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EXHIBIT 4.1
MUSI INVESTMENTS S.A.
LOAN AGREEMENT
This Loan Agreement (the "Agreement") dated as of May 14, 2001, by and
between MUSI INVESTMENTS S.A., a Luxembourg societe anonyme ("Lender") and the
Borrower described below:
In consideration of the MUSI Loan described below and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby,
Lender and Borrower agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other terms defined
herein, the following terms shall have the meaning set forth with respect
thereto:
A. Affiliate. As to any Person, each of the Persons that directly or
indirectly, through one or more intermediaries, owns or controls, or is
controlled by or under common control with, such Person or any individual
related to such Person. For the purpose of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies, whether through the ownership of voting
securities, by contract or otherwise.
B. BofA Facility. The commercial loan agreement dated as of February 29,
2000 (as amended) between Bank of America, N.A., a national banking association
("BofA"), and Borrower.
C. Borrower. Xxxxxx Technologies, Inc., a Delaware corporation.
D. Borrower's Address: 0000 Xxxxxx Xxxx Xxxxxxxxx, Xxxxxxx-Xxxxx, XX 00000
E. Collateral. The property and interests in property securing payment and
performance of the MUSI Loan, as set forth in Section 3 hereof.
F. Convertible Note. The promissory note described in Section 2 hereof.
G. Hazardous Materials. All materials defined as hazardous wastes or
substances under any local, state or federal environmental laws, rules or
regulations, and petroleum, petroleum products, oil and asbestos.
H. Loans. Collectively, the loans made by Lender to Borrower under this
Agreement and any other subsequent loan or extension of credit by Lender to the
Borrower that is subject to this Agreement.
I. Loan Documents. Loan Documents means this Loan Agreement, the
Convertible Note executed by Borrower in favor of Lender and all other
documents, instruments, guaranties,
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certificates and agreements executed and/or delivered by Borrower, any guarantor
or third party in connection with this Loan Agreement.
J. Material Adverse Effect. Any material adverse effect on (i) the
business, assets, operations or financial condition of Borrower and its
subsidiaries, taken as a whole, (ii) the Borrower's ability to pay the
Obligations in accordance with the terms thereof, or (iii) the Collateral or
Lender's security interest in the Collateral or the priority of such security
interest.
K. Obligations. The Loans and all other loans, advances, indebtedness,
liabilities, obligations, covenants and duties (including post-petition interest
on the foregoing, to the extent lawful) owing, arising, due or payable from the
Borrower to the Lender of any kind or nature, present or future, arising under
this Agreement or any of the other Loan Documents, whether direct or indirect
(including those acquired by assignment), absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising. The term
includes, without limitation, all interest, charges, expenses, fees, attorneys'
fees and any other sums chargeable to the Borrower by the Lender under this
Agreement or any of the other Loan Documents.
L. Permitted Liens. Collectively, (i) all liens or security interests
securing indebtedness owed to Lender, (ii) pledges or deposits made in the
ordinary course of business in connection with or to secure workers'
compensation, unemployment insurance, pensions or other employee benefits
accruing under provisions of law or under agreements now in force and disclosed
to Lender, (iii) liens imposed by law, such as carriers', warehousemen's,
materialmen's and vendors' liens and other similar liens, incurred in good faith
in the ordinary course of business and securing obligations that are not
overdue, or which are being contested in good faith and against which, if
requested by the Lender, the Borrower will establish reserves satisfactory to
the Lender, (iv) zoning restrictions, easements, licenses, reservations,
covenants, conditions, and restrictions on the use of property which do not, in
the aggregate, materially detract from the value of Borrower's property or
assets or materially impair the use thereof in the operation of its business;
(v) liens for taxes not due or which are being contested in good faith and
against which, if requested by the Lender, the Borrower will establish reserves
satisfactory to the Lender; (vi) purchase money security interests granted by
the Borrower in the ordinary course of its business; and (vii) liens and
security interests described on Schedule 1L attached hereto.
M. Person. A corporation, an association, a joint venture, a limited
liability company, a partnership, an organization, a business, an individual, a
trust or a government or political subdivision thereof or any government agency
or any other legal entity.
N. Prime Rate. Prime Rate shall have the same meaning set forth in the
Convertible Note.
