E-30
Exhibit 7
J-Bird Music Group Ltd.
Form 10-KSB
File No. 0-24449
CREDIT AGREEMENT
Dated as of October 1, 1998
by and among
J-BIRD MUSIC GROUP, LTD.
as Borrower,
and
IMM INTERNATIONAL, INC.
as Lender
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 1, 1998, by and
among J-BIRD MUSIC GROUP, LTD., a Pennsylvania corporation as
"Borrower", and IMM INTERNATIONAL, INC., a Pennsylvania
corporation, as "Lender."
WITNESSETH:
RECITALS.
A. The Borrower desires to obtain from the Lender Term
Loans in the aggregate principal amount of up to $500,000; and
B. The Lender is willing, on the terms and conditions set
forth herein, to make the Term Loans;
NOW, THEREFORE, for good and valuable consideration, the
receipt and legal sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE 1.
DEFINITIONS
SECTION 1.1. Defined Terms. The following terms
(whether or not underscored) when used in this Agreement,
including its preamble and recitals, shall, except where the
context otherwise requires, have the following meanings (such
meanings to be equally applicable to the singular and plural
forms thereof):
"Affiliate" of any Person means any other Person which,
directly or indirectly, controls or is controlled by or under
common control with such Person (excluding any trustee under, or
any committee with responsibility for administering, any Plan).
A Person shall be deemed to be "controlled by" any other Person
if such other Person possesses, directly or indirectly, power (a)
to vote 5% or more of the securities having ordinary voting power
for the election of directors of such Person, or (b) to direct or
cause the direction of the management or policies of such Person
whether by contract or otherwise; provided that the Lender shall
not be deemed to constitute an Affiliate of the Borrower.
"Business Day" means any day, which is neither a Saturday
nor Sunday, nor a legal holiday on which banks are authorized or
required to be closed in New York, New York.
"Charges" means all federal, state, county, city, municipal,
local, foreign or other governmental (a) taxes at the time due
and payable and (b) levies, assessments, charges, liens, claims
or encumbrances upon or relating to (i) the Collateral, (ii) the
Obligations, (iii) the Borrower's ownership or use of its assets,
or (iv) any other aspect of the Borrower's business.
"Commitment Period" means the period beginning on the date
of this Agreement and ending March 31, 1999.
"Contract" means any agreement or agreements pursuant to or
under which any Person shall be obligated to pay for services
rendered or merchandise sold to any Person from time to time.
"Contractual Obligation" means, relative to any Person, any
provision of any security issued by such Person or of any
Instrument or undertaking to which such Person is a party or by
which it or any of its property is bound.
"Default" means any Event of Default or any condition or
event, which, after notice or lapse of time or both, would
constitute an Event of Default.
"Event of Default" means any of the events set forth in
Section 6.1.
"Funding Date" means the date on which each Term Loan is
made pursuant to Section 2.1.
"herein", "hereof", "hereto", "hereunder" and similar terms
contained in this Agreement or any other Loan Document refer to
this Agreement or such other Loan Document, as the case may be,
as a whole and not to any particular Section, clause or provision
of this Agreement or such other Loan Document.
"including" means including without limiting the generality
of any description such term.
"Instrument" means any contract, agreement, letter of
credit, indenture, mortgage, deed, certificate of title, document
or writing (whether by formal agreement, letter or otherwise)
under which any obligation is evidenced, assumed or undertaken,
any Lien (or right or interest therein) is granted or perfected,
or any property (or right or interest therein) is conveyed.
"Lien" means any mortgage, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien
(statutory or other), adverse claim or preference, priority or
other security agreement or preferential arrangement of any kind
or nature whatsoever (including any conditional sale or other
title retention agreement, any financing lease involving
substantially the same economic effect as any of the foregoing
and the filing of any financing statement under the UCC or
comparable law of any jurisdiction).
"Loan" means, collectively, the Term Loans.
"Loan Document" means, collectively, this Agreement and the
Term Notes entered into by the Borrower and Lender, and each
other Instrument executed and delivered by the Borrower as of the
date hereof or any time thereafter, in connection with the
transactions contemplated by this Agreement, in each case, as
amended, modified or supplemented from time to time.
