lender and its
special counsel.
(f) Fourth Warrant Purchase Agreement. The Company and
Lender shall have entered into the Fourth Warrant Purchase Agreement
substantially in the form attached hereto as Exhibit A.
5. Miscellaneous.
5.1 Cross-References. References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.
5.2 Instrument Pursuant to Existing Loan Agreement: Limited
Amendment. This Amendment is executed pursuant to Section 12.1 of the Loan
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered, and applied in accordance with all of the terms and provisions of
the Loan Agreement, including Section 12.1 thereof. Except as expressly amended,
any conditions of the Loan Agreement shall remain unamended and unwaived. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be a waiver
of, amendment of, consent to or modification of any other term of provision of
any other document or of any transaction or further action on the part of the
Company which would require the consent of the Lender under the Loan Agreement.
5.3 Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
5.4 Counterparts. This Amendment may be executed simultaneously
in two or more counterparts, each of which shall be deemed to be an original but
all of which shall constitute together but one and the same instrument.
5.5 Governing Law. This Amendment and the notes shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia.
5.6 Expenses. The Company agrees to pay all expenses of the
Lender in connection with the transactions contemplated by this Amendment
(including, without limitation, the reasonable fees and expenses of counsel for
the Lender).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers of the
day and year first above written.
VALUE AMERICA, INC.
By: /s/ XXXX X. XXXXXXX
--------------------------------------
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Executive Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ XXXXXX X. XXXXX
-------------------------------------------
An Authorized Officer
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
VALUE AMERICA, INC.
By: /s/ XXXX X. XXXXXXX
--------------------------------------
Xxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By:
--------------------------------------
An Authorized Officer
FOURTH AMENDMENT TO AMENDED
AND RESTATED REVOLVING LOAN AGREEMENT
This FOURTH AMENDMENT TO AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
dated as of January 6, 1999 (this "Amendment") is hereby entered into by and
between Value America, Inc., a Virginia corporation (the "Company"), and The
Union Labor Life Insurance Company, acting on behalf of its Separate Account P
(the "Lender").
RECITALS
A. WHEREAS, the Company and the Lender have executed and delivered that
certain Amended and Restated Revolving Loan Agreement dated as of November 17,
1998 (as amended by that certain First Amendment to Amended and Restated
Revolving Loan Agreement dated as of December 14, 1998, that certain Second
Amendment to Amended and Restated Revolving Loan Agreement dated as of December
23, 1998 and that certain Third Amendment to Amended and Restated Revolving Loan
Agreement dated as of December 31, 1998 and as the same may be further amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement");
B. WHEREAS, the Company desires that the Lender, among other things,
increase the Revolving Loan Commitment from up to Twenty-Nine Million
Twenty-Four Thousand Four Hundred Forty-Four Dollars ($29,024,444), in the
aggregate, up to Thirty Four Million Twenty-Four Thousand Four Hundred
Forty-Four Dollars ($34,024,444), in the aggregate, and the Lender is willing to
make certain secured loans to the Company of up to such amount upon the terms
and conditions set forth herein and therein; and
C. WHEREAS, on and subject to the terms and conditions set forth herein,
the parties hereto have agreed to amend the provisions of the Loan Agreement,
and the Lender has agreed to increase the Revolving Loan Commitment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Lender do hereby
agree as follows:
1. Relation to Loan Agreement: Definitions.
1.1 Relation to Loan Agreement. This Amendment constitutes an
integral part of the Loan Agreement. Each reference contained in the Loan
Agreement to the "Loan Agreement," any section or provision contained in the
Loan Agreement, or any of the following or similar terms "this Agreement,"
"herein" or "hereof" shall be deemed to be a reference to such "Loan Agreement,"
section or provision or term as hereby amended and as the same may be further
amended, restated supplemented or otherwise modified and in effect from time to
time hereafter.
1.2 Capitalized Terms. For all purposes of this Amendment,
capitalized terms used herein without definition shall have the meanings
specified in the Loan Agreement, as said agreement shall be in effect on the
Effective Date after giving effect to this Agreement.
2. AMENDMENTS TO THE LOAN AGREEMENT.
2.1 Amendment to Section 1(e) of the Loan Agreement. Section 1(e) of
the Loan Agreement is amended by deleting it in its entirety and replacing it
with the following:
(e) The "Revolving Loan Commitment" shall mean the greater of
(i) TEN MILLION TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS
($10,024,444) (the "Original Commitment") or (ii) such greater amount as Lender
may specify from time to time in a notice to the Company increasing the amount
thereof, provided, that the Revolving Loan Commitment may not exceed THIRTY FOUR
MILLION TWENTY-FOUR THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS ($34,024,444). Each
time the Company requests a Loan in excess of the then outstanding Revolving
Loan Commitment it shall deliver to Lender an additional secured negotiable
revolving promissory note in the amount of the increase in the Revolving Loan
Commitment substantially in the form of Annex A (also a "Revolving Note"). All
Revolving Notes are also sometimes collectively referred to herein as "Notes"
and sometimes individually as "Note."