O. Private Placement. The issuance by the Company to any investor (other
than Lender) pursuant to a subscription agreement or other purchase agreement of
equity securities or convertible securities, including "Units" consisting of
common stock and warrants to acquire common stock, of the Company, other than
any issuance made pursuant to a registration statement filed under the
Securities Act of 1933, as amended. A "Designated Private Placement" means the
sales of Units listed on Schedule 1O attached hereto.
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P. Tangible Net Worth. The amount by which the Borrower's total assets
exceed total liabilities, in accordance with GAAP, minus: (i) goodwill, net of
accumulated amortization; (ii) contract rights, net of accumulated amortization;
(iii) leasehold improvements, net of accumulated depreciation; (iv) assets
representing claims on (A) shareholders, directors or officers or (B) Affiliates
and (v) other assets net of accumulated depreciation and/or amortization
constituting intangible assets including, without limitation, any capitalized
patents, trademarks, tradenames, copyrights or similar intellectual property.
Accounting Terms. All accounting terms not specifically defined or
specified herein shall have the meanings generally attributed to such terms
under generally accepted accounting principles ("GAAP"), as in effect from time
to time, consistently applied. All financial computations made under this
Agreement for the purpose of determining compliance with the financial
requirements of this Agreement shall be made, and all financial information
required under this Agreement shall be prepared, in accordance with GAAP, as in
effect on the date hereof.
2. LOAN.
A. Subject to the terms of this Agreement, Lender hereby agrees to extend a
loan to Borrower (the "MUSI Loan"), in the principal amount of One Million Five
Hundred Thousand Dollars ($1,500,000), for the purpose of: (1) paying in full
the outstanding principal balance due under the BofA Facility; and (2) to the
extent that the MUSI Loan exceeds the outstanding principal balance due under
the BofA Facility, Borrower shall use the balance of the MUSI Loan for its
working capital needs and other general corporate purposes.
B. To evidence the MUSI Loan, Borrower shall execute and deliver to Lender
a convertible promissory note (the "Convertible Note") in the principal amount
of $1,500,000, which Convertible Note shall bear interest and be payable in
accordance with the terms set forth hereinbelow. The MUSI Loan shall mature and
become payable in full on January 2, 2002, which date shall be the "Maturity
Date."
C. Borrower shall apply the aggregate net cash proceeds of all Private
Placements, including the Designated Private Placements, received by Borrower in
excess of One Million Three Hundred Thousand Dollars ($1,300,000) to repay any
outstanding principal amount of the MUSI Loan until the same has been repaid in
full.
D. Interest and Principal. Interest on the principal amount outstanding
under the MUSI Loan from time to time shall accrue at a variable rate of the
Prime Rate, plus seventy-five basis points (.75%) per annum, which accrued
interest shall be payable quarterly in arrears. The principal of the Convertible
Note shall be repaid in full on the Maturity Date, together with all accrued but
unpaid interest.
E. Collateral Security. Repayment in full of all Obligations of the
Borrower shall be secured by the Collateral.
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F. Pledge and Guaranty. Repayment in full of all Obligations of the
Borrower shall be secured by a pledge and guaranty by Xxxxxxx X. Xxxxxx (the
"Guarantor") of all of his shares of common stock of Borrower, pursuant to a
pledge agreement and guaranty agreement, each in form satisfactory to the
Lender.
3. COLLATERAL SECURITY. Payment and performance of the Obligations shall be
secured by the following Collateral, and the Borrower hereby grants, conveys,
transfers and assigns to the Lender a security interest in and lien upon all of
the property described below:
A. A first and prior assignment of, security interest in and lien upon all
of the Borrower's interests in and to all patents for products, goods and items
produced or manufactured by the Borrower, and all processes employed in the
production or manufacture thereof, to the extent the granting of such security
interests shall not constitute a violation of law or a default under any
existing agreement between the Borrower and any Person with regard to any such
patents;
B. A continuing first priority security interest in and lien upon all of
the Borrower's accounts, inventory, and general intangibles, and a first
priority security interest in and lien upon all of the Borrower's furniture,
machinery and equipment, whether now owned or hereafter acquired, and wherever
located, together with all proceeds thereof.
Borrower agrees and undertakes to execute and deliver to the Lender such
deeds of trust, security agreements, pledge agreements, assignments, financing
statements, subordinations, certificates, waivers, estoppel agreements, and
other documentation, in form acceptable to the Lender, as may be reasonably
requested by the Lender in connection with the Collateral. Borrower further
agrees that all of the Collateral shall secure all of the Obligations of the
Borrower to the Lender. It is specifically agreed and acknowledged by the
parties hereto that the personal and real property owned by Schoeller Xxxxxx
Technologies GMBH, a joint venture between Borrower and Schoeller Textil AG,
shall not be deemed to be Collateral, as herein defined.