"Material Adverse Change" means a material adverse change in
(a) the condition (financial or otherwise), operations,
performance, business, properties or prospects of the Borrower;
or (b) the rights and remedies of the Lender under the Loan
Documents; or (c) the ability of the Borrower to repay the
Obligations or of the Borrower to perform its obligations under
the Loan Documents; or (d) the legality, validity or
enforceability of any Loan Document.
"Maturity" means relative to any Loan or portion thereof,
the earlier of such Loan's Stated Maturity Date or such other
date when such Loan or portion thereof shall be or become due and
payable in accordance with the terms of this Agreement, whether
by required repayment, prepayment, declaration or otherwise.
"Obligations" means all payment and performance obligations
of the Borrower (monetary or otherwise) arising under or in
connection with this Agreement, the Term Notes and other Loan
Documents.
"Organic Document" means, relative to any Person, its
articles or certificate of incorporation or organization or
certificate of limited partnership or organization, its bylaws,
partnership or operating agreement or other organizational
documents, and all stockholders agreements, voting trusts and
similar arrangements applicable to any of its common stock or
partnership interests or other ownership interests.
"Person" means any natural person, corporation, partnership,
limited liability company, firm, association, government,
governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.
"Requirements of Law" means, as to any Person, the Organic
Documents of such Person, and all federal, state and local laws,
rules, regulations, orders, decrees or other determinations of an
arbitrator, court of other governmental authority.
"Stated Maturity Date" means, with respect to the Loan, June
30, 2000.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the
common stock or has the power to vote or direct the voting of
sufficient securities to elect a majority of the directors.
"Taxes" means all taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of the Lender, taxes imposed on
or measured by its net income and franchise taxes imposed on it.
"Term Loans" means the advances to be made by Lender to
Borrower pursuant to Section 2.1.
"Term Notes" means the promissory notes of the Borrower
substantially in the form of Exhibit A, and shall also refer to
all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"written" or "in writing" means any form of written
communication or a communication by means of telephone facsimile
device.
ARTICLE 2
COMMITMENTS
SECTION 2.1. Term Loans. The Lender will make Term Loans
to Borrower under this Agreement, as requested by Borrower from
time to time during the Commitment Period. Borrower shall be
deemed to have made a request for a Term Loan on and as of the
second business day following the day on which Borrower gives
Lender telephonic notice (confirmed in writing) of each requested
Term Loan (the "Funding Date") by calling Xxxx Xxxxxxxxxx (Tel.
No. 000-000-0000). Each telephonic notice and written
confirmation shall contain an affirmation by a duly authorized
officer of Borrower to the effect that the conditions under
Article 3 of this Agreement are satisfied as of the date of the
request and that the funds will be used to satisfy outstanding
obligations incurred and for working capital purposes. No later
than 3:00 P.M. (Eastern time) on the Funding Date, Lender will
wire transfer to Borrower in immediately available funds an
amount equal to the requested Term Loan, subject in each instance
to the satisfaction of the conditions set forth in Article 3
hereof.
SECTION 2.2. Notes. Each Term Loan made by Lender shall
be evidenced by a Term Note payable to the order of the Lender in
the principal amount of the Term Loan.
SECTION 2.3. Principal Payments. The Borrower will make
payment in full of all unpaid principal of the Loan at its Stated
Maturity Dated (or such earlier date as such Loan may become or
be declared due and payable pursuant to Article 6). Prior
thereto, the Borrower may, from time to time on any Business Day,
make a voluntary prepayment in whole or in part, of the
outstanding principal amount of the Loan. Payments under this
Section 2.3.1 shall be applied first to the payment of Interest
under Section 2.4.1, and next to the payment of principal.
SECTION 2.4. Interest. Interest on the outstanding
principal amount of the Loan and other outstanding Obligations
shall accrue and be payable at the rate of 8% per annum. The
Borrower will make payment in full of all accrued and unpaid
Interest on the Loan at its Stated Maturity Dated (or such
earlier date as such Loan may become or be declared due and
payable pursuant to Article 6). Prior thereto, the Borrower may,
from time to time on any Business Day, make a voluntary
prepayment in whole or in part, of the outstanding accrued and
unpaid Interest on the Loan.
SECTION 2.5. Payments, Interest Rate Computations, Other
Computations, etc. All such payments required to be made to the
Lender shall be made, without setoff, deduction or counterclaim,
not later than 2:00 p.m., Eastern time, on the date due, in
immediately available funds, to such accounts as the Lender shall
specify from time to time by notice to the Borrower. Funds
received after that time shall be deemed to have been received by
the Lender on the next following Business Day. All interest and
fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring
during the period for which such interest or fee is payable over
a year comprised of 360 days. Whenever any payment to be made
shall otherwise be due on a day, which is not a Business Day,
such payment shall be made on the immediately preceding Business
Day.