2.2 Amendment to Section 3.1 of the Loan Agreement. Section 3.1 of
the Loan Agreement is amended by deleting it in its entirety and replacing it
with the following:
3.1 Organization, Standing, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and has all requisite power and authority to carry on
its business, to own and hold its properties and assets, to enter into this
Agreement, the Notes, the Amended and Restated Security Agreement (as
hereinafter defined), the Warrant Purchase Agreement (as hereinafter defined),
the Second Warrant Purchase Agreement (as hereinafter defined), the Third
Warrant Purchase Agreement (as hereinafter defined), the Fourth Warrant Purchase
Agreement (as hereinafter defined), the Fifth Warrant Purchase Agreement (as
hereinafter defined), the Registration Rights Agreement (as hereinafter
defined), the Amended and Restated Subordination Agreement (as hereinafter
defined), the Pledged Account Agreement (as hereinafter defined), the Escrow
Agreement (as hereinafter defined) and the Financing Statements (as hereinafter
defined and together with the Notes, the Amended and Restated Security
Agreement, the Warrant Purchase Agreement, the Second Warrant Purchase
Agreement, the Third Warrant Purchase Agreement, the Fourth Warrant Purchase
Agreement, the Fifth Warrant Purchase Agreement, the Registration Rights
Agreement, the Amended and Restated Subordination Agreement, the Pledged Account
Agreement and the Escrow Agreement, the "Related Agreements", and each,
individually, a "Related Agreement"), to borrow money and issue the Notes in
accordance with this Agreement and to carry out the provisions hereof and
thereof. The copies of the Articles of Incorporation and Bylaws of the Company
which have been delivered to Lender prior to the execution of this Agreement are
true and complete and have not been amended or repealed. The Company has no
Subsidiaries (as hereinafter defined) or direct or indirect interest (by way of
stock ownership or otherwise) in any firm, partnership, corporation, association
or business enterprise.
2.3 Amendment to Section 8 of the Loan Agreement. Section 8 of the
Loan Agreement is amended to add the following new Section 8.20 to follow after
Section 8.19 of the Loan Agreement:
8.20 First, Second, Third, Fourth and Fifth Warrant Purchase
Agreement. The Company shall perform and discharge all of its obligations as
provided under each of the Warrant Purchase Agreement, the Second Warrant
Purchase Agreement, the Third Warrant Purchase Agreement, the Fourth Warrant
Purchase Agreement and the Fifth Warrant Purchase Agreement.
2.4 Amendment to Section 11 of the Loan Agreement. Section 11 of the
Loan Agreement is amended to add the following definition in alphabetical order:
"Fifth Warrant Purchase Agreement" shall mean that certain
Warrant Purchase Agreement dated as of January 6, 1999 by and between the
Company and Lender.
3. Representations and Warranties of the Company.
3.1 Representations and Warranties. To induce the Lender to execute
and deliver this Amendment (which representations shall survive the execution
and deliver of this Amendment), the Company represents and warrants to the
Lender that:
(a) Authority. This Amendment has been duly authorized, executed
and delivered by it and this Amendment constitutes the legal, valid and binding
obligation, contract and agreement of the Company enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally.
(b) Validity of Amendment. The Loan Agreement and the Related
Agreements, as amended by this Amendment, constitute the legal, valid and
binding obligations, contracts and agreements of the Company enforceable against
it in accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally.
(c) Authorization: No Violation. The execution, delivery and
performance by the Company of this Amendment (i) will not require from the Board
or stockholders of the Company any consent or approval that has not been validly
and lawfully obtained, (ii) will not require any authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality of
government, (iii) will not cause the Company to violate or contravene (A) any
provision of law, (B) any rule or regulation of any agency or government,
domestic or foreign, (C) any order, writ, judgment, injunction, decree,
determination or award, or (D) any provision of the Articles of Incorporation or
Bylaws of the Company, (iv) except as disclosed in Annex 3.1, will not violate
or be in conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under, any indenture, loan or credit
agreement, note agreement, promissory note, deed of trust, mortgage, security
agreement or other agreement, lease or instrument, commitment or arrangement to
which the Company is a party or by which the Company or any of its properties,
assets or rights is bound or affected, to the extent that such violation,
conflict, breach or default would (individually or in the aggregate) have a
Material Adverse Effect and (e) except as contemplated by the Amended and
Restated Security Agreement, will not result in the creation or imposition of
any Lien. Except as disclosed in Annex 3.1, the Company is not in material
violation of, or (with or without notice or lapse of time or both) in default
under, any term or provision of its Articles of Incorporation or Bylaws or of
any indenture, loan or credit agreement, note agreement, promissory note, deed
of trust, mortgage, security agreement or other agreement, lease or other
instrument, commitment or arrangement to which the Company is a party or by
which any of the Company's properties, assets or rights is bound or affected.