4. CONDITIONS PRECEDENT. The Lender's agreement to extend the MUSI Loan to
the Borrower is subject to the fulfillment, to the Lender's satisfaction, of all
of the following conditions:
A. Lender shall have received, on or before the date hereof (i) a copy of
the resolutions of the Board of Directors of the Borrower, certified on such
date by an officer of the Borrower, authorizing the execution and delivery of
this Agreement, the borrowings hereunder and the execution and delivery of the
Convertible Note, and the other Loan Documents and the Collateral, and (ii) such
additional documents and requirements as the Lender or counsel for the Lender
may reasonably request.
B. The Borrower shall have executed and delivered all documentation for the
MUSI Loan reasonably requested by the Lender, which shall be in form and content
reasonably acceptable to the Lender and its counsel.
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C. The Borrower shall have provided to the Lender, in form satisfactory to
the Lender, all financial and other information concerning its business and
affairs, as reasonably requested by the Lender.
D. To the best knowledge of the Borrower, no event has occurred or failed
to occur that would have a Material Adverse Effect on the financial condition of
the Borrower, as set forth in its December 31, 2000 annual financial statements.
E. The Borrower shall have certified that the execution of the Loan
Documents shall not cause any default which would have a Material Adverse Effect
on Borrower under any other contract or agreement to which the Borrower is
subject.
F. The Borrower shall have paid or agreed to make payment of all reasonable
expenses actually incurred in connection with the closing of the MUSI Loan,
including, without limitation, insurance premiums, audit charges and attorneys'
fees.
G. The outstanding principal balance due under the BofA Facility shall not
be greater than $1,500,000, and the Company, except as disclosed on Schedule 4G
attached hereto, shall not be in default of any of its obligations under the
BofA Facility.
H. The closing of each of the Designated Private Placements shall occur and
the cash proceeds thereof shall be released from escrow to the Borrower.
5. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
to Lender as follows:
A. Good Standing. Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware (except as
to franchise taxes which are being contested in good faith) and has the power
and authority to own its property and to carry on its business.
B. Authority and Compliance. Borrower has full power and authority to
execute and deliver the Loan Documents and to incur and perform the obligations
provided for therein, all of which have been duly authorized by all proper and
necessary action of the appropriate governing body of Borrower. No consent or
approval of any public authority or other third party is required as a condition
to the validity of any Loan Document, and Borrower is in compliance with all
material laws and regulatory requirements to which it is subject, the failure to
comply with would result in a Material Adverse Effect on the Borrower.
C. Binding Agreement. This Agreement and the other Loan Documents executed
by Borrower constitute valid and legally binding obligations of Borrower,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
reorganization and similar laws and other laws generally affecting the
enforceability of creditors' rights and to general principles of equity.
D. Litigation. There is no material proceeding involving Borrower pending
or, to the knowledge of Borrower, threatened before any court or governmental
authority, agency or
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arbitration authority which is likely to result in a Material Adverse Effect on
the Borrower, except as disclosed in Schedule 5D attached hereto.
E. No Conflicting Agreements. There is no charter, bylaw, stock provision
or other document pertaining to the organization, power or authority of Borrower
and no provision of any existing agreement, mortgage, indenture or contract
binding on Borrower or affecting its property, which would conflict with or in
any way prevent the execution, delivery or carrying out of the terms of this
Agreement and the other Loan Documents, and violation of which would have a
Material Adverse Effect on the Borrower.
F. Ownership of Assets. Borrower has good title to, or a valid leasehold
interest in, its assets, and its assets are free and clear of liens, except
those granted to Lender, except as disclosed in Schedule 1L attached hereto.
G. Taxes. Except as set forth on Schedule 5G attached hereto, all material
taxes and assessments due and payable by Borrower have been paid or are being
contested in good faith by appropriate proceedings and Borrower has filed all
material tax returns which it is required to file, or has been granted
extensions of time to file such tax returns.