SECTION 2.6. Use of Proceeds. The Borrower shall use the
proceeds of the Term Loans for working capital needs.
ARTICLE 3.
CONDITIONS TO LOANS
SECTION 3.1. Initial Loan. The obligation of the Lender
to fund the first Term Loan and each subsequent Term Loan shall
be subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this Section 3.1.
SECTION 3.1.1. Resolutions, etc. The Lender shall have
received:
(a) a certificate, dated the Closing Date, of the secretary
of the Borrower as of the Closing Date as to:
(i) resolutions of its Board of Directors, then in full
force and effect authorizing the execution, delivery and
performance of the Loan Documents and the related transactions
contemplated thereby, and
(ii) the incumbency and signatures of those of its officers
authorized to act with respect to the Loan Documents;
(b) such other documents (certified if requested) as the
Lender may reasonably request, with respect to this Agreement,
the Note, any other Loan Document, the transactions contemplated
hereby and thereby, or any Organic Document or Contractual
Obligation.
SECTION 3.1.2. Notes. The Lender shall have received a Term
Note executed and delivered pursuant to Section 2.2.
SECTION 3.1.3. No Contest, etc. No litigation, arbitration,
governmental investigation, injunction, proceeding or inquiry
shall be pending or, to the knowledge of the Borrower, threatened
which:
(a) seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of,
the transactions contemplated by or in connection with the
Agreement or any Loan Document; or
(b) would, in the opinion of the Lender, be materially
adverse to any of the parties hereto with respect to the
transactions contemplated hereby.
ARTICLE 4
WARRANTIES, ETC.
In order to induce the Lender to enter into this Agreement,
to engage in the transactions contemplated herein and in the
other Loan Documents and to make the Loans, the Borrower
represents and warrants to the Lender as set forth in this
Article 4.
SECTION 4.1. Organization, Power, Authority, etc. The
Borrower (i) is a corporation validly organized and existing and
in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where
the failure to so qualify could result in a Material Adverse
Change, and (iii) has full power and authority, and holds all
governmental licenses, permits, regulations and other regulatory
approvals required under all Requirements of Law, to own and hold
under lease its property and to conduct its business as conducted
prior and subsequent to the date hereof. The Borrower has full
power and authority to enter into and perform its Obligations
under this Agreement, the Notes and each other Loan Document
executed or to be executed by it and to obtain Loans hereunder.
SECTION 4.2. Due Authorization. The execution and
delivery by Borrower of each Loan Document executed or to be
executed by it, and the incurrence and performance by the
Borrower of the Obligations have been duly authorized by all
necessary corporate action, do not require any regulatory
approval (except those regulatory approvals already obtained), do
not and will not conflict with, result in any violation of, or
constitute any default under, any provision of any Organic
Document or Contractual Obligation of the Borrower or any law or
governmental regulation or court decree or order, and will not
result in or require the creation or imposition of any such Lien
on the Borrower's properties pursuant to the provision of any
Contractual Obligation.
SECTION 4.3. Validity, etc. Each of this Agreement, the
Term Notes and the other Loan Documents constitutes, the legal,
valid and binding obligation of the Borrower enforceable in
accordance with its terms subject to the effect of any applicable
bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally, and the effect of general principles
of equity (regardless of whether considered in a proceeding in
equity or at law).
SECTION 4.4. Absence of Default. The Borrower is not in
default in the payment of (or in the performance of any material
obligation applicable to) any indebtedness, or is in material
default under any regulation of any governmental agency or court
decree or order, or is in default under any Requirements of Law
which default could result in a Material Adverse Change.
SECTION 4.5. Litigation, Legislation, etc. There is no
pending or, to the knowledge of the Borrower, threatened
litigation, arbitration or governmental investigation, proceeding
or inquiry which, if adversely determined, could result in a
Material Adverse Change. To the knowledge of the Borrower, there
is no legislation, governmental regulation or judicial decision
that could result in a Material Adverse Change.
SECTION 4.6. Ownership of Properties. The Borrower owns
good title to all of its material personal properties and assets
of any nature whatsoever, free and clear of all Liens.