The Company is not subject to any restriction of any kind or character which has
or may have a Material Adverse Effect or which prohibits the Company from
entering into this Amendment or would prevent or make burdensome its performance
of or compliance with all or any part of this Amendment or the consummation of
the transactions contemplated hereby.
(d) No Event of Default. As of the date hereof and after giving
effect to this Amendment, no Event of Default has occurred which is continuing.
(e) All Other Representations and Warranties. All the
representations and warranties contained in Section 3 of the Loan Agreement are
true and correct in all materials respects with the same force and effect as if
made by the Company on and as of the date hereof (except as to the extent that
any such representations or warranties relate to a specific prior date or
period).
4. Conditions to Effectiveness of this Amendment.
4.1 Effective Date. This Amendment shall not become effective until,
and shall become effective when, each and every one of the following conditions
shall have been satisfied or waived by the Lender (The "Effective Date").
(a) Execution of Counterparts. Counterparts of this Amendment
shall have been executed and delivered by each of the Company and the Lender.
(b) Ratification and Confirmation of Loan Agreement: No Event of
Default. The Loan Agreement and all Related Agreements and all representations,
warranties, terms and conditions therein remain in full force and effect, and
the Company hereby confirms and ratifies each of the provisions of the Loan
Agreement and the Related Agreements. After giving effect to the Amendment, no
event has occurred and no condition exists which constitutes an Event of Default
under the Loan Agreement or the Related Agreements.
(c) No Material Effect on Collateral. There has not been and
there will not be any adverse effect on the Lien created by the Loan Agreement
or the Related Agreements or the priority of such Lien in connection with or as
a result of the consummation of the Amendment.
(d) Consents. All necessary consents, waivers, approvals,
authorizations, registrations, filings and notifications in connection with the
authorization, execution and delivery of this Amendment shall have been obtained
or made and are in full force and effect.
(e) Proceedings, Instruments, etc. All proceedings and actions
taken on or prior to the Effective Date in connection with the transactions
contemplated by this Amendment and all instruments incident thereto shall be in
form and substance satisfactory to the Lender and its special counsel, and the
Lender and its special counsel shall have received copies of all documents that
it or they may request in connection with such proceedings, actions and
transactions (including, without limitation, copies of court documents,
certifications, and evidence of the correctness of the representations and
warranties contained herein and certifications and evidence of the compliance
with the terms and the fulfillment of the conditions of this Amendment) in the
form and substance satisfactory to the Lender and its special counsel.
(f) Fifth Warrant Purchase Agreement. The Company and Lender
shall have entered into the Fifth Warrant Purchase Agreement substantially in
the form attached hereto as Exhibit A.
5. Miscellaneous.
5.1 Cross-References. References in this Amendment to any Section
are, unless otherwise specified, to such Section of this Amendment.
5.2 Instrument Pursuant to Existing Loan Agreement: Limited
Amendment. This Amendment is executed pursuant to Section 12.1 of the Loan
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered, and applied in accordance with all of the terms and provisions of
the Loan Agreement, including Section 12.1 thereof. Except as expressly amended,
any conditions of the Loan Agreement shall remain unamended and unwaived. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be a waiver
of, amendment of, consent to or modification of any other term or provision of
any other document or of any transaction or further action on the part of the
Company which would require the consent of the Lender under the Loan Agreement.
5.3 Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
5.4 counterparts. This Amendment may be executed simultaneously in
two or more counterparts, each of which shall be deemed to be an original but
all of which shall constitute together but one and the same instrument.
5.5 Governing Law. This Amendment and the notes shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia.
5.6 Expenses. The Company agrees to pay all expenses of the Lender
in connection with the transactions contemplated by this Amendment (including,
without limitation, the reasonable fees and expenses of counsel for the Lender).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
VALUE AMERICA, INC.
By: /s/ XXXX X. XXXXXXX
_____________________________________
Xxxx X. Xxxxxxx, Executive Vice President
and Chief Financial Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: ________________________________________
An Authorized Officer
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
VALUE AMERICA, INC.
By: _____________________________________
Xxxx X. Xxxxxxx, Executive Vice President
And Chief Financial Officer
THE UNION LABOR LIFE INSURANCE COMPANY
Acting for its Separate Account P
By: /s/ XXXXXX X. XXXXX
________________________________________
An Authorized Officer