H. Financial Statements. The audited financial statements of Borrower
heretofore delivered to Lender have been prepared in accordance with GAAP
applied on a consistent basis throughout the period involved, with respect to
Borrower, and fairly present Borrower's financial condition as of the date or
dates thereof, and there has been no material adverse change in Borrower's or
such companies' financial condition or operations since December 31, 2000. To
the best of its knowledge, all factual information furnished by Borrower to
Lender in connection with this Agreement and the other Loan Documents is and
will be accurate and complete on the date as of which such information is
delivered to Lender and is not and will not be incomplete by the omission of any
material fact necessary to make such information not misleading.
I. Place of Business. Borrower's chief executive office is located at: 0000
Xxxxxx Xxxx Xxxx, Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000.
J. Environmental Matters. To the best of Borrower's knowledge after
diligent investigation, the conduct of Borrower's business operations does not
and will not violate any material federal laws, rules or ordinances for
environmental protection, regulations of the Environmental Protection Agency,
any applicable local or state law, rule, regulation or rule of common law or any
judicial interpretation thereof relating primarily to the environment or
Hazardous Materials, and Borrower will not use or permit any other party to use
any Hazardous Materials at Borrower's places of business except such materials
as are incidental to Borrower's normal course of business, maintenance and
repairs and which are handled in material compliance with all applicable
environmental laws. Borrower agrees to permit Lender, its agents, contractors
and employees to enter and inspect any of Borrower's places of business or any
other property of Borrower at any reasonable times upon three (3) days prior
notice for the purposes of conducting at Lender's expense an environmental
investigation and audit (including taking physical samples) to insure that
Borrower is complying with this covenant.
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K. No Material Adverse Effect. To the best knowledge of Borrower neither
this Agreement nor any of the Loan Documents, nor any written statements when
furnished to the Lender by or on behalf of the Borrower in connection with the
Loans or the Loan Documents, contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading. To the best knowledge of the Borrower, there is no
material fact that the Borrower has not disclosed to the Lender in writing that
would reasonably be deemed to have a Material Adverse Effect on the Borrower.
6. AFFIRMATIVE COVENANTS. Until full payment and performance of all
Obligations of Borrower under the Loan Documents, Borrower will, unless Lender
consents otherwise in writing (and without limiting any requirement of any other
Loan Document):
A. Financial Condition. Maintain Borrower's financial condition, determined
in accordance with GAAP applied on a consistent basis throughout the period
involved, as follows:
(i) Maintain a Tangible Net Worth of not less than $1,250,000 as of
the end of each fiscal quarter hereafter.
B. Financial Statements and Other Information. Maintain a system of
accounting satisfactory to Lender and in accordance with GAAP applied on a
consistent basis throughout the period involved, permit Lender's officers or
authorized representatives to visit and inspect Borrower's books of account and
other records at such reasonable times and as often as Lender may desire. If an
Event of Default has occurred and continues, Borrower agrees to reimburse the
Lender on demand for the reasonable costs of one such inspection conducted
during such Event of Default. Unless written notice of another location is given
to Lender, Borrower's books and records will be located at Borrower's chief
executive office set forth above. All financial statements called for below
shall be prepared in form and content acceptable to Lender and by independent
certified public accountants acceptable to Lender.
In addition, Borrower will:
(i) Furnish to Lender audited consolidated financial statements of
Borrower for each fiscal year of Borrower, within 120 days after the close of
each such fiscal year.
(ii) Furnish to Lender monthly consolidated financial statements
(including a balance sheet and profit and loss statement) of Borrower, which
shall be prepared by Borrower, for each month of each fiscal year of Borrower,
within 45 days after the end of each month.
(iii) Furnish to Lender for each fiscal quarter a compliance
certificate for (and executed by an authorized representative of) Borrower
concurrently with and dated as of the date of delivery of each of the financial
statements for such fiscal quarter as required in paragraphs i and ii above,
containing (a) a certification that the financial statements of even date are
true and correct and that the Borrower is not in default under the terms of this
Agreement, and (b) computations and conclusions, in such detail as Lender may
request, with respect to compliance with Section 6(A)(i) of this Agreement which
compliance certificate shall be substantially in the form of Exhibit A attached
hereto.
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(iv) Furnish to Lender promptly such additional information, reports
and statements respecting the business operations and financial condition of
Borrower from time to time, as Lender may reasonably request. Without limiting
the scope of the preceding sentence, Borrower shall furnish Lender a copy of its
quarterly report on Form 10-Q promptly upon the filing thereof with the
Securities and Exchange Commission.