SECTION 4.7. Accuracy of Information. All factual
information heretofore or contemporaneously furnished by or on
behalf of the Borrower in writing to the Lender for purposes of
or in connection with this Agreement or any transaction
contemplated hereby is true and accurate in every material
respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of this
Agreement by the Lender and such information is not incomplete by
omitting to state any material fact necessary to make such
information not misleading. Neither this Agreement nor any
document or statement furnished to the Lender by or on behalf of
the Borrower contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the
statements contained herein or therein not materially misleading.
ARTICLE 5
COVENANTS
SECTION 5.1. Affirmative Covenants. The Borrower agrees
with the Lender that until all Obligations (other than
Obligations that expressly survive the termination of this
Agreement pursuant to Section 7.4) have been paid and performed
in full, the Borrower will perform the Obligations set forth in
this Section 5.1.
SECTION 5.1.1. Maintenance of Corporate Existence, etc. The
Borrower will cause to be done at all time all things necessary
to maintain and preserve the corporate existence of the Borrower.
SECTION 5.1.2. Foreign Qualification. The Borrower will
cause to be done at all times all things necessary to be duly
qualified to do business and be in good standing as a foreign
corporation in each jurisdiction where the failure to so qualify
could result in a Material Adverse Change.
SECTION 5.1.3. Payment of Taxes, etc. The Borrower will pay
and discharge, as the same become due and payable, (a) all
Charges against it or on any of its property, as well as claims
of any kind which, if unpaid, might become a Lien upon any one of
its properties, and (b) all lawful claims for labor, materials,
supplies, services or otherwise before any thereof become a
Default; provided, however, that the foregoing shall not require
the Borrower to pay or discharge any such Charge or claim so long
as it shall be diligently contesting the validity thereof in good
faith by appropriate proceedings and shall have set aside on its
books adequate reserves in accordance with GAAP.
SECTION 5.1.4. Notice of Default, Litigation, etc. Upon
learning thereof, the Borrower will give prompt written notice
(with a description in reasonable detail) to the Lender of:
(a) the occurrence of any Default;
(b) the occurrence of any litigation, arbitration or
governmental investigation or proceeding not previously disclosed
in writing by the Borrower to the Lender which has been
instituted or, to the knowledge of the Borrower, is threatened
against, the Borrower or to which any of its properties, assets
or revenues is subject which, if adversely determined, could
result in a Material Adverse Change; and
(c) the occurrence of any other circumstances which could
result in a Material Adverse Change.
SECTION 5.1.5. Books and Records. The Borrower will keep
books and records reflecting all of its business affairs and
transactions in accordance with GAAP and permit the Lender or any
of its representatives, during normal business hours, to visit
all of its offices, to discuss its financial matters with its
officers and independent public accountants and to examine (and,
at the expense of the Borrower, photocopy extracts from) any of
its books or other corporate records. The Borrower shall pay any
fees of its independent public accountants incurred in connection
with the Lender's exercise of its rights pursuant to this Section
5.1.6.
SECTION 5.1.6. Maintenance of Properties, Etc. The Borrower
will maintain and preserve all of its properties (real and
personal and including all intangible assets), except obsolete
properties, which are used or necessary in the conduct of its
business in good working order and condition, ordinary wear and
tear excepted.
SECTION 5.1.7. Maintenance of Licenses and Permits. The
Borrower will maintain and preserve all rights, permits,
licenses, regulatory approvals and privileges issued under or
arising under any Requirements of Law to the extent material to
the conduct of the business of the Borrower.
SECTION 5.1.8. Compliance with Laws. The Borrower will
comply with all applicable Requirements of Law; provided,
however, that this Section 5.1.8 shall not apply to any
circumstances of noncompliance that together with all other
noncompliance could not result in a Material Adverse Change.
SECTION 5.2. Negative Covenants. The Borrower agrees with
the Lender that until all Obligations (other than Obligations
that expressly survive the termination of this Agreement pursuant
to Section 7.4) have been paid and performed in full, the
Borrower will perform the Obligations set forth in this Section
5.2.