C. Reservation of Shares. The Company will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued common stock or its authorized and issued common stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
common stock upon exercise of the conversion right of the Convertible Note, the
maximum number of shares of common stock which may then be deliverable upon
conversion of the entire outstanding principal balance under the Convertible
Note.
D. Insurance. Maintain insurance with responsible insurance companies on
such of its properties, in such amounts and against such risks as is customarily
maintained by similar businesses operating in the same vicinity, specifically to
include fire and extended coverage insurance covering all assets, business
interruption insurance, workers compensation insurance and liability insurance,
all to be with such companies and in such amounts as are satisfactory to Lender
and with respect to insurance on the Collateral, to contain a mortgagee clause
naming Lender as a loss payee or an additional insured (as applicable) as its
interest may appear and providing for at least 30 days prior notice to Lender of
any cancellation thereof. Satisfactory evidence of such insurance will be
supplied to Lender prior to funding under the MUSI Loan and 30 days prior to
each policy renewal.
E. Existence and Compliance. Maintain its existence, good standing and
qualification to do business, where required and the failure to be so qualified
will have a Material Adverse Effect on Borrower and comply with all laws,
regulations and governmental requirements including, without limitation,
environmental laws applicable to it or to any of its property, business
operations and transactions, where the failure to comply will have a Material
Adverse Effect on Borrower.
F. Adverse Conditions or Events. Promptly advise Lender in writing of (i)
any condition, event or act which comes to its attention that Borrower
reasonably believes is likely to have a Material Adverse Effect, (ii) any
litigation filed by or against Borrower, an adverse outcome of which could
reasonably be expected to have a Material Adverse Effect on Borrower, (iii) any
event that has occurred that would constitute an event of default under any Loan
Documents and (iv) any uninsured loss of Collateral through fire, theft,
liability or property damage in excess of an aggregate of $500,000.00.
G. Taxes and Other Obligations. Pay all of its taxes, assessments and other
obligations where the failure to make such payments will have a Material Adverse
Effect on Borrower, including, but not limited to taxes, costs or other expenses
arising out of this transaction, as the same become due and payable, except to
the extent the same are being contested in good faith by appropriate proceedings
in a diligent manner.
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H. Maintenance. Maintain all of its tangible property in good condition and
repair, excepting ordinary wear and tear, and make all necessary replacements
thereof (provided that Borrower shall not be required to maintain any obsolete
or immaterial property), and preserve and maintain all material licenses,
trademarks, privileges, permits, franchises, certificates and the like necessary
for the operation of its business.
I. Notification of Environmental Claims. Borrower shall immediately advise
Lender in writing of (i) any and all enforcement, cleanup, remedial, removal, or
other governmental or regulatory actions instituted, completed or threatened
pursuant to any applicable federal, state, or local laws, ordinances or
regulations relating to any Hazardous Materials affecting Borrower's business
operations which is likely to result in a Material Adverse Effect; and (ii) all
claims made or threatened by any third party against Borrower relating to
damages, contribution, cost recovery, compensation, loss or injury resulting
from any Hazardous Materials which is likely to result in a Material Adverse
Effect. Borrower shall immediately notify Lender of any material remedial action
taken by Borrower with respect to Borrower's business operations.
7. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will not, without the
prior written consent of Lender (and without limiting any requirement of any
other Loan Documents):
A. Ownership and Management. Make or permit to be made any material change
in the ownership or executive management of the Borrower.
B. Transfer of Assets or Control. Sell, lease, sell and leaseback, assign
or otherwise dispose of or transfer all or substantially all of its assets,
except in the normal course of its business, or enter into any merger or
consolidation, or transfer control or ownership of the Borrower.
C. Liens. Grant, suffer or permit any contractual or noncontractual lien on
or security interest in the Collateral, other than Permitted Liens. It is
expressly provided, however, that leases for office equipment and vehicles
entered into in the normal course of Borrower's business shall not be subject to
this covenant.
D. Extensions of Credit. Make any loan or advance to any individual,
partnership, corporation or other entity, except: (1) advances to employees of
the Borrower for expenses incurred in the ordinary course of business; (2) loans
made to Schoeller Xxxxxx Technologies GmbH in accordance with the terms of the
Joint Venture Agreement between Borrower and Schoeller Textil AG or as approved
from time to time by the board of directors of the Borrower; (3) loans
outstanding on the date of this Agreement and listed on Schedule 7D attached
hereto.
E. Borrowings. Create, incur, assume or become liable in any manner for any
indebtedness (for borrowed money, lease payments under capital leases, as surety
or guarantor for the debt for another, or otherwise), other than to Lender,
except for (1) normal trade debts incurred in the ordinary course of Borrower's
business; (2) existing indebtedness disclosed to Lender on Schedule 7E(2)
attached hereto; (3) indebtedness arising pursuant to purchase money
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contracts for assets acquired after the date hereof, provided that (i) any lien
in respect of such indebtedness attaches only to the assets purchased, and (ii)
the indebtedness is within the ranges set forth on Schedule 7E(3); (4) other
indebtedness which, by its terms is expressly subordinated in repayment to the
MUSI Loan, and the covenants, events of default and mandatory prepayment
provisions of such indebtedness may not be more restrictive than the
corresponding provisions contained in the Loan Documents and any conversion
rights may not be any more favorable than the conversion rights in the
Convertible Note; and (5) short-term unsecured indebtedness up to an aggregate
amount outstanding of $85,000 at any one time.
F. Dividends and Distributions. Pay any dividend (other than dividends
payable in capital stock of Borrower) or make any distribution on any shares of
any class of its capital stock, other than in the normal course of Borrower's
business, or apply any of its property or assets to the purchase, redemption or
other retirement of any shares of any class of capital stock of Borrower, or in
any way amend its capital structure.
G. Character of Business. Change in any material respect the general
character of business as conducted at the date hereof.
8. DEFAULT. Borrower shall be in default under this Agreement and under
each of the other Loan Documents if it shall default in the payment of any
amounts due and owing under the MUSI Loan and such default continues for 5 days
after written notice thereof. Borrower shall also be in default if it should
fail to timely and properly observe, keep or perform any term, covenant,
agreement or condition in any Loan Document or in any other loan agreement,
promissory note, security agreement, deed of trust, assignment, pledge or other
contract securing or evidencing payment of any indebtedness of Borrower to
Lender, and such default shall continue uncured for a period of thirty (30) days
following written notice by Lender to Borrower; provided, further, that if the
Borrower has undertaken to cure any such default and is diligently prosecuting
such cure, to the reasonable satisfaction of Lender, it shall not constitute a
default under this Agreement if the subject default remains uncured beyond
thirty (30) days following written notice by Lender to Borrower.
9. REMEDIES UPON DEFAULT. If an event of default shall occur, Lender shall
have all rights, powers and remedies available under each of the Loan Documents
as well as all rights and remedies available at law or in equity.
10. NOTICES. All notices, requests or demands which any party is required
or may desire to give to any other party under any provision of this Agreement
must be in writing delivered to the other party at the following address:
Borrower: Xxxxxx Technologies, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxxx-Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx
Chief Financial Officer
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With a copy to:
Womble, Carlyle, Xxxxxxxxx & Rice, PLLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxx, Esq.
Lender: MUSI Investments S.A.
000 Xxx xxx Xxxx Xxxxxxx
X-0000 Xxxxxxxxxx-Xxxxxxxxx
Attn: Dott. Xxxx Xxxxxxx Antivari
With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxx xx Xxxxxxxx Xxxxx-Xxxxxx
00000 Xxxxx, Xxxxxx
Attn: Xxxxx X. Xxxxxxxxx, Esq.
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:
A. If sent by hand delivery, upon delivery;
B. If sent by a nationally-recognized overnight courier, on the business
day following the date sent; or
C. If sent by mail, upon the earlier of the date of receipt or five (5)
days after deposit in the U.S. Mail, first class postage prepaid.
11. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Lender
immediately upon demand the full amount of all costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and all allocated
costs of Lender's in-house counsel), incurred by Lender in connection with (A)
negotiation and preparation of this Agreement and each of the Loan Documents,
and (B) Lender's continued administration thereof. Whenever in the Loan
Documents reference is made to "attorneys' fees" or "counsel fees", each such
reference shall mean and refer to the reasonable fees (and expenses) actually
incurred by the party retaining such attorneys or counsel.