SECTION 5.2.1. Indebtedness. The Borrower will not create,
incur, assume or suffer to exist or otherwise become or be liable
in respect of any indebtedness other than:
(a) indebtedness in respect of the Loans and other
Obligations;
(b) indebtedness in respect of liabilities resulting from
(i) endorsements of negotiable instruments in the ordinary course
of business; and (ii) surety bonds and other bonds issued for the
Borrower's account in the ordinary course of business;
(c) indebtedness of the Borrower existing on the Closing
Date;
(d) capitalized lease liabilities;
(e) Purchase money indebtedness;
(f) extensions, refinancings, replacements and renewals of
any of the foregoing Indebtedness described in clauses (c)
through (e) of this Section 5.2.1, provided that the principal
amount thereof is not increased, and such extension, refinancing,
replacement or renewal does not impose more burdensome terms upon
the Borrower than the indebtedness being extended, refinanced,
replaced or renewed.
SECTION 5.2.2 Liens. The Borrower will not create, incur,
assume or suffer any Lien upon any of its property, revenues or
assets, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter
payable with penalty or being contested in good faith by
appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books; and
(b) Liens existing as of the Closing Date.
SECTION 5.2.3 Consolidation, Merger, Subsidiaries, etc.
(a) The Borrower will not liquidate or dissolve,
consolidate with, or merge into or with, any Person, or purchase
or otherwise acquire all or substantially all of the assets or
stock of any Person (or of any operating division or unit
thereof).
(b) The Borrower will not create any subsidiary or transfer
any assets to any subsidiary.
SECTION 5.2.4 Asset Dispositions, etc. The Borrower will
not sell, transfer, lease or otherwise dispose of, or grant
options, warrants or other rights with respect to, any of its
assets (including accounts receivable) to any Person in excess of
$10,000 in the aggregate, unless (a) such disposition is made in
the ordinary course of business and consists of inventories; or
(b) such disposition constitutes a disposition of obsolete or
retired assets no longer used in the business of the Borrower.
SECTION 5.2.5 Modification of Organic Documents, etc. The
Borrower will not consent to any amendment, supplement or other
modification of any of the terms or provisions contained in, or
applicable to, the charter or the by-laws of the Borrower.
SECTION 5.2.6 Inconsistent Agreements. The Borrower will
not enter into any material agreement containing any provision
which would be violated or breached in any material respect by
any Loan or by the performance by the Borrower of its obligations
hereunder or under any Loan Document.
ARTICLE 6
EVENTS OF DEFAULT
SECTION 6.1 Events of Default. The Term "Event of
Default" shall mean any of the events set forth in this Section
6.1.
SECTION 6.1.1. Non-Payment of Obligations. The Borrower
shall default:
(a) in the payment or prepayment when due of any principal
of any Loan;
(b) in the payment when due of the interest payable in
respect of any Loan or any other Obligations and such default
shall continue unremedied for a period of five (5) days.
SECTION 6.1.2. Non-Performance of Certain Covenants. The
Borrower shall default in the due performance and observance of
any of its obligations under Section 5.1 and such default shall
continue unremedied for a period of ten (10) days after notice
thereof shall have been given to the Borrower by the Lender (or
if such default is not reasonably susceptible to cure within 10
days and so long as the Borrower promptly commences and
diligently pursues such cure, such longer period as is reasonably
needed to effect such cure, but in no event longer than 30 days
from the date notice is given), or shall default in the due
performance or observation of any of its obligations under
Section 5.2.
SECTION 6.1.3. Defaults Under Other Loan Documents; Non-
Performance of Other Obligations. Any "Event of Default" shall
occur under the other Loan Documents; or the Borrower shall
default in the due performance and observance of any other
obligation, covenant or agreement contained herein or in any
other Loan Document and such default shall continue unremedied
for a period of ten (10) days after notice thereof shall have
been given to the Borrower by the Lender (or if such default is
not reasonably susceptible to cure within 10 day and so long as
the Borrower promptly commences and diligently pursues such cure,
such longer period as is reasonably needed to effect such cure,
but in no event longer than 30 days from the date notice is
given).
SECTION 6.1.4 Bankruptcy, Insolvency, etc. The Borrower or
any of its Subsidiaries shall:
(a) become insolvent or generally fail to pay, or admit in
writing its inability to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment
of a trustee, receiver, sequestrator or other custodian for any
of any of the Borrower or its Subsidiaries or any of its property
or make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent of
acquiescence, permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for any of the
Borrower or its Subsidiaries or for a substantial part of its
property, and such trustee, receiver, sequestrator or other
custodian shall not be discharged within sixty (60) days;
(d) permit or suffer to exist the commencement of any
bankruptcy, plan reorganization, debt arrangement or other case
or proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation proceeding, in respect of
any of the Borrower or its Subsidiaries and, if such case or
proceeding is not commenced by the Borrower or its Subsidiaries,
as the case may be, such case or proceeding shall be consented to
or acquiesced in or shall result in the entry of an order for
relief or shall remain for sixty (60) days undismissed; or
(e) take any corporate action authorizing, or in
furtherance of, any of the foregoing.