12. MISCELLANEOUS. Borrower and Lender further covenant and agree as
follows, without limiting any requirement of any other Loan Document:
A. Cumulative Rights and No Waiver. Each and every right granted to Lender
under any Loan Document, or allowed it by law or equity shall be cumulative of
each other and may be exercised in addition to any and all other rights of
Lender, and no delay in exercising any right shall operate as a waiver thereof,
nor shall any single or partial exercise by Lender of any right preclude any
other or future exercise thereof or the exercise of any other right. Borrower
expressly waives any presentment, demand, protest or other notice of any kind,
including but not limited to notice of intent to accelerate and notice of
acceleration. No notice to or demand on
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Borrower in any case shall, of itself, entitle Borrower to any other or future
notice or demand in similar or other circumstances.
B. Applicable Law. This Loan Agreement and the rights and obligations of
the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of New York and applicable federal law.
C. Amendment. No modification, consent, amendment or waiver of any
provision of this Loan Agreement, nor consent to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
an officer of Lender, and then shall be effective only in the specified instance
and for the purpose for which given. This Loan Agreement is binding upon
Borrower, its successors and assigns, and inures to the benefit of Lender, its
successors and assigns; however, no assignment or other transfer of Borrower's
rights or obligations hereunder shall be made or be effective without Lender's
prior written consent, nor shall it relieve Borrower of any obligations
hereunder. There is no third party beneficiary of this Loan Agreement.
D. Documents. All documents, certificates and other items required under
this Loan Agreement to be executed and/or delivered to Lender shall be in form
and content satisfactory to Lender and its counsel.
E. Partial Invalidity. The unenforceability or invalidity of any provision
of this Loan Agreement shall not affect the enforceability or validity of any
other provision herein and the invalidity or unenforceability of any provision
of any Loan Document to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances. Upon any such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Loan Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated by this Loan Agreement are
consummated to the extent possible.
F. Indemnification. Borrower shall indemnify, defend and hold Lender and
its successors and assigns in Lender's capacity as a lender under this Agreement
harmless from and against any and all claims, demands, suits, losses, damages,
assessments, fines, penalties, costs or other expenses (including reasonable
attorneys' fees and court costs) arising from or in any way related to any of
the transactions contemplated hereby, including but not limited to actual or
threatened damage to the environment, agency costs of investigation, personal
injury or death, or property damage, due to a release or alleged release of
Hazardous Materials, arising from Borrower's business operations, any other
property owned by Borrower or in the surface or ground water arising from
Borrower's business operations, or gaseous emissions arising from Borrower's
business operations or any other condition existing or arising from Borrower's
business operations resulting from the use or existence of Hazardous Materials,
whether such claim proves to be true or false. Borrower further agrees that its
indemnity obligations shall include, but are not limited to, liability for
damages resulting from the personal injury or death of an employee of the
Borrower, regardless of whether the Borrower has paid the employee under the
worker's compensation laws of any state or other similar federal or state
legislation for the
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protection of employees. The term "property damage" as used in this paragraph
includes, but is not limited to, damage to any real or personal property of the
Borrower, the Lender, and of any third parties. The Borrower's obligations under
this paragraph shall survive the repayment of the Loans and foreclosure of the
Deed of Trust securing the Loans.
G. Survivability. All covenants, agreements, representations and warranties
made herein or in the other Loan Documents shall survive the making of the Loans
and shall continue in full force and effect so long as the Loans are outstanding
or the obligation of the Lender to make any advances under the Line of Credit
shall not have expired.
H. Updated Appraisals and Maintenance of Collateral Value. Lender may at
its option, at Lender's own expense, obtain an appraisal of any Collateral
securing payment of the MUSI Loan, which appraisal shall be prepared by a
third-party appraiser engaged directly by Lender.
13. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO, INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON
OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW). THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF COMMERCIAL DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION, OR ANY SUCCESSOR
THEREOF ("A.A.A."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN NEW YORK COUNTY,
NEW YORK AND ADMINISTERED BY A.A.A., WHICH WILL APPOINT AN ARBITRATOR. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL BE
DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II) LIMIT
THE RIGHT OF THE LENDER HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT
NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL
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PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. THE LENDER MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS AGREEMENT. NEITHER THE EXERCISE OF SELF HELP REMEDIES NOR THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
14. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized representatives as of the date
first above written.
BORROWER:
WITNESS: XXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
/s/ Xxxxxxxxx X. Xxxxxx Title: Chairman and CEO
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[Corporate Seal]
LENDER:
MUSI INVESTMENTS S.A.
By:/s/ Xxxx Xxxxxxx Antivari
---------------------------------
Title:
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