SECTION 6.1.5. Breach of Warranty. Any representation or
warranty of the Borrower hereunder or in any other Loan Document
or in any other writing furnished by or on behalf of the Borrower
to the Lender for the purposes of or in connection with this
Agreement or any such Loan Document is or shall be incorrect when
made in any material respect.
SECTION 6.1.6. Default on Other Indebtedness, etc. (a) Any
indebtedness of the Borrower in an aggregate principal amount
exceeding $25,000 (i) shall be duly declared to be or shall
become due and payable prior to the stated maturity thereof, or
(ii) shall not be paid as and when the same becomes due and
payable including any applicable grace period; or (b) there shall
occur and be continuing any event under any Instrument relating
to any indebtedness of the Borrower in an aggregate principal
amount exceeding $25,000, the effect of which is to cause such
indebtedness to become due prior to its stated maturity or to
permit the holder or holders of such indebtedness, or a trustee,
agent or other representative on behalf of such holder or
holders, to cause such indebtedness to become due prior to its
stated maturity or to require (or permit the holder or holders to
require) the Borrower to redeem, repurchase or otherwise acquire
or retire such indebtedness for value.
SECTION 6.1.7. Judgments. A final judgment which, with
other such outstanding final judgments against the Borrower (in
each case to the extent not covered by insurance), exceeds an
aggregate of $25,000, shall be entered against the Borrower and,
within 30 days after entry thereof, such judgment shall not have
been discharged or execution thereof stayed pending appeal, or,
within 30 days after the expiration of any such stay, such
judgment shall not have been discharged or stayed.
SECTION 6.2. Action if Bankruptcy. If any Event of
Default described in subsection (d) of Section 6.1.4 shall occur,
the outstanding principal amount of all outstanding Loans and all
other Obligations shall automatically be and become immediately
due and payable without notice, demand or presentment.
SECTION 6.3. Action if Other Event of Default. If any
Event of Default (other than any Event of Default described in
Section 6.1.4) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Lender may, upon notice or
demand declare all or any portion of the outstanding principal
amount of the Loans to be due and payable and any or all other
Obligations to be due and payable, whereupon the full unpaid
amount of such Loans and any and all other Obligations which
shall be so declared due and payable shall be and become
immediately due and payable without further notice, demand, or
presentment.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Waivers, Amendments, etc. (a) The provisions
of this Agreement and of each Loan Document may from time to time
be amended, modified or waived, if such amendment, modification
or waiver is in writing and, (x) in the case of an amendment or
modification, is consented to by the Borrower and the Lender and
(y) in the case of a waiver of obligation of the Borrower or
compliance with any prohibition contained in this Agreement or
any other Loan Document, is consented to by the Lender.
(b) No failure or delay on the part of the Lender in
exercising any power or right under this Agreement or any other
Loan Document shall operate as a wavier thereof, nor shall any
single or partial exercise of any such power or right preclude
any other or further exercise thereof or the exercise of any
other power or right. No notice to or demand on the Borrower in
any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Lender to any
other Loan Document shall, except as may be otherwise stated in
such waiver or approval, be applicable to subsequent
transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or regulatory approval thereafter to
be granted hereunder.
(c) The Lender shall be under no obligation to marshal any
assets in favor of the Borrower or any other party or against or
in payment of any or all of the Obligations. Recourse for
security shall not be required at any time. To the extent that
the Borrower makes a payment or payments to the Lender that are
subsequently for any reason invalidated, set aside or required to
be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable
cause, then to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied, and all rights
and remedies therefor, shall be revived and continue in full
force and effect as if such payment had not been made.
SECTION 7.2. Notices. All notices hereunder shall be in
writing or by telecopy and shall be sufficiently given to the
Lender or the Borrower if addressed or delivered to them at the
following addresses:
If to Lender: IMM International, Inc.
Attn: Xxxx Xxxxxxxxxx, President
#0 Xxxxxxxxxx Xxxx, Xxxxx 00
Xxxxxxx, XX 00000
Telecopy No. 000-000-0000
If to Borrower: J-Bird Music Group, Ltd.
Attn: Xxx Xxxxxxxx, President
000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Telecopy No. 000-000-0000
or at such other address as any party may designate to any other
party by written notice. All such notices and communications
shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; when received, if deposited in
the mail, postage prepaid; when transmission is verified, if
telecopied; and on the next Business Day, if timely delivered to
an air courier guaranteeing overnight delivery.
SECTION 7.3. Costs and Expenses. The Borrower agrees to
pay and hold the Lender harmless from any stamp, documentary,
intangibles, transfer or similar taxes or charges, and all
recording or filing fees with respect to the Loan Documents or
any payments to be made thereunder, and to reimburse the Lender
upon demand for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and expenses) incurred by the Lender
in enforcing the Obligations of the Borrower under this Agreement
or any other Loan Document or related Document or in connection
with any restructuring or "work-out" of any Obligations.
SECTION 7.4. Survival. The obligations of the Borrower
under Sections 2.5 and 7.3, shall in each case survive any
termination of this Agreement. The representations and
warranties made by the Borrower in this Agreement, the Term Notes
and each other Loan Document shall survive the execution and
delivery of this Agreement, the Term Notes and each such other
Loan Document.
SECTION 7.5. Severability. Any provision of this
Agreement, the Term Notes or any other Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of
this Agreement, the Term Notes or such other Loan Document or
affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 7.6. Headings. The various headings of this
Agreement, the Term Notes and of each other Loan Document are
inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement, the Notes or such other Loan
Document or any provisions hereof or thereof.
SECTION 7.7. Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several
counterparts, each of which shall be deemed to be an original and
all of which shall constitute together but one and the same
agreement. This Agreement shall become effective when
counterparts hereof executed on behalf of the Borrower and the
Lender shall have been received by the Lender.
SECTION 7.8. Governing Law; Entire Agreement. (a) THIS
AGREEMENT AND THE TERM NOTES SHALL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF CONNECTICUT. This Agreement, the Term Notes and the
other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect
thereto.
(b) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS
TO THE JURISDICTION OF ANY CONNECTICUT STATE OR FEDERAL COURT
SITTING IN CONNECTICUT IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
RELATED DOCUMENT, AND EACH HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH CONNECTICUT STATE OR FEDERAL COURT. THE
BORROWER AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE WITH
RESPECT TO ANY SUCH ACTION OR PROCEEDING BROUGHT BY IT AGAINST
THE LENDER. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF ANY INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING.
(c) The Borrower irrevocably consents to the service of
process in the State of Connecticut when and as such legal
actions or proceedings may be brought in the courts of the State
of Connecticut or of the United States of America sitting in
Connecticut by the mailing of the copies thereof by certified
mail, return receipt requested, postage prepaid, to it at its
address set forth herein, such service to become effective upon
the earlier of (i) the date 10 calendar days after such mailing
or (ii) any earlier date permitted by applicable law. Nothing in
this Section 7.8 shall affect the right of the Lender to bring
proceedings against the Borrower in the courts of any other
jurisdiction or to serve process in any other manner permitted by
applicable law.
SECTION 7.9. Successors and Assigns. This Assignment
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns;
provided, however, that the Borrower may not assign or transfer
its rights or obligations hereunder without the prior written
consent of the Lender.
SECTION 7.10. Other Transactions. Nothing contained herein
shall preclude the Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other
Loan Document, with the Borrower or any of its Affiliates in
which the Borrower or such Affiliate is not restricted hereby
from engaging with any other Person.
SECTION 7.11. Waiver of Jury Trail, etc., THE LENDER AND
THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE LENDER OR THE
BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
ENTERING INTO THIS AGREEMENT.
SECTION 7.12. Usury Savings Clause. Notwithstanding
anything to the contrary in this Agreement or any other Loan
Document, if at any time any rate of interest accruing on any
Obligation, when aggregated with all amounts payable by the
Borrower under any of the Loan Documents that are deemed or
construed to be interest accrued or accruing on such Obligation
under applicable law, exceeds the highest rate of interest
permissible under any law which a court of competent jurisdiction
shall, in a final determination, deem applicable to the Lender
with respect to such Obligation (each a "Maximum Lawful Rate"),
then in such event and so long as the Maximum Lawful Rate would
be so exceeded, such rate of interest shall be reduced to the
Maximum Lawful Rate; provided that if at any time thereafter such
rate of interest accruing on Obligations held by the Lender is
less than the Maximum Lawful Rate, the Borrower shall continue to
pay interest to the Lender at the Maximum Lawful Rate until such
time as the total interest received by the Lender in respect of
the Obligations held by it is equal to the total interest which
the Lender would have received had interest on all Obligations
held by the Lender (but for the operation of this Section 7.12)
accrued at the rate otherwise applicable under this Agreement and
the other Loan Documents. Thereafter, interest payable to the
Lender in respect of the Obligations held by it shall accrue at
the applicable rate set forth in this Agreement or other Loan
Documents unless and until such rate again exceeds the Maximum
Lawful Rate, in which event this Section 7.12 shall apply again.
In no event, shall the total interest received by the Lender
pursuant to the terms hereof exceed the amount which the Lender
could lawfully have received had interest been calculated for the
full term of this Agreement at the Maximum Lawful Rate. In the
event that the Maximum Lawful Rate is calculated pursuant to this
Section 7.12, (a) if required by applicable law, such interest
shall be calculated at a daily rate equal to the Maximum Lawful
Rate divided by the number of days in the year in which such
calculation is made, and (b) if permitted by applicable law, the
Borrower and the Lender shall (i) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effect thereof, and
(iii) amortize, prorate, allocate and spread in equal or unequal
parts that total amount of interest throughout the entire
contemplated term of the Loans so that interest for the entire
term of the Loans shall not exceed the Maximum Lawful Rate. In
the event that a court of competent jurisdiction, notwithstanding
the provisions of this Section 7.12 shall make a final
determination that the Lender has received interest in excess of
the Maximum Lawful Rate, the Lender shall, to the extent
permitted by applicable law, promptly apply such excess, first to
any interest due and outstanding under this Agreement and the
other Loan Documents, second to any principal due and payable
under this Agreement and the Term Notes, third to the remaining
principal amount of the Notes and fourth to other unpaid
Obligations held by the Lender, and thereafter shall refund any
excess to the Borrower or as a court of competent jurisdiction
may otherwise order.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
J-BIRD MUSIC GROUP, LTD.
By: /s/
Name: Xxxx X. Xxxxxxxx
Title: President
IMM INTERNATIONAL, INC.,
By: /s/
Name: Hope X. Xxxxxxxxxx
Title: President
Exhibit A
TERM NOTE
$_____________
_________, 1998
FOR VALUE RECEIVED, the undersigned J-BIRD MUSIC GROUP,
LTD., a Pennsylvania corporation (the "Borrower"), promises to
pay to the order IMM INTERNATIONAL, INC., a Pennsylvania
corporation (the "Lender"), at the times and in the manner
provided in the Credit Agreement referenced hereinafter, the
principal sum of
________________________________________________________ AND
NO/100 DOLLARS ($_________________) or, if less, the outstanding
principal amount of the Term Loan made by the Lender pursuant to
that certain Credit Agreement, dated as of ___________________,
1998 (as amended, restated, supplemented or otherwise modified
form time to time, the "Credit Agreement"; capitalized terms used
herein and not defined herein shall have the meaning ascribed to
them in the Credit Agreement), by and among the Borrower, and the
Lender.
The unpaid principal amount of this Note from time to time
shall bear interest as provided in Section 2.4 of the Credit
Agreement. All payments of principal of and interest on this
Note shall be payable in lawful currency of the United States of
America to the account designated by the Lender in immediately
available funds in accordance with Sections 2.3 and 2.4 of the
Credit Agreement.
This note is a Term Note referenced in, and evidences
indebtedness incurred under, the Credit Agreement, to which
reference is made for a statement of the terms and conditions on
which the Borrower is permitted and required to make prepayments
and repayments of principal of the indebtedness evidenced by this
Note and on which such indebtedness may be declared to be or may
automatically become immediately due and payable.
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CONNECTICUT.
The Borrower hereby waives all requirements as to diligence,
presentment, demand of payment, protest and notice of any kind
with respect to this Note. All amounts owing hereunder are
payable by the Borrower without relief from any valuation or
appraisal laws.
J-BIRD MUSIC GROUP, LTD.
By:
________________________________
Name:
Title:
